ROYAL ASSENT

Mr. SPEAKER:: 

PRIVILEGE


[Stage Direction]
Right Hon, W. L. MACKENZIE KING (Prime Minister):	At last night's sitting I
drew attention to an article which appeared in the Globe and Mail of March 31, under the name of Mr. Harold Dingman. staff writer of the Globe and Mail, which I felt affected the privileges of this house, inasmuch as it contained a statement which was attributed to me, which was not in accordance with the statement I made in this house, and which as published was certain to create an entirely erroneous impression as to the significance and actual meaning of what I had said.
After the house rose last night the publisher of the Globe and Mail, in company with Mr. Dingman, came to my office and explained to me the circumstances which accounted for the article containing the passage to which I had taken exception, and stated that Mr. Dingman himself was in no way responsible for the particular paragraph that appeared in the article under his name.
I have since received from the managing editor of the Globe and Mail a full explanation of how the article came to appear in the form in which it did, and I have also received from the Canadian Press a statement which goes further to explain the circumstance of the article appearing as it did. I should like to read at once to the house these communications, because they completely exonerate Mr. Dingman in respect of the article referred to in so far as concerns the particular paragraph which was in quotation marks and to which I took exception.
The telegram received this morning from the managing editor of the Globe and Mail is as follows:
Right Hon. W. L. M. King,
Ottawa, Ont.
Quotation from your speech last Thursday for which you blame our Mr. Dingman in Commons last night was clipped from Canadian Press running report and inserted at our desk here Mr. Dingman having omitted that particular quote from his report. All Canadian newspapers have right' to rely and do rely on meticulous accuracy of house reports by Canadian Press which is official news gathering agency of Canadian newspapers. Mr. Dingman entirely ignorant of its insertion here and blameless for any variation from actual verbiage. Inasmuch as you denounced Dingman as having perpetrated a " false and perverted report, a very wilfully false and perverted report having regard to all the circumstances " I feel sure your sense of fairness will prompt you to
exonerate him in the same place from which you made the accusation. I have been in touch with Canadian Press executive and Canadian Press is issuing its apology for the paragraph in question which the Ololie and Mail in pursuance of its policy of unfailingly rectifying any error or injustice in its columns will glady carry in Wednesday's late edition and then through Thursday's early editions these early editions having gone to press to-night prior to m.v being able to straighten out this tangle.
Respectfully,
E. George Smith, Managing Editor, The Globe and Mail.
This morning I received from Mr. Carnegie, the superintendent of the Canadian Press at Ottawa, the following letter:
April 5, 1939.
Right Hon. W. L. Mackenzie King,
Prime Minister of Canada,
Ottawa.
My dear Mr. Prime Minister:
In the body of The Canadian Press running report of your speech on international affairs last Thursday was a paragraph quoting you as follows:
"I cannot accept the view of some that regardless of circumstances this country must say here and now that Canada is prepared to support any action that may be decided upon by the government at Westminster."
As I have explained to you-
I should have mentioned that Mr. Carnegie also came to my office last night and immediately made an explanation to me.
-the same quotation appeared in the Globe and Mail's report to which you directed attention in the House of Commons last night. Evidently the Globe and Mail lifted the quotation from The Canadian Press report and incorporated it in its own report.
Later when the text of your speech was available The Canadian Press carried your exact words in this connection. You will note in the morning papers we express our regret.
You will realize summarizing a running report of a lengthy speech provides some margin of error and I think it is a tribute to the excellence of our parliamentary reportorial staff that the errors are so rare.
Most of our members used the textual excerpts of this and other portions of your speech we put out when we received the text including the Globe and Mail itself.
With kind regards,
Sincerely yours,
R. K. Carnegie, Ottawa Superintendent.
These two communications fully explain, I think, the circumstances in which the paragraph to which I took exception came to be inserted in Mr. Dingman's dispatch to the Toronto Globe and Mail. They were circumstances of which I had no knowledge whatever. Had I had any knowledge of them I
Royal Seals
[Stage Direction]
should certainly not have spoken as I did. Let me say that I think the Globe and Mail has done all that possibly could be expected in the way of seeking to rectify the mistake. I think also The Canadian Press has done all that it possibly could in the way of rectifying the mistake. I should like on my part to do all I possibly can to remove from Mr. Dingman's mind any sense of injustice or wrong that he may feel has been done him by words of mine, occasioned as they were in the circumstances that are now known to the house. I need not say that in the light of the situation as it appeared from the article itself I felt that it was desirable, in the interest of the privileges of parliament, to make the remarks I did; but had I known of the circumstances I certainly should not have said what I did in reference to Mr. Dingman. I exonerate him completely, as have both the Globe and Mail and the The Canadian Press. I would say further that I do not think that either the Globe and Mail or The Canadian Press intentionally sought to alter the meaning of what I said, or in any way to misrepresent my position. I certainly did not wish to misrepresent Mr. Dingman's position. I wholly withdraw what I said in reference to him, and, as I have just said, I regret sincerely that he should have been occasioned feelings of injustice in reference to a matter in which he was wholly innocent, just as I myself regret the circumstances which caused me to feel a sense of injustice, and occasioned the necessity of making the remarks I did in this house last night.


[Stage Direction]
Sir EUGENE FISET (Rimouski) presented the first report of the standing committee on railways and shipping owned, operated and controlled by the government, and moved that the report be concurred in.
Motion agreed to.

Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That the name of Mr. Cameron be substituted for that of Mr. Fraser on the standing committee on railways and shipping owned, operated and controlled by the government.


[Stage Direction]
Motion agreed to.


[Stage Direction]
Hon. J. E. MICHAUD (Minister of Fisheries) moved for leave to introduce Bill No. 75, to amend the Meat and Canned Foods Act (fish and shell fish).
Some hon. MEMBERS:: Explain.


Mr. MICHAUD:: The purpose of this bill is to amend the Meat and Canned Foods Act with a view to bringing under its terms a new method of marketing lobster meat, fresh or frozen, in cans; and also to provide for the better labelling and indication of the place of origin of canned fish and shell fish placed on the Canadian market.
Motion agreed to and bill read the first time.



ROYAL SEALS


[Stage Direction]
Right Hon. ERNEST LAPOINTE (Minister of Justice) moved for leave to introduce Bill No. 76, to make provision for the sealing of royal instruments.
He said: Mr. Speaker, this bill is intended to serve a double purpose, the first of which arises as a result of the prospective visit to Canada of His Majesty the King. During his majesty's presence in Canada under existing laws and practice it would not be possible to issue royal instruments under the great seal or the signet. This bill makes provision for passing such instruments under the great seal of Canada, of course in relation to Canadian affairs; for instance, in connection with giving full powers for the signature of treaties, and so forth. These are royal instruments, and the great seal has to be used.
Mr. MANION:: Titles?


Mr. LAPOINTE (Quebec East):: No, not titles. That is done without so many instruments.


Robert James Manion: Oh no; they are laid on the table beside your plate.


Ernest Lapointe: The second purpose is to make provision for Canadian royal seals for use in Canadian matters. This is for instance, for exequaturs, leave of absence to the governor general, and matters of the

Questions
kind. This will be permanent. The present bill is designed to enable Canadian transactions involving the use of royal seals to be subjected in form as well as in substance to the direct control of responsible Canadian ministers.	.


Mr. CAHAN:: Does it include as well the use of the royal signet?


Ernest Lapointe: Yes; not the royal signet as used in the United Kingdom.


Charles Hazlitt Cahan: I do not wish to interrupt, but it is still used in the United Kingdom with regard to some Canadian affairs.


Ernest Lapointe: This will not necessarily dispense with that. I think when the bill is distributed my hon. friend will see that the whole procedure will now be under the control of Canada. The great seal of Canada will be used, or another seal or signet may be used, but under the instructions of the Canadian parliament.
Motion agreed to and bill read the first time.



PRIVATE BILL


[Stage Direction]
Bill No. 65, to ratify and confirm the agreement respecting the joint use by Canadian Pacific Railway Company and the Midland Railway Company of Manitoba of certain tracks and premises of Canadian Pacific Railway Company at Winnipeg, Manitoba- Mr. Maybank.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
cost of life insurance
['1.\tGracious act of generosity towards the needy.\n2.\t(a) Yes. (b) No.\n3.\t1937-38\t1938-39Nova Scotia\t.. $150,000\t$150,000New Brunswick\t.. 100.000\t50,000Prince Edward Island..\t.. 50,000\t80,0004.\t1937-38\t1938-39Nova Scotia\t.. $ 75,000\t$ 50,000New Brunswick\t,. 50,000\t25,000Prince Edward Island..\t.. 25,000\t40,0005.\tTerms of agreement.6.\tAudits.']
Mr. CHURCH:: What measures have been taken by the present government to secure a reduction in the high cost of life insurance in Canada?


Mr. DUNNING:: I should like to try to answer this question orally, although I have some doubt whether it is a proper one, because in asking the question an attempt is made to state an alleged fact. As I think is well known, the insurance statutes of Canada do not give to the government as such any control over life insurance premiums. My information, however, is that in recent years premiums have tended to decline rather than increase.
real estate mortgage interest rates


Thomas Langton Church: What action has been taken by the present government to reduce the high interest rates charged on real estate mortgages in Canada?


Charles Avery Dunning: Obviously this concerns a question of policy, and therefore should be dropped.


Walter Edward Foster: Dropped.


Thomas Langton Church: Why not say you will not
do anything? That is no answer at all.
prairie farm rehabilitation act-damage TO DAMS


['Why not say you will not\ndo anything? That is no answer at all.\nprairie farm rehabilitation act-damage TO DAMS']
Mr. GARDINER:: 1,	Year; 2, name of project; 3, location; 4, cost of construction; 5, cost of repairs.
1	2	3	4	51936	Crystal City	$ 2,978 91	$ 355 301937	Wildhorse	.... 23-2- 3-W4	17,990 00	6,379 781938	Wildhorse	See above	Not yet repaired1938	Bartman	24385 00	10,118 581938	Dead Lake	14,615 98	5,985 001938	Long Creek dam No. 2	8,701 46	2,960 001938	Lafleche	930 00	736 721939	Lake of the Rivers	.. .. 4- 8-29-W2	10,805 14	Not yet repaired1939	Masefield	.... 16- 2-14-W2	3,187 23	Not yet repaired
Small projects, constructed by individuals or communities with financial assistance from the Prairie Farm Rehabilitation Act vote, are not included in the above.
2608
Questions



Mr. MARTIN:: Will provision be made at once for the testing of cattle for tuberculosis in the county of Essex ?


James Garfield Gardiner: No. The county of Essex is seventh in order of acceptance as a restricted area for the eradication of bovine tuberculosis in the province of Ontario, and approximately 360,000 cattle are due for initial tuberculin test before testing will be started in this county.


AID TO MARITIME FISHERMEN
Mr. BROOKS:: 1.	Under what policy does the Department of Fisheries give aid to the fishing industry and the fishermen of the maritime provinces?
2.	Does the same policy apply to the three provinces, or is there a different policy for Nova Scotia, New Brunswick and Prince Edward Island?
3.	What amount of money did the federal government give to each of the provincial governments in the maritimes for expenditure among the fishermen in the years 1937 and 1938?
4.	What amount did the provincial governments contribute in each of these years?
5.	What check has the federal government on the expenditure of the money it contributes?
6.	What facilities have the federal government for knowing that the provincial governments put up their share of the money?


Mr. MICHAUD:: 1.	Gracious act of generosity towards the needy.
2.	(a) Yes. (b) No.
3.	1937-38	1938-39Nova Scotia	.. $150,000	$150,000New Brunswick	.. 100.000	50,000Prince Edward Island..	.. 50,000	80,0004.	1937-38	1938-39Nova Scotia	.. $ 75,000	$ 50,000New Brunswick	,. 50,000	25,000Prince Edward Island..	.. 25,000	40,0005.	Terms of agreement.6.	Audits.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. FAFARD:: How many loans and of what total amount, were made in the province of yuebec by the Canadian farm loan board in each fiscal year from April 1, 1935, to March 31, 1939?


HOUSING AND HOME IMPROVEMENT-QUEBEC
Joseph-Fernand Fafard: What was the total expenditure of the federal government in the province of Quebec, each fiscal year from April 1, 1935, to March 31, 1939, as assistance in (a) housing; (b) home improvement?


ASSISTANCE TO AGRICULTURE-QUEBEC
Joseph-Fernand Fafard: What was the total expenditure of the federal government in assistance to agriculture in the province of Quebec, each fiscal year from April 1, 1935, to March 31, 1939?


PUBLIC WORKS EXPENDITURES-QUEBEC
Joseph-Fernand Fafard: What was the total expenditure of the federal government on public works in the province of Quebec, each fiscal year from April 1, 1935, to March 31, 1939?


CADET TRAINING-QUEBEC
Mr. BOUCHARD:: 1.	What amounts were spent by the federal government in cadet training in the province of Quebec, each fiscal year from April 1, 1935, to March 31, 1939?
2.	To whom were such amounts paid?


FEDERAL EXPENDITURES ON WATERWAYS, HARBOURS, MARITIME COMMUNICATIONS AND TRADE-QUEBEC
Mr. BOUCHARD:: What was the total expenditure of the federal government in the province of Quebec, each fiscal year from April 1, 1935, to March 31, 1939, for the following purposes: (a) maintenance and improvement of the St. Lawrence waterway; (b) maintenance and improvement of harbours; (c) subsidies and assistance to maritime communications and trade?


FEDERAL HEALTH EXPENDITURES-QUEBEC
Joseph Georges Bouchard: What was the total expenditure of the federal government in promoting health improvement and prevention of disease in the province of Quebec, each fiscal year from April 1, 1935, to March 31, 1939?


CANADIAN BROADCASTING CORPORATION-EXPENDITURES ON NEW CONSTRUCTION-QUEBEC
Mr. BOULANGER:: What amounts were spent by the radio commission or Canadian Broadcasting Corporation on new construction in the province of Quebec, each fiscal year from April 1, 1935, to March 31, 1939?


CANADIAN NATIONAL RAILWAYS
Joseph Oscar Lefebre Boulanger: What amounts were spent by the national railways on renewals and new constructions in the province of Quebec, each fiscal year from April 1, 1935, to March 31, 1939?


FEDERAL GRANTS TO QUEBEC
Joseph Oscar Lefebre Boulanger: What amounts were granted by the federal government to the provincial government of Quebec, each fiscal year from April 1, 1935, to March 31. 1939, for the following purposes: (a) as federal subsidy to the province under the provisions of the British North America Act; (b) to assist the province and the

Distribution of Free Butter
municipalities for the relief of the poor and the unemployed; (c) to assist the province and the municipalities in carrying out relief works; (d) to assist the province and the municipalities in the construction of the trans-Canada highway; (e) to assist the province, municipalities and mine owners in the construction of roads to the mines; (f) to assist the provinces and the municipalities in land settlement; (g) to assist the province in the payment of old age pensions to persons over 70 years of age; (h) to assist the province to pay a pension to the blind; (i) to assist the province in the professional training of youth and the rehabilitation of young people out of work; (j) to assist the province in fighting tuberculosis in cattle; (k) to assist the province in all other works not enumerated above?


MOTIONS FOR PAPERS
Mr. GAUTHIER:: For a copy of all correspondence, letters, telegrams and other documents exchanged between the government, the Canadian Broadcasting Corporation and any other persons, associations, provincial governments or others w:th respect to radio programs sponsored by breweries or wineries in the province of Quebec.


Walter Edward Foster: Dropped.


MACKAY'S POINT, VICTORIA, N.S., WHARF
Mr. BROOKS:: For a copy of all payrolls and accounts in connection with work done on the government wharf at MacKay's point. Victoria county, Nova Scotia, during the years 1938 and 1939.


ARMY ACT AND MANUAL OF MILITARY LAW
Mr. MacNEIL:: For a copy of the Army Act and the manual of military law, as amended to date and as referred to in the King's Regulations and Orders for the Canadian militia promulgated under authority of order in council P.C. 2974, November 29. 1938.



DAIRY INDUSTRY ACT


[Stage Direction]
Hon. J. G. GARDINER (Minister of Agriculture) moved that the house go into committee at the next sitting to consider the following proposed resolution.
That it is expedient to amend the Dairy Industry Act to authorize the minister to constitute an advisory committee to advise him on matters affecting the dairy industry and to authorize the payment of the actual reasonable travelling or other expenses of the personnel of such committee.
He said: Mr. Speaker, it has been suggested by the dairy council that it would be helpful if an advisory committee, composed of nominees of the dairy interests and perhaps one or two of the officials of the department, 7X492-165^
particularly the commissioner of the dairy branch, were set up in order to advise in connection with matters having to do with the dairy industry. That advice will be shared in both directions, some of it going to the department through the minister and some of it to the industry itself, in relation to production of surpluses and the ridding of the industry of surpluses from time to time, particularly as affecting butter and cheese. It will be a one-section bill, which will legalize the appointment of such a committee.
Robert James Manion: The committee will be entirely advisory?


James Garfield Gardiner: Yes.
His Excellency the Governor General, having been made acquainted with the subject matter of the resolution, recommends it to the favourable consideration of the house.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. W. J. WARD (Dauphin):: Mr. Speaker, I would direct your attention to Bill No. 63, to amend the Canadian Wheat Board Act, 1935. May I ask the Minister of Trade and Commerce (Mr. Euler) if he would delay consideration of this bill until, say, about the 17th or 18th of April, or until such time as we return after the Easter recess?


Hon. W. D. EULER (Minister of Trade and Commerce):: The hon. member had not given me notice of his intention to make this request. I think perhaps all I can say at the moment is that the bill will not come up before the Easter recess. I cannot give him any further assurance.



DISTRIBUTION OF FREE BUTTER


[Stage Direction]
On the orders of the day.
Mr. M. C. SENN (Haldimand):: I should like to address a question to the Minister of Agriculture (Mr. Gardiner). Yesterday I asked what the government has in mind in regard to a scheme to buy and distribute butter. My question was based on a clipping from yesterday's Ottawa Journal. I have in my hand another clipping from the Montreal Star headed " Butter scheme sends price up on mart here." Is the minister yet prepared to make a statement in regard to this matter? Yesterday he rather turned it aside with & smile, as though it were of small importance.
Toronto Post Office Building

The impression is abroad that this is designed more to assist speculators who have butter in their possession than to assist the market in dther ways. I think the minister should make a statement in regard to the matter.


James Garfield Gardiner: I am sony if yesterday I gave the impression that the matter is not one of importance. The only idea I had in mind was to give the impression to the house that it has not yet reached the point where I could make a statement with regard to it. All I can say at the moment is that the whole matter is under careful consideration by officials of the department, who are carrying on negotiations with organizations-not those which have butter, but with other organizations-which might be interested in such distribution. But nothing has been definitely decided upon with regard to the deal, or as to how any such plan would be carried out or put into effect.


Mark Cecil Senn: One more question. Has the minister made any definite arrangement as to how the price will be set when the butter is bought? Because evidently the market is rising, and somebody is going to benefit.


James Garfield Gardiner: Of course one of the intentions of such a plan would be to maintain the market. I do not know-if the market is going to go up without our doing it-


Robert James Manion: But not for the speculators. If I might say a word, I think that in view of the publicity which has been given to this whole proposed or possible scheme, the minister Ought to assure the house that every effort will be	made by	the government, if	theproposal	is carried	out, to	see to it	thatspeculators shall not profit by it, and that if anybody	profits it	will be	the farmers of
Canada.


James Garfield Gardiner: I think all of that is
properly being taken care of. It will certainly be safeguarded in that way. I think it may be taken for granted that any plan decided	upon will	be one	which will	not
benefit the speculators-at least without benefiting everyone else who is producing butter.



TORONTO POST OFFICE BUILDING


[Stage Direction]
On the orders of the day:
Thomas Langton Church: Mr. Speaker, I should like to ask a question of the Minister of Public Works (Mr. Cardin), about a matter I mentioned three weeks ago. It arises out of an article appearing in this

morning's Globe and Mail, in which it is stated that Mr. Somerville, Secretary of the Department of Public Works, has notified the contractors and architects that the new post office building at the foot of Bay street, where it meets Fleet street, will not be proceeded with this year. I should like to know if that information is correct, because the building is badly needed.


Hon. FERNAND RINFRET (Secretary of State):: Mr. Speaker, in the absence of the
Minister of Public Works (Mr. Cardin) I can only note the question and see that my hon. friend receives an answer to-morrow.


Thomas Langton Church: It would give work to
three or four thousand men.


Mr. SPENCE:: I was going to ask the
same question, only I had a little more added to it. However, as usual, the hon. member for Broadview (Mr. Church) has stolen it from me, so I had better sit down.



SPANISH NATIONALIST GOVERNMENT


[Stage Direction]
On the orders of the day:
Mr. J. S. WOODSWORTH (Winnipeg North Centre):: Mr. Speaker, I should like
to direct a question to the Prime Minister (Mr. Mackenzie King) based on a news item published yesterday to the effect that action had been taken by the government of Canada to recognize the nationalist government in Spain. First of all, I understand there has been an embargo on arms going into Spain. Will that embargo now be lifted with respect to nationalist Spain? The second question is: Has the government made any representations to the new Spanish government with a view to securing adherents of the former government against anything like reprisals?


William Lyon Mackenzie King: Mr. Speaker, in regard
to my hon. friend's first question, may I say that I would prefer to answer it to-morrow.
With regard to his second question, respecting reprisals, I would say that at the time of recognizing the nationalist government in Spain the British government took up with General Franco the question of reprisals, and I believe the French government did the same. I believe that the matter of reprisals might better be considered by the governments of Europe, in preference to our own government taking up the matter. Any object which would be served by such action would be better served by leaving the matter in the hands of the governments which are much

Farm Assistance-Acreage Payment
more immediately associated with the situation in Spain than is the Canadian government.



RAILWAY SERVICES


[Stage Direction]
On the orders of the day:
Mr. J. R. MacNICOL (Davenport):: Mr. Speaker, before the orders of the day are called I should like to ask a question of the Minister of Transport (Mr. Howe). I am sorry I have not had time to send him notice of my question, because it is only a few moments ago that the article in the Wall Street Journal of this date was brought to my attention. I refer to a statement announcing that the Canadian National section of the joint committee of the two railways in Canada, namely the Canadian National Railways and the Canadian Pacific Railway, states that it intends to recommend the pooling of all passenger trains in Canada. I believe the committee in question is the one which has to do with the pooling of trains. Before such a step may be taken, do not the railways have to obtain the consent of the Department of Transport, in view of the fact that so many men would be thrown out of employment?


Hon. C. D. HOWE (Minister of Transport) :: Mr. Speaker, under The Canadian National-Canadian Pacific Act, the railways have authority to carry out a procedure of that kind without reference to parliament in any way.



PRAIRIE FARM ASSISTANCE


[Stage Direction]
Hon. J. G. GARDINER (Minister of Agriculture) moved that the house go into committee to consider the following proposed resolution:
That it is expedient to introduce a measure making provision for a percentage deduction from all grain marketed in the spring wheat area, and making available other sums required for the purposes of the proposed act; to provide assistance to farmers in emergent conditions by making provision for an acreage payment, with provision also for the appointment and assignment of officials, auditors or employees.
He said: Mr. Speaker, this resolution is the twin resolution of order No. 17 standing in my name on to-day's order paper, and having to do with the cooperative marketing of wheat. With the permission of the house I should like to apply my remarks at this
time to both resolutions; it will make unnecessary a second speech with regard to the other. The two are so closely allied that it is almost impossible to discuss the one without discussing the other.
The resolutions have to do with the marketing of wheat. Earlier in the session someone in the house said that every time I had spoken during the session I spoke with regard to wheat. He was somewhat critical of the fact that I had not addressed the house more frequently on other matters which have to do with agriculture. Here is one of the outstanding reasons why it has been necessary to discuss wheat rather frequently during this and other sessions. In my opinion many things have been done in connection with wheat in the last eight or ten years which have not been sound in principle. What has been done from time to time in connection with the marketing of wheat has made it very difficult to apply to the problem of the marketing of other farm products the principles which have been applied to the marketing of our main farm product, wheat. This being so, it has been necessary from time to time to discuss ways and means of so changing our policy in relation to wheat as to make it possible to apply to the marketing of other farm products the principles which have been applied to the marketing of wheat.
In this connection the report of the royal grain inquiry commission, 1938, the preparation of which required a period of two years, makes certain comments with regard to the policies followed in connection with the marketing of wheat. Hon. members will remember that this was a one-man commission; and at page 189 of the report the commissioner states:
I am therefore of the opinion that under what may be called normal conditions-open markets in the United Kingdom, a fair relationship between world supply and import demand, and no danger clouds on the immediate horizon- the government should remain out of the grain trade, and our wheat should be marketed by means of the futures market system (under proper supervision), and encouragement given to the creation of cooperative marketing associations, or pools. The government's activities should, I think, be confined, under these conditions, to such helpful action as I have already indicated and such as I shall refer to presently: trade agreements, assistance to commercial and economic research, to the gathering of information, to promotional services, etc.
Then with regard to this general recommendation, he states further on page 194:
For all these reasons (and notwithstanding the adverse considerations to which I have referred in relation to government boards) I do not feel that I can suggest the immediate dissolution of the Canadian wheat board. There
2612	COMMONS
Farm Assistance-Acreage Payment
is a strong possibility that conditions may develop which will require a measure of assistance in the marketing of the coming crop, and I do not know, of course, how long these conditions may continue after the final chapter of this report is written. In the meantime I can think of nothing better to suggest than that the board be maintained to meet any situation which may arise.
These recommendations have to do with what might be called our permanent policy and the emergent policy which was to apply at least to the year 1938. In order that we may have before us what apparently was in the mind of the commissioner in relation to pools, I should like to read this further paragraph from page 182 of the report:
Our policy should then be the continuation of the futures trading market at Winnipeg and the encouragement of the building up of producers' cooperative marketing societies, organized and conducted in a manner approaching, in so far as practicable, the organization and business methods of the Australian pools to which reference has been made and which have been in successful operation for many years. I nave in mind pools organized on a flexible, voluntary basis, not necessarily of great size, selling in line with market conditions, and operating overseas "with the trade and not against it" as was said in reference to the Australian pools. Such pools should, in my opinion, make use of the futures market, not for speculation, as by long buying, but for hedging purposes such as the securing of a price, "when prices look attractive" as was said in 1924 by the manager of the Alberta pool; or again "to accommodate the buyer" as was also said on that occasion, care being taken in such last case to avoid speculation.
Mr. COLDWELL:: Did that recommendation only have to do with normal conditions?


James Garfield Gardiner: I read the recommendation with regard to normal conditions. It was suggested that the wheat board be continued last year for the purpose of dealing with the situation, and the commissioner did not know how long in addition to last year it would be required. In order to place this matter before the house in the manner I desire, and before going on with a discussion of the wheat matter itself, I think it is of the utmost importance that we should lay down at this time-probably it was important that it should have been done even earlier-the general policy having to do with the marketing of farm products and the encouragement of agriculture generally.
I think it goes without saying that agriculture in Canada has been going through a most difficult period during the last eight or ten years. These difficulties have not all had to do with the marketing of wheat. There have been difficulties in connection with agriculture in other directions. I repeat that one of the main objectives which I have in mind in presenting this matter to the house at this 
time is to place before hon. members some sound principles upon which we may build in reestablishing agriculture generally across Canada. In order to get the true picture as to why' we have the present legislation, in order to explain the conditions under which it has operated and why it has operated in the way it has, I should like to place on Hansard some quotations from the remarks of two hon. gentlemen who presented this question to the house in 1935 when the present wheat board act was placed upon the statute book of this country.
The Right Hon. R. B. Bennett, then leader of the government, speaking on the grain board bill which was introduced in 1935, made certain statements setting forth his views with regard to the matter of wheat marketing and conditions generally related thereto. In moving the second reading of this bill he stated, as reported at page 3562 of Hansard of 1935:
Need I remind the house that the reason wheat plays so large a part in the economic life of Canada is that it is a product which is more readily converted into new wealth than any other resource upon which we can have reliance to take care of our adverse trade balances and to increase the purchasing power of our people. I need hardly remind the house that when there is a favourable crop with a favourable market the railways have traffic and that when the railways have traffic employment on the railways is larger than it otherwise would be. I need hardly remind the house that in eastern Canada, whether it be Quebec, Ontario or any part of the country, the ability of the industrial population to produce in their factories and mills the requirements of the population west of the lakes depends entirely upon our ability to market our crop of wheat.
That expression, I think, is the well-considered opinion of all parties in this house, and it needs no further comment from me. Mr. Bennett then asked, as reported at page 3572 of Hansard of 1935:
Can the people of this country afford to see the wheat that plays so large a part in our economic life become the sport and play of what is called supply ancf demand at 38 cents a bushel ?
Mr. Bennett answered this question at page 3577 of Hansard, toward the end of his speech, in these words:
The terms and provisions of the bill are short and simple. It provides for the marketing of the Canadian wheat crop through the channel I have indicated, and not through a private enterprise. It is to be done through a public board created by the Dominion of Canada.
Those words are clear and unmistakable. They state that the board is to handle all the wheat grown in Canada which goes into interprovincial and export trade.
Hon. J. L. Ralston, speaking in 1935 for the Liberal party, then the official opposition, on the grain bill of that year, which later

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became the wheat bill, and replying to Mr. Bennett, said, as reported at page 3581 of Hansard:
I do not believe that the people of the Dominion of Canada are favourable to a compulsory wheat board, to a board the constitution of which will mean that every wheat grower, every elevator man and everybody engaged in the wheat business must deal with the government agency and no one else. This matter of policy lias been discussed before not only in this house but throughout the country. The government has carried on with a voluntary system for five years as Mr. McFarland and the Canadian Cooperative Wheat Producers Limited have been nothing more or less than a board conducting voluntary market operations. A man was entitled to sell or not sell to Mr. McFarland as he saw fit. I submit that so far as the western wheat grower is concerned that the voluntary system should be continued until there has been more opportunity to consider the matter. I do not believe the compulsory feature of this bill will meet with approval, either in the west, in the east or in this house.
There you have the issue clearly drawn between the two parties at that time in the house: one was for compulsion; the other was for a continuance of the voluntary system.
Following this discussion the bill went to a committee and returned with some amendments, and in the course of the discussion which took place when the bill came back to the committee of the whole, Colonel Ralston made this statement:
I submit that this is an emergent measure due to the situation in which we find ourselves, and to some extent perhaps an experiment, one which will have to be tried out in order that we may find out whether it is the best for all concerned.
May I say Mr. Speaker, that when this bill came back from the special committee to the committee of the whole house it was entitled the Wheat Board Act of 1935, and not the Grain Act of 1935. Colonel Ralston, after making the statement I have just quoted from Hansard, continued, on the same page:
Before this bill comes out of the committee, I think the Prime Minister (Mr. Bennett) who is in charge of the measure, should reconsider the proposal made to him in the committee and insert some clause in the bill to indicate its nature, namely, that it is an emergency measure; that it is for the purpose of dealing with the situation in which we find ourselves; that it is to bridge the gap; to provide, as suggested in the committee, that the bill should be in force for one year, giving the governor in council power _ to extend it for a second year and providing at the end of that second year that it should automatically lapse unless it is further extended by parliament. That is the feeling which I have with regard to this matter.
In those words Colonel Ralston expressed the opinion of the Liberal party as then represented in the House of Commons.
Right Hon. R. B. Bennett, speaking on the same occasion in reply to what Colonel
Ralston had said, after pointing out the changes which had been made before the bill received its third reading, made this statement, as reported at page 4273 of Hansard:
We have this bill which the committee accepted for the purpose of doing two things: one, taking care of the surplus accumulations of the wheat of this country at a time when the requirements of importing countries have been enormously reduced, as will be found from the returns, and the production has made no corresponding diminution; second, this year's crop is to flow into the channels of consumption by the methods I have mentioned: a fixed price, a sharing in subsequent profits, if any, and the purchase by the board directly from the producer.
Then, at page 4274 of Hansard, Mr. Bennett made this statement:
But over and above and beyond all else stands the fact that whatever may be said, the board must be amenable to the orders in council and direction and control of the government of the day.
It will be noted from these statements that certain departures were made from the announced policy regarding the nature of the proposed legislation between the time the bill was introduced and its final passing. The bill as it entered the house declared that all grain entering interprovincial or international trade was to be marketed through a government board. This would have declared the marketing of grain a government monopoly and would have forced out all others in the trade in a very short time. But when the bill became an act it provided for setting an initial price; it left the individual free to sell to whom he chose. It provided that grains other than wheat would be handled by the board only if it were decided to do so by order in council.
Representative speakers on both the government and the opposition side had agreed that the main objects of the legislation were to dispose in an orderly manner of the carryover which had accumulated, and, while that was being done, to provide farmers who were marketing new crops with the protection of a fixed price through a government board.
It had been further stated by the prime minister of the day, at more than one point in the discussions, that the actions of the board were subject to the will of council; to use his own words already quoted:	.
But over and above and beyond all else stands the fact that whatever may be said, the board must be amenable to the orders in council and direction and control of the government of the day.
When these undertakings were given, indicating that the legislation was to deal with a temporary condition, that it was not a permanent policy, and that even while it

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was in force it was subject to the control of the government of the day, it passed the house unanimously.
I place this record on Hansard in order that the position may be quite clear in any discussion which may take place in regard to the actions of the government from that day to this, whether under the previous prime minister or the present Prime Minister.
The Wheat Board Act of 1936 went into operation in the summer months of 1935, and a board was appointed under this legislation. The board set an initial price for wheat of 874 cents a bushel, No. 1 northern, Fort William. The newly appointed board took over an accumulated surplus of 205,000,000 bushels of wheat from Mr. McFarland, who had been conducting stabilization activities in previous years. Between August of 1935 and December 3, 1935, the board purchased from the producers 102,766,855 bushels of wheat, and sold 12,577,668 bushels of wheat, leaving a further accumulated surplus of 90,000,000 bushels. So that on December 3, 1935, the McFarland board turned over to the Murray board 295,000,000 bushels of wheat, covered by grain and contracts. The Murray board proceeded to deal with the surplus of 205,000.000 bushels accumulated prior to 1935, and with the wheat taken from the producers in 1935, in exactly the manner intended by the understandings reached between Colonel Ralston and Mr. Bennett when speaking on the floor of the house. That is, the board proceeded to the orderly marketing of the 205.000,000 bushels of wheat which had been carried into that year from the previous crop years, proceeded to handle the sale of that wheat so as not to interfere with the marketing of the wheat then coming on the market in that crop year.
The board attempted to get rid1 of as much as possible of the accumulated surplus before the new crop came on the market in 1936 and after the bulk of the 1935 crop had been delivered by the farmer. The result was that the government paid, under the 874 cent price guarantee for the 1935 crop, $11,858.104 more for the wheat than it actually netted on the market after paying costs and storage.
The amount of wheat disposed of during the year was 254,000,000 bushels, which reduced the board's carry-over to 84,698,652 on July 31, 1936. The government in dealing with the producer in 1935-36, had a certain experience which, I think, is of interest in a discussion of this question. Colonel Ralston was right in 1935 in stating on the floor of the house that the majority of the farmers both east and west were opposed to the setting up of a govern-

ment monopoly in grain handling and marketing facilities. Had I had any doubts about that at the time he made the statement, they would have been absolutely removed by the actions of our farmers themselves during the marketing season of 1935. The price of wheat during the last three weeks of September and during October, 1935, was above, but only slightly above, the set price of 874 cents. At the end of any week it was never higher than 94-2 cents Fort William, and the lowest was 88-6 cents, which is only slightly above the 87J cent price. Actual closing prices at the end of each week were: 89-7; 94-2; 91-1; 94-2; 92-6; 90-2; 88-6 respectively. Prior to October 25 there had been delivered by the farmers 145,670,535 bushels of wheat.


Robert James Manion: To the board?


James Garfield Gardiner: No, delivered altogether to the elevators by the farmers. Only 63,789,477 bushels, or forty-four per cent of the total delivered, came to the wheat board.


Mr. QUELCH:: Was that the 1936 crop?


James Garfield Gardiner: The crop of 1935-in the fall of that year. This would indicate that when wheat was above the set price fewer than half the farmers were prepared to deliver their wheat into the pool and take their chance on an average price through the participation certificates. I say again that when the price was only slightly above 874 cents-between 88 and 93-only forty-four per cent of the wheat was actually delivered to the board during that period. Wheat did not again reach 874 cents until July, 1936. Wheat went down after the end of October to below 874 cents and remained there until July, 1936, rvhen for three weeks it again reached the figures of 92, 93 and 93-6 cents.


Mark Cecil Senn: Fort William?


James Garfield Gardiner: Yes, for No. 1 northern. During these three weeks 4,000,000 bushels were delivered to the elevators by the farmers, of which quantity only 1,500,000 bushels were delivered to the board, while 2,500,000 bushels were delivered to the trade. This indicates that little more than one-third of the farmers were prepared to risk a loss of from four to five cents a bushel in order to support the idea that the government should market all the wheat through the wheat board.
During the period from the end of October, 1935, to the first of July, 1936, wheat, as I said, was below 874 cents a bushel, and all the wheat delivered during that period came to the board. In addition to all that was delivered to the elevators during that period, there was an amount of 19,000.000 bushels which had been placed in storage by

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the farmers during the months of September and October, when the price was above 874 cents, which was passed over to the board at 874 cents during the period when wheat was below 871 cents.
The meaning of that is simply this, that of that quantity of wheat which was delivered when the price was above 871 cents and the farmer was holding the wheat under his own control, 19,000,000 bushels were turned over to the board after the price went below 871 cents and remained there. I recite these facts in order to point out that what Colonel Ralston and others said at the time the bill was being considered in the house, was in accordance with the facts as they knew them in relation to grain handling in western Canada. This experience was sufficient to convince the government-that is, the government o'f the present day-that farmers are not yet prepared to risk wheat with a government agency and take a flat price for it under all circumstances. If the choice is left and the government desire to handle all the wheat, then they can do so only by setting a price above the market and keeping it there. I think the figures prove that if the government do not at all times offer a better price than the market will bring, they will not get enough wheat to pay for the overhead cost of doing business, and that the act can function with participation as a possibility only so long as the farmers are absolutely sold on the idea of cooperation. It can function only when the world price is below the set price. Until the farmer has decided that he desires a cooperative set-up, such voluntary legislation can function only as a bonussetting piece of machinery. We paid a bonus to the extent of $6,182,453 in 1935. We paid that bonus to the farmers at the rate of about four cents a bushel on wheat delivered to the board in 1935, and in addition we paid $5,675,650 in carrying charges, mostly storage. I shall refer to that figure later on in a discussion I desire to carry on with regard to this method of marketing.
It was argued in 1936 and 1937 that the set price should be raised because the world price was rising. The government still adhered to the original intent of the act and maintained that an effort should be made to put the surplus into consumption and thus get rid of it rather than accumulate more. The government knew from the experience of the preceding year that unless we were prepared to advance the price periodically throughout the year, keeping it on a level with the world price, the government board would not function as part of the marketing
machinery for continuing delivery of the current crop. In order to avoid later confusion through having on our hands a small volume of wheat which those who actually follow a principle, even to the extent of great financial loss, had delivered, we stated that unless wheat dropped below 90 cents, the board would not take delivery of any wheat. We acted on the understanding reached at the end of the discussions of 1935 when the Wheat Board Act became law, and determined this action by order in council. I believe that in doing so, once having decided that we could not advance beyond 874 cents, we saved a group of farmers who would follow a principle to the bitter end even if they had to take a loss. We saved them from a loss which they certainly would have suffered had they depended upon the legislation for marketing their crop that year. We knew from the experience of the wheat pools, and have since had it corroborated by the experience of 1938, that it is most difficult to adjust your set price on a falling market if you have advanced it on a rising market. One of the difficulties experienced by the pools in 1928, 1929 and 1930 was the fact that they had set a comparatively high price during the period of high and rising prices, and they found it most difficult to reduce that price in the years when the price itself was falling.
I have come to the conclusion that to ignore the so-called law of supply and demand, as Mr. Bennett said his government intended to do when they brought in the first bill in 1935, will eventually wreck any system that can be devised, by loading the system with an enormous surplus or by giving it an enormous deficit. Wheat went up to an average of $1.22 a bushel for No. 1 northern at Fort William in 1936-37 and to an average of $1.31 a bushel in 1937-38. In order, then, to have been in a position to take delivery of wheat during that period the government would have had to be periodically advancing the price from 874 cents until wheat reached a price which was above that at which wheat was being sold from time to time, in order to assure that the government would get delivery of a sufficient volume to be worth while.


Victor Quelch: Is it not true that the majority of the wheat was sold before the price went to that level?


James Garfield Gardiner: No. I intend to place on Hansard a list of prices throughout the period, and the answer to my hon. friend's question will be found in those prices. There was, of course, a considerable part of the period during which the price was below the top level.

2616	COMMONS
Farm Assistance-Acreage Payment


Mark Cecil Senn: The minister stated a few
minutes ago that the wheat sold of the 1935 crop cost the government, I think he said $5,000,000 more than current market prices. But by that he does not mean to say that the government eventually lost $5,000,000 by taking over the wheat. Was there not a profit?


James Garfield Gardiner: There was a loss of $11,800,000 on the handling of the 1935 crop, of which $5,600,000 odd was for storage and carrying charges, and about S6.100.000 went to the farmers in an increased price, which amounted to about four cents a bushel on the wheat delivered to the board during that period.


Robert James Manion: But there was later a making up of the loss in unloading the surplus left in the hands of the board.


James Garfield Gardiner: Well, that is another matter. I will deal with that in a moment. It has no relation to this problem.
The farmer, therefore, did not need the assistance of the government to market his crop to advantage. The carryover in Canada was reduced to 23,411,171 bushels by July 31, 1938, which is as low as it could be reduced in any year, in view of the wheat distributed here and there in elevators and in farmers' bins throughout the country. In other words, the act of 1935, together with the action taken by the government by order in council, did function as was intended when the legislation was enacted. It reduced the surplus to 23,411,171 bushels; and the farmers were able, in the two years during which that surplus was being reduced, to market their wheat at a higher price than they had experienced for many years previously.
Then the board was continued during the year 1937-38 to assist in the distribution of seed grain. That is, there was a comparatively small bushelage of wheat in the hands of the board at the end of the crop year 1936-37; that small bushelage was made available for supplying wheat to farmers for seed in the spring of 1938, and the board was continued in order to take care of that and of the winding up of the business which had been done.
The Turgeon report was brought down in the spring of 1938. During all this period of activity the Turgeon commission had been sitting. Before the report was brought down, because of public demand for a statement of policy, the government announced that it would be impossible to set up a new policy for handling the crop of 1938. It was announced that the wheat board would be continued for the year, a price set, participation 
certificates issued, and if the world price did not equal the set price the government would take any loss.
When the Turgeon report was presented to the government on May 4, 1938, and tabled in the house on May 9, 1938, it stated what I read at the beginning of what I have had to say this afternoon, namely, that:
For all these reasons (and notwithstanding the adverse considerations to which I have referred in relation to government boards) I do not feel that I can suggest the immediate dissolution of the Canadian wheat board.
I may, however, call attention to the fact that even before that report was made available, a statement had been made, I think in this house, regarding that matter. The report continues:
There is a strong possibility that conditions may develop which will require a measure of assistance in the marketing of the coming crop, and I do not know, of course, how long these conditions may continue, after the final chapter of this report is written. In the meantime, I can think of nothing better-
It is well to consider the exact wording of that sentence.
In the meantime, I can think of nothing better to suggest than that the board be maintained to meet any situation which may arise.
Before making that statement, he had referred to the fact that there were uncertainties in Europe, that there was the possibility of a great carryover, 900,000,000 bushels-it developed later that it was over a billion-and that there were other developments which were taking place during that year.
Thus, through force of circumstances a set of conditions similar to those in 1932, a world supply for export of over 1,000,000,000 bushels, and a falling price, had to be faced, and the only method of meeting them was provided along the lines of the legislation of
1935.	In other words, as a parliament we -had not taken action prior to 1938 which made it possible to meet a situation of that kind in any other way then in the manner provided in the legislation of 1935.
There are those who maintain that we are in the same position this year. Whether that is right or otherwise, we have decided, as has already been stated, through the bill which has been introduced by the Minister of Trade and Commerce (Mr. Euler) to continue the wheat board this year to deal with any emergency which exists or may come into existence during the year.
On August 4, 1938, the price was set at ,80 cents a bushel, basis No. 1 northern at Fort William. From the beginning of August until now the government has. taken delivery of 266,000,000 bushels of wheat at 80 cents a

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bushel No. 1 northern, Fort William. I think I am right when I suggest that all of that wheat would naturally be delivered in the first instance to the board, but it would not all remain in the hands of the board during all this time. There is probably a considerable part of it in the hands of the trade at present, and probably, as the year goes along, the greater part of it will pass through the trade into consumption.


Mr. JOHNSTON (Bow River):: How did the government arrive at the 80 cent price?


James Garfield Gardiner: That is the set price.


Charles Edward Johnston: But what was the basis on which it was set?


James Garfield Gardiner: I shall deal with that later. It is a matter of opinion, largely.


David Spence: It would be pretty hard
to get it at that, would it not?


James Garfield Gardiner: Yes. The average price of wheat to date has been 62 cents for No. 1 northern at Fort William, and I may say the fear that the price would perhaps be 62 cents might have had something to do with the decision which was reached. The difference between what has been paid for the wheat and what it would bring in the market has been on an average 18 cents. This difference would be carried approximately through the grades. Therefore the total difference between what the farmer received and the average price for the period amounts to approximately $48,000,000. I do not wish the house to conclude from that statement that there will be a $48,000,000 loss. As was pointed out by the leader of the opposition (Mr. Manion) a minute or two ago, while we thought at one stage a very great loss would have to be taken on the wheat which had been accumulated by the previous wheat board, when that wheat was finally sold such a loss was not taken. But up to the present time there has been paid to the farmers $48,000,000 more than could have been realised for the wheat at the market price.
On February 16 last, as reported at page 1035 of Hansard, I pointed out that the 1935 act operated merely to pay a bonus, and it required the experience of 1938 to prove how inequitable such a bonus could be. Those with good crops were drawing as high as from $3 to $7 an acre from the treasury on wheat which had already brought them a gross return of S10 to $20 an acre.
In the fall of last year Premier Bracken of Manitoba called a conference in Winnipeg to discuss agricultural problems. This conference met from December 12 to 15, 1938. The conference was well constituted and
admirably conducted, and published a comprehensive report of the papers presented. Following this conference a committee, known as the western committee on markets and agricultural readjustment, was set up. It held a meeting in Regina and a later meeting in Saskatoon on February 14, at which the following resolution was passed:
That in view of the present international position with reference to the marketing of wheat, and of the importance of the wheat industry within the general economy of the Dominion of Canada.
And of the necessity of the continuance of protection for western wheat growers, at least to the extent of the protection afforded to them during the crop year 1938-39, and pending the determination of a permanent western wheat and agricultural program to which this committee is devoting and proposes continuously to devote its study and attention.
The dominion government be requested to establish as its wheat policy for the crop year 1939-40:
(1)	The continuance of the *wheat board for 1939-40.
(2)	The setting of a guaranteed price for
wheat of at least 80 cents for No. 1 Northern, basis Fort William.	.
In addition to the foregoing the committee considered the possibility of subsidiary assistance, as follows:
The committee, while it believes that the wheat industry by reason of its very nature and of the position which it occupies in the national economy, requires specialized consideration, is also aware of the difference between the problem of protection for the wheat industry, the problem of that limited class of farmers who grow coarse grains for sale, and the problem of those farmers who by reason of drought or other calamity suffer a total or partial crop failure.
In view of what may evolve as the particular needs of the twro last named classes, the committee submits to the government for consideration the extension to those classes of some system of reasonable assistance and in particular ask the dominion government to consider some subsidiary assistance by way of a crop insurance plan or some other method to assure all farmers an improved minimum maintenance income.
To that end the committee will be prepared to assist the government in the consideration and the formation of any such subsidiary scheme, or of an adequate long term plan.
This was the resolution passed by the committee which was set up following the conference in Winnipeg, after discussions which were held first in Regina and later in Saskatoon, on February 14. From that resolution it will be noted that the committee recommended the continuation of the 1938-39 wheat board with a fixed price of at least 80 cents per bushel, basis No. 1 northern at Fort William. In that regard I would again direct attention to the statement I made a moment ago, that the government has already introduced legislation to provide for con-

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tinuation of the wheat board, to act in connection with the marketing of the wheat crop of 1939-40.
The committee was unable to. recommend anything different for the 1939-40 crop from what we had for the 1938-39 crop. Its recommendation was that we carry on exactly as we had operated in 1938-39. It was further suggested that some thought be given to a policy which might afford some assistance to the growers of other grains, possibly through a form of crop insurance.
The second recommendation, having to do with the fixing of an 80 cent price, is a little difficult to understand in view of the definite information which was in the hands of the members of that committee in regard to the inequalities under the 80 cent payment last year. Professor E. C. Hope was invited to address the conference which met in Winnipeg, on the subject of what the price of wheat means to western farmers. Professor Hope is connected with the university of Saskatchewan, in the province where the greatest amount of wheat is grown; he makes economic studies in connection with agricultural matters. He said:
One more word I might say about the present system of bonus this year. This year it may cost the federal government $60,000,000-we don't know-but whatever it is, personally I think it is about the most unfair kind of bonus you can possibly give western agriculture, because it gives a definite bonus to the man with a big crop, and nothing to the man with a crop failure. There is no bonus on coarse grains. The farmer with no crop is out of luck. If there is no change in policy by next spring we will have a shift to increased wheat acreage. If I were a farmer I would plant more wheat next year. Why? Because oats are 15 cents a bushel and wheat is between 58 and 60 cents a bushel.
He was speaking of the prices on the farm, not the prices at Fort William.
A farmer would be dull if he did not react in this manner; and this is exactly what he is thinking of right now. To make the bonus fair, if it should be necessary in another year, it should be based on the total acres of crop land.
This is the opinion of the man who has been paid by both the government of Saskatchewan and the federal government to study this question from an economic point of view.
To make the bonus fair, if it should be necessary in another year, it should be based on the total acres of crop land. In western Canada we have approximately 60.000,000 acres broken up-summer fallow, oats, barley and all crops combined. One dollar an acre on all land broken gives no special emphasis on either oats, barley or wheat. It gives equal emphasis to all, and if wheat is sold at, let us say, a market price of 40 cents the total cost would be the same this year and probably some wheat would be fed. This wheat is not fed at 60 cents.

At a dollar an acre basis it wouldn't cost any more money to the government of Canada. But bonusing the price of wheat prevents the very thing you are trying to do, it does not help to feed any of that surplus. As long as the farmer can get 60 cents for wheat he will not feed wheat to hogs.
This, let me repeat, is the opinion of Professor Hope, who is connected with the agricultural school at the university of Saskatchewan, in the very centre of the wheat growing area, Of course he takes the simplest way possible of setting up an acreage bonus; he says, "If you get a dollar for every acre broken up in western Canada, it will amount to exactly the sum it is estimated will be lost this year as a result of handling the crop under the plan followed in the past."
The government of Saskatchewan, the greatest wheat growing province in Canada, had a full study made of the matter. I think I can say without much fear of contradiction that the minister of agriculture of that province is easily the outstanding agricultural authority of western Canada. He was one of the ablest officials of the department which I now have the honour to administer before I took over this department, and before he became minister of agriculture of the province of Saskatchewan. He was so moved by the inequalities resulting from the payments made last year under the 80 cents set price which resulted in the expenditure of this large amount of money, that he had a man appointed to make a complete study of those inequalities; and I think the facts as I placed them on Hansard on February 16 have convinced everyone who read them that the inequalities under that system could not properly be continued. Knowing as we do that so many districts with low yields got such small consideration and so many districts with high yields got a great deal of consideration, it would be difficult for a government to continue a policy which would maintain all the inequalities of the system that we had during the last year.
Some criticism has been made to the effect that the government should have known, before setting the 80 cent price, that these inequalities would develop. Well, I may say, Mr. Speaker, that the government did know that some inequalities were sure to develop, as soon as we were operating on a falling price market, with an unequal crop. There was some indication of that at the time the price was set, but any indications that there were then were accentuated by what happened from that time on. We knew as a matter of fact when we set the price last year that we would take a loss. We did not anticipate a loss as great as may develop, but we were prepared to take some

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loss to assist the farmers who had come into the difficulties of a world surplus immediately after eight years of crop failure. Rust and grasshoppers added to the inequalities, even after that price had been set.
I still think, Mr. Speaker, that the government took the only move that was open to it, with the legislation which was on the statute book, when that price had to be set in the year 1938.
Immediately the price was set I was asked by the government to make a personal study of the problem with a view to evolving a plan which would remove the weaknesses of the present system, and possibly put into effect as soon as possible the recommendations of the Turgeon commission. I personally drove over a considerable part of the wheat area, during harvest. And while people were thankful for the bonus where there was wheat in quantity, I heard nothing but criticism of the inequalities of a system which paid $4.50 an acre to the man with thirty bushels to the acre, and nothing to the man with two bushels, who had to keep his seed. That is, he had nothing to sell, when he had only two bushels to the acre, whereas the man with thirty bushels to the acre was able to secure from the sale of his grain, even at the market price, $15 an acre, and he got an additional $4.50 an acre from the treasury. The one man who already received $15 an acre at the market price received $4.50 from the government, while the other one went on relief at $20 a month.
The Saskatchewan government collected records of the whole area, and forwarded them to the government here. These records proved to me conclusively that the inequalities of the system could not be continued. I so stated to the house on February 16. Now, I ask hon. members, what do the records show with regard to the handling of the 1938 crop, in relation to what could have happened had we had a crop similar to that of, say, 1928?
The suggestion was-I think it is the suggestion of the printed submission of the western committee which met in Saskatoon, but if it is not, it certainly was the suggestion made to the government at the time the submission of the western committee was placed before us-that the price of 80 cents should be announced now. It was intimated that the announcement of such a price might have some effect upon the acreage that would be seeded to wheat in the spring of 1939. In reference to that I would again remind the house of the statement by Professor Hope, that the continuation of the policy, and particularly the announcement of it, could have

no other result in the spring of 1939 than to increase the acreage which would be seeded to wheat in the western provinces.
The crop of 1928 resulted in a yield of 544,598.000 bushels of wheat. I ask the house if it would be possible for the government or the house to take the position at this time that the price of 80 cents should be set for the crop of 1939, in the light of the fact that we may have a crop as large as that of 1928. That is always a possibility in western Canada, as every western man knows. Wo are seeding approximately the same acreage of wheat now that we were in 1928, and with proper weather conditions we can again harvest a crop of approximately 550,000.000 bushels of wheat. If we should harvest a crop of 550.000,000 bushels of wheat we would have 500,000.000 bushels to sell. Or. if we had a set price of 80 cents, and the price remained at 60 cents on the market, there is nothing surer, Mr. Speaker, than that in the fall of 1939. 500.000.000 bushels of that crop would be delivered to the government of Canada, leaving in the farmers' hands sufficient to seed the crop of the succeeding year.
Well, at an 80 cent set price and a 60 cent market price it would mean $100,000,000 to the treasury of Canada, and would mean twenty-two per cent of all the revenues collected by the dominion into the federal treasury. I have said on one or two previous occasions that the fanners of western Canada are reasonable men. I have always found them so. I have said that the farmers in western Canada have appreciated what the Dominion of Canada-not the government of Canada- the people of Canada have done during these trying times in order to assist them. But I suggest that the farmers of western Canada-


Robert James Manion: They did not show much sign to us.


James Garfield Gardiner: They probably did
appreciate some of the effects that some of this legislation I have been outlining to the house was going to have.


Robert James Manion: If they could have foreseen that, they would not have voted for you people.


James Garfield Gardiner: In addition to the amount which such a decision might risk, if the price were now set at 80 cents, as Professor Hope suggests we would be giving an invitation to everyone in the west to sow more wheat this year. If, as suggested in representations from the west, the farmers should know -before their crop is sown what the government is going to do, then in the light of the experience of this year a price
2620	COMMONS
Farm Assistance-Acreage Payment
of 80 cents with no change in policy would be most inequitable; it would result in a most inequitable distribution of the funds made available out of the treasury.
It is also apparent that the setting of an 80 cent price is asked for only as a temporary expedient. We have been dealing with the problem now for ten years, as though we were passing through some temporary experience. Yet every experience we have had has been gone through periodically, ever since Joseph first dealt with it in Egypt, and I think it will continue to recur from time to time wherever wheat is sown. Because after all the best varieties of wheat grow only in the areas in which there is a comparatively dry climate. We in western Canada are suffering from exactly the same difficulties as those which other countries where wheat has been sown have suffered from, periodically, over the years gone by.
I think it is time we recognized a few of the obvious facts when we are dealing with this question in the house. Wheat of a kind can be grown almost anywhere in the world; therefore you cannot force your wheat upon anyone. There are a great many foods which can be used as substitutes for wheat in a diet. I believe Germany has proven that conclusively in recent years. Wheat is not a luxury food. It must be eaten in considerable quantities by working people, if it is to be consumed at all. It must therefore be available at a competitive price. There is one lesson which we should have learned from our experience with stabilization which has apparently been forgotten. Most of the work done by boards has not resulted in further returns to the farmer. We purchased wheat at a given price during all the period from 1932 to 1935 and carried it at government expense. When the Liberal government came into office in 1935, we estimated that if we sold the wheat at the price then prevailing, which was much above the price at which it had been purchased, we would lose some 821,000,000. We sold wheat for the next two years and received $80,000,000 more than the farmer had got for it, plus his first costs to Fort William. But not another dollar went to the farmer. Why? Because it cost the government of Canada, or, I should say, it cost the wheat board, approximately $76,000.000 to carry that wheat.


Charles Avery Dunning: Over what period of
years?


James Garfield Gardiner: That is for all the
years from 1931 down to 1938. Every dollar of that money went to those with carrying facilities. In handling the 1935 crop alone,

as I stated earlier, we lost $11,858,000; only $6,182,000 of that went to the farmer in increased prices, while $5,676,000, or almost half of it, went to those with the carrying facilities. I include in those with carrying facilities, not only the elevator companies but also those who carry the financing. In handling the crop of 1938 we have paid 18 cents a bushel over the average market price of the wheat to the producer, but we shall also have to pay, on top of that, the carrying charges, including elevator storage, before *we can get a cent of money back into the treasury of Canada. If the price remains where it is until the wheat is sold, we must pay those charges on top of what we have already paid to the farmer.
If this policy is going to be continued, it seems to me that there can only be one logical result, namely, that the government will be compelled to take over the handling facilities as well as the handling of the wheat. It seems to me that neither this nor any other government can afford to be operating a business which operates only in the centre of the transaction, taking the wheat from the trade, bearing the expense and handing it back. That is all we have done. We take delivery from the producer, through the elevator or over the platform, and then carry the wheat until the outside trade requires it, when it is turned over to somebody to be resold to the miller in England or somewhere else to be milled into flour. As long as we stay in the middle of the trade, we shall pay for the carrying charges on top of any price which we may pay to the farmer for the wheat when we take delivery.
There is another fact which appears to have been overlooked. If hon. members will examine the prices of the last four years they will find that there is a marked difference between the trend of prices when the open market operates compared with the trend under a government monopoly. With your consent, Mr. Speaker, I should like to place on Hansard, in order that it may be available to everyone, a statement showing the weekly average cash price, No. 1 northern wheat, Fort William. This statement covers a sheet and a half of foolscap, and it would take some time for me to read it.


Walter Edward Foster: With the unanimous
consent of the house.


James Garfield Gardiner: By the way, this statement will answer the question which was asked some time ago as to whether the average price was up or down when delivery was taken at Fort William. In 1935-36 we had practically all the wheat, and the result

Farm Assistance

Acreage Payment
was that prices remained at a level. They varied little from week to week. In 1938-39 exactly the same condition prevailed. In the intervening two years there is a considerable variation, showing that there was competition in buying and selling. If the price remained level at the top of the market, or even at
the average of the market, this might be desirable from the producers' point of view. If the price tends to remain level at the bottom, it is another matter. The following table bears out the fact that there was a marked difference in the centre two years of open selling as against the other two years:
Weekly average cash price No. 1 Northern Wheat, Fort William (Note: Figure after dash (/) represents eighths of a cent)
Month	Week	1938-39	Week	1937-38	Week	1930-37	Week	1935-36ending	ending	ending	ending	August	6	82/4	7	132/7	1	100/2	10	84/413	82/7	14	134/6	7	108/1	17 -	83/120	75/4	21	131/6	15	102/1	24	86/227	69/4	28	129/1	22	102/1	31	84/29	96/7	September	3	63/1	4	128/7	5	96/5	7	84/710	59/3	11	132/	12	100/3	14	89/717	64/7	18	130/2	19	105/1	21	94/224	65/7	25	134/4	26	109/6	28	91/130	65/2	October	8	60/6	2	143/	3	108/2	5	94/215	62/4	9	138/2	10	110/1	12	92/622	63/	16	139/2	17	113/7	19	90/229	60/4	23	147/7	24	111/	26	88/630	143/2	31	109/7	November	5	58/2	6	135/6	7	108/4	2	85/712	58/5	13	137/5	14	108/	9	84/619	60/2	20	137/3	21	108/5	16	84/626	59/1	27	127/7	28	108/3	23	86/430	86/7December	3	59/5	4	133/2	5	112/3	7	84/310	61/1	11	133/5	12	114/6	14	84/217	60/5	18	138/	19	123/7	21	85/323	59/5	24	138/3	26	124/5	28	84/430	61/2	31	142/6	January	7	60/5	8	150/7	2	128/3	4	85/214	59/1	15	151/	9	127/6	11	85/121	59/4	22	147/1	16	127/5	18	84/528	60/4	29	147/6	23	122/6	25	84/630	120/5	February	4	60/1	5	147/4	6	124/7	1	83/711	59/3	12	144/5	13	129/6	8	83/18	60/3	19	143/	20	128/2	15	81/225	60/1	26	144/2	27	125/1	22	81/129	82/4March	4	60/6	5	140/4	6	128/1	7	81/711	59/6	12	136/5	13	130/5	14	83/218	58/5	19	135/3	20	136/	21	82/425	59/3	26	136/	27	143/	28	81/1April	2	146/7	3	147/5	4	79/59	146/3	10	147/5	11	79/416	142/3	17	137/7	18	81/423	136/6	24	134/6	25	81/630	126/1	May	7	118/4	1	130/2	2	79/214	116/7	8	131/2	9	77/521	115/1	15	128/4	16	77/528	111/	22	134/	23	76/29	128/4	30	75/June	4	118/1	5	120/5	6	77/411	113/4	12	117/7	13	77/418	116/6	19	121/5	20	80/25	113/6	26	127/5	27	83/4July	2	105/4	3	142/5	4	84/49	98/3	10	145/7	11	92/16	100/1	17	150/7	IS	93/23	100/4	24	146/	25	93/630	94/3	31	139/2	
Farm Assistance-Acreage Payment
I think an examination of this table will disclose certain obvious facts. Let us examine a market created by the circumstances prevailing in order to satisfy ourselves as to where a monopolized market would likely find its level. I think this will give us something which will be worth while considering. We have in Canada 419.000,000 bushels of elevator storage capacity. We have about twenty-five elevator companies, including the pools, operating most of this storage. Small companies, individuals and the government operate the remainder.


Robert James Manion: That would include port and country elevators?


James Garfield Gardiner: Terminal, transfer and all types of elevators. Three large milling corporations operate eighty per cent of the milling capacity of Great Britain, and there are buyers from other countries desiring to buy wheat in Canada. When there is an open market, the companies which have the wheat in. store in Canada are anxious to dispose of it at a reasonable price and thus save carrying charges. That is, once they have taken delivery of wheat and have it in their storage facilities, they are naturally anxious to sell it at a price which will get them out of the transaction. Therefore, they become active agencies to sell the wheat. The millers are anxious to make sure that they will have a proper proportion of our strong wheat to put in their mix. There is, accordingly, constant competition between buyer and seller. There is a group anxious to find markets, and there is another group anxious to establish stores under their control. That is the condition under the open market, and the tendency of the system is to get the best possible price even though the competition causes constant variations. It is true that the best price may not prevail at a time when the farmer is delivering his greatest volume of wheat, but the tendency is for prices to take a higher level under competition than they do under other methods.
But let us examine the condition when the government has all the wheat. Because the price was above the market in 1938, the government took delivery of practically all the wheat. As there was no chance of the set price being reached, the farmer rushed all the wheat to the government as soon as possible and got his money. The wheat was then in store at the government's expense. The elevator operator has not the same reason to be an agent for its sale. I do not say that he is not taking part in the sale of our grain, but he has not the same reason to be active. The usual charge for storing is a
[(Mr. Gardiner.]
cent a bushel a month. Therefore, the elevator operators have no special reason to be anxious about markets. A cent a bushel a month will pay the average cost of carrying grain. I may say that the wheat board is not paying that much for spreading wheat, say from December or September into May; it is paying considerably less than that, but the usual charge to the producer is a cent a bushel a month.
The buyer knows who has all the wheat; he knows it is the government of Canada, and he has no reason to be anxious about his supply. All the wheat is under one ownership. Since the government is meeting the carrying charges, he tends to buy wheat as he needs it. If he is a wise business man-and these importers all are-he will come and get it at the bottom rather than at the top of the market. The result is that we carry the grain at our expense for both seller and buyer, and the price levels off at the bottom of the market rather than at the top or in the middle. I venture to say that Canada has lost from five to ten cents a bushel on her wheat this year through having it all in the possession of the government.
With these facts in mind, and many others which I have not time to cover, it would be impossible for the government to continue to sit indefinitely in the middle of the grain trade-it may do so for a time in order to deal with an emergency-taking delivery of grain from producers, paying a bushelage bonus on it, storing it until the trade requires it and then handing it back to them to be exported. That makes of us wood haulers and bottle washers for the importing countries. To my mind, those are not the best circumstances under which to handle the grain crop of the farmers of this country.
It is evident that Mr. Justice Turgeon recognized the importance of retaining the competitive element in the trade. Not only did he recommend that the government get out of the grain business, but he also recommended our encouraging pools rather than a pool. He even suggested that these pools should operate on the market much as other dealers. Having decided not to set a price of 80 cents a bushel at this time and having determined to ensure a certain return per acre to the wheat farmer, it became necessary for the government to consider setting up a system which had some chance of being permanent and which at the same time would tend to carry the farmer over his difficult years. This is the only method by which the industry can be rendered permanent on a basis which will make homes upon farms in western Canada a possibility.

Farm Assistance-Acreage Payment
It has been proven over and over again that twenty bushels to the acre of wheat can be produced at a cost of from 30 to 40 cents a bushel. We have had a great deal of discussion about the cost of producing wheat. It costs a certain amount to work an acre of land whether you get any wheat off it or not; it costs a certain amount to harvest it if you do get any wheat off it. It has been proven over and over again, I say, that twenty bushels to the acre of wheat can be produced at a cost of from 30 to 40 cents a bushel. For every bushel a man gets over twenty his costs per bushel decrease. When he has a crop of twenty bushels or more per acre, his other crops are usually good in proportion.


Charles Edward Johnston: What is the basis of that estimate of from 30 to 40 cents a bushel as the cost of production?


James Garfield Gardiner: Estimates have been made by authorities in Saskatchewan university, and there are also the figures submitted by the Saskatchewan government to the Rowell commission.


Major James William Coldwell: Professor Hope gives quite a different set-up.


James Garfield Gardiner: He gives a set-up based on the cost of the wheat itself, but it amounts approximately to this. By adding debt costs and other items he arrives at another figure.


Major James William Coldwell: But are not those legitimate costs?


James Garfield Gardiner: Not in estimating the cost of producing wheat.


Victor Quelch: Professor Hope gives a figure of ninety cents a bushel.


James Garfield Gardiner: You will find upon a close study that he arrives at pretty much the same figure I have given.
A crop of twenty or more bushels to the acre, with a reasonable price-I say a reasonable price, not the price that sometimes prevails-would therefore give a profit to the average farmer. If the government, by paying a bonus even above a small profit, makes it more profitable to produce wheat than anything else, it tends to increase the acreage in wheat. Since the 30 cent costs are on large mechanized farms, and the 40 cent costs on smaller farms, the tendency to change from the small to the large farm is greatly encouraged by increasing profits in that manner.
Just as the bushelage cost decreases as the production increases above twenty bushels to the acre, so the bushelage cost increases as the production decreases below twenty
bushels to the acre. The average wheat farmer starts to get into difficulties when his crops run for any length of time below eighteen bushels to the acre, and those difficulties come sooner or later unless he is getting a very high price over a considerable term of years.
There would be great difficulty in checking every individual farm in order to determine its average yield. It is not difficult, however, to determine the average yield of a township or municipality. We now determine the average yield of municipalities, and so do many authorities, and in determining these average yields they usually determine at the same time the average yield per township. A township in the west is an area of land averaging six miles square, and all wheatgrowing areas are mapped out in sections of that type.


Charles Edward Johnston: Would the minister get that information from the municipalities?


James Garfield Gardiner: From many sources. It is coming to my desk all the time in dealing with relief, and so forth. We get it first from the municipalities. It is checked by the provincial authorities and then we check it. The railways and the banks also have their own sources of information, and loan companies have their own information with respect to certain areas. The newspapers also make up every year estimates, which are very close to the facts.


Charles Edward Johnston: There would be a variation in the estimates.


James Garfield Gardiner: We would prepare our
own estimate, but we would check it with the estimates of others before determining our final figure.
It has been decided to make use of these facts in setting up a system of assistance which will be helpful in retaining the agricultural industry in the western provinces.
About eighty per cent of the wheat is usually delivered to the elevators between August 1 and December 1 of each year.
The average 320-acre farm in western Canada has eighty acres of wheat grown upon it. The average 480-acre farm may have as much as 200 acres of wheat. In some parts of the west the 320-acre farm is the family unit, and in others-it is necessary to have 480 acres in order to farm to advantage.
These facts are also taken into account in deciding upon a plan.
It is an advantage from every point of view not to encourage the production of wheat to the exclusion of other crops. Wheat, therefore, is only used in the legislation as

Farm Assistance-Acreage Payment
a check upon the production, and the acreage bonus is proposed on half the cultivated acreage up to 200 acres on any farm. If anyone prefers to cultivate more than 400 acres, the government do not consider that it should be interested in helping, at any time, through bonus, in connection with the additional acreage over the 400 acres.


Charles Edward Johnston: Would it have to be in crop?


James Garfield Gardiner: The acreage would
have to be cultivated, but not necessarily in crop.
After having given full consideration to all these matters the government proposes to pay an acreage bonus for 1939-40 not to exceed $1 an acre in townships where the average yield is from eleven to fifteen bushels an acre; of $2 an acre in townships where the average yield is from six to ten bushels an acre; and of $2.50 an acre in townships where the average yield is from nothing to five bushels an acre, provided wheat is not above 70 cents a bushel If it is above 70 cents on an average from* August 1 to December 1, there will be a deduction of one-tenth for every cent that it is above 70 cents, which will result in the assistance disappearing at SO cents a bushel.
This will be true of all townships in municipalities with over a five-bushel average. Those with five bushels or less, which will take in most persons up to six or seven bushels provided it is a crop failure year, will obtain the assistance no matter what the price may be.
If a man has no wheat to sell, it makes no difference what the price is. If he has a crop failure, as he had in 1937 or 1931, the payment is $2.50 per acre on half his cultivated acreage with a maximum acreage upon which payment can be made of 200 acres and a minimum of 100 acres and the payment will be made irrespective of what the price of wheat is.


Mr. ROWE (Dufferin-Simcoe):: What if his yield is forty bushels to the acre?


James Garfield Gardiner: He would not get
anything under this plan. He would not get anything if his yield were from eighteen bushels up.


William Earl Rowe: Even in
the bad district?


James Garfield Gardiner: He would scarcely have that much to the acre* where the average yield is fifteen bushels.


Victor Quelch: What about a crop failure?


James Garfield Gardiner: There are certain conditions set out in the legislation. In this proposed legislation, 1939-40 is declared an emergency year, and this system will apply

to 1939-40. The reason being that we have just come through seven or eight crop failures in many parts of the west where the farmers did not get the advantage of the 80 cent price this year because they had no wheat. So we propose in the bill that this particular year shall be called an emergency year. From that time on, the assistance will be given on the same basis, with the provision that the government can vary the 10 cent range which controls the amount of the payment and thus keep control of the cost to the government.
To illustrate how this compares with the assistance given under the 80 cent guarantee given in 1938, perhaps I might give some figures. On a half section of land, all under cultivation, assuming that, the farmer had No. 1 northern wheat and sold at the average which might have been secured between the first of August and the first of December last; assuming, further, that the farmer grew about eighty acres of wheat on the half section; and assuming, still further, that farmer retained two bushels to the acre for seed, the farmer with fifteen bushels to the acre and receiving 80 cents a bushel Fort William under the guaranteed price could have sold his wheat for $676 on the half section.
Under the proposed plan, assuming that the wheat is No. 1 northern, he could have received, at the average price prevailing, $520 for his wheat, and he could have received, as an acreage bonus, $160, giving him a gross return of $680 from wheat sale and government assistance. If I may be permitted I should like to place on Hansard a table which will show the comparative amounts that could have been obtained in 1938 under the 80 cent price, with the amounts that could have been obtained had this system been applied to 1938 in the manner I have indicated, with the average price as it was from August to December at 65 cents a bushel on the market.


Walter Edward Foster: The minister may put the table on Hansard with the consent of the house.


Robert James Manion: The minister has given one figure. Can he give the figures for both sides of the question, showing how much comes from the government in each instance?


James Garfield Gardiner: In the particular case I have described it would be $160, and it would be $160 in every case from there down to eleven bushels; from eleven bushels down to five bushels the amount would be $2 an acre on half the acreage, and from 5 bushels down, it would be $2.50 on half the acreage.

Farm Assistance-Acreage Payment
The object of this plan is to set up a permanent policy for western agriculture. It gives the farmer assistance at the time he needs it. The man with 20 bushels an acre would be in a position to sell 18 bushels and therefore would receive, on the same basis, $720. That is, he would obtain that as his selling price in any case, because of having grown wheat without government assistance at all. The man with 19 bushels would get $680, or the same as the man with 15 bushels obtained after receiving government assistance. It figures out in this way: even after the man with 15 bushels has received assistance, he gets the same amount as the man who had 19 bushels and had no assistance; and most of those receiving 16, 17 and 18 would find themselves in townships averaging 15, and therefore would share in the acreage payments in most years. If, therefore, you take the table as I have outlined it, and as I shall place it on Hansard, and compare the amounts which would go to the farmers operating under these conditions, taking at the same time the figures above-I have given five above 15 acres- you will get some idea of the way in which the system will work in practice. If one applied the system to those operating larger farms, and therefore receiving payments up to 200 acres, one would find that all those who had 10 bushels or under would have received more under the new plan for the 1938 crop up to 400 acres of cultivated acreage than they did receive, provided they had had 200 acres cropped to wheat. Those from 11 up would have received slightly less until they got to 15 and still less up to 20. In other words, under the system which is proposed, farmers who have up to 15 bushels an acre and are farming a half-section would get more money under this system up to 15 bushels an acre than they did get under the 80 cent set price last year, in years when there was an emergency or when there was a crop failure; and so far as those farming three-quarters of a section are concerned and who would have probably 400 acres under cultivation, they would obtain more up to 10 bushels an acre. Beyond that, they would have got more under the 80 cent price.
To indicate the weakness of the policy under which the 80 cent payment is maintained as compared with this, one has only to point out that those who grew 20 bushels to the acre could have obtained last year $10 an acre for wheat; those with 30 bushels to the acre would have obtained $15; and those with 40 bushels to the acre would have received $20, without assistance.
It is difficult to justify the payment of another $3 to the first man, more difficult
to justify the payment of another $4 to the second, and even more difficult to justify the payment of $6 to the third man. It is doubtful if anyone could justify asking the people of Canada to make this latter payment, and if it were done it might endanger any method which might be set up for bringing assistance to the grain-growing industry as such in western Canada or obtaining suitable assistance in time of crop failures. This is a matter that should be given careful consideration in dealing with this question. If we are to set up a system which will tend to become permanent we must be reasonable in what we are suggesting. We must make it appeal to the reason of people outside of western Canada as well as to people in the west, and it seems to me that it would be rather difficult, even in a year like last year, to justify paying $6 an acre more out of the treasury of Canada to a man who was already able to get $20 an acre for the wheat he sold off that particular land. If we attempted to make that a permanent policy in Canada to apply to difficult years, I think we should have a great deal of difficulty in keeping it on the statute books. And now I will place the figures on Hansard:
Return 1938 Return under new plan
Yield	basis 80 cents	applied to	1938 cropper acre	No. 1 N.	Per acre(bus.)	Fort William	Total	of wheat20	$936	$720	$9 0019	884	680	8 5018	832	640*	8 0017	780	600*	7 5016	728	560*	7 0015	676	680	8 5014	624	640	8 0013	572	600	7 5012	520	560	7 0011	468	520	6 5010	416	640	8 009	364	600	7 508	312	560	7 007	260	520	6 506	208	480	6 005	156	520	6 504	104	480	6 003	52	440	5 502	400	5 001	400	5 000	400	5 00
* To produce a 15 bus. average, these returns would be increased in most cases.
This table shows what the result would have been on a half-section farm in 1938. It will be acknowledged that it would have worked out much more equitably than the SO cent bonus had the government given no assistance to the price which the market made possible, but paid the acreage bonus. The average price available to farmers under this system, to a man at his own local point, with conditions prevailing such as I spoke of a

Farm Assistance-Acreage Payment
moment ago, a man farming a half-section and having 15 bushels to the acre, would have been 65 cents a bushel. This year, of course, he is naturally complaining, because without a set price he would have had to take in the neighbourhood of 40 cents a bushel for that same wheat. As I said a little while ago, it would have been possible, had we been handling wheat in the open market, for him to get 70 cents instead of 65 cents; in other words the open market might have been 5 cents higher. The result would have been more equitable. Up to 400 cultivated acres and all those with less than 11 bushels per acre would have received more than they would have received with the 80 cent set price. On all the acreages lower than 320 which come under the act the advantage in favour of the new plan would be even greater.
Someone might criticize the payments on the higher yields, say from 12 to 15 bushels, but I think they can be justified on the ground that a charge is being made of one per cent of all grain which comes to the terminals. That is, the proposal in the measure is to take one per cent of all the grain that comes to the terminals, sell that grain, put the money in a fund, and then if necessary contribute to that fund from the treasury in very much the same way as we do now in our schemes for setting up pension payments to employees, or in any scheme for the provision of insurance payments to unemployed under an unemployment insurance scheme.


John Ritchie MacNicol: But you do not put
them up; you have no unemployment insurance scheme.


James Garfield Gardiner: We have not up to date, but we are proposing one from time to time, and it would have those features.
The main criticism to date is that we have fixed the price at 60 cents. I wish to make it plain that this proposal does not set a fixed price for wheat. We have not fixed a price for wheat at all if this proposal goes into effect. We have fixed, by this and the proposed cooperative marketing measure, the twin measure I spoke of a moment ago, which is suggested in order No. 17, an assured amount which farmers can get per acre, which in most cases is a little more than enough to cover cost of production as figured by the university of Saskatchewan. By adopting the two measures I have indicated, in the one, the cooperative marketing measure, a readiness to guarantee a sound system of pooling conducted by producers and those with facilities who are not producers-


Mr. ROWE (Dufferin-Simeoe):: Is this
applicable to the whole of Canada?
[Mr. Gardiner.l


James Garfield Gardiner: To the four western
provinces. The adoption of this system will assure to farmers a means of securing an advance on their grain every year up to 60 cents a bushel. They are assured by the measure proposed in this resolution the additional amount necessary to cover the recognized cost of production in emergency years, but no assurance is given in connection with other years, because it is presumed that they will get this in the ordinary marketing of the crop.
If hon. members have any doubts as to the liberality of such a plan as the measure proposed, they have only to compare the returns per acre with any hail insurance scheme we have had in western Canada, whether under a private corporation or under governments or municipal organizations.


Charles Edward Johnston: This would not apply to hail damage?


James Garfield Gardiner: No, to damage by grasshoppers or drought.


Charles Edward Johnston: What
about frost?


James Garfield Gardiner: Frost might come in in an emergency year, and rust, but not crop failures caused by these.
If I were asked how we arrived at 60 cents, which was the question asked a little while ago in regard to the 80 cents, I should say that in only two years out of the last forty-nine, for which we have the records, has wheat been below 60 cents on an average throughout the year, and in one of those years it was only one-fifth of a cent below. I read in the debates of 1935, in the speech of the then leader of the government, that up to that time in only one year out of four hundred had that been the case. But I checked for myself the last forty-nine years, and I find there were only two years during that period in which the average price was below 60 cents. In one it was 59-8 cents, and in the other it was 54 cents and a fraction. Those years were 1932 and 1933.
We therefore think that the government is taking little if any risk in a scheme of this kind as far as the 60 cent advance is concerned. In taking that position we are doing exactly what elevator companies have done over the last fifty years. You could always take a load of wheat to an elevator in western Canada and get an advance on it. In the years when prices were advancing you could get up to 60 per cent of the market price, and some farmers got even more than that. In years when the price was going down you could get probably 50 per cent or 40 per

Farm Assistance-Acreage Payment
cent of the price on the day you took it to the elevator, and leave your wheat there and sell it whenever you liked. So that as far as this system is concerned the government has worked out the point at which we think we would be experiencing the same measure of security as elevator companies have had in the past in dealing with a different situation, and it is believed that over a term of years we would take no loss in connection with the 60 cent advance thus made.
All the money which is paid out in order to help farmers under a plan of this kind is paid out after careful consideration by the government of the existing circumstances, and a decision made by the governor in council. And that decision would be made, not before the crop is harvested, but in the month of December, when everyone knows the facts. In addition to that, the payments would not be made in one lump sum, but 60 per cent would be paid in December and 40 per cent in the following March, thus making it possible for farmers who were in that position to maintain themselves on the payments made to them through the early part of the winter at a standard higher than the standard now provided by any system of relief given in any western province or anywhere else for that matter.


Mr. HOMUTH:: There would be only two periods of payment, would there?


James Garfield Gardiner: Just two periods of payment. It provides for a payment in March, at a time when we in this house and every legislature in the three prairie provinces are being appealed to to provide seed in the spring. In other words, by this system we would be doing two things. We would be attempting to take western Canada out of the position into which the western farmer has been forced in regard to financing ever since western Canada was opened up, namely, the selling of all our crop, collecting all our money when we threshed the crop, having all our creditors sitting on our doorstep the day we thresh to collect everything they can collect, and then finding ourselves trying to live through the remainder of the year in the hope that we shall have a crop next year with which to pay debts incurred during the year. Under this system, if it can be applied in western Canada, and I think it can, we would give the western farmer in his periods of difficulty the opportunity of doing what farmers have done in every other part of Canada and any part of the world where weather conditions have been sufficiently constant, that is, pay his way as he goes along
by selling his produce from day to day, week to week, and month to month, thus being able to pay his bills as they come in. We in western Canada have been on a different basis. We have experienced I think more difficulty because of the credit system we have been forced by circumstances to follow than through any other cause. It seems to me that the system just outlined would tend to get us away from this difficulty, and I believe any help which this house can give by laying down that system would be action in the right direction.
To sum up, I would say that the outstanding features of the acreage insurance plan are these:
1.	The township is used as the unit to determine yield, thus avoiding dependence on individual declarations, and also leaving some room to benefit from individual effort, while giving no encouragement to farming poor land.
2.	Wheat is used only as a means to determine the crop yield; the payment is made on half the cultivated acreage up to 200 acres, whatever is grown on it.
3.	Because of the payments I have described, encouragement is given to summer fallowing, grass growing and mixed farming.
4.	Because of the limitations referred to, the half-section and three-quarter-section home units are encouraged rather than the large farm.
5.	A charge of one per cent of all the grain which goes to the terminals forms part of a fund, the remainder of which, when necessary is provided from the treasury. This is the same principle as would probably be followed in any unemployment insurance plan which might be adopted.
6.	The year 1939 is declared an emergency year in the bill. The government must first declare any succeeding year an emergency year before the month of December.
7.	Acreage payments will be made in an emergency year of $1 an acre on half the cultivated acreage in all townships with an average yield of from 11 to 15 bushels per acre, of S2 an acre in all townships with an average yield of from 6 to 10 bushels per acre, and of $2.50 an acre in all townships with an average yield of from 0 to 5 bushels per acre.
8.	These payments will be made in 1930-40 in full if the average market price of wheat from August to December is not more than 70 cents. If the market price is more than 70 cents, one-tenth will be taken off the above

Farm Assistance-Acreage Payment
amounts for every cent that it is more than 70 cents. When it reaches 80 cents no amount will be payable under this part.
9.	In succeeding years the government will set the governing 10 cent controlling maximum and minimum.
10.	In years of crop failure caused by grasshoppers or drought, of proportions which constitute a national calamity, payments will be made in municipalities with an average of 5 bushels or under at the rate of $2.50 an acre on half the cultivated acreage, irrespective of whether it is an emergency year and irrespective of price.
11.	If this plan had been in effect in 1938 those residing in townships with an average yield from 15 bushels down, farming half a section of land with the average wheat acreage, and those with 400 acres under cultivation with 10 bushels or less, could have received more from the sale of their wheat and acreage payment than they received from the 80 cent price.
12.	As a permanent policy this measure would function with the act to encourage cooperative marketing of wheat, which guarantees a 60 cent advance. This makes it possible for any individual to assure himself an advance payment which with the acreage payment guarantees him a minimum return from his cash crop.
13.	It is impossible to estimate costs of production on a cost per bushel basis because of the variation in yield. It is comparatively easy to estimate costs on an acreage basis. The university of Saskatchewan have estimated these costs at from $6 to $8 per acre.
14.	The minimum acreage cost guaranteed under this bill on a basis of wheat usually grown on a half section of land runs from $5 an acre, where the yield is under 6 bushels, to over $8 an acre where the yield is under 16 bushels.
15.	With the bill as drawn and functioning with the act to encourage cooperative marketing of wheat, the farmer can still draw in addition through participation certificates or sale on the open market if the price permits another 10 cents a bushel before the provisions reducing the possible acreage payments begin to operate.
16.	With the two bills functioning a half section farmer with 80 acres sown to wheat, living in an area with a 15 cent charge in store Fort William, an area with an average yield of 15 bushels to the acre, could have obtained an amount equal to 65 cents a

bushel at his local elevator for No. 1 northern wheat. Those with 10 bushels to the acre could have obtained an amount equal to $1 a bushel.
17.	It has been considered wise in view of general conditions following a period of poor crops and the accumulated surplus on hand from last year to continue the wheat board. It is proposed that the wheat board function in the same manner as a central selling agency would if the cooperative wheat marketing act had been in effect. This if accepted will result in all the advantages of the above plan being immediately available and experience being gained which when normal conditions return will make the complete plan easily applicable.


Robert James Manion: If I may ask a question, has the minister any estimate to give the house as to what this might have cost the country, in round figures, if it had been in operation during the past year?


James Garfield Gardiner: Our present estimate is that even if the worst conditions we have ever experienced had prevailed it could not have cost more than about $30,000,000; and that in the ordinary year it would cost somewhere between $10,000,000 and $15,000,000. The greatest amount it could cost would be half what the existing scheme may cost this year under present conditions. I may add that in order to get that last figure you would have to take in the cost of relief, which will amount to some $12,000,000, in addition to the amount paid out already in connection with wheat.
In conclusion, then, Mr. Speaker, I should like to refer again to what I said in the beginning. I bring this measure before the house for the purpose of calling attention to a situation which has existed in western Canada for many years and to efforts which have been made to cope with the situation, with a view to bringing before the house during this session other measures that are now either on the order paper in the form of resolutions or that will be on the order paper to-morrow in that form, for dealing with agriculture in other parts of Canada. Before bringing down these measures I should like if possible to have this house establish a principle that we can apply in connection with our agricultural problems throughout Canada, If that is done the same principle can be followed in dealing with the problems of the dairy industry, the live stock industry, the fruit industry and

The Royal Assent
other branches of agriculture across this country. I believe that if we can establish a principle of that kind during this session we have at least started to give Canada an agricultural policy which will lift agriculture out of some of the difficulties it is experiencing from one end of the dominion to the other. It is with that end in view that I bring this measure before the house.
I should like to say, Mr. Speaker, that I gave an undertaking to many of the western men who left last night and the night before, that after making this speech I would delay further discussion if possible until they returned. With the permission of the house, therefore, I will move the adjournment of the debate.


Major James William Coldwell: Before the debate is adjourned I suggest that the minister give consideration to another suggestion. . I do not want to interfere at all with the undertaking the minister has given, though I have been taking copious notes this afternoon; but I suggest that this proposal is probably one of the most far-reaching concerning agriculture ever to be presented to the house, and it might be well if the minister-


Walter Edward Foster: Order. The question
before the house is whether the debate should now be adjourned. If the hon. member is speaking to a question of privilege, he may proceed, but at this time he should not make a speech.


Major James William Coldwell: I suggest that since
this question is of such widespread interest and importance, the minister should not only wait until the western. members and others have returned but that during the recess he might consider the advisability of having the Minister of Trade and Commerce (Mr. Euler) move his resolutions, and then turn the whole thing over to the agriculture committee, where it can be thoroughly gone into; because I think this program on which we are entering-


Walter Edward Foster: The motion is not debatable.


William Daum Euler: The Minister of Trade and Commerce has no resolution to move; he has already introduced the bill.


Thomas Langton Church: When will the debate be resumed?


Mr. MACKENZIE (Vancouver):: After
the recess.
Motion (Mr. Gardiner) agreed to and debate adjourned.



NATIONAL DEFENCE


[Stage Direction]
The house resumed from Wednesday, March 29, consideration in committee of Bill No. 38, to establish a defence purchasing board- Mr. Mackenzie (Vancouver)-Mr. Sanderson iii the chair.
On section 7-Maximum net profit.
Hon IAN MACKENZIE (Minister of National Defence):: We were on section 7 when we rose the other evening. I gave a figure of 15 per cent in reply to the hon. member for Weyburn with reference to contracts which would come under the five per cent limitation. That figure should be 24-4 per cent.
I desire also to refer to a question asked by the hon. member for Vancouver North; though it really should not enter into this discussion I think I should have the privilege of amplifying the statement I made the other evening in regard to the prices paid by the British air ministry for Bristol engines.
Progress reported.



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by Major A. R. Thompson, Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, His Honour, the deputy of His Excellency the Governor General, desires the immediate attendance of this honourable house in the chamber of the honourable the Senate.
Accordingly, the house went up to the Senate.
And having returned,
Mr. SPEAKER informed the house that the deputy of His Excellency the Governor General had been pleased to give in His Majesty's name royal assent to the following bills:
An act respecting the appointment of auditors for national railways.
An act to authorize an agreement between His Majesty the King and the corporation of the city of Ottawa.
An act to amend the Loan Companies Act.
An act to amend the Trust Companies Act.
An act to amend the Technical Education Act
An act to amend the Food and Drugs Act.
An act respecting Penitentiaries.
An aot to amend the Prairie Farm Rehabilitation Act.
An act respecting the Quebec Railway, Light and Power Company.
An act for the relief of Edythe Marjorie Burke Atkinson.
An act for the relief of Marie Louise Rossetti Di Rosa.
An act for the relief of Stefano Guilio Luciano Roncari.
Dejence Purchasing Board
[Stage Direction]
An act for the relief of Gertrude Saul Baker.
An act for the relief of Mary Frances Todd Lister Cardwell.
An act for the relief of Herbert John Butler.
An act for the relief of Anna Lasnier Blain.
An act for the relief of Annie March Breakey Coburn.
An aot for the relief of Mabel Gertrude Marks Lamoureux.
An act for the relief of Earl Keith Drennan.
An act for the relief of Per Ernst Martinsson.
An act respecting the United Church of Canada.
An act to incorporate the Trustee Board of The Presbyterian Church in Canada.
An act for granting to his majesty certain sums of money for the public service of the financial year ending the 31st March, 1940.


[Stage Direction]
The house resumed consideration, in committee of Bill No. 38, to establish a defence purchasing board-Mr. Mackenzie (Vancouver) -Mr. Sanderson in the chair.
Ian Alistair Mackenzie: Before royal assent I was referring to a question asked last Wednesday, when we last considered this bill, in connection with Bristol aeroplane engines. While it is scarcely pertinent to the discussion of this particular bill, I should like to amplify the statement I made the other day. I referred to prices paid by the British air ministry to Bristol Aeroplane Company, Limited, for Bristol engines. I have since learned that under the provisions of the agreement between the air ministry and Bristol Aeroplane Company, Limited, the former is precluded from disclosing the prices paid by the air ministry for Bristol engines. I have also been since informed that there is good reason to believe that the relations between the air ministry and the company already mentioned are of a confidential nature in this respect, being virtually that of a qualified partnership, and that it is deemed inadvisable by the air ministry to disclose either the prices paid by them for these engines or other details of the relations at the present time.
In view of the situation and with the fullest recognition of the air ministry's position, I wish to amplify my previous statement to the house. The Department of National Defence purchases Bristol engines at prices quoted by the Bristol Aeroplane Company, Limited, which are " subject to reduction, if any, following consultation with the British air ministry." The department maintains a liaison officer in the British air ministry. Among other duties, he has to seek the greatest possible benefit from the air ministry's advice and assistance

in checking these prices. On April 1, 1939, the liaison officer forwarded the following information to the department:
Air ministiy arrive at price by negotiations based technical cost, investigation overhead charges after making provision for capital clause liability, machine tools, etc. As we include accessories in our demand and air ministry purchase only bare engines from manufacturer we cannot get same price as air ministry. On the whole believed we get reasonable approximate price definitely below foreign price. Air ministry under agreement not to reveal their price but always willing to examine our price and say whether considered fair and reasonable which would give a definite indication that prices approximate those of air ministry.
I can only add that the Department of National Defence does take advantage of and deeply appreciates the cooperation and assistance extended to us by the British air ministry in this and other directions.
While I am on my feet I should like to refer to an article which appeared in the Winnipeg Free Press of April 3, 1939, which cast some doubt upon the value of Bristol engines when operated under Canadian conditions. In this connection I should like to quote the following memorandum which was received from the chief of the air staff:
For the past three winters the Department of National Defence has carried out winter flying tests on Bristol engines, in collaboration with the British air ministry. These tests have been made under all weather conditions, and Canada was chosen because of the severe conditions. Results have been entirely satisfactory.
The question of icing of carbureters is not peculiar to Bristol engines, but is largely a question of installation, and the report of the loss of the Cavalier has naturally resulted in a review of the engine installation of all types of aircraft. It is not anticipated that any difficulties will be met which cannot be overcome.
I thought I owed it to the committee to give this amplified statement.


Mr. STIRLING:: The minister was going to give consideration to the remarks I made with regard to income tax. Is he prepared to modify the wording used? Investigations may be carried on by an accountant employed by the board, and returns by firms or individuals may be displayed before him. The objection that I raised to the wording was that I thought it was a distinct blow at the secrecy of income tax returns, which is always to be preserved.


Ian Alistair Mackenzie: I shall be glad to give the fullest consideration to the suggestion of my hon. friend, and he can rely upon the utmost discretion being exercised in that regard.


Grote Stirling: But is it proposed to
leave the wording as wide open as it is now?

Questions


Charles Avery Dunning: I suggest, Mr. Chairman, that between now and consideration of the bill by the senate it would be wise, in view of my hon. friend's suggestion, to bring it to the particular attention of the Minister of National Revenue (Mr. Ilsley), whose department is concerned, in order that it may be given consideration. I must apologize for not having done so previously. I thought it would have been considered prior to now. This provision is a very important element in the bill and I hesitate to see it dropped without the most careful examination. There will be an opportunity to give consideration to it between now and the time the bill is considered in the senate.


Grote Stirling: That is a satisfactory suggestion, but the point I am emphasizing is this: We set up a board; that board may employ accountants, and it does not seem right to me that those accountants should go into the Department of National Revenue and have displayed before them these returns. If it is desired to obtain certain information, I think this provision should be restricted to that information being supplied.


[Stage Direction]
Section agreed to.
Bill reported.


[Stage Direction]
Hon. C. D. HOWE (Minister of Transport) moved the second reading of Bill No. 61, to give effect to a convention for the unification of certain rules relating to international carriage by air, to make provision for applying the rules contained in the said convention, subject to exceptions, adaptations and modifications, to carriage by air which is not international carriage within the meaning of the convention, and for purposes connected therewith.
Motion agreed to, bill read the second time, considered in committee, reported, read the third time and passed.
At six o'clock the house adjourned, without question put, pursuant to standing order.
Thursday, April 6, 1939