Mr. K. J. COCHRANE (Cumberland):: In the absence of the hon. member for Outre-mont (Mr. Vien), I desire to move that the standing committee on railways, canals and telegraph lines be given leave to sit while the house is sitting.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the order:
Resuming the adjourned debate on the motion of Mr. Bothwell for the concurrence in the third report of the special committee on electoral matters, presented to the house on Thursday, May 4, last.
Hon. C. C. POWER (Minister of Pensions and National Health):: I was under the impression that the motion referred to in this order
received concurrence on Saturday.


Mr. SPEAKER:: There appears to have been an error in the votes and proceedings, because I remember quite well that I put the motion and that it was carried without opposition. The correction will be made accordingly.



MOTIONS FOR PAPERS


Mr. GREEN:: For a copy of all leases, contracts, and agreements between the government and Johnston National Storage, Limited, of the city of Vancouver, concerning the public assembly dock at the city of Nanaimo, together with all reports, correspondence and other documents in regard thereto.



MORGAM HARBOUR, N.S., BREAKWATER

Mr. BROOKS:: For a copy of all payrolls, statements and other documents showing moneys expended by the Public Works department at Morgam harbour breakwater, county of Inverness, for the year 1938.



REX V. GORDON LIM

Howard Charles Green: For a copy of all correspondence, letters, telegrams and other documents exchanged between any department of the dominion government and the government of the province of British Columbia, or any department thereof, concerning the dominion being represented upon the taking of evidence on commission in China in the case of Rex v. Gordon Lim.



FOREIGN PROPAGANDA


[Stage Direction]
On the orders of the day:
Hon. GROTE STIRLING (Yale):: I want to ask whether the attention of the government has been drawn to the activities of an Austrian nazi who has been delivering a lecture and showing a film in British Columbia. He arrived in the southern end of the Okanagan valley from the state of Washington and just across the border into Canada, and under the auspices of the Oliver and Osoyoos labour front he delivered this lecture and showed this film. It was greeted with cries of "Heil Hitler," "Sieg Hitler" and "Deutschland fiber Alles." He was to have delivered the same lecture just outside Kelowna in a German colony but was prevented by the provincial police, and the chief of police has received a threatening letter. May I ask whether in view of these activities the time has not arrived for some definite action to be taken, because public opinion is aroused.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: The government is watching very closely activities of the sort referred to by the hon. member. The particular
Royal Visit

instance he mentions has come to the attention of the authorities here and the appropriate officials of the public service are taking what they believe to be most effective steps at the present time.



ROYAL VISIT


[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: Hon. members will have noticed press reports of the unfortunate delay of the R.M.S. Empress of Australia, as a result of fog and ice encountered in the north Atlantic. I am glad, however, to be able to inform the house., that the Empress of Australia is now proceeding at full speed and is expected to arrive at Quebec in time to enable their majesties to land at 10.30 on Wednesday morning. The full program at Quebec, originally scheduled for Monday, May 15, will be carried out on Wednesday, the 17th.
Similarly, the program originally planned for Tuesday, including the stop at Three Rivers and the ceremonies at Montreal, will be carried out on Thursday next.
It is expected that the royal train will arrive m Ottawa on Friday, May 19, as originally arranged for Wednesday. Some rearrangement of the Ottawa program will have to be made. At present I am unable to inform the house of the detailed changes. It is expected that the ceremony of royal assent will take place on Friday as originally planned. The state dinner will take place on Friday evening and the parliamentary dinner on Saturday evening.	.	.
Hon. members will appreciate the difficulties which have resulted from the unfortunate and unpredictable delay to the Empress of Australia. I am, however, able to assure the house that every effort is being made by the interdepartmental committee so to rearrange the program as not to disappoint those in the different parts of the country who have made long and careful preparations for the reception of the king and queen. It is hoped that it will be possible for the interdepartmental committee to make later to-day a detailed announcement of the rearranged program.
I am afraid that is as far as I am able to give the house information at the moment. The circumstance that their majesties will not arrive in Ottawa until Friday will make possible the sitting of this house on Thursday, and it is the intention of the government to have the house sit on Thursday.

Mr. JEAN-FRANQOIS POULIOT (Temiscouata):	The delay in the coming of their
majesties is to be regretted by all. But it should be noted that the Empress of Australia has been chartered by the admiralty, is under the command of the admiralty; and that the merchant marine knows more about navigation in Canadian waters than the admiralty does.


Some hon. MEMBERS:: Order.


Walter Edward Foster: Order.


Mr. POULIOT:: His Majesty the King is
the king of Canada, and my king, and I am anxious to see him-


Walter Edward Foster: Order. I do not think
these remarks are proper.



LONG LAKE WATER DIVERSION


[Stage Direction]
On the orders of the day:
Mr. J. R. MacNICOL (Davenport):: I
should like to ask the Prime Minister if anything further has taken place in reference to the Long Lake-Ivenogami diversion following the letter of the Secretary of State of the United States of March 17, 1938, in which the United States declined to consider the Kenogami diversion alone.


William Lyon Mackenzie King: I am unable to answer
my hon. friend's question at the moment, but I shall try to see that an answer is given to-morrow.



FREIGHT RATES


[Stage Direction]
On the orders of the day:
Hon. J. L. ILSLEY (Minister of National Revenue):: 

SASKATCHEWAN DROUGHT AREA


[Stage Direction]
On the orders of the day:
Mr. T. C. DOUGLAS (Weyburn):: On
Saturday last I drew the attention of the government to the fact that there was a twenty per cent cut in relief reported from Saskatchewan effective May 1 in the drought area, and asked the government if that cut came as a result of a cut in the grant in aid to Saskatchewan. The Minister of Labour (Mr. Rogers) pointed out that this was not in his department but promised to draw it to the attention of the Minister of Agriculture.


Hon. J. G. GARDINER (Minister of Agriculture) :: The administration of relief in the
drought area of Saskatchewan is being carried on by the provincial government. I have no information concerning a reduction.



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

[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Finance) moved the second reading of Bill No. 93, to authorize the raising, by way of loan, of certain sums of money for the public service.
Mr. J. C. LANDERYOU (Calgary East):: This bill can be divided into two parts. First it provides that:
The governor in council may, in addition to the sums now remaining unborrowed and negotiable of the loans authorized by parliament by any act heretofore passed, raise by
way of loan, under the provisions of The Consolidated Revenue and Audit Act, 1931, by the issue and sale or pledge of securities of Canada, in such form, for such separate sums, at such rate of interest and upon such other terms and conditions as the governor in council may approve, such sum or sums of money as may be required, 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,
It is the intention of the government by the issue of new securities to pay off or redeem maturing obligations of Canada, and to borrow money on the security of Canada for purchasing and withdrawing unmatured securities of Canada, and for public works and general purposes. We can deal with this bill by dividing it into two parts-the money required for retiring loans, and that required for public works and general purposes.
I moved an amendment to the resolution asking the government to issue $600,000,000 to retire Canada's obligations as mentioned in this resolution. At that time I asked the minister a number of questions which I should like to have had answered. I should like to know why that money was borrowed in the first place, and what can we as a parliament point to and say to the people that those are the assets that we have to show for the expenditure of this money. Why is it that no reserve was set up to retire these bonds as they fell due? Why is it that we must continually refund and go progressively into debt? The Minister of Finance declares that there are only two ways by which this government can secure money: one by borrowing, and the other by taxation.


Mr. DUNNING:: My hon. friend is misquoting me. I named a third way which is worse than the others.


John Charles Landeryou: I asked the minister whether there was no other way of raising money except by borrowing or through taxation, and the minister replied, "that is right." Of course he may have another way that he claims is worse, but I should like to have an answer to these questions. To whom do we actually owe this money? How was this debt created in the first place? A great deal of false information is being spread throughout the length and breadth of this country by bankers and their associates. They are telling the people all kinds of claptrap and buncombe; I never heard the like in all my life. The other day I was talking to a banker who has been engaged in that business for twenty years. He claimed that all money has come into existence because gold has been mined; that from the mining of gold we have brought money into existence; that the money based
Loan oj $750,000,000

upon this gold has become the deposits of the people and that banks lend the deposits of the people to individuals and to governments.
Nothing is further from the truth. Some of us assert that banks can create assets for themselves out of nothing, out of thin air, by the use of a fountain pen. Many laugh at that statement; but let us go into it. We will say the government goes to the bank with a thousand dollar bond and asks the bank to issue credit against that bond. Does the bank lend the savings of the people which it has on deposit? It absolutely does not. It creates SI,000 by the stroke of a fountain pen, and that SI ,000 is placed to the credit of the government of Canada. The bank puts that thousand dollar bond in its portfolio. The government has a deposit of $1,000 against which it can write cheques; then when the money is spent there is $1,000 on deposit in the commercial banks belonging to the people of this country, $1,000 of newly created credit, not the savings of the people. It is true that this $1,000 is a liability of the bank, but the bank has an asset of $1,000 in the form of a government bond. That bond is a revenue producing asset, and the banks hold $1,400,000,000 worth of government securities, revenue producing assets which they created by the simple expedient of using a fountain pen. It is true that they have created liabilities in the form of deposits in the commercial banks, belonging to various people in Canada; but to go back to the illustration of the thousand dollar bond and the liability of the bank in the form of $1,000 in deposit, part of that thousand dollars is taken, year by year, by the government from the people in the form of taxation to pay the interest on the bond. If the bond carried a rate of five per cent, the government would be obliged to tax the people in order to obtain the $50 to give to the bank whenever the interest fell due, thus reducing the amount of the people's deposits to the extent necessary to recover the interest due on the bond. So that the bank has a revenue producing asset, and at the end of a few years the bank would secure the face value of the bond in the form of interest, which it would use for its own purposes.
How are we going to pay off that bond? How are we going to redeem that debt of $1,000? Under the present system of taxation, or as an alternative-borrowing-we know we cannot borrow ourselves out of debt-the government would have to tax $1,000 away from the Canadian people, reducing their deposits by that amount. No

wonder the banks are anxious that the government should not tax the people to pay them off. They know that if the government taxed the people sufficiently to retire the outstanding obligations of this country, it would create national bankruptcy and would destroy the revenue producing assets of the bank. Why, if the government were to tax that $1,000 away from the people's deposits and give it to the banks, the banks would surrender the bond to the government, who would tear it up, and the banks would have to destroy the $1,000 cheque that they would receive in payment of the bond.
To support my contention may I say that many of the outstanding monetary reformers and administrators in the United States make the same contention. In the Congressional Record of the United States, under the heading Constitutional Money and Government Money Control, I find the extension of some remarks by Hon. Knute Hill, in the House of Representatives, who placed on record a radio broadcast in which Mr. Binderup, a former congressman of the United States, said:
Mr. Binderup. Right you are. Yes, truly, truth is stranger than fiction. We are basing our money on the people's debts. If we pay our debts, our money disappears, and we will all go broke. And if we don't pay our debts, the sheriff takes all we have and we will also go broke; so, in principle, it merely means that we are dammed if we do and dammed if we don't. Isn't that so?
Mr. Voorhis.
Who was also a congressman.
Yes, Binderup; you are absolutely right. If Uncle Sam and all the rest of us paid ou-r debts, there would then not be one dollar in circulation except our old reliable Abraham Lincoln coin money and our silver. The bulk of our money consists of bank deposits created by the banks for the explicit purpose of making loans. By the same token the payment of those loans wipes out the deposits and, in effect, destroys that much of our money. Under our present monetary system, the people are definitely between two fires, a money famine on the one hand and increasing debt on the other.
And in another broadcast of the same nature which was read into the Congressional Record you will find this by Professor Irving Fisher of Yale university:
Professor Fisher. Years of study have convinced me that the depression has been primarily a monetary matter. The simple failure to have a sound and stable monetary system has been the most fundamental reason for business and bank failures, foreclosures, bankruptcies, and unemployment-in a word, for the depression. It was the depression, the pressure of starving and disillusioned men and women, which mainly caused and still causes the great world upheavals-economic, political, social, and even religious.
Senator Norris. But how can our money system have such a powerful influence?

Loan of $750,000,000
Professor Fisher. Simply because money has become a prime necessity in our civilization. Without it. goods cannot be sold and will not be produced. There may be crying need for the necessities of life; there may be all the iron, coal, lumber, and other raw materials used for manufacturing; there may be millions of able-bodied men anxious to work, yet, if there is no money there is no production; there is unemployment and starvation. You have witnessed all this. Scarcity of money is called deflation. It is just as great an evil as its opposite, superabundance of money, called inflation. Inflation makes booms; deflation makes depressions.
And he goes on to contend that banks create money out of nothing, that they do not lend the savings of the people. When a private individual goes to a bank he does not borrow the savings of his friends. Professor Fisher says this;
The greatest confusion comes from a general lack of understanding of what we use for money. Our principal money has no existence whatever, except in the figures on the ledgers of our commercial banks. We call it bank credit. It is the credit balances in the checking accounts of the individuals, firms and corporations of the nation. It is created and destroyed by the commercial banks. When you borrow $500 from a commercial bank, it is quite different from borrowing $500 from a friend. When you borrow from a friend, the transaction adds $500 to your cash and takes $500 from the cash of your friend. The total sum of money in circulation is not changed, but borrowing $500 from a commercial bank is an entirely different transaction. The bank creates the $500 credit which it enters on its ledgers, and y9u enter on the stub of your checkbook. It is, in effect. $500 of new money. The purchasing power ot the nation has increased $500. It is almost as if the bank had printed $500 of new bank notes to lend to you. Actually, there is no such money in the bank, but only that pen-and-ink record on the bank's books. It is merely a promise of the bank to furnish you $500 of currency and coin on demand. You transfer the title to that promise by drawing checks against it just as if it were real money, and those to whom you pay these checks accept them as money. We may therefore call these promises checkbook money, as contrasted with real or pocketbook money. The important fact, however, is that, call it what you will, this $500 you have borrowed is new money. It never existed before you borrowed it. Your act of borrowing added $500 to the circulating medium of the United States.
Senator Norris: What really happened when you borrowed that $500 is that you and the bank swapped promises. You promised to pay the bank $500 in 3 months with interest, and in return for this promise the bank promised to furnish $500 in money upon demand at any time. You really do not want the actual money ordinarily. You really want this credit upon which you can draw cheeks and transfer to others. The recipients of your checks do not ordinarily want the money in actual cash. Ihey, too, want the credit, which they in turn can transfer by check, and so this credit continues to circulate in the continuous transfer of goods and services and serves just as actual currency and coin. And yet, as you have stated, it has no actual existence excepting in figures upon the ledgers of the banks.
We have suggested that the government should issue $600,000,000 to retire the portion of outstanding obligations falling due in the coming year. But the government is of the opinion that that would create inflation. We realize that simply to issue $600,000,000, without controlling the creation of credit, which is a power in the hands of the banks at the present time, would create inflation. And so we have advocated that the government direct the banks to increase their cash reserve.
There are many students of money in the United States. Those students are found not only among the members of the Senate and the House of Representatives, but among economists in business and professors in the universities. They have even formed an association known as the Monetary Reform Association, in which are found some of the outstanding men of the United States. They have advocated what is known as the one hundred per cent money idea. I should like to put on record the facts in connection with this one hundred per cent money idea, as explained by Robert L. Owen, former chairman of the committee on banking in the United States. At page 62 of The National Economy and The Banking System of the United States he says-
Mr. DUNNING; Mr. Speaker, I rise to a point of order. I do not wish to limit the debate; certainly it cannot be said that there has been any limitation, because this matter has been before the house on six previous occasions and at each time was debated fully.
I now call your attention, Mr. Speaker, to the rule respecting reiteration and repetition of argument, inasmuch as the debate on a bill the other day was ruled to be continuous on the whole of the bill. The arguments now being made-in fact some of the exact words- have been repeated at least three or four times in the debate. While I know the hon. member wishes to take full advantage of the rules so far as they apply to liberty of speech, I submit that that very fact makes hon. members subject to the rules and to the rights of other hon. members.
I would call your attention, Mr. Speaker, to citation 287, page 93 of Beauchesne's Parliamentary Rules and Forms:
287. Mr. Speaker or the Chairman, after having called the attention of the house, or of the committee, to the conduct of a member who persists in irrelevance, or tedious repetition either in his own argument, or of arguments used by other members in the debate, may direct him to discontinue his speech.
I rise at this stage to speak, not particularly with respect to the hon. member alone, but because it is evident that we are in for a
Loan of $750,000,000

seventh repetition of similar arguments and similar facts. I ask you, sir, to consider the matter.


John Charles Landeryou: Speaking to the point of order, I was making a simple statement preparatory to the reading of something which has never before been put on the records of Hansard. I refer to a declaration by Senator Owen, a former chairman of the banking and currency committee of the United States senate, with reference to one hundred per cent money.


Mr. YOUNG:: It has been read before.


John Charles Landeryou: It was possibly read many years ago, but never since I have been a member of the house. I was just preparing to read into Hansard-


Walter Edward Foster: Does any other hon. member wish to speak to the point of order? If not, I would say that the point of order taken by the Minister of Finance (Mr. Dunning) is a proper one, and that the discussion should be limited at this stage, on motion for second reading. A great deal of latitude was allowed to hon. members on all sides of the house when the matter was discussed before.


John Charles Landeryou: Then I shall just read this into the record, and in that way I will not be repeating myself.
One Hundred Per Cent Reserves It has heretofore been pointed out that the power of the privately owned banks, state and national, to expand the money supply by loans and contract the money supply by liquidating the loans, or requiring the loans paid has been the means of repeated booms and depressions in the United States.
In order to put an end to this destabilizing influence and power, many economists now believe with Professor Irving Fisher of Yale that the national and state banks should be required to have one hundred per cent reserves with the Federal Reserve banks against their demand bank deposits. The effect of this would be:
1.	The inability of the banks to cause booms and depressions by the indefensible expansion and contraction of credit.
2.	The absolute stability in the security of the demand bank deposits all of which could be liquidated instantly on the demand of the demand bank depositors.
3.	By this method the banks would have perfect security against the possibility of any sudden demand.
4.	The banks would still have the money arising from savings accounts and time deposits which they could invest, or could loan for business purposes.
5.	The banks would still have the right to obtain loans from the Federal Reserve banks or sell to the Federal Reserve banks commercial bills and real estate loans on long time.

6.	The banks of course would have the earnings from handling deposit accounts, both as to number and in the volume of such accounts.
7.	The banks would have stability in the solvency of their borrowers and stability in the value of their investments, and would automatically cease to finance speculative operations on tne security and commodity exchanges under a properly ordered system.
In addition to these advantages to the banks tne United States would have the advantage of acquiring through the Reserve banks the United States bonds, which the banks and pubhc hold, by the payment of these bonds when they fall due or are sold to the Reserve banks m credit of the Federal Reserve banks. Under this system the Federal Reserve banks would gradually acquire the public debt, save the interest on such bonds and the amortization charges, and therefore greatly facilitate the balancing of the budget.
,, -The 100 per cent reserves required against the demand bank deposits would make it impossible for the banks to create an inflation of the money supply of the United States with its destabilizing influence. The banks at present have in cash and bonds a 100 per cent reserve against their demand deposits.
If the government really has control over money and credit day by day, week by week, and month by month, surely it can prevent any inflation on the part of commercial banks.
I desire to move an amendment to the motion, as follows:
That all the words after the word "that" in the motion be struck out and the following substituted therefor:
"In the opinion of this house, it is expedient that the governor in council should be authorized to raise by the issue of currency and/or credit through the Bank of Canada an amount not to exceed $200,000,000 for public works and general purposes."
I am not unmindful of the promise made by the Prime Minister (Mr. Mackenzie King) that when any individual made a suggestion to parliament, the matter would be given prompt attention and efficient direction. I am anxious that this amendment should be debated. I do not think it is sufficient that the minister should rise in his place and say that it would create uncontrolled inflation. We know that the borrowing of money under the present system is defended by orthodox economists. I intend to deal with some of the statements which have been made by orthodox economists in attempting to discredit the monetary reformers of this and other countries. They want to know whether this money is going to be printing press or fiat money. They continually try to alarm the people by such statements. The fact is that our present system is based upon printing press money and we are working under a fiat money system at the present time. Then they become greatly concerned about what the redemption is to be, they want to know

Loan of $750,000,000
with what we are going to redeem the money. Money is redeemed every time a citizen is prepared to give a commodity or services for it. The only value of money is its possibility of transfer for goods and services. _
If the money we have at the present time is not made of rubber, it surely has acted as though it were. We have had changes in value from year to year; we have had no stabilized value in terms of commodities or services, and this has caused all kinds of hardships for the producers, the wage earners and the debtors of this country. Surely we can find some way to stabilize the value of our money and prevent the terrible effects of the unstabilized dollar of the past.
I should like the minister to answer some of the questions that we have directed to him in the past. I should like to hear from him just what effect the issuing of this $200,000,000 by the government, instead of borrowing it and adding to our national debt, would have upon the country as a whole. The minister contends that we have an easy money policy in this country, and I should like to know just what that easy money policy has accomplished. What effect has that easy money policy had upon the position of the unemployed? Has it benefited the unemployed of this country? Has it benefited the primary producers of this country, the wheat growers of western Canada? Has it benefited the wage earners of this country? Has it assisted private individuals, municipalities and the provincial and federal governments in meeting their debt obligations?


Charles Avery Dunning: The answer to all that is
yes.


John Charles Landeryou: Unemployment is on the increase, and the prices of wheat and other raw materials are not on the same level as they were in 1926, which year is recognized by many economists as a normal year. They are not even on a level with the prices of 1935. Wages paid in industry under the easy money policy of this government have not increased.


Charles Avery Dunning: Yes, they have.


John Charles Landeryou: The minister says "yes, they have," but I should like him to indicate in what industry wages have increased.


Charles Avery Dunning: The hon. member is making the speech.


John Charles Landeryou: Yes, I am making the speech. I fail to see where there has been any specific increase in the wages paid in this country. There has been some little increase in bank deposits, but, as the hon.
member for Jasper-Edson (Mr. Kuhl) says, most of it is due to the purchase by European nations of materials for armaments. It is not due to the easy money policy of the minister.
If this easy money policy has been sound, why has the government had to pass orders in council to protect bonds and issues of securities, and provide for a certain fixed price which is guaranteed by the government? The easy money policy of the government and these orders in council have come to the assistance of the bondholders, but they have had no real effect upon the well-being of the Canadian primary producers, workers and business men. There are still millions of people in this country who are in need of more purchasing power.
I hope the government will see fit to commence the issue of money in terms of public need rather than continue this borrowing which increases the debt burden and the taxes of this country. Under our easy money policy taxes have gone up tremendously and the minister has been unable to balance his budget. He is not alone in that trouble, because there are very few people, outside the bankers, who have been able to balance their budgets. As compared with 1933, taxes have gone up $200,000,000, and the debt of this country has increased a billion dollars in the last ten years. Is this what the minister calls an easy money policy, increasing our national debt, increasing the taxation to be paid by a people already overburdened?
The governor of the Bank of Canada contends that debts are an asset of the people. That may be true in one sense, but they are assets of a very few people. The banks of this country hold $1,400,000,000 in bonds, and these are revenue producing assets of the people who own the banks. However, it is a liability of this government to the banks, and the only way the banks can get paid is by the government taxing the people. That is what will happen unless the government pursues a hundred per cent money policy or some other plan that will do it.
I do not see how the Minister of Finance can justify his actions during the last few years. I have been interested in some of the evidence that has been given before the banking and commerce committee, particularly the evidence given by-


Charles Avery Dunning: On a point of order, my hon. friend cannot discuss here the evidence given before a committee still sitting. He knows that.


Walter Edward Foster: I think the point of order is well taken.
Loan oj $750,000,<000


John Charles Landeryou: I am not quoting the evidence.


Charles Avery Dunning: The hon. member cannot discuss it.


John Charles Landeryou: I cannot even refer to any evidence given in a committee?


Charles Avery Dunning: It cannot be discussed.


John Charles Landeryou: We shall have to leave that until such time as the report of the committee is before the house. There may not be an opportunity this year, but there will be next year.


Mr. BEAUBIEN:: You will not be here.


John Charles Landeryou: My hon. friend says I will not be here.
. 'Mr- DUNNING: He has great confidence in the common sense of the people of Calgary.


John Charles Landeryou: He reminds me of the rest of the transients; he is just here for a little while, and if there is an election in the fall I shall miss his smiling face and happy manner in the next parliament. But I will send him, free of charge, a copy of Hansard containing my speeches if he will only drop me a line.


Charles-Philippe Beaubien: Your photograph would be more interesting than your speeches.


John Charles Landeryou: I shall be happy to send him that, too.


Charles Avery Dunning: But you could not send that free.


Mr. COLD WELL:: That will come out of the dividend.


John Charles Landeryou: I hope the Minister of Finance will explain to the house the fundamental changes in the financial policy of this country that have been made since the Liberal administration came into office, and point out the effects of the easy money policy.
I remember a statement made by the hon. member for Vancouver-Burrard (Mr. Mc-Geer), who said that the central bank was only a filling station-and I think he was absolutely right-issuing money as the banks needed it and withdrawing it when they did not need it. It is a little game of put and take, or as the hon. member said, a filling station for the commercial banks. I should like to have a little more light on this whole question of the Canadian banks.


Charles Avery Dunning: You need it all right.


John Charles Landeryou: Not only do I need it, but there are many others in the country who need it.


Mr. McIVOR:: Mr. Speaker, I should like to ask the hon. member a question, if I may. Are we to have all this stuff again so early on Monday morning?


John Charles Landeryou: I sat down, assuming a question was to be asked. If the hon. member has an intelligent question to ask I am prepared to answer, but I can see none in his remark. I believe the hon. member is one of those who are in need of a little light on money matters.


Daniel (Dan) McIvor: I have heard the hon. member speak very often; if he can give me any light I shall be glad to have it, but I have not got it yet.


Walter Edward Foster: Order.


John Charles Landeryou: If my hon. friend will lead back in Hansard he will find the speeches which have been made by members of this group on the $750,000,000 resolution, and he will find the replies of the Minister of Finance to our questions-that is, the ones he answered. He will also find our amendments,, which were declared out of order, and if he goes back far enough he will find the promises made by the Liberal party that they would issue money and credit in terms of public need. We have never had any adequate explanation from any Liberal in the house of just how the Liberal government intended to carry out that policy. I am still waiting for an explanation; none has been given. What did the leaders of the Liberal party mean when they said that they would issue currency and credit in terms of private and public need. Perhaps I should not have used the word "need"; I should have said "requirement," because there was quite a discussion in the house whether the Prime Minister used the word "need" or "requirement." The people of Canada, I and others are all anxious to hear the detailed plan of the Liberal government to abolish poverty in this country as was promised by the Prime Minister, and just what effect this easy money policy has had, and just what the Bank of Canada is doing for the people of Canadh- or are they just lackeys for the commercial banks? Are they continuing the policy of restricting credit and permitting the destruction of money by the commercial banks in times of depression, or has the central bank control over the entire money system of this country. We should like to be shown whether we are right or wrong. If we are right, we expect to receive the support of intelligent members of parliament.

Loan of &750,000,000.


Mr. W. F. KUHL (Jasper-Edson):: Mr. Speaker, there seems to be a certain amount of resentment on the part of several hon. members because of the emphasis we in this *corner are placing on the subject of money. Personally I do not think that resentment is in the least justified. Surely all hon. members and the people of the country at large must realize by now that the major obstacle in dealing with our problems is the present monetary policy. Personally I am not going to indulge in undue repetition of material that has already been placed on Hansard. I shall rather endeavour to say a few things that have not been said thus far.
I am convinced that there is no more important subject which can be discussed in this house or in any parliament in any country of the world than monetary policy. Every phase of our national life, every activity in which we indulge privately or publicly depends absolutely upon the medium of exchange. What is the use of talking about trade or public works or any form of enterprise if you have not at your command an adequate financial system? You can accomplish nothing in this world unless you have an adequate monetary policy. Everything we do, every phase of our activities, depends on the use *of the medium of exchange, and if that medium of exchange and the policy under which it is issued does not conform to or is not in harmony with what we are trying to do, we can never attain our objectives. We are not living in a barter age in which we can swap goods for goods. That day has gone by.


John Ritchie MacNicol: The Germans are doing it to-day, are they not?


Walter Frederick Kuhl: No, they are not. True, there is an exchange of goods, from one point of view, but it involves the use of tickets of some kind, whether it be cheques or bills for the transfer of goods. Undoubtedly it involves the use of some medium of exchange. So, Mr. Speaker, I do not think that any criticism levelled at us in this corner for emphasizing monetary policy is justified.
I wish to protest on two scores in particular against the principle of Bill No. 93, to borrow an additional $750,000,000. The first score on which I protest is that the bill seeks to perpetuate the criminal practice of permitting a private monopoly to issue the medium of exchange. The medium of exchange I consider to be the crown's prerogative- indeed, the most sacred of the crown's prerogatives, because the life and destiny of every individual in the nation is absolutely dependent on the monetary policy that is pursued. Rothschild in 1790 said: "Give me
the power to create the money of a nation and I care not who makes its laws." That statement emphasizes the fact that those who control the money control the nation. If a private monopoly has the control of money, parliament should know it, because when that condition prevails parliament can do nothing to control the affairs of the nation. To-day our medium of exchange is still issued, not by parliament but by a private monopoly. This most sacred prerogative of the crown is in the control of a private monopoly. I regard that as a capital crime.
Judging by some remarks that have been made in this house, we who advocate the government issue of money have been looked upon as heretics. In fact, the shoe is on the other foot; those who are insisting that the government shall not issue money but that a private monopoly should be allowed to do so are the real heretics. All money should be issued by the government; every cent of money put into circulation should be government money. Our national conscience has become so calloused that to-day we do not even distinguish between right and wrong. We imply by our statements that a private monopoly should have the right to issue money, but that the government should not. If governments issue a dollar, it is inflation. We must bestir ourselves and wake up to the fact that the putting of money into circulation is a crown prerogative, something that belongs to the government, to the state; and no private monopoly should be permitted to issue even a five-cent piece. That is the first score on which I protest against this bill. It perpetuates the practice of permitting a private monopoly to issue the medium of exchange.
The question of policy under which the medium of exchange is issued is another matter entirely, which we can debate; but as to the government's right to issue and put into circulation the medium of exchange, I do not think there should be any debate at all. It should be taken for granted that the government is the only authority that should have the privilege of issuing the medium of exchange.
The second ground on which I protest against this bill is that it places another mathematical impossibility before the Canadian people. If we pass the bill authorizing the government to borrow another $750,000,000- and this is true of all bills which have permitted such action-we are simply adding more weight to the already mathematically impossible problem which the Canadian people are expected to face. Those who criticize the social credit philosophy have
Loan of #750,000,000

frequently suggested that we advocate a weird sort of economy in which we expect two plus two to equal six, but that is exactly what we are expecting of the people of Canada under the present policy. Under present circumstances it is mathematically impossible for the people of the country to pay interest on money. The banks are the ones who expect two plus two to equal six. All that is created in the way of money is a loan, regardless of whether it is a loan to governments or a loan to private individuals. An amount of money equivalent to interest which is expected of the public on private or government loans is never created. It is merely the principle that is created, and if the people are expected to pay interest, they can do so only by going further into debt at the rate of interest charged for the use of money. The fact that our debts have progressively increased rather than decreased is proof positive that this is so.
The borrowing of this additional S750,000,000 will simply mean that the people of Canada will be expected to meet an obligation equivalent to the interest charged on the money, no matter how small or how great it is, and that is a mathematical impossibility.


Charles Avery Dunning: The hon. member is constantly referring to the $750,000,000 as if it represented an increase in the public debt to that extent. He must bear in mind the explanation I gave. The greater part of it is for refunding purposes.


Walter Frederick Kuhl: I am not a financial expert
and I am not aware of all the implications and ramifications of what will result from the use of this money, but personally-


Charles Avery Dunning: Perhaps I might illustrate. If my hon. friend owes me $50 and he borrows from the hon. member for Calgary East $50 with which to pay me, his debt is not thereby made S100; it still remains $50. It does not require any great financial acumen to understand that.


Walter Frederick Kuhl: It does not make any difference what relationship there exists between individuals. All money originates with banking institutions, and all money in the possession of individuals is owed to those institutions. Every one who uses money, who obtains loans, owes to the banks more than he can pay back, so that the collective obligation of the people to the banking institutions is greater than the people can mathematically repay. I see no reason at all why we should have a national debt.


Charles Avery Dunning: Or any debt at all?


Walter Frederick Kuhl: Any debt at all. Actually
in a country in which we have the physical resources and the resources of human energy and skill, I see no reason why we should be obliged to go into debt. Anything we wish to accomplish costs only these things, the physical materials and the human energy and skill, together with the time involved in production, whether what is produced be foodstuffs or clothing or shelter or public works or a railway system or the requirements for waging war. In the final analysis, the only cost of doing any of these things consists in the material, the time, and the human energy and skill necessary. If in the past we have provided these things and have met our obligations collectively in a physical way at all times, why should our money system, our book-keeping system, indicate to-day that we are in debt? What is wrong is that our banking system, our monetary policy, our book-keeping system, does not reflect the facts. Every cent of the medium of exchange that we need in order to engage in enterprises, whether public or private, is issued by a private monopoly, issued as debt, and we are expected to pay back more than we are mathematically able to pay. Consequently, because of the monetary policy, we are forced into debt. There is no way out. Yet we have met all the real costs.


Mr. SLAGHT:: Will the hon. member
permit a question now, or would he prefer that I reserve it until later?


Walter Frederick Kuhl: All right; go ahead.


Arthur Graeme Slaght: Do I understand that the hon. member goes as far in inveighing against the present system as to advocate a policy which would cancel existing debts?


Walter Frederick Kuhl: No. I am not dealing with the manner in which we should settle our debts; I am dealing with the principle of creating a financial debt as opposed to the costs involved in carrying on enterprise, whether public or private. The question of how to settle these debts I am not going to discuss at this time. I am trying to point out that there is no reason why we should be going into debt for another $750,000,000 or whatever amount it is going to be. We can afford the costs of book-keeping, the cost of issuing this money. Money to-day is simply a question of book-keeping, of figures in a book. We have book-keeping services, we have those skilled in the art of bookkeeping, we have an excellent banking system so far as the institution and methods used in the book-keeping are concerned. We can afford the costs of conducting the money

Loan of $750,000,000
system. The only costs are human labour, skill and the consumption of material. We are meeting those costs from day to day If we wish to carry on a huge program of public works, we have the necessary labour; we have the machines, the materials, all the physical things necessary. Then why should we not set up a book-keeping system that will reflect these facts, and when we have built a road, say that that road is paid for?- because when that road is built it is paid for. There are no further costs. The rest is merely book-keeping. We can afford to do in this country exactly what we can provide the physical material and the human skill and energy to do; that is the only cost of doing anything. Why, then, can we not engage in a system of public works, of hard-surfacing all our roads, completing the trans-Canada highway and making it a real highway? Why can we not carry on a large system of public works? We have all the real physical requirements. In every province we have plenty of material, and idle men and machinery. But just for the want of tickets we are unable to bring these things about.
We should carry on a slum clearance program. We have the building material; we ship millions of feet of lumber out of this country every year; why should we not use it in the erection of houses to provide for our own people? We are shipping many things out of this country which we could use here, but we cannot use them simply because our policy of issuing these tickets does not conform with the needs and desires of our people. As to all the debts which have been incurred in the past, whether for public works, the waging of wars, the railway system, or anything that we have done in the way of public or private enterprise, every one of them should be marked paid in full; they were all paid in physical materials and human skill and effort. Why should we, just because we have not adopted the proper policy in connection with our national book-keeping system, say that we are in debt, when actually we are not? The war was paid for when the war was over. We provided all our share of the cost of that war at the time. Why should we and our children and our children's children be obliged to provide a rake-off for a private issuer of the tickets and the book-keeping service that we needed during the war?


Mr. LAPOINTE (Quebec East):: Could we deal in the same way with our individual debts? There is nothing I should like so much as to do it by book-keeping.


Walter Frederick Kuhl: That is all you do, anyway. I am not suggesting that it is merely the figures in the books that meet the debt obligation,
but the figures in the books reflect what takes place physically. The figures in the books to-day are not doing that. We have met the costs, but the figures say we are in debt.


An hon. MEMBER:: Change the books.


Walter Frederick Kuhl: Absolutely, we are asking that that be done. Hon. members opposite told the people of the country that they were going to do that, but they have not done it. That is all we ask the government to do-change the book-keeping system and make it reflect the facts. If the cost has been met, the books must say that the bills are paid in full. If the book-keeping system is not changed, we shall have to change the book-keepers.
In my opinion the first duty of this government is to restore to parliament the crown prerogative. Whether the Prime Minister in the last election stated that in so many words is difficult to say, but certainly the people drew that inference when he said that until the control of the issue of currency and credit is restored to the government and recognized as its most conspicuous and sacred responsibility, all talk of the sovereignty of parliament and of democracy is idle and futile.
If one examines those words carefully, of course it may be said that there is nothing there to indicate that parliament should issue money. It merely says "until the control of the issue of currency and credit is restored." I believe that the Prime Minister played up-


Charles Avery Dunning: My hon. friend is clear that if parliament has the prerogative, that carries with it the right to use that prerogative as it sees fit? My hon. friend should not confuse the creature of the power with the power itself. Parliament undoubtedly has the power.


Walter Frederick Kuhl: I grant that parliament has the power to issue currency and credit.


Charles Avery Dunning: If it wants to.


Walter Frederick Kuhl: If it wants to, but it is not doing that to-day. Parliament is not exercising its prerogative. It has delegated to a private monopoly the privilege of issuing the medium of exchange.


Charles Avery Dunning: No, that is not true.


Walter Frederick Kuhl: Well, where does the money come from? It certainly does not originate with the government.


John Charles Landeryou: It originates with the banker's fountain pen.


Charles Avery Dunning: If my hon. friend desires me to answer, it is quite clear that parliament has, in the exercise of its undoubted prerogative, placed upon the statute books enactments
Loan of S.750,000,000

giving that power to a creature of its own, the Bank of Canada, wholly owned by the government of the country.


Walter Frederick Kuhl: But the minister is not suggesting that the entire medium of exchange is issued by the Bank of Canada as a creature of the government, is he?


Charles Avery Dunning: Certainly the medium of exchange is issued by the Bank of Canada. There is no question about that.


Walter Frederick Kuhl: The entire medium of
exchange?


Charles Avery Dunning: There we get into a confusion of terms. In fact anything is a medium of exchange between myself and my hon. friend which is mutually acceptable to us as a medium of exchange.


Walter Frederick Kuhl: That is aside from the point.


Charles Avery Dunning: If I trade jack-knives with him, that is a medium of exchange. As far as money as a medium of exchange is concerned, there is no doubt where the control rests, placed there by this parliament; it is in the Bank of Canada under the Bank of Canada Act.


Walter Frederick Kuhl: I grant that anything may
become a medium of exchange if people are willing to accept it, but what we accept to-day as the medium of exchange for ninety-five per cent of our business is bank cheques.


Charles Avery Dunning: Oh, no.


Walter Frederick Kuhl: What are we accepting, then, if not bank cheques.


Charles Avery Dunning: Well, we are not in committee, and perhaps I should not continue this. But my hon. friend knows perfectly well that a bank cheque is not a medium of exchange. It is a satisfactory payment as between one individual and another; it is a medium of accounting, if you like. But a medium of exchange is something which passes readily from hand to hand; it does not require to be paid into a bank and be cashed and another one issued. A medium of exchange is something which passes around freely, carrying at all times on its face a stable value. That cannot be said of a cheque on my account in favour of my hon. friend. It is all right in his hands, because in accepting it he has confidence that he can get legals for it at the bank, because he believes I have an account there; but he could not continue passing that cheque around with endorsement after endorsement on it, using it as a hand to hand medium of exchange in the proper sense of the term.


Mr. CAHAN:: To do so is a criminal offence under, the law.


Charles Avery Dunning: Yes; it is an offence to do so.


Walter Frederick Kuhl: Well, I believe the minister is saying the same thing I am saying, only he is using different terms.


Charles Avery Dunning: I am using different
money.


Walter Frederick Kuhl: Certainly it is obvious that ninety-five per cent of business transactions to-day are carried on through the use of the chequing system, transferring figures from one book to another through the medium of the cheque.


Charles Avery Dunning: Not figures; transferring credits.


Walter Frederick Kuhl: That is the same thing in
other words. Goods are transferred, but they can be transferred only through the use of the medium of a cheque. You cannot transfer them without the cheque; therefore your cheque acts as a medium of exchange.


Charles Avery Dunning: No.


Walter Frederick Kuhl: It is just a question of describing the same action in a different set of words; the only difference I can see is a difference of terminology.
The point I was making was that in the last election the people of Canada were of the opinion that if the Liberal party were returned with a majority, parliament itself through its own creatures, the Bank of Canada if you like, would issue all the medium of exchange, and issue it debt free. That is my opinion of what the people of Canada took for granted was going to happen, as a result of the statements made by the Prime Minister and others who spoke on behalf of the Liberal party. To show that this opinion is not unfounded I am going to read what the Liberal candidate in the constituency of Jasper-Edson, Hon. Charles Stewart, stated to the people during the last campaign.


Ernest Lapointe: He was defeated.


Walter Frederick Kuhl: Certainly he was defeated. By reason of the experience he has had in public affairs I believe this gentleman is competent to speak on these matters. He was minister of municipal affairs and minister of public works in Alberta from 1912 to 1917; premier of Alberta and minister of railways and telephones in that province from 1917 to 1921, and Minister of the Interior and Minister of Mines at Ottawa from 1921 to 1930. Certainly
fMr. Dunniniz.]

Loan oj $750,000,000
a man with that experience behind him should be able to speak authoritatively on money matters. I have before me a letter which he sent to each of the electors of the Jasper-Edson constituency during the last campaign. To me what he had to say on the question of monetary reform is extremely interesting, and I intend to read it. He divides the matter into two sections, the first dealing with the Bank of Canada in particular, and the second having to do with monetary reform.


Charles Avery Dunning: My hon. friend of course will put the whole letter on the table, since he is referring to it.


Walter Frederick Kuhl: The letter consists of three pages.


Charles Avery Dunning: I think it should go on.


Walter Frederick Kuhl: It is simply a resume of the Liberal platform, referring to trade policies, unemployment, the Canadian National railways, and so on.


Charles Avery Dunning: I think my hon. friend can comply with the rule by tabling the letter to which he refers. Then he would be in order in referring to any part he wished.


Walter Frederick Kuhl: I do not think it is necessary to read the whole thing. The writer of the letter also said something about social credit; perhaps the house would like to hear that also. I will read the section in which he deals with monetary reform. In times past the Minister of Finance and, I believe, others on the front benches, when we spoke of a money monopoly in this country, rather ridiculed and pooh-poohed that suggestion.


Charles Avery Dunning: My hon. friend cannot point to a single occasion on which I discussed the matter of a monetary monopoly. If he can do so I wish he would refer to it, instead of attributing such remarks to me.


Walter Frederick Kuhl: I distinctly remember something in 1936, though I cannot just recall when it occurred. I distinctly remember an occasion when the minister rather ridiculed us for making the suggestion that there was a money monopoly in this country.


Charles Avery Dunning: My hon. friend will have to produce it.


Walter Frederick Kuhl: I accept the minister's word for the present, but I believe I can find it. To return to this letter, this was an election platform, and it is significant that the first words from Hon. Charles Stewart to the electors in reference to monetary reform were these:
Sinister forces are at work to prevent the control of the nation's currency and credit, now in the hands of a private bank, being
restored to the people's representatives under the federal parliament.
Apparently he believed in sinister forces. Here is the second sentence:
The money powers

Apparently the sinister forces are the money powers.


Charles Avery Dunning: Read it. We cannot tell when the hon. member is reading and when he is speaking.


Walter Frederick Kuhl: Very well. This is the second sentence:
The money powers are endeavouring to divide our people into groups and small parties in parliament, in the hope of forcing on the Canadian people a so-called national government which will continue their private privileges against the people.
The special aim of the money powers _ is to prevent the Liberal party from having a majority in the next parliament, knowing full well that it will carry out its pledge to take away from private profiteers the present monopoly which they have over money and credit.
Recently the Conservative government set up a privately owned and controlled central bank in Canada. The result is to place Canadian banking under the control of international bankers. Along with many other members of parliament I fought strenuously on the floor of the House of Commons against this proposal, believing that money power should be the servant of the people and not its master. We will immediately place the central bank under the ownership and control of the government, and the central bank in turn will regulate the private banks.
So much on the question of the Bank of Canada. Apparently, according to this statement, the banks had more confidence in the Liberal party than the Liberal party has in itself. Then Mr. Stewart went on to speak of monetary reform, and this is the point I wish to emphasize. The Prime Minister said that at no time in the statements he made with regard to monetary reform did he promise that parliament itself would issue the medium of exchange. Well, here is what Hon. Charles Stewart stated to the electors of Jasper-Edson:
We have also pledged ourselves to monetary reform and to government control and issue of currency and credit.
That is the sentence I wish to emphasize.
We have also pledged ourselves to monetary reform and to government control and issue of currency and credit.
"Government control and issue"-these words certainly imply that the government itself was going to issue currency and credit.
We will provide that the central bank regulate and reduce interest rates and bring them into conformity with the prices received for the basic commodities produced by agriculture, mining, lumbering and fishing. These constitute the real wealth of the country and on them we depend.
Loan of $750fl00,000

We also propose to refinance the entire federal debt structure at greatly reduced rates of interest. This will effect a great saving to you and all the taxpayers of Canada.
We believe in controlled inflation, and will use this in a proper way for the benefit of our people. We must abolish poverty in the midst of plenty. We must bring about a more equitable distribution of wealth.
All these functions and duties can be performed through a government owned central bank.
I suggest the word "all" is all-inclusive. Then, there is one further paragraph I should like to read, since I am expected to place the entire document on Hansard.


Charles Avery Dunning: On the table.


Walter Frederick Kuhl: I might as well read the part pertaining to social credit.
The social credit government headed by Premier Aberhart-
I am sorry some of the words are obliterated. However, I shall read the sentence following that one.
I wish to state my attitude clearly and frankly towards this government.
That is the Alberta government, to which he was referring.
In my opinion no obstacles should be placed in the way of Premier Aberhart carrying out the promises upon which he was elected. He has stated that he can carry out his plan within Alberta. My leader, the Right Honourable W. L. Mackenzie King, and I, have repeatedly declared that we will give the same friendly cooperation to Mr. Aberhart and his government as we will give to the other provincial governments in Canada.


John Charles Landeryou: Discrimination and disallowance.


Walter Frederick Kuhl: I will leave it to the judgment of hon. members as to whether or not that has	been done. I	think it	is	quite evidentthe	Hon. Charles	Stewart	anticipated thatif the Liberal party were elected, the crown's prerogative was going to	be	exercised byparliament itself rather than by private monopoly. All I am saying now is that if the	Liberal party	will go	as	far as Hon.
Charles Stewart apparently thought it was going, I shall be satisfied for the present, so far as this bill is concerned.
My last suggestion is that once the prerogative of the crown of issuing the medium of exchange, regardless of whether that medium be printing press money, coin, cheque-book money, or broken teacups, is restored to parliament, the second duty of parliament is to exercise that prerogative in the interests of the people. It should issue money and credit according to the needs of the people, as the Liberal party said it was going to do. As I have said on previous occasions, I deem it the duty of government to do for the people

what they cannot do for themselves. The people cannot issue a medium of exchange; we could not function and carry on intelligently if each individual were permitted to issue a medium of exchange. We might have enough of it, but we need order and system. Consequently a medium of exchange must be issued by a central authority.
The people are willing to apply their effort to the national wealth of the country. They are ready to process it and to put it into forms in which it can be used. People want to engage in private enterprise. To-day we need a good deal of public enterprise, but our monetary policy does not permit it to take place. It is the duty of the government to do for the people what they cannot do for thbmselves. Parliament must see to it that the medium of exchange is issued in accordance with the needs of the people. Otherwise why do we have parliament? What is parliament for, if it does not do that? I think circumstances which still exist indicate obviously that the monetary policy does not reflect the real facts. We need highways. We need better housing. We need a thousand and one different types of public programs. We always come back to the one point of an insufficiency of money. The group to which I belong says it is the duty of the government to make the financial policy of Canada reflect the facts, and permit the people to carry out what it is physically possible for them to do.
Just a word with respect to the unity of Canada


Walter Edward Foster: The hon. member has exhausted the time at his disposal.


Walter Edward Foster: The hon. member has exhausted the time at his disposal.


Mr. M. J. COLDWELL (Rosetown-Biggar):: Mr. Speaker, I do not propose to enter into a discussion of monetary reform matters, because these things can be done at another time and place.- Before the banking and commerce committee last Wednesday I endeavoured to discuss the basis of a financial system. However, we have before us a bill, and an amendment thereto which, since it has not been questioned, I must conclude is at the moment in order and open for discussion.
The original proposal of the hon. member for Calgary East (Mr. Landeryou) was that 750,000,000 of new dollars might be issued in order to retire the bonds maturing, to retire certain treasury bills, and to provide a balance which might be utilized for the provision of public works. I thought then, and I think now, that if the words "and general purposes" at the end of the amendment mean that any part of the amount men-

Loan of $750,000,000
tioned in the amendment shall be used to retire bonds now maturing, it may not have the result which I am sure hon. members supporting the amendment would wish it to have. In other words the portion of the issue used for that purpose would pass immediately into the hands of persons and financial institutions who would have no use for it other than to place it in their bank accounts for reinvestment in other securities of perhaps a similar nature. If they sought these fields of investment, the net result would be a rise in the monetary value of government bonds offered for sale on the open market, and of other gilt-edged securities. When these became exhausted in number the investor might turn to some other less remunerative or less desirable field, and if we proceeded all the way down the line the result might be a speculative boom. There is no guarantee that that portion of the amount first mentioned as $750,000,000, or the amount mentioned in the amendment as $200,000,000, would benefit the workers and farmers to the extent to which such an issue might be beneficial to them.
Having said that, let me say that I am not opposed to the proposal before us on the ground upon which many would oppose it, namely, that it would mean inflation. That argument certainly does not frighten me, because I am convinced that we are suffering from a severe deflation of prices and employment. The fall in the value of our primary commodities which has taken place in the past few years must be arrested. The price level of our primary commodities must be raised, otherwise our whole economy will suffer. When I say that, I realize that money has some basis in fact, some basis in real goods and services. I think the mistake our friends often make when discussing monetary reform is, as I have said before, that they tend to mistake the shadow for the substance.
I seldom tell a story in this house, but I heard a good one the other day which I think I should repeat. A farmer in Alberta was taking a lot of hay tc a nearby village last autumn. A friend stopped him and said, "John, I see you are taking a lot of hay to town. Are you selling it for cash or credit?" John said, "I am selling it on credit." His friend then asked, 'Are you not going to lose a lot of money?" John replied, "No, but I may lose a lot of hay." I think that illustrates the point that must be understood when we discuss money.


Charles Avery Dunning: If he was a farmer in Alberta, surely he must have understood that credit would only be book-keeping.


Major James William Coldwell: I cannot answer for the Alberta farmer. The point I am trying to make, the point I always try to make in respect to this matter, is that every dollar we have in our pocket is a demand for somebody's goods or somebody's services. The only way that demand can be met is by the provision of goods or the provision of services.
I am not saying that our friends in bringing monetary matters to the attention of the House of Commons are not rendering a valuable service. I think they are, because there are many things in connection with our economic affairs that we ought to understand better than we do. Much thought should be given to improving our banking and monetary systems so that they will serve the nation as a whole rather than a comparatively few people. Therefore I am not opposing the principle of the issue of national money by the Bank of Canada under the direction of this parliament; I am only opposing any suggestion that we can issue unlimited amounts at any particular time.


Walter Frederick Kuhl: Did anybody suggest that?


Major James William Coldwell: I would regard $750,000,000 issued all at once as being an almost unlimited amount.


Walter Frederick Kuhl: How does the hon. member arrive at that?


Major James William Coldwell: I shall probably have something to say about that in a moment. I may move later a subamendment to provide for the issuing of an amount of new money to be used for the provision of useful and necessary public works. If we are going to issue new money, let us place it in the hands of those who must spend it on consumer goods, such as food, clothing, homes, and so on. As I said on Wednesday before the banking and commerce committee, if we are going to pump it in at all, let us pump it in at the bottom rather than into the stagnant pool at the top. If our object is to stimulate our economy, let us stimulate it where the stimulation will most beneficially affect our economy.
Our two most pressing problems at the moment are unemployment and the low prices received for agricultural products. To pay many millions of dollars to bondholders cannot ameliorate these problems to any appreciable degree. The stimulation of secondary production which would result in greater employment and a consequent demand for farm products would depend entirely upon the reinvestment of these funds by private capitalists and corporations. We have no control over the places where this money would be invested, nor have we any guarantee
Loan of HV50,000,000

that it would be invested. If, on the other hand, $100,000,000 were issued, as our friends say, free of debt, but as I would prefer to say, free of interest-


Charles Avery Dunning: That is not what they mean.


Mr. BLACKMORE:: No, not by any means.


Thomas Miller Bell: " Free of debt " is really a misnomer. The moment a dollar is issued by the government it is a demand for a dollar's worth of someone's goods or services. Somewhere in our economy someone will have to pay a dollar's worth of commodities or goods to me, the demand for which I hold at the moment, and which is their debt to me temporarily. Consequently I am speaking of our dollar as being free of interest. As I said, I am not opposed to such an issue to finance a comprehensive program of works, housing or even to improve our social services. This money would pass immediately into the hands of persons who need more food, more clothes, more furniture, more houses, more of everything that industry and agriculture produces. This in turn, I believe, would improve the demand for milk, butter, cheese, eggs and other agricultural products, and, therefore, benefit the farmer. I take it that these are the groups which suffer most to-day under our present economic chaos.
It seems to me that we should also keep in mind the fact that when the money had been spent the nation would have something to show for it. The nation would have public works, houses and services, to the value of the sum issued, while the farmer and the unemployed would have furniture, food, and many of the amenities of life that they now lack. Municipalities would be able to improve their tax position through having arrears paid, while lending institutions would benefit by the repayment of loans in full or in part. Manufacturers and retailers would benefit, and I believe our whole economy would be stimulated. If we are going to try the experiment of issuing interest-free money, then let it be tried in the manner which is most likely to do the most good.


Charles Avery Dunning: I take it my hon. friend is leading up to a proposal that $100,000,000 should be issued in the form of currency in order that it may be interest-free, as he describes it, and go into the various forms of public works to which he has referred. Is he contemplating that there would be an annual issue of $100,000,000, or would he just make one issue of $100,000,000 and then stop? 
My hon. friend must recognize the importance of the point, in view of the fact that he admits that every dollar issued becomes a call upon a dollar's worth of goods or services.


Major James William Coldwell: I have just scribbled the subamendment, but I think I have covered that point. I would do it this one year with a view to studying its effect upon our economy.


Charles Hazlitt Cahan: We have a precedent for
studying the effect.


Major James William Coldwell: Mr. Bennett did that
a few years ago.


Charles Hazlitt Cahan: Mr. Robb, a former minister of finance, did it.


Major James William Coldwell: It was done during
the great war also. I am not unmindful of the fact that it would be another experiment. I do not think it would be a bad thing at the-present time to increase the price level of our primary commodities. I am not forgetting, of course, that when you issue a quantity of money in relation to the goods available you are apt to increase the price of goods.. I am not forgetting for one moment that an inflationary movement is a form of taxation on a particular class in the community.


John Charles Landeryou: If uncontrolled.


Major James William Coldwell: If it causes a pricerise at all. I am not therefore suggesting that we lay down a program for a number of years, but that we see what the effects would be of the-issue of say $100,000,000 during the course of the issue of that currency.


Arthur Graeme Slaght: If the hon. member will
permit a question, I am interested in his suggestion and in his proposed amendment; but would he indicate whether or not from the evidence in the banking and commerce-committee, of which I am not a member, it has been indicated that to issue that additional paper money would not, as I understand it, disturb our recognized ratio of twenty-five per cent gold in the treasury?


Charles Avery Dunning: It would not.


Major James William Coldwell: No, it would not.


Arthur Graeme Slaght: I should like it made clear that that is the fact, as I understand it.


Charles Avery Dunning: There is quite a latitude.


Major James William Coldwell: We have quite a latitude at the present time, as the Minister of Finance says. I did not want to refer to the banking and commerce committee, but I would recommend to the hon. member a

Loan oj $750,000,000
reading of No. 17 of the proceedings of the banking and commerce committee, in which the governor of the Bank of Canada discusses the proposal of the hon. member for Winnipeg North Centre (Mr. Woodsworth) for an issue of some 550,000,000.
I was speaking, Mr. Speaker, of the results that might be expected from an issue of, say, $100,000,000. We might see a stimulus given to our economy within a measurable period of time. We have been asked to observe the results that have followed a policy of that sort in the Dominion of New Zealand. While some of my friends may tell me that New Zealand will ultimately come to the point of an economic crisis-that prophecy is being made quite widely-my understanding of what is going on there is that for the time being at least there has been a real upturn in business, that houses are being built-


Charles Avery Dunning: That always follows
inflation.


Major James William Coldwell: If the situation there is not altogether what we hope, nevertheless if a crisis should come, by that time the New Zealand people will have had a period during which they will have built better homes and enjoyed more of the amenities of life. Their morale will be better to withstand the subsequent depression than ours would be should we get another depression on top of the one we now have.


Mr. MANION:: May I ask the hon. member a question? I have been reading a good deal of literature on New Zealand; is it not correct that New Zealand is to-day taxing all wages and salaries about six per cent? That would be a huge tax in Canada.


Major James William Coldwell: The hon. member does not mean a direct tax?


Robert James Manion: Yes, a direct tax.


Major James William Coldwell: I do not think they have a direct tax on wages and salaries, but I believe there is an indirect tax on wages and salaries, because the price level in New Zealand has risen by more than six per cent-by eleven per cent, I understand.


Robert James Manion: I mean a direct tax.


Major James William Coldwell: I think not.


Robert James Manion: I think there is.


Major James William Coldwell: While the price level has risen by about eleven per cent, the increase in business, on the other hand, has been some thirty per cent, and unemployment has disappeared; not only has it disappeared, but
New Zealand is sending people across to Australia to recruit carpenters, bricklayers and others engaged in the building trades.
If a stimulation occurs in our economy I would point out to my social credit friends that any increase in the public debt, particularly if it is at a lower rate of interest, is not the most alarming symptom in our economy. None of us wants to see our public debt increased; but that is not the most alarming symptom. . The most alarming symptom in our economy is widespread unemployment and poverty among the farmers and workers.


John Charles Landeryou: If my hon. friend will permit a question, we have never suggested that the public debt is the most alarming feature. The most alarming feature is a shortage of purchasing power in the hands of the people.


Major James William Coldwell: That is not a question, it is a speech.
It may be argued that the retirement of millions of dollars of bonds for new money would tend to reduce interest rates. That is true. But if, on the other hand, the money were paid out for public works and the money so paid out got back into the hands of the banks, it would have precisely the same effect but it would have already served a still more useful purpose through having distributed goods to workers and farmers and having provided the nation with public works. A criticism I have to make of the minister's proposal to borrow large sums of money is that you increase the national debt before you reduce unemployment..
At one o'clock the house took recess.
The house resumed at three o'clock.


Major James William Coldwell: When the house rose at one o'clock I was discussing what I thought the effect of the issue of, say $100,000,000 worth of new money would be upon the economy. Some, of course, will argue also that this would depreciate our Canadian currency in terms of foreign exchange, and that Canada is an exporter of goods. In my opinion, there are circumstances under which such depreciation would actually benefit the Canadian producer. Recently we have seen a slight depreciation of the pound sterling in terms of Canadian dollars, and in 1932 such a depreciation occurred to a very large extent, I believe at one time the pound sterling fell in value to such an extent that the exchange was about $3.25 in our money, and that was
Loan of $750,000,000

a disaster to the Canadian farmer-not only the western farmer, but the entire farming community of Canada.
Depreciation of the dollar in terms of foreign exchange would give one class of producers, those who produce export commodities, a larger return for their goods in terms of Canadian currency, provided, of course, the depreciation were not too great. I notice that the Australian government is considering the fixing of a set price for Australian wheat at 3s. lOd. per bushel. If we remember that we have a normal exchange rate of $4.87 to the pound and the Australian currency gives them 480 halfpennies to the pound, we can make a comparison using the halfpenny as a cent, and under normal exchange conditions 3s. lOd. would give them 92 halfpennies or cents with which to retire their own internal debt with their own internal currency. But when we translate the proposed price of wheat in Australia into Canadian money at current rates of exchange, that is, 65 cents, we are neglecting the effect upon the domestic economy of Australia; consequently I believe that if there were some depreciation in our currency overseas as a result of the issue of additional currency in Canada it would at least benefit our Canadian producers.
The difficulty under our present system is that the manipulation of currency results in increasing or decreasing returns to various classes in the community, and at the present moment the farmer suffers from low prices and the worker from unemployment while those in receipt of fixed incomes from bonds, mortgages, securities and so on are able to obtain more goods for money expended. Of course, depreciation, if it occurred, would tend to take something from the latter group and give it to the former. Again we are faced with a problem of choice.


Charles Avery Dunning: My hon. friend is not forgetting the consumer group?


Major James William Coldwell: No; we are all consumers.


Charles Avery Dunning: What would happen to them?


Major James William Coldwell: Suppose we repeated the experience of New Zealand, say, where unemployment has been banished, where business has been stimulated, and the price level has risen eleven per cent, so that the consumer is paying eleven per cent more for the goods he consumes; nevertheless the benefits that 
accrue from depreciation outweigh the other factors which the minister has in mind. I say, therefore, that we are faced with a problem of choice.


Charles Avery Dunning: Does my hon. friend consider the tariff raising effects of currency depreciation?


Major James William Coldwell: No, I did not consider the effect upon the tariff. Probably there is an argument there against what I am saying. Still, I believe that all these risks are worth taking if we can do the two things that we need to do at the present time. In other words, we have this choice: either employment for the unemployed and better prices for the producer, or doing away with some of the privileges which another group in our society enjoy to-day. I believe that eventually it would improve even their position, because improved economic conditions would improve conditions for all the people. But until that improvement comes I will admit that inflation-if it should prove to be inflation, though I do not think it would; it would be rather reflation-would reduce the return to some groups in the community.
I am willing to admit, in the course of an argument such as this, that you cannot get something for nothing, although the redistribution of wealth which would result from large expenditures on public works, financing directly and effectively increased consumption among the workers and benefiting the farmers, would eventually result in improved conditions generally. My argument is that instead of placing money in at the top to retire bonds we should endeavour to finance consumption, and that would improve conditions generally throughout the economy.
I said, too, that improved conditions would improve our tax position. I mean not only municipal taxation but the tax position of the country; because it would enable our national treasury to collect more money from those to whom it would eventually flow, particularly if it were accompanied by more steeply graded income tax and death duties. If we owned the entire banking system, an operation of this sort would be easier; but we do not own either the chartered banks or any large segment of our economy; hence we must rely on taxation to recover the national issue in order to reissue national money in the future. This is something we sometimes overlook when discussing monetary reform. In other words you cannot issue money indefinitely without providing some means of recovering at least the major part of the issue, and that has to be done usually by taxation. You could not

Loan oj $750,000,000
keep on issuing new national money without recovering a substantial part of it, because if you did your economy would be in other difficulties.
The raising of the total national income enables a government to raise more revenues by taxation, and the experience of the United States in the last few years has shown this. There they raised annually the national income by some $30,000,000,000 between 1932 and 1937, enabling the government to collect more revenue by $4,400,000,000 annually. In Canada, incidentally, we have benefited from what they have done in the United States, making it, in the eyes of our government, unnecessary to do what they did there.
I would point out also that our circulating medium to-day has not increased-I mean our active circulating medium. There has been no increase in recent years over 1929 and our price level at the moment, in terms of the 1926 price level, if you take that at 100, is about 73. Consequently I would argue that if we brought that up to the 1926 level, 27 per cent more, we should have, not inflation, but simply reflation to that level. We are frequently told that the present currency is all that we require to carry our present credit needs, and that the issue of $100,000,000 would increase the reserves of the chartered banks, and that all that it would really do would be to broaden the base so that they might issue another billion dollars' worth of loans, and so on. That may be true. On the other hand I think this is true, that to-day private enterprise will not do the things which should be done in order to relieve unemployment. That is largely because the banks, as private institutions anxious to preserve their profit basis, are unwilling to lend money to private enterprise to carry on the work, particularly what is usually called the unprofitable work, which needs to .be done. So that if private enterprise will neither invest its own savings nor borrow from the banks, a public issue for public works is in my opinion fully justified.
I did not expect this matter to come up to-day, and I have not had an opportunity of looking up a statement which was made by the Minister of Finance (Mr. Dunning) in the house earlier in the session. I am not sure of the exact amount, but I believe that on one occasion he said we could issue an additional amount of currency without impairing our gold standard basis.


Charles Avery Dunning: There is no doubt about that.


Major James William Coldwell: That objection, then, cannot be raised to what it is proposed to do. Of course I have mentioned as I passed along
the dangers, which I fully appreciate; but I believe that in the situation in which we are to-day, with a choice before us, the choice which is suggested by the subamendment is well worth trying. I am therefore going to move, seconded by Mr. Douglas (Weyburn):
That the amendment be amended by striking out the amount "two hundred million dollars" and substituting the amount "one hundred million dollars"; and further, that the words "for general purposes" be deleted from the last line and the words "during the current financial' year" be substituted therefor.
I make these alterations first of all because I think that if we are to issue an amount of money of this description it should be issued definitely for a purpose, and that purpose ought to be for public works, to go in at the bottom as consumers' purchasing power instead of into the stagnant pool of bank deposits at the top. The amendment includes the words, " for general purposes." That may mean anything. It may mean for the retirement of debt, and I should be opposed to issuing money for the retirement of debt when wre need large sums of money for public works.
I would also say that the amendment should set a period of time during which this money should be spent. The amendment does not deal with that, and the bill provides for an expenditure of money over several years-I have just forgotten how many. Therefore to leave the issue of this money for a specific purpose to be spread over, we will say, a few years, would not do what I want to see done. The government might spend only $10,000,000 this year and leave the other $190,000,000 to be spent in subsequent years. I want to see the amount authorized definitely earmarked to deal with the present unemployment and the low price level of primary commodities. That is why I have moved the subamendment to the amendment.


Robert James Manion: I do not rise to go at any length into the discussion. I have listened in this house to many debates upon this subject, which is a very interesting one, but it is also so complicated that I have always hesitated to take part in it. I do not suppose that in all the realm of political economy there is any question concerning which it is so difficult for a man to make up his mind. My hon. friend the member for Leeds (Mr. Stewart) says, " unless he is an expert." Well, if there is any group in the world which has been discredited in connection with this matter, it is the experts.


Charles Avery Dunning: And we are breeding new ones all the time.
Loan of SJ50P00,000


Robert James Manion: Of course. It is because the question is so difficult that there are so many " experts."


Charles Avery Dunning: That is right.


Robert James Manion: I believe that anyone who has given attention to the terrible effects which throughout the world have followed an unlimited issuance of paper money would hesitate a long time before he agreed to a similar proceeding in this country. I must, however, confess that after a great deal of thought and study I believe there is a germ of truth in this aspect of the question, an element of truth in the idea that to a certain extent we can improve our condition by some monetary reform. This idea has spread almost like wildfire among certain classes of our people, and until it is proved to them that there is no germ of truth in it they will go on agitating for it. I believe there is some basis for their feeling that the proposal to issue additional paper money has some justification, and if there is any element of truth in it, it is that element which is covered by the subamendment. That is, if you are going to issue paper money at all, it must be for some constructive purpose such as that proposed by the hon. member for Rosetown-Biggar (Mr. Coldwell). He suggests in the subamendment that there should be issued .$100,000,000 of paper money for the purpose of building public works.


Charles Avery Dunning: In this year.


Robert James Manion: Yes. As I see it, the danger of that is the same as the danger in using opium. As a medical man I know something about the opium habit. Anyone who does not and who wants to read about it can do so in that very fine story by De Quincy, Confessions of an English Opium Eater. I read it many years ago; I well remember seeing De Quincy's grave in Edinburgh when I was studying over there. In taking opium, a victim gets so that he wants to take larger and larger quantities to give him the same effect which at first he derived from a small dose. There is a similar danger in connection with the issuance of fiat money. One issue goes out and undoubtedly seems to do good; it picks up the patient, it revives business and starts freer spending; there seems to be a great improvement in the patient's condition-the patient in this case being our country-and it seems reasonable to issue more as the good effect of the first dose dies down. So you get in the position where more fiat money is demanded, just as the opium eater, after he takes a dose which does not affect him so well as the last, begs for more. That is the great danger.

At the same time I am not condemning the subamendment. I do unqualifiedly condemn as beyond the realm of reason, the idea of issuing, as has been proposed once or twice in this house, and sometimes before the banking and [DOT] commerce committee, $650,000,000 or $750,000,000 worth of money.
The reason I say even the experts may be wrong is that if you look back over our monetary history, even for the last few years, you will find the changes so great that to-day we are working under a controlled or managed paper currency which even a short time ago would have been said to be absolutely impossible to work under. I do not think there can be any doubt about that. We are virtually on a fiat money basis to-day, without a doubt, on a controlled paper money basis. Not so long ago you could cash in your bills and get gold for them. I well remember that on my first visit to England, and I think on some of my subsequent visits, we had to carry a leather purse-I think I have my first one yet, a pigskin purse-in which to carry around the gold. If I remember correctly at that time there was no smaller bill than the five pound note. I was a student; most of us did not have five pounds, and we carried a sovereign, if we had that, or a half sovereign.
Mi-. DUNNING:	You must have been
wealthy to have a sovereign.


Robert James Manion: A sovereign made me feel
pretty good. We carried around whatever we had in gold and hardly saw any paper money at all. That was the unlimited gold standard; if you had any paper money you could change it into gold. I think to-day, for certain purposes such as the payment of external debts, we can get gold bullion to export, but that is about the only gold at present in use. That illustrates what I mean by pointing out the important changes that have taken place in the last few years. I have no doubt that if before the war anyone had suggested to the present Minister of Finance (Mr. Dunning) or to the financial leaders of that day that a time would come during the war when Canada would issue bonds to the extent of $2,000,000,000, the person responsible for the suggestion would have been called crazy. Well do I remember reading, before the war, "The Great Illusion," by Norman Angell, now Sir Norman Angell, in which he proved conclusively that no war could continue for more than about six months. He was one of the great authorities of his day, and when I read his book I was

Loan of $750,000,000
convinced that he was right. So was everybody else who read the book. He was one of the experts we spoke of a moment ago.


Charles Avery Dunning: Not a monetary expert.


Robert James Manion: I do not know that he
was particularly a monetary expert, but he has written a great deal along that line, and I imagine that he has given the question very much more study than even my hon. friend has given it. Norman Angell was an authoritative writer on financial matters.


Mr. MACKENZIE (Vancouver):: His
main theory in that book was that war was economically and socially futile.


Robert James Manion: But in addition he proved
conclusively to the ordinary reader that the financial implications would absolutely prevent a wnr continuing very long. I well remember that, though I have not read the book for many years. If anyone had suggested the possibility of issuing the huge amount of bonds that were issued throughout the world in connection with the war, he would have been thought by the financial authorities of that day to be crazy.
Then there was the question of gold backing. Up to a few years ago it was considered necessary that we should have a forty per cent gold backing. Then came the world economic conference in London in 1933, I think, at which a resolution was passed providing that twenty-five per cent would be sufficient gold backing.


Charles Avery Dunning: That it should not go
below twenty-five per cent.


Robert James Manion: Very well; twenty-five per cent would be' sufficient gold backing instead of the previously accepted minimum of forty per cent.
However, the reason I rose was not to express any dogmatic opinion, because very frankly I have no dogmatic opinion. I have an entirely open mind on this question, though not an open mind to the extent of accepting the suggestion of the hon. member for Calgary East (Mr. Landeryou) in regard to issuing anything like six or seven hundred million dollars' worth of fiat money. I have not an open mind on that; I am convinced that he is wrong.


Mr. JOHNSTON (Bow River):: Then it is only a partly open mind.


John Charles Landeryou: May I suggest to the leader of the opposition that the $600,000,000 was for the retirement of debt, not for public works or general purposes.


Robert James Manion: Then I would say there is a double fallacy in the proposal, because if you are going to issue money at all it would be far better to issue it for public works than for the retirement of debt. However, I do not wish to get into an argument on that point. I do not agree at all that the issuing of hundreds of millions of dollars of new money would be a wise thing.
The hon. member for Rosetown-Biggar mentioned New Zealand, and I asked him this morning if he knew that New Zealand had a tax of six per cent on all income, in addition to ordinary taxation. Since then I have looked up some papers I have received from a gentleman in Winnipeg, who probably has been circularizing many hon. members of the house in addition to myself, and I find that the figure is five per cent. This gentleman in Winnipeg, Mr. A. E. Grassby, an outstanding man, is deeply interested in New Zealand. One of the last articles I received from him contained a synopsis of what New Zealand has done, and he makes the statement that New Zealand has imposed a tax of one shilling in the pound, on all income which works out at five per cent. I wrote back to Mr. Grassby and asked: "Am I to understand that this tax is on all income?" So far as I know I have not received a reply as yet. But assume we imposed a tax of five per cent on all income in Canada, that is, wages, salaries, and so on, in addition to present taxation. I take it that our national income is probably $4,000,000,000; I looked it up about 1931, and I imagine we are about on the 1931 basis at the present time. So we will say salaries and wages, not including returns on investments, in Canada to-day amount to roughly $4,000,000,000. If we imposed a five per cent tax on that income the result would be an additional $200,000,000. Then the Minister of Finance would have no difficulty in balancing his budget. Even allowing for the fact that he may be minimizing his deficit a bit, he would still have about $125,000,000 with which to do as he pleased, even in these extraordinary times. Then we would be able to solve our problems without issuing any additional paper money at all.


Mr. HEAPS:: Does that tax apply to all income?


Robert James Manion: In a moment or two I Mr. MANION: That is what I do not will tell why my mind is not open to that know; the article simply says it is five per extent.	cent on income, and I take it to be on all

Loan of $750,000,000


Thomas Clement (Tommy) Douglas: I think it is graduated.


Robert James Manion: It does not say so in the article I saw.


Charles Avery Dunning: Without having the
reports before me I think the tax to which my hon. friend is referring is an extra tax in addition to the ordinary graduated income tax. If my memory serves me aright, it was imposed in order to meet the greatly enlarged payments being made under the old age pension and health insurance schemes. I think my hon. friend is quite correct as to its application to all salaries and as to its total yield.


Robert James Manion: I understood it to be just as the Minister of Finance says, an extra tax, having nothing to do with the ordinary taxation at all. They have the other taxes, just as we have. I well remember from my reading before the war that Germany had a tax of six per cent, which paid for expenditures on social services of various kinds; because before the war I think it is correct to say that Germany was probably the most highly developed country in the world from the point of view of social insurance, old age insurance, health insurance, and so on. So that this five per cent, if it is correct-and I think it is; it has not been contradicted by anything I have seen since'-if we could put it on, in addition to our tax, it would give us a huge sum with which to correct some of the inequalities that exist to-day.


Abraham Albert Heaps: If that tax is levied on the income of the population and is paid out not for general but for specific purposes, then I think the arguments of my hon. friends are not quite sound.


Robert James Manion: I do not know what it is being paid out for. They simply give a list here of the various taxes. They do not specify this for any particular purpose.


Abraham Albert Heaps: Social security.


Robert James Manion: It is not specified in these papers. However, I do not wish to get into a discussion about New Zealand.

I wish for a few moments to deal with inflation in general, and particularly with the dangers of it. Anyone who has read the histories of other countries-and I presume all hon. members have done so-and have studied the effects of inflation in those other countries would hesitate ever to suggest for this country anything that might be termed inflation.


Walter Frederick Kuhl: What does the hon. member take as a definition of inflation?


Robert James Manion: I would say it is the issue of too much paper money.


Walter Frederick Kuhl: What is "too much"?


Robert James Manion: That is a debatable point. As a matter of fact that is why I say there is a germ of truth in the arguments of my hon. friends. I do not know how much is too much. But certainly I would say unhesitatingly that $600,000,000 or $700,000,000 in one year is too much. I do not know whether $100,000,000 would be too much. I rather think it would be. However I do not wish to be dogmatic. My hon. friends may be experts but certainly I am not an expert, and I admit it. The only reason I have never opened my mouth in the house before on the subject is that it is so complicated, and that there is so much uncertainty as to the absolute truth. Therefore I have hesitated to be dogmatic about it.
I was going to say that anyone who has studied other countries must have formed some opinions in the matter. For example, in the United States after the civil war large amounts of fiat money were issued. That money became worthless. Among some of the earliest paper money I *ever saw were confederate notes, worth nothing at all. I think we still see the odd one; I used to see them when I was a youngster. The most recent illustration, one within the memory of all of us, is found in what happened in Germany. In the early twenties Germany issued unlimited amounts of paper money. In 1923 I purchased for ten cents a German note worth a million marks-equal to $250,000 at par-and if I had waited longer I might have saved seven or eight cents on the deal. I point this out only to illustrate how worthless the paper money became.


Charles Avery Dunning: You never could have sold it at a profit.


Robert James Manion: No, and I believe I have some of it around somewhere even yet. But the classic example of inflation was that which took place in France during the revolution of 1789-perhaps one of the most fascinating periods in the world's history.

Loan oj $750,000,000


John Charles Landeryou: Has the hon. member read about what has taken place recently in Germany, under Hitler-the way they have financed the construction of armaments?


Robert James Manion: I have read a great deal about it.


John Charles Landeryou: Well, that has taken place since the inflation.


Robert James Manion: Yes, I have read what Germany has done. But when we talk about Germany at the present time we must remember that Germany forgot to pay her debts. We are one of the few countries which has continued to pay its debts. Certainly Germany stopped paying hers. In fact, she repudiated her debts. She borrowed sufficiently after the war to pay part of them. The fact is that she made victims of other countries; for every dollar she paid out in interest and indemnity she borrowed an equal amount from the United States, England and France. And when the time came she simply handed back to those countries their own money. Then she borrowed a lot more money for the building of good roads, new buildings and all that sort of thing. She spent the money in her own land and did not pay it back. I say if we wished to repudiate our debts we would save about a hundred million dollars a year. If we repudiated only our war debts-


John Charles Landeryou: Most of the debt is owed internally.


Robert James Manion: 
Walter Frederick Kuhl: For whose benefit is the hon. member reading?


Robert James Manion: I am reading it for all. If the hon. member who has interrupted does not need it, then I hope some other hon. members, including hon. members opposite, may appreciate it.


Walter Frederick Kuhl: We do not advocate inflation.


Robert James Manion: I think you do. I think my hon. friend advocates inflation if he advocates the issuance of 8600,000,000 in paper money. I say he does advocate that kind of money.


John Charles Landeryou: Does my hon. friend declare how inflation would be brought about? Would he explain how it could be brought about?	.


Robert James Manion: I submit that $600,000,000 issued in paper money at the present time would be inflation. I may be wrong. I am not putting myself up as being always in the right or anything of that kind. I never have done that. And I say further that my hon. friend is quite at liberty to go on arguing as he does.
This book was written by Andrew Dickson White, a fine scholar, who became Ambassador to Germany and various other countries. Speaking of the French revolution he refers particularly to the issuance of fiat money- mandats and assignats, as they were called in those days. I would point out that that paper money was not issued without backing. As a matter of fact it was issued with the backing of confiscated estates of the church and of the aristocrats of France.


Charles Avery Dunning: Land assets.


Robert James Manion: Yes. They were assets in all amounting to about a billion dollars. Those assignats and mandats were issued with a backing of that amount. And yet as a result of that issuance a most terrible condition arose in France.


Mr. REID:: But is it not so that that was sabotaged by the issue of millions of overseas notes?


Robert James Manion: No; I think France was sabotaged by the issuance of these notes. That is what happened. At first the issue stimulated -business. Then, after that improvement, things toned down. Another issue was made, and another-more and more and more was pumped into the monetary situation, with results which I shall describe when I read from the book. Even Mirabeau, one of the great men of France of that day, supported the proposal. In reading the book it is interesting to note that one
Loan of $750,000,000

of the ancestois of the du Ponts, who are now among the strong financial people of the United States, was one of the few who opposed the issuance of paper money to an unlimited extent. He fought against it, but Mirabeau, a great man at that time, advocated the issuance of it.
I do not wish to take too much time in reading. As a matter of fact I do not often read from a book in the House of Commons- either from anybody else's, or my own. My own book is quoted sufficiently by others and I do not think it is much of an argument when a man quotes others instead of presenting his own thoughts. However, I do not think I can put the argument I want to offer in phraseology better than that used by Andrew Dickson White, and I intend to read a few paragraphs from his book.
First, I should like to quote the introduction to the book, which is not by the writer:
To Americans of yesterday the name of Doctor Andrew Dickson White, university president, historian, diplomat, was a familiar one. Born in central New York November 7, 1832, the son of a successful but conscientious and public-spirited financier-
I find that language a little queer; I do not know why he uses the word " but."
-and educated at Hobart and Yale, in France and in Germany, he was at twenty-five professor of history in the university of Michigan.
That is from the introduction to his book, and I quote it to indicate that Doctor White was an outstanding authority. I shall go on now and read from the book itself, but before doing so I should like to read shortly from a foreword by Mr. John Mackay, who said:
The story of "Fiat money inflation in France" is one of great interest to legislators, to economic students, and to all business and thinking men. It records the most gigantic attempt ever made in the history of the world by a government to create an inconvertible paper currency, and to maintain its circulation at various levels of value. It also records what is perhaps the greatest of all governmental efforts-with the possible exception of Diocletian's-to enact and enforce a legal limit of commodity prices.
A little lower down:
They left behind them a legacy of moral and material desolation and woe, from which one of the most intellectual and spirited races of Europe has suffered for a century and a quarter, and will continue to suffer until the end of time. There are limitations to the powers of governments and of peoples that inhere in the constitution of things, and that neither despotisms nor democracies can overcome.
Legislatures are as powerless to abrogate moral and economic laws as they are to abrogate physical laws. They cannot convert wrong into right nor divorce effect from cause, either by parliamentary majorities, or by unity of supporting public opinion.
[Mr. Manion.l
And again:
From among an almost infinite variety, there are four great and fundamental facts that clearly emerge, namely,-
(1) Notwithstanding the fact that the paper currency issued was the direct obligation of the state, that much of it was interest bearing, and that all of it was secured upon the finest real estate in France, and that penalties in the way of fines, imprisonments and death were enacted from time to time to maintain its circulation at fixed values, there was a steady depreciation in value until it reached zero point and culminated in repudiation. The aggregate of the issues amounted to no less than the enormous and unthinkable sum of $9,500,000,000, and in the middle of 1797 when public repudiation took place, there was no less than $4,200,000,000 in face value of assignats and mandats outstanding; the loss, as always, falling mostly upon the poor and the ignorant.
In the attempt to maintain fixed values for the paper currency the government became involved in an equally futile attempt to maintain a tariff of legal prices for commodities. Here again penalties of fines, of imprisonments and of death were powerless to accomplish the end in view.
An wholesale demoralization of society took place under which thrift, integrity, humanity, and every principle of morality were thrown into the welter of seething chaos and cruelty.
The real estate upon which the paper currency was secured represented confiscations by the state of the lands of the church and of the emigrant noblemen. These lands were appraised, according to Mr. White's narrative and other authorities, at $1,000,000,000.
Then another comment by the writer of the foreword:
Public opinion in our own country is so far sound on the question of currency, but signs are not lacking in some lay quarters of an inclination to sanction dangerous experiments.
Then on page 27 of the book itself, there is the following:
Still another difficulty appeared. There had come a complete uncertainty as to the future. Long before the close of 1791 no one knew whether a piece of paper money representing a hundred livres would, a month later, have a purchasing power of 90 or 80 or 60 livres.
The livre at that time was worth about a franc, or about twenty cents. A further quotation from the same page:
But these evils, though great, were small compared to those far more deep-seated signs of disease which now showed themselves throughout the country. One of these was the obliteration of thrift from the minds of the French people. The French are naturally thrifty; but, with such masses of money and with such uncertainty as to its future value, the ordinary motives for saving and care diminished, and a loose luxury spread throughout the country. A still worse outgrowth was the increase of speculation and gambling. With the plethora of paper currency in 1791 appeared the first evidences of that cancerous disease which always follows large issues of . irredeemable currency,-a disease more permanently injurious to a nation than war, pestilence

Loan of $750,000,000
or famine. For at the great metropolitan centres grew a luxurious, speculative, stockgambling body, which, like a malignant tumor, absorbed into itself the strength of the nation and sent out its cancerous fibres to the remotest hamlets. At these city centres abundant wealth seemed to be piled up: in the country at large there grew a dislike of steady labour and a contempt for moderate gains and simple living.
Then from page 29:
In the leading French cities now arose a luxury and license which was a greater evil even than the plundering which ministered to it. In the country the gambling spirit spread more and more. Says the same thoughtful 'historian whom I have already quoted: "What a prospect for a country when its rural population was changed into a great band of gamblers!"
And page 31:
Even worse than this was the breaking down of the morals of the country at large, resulting from the sudden building up of ostentatious wealth in a few large cities, and from the gambling, speculative spirit spreading from these to the small towns and rural districts. From this was developed an even more disgraceful result,-the decay of a true sense of national good faith. The patriotism which the fear of the absolute monarchy, the machinations of the court party, the menaces of the army and the threats of all monarchical Europe had been unable to shake was gradually disintegrated by this same speculative, stockjobbing habit fostered by the superabundant currency.
Then from page 50 I quote:
Interesting is it to note in the midst of all this the steady action of another simple law in finance. Prisons, guillotines, enactments inflicting twenty years' imprisonment in chains upon persons twice convicted of buying or selling paper money at less than its nominal value, and death upon investors in foreign securities, were powerless. The national convention, fighting a world in arms and with an armed revolt on its own soil, showed titanic power, but in its struggle to circumvent one simple law of nature its weakness was pitiable. The louis d'or stood in the market as a monitor, noting each day, with unerring fidelity, the decline in value of the assignat; a monitor not to be bribed, not to be scared.
When I first went to France the louis was the pocket money of the people, the 20 franc piece. Then there was also the half louis. I continue:
As well might the national convention try to bribe or scare away the polarity of the mariner's compass. In August 1, 1795, this gold louis of 25 francs was worth in paper, 920 francs; on September 1st, 1,200 francs; on November 1st, 2,600 francs; on December 1st, 3,050 francs. In February, 1796, it was worth 7,200 francs or one franc in gold was worth 288 francs in paper. Prices of all commodities went up nearly in proportion. The writings of this period give curious details. Thibaudeau, in his Memoirs, speaks of sugar as 500 francs a pound, soap, 230 francs, candles, 140 francs.
Considering a franc as worth 20 cents, that would make sugar worth $100 a pound. Then on page 58 appears a comparison of prices as follows:
On the prices charged for articles of ordinary use light is thrown by extracts from a table published in 1795, reduced to American coinage.
This was at the time when assignats and mandats were issued:
For a bushel of flour. . For a bushel of oats.. For a cartload of wood For a pound of sugar. For a pound of soap.
1790	1795
40 cents	45	dollars18 cents	10	dollars4 dollars	500	dollars18 cents	12J	dollars18 cents	8	dollars
I shall not give all the items in the long list that appears on that page. Then on page 54 the author has this to say:
Such were the results of allowing dreamers, schemers, phrase mongers, declaimers and strong men subservient to these to control a government.
The last quotation appears on page 66. as follows:
And, finally, as to the general development of the theory and practice which all this history records: my subject has been fiat money in France; how it came; what it brought; and how it ended.
It came by seeking a remedy for a comparatively small evil in an evil infinitely more dangerous. To cure a disease temporary in its character, a corrosive poison was administered, which ate out the vitals of French prosperity.
It progressed according to a law in social physics which we may call the "law of accelerating issue and depreciation." It was comparatively easy to refrain from the first issue; it was exceedingly difficult to refrain from the second; to refrain from the third and those following was practically impossible.
It brought, as we have seen, commerce and manufactures, the mercantile interest, the agricultural interest, to ruin. It brought on these the same destruction which would come to a Hollander opening the dykes of the sea to irrigate his garden in a dry summer.
It ended in the complete financial, moral and political prostration of France-a prostration from which only a Napoleon could raise it.
And Napoleon did later do so. Anyone who has not read Andrew Dickson White's story of fiat money inflation in France should do so, because if anything would cause one to fear the grave danger of inflation in a country such as this, it is his historical account of fiat paper money in France.
While I believe there is a germ of truth in the arguments for monetary reform, how powerful that germ is I do not know. It is worthy of consideration, but without giving the matter more study than I have been able to give it I should not like, to vote either for the amendment or for the subamendment. The subamendment, I think, is well worthy of consideration, but my suggestion is that it
Loan of $750,000,000

should be left at that, without forcing it to a vote. The mover, the hon. member for Rosatown-Biggar, admitted in his very able speech-and he always speaks ably in this house-that he had doubts about the wisdom of the action he proposed, but he suggested that it be done once only to observe its effects. My fear is that if you do it once to note its effects, there will be a clamour, just as there was in France, for more and more- just as the opium eater craves more and more opium as the effect of the first dose wears off.


Walter Frederick Kuhl: If the hon. member will permit a question, the bill proposes to raise $750,000,000 for various purposes; would he mind stating why he believes the raising of that money will not cause inflation?


Robert James Manion: Again I say that I do not want to put myself forward as one who knows this subject thoroughly, although I have studied it for some years. But there is one thing I have learned, and that is that the knowledge that one is ignorant of a subject is the beginning of wisdom. While I do not wish to speak too positively, the difference between issuing bonds and issuing interest-free money strikes me as this, that you have to pay interest on the bonds, and the interest obligation acts as a control to prevent you from issuing too much; but when you issue money that does not bear interest, the tendency is to go on issuing more because the cost is merely that of the printing and the paper.
But there is another answer to all this argument for monetary reform. Surely all the wisdom of the ages has not percolated down to rest in this House of Commons. If it were as simple as my hon. friends say it is-I am not saying this offensively at all, because I know my hon. friends are sincere-if it were possible for any country to pay its way by issuing paper money, and spending it, if you like, on public works or to pay off its debt, why has not the United Kingdom, to my mind the wisest country in money matters, or the United States, or France, or any other great country, adopted such a policy long ago? If it is as simple as all that, it would have been done long ago.
But money, after all, is only a token. The best definition I know is that money is a measure of value and a medium of exchange. Its use is to simplify trading. Suppose I want to sell something. Rather than running around to find some person who wants to trade something for the article I wish to dispose of, I sell my article for money, and with that money I buy the article I want. Without such a medium of exchange we

should go back to chaotic conditions. Paper money is not wealth. No country can enrich itself by issuing a lot of paper money. The only wealth we have is the wealth we can produce. Without production we have no wealth at all. The only wealth we have is what we produce from our soil, our mines, our forests and other resources.


Arthur Graeme Slaght: Would the hon. member permit a question?


Robert James Manion: Yes.


Arthur Graeme Slaght: I did not get clearly the hon. gentleman's reference to the parallel of New Zealand, but I gathered that he was urging the Minister of Finance to raise an issue of $200,000,000 by putting an extra five per cent tax on four billion. Did I misunderstand the hon. gentleman?


Robert James Manion: Yes, the hon. member misunderstood me. My hon. friends to my left were quoting New Zealand as an example of a country that had solved its problems, and I pointed out that one of the methods by which New Zealand had attempted to solve its problems was by imposing a tax of one shilling in the pound, which is five per cent, I said that if we put a five per cent tax on wages and salaries in this country, leaving out dividends altogether, it would bring in about $200,000,000. It would be a very heavy tax. It might help solve a lot of our problems, but I was not advocating it.


Mr. JAQUES:: Mr. Speaker-


Walter Edward Foster: I saw the hon. member for Queens (Mr. Dunning).
Hon. CHARLES A. DUNNING (Minister of Finance): Mr. Speaker, I hope my hon. friend (Mr. Jaques) will permit me a few words. No one from this side of the house has spoken as yet on this seventh occasion on which the subject matter of this bill has been before the house. I hope when I mention that, the seventh occasion, it will put an end to all the complaints we have heard of discussion being prevented on monetary matters. I have said in the house previously that I know of no subject which has been ventilated so thoroughly here as questions relating to money and credit, and the volumes of so-called evidence which are being taken to-day at the meetings of the banking and commerce committee are further evidence that hon. members have every opportunity to ventilate their views no matter to which party they belong.
I shall not traverse again the ground covered in former debates on previous stages of this measure. We are apparently getting

Loan oj $750,000,000
closer together. I use the word "apparently" advisedly because I believe the reduction in the ideas of the hon. member for Calgary East (Mr. Landeryou) from $600,000,000 to $100,000,000 does not represent any adjustment in his belief as to what should be done. He and his party would like to see this country forthwith issue $600,000,000 of currency. That is clear from former discussions and from the amendments moved by the hon. member. But finding himself out of order and his proposal not very sympathetically received by the house, he now scales it down to $100,000,000.


John Charles Landeryou: 


Charles Avery Dunning: As a matter of fact, what is a hundred million between two social crediters?


Norman Jaques: What is $200,000,000 more debt?


Charles Avery Dunning: May I point out that the proposal to retire debt now represented by bonds by issuing currency simply means that you turn a deferred obligation into a demand obligation. By issuing bonds you promise to pay at some future time; by issuing money you promise to pay in terms of goods and services whenever the man holding the dollar bill presents it and demands for it goods and services. That is an important distinction. The leader of the opposition (Mr. Manion) mentioned another important one, but the distinction I am now making is fundamental, if I may say so. We come down, therefore, to a consideration of the amendment and the subamendment and the speeches made with reference to them.
I should like to say just a word about this new utopia, New Zealand. I shall not say a word in criticism of the present government of New Zealand or of its policies.


John Charles Landeryou: Why don't you deal
with your own financial policies?


Charles Avery Dunning: I am attempting to do
so through the medium of the illustrations which the hon. member and his own friends have advanced, and I would ask him to keep his place and allow me to put on the record some information with respect to a comparison between the results of policy of the present government in Canada and the policies of whatever governments have been operating in New Zealand, without in any way criticizing the administration of that country. We are told that New Zealand is more or less utopia with regard to money matters and interest rates. Well, what are the facts? At the present time, with regard to New
Zealand internal loans in their own country, their four's of 1943-46 are yielding 4-23 per cent, and Canadian fours of 1943^5 are yielding 2-20 per cent, more than two per cent cheaper money to the government of Canada than the government of New Zealand is able to get from its own people, with all the machinery which has been described by my hon. friends opposite.
We hear, of course, only the good things about other countries. I wonder if those who advance other countries by way of example, particularly when they are other countries of the British commonwealth, realize how difficult it is for a minister of the crown in Canada or in New Zealand to indulge in criticism of the policies of the government of another part of the British commonwealth. It is perfectly all right for my hon. friends to represent another British country as a utopia or a heaven. That is fine. But I can well imagine that it would be regarded as a grave discourtesy on my part as a minister of the crown in Canada to make speeches which could be used in criticism of the government of New Zealand or of any other dominion by their opposition. It would be a very undesirable condition; therefore I limit my reference to New Zealand by that one recital of fact to which I have referred.


Abraham Albert Heaps: What does that prove so far as the people are concerned?


Charles Avery Dunning: I thought it was selfevident that when money costs a government little, the people are advantaged in comparison with a country in which it costs the government much, and that comparatively that country which is borrowing from its own people at the cheapest rate has on the whole a healthier monetary situation than that country the government of which is paying to its own people a higher rate of interest. That surely is self-evident.


Major James William Coldwell: Does not the minister
think that unemployment is a better barometer than rates of interest?


Charles Avery Dunning: I will admit at once
that unemployment represents a major problem in practically all countries. My hon. friend says it is solved in New Zealand. There again I am embarrassed in trying to discuss it, because I want no word of mine to appear to be critical of the policies of another country.
With regard to the amendment, we are asked by its terms to authorize the governor in council-mark the term, to authorize the governor in council-to raise by the issue of currency and/or credit through the Bank of
Loan of $750,000,000

Canada an amount not to exceed $200,000,000 for public works and general purposes. I take it from the language of the amendment, which does not appear to have been very well thought out in its relation to the whole problem, that the $200,000,000 currencyissuing authority which it advocates is not limited as to time. When we come to the subamendment of the hon. member for Rose-town-Biggar (Mr. Coldwell) a limitation as to time is imposed, but I take it that the hon. member for Calgary East is quite prepared to extend this $200,000,000 currencyissuing or borrowing from the Bank of Canada authority over any period of time, because in no sense is there any time limitation implied.
May I point out, to the hon. member and to those who believe that something of this sort is necessary, that all his amendment seeks to attain is now within the power of the governor in council, if I read his amendment correctly. It is now within the power of the governor in council through the medium of the Bank of Canada. That is to say, if the government wishes to make an arrangement with the Bank of Canada to buy its treasury bills, or if it wishes to make an arrangement with the Bank'of Canada to borrow against expected revenues, full provision for both these ends is found within the four comers of the present Bank of Canada Act. May I point out further that there seems to be in the minds of hon. gentlemen in the corner some virtue in printing more money and issuing that money as against borrowing the money from the Bank of Canada at a lesser cost than is involved in printing it, or at any rate at approximately the same cost. The present rate on treasury bills, which are virtually put up to auction every month and which are outstanding at the moment to the extent of either $150,000,000 or $155,000,000, I forget which, is less than two-thirds of one per cent per annum in the form of interest payable by the government of Canada upon those treasury bills. I speak from memory, but I think I am correct in saying that the cost of printing money exceeds one-half of one per cent, and certainly what is involved in its distribution entails much more than that. So that, according to the terms of the amendment itself, the sole effect of its carrying, apart from defeating the government, would be to alarm the people with the idea that we were going very much beyond our usual financial practice of recent years in financing public undertakings. In effect it would not add one tittle to the authority of the government or to the authority of the Bank of Canada, if I read the amendment correctly, and I think I do.
IMr. Dunning.]
On the general principle may I point out, following the very pertinent remarks of the leader of the opposition, that in the last ten or fifteen years the world has moved further away from metallic backing for currency than ever before in its history. Always previously there had been nations who, out of the bitter experience of their own recent past, stood fast against getting away from a substantial gold or other metallic backing for their currency. The different parts of the world have got closer together since the great war in matters of finance and economics; and, following the London conference of 1933, a lesser proportion of gold backing is now recognized as being practicable-combined, however, with sound and careful monetary management; that is the essential.
We have moved, then, toward and into the realm of managed currency. Not only this country but practically all the major countries of the world are now operating on that basis. Proposals such as those to which we have listened to-day have a familiar ring, in that they are identical with a type of proposal which has always been heard whenever in the past in any individual country a managed system of currency has been set up. Always the popular assembly says, let us have more money. Always there is some unfortunate person standing as I stand to-day, warning as to the consequences. Why do I say that? In order to try to get away from the evils attendant in the past upon managed or mismanaged currency. Every country having at present a managed currency is, through the medium of expert investigation and consideration of all the economic factors, trying to go carefully and slowly in the direction of building up a large volume of paper money. All history tells us what a difficult thing it is to manage paper currency backed only to a limited extent by metal or other forms of value. Every country is proceeding slowly.
In our own case, I have previously pointed out the extent to which our currency issue and consequently our deposits have grown during the past four years. I have tried to describe the motives which have actuated what I have called our easy money policy and the results which flow from it. I know it is easy to be popular by saying, why not issue more? But may I point out that the very nature of the proposals to which we have listened to-day indicates how little careful examination of the bases is really made by those who propose them, because they are willing to consider two hundred million dollars if they cannot get six hundred millions, and

Loan oj $750,000,000
the Cooperative Commonwealth Federation party is willing to consider one hundred millions. No basis was advanced as to why we should undertake to issue one hundred millions, particularly, or fifty, or forty, or thirty. My experience is that those whose business it is to watch from day to day the factors which make it wise or desirable to enlarge by this sum or that sum would be the last to be dogmatic as to the amount which could safely be issued under any given set of circumstances.
The leader of the opposition expressed my feelings when he said something to the effect- I have said it before in this language, which maybe is not quite like his-that the more I know about this vast and complex subject the more conscious I am of my own limitations in that regard. And I go this much further, that the more any man really learns about it, the less dogmatic he will be as to what can be done at a given moment with such a delicate and complex matter as the management of the currency and credit of a country. The factors which operate are ever changing. They are not controlled entirely within even the confine of our own country. Things which happen elsewhere constantly affect what we in Canada can do, just as what is happening here in Canada has its effect upon what other countries can do. I was one of those who hoped that out of the conference of 1933 might come a greater degree of world cooperation in monetary matters. I believe that conference represented the high-water mark along that line up to that time. But everyone knows what happened subsequently. Everyone knows that forces diverse from and greater than monetary forces intervened and operated to prevent further growth and development, internationally speaking, of the monetary question, from 1933 onward. Progress has been made within what is known to-day as the sterling bloc, those who normally associate themselves with Great Britain and the pound sterling; and progress has been made as between the sterling bloc and France and those who associate themselves with her, and the United States. But no one can say what the future may hold with respect to international agreement on matters of monetary management.
I do urge upon this house the undesirability of parliament itself, 245 individuals, attempting by any form of resolution to say whether 10, 20, 30, 40, 50, 100 or 600 million dollars should be issued or what amount should be issued by the Bank of Canada. It seems to me that a deliberative assembly-and I say this with all respect to that assembly-cannot 71492-257
possibly judge to a million or even to ten millions or a hundred millions what is the proper amount of currency for its central bank to have in existence at a given time. The deliberative assembly should, as is its right and duty, endeavour to assure itself that the executive body to which it has entrusted its currency-issuing power is using that power in the best interests and for the well-being of the people and the nation as a whole.


John Charles Landeryou: Does the minister maintain that they are doing that to-day?


Charles Avery Dunning: I maintain that the men who are in charge of that work are honestly and sincerely carrying out precisely that intention.


John Charles Landeryou: Will the minister-


Charles Avery Dunning: Oh no. My hon. friend has made sixteen speeches on this matter and I have made only two.


John Charles Landeryou: Deal with the results.


Some hon. MEMBERS:: Order.


Charles Avery Dunning: I say this without fear of contradiction, that the preamble to the Bank of Canada Act imposes upon those who have to do with the administration of the bank a great duty, a great task. Let me put it on record once more:
Whereas it is desirable to establish a central bank in Canada to regulate credit and currency in the best interests of the economic life of the nation, to control and protect the external value of the national monetary unit and to mitigate by its influence-
Mitigate, remember.
-fluctuations in the general level of production, trade, prices and employment, so far aa may be possible within the scope of monetary action, and generally to promote the economic and financial welfare of the dominion.


John Charles Landeryou: They have not done it.


Charles Avery Dunning: I say without fear of successful contradiction that the men who have been plated in charge have sincerely endeavoured to carry out the responsibility laid upon them.


John Charles Landeryou: Well, what about the
results?


Charles Avery Dunning: I do not believe that it lies in the mouth of any hon. member to assert that these men are not sincerely carrying out that endeavour and that intention, unless he can bring forward specific charges as to the manner in which they are failing and why they are failing.

Loan of $750,000,000


John Charles Landeryou: We still have poverty and the unemployed.


Charles Avery Dunning: I will admit at once that those who originally framed the Bank of Canada Act-and I share their view-did not regard monetary control as all-powerful, as the only factor. We all know, with the exception of the hon. member for Calgary East (Mr. Landeryou)-I think even those associated with him know-that there are many factors of a non-monetary kind which are more powerful than any particular monetary policy in their impact upon the economic life, of the nation. A good sound monetary policy will help; a good sound monetary policy will assist in preventing undesirable economic developments from arising from other causes. But the mistake of the hon. member for Calgary East, and of those who held similar views years ago at the time of the French revolution, is in assuming that the mere issuance of money is all that is necessary to make the people happy and prosperous. Those who, as I say, held these views at the time of the French revolution, discovered their mistake to their bitter cost; most of them lost their heads, as a matter of fact, not figuratively as my hon. friend does, but literally.
This bill is a very ordinary measure. It continues the borrowing authority to the government, to enable the government to perform one or two essential governmental acts. One is to arrange for meeting the obligations of Canada in the terms of the obligations as they come due. The second is to provide the wherewithal to carry out the instructions of this parliament in regard to expenditures. That is all that is involved in this bill. It does not necessarily involve this discussion of monetary policy, which is really a separate matter. My hon. friends have hung upon the bill a discussion of monetary policy. That is their right.
I shall ask the house, Mr. Speaker, on behalf of the government, to vote down both amendments. I do not think I have any alternative. I do not believe either amendment to be really constructive. I am doubtful if either confers upon the government any greater power than it has to-day. I take it that the amendment to the amendment adopts all the language of the amendment, in that it would authorize the government to do certain things, except that it would limit the amount to $100,000,000, would eliminate the words "general purposes" and would impose upon the authority conveyed under the bill a twelve month limit. I think I have interpreted the amendment to the amendment correctly. If during the coming year a set
TMr. Dunning.]
of conditions should arise which seemed to make it desirable for the government to borrow more largely from the Bank of Canada, that, as I have indicated, can be done. I submit that this house cannot intelligently determine to-day by resolution that we ought to borrow $100,000,000 or $200,000,000 or $600,000,000 or $1,000,000,000 from the Bank of Canada. That, I submit, is a general executive matter which, in the nature of things, must be given day to day study not by only one group of people but by a number of groups of people studying the impact of the various factors of our economy.
I do not think I can say more at the present time; I do not want to traverse ground already covered, but I do ask the house to vote against the two amendments.


Norman Jaques: Mr. Speaker, I do not wish to take up the time of the house unduly, but I should like to clear the minds of some hon. members-


Mr. BRADETTE:: What a teacher!


Norman Jaques: I hope the hon. member will keep as quiet as I did. I should like to remove the impression held by some hon. members that the printing of money'-and, as the Minister of Finance (Mr. Dunning) always adds, unlimited money-has anything to do with social credit. You can read every word Douglas ever wrote; and if you find that once suggested in any of his books, any of his writings or any of his speeches, then I will admit that I know nothing about social credit and that I am not fit to occupy this seat. I am speaking of social credit, of which Major Douglas is the originator. It has nothing to do with the printing of paper money; especially has it nothing to do with what is always brought in, the unlimited printing of it.
In opposing this bill we are not advancing any social credit ideas. It is a matter of principle. All we say is that if the government must spend money for governmental purposes, then the government should once more assume its sovereign powers and create and distribute its own money. Anyone would think that was a new idea. No; that is the old idea. This idea of borrowing from bankers is the new idea, the idea which has landed this and every other country in a sea of unpayable debt. When did the national debt of Great Britain arise? It began with the rise of the Bank of England. There was no national debt until the Bank of England was created, but that debt has been growing from that day to this. In connection with this bill we are not advocating any social credit concepts at all. We merely say that this is a

Loan oj $730,000,000
sovereign government; that it has the power, which nobody else should have, of issuing and controlling the money of the country. We are not proposing any amount, either $100,000,000, $200,000,000 or $300,000,000; all we say is that if this government finds it necessary to expend money in the interests of the country-we do not know what sum may be required-that sum should not be borrowed but should be created and used, as it always was before the rise of the banking interests.
I should now like to say a word in regard to the French assignats. As the hon. member for New Westminster (Mr. Reid) very truly said, those assignats were sabotaged. They were based on the land of France, which land up to the time of the revolution belonged to the aristocracy and the church. The land was confiscated from both, and as many of the aristocracy and members of the church as could sought refuge in Great Britain, where they found themselves among friends of all kinds. The English were at war with France, and of course the English bankers were just as much opposed to the idea of the government issuing money as they are to-day. What was the obvious thing to do? What would anybody do, if he were faced with that situation? It was, as the hon. member for New Westminster suggested, the simplest thing. Millions or billions of those assignats were printed in England and sent to France, utterly destroying the French issue. In that way they got back at the revolutionary government, in the hope, of course, of bringing about a restoration of lands. That is the truth about the French assignats.


Mr. McLEAN (Melfort):: What was the total issue of assignats authorized by the government, aside from those counterfeited in England and sent back to France?


Norman Jaques: I never attempt to carry figures in my head; I cannot do it. One of my colleagues tells me, however, that when he speaks he will give that information.
Listening to the quotations placed on record by the leader of the opposition (Mr. Manion), one would never gather there had been such a thing as a revolution in France, and that the country had been plunged into the most dreadful orgy of blood; all the evils of the country are traced to the issue of this paper money.


Robert James Manion: No, that is not fair.


Norman Jaques: Well, that was the impression I gathered. This is true: Although those assignats may have failed in the end, at the time they achieved their purpose. Here was
a revolutionary government faced with maintaining order and at the same time fighting the rest of Europe. In those days bank credit had not been invented; if it was in operation it was operating only to an extremely limited extent, and countries depended on cash. Obviously, when a country is threatened or overrun by revolutionaries, the people are bound to hide their money. They dig a hole and hide it. The country had no money, and the government found that it had to have money or perish. That was the reason for the issuing of the money at that time. Whatever may be said of the failure in the end, it must be adm'tted that that issue did enable the revolutionary government to maintain order, and to carry on a successful campaign in which it defeated the rest of the world.


Malcolm McLean: No, no; it was under Napoleon they succeeded in the field, and he never issued wooden money.


Norman Jaques: If hon. members will read Napoleon's idea of money they will find that he did not leave any debt, because he would not borrow.


Malcolm McLean: And he never issued a dollar of wooden money.


Norman Jaques: Why is it hon. members seem to think that if money comes out of a bank or is created by a bank it is thereby sanctified, but that if it comes out of a government it is bedeviled? This is indeed a strange conception.
The German inflation is always thrown up to us. I would point out that it was brought about deliberately to destroy the internal debt of Germany, and from their point of view they made a splendid job of it. It was done for that purpose, and for that purpose only.


Robert James Manion: And they repudiated external debt.


Norman Jaques: I should like to know how Germany could repay its external debt. That is a thought which never struck the eminent and brilliant economists who were advising the peace conference. Germany was condemned by the great bankers and economists who advised the peace conference in Paris, to pay in gold, if I remember rightly-and I repeat that I cannot carry figures in my head-something like ten times the amount of gold there is in existence.


Joseph-Arthur Bradette: What happened in
France in 1871?


Norman Jaques: The amount was paid in that instance because it was quite limited.
4082
Loan of $750,000,000


Robert James Manion: A thousand million dollars was paid by France to Germany.


Norman Jaques: I forget the figure of the amount demanded by the allies from Germany for reparations in 1918, but I believe it was forty thousand million pounds.


Robert James Manion: No, I think it was forty thousand million dollars.


Malcolm McLean: Germany might have paid some, if she had tried.


Norman Jaques: 
An hon. MEMBER:: No.


Malcolm McLean: People would
have just that much more to consume.


Norman Jaques: In order to prevent Germany from paying debts every country had to raise its tariff. I should like to point out that if the allied countries had been operating under a system of social credit they could have accepted German repayments in goods as the greatest of blessings. The debts could have been paid. But under our orthodox system of finance and economics it is impossible to pay those debts.
In reference to the statement of the Minister of Finance concerning the care and, I might say, the infallibility of the Department of Finance in ordering the financial affairs of this country, I would point to a greater chancellor than our Minister of Finance; I refer to Viscount Snowden, Chancellor of the Exchequer in England in 1931. He held office in a country greater than Canada. In Great Britain at that time they were faced with an economic and financial crisis. He took the advice of the same orthodox economists, the same bankers. Their advice was a most drastic deflation. A royal commission headed by Sir George May, reputed to be one of the greatest financial
fMr. Jaques.]
authorities in the empire, was appointed. That commission brought out a report which was endorsed by the city of London-and when I refer to the city of London I mean, of course, the bankers of London. In the report there was the recommendation for most drastic economies. Everything must be cut down-[DOT] social services, the dole, pensions, the army and the navy. That was done, with most disastrous consequences, until the very navy mutinied. The socialist government was forced out of office to make way for a nationalist government, and the nationalist government was elected to keep Great Britain on the gold standard. It had not been elected very long before Great Britain was forced off that same gold standard, to the great advantage of everybody in the country.
When these authorities are quoted to us as being infallible, we look back on events in our own recent history. These very same people are sponsoring the greatest spending program the w'orld has ever seen. Without quoting figures, they are spending to-day what would have been considered unthinkable sums ten years ago. This money is not being spent on consumable goods, it is being spent on goods which the general public will never use. A total of ten billion dollars a year is being spent on rearmament, and surely no one will argue that this is being spent on producing consumable goods. This total of ten billion dollars, not $200,000,000, is all being spent in Great Britain. Does anyone say that there will be uncontrollable inflation, that the country will be ruined? No, there is no answer to that. There is no inflation there. Why? As my hon. friend beside me says, first because it is extremely good business for the bankers. There are no private borrowers. Why not bring the people to a state of mind where they will submit to any amount of taxation? It will then be quite safe to lend money in the sums which they require because the people will submit to any degree of taxation in order to be made secure from a hostile power. That is why the money is forthcoming.
Hon. members opposite laugh at our ideas. They are so dogmatic in their ideas of what is orthodox and sound. They cheer every time the Minister of Finance mentions inflation. I should like any one of them to explain how ten billion dollars can be spent on goods in Great Britain which are not retailed without the evils of inflation. I hope it is not being thought that the people of Great Britain are putting their hands into their pockets to bring out the pennies they have saved. If the bankers and financial institutions of Great Britain can create money for this purpose to lend to the government at interest, I should

Loan oj $750,000,000
like to know why the government cannot create the money to rearm the country without debt, without interest and without inflation. That is what we should like to know, but that is what we are never told. As soon as it is proposed that the government should issue its own money, the orthodox immediately rise and cry "inflation." They ask us to look at Germany and France and the uncontrollable inflation that occurred there.
Every country in the world is doing precisely this thing. The only trouble is that at the same time they are accumulating unpayable debts. If a bank creates money for the people to use, that is not considered to be inflation, but if the government does, that is inflation. That is the only argument the opposition have, and there is no real argument about it. With regard to President Lincoln of the United States, I urge Liberal members to read the book of one of their own members, the hon. member for Vancouver-Burrard (Mr. McGeer). I understand that hon. gentleman is an eminent commercial lawyer. He took the trouble to go to Washington to seek out the records and we have his word for it- this is corroborated by many other authorities -that President Lincoln was murdered because he had threatened the monopoly of the bankers who were issuing the money of the country. His greenbacks fought and won the the war, and he would have continued had he been given his way and not been overcome by the power of finance. This is all in the book, Conquest of Poverty, by the hon. member for Vancouver-Burrard.


Mr. GOLDING:: Does the hon. member think John Wilkes Booth was working for the financial interests?
Mr.	BLACKMORE:	Of	Toronto	and
Montreal.


William Henry Golding: Does the hon. member believe everything that is untrue?
Mr.	BLACKMORE:	The	hon. member
cannot disprove that.
Mr.	JAQUES:	The	hon.	member	forVancouver-Burrard was	regarded with	the
greatest thankfulness when he took part in a certain debate earlier in this session.


John Ritchie MacNicol: The Bren gun debate.


William Henry Golding: That has nothing to do
with this question.


Norman Jaques: The hon. member proved
his worth and his brains.


John Ritchie MacNicol: He was all wrong on the Bren gun.


Norman Jaques: That may be.


Mr. DEPUTY SPEAKER:: It is quite
out of order to bring up the Bren gun debate at this time.


Norman Jaques: I did not bring it up, it
was suggested by an hon. member to my right. I have spent much of my time during the last few weeks in attending the meetings of the committee on banking and commerce. I suppose I cannot repeat anything I heard there without finding myself out of order. I have no wish to h .'eak any of the rules of this house because I have too much respect for it, but I must confess that I still find them more or less of a mystery and I believe they will always remain a mystery.- The proceedings of this committee are printed daily, and I recommend hon. members to spend a little of their time during the recess in a study of these reports. I think they will find them worth while. After all, they contain the opinions of members of this house who are supposed to take the most interest in financial affairs.
When you become more familiar with a thing, you lose many of the prejudices you may have had because that thing is new. We should consider the state of affairs in Canada and in all parts of the civilized world. We should consider the economic state of society in the United States, Europe and everywhere else. We should consider what has happened under the blessings of orthodox finance. Is the state of the world such that the people should close their minds to- any possible alternative? Surely they should be willing to agree that things are fundamentally wrong and be willing at least to consider proposals from those who have given the matter a great deal of study. That is all I wish to say now. I had not intended to speak at all, but I did not like to see the unlimited issue of paper money tacked on to this group here and labeled social credit when, as a matter of fact, it has nothing to do with social credit.
Mr. A. G. SLA'GHT (Parry Sound): Mr. Speaker, to my mind the discussion this afternoon has clarified the situation, and I should like to put it as I see it; it will take me only a moment.
We passed a Bank of Canada Act, initiated, as I recall it, under the regime of Mr. Bennett and the late Conservative government, and amended by this government in that we took for the people of Canada complete control of the bank against the fifty-fifty division of governmental control and private control under which the -bank was started on its
4084 [DOT]
Loan of $750,000,01/0

career. The recitals that have recently been read by the Minister of Finance (Mr. Dunning) make it abundantly clear to me that parliament delegated to the Bank of Canada, now controlled by the government of the day through the governor in council, both the power and the obligation to decide to what extent we should issue paper money and to what extent we should borrow on bonds. That being so, if that be so-and I have no doubt about it-then with no attack made upon that legislation this session, and no suggestion by any group or any member that we should take back from that tribunal the definite power we gave the bank and revest it in parliament, we find ourselves in this position. When this bill is brought forward by the Minister of Finance we have one group that has given a good deal of study to money matters expressing the opinion that if they had the power to determine what amount would be issued in paper money within the next twelve months they would fix it arbitrarily at $200,000,000-that is the effect of their amendment, and they are quite sincere. We have another group, with greater caution, proposing to issue $100,000,000.
I am not one of those who believe that either of these amounts, if issued in paper money, would cause inflation at all. That is my view, and if it were within my right to make a recommendation as to the amount of currency which should be issued within the next twelve months, I am not sure, I should not say $300,000,000, if you please. But the suggestion by way of amendment of two different amounts, $200,000,000 and $100,000,000, as proper amounts of paper money to be issued illustrate that this legislative body is not in a position to determine how much paper money should be issued within the next twelve months and how much should not. It seems to me that the very difference between these two groups, each of which proposes an amendment, indicates that this legislative body is not the best tribunal to decide the problem. If that be so, and if the two resolutions were strong recommendations to the governor in council and the Bank of Canada-remember that its board of directors comprises fifteen members, every one of them nominees of the government of Canada, and that in turn Mr. Towers is engaged to carry out the wishes of the government-(a) that if circumstances do not arise to make it difficult the Bank of Canada should issue $200,000,000 of paper money in the current year, and (b) that the bank ought to issue $100,000,000 only, I should be inclined for once in my life to vote for the social credit resolution, which proposes the issue of $200,000,000, because my

view is that the Bank of Canada could find it possible to issue $200,000,000 without hurting us or causing any inflation.
Let me state why I am in favour of the issuance of all the paper money that we can safely issue instead of bonds; I think it has not yet been mentioned in this debate: If the amendment of the hon. member for Rosetown-Biggar (Mr. Coldwell) were to carry and $100,000,000 in currency were to be handed out to-morrow for the construction of public buildings, and so on, that money of course would go immediately into circulation. But if you issue no currency and instead hand $100,000,000 in bonds to a bank and draw your cash through a banker, the bonds are locked up in a box and frozen, and the money goes out of active business. That is why I am in favour of the issue of all the paper currency in lieu of bonds that we can safely issue.


John Charles Landeryou: By the government?


Arthur Graeme Slaght: By the government-all that can be safely issued. But let us not forget that parliament has delegated that power to the Bank of Canada, and there has been nothing this session to cancel that delegation of power. I ask the two groups if they would not consent to amend their resolutions to make them a recommendation, to those who have the power to deal with this matter, that during the coming year they issue if possible $200,000,000 or $100,000,000, the amounts mentioned in the two amendments respectively as desirable amounts for the Bank of Canada to endeavour to put into paper currency during the year.


John Charles Landeryou: If I may interject, the reason why our party advanced this resolution was to bring about a fundamental change in the policy of financing for government expenditures. We are of the opinion that currency should be issued rather than that money should be raised through the commercial banks in the form of bonds.


Arthur Graeme Slaght: I understand that clearly, and I am largely in accord with it. I am simply endeavouring to make clear to my hon. friend and his group and to the other group that in my opinion we in parliament are stultifying ourselves by endeavouring to prescribe a precise amount as binding on the Bank of Canada during the coming year. It is a dangerous thing to do.


Major James William Coldwell: Is the hon. member aware of the fact that the governor of the Bank of Canada takes the position that it is

Loan oj $750,000,000
a matter of government policy and that parliament must decide? That is why we are discussing it here.


Arthur Graeme Slaght: I would not put it quite as the hon. member does. It is a matter of policy primarily for our deputed agent, the Bank of Canada. It is true that the Bank of Canada is wholly controlled by a board of directors nominated by the government of Canada, and that its stock is wholly owned by the government; therefore the government can influence the policy of the Bank of Canada. But when one group says: "We are going to lay down to-day, on the 15th of May, what the Bank of Canada must do during the next twelve months," and the other group says, "We are going to lay down to-day a different amount which the Bank of Canada must issue in paper currency in the next twelve months," and we have no motion to amend the Bank of Canada Act, then I suggest that having delegated this power to the Bank of Canada we are moving too fast, and that technically both resolutions, so long as you leave on the statute book the Bank of Canada Act, are strictly out of order.
When I say that, I am in sympathy with the objects aimed at in both resolutions, even in so far as the greater amount is concerned, if this parliament, under the Bank of Canada Act, had the right to dictate what should be done. But we have not. I hope I have made my position clear. Do not misunderstand me. This parliament undoubtedly has the right to repeal the Bank of Canada Act in its entirety and to go back to the old financial system that existed before we had the Bank of Canada.


John Charles Landeryou: Who determines the fundamental policies of the financial system? Mr. Towers of the Bank of Canada claims that parliament has the right to indicate policy.


Arthur Graeme Slaght: The hon. member has put the case for me in what he has said. Mr. Towers says that parliament has the right to indicate policy, and that is so. This house however is not administering the affairs of the country for the next twelve months; that is being done by the government from the treasury benches. If therefore the members of a group wish to put their particular views- and they differ in this instance-before the government of the day, they are going as far as they can as a wing or a part of parliament in indicating to the government that in their opinion the government should say to the Bank of Canada that it should do this or that. Surely that is the position. If they do that-and I join with them in
that regard-and the government of the day after twelve months shall have taken no steps to have the Bank of Canada issue a larger amount of paper money, and we know enough about the finances during the year to say that they ought to have done so and so, then when we come back a year from now we can call the government of the day to account. But I am trying to point out that the resolutions as worded ask parliament to usurp the functions it has delegated, instead of advising the government of the day that in the opinion of these respective groups the government should advise the Bank of Canada to issue this or that amount. I think my hon. friends would have been more consistent, the procedure would have been more in accord with parliamentary rules, and they would have advanced their cause a step further, had they followed that course instead of pressing these resolutions. To my mind the resolutions are out of order in that they ask parliament to dictate to the Bank of Canada the particular policy which these groups have advocated, thus upsetting the whole scheme and operation of the bank. I ask them to appreciate this and to amend their resolutions accordingly. If they do, I believe they will be more effective than they can be in attempting something which is entirely opposed to the terms of the Bank of Canada Act, which none of them have asked to have repealed at this session.


Mr. ANGUS MacINNIS (Vancouver South):: I do not very often speak on financial matters; but so many members, eminent members, have stated to-day that they know very little about money, and yet have spoken, that I have been encouraged to say a word even if I do not know very much about the subject.
I do not follow the argument of the hon. member for Parry Sound (Mr. Slaght). I do not think it is sound. The Bank of Canada is the creature of the government.


Mr. MICHAUD:: Of parliament.


Angus MacInnis: The Bank of Canada
does not decide the government's financial policy; the government decides its own financial policy and then carries it into effect through the instrument that has been created for the purpose. That is my understanding of the Bank of Canada. The financial policy of the government for the coming year is indicated by this bill. It is a policy of borrowing $750,000,000, some of it to be used to retire maturing obligations, a part of it to be used for financing public works. My understanding is that the amount of maturing obligations that will be retired this year is
Loan oj $750,000,000

$575,000,000. That would leave $175,000,000 to be used for public works. When the government wants to buy treasury bills, it goes to the bank and declares that it wants so much money in treasury bills, or treasury bills fol a certain amount. We in this corner are asking the government to go to the bank and, instead of requiring the issue of treasury notes, to ask for the issue of a certain amount of new money.
I would point out that we have not said definitely that we want $100,000,000 in new currency. The amendment to the amendment says "a sum not to exceed $100,000,000," and the amendment asks for "a sum not to exceed $200,000,000." We are here on new ground. If this policy were accepted and the government felt that $100,000,000 were too much new money to issue at one time, then, according to the amendment, they would be quite in order, if parliament approves this amendment, in issuing a lesser amount, whatever might be issued with safety. We are on the horns of a dilemma. If we continue borrowing, the day will come when we shall have reached the limit of our borrowing powers; on the other hand, we must borrow or we must issue new money in reasonable amounts to meet the purposes of the government.
I believe the minister said on a former occasion when the same subject was under discussion, that he did not believe $100,000,000 of new currency would cause inflation. I believe that is the amount he mentioned. Within certain limits, those limits to be carefully watched, it would, in my opinion, be better to issue some new money than to be continually borrowing. We must remember that every time we borrow we transfer the right to property. What is being done by our continual borrowing is to increase the property rights of a certain class of people at the expense of the property rights of all the people, so that to-day a small percentage of the people of Canada own the greater proportion of the wealth and resources of the country. Every time we raise money by borrowing we are transferring property rights.
When I was a child I was raised in a fairly strict, but not too strict, Presbyterian family. I was brought up on the Bible. I was continually told of the evil of borrowing. The sad example of Esau, who sold his birthright to Jacob for a mess of pottage, was brought to my attention. Esau sold something which was of material value to him. Every time we borrow we give away something which is of material value to us until such time as we can pay back the loan, but we cannot pay it back, for the very reason we had to borrow it in the first place.

I do not agree with my friends on the left as to their monetary policy. I admit that to-day, because of the enormous power of finance, money is an immensely important factor in our economic life. But I do not believe that merely by issuing new money we can make our economy operate without bringing about fundamental social changes. However, my hon. friends have very good authority for suggesting that we create new money. During the last parliament members heard a great deal about the creating of new money; and when the hon. member for Calgary East (Mr. Landeryou) moved on behalf of his group an amendment for the creation of $600,000,000 of new currency, he was not so far away from a proposal which was made in this house in 1935 by one who is now a cabinet minister. I have before me Hansard of 1935, and at page 1193, I find, among a number of suggestions for ending unemployment made by the hon. member for Vancouver Centre (Mr. Mackenzie), who is now Minister of National Defence, this one:
I suggest the increase of our currency by $430,000,000, which is scientifically justifiable by the appreciation of gold values.
That was the talk throughout western Canada, I remember during the 1935 election the last campaign meeting which was held by the Liberal party in Vancouver. It was in the ballroom of the hotel Vancouver; and all the candidates of the Liberal party from the lower mainland, or at any rate from the city itself, were present, and the platform was crowded with a galaxy of British Columbia Liberal stalwarts. The hon. member for Van-couver-Burrard (Mr. McGeer) proposed his monetary policy, the creation of money to finance consumption; he enlarged on it and told of the support he was going to have when he came to Ottawa-support from all parts of the house-and there was not a Liberal candidate on that platform who rose and said that he did not agree with the hon. member for Vancouver-Burrard. If they did not rise and say they disagreed with him, surely the audience had a right to believe that they agreed with him.


Malcolm McLean: Not necessarily.


Angus MacInnis: Oh, well, if I am associated with the hon. member for Melfort and I say something with which he does not agree, he rises and says that he does not agree with it.


Malcolm McLean: Not half the time.


Angus MacInnis: them, but the members of the medical profession think there is and consequently they administer drugs. Because a large amount of a drug might kill a patient is no reason for not administering a small amount of the same drug if the stimulating effect would be beneficial to the patient.


Alexander MacGillivray Young: The hon. member did not quite understand the leader of the opposition, who was speaking of a particular drug and its peculiar action.


Angus MacInnis: But I think my hon. friend, who is also a medical man, will concede that the drug mentioned is very often administered to those in ill health.


Alexander MacGillivray Young: Under the most severe control.


Angus MacInnis: Quite so, and we suggest that a certain amount of money should be issued under the most severe control. We will put Doctor Dunning in charge to see that the control is effective. I believe I understood the leader of the opposition quite well, and I touched on the point only to suggest the fallacy of the argument he was making. You might as well say that because too much sun will burn up the crops, therefore the sun is a bad thing; or because too much rain will drown out the crops, therefore rain is a bad thing. Most things are good in moderation, and we are suggesting that the government use their power to create new money, as they have power to use it, and in moderation, because we cannot forever go on borrowing. In this way I think we can borrow less than we have borrowed in the past, and possibly prepare for the time when we can cease borrowing.
I suggest, Mr. Speaker, that neither the amendment nor the amendment to the amendment binds the government to issue $100,000,000 or $200,000,000 of new money. They simply say that a certain amount of money should be issued without interest by the Bank of Canada, under the direction and control of the government.
Mr. T. J. O'NEILL (Kamloops):	Mr. Speaker, it had not been my intention to speak on this matter because I believed the whole thing was out of order. However, the hon. member who just took his seat (Mr. Maclnnis) referred to a meeting of stalwart Liberals in Vancouver. I was one of the Liberals fortunate enough to be elected in British Columbia in 1935. I did not happen to be in Vancouver when the meeting to which he refers took place, but I may tell him that I was in 
complete accord with the views expressed there, and after listening to the speeches that have been made on this subject of monetary reform I am even more in accord with what was said at that meeting.
To my mind the Bank of Canada should have been created to look after the monetary policy and needs of the people of this country. Whether or not it was instituted for that purpose I do not know. Every time anyone rises to speak in opposition to orthodox finance, his ideas are immediately ridiculed. But to-day, Mr. Speaker, we are doing things we did not do ten years ago, and any man who had advocated them at that time would have been called positively insane. If anyone had suggested that money could be borrowed at less than one per cent he would have been told that it was absolutely impossible, yet to-day we are doing that very thing. I am not going to say that we should have more money or more credit; I am not sufficiently versed in the financial system of the dominion to know what we should have. I do know, however, that if an emergency such as war should overtake this country, money and credit would be made available at once in unlimited quantities. There is in existence in Canada to-day an emergency which, in my opinion, is just as bad as war, if not far worse. We have been told from the opposition benches that thousands of our young men are dying of starvation. I cannot agree with that at all, but I do know that in this country, probably the most blessed in the world, thousands of people are suffering from privation of one kind or another.
This situation could be relieved by a change in our monetary system, without inflation. Every time anyone speaks of issuing new money he is instantly met with the cry of inflation. If you want to increase the credit of this dominion and you do so by issuing bonds on which you pay interest, that is not inflation. The instant you suggest that you should do that without paying interest, that is called inflation. I cannot see where, there is any difference in the procedure, so far as inflation is concerned. If one looks in a dictionary to find the meaning of " inflation," he will find that it describes inflation as the issuing of paper money. Well, my idea of inflation would be to issue any kind of money, paper or otherwise, in quantities in excess of the amount required to buy the goods and services produced by the country. If you do not issue your currency in amounts in excess of the goods and services in your country, to my mind you have not inflation, and your money will retain its value, whether

Loan of $750,000,000
it be gold or paper. But if you issue more than is required to buy what you have to sell, you have too much money.
In my opinion we have not too much money or too much credit in Canada to-day. I say that because we have hundreds of people who are willing and anxious to work, but who cannot get an opportunity to work. There are thousands of people who wish to buy some of the luxuries of life, but they have not the wherewithal to buy them. There are many people who are short of the necessities of life because they have not the money to buy them. When a condition like that exists in a country, then to my mind there is not too much money or too much credit. I believe we are out of order when we speak of anything under discussion before a committee, so that I shall not do that. But we are advised by some of the most reliable financial authorities in Canada that to-day we are using less than one-sixth of the available credit of the dominion, a credit that could be used without reducing the finances or injuring the credit of the country in any way.
Mention was made to-day about the absurdity of buying ourselves out of debt. Well,
I think it is infinitely more ridiculous to attempt to borrow yourself out of debt. You can never buy yourself out of debt. I am one who considered that we should have a Bank of Canada and that that Bank of Canada should be publicly owned. I congratulate the government of the day upon bringing about that condition. But if that Bank of Canada does not bring about the monetary reform which it could bring about, then we have only another bank added to the banks we already have, and it will not do us a particle of good.
To-day the Minister of Finance (Mr. Dunning) told us that we are borrowing in the neighbourhood of S155,000,000 at less than three-quarters of one per cent. I am quite in agreement wTith that. As a matter of fact, I do not see how our present financial structure has a possible chance of living unless we do that very thing. If you are going to borrow money it must eventually be borrowed at the actual cost of production. That is the only way the financial structure can live.
No private concern to-day would be given money by a bank on the same terms as those at which the government borrows. If any private industry reached a state where it had to borrow money to pay the interest on what it already owed, that business would not be able to get money from a financial institution. Yet that is the very thing we are doing to-day, with respect to borrowing money and the payment of interest. When any of us wishes to borrow money in excess of the
amount for which the bankers think we can supply security, they will tell us we must get someone to back our note. If a man who borrows money is able to pay back on the note, everything is well and good. But in the event that he is not in a position to pay back, the backer of the note must pay. In any event the banker gets the interest. The man who backed the note is the one who put up the collateral security ; yet the banker gets the interest.	.
To mv mind we are doing exactly that in public financing to-day. When we require money in large amounts for public purposes we issue bonds. Those bonds are sold to financial institutions or banks. When we sell bonds in that way we have to pay an interest rate. But the only thing that makes those bonds good on the money markets of the world is the fact that they are backed by the natural resources of this country. Those natural resources do not belong to the bankers. When we have a Bank of Canada owned by the government, I cannot see any reason why that bank cannot issue bonds, or why without any difficulty it cannot issue currency. I cannot see that, and so far no one has been able to explain it to me. I believed during the 1935 campaign and I still believe that, instead of being a measure providing for $750,000,000, the measure introduced by the Minister of Finance might be one for a billion dollars to relieve distress in Canada; and the great majority of it should be financed by the Bank of Canada, without increasing the debt of this country.
kr. DUNNING: Mr. Speaker, before the hon. member for Lethbridge (Mr. Blackmore) proceeds to speak, would he permit me to say that there was an arrangement among the parties to proceed at five o'clock with the bill respecting youth training. My colleague the Minister of Labour (Mr. Rogers) has been good enough to permit me to continue with this measure for some additional time. I would ask the hon. member who is now about to speak if at six o'clock he would be good enough to move the adjournment of the debate.


John Horne Blackmore: If the Minister of Finance (Mr. Dunning) would prefer, I would be prepared to move the adjournment of the debate now, and thereby permit the Minister of Labour (Mr. Rogers) to proceed.


Charles Avery Dunning: Very well; whatever the hon. member wishes.


John Horne Blackmore: Mr. Speaker, in order to permit the Minister of Labour to go on with his bill, I would be pleased to move the adjournment of the debate.
Motion agreed to and debate adjourned.
4090	COMMONS
Unemployment Relief-Youth Training



UNEMPLOYMENT RELIEF


[Stage Direction]
The house resumed from Thursday, April 27, consideration of the motion of Mr. Rogers for the second reading of Bill No. 94, to provide for the training of young people to fit them for gainful employment.
Motion agreed 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-Definitions.
Mr. PELLETIER:: In the event of the Northwest Territories becoming a part of any province, would the interpretation section have to be amended?
Hon. NORMAN McL. ROGERS (Minister of Labour): I am not able to give a legal opinion, but at all events the various provinces would have received an allocation which, I believe, would enable them to carry on the work they wished to do under the youth training program.


[Stage Direction]
Section agreed to.
Sections 3 and 4 agreed to.
On section 5-Application to provinces.
Mr. ROBICHAUD:: This section reads:
This act shall not apply to any province until tne government of such province has, by order
thereof011' Slgnified its desire to take advantage
The hon. member for St. Lawrence-St. George (Mr. Cahan), if I remember correctly, raised the question whether this bill was intra vires of this parliament. I think this point could be cleared up by adding the words unless and" after the word "province" in the first line of the section. If the section has only the word "until" in it, it means that we are arrogating to ourselves the right to legislate for the provinces, whether they come in or not. As the section now reads, there is a limitation as to time only, but if the words "unless and" were added, there would be an acknowledged limitation of our constitutional power to legislate. I understand it is not intended that this legislation shall apply to any province that does not want it, and I think hon. members will see the distinction in the words. By adding these words it would simply mean that the legislation will not apply ab initio so far as any particular province is concerned.


Mr. ROGERS:: I see no objection to the insertion of the words proposed by my hon. friend. I may say that the hon. member for St. Lawrence-St. George had previously recommended an amendment to this section, and I shall ask my colleague, the Minister of Trade and Commerce (Mr. Euler), to make the necessary amending motion. It is suggested to strike out the words "signified its desire to take advantage thereof" in the twenty-fourth line and to substitute the words "signified its agreement to cooperate with the minister in carrying its provisions into effect."


Mr. EULER:: I move accordingly.


Louis-Prudent-Alexandre Robichaud: I do not think that amendment will cure the objection of the hon. member for St. Lawrence-St. George. As I understood his objection, it was that this parliament had not the power to legislate in this matter to cover the provinces. I believe my amendment would cure this objection.
Amendment (Mr. Euler) agreed to.


Mr. STEWART:: Inasmuch as the hon. member for St. Lawrence-St. George raised this point and offered an argument which seems to contain much merit and a good deal of strength from the legal point of view, I think this section should be allowed to stand for a few minutes. We have sent for the hon. member and asked him to come here if he wishes to discuss this bill any further. I cannot see any objection to adding the words "unless and" as suggested by the hon. member.


Norman McLeod Rogers: I see no objection to adding those words.


Hugh Alexander Stewart: I am not quite sure that it adds much to the section, but it certainly does not take anything away and it possibly would provide a safeguard. Has the minister submitted to the hon. member for St. Lawrence-St. George a draft of the amendment he has now proposed?


Norman McLeod Rogers: I did so previously.


Hugh Alexander Stewart: And it meets with the hon. member's approval?


Norman McLeod Rogers: Yes, the position he had in mind.


Hugh Alexander Stewart: That meets my point.


Norman McLeod Rogers: I am quite agreeable to allowing this section to stand until the hon. member for St. Lawrence-St. George is here.


Hugh Alexander Stewart: If he has assured the minister that this is satisfactory, the object I had in mind is accomplished.

Unemployment Relie]- Youth Training


Norman McLeod Rogers: I am quite agreeable that the Unemployment and Agricultural Assistthe words "unless and" should be added to the section, as suggested by the hon. member. The words "unless and" would be added after the word "province" in the twenty-second line on page 2 of the bill.


William Daum Euler: I move accordingly.


[Stage Direction]
Amendment agreed to.
Mr. BARBER:: How many provinces have expressed a desire to take advantage of this legislation?


Norman McLeod Rogers: All the provinces have
indicated a desire to take advantage of the youth training program.
Section as amended agreed to.
On section 6-Grants to be determined by governor in council.


Mr. KENNEDY:: Have the maximum
amounts been allocated to the different provinces?


Norman McLeod Rogers: The allocations have not been made for the forthcoming year. They will be made under agreements made pursuant to the provisions of this measure and after conference with the various provinces concerned.


Alfred Johnson Brooks: If a province is not financially able to take advantage of this legislation, will it receive no money for youth training?


Norman McLeod Rogers: If a province is not
financially able to take advantage, in the sense of its having to borrow under the provisions laid down in the Unemployment and Agricultural Assistance Act, it would qualify for a grant under such conditions. So far as I am aware, that has occurred only in the case of some western provinces. Apparently all of the other provinces have realized the value of this youth training program and have been able to provide the necessary financial contributions.


Hugh Alexander Stewart: Does this bill involve
any extension of the principles or the scope of the legislation of former years? To what extent have the provinces cooperated with the government at Ottawa in former years in taking advantage of such legislation?


Norman McLeod Rogers: As I explained when the resolution was before the house some time ago, this money was made available previously under the appropriation act, and agreements were entered into according to the terms of
ance Act. This bill proposes to ensure a continuity of the program for a period of three years, so that in future the appropriations will be statutory.


Hugh Alexander Stewart: I was not thinking so
much of the financial aspect as of the other features. Are they identical with those of the former acts? This bill provides for a peiiod of three years instead of there being an appropriation for just one year.


Norman McLeod Rogers: Under this bill, as under the previous unemployment and agricultural assistance acts, we shall proceed by way of agreements with the provinces. Those agreements will allow a great deal of latitude as to the number and variety of projects adopted for the training of unemployed young people. I cannot see that this legislation will restrict the scheme in any way, its purpose is rather to ensure continuity of the plan for a period of three years.


Alfred Johnson Brooks: Will the federal government exercise control over the selection of young men for youth training projects, or will that be left entirely to the local governments? In the past considerable partisanship has been shown in these selections, and I should like to see the federal government have more control.


Norman McLeod Rogers: My hon. friend has raised a question of some difficulty. We do provide in most of the agreements that those selected for training shall be taken through the employment service of Canada. There appears to be no other machinery through which that selection can be made, short of a selection by some specially appointed officer of the dominion government, and there we have to keep in mind that the funds expended are contributed jointly by the dominion government and the provincial government. So the employment service, which of itself is a cooperative service, appeared to be the most reasonable method of recruitment for these youth training projects. I am bound to say that there have been some complaints with respect to the selections that have been made in this way. Whenever evidence of discrimination is brought to our attention, we see to it that an investigation is made and that the situation is corrected. I would doubt myself the wisdom or practicability of setting up an entirely separate federal system of recruitment for what, after all, is a cooperative youth training project.


Alfred Johnson Brooks: I had in mind that a better selection could be made through the cities and towns, heads of municipalities, county
4092	COMMONS
Unemployment Relief-Youth Training
councils and so on, than by the local government. I think better selections would be made in that way.


Norman McLeod Rogers: I shall be glad to bear in mind what my hon. friend has said. That, of course, will be dealt with in the terms of the agreements which are entered into with the various provinces.


Jean-François Pouliot: One is supposed to be young so long as he or she feels young at heart, but under this legislation may I ask what is the age limit for youth?


Norman McLeod Rogers: From sixteen to thirty years.


Thomas Reid: I would suggest that the minister give serious consideration to the appointment of a federal officer to supervise. We have a liaison officer in connection with public works done jointly by the dominion and the provinces, who sees to it that the contracts are properly carried out, and from what I know of youth training projects I would say that it is even more imperative that we should have a federal officer appointed to supervise them, and not leave it entirely to the provinces to carry them out, and wait until complaints reach the government before any investigation is made.


Jean-François Pouliot: May I tell the minister that I have recommended several hundred young men under this scheme, and I have not yet succeeded in having one selected to receive training for gainful employment. Would the minister be good enough to state once and for all how people can take advantage of this training in any province in order that I may have the excerpt from Hansard put in the local papers?


Norman McLeod Rogers: As I mentioned a moment ago, in most of the provinces recruitment is through the employment service of Canada. In the province of Quebec the recruitment has been through the office of the director of youth training in that province; it has not been through the employment service of Canada. I believe I am correct in making that statement.


Charles Avery Dunning: The provincial officer.


Norman McLeod Rogers: The provincial officer.


Howard Charles Green: When the government enters into agreements with the provinces, are standard residence qualifications to be set out in the terms so that no question will arise as to where the applicant is resident? A man may not be able to establish residence in the province where he lives.


Frederick George Sanderson: We are on clause 6.
The agreements with the provinces come under clause 8, which we have not yet reached.


Howard Charles Green: This clause, Mr. Chairman, deals with the conditions of financial assistance, and the only way we can bring about uniform residence qualifications is by saying to the provinces:	"You get your
money if you agree to certain terms." I am asking the minister whether in the terms of the agreement a residence clause will be inserted.


Norman McLeod Rogers: What my hon. friend has
in mind is that a clause should be inserted in the general agreements with the provinces with respect to grants in aid for the relief of unemployment. The insertion of such a clause is receiving attention at this time. We have a draft agreement which shortly will be sent to the provinces, and through a clause inserted in the agreement I hope we shall be able to attain a greater degree of uniformity in respect to residence qualifications than we have had hitherto. So far as these agreements are concerned, we have in the past provided that transients shall not be excluded from the advantages of the act. We do not give them a preferred position, but we feel they ought not to be excluded.


Howard Charles Green: Will the men who have been in the forestry camps in British Columbia all winter be eligible for training under this legislation?


Norman McLeod Rogers: That is a matter of administrative decision in British Columbia, or it has been such in the past. I believe I am correct in saying that last year the department of labour of British Columbia decided that those who had been in the various conservation camps all winter should not be eligible for forestry training in the summer under the youth training program. I doubt myself if that situation will arise this summer in British Columbia because I believe other arrangements are to be made with respect to the summer months.


Mr. GRAYDON:: How many unemployed
young men will be taken care of in youth training projects during this fiscal year?


Norman McLeod Rogers: On the basis of last year's
experience I would expect that in the coming fiscal year some fifty thousand would be registered for the various projects under the dominion-provincial youth training program. That would not mean that all those so registered would be taking courses which may be expected to lead directly to employment.

Unemployment Reliej-Youth Training
There are, for instance, projects of rural training which are not designed to lead to new employment but rather to improve efficiency within rural employment. My hon. friend the member for Melfort (Mr. McLean) described some of these projects to the house when he spoke some days ago. I should not like to say offhand how many people would be registered for projects leading to employment, but during the last two years some twenty thousand have been so registered, and the placement of those registered in such courses has been encouraging, much more encouraging this year than it was in the first experimental year.


Jean-François Pouliot: I have no complaint to
make, because to make complaints one should know of a wrong, and I know nothing in regard to this program. I regret that members of parliament should have known nothing about the operation of similar acts in the past, and that we know absolutely nothing about the operation of this bill. We send in recommendations, but we do not know what happens to them. Boys and girls come to us to take advantage of youth training schemes, and we recommend them and hear nothing of them afterwards. All is oblivion. As the federal government is subscribing to the scheme, I hope that members of parliament will be entitled to know something about it.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Charles Hazlitt Cahan: I was about to direct the minister's attention to a phase of this bill which I think may be discussed properly under either section 6 or section 8, and possibly I might be permitted to call attention to the matter now. I refer to the subject of occupational training. In the discussion of this bill in the public press and, I believe, in some of the official pronouncements made prior to the introduction of the legislation it was suggested that the bill would cover appropriations for what is commonly known as occupational training. I assume the application of the grant made under section 6, which is payable to any province, will be determined in a measure by the terms of the agreement referred to in section 8, which is to be made between the minister and the government of the province.
I am very much interested indeed in this subject of occupational training. In the city of Montreal I am in contact with a considerable number of young men who come to me for advice concerning prospective training. We have there a number of night and other schools in which occupational training is given to a certain extent. It is a phase of educational training which deserves the utmost attention of the government and of parliament, and I was about to ask the minister whether, in the terms under which these grants will be made payable or under which agreements will be entered into between himself and the governments of the provinces, due attention will be paid to the subject of occupational training.
A great number of young men who come out of our public schools, some out of high schools, are not trained for any occupation, and the difficulty in securing employment for them is that prospective employers immediately inquire as to what qualifications the applicant has and what training, especially manual training, he has received. If I am at liberty to do so, I would suggest to the minister that for occupational training to be effective arrangements should be made, between the various labour unions of the country and industrial employers for a revival of the old system of apprenticeship.
When I was a lad, the boys of every family, no matter how well to do the family was, were expected, as a qualification for their life's work, to be apprenticed for a year or two or three years in some employment based on manual training which would qualify them in the future, in the event of embarrassments or financial difficulties, to earn their living by means of such training and such qualifications as they had obtained during their apprenticeship. If we are to have effective educational training in this country I am persuaded that some amicable arrangements must be made between the labour unions and large industrial employers whereby the old system of apprenticeship may be revived.
At the present time the labour unions, I understand, are not very heartily in sympathy with a prospective increase in the employment of apprentices. The idea seems to be that as the apprentices grow up they will probably take the place of older members of the labour unions. But a change must be made if we are to equip young men for their life's work in industrial employment. With this observation, which perhaps is not directly pertinent to section 6, I would ask the minister to explain to us in some detail the provisions, which are
4094	COMMONS
Unemployment Relief-Youth Training
made or are likely to be made under this bill, for agreements with the provinces respecting what is usually termed occupational training.


Norman McLeod Rogers: I may say at once that
I agree with everything that has been said by the hon. member for St. Lawrence-St. George in support of occupational training for those who are unemployed in these years. As a matter of fact that was very much in the mind of the national employment commission when it made its recommendation with respect to youth training. The commission recommended the following as the basis upon which the plan should be framed:
Training projects of an occupational nature;
Short-term learnership courses, not exceeding one year in duration, devised to provide theoretical training concurrent with specific employment;
Work projects incorporating reconditioning, training and conservation features, for the purpose of restoring morale and conserving natural resources;
Training projects of a physical nature to assist in the maintenance of health and morale pending employment.
It will be seen that the commission, following in terms the recommendations of the youth employment committee, placed occupational training in the forefront of the program which it recommended to the government. When this plan was first put into operation, we made proposals to all provinces asking them to submit to us training projects that would fall within the various categories proposed by the national employment commission. At the same time we recognized, as the employment commission realized, that in view of the diversity of industry in the various provinces it would be desirable that the provinces themselves should decide where the emphasis should be placed with respect to one or another of these training plans.
Actually most of the provinces did in that first year, and later in the succeeding year, submit to us projects for occupational training. My hon. friend has referred particularly to the city of Montreal. The province of Quebec expressed its desire to cooperate in the youth training program and did submit a project for occupational training. Last year there was a schedule to the Quebec agreement providing for an expenditure of $225,000 for occupational training in that province. I am informed that up to the present time not more than $10,000 of that amount has been expended. I ought to say that we accepted without question the proposal of the Quebec government that this sum, $225,000, should be devoted to occupational

training, and that for obvious reasons. Quebec, like Ontario, is a great industrial province. Much of our manufacturing is centred there. We felt that in that province and in Ontario there was an exceptional opportunity to develop occupational training of our unemployed young people.


John Ritchie MacNicol: May I ask the minister whether his department had anyone qualified to instruct the department in Quebec how to proceed to encourage or induce manufacturers to employ beginners or apprentices in their plants?


Norman McLeod Rogers: We do have in the Department of Labour, in the person of Mr. R. F. Thompson, supervisor of youth training, one who is fully qualified to assist provincial officers in maintaining that contact with industry and with labour organizations which, after all, is necessary to the success of these occupation training plans. I should say this, that it has been represented to us from time to time by some of the provinces that the limitation of the appropriations to a single year was an obstacle to their entering upon these training projects. That was represented to us on behalf of the province of Quebec. That is one of the reasons why in this bill we are providing for the continuity of this plan over a period of three years; that obstacle, therefore, will disappear in the province of Quebec in so far as it was used as an explanation of their failure to take up the full quota of $225,000 for occupational training plans. I assure my hon. friend that I fully agree that we should see to it that proper contacts are established as between industry and labour organizations and these plans, in order that the best possible results may be realized. I feel sure that the assurance which this legislation gives that the program will be continued over a period of years will assist greatly towards that end.


Jean-François Pouliot: Would the minister be kind enough to tell us about the results achieved by that Mr. Thompson, who knows so much about youth? What is the result or the degree of success of his efforts to have young men get jobs in industry after having followed one of these courses?


Norman McLeod Rogers: I had intended a little later to place upon Hansard, with the consent of the committee, a recapitulation of the results obtained under the dominion-provincial youth training program during the past two years. This, I may say, was requested by a number of hon. members when the bill was before us for second reading. Meanwhile, however, I might answer the question of the hon. member

Unemployment Relief-Youth Training
for Temiscouata by stating briefly that up to March 31, 1939, there were registered in courses designed to lead to employment, 28,614 men and women.


Abraham Albert Heaps: Was that for the whole of Canada?


Norman McLeod Rogers: Yes. These are courses designed solely to lead to employment. They do not include the rural training courses on the Danish model which have been used very widely in the western provinces. The actual total of all who have received some form of training is 117,675. That includes rural training courses, and also physical training courses which have been carried on very successfully in British Columbia and Alberta. But the courses which were designed particularly to lead to employment had a registration of 28,614, of whom 9,239 discontinued training before the completion of their courses. Of the remaining 19,375 there have been placed in employment, 8,029, or about 404 per cent; and those still in training number 5,178. That is the statement as of March 31, 1939.
When the bill was before the house for second reading some reference was made to the experience of the conservation camps, or as they are better known, the CCC camps in the United States. Unquestionably the civilian conservation corps has performed a very useful service in the United States. It would be a mistake, perhaps, to suggest that the whole value of that work is to be measured by the number of those placed in employment. I would equally say that it is unreasonable to assume that the whole value of our youth training program is to be measured by the number of those who have been actually placed in employment. That would neglect entirely, for example, the real service which has been rendered through the rural training courses in the western provinces. Actually, under the civilian conservation corps the placement record is by no means as good as the placement record achieved in Canada with respect to those courses which were designed principally to train young men and women for employment.


John Charles Landeryou: May I say to the minister that the civilian conservation corps camps in the United States are not designed for the same purpose as that for which this youth training legislation is designed?


Norman McLeod Rogers: As a matter of fact the civilian conservation corps camps of the United States serve a dual purpose. I would agree with my hon. friend that the primary object is wTork, useful work in the conservation of the forest resources of the country. But apart from that there are also training courses.


John Charles Landeryou: Yes, in conjunction with that.


Norman McLeod Rogers: It is in connection with this that I have stated that the placement record in the United States is not as favourable as that which has been attained in Canada under our training plans.


John Charles Landeryou: The point is that these CCC camps are open to more youth, they are thrown open to practically anyone who wants to go into them.


Norman McLeod Rogers: That is not quite correct.


John Charles Landeryou: To a large extent.


Norman McLeod Rogers: No, there is a marked limitation.


Jean-François Pouliot: There is a French proverb: "An ounce of prevention is better than a pound of cure." Perhaps it is international 1
There is, of course, unemployment relief. But this is not at all unemployment relief; it is supposed to be for the prevention of unemployment among the youth. A vocation is something most delicate and at times most difficult to find. It is not so difficult to find in respect of manual occupations as in others. Of course, young men who complete a commercial course, or even graduate from a university, are not always ready for life, because there are many gaps in the educational system of this country. In some parts of Canada the commercial teaching is completed by some lessons in manual labour which are very useful for young men. May I say that here in Ottawa, for instance, at the collegiate and some other places, they teach young men how to make good use of their hands by doing some type of mechanical work, or artisan work such as carpentry, and it may help them along. As was so aptly said by the hon. member for St, Lawrence-St. George, in the old times people of good family used also to learn a manual trade in case they might not succeed in their professions. Some kings of France were locksmiths or had various occupations of that kind. This is a lesson of history. We see now these young men who want to achieve something in the world by earning their own living, by being self-supporting, and those who are sure of a shelter, three meals a day, and good clothes, want to have their own money to use, in part for their enjoyment, in part for saving-which is a legitimate desire. Of course it is very difficult for some young men to receive any practical benefit from the instruction they receive under legislation similar to this. That is so for several reasons. In the first place many lectures are attended by young men who do not receive any direct benefit from them
4096	COMMONS
Unemployment Reliej-Youth Training
At times they have to travel quite a distance to follow these courses, and often after having received the instruction they have no money with which to buy the tools necessary to follow any of these trades.
There are many problems facing youth to-day; and if you remember, sir, it was the hon. member for Temiscouata who spoke about the importance of manual labour and the respectability of the trades when this matter was under consideration three or four years ago, either in the house or in the committee. A young man comes to one of us and says, "I want to take advantage of this legislation. Will you please give me a letter of introduction?" This is something that cannot be refused to any young man. He gets the letter of introduction, which he sends to the provincial director. In many instances he receives no word in reply, or perhaps he may receive a reply that is absolutely insignificant and means absolutely nothing. I want the young men to know that we are all interested in them, that we want to do something for them. The political affiliation of their parents does not count; what is important is the future of the young men or young women who come to us for help in finding careers. We are all ready to help; but if we take the trouble to give the boy or girl a recommendation we want it to be helpful to that boy or girl, so that they may learn to use their hands in order to follow some trade and earn some money.
What is the use of boys or girls taking lectures and learning trades if they do not get jobs afterwards, if they do not get any practical benefit as a result? They may be kept busy for a few hours, a few days, a few weeks or even a few months, but afterwards they are not much further ahead than when they started.


An hon. MEMBER:: Carried.


Jean-François Pouliot: Youth shall not be disappointed. It is very wrong to disappoint the young. I hear a young member say, "Carried." I should like his constituents in the Niagara valley to see how he behaves in this house. Then I am sure none would vote for him, not only the young men but the parents of the young men.


Mr. SENN:: Oh, yes, they will.


Jean-François Pouliot: They might be confused, but if they were not confused they surely would not again cast their votes for him. This matter is too serious to be taken laughingly.


Arthur Graeme Slaght: The technical schools of Ontario go a long way in the matter mentioned by my hon. friend.


Jean-François Pouliot: That is a good thing; but technical schools are not located in every city, town and village, so that in many instances a young man attending technical school must pay for his board, and of course in a city or town that is more expensive than in the rural districts. Many gifted young men have not the means with which to pay travelling expenses and the cost of board outside their own homes. Even if they go to technical school and learn a trade they are not always sure of work when they complete their course.


John Charles Landeryou: What would my hon. friend recommend as a policy in regard to the employment of these youths? What industry would be open to them after they received training? That is the question before us now.


Jean-François Pouliot: I am just coming to that. I am sure my hon. friend realizes the seriousness of the problem. A young man completes his course at a technical school, either in his own city or somewhere else; he becomes a mechanic, an electrician or a carpenter. How can he get work if he finds the labour unions in his way? That is a very great problem. A moment ago the minister said Mr. Thompson was trying to find some means of establishing a proper contact between industry and the labour unions; at least that was what I understood the hon. gentleman to say.


Norman McLeod Rogers: With the youth training plan.


Jean-François Pouliot: That means two things: In the first place it means that industry must be willing to accept young apprentices, and in the second place it means that labour unions shall not be unwilling to see these young men come in and do work which heretofore may have been done by older employees in the same industry. Therefore either the older employees must show some generosity to the youths coming in, or industry must see to it that new work is provided to engage these young men. It is a most difficult problem, but it is a problem that should be handled precisely by the Department of Labour.
I am not at all sure that this legislation is constitutional, because it relates to education, which is essentially a provincial problem. On the other hand we have put the constitution aside and have said to the provinces, "We are ready to help you in a youth training plan." There was some objection by the province of Quebec in regard to the end of the fiscal year, and that objection is proposed to be met by this legislation. But having in mind what has been done in the past by

Unemployment Relie]-Youth Training
the provincial branch in Quebec I do not know that it would be very safe to sign a contract for three years. These people have not given satisfactory replies to letters of recommendation which have been given by members of parliament on behalf of various young men. We must be sure of what is going to be done, and we must be sure that what is done will be good, practical and useful. There is nothing that humiliates me more-and it must be the same with other members of parliament-than when a young man comes and asks for something and I have to reply, "I cannot do it. I will recommend you, however." He comes again and says, "I have not received a satisfactory reply to your recommendation." I have to reply: "I do not know why. I have recommended you. I cannot tell you any more." He says, "But how is it that your government pays so much money for this very same thing, and yet you cannot get a satisfactory answer?" I hope every cent expended on this scheme will bring satisfactory results to thousands of youth in this country. It is not the number of courses to be followed that counts. We know there are some courses in cooking which are followed by the girls. That is supposed to be taught to girls by their mothers. In Quebec there are many schools of that kind for girls where they are taught housekeeping, and that sort of thing; and it is very good training.
But the best teaching is still the family teaching. There is nothing worse than disappointing a young man or woman; it gives them a very bad impression for the rest of their lives. If this government is to do something, then whatever it does must be done to serve a real purpose.
I would ask the minister to be kind enough to tell the committee how many boys and girls in Quebec have been successful in finding occupations after having taken youth training lectures. But before he answers may I tell him that I know a lady in Ottawa who is a most competent educator of youth-and the minister knows to whom I refer-who told me that 90 per cent of the boys and girls who leave the Ottawa collegiates each year find jobs. I do not see why the same could not be done everywhere else in Canada. If it is done in Ottawa, surely it could be done somewhere else.


John Ritchie MacNicol: The parliament buildings are only in one city.


Jean-François Pouliot: My hon. friend knows
that carpenters, electricians and other tradesmen are needed everywhere. He knows, too, that there are legislative buildings in nine other cities of Canada.


Norman McLeod Rogers: Answering the question of
the hon. member for Temiscouata, I would say that up to date the total placed in Quebec, including men and women, stands at 524.


Robert James Manion: A few minutes ago the
minister said that those who were getting training leading to employment, as he expressed it, numbered about 28,000. The total number receiving training was 117,000, and then he said that, out of the 28,000, those who had obtained jobs numbered about 8,000, of whom about 5,000 are still working. What kind of training are those above the 28,000 receiving? What is the difference in the training received by the different groups?


Norman McLeod Rogers: As I understand my hon.
friend's question, it relates to the number in excess of 28,000 who have actually received some form of training under the dominion-provincial youth training program. The larger figure of 117,000, which I gave, covered all those who have received under this expenditure, any form of training at all during the past two years. The bulk of the group to which my hon. friend refers would be found in the rural training classes and physical training classes.


Robert James Manion: On farms?


Norman McLeod Rogers: No; these are rural training centres which are established at various points in the provinces which have adopted these courses, particularly Saskatchewan, Alberta and Manitoba. The training centres are formed very largely upon the model of those which for many years have been established in Denmark. Students who are enrolled come in from the outlying farms to a village or town, are billeted there for several weeks, and, while there, receive instruction. They may receive instruction in farm mechanics or Diesel engines. The girls would receive training in various forms of homecraft, and medical training of an elementary kind.


Robert James Manion: And then go back to
their own homes?


Norman McLeod Rogers: Go back to their own
farms, yes. These courses are not designed to draw young men and women from the country to the cities. Rather they are to make them more contented with conditions in the countiy and give them training for leadership in rural communities. That, I believe, is also the purpose of similar training in Denmark.


Miss MACPHAIL:: On what particular
Danish schools are they modeled?
4098	COMMONS
Unemployment Relief-Youth Training


Norman McLeod Rogers: I am not aware of the
particular model, but my information is that those established particularly in Manitoba- and in that province Mrs. Lindal, herself of Danish descent, has been active in that work- are based largely upon the schools set up originally in Denmark.


Agnes Campbell Macphail: I do not think so.
From what I have read of them I think they are more like the courses given by the Ontario government. They are very good courses, and I think they serve a useful purpose, but as I understand Danish folk schools, these courses certainly are a far cry from them.


Norman McLeod Rogers: If my hon. friend ever
has the opportunity I would suggest that she visit some of the schools in Manitoba. I did so for the first time last autumn, and I am bound to say that at the beginning I had some misgivings as to whether training centres of that kind could properly be brought within dominion-provincial youth training. But what I did see convinced me of their great value. As to whether or not they are based strictly upon the Danish model, perhaps my hon. friend is more competent to say than I am.


Mark Cecil Senn: I believe the hon. member for Grey-Bruce is right in comparing these schools with the short courses given by the government of Ontario. Has the provincial government of Ontario at any time requested assistance along this line, in view of the fact that it is being granted to the other provinces?


Norman McLeod Rogers: Ontario has entered into an agreement with the dominion government for youth training. This province has not taken advantage of the opportunity to establish agricultural or rural training courses to the same degree as have other provinces. The bulk of the work in Ontario has been in mining and forestry occupational training, and training in home service.


Mark Cecil Senn: Do the schools established in the western provinces-if we may call them schools-get any support or assistance from provincial authorities in the west?


Norman McLeod Rogers: These rural training centres of which I speak are established under the dominion-provincial youth training program. In the rural sections of Manitoba last year there were about fifteen for young women and twenty for young men.


Jean-François Pouliot: May I make a suggestion to the minister? There are courses for everything, but there is one course every young man and young woman should follow, and that is a course in private initiative 
During the last few years they have received courses in paternalism. They have been told that the state owes each boy or girl a job. Of course they have seen scandalous examples in the civil service of Canada, and probably they have seen the same thing in the civil service of all the provinces. On the other hand it is time to teach our young men to follow the example of their parents, and that they should not expect to be entitled to old age pensions when they reach the age of eighteen.
At times I receive most extraordinary letters. I understand the feelings of young men who expect jobs from the dominion government. They want jobs and when we ask them what they can do they say, "everything." "What do you want"? "Anything." There is no one in the world who can do "everything" and who may want "anything." There is the distinction. The best way for any one to qualify for a job is to be willing to do something unpleasant at the start, even at a mediocre salary, and then show that he can do better, gradually, by becoming more and more familiar with his task. That is what was done by leaders of industry in all the countries of the world. Except in Great Britain and in some European countries, you very seldom see several generations of the same family in the same industry. A man will gain a fortune, but his sons and daughters may be spoiled and not interested in his business, and it is finally transferred to others. The dominion and all provincial governments should see to it that our young men and women are taught initiative in order to make successes of their lives. There is a French expression, "une poire pour la soif." These young people must be willing to start humbly. Then they may make progress and finally succeed in their vocations.


Robert James Manion: How much was spent last year on youth training?


Norman McLeod Rogers: The total apportionable disbursement was $1,156,533.64, of which the dominion portion would be $578,203.86.


Harry James Barber: Has the minister the figures for the different provinces?


Norman McLeod Rogers: I have a table here which perhaps I could place on Hansard in its present form.


Charles Hazlitt Cahan: I think it would be interesting to all of us if it were placed on Hansard.


Norman McLeod Rogers: With the consent of the house I will place these on the record. The table is as follows:

Unemployment Relief-Youth Training
The Unemployment and Agricultural Assistance Act, 1937 Youth Training
Classification of expenditures included in statements of claim rendered by the
provinces to the dominion to February 2,		1939	
Schedules	Maximum dominion contribution authorized	Total shareable disbursement	Dominion proportion
Prince Edward Esland-Agreement dated October 30, 1937-			
Schedule "A" Training in household work and home management for unemployed young women	$ 5,500 00	$ 6,342 76	$3,171 38Schedule "B" Men's agricultural and rural training project	3,500 00	6,594 25	3,297 13Schedule "C" Men's occupational training	2,625 00	4,253 30	2,126 65Schedule "D" Forestry training project	600 00	1,200 00	600 00$12,225 00	$18,390 31	$9,195 16Nova Scotia-Agreement dated September 17, 1937-	Schedule "A" Hard rock mining	$55,600 00	$111,200 01	$55,600 00Schedule "B" Training household workers	1,400 00	2,183 31	1,091 65Schedule "C" Training in farming and other subjects related to agriculture	3,000 00	3,042 47	1,521 25$60,000 00	$116,425 79	$58,212 90New Brunswick-Agreement dated October 20, 1937-	Schedule "A" Forestry training project	$22,500 00	$41,820 94	$20,910 46Schedule "B" Training in household work, home making, handicraft and specialized services for unemployed young women	9,500 00	10,245 75	5,122 86Schedule "C" Class instruction and practical training in agricultural and related subjects to unemployed young people	4,500 00	5,087 10	2,543 55Schedule "D" Project to train leaders and to provide vocational guidance	$ 3,400 00	$ 4,654 81	$ 2,327 40Schedule "E" To provide vocational guidance and occupational training through technical schools or elsewhere	8,500 00	6,257 26	3,128 63Schedule "F" Agricultural courses.	1,600 00	2,976 66	1,488 32$ 50,000 00	$ 71,042 52	$ 35,521 224100	COMMONS
Unemployment Reliej-Youth Training
The Unemployment and Agricultural Assistance Act, 1937-Continued
Youth Training
Classification of expenditures included in statements of claim rendered by the provinces to the domini n to February 2, 1939-Continued
Schedules
Quebec-Agreement dated September 17, 1937
Schedule "A"
Men's mine training project Schedule "B"
Vocational guidance and occupational training project	
Schedule "C"
Recreational activities and physical education project	
Schedule "D"
Training in household work, home management, etc., for unemployed young women Schedule "E"
Men's agricultural and rural training project	
Schedule "F"
Men's forestry training project	
Ontario-Agreement dated September 14, 1937 Schedule "A"
Forestry training and conservation training Schedule "B"
Technical training relating to mining.. .. Schedule "C"
Household work and specialized services
for unemployed young women	
Schedule "D'r
Practical farming, rural homecraft and subjects allied to agriculture	
Schedule "E"
Placing apprentices in skilled trades or
specialized occupations	
Schedule "F"
Vocational guidance and training for young people in urban areas	
Manitoba-Agreement dated July 13, 1937. Schedule "A"
Forest conservation and improvement work Schedule "B"
Learnership courses in industry with related
technical instruction	
Schedule "C"
Operation of domestic training school in city of Winnipeg for unemployed young
women	
Schedule "D"
Operation of a specialized employment and
training service for women	
Schedule "E"
Occupational training and vocational guidance for young men and women	
Schedule "F"
Agricultural training for rural young people Schedule "G"
One year agricultural course for 25 unemployed young people	
Special placement officer, Mr. R. Jacobs.. ..
Maximum dominion contribution authorized	Total shareable disbursement	Dominion proportion$ 30,000 00	$ 16,776 08	$ 8,388 0255,000 00	31,793 19	15,896 5715,000 00	1,614 66	807 3225,000 00	2,501 67	1,250 8360,000 00	91,557 49	45,778 7335,000 00	51,851 22	25,925 59$220,000 00	$196,094 31	$ 98,047 06;$ 43,000 00	$ 80,382 96	$ 40,191 489,000 00	16,860 08	8,430 0442,500 00	38,341 77	19,170 89$ 45,000 00	$ 27,293 73	$ 13,646 9065,000 00	57,933 48	28,966 7535,500 00	214 00	107 00$240,000 00	$221,026 02	$110,513 06$ 44,000 00	$ 80,662 62	$ 40,331 305,000 00	1,419 12	709 554,400 00	4,838 98	1,935 584,000 00	3,307 16	1,653 5817,500 00	29,271 70	14,635 8522,500 00	22,720 20	11,360 092,100 00	3,850 25	1,925 13$ 99,500 00	$146,070 03	$ 72,551 08$ 842 22	$ 842 22	$ 842 22

Unemployment Relie]-Youth Training
The Unemployment and Agricultural Assistance Act, 1937-Concluded
Youth Training
Classification of expenditures included in statements of claim rendered by the provinces to the dominion to February 2, 1939-Concluded
Schedules
Saskatchewan-Agreement dated October 18, 1937-
Schedule "A"
Occupational training allied to agriculture.. Schedule " B "
Vocational guidance for young women.. .. Schedule " C "
Vocational guidance for young men	
Alberta-Agreement dated August 3, 1937-[DOT] Schedule "A"
Local agricultural courses for men and
women	
Schedule " B "
Forest conservation project	
Schedule " C "
Training of young women as household
workers	
Schedule " D "
Vocational guidance for young men and
women	
Schedule " E "
Training in agriculture	
British Columbia-Agreement dated August 11, 1937-
Schedule "A"
Forest conservation and improvement work. Schedule " B "
Technical and practical training in placer
mining	
Schedule " C "
Occupational training and vocational guidance (urban centres)	
Schedule " D "
Physical training and health education.. ..
Grand total
Maximum dominion contribution authorized	Total shareable disbursement	Dominion proportion$44,815 00	$ 61,657 07	$30,828 539,000 00	14,068 49	7,034 2420,000 00	24,641 48	12,320 74$73,815 00	$100,367 04	$50,183 51$18,500 000	$ 31,237 70	$15,618 8417,500 00	20,269 65	10,134 814,500 00	4,977 12	2,488 5421,250 00	38,917 32	19,458 6616,250 00	11,762 69	5,881 33$78,000 00	$107,164 48	$53,582 18$ 47,500 00	$	94,999 86	$ 47,499 9312,500 00	21,807 05	10,903 5330,000 00	46,299 41	23,149 7110,000 00	16,004 60	8,002 30$100,000 00	$	179,110 92	$ 89,555 47$934,382 22	$1,156,533 64	$578,203 86


John Charles Landeryou: Are the courses
different in the various provinces? I should like to know the number of youth taking the course in cooking, for example?


Norman McLeod Rogers: As a matter of fact, a great deal of latitude is left to the provinces in the selection of the courses. The reasons for this are sound. The provincial government is closer to the unemployment situation and the prospective industrial opportunities. A most interesting course in mink farming was
established in Alberta. I saw this course in operation when I was in that province. A number of boys had been apprenticed to mink farmers, and I was told the course was working out quite successfully. Obviously, several hundred boys could not be placed in this way, but as I recall it, some thirty or forty young men were employed on mink farms. When they have completed their apprenticeship, they are to be set up in business, so to speak, with so many mink as partial compensation for the time they have devoted to this course.
4102	COMMONS
Unemployment Relief-Youth Training


John Ritchie MacNicol: How many of them were Indians?


Norman McLeod Rogers: None. They were Albertans.


Abraham Albert Heaps: That problem which is commonly designated as the youth problem is really part of the general unemployment problem that we have to face in this country. Until such time as we deal effectively with the problem of unemployment, just so long shall we have a youth problem to face. I do not think we can get away from that fact. On the other hand, one cannot help having a great deal of sympathy for the work that has been done by the Department of Labour in trying to establish even a small number of youth in some form of useful work for the years that lie ahead. Even if only a few youth are kept off the streets by performing a useful function, any expenditure is well worth while. However, I think we expect too much from occupational training. A few moments ago the minister told the committee that approximately 28,000 young people took the course in occupational training.


Norman McLeod Rogers: Training designed to lead to employment.


Abraham Albert Heaps: Practically the same thing. Of that number, approximately one-third have discontinued their activity. It would be interesting to find out why a little over 9,000 of these young men who were engaged in occupational training decided to' discontinue it. Personally, I would not be surprised if it were found out that they did so because they felt there was a certain amount of uselessness in learning an occupation for which they would have no use later on.


Norman McLeod Rogers: There has always been a marked wastage wherever education is on a voluntary basis. A moment ago I referred to the civilian conservation corps in the United States. Their record has been substantially the same because they have had many discharges through withdrawals of those who originally had enlisted.


Abraham Albert Heaps: Could the minister say
whether one-third of those in the CCC camps in the United States voluntarily withdrew from the camps?


Norman McLeod Rogers: I shall have the number in a minute.


Abraham Albert Heaps: The arghment I am developing is that many of the trades are disappearing from our midst. When I left school at the age of twelve years I was apprenticed to a

trade and I spent five years learning that particular trade. To-day it has practically disappeared and there are hardly any craftsmen in the trade. The same thing applies to a great many others. The ratio of skilled mechanics to the total number employed in industry is extremely small compared with what it was a few years ago. This ratio has a tendency to diminish as time goes on because of new inventions and new machinery which is continually being brought into industry. When we put a young man into some form of occupational training, the chances are that he will have very little to do once his term of training has expired.
I come now to the other point raised in connection with asking the labour unions to relax their regulations. I do not know that the labour unions have shown themselves to be hostile to youth training, but I do know that they do not want to see the labour market flooded with new industrialists when there is no chance of their obtaining employment. It seems to me incongruous that a lawyer, of all people, should plead for relaxation of trades union regulations. I wonder how many lawyers in this house would consider a relaxation of the regulations having to do with their own profession? I do not think we would find them willing to agree to anything of that kind. I do not, however, wish to stress this point. While I agree with the value of the work that has been done by the Department of Labour in these youth training projects, I do not think we should expect too much in the way of finding employment for these young men and young women. As I said, this problem of youth is part of the general problem of unemployment which we have to face here in the Dominion of Canada. Until the government has a definite policy, until the government adopts a definite plan of dealing with the general question of unemployment, so long shall we have the problem of youth to face.


Norman McLeod Rogers: A little while ago I gave the number of those who had retired from the various training courses, and I spoke of the civilian conservation corps in the United States and stated that in my belief that organization has had practically an equal number of retirements despite the fact that it provides for wage payments to all members. Under our youth training plan these payments are confined largely to those engaged in the forestry and mining projects. According to the report for the year ended June 30, 1938, the average number in the courses per month during the year was 271,000. The statistics

Unemployment Relief-Youth Training
of those leaving during the year are as follows: sickness and death, 6,862; employment, 48,327; discharged, 23,932; deserted, 48,485.


Abraham Albert Heaps: What percentage of the total is that 48,000?


Norman McLeod Rogers: I have not added the totals, but there would be a considerable withdrawal from courses designed to lead to employment.


Abraham Albert Heaps: Discharges and so on are included in the figure the minister gave?


Norman McLeod Rogers: My figure also included discharges.


Abraham Albert Heaps: In the 9,000?


Norman McLeod Rogers: Oh, yes.


Mr. MARTIN:: Would this be a convenient time for the minister to give details of the proposed scheme of scholarship assistance for students on the basis of ability and need, announcement of which was made some time ago, but the details of which have never been given to the house?


Agnes Campbell Macphail: Before the minister
answers, I should like to ask one or two questions about rural training in Ontario. A few weeks ago I heard some groups of young people expressing a desire to have what we call cooperative schools. They feel that the Ontario government is serving very well in providing training in agriculture and short courses in household science, but they would like to have cooperative schools, possibly modeled to some degree on the one held at the Ontario agriculture college last September. Has the minister heard anything from them in that regard?


Norman McLeod Rogers: I have had no application from the Ontario government requesting that a course of that kind be included in the program for next year, but certainly if such a request did come to us to establish rural training centres in Ontario along the lines of those established in the western provinces we would consider it favourably.


Agnes Campbell Macphail: I did not mean that, that is already being done by the schools in Manitoba, but what I had in mind was the desire of some young farmers in Ontario, both girls and boys, to have cooperative schools established, and I wondered if that could be done under this youth training scheme. I wondered if they had been powerful enough to induce the Ontario government to ask the department here for the establishment of such schools.
There is one other thing which I think might be done; I do not know whether it can be done, but I do not see why not. Rural youth leave Ontario farms, and I suppose it is true of all the provinces, for two reasons. First, they want to make a living, and it is of course very difficult for them to get established on a farm. That is another story. There needs to be some way of helping to establish young farmers on land at rates of interest and on terms of payment they can meet. But quite apart from that, the girls leave country homes, not because they do not want to stay there, but because their parents cannot afford to dress them as they would like to dress, and so they leave and come into the town or city and try to get a job. That reason for leaving will have to be met, of course, by solving the economic problem.
Another reason why young people leave the farm is the lack of a satisfactory social and recreational life. This project of the government might be used to meet that need. The need is for a community centre where young people could meet and get training in dramatics, for instance, with some person who knows how to do the job assisting and supervising them. They also need to learn to sing, and to sing together. The old singing schools of pioneer days need to be revived. These young people also need physical culture training, something like they have in British Columbia. These three things have occurred to me-dramatics, physical culture, music, and I am thinking particularly of singing, as well as all sorts of music. There are many other things that would interest the young people- sports, for instance. I know that the United States has done remarkable work in sending out highly trained people at the request of a community which showed initiative enough to organize with a view to meeting its needs. Then they get some well trained person to come in and help them, and that person is financed to some degree, if not wholly, by the government. That is something we could do. Even if we do not solve our economic problems as rapidly as we should like to do, we could help to brighten rural life all over Canada by helping the young people to develop a satisfactory social and recreational life, and I suggest that the minister give some thought to the possibilities in this direction.


Mr. WEIR:: It seems to me that the training schools, particularly in Manitoba, have done exactly what the hon. member for Grey-Bruce has been advocating. There were two of them, one for boys and one for girls near

4104	COMMONS
Unemployment Relief-Youth Training
where I live, and the program of at least the boys' school included many of the things which the hon. member has suggested. There was singing, for instance, and dramatic evenings. At the close of a course there was even a debate, which by the way was on wheat marketing, and the local board of trade took part in it.
Another thing has been done which perhaps many of us do not fully appreciate. These courses have been designed primarily to give boys and girls in their teens or early twenties an opportunity to become acquainted with and enjoy, if you like, town life; and on the other hand it gives the townspeople the opportunity of becoming better acquainted with the problems of the rural young people. I think the real idea behind it was to give these boys and girls a fuller appreciation of the lives which they were living right at home.
One thing particularly struck me in the two schools which I had the opportunity of seeing. It is true that these schools were largely on a voluntary community basis so far as the teaching was concerned. While specialists from outside were brought in for certain courses, the people in the community also made their contribution, and what has contributed so much to the success of the schools is the calling in of the people of the community to make their contributions. I know, for example, that the ministers in both towns in my constituency made their contribution, as did the municipal officials, the secretary and the reeve; business men, the banker and the townspeople generally, the doctor, the dentist, and the eye specialist all made their contributions to that school. We may think perhaps that this in itself is not very important from the point of view of educational courses for a training school, but my reaction to it was this, that those people made a contribution to the school which they had no idea they could make, which they had not realized they were capable of making. In return they got perhaps a better appreciation of the desires and aspirations of the young people attending the schools than they could have got in any other way.
On the whole I think the schools have filled a definite need, and I could not help reflecting, as I looked at the school, how fine it would have been if a similar opportunity right at our doors had been open to the young people who were boys and girls with me many years ago. It would have been greatly appreciated by the young people who were then just starting out in life. The schools have provided good, practical courses. The instructors have gained

the confidence of the boys and girls, and those attending have certainly taken part in dramatics, singing and many other activities which the hon. member for Grey-Bruce mentioned. So I think the schools at least in Manitoba are providing just what the hon. member desired. Judging from our experience in Manitoba, I believe that the people desire to have these schools continued for a further period.
. Mr. MARTIN: Would the minister consider answering the question which was intercepted, unintentionally I am sure, by the hon. and very eligible member for Grey-Bruce (Miss Macphail).


Norman McLeod Rogers: I am grateful for the suggestion from the hon. member for Grey-Bruce, and I assure the committee it will be considered. I should like to see such centres established in Ontario.
With regard to the question asked by the hon. member for Essex East (Mr. Martin), the matter of student aid has been brought to the attention of'the government by himself on a number of occasions, and as a matter of fact there have been debates in this house touching the wisdom of establishing national scholarships. Some months ago a delegation from the Canadian Student Assembly presented a memorandum supporting the idea. I told them that I regarded education as primarily and in the first degree, the responsibility of the provincial governments. I did not consider that the dominion government with its present obligations should be asked to establish national scholarships until at least the provincial governments had met their responsibilities in that regard, but I said that we should be prepared to accept projects for student aid within the framework of the dominion-provincial youth training program, which seemed a reasonable method of meeting what, after all, has been a difficult situation for so many young people in these last years. They are equipped to go to university and are anxious to do so, but they have lacked the means, and it would be most unfortunate for this or any other country if, as a result of the depression, we should lose what might come from some of these highly-gifted young men and women who, by reason of poverty or unemployment, or because their families are on relief, are unable to gratify their ambition to go to university. The proposal briefly is this. We have said that we would accept from the provinces a proposal for student aid based on a fixed percentage of the total dominion

Unemployment Relief-Youth Training
allocation to each province in each year, that percentage increasing in each of the three years covered by the present measure. The allowance would be $25 a month for a period of eight months with a maximum of $150 a year, and on that basis we believe it would be possible to give such student aid to 300 students in the first year, 500 in the second and 700 in the third. This proposal has been placed before all the provinces. It is under consideration, and some have already indicated their desire to cooperate.


Jean-François Pouliot: Will the minister instruct
his officers to prepare a tabulation with regard to the 524 positions that have been awarded in the province of Quebec to boys who have followed the scheme?


Norman McLeod Rogers: I shall be glad to secure
that information. It came to us, naturally, from the appropriate officers of the provincial government, and if it is not available in the form in which my hon friend would like to have it I shall try to get it for him.


Agnes Campbell Macphail: The minister and I
were not talking about the same thing. I agree with the hon. member for Macdonald (Mr. Weir) that the course would be good. We have very good courses in Ontario running for about three months, but they necessitate young people leaving their homes and going to the school. But that touches the lives of but very few rural young people. What I was suggesting was that every rural community needs leadership and help in developing the abilities of the youth in the community. What was done in the United States was excellent. Where a community of young people-and some not quite so young-are living in their own homes and show an interest in dramatics, they get someone who is well-versed in the drama to come to the community and assist them in bringing out and developing the qualities of the youth in the community. They do not leave their homes and go to a school; the community itself is served by teachers who are thoroughly trained in the art. The community itself is the most natural setting for this work-and I am thinking particularly of the farm. In the evening the young people on the farms want recreation, and they want a form of recreation that develops the qualities which some of them feel they have. I believe that physical training, singing and dramatics
are three forms of culture in which real help could be given where it is needed; but the schools cannot meet this particular need because you could not transplant whole communities and put them in schools far distant from their farms.


Abraham Albert Heaps: Have all nine provinces come under the provisions of the act?


Norman McLeod Rogers: Yes.


Howard Charles Green: I understood the minister to say that the maximum period during which scholarships would be given would be eight months.


Norman McLeod Rogers: Yes.


Howard Charles Green: Would it not be well to make provision so that even a small number of these young men and women who are in such straitened circumstances could go right through to the top? Take a young man who goes into a forestry training camp in British Columbia this summer. Would it not be possible to give him help for three or four years so that he might become a forestry engineer, going right through and obtaining his degree? If you did something of this sort you would inspire these young people with greater hope. If they are able to go to the top, it means more than obtaining a scholarship for eight months in which they cannot get very far. The same would apply to young women taking a domestic science course. There are many young women who are taking training in this direction. Some of them have marked ability, and if they could go right through and obtain their degrees in domestic science it would be invaluable. I suggest that the minister consider putting the scholarships on some such basis so that these young people can get somewhere along the lines they are pursuing.


John Charles Landeryou: How many individuals are taking particular courses? I am trying to find out what the youth are interested in.


Norman McLeod Rogers: I said that I would put on Hansard-and this may be a convenient time -a complete recapitulation of the results obtained under the dominion-provincial youth training up to the present time.


Abraham Albert Heaps: What is the date?


Norman McLeod Rogers: It goes to March 31, 1939. The table follows:
Rogers.]
Dominion-Provincial Youth Training Statistical Summary from Commencement in 1937 to March 31, 1939
-	-	Prince Edward Island	Nova Scotia	New Bruns- wick	Quebec	Ontario	Mani- toba	Saskat- chewan	Alberta	British Col- umbia	Domin- ion Totals
	Numbers Given Training										
Given training 1937-38	Male	457	300	770	13,542	1,586	3,893	5,471	2,589	3,693	32,301Female...	400	132	361	G,853	1,330	3,255	3,468	1,568	5,729	23,156Total	917	432	1,131	20,395	2,916	7,148	8,939	4,157	9,422	55,457Given training 1938-39 to Mar. 31,1939. .Male	436	1,063	1,518	14,070	1,035	2,190	6,699	5,029	5,948	37,988A	(excluding those continuing from Female...	153	213	1,104	2,422	820	3,013	3,149	5,313	8,043	24,2301937-38). Total	589	1,276	2,622	16,492	1,855	5,203	9,848	10,342	13,991	62,218Total number given training to Mar. 31,	1939	Male	893	1,363	2,288	27,612	2,621	6,083	12,170	7,618	9,641	70,289Female...	613	345	1,465	9,275	2,150	6,268	6,617	6,881	13,772	47,386Total	1,506	1,708	3,753	36,887	4,771	12,351	18,787	14,499	23,413	117,675Numbers placed in wage earning employment	104	139	25	869	303	99	55	470	2,06432	7	342	456	104	62	215	1,218Total	136	146	25	1,211	759	203	117	685	3,282Placed in employment 1938-39 to Mar.	31,1939. . 	Male	92	154	62	423	701	386	102	441	326	2,687Female...	1	42	41	76	653	764	105	182	196	2,060Total	(J) 93	196	103	(*) 499	1,354	1,150	207	623	522	4,747B	Total placed in employment to Mar. 31,	1939 	Male	92	258	201	448	1,570	689	201	496	796	4,7511	74	48	76	995	1,220	209	244	411	3,278Total	93	332	249	524	2,565	1,909	410	740	1,207	8,029Man days worked (work training projects only)	20,321	14,228	15,944	33,022	32,581	8,304	51,348	175,748c	443	35,877	16,345	24,683	10,895	29,636	480	32,004	82,807	233,167Total man days worked to Mar. 31, 1939	443	56,198	30,570	40,627	43,917	62,217	480	40,308	134,155	408,915Days class instruction given	12,745	4,545	17,339	314,034	48,047	35,409	60,453	74,215	41,723	608,510D	14,493	18,812	74,085	193,174	119,861	62,898	124,087	90,816	32,653	730,879Total days class instruction to Mar. 31, 1939	27,238	23,357	91,423	507,208	167,908	98,307	184,540	165,031	74,376	1,339,389
s
o
Unemployment Relie/-Youth Training
E	Hours class instruction given (applies to classes not operated whole day)						311,847 317,869 629,716	233,575 384,711 618,286	6,685 209,917 216,602	200,000 853,728 1,053,728	752,107 3,451,038 4,203,145
	Hours class instruction 1938-39 to Mar. 31, 1939.... Total hours less instruction to Mar. 31,1939					1.684.813 1.684.813						
F	1938-39 Program Only-to March 31, 1939 Total Number Given Training Various Types of Projects (including those continuing from 1937-38) Projects designed to train for wage-earning employment-	28		279 90 1,091	357 131 796		499		114	689 137 1,760	1,966 635 11,015 476 1,786
			237 187			40 958 254 777					
Urban Occupational	251	2,656	2,082	i,234 222 153	Home Service Training	96	117	94	i69	197	183	Total Projects designed to train for wage-earning employment	279	520	1,577	1,378	2,029	3,324	2,279	1,723	2,769	15,878Other projects Agricultural and rural training courses	310	863	1,135	15,974	1,141 827	7,569	3,735 5,019	949 18,175	31,676 24,021Total other projects	310	863	1,135	15,974	1,968	7,569	8,754	19,124	55,697Grand total all courses April 1, 1938 to March, 31, 1939	589	1,383	2,712	17,352	2,029	5,292	9,848	10,477	21,893	71,575(!) Quebec and Alberta figures for 1938-39 are incomplete.	(2) Includes numbers trained in 1937-38 and placed in employment during 1938-39.
Note.-In reference to Section "B" it is observed that not all the projects undertaken have been designed to place those trained in wage-earning employment. A large proportion of the numbers shown in Section "A" were enrolled in physical training courses and in a wide variety of rural courses. In respect to the 1938-39 activities Section "G" shows separately the numbers in the various courses designed to train for wage-earning employment and those in other courses. Section "B" includes those who obtained employment during or on completion of their courses, and those subsequently placed by instructors or placement officers, but does not nclude those who subsequently on their own initiative found work. There is no authoritative information as to the numbers who have obtained employment in this latter way, but sample surveys indicate that the number is considerable.
It is noted that from the commencement in 1937 to March 31, 1939, the total number in courses designed to train for employment was 28,614 of whom 9,239 discontinued training before the completion of their courses; of the remaining 19,375, there have been placed in employment 8,029 or about 41$ per cent, and there were still in training 5,178 at March 31, 1939.
g
>
><

Unemployment Reliej- Youth Training
4108	COMMONS
Unemployment Relief-Youth Training


Mr. LEDUC:: Has the Department of
Labour proposed to Quebec or any other province any special courses to be given?


Norman McLeod Rogers: We have suggested the student aid which I have just described. We have also proposed to the different provinces that they should join in a national forestry program; that is, over and above the expenditures contemplated in the dominion-provincial youth training program, we sometimes do pass on suggestions to the provinces for their consideration, but the initiative in making proposals on projects .belongs with the provinces, the assumption being that the provincial governments are in a better position to know what kinds of projects are likely to be most successful within their boundaries.


Rodolphe Leduc: I believe it would be wise for the Department of Labour to suggest to the province of Quebec the inauguration of a course of guide training. In my riding we receive every year a large number of tourists who are looking for competent guides, but cannot find them, owing to the fact that young men cannot get a course of training in this work. I think it would be wise to suggest to the province of Quebec that boys be trained for this employment.


[Stage Direction]
Section agreed to.
On section 7-Supervisor of youth training.
John Ritchie MacNicol: I should like to pass a word or two of comment. Upon first reading the clause I felt strongly opposed to the appointment of a supervisor; but I have arrived at the conclusion that perhaps an all-round supervisor is necessary, if one can be obtained to fill the bill. I hope the minister will select one who has some knowledge of industry and some knowledge of employment in the industry. So far this evening we have heard a great deal about forestry and farming. Like my hon. friend from St. Lawrence-St. George I come from a city where there are many thousands of young men unemployed, with no opportunity of learning anything about a trade or industry, and there is a dearth in training of future mechanics. I spoke of this when the bill was first before the house, and have received from all over Canada letters, both from young men who desire to become trained in industrial trades and crafts, and from employers telling me that they endorse what I said with reference to the training of youth in industry. The hon. member for St. Lawrence-St. George spoke of the same necessity, and on the way out of the chamber mentioned the matter to me. I told him that (Mr. Rogers.]
I had referred to it when the bill was first before the house, and he said, "I endorse industrial training in that regard."
I suggest to the minister that industry be approached, that fifty to a hundred large employers of labour, also leading men in the labour unions-men who know what they are talking about-be called in. At that conference perhaps means could be worked out to put into effect the plan I suggested when the bill was first before the house, namely, apprenticeships in industry supported by the government under this plan, or the establishment of vestibule schools adjacent to industry where young men could be trained in the crafts; for example, those needed in a large plant such as the Massey-Harris, or a large brass manufacturing plant like the James Morrison company, or the Dominion Radiator Company of Toronto, or the Steelwares of London, Ontario, the former McClary company, and hundreds of companies throughout Ontario and Quebec. A competent supervisor should be obtained, a man who knows a great deal more than just about forestry or farming, although they are very important and necessary. So few hon. members have anything to say on behalf of industry or labour that I felt it incumbent upon me to say something about this matter. I am convinced that if the minister called a conference of fifty to a hundred large employers of industry he could engage their assistance in this important work. I do not wish to take up the time to explain how this should be done, although I have had a great deal to do with industry. In this way the minister would assist employers who perhaps are not under the immediate necessity of training additional machinists or welders or artisans in one or another of a hundred vocations. I am>
sure that a plan could be worked out whereby a great number of young men could be trained in industry for their own benefit and the benefit of the country.


Norman McLeod Rogers: Actually at the present time there is a supervisor of youth training in the person of Mr. R. F. Thompson.


Paul Joseph James Martin: A good man.


Norman McLeod Rogers: He was a member of the youth employment committee from which originally came the recommendations which have led to the youth training program. I was pleased the other day to hear words of commendation of Mr. Thompson by the hon. member for Greenwood, and I believe that anyone who is familiar with what Mr. Thompson has done would endorse what has been said in support of his qualifications for this position. Mr. Thompson has had a varied

Canadian Wheat Board
experience. At one time he was personnel manager for the Massey-Harris Company, so he has had industrial contacts as well as contacts with labour organizations.


John Ritchie MacNicol: And is he following along such lines as I suggested to the minister?


Norman McLeod Rogers: Yes.


Harry James Barber: The supervisor would be located, I suppose, at Ottawa.


Norman McLeod Rogers: He would be travelling about a great deal through the provinces.


Harry James Barber: And he would have under him an organization in each province; or what is the idea?


Norman McLeod Rogers: In the past we have had a very small organization to carry out our federal obligations in relation to this program. We share the expenses of instructors in the provinces, and also share the expenses of placement officers in the provinces. I am inclined to think it will be desirable for us to expand somewhat our federal supervisory service, particularly in view of some observations made by hon. members here this evening. It is not intended to create a duplicate service here.


[Stage Direction]
Section agreed to.
On section 8-Agreements with provinces.
John Ritchie MacNicol: How many of the legislatures have prorogued for this year? If they have prorogued, in what way can they assist this year, and in what way can the bill become operative?


Norman McLeod Rogers: Most of the provincial legislatures have prorogued, but actually all provinces have been participating in this program during the past two years and will have made adequate provision to meet their engagements under any agreement.


Howard Charles Green: What facilities are there for placing these young men and women in employment once they have received their training? Do they have to rely on the provincial employment agencies?


Norman McLeod Rogers: No, Mr. Chairman. In most of the provinces we have appointed special placement officers who will keep in touch with the trainees while they are receiving training and endeavour to lead them to employment at the end of their courses. Apart from that, of course, there is the employment service of Canada, but we have tried to supplement the facilities of the employment service and have appointed special placement officers with respect to the various training courses.


Howard Charles Green: The placement officers work through the employment agencies?


Norman McLeod Rogers: They keep in close contact with the employment agencies, but are not actually a part of that organization.


Louis-Prudent-Alexandre Robichaud: May I be permitted to draw the attention of the minister to what I shall call a misprint in the fourth line of the section, line 39 of the page, and the last word? It says "of" instead of "on"-"as to the terms and conditions on which", instead of "of which" payments are to be made. I think that is obvious.


Norman McLeod Rogers: I think it relates to the word "purposes."


Louis-Prudent-Alexandre Robichaud: You have four words "purposes of" and "for which," and "of" relates to the terms and conditions.


Norman McLeod Rogers: I think we might leave it as it stands. My colleague the Minister of Justice feels that it is quite adequate.


[Stage Direction]
Section agreed to.
Sections 9, 10 and 11 agreed to.
Bill reported.


[Stage Direction]
The house resumed from Friday, May 12, consideration of the motion of Mr. Euler for the third reading of Bill No. 63, to amend the Canadian Wheat Board Act, 1935.
Mr. ROBERT FAIR (Battle River):: Mr. Speaker, for a number of days we have been treated to a diet of wheat, with a liberal allowance of red herring thrown in. One of the last doses of red herring was handed to us, perhaps on a platter, for some forty minutes by the hon. member for Temiscouata (Mr. Pouliot) who criticized members of this group and members of the group to my right, but forgot to criticize those most responsible for this policy. This hon. member had a great deal to say because some of us were not born in Canada. I want to tell him now that those of us who were born in other parts of the world are just as good Canadians as the hon. member or any others sitting in this house. I was criticized because I came from Ireland. Perhaps if the hon. member were in his seat I would tell him that the Irish will be found everywhere in the world except one place; and if he is in any doubt as to
Canadian Wheat Board

that he can go to that place and find out. In proof I could tell a little story in about two minutes, but perhaps if I told it to him privately it would be better than telling it here.
We have heard a number of quotations during this debate, and I should like to quote a few lines from the remarks of the Minister of Trade and Commerce (Mr. Euler) appearing at page 3911 of Hansard for May 11. I intend to quote these few words and then to mention one or two illustrations to show inequalities in my own district. The minister said:
I do not think any member of the house, whether representing the east or the west, can say correctly that the people of eastern Canada, Ontario, Quebec and the maritime provinces-and that includes myself-have not had every sympathy with the people of the west. And that sympathy has been expressed in the most practical way. If my hon. friends will recognize that, we can agree to differ as to whether they are bearing too great a share of the tariff, and I will not enter into a discussion of that question. I might say, however. that if I wanted to indulge in recrimination, I could strike a balance, have a sort of ledger account showing that the west is receiving this and giving that, and so on. But that would be quite purposeless and useless, and it would only tend to cause disruption among us. In my estimation, I could make a good case as to w-hether that 'balance is on the side of the east or the west, but I will not try to do that because that sort of thing only makes for disruption and disunity.
I agree with the statement that when some people are giving more than they are getting, it causes disruption and disunity. In the case of the people who grow wheat it seems that it is more blessed to give than to receive. I have in mind the cases of one or two people in the west who have been soaked, if I may use that word. The first case is that of a widow with several children who for a number of years has been paying nine per cent on a mortgage. The original amount of that mortgage was paid off some years ago, but still more than the original amount remains to be paid. Another case is that of a farmer who borrowed some money, and the mortgage company was so ashamed of charging a rate of ten per cent that it set up a second mortgage to take care of two per cent of the interest and then charged eight per cent on the whole amount.


Mr. POTTIER:: You are not blaming that on the east?


Robert Fair: The mortgage company has its head office on this side of the great lakes, as a number of them have. While we were getting a reasonable price for our wheat people 
did not kick so much; but in the present situation, with conditions existing that should have been rectified years ago, the people of the east and of the west as well, I believe, cannot keep out of debt. At page 150 of the report of the Bracken Sonference we find this:
The Saskatchewan brief before the Rowell commission on inter-provincial relations, after exhaustive analysis estimated the total farm debt of Saskatchewan at December, 1937, to be approximately $482,000,000. In 1938 practically no interest was paid on this debt, only half the taxes were collected, direct relief and seed and fodder have been given on a big scale following the widespread drought of 1937. It is estimated that the total debt increased about $64,000,000 during the past year and now stands at $546,000,000 or about $18 per acre of crop land, or about $25 per acre of seeded crop.
We had a price of 80 cents or better at the time this condition came into being, and now we find the initial price cut to 70 cents. With the present carry-over there is absolutely no guarantee that there will be any further payment beyond the initial price. The fact that we are given participation certificates does not at all guarantee that they will be worth any more than the thousands of those certificates that are stored away in the west, and that are absolutely useless at the present time. Since Bills Nos. 63 and 83 have been revised and reprinted, we find that because the initial payment has been increased to 70 cents there has been a reduction in the bushelage, and also a restriction on the amount on which a person may get that initial payment. I am opposed to this provision for 5,000 bushels. If we were getting even cost of production I do not think I would object quite so strenuously, but because the price is far below the cost price I think we have a just reason for kicking, and for opposing the 5,000 bushel limitation.
There is another mistake in the bill in connection with which my colleague from Acadia (Mr. Quelch) received the following telegram from the manager of the Alberta wheat pool: Victor Quelch,
Ottawa, Ontario.
Wheat Board Act section 7 (e) empowers board to determine "place of delivery." Bill 63 deletes those words. Does that restrict it to Fort William basis or can the board under section 15 of act reflect to grower advantage of lowest freight rate whether Vancouver or Fort William as interpreted under old act? Very important Alberta farmer advantage recognized under old act be retained.
Lew Hutchinson.
Chairman Alberta Wheat Pool
I should like an assurance from the minister that we in Alberta or any other province will be given the right to deliver our grain at Vancouver or Fort William.

Canadian Wheat Board


William Daum Euler: I think I mentioned a few days ago, when the bill was under discussion, that it was the practice of the board when it was found that wheat was located farther to the west, which ordinarily, by a shorter haul, would go out through Vancouver, to deliver to Fort William, if by so doing it would make it more profitable; and that in those circumstances the producer would be charged only the rate to the port of Vancouver. He would not be penalized by having his wheat taken a long distance to Fort William.


Robert Fair: I thank the minister. I believe a few days ago the hon. member for Cam-rose (Mr. Marshall), when speaking on this matter, gave an outline of where the farmer was paying his debts some years ago, and where he is paying them to-day. I believe all hon. members believe that the farmer and his family should first of all have their food, clothing and shelter provided, before making payments on the mortgage, taxes or other things. Taxes have a preferred position after living costs, threshing bills and so on. So that perhaps we shall find out that the trend indicated by the hon. member for Camrose for the past two or three years in Alberta will be followed. We hope prices will be rectified, thereby giving those on the land a chance to make at least a reasonable living.
I would strongly recommend the abolition of the Winnipeg grain exchange. We have been told that the Turgeon commission made certain recommendations, and that the legislation up to the present time is in line with them. I am not disputing that statement. I must say, however, that I am not in accord with the Turgeon commission or a number of other commissions set up prior to that time. So far as I can see, the result from all these commissions has been to bolster up an organization which should have been put out of existence a number of years ago. I refer to the Winnipeg grain exchange.
What we wheat growers need is a wheat board to handle our grain. That, I believe, would be the only effective means of marketing. On that board we should not have, as we have at present, members who are not farmers. There should be at least some producers' representatives or, if we cannot have that, we should have an advisory board with a majority of producers' representatives. The pools for which there was provision in the legislation which passed the house last week are an instance of divide and rule, and perhaps accomplish just as well as anything else what the exchange and its friends want. I am opposed to the set-up of a number of small pools, because so 71492-259
long as we have a number of wheat organizations, we might as well have a number of individual farmers selling. We shall never get the results we require.
I do not intend to take up more time, but would point out that 70 cent wheat seems to be the very best that this old, inadequate system can provide for us, and I would advocate strongly that members in the house and people outside the house study the policy of social credit, which would give everybody a reasonable living.


Mr. JOSEPH NEEDHAM (The Battle-fords) :: Mr. Speaker, I have been listening patiently to the discussion on this and kindred legislation respecting wheat, and I have been trying to analyse the situation in the past four years, since the wheat board was first created. I have been trying to find the cause of the situation in which we find ourselves to-day. There is no doubt that there is and has been trouble, right along. I was going to say that ever since this government took office, the matter of the wheat board has been one of uncertainty in the west. There was so much changing that the people did not know just what confidence to place in the board, or the government that was behind it.
One of the first things done by this government was to change the McFarland board to one headed by Mr. Murray. We very soon found out that the advisory committee had been dismissed. At this time I should like the minister to give us a reason for their dismissal. There must have been one. I am wondering whether they were inefficient, whether they were not fulfilling the necessary functions, or what causes there may have been. According to the evidence before the Turgeon commission, Mr. Murray would not accept the chairmanship of the new board, with an advisory committee. The question is whether Mr. Murray was to be the boss, or whether the government had a policy. Somebody had to make a decision, and evidently the government made it and dismissed the advisory committee.
I therefore ask the responsible minister to tell the house why the advisory committee was discontinued, because if there is anywhere a need for producers' committee or the membership of producers on a committee, surely it is in connection with a wheat board. Because the volume handled and the problems that would arise from the growers' point of view, it seems to me-and this must have been apparent to those who drafted the bill-that it is necessary that there should be grower representation on that committee. The

Canadian Wheat Board

board is handling the property of the producers, and when the volume handled is considered, I think the western wheat grower should have a say in the marketing of his commodity. Surely the interest of the grower does not end when he delivers his wheat to the elevator.
To-day there is no advisory committee to the wheat board, which to me is a serious situation. I cannot overlook the fact that legislation has been passed at this session to provide for two advisory committees to deal with producer goods. I refer to the salt fish board made up of five members, two representing the producers and three the dealers and exporters. Then there was an amendment to the Dairy Industry Act whereby an advisory committee is provided for. Is wheat less important than salt fish or any other commodity? Why should not there be an advisory committee with grower representation? I am satisfied that the troubles of the last four or five years can be traced to the fact that there has been no contact between the producer and the authorities having to do with the marketing of his goods.
I feel safe in saying that had this government administered the wheat board act as passed by this house we would have little trouble to-day. A question has been raised in this house, and this question has been of vital interest to the west, as to why sections 9, 10 and 11 were not made operative. Did the government come to the conclusion that these sections would not serve any useful purpose? If they had been made operative there would have been no doubt as to full control by the board from the beginning to the end. It seems to me that this government did not want the wheat board act to function in the way it was intended to function. The other night the Minister of Agriculture (Mr. Gardiner) said that there were two ways to prevent the wheat board from operating continuously. The first was to set the initial payment too high, and the other was for the farmers to refuse to deliver wheat to the board.
Let us look at the record. In 1935 the pegged price was 87i cents, and there is no doubt that the farmers delivered wheat to the board during that year. In 1936 the government passed a regulation whereby the board could not accept wheat unless the price dropped to 90 cents, so we can say that the pegged price was 90 cents. Some wheat was delivered to the board before that announcement was made on August 4, and) I know that farmers wanted to continue sending their wheat to the board, taking the initial payment of 87i cents and participation certificates
[Mr. Needhana.l
which would give them the advantage of any rise in price, but the order in council said that the board could not accept wheat unless the price dropped to 90 cents. The same condition prevailed in 1937. Then we come to 1938 when the pegged price was 80 cents, and the farmer delivered the full amount of his wheat that year to the board. It was not the fault of the farmer that no wheat was delivered to the wheat board in 1936 and 1937. Then we come to 1939 with a pegged price of 70 cents. What do the government say? Do they say they will take the farmers' wheat? No, they do not; they say they will take not more than 5,000 bushels from any farmer. If a farmer delivers one bushel more than the allotted number of bushels, he is to be penalized ten cents a bushel.
The minister said that one of the ways to kill the wheat board was for the farmers not to deliver their wheat. When the producers asked for a wheat board, is it likely that they will try to cripple it in any way? I do not think there is any evidence to show that the producers have prevented the full operation of the board. But it looks to me as though those in charge of the administration of the act have been largely responsible for the situation we have to^Iay. Was the wheat board operated according to the act from 1935 up to the present time? Had that board seen the necessity of creating a reserve, they had opportunities to do so when the price was fairly good. This reserve would have helped to meet the situation we have at the present time. When the price is low is no time to create a financial reserve. The board had opportunities since the act was passed to prepare for the situation we have to-day. I feel like offering criticism for the way in which those responsible have administered the act up to the present time. There have been too many changes. As I did the other dlay, I hold in my hand a petition signed by 10,028 citizens in my constituency. They objected to the passing of this bill providing for a price of 60 cents, and I have had no word of commendation from them since the price was raised to 70 cents. In order to carry out the wishes of my constituents, I must oppose the passing of this bill.


John Horne Blackmore: Mr. Speaker, in rising for what perhaps will be the last effort which this group will make to bring to the attention of this house in this critical year the necessity of making an adjustment in the interests of the western farmer, I wish first of all to refer to two or three things which the Minister of Agriculture (Mr. Gardiner) said the other day. He expressed

Canadian Wheat Board
anxiety lest we set an initial price too high and thereby arouse such a storm of opposition from somewhere in the east that it would be impossible to carry on. Up to the present time, except once or twice when we have reverted to the possibility of one dollar a bushel, we have not advocated a price higher than 80 cents. In 1935 the price was set at 87i cents, and we did not hear that the eastern forces were opposing the government policy in setting that fixed price. In 1936 and 1937 the price was virtually 90 cents, and apparently there was no great opposition; at least so far as we know there was none. It seems to me, therefore, that the minister is worrying unduly.


Ernest Lapointe: We heard more about it than you did.


John Horne Blackmore: Probably we shall
have to talk to those interests and bring them to see the light. But I have stated the facts as they appear. We were paid 87^ cents in one year, and virtually 90 cents in the other two years. So it does seem overdoing it a little for the minister to suggest, when we are trying to get back to that higher price, that we are going to extremes.
It has been suggested that we should have a number of small cooperatives; at least I gathered that was the purpose of one of the bills which the Minister of Agriculture has brought forward. I have no objection to small cooperatives, but I ask this question: If the great wheat pool which grew up and flourished and became so powerful on the plains of western Canada was unable to survive against the forces brought to bear against it, what possible chance would there be for small organizations to succeed? It was implied that there were paid agitators, and that the forces asking for a reasonable price for the farmers were apparently under the influence of these paid agitators. I would be prepared to suggest, if that is the case,
that there must be paid agitators on both sides. Certain it is that the men in my constituency who are asking for a reasonable price are not under the influence of paid agitators.
There has been some question raised, mainly by the Minister of Trade and Commerce (Mr. Euler), when we have pointed out that we are paying an unduly heavy levy in the west because of the tariff structure of this country. We have pointed to the $47,000,000 which it has cost the west, and which is well known now.


William Daum Euler: But not altogether believed.


John Horne Blackmore: I know the Minister of Trade and Commerce has not been the only one or the most vociferous one, but he was one.
For the benefit of members of the house I shall read a table which was prepared by the highly respected Minister of Labour (Mr. Rogers) in the present cabinet and given in evidence in that same investigation which he conducted in 1931.


William Daum Euler: Has it not been put on
Hansard many times?


John Horne Blackmore: I think not.


William Daum Euler: I am sure of it.


John Horne Blackmore: Not the whole of it.
If it is the desire of hon. members that I put this on Hansard without reading it, I shall be glad to do so.


Ernest Lapointe: Is it
given by provinces?


John Horne Blackmore: By provinces.


Walter Edward Foster: Has the hon. member
the consent of the house?


Some hon. MEMBERS:: Agreed.


John Horne Blackmore: Thank you, Mr. Speaker. It is as follows:



TABLE YI

[Stage Direction]
Comparison of tariff subsidies and tariff costs by provinces as estimated by Professor N. M. Rogers for 1931.*
Province	Enhancement of business due to tariff	Estimated tariff subsidies to protected manufacturers	Net gain Total	or loss Per capitaP. E. I	. . $ 2.042,150	$ 467,992	-$ 1,574,158	-$17 88Nova Scotia	. .. 15,784,124	9,487,493	- 6,296,631	12 28.New Brunswick.. ..	.. 12,891,077	8,126,059	- 4,765,018	- 11 67Quebec	.. 101.171,562	132,867,447	+ 31,695.885	+ 11 03Ontario	.. 168,732,723	220,722,484	+ 51.989.761	+ 15 15Manitoba	.. 29,185,740	19.910.971	- 9.274.769	- 13 25Saskatchewan	.. 29,228,285	3,275,950	- 25,952,335	- 28 16Alberta	.. 27,909.396	8.211.148	- 19,698,248	- 26 93British Columbia. . ..	. . . 37,737,247	22,378,571	- 15,358,676	22 33
*A submission on the fiscal disabilities of Nova Scotia within the Canadian federation, presented by N. M. Rogers, Halifax. 1934, chapter VIII.
7H92-2591
Canadian Wheat Board
[Stage Direction]
Briefly, the effect of it is to show beyond question that all the provinces except Ontario and Quebec are suffering from the tariff structure. Let me make it clear that by that I do not mean that the primary producers of Ontario and Quebec are necessarily receiving any great advantage.
Joseph Enoil Michaud: Did the Minister of Labour draw the conclusion which the hon. member is now drawing?


John Horne Blackmore: Yes, it will all be on Hansard to-morrow.


Joseph Enoil Michaud: Did he say they suffered from the tariff?


John Horne Blackmore: It is pointed out that Quebec receives from the tariff an advantage of $31,000,000, in round figures, over and above all her loss.


Ernest Lapointe: That is all on paper.


John Horne Blackmore: It is a minister of this government who said it. Everything we are dealing with is on paper. Ontario is shown to have an over-all gain of more than $51,000,000, almost $52,000,000, while every other province in the dominion has a loss.


William Daum Euler: I am afraid that all the citizens of Ontario did not get their share of that $51,000,000.


John Horne Blackmore: I said just that a
minute ago. I do not say that they did by any means. In fact I am inclined to think that probably the greatest sufferers to be found in Canada are to be found in these two central provinces. I do not hesitate to say that for one minute. But that is no fault of ours; that is the fault of some one else; where the fault lies I am not going to say.


Mr. GLEN:: Mr. Speaker, I rise to a point of order. The other day when I was speaking on this question and I referred to the 1938 budget, I was called to order. The hon. member is now referring to something which happened many years ago and which is not related to the question before the house.


Robert Fair: I do not think he is out of order, Mr. Speaker. The hon. member for Marquette is just trying to draw a red herring across the trail.


Walter Edward Foster: I would ask the hon. member for Lethbridge (Mr. Blackmore) to confine himself as much as possible to the question before the house, which is the third reading of Bill No. 63, to amend the Canadian Wheat Board Act, 1935.


John Horne Blackmore: Thank you, Mr. Speaker. I am giving the reasons why special consideration must be given to the western provinces, and one of the main considerations is that we are being placed in a position where we cannot possibly survive unless some special consideration is given to us.


Ernest Lapointe: This bill is special consideration.


William Daum Euler: Certainly it is.


John Horne Blackmore: Not nearly enough. It is contended that Ontario and Quebec farmers are going to suffer a disability. It is contended that they are suffering. I wish to point out, as I have done once or twice before, that we are not contending for one moment that the farmers all over the dominion should not be given that consideration which will enable us to live. When we argue for the wheat industry of the west we are using that simply as a point of departure. The day will come in this dominion, if it is the will of heaven that we find favour in the eyes of fortune, when it will be realized that the men who are engaged in the essential industries in this country must be placed in a position in which they can live, and until that is done we cannot begin to have a sound economic position in Canada. So when we say that the wheat industry must be put on a sound basis we are by implication saying that the whole agricultural industry and every primary producer in this dominion must in a similar way be put on a sound economic basis.


William Daum Euler: Does my hon. friend really think that by giving the western wheat producer a fixed price, whether it be 70 cents or 80 cents or 90 cents or one dollar, that is putting the industry on a sound basis?


John Horne Blackmore: I think I would be safe in saying that it is much more likely to be on a sound basis at 80 cents than at 70 cents.


William Daum Euler: Does my hon. friend think that bonusing an industry permanently out of public funds is putting it on a sound basis?


John Horne Blackmore: Provided that the
public funds are coming from the right source.


William Daum Euler: Are they?


John Horne Blackmore: That is the next problem. If we were to start telling where the public funds should come from we would be called to order, because we would be telling exactly where the money ought to be obtained. But it does not need to come from taxation.

Canadian Wheat Board


William Daum Euler: I gather from what the hon. gentleman says, that the only way in which it can be put on a sound basis is to bring in the principles of social credit.


John Horne Blackmore: You would not need to bring in all the principles of social credit but the principle of the state creation of money backed and governed by the amount of production in the country. Let us stop for two or three minutes and reason the matter out. In a country where there is plenty of fish and fruit, plenty of lumber, plenty of coal, plenty of food of every kind, plenty of clothing and all the rest of it, is there any conceivable reason why you cannot enable the people who produce wheat to get enough of each of these other products to reward them for the effort which they make in producing that wheat? None whatever.


William Daum Euler: And the same with other commodities?


John Horne Blackmore: Exactly; the same with other commodities. The mere fact that this government does not know how to do it is no evidence that it cannot be done. It is merely evidence that it is time that this government began to grow in its ideas with regard to finance.


An hon. MEMBER:: They will go next time.


John Horne Blackmore: I said "grow," and I mean it. As regards the representatives of the farmers of Ontario and the farmers throughout the country generally, instead of any complaint coming from them with regard to 80 cents on wheat, the thing for them to do is to begin to agitate for a fair price for their own farm products. And it can be given, beyond any question. I have stated two or three times already that if Canada were an island there is no reason in the world why we could not live. Is there any reason? To ask the question is to answer it.
There are two or three other points that bear on the general question, and I wish to put them in a straightforward, simple way before the house in this last appeal we are making. In addition to our having a tariff disability, we are labouring under certain other handicaps, in western Canada particularly, which the people of the dominion must learn to realize and fully to appreciate. Our first difficulty comes from the extremely careless way in which the lands were dealt with in years gone by. In the three prairie provinces there are special areas which have
been seriously affected because of past immigration and settlement policies, which were directly governed by men sitting in this house over whom the provinces had no control.
Take in the first place the question of land settlement. When this government dealt with the Hudson's Bay Company it allowed them to have one-twentieth of the lands from the boundary to the North Saskatchewan river. It allowed them to take sections 8 and 26 in every fifth township, sections 8 plus the south, one-half of 26 in all the other townships. All we need to do is to imagine this floor - of the House of Commons to be a great stretch of land laid out by survey, and allow any group whatsoever to select townships and sections in that way, and hon. members will realize how the settlement over that whole area will spread out in a way which will make it extremely costly to administer that country, no matter who undertakes the task. Not only was the Hudson's Bay Company allowed to select lands all over the country, but the Canadian Pacific Railway was paid in large measure with lands-18,000,000 acres were given them plus the mineral rights. They had exemptions from taxation on their main line properties and twenty-year exemptions on lands and minerals; and by and by more and more lands were pledged to them. Alberta alone was called upon to give the Canadian Pacific Railway 13,120,000 acres of land. The company was allowed to select that land wherever they chose, and once more, the way in which they selected the land forced out settlement in Alberta so that it became widespread. The cost of administering the public services in Alberta and Saskatchewan, because of that mismanagement of our lands, has been so much enhanced as to endanger the financial stability of those two provinces for many years to come.
Unless we realize that, we shall face annual trouble from those two provinces, not because of complaints from the people but because they simply cannot carry on. Practically all the land which went to pay the Canadian Pacific Railway came from the three prairie provinces, and the Canadian Pacific selected odd numbered sections anywhere. They took good care to get the best and choicest lands.
Not only in dealing with these two great companies was the government careless and improvident, but it was careless and improvident in its immigration policy as well. May I read two or three statements which I admit astonished me when I first heard them. I doubt whether very many hon. members have ever heard that such things took place in
Canadian Wheat Board

years gone by. In 1905 the Hon. Clifford Sifton made this statement, speaking in this House of Commons:
So, Mr. Speaker, I am clear upon that point; and if there is anything I can say to the members of this bouse that I think should commend itself to the judgment of both sides, I would say that nothing could be done which would more certainly imperil a successful settlement policy upon which the greatness and increase in the financial strength and resources of Canada depend than, under any circumstances, to allow the public lands of the prairie provinces to pass from the control of the dominion government.
That was in 1905 when the two western provinces were to be set up. Not only had the dominion allowed men to go in and settle at random all over the country, but it retained control over the lands so that the process could go on-what for? For the benefit only of Ottawa, utterly regardless of what might be the interests of people who might try to establish homesteads in Alberta or Saskatchewan.
I have another quotation from the same gentleman:
I want the house to understand the policy which this government is following. It is endeavouring to 'build up a consuming and producing population in our vast western country for the purpose of giving legitimate occupation, without excessive duties, on a legitimate business basis, to the mechanics and artisans in eastern Canada.
This has not been the result of any haphazard policy; it had been planned and designed for many years. We are suffering from it to-day, and we are blaming everybody but the people who ought to be blamed. He goes on:
It is not necessary in order to give that occupation that we should have a fiscal policy which is oppressive to the people who are actually furnishing the money to pay for the goods which are produced in eastern Canada.
There is another quotation, this time from Hon. Frank Oliver:
This Dominion of Canada can make millions out of the lands of the northwest, and never sell an acre; it has made millions out of these lands without selling an acre. The increase in our customs returns, the increase in our trade and commerce, the increase in our manufactures is to a very large extent due to the increase in settlement on the free lands of the Northwest Territories. The prosperity this dominion is enjoying to-day is to a very large extent due to the fact that the lands of the Northwest Territories have been given away and that people have taken them. I say that the interest of t'he dominion is to secure the settlement of the lands, and whether with a price or without a price makes little or no difference. It is worth the while of the dominion to spend hundreds of thousands of dollars in promoting immigration to that country and to spend thousands and thousands of dollars in surveying and administering these lands, and then to give them away.

After the dominion government had exploited those lands as it was designed to do, the problem was turned over to the provincial governments. If a person can imagine anything more unfair, more callous and more short-sighted than that, I can hardly understand his mentality. The earnestness and sincerity with which we are struggling here to-night are to a very large extent the necessary consequence of that very mismanagement.
Not only was the dominion government callous about the settlement of that country, but it disregarded an area in western Canada which has many times been mentioned in this house, known as the Palliser triangle. As far back as 1860 all men who were well informed knew that land would never be fit for settlement; and yet the dominion government allowed people to go in and settle all over that land, building up a problem which would constitute a major burden on the whole Dominion of Canada. And now the wheat bonusing plan through a levy of one cent a bushel, which some of us opposed so earnestly, was apparently designed to place upon the three prairie provinces, whose economies have been so plundered and rendered almost impossible, the responsibility of taking care of the sufferers in the Palliser triangle. In other words, the dominion government builds up a problem which is insuperable for the three prairie provinces and then proposes to leave them to handle it. It is just impossible; that is all. If the members of this government do not realize that and do not listen to those who come here and tell about it, the future will suffer for it. Just how, I do not know, but the future will suffer for it.
Here are some of the results which have accrued from that kind of thing. Alberta to-day has to maintain 500 per cent more miles of highway per 1,000 people than Ontario does, and 200 per cent more than the people of Canada generally. I have read that Alberta must support 90,000 miles of highway.


James Garfield Gardiner: Two hundred and ten thousand in Saskatchewan.


John Horne Blackmore: True enough. We do not say that it is any worse in Alberta than in Saskatchewan; I believe the condition is a little better in Alberta, but for either of the provinces it is a crying shame, an impossible condition. The more the trucks come in, the more insistent and the more irresistible is the demand for highways. The more the people of this country everywhere demand public services, such as schools, the greater the difficulties become because of this widely

Canadian Wheat Board
dispersed settlement of the country, requiring bridges, railroads, highways, telephones and schools over an area where not enough is produced to justify the expense but where nevertheless the expense must be incurred. I believe I will just read a table which hon. members may find interesting.


An hon. MEMBER:: Put it on Hansard. Take it as read.


John Horne Blackmore: I have lost track of it. I was going to read a table to show the number of miles of highway per 1,000 of population which the different provinces have to maintain. It has a bearing upon this whole question. One of the major expenses is highways, and it is going to 'be a major cost for I do not know how many generations to come, because of the spread-out condition of the country.


Ernest Lapointe: What has this bill to do with it?


John Horne Blackmore: (Mr. Gardiner) so well pointed out the other day., that already in Canada we are spending a great deal of money; but the amounts we are spending are not comparable with these. Canada simply must begin to look to a time when she will aid her agriculture and her primary producers in ways of which most people have never yet dreamed. I think it was the hon. member for Macdonald who raised this question the other day: Can any other party pay more than this party is paying? I say unequivocally, yes.


An hon. MEMBER:: Social credit.


John Horne Blackmore: Social credit, indeed; and if the Liberal party would adopt it they could do it also. To imagine that we cannot devise a financial system adapted to this age of plenty in which we live is to imagine a vain thing. It might be asked if there is anything else we can do for our farmers. There are several things we can do to help the western farmer. I have referred already to the increase in the cost of commodities the farmer must buy. According to the Searle letter of April 19, 1939, the present cost, as compared with 1913-14, is as follows:
Index
number for 1939 (1913-14 = 100)
Groceries (16 items)	 109
Clothing (36 items)	 125
Household equipment (28 items) .. ..	147
Farm equipment (53	items)	
138Heavy farm machinery	(12 items). .	157
Taxes (2 items) school and municipal 172
Total (147 items)	 132-9
The writer of this letter goes on to estimate that for a family of five to live and carry on, it is necessary for that family to derive an annual income of $887.24, which I maintain they cannot do with wheat at 70 cents a bushel. Some may imagine that luxuries are included in that list of 147 items. I have the full list before me, and if given the consent of the house I will place this list on Hansard because I believe hon. members would find it interesting.


Walter Edward Foster: It can be done only with the unanimous consent of the house.


John Horne Blackmore: I believe everyone will be interested to see that there are no luxuries included in the 147 items.


Some hon. MEMBERS:: Carried.


John Horne Blackmore: : The list is as follows
Cream separators	Work shoes
Incubator	Blankets, all wool
Post maul	Flannelette blankets
Post hole digger	Sheets, white cotton
Barbed wire	Pillow cases
Staples	Turkish towels
Gate	Sewing thread, linen
Wire stretcher tackle	Sewing cotton
Hog fence	Sewing machine
Poultry fence	Coat, children's, cloth
Field fence	Coat, women's, cloth
Lawn fence	Woman's fur coat
Pitcher spout pump	Frock, women's party
Stock spout pump	Gloves, women's kid
Windmill head	Gloves, women's
Windmill tower	woollen
Stock tank	Underwear, women's
Engine	woollen
Feed grinder	Sweater, women's
Hand feed cutter	woollen
Stock feed cooker	House dress, women's
Rubber belting	cotton
Leather lacing	Shoes, women's patent
Leather belting	leather
Pole saw	Stockings, cashmere
Drag harrow	Stockings, women's
Weelbarrow	cotton
Manila rope	Axe
Lariat rope	Bucksaw
Doubletrees and neck	Shoes, children's
yoke	Overshoes, women's
Saddle	Socks, children's
Plough harness	cashmere
Teaming harness	Lunch pail, with
Halter	thermos
Horse collar	Scissors
Sweat pad	J ack-knife
Cookstove	Tea
Queen churn	Coffee
Milk can	Evaporated apples
Clothes basket	Sugar
Strainer pail	Beans
Food grinder	Flour
Washing machine	Prunes
Blanket felt	Canned tomatoes
Tar paper	Rolled oats
Wire nails	Rice
Seales	Raisins
Crowbar	Jam
Gooseneck	Salt
Tent	Pepper
Paint	Vinegar
Shingle stain	Corn
Carpet sweeper	Fence posts
Scoop shovel	Walking plough
Pitchfork	Gang plough
Oil lantern	Seed drill
Logging chain	Hay rake
Grindstone	Binder
Sheepskin coat	Mower
Cotton overalls	Disc, harrow
Cotton smock	Municipal taxes
Socks, wool	School taxes
Socks, cashmere	Wagon complete
Underwear, men's wool	Lumber
Gloves	Kerosene
Pullover mitts	Lamps
Felt shoes	Kettle
Cap	Coffee pot
Sweater, man's wool	Teapot
Shirt, flannel	Saucepan
Shirt, cotton	Dishpan
Shirt, black sateen	Frying pan
Rubber boots	Crockery ware
Underwear, fleece	Bob sleigh
lined (men's)	Gasoline

Canada Grain Act
It is conceivable, it is possible, for this government so to organize the economy and the financial structure of Canada that part of the price of these commodities can be paid for the farmer, without costing the taxpayers of this country one cent in addition. The question is where the money will come from. The money will come from state created credit instruments issued debt free, and it might be used to remove the surplus from the market, to pay fair prices, to reduce the cost of these 147 items, to establish new projects such as fur farming, honey establishments and so on, or to create price parity in general.
I now come to the last thing I am going to ask the minister in this debate, and I suppose he is not sorry. I am going to ask him earnestly to take steps to see that an 80 cent minimum is given the people this year, that 874 cents or 90 cents be the goal at a not remote date, and that one dollar and not a cent less be the objective on which he fix his mind; for without one dollar a bushel it will be impossible for the three prairie provinces to establish their economy on a sound basis.
I am going to ask one further thing; that is, that the advisory board be restored. The hon. member for The Battlefords (Mr. Needham) pointed out that we have an advisory board in connection with the salt fish industry, as set out in Bill No. 130. Why should we not have an advisory board for the farmers? Judging from Bill No. 82, while I do not wish to be unduly suspicious, I am surely afraid that it was designed to be a casket in which the wheat board was to be conveyed away to the morgue in respectable fashion.
I have one more request, which has been implied since I commenced to speak. It is that Canada provide for a just price on other grain products. I notice that in section 6 of this Bill No. 63 we have repealed section 14 of the Canadian Wheat Board Act of 1935, which section provided for the application of the principles of the bill to oats, barley, rye and flax produced in the provinces of Manitoba, Saskatchewan, Alberta and British Columbia. In place of that section we have a provision extending the wheat _ price to the eastern division. I have no objection to this latter; I think the eastern division should have a just price as well as the west, but certainly we must be prepared to apply the principles of this legislation to wheat, ^ oats, barley, rye and other agricultural and primary products.
In conclusion, sir, let me say that we have presented our case in as great detail as time and propriety would permit. We have endeavoured to speak with becoming moderation, but likewise with fitting emphasis. So far as my group are concerned, we now leave the matter to this high court of parliament. For better or for worse parliament must decide.
Motion (Mr. Euler) agreed to on division, and bill read the third time and passed.



CANADA GRAIN ACT


[Stage Direction]
Hon. W. D. EULER (Minister of Trade and Commerce) moved that the house go into committee to consider Bill No. 62, to amend the Canada Grain Act.
Motion agreed to and the house went into committee, Mr. Sanderson in the chair.
Sections 1 to 38 inclusive agreed to.
On section 39-Limited quantity dischargeable from mill elevator.
Mr. ROSS (Moose Jaw):: In section 39 an amendment was made in the committee on agriculture that was not in the bill which went to the committee, changing the section to admit only five per cent of grain taken into the mills to be shipped out. The mills in the centre of the grain district buy a considerable amount of their wheat from farmers locally. When purchasing from a farmer they must take all his grain that he brings there, whether they want that kind of grain or not, in order to keep him as a customer. Therefore in a good many instances they have to ship grain out. Then, again, cars of grain which come there have not gone through government inspection, coming from elevators throughout the country; and often a great many cars ordered by the mill are not according to the grade purchased. There is a one cent per bushel diversion charge on that grain. If the mills cannot use that grain and have to ship it out again they cannot take it, and therefore the elevator companies would not ship grain to the mills unless they were willing to take all that comes to them.
In other instances these mills in the centre of the west often mill low grade wheat for oriental shipment, and in some years past they have milled many hundreds of thousands of bushels. Last fall one of the mills in western Canada, for the first time in a good many years, got an order for some 15,000 barrels of flour to be milled for the orient. The result was that they thought possibly there might be further orders following that, and they purchased 200,000 bushels of low grade wheat. If they had not purchased it then, it would get by them to Fort William, and they
Canada Grain Act

would have to ship it back again. In such instances, if they were not allowed to ship out more than five per cent they would not be able to make arrangements for that kind of business. Again, the mills in the centre have to buy their supplies for a year ahead, and it is pretty hard for anyone to figure out exactly how much and what kind of wheat he would need in the year, because, if the wheat gets by them again, they cannot make proper arrangements for milling.
Back in 1936 when there was a high premium for spot wheat at Winnipeg-I believe it ran as high as twenty-five cents a bushel-the mills were not able to hold the wheat that they had in elevators, because they must hedge on their grain as it comes in there on the Winnipeg market. They had that grain hedged, and at least one milling company at that time had to ship a million and a half bushels of wheat to cover hedges, or they would have lost that premium.
Where the section contains the words "not exceed five per centum" I want to insert the words "except by permission of the board." In other words, I want to give the board authority or power to check over exactly what the mills are doing, and under circumstances where necessary that permission of the board will be given to allow the mill elevators to ship more wheat out. I therefore move in amendment:
That the words "except by permission of the board" be inserted after the word "not" in line 30 page 10 of the bill.


Mr. STEVENS:: Was this matter considered in the committee on agriculture?


John Gordon Ross: Not fully. We thought this would not hurt the mills. Because there was no amendment of this kind in the bill when it went before the committee on agriculture; there was no representative from any of the milling interests before that committee. There were several there representing elevator interests, but there was nobody representing the millers. Had there been a section such as this in the bill prior to the time it went to the committee they would have had their representatives in attendance.


Henry Herbert Stevens: Is this being asked for by the milling companies?


John Gordon Ross: Yes.


Mr. DONNELLY:: For a number of years, until 1929, we complained in western Canada about the habit of mixing grain at terminal elevators. In 1927, 1928 and 1929 the committee on agriculture met here to discuss the mixing of wheat, or the habit that has grown up of mixing wheat in terminal elevators.

In 1930 the act was amended. A new act was drawn up which prohibited the mixing of grain in terminal elevators, including No. 1 hard wheat, No. 2 northern and No. 3 northern. Mixing was still allowed in No. 4 northern and other grades. Since that has been in effect, another habit or evil has grown up, namely, the habit of not mixing at terminal elevators but of mixing back in the country. And among those who have been guilty of this infringement, not the least have been the mills. I say that because the mills have been taking in grain in carload lots, mixing it in elevators, reducing it down to the minimum of grade, and then shipping down to the terminal that minimum grade. They are taking out mill elevator licences. The bill has been changed this year to prevent that habit which has grown up in the last few years. Not only has that habit grown up, but we find that certain of the elevator companies are now building larger elevators back in the country. Instead of 25,000 bushel elevators, they are building 50,000, 75,000 and 100,000 bushel elevators. They are building these larger elevators in order to mix in the country. The board of grain commissioners came to Ottawa this year with the full intention of stopping this habit which has grown up in connection with the mill elevators, and the act was changed in order to prevent this very thing which the mills now want to have put back in the act. I am not inclined to leave it to the grain commissioners to say whether they shall be allowed to ship grain out. I think the act is quite clear that five per cent is enough.
The hon. member for Moose Jaw (Mr. Ross) says that sometimes they get grain in carload lots. As a matter of fact, few if any of these elevators take grain in carload lots until the sample has been brought in. Cars are brought in and samples are taken. The mills take the samples and test them, and then they decide whether they will take particular cars. It is only after they get the samples and have tested them that they decide whether they will take the grain. That is one of the evils which have grown up. For example, 100 cars may be in front of one of these mills. They go out and get samples from the hundred cars, and the samples may show that fifty cars contain grain of the top grades, while the other fifty contain grain at the bottom. The fifty cars of high protein content grain are taken by the mill, while the other fifty cars are shipped on to the head of the lakes. They skim off the best of the protein wheat and ship it across the line, while the other fifty cars are allowed to go through the ordinary channels of trade to

Canada Grain Act
export. When there is a shortage of protein wheat in the United States, a great deal of this is taken away, but this has not been the case so much in the last year or two. In other years, however, it has been done to a large extent. I object to interfering with the act as it is at the present time. This matter was discussed in the committee; we were satisfied to leave it as it is now, and I am ready to vote to do that.


William Daum Euler: I understood my hon. friend to say that this wheat could go out at the minimum.


James J. Donnelly: The wheat has to come down and is graded into the elevators at Fort William.


William Daum Euler: It must be of export standard, 75 per cent average and 25 per cent minimum.


James J. Donnelly: It goes to Fort William. Mr. EULER: That is the present act.


James J. Donnelly: The present act has
been changed to that.


Mr. LEADER:: Mr. Chairman, I want to speak for only a few moments in regard to the question before the committee. I certainly would not want to place any obstruction in the way of the milling industry of Canada because that industry forms a valuable part of the industrial life of this country and is no doubt an asset to Canada. But I should like to say a word with regard to mixing. I was a member of the committee, and I took a stand against opening the door to allow mixing of any kind in connection with our four top grades. It is true that the majority of the committee was against this, but I voted against mixing. I took the stand that it was a retrograde step. We grade every other farm product and try to put something on the market a little better than our competitors, but we except wheat. For the life of me I cannot understand why we should except this main product of our agriculturists. Nature has endowed us with advantages over every other wheat producing country, and we are able to produce the most highly sought after product in the world. Yet we allow our top grades to be adulterated with inferior grades, and this seems to me to be standing in our own light.
As the hon. member for Wood Mountain (Mr. Donnelly) has said, we allow the United States millers to come over here and skim off our high protein content wheat. The Canadian millers are allowed to do likewise. I do not want to take away any legitimate advantages from the milling companies of Canada, but the fact is that this practice is hurting
the standard of our grain in the old country which, after all, is one of our most important markets. They know these practices are occurring in this country and they know they are playing second fiddle to the millers of Canada and the United States. We cannot fool them. Our best grades are being skimmed off. The board of grain commissioners are allowing the terminal elevators to take tough grades of wheat to mix with the drier grades, and there is no doubt in my mind that the standard is being lowered. The old country millers know this, and this is hurting our market.
I want to say something to-night about how we suffer in western Canada because of a lack of industries. This is one of our greatest handicaps. We have not industries such as they have in the east, which provide the eastern farmer with a market for his farm products.


John Ritchie MacNicol: They have been killed by a free trade policy.


Harry Leader: At one time there were many flour mills scattered throughout western Canada. There were many small and large mills scattered throughout the three prairie provinces, but they are gradually being absorbed by the larger companies or closed down entirely. We are losing an industry which is native to that part of the country. The raw material is right at hand, and the cheapest power in the world is available as well as all kinds of labour, but what do we find? I should like to give one example of what happened in my own city of Portage la Prairie. The Lake of the Woods Milling Company opened a mill there forty-five years ago, with a capacity, I believe, of 1,000 barrels a day. This mill has been kept right up to date, but two years ago they decided to close it because their export sales had decreased. They found they could pay bigger dividends by closing up that mill and transferring the business to Ontario. Forty families in that city were thrown on their own resources. The ministerial association took up the matter and some families were placed on relief. I am willing to admit that a few employees were superannuated, but forty families had to be taken care of.
It seems to me that the government of Canada should not allow such practices to occur. Here was an industry which had been bonused or protected to the extent of 50 cents a barrel. They took the farmers' wheat, and ground it into flour. The flour was sent to Fort William, the farmer paying the freight. With that protection, it seems to me that an industry native to the district should be made to see that they owe something to the
Canada Grain Act

people of this country. They should not be allowed to continue to make large dividends and then, when times are slack, take it out of their employees. That is just what they did. I submit this government should say to the Lake of the Woods Milling Company, "You open that mill at Portage la Prairie or else we will expropriate it and sell or lease it to some cooperative company that will continue to operate with more regard for the people and less regard for dividends."


William Daum Euler: This change is made for the benefit of the inland millers, and I think is of value to the farmers and producers themselves. While the agriculture committee did not discuss this, while this amendment was proposed since then, we felt it would not do any possible harm. If we have any confidence at all in the board of grain commissioners, it would be perfectly safe to say " except by permission of the board." I am quite sure they would not abuse it; it is in the interests of the millers as well, and should be accepted.
Amendment (Mr.	Ross, Moose Jaw)
agreed to.
Section as amended agreed to.
Sections 40 to 45 inclusive agreed to.
On section 46-Binning of tough with straight grades, as a means of drying.


William Daum Euler: It is thought the meaning
would be clearer if the word "could" in line 25, on page 12, of the bill were struck out and "would" substituted therefor.


James Garfield Gardiner: I move accordingly,
Mr. Chairman.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 47 to 70 inclusive agreed to. Schedules 1 and 2 agreed to.
On schedule 3.
James Garfield Gardiner: J move:
That forms 7 and_ 8 be amended by striking out the word "and" as and where it appears under the headings "fixed price" and "price depending on government grade" respectively, and substituting therefor the word "or" in each case.


[Stage Direction]
Amendment agreed to.
Schedule as amended agreed to.
Schedule 4 agreed to.
Bill reported, read the third time and passed.
On motion of Mr. Lapointe (Quebec East), the house adjourned at 10.59 p.m.

Tuesday, May 16, 1939