LOAN OF $750,000,000 TO MEET LOANS OR OBLIGATIONS, TO PURCHASE UNMATURED SECURITIES, AND FOR GENERAL PURPOSES

[Stage Direction]
The house resumed from Thursday, February 16, consideration in committee of the following proposed resolution-Mr. Dunning -Mr. Sanderson in the chair:
That the governor in council be authorized to raise by way of loan under the Consolidated Revenue and Audit Act, 1931, an amount not to exceed in the whole the sum of seven hundred and fifty million dollars for paying or redeeming the whole or any portion of loans or obligations of Canada, and also for purchasing and withdrawing from circulation unmatured securities of Canada, and for public works and general purposes.
Mr. VICTOR QUELCH (Acadia):: Mr. Chairman, I rise to oppose the resolution because I am opposed to the financial policy of this government, a policy which in my opinion is forcing the people of this country further and further into debt, resulting in increased taxation and a steady lowering of the standard of living of the people.
Some members appear to believe that the present system has operated satisfactorily in the past and that there is no reason why it cannot continue to operate satisfactorily in the future. But, as was pointed out by the hon. member for Calgary East (Mr. Lander-you) the other day, the present system is a debt-creating system, and so long as we operate under it our debts are bound to increase steadily until eventually our fixed debt charges may well be in excess of our total revenue.
What is the result of this system? In the field of physical accomplishment it is no doubt one of which we may well be proud. But in the economic field it is one which must be a matter of concern to every thinking individual. The record of the present system has been that of building up enormous unrepayable debts, federal, provincial, municipal and private, resulting in default on
Loan oj $750,000,000

bonds and mortgages, in bankruptcies and wholesale cancellation of debt, this very often taking place in the face of tremendous selfdenial and long hours of overtime on the part of the people. Perhaps the greatest condemnation of the present system is that it creates an artificial scarcity in the face of potential abundance, and restricts production in the face of actual want, thus causing starvation and destitution.
We find many people in their smug complacency telling us that the system has operated satisfactorily in the past. I would say that the present system is a dishonest one; because what moral right have we to mortgage the production of future generations? What right have we to place a debt against unborn generations? To my mind the present financial system is nothing more or less than a gigantic racket, wherein the Minister of Finance has been placed in the position of acting as a collector for these financial racketeers. We are told that this system is highly efficient and that it has operated satisfactorily, but I would say, satisfactorily from whose point of view? From that of the bankers, certainly. But a system which has operated so as to force the people of this country steadily further and further into debt can hardly be considered from their point of view a satisfactory system.
The motion is-
-to raise by way of loan under the Consolidated Revenue and Audit Act, 1931, an amount not to exceed in the whole the sum of seven hundred and fifty million dollars for paying or redeeming the whole or any portion of loans or obligations of Canada, and also for purchasing and withdrawing from circulation unmatured securities of Canada, and for public works and general purposes.
WTe are opposed to the policy of the government as exemplified by this resolution, because we feel it is a policy which is largely responsible for the poverty that exists throughout the country; and it is our intention to move an amendment. I had hoped that this amendment would have been moved before I spoke, but it will be proposed, after I have finished, by the hon. member for Calgary East (Mr. Landeryou).
We hear a great deal about the dangers of communism and fascism. The greatest protection against communism or fascism is a happy and contented people. Both these "isms" thrive on discontent, and discontent is rife from one end of this dominion to the other. The failure of this government to bring about any really progressive policy is responsible, more than any other single factor, for the growth of fascism and communism. For several years we have been told that the major problem is unemployment. The Bank [Mr. Quelch.l
of Canada report points out that unemployment must be regarded as a long-term problem. But 1 would point out that employment is merely a means to an end; that end is economic security for the people. The real problem therefore is not so much one of employment as of providing social security for the people.
Have we any reason to believe that this resolution will help to bring social security to the people? I am afraid that all we can expect is that it will help to bring about better conditions of a temporary nature, but eventually it must mean an increase of debt, resulting in more poverty. For generations the best brains of the world have been endeavouring to find ways and means by which the productivity of mankind could be increased, and to-day we have at last reached the position where we have actually created a surplus productive capacity both of manpower and of machine-power. We have emerged from an era of scarcity into one of abundance. We have now reached the stage where it is not only possible but logical that the people of this country should be able to enter an era of greater leisure. It is a picture of which we might well be proud. But what do we find? We find at the present time the Minister of Labour pitting his puny weight against the combined brains of the scientists. They on the one hand are making it possible for more and more people to be relieved of the heavy and long toils of labour; he on the other hand is trying to put more men back to work. Unquestionably he is fighting a losing battle, and I -would say it is a good thing that he is, because his policy is one of reaction.
What is the situation in Canada to-day? We have a great productive plant in the form of factories, farms and mines, working at only a small percentage of their capacity; great natural resources barely tapped; great reserves of energy, a large surplus of unused labour in the form of the unemployed; and, in addition, a favourable balance of payments in the neighbourhood of, I believe, $185,000,000. It is a glorious picture, and one of which we might well be proud. I suppose that if anybody who was unfamiliar with conditions in Canada were confronted with that picture he would immediately say, "Undoubtedly there cannot be any poverty in Canada; for you must be enjoying a very high standard of living". He would be justified in coming to that conclusion, because there can be no excuse for having a picture of that kind on the one side, and on the other approximately a million people on the verge of starvation, with thousands upon thousands suffering from a very low standard of living.

Loan oj $760,000,000
We hear hon. members and people outside the house criticize industry for not having more confidence, for not expanding; but how can industry expand when it is already in the unfortunate position of having difficulty in selling its products? It is true there is a large physical demand for goods in Canada to-day, but what good is that physical demand unless it is backed up by money? We therefore contend that steps will have to be taken to put money in the hands of the general consumer so that it will be possible to make that great physical demand effective against the production of the country. Until this is done it is useless to talk about industry expanding.
The reason for this 'condition-we have stressed it in this chamber many times, and I do not wish to labour the point-is that industry is not in a position to create, except in times of excessive capital goods construction, an effective demand for its own production. When, on March 14 of last year, I spoke in this chamber, I dwelt at some length on this subject, and I do not intend at this time to go over that field, but in passing I would merely mention what I believe are three of the main causes: (1) the practice of charging profits into prices without distributing purchasing power to pay those charges; (2) the practice of saving and the reinvestment of savings, which increases production without bringing about a corresponding increase in the effective demand of the people; and (3) the repayment of old debts, which results in a certain charge being put into prices to recover those debts, without a corresponding issue of purchasing power to pay them. As these deficiencies are occurring concurrently with production, and as production goes on continuously, it is quite obvious that a deficiency must occur continuously as well unless, as already stated, there is a certain definite volume of capital goods construction. I call that point to the attention of the Minister of Finance because when he spoke last year he said that we had absolutely ignored the question of capital goods construction; and yet when most of us have spoken on this point we have mentioned that there must be a certain definite volume of capital goods construction, or in other words you must maintain a definite relationship between capital goods construction and the production of consumption goods.


Mr. DUNNING:: What relationship?


Victor Quelch: The very first time I spoke in this house at the first session I laid down the premise that industry could not create an effective demand for its own production unless you had a sufficient volume of capital goods
construction, so that the salaries, wages and dividends paid in that production were equal to the deficiency of purchasing power that existed as between total prices of consumer goods and the purchasing power distributed in their production. You have to maintain that relationship; otherwise there will be a lag in the demand for consumer goods. It must be obvious that there is a definite limit to the amount of capital goods production, that can be carried on because there is no use in building factories if you cannot sell the goods produced by the factories already in existence.
This resolution proposes the borrowing of money for capital goods. That is a very fine thing and in that way the deficiency might be made up temporarily. But, I repeat, inasmuch as the deficiency occurs continuously with production it stands to reason that you cannot make it up by borrowing money on a permanent basis. That money will have to be issued debt free if you are ever to make up the continuously recurring deficiency. It must be obvious that borrowing money to make up a continuously recurring deficiency can only result in steadily increasing debt. If, as we have done in the past, we can have the banks create money for our use, without that action resulting in inflation, then I say that there is no reason under the sun why under similar circumstances we cannot use the Bank of Canada for the purpose of creating money without any greater danger of inflation, thereby saving the people of Canada millions upon millions of dollars in interest.
With some members the term " inflation " has become an obsession; it is like waving a red rag in front of a bull. They are afraid to feed starving people for fear that those people will eat so much that they will burst. In other words, they are afraid to give money to starving people to buy the goods that are available for fear that they will buy so many that there will be a resulting shortage. Now, we fully realize that there is a well-defined limit to the amount of money that can be issued in any period, and so long as it does not go beyond that limit there need not be any fear of inflation.


Charles Avery Dunning: What is the limit?


Victor Quelch: The limit is the amount of money necessary to make the great physical demand of the people effective against the production of the country; that is to say, if you have on the one hand goods unsold and on the other hand people requiring those goods, you can give them enough money to buy those goods without any possible danger of inflation. There may be a danger of
Loan of $750,000,000

exploitation. Industry might say, " Seeing that there is more money in circulation we will take advantage of that fact to raise prices." But that is a matter for government control. In England during the war it was necessary for the government to exercise such control. The day that war was declared prices started to go up without any increase in the money in circulation, simply because industries wanted to exploit the people. The government therefore took action. That is not inflation but exploitation, and the government, will always have to take the necessary action to avoid it if prosperity is to be brought about by an increase in money.
Some members contend that if our argument is sound the system would have crashed long ago. I would point out that the system has been kept in operation by the creation of enormous unrepayable debts, bankruptcies and unnecesary starvation. I should like to give briefly two examples to show how the system has been kept in operation in the past. First, I would take a highly industrialized creditor nation, England, and secondly, the Dominion of Canada.


An hon. MEMBER:: What about Scotland?


Victor Quelch: This will apply to Scotland as well as England. At any rate I am going to quote a Scotsman.


Mr. REID:: Be fair; call it Great Britain.


Victor Quelch: Very well, though he calls it England. I quote from Reginald McKenna, who I believe is a Scotsman, in a speech he made to the American Bankers' Association on October 5, 1922:
For over two centuries British capital, that is, credit, had been lent to other countries; year by year England produced more than she either consumed herself or could exchange for the products of other nations, and she could not obtain a market for the surplus unless she gave the purchaser a long credit. Foreign loans and foreign issues were taken up in England and the proceeds were spent in paying for the surplus production. British factories and workshops were kept in good employment, but it was a condition of their prosperity that a part of their output should be disposed of in this way.
That is to say, for over two hundred years England consumed only a portion of her production.


Charles Avery Dunning: Are you quoting McKenna now?


Victor Quelch: 
Mr. WOODSWORTH:: Might it not have been given in the form of wages and services?

Loan oj $760,000,000


Victor Quelch: I am not saying it could not. It could have been used to finance public works, but if it had been given as wages for producing goods there would have been that many more goods left unsold.


James Shaver Woodsworth: I mean higher wages and increased public services.


Victor Quelch: If you have higher wages you immediately increase costs; prices would rise, and the discrepancy between goods and prices would continue, unless you controlled the prices.


Mr. HAYHURST:: And better homes.


Victor Quelch: I will refer to that. But this article in the Times supplement says-


Charles Avery Dunning: Who wrote it?


Victor Quelch: It is an editorial in the London Times.


An hon. MEMBER:: What date?


Victor Quelch: It does not give the date. It is quoted in this book. It must have been shortly after November, 1930, because it is a comment on this statement of Sir Samuel Martin. It reads:
Exporting is commonly referred to as though it were a thing desirable in itself; in fact, as we have often urged, the object of exporting is to create a credit abroad that can be used for the purchase of commodities, for permanent investment abroad, or for some other purpose; otherwise it is clear that the same need would be achieved if the goods were sent to sea and sunk in the Atlantic.
Yet that action, according to Reginald McKenna, brought prosperity to England. How much greater the resulting prosperity would have been if the money had been issued in the form of wages for public works, or in dividends, so that the people could have bought those goods, instead of giving the money to foreign nations to buy the goods and then having the debts repudiated.
I quote what Loftus has to say referring to this article:
It is difficult to bring home to the reader what this great loss of wealth has meant to the country. One may perhaps point out that all our great cities, London, Liverpool, Glasgow, Manchester, Birmingham and twenty or thirty more, could have been pulled down and rebuilt with wide streets, open spaces, parks and commodious healthy housing for all, with a portion of the wealth now as utterly lost to the nation as if. (to quote the Times,) it had been "sunk in the Atlantic."
This, I say, is a great condemnation of the system. But that is how it is kept in operation-by creating artificial scarcity in the country in which the goods are produced, and exporting to foreign nations. I contend that charity should begin at home.
I wish now to refer to what has happened in Canada under this system, going back prior to the war. Prior to 1914 there was in Canada fairly general prosperity, far better than we have now; men could always get a job. That prosperity was mainly due to the tremendous capital development that was taking place- the building of railways, highways, towns, and so on. The money so distributed in capital production was made available to the people to buy consumer goods. Prosperity was thus brought to Canada, but that prosperity was built on debt. To-day the people are being asked to pay in current prices not only the cost of production of current goods but also for the goods consumed prior to 1914. The wages, salaries and dividends paid out on current production cannot possibly by themselves pay for the production of former years, therefore the effective demand of the people against production to-day is being destroyed. The only way that can be made up is by issuing debt free money. If it is made up by borrowing, when the loan is repaid it has to be included in the price of the goods, and the same condition will result. We cannot pay debt with debt. We can transfer a debt from one place to another-


Charles Avery Dunning: Will my friend permit a question there? He uses the phrase "debt free money." Does he thereby mean money which does not have to be repaid to anybody?


Victor Quelch: I mean money issued by the Bank of Canada; if you like it would not make any difference whether it be issued as permanent non-repayable debt, because remember-


Charles Avery Dunning: Just a minute. I am asking, purely for information, whether the term "debt free money" as used by my hon. friend means interest free money, or money which does not have to be repaid to an}Tbody by anybody?


Victor Quelch: I mean both-debt free
and interest free. Under our proposals, if at any time too much money was in circulation, it would be taken out of circulation, either by taxation or through the price discount factor. But this is the point we make: that that money would not be taken out for the purpose of providing revenue for the government. It would be taken out in order to avoid inflation, and could be cancelled or burnt as soon as taken out. This government taxes in order to get revenue for itself; we do not believe that is necessary. This government can issue what money is needed through the Bank of Canada. If too much money is in circulation, that money can be taxed out for the purpose of avoiding inflation, but not to
Loan oj $750,000,000

provide revenue. This government ties its activities down to the amount it can take from the people in taxes. The minister said that the only money available is what is taken from the people; we say that is a major factor in creating poverty, and absolutely unnecessary.


Charles Avery Dunning: I am trying to get an understanding. Will my hon. friend permit me to ask-


Victor Quelch: If the minister will be good enough to wait, I shall be dealing at some length with the question of issuing debt free money, and probably his questions will be answered as I speak.
As I have already stated, to avoid this difficulty the Minister of Finance proposes that we must misappropriate the funds of the future. That is the only word I can use. We have no right to use the purchasing power of future generations for that purpose. What right have we to tell unborn generations: You have to pay a higher price for the goods you want in order that we may buy more goods to-day? It is rank dishonesty, a straight case of misappropriation of other people's funds.


Mr. MOORE:: Order.


Victor Quelch: There is nothing out of order in that.


William Henry Moore: Is the word "dishonest" a parliamentary word?


Victor Quelch: I am not accusing any hon. member of being dishonest.


William Henry Moore: I think the hon. member said it was a dishonest policy.


Victor Quelch: Yes, absolutely, but I am not saying that any hon. member of this house is dishonest. I do not want anyone to think for a moment that I am suggesting that the Minister of Finance or anyone else is dishonest. I say we are operating under a dishonest system; that is the distinction I draw. When I attack the banking system as being a gigantic racket, I do not want anyone to think I am attacking the bankers, or accusing them of being dishonest men. I agree that the general run of bankers are as fine a body of men as any; it is not their fault that they are operating under a dishonest system. We maintain that so long as we continue to operate under this debt creating system our debts are bound to increase steadily year after year, resulting in increased taxation and increased poverty.
We therefore believe that internal expenditures can be met by national money, without any danger of inflation, provided that we are

only stimulating the demands of the people up to the capacity of industry to satisfy those demands.
Last year the Minister of Finance stated that an issue of money by the Bank of Canada might cause inflation, due to the practice of the chartered banks of expanding their loans up to ten times the amount of their cash. The minister used that as an argument against the issue of money by the Bank of Canada. I ask the minister, has parliament to-day established effective control over currency and credit?


Charles Avery Dunning: Yes.


Victor Quelch: The Minister of Finance answers yes. Speaking in this house on February 28, 1938, he said, as reported at page 891 of Hansard of that year:
Parliament through instruments which it has created and which are now in operation does control currency and credit in Canada day by day, week by week and month by month.
He is still of the same opinion. It is rather strange, though, that a few days after that statement was made the deputy governor of the Bank of Canada, Mr. J. A. C. Osborne, speaking before the junior board of trade of Ottawa, should say:
No respectable central bank would accept from its government a policy with which it differed fundamentally.
In other words we control it only provided that our policy is acceptable to the Bank of Canada.


Charles Avery Dunning: No.


Victor Quelch: Then Mr. Osborne was not stating the facts.


Charles Avery Dunning: Oh, no.


Victor Quelch: I will repeat what Mr. Osborne said:
No respectable central bank would accept from its government a policy with which it differed fundamentally.


Charles Avery Dunning: Of course any man who was asked by this government to do something which in his opinion was wrong or bad ought to get out of the service of the government rather than do it. That is what is meant by a statement of that kind. No man who was responsible and who had a due regard for his responsibilities would remain in the position of carrying out a policy which he believed to be fundamentally wrong.


Victor Quelch: It does not say "no respectable servant of the Bank of Canada." It says "no respectable central bank."


Charles Avery Dunning: Quite; the same thing.

Loan oj $750,000,000


Victor Quelch: In other words the bank would need to be demolished. If he had said "no self-respecting governor or deputy governor of the bank" I would have agreed with the minister, but he said "no respectable central bank." So I do not think the argument is well founded.


Charles Avery Dunning: The bank is the instrument which this parliament has created; and the bank, used in that sense, is of course the governor and other officials of the bank. It is very plain.


Victor Quelch: The Minister of Finance told us last evening, and he has told us again, that he considers that this government has control of currency and credit; yet last year in this house he made a statement that showed absolutely beyond any shadow of doubt that we have no effective control of the issue of currency and credit in this country. Speaking on March 8, 1938, and referring to the suggestion made by the hon. member for Rosthern (Mr. Tucker) that we should issue some S350,000,000 for public works, the minister said:
An increase of say $350,000,000 in chartered bank holdings of Bank of Canada notes would increase their cash reserves from the present figure of about $250,000,000 to $600,000,000, and their cash ratio from about ten per cent to roughly twenty-four per cent.
The sponsor of the suggestion contends that no inflation is intended or would result by thus increasing bank cash, so long as the gold cover of the Bank of Canada did not fall below the twenty-five per cent minimum. This factor, however, is not a test of inflation. If the banks use their increased cash in a normal way, as a basis for the extension of roughly ten times as much in loans to the public, or for the acquisition of ten times as much in investments, bank deposits would expand by approximately an equal amount until the cash ratio was brought down again to approximately ten per cent. This would mean an increase in bank deposits from the present level of about $2,387,000,000 to something like $6,000,000,000, or more than 2'6 times the level of December 31, 1929.
Then he goes on to say:
Am I merely old fashioned or orthodox when I say that this would mean a colossal measure of inflation?


Charles Avery Dunning: That sounds better now than it did when I said it.


Victor Quelch: Let us go on. The minister says we have absolute control over the issue of currency and credit. If we considered it desirable to have another $350,000,000 in circulation for public works, the Minister of Finance points out that we would not dare do that because-these are not his words- owing to the fact that we have no control over the chartered banks, they would expand that ten times over, and instead of having
$350,000,000 in circulation you would have $3,500,000,000. That inflation would not result from the action of the government; it would be the deliberate result of the expansion of credit on the part of the chartered banks, which shows conclusively that we have absolutely no control over the expansion of credit by the chartered banks. I think it is high time-


Charles Avery Dunning: The limit of expansion is clearly stated in the law.


Victor Quelch: Yes; up to twenty times their cash holdings. Every action taken by this government can be multiplied twenty times over by the chartered banks. If we issue a certain amount of money they can expand it twenty times. As I have said before, the sort of control we have in this house is like the control you would have over a high powered car with a worn out steering gear. If you gave it a little turn to one side the chartered banks would shove you into the ditch on that side. Then, if you got out of the ditch of inflation they would shove you in the ditch of deflation on the other side. It is absolutely impossible to hold this country to any definite line of action, because you always have to take into consideration the fact that the chartered banks have power to expand by ten or twenty times the amount of money we put into circulation, or to deflate by twenty times the amount we may draw out of circulation. I think it is quite obvious that to regain that control might entail quite a severe battle in this house. Is that not the very thing the Prime Minister (Mr. Mackenzie King) led the people of this country to believe would be done, when after the last election he said:
Canada is faced with a great battle between the money powers and the powers of the people, a battle that will be waged in the next parliament.
We have yet to see any sign of that battle. Personally I cannot help feeling that the Liberal party has adopted the old slogan, that he who fights and runs away will live to fight another day; and I believe it is becoming harder and harder for them to find some place to run to. I do not believe the people will be satisfied to let them run to their arms in the next election.
We believe the government should utilize the Bank of Canada to create the necessary funds to meet government expenditures, placing the full responsibility upon the Bank of Canada to see that no undue inflation occurs. That is their duty. If the chartered banks refuse to govern their actions according to the recommendations of the Bank of
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Canada, then steps can always be taken to enforce that action by increasing the cash reserve requirements of the chartered banks.
Now I come back to the question of the control and issue of credit. On several previous occasions when speaking in this house I have referred to what is very often described as the one hundred per cent money system.


The CHAIRMAN:: I must inform the hon. member that he has spoken for forty minutes.


Victor Quelch: Very well; I will finish this another time. It is just the question of one hundred per cent money, with which I will continue later.


Mr. BLACKMORE:: Mr. Chairman, may this count as an interruption which will give the hon. member the privilege of going on for another forty minutes?


Charles Avery Dunning: On a point of order, Mr. Chairman, it seems to me there are a great many members of this committee who may wish to speak on this matter. If you recognize a subsequent speaker who deliberately rises merely for the purpose of providing an interruption in order to permit the original speaker to continue, and who in fact so states, I submit that other speakers are being denied their right to speak. The hon. member for Calgary East was on his feet; he is straining at the leash.


Mr. LANDERYOU:: I am prepared to allow the hon. member to go ahead.


Charles Avery Dunning: There may be others who desire to speak.


Victor Quelch: Does not this all count as an interruption?


Frederick George Sanderson: I do not think the
point raised by the hon. member for Lethbridge (Mr. Blaekmore) is well taken. I know there have been occasions in this house during the last few years when members who have spoken for forty minutes in committee of the whole have been notified that their time was up and another hon. member would say something not particularly relevant and immediately sit down again, after which the hon. member who previously had the floor would rise and continue. In my opinion that is out of order. The forty minute rule never provided for that.


John Horne Blackmore: Mr. Chairman, may
I ask a question? We are looking for information. As soon as we learn how to play according to the rules of the house, believe me we will do so. But we want to know how to do it. The Minister of Finance rose and

delivered a little speech in the midst of my hon. friend's speech. Was that not an interruption by him?


Frederick George Sanderson: But the hon. member who had the floor allowed the minister to interrupt. That is the course followed in debate.


Mr. BOUCHARD:: It was to help him.


John Charles Landeryou: As the hon. member who has been described by the minister as straining at the leash, I shall proceed to let him know what I feel about this whole matter of finance, and about these indirect and complex financial manipulations which have so befuddled his mind that, according to his own words, the more he studies the less he seems to know.


Charles Avery Dunning: I did not say that at all. Mr. LANDERYOU: The less he is sure of.


Charles Avery Dunning: Mr. Chairman, I ask for an absolute withdrawal of that statement. It is not a correct statement of what I said, and the hon. member purports to quote me. It is a well known rule of the house that he who purports to quote a member must quote him correctly, or not at all. I will stand by anything I have said, but not by what my hon. friend says I have' said.


John Charles Landeryou: I recall that he said the more he studies the less sure he is.


Charles Avery Dunning: No, I did not say that,
either.


John Charles Landeryou: What did he say,
then?


Charles Avery Dunning: You will have to look
it up.


Some hon. MEMBERS:: Withdraw.


John Charles Landeryou: The resolution we are


Charles Avery Dunning: My hon. friend should
withdraw.


Frederick George Sanderson: The hon. member for Calgary East (Mr. Landeryou) should conform to the rules of the house, and withdraw.


John Charles Landeryou: I withdraw, and
accept the explanation.


Frederick George Sanderson: Without reservation.


John Charles Landeryou: 
An hon. MEMBER:: Why don't you read your own?


John Charles Landeryou: At the moment I
wish to refer to one of those promises. I do so because the people of Canada are becoming alarmed over the rapidly increasing burden of private, municipal, provincial and federal debt. These are the words of the present Minister of National Defence (Mr. Mackenzie) as they were reported in the Toronto Daily Star of July 6, 1935.


Mr. MacINNIS:: That was an election
year, was it not?


John Charles Landeryou: Prime Minister on behalf of the debt ridden and poverty stricken people of this country to take immediate action along the lines he has indicated, and to fulfil the promise made by him, the Prime Minister.
Speaking last year in the House of Commons the Minister of Finance said:
I hope on some future occasion, if opportunity serves and hon. members will give me sufficient time, to demonstrate to the house that this parliament through instruments which it has created and which are now in operation does control currency and credit in Canada day by day, week by week and month by month. The only question is whether the proper methods of control of credit and currency are being used by the instruments which this parliament has created and which are under its own control for that purpose. On some future occasion I shall attempt to demonstrate that this function is being performed by the instruments which parliament created for the purpose, and that the control is real and continuous.
I hope that the Minister of Finance will seize this opportunity to demonstrate to the house just how the control of the issue of money and credit is effected in this country, and answer the questions we have asked.


Charles Avery Dunning: I did that last session in a subsequent speech.


John Charles Landeryou: How can the minister explain away the fact that, shortly after that statement was made, the deputy governor of the Bank of Canada said that no respectable central bank could accept a policy with which it differed fundamentally?


Charles Avery Dunning: That is right.


John Charles Landeryou: Is it not the duty and responsibility of parliament to declare what policy shall be carried out and what shall and shall not be done?


Charles Avery Dunning: Absolutely.


John Charles Landeryou: And is it not the responsibility of this instrument we have created to carry out that policy?


Charles Avery Dunning: Or to get out.


John Charles Landeryou: How are we going to get out of the mess we are in now, how are we going to reduce debt and taxation as long as we have a continuance of what I call this hoary fallacy under which we can secure money only from the pockets of the taxpayers? Is there no other way of raising money in this dominion except by debt and taxation?


Charles Avery Dunning: That is right.


John Charles Landeryou: That is the only way the minister has. But how about the Liberal promise of issuing money and credit in terms

of public need? All they do is borrow credit, and not in terms of public need. There is great need in this country of increased purchasing power. "Usury once in control will wreck any nation." That is the declaration of the Prime Minister (Mr. Mackenzie King).
The Prime Minister said:
Until the control of the issue of currency and credit is restored to government _.	.	.
all talk of sovereignty of parliament is idle and futile. To regain for the nation what has been lost and to secure a properly constituted national central bank will continue to be the first objective of Liberal effort.
Usury has a strangle hold on private citizens, on municipalities, on provincial governments and on this federal government. From thirty to fifty per cent of the revenues of municipalities and of provincial governments and of this federal government goes to meet debt charges on the obligations we have incurred in the seventy-two years since confederation.
The London chamber of commerce says in respect of usury:
Humanity can have good will and peace, but it cannot have usury and peace.
Martin Luther says:
Whosoever eats up, robs and steals the nourishment of another, commits as great a murder as he who carves a man or utterly undoes him. Such does a usurer, and he sits the while on his stool, when he ought rather to be hanging from the gallows.
That will be found in Elliott on Usury, at page 71. Calvin in English Economic History, Ashley, volume 2, at page 459, says:
For if we altogether condemn usuries we shall impose severer restrictions upon consciences than the Lord himself desired; while if we make the least concession, many will use it as a pretext, and will snatch at a bridleless licence, which can never afterward be cheeked by any moderation or exception.
I also quote this:
The laws of King Alfred, about 900 A.D., directed that the effects of money lenders upon usury should be forfeited to the king, their lands to the lords under whom they were held, and they should not be buried in consecrated ground.
By the laws of Edward the Confessor, about 1050 A.D., the usurer forfeited all his property and was declared an outlaw and banished from England. In the reign of Henry II, about the close of the twelfth century, the estates of usurers were forfeited at their death and their children were disinherited.
His successor, Richard I, was yet more severe, forbidding the usurers attending his coronation, nor would he protect them from mob violence.
During the thirteenth century the severities against the usurers were not relaxed. King John confiscated their gathered wealth without scruples.
In the fourteenth century, under the three Edwards, the taking of interest was an indictable offence and Edward III made it a capital crime.

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Attorney General Noy, in the reign of James I, thought the taking of money by usury was no better than taking a man's life. He said, "Usurers are well ranked with murderers."
Aristotle in 350 B.C. said:
Usury is most reasonably detested, as the increases arise from the money itself and not by employing it to the purpose for which it was intended.
Cato the Second, at the time of these persecutions, was asked what he thought of usury, and he replied by asking the question: What do you think of murder? That will be found in Cicero de Officiis, Peabody, book 2, section 25.
In the English Economic History, by Ashley, in part I, at page 149, third edition, we find this:
Among the canons of the great Lateran council held by Alexander III in 1179, one ran as follows: "Since in almost every place the crime of usury has become so prevalent ... we ordain that manifest usurers shall not be admitted to communion nor, if they die in their sin, receive Christian burial, and that no priest shall accept their alms." . . . "The Pope in letters to the Archbishop of Salerno and the Bishop of Piacenza, had pronounced that usurers, and even the heirs of usurers, ought to be compelled to restore their unjust gains under similar penalties."
The same authority says:
It was at another great council, that of Lyons in 1274, that Gregory X ventured to make a fresh advance in both these directions. In one he ordains that "no community, corporation or individual should permit foreign usurers,"- local usurers seem to have been under control- "to hire houses, or indeed to dwell at all upon their land, but rather should expel them within three months;" and he forbids anyone to let houses to them.
And again:
The next canon ordained that the wills of unrepentant usurers, of usurers who did not make restitution^ should be without validity.
And again, from the same authority:
"We therefore decree, with the approval of this sacred council of Vienne, that whatever authorities, captains, rectors, counsels, judges, councillors or any others presume to make in future any statutes, either that debtors shall pay usury, or, that a usurer is not bound to restitution, shall incur sentence of excommunication."
Shcaff-Herzog says, "All apostolic fathers condemned the taking of usury." The Encyclopedia of Religious Knowledge declares the same. Chrysostom said, "Nothing is baser in this world than usury, nothing more cruel."
Nehemiah rebuked nobles and rulers of Jerusalem for exacting usury. People had been forced to mortgage their land and vineyards and their houses to buy corn because of a dearth. Many had borrowed money to pay the king's tribute and found themselves with
their sons and daughters brought into bondage. Chapter 5, verse 7, reads:
Then I consulted with myself, and I rebuked the nobles, and the rulers, and said unto them, "Ye exact usury, every one of his brothers. And I set a great assembly against them."
Also I quote Ezekiel, chapter 22, verses 12 and 13:
12.	In thee have they taken gifts to shed blood; thou hast taken usury and increase, and thou hast greedily gained of thy neighbours by extortion, and hast forgotten me, saith the Lord God.
13.	Behold, therefore I have smitten mine hand at thy dishonest gain which thou hast made, and at thy blood which hath been in the midst of thee.
And here in the Dominion of Canada people are losing their homes. The mayor of the city of Niagara Falls pleaded with the people to vote only for those candidates who would take steps to prevent the seizure of homes in the cities of this country. Hundreds of thousands of homes are in danger of being lost, and many have already been lost because of the usury we charge one another. The Liberal party said, "Usury once in control will wreck any nation," but they have done nothing to lessen the great burden of debt and taxation or the interest charges on private mortgages. They have done nothing to lessen municipal indebtedness or the indebtedness on provincial and federal obligations. On the contrary that burden is still increasing in Canada and the world over. No wonder that Arthur Kit-son said of this gold debt-creating system that it is like a prison gate that only opens inward, and "its victims are permitted to enter but never to escape." He says:
Gold creates debts and then prevents men from settling them. It places mankind in perpetual bondage. It is a prison gate that only opens inward. Its victims are permitted to enter but never to escape.
Not only are the factors of well being and of progress rendered impotent by the gold standard but the factors of evil minister to its exploiters. Wars, state extravagance and political corruption all serve to build up this pyramid of irremedial debts which almost every nation is now adding to and upon which the gold octopus feeds.
Repudiation is inevitable. Let us clearly see this. It is not a threat. It is an inevitable result. It cannot be avoided. Nations must strangle this monster or it will strangle them. The gold debts of the world can never be redeemed. In vain men toil, in vain they produce, so long as this tapeworm of society exists. All our surplus wealth which should go to form a national store, all our surplus creations we must sacrifice. In vain science prosecutes her voyage of discovery and art labours to convert the discordant and hostile elements of nature into a system of usefulness and harmony. In vain temples of learning are reared and libraries founded. All these institutions, all these achievements that have for their object the advancement of learning
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John Horne Blackmore: May I interrupt the hon. gentleman? We have not advocated inflation. I know that the minister would not wish to say something that is not true. At no time since coming to this house have we advocated inflation in any shape or form.


Charles Avery Dunning: Well, let me put it this way. My hon. friends deny on all occasions that they advocate inflation, t it they propose resolutions similar in terms to the one we now have before us, which does mean the issue of currency by the Bank of Canada to the extent of from $500,000,000 to $750,000,000 more currency than is now outstanding, which would mean an increase in the total currency available in this country of from two and a half to four and a half times. Now, my hon. friend says he does not advocate inflation.


John Horne Blackmore: Hear, hear.


Charles Avery Dunning: I am unable to describe in any other terms action such as that contemplated by the amendment. In his address, the hon. member for Acadia (Mr. Quelch) described the manner in which the principle would work from the point of view of hon. gentlemen in the corner, and I gathered from him that all taxation is to be abolished, that it is wrong for governments to tax. Then he proceeds to tell us where the money would come from to carry on the essential services of government. Whenever the government needed money it would print some more.
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Victor Quelch: I did not say that there would be no taxation, but that there would be no increase in taxation.


Charles Avery Dunning: I will look up Hansard. At any rate, in order to carry out my hon. friend's ideas logically, taxation ought to be abolished altogether; because if you can safely print unlimited sums of money, and the government has the power to do so, why not print enough instead of bothering to tax people?


John Charles Landeryou: I suggest that the minister read Hansard to find out what was said.


Charles Avery Dunning: I was following the hon. member for Acadia a little further in order to demonstrate the accuracy of my statement of his policy. He says that the government should print enough money-


Victor Quelch: I did not say print
money-


Some hon. MEMBERS:: Sit down.


Some hon. MEMBERS:: Order.


Frederick George Sanderson: Is the hon. member rising to a point of order?


Victor Quelch: Yes.


Frederick George Sanderson: Then I would ask him to state the point of order.


Victor Quelch: The minister is putting
into my mouth words I never used.


Charles Avery Dunning: It may be a confusion of terms, but I am in the judgment of the committee whether my hon. friends, all of them, who steadily and consistently advocate what they describe as the issuing by the government of purchasing power-


Some hon. MEMBERS:: Hear, hear.


Charles Avery Dunning: Hon. gentlemen say,
"Hear, hear." Well, I do not know any other form of purchasing power than that which is expressed in terms of money or of credit. Why get angry because I say that hon. gentlemen want the government to print more money? It seems to me that is the only, the easy and simple way of carrying out what they advocate; and as a matter of fact the amendment now before the committee provides for precisely that being done by the Bank of Canada. And i$ must be debt free. I asked my hon. friend from Acadia when he was speaking a question or two that brought out this view from the Social Credit party: that they recognize that such a policy would involve too much money getting into circulation, too great a possibility thereby of the evils of inflation which I have described in

this house more than once. Then my hon. friend went on to describe the means whereby the Social Credit party would prevent that happening. I asked the question whether the term debt free money really meant interest free money or money which did not have to be repaid, either principal or interest, and the answer was "both." That is to say, any money emitted-I will not say printed because he will say that he did not say that; but any money emitted or issued under this social credit scheme might conceivably be too much. It would be issued without the obligation on anyone's part ever to give value for it; and the means of taking it out of existence, should there be too much of it, as stated by my hon. friend from Acadia, would be to tax it out of existence.


Victor Quelch: The just price factor would automatically absorb surplus effective demand.


Charles Avery Dunning: Following a dollar bill issued by the Bank of Canada, you must recognize that if the currency of this country is to have a consistent and steady buying value, that dollar bill cannot be put out of existence without someone supplying a dollar's worth of value for it. The assumption inherent in the thinking of so many, that the government can issue money and have it perform its function, and by and by, when it comes back to the Bank of Canada, it can be destroyed without hurting anyone, is all nonsense, because the last man who held that bill and paid it into the Bank of Canada would be entitled to one dollar's worth of value from the Bank of Canada for it. There is no escape from that.


Victor Quelch: May I ask-


Some hon. MEMBERS:: Order.


Some hon. MEMBERS:: Sit down.


Victor Quelch: I have asked the minister several questions but he will not answer one.


Charles Avery Dunning: We are in committee and I expect, judging by the indications, that we shall remain in committee for a long time on this matter. My hon. friends in the comer can speak as many times as they like, and doubtless they will. What I have just said stands, that when the government of this country through its central bank issues a dollar bill, that dollar bill cannot go out of existence without the last holder of it receiving credit for its full value. My hon. friend himself recognized that principle when he said that excess currency, if it existed, would have to be taxed out of existence.


Victor Quelch: Provided it became surplus to physical demand.

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Charles Avery Dunning: Provided it became surplus to physical demand, whatever that means.
I would put it in this way: provided the effects of inflation, which have been the same from time immemorial, become evident; then the remedy would be to impose taxation to take out of circulation a sufficient sum of money to bring matters once more to an even keel. That is the principle _we _ are asked to adopt. But no information^ given as to how that taxation is to be levied, how it is to fall equally on the just and the unjust; we are simply told that there is too much money in circulation and consequently we have the evil effects of inflation,-undue rise of prices, speculation, gambling, which throughout history have always resulted from too great an emission of money by the ruling authority. My hon. friends acknowledge it by what they say as to providing the machinery to control it-they say they will tax the excess out of existence.


Mr. MacNICOL:: And burn the bills.


Charles Avery Dunning: Yes, burn the bills.


Mr. JAQUES:: What about deflation?


Charles Avery Dunning: That would be the rankest kind of deflation, which always follows excessive inflation.


Norman Jaques: We have had it for ten years.


Charles Avery Dunning: My hon. friends provide for both. In effect they say we must have a system of inflation, but we recognize that inflation brings certain evils, therefore we must provide in advance for a method whereby we can deflate the inflation which we have brought about.


Norman Jaques: You brought it about. We have had it for ten years.


Charles Avery Dunning: And we are told that that is to be an improvement on what we have.


Some hon. MEMBERS:: Oh, oh.


Charles Avery Dunning: Could we have a little order? I listened very patiently to lengthy extracts read by the hon. member for Calgary East (Mr. Landeryou). I did not interrupt except to ask a question when the hon. member permitted it.


Victor Quelch: You will not even permit a question.


Frederick George Sanderson: Order. I must insist on order in the committee. The disturbance is coming largely from the Social Credit quarter of the house. I ask hon. members to assist the chair in keeping order by obeying the rules.


Charles Avery Dunning: Well, Mr. Chairman, we are in committee; the discussion will continue.
I shall not attempt to make any longer statement just now, but I wanted to touch the high spots of the proposal. I think the committee can see it. It is a proposal to inflate the volume of existing currency two and a half to four and a half times its present volume, and to use that currency to pay off the obligations of the dominion as they mature within the next two years. That in my judgment is absolutely uncontrolled inflation of the crudest possible variety. In my judgment it would ruin the credit of this dominion, would bring misery and suffering, particularly to our poorest people, would give opportunities to the speculatively minded to make and lose fortunes, would bring about precisely what has happened all through history whenever that kind of thing has been tried, whether by kings of old or in more recent years in some of the countries of Europe. It seems a pity that each succeeding generation has to learn the lesson afresh. It is indeed bitter experience. We do not find similar measures being proposed in any country which has had recent experience of them.
For the moment I shall confine myself to questioning the order of the amendment, in that it changes completely the scheme of the original resolution. I do not deny that my hon. friend can alter his amendment and put it in order, and I shall be glad to have him do so; or he can withdraw it, as he wishes.


John Charles Landeryou: I should like to have it redrafted in proper form, and it can then be presented.


Charles Avery Dunning: Very well. I should like this committee to go on record in this matter. We want to make known to the people of Canada and the people of the world whether we want to embark on crude and uncontrolled inflation, or whether we will maintain that measure of scientific control which has been made possible by the creation of the Bank of Canada and by the various statutes of this country dealing with the control of currency and credit. I said last year that in my opinion we have now under our present statutes an ample measure of control of currency and credit. The only question is, and it is a difficult and serious one: How shall we use the degree of control which we have, from day to day, from week to week, from month to month? We take the view that the control must be used carefully, having regard at all times to one interest only, the best interest of all the people of Canada; taking into account all the various conditions which must be con-
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sidered in connection with this most difficult question of control of currency and credit. It is more difficult to-day as a world question than it has ever been before, because of the abandonment by most of the nations of the world of that standard which rendered things a great deal easier to manage during a long period of years. We have now, as I said the other day, management of credit and currency in all countries, not by an agreed-upon gold standard, but management by men's minds, by the thinking of those who are placed in control of credit and currency. The standard which worked for so many years of agreed-upon international value for gold is for the time being suspended, therefore we have the variable factor that in each country groups of men entrusted by government with the task are endeavouring to manage their credit and currency in the interests of their own people. Under these circumstances how much greater is the difficulty of bringing about that international understanding which makes trade relations between nations possible and sound.
I say again, as I said the other day, that for Canada-fourth exporting nation in the world, fifth in total trade in the world, with the relations which she must have with other countries-for Canada to embark on uncontrolled inflation of credit or currency or both, would in my opinion be national suicide.


John Horne Blackmore: Mr. Chairman-


Frederick George Sanderson: I think in order to
keep the record clear, as this amendment has not been read from the chair, I shall read it now. It was moved by Mr. Landeryou, seconded by Mr. Elliott (Kindersley)-and I may say it does not require seconding:
That the resolution be amended as follows:
"Provided that the loan authorized shall be reduced by an amount equal to that portion thereof representing all payments or redemptions mentioned in this resolution which can be made in Canadian funds, and provided further that the Bank of Canada be authorized to issue debt free a sufficient amount of currency to the government for such payments or redemptions."
Do any other hon. members wish to speak to the point of order?


John Horne Blackmore: Are we going on with the discussion, or not?


Frederick George Sanderson: On the point of order. First I draw the attention of the committee to the terms of the resolution. It reads:
Resolved, that the governor in council be authorized to raise by way of loan under the Consolidated Revenue and Audit Act, 1931, an amount not to exceed in the whole the sum of seven hundred and fifty million dollars for paying or redeeming the whole or any portion

of loans or obligations of Canada, and also for purchasing and withdrawing from circulation unmatured securities of Canada, and for public works and general purposes.
I quote from May, page 544:
Proposals for the variation or modification of_ taxation can therefore be made in the committee; but these proposals must be granted upon the financial scheme submitted by the government, and must not affect the balance of ways and means voted for the service of the year.
In my opinion the amendment is out of order.


John Horne Blackmore: Is it in order now, Mr. Chairman, to discuss the main motion?


Frederick George Sanderson: The hon. member
proposes to speak on the main motion?


John Horne Blackmore: Yes; I should like to make a few remarks while the hon. member for Calgary East is redrafting his amendment. I am not sure, but it looks as though after three and a half years this is to be the first time we have really been able to come to grips; and, Mr. Chairman, may I say that if we all play the rules and keep our heads we may get quite a little way with this discussion.
In the first place I wish to point out one or two things as we see them. The Minister of Finance insists on declaring on every occasion that the Social Credit party advocates inflation. I say we do not.


Some hon. MEMBERS:: What is it?


John Horne Blackmore: Manifestly the first thing to do is to define " inflation," because I believe there exists in this parliament and throughout the dominion the wildest degree of uncertainty, inaccuracy of information and, I may say, prejudice concerning the word. What is inflation? Not only is it inflation; it is called crude inflation, though not one member from this group has ever advocated either inflation or crude inflation. Time and again the minister has also used the words " uncontrolled inflation." One cannot advocate the creation of ten dollars of dominion money without its being called uncontrolled inflation, crude inflation or simply inflation. What contemptible piffle! All one needs to do is recall that between 1915 and 1917 the Dominion of Canada printed $26,000,000 of bills, of which $10,000,000 had nothing behind it and $16,000,000 had only worthless	railway
securities behind it. Apparently those bills were used for government purposes, and they did not cause inflation or disturb the exchanges. They were sound money then, and they have been sound money ever since. All one needs to do is remember that fact to see how absurd are some of these contentions, when people

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call any issue of government money inflation, crude inflation or uncontrolled inflation. So I hope we shall not have to spend any more time talking about inflation, crude inflation or uncontrolled inflation, because this group advocates none of the three.
There is one other point I wish to get quite clear. As far as I can remember, never since we came to this house have we refused to answer a question which has been put to us.


Mr. McLEAN (Melfort):: Yes, you have, many times.


John Horne Blackmore: I can say that personally I have never done so; I defy any member of the house to point to any occasion when I refused. Time and again I have tried to secure the privilege of asking a question in order to correct a false impression which was being created in the course of a speech; in over half of the cases I have been refused, many times with insults from the opposite side. I just ask if that is what they consider fair play. We will permit any number of questions and try to answer them. If we cannot answer them, it is evident that we simply do not know the answers, but we should like the privilege of asking questions in turn. If we are to be denied that privilege, let it be known; let the country know that here is a group that is not allowed the privilege of asking questions. We are supposed to be ignoramuses; we are not supposed to know what we are talking about. Why be afraid of answering any questions that we can devise?
Now I am going to spend a few moments on the subject of inflation. What is inflation? I am going to quote two authorities in that regard, and I think it will take a good deal to explain them away. Before I do so, however, let me say this: You do not have inflation in a country until you have more money coming into the markets of that country to buy than there are goods and services to be bought with that money, without a rise in prices.


Mr. EVANS:: What are you going to do
with all your wheat?


John Horne Blackmore: One thing at a time, please. That is a definition of inflation; just as soon as you get more money in circulation than you have goods and services to be bought with that money, without a rise in prices, then you have inflation. It matters not whether the government creates that money, whether a banker creates it, or whether it comes in from outside the country. Let us get that laid down solidly as a fundamental principle.
Before I quote the authorities I mentioned a moment ago, I should like to point out something in which I believe all hon. members will be interested. On November 13, 1933, the hon. member for St. Lawrence-St. George (Mr. Cahan) delivered a speech in Toronto, of which I have a copy in my hand. One thing he said has a bearing on this subject. In the course of his remarks the hon. member made clear to his audience that between 1929 and 1933 the banking fraternity in the Dominion of Canada withdrew from circulation some $932,000,000. There is no question that this was a most colossal deflation. The people after that were without the money that was necessary to carry on business, and as a result prices fell and disaster reigned generally throughout the country. But, according to the definition of inflation which apparently is in the minds of most hon. members, if the government of the day had undertaken to put $100,000,000 of that huge amount back into circulation it would have been inflation, crude inflation, uncontrolled inflation. What nonsense!


Charles Avery Dunning: No; that is not so at all.


John Horne Blackmore: I am glad to hear it is not so; we will have a discussion on that later on.
I quote these facts so that we may come to grips with the problem in a general way. It is not likely, Mr. Chairman, that a whole province of this dominion would go completely crazy over an idea so fallacious as the Minister of Finance would lead us to suppose this is.


Mr. MARTIN:: The province has not, but its politicians have.


John Horne Blackmore: In all probability it
will be found that the people of Alberta could give some very good reasons for the hope that is within them.
Now, first of all, with respect to inflation I am going to quote a passage from Planned Money by Sir Basil P. Blackett, published in 1932. This very short quotation appears at page 106. I would ask hon. members to note it carefully:
The right amount of currency in circulation at any given moment is that amount which will do the work required of it at a given level of prices. If it is too much, prices will rise. If it is too little, they will fall.
The minute you get more money in circulation, let me repeat, than enough to do the work of distributing goods and services which are abroad in a country to be distributed, then you have inflation, and not a minute before.
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Charles Avery Dunning: That is correct.


John Horne Blackmore: It matters not who creates the money, or where it comes from. This idea of trying to foist upon the people of this country and the world the idea that a dollar of dominion money backed by the credit of this dominion is inflation, while a dollar created by the most insignificant bank manager is sound money, is nonsense in the highest degree.
I shall quote another statement by a man who surely is respected in his country- whether in this country, or not. I refer to Senator Owen, who is prominent in monetary affairs in the United States. His ideas are not entirely popular, but neither were the ideas of the great inventors, the great reformers or the great leaders of times past in other great movements. But they were right, just the same. Here is what Senator Owen said when giving evidence on June 9, 1937 before a committee of the United States senate in connection with a discussion on "Farm Commodity Prices":
Inflation does not occur until maximum employment and production is achieved. If it should occur, the volume of money could be immediately reduced by selling bonds, by sales tax and other taxes, and retiring such excess money from circulation.
I ask any hon. member of the house: After the $932,000,000 was withdrawn from circulation in Canada, do you suppose there was enough money in the country to do the business of the country? Certainly not. The government at that time could easily have created money and put it into circulation without getting into circulation more than enough money to do the business of the country. That is abundantly clear. Never from that day to this has there been a sufficient restoration of the money that was withdrawn in those four years-never yet. Until enough money is restored to circulation you cannot speak of inflation with any degree of understanding or sincerity.


Charles Avery Dunning: Will my hon. friend permit an interruption?


John Horne Blackmore: Yes.


Charles Avery Dunning: I know he does not wish to create a wrong impression. There never was $932,000,000 withdrawn from circulation. The hon. member's words would bear that interpretation. There never has been that much money in circulation. My hon. friend's last words would leave the impression that it was actual cash money to which he was referring, whereas it was really credit, not cash, to which he referred.


John Horne Blackmore: Has the ministeii
finished?


Charles Avery Dunning: Yes.


John Horne Blackmore: Yes, I grant that,- and that is just the sort of question and answer I welcome. I shall gladly answer questions from hon. members. It has been the contention of this group steadily that purchasing power is of two kinds, both currency and credit. So far as its ability to buy and do other work is concerned, I think my hon. friend will admit that every dollar of the $932,000,000 could do just as much work as a dollar bill. The result was that when that credit was withdrawn the country was short of money, just as definitely as though it had been dollar bills. I am glad the minister raised that point, and let me get it straight.
Now, dollar bills might be replaced by either credit or currency. The minister made much of a further point-and he is sincere when he makes a statement. I am just as sincere when I say he is wrong. The clash between the two of us on the issue is there, and perfectly honestly. He says that when one dollar is drawn from circulation somebody has to pay for it. We do not doubt that. Every dollar he withdraws by taxation now somebody has to pay for. Surely. But if the dollar he withdraws from taxation happens to have been borrowed out of a bank, and then withdrawn by him through taxation, there are at least two people paying that dollar, the man who has to pay it back to the bank and the man who has to pay it in to the government. There is no escaping the truth of that statement.
There are a great many people in the country who have the idea that you cannot have a dollar unless it is a debt dollar. I ask any hon. member: What about that $26,000,000 that Canada created? Was that debt money? Did anybody do anything for that money? Did it cost this dominion one cent? Was it paid back? The answer in every single case must be no. There was some debt free money and there was some interest free money, beyond any question.
The minister implied that every time in the world's history a government has issued money it has gone awry. He did not use those words and, while I do not wish to overstate what he has said, yet on the other hand wish to be perfectly honest, I believe I have interpreted him correctly. His implication was that whenever a government has created and used state money we have had crude or uncontrolled inflation and disastrous consequences.


Charles Avery Dunning: Yes, if to excess.

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John Horne Blackmore: 
Charles Avery Dunning: Just as we found we could support two hundred and seventy millions of dollars. That is monetary management.


John Horne Blackmore: Quite so, and the
question then at issue between us would be: Shall the banker create all that money and own it and make us pay interest on it, or shall we own it, and make him pay interest on it if anybody has to pay interest.


Charles Avery Dunning: That is not reasonable. When I mentioned the two hundred and seventy millions of currency presently outstanding, it was issued by the Bank of Canada which is owned by the government and controlled by parliament; and whereas that issue was two hundred million dollars three years ago, it is now two hundred and seventy million dollars. I do not say for one moment, because that issue of currency has grown by seventy million dollars in three years, that that is inflation. That is management, management in accordance with the demonstrated needs of the country from time to time. The difference is between management and uncontrolled inflation-that is all.


John Horne Blackmore: Following up what the minister has just said, I should like to know this: Did that seventy million dollars come into the possession of the Dominion of Canada as debt-free money, or was it created by the bank with power to lend it to somebody, SO' that in effect it belonged to the bank? For instance, can the Dominion of Canada get ten million dollars of that money to run dominion affairs without going into debt for it?


Charles Avery Dunning: We go into debt to our own bank, of course.


John Horne Blackmore: That is the principle to which I object. The Guernsey island people did not do that. I shall speak further of that experiment when I have a little more time, and it will likely be in this debate. The first move of the Guernsey island people was to create three thousand one-pound notes, and with those build a market house. Then it collected the three thousand one-pound notes as yearly dues on the market place, and no one owed anybody for the money. The state created it and the state spent it.


Charles Avery Dunning: And the taxpayers paid it back.


John Horne Blackmore: Surely. Very fine. But the difficulty is that if Canada had been doing that, Canada would have borrowed the three thousand pounds from a banker and then would have taxed the people enough to pay it all back to the banker, and to pay the interest on it as well, and still the people and the government would have owed the bank the three thousand pounds. That is exactly where thr difference lies. I think that is quite clear
Loan oj $750,000,000

Without discussing money further now, I am going to say a word or two about the debt situation in Canada. I expected to say something about that, but I was not quite sure whether I would be allowed to speak on it. Until recently I thought I knew a little about the rules of the house, but now I find I know practically nothing about them.


Mr. LAPOINTE (Quebec East):: Why not wait for the budget debate?


John Horne Blackmore: Then we would not have time to discuss this matter. I may seem over-earnest in discussing money, but it is the most important thing that you can discuss to-day; for this proposal will work out a solution of your problems, which otherwise are unsolvable. To relegate the discussion of this vitally important matter to some little corner does not appeal to us as common sense. Let me say that we have deliberately refrained from participating in many of the discussions of this house so that in the time which might justly be allowed to us we could set forth the message that we came here to deliver. All we want is an opportunity to set it forth and an attentive, patient hearing such as we give to those who are speaking of other matters.
Now just a word about Canada's debt.


Mr. LAWSON:: Before my hon. friend goes to debt-


An hon. MEMBER:: Goes into debt.


James Earl Lawson: Before my hon. friend goes into the subject of debt, may I ask him this question? If he were putting into effect in Canada a new monetary system along the lines he is advocating, would it still be a principle of that system that I could go to a clearing house or some other institution and obtain there a credit which I, in turn, could use for the purpose of acquiring goods without my giving to that institution, in exchange for that credit, either goods or services or a promise to deliver goods or services at some future date? I ask that sincerely because 1 am anxious to understand.


John Horne Blackmore: That, of course, is a sincere question. In order to be able to understand it, I must first lay down this principle, that social credit has two great objectives in the financial system. The first one of these is to see to it that there is adequate production of all kinds, sufficient to the needs of all the people of Canada. The second of these is to bring about consumption. The money which is advanced for production goes, as it does to-day, in the form of a debt, and it must be repaid.
[Mr. Blackmoro.J


James Earl Lawson: If my hon. friend will permit me, is it not conceded by all people that we have all the production that we can possibly need in Canada, and that our need is not greater production but the power to consume what we are producing and an equitable distribution of the profits of that production? I am trying to follow the hon. member.


John Horne Blackmore: Yes, but the reason I stated that principle first for my hon. friend is that if we said, first of all, that we will issue money for consumption, then we would be met at once by the very thing that popped up when we first came to parliament, when an hon. member who is now in the chamber said: We cannot produce enough.


An hon. MEMBER:: Still true.


John Horne Blackmore: There, do you hear that? You see how it directly opposes what the hon. member for York South (Mr. Lawson) said. So we say the first thing is to make sure that you will have all of the production that all of your people can use in so far as your resources and the industrial equipment which you possess can produce that abundance; and you govern that by lending, perhaps at two per cent or one and a half per cent interest, whatever amount is necessary to bring down the cost of production where it ought to be, instead of where it is to-day. That is the first principle to be grasped. That money continues to go out as a debt; but still, so far as the government is concerned, it is not a debt. That is, the government does not borrow it from anyone, does not owe anyone for it.
Some people may say: We do not understand that. Perhaps in this very discussion I will bring to the attention of the committee the treasury note, the Bradbury, in England, and will point out the way in which the British people managed to get into circulation over three hundred million pounds of paper that did not cost the British treasury one cent beyond the cost of printing the notes.


Malcolm McLean: Would the hon. member permit a question?


John Horne Blackmore: Certainly.


Malcolm McLean: I would ask the hon. member if he has answered the question put by the hon. member for York South in the affirmative or in the negative.


John Horne Blackmore: Just as soon as we can get to it. Let us not rush along. As the hon. member for Acadia (Mr. Quelch) so well pointed out, the social credit concept is this. There is at the present time in our financial and productive system a deficiency of purchas-

Loan oj $750,000,000
ing power. This is well illustrated by the figures which record United States production and income in 1918. In that year, as is shown in Income of the United States, volume 2, pages 242 to 248, there were sixty billion dollars' worth of consumers' goods produced, and into the hands of the consumers in wages, salaries, dividends, bonuses and every other form of purchasing power, there went only forty-five billion dollars. The result was that there were fifteen billion dollars' worth of consumers' goods which there was no purchasing power in the hands of the people to buy. The result was that either the goods had to be sold on time or credit, putting the people of the United States into debt, or they had to be sold to foreign nations, putting them into debt. That is the very principle about which the hon. member for Acadia was talking a few minutes ago. It was considered sound finance for the government of the United States to advance credits to foreign countries- let us say, for fifteen billion dollars, although of course that is too much-to let them buy those goods on time; but to advance the credit to their own people has never yet entered their minds.


James Earl Lawson: If my hon. friend will pardon me-I know what he is telling us, because I have taken the trouble to try to make a study of the social credit system-if the United States lends money to a foreign nation it gets that nation's promise to pay, be it good, bad or indifferent, and that is in effect a promise to deliver future goods and services. If the social credit monetary system is put into effect, do I understand that the hon. member advocates the advance of credit- which according to him is as good as money- to people without those people in turn delivering, in exchange for that credit, goods or services, or without their promise to deliver at some future time goods or services?


John Horne Blackmore: We are coming right to the answer.


An hon. MEMBER:: You are a long time coming.


John Horne Blackmore: Well, I may have to be.


James Earl Lawson: Not for me.


John Horne Blackmore: It so happens that the hon. member for York South is a little keener than a good many other hon. members. I have had some experience with some of them. I come now to the direct answer to my hon. friend's question. Suppose we keep in mind the situation in the United States. If the United States, with sixty billion dollars' worth of consumers' goods in 1918, 71492-97
realizing it has only forty-five billion dollars with which to buy the goods, wishes to balance its economy to enable its producers to sell their goods, what must it do?


James Earl Lawson: Issue more medium of
exchange.


John Horne Blackmore: Now we are on the right track. Exactly. That is the social credit contention. Just as an illustration, let me come back to Canada and the twenty-six million dollars.


John Ritchie MacNicol: A minute ago the hon. member said "billions," and now he says "millions."


John Horne Blackmore: If I made a slip I stand corrected. I am listening to all these questions at the same time and trying to get through a speech.


An hon. MEMBER:: We are trying to follow you.


John Horne Blackmore: That is all right. We will get there. At least I hope so, in the interests of Canada and the British empire. When Canada created that twenty-six million dollars, was it necessary that that money should be lent out only to somebody who agreed to pay it back, or could it have been used to pay soldiers' pensions or widows' pensions or pensions for the blind or the aged? There is no conceivable reason why it could not have been used as a gift to the people. It would have been just as good, just as sound money.


James Earl Lawson: Oh, yes, but-if my hon. friend will pardon me-surely he will agree with me that if we take this money or currency or credit and use it as a gift to somebody, that simply means that we are arbitrarily taking from somebody else something which is theirs in order to give it to another class.


An hon. MEMBER:: Not necessarily.


James Earl Lawson: We are redistributing goods and services without something being given in exchange.


John Horne Blackmore: Let us keep right to the point. I appreciate greatly the interest; that is what we want. I want to answer the first question, and I am going to put the matter straightforwardly. I say unqualifiedly, yes, the government will create the purchasing power which is necessary to market this fifteen billion dollars' worth of goods in the United States. It will distribute that purchasing power to the people, who will buy the goods, and thereby enable the producers

Loan of $750,000,000

to have a market and assist their economy to go forward, and equate consumption with production.


James Earl Lawson: Without the people who receive it giving goods or services in return?


John Horne Blackmore: Yes, unquestionably.


Charles Avery Dunning: I cannot quite hear.


James Earl Lawson: The answer is. "yes, unquestionably."


Charles Avery Dunning: The money would be
given without any return?


James Earl Lawson: Without goods or services?


John Horne Blackmore: In a way it seems
queer. This is new to us, I know; but Mr. Chairman, I ask you, can we expect a new system which will solve our problems to be devoid of something which is new and strange to us? Everything else about us is new and strange; why shall we not expect the solution of our problems to involve and embody principles which are new and strange?


Mr. POULIOT:: If my hon. friend permits me, we all admire his system, but what we want to know is how it will work.


John Horne Blackmore: May I go back to
the question of the hon. member for York South? I had not expected to talk along this line, so I am speaking quite extemporaneously. I trust I do not make a slip which will be reported in Hansard, it is easy to do so when one is speaking extemporaneously.


James Earl Lawson: The hon. member is making himself perfectly clear.


John Horne Blackmore: I want to make
myself perfectly clear. I think I can do so without making statements which can be distorted. But I am anxious to make myself clear at this point although just now I had not been thinking it through. I have gone through it scores of times, but not upon the floor of the house before such an interested audience.
As the hon. member for Acadia pointed out, what did Great Britain do? She advanced millions of pounds on credit so that she could sell her goods, and she thought it was good business. She lost money.


Charles Avery Dunning: But she had the promise to pay.


James Earl Lawson: She got in exchange the
promise to deliver goods and services of an equivalent value in the future.


John Horne Blackmore: She got nothing for
the promises. But she was not ruined. What she got was a market.


Charles Avery Dunning: She got or expected to
get her money back.


John Horne Blackmore: 
Charles Avery Dunning: Those are losses over
a long period.


John Horne Blackmore: Exactly. But the
money never came back.


Charles Avery Dunning: Not that particular
money. But other money did.


John Horne Blackmore: Perhaps, but a great
deal has not come back. To continue point by point; this is a new idea; we grant that. I wonder if I have answered the hon. member for York South?


James Earl Lawson: You have answered my
original question completely, in the affirmative.


John Horne Blackmore: Now we are dealing
with the logicality of the proposal. Is it logical; is it sensible to give money to people to buy with? That is the next question. Let us refer to the fifteen billion dollars of surplus goods. Is it logical to let fifteen billion dollars' worth of goods be destroyed?


An hon. MEMBER:: No.


John Horne Blackmore: Is it logical to let
those goods stay on the shelves until they decay? Is it logical to let the factories which produced them close up and to turn men out of work so that they can no longer produce goods?


Mr. POOLE:: Monetize the goods.


John Horne Blackmore: Is it logical to issue millions of dollars of debt which will never be paid? That is what we are doing. Is it logical to engage in a trade war with other countries, trying to elbow other countries out of foreign markets so that we can sell our goods, against-for instance-the competition of the United States, thereby engaging in an international trade war which may ultimately lead to armed conflict? These are things which have been done up to the present time. Social creditors say that such foolish and wasteful practices are all absolutely illogical, absolutely insane, and that they must be changed. What the United States needed above all other things, when they had sixty billion dollars' worth of goods and only forty-five billion dollars' worth of purchasing power, was another fifteen billion dollars' worth of purchasing power, fifteen billion dollars' worth of markets whereby those goods could be put

Loan oj S750,000,000
into the hands of the people. The thing we are suffering from is simply this, that after we have installed the machine to produce shoes, for example, without the use of manpower, the men who are displaced are unable to obtain shoes. We cannot get the shoes into the hands of the poor fellows who, because they have been displaced, are unable to earn wages.


James Earl Lawson: It is easy to get the shoes into their hands. All you have to do is give it to them, and that is more simple than the hon. member's' scheme. AVhat I say sincerely is that, having tried to study his scheme, I have come to the conclusion that that is exactly what he proposes to accomplish, namely, to give the shoes away for nothing. They give nothing in exchange. They do not give any goods or services in exchange, and if they do not, what are they going to give?


John Horne Blackmore: In exchange, they are giving consumption. Men are coming to realize that a person who can consume is an asset to a country. Let any agent to-day, representing any company, go out and try to sell his product. What is the first thing he does in the community in which he is trying to promote sales? He looks for men who might be able to buy.


James Earl Lawson: Effective buyers; that is, those who have something to give in exchange.


Eric Joseph Poole: That is why we need purchasing power.


James Earl Lawson: But when someone is not an effective buyer and consumes anyway, he is not an asset but a liability.


John Horne Blackmore: Let us study the question calmly-


James Earl Lawson: I did not mean to interrupt the hon. gentleman.


John Horne Blackmore: We welcome interruptions. That is what we want. Let us take the questions point by point, answering one at a time even if we have to stay here all night-because we can answer all these questions.


Malcolm McLean: What about the resolution?


John Horne Blackmore: Suppose the dominion government creates a five dollar bill and puts it into the hands of a widow, enabling her to buy a pair of shoes. The government is not exactly compelling the shoe factory to give her a pair of shoes.


James Earl Lawson: But we are making the people of Canada give it to her, the people from whom we take five dollars by way of taxation.
71492-97J


John Horne Blackmore: You are not making the people of Canada give it so long as you have not created more purchasing power than there are goods and services to justify the giving of that five dollars.


James Earl Lawson: I cannot agree with your premise.


John Horne Blackmore: It is true whether you agree with it or not. When you have in the United States $15,000,000,000 worth of consumers' goods which you cannot sell, those goods are a justification for the creation of more money, and the state can create more money up to the extent to which it can enable the people to consume or distribute the $15,000,000,000 worth of goods. And there will not be any inflation, according to the definitions of that word which I have read from Sir Basil Blackett. If there is no inflation you take nothing from the people because there is no rise in prices as a result of which there is any indirect taxation. If new money results in a rise in prices, creating an indirect tax, then you are taking something from the people. But if you create a new dollar bill, which does not cause inflation, and put it into the hands of a person who has to consume, you have created a market in your own country and distributed the product in your own country, and you have blessed both your own consumers and your own producers.


Charles Avery Dunning: Then why should anyone work if he can get something without working? Why should any man work if he can get purchasing power for what he needs without having to go to work? And what would happen to production if everybody said, " There is no need to work because we can get purchasing power without doing so?"


John Horne Blackmore: That is an excellent question.


An hon. MEMBER:: Answer it.


John Horne Blackmore: Hon. members will notice that we have changed our point of discussion from inflation to an altogether different aspect of the subject.


James Earl Lawson: I was never on inflation; that is not a bugbear to me.


John Horne Blackmore: Now we are on the question, how to get the people to work under the system that we propose. My time has already gone, and the chairman has been considerate enough to give me some latitude. I must hurry. That is a legitimate question and it must be answered. Suppose the government gave $25 a month to everyone-I mention that figure because everyone hears about $25 to-day-and that there were jobs
Loan oj $750,000,000

to be had. Now take any young couple, a married couple, say. The young woman gets $25 and her husband gets $25.


Charles Avery Dunning: For nothing?


John Horne Blackmore: Yes, simply because they belong to society. Let me say right here that to-day we are giving something to all the people who are on relief, so that when we balk at this supposition about giving $25 to everybody we are simply straining at a gnat and swallowing a camel. We are allowing thousands of returned men who should be receiving munificent treatment from the country, who have already earned it, to go on suffering in misery-


James Earl Lawson: That is not fair.


John Horne Blackmore: I am prepared to modify that statement to the extent that is necessary.


Frederick George Sanderson: I must remind the hon. member that he has exceeded his time, and the questions and interruptions have not counted in his time.


James Earl Lawson: I will talk for a couple of jninutes and you can start again.


John Horne Blackmore: May I just finish the point I was making about the supposititious married couple? Does anyone here suppose that if a young married man had a chance to make $25 a month in addition to the $25 that he was receiving he would not take that chance? I venture to say that if he were disinclined to take it his wife would very soon make matters so uncomfortable for him that he would be willing to change his mind. The point that we overlook is that under our relief arrangement when a young man is energetic enough to get a job we take away his relief. Under social credit we propose to continue giving him his relief so that he will have an additional incentive to obtain work if work can be had at all.


Jean-François Pouliot: (Temis-couaita): I 'have listened with deep interest to the last part of the speech delivered by the leader of the Social Credit party (Mr. Black-more). There are some points in his speech which I do not understand, and I will try to give him an explanation of what I gather from his remarks. I will try to be just as courteous as he has been, and to answer to the best of my ability any questions that may come from his group. I am not a mathematician and I will not deal in large figures-billions or trillions. I will speak only of millions. That is large enough for concrete examples of what we understand.

In the first place, at a time when the happiness of man was unclouded, in the garden of Eden, there was no mint to make currency. Man was happy just the same. After Adam and Eve were expelled from the garden of Eden, it was a penalty imposed upon them, to earn their own living. But for several centuries there was no coinage. It was the wonderful age of the patriarchs; they had no coins although they exchanged goods. It is just on account of the fact that our great-great-great-great-great-grandparents were expelled from the garden of Eden because of their sin that man has to work and to receive money for his services or his work. Therefore coinage is the result of sin.


James Earl Lawson: And sin is the result of an apple.


Jean-François Pouliot: Yes, and the eating of the apple was the cornerstone of all mints in all countries of the world. Of course some hon. members may think I am joking in speaking like that; but I am serious, and I am sure that if all hon. members do not understand the seriousness of my argument, some at any rate realize that there is something in it.
To speak in another vein, of course there is only one Christmas in the year. In order to give money freely to people there should be beforehand a very important reform, a reform of the calendar. Instead of one Christmas only, we should have Christmases every day of the year.


John Horne Blackmore: A good idea. Why
not?


Jean-François Pouliot: Therefore Santa Claus
would not have time to go to the north pole; he would have to stay away from the snow during the spring, summer and fall.


William Hayhurst: You still believe in
Santa Claus?


Jean-François Pouliot: Well, I believe in Santa Claus as much as I believe in social credit.


Norman Jaques: You prefer Black Friday.


Jean-François Pouliot: I know my hon. friends are sincere; I do not mistrust their sincerity. But when people have no money, I wonder whether it is wise to speak to them of millions without giving millions to them. Those who are thirsty it makes more thirsty, and those who are hungry it makes more hungry. It is dangerous to show bubbles to the people. They are brilliant, but they disappear very soon.
There is the question of the creation of purchasing power. What is it? It is power to purchase, or the power to get some other goods. For what consideration, or how shall

Loan oj $750,000,000
we get it? There is a Latin line which is known by all: Quis, quid, ubi, cur, quibus auxiliis, quomodo, quando? Whenever there is an argument of some kind one can ask, Quis-who said it? I know it is Major Douglas who first said it, and he had some eminent disciples in this country, including the premier of Alberta. They are highly respectable people, we know, and they say it. Then there is quid; What do they say? On that point I am not sure because I do not understand very well. Then there is quod; Why?
I do not impute motives to anyone, and I shall not say that it is for political motives. Quibus auxiliis? With what help, what assistance? Is it with the assistance of the provincial government of Alberta, or people of goodwill throughout this country who are ready to subscribe any amount of money to see the result of experience? It may be possible. Then there is also quomodo? by what means; and quando? when. I know of course that the theory is expounded to us and explained very ably, but to my mind not absolutely satisfactorily. Therefore the main points are: What is it, how will it be done, and when? I leave aside the other questions.
It is a law of nature that man has to work to earn his living. In the first place there was no coinage; there was no money; man worked and he received clothes and food from his employer. Those who were rich exchanged cattle for other goods, until trade became more widespread and cities came into being; then every man could not have a herd of camels or sheep or other animals to dispose of in order to obtain other things that he required, and people becoming more civilized got some form of coinage, which as my hon. friends know was first a piece of stone, which was supposed to have value. At that tame the population of the world was not so big, but when the population became larger it was understood by tradesmen that they had to exchange a certain quantity of metal for other goods that they required for their living.


John Horne Blackmore: Would the hon. member like to have me answer his questions one by one as he asks them? Then we should not be confused by too many questions.


Jean-François Pouliot: I am ready to do anything. If my friend prefers to ask me questions right now, I am ready to answer them. If he prefers to ask me questions afterwards, I am at his disposal just the same. I warn him that I am not an expert in those matters; I speak as an ordinary individual who has read a little-very little-of the history of the world and who is open-minded in all these matters. If my hon. friend has a question to ask, I am ready to answer him.


John Horne Blackmore: I wish to say here in public that the behaviour of the hon. member for Temiscouata (Mr. Pouliot) in the past has convinced me beyond any question that what he says about himself is true. He is a sincere, earnest man who really wishes to find the truth. I think it would be better in the interest of elucidating the truth that I should answer his questions one by one.


Jean-François Pouliot: That is not my understanding. It is that I speak earnestly, candidly and I express my views, which of course may be all wrong, but I want my hon. friend to tell me where I am wrong. I ask him questions in order to have an opportunity to understand his system.


John Horne Blackmore: I thought that would be what my hon. friend wanted, so I believe I will ask him-


Frederick George Sanderson: If the hon. member is going to ask a question, I wish he would do so and not make a speech.


John Horne Blackmore: Perhaps I had better put my answer in the form of a question, in order to be entirely within the rules.


Mr. SLAGHT:: In the interests of all the other hon. members of the committee I suggest that the two hon. gentlemen ought to hire a hall for themselves.


Jean-François Pouliot: I thank the hon. member for Lethbridge warmly for his kind words. Perhaps he would tell me how A or B may be given any purchasing power in the form of money by the state for services that are not rendered, except by w'ay of a gratuity voted by both houses of parliament and sanctioned by the governor general?


John Horne Blackmore: I think this will cover that point. The dominion government to-day is granting relief to the extent of millions of dollars and is getting no services in return. If the dominion government can borrow money or raise money by taxation and give that money to people without getting a return for it, is there any reason why they should not be able to create money and do the same thing with it? If by borrowing money now the government are able to give a man $25, $30 or $40 a month-which is not enough -is there any reason why, if the production of the country will justify it, they should not create enough money to give that man $50, which might be somewhere near what he ought to have?


Jean-François Pouliot: The government subscribes some money for the relief of a certain group of good Canadians who unfortunately have no means of earning their livelihood. That
Loan oj 8750,000,000

is true, but that group does not include all Canadians. Those who receive this assistance form only a fraction of our population, and this relief is paid by the taxes which come from the pockets of the rest of the population, as my hon. friend knows. On the other hand, if every Canadian is to receive $25 or $50 a month, who will pay for it? That is my point. If the Canadian parliament has decided, on humanitarian grounds, to give assistance in the form of relief or relief works to that portion of the population which is unemployed, my hon. friend must remember that this is only one part and not the whole population. Furthermore, as my hon. friend knows very well, if everyone were assisted by parliament there would be no more relief. It would be a kind of superannuation for everyone in this country, by means of money voted by parliament.
Suppose we have a group of one hundred people forming the whole population of the world. Of the one hundred two are sick and five are unemployed. These seven are assisted by the remaining ninety-three, out of charity.


Norman Jaques: What about the machines?


Jean-François Pouliot: I am answering the hon. member for Lethbridge. If any other hon. member desires to ask me a question he may do so. Seven of the one hundred are assisted by the ninety-three remaining. But suppose each of the one hundred receives $25 a month. Would that come from the pocket of A to the pocket of B and from B back to A? Is it just an exchange of money that comes from somewhere else? And if these one hundred people, forming the population of the world, were all unemployed, how would they get $25 or S50 a month or a week?


John Horne Blackmore: That is a sincere question, and I think I can bring the answer forcibly to the hon. member's attention in this way: If we continue at our present rate we shall arrive at the point where all the goods and services people can possibly use will be produced by about two per cent of the population. So that really the people who are getting the S50 a month are getting it from the work of the machines, which have so tremendously increased the productive power of our people that it is almost as though we had these hundred people in a lovely valley where all the fruits, all the fishes and everything of that kind were produced in abundance. We know such conditions could exist. We have virtually made this wTorld into such a valley now where we can produce plenty; for we have learned to produce more of every kind of food, clothing, shelter and amusement, than we can use.

But we cannot use the labour of all the people; we use machines instead. The question is, shall we let the machines work and let the people have the results of that work, much as one would allow people to pick fruit from the hillsides and catch fish in the streams; or shall we deny all the people who cannot get at the machines the privilege of enjoying any of the benefits derived from the machines which put them out of w'ork? That is the vital question confronting us.


Mr. FAFARD:: Is my hon. friend speaking to the amendment or to the resolution?


John Horne Blackmore: I am just answering the question of the hon. member for Temis-couata.


Jean-François Pouliot: I was dealing with a world population of one hundred. My hon. friend said that at the rate the machine age was progressing, in the more or less distant future only two per cent of the population would have work.


John Horne Blackmore: Probably, I just
supposed that.


Jean-François Pouliot: Therefore, of the one hundred only two would work, and they would have to provide that $25 a week for the ninety-eight others. This would mean that these two men would have to provide over $100,000 for the support of the ninety-eight others. Each man would require a salary of about $50,000 to give away for the benefit of the others.


John Horne Blackmore: My hon. friend is overlooking the work done by the machines; he has not allowed for that. There are just two men managing the machines, and the machines are doing the work. You can get an illustration of that by going to a power plant. After the plant is completed, two or three men can run it and produce all the power needed over a wide area. The power plant is there and is producing this service out of the resources of the country, and the resources and machinery of the country belong to the state, to the people as a whole. That is beyond any question, just as our highways, churches, schools and universities belong to the people, even though those who built and paid for them may be dead. Do I answer the question?


Jean-François Pouliot: I do not think my hon. friend has met the point. There are a hundred men together. Only two of those men have purchasing power. In other words, two have to support ninety-eight others. My hon. friend mentioned that there could be a creation of purchasing power. I should like

Loan of $750,000,000
to know how we would increase the purchasing power of the ninety-eight people who have no money at all and no means of getting it?


John Horne Blackmore: That is where the state comes in. If the machines operated by two men are producing enough shoes, food and eveiy other kind of goods to feed all of the one hundred, then it will be the state's task to turn the goods into money; for while goods ought to be purchasing power, to-day they are not purchasing power unless they can be sold. The goods must be changed into money before they become genuine purchasing power. The state, using goods, creates purchasing power, tickets, and distributes them to the men, and then the men are able to take part of that supply of goods. That is the kind of situation we are going into, beyond doubt. It is not a question of the amount of income each of the two men can win running the machines. It is the fact that the products of the machines are enough to supply everybody's needs and are changed into purchasing power in the form of money or tickets, as though the machines were creating a great heap of all kinds of goods, and all the people around were enabled to have a share out of the pile. The tickets are made and distributed to the people so that they can buy goods out of the pile. If that is not done you will find this peculiar thing happening: With the two men doing all the work and apparently having all the purchasing power, your machines will run just long enough to feed the two men, while all the others will starve and the machines will stand idle-which would be absurd.


Jean-François Pouliot: I do not quite understand the explanation the hon. member has given.


Frederick George Sanderson: The questioning between the hon. member for Temiscouata and the hon. member for Lethbridge has been going on for some time. When the hon. member for Temiscouata continues, I would ask him to address his remarks to the chair.


Jean-François Pouliot: I will tell you, sir, that I have always addressed the hon. member in the third person. In fact, while I looked at him my observations were addressed to the chair. The matter has been discussed since three o'clock and. seeing that it is now five minutes to six, I hope the chair will not object if we continue until six o'clock. The discussion is regular, provided no other members wish to ask questions. They in their turn may rise, provided each does not speak more than forty minutes.


Frederick George Sanderson: Will the hon. member proceed with his discussion of the resolution.


Jean-François Pouliot: Thank you. Of course,
according to your ruling, Mr. Chairman, I shall not ask any more questions of the hon. member for Lethbridge.


Charles Avery Dunning: Would the hon. member for Temiscouata permit me to ask a favour of him?


Jean-François Pouliot: Yes.


Charles Avery Dunning: I would prefer not to continue this discussion this evening, and before six o'clock had intended moving that the committee rise, report progress and ask leave to sit again. I should think the hon. member would prefer not to break in on his own remarks five minutes from now.


Jean-François Pouliot: No; but if the Minister of Finance does not mind I would ask him for some information.


Charles Avery Dunning: Very well.


Jean-François Pouliot: I should like, first, a tabulation showing the deposits by the public payable on demand in Canada; second, deposits by the public payable after notice or on a fixed day in Canada, and, third, the total monthly clearings of all chartered banks for the last two or three years.


Charles Avery Dunning: Yes.


Jean-François Pouliot: It seems that that could be done easily.


Charles Avery Dunning: Yes.


Jean-François Pouliot: I thank the minister. Then, I should like to have a tabulation for the past five years showing the amounts of dividends paid twice a year by each of the chartered banks, and also the total amount of interest paid on deposits twice a year by the banks.


Charles Avery Dunning: I am not sure of the
latter, but I shall make every effort to get it.
Progress reported.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock. PRIVATE BILL



QUEBEC RAILWAY, LIGHT AND POWER COMPANY

[Stage Direction]
The house again in committee on Bill No. 8, respecting the Quebec Railway, Light and Power Company-Mr. Parent (Quebec West and South)-Mr. Sanderson in the chair.
[Stage Direction]
Quebec Railivay, Light and Power
On section 1-Declaratory.
Jean-François Pouliot: Mr. Chairman, the other
day we had very able explanations of this bill given by two or three hon. members. At page 1412 of Hansard the hon. member for Quebec West and South (Mr. Parent) is reported as having said:
We claim that the original charter covers whatever forms of transportation science may discover.
I wonder if the hon. member was accurately reported in Hansard?


Mr. PARENT (Quebec West and South):: I have not a copy of the Hansard before me, so I cannot answer my hon. friend.


Jean-François Pouliot: Does the hon. gentleman
say yes?


Charles Eugène Parent: I have not the Hansard before me.


Jean-François Pouliot: I will repeat my question. At page 1412 the hon. gentleman is reported as having said:
We claim that the original charter covers whatever forms of transportation science may discover.
I wonder if the hon. member was accurately reported.


Charles Eugène Parent: To the best of my knowledge I may have said what the hon. member has quoted. I was interpreting section 8 of the original charter of 1895 which provides for the use by the company of "any approved mechanical power or other means, agency or force for such purpose that science or invention may develop." I certainly used the words "that science or invention may develop," if that is what my hon. friend is referring to, because those are the words used in the original charter of 1895.


Jean-François Pouliot: I thank my hon. friend for his explanation, but if he is correctly reported there is no need for this bill. He is proposing that the original charter be amended to permit the company to use buses, but if the original charter covers whatever forms of transportation science may develop the present bill is useless.
I should like to summarize what has happened in this case. It is to be regretted at times that the evidence which is given before all the committees of the house is not recorded. Able counsel for the Quebec Railway company, after numerous questions had been put to them, admitted in the committee that the company was operating buses; that it was also operating taxis, and further, that it controlled the majority of shares in the Quebec

Cartage Company. The Quebec Cartage Company is a taxi and truck company, and therefore they do not need this legislation at all. In other words, the Quebec Railway Company comes here just to be in a position to state that the Quebec utilities commission has no jurisdiction over the rates that the company may charge the travelling public, and this bill is just a smoke-screen. I do not see how the committee can approve it. That is my first point.
But there are other considerations. The agreement between the railway company and the city of Quebec is one that apparently requires approval by the dominion parliament. At least six or eight times there have been previous agreements between the city of Quebec and the Quebec Railway company, but at none of these times did both parties come to parliament for approval. They went to the Quebec legislature, and I do not see why they do not follow the same procedure now. There is no reason for changing their procedure, because we have no jurisdiction whatever in such matters.
May I remind the committee of another statement which was made by Mr. J. A. Nadeau, chief counsel for the city of Quebec, before the railway committee. He was asked if it was the intention of the city to have the same exclusive franchise for buses as they have already for trolley cars for a period of thirty years from 1925 to 1955, and he answered affirmatively. That, of course, is outside the knowledge of hon. members who have not attended the sittings of the railway committee.
Therefore, sir, because this parliament has no jurisdiction over buses that operate within one province only, and because the purpose of the city of Quebec is to secure by this disguised legislation an exclusive franchise, it seems to me that this committee should not approve the bill.


[Stage Direction]
Section agreed to.
Preamble agreed to.
Frederick George Sanderson: Shall I report this bill?
Mr. O'NEILL: Mr. Chairman, there were some remarks that I wanted to make on this bill. I tried to make them on the former occasion on which the bill was in committee, but I was told I was too late then. I do not know whether I am too late again now, but if I am in order I should like to say a few words. The company contend that conditions have changed since they obtained
Technical Education
their franchise and they now wish to operate trolley buses and auto buses. I am quite prepared to grant them that privilege, but they also wish to operate in addition "all kinds of public or private conveyances." I think that takes in a little too much territory. I do not understand why they should want to provide now for some sort of conveyance that may be operating five or six years from now under some different name from trolley bus or auto bus. It seems to me that if they get what they are asking for now, the right to operate trolley buses and auto buses, they should be quite satisfied with that. Then, in five or ten years' time, if there is some other sort of public conveyance for which they wish to have a franchise, they can come and get it. They have not offered me any reasonable excuse why they should ask for that. It is that to which I want to object, and to be on record as objecting to that clause: "all kinds of public or private conveyances."
If they are willing to delete that clause, I am quite willing that the bill should pass; otherwise I want my vote registered against it.


Frederick George Sanderson: Shall I report the bill?


Jean-François Pouliot: Carried on division.
Bill reported on division, read the third time and passed.



TECHNICAL EDUCATION


[Stage Direction]
Hon. NORMAN McL. ROGERS (Minister of Labour) moved the second reading of Bill No. 33, to amend the Technical Education Act.
Motion agrteed to, bill read the second time, and the house went into committee thereon, Mr. Sanderson in the chair.
Section 1 agreed to.
On section 2-Disposition of unexpended
balances.
James Earl Lawson: Is this the general clause which provides for the continuance of the grant? It is perfectly apparent, from the fact that the full grant was taken up by most of the provinces within the time originally limited, that technical education is regarded very highly in many provinces. In addition to that, the national employment commission apparently recommended the continuance and extension of technical education as a means 71492-98
of youth training. Would the minister have any objection to advising the committee whether or not the government is giving serious consideration to the matter of extending grants for technical education, or, in other words, creating a new grant such as the original bill of 1919 provided in order that it might be furthered? I quite realize the minister may say that at this time he is not prepared to make any announcement; but I suggest to the minister that it is a live subject of discussion, particularly in the industrial centres, and the people of those centres are very much interested in knowing whether such a scheme is contemplated.


Mr. ROGERS:: The question asked by my hon. friend is an entirely relevant one. As a matter of fact, the bill before the committee simply provides for a continuance of the old grants, and only one province, Manitoba, is in a position where it may take advantage of the original grants under the act of 1919. As to any extension of the policy which was given expression in the original act of 1919, my hon. friend is aware that the government must naturally choose its own time for any statement of policy.


James Earl Lawson: Quite right.


Norman McLeod Rogers: We had to consider this whole question rather carefully when we undertook certain responsibilities in connection with youth training. The specific recommendation of the national employment commission was that this government should, in cooperation with the provinces, make technical training available for unemployed young people. We have been doing that under the youth training plan. It has already been announced that at this session of parliament a bill will be introduced to provide for a continuance of youth training over a period of three years, so that I should feel that in very large measure the government had responded to the opinion which, I agree, is prevalent in the country, that there is a need for technical education. We did accept the view that the need was most urgent with respect to unemployed young people, and as I have said, we are seeking to meet that need through the youth training program.


James Earl Lawson: I have no desire to condemn this government for the provision it has made to implement a recommendation of the national employment commission. As a matter of fact, I commend this government for the extent to which it has gone. I wish it understood I am not speaking in a political sense.


Norman McLeod Rogers: Quite.

Technical Education


James Earl Lawson: I think this question is above mere partisan polities. I understand that the youth training projects which this government contemplated and for which money has been voted have been sabotaged- I do not use the word in an offensive sense- by lack of cooperation on the part of the government of Ontario, and my information is that there is about $135,000 now available through the department which might be taken advantage of for youth training in technical education in Ontario. If I am in error in the figure the minister can correct me. It is obvious, it seems to me, that for some reason best known to themselves the government of Ontario are not receptive to the idea of using that money in the form in which it has been given for the training of youth in technical education in that province. I am confident that the minister is sincere in his desire to advance youth training and technical education, and I suggest that as an alternative to his present scheme, which apparently is resisted in Ontario-I do not know about the other provinces-he might very well consider the idea of going back to the original scheme of providing a fund on the basis of the original Technical Education Act, which might be taken advantage of in the provinces, and which, I believe, would be made use of in Ontario.


John Ritchie MacNicol: I wonder if any of the money which the minister appears to have on hand under the vote for technical education could be used for aviation purposes. The Toronto board of education are anxious to extend their facilities for instruction in aviation. In 1932 or 1933, or earlier, the board commenced teaching matters pertaining to aviation in a branch of the technical school on Bathurst street. They now desire to branch out considerably because, as the minister knows, there is a large number of young men who would make first-class aviators, but unfortunately it is too expensive to teach them. A few days ago the board sent a letter to Ottawa asking the Toronto members to support their request for an increase in aviation facilities under the technical school grant. I assume that the minister has seen that communication and has been in touch with the board.
In the branch of the technical school located on Bathurst street the facilities are altogether inadequate for further advance in the subject. Is it possible to use some of this money to assist the board not only in the development of an aviation curriculum in the city but for the purpose of promoting cooperation in some way with one or more of the flying schools located in the vicinity of
(Mr. Rogers.]
Toronto? If that is not satisfactory, perhaps they could start flying courses themselves outside the city where students could finish their education as aviators. I do not know whether that conflicts with what the government is doing, at present. I understand that a few years ago a number of students who had obtained initial education in aviation in the Toronto technical school graduated either to Camp Borden or to Trenton. If some of the money could be used by the government for these purposes two very useful purposes would be served. In the first place, an opportunity would be afforded a good many young Canadians to learn aviation from the beginning, as I suppose they do now-that is, all about the machines, engines and so on. Second, provision would be made for turning out well trained young men for commercial aviation or perhaps for another form of flying which we hope will never be necessary.


Norman McLeod Rogers: It is quite true that the government has received requests from the board of education of Toronto in connection with an enlargement of their facilities for aeronautical engineering. I met a delegation from the board some time ago and discussed with them what might be done to assist their efforts in that direction. I was obliged to inform them that there was no appropriation from which a grant could be made for the construction of a building for that purpose. Even under the old Technical Education Act of 1919, as my hon. friend is no doubt aware, only twenty-five per cent of the annual grants could be expended for capital purposes; the balance was to be spent rather for purposes of actual instruction given to students in the technical schools.
I fully agree with the hon. member in regard to the importance of aeronautical engineering at this time. As a matter of fact, through the Department of Transport and the Department of National Defence, the government is giving a measure of assistance to instruction in aviation and aeronautical engineering. That is done not only through assistance given to municipal airports but also through encouragement and assistance given the flying clubs. In addition to that, Trans-Canada Air Lines has established a school of its own in Winnipeg for the training of its own pilots and mechanical staff.
As to any money being available under the legislation now before the committee for the purpose mentioned by my hon. friend, he will be aware from the previous discussion that the only amount made available by this legislation is for Manitoba. No portion of the money could therefore be made available for technical education in Ontario.

Technical Education


John Charles Landeryou: The minister will agree with me, I think, that Alberta has cooperated with his department to the fullest extent in the youth training projects.


Norman McLeod Rogers: That is correct.


John Charles Landeryou: I do not know whether the other provinces have cooperated as wholeheartedly. Could we at this time direct a question or two to the minister regarding the success of these projects?


Norman McLeod Rogers: Alberta exhausted its grant in the second period of the act from 1929 to 1934.


Mr. HANSON:: Is anything available for British Columbia?


Norman McLeod Rogers: British Columbia has
also exhausted its original allotment under the legislation.


William Hayhurst: How much of this
$10,000,000 is left to be expended?


Norman McLeod Rogers: I have no desire to restrict discussion, but there will be ample opportunity to discuss youth training in all its aspects when the legislation providing for a three year program of youth training is before the house. I suggest that it would be preferable to wait until then.


James Earl Lawson: That is not yet on the order paper.


Norman McLeod Rogers: No.


Angus MacInnis: Will the minister say how much of this $10,000,000 is still available for Manitoba and whether that province has ever taken advantage of any part of its share of the fund?


Norman McLeod Rogers: The total amount available to Manitoba was $719,746.56. The amount paid to Manitoba, during the entire period from 1919 to the present date, is $433,709.17. The amount still available to that province is $286,037.39.


John Charles Landeryou: What about Alberta?


Norman McLeod Rogers: The total amount to be expended is $286,037.39, and that can be expended only by Manitoba. All other provinces have taken up their full allotment under the original legislation and the later amending acts.


Jean-François Pouliot: What was the allotment and expenditure for Quebec?


Norman McLeod Rogers: The allotment was $2,-
569,655.53, which has been fully taken up.


Jean-François Pouliot: During what year?


Norman McLeod Rogers: The province of Quebec
exhausted its allotment in the second period, that is, from 1929 to 1934.


Mr. DOUGLAS (Weyburn):: Has the minister a table showing how much was allotted to each province? If the whole statement were put on Hansard we would have a record.


Norman McLeod Rogers: With the consent of the committee I am glad to put on record a statement of the total allotments under the original legislation, and the amount outstanding for Manitoba.
Statement showing disposition of funds under the Technical Education Act as at the end of September, 1938
	Amount	Amounts paid	
	available	by federal	
	during	government as	Balance
	period of	at September	
	act	30,1938	
Prince Edward Island	
$ 198,187 86	$ 198,187 86	Nova Scotia	
662,113 94	662,113 94	New Brunswick	
512,461 28	512,461 28	Quebec	
2,569,655 53	2,569,655 53	Ontario	'	
3,178,608 97	3,178,608 97	Manitoba	
719,746 56	433,709 17	$286,037 39Saskatchewan	
847,620 91	847,620 91	Alberta	678,524 40	British Columbia	
633,080 55	633,080 55	$10,000,000 00	$9,713,962 61	$286,037 39
7X492-98^
Technical Education


John Charles Landeryou: Could the minister
give the number of youths dealt with in each province?


Norman McLeod Rogers: I have not that information, and I doubt very much whether it is available in the Department of Labour. The federal government paid grants in aid to the provinces under the legislation, but the number enrolled in the various courses would be in the provincial records, not in the records of the Department of Labour.


Jean-François Pouliot: What will happen to-morrow when young men read that this committee has passed a bill for the purpose of spending some part of 810,000,000 appropriated under the Technical Education Extension Act? Most of them will think that members of parliament can distribute part of $10,000,000 for education, and many of them will want a slice of that for their own education. They will tell us, "You voted $10,000,000, I hope personally to take advantage of that." It is embarrassing for members of parliament to whom such requests are directed. In our province we write to a gentleman who is in charge of this scheme, and he always answers very nicely the letters of recommendation which are sent for anyone who seeks to take advantage of that act. But to my knowledge very few, at least from my constituencjq have derived any benefit from it.
Before going any further, I should like to know from the minister if this act applies only to the sons of those on relief, or if it applies to any young man who is willing to learn a trade.


Norman McLeod Rogers: Perhaps I have not made it sufficiently clear that the legislation now before the committee is not designed to carry out the objects of the youth training program. This is merely a continuation of the Technical Education Act of 1919 in order that one province, Manitoba, which has not taken up its full allotment, may be permitted to do so. The form of the bill is similar to the amending acts of 1929 and 1934. I agree with my hon. friend that it would be unfortunate if the impression went out from this house that we are dealing in this bill with an appropriation of $10,000,000. But I am sure that we may rely upon the press to put the position correctly. The whole purpose of this bill is to permit one province, Manitoba, to take up what portion of its original grant under the act of 1919 may still be claimed under the provisions of that statute.


Jean-François Pouliot: I understand that the
federal government has nothing at all to do with the distribution of that money? Grants

are made to the provinces, which decide to what individuals the money shall be awarded; is that the idea? Or does the dominion government give scholarships from that amount to private individuals?


Norman McLeod Rogers: The hon. member for
Temiscouata (Mr. Pouliot) may be confusing this bill with the youth training program. As I explained earlier in this discussion, legislation dealing with the youth training program will be introduced later in this session. The present bill has one object only, which is to permit Manitoba to take up its remaining portion of the allotment under the legislation of 1919. Under that legislation the dominion government made certain grants available annually for the assistance of technical education in the provinces. The procedure was that an agreement was entered into between the dominion government and the provincial government respecting the expenditure of the federal grant. That agreement, of course, was bound by the terms of the statute, which stated that not more than twenty-five per cent of the annual grant payable to any province should be used for acquiring land or erecting or improving buildings or supplying furnishings or equipment. I suggest to my hon. friend that the other matters to which he has referred would properly, and most usefully be considered, when we have before us the measure dealing with the youth training program. .


Jean-François Pouliot: Have the amounts which
the minister has already mentioned, and which will appear on Hansard, been paid to the provinces, or to individuals?


Norman McLeod Rogers: To the provinces, not to
individuals.


Mr. ROSS (St. Paul's):: Would it not be
possible to extend this bill? It has been very satisfactory in its operation in connection with technical education in Toronto-I am speaking of Toronto particularly-and the minister has seen Doctor Butt of the department of education in respect to his request for money for aeronautical training. Since this scheme has worked so well, would it not be possible to have more money appropriated so that the department might be able to meet the request of the Toronto board of education to carry on this excellent work, especially in view of the times in which we live?


Norman McLeod Rogers: I doubt whether on that
point I can add anything to what I have already said. There is no lack of appreciation of the importance of aeronautical engineering,

Technical Education
nor has there been any disposition on the part of the government not to do its part in supporting aviation. But as I have suggested, that is done through the Department of Transport and the Department of National Defence. Under the present measure it is not proposed to extend the Technical Education Act apart from the one purpose indicated, namely, to permit Manitoba to take up its full allocation under the legislation.


Angus MacInnis: I fully appreciate that
this bill could not be extended beyond the specific point with which it deals. But I do not think there should be any misunderstanding either in the house or in the country as to the Technical Education Act itself, that is, the act by which assistance was rendered to the provinces for the purpose of technical education. I feel quite sure that most of the allocation to British Columbia was spent in the city of Vancouver. I happened to have something to do with the school board there during part of the time when this money was being expended on technical schools and furnishings for those schools. But there is a great deal in the point that has been raised by a number of hon. members, particularly those from the city of Toronto, that the time is opportune for the passing of another technical education assistance act, because I doubt if the demand on the school boards of the various cities for technical education was ever as great as it is now, and I do not believe the youth training projects will meet that demand in its entirety. That again, I think, is something separate. I believe the time is opportune for the government to give consideration to the extension of aid of this kind to the educational authorities in the various provinces.


Douglas Gooderham Ross: I do not like to repeat what has been said already. The minister no doubt has seen this brief from the board of education of the city of Toronto, and I think he will realize that there is not sufficient space in the main building of the school in question. They went to the extent of renting a garage, or something like that, as a temporary arrangement, because the building is so badly crowded. I should like to point out the success they have had in their endeavour. One hundred boys have graduated from this four year course, and ninety per cent of those boys are employed at the present time, most of them, I understand, by firms engaged in aircraft production. Some have obtained positions with firms that put a premium on a high degree of efficiency,
accuracy and care. Thirty-six boys graduated from the aircraft course, of whom twenty-one have secured employment.
As I understand it, this act had the dual purpose of making grants for the education of the youth as well as providing accommodation for the education of these boys. When we think of the number of young boys walking around these days who have never had jobs, it seems to me that the government might take into consideration the further extension of this act, because it has worked very well so far. I believe, too, that these men who are giving of their time in the city of Toronto, the board of education, an excellent body which is doing such great work, should have their efforts appreciated and that they should be allowed to carry on this work. They are the people who have most to do with the education of these boys, and I believe it would be a splendid thing if these people had the money to spend on the necessary buildings and equipment. So I would ask the minister to consider extending this bill to serve further the purpose that it has served previously.


James Earl Lawson: Supplementing what I said a few moments ago in favour of consideration of the introduction of a further technical education act providing new and additional grants, I should like to leave a thought with the minister, which in turn he might present to his colleagues when dealing with the matter, in a light which probably has not occurred to him. We are all agreed that it would be a real contribution to the solution of the unemployment problem, particularly among the youth of the country, to provide further technical education in certain lines of mechanics. We are also aware that a terrific handicap is at present placed upon boards of education, certainly in urban centres, by the burden of municipal taxation. Within its jurisdiction this government probably cannot very well make a contribution towards the direct relief of that burden of taxation, because the municipalities are creatures of the province. I suggest to the minister, however, that this government might make a contribution to the relief of that burden in an indirect way. That is, they might further advance technical education, thus helping to solve the problem of unemployment among our youth, by making new grants for technical education which could be taken advantage of by the municipalities without imposing a further burden of municipal taxation upon property owners in the municipality.
If the government does not consider that a wise and feasible suggestion then might I suggest to the minister, in view of the fact
Technical Education

that Ontario has not cooperated in taking advantage of the money already granted for youth training projects, and in view of the fact that the minister has intimated that later in the session there will be introduced a youth training project which will be a three year plan, that before the introduction of that new legislation he might advantageously confer with the minister of labour of Ontario in an endeavour to 'bring down in this house a plan under which the government of that province will cooperate, so that Ontario youths may obtain the benefit of these training projects. In any event, if agreement cannot be reached, when that bill comes down in this house the minister will be able to advise us as to why it is not possible to get that measure of cooperation which we all so much desire.


Norman McLeod Rogers: Dealing first with the
observations of the hon. member for St. Paul's, I agree entirely with him as to the value of the work done by the technical schools of the city of Toronto. As a matter of fact I was greatly impressed by what was presented to me by the delegation from the board of education of that city. On the other hand, I was obliged to tell them that there was no federal appropriation from which a grant could be made for the construction or enlargement of the technical school in which aeronautical engineering was being taught. I believe they went away persuaded that this was the case, though naturally they were disappointed and would have been pleased if they had received word that they could be given some direct financial assistance.
As to the point raised by the hon. member for York South, under the youth training program provision is not made for capital equipment. We do contribute to rentals of buildings and equipment, but our thought was that those who were enrolled for training should receive the maximum benefit of the various training projects. At the same time we felt that most of the provinces would be able, through their schools, to provide facilities for training purposes. We did not wish to duplicate those facilities, and in that I believe we were following a sound and economical course. .
As to Ontario not having taken up its full allocation under the youth training program, I can say only that in the present year, according to my present knowledge of the amount actually expended, there is still available for that province the sum of about $220,000.


James Earl Lawson: That is more than I had thought. I believe I mentioned the sum of $135,000.


Norman McLeod Rogers: I shall ascertain the exact figure and see that it appears correctly in Hansard to-morrow. However, the full amount has not been taken up in Ontario, as it has in all the other provinces. It is, of course, for each province to determine what projects shall be established. Naturally any government in dealing with these matters is governed by consideration of what expenditures are most urgent. It is not a case of doing this and that, but rather a case of doing this or that. We did feel, and it is still my view, that the most urgent need comes from unemployed groups, and that is why through the youth training program we have been attempting to give special assistance to unemployed young people. Under a renewal of the Technical Education Act we would be assisting unemployed groups only in a limited degree-a much more limited degree than we are assisting them under the youth training program.


John Charles Landeryou: What measure of
success has been secured in providing employment for youth under these past projects?


Norman McLeod Rogers: Upon that point we have not the figures available as to placement of those who have received training in the various technical schools of the provinces, but I shall have that information in respect to youth training when the measure is before the house.


Douglas Gooderham Ross: May I say the deputation from the board of education went away quite happy in their minds. I was wondering whether the minister has suggested to them some way in which they might overcome this difficulty, particularly in view of the success they have had. They were very happy about it.


Thomas Clement (Tommy) Douglas: I understand Manitoba is the only province which has not drawn its full allotment.


Norman McLeod Rogers: Correct.


Thomas Clement (Tommy) Douglas: Has the
minister the approximate dates when the other provinces drew the last of their allotments? Have they been going for a number of years without any further grants from this sum of money?


Norman McLeod Rogers: 
[Stage Direction]
Section agreed to.
Bill reported, read the third time and
passed.


[Stage Direction]
Right Hon. ERNEST LAPOINTE (Minister of Justice) moved the second reading of Bill No. 34, respecting penitentiaries.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Sanderson in the chair.
On section 2-Definitions.
Ernest Lapointe: Perhaps at this point I might give some information which was asked for yesterday during the debate on the resolution. I should like to place on record first the information as to the number of penitentiaries in Canada, the staffs in each of them, and the convict population. There are eight penitentiaries, counting the three at Kingston. They are as follows: Dorchester; St. Vincent de Paul, Kingston-and at that point there is the women's prison as well as the new penitentiary at Collin's Bay-Manitoba, Saskatchewan and British Columbia. The following table will serve to show the convict population and staff at each penitentiaiy:
Staff
Convict (guards and Penitentiary	population officers)
Dorchester	 457
St. Vincent de Paul.. ..	1,033
Kingston (main penitentiary)	 702
Kingston (women's prison)	31
Kingston (Collin's Bay) .	250
Manitoba	 364
Saskatchewan	 463
British Columbia	 328
223
6
103
101
I was also asked by the hon. member for Kootenay East (Mr. Stevens) as to the increase in the penitentiary population during the period of the depression. The prisoners in custody in federal penitentiaries were as follows, on March 31 of each year:	1930,
3,187; 1931, 3.714; 1932, 4,164; 1933, 4,587;
1934, 4,220; 1935, 3,552; 1936, 3,098; 1937, 3,264; 1938, 3,584; and on February 10, 1939, 3,598: So it is gratifying to note that the fears of the hon. member for Kootenay East were not quite justified, because the population in the penitentiaries is not greater than it was nine or ten years ago.
Other encouraging statistics are as to the number of younger men in the penitentiaries. The hon. member for Kootenay East thought the number of younger men in the penitentiaries had increased in an alarming way, but that is not so. I will give the number of young men under twenty-one, in the penitentiaries for a certain number of years. In 1929 the number was 322. That is a good deal too many but the number has not increased compared with later years. In 1930 the number of young men under twenty-one in the penitentiaries was 377; in 1931, 484; in 1932. 527; in 1933, 467; in 1934, 409; in
1935,	325; in 1936, 280; in 1937, 317. I am sorry I have not the figures for 1938, but the numbers in 1936 and 1937 were smaller than in 1929, in a period of great prosperity.
The number between the ages of twenty-one and thirty is perhaps a little larger. In 1937, there were 1,515 men between those ages in the penitentiaries, while in 1929 there were 1,270. On the other hand, in. 1932 the number was 1,900; in 1933, 2,052; in 1934, 1,916. So the number has been decreasing rather than increasing since 1933. The figures for men between the ages of thirty and forty are in about the same proportion. I suppose the committee is not interested in knowing the numbers between forty and fifty, and between fifty and sixty, because it was rather with regard to the younger men that questions were asked.
Those figures, Mr. Chairman, show the vastness of the problem, and I feel that those who thought a commission of three was unnecessary to administer such an important branch of the affairs of our country did not grasp the magnitude of the work to be done or the contact, supervision and control which the heads of the penitentiary branch must exercise over this considerable population of convicts and in the management of every one of these institutions. There is, of course, this other feature, the great importance of improving in every way possible not only
3,628
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the management but ways and means of reforming those who are susceptible to reformation, and to give to that branch of social service in every way the consideration and attention which it deserves.


Mr. MacNEIL:: I would suggest to the
minister that in order to get a complete picture of the criminal problem, although perhaps this does not definitely relate to the bill under discussion, we should have statistics of the prison population in provincial institutions. I do not know whether that information is in the possession of the Department of Justice.


Ernest Lapointe: No, those records are absolutely outside our control, and I am sorry I cannot supply that information.	.


John Ritchie MacNicol: Mr. Chairman, I had
expected the minister to tell us in a general way something about the improvements that are proposed. Not having received the bill until a few minutes ago, I have had no chance to look through it, and it is difficult to discuss the clauses unless we have some idea of what is proposed to be done. I understood the minister to say that we are going to have a commission.


Ernest Lapointe: That is all.


John Ritchie MacNicol: I am opposed to any
more commissions unless they are of civil servants under the department. But if we are to have an independent commission with full power to do what it likes in the matter of employing people-and I see this commission has the right to select guards and all that-I never saw a commission yet that, in the spending of money, did not go away beyond the expectations of those who created it, and unless some limit is imposed upon the power of employing anyone and everyone it wishes to employ, I am not in accord with this commission idea.
Apart from that, I remember very well that when the minister was speaking on this question a year ago, something was said to the effect that other methods would be introduced to cure the evils that had apparently grown up in our penitentiary system. If the bill has in it anything in that regard I should like the minister to let us know. If it has, I shall have some further comments to make.


Ernest Lapointe: I wonder whether my hon. friend was in the house when the resolution was being discussed.


John Ritchie MacNicol: Yes, I was.
TMr. E. Lapointe.]


Ernest Lapointe: Well, I cannot say more than I said at that time. This bill, although it seems to be a voluminous document, is really a reenactment of the Penitentiary Act as it was, in all its provisions, except that a commission of three, instead of a superintendent, is to administer the penitentiaries.
As to the reforms to be made, some of them, as I said yesterday, are merely changes in the regulations which do not necessitate waiting for the appointment of the commission. But the recommendations of the investigating commissioners will be given effect by means of legislation. My purpose-and it was also one of the recommendations of the commissioners-is that such legislation should be scrutinized in the light of the conditions which the new commission will find, and approved, before it is submitted to parliament by the Minister of Justice, under whose control the penitentiaries branch will continue to be.
So I cannot give my hon. friend more details about the bill. He says that he is opposed to a commission because he does not know of any commission which has not spread and has not expanded its activities. My hope is that the penitentiaries commission will expand its activities in this momentous part of the civil service. There are reforms which have been suggested which may be commendable-the Borstal system, for instance, which is one way of attending to the young offenders; and there are other ways. But the Borstal or any other system cannot be put into operation without the proper buildings, without the accommodation necessary for that purpose, so that a pretty large expenditure is involved. As I said, this will have to be carefully studied and considered by the commission which will be at the head of this service and will, I hope, consist of men of ability and experience who will help myself, the government and parliament to do our duty in this regard.


John Ritchie MacNicol: I certainly hope that the objective the minister has in mind will be carried out. As was said the other evening

and there is no harm in repeating it-the house has confidence in the minister himself, and perhaps the system would have done better under his direction.


Ernest Lapointe: I thank my hon. friend, but some people do not think so.


John Ritchie MacNicol: I have had some experience in investigating prison reform. I spent some time two years ago in investigating Wakefield, near Leeds, looking into the Borstal system.

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Ernest Lapointe: Which prison?


John Ritchie MacNicol: Near Leeds. Wakefield is about eight miles or less from Leeds.
I had the good fortune to meet, in the city itself, a gentleman who, I believe, was the original proposer of the idea that humane treatment of prisoners would work a marvellous reform, and be much more effective than ill treatment.


Mr. HARRIS:: How long did the hon.
member serve there?


John Ritchie MacNicol: I will state that in a
few minutes. At Wakefield I learned that the official who had introduced the system there had been transferred to Barlinnie prison at Glasgow; in fact I got a telegram from the home office suggesting that I could proceed to Barlinnie and discuss the subject with the man who, more than any other I was told, was responsible for making the Borstal system a success. The minister will not mind if I tell him that I spent seven hours in Barlinnie, not of course as a prisoner. I wanted to understand thoroughly how the reform plan was being carried out. After reading the report through, what I have been wondering is if it is the intention of the department- I believe it is-to instruct the commissioners to carry out to the best advantage, of course under Canadian conditions, the means and methods which have resulted in such a reduction in the old country of second offenders, third offenders and so forth. Certainly they have had great results over there; compared with what I have observed here in Canada the results they have achieved are remarkable.


Ernest Lapointe: Yes, but my hon. friend realizes our difficulties in Canada, because of the provincial gaols.


John Ritchie MacNicol: Yes, I was just coming to that.


Ernest Lapointe: We cannot do what they are doing over there, because we have no control over a very large number of prisoners.


John Ritchie MacNicol: I was just coming to that matter, and further, to the fact that conditions of administration and taking care of offenders are much more difficult here than in the old land because over there, if an offender escapes, he cannot get off the island, and the effect is that the incentive to try to escape is not one-two-three in the old country what it is in Canada and the United States where escaped prisoners can go such long distances and move from one country to another.
In reference to what the minister has just said about the difficulty of administering prison affairs and reforms in Canada compared with England because of the amount of control retained by the provinces, on reading over the report I noticed that the second of the eighteen recommendations made by the commission is:
An immediate conference between the federal and provincial authorities should be held with a view to obtaining the full cooperation of the provincial authorities in putting the recommendations of the commission into effect.
I should like to know whether that conference has been held. It has not been held?


Ernest Lapointe: No. As I stated last year when I tried to get the immediate appointment of that commission, I desire the commission to take over and study the whole problem before we communicate with the provinces.


John Ritchie MacNicol: The whole problem, as I said, is one of reducing the number of second and third offenders and so forth; in other words, of improving by proper administration the mentality and the inclination of the prisoner himself to really reform. I assume that is the main objective of the report. There is nothing I can add in view of what the minister has just said.


Mr. STIRLING:: The minister has given the convict population of the eight penitentiaries in the nine provinces. I wonder if he would explain how the distribution of [DOT]those convicts is carried out. I do not think, for instance, to take the one in British Columbia, that the number 328 necessarily means that they are all prisoners convicted in British Columbia, does it? They are moved about from province to province in accordance with certain views of the superintendent. Will that distribution now be in the hands of the commission?


Ernest Lapointe: Generally speaking, the population of the British Columbia penitentiary is composed of prisoners sentenced in that province. In Prince Albert they are the prisoners sentenced in Alberta and Saskatchewan; in Manitoba there is Stoney Mountain; in Ontario, Kingston; in Quebec, St. Vincent de Paul; and in the three maritime provinces, Dorchester. It happens occasionally that for the good of the management-and the minister has power in this regard-transfers are made from one penitentiary to another, but that is because of exceptional circumstances. For instance, as was said yesterday, a certain number of men were transferred a couple of weeks ago from
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Kingston to the western penitentiaries. That was because of overcrowding in Kingston. We hope that with the improvements which will be made and the necessary enlargement of the buildings in the various penitentiaries this will be avoided in the future, and there is actually in Kingston extension work being carried on which subsequently will provide the necessary space. These transfers are made with great care and there has been no trouble of any kind. The convicts have suffered no ill effects as a result, and as a matter of fact they are much better off in a prison in which there is adequate accommodation than they would be if they were crowded, as they were in Kingston, owing to an increase in population. Generally speaking, each penitentiary serves a certain section of the country.


Grote Stirling: The female convicts are all congregated at Kingston?


Ernest Lapointe: They are all at Kingston, and I am pleased to say the number is very small. There are at present thirty-one female convicts in Canada, which speaks well for the weaker sex.


Mr. BROOKS:: I have read quite closely the report of the royal commission and I must say I was much surprised at it. There seems to be, according to the report, hardly any penitentiary in Canada, which has been conducted properly in the past. The commissioners found fault with the guards, with those in charge, with the commissary, with the stewards in every penitentiary, with the recreation and schools. In fact, there was no branch of the penitentiary service that was not ' severely criticized in the report. What particular qualifications had these commissioners to pass such severe censure upon the penitentiaries of the country? Unfortunately we have had penitentiaries in Canada for a good many years; but surely the majority of the men in charge of these institutions must have been better qualified for the work they were doing than this commission has given them credit for. I consider the report a severe criticism of the administration of our Oanadian penitentiaries. Have any changes been already made in the administration of the penitentiaries, on the basis of the commission's report?


Ernest Lapointe: As regards the first question, I may repeat what I said yesterday. The commission to investigate penitentiaries was appointed because of public demand which had been heard for many years and which had become increasingly difficult to resist, and more particularly because

of troubles in penitentiaries prior to the setting up of that commission. At one time there was considerable trouble in some of the penitentiaries, and the press of Canada had been insisting upon an investigation.
When it came to the appointment of the commissioners there was difficulty, just as the appointment of a permanent commission will be a difficult task to perform. The three commissioners first appointed were these: There was Mr. Justice Archambault, who is a judge of the high court of the province of Quebec, who had great experience in criminal matters, having been crown prosecutor for the district of Montreal, which I suppose was the largest in the country for many years. Then there was Mr. Anderson, then editor of the Globe. The press had taken such an interest in this matter that it was thought advisable to have from among its number a permanent member on the commission. Unfortunately my good friend Mr. Anderson died almost immediately after he was appointed. Mr. McRuer, K.C., who was appointed to replace him, was recommended more particularly by those who had been very much pleased with the appointment of Mr. Anderson-I refer to that section of the community which was impressed with the idea that some improvements ought to 'be made and some changes effected. The same element, more especially those who are interested in prison reform and who had recommended Mr. Anderson, were also recommending Mr. McRuer. Mr. McRuer had had a wide experience not only in legal matters but in criminal law, having been counsel on commissions concerned with some penitentiary troubles and other matters. As regards the other commissioner, we thought we should have a western man, and Mr. Craig, K.C., of Winnipeg, who was also crown counsel, having been attorney general of Manitoba for some years, was appointed. Of course it is always possible to criticize any appointment, but we try to get the best men possible. Others might prefer other names, but we thought we could not do better than appoint these three men. My hon. friend may not be satisfied with all they say in that report, but one thing he will admit, that the report evidences a great amount of work on the part of those commissioners.
As to the other question, I repeat what I said last year-and that is rvhy I was very sorry that the bill did not become law last year. I do not want those recommendations put into effect before this commission is appointed and before those men, who are expert and who devote their ability to this service, have an opportunity to consider carefully every one of those recommendations.

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Then I as Minister of Justice, on their report, will submit to parliament any legislation which is necessary.


James Shaver Woodsworth: I am concerned
about the long delay in getting something done along these lines. I notice the summary of recommendations of the commission contains some eighty-eight clauses. This is a pretty wide program, and while it is true that in making the recommendations the commissioners did urge that a commission should be appointed at once, they also recognized that there would have to be a well planned program. Two questions occur to me in this connection. A number of these recommendations deal with much more than the care of people in penitentiaries. The other night the minister said:
This legislation is to take care of prisoners. Of course the heads of penitentiaries are vitally interested in anything which would tend to cure existing evils and help reform the men committed to their charge, as well as to protect society against them.
Evidently this bill is intended primarily to take care of prisoners, but -what is to be done about the larger program of crime prevention? Is that to come specifically under the charge of these commissioners to be appointed?


Ernest Lapointe: The prevention of crime is as much my hon. friend's responsibility as my own; that is, the work of all men who are interested in social matters, not specifically the work of the management of penitentiaries.


James Shaver Woodsworth: But that is part of the work that must be undertaken, according to the report of the commissioners. We live in a scientific age, and I do not think most of us believe that people commit crimes because of native depravity. We recognize that there are certain conditions of environment which tend to foster crime. Some people may be bom better and some worse, but in practice I think people with decent environment have a much better chance to live a decent sort of life, and will do so; whereas if people have to live in slums, half starved and subject to temptation on all sides, they are more likely to go wrong.


Ernest Lapointe: I quite agree with my hon. friend.


James Shaver Woodsworth: I am very glad; I thought the minister would. My first question is: Who is going to be charged with this special task of trying to discover those causes which lead to crime, and setting to work in our communities those remedial agencies which at least help to prevent the production of
criminals? So far as I have been able to learn by glancing at the bill, there does not seem to me much in it that would provide for that. Are we to have nothing in the way of implementing that broader program?
Then there are a number of recommendations which seem to call for pretty definite legislation. I mentioned one the other night, that of the indeterminate sentence. There is a suggestion or recommendation of a somewhat extensive revision of the criminal code, and new classifications of prisoners. My second question is, these commissioners having been appointed-and I was delighted that the minister came out in such a forthright way and said there would be no political considerations in their appointment, but they would be men who would commend themselves to the public generally-I should like to know whether these new commissioners will have the machinery at their disposal so that they can carry out this program without waiting another year, thus delaying action long overdue.


Ernest Lapointe: The prevention of crime of course is a matter in which we are all interested. My hon. friend suggested the abolition of slums, which are hotbeds of crime; he is quite right, but of course this will have to be dealt with in conjunction with other branches of the service and with the provinces. Here again there are certain spheres or domains on which we cannot very well trespass. But we all have the matter at heart, and I have no doubt that the men who will be at the head of this penitentiaries commission will do their best to cooperate with any other authority in any measures which would lead to the suppression of crime.
The treatment in prisons may have much to do with reforming men. There are two schools of thought in Canada as elsewhere; there is the one that thinks criminals are criminals anyway, that they are born so and that we should not try to reform them. I think that school is wrong. At the other extreme are those who would have them pampered, and released as soon as possible. But the protection of society must always be considered. Those two points of view have to be taken into account in dealing with this matter. For the benefit of the first school, those who say we should not do anything for the criminal, I point out that in a study made before that royal commission it is shown that on January 1, 1938, 188 prisoners confined in Canadian penitentiaries had been convicted more than ten times, and have cost the public of this country approximately $4,500,000, or $25,000 each. So, if we look
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at the question only from the point of view of cost in dollars and cents to the taxpayer, without any regard to the humanitarian aspect, the answer is still the same; society and the country are interested in trying to prevent this recidivism which costs the people of Canada so much, as well as making those men a danger to their fellow men, and derelicts without hope in this world.
That is where the question of the young offenders comes to the fore, and it ought to be taken care of and dealt with in the best possible way. There is no doubt that to send to the penitentiaries young men who may have made only one mistake, and to mix them up with hardened criminals, makes those young men lose what they had in the world in the way of opportunity and hope. It is our duty and the duty of all those who want to improve conditions in this country to try to bring about the best possible conditions not only in prison management but in the other, larger questions which my hon. friend has mentioned.


James Shaver Woodsworth: Then there is the
second question. Is the minister convinced that we have sufficient machinery, that is, are sufficient changes being made in the law, to permit these commissioners to go to work immediately? Can they make the classifications and do the other things that are recommended by the royal commission?


Ernest Lapointe: Of course we have the whole branch, which is a pretty effective machine at the present time. The commission will have the present staff. The inspectors will become assistant commissioners; they will change their title, but they will be the same officers, and of course there will be need of additional officers if we carry out all the recommendations. But as the commission itself stated, the changes will have to be made gradually, by stages or instalments, if you like. That is the only way to achieve real and lasting progress.


James Shaver Woodsworth: For instance, there are changes that will have to be made in the criminal code. The commissioners would not have the right to alter the criminal code, yet the royal commission suggested that changes should be made at once.


Ernest Lapointe: This all
goes together. I should like to make the changes in the criminal code in cooperation with the commission, when it is appointed.


William Hayhurst: I think the measure
respecting penitentiaries is a distinct improvement, according to my understanding of the methods followed in the past and the

methods that will be followed in the future, so I would congratulate the minister upon this improvement. But as far as I have been able to learn from reading and speaking to people, the charge has been made frequently both by newspapers and by individuals that the greatest waste was in connection with repeaters, that is, criminals who repeat from time to time. Could the minister give us any information as to the number of repeaters in the last five years, we will say? We notice, for instance, that in that time there has been some diminution in the number of criminals, and I should like to get the figures with regard to the number of repeaters during that period of time.


Ernest Lapointe: I have
here some statistics with regard to those who were sent to the penitentiaries during the last fiscal year. The total number was 1,447, of whom 349, or 24-1 per cent, had no previous commitment reported. The total with previous commitments was 1,098, or 75-9 per cent. Of that number those who had gone to gaol only numbered 371, or 25-6 per cent. Those who had gone to reformatory only numbered 100, or 6-9 per cent. Those who had previously been committed to penitentiary only numbered sixty-one, or 4-2 per cent. Those who had been committed to gaol and reformatory numbered 127, or 8-8 per cent, while those who had been sent to gaol, reformatory and penitentiary numbered 132, or 91 per cent. I suppose that will give my hon. friend an indication of the proportion, which must have been about the same in previous years.


John Charles Landeryou: I wish to congratulate the commission upon the splendid report which has been submitted to parliament. I believe the minister holds humanitarian and sensible views with regard to this question of our penitentiaries and the matter of crime in general, but I would say that at least ninety per cent of crime is due to the conditions of poverty that exist throughout the country. This poverty, which is so manifest throughout Canada, is the result of our inability to provide people with the standard of living which they realize is possible with the technical developments and tremendous resources that we have in Canada. After all, it is the duty and responsibility of this parliament to eliminate poverty and thereby reduce the number of criminals in the country. Has the minister any figures in regard to the salaries paid the officials and employees of the penitentiaries, that is, the guards and supervisors?

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Joseph Georges Bouchard: The hon. member thinks ninety per cent of our criminals committed crimes because they were poor. I should like to ask the minister what is the proportion of poor people in the penitentiaries.


Ernest Lapointe: I am
afraid I could not give any definite proportion.


Charles Grant MacNeil: Could the minister indicate the percentage of ex-service men employed on the staffs of the penitentiaries?


Ernest Lapointe: I am informed there is quite a proportion of exservice men among the employees of penitentiaries. According to the information my officers give me I believe the proportion would be about twenty-five per cent. The guards, who form by far the largest proportion of employees of penitentiaries, are paid salaries varying between $100 and $125 a month.


John Charles Landeryou: In respect of the
point raised by the hon. member for Winnipeg North Centre (Mr. Woodsworth) to the effect that complete revision of the criminal code was recommended in the report, can the minister-


Ernest Lapointe: Not a complete revision.


John Charles Landeryou: I thought there was reference to a complete revision of the criminal code. However, I congratulate the minister upon introducing the bill.


Ernest Lapointe: The matter is being considered.


John Charles Landeryou: It is being considered? Mr. LAPOINTE (Quebec East): Yes.


John Ritchie MacNicol: I have a little more to say. A year ago, just before prorogation, this matter was brought up, and at that time, while I will not say the minister was annoyed, yet he did seem rather disappointed that he did not get his bill before the house.


Ernest Lapointe: Yes.


John Ritchie MacNicol: I have looked carefully through the bill, and so far I have not been able to see anything of consequence, with the exception of the appointment of the commissioners.


Ernest Lapointe: That was the first step.


John Ritchie MacNicol: After reading the report of the commission, a commission which went all over this country, and visited Europe, I had hoped that we would be told what the
department proposes to do to deal with the problem of second and third offenders, and its intention with respect to young offenders. There is nothing in the bill in that regard.
Paragraph (f) of section 2 refers to "penitentiaries." May I point out, however, that in the old country first offenders are sent to special penitentiaries or prisons. In this country are we going to continue to send to the penitentiary the first offender who has committed a crime which calls for a term in a penitentiary, but which might be a first offence? Is such offender to be sent to Kingston, Stoney Mountain or St. Vincent de Paul, or is there to be a special penitentiary for that class?
Some observations by Sir Samuel Hoare, to whom I listened in London encouraged me to spend a great deal of time in a survey with respect to prison reform. Prior to that time I had not taken much interest in the subject. I had heard it debated in this house, but I was enthusiastic over Sir Samuel's observations respecting the results of what had been done in England in connection with the reform of first offenders. Remarkable achievements have been accomplished in that connection. Of course some criminals cannot be reformed, and on them the police keep a close check; but a large percentage can be reformed. The home office has issued a report, a copy of which I have no doubt the minister has, in reference to the return of first offenders to prison in England. I find that in 1932, 769 were discharged, and that after several years 196 had been reconvicted two or more times. In 1933, of 883 discharged, 185 had been returned two or more times, and of the 900 discharged in 1934, there were 117 who were reconvicted two or more times. Sir Samuel Hoare has pointed out the remarkable results which have been attained in the reform of prisoners. On the other hand, I notice in an article published in the Toronto Star in 1937, out of 4,036 prisoners there were 2,662 repeaters-a very high percentage, indeed.
I should have liked to see something in the bill along the lines I have mentioned. Probably the commission will do something. I hate to think of a big bill like this which provides only for the appointment of three commissioners, something which could have been provided for in one paragraph.


Ernest Lapointe: No.


John Ritchie MacNicol: Apparently the department wishes to havfe the appointment of three commissioners who are going to do all the work. That is not the way it is in the old country.
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Ernest Lapointe: Oh, yes, it is.


John Ritchie MacNicol: They prepared a bill
over there.


Ernest Lapointe: No.


John Ritchie MacNicol: The minister knows
more than I do about it.


Ernest Lapointe: I know
a little bit about what they did.


John Ritchie MacNicol: As I understand it, in
England the administration is under the home office, whereas in Canada it will be administered by a commission.


Ernest Lapointe: It will
be exactly the same thing. In England they have a central board under the Home Secretary. Here we will have a board under the Minister of Justice.


John Ritchie MacNicol: That is the same administration as they have in the old country?


Ernest Lapointe: Exactly
the same, yes.


John Ritchie MacNicol: And in the old country
did a board under the home office prepare all the regulations?


Ernest Lapointe: Yes.


John Ritchie MacNicol: And that is what the
minister has in mind here?


Ernest Lapointe: That is
what I was going to tell my hon. friend.


John Ritchie MacNicol: The purpose is as nearly as possible to follow out the rules and regulations which have brought about such remarkable achievements in the old country?


Ernest Lapointe: Yes.


John Ritchie MacNicol: That being the case, I
have nothing more to say.


Mr. McCANN:: The purpose of this bill is to appoint a commission with power under the minister to control, administer and manage the penitentiaries of the country. We have been criticized by our Tory friends for appointing a commission for this particular purpose. On former occasions there has been criticism of the government with respect to its not carrying out the recommendations of different commissions. The chief recommendation of the commission which investigated the penitentiaries and made a study of the penal system in Canada was to the effect that under our present system the problem of penal administration is too large in scope and too serious in results to be left in the hands of one man.

In his criticism yesterday, when, speaking on the resolution prior to the introduction of the bill, the hon. member for Lanark (Mr. Thompson) said the commission was being appointed for the purpose of shifting responsibility. To any one who has read the report of the commission on penal institutions it must be evident that one man was not capable, as superintendent of our institutions, to carry on the work. No country in the world lags as far behind in penology as does this Dominion of Canada. I am not a penologist, a criminologist or a sociologist, but I have read the report, and have made a study of it. I have made it my business to visit one of the largest penal institutions in Canada, and have spent some time therein viewing conditions and studying problems in the hope that when the bill came before the house I, looking at some of these problems from the point of view of the medical man, might be in a position to make to a commission some recommendations tending to bring about a betterment of conditions in our institutions.
It is remarkable that the public has always shown an absorbing interest in criminals. Newspapers devote much of their space to the subject, even to the prejudice of law enforcement bodies, to such an extent that J. Edgar Hoover, chief of the United States federal bureau of investigation, has protested again and again that the publicity given criminals encourages crime. The tendency of recent years, expressed in tabloids and in the moving pictures, has been to give the hero role to the police rather than to the criminal, and the shift is said to be obtaining results. But whether the neighbourhood boys play G-man, mounted police or gunman, adult interest is still centred in the criminal, as it has been from Homer to Dickens, Zola and Hugo. This interest has, of more recent years, sold thousands of crime and detective stories, and has proved a gold-mine to publishers and authors of such works.
A noted criminologist, J. L. Gillin, attributes this phenomenon to public interest in human conduct, which is greater in proportion to the unusualness of such conduct. In so far as most citizens lead lives which do not violate the standards approved by society, the unusual person stands out the more clearly. Psychologists explain also that until fairly modern times man has been constantly subjected to danger, and that danger has two reactions: cowardice and courage. Danger still provides a thrill to be met with appropriate activity, and in following the careers of criminals, the honest citizen vicariously experiences this thrill without the accompanying activity and danger. LTnfortunatefy this interest does not

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extend beyond the apprehension, trial and conviction of the criminal. Just as books of romance end with wedding bells, books of crime usually end with the clanging of prison gates.
So much for the general public interest in crime and criminals. There is, however, another and more serious approach to the subject -interest in crime and criminals as a social phenomenon-a social disease to be met and, in so far as is possible, eradicated by scientific study and scientific treatment. This scientific study, which includes the process of making laws, breaking laws, and reacting toward the breaking of laws, is directed to the end of protecting society. Any scientific study of criminology must have this objective constantly in mind, whether it is to be attained by prevention of crime, apprehension of the criminal, punishment or reform.
We should keep in mind, Mr. Chairman, that the main purpose of any penal system is, first, to protect society, and, second, the regeneration, education and rehabilitation of criminals.
It may be redundant to quote the axiom that "prevention is better than cure," but in our methods of crime control this precept is far from being adequately observed. We are too prone to stint expenditures at the outset in preventive work through schools, boys' clubs, and juvenile courts, and to spend large sums in the apprehension and imprisonment of adult criminals when cure is all but hopeless. At the same time we regard soaring costs of crime with dismay.
It has been estimated that the total cost of criminal justice in the United States costs that country in excess of three hundred and fifty million dollars a year, and estimates of the total cost of crime have run as high as thirteen billions. While these figures, particularly the latter, are far from accurate, they give some indication of the enormous expense which is thrown upon the general public by criminal activities. In the report of the royal commission to investigate the penal system of Canada, it is estimated that the cost of 188 recidivists in Canadian penitentiaries at the date of the investigation had cost Canadian taxpayers over four and a half million dollars, or $25,000 a man. That is a figure which was also given by the hon. Minister of Justice (Mr. Lapointe) when he was speaking. These figures show us that money spent in the prevention of crime would be money well spent. If, by the provision of, say $1,000 in juvenile crime prevention, we can prevent a juvenile from becoming a hardened recidivist, who will cost the taxpayer over $25,000 before his useless life is ended, we shall be saving $24,000 rather than spending $1,000.
Crime prevention begins in the home and may be attacked from the general angle of correcting undesirable social conditions-the clearing of slums, better housing, a higher standard of living, health control, employment opportunities, and adult education-or from the particular angle of family or domestic relations courts, boys' club activities, and the school.
Students of criminology assign the main social condition causing crime to deficiencies in the home life of the child, manifested by poor training, lack of discipline and emotional instability. This may occur in the homes of the rich, where the parents have other interests and leave their children to the care of servants or to their own devices, or in the homes of the poor, where adverse economic conditions press upon family life. But when heredity influences are also present, and the parents are emotionally unstable and temperamentally maladjusted, the child, in addition to lack of proper discipline and care, will inherit the disordered emotional system of his parents, requiring the best, rather than the worst, of care to correct. Broken homes, where there is divorce, disharmony or a step-parent, or where the child is reared by disinterested relatives, will also provide a favourable breeding place for juvenile delinquency.
The preventive approach to such problems is through the family court, where broken homes come to the attention of the authorities. Let me mention here that perhaps no city in the whole of Canada is more to be commended than Ottawa for the introduction and the carrying on of the family court which investigates the conditions which underlie crime in this city.
The preventive approach, as I was saying, is through the family court; second, through the school, where emotional, physical or mental deficiencies may be detected, and. third, through boys' clubs where lack of parental training and discipline will become apparent. When, through any of these agencies, character deficiencies or undesirable environmental influences of the juvenile are detected, immediate action should be taken through social agencies to' correct the dangerous trends that have been discovered. It is here that society should spend without stint some portion of those many millions that will later have to be spent if preventive measures fail.
There will always be cases in which dangerous trends are not discovered in time or where preventive measures will fail. There will also be those cases where no criminal or anti-social attitude is present but where
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emotional strains will prove too much for the emotional control of the individual, and manslaughter or murder will result. There will also be cases where temptation exceeds powers of resistance, and embezzlement or other form of theft will be committed. For these cases special adult treatment will have to be provided.
The question of this adult treatment is one which is engaging the best thought of penologists in every civilized country, and no general panacea has as yet been evolved. Human behaviour being individualistic, it is improbable that any - general theory will ever be entirely successful.
Canada, as the report of the royal commission has demonstrated, is lagging behind in penological matters, and the bill before us at this time is the first step in a program to bring this country abreast of the times.
The lag in our development is not an unmixed evil, because it gives us an opportunity to study the methods of those countries which have outdistanced us and to select from their systems the best features already proved to be successful, as well as to profit by their mistakes.
That development in modern penological treatment which has met with the most outstanding success has been classification, segregation, and the special treatment of special types of prisoners. Such classification depends upon the buildings available and the distances to be overcome, but in so far as these considerations have permitted, classification has been the most successful treatment which has been yet evolved.
The types which require to be classified and segregated are: First, the insane; second, the subnormal; third, drug addicts; fourth, young offenders; fifth, hardened recidivists; sixth, first offenders and accidental criminals. The remainder of the criminal population will form a final class which will be the largest of all.
The treatment of insane persons and drug addicts is one for specialized medical attention.
With reference to subnormals, those who cannot be certified as definitely insane within the meaning of the Penitentiary Act, but who have obvious deficiencies, should not be permitted to mingle with the general prison population, because they cannot appreciate the necessity of observing prison discipline and because they are victimized by the more intelligent and troublesome prisoners who may aggravate their mental condition or urge them into rebellion and revolt in which the

instigators do not participate. That, Mr. Chairman, I submit, is one of the principal reasons why we have had in Canadian penitentiaries throughout the last number of years a great number of riots and insurrections.
Hardened recidivists should be subjected to preventive detention. It is known that their period of freedom on release will be limited to a vacation and that they will surely revert to crime, which is the only occupation they know or will follow, and will surely return to prison. These men are like lepers. They are unfit to live in society, and should therefore be segregated from it, not as a form of punishment but as the least expensive and most effective form of treatment. Their routine should not be onerous. They should have proper exercise, proper food and clothing, and some recreation, but they should not again be released to prey upon society.
I might remark here that I think well of the regulation in the United States whereby a criminal who has a number of convictions against him is finally sent to prison for life.
This applies also to the so-called sex criminal, who should be subjected to curative or corrective treatment and should never be permitted to advance along the well beaten and easily predictable path from indecency to murder. Let me say here that the vast percentage of indecency cases in the penal institutions of this country are cases of crimes which have been committed by men over fifty years of age. To the medical men that cannot point to anything but some type of physical disability which may be cured by modern surgical methods.
With regard to the accidental offender who has been overcome 'by a temptation too strong for him, or by the stress of an overmastering emotion, his sentence can be justified only by its deterrent effect upon others. This man is inclined to look upon his imprisonment as just retribution for his crime or as a penitence to be performed. There is no need of imprisonment or training for him; its only effect can be to deter others. He has learned his lesson before his sentence has commenced, and he is less likely to repeat a criminal offence than another is to commit one. His penal treatment should be so designed as to keep him from becoming bitter, while preparing him for a resumption of his normal life. With regard to this type of offender it can be truly said, " There, but for the grace of God, go I"; for who knows what he may do under pressure of circumstances when confronted by some immediate and compelling emotional crisis.

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With regard to young offenders, special individual treatment must be given. These youths are still in their formative years. Wrong ideals can still be corrected. The influence of early environment and associations can be eradicated. New and worthwhile objectives can still be made attractive. But the task is a difficult one, and failure will but confirm the youth in his anti-social point of view.
One of the things which struck me on my visit to the Kingston penitentiary was the great number of young men who were in that institution. I happened to be there about the time they were coming in for their noonday meal; and one would think, from the appearance of the men who were entering in file at that particular time, that one was looking upon the campus of Queen's university rather than a penitentiary. I was told by the warden of Kingston penitentiary that the average age of those within that institution is twenty-four years; and the day I was there there were 783 prisoners. It is a sad reflection on our present sociological system, when so many young men coming from broken homes have to start off their career in the penitentiaries.
Youths at this age revolt against the humdrum routine and irksome responsibilities with which the world confronts them. They crave adventure, romance, admiration, and the immediate realization of their dreams. They are thoughtless, reckless, animalistic, not yet socialized. It is not surprising that the slow and plodding road of honest endeavour should repel them, and that lawlessness, with its apparent quick result, should attract them. They must have their heroes, and if these heroes are big-shot gangsters they will take pride in being tough and hard, and will be sullenly resistant to any attempt to influence them. It is necessary to substitute a more desirable hero, and the man who can do so must possess their confidence and something of their admiration before he can succeed. That is why the Borstal system, which is dependent upon the Borstal staff, has shown such satisfactory results. To deal with this type of offender we must develop a type of prison officer that is individually exceptional.
I ask you, Mr. Chairman, what makes young men in this country want to join the mounted police? Because it offers them a career. There is a glamour, something about it which appeals to them. When this prison commission is set up, one of the first things it should do is attempt to have guards of a higher quality and of a higher classification than the present guards at our institutions. I would suggest
that our universities give a special course to young men who would take up this particular career. After training along the lines of penology to a limited extent with a high type of man has been given, you will have the men in the prisons look up to these men who are their guards and their trainers, and they will have beneficial effects on the men who are confined. That is exactly why the Borstal system has been the success which it has.
I have heard it said on several occasions that the Borstal system should be introduced into this country. I do not think it is any better system than we have in Ontario in what is known as the parole system. That system could be adapted to advantage to the whole of Canada; instead of introducing a new system we could have a further extension of the parole system which we have for the penal institutions of Ontario.


John Ritchie MacNicol: The Borstal system operates in the prison or in properties adjacent to the prison.


James Joseph McCann: My contention is that the parole system is as good as the Borstal system, although I readily understand that the two have separate functions.
With regard to the large remaining class, the ordinary second or third offender, who is neither mentally deficient nor addicted to drugs, who is neither a first offender nor a hardened recidivist, we must give them moral hospitalization and treatment. In this we can look to the medical profession for guidance.
What would we think of a physician who, diagnosing typhoid fever, said to his patient, "I am sending you to the hospital because you have typhoid fever. You will remain there for two weeks. During that time, food, shelter and a bed will be provided, but no treatment will be given for the disease. At the end of two weeks you will be discharged whether you have recovered before that time, at that time, or not yet." We would regard such a physician as a madman; yet we do exactly that with our morally sick. It is long past the time for us to change this procedure. We must diagnose the criminal's condition and prescribe his treatment. From what contaminated source did this condition arise? What incubated it? Only by understanding the particular case can we prescribe the proper treatment. How long should the man be hospitalized? Obviously, until he is cured. Some conditions can be cured immediately; some require time; some may be incurable, and a man is fit to be discharged only when he is cured. At that time hospitalization
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should cease and convalescence should commence. If the man has a relapse it does not mean that we should be discouraged. We must resume the cure and make more certain that next time it is effective.
During convalescence we cannot expect the man to compete on an equal footing with people in robust health. He must still be under the supervision of his physician, who can give him necessary treatment, and who can watch for indications of a relapse.
We have passed the age when torture and beatings were prescribed for the cure of the insane. We no longer permit those with contagious diseases to mingle with surgical or other medical cases. We must progress with those who are morally ill as we have already progressed with those who are mentally or physically ill.
In this progression our greatest obstacle, as was the case in psychiatry and medicine, will be public indifference and public ignorance. If we give offenders in our penitentiaries special treatment and training we shall be accused of pampering the criminal. If we give him assistance and supervision after release, we shall be accused of discriminating against the honest man who is suffering economic hardship. We shall be asked why we assist ex-convicts to obtain employment when honest men are without jobs. We might as well be asked why a sick man, recently risen from a sick-bed. should require convalescence and treatments. The answer is the same in both cases: The treatment is to overcome a handicap and to place the man in a position to compete with those who are fit-not on a preferred basis, but on as nearly an equal basis as we can achieve. To do otherwise-thus ignoring the handicap of the discharged convict-is, whether his sentence be for thirty days or thirty years, to condemn him for life.
We must make up our minds to one of two courses: that dictated by reason and founded upon our experience in medicine and psychiatrj' and in most advanced and successful penal systems, which is the scientific curative method; or that dictated by ignorance and prejudice, which is barbarous and destructive. If the people of this country, misled by embittered cynicism or by indifferent stupidity, choose the latter course, they must be prepared to abide by the inevitable result -/nounting law-enforcement costs and increased viciousness in crime.
I think that we might at this time say a word or two with reference to some other matters with which the commission will have to deal. Let me say something first with regard [Mr. McCann.1
to the personnel of the commission. It cannot be a personnel of supermen. There are no such things as supermen; supermen exist as such only in their own minds. What we do want is a commission of men who have the humanitarian point of view. Our penal system has been run for years by men who have had entirely the militaristic point of view. We want men of education, learning, culture and some experience, but especially men who see the human side of things. It has been said that there should be a medical man on the commission. I do not agree with that suggestion. The commission should receive the advice of medical men; every man who is sent to a penal institution should be given the advantage of a proper physical examination, and his case should be studied individually with a view to seeing whether or not he has physical disabilities, the removal of which will improve his moral condition.
In visiting the institution at Kingston I find that the facilities, there for medical work are altogether inadequate. We have a makeshift hospital. I do not want to be too critical of the past administration or of the institution; but if we are to get anywhere in the treatment of those in our penal institutions, then we must improve the physical conditions under which they live. For instance, the whole outfit of buildings at Kingston is antiquated. The warden of that institution, showing me around, pointed with pride to the date-stone of one building, which said "1830." The remark which I might have made on that occasion but did not like to make was, "Your system is just as antiquated as are your buildings." They undertake to teach these prisoners a trade, but they have nothing like proper workshops. Their whole commissary department is antiquated. One gets the odour of it as soon as one enters the institution. All these things added together will make a criminal, even when he is within the prison, highly incorrigible, and embitter him against society, and it is to my mind one of the causes of many of the riots that we have had.
Another department which ought to undergo revamping is the remissions branch. Under the present system the remissions officer makes a recommendation to the minister with regard to any remissions of cases that are brought to his attention. In my opinion, instead of a remissions officer and remissions branch, the commission with their inspectors should constitute a parole board, and prisoners should be given an opportunity to appear before that board to present their particular case. I am sure there is not a member of this house, and very few clergymen in the country, who have not. been requested by friends of those who

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are in these institutions to use their influence with the remissions oflicer or with the Minister of Justice with a view to obtaining some remission of sentences imposed.
I have said something with reference to training. The present guards, as they are called, who are the officers in. charge of the prisoners, are taken from here, there and everywhere. They should be men especially adapted to that particular kind of work, and given some training for it. Schools should be established for the training of these people. Let me say in passing that in the city of Kingston there is another institution which houses almost twice as many inmates as are in the Kingston penitentiary, that is the Ontario Institute for the Insane. In my experience of twenty-five or thirty years observation. of that institution I have never heard of any insurrections or riots or irregularities, and I attribute that to the fact that the inmates are supervised by people who are trained for that supervision. There could not be a better exemplification of what in the one instance, trained officials can do, and what takes place when officials are without training.
Then, in connection with all these institutions, not enough consideration is given to what shall become of a man after he is discharged. Efforts should be put forth to rehabilitate him, restore him to society and make him a useful citizen. I suggest that the commission should give serious consideration to the appointment of a trained rehabilitation officer in every prison, who will give consideration to the individual cases, and months before the discharge of a prisoner will seek ways and means whereby that man will be rehabilitated and restored to the community.
However, I believe that the greatest progress that will be made in penology in this country in the next twenty-five years will be along medical and surgical lines; giving men a complete and thorough examination, seeking to classify them on the advice of trained psychiatrists and to remove the physical defects which so many have that aggravate their mental condition and make them go morally wrong. If a commission is to be set up in this country just for the purpose of having something new and transferring the work from the superintendent, without the Minister of Justice and his department having in the background a fixed determination to improve the condition of our penal institutions and the people in them, we might just as well not bother enacting this bill.


[Stage Direction]
Section agreed to.
On section 3-Minister to have control.
Mr. ROBICHAUD:: It appears to me that section 3 is in conflict with section 5, and is not in line with the object of the bill. The explanatory note states that the general object of the bill is to establish a commission with power to control and manage the penitentiaries, under the Minister of Justice. Section 3 reads:
The minister shall have the control and management of all penitentiaries. . . .
Section 5 reads:
The commission shall under the minister, have the control and management of all penitentiaries. . . .


Ernest Lapointe: Under the minister.


Louis-Prudent-Alexandre Robichaud: Yes, exactly the same wording, except that the words "under the minister" are added. It seems to me that the object of the bill as explained by the minister is to give the primary responsibility to the commission, and section 3 still gives, as in the old act, not only the primary responsibility but the final responsibility to the minister, while section 5 gives the primary responsibility to the commission and the final responsibility to the minister.


Ernest Lapointe: It was the same in the old act.


Louis-Prudent-Alexandre Robichaud: I say the object of this bill is different from that of the old act.


Ernest Lapointe: No.


Louis-Prudent-Alexandre Robichaud: I understood the
primary responsibility is to be placed on the commission.


Ernest Lapointe: Yes, under the minister.


Louis-Prudent-Alexandre Robichaud: But I mean the
primary responsibility. The final responsibility was always upon the minister, and still is, under this bill. But under this bill the primary responsibility is on the commission, and the final responsibility is with the minister. Section 3 gives the primary responsibility to the minister, as under the old act. To my mind it should not. Section 3 is unnecessary, and not in line with the object of the bill. Section 5 is the section we should have in the bill, and section 3 should be deleted.


[Stage Direction]
Section agreed to.
On section 4-The penitentiary commission.
John Ritchie MacNicol: In regard to remuneration,-is the minister able to tell what the salaries will be?
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Ernest Lapointe: No, I really could not.


Alfred Johnson Brooks: What is to become of all the officials that we have in the penitentiaries now? Under this commission they could all be dismissed. Is there no way of looking after them?


Ernest Lapointe: They are all under the Civil Service Act, and they are going to be retained unless they are incompetent. It is not proposed to dismiss men who are in the service.
Mr.- BROOKS: There are now a superintendent and three inspectors. What will become of the three inspectors?


Ernest Lapointe: The three
inspectors will become assistant commissioners under another clause.


[Stage Direction]
Section agreed to.
Section 5 agreed to.
On section 6-Commission may perform other duties.
John Ritchie MacNicol: What other duties? *


Ernest Lapointe: The provision is inserted just to give more power to the minister to impose upon the commission certain duties. I cannot name any special duties.


John Ritchie MacNicol: I hope it does not mean carrying out one proposal of the report, namely to manufacture in the penitentiaries all the canned goods required by the prisons of Canada. That would be nothing short of ridiculous. One insignificant factory could manufacture in a week all that all the prisons of Canada use in ten year's time.


Alfred Johnson Brooks: Are there any penologists in Canada; and, if not, where would you get penologists for your commission? I assume you would have the best penologists you could get. What is a penologist?


Ernest Lapointe: Perhaps we have not developed that extremely technical branch of sociological science, but I hope we shall in due time. There are people who have devoted much time to that subject, and we have good psychiatrists and that sort of thing. We shall do our best with the material at our disposal.


Mr. GARIEPY:: Reverting to section 4, I notice that under subsection 2, a commissioner may be removed from office by the governor in council at any time for cause, although subsection 1 says the appointment is for a 
period of ten years. Is that provision for removal for cause not very dangerous? It means that with a change of government-


Ernest Lapointe: No; "for cause " does not mean that.


Wilfrid Gariépy: -you could have the governor in council removing these commissioners for any cause whatever so long as it was satisfactory to the government, which -would mean a disturbance. This provision does not exist in other acts. We have railway commissioners appointed for ten years straight, and members of the civil service commission are also appointed for ten years. There is no such removal at pleasure, because that is what it amounts to.


Ernest Lapointe: Oh, no.


Wilfrid Gariépy: Well, the governor in council will be the judge, and any cause satisfactory to them-


Ernest Lapointe: No, no.


Wilfrid Gariépy: -will be sufficient.


Ernest Lapointe: I have more confidence in governments than my hon. friend has, even under my opponents in politics.


Wilfrid Gariépy: Well, I am surprised to hear the Minister of Justice speaking in that way, because I could give him a list of removals made in 1930 which were not to the honour of this country at all. There were general dismissals throughout the country-


Alfred Johnson Brooks: And in 1935.


Wilfrid Gariépy: -and the same thing may happen in the future. If we are going at this work seriously and desire a commission that will be able to do its work efficiently, it seems to me there should be some tenure of office which would permit the commissioners to feel safe in their positions. Then they will be absolutely independent; they will not be under any threat from any government. Even if there is no change of government; if by any chance a, commissioner happens to displease by his independence of character; if he chooses to make recommendations which are not satisfactory to some of the ministers or possibly some members of parliament, then he may be in danger of dismissal. It seems to me this provision is dangerous, and I direct the attention of the committee to it.


Ernest Lapointe: I do not know whether I should reply to the remarks of my hon. friend, but there are standard rules which cover this matter of " for cause." There are even legal decisions. A commissioner who

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was removed merely because of a change of government certainly would have a claim against the government. The words " for cause " mean something which makes him unfit for office, not merely political opinions or things of that kind. Those words appear in most of the legislation appointing boards, and it has never been considered that there was danger in inserting that provision. I think they are rather a protection. Otherwise the government would be forced to keep in office for ten years a man who, for instance, might be unable to fulfil his task for physical or other reasons. I believe this is a protection for the country.


Wilfrid Gariépy: That is what is done in regard to judges. We have several judges now who are physically unfit, but they are appointed for life and they remain in their positions. [DOT]


Ernest Lapointe: That would be a bad thing.
Mr. GARIEPY. Those judges are still retained in office.


Ernest Lapointe: The
Judges Act provides for that. If a judge, even of a high court, is mentally or physically unable to do his work, the Minister of Justice may appoint a commission to investigate and retire him compulsorily.


[Stage Direction]
Section agreed to.
On section 7-Commission to make rules.
John Charles Landeryou: In connection with
paragraph (b), could the minister tell us what type of work is carried on and what wages are paid the convicts?


Ernest Lapointe: Blacksmithing, tinsmithing, and so on; the manufacture of mail bags for the Post Office Department; tailoring, shoemaking, the manufacture of brooms, stonecutting and so on.


John Charles Landeryou: This paragraph mentions wages or remuneration, and I was wondering what remuneration they received. Is there any difference in the remuneration for different types of work, or do they all get the same?


Ernest Lapointe: They are not union wages but only a few cents a day. I think five cents a day is the average, but they may sometimes get more because of good conduct.


John Ritchie MacNicol: Under the management
of this commission will they engage all employees themselves or will the employees be selected by the civil service commission?


Ernest Lapointe: That
question is dealt with in sections 10 and 11.


[Stage Direction]
Section agreed to.
Sections 8 and 9 agreed to.
On section 10-Appointment of wardens, etc.
Charles Grant MacNeil: Would the minister explain the procedure to be followed in making appointments? As I read the bill, the governor in council will appoint wardens, deputy wardens and other administrative and executive officers, while under section 11 the commission may appoint such guards, trade instructors and other officers as may be necessary. It seems clear that this bill does not provide for open, competitive examinations under the civil service commission. If this penitentiaries commission is to be established to correct the conditions which were disclosed by the report of the royal commission, I see no reason why it would not stabilize the service and remove influences tending to corruption if all appointments were placed under the civil service commission. I would ask the minister why this bill has disregarded the merit system with regard to such appointments.


Ernest Lapointe: The
appointment of these officers was under the civil sendee commission while I was Minister of Justice previously, prior to 1930. In 1933 the then Minister of Justice introduced a bill placing the appointment of these officials under the governor general in council. I was on the opposition side at the time, but I must say that I gave the new legislation my full support. I have myself experienced the troubles caused by the former system. I cannot understand why the civil service com^ mission should have the responsibility of appointing wardens and deputy wardens, men who have convicts under their supervision, men who have most delicate work to do and carry tremendous responsibility. In the end the Minister of Justice is the one responsible for what happens in the penitentiaries. But there are troubles, and when those troubles develop they are of an extremely serious nature. There have been riots, rebellions and all sorts of disturbances. How can the civil service commission, rather than the one who in the end will bear the responsibility, appoint those who will be at the head of those institutions? The present system is working well. I assure my hon. friend that so far as I am concerned-and any Minister of Justice would do the same-I have to take the greatest possible care, because of the
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serious consequences. I know that in connection with that special work I have more confidence in myself than in the civil service commission.


Alfred Johnson Brooks: I find myself in accord with the hon. member for Vancouver North. We find that the commission criticized more strongly wardens and deputy wardens than they did other officials of the penitentiaries. If we are going to improve the system it would seem to me there must be some way by which we can get a better class of wardens and deputy wardens. Under this bill we are simply keeping the same old class we had before, and I cannot see how there can be any great improvement in our penitentiaries. It must be realized that the Warden and deputy warden are the men primarily responsible for the discipline in their particular institutions. It seems to me that the bill is very weak in this section.


Ernest Lapointe: What
does the hon. member suggest?


Alfred Johnson Brooks: I think it should be placed under the commission.


Ernest Lapointe: But not the civil service commission, as the hon. member for Vancouver North has suggested.


Alfred Johnson Brooks: No, not the civil service commission. I mean the three men appointed under the minister to conduct the affairs of the penitentiary.


Charles Grant MacNeil: I thoroughly agree with the minister that we must have first-class men in these institutions. We must have a very high type of men to act as wardens and deputy wardens, and thoroughly reliable men to act as guards. But I am not certain that ...under the present system of political patronage we get a good type of men, and I feel that much of the trouble exposed in the report of the royal commission has been due to the influences of political patronage. It would be difficult to .persuade me that the minister has time personally to supervise all such appointments. It would be difficult to persuade me that the members of the new commission should devote much of their time to the appointment of guards.


Ernest Lapointe: Under
section 11 the guards would be appointed by the commission.


Charles Grant MacNeil: I was asking the minister a moment ago to explain the procedure. It is my understanding that the wardens, deputy wardens and other administrative or executive officers are to be appointed by the governor in council, and that the guards and other

officers and instructors are to be appointed by the commission. But it will still remain that these appointments will be made on the basis of political patronage. And the men who are Liberal members or defeated Liberal candidates in the districts adjacent to penitentiaries will make recommendations with regard to appointments.


Ernest Lapointe: No', no.


Charles Grant MacNeil: Appointments will be made not so much on merit as on the basis of reward for political service. That does not result in the appointment of the best type of men. Furthermore, it does not result in exservice men getting the preference which the government has assured. That preference does not apply when the position is not openly advertised. I recognize the intention of the government that the preference should apply, but the ex-service men, who perhaps are best qualified for that type of work, if they are physically fit-


Ernest Lapointe: Has the hon. member read section 12?


Charles Grant MacNeil: Yes. But my point is that unless the position is advertised, ex-service men who may be qualified do not have an opportunity to apply. When these appointments are made through political patronage, they are made in secrecy. Statistics show that under patronage ex-service men do not get as fair a deal as they do under the civil service commission, where the merit system and open competition prevail.


Ernest Lapointe: If my
hon. friend is under the impression that the commission which will be appointed will make appointments of guards and officers in the penitentiaries under political patronage, then he is altogether wrong. I would withdraw the bill immediately if it were to be so. My hon. friend must have some confidence in those who are responsible, and I give him my word that it is not the intention and it will not be done. We shall try to have men who will not be absolutely subordinate to political exigencies, as the hon. member seems to be afraid. There are still some good people in the world, despite what my good friends in the Cooperative Commonwealth Federation seem to believe. Trust us a little, sometimes. In this matter I am sincere. Why do you not trust us a little-some of you fellow members?


Charles Grant MacNeil: I am not expressing a lack of confidence in the minister. I am expressing a lack of confidence in the policy. Only a few days ago the government declared itself as being in favour of the merit system.
Wheat Board-Selling Policy
Members of the government declared that this administration stands solidly behind the merit system. Since the time when these appointments were taken from the jurisdiction of the civil service commission, the facilities of that commission have been extended.
I	submit they are fully equipped to-day, by open competitive examination, to secure wardens, deputy wardens and guards. I submit we can now make appointments on the basis of merit under the civil service commission.


Ernest Lapointe: I believe the civil service commission itself thought this class of appointment in the penitentiaries should not be under them. They have not the requirements. I do not see how this may be done through examination, and all that sort of thing, under the civil service commission. When the change was made in 1933, the whole house agreed that this should be done, and I do not think the civil service commission would like to undertake the work.


John Charles Landeryou: I am absolutely in
accord with section 10, but I believe there is some confusion between sections 10 and 11. We have been discussing section 11 under section 10. May I say that I disagree with section 11.


Frederick George Sanderson: We are not discussing section 11. We are discussing subsection 2 of section 10.


John Charles Landeryou: I find myself in accord with the Minister of Justice in this respect, and will reserve my observations until section
II	is called.


Frederick George Sanderson: Shall subsection 2
carry?


Angus MacInnis: No.
Section stands.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Monday, March 6, 1939