MISCELLANEOUS PRIVATE BILLS

[Stage Direction]
Third report of the standing committee on miscellaneous private bills.-Mr. Fournier (Hull).

[Stage Direction]
Fourth and final report of special committee on the defence of Canada regulations.-Mr. Ilsley.
Mr. HANSON (York-Sunbury):: There has been no motion for concurrence in this report and possibly there will be none. Will the Prime Minister (Mr. Mackenzie King) say if the recommendation as to the consolidation of the regulations will be considered by the government? I think it would be most convenient to have this done as soon as possible.


Mr. MACKENZIE KING:: Yes, certainly.



QUESTIONS

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

Mr. ADAMSON:: 1.	What action is the government taking in connection with the registration of persons in reserved occupations?
2.	Has a committee been set up to consider this matter? Has any report of recommendations been given? If so, could it be tabled?


Mr. GARDINER:: This question, and questions by Mr. Adamson and Mr. Pinard

Questions
(See below), are difficult to answer. The answers will depend upon the regulations now being drafted. The regulations will be brought down just as soon as they are completed, and I ask that these questions be dropped.


Richard Burpee Hanson: Will they be brought down before the house prorogues?


James Garfield Gardiner: If not, they will be sent to hon. members.
Question dropped.


ISSUANCE OP BADGES TO MEN IN SPECIALIZED OCCUPATIONS
Mr. ADAMSON:: What action has the government taken with respect to the issue of badges or certificates to men who are prevented from enlisting because of their specialized occupations?
Question dropped.


HOME DEFENCE TRAINING
Mr. PINARD:: 1.	With regard to calling out men for training under the compulsory training plan for home defence, have provisions been made requiring employers to keep open the positions for these men during the period of their camp training?
2.	Has provision been made requiring employers of these men to pay them the difference between the non-permanent active militia rate of pay of $1.20 per day and their civilian rate of pay during the period of their camp training?
Question dropped.



MUNITIONS AND SUPPLY-VALUE OF CONTRACTS

['Canadian exports of potatoes from Canada to the United States during the calendar years 1938 and 1939.\n1938\t1939\nItem\tBush.\tValue Bush. Value\nPotatoes, seed,\ngovernment\t$\t$\ncertified... 735,185 592,253 851,125 767,041\nPotatoes,\nn.o.p\t 177,352\t91,941 238,105 148,389']
Mr. HOWE:: I should like to ask the
leader of the opposition, if he has considered dropping this question.


Richard Burpee Hanson: Dropped.
Question dropped.



Mr. ROY:: 1.	Is it the intention to appoint a number of temporary clerks at Ottawa to carry out the national registration?
2.	If so, who will make the appointments?
3.	Will a knowledge of both official languages be required of candidates for these positions?
4.	How many such temporary clerks will be appointed?
5.	What remuneration will these employees receive according to their rank?
6.	Has the head of this personnel been already appointed? If so, is he familiar with both official languages of the country?


James Garfield Gardiner: This is a most difficult
question to answer in its present terms. As to the first question, I may say that temporary clerks will be appointed, but most of them will be appointed in the different branches, such as the statistics branch and the branch having to do with the conduct, of elections. They will not be appointed directly under the set-up of the department.
2.	The appointments will be made after consultation with the civil service commission.
3.	In some cases, yes; in other cases a knowledge of both languages will not be necessary.
4.	This will depend upon the work to be done from time to time.
5.	The remuneration will be in accord with the general remuneration paid for similar work throughout the service.
6.	As I said at the beginning, temporary employees in most cases will be brought into branches already established in this or in other departments. There will be no one head for this purpose.


LEAVE TO ENLISTED MEN FOR FARM WORK
Mr. AYLESWORTH:: 1.	What provisions, if any, have been made under which those who have enlisted in the military forces of Canada may be permitted leave for the purpose of assisting farmers in harvesting of the crops?
2.	Will the government give consideration to this matter?


Mr. RALSTON:: 1.	Personnel of certain Canadian active service force military emits may be granted harvest leave for a period not to exceed eight weeks. Such leave will be without pay or allowances of any kind.
2.	Answered by No. 1.
Questions


VIMY RIDGE MONUMENT
Mr. CHURCH:: Has the government any information to give the house regarding the effect of the war on the Vimy Ridge monument? Has it been damaged or destroyed by Germany as yet, or has any report been received and, if so, will it be tabled?


Mr. RALSTON:: No definite information has been received. On May 25th, Major D. C. U. Simson, supervisor of Canadian memorials in France and Belgium, cabled, "Report on Vimy forwarded by bag June 1st. Trying to obtain aerial photograph Vimy to confirm report of destruction".
In the report which was dated May 31st, Major Simson said, "However, since that time the ridge has been unfortunately the scene of very heavy fighting and I can but think that the monument must have received considerable damage. If it is possible I shall endeavour to obtain an aerial photograph to see the result".
On June 3rd a letter was received from the chairman of the Imperial War Graves Commission speaking of "the damage done to the Vimy memorial, if the report which has been published is confirmed".
No confirmation has been received. Quite recently it was learned that Major Simson on arrival in London had gone through Royal Air Force photographs which were available but 'these did not disclose the information desired. R.A.F. officers said that they would endeavour to obtain a photograph when opportunity offered.
Steps were taken in the summer of 1939 to protect all the lower sculpture and the bases of the pylons by sand-bag barricades.


*LEAGUE OP NATIONS
Mr. BLACK (Yukon):: 1.	Is Canada a member of the League of Nations?
2.	If so, when did Canada become a member?
3.	What has it cost Canada to be a member during its membership of such league?
4.	What has been accomplished for Canada by the League of Nations?
5.	Has the government decided whether Canada will continue membership in the League of Nations?


Richard Burpee Hanson: I think
the Prime Minister could answer this offhand.


William Lyon Mackenzie King: I am able to answer one or two of the questions offhand. The answer to the first question is, yes. The answer to the second question is that Canada became a member the first year of the existence 
of the league. As to question 3, I cannot give the information offhand, but I shall try to obtain it.


Richard Burpee Hanson: Much
money.


William Lyon Mackenzie King: A certain
amount, yes. As to question 4, this is a matter of opinion on which views might vary. As to question 5, the government has not decided to discontinue.


Thomas Langton Church: Who were the delegates
last year to the league, and have they sent in any report?


William Lyon Mackenzie King: A report, I
believe, has been tabled, but I shall make sure.


Thomas Langton Church: Why not apply for a winding-up order so far as the league is concerned.


POTATO EXPORTS
Mr. HILL:: How many bushels of Canadian (a) seed potatoes, (b) other potatoes were exported to the United States during the years 1938 and 1939 respectively?


Mr. MACKINNON (Edmonton West):: Canadian exports of potatoes from Canada to the United States during the calendar years 1938 and 1939.
1938	1939
Item	Bush.	Value Bush. Value
Potatoes, seed,
government	$	$
certified... 735,185 592,253 851,125 767,041
Potatoes,
n.o.p	 177,352	91,941 238,105 148,389



LAKEFIELD, ONT., MAIL CONTRACT

Mr. McGREGOR:: 1.	Was the mail contract for R.R. No. 1, Lakefield, Ontario, renewed this year? If so, by whom?
2.	Were tenders called?
3.	Who received the contract, and for what amount ?
4.	When did the previous contract expire?


Mr. MULOCK:: 1.	Yes, on authority of Postmaster General as provided by section 77 of Post Office Act.
2.	No.
3.	Harry A. Shearer, $1,541.06 per annum.
4.	30th September, 1936. The present contract with Harry A. Shearer was obtained by regular transfer from Roland Windover in December, 1933, and was renewed for a further term in 1936 and 1940.

Questions as Orders jor Returns



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. JACKMAN:: 1.	How many foster children under the age of twenty-one are there in Canada?
2.	Is the $400 per child income tax exemption allowed to the foster parents of these children?
3.	How many of these children are related by blood or marriage to the foster parents?
4.	How many adopted children are there subject to income tax exemption in Canada?
5.	How many child refugees have been admitted into Canada since the beginning of the war, up to the most recent date for which figures are available?
Return tabled.


OLD AGE PENSIONS-AGREEMENT BETWEEN DOMINION AND NEW BRUNSWICK
Mr. HATFIELD:: 1.	Will the minister of the department concerned submit a copy of the agreement entered into between the dominion government and the government of the province of New Brunswick or the old age pensions board of that province, as at January 17, 1936?
2.	If there have been any amendments to that agreement, subsequently made, will the minister also submit copies of all such amendments to that agreement?



NORTHWEST REBELLION-PENSIONS FOR VETERANS

Thomas Langton Church: What action has been taken regarding applications during 1938. 1939 and 1940 for pensions for veterans of .the Northwest rebellion, 1885?



BUSINESS OF THE HOUSE


William Lyon Mackenzie King: That on Saturday, the 3rd of August, 1940, and every Saturday thereafter until the end of the present session the house shall meet at eleven o'clock a.m. and the order of business and procedure shall be the same as on Wednesdays.


[Stage Direction]
Motion agreed to.


James Layton Ralston: Mr. Speaker, last night the hon. member for Yale (Mr. Stirling) asked what arrangements had been made to complete the Book of Remembrance.
Prior to the death of Mr. James Purves, the artist who had been engaged to complete the Book of Remembrance, the Book of Remembrance committee reached the conclusion that, to ensure its completion, certain
reorganization of the work was necessary. This involved the employment of skilled assistance to make and lay out designs, assist in the colouring and in various repetitive work in connection with the whole scheme. The cervices of Mr. Alan Beddoe were commissioned to assist the artist.
Upon the death of Mr. Purves on June 18, 1940, Mr. Beddoe was requested by the Book of Remembrance committee to continue this work, and the employment of two assistants has been authorized. By this means the committee hope that the pages of the book can be almost ready for binding by the end of the current fiscal year. The cost of salaries and materials can be provided within the limits of the amount being requested.



CANADA'S WAR EFFORT


[Stage Direction]
On the orders of the day:
Richard Burpee Hanson: Mr. Speaker, may I ask the Minister of Finance (Mr. Ilsley) if he will be good enough to bring down the figures I asked for on a previous occasion and to which I referred again last evening?


Mr. ILSLEY:: Yes.



MOBILIZATION OF RESOURCES


[Stage Direction]
On the orders of the day:
Richard Burpee Hanson: The regulations under the mobilization act must be in such form by this time that they could be laid on the table before we either prorogue or adjourn. I feel insistent about this because we should know something about the regulations before we separate.


James Garfield Gardiner: Mr. Speaker, the regulations are not yet in form to be tabled. As a matter of fact I have not yet had the opportunity to review them; they are not yet in form to be reviewed, but I gave the substance of them in the statement I made to the house the other day.



RULES OF THE HOUSE


Mr. ALAN CHAMBERS (Nanaimo):: Mr. Speaker, I rise to a question of privilege. On Thursday, July 25,1 endeavoured to attend
2248	COMMONS
Rules of the House-Committees
a meeting of the select committee appointed by the house to consider the unemployment insurance bill, and I was denied admittance on the ground that the committee was sitting in camera. Being a new member and not fully aware of a member's rights in the matter I naturally withdrew without comment, but in view of the fact that a distinct principle seems to be involved I thought it well to ask your honour whether the committee's ruling was correct or not.
A reference to May, chapter 17, would seem to indicate that the ruling then given to exclude a member from a select committee of the house was not correct. I quote May, page 476:
Members of the House of Commons have claimed the right of being present, as well during the deliberations of a committee as while the witnesses are examined; and although, if requested to retire, they would rarely make any objection, on the grounds of established usage and of courtesy to the committee, they ought immediately to retire when the committee are about to deliberate; yet it appears that the committee, in case of their refusal, have no power to order them to withdraw.
The quotation is from a ruling of the Speaker on February 23, 1849, in the course of which the Speaker said that although it had been the practice for members of the house to withdraw under such circumstances the committee had no power to exclude them.


Mr. SPEAKER:: Order. There can be
no question of privilege involved. The hon. member has made his statement and I presume is asking if members of the house may be allowed to attend the sittings of a house committee of which they are not members. If that is so I am prepared to give a ruling now.


Alan Chambers: Not exactly, Mr. Speaker, but whether they have the right to attend meetings of select committees when they are deliberating. I do not mean meetings of secret committees.


Georges Parent: There is no question of
privilege involved because any question of privilege must necessarily be raised immediately the breach of privilege takes place in order that a remedy may be applied forthwith. But the hon. member has raised a question which may be of interest and I feel that I should probably say something from the chair in regard to the attendance of members at committees, select or otherwise.
The hon. member began to read a statement from May at page 476:
Members of the House of Commons have claimed the right of being present, as well during the deliberations of a committee as while the witnesses are examined, and although, if requested to retire, they would rarely make
tMr. Chambers.]
any objection, on the grounds of established usage and of courtesy to the committee, they ought immediately to retire when the committee are about to deliberate; yet it appears that the committee, in case of their refusal, have no power to order them to withdraw.
Bourinot also deals with this question at pages 468 and 469, and this is also contained in Beauchesne's Parliamentary Rules and Forms:
Members of the Commons may be present during the proceedings of their committees, and a committee has no power of itself to exclude any member at any stage of its proceedings, but may obtain special power from the house for that purpose. Such applications have not been favourably entertained by the house. Consequently the house will at times appoint secret committees which will conduct their proceedings with closed doors. Such committees are often chosen by ballot in the English parliament. It has been decided that "a member who is not a member of the committee has no right whatever to attend for the purpose of addressing the committee, or of putting questions to witnesses, or interfering in any way with the proceedings."
The practice in our house has been that hon. members of the house may attend committees of which they are not members, but they are not permitted to take any part in the proceedings, either to examine witnesses, to consult, or to make remarks with regard to the deliberations of the committee. I have seen once or twice in the course of my own experience cases where an hon. member who is not a member of the committee has asked permission to question a witness or submit some statement of fact to the committee, but such permission has been granted only with the unanimous consent of the committee. The practice has been, and has been accepted by all hon. members for years, that members of the committee will be allowed to sit in camera on their deliberations and that no member of the house will have the right to attend. That has been the practice and the usage of this house; it has not been and is not contained in our rules. Therefore those who have been attending on committees and are not members of those committees are asked to retire when the deliberations of the committees are being entered upon and the report is being prepared. That has been the practice. Whatever privileges a committee may desire other than are contained in the parliamentary rules of procedure, those privileges must be obtained from the house itself.



ROYAL CANADIAN MOUNTED POLICE


[Stage Direction]
Hon. P. J. A. CARDIN (Acting Minister of Justice) moved the second reading of and

Royal Canadian Mounted Police
concurrence in amendments made by the senate to Bill No. 112, to amend the Royal Canadian Mounted Police Act.
He said: We have no objection to the amendments made by the senate to this bill. Hon. members will remember that the object of the measure was to permit the Minister of Justice to make agreements with municipalities for the taking over of the policing of those municipalities, and also to bring into the mounted police force the municipal police. The senate has amended the bill by stating that, before entering into an agreement with a municipality for the policing of the municipality by the mounted police, the approval of the provincial government shall be obtained. We have no objection to that, because that was the practice followed even before this bill was adopted.
As regards the taking of officers and men of the municipal police into the mounted police force, the senate desired that the taking in of these municipal police should not confer upon them the privilege of a pension. They can be taken into the mounted police force but they will be deprived of any pension such as ordinary mounted policemen and officers are entitled to receive. The department and the commissioner of the mounted police have no objection to that amendment, because it is well understood that there is no intention on the part of the minister and the mounted police to extend the policy of making arrangements with the municipalities for the policing of those municipalities. In two cases the mounted police are taking charge of the policing of the municipalities, namely at Flin Flon, in Manitoba, and in Melville, Saskatchewan. There is no intention of developing that policy. Under the circumstances, therefore, we have no objection to accepting the amendments made by the senate, because we do not see any necessity in the near future of taking over the policing of any municipality.
Richard Burpee Hanson: As I read the senate amendment, it is limited to the two features to which the minister has alluded. In respect to the second one, it would appear to be very useful, because unless something like this were provided for in the bill there is a possibility that officers of the municipal police forces might come under the pension provisions of the Royal Canadian Mounted Police and be a charge upon the fund. That was never intended, and I do not think it would be good policy.
Mr. JEAN-FRANQOIS POULIOT (Temi-scouata): Mr. Speaker, the mounted police
is doing excellent work in Canada. But if we look at section 3 of the Royal Canadian Mounted Police Act, chapter 160 of the revised statutes, 1927, we shall see that the Royal Canadian Mounted Police is a force that has been organized for Canada and that it is employed in various parts of Canada in conformity with orders in council passed in due course. To my great surprise I have learned that a detachment of the mounted police has been sent to England. Of course in peacetime detachments have been sent to England to participate in the coronation festivities, and also to Madison Square gardens, New York. But now we are at war, and home defence must in the first place be in charge of the mounted police, so that I do not see why a certain number of members of that force have been sent to England.
Moreover I cannot understand why, upon the application forms to be filled in by those who desire to enter this force, there has been added a last and typewritten paragraph to the effect that they are asked to consent to serve overseas. Every person who is desirous of getting into the force has to give his consent to go overseas. I find that quite strange, because it is not in conformity with the constitution of the force. It is incredible that the mounted police should do the policing of England, and as for our regiments there, they are doing their own policing. For all these reasons I would ask the minister seriously to consider at the earliest available opportunity the two following requests: in the first place, to bring back all the men of the mounted police who have been sent to England, because they will be more useful in Canada than overseas; in the second place, to see to it that the question regarding consent of applicants to serve overseas shall be struck from the application forms.


Mr. CARDIN:: May I say in answer to my hon. friend that I am quite sure that, if a certain number of mounted police officers and men are being sent to England, it is not at all to the detriment of the safety of Canada, and that these mounted police officers and men in England are fulfilling duties which are exclusively relevant to Canada. In any event I shall take upon myself the responsibility and duty of bringing the observations of my hon. friend to the attention of the Minister of Justice (Mr. Lapointe) as soon as he comes back to Ottawa.


Thomas Langton Church: Referring to the senate amendment to Bill No. 112, I am glad to see that the government has at last given direct legislative sanction to using the municipal and provincial police systems
Compensation Act

for auxiliary work. That proposal was made when the estimates of the department were up last year. I think it is a step which will bring about better law enforcement throughout the country.
Motion agreed to; amendments read the second time and concurred in.



COMPENSATION (DEFENCE) ACT PROVISION FOR PAYMENT OF COMPENSATION FOR PROPERTY TAKEN FOR WAR PURPOSES

[Stage Direction]
Hon. P. J. A. CARDIN (Acting Minister of Justice) moved that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to provide for the determination of compensation and the payment thereof for the requisition of vessels or aircraft or for the requirement of space or accommodation in vessels, requisitioned, acquired or required by or on behalf of his majesty under the War Measures Act, or any other act of the parliament of Canada.
He said: The purpose of the proposed bill is to establish certain rules in order to determine the indemnity to be paid for the acquiring or requisitioning of any vessel or aircraft by the crown for national defence purposes. At present there are no stated rules for the determination of what indemnity should be paid to the proprietor of a vessel taken over by the crown for national purposes. The main principle of the bill is to enact that the excess value of a vessel, attributable to war conditions, is not to be taken into consideration when the indemnity is being paid the proprietor. The second point is that no lump sum could be fixed for the acquisition of a vessel because we do not know exactly for what period the requisition will last. The bill therefore provides that compensation be paid monthly for the vessel that is to be requisitioned. These are the main points covered by the bill.
This bill will be almost an exact copy of a similar measure passed in the United Kingdom in 1939. The British act is much more extensive because it covers lands that are acquired for defence purposes. It relates also to vehicles of all sorts, whereas our bill is limited to the requisitioning of vessels and aircraft. In the event of any difficulty, according to the War Measures Act, the indemnity or price is to be fixed or determined by the Exchequer Court of Canada, but it was thought advisable to have these rules established by legislation instead of leaving them to the authority of order in council. These are the principal points of the bill which is to be introduced after the resolution is adopted.
Richard Burpee Hanson: I appreciate the principles which

the acting Minister of Justice (Mr. Cardin) is laying down for the committee, but I am wondering whether his first statement, that there are no rules providing for compensation for ships taken by the crown from the subject, is quite correct. I am referring to the requisitioning of ships not for a limited period of time but where the title is being taken, as I believe it is in certain instances.
I should have thought that as between the crown and the subject the principle was well established by the common law and that in the event of disagreement the matter might well be left to adjudication by the exchequer court in a case involving the crown in the right of Canada. The principle that the value of the ship taken is its market value at the time of appropriation is well established by numerous cases. What is the reason for the departure from that common law principle, which has obtained for many years, in peacetime as well as in war-only occasionally, of course, in war, though in peace-time it is certainly well established. Perhaps the intention is to override the principles of the common law and to ask the subject to take a lower price than he would have obtained if the matter had been left to the ordinary principles of the common law or to adjudication by the exchequer court, which of course is the crown court.
There may be very good reasons for change. It may be that cases have arisen which would suggest to the law officers of the crown, or to the members of the government itself-the Department of Justice, which is charged with the responsibility of looking after this sort of thing-that there should be a change in the law and the principles of compensation applicable thereto. But I think they ought to be very good reasons. The mere fact that we are at war is not in itself a sound reason why we should change the principle of the law. What is the actuating motive for changing a well-established principle of law which has been recognized for many years by judicial decisions?
I myself, in former years, have had a good deal of experience in matters of this sort, not in connection with ships but with land for public works and so forth, and I have always found that the exchequer court pretty largely defended the position of the crown and the treasury. Unless there is a really good reason for departure from a well-established legal principle, which reason I think ought to be stated either at this stage or later, I really see no necessity for that part of the bill which deals with the expropriation, shall I say, of ships where the title actually passes.
With respect to the payment for the acquisition of vessels or aircraft or for the acquire-

Compensation Act
ment of space or accommodation in vessels requisitioned, acquired or required, the same principle in a lesser degree is applicable, but it may be desirable, much more desirable perhaps, to establish a scale based upon marine commercial usage for the use of these ships. Regard, however, ought to be had to any damage which through the necessities of war may accrue to the owner of a ship as a result of the requisitioning of the ship by the crown on an established route whereby a man's business is practically taken out of his own hands. Some reasonable arrangement should be made to protect the owner's position. This is quite serious legislation. Perhaps the minister, either at this stage or later, will deal with the two points to which I have referred.


Pierre-Joseph-Arthur Cardin: The reason why the legislation was prepared and is proposed to parliament is that, according to the advice of the officers of the departments concerned, the Department of National Defence and the Department of Transport, there is no such thing at present in connection with vessels and aircraft as ordinary market value. Values of vessels and aircraft are at present upset by war conditions, in comparison with values in ordinary times. In fact the government is practically the only purchaser of vessels and aircraft just now.


Richard Burpee Hanson: There is a principle that the value to be attached is not the value to the taker but the value to the owner at the time of the taking. That does not need to cause the government any embarrassment.


Pierre-Joseph-Arthur Cardin: When the bill is brought down my hon. friend will see that every precaution is being taken not to cause any unfair treatment to owners.


Richard Burpee Hanson: With that declaration I am content.


Thomas Langton Church: Would the minister change one word in the resolution? The resolution uses the word "vessels"; in maritime and admiralty law the word used is "ships," meaning any craft not propelled by oars. Would the minister have a statement ready about the number of vessels-


Pierre-Joseph-Arthur Cardin: All kinds of vessels or
boats are affected by this legislation.
Motion agreed to and the house went into committee, Mr. Vien in the chair.


Thomas Langton Church: I object to the use of the word "vessels"; it is not a legal word. Moreover, there should be some explanation of the number of vessels on the great lakes that could have been used in this war but were 95826-142J
sold as scrap to the United States. Some went to Germany, some to Russia, some to Japan. A number of ships of the Canada Steamship Lines that were in Toronto harbour and other great lakes harbours and along the canal systems of this country since the war started were scrapped and the iron-pig and many other kinds of iron and base metals- shipped across the border, finally reaching our enemies. Ships of our own merchant marine that were built in Toronto and elsewhere at a cost of half or three-quarters of a million dollars were sold, some without tender, for very small amounts. These ships should have been used.
It was announced in the press on October 14 last that the Minister of Trade and Commerce or some other minister had agents, one a deputy minister, down in Washington seeing if they could get charter parties for certain vessels along the lakes, some of them of the whaleback type used on the lakes and the Atlantic coast, for use in the war. It is a strange situation, in view of the position Canada took at the last imperial conference in 1937: our empire with two thousand less ships to carry food than in 1914, and Canada sat back and did not do anything. When New Zealand and Australia wanted to do something Canada sat back and did not cooperate with Britain or the rest of the empire, with the result that we are without the necessary ships to operate during the war in the carrying of food to Britain. I raised this point two years ago, in requesting that we have a storage reservoir in England for food. Nothing was done.
Before the resolution passes we should have some survey presented to the committee showing what these ships are. There are several blank pages in the shipping list of Canadian ships of British registry. What has become of these? Many have been scrapped and sold and others are out of commission. Surely we are a nautical people, we have a new minister, a new department; the merchant marine has always been the backbone of the British navy to keep open our trade routes.
It is time that the province of Ontario had proper representation in the cabinet. We have three very good men, but there are others who might be there looking after Ontario and the shipping along the St. Lawrence and the great lakes and the Welland canal, which has a capacity larger than the Suez canal. We are not getting the returns from that canal that we should. The whole matter of shipping is wrapped up in this resolution, the whole principle and policy are involved. We should have some explanation from the government in this darkest hour of the war.
Compensation Act


Pierre-Joseph-Arthur Cardin: Regarding the hon. member's dissatisfaction about the word "vessel", he will find in the bill that "vessel" means any ship or boat or any other description of vessel used or designed to be used in navigation. The term is sufficiently wide to cover all kinds of vessels and all kinds of boats.
In regard to the requisitioning of vessels by the Department of National Defence, I can only say that so far as I know they have requisitioned all the vessels they thought it desirable to requisition for the purposes of the war.
Regarding the other question, I am not so sure that it is within the purview of the Minister of Justice to answer it. At all events I shall try to supply the information asked for when we deal with the clauses of the bill.


Mr. GREEN:: Apparently quite a number of boats were requisitioned shortly after the war broke out, and it is my understanding that there has been some provision under which the government has been compensating the owners of those boats. Could the minister tell us how that has been done? Also, unless he thinks the information should not be given, could he tell us approximately how many boats have been taken over, and the amount that has been paid to date to private owners for the use of those boats?


Pierre-Joseph-Arthur Cardin: I will undertake to give that information when we are dealing with the clauses of the bill. At the moment I have not the information before me.


Howard Charles Green: Under what provision has the compensation been paid for the last ten months?


Pierre-Joseph-Arthur Cardin: It is according to agreements between the officers of the crown and the proprietors of the vessels.


Howard Charles Green: Has there been a separate agreement with each owner?


Pierre-Joseph-Arthur Cardin: Yes.


Howard Charles Green: There is no order in council or any governmental authority?


Pierre-Joseph-Arthur Cardin: These agreements were
covered by an order in council, but there is an agreement in each case.
Resolution reported, read the second time and concurred in. Mr. Cardin thereupon moved for leave to introduce Bill No. 123, respecting the payment of compensation for the taking of certain property for war purposes.
Motion agreed to and bill read the first time.



CANADIAN WHEAT BOARD ACT


[Stage Direction]
Hon. J. A. MacKINNON (Minister of Trade and Commerce) moved the second reading of Bill No. 118, to amend the Canadian Wheat Board Act, 1935.
He said: Mr. Speaker, I do not intend at this time to make further remarks on this bill or on the amendments; I covered that pretty fully in speaking on the resolution. I am satisfied that I shall have ample opportunity to speak further when the bill is in committee. But I think it is proper at this time to refer to several amendments that will be introduced when the bill is in committee.
To begin with I propose submitting to the committee an amendment providing for the inclusion of the port of Vancouver as a grain shipping point in connection with the initial wheat payment.
An amendment will also be introduced to clear up an indefiniteness in connection with the processing tax. At the present time the wording seems to indicate, or at least permits the interpretation, that it would be the intention to pass the tax on to the bakers in full. This was not and is not the case. That point will be cleared up. There are three other amendments of a more or less minor nature in connection with the wording, and they will be considered when the bill is before the committee.
I believe it only fair to myself and to the government to say at this time that in addition to these amendments the matter of financing the portions of the grain which necessarily will be retained in the farmers' own granaries has been receiving our serious consideration. We fully recognize the seriousness of this matter, as applied to the economic life of all Canada, if some means is not arrived at of liquidating at least to a certain extent these vast amounts of grain which will be left in storage in farmers' granaries and on which, at this time, in the great majority of instances he is unable to realize. Unless something is done to make available to the farmer more money than, owing to elevator capacity conditions, he can obtain from his first deliveries, there will be widespread suffering, and there would be widespread necessity for relief.
In our opinion a farmer must be able to get from the grain in storage on his farm sufficient to take care of the taxes he wishes to pay. I know he wants to pay those taxes to maintain the system of municipal government obtaining throughout western Canada.

Canadian Wheat Board
Should this not be made possible there would be widespread distress not only in the towns and villages but throughout the farming districts. In this way the farmers would be enabled to make payments on certain liabilities recognized by them and which they are anxious to liquidate as soon as possible. This will make possible the carrying on of trade and commerce, in the usual way, throughout the western country.
Numerous suggestions have been made as to the best method of providing this assistance to the farmers who have grain in enforced storage on their own farms. We have received many representations, and many conferences have been held. Others have been arranged. Our anxiety is to arrive at some fair method of releasing at least in part the purchasing value of the wheat which otherwise would remain a frozen asset on the farms.
Richard Burpee Hanson: Mr. Speaker, the brief statement the Minister of Trade and Commerce (Mr. MacKinnon) has just given to the house and country indicates better than anything I can say the absolute lack of policy on the part of this government, over a long period of time, in dealing with what I consider to be one of the major domestic problems of Canada. The fact that there will be a great carry-over, and that there will be a heavy crop-perhaps not as heavy as some people have anticipated-has been known to the ministry for many weeks. Now, in the last days of this session, we have had brought down and laid on the table of the house a bill which would seem to attempt to deal with an emergency condition. It is a measure which, we are now told by the minister, at least by implication and inference, was ill-digested, ill-considered and incomplete. I do not congratulate the government on its method, up to date, of handling this problem. Later I shall have something to say respecting the present-day conditions of this problem.
I believe I may be pardoned if I take a few minutes of the time of the house, even at this late hour of the session, to review briefly, as I see it, the position of wheat in Canada. Ever since I was a boy I have read about the romance of wheat in western Canada-and it has been a real romance. No other country in the world, in such a comparatively brief and limited period of time, has made such strides in the production of a great stable and basic commodity. The story of wheat in the three western provinces of Canada is unequalled in the history of production. It is a drama which has been unfolded scene by scene, act by act, over a substantial period of time. Watching that drama we have seen billions of dollars in new
wealth created in the prairie provinces, to the benefit not only of the producers themselves, and their immediate communities, but to the great benefit, I am bound to say, of eastern Canada as well.
This is a huge subject, and I do not intend to take up the time of the house to traverse the whole position in respect to wheat. I came to the house nearly twenty years ago, and one of the first debates to which I listened was on the subject of wheat. During all the intervening years, save and except a few when I was living in retirement, I heard about wheat. What a transition there has been in that story!
Let your minds go back to the session of 1922. In those days I sat in the seat now occupied by the hon. member for Prince Edward-Lennox (Mr. Tustin).


Mr. POTTIER:: Too far back.


Richard Burpee Hanson: While
sitting there I heard the story of wheat, with relation to freight rates. At that time the present minister of Mines and Resources (Mr. Crerar) was leader of the progressive party and sat about where the leader of the Cooperative Commonwealth Federation is now placed.


Mr. CRERAR:: Not so far down.
Mr.	HANSON	(York-Sunbury):	But	in
the front row, as the leader of that party. The Prime Minister (Mr. Mackenzie King) sat where he sits to-day. He was in office, but he was without power. For four long years he was kept in office by playing one party against the other.


William Lyon Mackenzie King: That is not
true. He was kept in office by virtue of his majority in the House of Commons.
Mr.	HANSON	(York-Sunbury):	No,	he
was not kept in office by virtue of	his
majority in the House of Commons. He was kept in office by virtue of his astute political ability to play one party against the other.


William Lyon Mackenzie King: Quite wrong.
Mr.	HANSON	(York-Sunbury):	That	is
the verdict of history. The right hon. gentleman will have his opportunity to speak on the point, and I mention it only as a passing phase of the situation. I well remember that on the question of freight rates the government of that day had no policy. They referred the whole matter to a committee. If that committee had been left untrammelled perhaps a different position would have been taken. But I shall not traverse that ground again.
I remember the debates which took place in the house in the days when a gentleman
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who was then the member for Melville was Minister of Agriculture. I refer to Mr. Motherwell, a gentleman for whom I have the highest regard. I hope he is well. We miss him in this house; I do at least, and I assume the government does. He had a large practical knowledge of agriculture, and he was also an astute politician. He had made a study of agricultural conditions in Canada and had a personal knowledge of this industry which was not equalled by many. I can remember the discussions which took place with respect to elevators, the storage of grain and the charges placed upon the farmers by reason of the operations of the middlemen- and I am not using that term in any offensive way.
I want to view this matter as dispassionately as I possibly can. As a Canadian, as one who has looked upon this matter in days gone by, as one who has tried to visualize conditions as they exist to-day, I want to say to the government and to the country that while this legislation may be viewed as being in favour of a particular section or a particular class, we should decide now that not one kernel of this wheat should be allowed to be destroyed. Wheat is the staff of life. We are at war, and what follows war? Famine follows war, and pestilence follows famine. If these things are allowed to exist, we will have more world hate. We in Canada with this great store of golden grain will be in a position, provided conditions are made right, to help save suffering humanity. That may be Canada's great contribution. This should be one of the ultimate objectives of this country, and it is one of the reasons why the credit of the country should be placed behind this position.
As to the manner and method of carrying this out, these are matters which will be subject to differences of opinion. But we should strive to achieve the ultimate end. Eastern Canada will be ready to bear its share of the load. With few exceptions, it has borne its share in the past. There can be no great prosperity in eastern Canada unless we have a prosperous west, a prosperous Pacific coast and prosperous maritime provinces. We must look at the picture in as broad a manner as possible. I 'have always viewed sympathetically any efforts which have been made to remedy conditions in the prairie provinces, especially those brought about by drought. I have done this on the theory that a portion of Canada which in a normal year can produce a billion dollars' worth of new wealth is worth trying to save.
I have never altered my outlook in that regard. That was the view taken by my leader between 1930 and 1935, and I heard him give utterance to it on more than one

occasion. It did him the greatest credit, but I am afraid that his labours were not requited by the people for whom he strove the hardest.
I can remember hearing the story of the marketing of our wheat, the rise of the cooperatives and the pools, the history of the Winnipeg grain exchange and the details of the antagonisms which have developed from time to time between the established channels of trade, as represented by the grain dealers in Winnipeg, and the cooperative marketing organizations. I recall the efforts that were made before, at and after 1930 to establish new channels of trade. There had been overproduction in Europe, in Australia and in the Argentine, and the question of surplus grains came to the forefront. I recollect the honest attempts which were made at the world wheat conference to limit production, and I recall how they failed. May I say one word, not as one who holds himself capable of giving advice to the western producer, for I do not consider myself to be an expert, but as an intelligent observer-unless conditions change, unless outlets are found for our surplus of this great staple commodity, the people of western Canada will have to consider altering their whole economy. In a word, we have passed from the drama of wealth and prosperity and happiness in the grain trade to the tragedy of to-day.
Unpeg the price of wheat and what will happen? In 1933 the price of wheat fell to what I was told was the lowest price in four hundred years. Conditions to-day in connection with marketing are not nearly as good as they were in 1933. Take away from the wheat market the support of the treasury of Canada and it is my considered opinion, based upon the advice of the best experts I have been able to consult, that the price of wheat will fall to nothing. There is practically no market to-day for wheat save and except for domestic consumption and the British cereals board. This is not an extreme statement; it may not be quite true to say that there is no market for a certain commodity. I think economically there is always a market, but that market may become so narrow, so infinitesimal, that it can really be said that there is no market. I am afraid that that would be the position if the credit of the country were not behind this staple.
What about the position of our coarse grains? I am told that there is no market whatever for our coarse grains, and that in some cases even the cost of harvesting will not be realized. That also may be an extreme statement to make, I do not know. I do not profess to be an expert; this is simply what

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I have been told. I mention these things-
I hope I am not exaggerating-simply to emphasize the point that the wheat business in Canada has reached a tragic stage. It has been a progressive retrogression, has it not?
I remember that in the years between 1930 and 1935 the wheat pools of the three prairie provinces, which had been financed in the major operations they undertook for the selling of our grain, reached the stage-by some process into which I am not going now but with respect to which I do think I have some knowledge and opinion-where they endeavoured to travel outside the established channels of trade both in Canada and, particularly, in Europe. Whether they decided rightly or wrongly, I do not condemn their judgment. Thej' w'ere endeavouring I think to eliminate the profits of those who stood between the producer and the consumer; and if that were their objective *who shall say that it was unworthy?
But time went on and credit failed them. The credit of the prairie provinces was no longer acceptable to those who had been financing their wheat marketing operations, and so the time came when the west had to come to eastern Canada and ask that new conditions be set up. I remember when Mr. John I. McFarland was asked by the wheat pools to come into the picture and become selling agent for our surplus wheat. I venture to submit that throughout the whole of western Canada no more loyal or abler man could have been found for the position, and for three years or thereabouts Mr. McFarland served Canada. He served the wheat producers, he served the pools, he served the banks which had their money invested in this great stable commodity, with as great a degree of ability as any single individual could have served those interests in Canada, and without a single dollar of compensation.
Rightly or wrongly, on a declining market the speculator receded into the distance, and the Winnipeg grain exchange practically ceased to function. The futures market which in normal times had been found by Sir Josiah Stamp as a result of his investigations to serve a useful purpose in our grain trade business failed; the time arrived when the selling agency, with the support of the federal treasury, found itself the potential owner of every bushel of wheat in Canada, and the principle was adopted which will be found in the operation of the wheat board act with respect to the surplus that is now in Canada,
together with the incoming crop if we give effect to this legislation. The difference is in method only; the actualities are the same.
I well remember how at first in western Canada the advice was given not to sell our wheat at a fire sale, but later there were certain elements in this country who sought to reverse that policy and demanded that our wheat should be sold and the surplus cleared off, the country taking the loss. That policy prevailed in the end. Time has shown that the policy of selling our wheat at a fire sale was a mistake. Canada did not lose as much as I had anticipated it would lose after 1935, but if the policy of John I. McFarland had been continued this country and the producers of this country would have made millions more than they did.
Now I come down to the summer of 1935. In the session of 1935 this parliament embarked on a new departure and enacted the Canadian Wheat Board Act. While hon. gentlemen opposite were hostile to the principle of the act, they did not go so far as to vote against the principle but they asked that the legislation be referred to a special committee of this house, for the purpose of procuring information. That was done, and when the report of the committee came back into the house the bill was put through with the consent I think of hon. gentlemen opposite but with the reservation that the act should be effective for a limited period of time-at the moment I do not recall just how long, and I have not looked it up. That was done in the spring of 1935. Previous to that, in the session of 1934, there had been an investigation before the banking and commerce committee. Charges or statements in the nature of charges that the country was speculating in wheat had been made by certain members of this house, notably I think by the member for Quebec South (Mr. Power) who is now the Minister of National Defence for Air. The banking and commerce committee held an investigation and I well remember Mr. McFarland appearing before the committee. Statements were made, and to the credit of certain western Liberals be it said that they supported the position taken by Mr. McFarland, and the charges were proved to be nothing but a mare's nest.
Then came prorogation. August came, and in that same year, after the Canadian Wheat Board Act had been passed, the government of the day set up a wheat board, and Mr. McFarland, much against his will I believe, was induced to become chairman of the board. Two other gentlemen from western Canada well versed in the marketing of wheat, were
Canadian Wheat Board

appointed as his associates and they took over the functions of the wheat marketing board as provided in the act.
Then came the election. Then came the defeat of the government. Then came the establishment of a new government led by my right hon. friend (Mr. Mackenzie King) and including the Minister of Mines and Resources (Mr. Crerar). On the 3rd day of December, 1935, on the advice of the then minister of trade and commerce, Mr. Euler, member at that time for Waterloo North, an order in council was passed to which I desire to direct the attention of the house. It was P.C. 3756, and it reads:
The committee of the privy council have had before them a report, dated 3rd December, 1935, from the Minister of Trade and Commerce-
-who has now escaped from the deluge of this wheat problem, along with his colleague the Minister of National War Services (Mr. Gardiner), who also is escaping from the office of Minister of Agriculture.


Mr. MACDONALD (Brantford City):: He is still the minister.


Richard Burpee Hanson: But only
for a limited period; he will be out of agriculture before the tragedy of this thing is borne in upon the Canadian people.


William Ross Macdonald: He has never run away from anything yet.


Richard Burpee Hanson: Well, he
is running away from this; at all events he is getting out from under.


James Garfield Gardiner: I may be here when
you are through.


Richard Burpee Hanson: That is
probably true. I don't expect to spend the rest of my days here. The hon. gentleman is a professional politician and I am not.


James Garfield Gardiner: Let me say-


Richard Burpee Hanson: Will the
hon. gentleman be good enough to resume his seat and allow me to continue my speech?


James Garfield Gardiner: I am only referring to
the hon. gentleman's speech-I shall be here after he is through.


Richard Burpee Hanson: That won't be long.


Mr. ROWE:: The minister may still escape the deluge.


Richard Burpee Hanson: Let me proceed, then, after that little interlude:
... a report . . . from the Minister of Trade and Commerce, stating that the problem of the marketing of the Canadian wheat surplus-

And it was a substantial surplus. What did it amount to? I pause to make an examination of what the surplus was. At the end of the crop year of 1935 the Canadian carryover, on August 1, 1935, was exactly 213,000,000 bushels, and the crop in sight was 282,000,000 bushels. The carryover, in other words, was a little more than the average carryover.


Thomas Alexander Crerar: Oh, no.


Richard Burpee Hanson: A little
more than the average carryover which the trade itself in normal times could have carried with great safety; and the crop, I suggest, was below the average.
-the problem of the marketing of the Canadian wheat surplus has been engaging the earnest attention of the subcommittee of the privy council, consisting of-
Whom? The Minister of Trade and Commerce, the Minister of Agriculture, the Minister of the Interior-now the Minister of Mines and Resources-the Minister of Finance.
. . . which subcommittee was authorized to review and advise upon the operations of the Canadian wheat board.
The minister further states that his opinion, concurred in by the other members of the aforesaid subcommittee,-
Those are the gentlemen to whom I have alluded, two of whom are still in the ministry.
-is that a definite and persistent resistance against the sale of Canadian wheat has existed and now exists in the world markets, which resistance is based on antagonism to the members of the present Canadian wheat hoard.
I suggest to the house and the country that that is an absolutely false statement. It may be a matter of argument, but as a statement of fact it is not true. It was unworthy of the gentleman who promulgated the statement, and should never have been embalmed in an order in council. It is wholly a matter of argument whether the policy which the board had adopted with respect to the sale of Canada's wheat surplus was sound or unsound. The fact of the matter is that the policy was based on this principle, that there should not be a fire sale of Canada's wheat; and history, the immediate history of the succeeding years, proved that their policy was absolutely sound. I believe that that is generally admitted. There was a great scarcity of wheat in other exporting countries; Canada had that surplus, and if she had held it just a few weeks or a few months longer it would have brought in $50,000,000 more than it brought in. I say, $50,000,000: That figure may be exaggerated. But I am safe in asserting that it would have brought in substantially more than it did bring in to the Canadian wheat board, which would have redounded to the benefit of the Canadian farmer.

Canadian Wheat Board


Thomas Alexander Crerar: I dislike to interrupt my hon. friend, but may I ask him a question?


Richard Burpee Hanson: Yes.


Thomas Alexander Crerar: He has stated that the surplus at the end of July, 1935, was
213.000.	000 bushels.


Richard Burpee Hanson: Yes.


Some hon. MEMBERS:: Louder.


Thomas Alexander Crerar: The leader of the opposition stated a moment ago that the surplus at the end of July, 1935, was 213,000,000 bushels. The surplus I anticipate at the end of the present crop year, that is as of yesterday, will exceed that figure possibly by 40,000,000 or
50.000.	000 bushels, possibly more. Now would my hon. friend, who is criticizing the wheat board headed by Mr. Murray at the end of 1935 for taking steps to get rid of a surplus which he thinks should have been held so that it would have realized many millions of dollars more, recommend the same policy to-day?


Richard Burpee Hanson: I do not see the point of the interruption. If the hon. gentleman sees it-it is too fine for me to see -he may make whatever he likes out of it. I say that the surplus at the end of the crop year, according to the information I have and which I believe to be authentic, for it was given to me by a man who ought to know, who was handling the wheat at the time, was 213,000,000 bushels.


Thomas Alexander Crerar: That is correct.


Richard Burpee Hanson: Well, then, I do not see the point of my hon. friend's interruption. I have not been able to get up-to-the-minute figures-the minister is in a position to get them-but I understand that the carryover to-day is greatly in excess of that amount, and that the storage capacity is more limited because of the existence in Canada of British-bought wheat which has not been taken out of Canada and which is not included in the present carryover.


Mr. ROSS (Moose Jaw):: Oh, yes.


Richard Burpee Hanson: I am subject to correction, of course, on the details of bushelage, because I have not access to definite information as to the situation on this first day of August, 1940. I do not suppose that as yet anybody has accurate information; it will probably be forthcoming in the course of a few days; but I do say that the carryover as of August 1, 1935, was not as great as the carryover to-day, and that is the only point I am making at the moment.
Now I have said all I desire to say with regard to that paragraph of the order in council, which in my view contains the false statement that the resistance against sale of Canadian wheat was based on an antagonism to the members of the then Canadian wheat board.
I do not doubt in the least that in certain places in Canada there was antagonism to these gentlemen; there was antagonism to them on the part of those who were not sympathetic to this legislation, and many others, including the members of the Liberal party in this house at the time. If you want any evidence of it, let me page the hon. member for Portage la Prairie (Mr. Leader). In the remarks he made the other day he told the government very frankly that the Liberal party in Canada was not favourably disposed to the principle of the wheat board and the wheat board legislation. I am not going to ask for any further evidence than that. Internal evidence is always better than external evidence. Here is a man who is himself a producer and a member of the Liberal party. He knows what is the attitude of the Liberal party with respect to this matter. I am content to leave the issue between him and his leader.


Mr. DOUGLAS (Weyburn):: Mr. Motherwell said the same thing.


Richard Burpee Hanson: Yes, and it is, I believe, the view generally entertained by the producers of western Canada, that the Liberal party is antagonistic to the operations and to the principle of the wheat board act, a principle which they themselves have adopted in the last few months. If they were a party of principle instead of a party of expediency they would repeal the wheat board act, but they will never do it because they know, so far as western Canada is concerned, that for them, after that would be the deluge.


Thomas Clement (Tommy) Douglas: And they are coming into it.


John Gordon Ross: That is what the hon. member said last year.


Richard Burpee Hanson: I am not so optimistic. I have run too many elections for that. I watched the Canadian electorate operate in 1926 at a time when I thought that the Conservative party would sweep this country, on the heels of the greatest scandal the country had ever seen. I remember the Prime Minister putting over his constitutional farce, shall I say-or shall I be out of order if I use that word?


Some hon. MEMBERS:: Order.
Canadian Wheal Board


Mr. HANSON (York-Sumbury):: Well,
smoke-screen; perhaps that is better.


William Lyon Mackenzie King: I got down to fundamentals.


Richard Burpee Hanson: I always deal with fundamentals.


William Lyon Mackenzie King: I say I got down
to fundamentals.


Richard Burpee Hanson: I want to say that no greater smoke-screen was ever put forward before the Canadian people than that.


William Lyon Mackenzie King: The people did not so regard it.


Richard Burpee Hanson: That is always the answer, so I am not-


Some hon. MEMBERS:: Order.


Richard Burpee Hanson: Just hold yourself in peace, my friends. One at a time. I am willing to take on any of you one at a time, but I confess frankly I cannot take on more than one at a time. I am not so sure that democracy is always right, you know; and I am not so sure that the Canadian people, especially the people in the Canadian northwest-


William Lyon Mackenzie King: I have great faith both in democracy and in the people.


Richard Burpee Hanson: Yes, I
understand that. I should like to say to the Prime Minister that before he shuffles off this mortal coil, after the way he has handled this war effort, the Canadian people will look after him.


William Lyon Mackenzie King: Well now, Mr. Chairman,-


Richard Burpee Hanson: You invited that.


William Lyon Mackenzie King: I should like to know what my hon. friend means by that insinuation.


Richard Burpee Hanson: I will tell you what I mean.


William Lyon Mackenzie King: I have been giving the best of my life, my thought and work to the service of the country, the war effort of the country, and if my hon. friend has any indictment to make against me in connection with it I wish he would state it specifically at once and let the people know, or withdraw that statement.


Richard Burpee Hanson: I have been trying to indict the government the whole session; the public press has been trying to

indict the government the whole session; nearly every great metropolitan newspaper in Canada has been indicting the government for its lack of war effort.


William Lyon Mackenzie King: And the people of the country are behind this government.


Richard Burpee Hanson: I do not believe it. However, I will not be diverted from my argument by any such cross fire. The Prime Minister always falls back on the election.


William Lyon Mackenzie King: He always falls back on the people from whom he gets his authority.


Richard Burpee Hanson: Let me get back to the order in council.


An hon. MEMBER:: You are better when you are talking wheat.


Richard Burpee Hanson: I wish to call the attention of hon. gentlemen to the wording of the next clause. I cannot believe that the Prime Minister ever saw this order in council or he would never have allowed it to go into the records of this country. It reads:
The minister is of opinion that it is inimical to the best interests of Canada in the circumstances that the present members of the Canadian wheat board should continue in office and, therefore, recommends that the said members-
Naming them.
-be retired.
Now, what does "inimical" mean? It means hostile, unfriendly

I can give half a dozen synonymous terms. Will any man in this house say that John I. McFarland and his associates were hostile or unfriendly to the best interests of Canada? That is what it means. These are the words which the hon. gentleman who has escaped from his place and taken refuge in the other chamber put into the order in council, acquiesced in by hon. gentlemen who are here to-day, in an endeavour to destroy a great Canadian citizen. I do not believe that these gentlemen in their hearts agree that that was a correct term to apply to Mr. John I. McFarland. I do not believe that these gentlemen, if they were doing it again in the calm light of time, would use that word with reference to Mr. John I. McFarland. I have every reason to believe that Mr. McFarland is one of the most outstanding citizens of the Canadian northwest and that he is held in the highest esteem by his fellow citizens. Only a year ago he was asked by the pool, at a time when there was danger of this wheat board legislation being repudiated by this government, to speak on their behalf to the

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people of the northwest for the preservation of this system of marketing. I think that the least this government could do, the least the Prime Minister could do as President of the Privy Council, the least that the Minister of Mines and Resources could do, as a man who has known John I. McFarland for many more years than I have known him, is to take such steps as to rectify what I consider a great human injustice. That is all I am going to say about that.
These gentlemen were released from their positions, so far as they were concerned, without regret, except for the inclusion in that order in council of that one word which cast a reflection upon them, and upon their children and their children's children, embalmed in the history of the country. Who would not object to the like of that? Other gentlemen were appointed. I do not know them, but I assume that they were friends of the government; I assume too that they were men who were qualified and capable as grain dealers, who understood the problems of western Canada. But they were men who were put there to carry out the ideas of the government, not their own ideas, and that was that there should be a fire sale of Canada's surplus wheat. And that fire sale took place.


An hon. MEMBER:: Not at all.


Richard Burpee Hanson: Pretty
much so. It was announced; I remember that. I was not paying very much attention to party politics in the fall of 1935. I was so delighted to get rid of the job that I got out of Canada for a holiday as quickly as I could, but I followed the public press.


Mr. EVANS:: You were sick of being beaten.


Richard Burpee Hanson: I am not sick of being beaten; I can take it like anybody else. But as a rule, I want to tell the hon. gentleman, the men who came up against me in days gone by lost their deposits. Therefore let us not get into that sort of thing. I shall get through much sooner if hon. gentlemen leave me alone.
At one o'clock the house took recess.
The house resumed at three o'clock.


Richard Burpee Hanson: Mr. Speaker, when the house rose I had about completed my references to the order in council of December 3, 1935. Pursuing this topic of wheat in purely chronological order I should have referred earlier to the European situation after the great war. Reference is made in the order in council to the resistance to the purchase
of our wheat by foreign countries, and, in my opinion, quite improperly, the blame was laid at the feet of three men. I do not for a moment accept that proposition. I think the fundamental reason for the resistance by Europe to the purchase of our wheat is to be found in what occurred during the great war. There was not control of prices during the great war, certainly not in Canada with respect to wheat until a very late date. There was no control in the United States with respect to wheat, at least until the entry of that country into the war. There never was any control with respect to Argentine wheat, and, as I recollect, very little with respect to Australian wheat and wheat from other nations.
What was the result? The world witnessed during the great war a succession of rising prices for wheat, with the result that the warring nations of Europe and the neutral nations of Europe were obliged to pay huge prices for the staff of life. And there arose, in Europe especially, a policy of economic self-sufficiency in order that never again would the European nations be obliged to pay ransom to anyone for the staff of life. France, Italy, Germany and other nations encouraged the production of wheat, often uneconomically I think, but that was the trend of opinion in those countries. The result was that there was from time to time a marked diminution in the demand for our primary staple product of wheat. That is the fundamental reason why there was a decline in the demand for our wheat.
All nations have attempted to do this thing with respect to one commodity or another. Take the question of sugar in the old country. Sugar is not a crop indigenous to the old country, yet they raise beet sugar, and the government of the old country for years, up to the beginning of this war-I do not know what the position is to-day-have been bonusing their own beet sugar producers, to the detriment, be it said, of their colonies in the West Indies. I happen to know a little about that; I have seen some of the effects of it. If you travelled to Barbadoes or to Trinidad you would have seen in the last decade the effect of that policy. That was a world trend, but primarily it was based on the fact that the European nations intended never again, so far as they could, up to a certain limited point if you will, to have to pay ransom for food.
That idea is the most striking economic factor resulting from what happened during the last war. There was of course resistance from the established channels of trade in the United Kingdom and in France. Anyone who
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has taken the time to investigate the conditions over there will realize the strength of the grip, if I may so call it, of the grain trade and the distribution of grain in the mother country and in France. I need not go further into that aspect except to say that for all the period after the war the grain trade was in a buyer's market and not a seller's market, and under such conditions the buyer inevitably is bound to dictate more or less not only prices but conditions. I think that is axiomatic. Only once in a while the primary producer finds himself in what may be termed a seller's market; nine times out of ten over-production results in a buyer's market.
I do not wish to delay the house unduly; therefore I pass on to a consideration of the marketing of our crop subsequent to the change of government and the introduction of new personnel into the wheat board. I shall not dwell upon the crop years 1935-36 and 1936-37, but I come to the season of 1938-39, the season ended just a year ago. In that year, from August 1, 1938, to July 31, 1939, this country exported only 166 million bushels of wheat, at a low average price of 60 cents a bushel. Canada, I am informed, was left with a carryover of 102 million bushels. The war, to which I shall presently refer as to its effects on the wheat trade, has not lessened Canada's exports. This is evidenced by the fact that up to the middle of July of this year Canada had exported about 190 million bushels of wheat and wheat flour. Canada therefore, since the war began has exported somewhere around 25 million bushels more than she did in the last pre-war year. And she sold that wheat at higher prices because of the war. I think that is a fair statement of the position.
It will not do to say that the wheat blockade in Canada, the wheat debacle if you wish, is due to the war. I suggest that it is quite false to say so. I suggest that had there been no war in the crop year 1939-40 this country would have exported probably no more, certainly not in excess of 25 million bushels more, than we exported last year. If there had been no war Australia would have exported her wheat, and that would have prevented Canada from doing any more than we have already done. I do not think that the responsibility for the present position can be laid on the war; in fact the responsibility goes back to the failure to export all the wheat crop in 1938 and 1939. That is where the present position begins. With a carryover last year of 102,000,000 bushels, plus a crop of 489,000,000 bushels, making available 591,000,000 bushels as of August 1

last, war or no war we are bound to have a record carryover, due to the failure to export in that crop year.
What is the record of the carryover? I have seen it estimated as low as 250,000,000 bushels. I have seen it estimated as high as
285,000,000 bushels. I think it is fair to suggest, without the exact figures before us, that as of this date we shall have a carryover of at least 275.000,000 bushels. Then, in the meantime, during the last crop year what was the attitude of the Minister of Agriculture and of the administration? If I correctly interpreted it, the attitude was that farmers in this country should be invited to produce more, because there was a war, and that they would sell more and thereby get more money for their crops. Certainly there was no suggestion of any restrictions. If so I have never heard it. I have never heard it officially suggested by the Minister of Agriculture or in any other way that there should be any restrictions on production.
As a matter of fact it seems to me the attitude of the government was that because there was a war Canada should therefore raise more wheat, that there should be more production, that we would sell more wheat and get more money for it. I suggest that correctly interprets the policy of the government.
Well, war came. The British government set up an allied commission to buy wheat. Why was not more wheat sold in the fall of 1939 and at a price which, I venture to say, would have been infinitely higher than the 70-cent pegged price of to-day? The hon. member for Churchill (Mr. Crerar) went to Europe in the autumn of last year, ostensibly to consult with the British government with respect to the war efforts. But as I understand it one of the objects of that mission was to deal with the marketing of Canada's surplus wheat. When he rises to speak he will correct me if I am wrong. I have no doubt he did discuss with the British government, and with others in authority on the other side, this very position.
There was some movement of our wheat. For a time prices did go up. But we did not sell the crop. We did not sell the surplus which I have estimated at 275,000,000 bushels, Why? I should like to know why.


William Ross Macdonald: You cannot force them to buy.


Richard Burpee Hanson: My hon. friend from Brantford will be good enough to hold his patience a little bit. I am addressing a question to a minister, which I am entitled to do. It is from him I am inviting the

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answer, and not from the hon. member from Brantford City-and I say that with all due respect.


William Ross Macdonald: I was not suggesting it in a critical way.


Richard Burpee Hanson: But the interruption tends to throw a man off his argument. If the hon. member will be good enough to permit me to proceed I shall soon have finished.
I invite the Minister of Mines and Resources (Mr. Crerar) to tell us the result of his mission so far as wheat was concerned. I have heard it stated-and I do not say it is a fact-that this country could have sold early last fall the major part of the surplus of
275.000.	000 bushels, not only at a price which would have been profitable to the farmers of Canada, but at a price which would have yielded a much greater margin of return than the pegged price of 70 cents of to-day. I invite him to tell the country, because the country has a right to know, what he did last autumn with regard to the sale of our wheat. What were the conversations? What steps, if any. were taken by the government, by the British cereals committee or the British authorities? What was the position of Canada? What price was asked? What quantities were talked about? We must remember that at that time France was an active belligerent, with money with which to buy. England had money with which to buy. On account of the lack of production of wheat in their own countries, between the two of them they needed surplus -wheat, whether it was stored in Canada, or the United States, or wherever it was stored. That is the position the minister ought to clarify. And he will have to do it before the Canadian people will be satisfied.
What has been the result of that failure to clear up the position? The result is that if we add the carryover to this year's wheat crop, which is estimated at 400.000,000 bushels -perhaps it will not be that much-certainly the two together will exceed 600,000,000 bushels. And where is it to be disposed of?
I am told that in a normal year Canada wall consume 50,000,000 bushels for bread and breadstuffs. That may or may not be an accurate estimate, but it comes from those who ought to know. In addition to that there is an amount for seed, and a further amount for feed. We will place that amount at
75.000.	000 bushels more, making a total of
125.000.	000 bushels. There is the further fact that Great Britain has pushed through an order in council, or an authoritative decree, whichever you wish to call it, that British bread
shall have a 60 per cent content. The normal consumption in the United Kingdom of any wheat is placed at 200,000,000 bushels per annum. Sixty per cent of that gives the figure of 120,000,000 bushels. If we add that to the local consumption in Canada we have a total of 245,000,000 bushels-in other words, not enough to take care of this year's carryover. We are going to be left in Canada with inadequate storage facilities, and wheat at least in excess of 400,000,000 bushels. That is the position which to-day confronts the government and the country.
What are we to do about it? I have stated my belief that not a kernel of this wheat should be destroyed. I repeat that not a kernel of it should be destroyed. Efforts should be made to house the crop.
I turn now to the proposals of the Minister of Trade and Commerce as contained in his statement on the resolution. Those proposals are amplified in the bill now before us. What are the minister's proposals? Well, from time to time they have changed, in a degree; and possibly before the bill passes they will be changed again, in other details-although not in principle-all of which shows that at least in my opinion the government have not given adequate consideration to the whole problem, long as they have pondered it.
The first proposal is that the producer is to be able to deliver a portion of his crop at the outset, the amount to be delivered to be based on the total available supplies of wheat, and the available storage. Of course that is in the interests of the producer. How it will work out depends entirely on how much each producer is able to deliver. As I understand it the producers must have cash. This is their one cash crop. As has been stated more than once by the hon. member for Souris (Mr. Ross), heretofore a bin of golden wheat was as good as money in the bank. That is not true to-day. It merely emphasizes the tragedy of the position.
The second proposal is that an allowance shall be made to the producer to compensate him for the cost of storing wheat on his own farm. That idea is not original with this government. The hon. member for Qu'Appelle (Mr. Perley) advocated this session that that be done, and he has advocated it on previous occasions. I am glad to see that the government are heeding his suggestion. This will not be accomplished without difficulty. Aside altogether from the question of the availability of storage in home bins, what is the government going to do about protecting the position of the treasury in this regard? Our farmers of western Canada are just as honest and just as honourable as are farmers anywhere else,
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but the treasury must be protected and adequate machinery should be provided to safeguard the position in connection with these advances.
Whose money is to be advanced? It is not to be the money of the members of the Winnipeg grain exchange. They recede from the picture whenever there is a prospect of loss. I am not throwing any stones at those gentlemen now or at any other time; I know some of them and they are fine business men, but they are business men and their primary motive is the profit motive. They are not seeking losses. They are not going to put in any money when there is a danger of loss. They and the speculators who go to make up the whole system of dealing in futures go out of the picture once a loss is possible. Once adverse conditions appear, the normal trading facilities simply are wiped out. It will be the public's money that will be paid out. This government are the guardians of the treasury for the people of Canada, and the proper facilities ought to be set up.
What legal arrangements are being made to protect the public treasury? How are we going to police this grant? These are pertinent questions which I think the Minister of Trade and Commerce or some of his colleagues should answer. They should clarify the position in connection with the protection to be provided against these advances. Advances must be made for the reason given by the minister and for the reasons which must be present in the mind of every hon. member. We all realize that this is the one cash crop of the western farmer. He must have money to harvest his crop, he must have money to pay his taxes, he must have money to pay the interest on his mortgage if he is unfortunate enough to have one, and he must have money to pay the grocer, the butcher and the candlestick maker. There is only one source from which it can be obtained, the public treasury.
We have not been told about this. I do not know what proposals the government are making. So far as I can see, they are not in the bill. How are these advances to be made? I invite the ministry to tell us that. There is a school of public opinion in eastern Canada which is against all this. I hold the view that it is not a large school during this time of national crisis, but there has always been some feeling that trade should be allowed to take its ordinary course. I am not advocating that; for the time being I am advocating protection for the producers and protection for the crop in the hope that sooner or later the position will be straightened out without this country being saddled with too much in the way of cost.

If there are any believers in free trade across the chamber I know they will disagree in theory with that statement, but in practice they will follow it. I am not going to attempt a dissertation of free trade or laissez-faire theories. We must be realistic and practical. We are faced with a condition, not a theory, and it is a pretty serious condition. We are about to pledge the treasury of Canada for the entire wheat crop at a pegged price of 70 cents a bushel, plus all storage and other charges which may accrue until the crop is sold and delivered overseas or wherever it may go. This is being done without any real prospect of marketing this crop at the moment. I invite the minister to tell us how he is going to protect the public treasury on these advances to the primary producer. I think we all agree that they must be made if these people are to survive the coming winter. How is the government going to do it? I am not sufficiently versed in the grain trade to offer a solution, but I have a suggestion to make. The government should avoid creating a multiplicity of inspectors, most of whom I am afraid will be political appointees, and be prepared to take from reputable farmers and other producers in the west documents which will transfer to the wheat board, acting for the crown, the title to their wheat.
I make this suggestion as a lawyer. I have no doubt that it can be done, and the legal officers of the department and the wheat board can advise the government accordingly. This is a matter of property and civil rights and as such would be in the jurisdiction of the provinces, but the country is at war and under the War Measures Act the government has overriding powers for the duration of the war. It is thus enabled to overcome any provincial legislation which might operate against this position. I think this is a constructive suggestion. I am not attempting to outline a complete policy for the government to adopt; I am simply offering something which I think is worthy of their consideration.
The third suggestion is that the initial payment to the producer of wheat will remain at 70 cents, as fixed by the amending act of 1939. Having regard to the fact that wheat prices were higher during this crop year than they were in the preceding year, having regard to the fact that the Bennett government fixed the initial price to the producer at 874 cents a bushel, I suggest that this government is not being over-generous to the western farmer. We gave him 874 cents in 1935. Conditions are not exactly similar, but I do suggest that that price of 874 cents basis Fort William was enough to let the farmer out. I have heard it stated on competent authority that a 70 cent price will not let the farmer out to-day.

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Do not let us have any eye-wash with respect to this processing tax. Do not let it be said that the farmer is going to get some part of this 15 cents per bushel processing tax. That is just eye-wash. Unless there is a greatly increased demand for our wheat, not one cent of that 15 cents processing tax will go into the coffers of the farmers. This 15 cents processing tax-I am going to deal with it a little later-will go into the treasury of Canada to reimburse, pro tanto, the loss that will accrue to the government on this whole operation. It will come out of the consumers of Canada-all the consuming public, producers, if you will, and consumers too, everybody who buys bread. I must say that I was amused at the innocence of the minister when he stated that this processing tax would not raise the price of bread. Why the news of it was still ringing in our ears, the ink on the paper had not dried, when the millers of this country advanced the price of flour 70 cents a barrel.


An hon. MEMBER:: Shame.


Richard Burpee Hanson: Perhaps
the millers have no friends in this house. I do not know. I am not a miller, and I do not know many of them.


Mr. REID:: There is a whole lot I would
like to say about them.


Richard Burpee Hanson: The only
time I had anything to do with them was once when I invested a few 'thousand dollars of hard-earned money in the bonds of a certain milling company, and I discovered soon afterwards that the manager had wasted $5,000,000 of the capital funds of that milling company, and the bondholders were left to carry the bag. And he never was prosecuted; I never could understand why. That is the nearest I ever came to the millers of this country.


William Earl Rowe: Close enough, too.


Richard Burpee Hanson: Just a
little bit too close for comfort. I still have the bonds, and I am hopeful that with good management, as I think the company has to-day, I may some day recover my capital; but I went without the return on those bonds for a substantial period of time.


William Ross Macdonald: The manager gambled in wheat; that is why they lost money.


Richard Burpee Hanson: I understand the story just as well as my hon. friend and I know the gentleman who was doing the gambling. What surprises me is why he was never prosecuted by the government of Manitoba or by some other government. If he
had been a poor man-of course, then he would not have had the opportunity-he would have been prosecuted and would have been out in Stony Mountain long ago. But he was not prosecuted. Perhaps the Minister of Mines and Resources (Mr. Crerar) will tell us why he was not prosecuted.


William Ross Macdonald: Why didn't you lay information against him?


Richard Burpee Hanson: How can
one small isolated bondholder like myself away down in the maritimes do much? The underwriters of the bonds might have done something, and I certainly communicated with them, but they did not do anything.


An hon. MEMBER:: Are you the only
loser?


Richard Burpee Hanson: No, I
am sorry to say there were many hundreds of others who suffered too. This is only in passing and perhaps I should not have referred to it. But it is something personal which has stuck in my crop for a good many years.
Coming back to the processing tax, the millers immediately raised the price of flour 70 cents a barrel. I do not know what action the war-time prices and trade board had to take to prevent an increase in the price of bread. The bakers are bound to pass that 70 cents along. What does it cost to a baking company? I saw it estimated by one baking company in the city of Toronto that this 70 cents a barrel increase, if passed on to them by the millers, would cost them $17,000 per month.	Docs anybody for a
moment think that that baking company is going to absorb that sum? Why, it is ridiculous even to talk about it, and I was amused at the childish innocence of the Minister of Trade and Commerce in even suggesting that the processing tax would have no effect on the price of bread.


William Ross Macdonald: It has not yet.


Richard Burpee Hanson: The price has been raised already, as I told the Minister of Trade and Commerce.


James Angus MacKinnon: In one case only that has come to my attention.


Richard Burpee Hanson: Of course this is a far-flung country and the minister cannot be aware of everything that is going on. In the city of Montreal the price of bread has been raised already, and to-day I am informed it has been raised in Vancouver. To-morrow it will be Ottawa, and the next day Toronto and all over the country. It is childish to deny that the tax will have that effect. It is bound to be passed on to
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the consumer, and this government has to bear the ignominy of adding to the cost of bread all over the country. Why didn't the government in the selection of a policy grasp the nettle man-fashion and say: We will pay the farmers a price of 70 cents a bushel; if we get more for it after we market the crop, we will give it to the farmers, and in the meantime the treasury will bear this burden. But no; they put on this tax in the hope of fooling the farmer that some day he will get some of that $7,500,000 that will be brought in by the processing tax. You may fool ail the people some of the time; you can even fool some of the people all the time, but you can't fool all the people all the time.


An hon. MEMBER:: You fooled them once.


Richard Burpee Hanson: 
Thomas Alexander Crerar: On that point may I say that representations were made on behalf of

the Winnipeg grain exchange to keep the market open, and may I add that the gentleman who made the representations was an ardent supporter of the party which my hon. friend now leads.


Richard Burpee Hanson: I do not doubt that, because there are still reputable gentlemen in the Winnipeg grain exchange. As a matter of fact I think they all are reputable gentlemen, but they are thinking of themselves, which is the most natural thing in the world. Speaking of gentle shepherding, this is not the first time that the hon. gentleman has acted in the capacity of the gentle shepherd. I remember 1922 and 1923 when he tried to shepherd the Progressive party in under the wing of the Liberal party in this house, and because he did not succeed he resigned the leadership of the Progressive party. I remember that because I used to watch with a good deal of admiration his attempts to do that very thing. I do suggest that the gentle shepherd sits where he is to-day and where he has been since 1935 because of his efforts to do that. Every labourer is worthy of his hire. But the progressives from the prairies, with few exceptions, were not to be caught in that net, not at that time anyway.


William Ross Macdonald: Let us get back to modern history.


Richard Burpee Hanson: Yes. This is a lot of fun for me. I have been wanting to say this for a long time. And it is not so long, either.


William Ross Macdonald: Just about a generation.


An hon. MEMBER:: What has this got to do with wheat?


Richard Burpee Hanson: Quite a lot to do with wheat, my friend. When you get through with this your education will have been quite liberalized.
Getting back now to the serious consideration of this matter, I should like the minister to tell us what was the recommendation of the United Kingdom cereals import committee. I think we have the right to know.


James Angus MacKinnon: Could I give that to the hon. gentleman now?


Richard Burpee Hanson: I am putting the interrogatories at the present time; the minister can give the answers later. Let us have them, and then let us have a statement from the ministry as to what useful function the grain exchange can perform at this time. I do not know. I am not setting myself up as an expert. I never do. But I think I have the right on behalf of the

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Canadian people to know what are all the considerations which prevailed upon the government in deciding to keep this wheat pit open.


Mr. FAIR:: It is a gambling den.


Richard Burpee Hanson: I do not say it is a gambling den. I want that made clear. That charge has been made in this chamber time and again in former years under different conditions, under nearly normal conditions. Mr. Bennett heard that charge made; a discussion took place; and he brought out to Canada, without a dollar of expense to the people of this country, Sir Josiah Stamp, one of the best economists in England, a gentleman who is to-day rendering noble service over there to his country in its war effort. Sir Josiah Stamp made a thorough investigation of this very question of the sale of futures in wheat in Canada, and after hearing everybody who had an interest in the subject he gave what I think was the most unprejudiced decision which could have been given in the circumstances by anybody. Free as he was from any local considerations or any local prejudices pro and con, his view was that the system served a useful purpose. I believe that most students of this question agreed with that view. I do not like to hear these men termed gamblers. They may be speculators. I suggest there is a difference- to me there is a great difference-between a gambler and a speculator. But why in the world the wheat pit is allowed to remain open now, when it cannot perform any useful function, I do not understand, and I ask to have it demonstrated on the floor of this house. That is the only observation I intend to make with respect to that matter. The wheat pit may serve a useful purpose, but so far as I have been able to determine from the investigation and the study I have made, it cannot do so at the present time.
Another recommendation contained in the minister's preliminary statement is, that that portion of section 7(b) of the Canadian Wheat Board Act limiting deliveries from one producer to 5,000 bushels, as well as the clause dealing with penalties, is to be repealed, so that every producer may be enabled to deliver if he so desires all his crop to the wheat board. I am frank to say that that is a technical matter which I do not understand very much about. I think I understand why under previous legislation a man's deliveries were limited to 5,000 bushels. It was so that the man who was nearest to the elevator or to his market would not get an undue advantage over his neighbour who was farther away.
The removal of that limitation will put everybody on an equal basis. Probably that is a good thing. Others may speak about that.
I come to the seventh recommendation:
Provision is also being made to authorize an interim payment on producers' participation certificates at a time when such payment cannot possibly result in a loss to the board.
What I understand is that these producers' participation certificates are to be handed out in accordance with the practice and under the law as heretofore, but what is meant by the limitation, "at a time when such payment cannot possibly result in a loss to the board"? The minister did not elucidate. I have asked a good many people and they do not know yet what it means. I ask the government to clarify that expression. If there is no market or a very limited market for wheat, and if the price on the foreign markets, if there be any such, falls below the cost as limited by the order in council pegging the price at 70 cents, there never can be a time when a participation certificate may be issued to the producers. That is a logical result which follows as day follows night. I think the minister should make quite clear what is the government's interpretation of that phrase, because to the layman it seems an impossibility. I may be all wrong. I do not know. I am asking for clarification and for information. I think it should have been given at the time.
Finally, as to this processing levy. I believe that it is a trap on the part of the government. I do not believe it will produce any benefits to the primary producer. It will relieve, pro tanto, the deficit of the Canadian treasury, but in the final result it is just one more tax upon the people of Canada. Let us face the fact frankly; all that has been done is to change the form of the tax. Were it not for this processing tax the entire deficit which may occur from the year's operations would be paid out of the consolidated revenue fund by this government. By the amount collected under this tax the deficit to be so paid will be less, but directly or indirectly it will come out of the people of Canada. Either the tax should not be there at all or, if it is to do anything for the primary producer, it should be high enough to bring results to the producer. I predict that not one cent of this money will find its way into his hands. Placed as it is on the staff of life, it will be an irritating tax. It cannot be justified in any sense as a war measure. The government must take the final responsibility for it, and sooner or later they will hear from the people of this country.
Lastly, this whole scheme is a temporary policy. There is no finality about it; it is

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just to tide the government over an emergency. With the principle of a peg I am not in disagreement. There may be differences of opinion as to the amount of the peg. Certainly this will not satisfy the western producer, because I am informed that it will net him a sum lower than the cost of production. To-day a little pap is being handed out to the farmer of Alberta by including Vancouver. We all understand what that means. It will be a good thing for the farmers of Alberta because of the question of freight rates. How many more changes are we to have in connection with the details of this measure before it becomes law? Is there any finality as to government policy? It would not appear so. These are questions I am asking myself.
I apologize to this house as a layman for having intruded myself to such a large extent into this debate. If I have been able to make any contribution by pointing out certain things I shall be amply repaid. I thank hon. members for the patience with which they have listened to me. This is a grave problem for Canada; the government must face it man-fashion. My advice to the government-and I have stated it not once but thrice-is this: Not one kernel of this wheat should be destroyed. It may be needed by suffering humanity before this war is over.


Thomas Alexander Crerar: With a good deal of what
the leader of the opposition (Mr. Hanson) has said in his contribution to the second reading of this measure I agree; with a good deal of it I disagree. May I congratulate him, as a layman, on the knowledge he has acquired of this rather intricate business relating to the marketing of wheat. For a layman a two hour contribution to the discussion is a very creditable performance. I agree with what my hon. friend said in his opening remarks, that there is a sort of fascination, a sort of lure about this problem of wheat in Canada. I agree too with the remarks he made as to the contribution which the development of our wheat industry in Canada, for it is an industry, has made to the economic life of this dominion during the last fifty or sixty years.
Following 1880 western Canada began to develop as an agricultural community. Prior to that the Indians and the buffalo had possession of it, but from that time on settlement spread, first in the Red river valley, then across the prairies to the Rocky mountains; and during the period from 1880 for the next fifty years there was a greater contribution of wealth to the national income of Canada in each succeeding year than had been

made in any previous time in our history. The effect of that on the economic life of the country is quite evident. It was only in 1878 that the Conservative party, under its great leader Macdonald, introduced a national policy of protection to Canadian industry. Those who have read the history of this country are well aware of the fact that at that time and in the early eighties Canada, in respect to the growth of its population and the production of wealth, was away behind; and it was a fact that hundreds of thousands of young Canadians were seeking their fortune in a foreign land in order to better their position.
I agree with what my hon. friend has said, that the opening up of western Canada to the production of wheat in ever-increasing quantities, the ease with which markets were found for this wheat, the benefits that came not only to the producers of wheat but to the transportation system of the country and to the manufacturing industries of eastern Canada, constituted one of the greatest contributions to the dominion that has been made. There is therefore a fascination about the problem of wheat.
My hon. friend said that he had only secondhand knowledge of the development of the west. May I say that I can claim in some measure to have first-hand knowledge, because, Mr. Speaker, next year it will have been sixty years since my father left western Ontario to go to make his fortunes on the prairies, and I as a lad of only a few years of age went along with him because I had nothing else to do at that time. I have watched the development of western Canada through all the succeeding years. I went through the pioneering stages -rather, I should say, my father and mother went through those stages in western Canada. They were only two of tens of thousands. I know what it is to experience the hardship and the penuiy of pioneer days. My father and his associates knew what it was to be unable to sell their grain without a market. And yet the sturdy spirit of independence, the sturdy determination to make their own way, triumphed over obstacles that were almost incredible, and I often reflect in these more mature years of my life that we then had no governments who were looking after our needs; it was a case of the survival of the fittest. I am not now criticizing the modern tendency, but I do say that that struggle, that effort to overcome the forces of nature, of drought and frost-because they existed then-that determination to make headway, developed qualities of character, qualities of stability and steadiness, which I sometimes fear we may be losing to-day.

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If the house will bear with me I should like to sketch briefly this problem of marketing Canadian wheat.
In the early years, when wheat began to be produced in comparatively small quantities in Manitoba, the problem of a market was a difficult one. So far as my parents were concerned, their problem was enhanced by the fact that for at least six years they were sixty-five miles from a railway and it was not possible to transport over that immense distance, with the methods then in use, any quantity of grain to market. In the nineties elevator companies began to develop in Winnipeg, which became the grain handling centre. That was a development borrowed from the United States. And I will say this to my hon. friends, that there has never been a time in the whole history of western Canada when the farmers in the marketing of their grain laboured under such disadvantages as they did from, say 1890 to 1904 or 1905. Out of that grew the development of individual farmers' elevators.
I dislike speaking about myself, and I hope the house will pardon me if I make a few personal references. For several years I was the manager of a farmers' elevator. When I was in my early twenties I was the secretary-treasurer of a farmers' elevator association in Manitoba. What was its purpose? To find a means of marketing their own grain outside the elevator ring that existed at that time. I recall the time the first grain act was passed, I think, in 1898, when the first warehouse commissioner was appointed, the late C. C. Cassels, who was given under the act certain powers of regulation of the elevator companies. I remember the fight there was fo get included in the grain act a provision that a farmer could order a car spotted at an elevator or a loading platform and by that means ship his own grain to a commission merchant in Winnipeg who sold it there on the open market. I recall what a priceless boon the farmers thought they had secured when they got that provision through.
I recall the early years of this century. We talk of agitations. May I say to my hon. friends of the Cooperative Commonwealth Federation that there never was an agitation among the farmers of western Canada that reached such intensity or had such influence as the agitation from 1903 to 1909 out of which was born the first farmers' grain handling company that we had in western Canada. There were cases fought through the courts, there was publicity, and it was only by the' strength of their appeal to the common sense and sense of right of the whole community that in the end we won out. I recall an agitation in 1906 in western Canada for the
95826-143J
complete control of the elevator system by governments. I know that a few years later, in response to that appeal, the gentleman who was then premier of Manitoba, Sir Rodmond P. Roblin, committed the government of Manitoba to a public elevator system. And the government of that day under his premiership acquired over 150 elevators, as a means to try to check the exactions of the line elevator companies.
I recall the development of the old Grain Growers' Grain company. Again I dislike to speak of myself, but in 1907, nine months after that company was created, I was taken from the post of manager of a farmers' elevator and for twenty-two and a half years I remained the president and general manager of the company. I saw it grow from small beginnings into a very powerful force. We never received a dollar of assistance from any government, and further we never asked for a dollar of assistance from any government. The idea in those days was that by the development of a sound cooperative plan the farmers of western Canada could do their own business; and may I say that I have never lost that faith. I stand here to-day and express this conviction, which I feel most strongly, that the farmers of western Canada, if they apply common sense and sound cooperative methods, can do any business that they wish to engage in far better than any government can do it for them.
Well, time passed, and we come to the outbreak of the great war. The little company with which I was associated had acquired strength year by year. We endeavoured to follow sound business methods, and while we started with the hostility not only of the financial interests of Canada but of the grain interests and the business interests generally, we did reach the stage where we had earned' their respect. I recall that in the early years the western supervisor of one of our large banks attempted to interfere with the right of a farmer to pass a draft on us for a car of grain that he had loaded over the platform, because he thought this group of farmers was a menace to the development of western Canada. He honestly thought it. I lived long enough to see a representative of that bank come to my office and ask the United Grain Growers for a share of its banking business. I mention all this because I still think it was a sound line of development.
Then we come to the great war. I am not going to deal with the history of wheat during that period, although I had something to do with it and know something about it. We pass on to the period after the war.
Canadian Wheat Board

There was a depression immediately following the war, and then came the hectic period of prosperity from 1923 to 1930. At that time there was no problem in selling Canadian wheat in the markets of the world. I shall touch upon that more directly in a moment or two. But in 1919 we had a strong demand for a wheat board in Canada. It was necessary to have control in 1917 because the allied governments in Europe had centralized their buying through one agency. It was impossible for individual firms to deal with one central buying agency in Europe, without the Canadian market being adversely affected; and so the first step towards centralization of control developed in this country arising directly out of the situation created by the great war.
We come then to the wheat board of 1919 and the decision of the government of that day-not this government-that that board should not remain as a permanent feature of marketing. The view was wisely held that the cooperative idea should be encouraged. In the meantime there had developed in Saskatchewan a cooperative elevator company, helped in its financing in the early stages by the government of the province. It may be of interest to the house to hear of these things because it is of importance to get started on the right lines and to fallow sound principles of development. The cooperative elevator company started operations in Saskatchewan in 1911. In Manitoba, earlier, the government took over the elevators, 150 of them. That venture wound up by a loss of over $2,000,000 to the province of Manitoba. In Saskatchewan the farmers were asked to create local cooperative elevator associations at selected shipping points. These were asked to subscribe the cost of an elevator and pay up 15 per cent of their stock subscription. On the strength of that, with a mortgage on the elevators, the Saskatchewan government advanced 85 per cent of the cost of the elevators and thus capital was provided for facilities for farmers to do their own business. Not only that; the government for at least six years guaranteed their operating account at the bank. But all their business was subjected to audit by the government auditors. What was the result? The government of Saskatchewan never lost a single penny. The result was that there was created a great farmer-owned handling company which was later taken over by the Saskatchewan pool.
I come now to deal very briefly with the pool development. I think it may be said that the driving force which created the pool system, so-called, in respect of the handling of grain-and it is now changed-was an Italian with a definite fascist complex who
{Mr. Crerar.l
came from California to western Canada. I refer to a gentleman named Aaron Sapiro.
If I might further enlighten the leader of the opposition (Mr. Hanson), that gentleman was offered $1,000 and his expenses to come to Alberta to tell the wonderful story of what he had done for the citrus fruit growers of California. And the people who financed him, the people who paid him the $1,000 were two Conservative newspapers in Alberta.


Mr. NICHOLSON:: Would my hon. friend-


Thomas Alexander Crerar: I do not wish to be interrupted. I may say this, too, to some of my Alberta friends-because I know whereof I speak-that the purpose of bringing that gentleman to Alberta was, if possible, to put a spoke in the wheels of the United Farmers of Alberta government which only a short time before had taken office in that province.
The pool theory of handling grain differed from the ordinary marketing methods in this way: The farmer signed a contract for five years to deliver his grain to the pool. That contract was one of the most iron-clad contracts any farmer ever signed. I say that without any desire to criticize it here. The farmer agreed to deliver his wheat to the pool. Under the contract the pool paid an initial advance. That is where we get the idea of participation certificates, which is employed in our wheat board legislation. If the sale of the grain realizes more than the initial advance, a distribution is made of the balance of the earnings to all the members of the pool, on an equitable basis.
That procedure spread from Alberta to Saskatchewan. I sometimes think that while the last war made a terrific impact upon the economic and financial structure of the world, it undoubtedly made an impact, also, upon the thinking processes of men. Everywhere, not only in Canada but elsewhere, we feel the repercussions, and we are reaping the deadly results of some of those repercussions in the catastrophe which to-day has come upon the world.
The pool idea spread to Saskatchewan. There was a rush to sign contracts. Farmers signed contracts for five years on the terms I ^ set out a moment ago. There was an ingenious method of financing-and again I am not criticizing. From every bushel of grain a certain deduction was made for the purpose of building elevators, and a further deduction for financial reserve. In that way financial stability was secured.	_
The pools began operations first in Alberta in the autumn of 1923, and in Saskatchewan and Manitoba in 1924. They had a great growth and a great success. And then came 1929. Again contracts were signed in large

Canadian Wheat Board
numbers. The pools fixed their initial advance for the crop of 1929 at SI .25 a bushel. At that time I thought the initial payment was too high, although I had nothing whatever to do with it. It was apparent then to anyone who knew anything about the grain business that a situation was developing which was bound sooner or later to lead to trouble, if not disaster. However that advance was fixed. In the autumn of 1929 came the collapse of the stock market. Values of all commodities, including wheat, were affected. Markets began to decline. When I was a member of my right hon. leader's government for a brief period, from the beginning of January, 1930, until the election in the summer of that year -at which time by the way, I was replaced, with the full consent of the electors of the constituency in which I was a candidate-I remember being called up in the month of March on the telephone by a premier of one of the western provinces. He told mo that the pools were in financial difficulties. He pointed out that the price had declined so that the margin over the $1.25 advance had practically disappeared, and he said, "We have had a meeting of the three prairie premiers and we think the federal government should guarantee the banks against the advance."
My late colleague, Mr. Dunning, was then minister of finance. I might say we never reported this to our leader; it is probably a bit of news for him.


Richard Burpee Hanson: Bad boy.


Thomas Alexander Crerar: Mr. Dunning said that we could not undertake that. I so advised the gentleman who had called me. Within a few days the governments of the western province had given their guarantee to the banks against the declining wheat market. What was the result of that guarantee? The result of the guarantee was that it cost the western provinces, among them-if my memory serves me correctly-about $25,000,000.


Alexander Malcolm Nicholson: The provincial governments?


James Garfield Gardiner: Yes.


Alexander Malcolm Nicholson: They have not lost that amount.


Mr. PERLEY:: It has all been paid back.


Some hon. MEMBERS:: Order.


Thomas Alexander Crerar: It amounted to $25,000,000.


Alexander Malcolm Nicholson: But they have not lost it.


Thomas Alexander Crerar: I did not say they lost it.


Clarence Decatur Howe: Make your speech later.


Thomas Alexander Crerar: Let my hon. friend be patient; I mentioned that point for the reason that it leads up to the criticism which has been made by the leader of the opposition. The provinces helped out. They had to make good their guarantee. Quite properly they took security in all the assets of the pools, and they gave the pools a period of years to repay that money. And the pools are repaying it.


Alexander Malcolm Nicholson: It has not cost the provinces anything, then?


Thomas Alexander Crerar: I did not say it did-except in Manitoba.


Alexander Malcolm Nicholson: You did originally.


Thomas Alexander Crerar: I did not. I did not say that at all. I believe Manitoba wrote off something like a million dollars of its claim. In all the provinces the provincial governments quite properly took security on all the assets of the pools. That was in the spring or early summer of 1930.
We come along to the election which took place in July of 1930. A new government took office at Ottawa, a government of which my hon. friend the leader of the opposition was a supporter. Mr. Bennett, who was then prime minister, was approached in the autumn of 1930 to help the pools financially. As I have already said, the provincial governments had security on all their assets, and they had to secure a line of credit with the banks iii order to care for the very large amount of grain that they were handling. They came to the federal government to get that financial assistance.
My hon. friend stated to-day that Mr. McFarland was asked by the pools to take the management of the cooperative wheat selling agency. I venture to suggest to the leader of the opposition that it was a condition stipulated by the federal government, of which Mr. Bennett was prime minister, when asked to give financial assistance, that Mr. McFarland should take charge of the selling operations.


Richard Burpee Hanson: There is no evidence of that. That evidence was not given before the banking committee of 1934. My hon. friend was not here, and I was. That is only his inference. I say here and now that the pools suggested Mr. McFarland.


Thomas Alexander Crerar: I know the whole story.


Richard Burpee Hanson: I do not think the hon. member does. He simply has some hearsay.


Ernest Edward Perley: That is the story.


Thomas Alexander Crerar: The story I got was-
Canadian Wheat Board


Richard Burpee Hanson: The hon. member got it; certainly it is hearsay.


Thomas Alexander Crerar: I did not get it second-hand, I got it first-hand. It was suggested to the pools that if they employed Mr. McFarland they would get a guarantee. My authority for that is a gentleman who was head of one of the pools.


Richard Burpee Hanson: That is not evidence, that is hearsay.


Thomas Alexander Crerar: I pass it on now.


Richard Burpee Hanson: Mr. McFarland was asked to take it over without receiving a dollar's remuneration.


Thomas Alexander Crerar: Now we come to an interesting phase of the development. Mr. McFarland took charge, and Mr. McFarland had not been an employee of the pools. He was made general manager of the central selling agency which the three western pools had set up. During the time from 1930 until this government came into office at the end of 1935, the guarantee of the government of Canada was behind the Canadian Cooperative Wheat Producers Limited.


Richard Burpee Hanson: Against
ultimate loss only.


Thomas Alexander Crerar: Ultimate loss?


Richard Burpee Hanson: There is a great difference.


Thomas Alexander Crerar: Is that not fine, Mr. Speaker? I do not know that I would want anything better than a guarantee against ultimate loss in handling any operation. My hon. friend has criticized us for our treatment of Mr. McFarland, and I should like to say a few words about that. My hon. friend referred to the order in council passed on December 3, 1935, by which the McFarland wheat board, so-called, was relieved of its duties and a new board appointed, and he was quite severe in his stricture of the government for that action.


Richard Burpee Hanson: Not for
the dismissal, but for the use of one word.


Thomas Alexander Crerar: Inimical.


Richard Burpee Hanson: It was
expected that they would retire.


Thomas Alexander Crerar: My hon. friend made a
great play on that word. During the lunch hour I took occasion to look up the meaning of the word "inimical" in one of the standard dictionaries.


Richard Burpee Hanson: So did I.
{Mr. Crerar.]


Thomas Alexander Crerar: The use of the word was perfectly proper in the order in council.


Richard Burpee Hanson: I do not
agree.


Thomas Alexander Crerar: What does it mean? It
means "of a character or constitution regarded as hurtful in tendency, or opposed in influence; incompatible; adverse." It means also "having the disposition or temper of an enemy," and there are several other meanings. The word can be used in several senses. The synonyms are adverse, antagonistic, hostile, hurtful and a number of others. We were convinced-I shall give the house the reasons in a moment-that it was inimical to the best interests of Canada to continue the operations of this wheat board. It was not that we thought that Mr. McFarland was a dangerous or dishonest man, not at all. In these matters the question of judgment is involved. For the enlightenment of my hon. friend and of the house-I have studied the record-I will say that from 1932, while Mr. McFarland was in charge of operations of the Canadian Cooperative Wheat Producers Limited, with a government guarantee against every dollar he employed in the interests of that organization, he engaged in the greatest wheat speculation which has ever taken place in this country. I dislike saying these things, and I certainly would not have mentioned them if my hon. friend had not taken the line he did. But the record is there, the sworn evidence which any man may find in the books of the Canadian Cooperative Wheat Producers Limited.
In the session of 1935 Mr. Bennett's government introduced the wheat board act, which is the parent of the amendment we are now considering. I received some enlightenment the other day when the hon. member for Qu'Appelle (Mr. Perley) told us when the bill was in the resolution stage that he had prepared a memorandum which was submitted to Mr. Bennett and that it was on the strength of this memorandum that Mr. Bennett launched out into his wheat board legislation.


Ernest Edward Perley: I said that certain things
were embodied in the act.


Thomas Alexander Crerar: Let me say to some of
my hon. friends who are colleagues of the hon. member for Qu'Appelle-I am looking just now at the hon. member for Davenport (Mr. MacNicol)-that when they feel a little anxiety over the future of the wheat business, they should just remember that it was the memorandum of the hon. member for Qu'Appelle which has landed us in all this trouble.

Canadian Wheat Board


Ernest Edward Perley: I bow to the statement
made by my hon. friend. I am pleased to take the credit for the wheat board act.


Thomas Alexander Crerar: I suspect that when the information gets abroad throughout western Canada that it was the hon. member's memorandum which led up to the wheat board act of 1935, the people will want to erect throughout the western prairies as many monuments to the hon. member as there are monuments for the soldiers of the last great war. Well, to be serious again, this legislation was passed in 1935, and the act was proclaimed early in August. Later in that month Mr. McFarland was appointed chairman of the newly appointed wheat board, his colleagues being Doctor Grant, a professor in the agricultural college of Manitoba, and Mr. D. L. Smith. On September 6, 1935, the wheat board fixed, and the government approved, the initial advance or payment at 87| cents a bushel. I make no comparison and I draw no invidious distinction; I merely invite the attention of the house to the fact that this price was fixed on September 6, at a time when the general election of that year was in progress.


Richard Burpee Hanson: It had to be fixed at some time. That was six weeks before the election.


Thomas Alexander Crerar: Now I go a step further. The Canadian Wheat Board Act specifically defines the powers of the board, and in order that the committee may be informed I direct the attention of hon. members to section 7 of that act, which is chapter 53 of the statutes of 1935. I shall read only two clauses of section 7, because the others deal with the method by which payments shall be made to the producers. Section 7 provides that the board shall have powers:
*	(a) To receive and take delivery of wheat
for marketing as offered by the producers thereof;
(b) To buy and sell wheat: Provided

Note this:
Provided that no wheat shall be purchased by the board except from the producers thereof.
That is from the farmers. Now what happened? Was that very provision in the act respected by the wheat board of which Mr. McFarland was chairman, this gentleman to whom we did so great an injury? It was not; because between September 6 and October 14, the date of the general election, Mr. McFarland or the wheat board, on his instructions I presume, bought more than 10,000,000 bushels of wheat in the pit at Winnipeg at a time when millions of bushels were being delivered by the producers every day. What has my hon.
friend to say about that? It took us a few weeks to get that information. I ask any fair-minded man in the house or the country: Was the new government that had taken office justified in retaining the services of the board when we found that it had acted in open violation of the act? Not only that, but the government guarantee of the bank account still stood. What was taking place at that time was a speculation in wheat by the board on the credit of the treasury of Canada, and I put it to any member of this house: Should we have permitted that state of affairs to continue?
My hon. friend criticizes the word "inimical" in the order in council replacing the McFarland board with a new board. But will he not agree that the action of the board in speculating, because it was speculating, as I said just a moment ago-hon. members can read the records of the buying and selling that was going on almost every day on the credit, I repeat, of the treasury of Canada, with the government guarantee to the banks-can be truly described as adverse, as hurtful, to Canadian interests? I say to my hon. friend that the word "inimical" was not a particle too strong to use in the order in council.
Then my hon. friend talks about a fire sale, a phrase which he has borrowed, I suspect, from the hon. member for Qu'Appelle.


Richard Burpee Hanson: Oh, no.


Thomas Alexander Crerar: At all events the hon. member for Qu'Appelle has talked more about fire sales than anyone else in the house.


Ernest Edward Perley: We had an investigation into that fire sale.


Thomas Alexander Crerar: My hon. friend will have his turn to speak. May I give some more information to the house on that question. Great Britain for many years has been the chief market for Canadian wheat owing to the fact that before the great war and even following it, Great Britain required to import annually from 200,000,000 to 220,000,000 bushels of wheat to. feed her population. The British miller in preparing his flour for the bakers prepares it from a grist of blended wheat. That is another factor I would invite the house to note because it is important. The British miller may take some of his wheat from the United Kingdom, some from the Argentine, some from the United States, some from Canada, perhaps some from the Balkans, or from Russia when Russia was exporting, and his purchases of these other wheats would be governed largely by the price factor, by the relative values of the wheat; but always he must have a certain percentage of Canadian wheat because of its superior quality in
Canadian Wheat Board

giving the necessary strength to the flour he produces for the bakers. Under normal conditions from fifty to sixty per cent or upwards of Canadian wheat was used in the blend making up the British millers' grist. But what was the position when we came into office in 1936? The percentage of Canadian wheat which the British millers were using had dropped to from ten to twenty per cent in most mills in Great Britain, and there were none, with the exception of a few millers in Scotland, that were using more than twenty-five per cent of Canadian wheat.


Richard Burpee Hanson: They were using a cheaper wheat.


Thomas Alexander Crerar: My hon. friend is right
for once. But why were they using the cheaper wheat?


Richard Burpee Hanson: Because it was cheaper.


Thomas Alexander Crerar: One of the cardinal mistakes in policy which the pools made, I think-and I say this without the slightest desire to criticize-was the impression they created in the consuming countries of Europe that an effort was being made not only in western Canada but in the United States and the Argentine to bring wheat producers into one huge organization that would exact a price for wheat.


Richard Burpee Hanson: And were not the millers in a cartel? Were they not the biggest cartel in Europe in wheat?


Thomas Alexander Crerar: I am not to be deflected from my argument by the interjections of my hon. friend. I heard Mr. Sapiro myself addressing a huge meeting in the amphitheatre in Winnipeg, describing how necessary it was that western Canada, the United States, Australia, the Argentine-


Georges Parent: I am sorry to have to interrupt the hon. gentleman but his time is up.


Richard Burpee Hanson: I suggest that he be allowed to proceed.


Georges Parent: I would just point out that I cannot accept this as a precedent; it can be done only by unanimous consent.


Thomas Alexander Crerar: Thank you, Mr. Speaker. I am grateful to the house because it is difficult to cover the ground and pursue all my hon. friend's tracks within forty minutes. I heard Mr. Sapiro upon that occasion describe how all these countries could be organized, and say that then there would be a board representing them all sitting in London selling wheat to the importing countries of Europe.

I am passing no criticism on that now, but I say that the impression spread throughout Europe that a concerted effort was being made by the producers of wheat to exact a price.
To my hon. friends from Saskatchewan may I recount an interesting incident which happened to myself in 1928, when I made a trip to Europe on behalf of the company of which I was then president. I was sitting in the office of a grain importer in Hamburg who bought from time to time a quantity of Canadian wheat. His first question was about the pools; he said, "Your pools are going to get legislation to compel every farmer to deliver his grain to them?" "Well," I said, "there is a little talk about that, but I am doubtful if it will ever come about. On what do you base that statement?" He said, "Your newspapers." I said, " You astonish me," and he handed me a copy of the Western Producer, which was then the official organ of the Saskatchewan pool.


An hon. MEMBER:: It still is.


Thomas Alexander Crerar: There were articles in that paper describing how the producing countries were to be brought together, and predicting that the provincial governments would have to yield and pass compulsory legislation requiring every farmer to come into the pool. That German importer had blue-penciled every paragraph which related to that matter. He was buying wheat from the Argentine, from Australia, wherever he could get it. The impression created in my mind was that these people, seeing their own business threatened, went elsewhere rather than to Canada to buy their wheat, and my criticism of Mr. McFarland's policy from 1930 to 1935 was that it tended to strengthen this impression in the minds of our European customers.


Richard Burpee Hanson: Oh, no.


Thomas Alexander Crerar: The result was that our chief market-


Richard Burpee Hanson: Would the minister allow me? Does he attribute that attitude of importers to anything which we did or which Mr. McFarland did or said? He cannot do that.


Thomas Alexander Crerar: I say that, rightly or wrongly, that impression persisted. At any rate the facts were that by the end of 1935, instead of Canadian wheat constituting fifty to sixty per cent of British millers' grist, it had fallen in many instances to twenty per cent and even ten per cent. That was the situation all over the United Kingdom excepting in Scotland, where some mills always used and still use a large percentage of Canadian wheat.

Canadian Wheal Board


Alexander Malcolm Nicholson: Does the minister
attach any blame to the pools for that situation?


Thomas Alexander Crerar: My point is that it created an attitude of mind on the part of our buyers. I have always thought it as good practice not to antagonize the customer. If we are to sell our produce in Europe in these days of keen competition, we must be careful not to pursue policies or do anything which will create suspicion or antagonism in the minds of buyers.
That was the situation. I was interested in what my hon. friend said about the carryover. He stated that the amount was 213,000,000 bushels at the end of July, 1935. In December of the same year the total amount of wheat in the control of the wheat board-I have not the precise figures but I believe my memory is accurate-was approximately 348,000,000 bushels.


Ernest Edward Perley: Better than 360,000,000
bushels.


Thomas Alexander Crerar: That was the amount of wheat on hand when the new board took charge. What were we to do? Pursue the policy of Mr. McFarland; buy and sell on the market, contrary to law, to try to scalp a few dollars of profit?


John Gordon Ross: Or lose.


Thomas Alexander Crerar: Or were we to adopt a policy which would win back the markets we had largely lost? We took the latter course, and wisely so. What is the result? Even before the war, in September of last year, Great Britain was using Canadian wheat to the extent of fifty to sixty per cent of her entire requirements. That was the consequence of the policy which was followed by the new wheat board.
My hon. friend, if I recall his words, said something about a "political board". WTe appointed as one of its members a gentleman who is now the chairman, who for years had been associated with Mr. McFarland-


Richard Burpee Hanson: I did not say that it was a political board. I said that the government set up a board which would carry out the ideas of the government.


Thomas Alexander Crerar: If that is not a board with a political complexion, I fail to understand what the word "political" means.


Richard Burpee Hanson: I did not mean to intimate that all the members were Liberals. I do not know what they were.


Thomas Alexander Crerar: Who were the other gentlemen? One was Dean Shaw of the university of Saskatchewan. The other was Mr. J. R.
95820-144	'
Murray, whose experience in the grain business had been largely with the United Grain Growers, a farmers' company. He had been for nearly twenty years assistant general manager of that company. Those are the men whom we selected. Our policy, which I am prepared to defend anywhere, was to try to sell this wheat. My hon. friend said, "You came in with a carryover as of August 1, 1935, of 213,000,000 bushels"; by December that had increased to 360,000,000 bushels, according to the hon. member for Qu'Appelle, and then, because the new board tried to sell some of that huge quantity of wheat and induced buyers abroad to take it, we are accused of having a fire sale. If that is not the pinnacle of complete nonsense, I have never observed one.
We come back to the present situation. I do not know the amount of the carryover yesterday, at the end of the crop year. My hon. friend says he thinks it is 275,000,000 bushels. I should think it is a little less. But whichever estimate is correct, is that not a matter of some concern to this country?


Richard Burpee Hanson: I would say it is.


Thomas Alexander Crerar: I agree with the observation of my hon. friend that wheat presents one of the most serious problems which Canada has to meet. I believe it may be even more serious ten years from now. Why have we a wheat problem? Our markets in Europe are virtually limited to the consumptive power of Great Britain. Before the war Canadian wheat went to Norway, Sweden, Latvia, Poland, Germany, Switzerland, Spain, Portugal, Italy, France, Belgium, Holland, and Denmark, as well as the United Kingdom. To-day every one of those countries with the exception of Britain is cut off. We might sell wheat to the orient; but when, some months ago, a dealer in Winnipeg made a sale to Russia, there was an outcry all over the country, and my hon. friends opposite were among the first to criticize this government for allowing a sale to a country which might pass the wheat on to Germany.
These are some of the problems which have to be dealt with. They cannot be dealt with excepting upon a broad view of the situation. It looks as though probably 250,000,000 people in Europe will be short of food in the next twelve months. That is one of the gravest problems which are facing the allied governments to-day. When the war comes to an end Europe will be starving, its agricultural life largely destroyed, requiring years to rebuild, and I am not worried about the sale of the wheat which may be available in

Canadian Wheat Board

Canada at that time. Canada may then be in a position to render a great humanitarian service to Europe.


Alexander Malcolm Nicholson: What are you going to do with the farmer now, though?


Thomas Alexander Crerar: In the meantime the
problem has to be dealt with. I do not propose to refer to the details of the bill. They can be better discussed in committee. My hon. friend asked me a number of questions which, I believe, can be more appropriately dealt with when we come to the relevant sections of the bill.
There is but one other point on which I wish to touch, and that is, my hon. friend's anxiety for information as to what happened in respect of wheat when I was in Europe in November and December last. The matter of wheat was discussed along with many other matters. One of the difficult problems before the British government, then and now, was to find the dollars in America to pay for the multitudinous and ever-increasing supplies which she is drawing from this side of the ocean.
I can tell my hon. friend, in reference to the closing of the Winnipeg grain exchange, that the view of representative men on the cereals import committee in London was that it would be unwise to close it. The hon. member for Qu'Appelle, in a previous discussion in this house, recited an interview he had had with the former Minister of Trade and Commerce about conditions that obtained last fall. A few members on the cereals import committee-I discovered this when I reached London-thought the market should be closed, but the weight of opinion in the committee was that it would be better to leave our market open. I agree with what my hon. friend says, that with the initial price of 70 cents from the board which the farmer will now receive, and a price pegged at 70 cents a bushel on the exchange, it does not matter whether the market is closed or left open from the point of view of its effect on the producer. I say that honestly to hon. members out of the experience and knowledge I have -and I may claim to have a little of both.
The difficulty in Britain is one of exchange. There is also difficulty in the matter of shipping. At the time I was in London, although all the countries in Europe that I am speaking of, with the exception of Germany, were open to receive Canadian wheat, and Canadian wheat was going to the Scandinavian countries, Holland, Belgium and the other countries that I have mentioned, these are now shut off and this has created an entirely new situation. I have no doubt that 
Britain will take a very large amount of our wheat this year; how much, I do not know. My hon. friend asked, "Why have you not sold 275,000,000 bushels to Britain out of the huge crop you have in Canada?" Well, Britain had seen the possibilities of war looming over the horizon, and I think it is a reasonable assumption that she had made some provision in foodstuffs against that. At any rate, we are facing the situation that to all intents and purposes we have now only the British market, and this means, I fear, that much of our wheat will have to be carried over into another year. The bill makes some provision for that contingency. It provides that if a farmer stores his wheat on his farm he gets an increased price month by month equal probably to the amount of storage he would have to pay if his grain were stored elsewhere in an elevator. That will help his individual economy.
My hon. friend asks what the government is doing to finance this wheat on the farm, and he belaboured us rather heavily. Then he admitted that there were great difficulties and he said that he could not see how it could be done.


Richard Burpee Hanson: How are you going to protect the treasury?


Thomas Alexander Crerar: He said that there were difficulties. In one breath he asks us to make some arrangement to finance this wheat on the farm, and then he issues the sternest sort of warning to us, that whatever may be done the treasury must be protected.


Richard Burpee Hanson: Hear, hear.


Thomas Alexander Crerar: And he says, "Hear, hear." I do not quarrel with that, but I mention it to show some of the difficulties which exist in working the thing out. We have all been extremely busy in the last few weeks and I find myself rather tired at eleven o'clock at night.


Richard Burpee Hanson: Hear, hear.


Thomas Alexander Crerar: I must say that I find it difficult to get the time to bring clear thought to the solution of some of these questions, but may I say to my hon. friend and to the house and the country that we are not lacking in appreciation of the need of financing this wheat on the farm. We recognize the bearing it has on our whole economy in Canada. I am confident that some method can be found, if not completely to remove, at any rate greatly to alleviate the difficulty, and I think the house and the country can trust the

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government to do what is reasonable and fair in the interests not only of the farmers but of the whole economy of the country as well.
I come now to the question of price, and I shall conclude because I have trespassed already on the indulgence of the house. The price was fixed in the act last year at 70 cents.


Richard Burpee Hanson: Minimum.


Thomas Alexander Crerar: 
Ernest Edward Perley: I would rather sleep with him than with you.


Thomas Alexander Crerar: I recognize the importance of this issue. I do not want to see it made a political football in Canada. It is an easy matter to go and inflame rural communities in western Canada with stories that they should be getting $1.25 a bushel for wheat.


Alexander Malcolm Nicholson: Does the minister think 70 cents at Fort William is enough?
95826-144)


Thomas Alexander Crerar: I will come to that. When the hon. member for Weyburn was speaking the other night, I did not catch the tenor of his remarks and so I looked up his speech in Hansard. With reference to the price of 70 cents he said:
I know the government have a problem and a very definite one in trying to dispose of this wheat; yet the fact remains, and we must face it, that farmers cannot grow wheat under present economic conditions for 70 cents a bushel, basis Fort William.
Now I did not clearly catch what my hon. friend said. I thought he said that no farmer could grow wheat at 70 cents a bushel. My reply as it reads is not correct. I would say that I know of my own knowledge farmers who last year made a profit, and a fair one, in selling their wheat at 70 cents a bushel. But I know that a great many farmers, probably the vast majority, did not; some of them lost money; some did no more than get by.


Thomas Clement (Tommy) Douglas: They did not get 70 cents.


Thomas Alexander Crerar: That is one of the difficulties there is in the situation of fixing a price for wheat. There is nothing more illusory and deceptive than talking about the cost of production of wheat, because it varies from district to district and from farm to farm. In the instances I mentioned a moment ago, farmers had a yield of twenty-five bushels to the acre. This happened in the district in which my own farm is situated and which I know well. These men are good farmers. My hon. friends who have had agricultural experience know, I have had it and I know, that if, for example, you have to work your summer fallow six or seven times to keep the weeds down, because your farming practice in the past was not what it should have been, that adds greatly to the cost. There are some farmers who, if they got SI .25 a bushel, probably would not make money. But I admit at once that the answer I gave to the hon. member for Weyburn was not correct in the light of the remark he made, which I did not understand. There are some farmers who made money at 70 cents, but I think the great majority did not, and I do not think they can.
I do not think there is much more that I wish to say now. I appreciate the indulgence of the house in listening to me for so long, and it may be I shall have some further contribution to make when the bill is in the committee stage.


Thomas Clement (Tommy) Douglas: First I want to thank the Minister of Mines and Resources (Mr. Crerar) for his timely warning. I can assure him that if I ever get into-
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bed with the hon. member for Qu'Appelle, I will certainly know what kind of bed I am getting into-


An hon. MEMBER:: You had better have your spurs on.


Thomas Clement (Tommy) Douglas: I have some friends who once got into bed with the Minister of Mines and Resources; when they went into the bed it was a Progressive bed and when they wakened in the morning it was a Liberal bed.


Mr. MACKENZIE (Vancouver Centre):: Or twin beds.


Thomas Clement (Tommy) Douglas: It was a feather bed, and they have been sleeping in it ever since.
It is not my intention to give a historical review of wheat legislation; I endeavoured to do that the other evening when I spoke on the budget. I propose to confine my remarks to a study of the underlying principles in this bill. This bill proposes first of all to implement a promise made by the government with reference to setting up an advisory committee to the wheat board. I am afraid that the letter of the promise is going to be kept but not the spirit, judging by the nature of the amendments. The committee is now to "assist" the board, rather than to "advise" it. The clause requiring them to meet regularly is taken out, and the committee is now to report to the board rather than to meet with the board. I hope this committee is not going to be just a futile gesture of the government in order to carry out merely the letter of the promise. It was said by the hon. member for Portage la Prairie (Mr. Leader) that this government had been unfriendly to the wheat board. As a matter of fact, they have been unfriendly all along to the idea of an advisory committee to the wheat board with producers' representation on it. If they were not, why did they dismiss the committee? Why is it that throughout their regime they have never used the advisory committee? Why was it dismissed in the first place? I have here a copy of the evidence presented before the Turgeon commission at Regina. As recorded at page 9191 of the evidence, Mr. J. R. Murray, the former secretary, was on the stand being questioned by Mr. M. A. Mae-Pherson, counsel for the pool. He was asked:
Q. As a matter of fact you never had occasion as chief commissioner to confer with the advisory committee at all?
A. No.
Q. Was that your recommendation, or was that, again, a matter of government policy?
A. I stated that I would not accept the position of chief commissioner w'ith any advisory board.
Q. So that your appointment was really contingent on the termination of this committee s life?
A. As far as I was concerned. _	.
Q. And consequently you were appointed chief commissioner and the advisory committee as provided in the act ceased to exist?
A. Yes. The government had the choice, of course.
Q. Oh yes, I am not questioning that. That was during pleasure.	_
A. No, but I mean they had the choice of getting someone else for chief commissioner and keeping the advisory committee.
Q. Yes. They had the choice of either taking you without the committee or getting somebody else with the committee.
A. Yes. I think, Mr. MacPherson, I would like at that point, not to interrupt you but you might not ask the question, I would like to make it clear that the personnel of the committee in existence at that time had nothing *whatever to do with my taking that stand.
And on the next page:
Q. I am submitting this, that you as a matter of principle refused to act as chief commissioner of the wheat board with the advisory committee as provided for in the act?
A. Yes.
That seems to make it fairly clear that this government has never been keen about having an advisory committee to the wheat board. In fact, the hon. member for Wood Mountain (Mr. Donnelly) said the other evening, "We do not need a committee; the board has been getting enough advice already." It is not a matter of whether it is getting enough advice. What is of importance is that this government through its responsible ministers stated last winter, prior to the general election, that such a committee would be appointed and that on that committee there would be producers' representation.
Before I leave that point, may I remind the house that there is a great deal of difference between representation of producers and producers' representation. I notice, for instance, that there is a provision for there being this producers' representative on the committee. But if the government merely select here, there and yonder some producer, or, what is worse, in some instances some individual who supports a farm, and put him on the board as representing producers, that does not constitute producers' representation. As I understand it, producers' representation must mean one thing and one thing only, namely, men selected by the producers to represent them and to present tbeir point of view to the wheat board. When these men are being selected, the different organized farmers' groups, the pools who represent several hundred thousand wheat producers, and other organized farm bodies ought to have the selecting of the men who will constitute the majority of that advisory committee.

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I come now to the second feature of the bill, namely, that according to the statement of the minister we are going to continue to market wheat in this country through the futures market. The futures market is going to remain open. The hon. member for Wood Mountain said the other evening, as reported at page 1958 of Hansard, "I have yet to hear anyone give me a concrete reason as to why the exchange should be closed." Well, the Minister of Mines and Resources this afternoon gave him a conclusive reason. He said, "We have now reached the stage of development in world conditions that it does not make any difference whether it is closed or open." Then why keep it open? It used to be said that the function fulfilled by the grain exchange was that it reflected the world market. As has been pointed out by the hon. member who preceded me, there is no longer a world market. Then the advocates for the Winnipeg grain exchange said, "Oh, but the exchange acts as a barometer of price." That argument was badly dissipated when on June 3 of this year the Montreal Gazette carried an article intimating that the British government, through its representatives in this country, bought 50,000,000 bushels of wheat above the market price. I have been told that it was bought at twelve cents above the market price. The amount above the market price does not matter; the fact remains that the British government was buying wheat at a price higher than the market price.


Mr. THORSON:: What market price?


Mr. DOUGLAS (Weybum):: The Winnipeg market price.


Joseph Thorarinn Thorson: It does not say that. It was the world market price.


James Lester Douglas: Even the Winnipeg grain exchange does not constitute a barometer with reference to prices. The government will not come out and say that they are going to keep the Winnipeg grain exchange open, just because they favour the Winnipeg grain exchange. No; they say the reason why they are keeping it open is that representations had been made to them by the cereals import committee of the United Kingdom. Surely the British government would not give as a reason for carrying out certain internal policies, that they were following suggestions and representations from any branch of the Canadian government? Surely this government is not going to try to shove on to the British cereals import committee responsibility for keeping open the speculative market. The minister said this afternoon that in 1917 it
was necessary to have a wheat board because the allies had pooled all their buying. That is exactly what the allies did last fall. At that time Great Britain and France pooled their buying. Now that France is out of the war, Great Britain has pooled her buying through one purchasing committee. The argument advanced by the minister for buying in 1917 through a wheat board, and directly with a purchasing agent for Great Britain, is just as valid in this year 1940.
I now quote a statement which appeared in the press of Friday, July 26, and purports to be a statement by Mr. J. H. Wesson of Regina, president of the Saskatchewan wheat pool. He said:
The statement the Winnipeg futures market is to remain open is not at all satisfactory to the wheat producers of western Canada. There is virtually only one buyer of Canadian wheat to-day. It is the wheat purchasing commission in Great Britain. There should be but one seller, the Canadian wheat board.
That certainly is true. Of course Mr. Rank, head of the cereals import committee, is not going to say to this government, "Close up the exchange, and deprive the brokers from getting their little commissions and brokerage charges." Certainly he will not say that. But this government will have to choose between looking after the interests of two or three hundred brokers and looking after the interests of 300,000 farmers in western Canada. They are not going to get out of their responsibility by trying to lay the blame on the British import committee.
I now come to the third feature in the legislation, namely, that having to do with the processing levy. We in the group with which I am associated have advocated for years a fixed price on wheat used for domestic consumption. We have always thought that was a reasonable proposition. I would go much further and say that, without hurting the consumer any more than the present levy is going to hurt him, we could have increased that levy materially.
The farm management department of the university of Saskatchewan, presided over by Professor Hope, has done some research along those lines, and he contends that it would take an increase of 52 cents a bushel in the price of wheat to justify an increase of one cent in the price of a 20-ounce loaf of bread. That is his opinion, as a result of the research he has made. Since the minister made his statement on July 24, indications are that we are going to have at least a one-cent increase in the price of a loaf of bread. We might as well have gone all the way and placed a levy of.
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let us say, fifty cents, which, on a 20-ounce loaf, would have increased by one cent, the price of bread to the consumer.
Under the price control board which is under the jurisdiction of the Minister of Labour (Mr. McLarty), the government could have seen to it that that price did not get out of hand, and it, would have helped greatly in the operations of the wheat board. Again I wish to quote Mr. Wesson's statement in that regard, because he represents in Saskatchewan an organization which has in its membership 105,000 wheat growers. He said:
The 15-eent processing tax to be charged on all wheat manufactured into flour consumed in Canada is merely a gesture, although a step in the right direction. The pools believe there ought to be a domestic price for wheat of at least $1.25 a bushel. An advance of 52 cents a bushel increases the price of bread one cent a loaf. Tlie $1.25 figure is close to what is known as the parity price level of the goods the producer has to purchase.
Therefore I suggest to the government that before the legislation is finally passed, the problem of financing through the wheat board could be benefited materially by increasing this processing levy, provided the government is prepared at the same time to take steps to see that the increase in the price of flour and bread is not out of proportion.
The next point with which I wish to deal is the fixed price which will be set under this legislation. That price is to be the same as last year, namely 70 cents a bushel. Most people in eastern Canada fail to realize that when we talk of wheat at 70 cents a bushel we are speaking of wheat, basis Fort William. As was evidenced last year, this means 49 cents a bushel, average grade, at the elevator. In these observations the Minister of Mines and Resources quoted what I said the other night, and his reply. He has said to-day that he misunderstood me. At page 1947 of Hansard I am reported to have said:
-yet the fact remains, and we must face it, that farmers cannot grow wheat under present economic conditions for 70 cents a bushel, basis Fort William.
And the Minister of Mines and Resources (Mr. Crerar) interjected, "That is not right." The minister has said to-day that he did not hear me correctly. But I have a hunch that in the meantime he has heard from a good many people in western Canada;, and he has certainly heard them correctly. Farmers, and farmers' organizations throughout western Canada, still say what the minister himself said this afternoon, namely, that with the exception of a small group of mechanized farmers-and they are really factory farmers- the great mass of the farm population in western Canada cannot grow wheat at present prices, on a basis of 49 cents or 50 cents a bushel at the local elevators.


Mr. JOHNSTON (Bow River):: The Minister of Agriculture (Mr. Gardiner) says 30 cents.


John Gordon Ross: No; he does not.


Charles Edward Johnston: Between
30 and 40 cents.


Thomas Clement (Tommy) Douglas: I will allow the two hon. gentlemen to have their dispute later in the debate. Just now I should like to proceed. I have before me some figures to which reference was made the other evening by the hon. member for Portage la Prairie. I refer to prices from 1908 until last year. Not only do these figures show the prices per bushel received by farmers on basic production, but they show a fair estimate on amounts received per acre. The figure we got last year, which will be the figure for this year, will be practically an all-time low, with the exception of a few depression years. I refer hon. members to a statement made last year by a gentleman who represents in the Manitoba legislature part of the constituency represented by the Minister of Mines and Resources. I refer to the premier of Manitoba, the Hon. John Bracken. That gentleman headed a western conference on marketing, which met in Regina, Saskatoon and Winnipeg, and it will be recalled that they were meeting at the time when the initial price was guaranteed at 80 cents, basis Fort William-not 70 cents, as it will be under this legislation. This is the resolution which was agreed to in Winnipeg:
That while this committee in the light of the expert evidence presented to the conference held in the city of Winnipeg and the unanimous reaction of its members with reference thereto is of the opinion that the present guaranteed price of wheat is not sufficient to enable the farmers of western Canada, either to pay interest on or to retire the capital of their present indebtedness, or to maintain adequate standards of living for themselves and their families, and while this committee also recognizes that a wheat policy for the crop year 1939-40 is necessarily only a temporary measure, pending an ultimate adjustment of western economy by national action and world market developments or both, it hereby requests the chairman forthwith to nominate a sub-committee to present to this committee for consideration and subsequently to recommend to the dominion government for adoption a federal wheat policy for the year 1939-40.
And by way of general direction to its subcommittee, this committee offers for its guidance, its unanimous opinion that the dominion government should he requested to extend to the western wheat growers in respect of the wheat to be grown in the crop year 1939-40 at least the protection given in the crop year, 1938-39.
That price was 80 cents a bushel, "oasis Fort William. I need not go on to quote what Professor Hope said, whose operations I believe the minister said the other night are being financed partly by this government and

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certainly by the government of Saskatchewan. He pointed out at the same conference that in order to meet his obligations, to say nothing about retiring his debt, the farmer would have to receive 90 cents a bushel at the local elevator. Since that time, prices of almost everything the farmer has to buy have gone up. Anyone who says in this chamber or anywhere else that the farmers can produce wheat at the figure suggested in this legislation is simply saying something which is not in accordance with the facts or in the best interests of the western producer.
I hope, before this debate is over, that the minister will give us some idea of what operations have been carried on by the wheat board to dispose of our wheat, and what prices have been offered by the cereals import committee of the United Kingdom. We should be told the average price at which the government has managed to dispose of most of this wheat. I have here a copy of an article which appeared in the Regina Leader-Post of March 12, 1940. It is headed, "Gardiner Talks Wheat, Correcting Manion Mistakes." There are about two columns of it, but I shall quote only the last section, which is headed, "Advance of Seventy Cents." This reads:
It was finally decided to make that advance 70 cents.
It was then decided the farmer should be given a participation certificate, just as before, which meant that when wheat went above 70 cents it again became the property of the farmer.
Because the price of wheat was between 50 and 60 cents a bushel when this decision was reached and remained there until most of the wheat was delivered and only rose to 70 cents for a few days before practically all the wheat was delivered and further because war was declared about the beginning of September, and before all the wheat wras delivered, the farmer delivered practically all his wheat through the wheat board. The result is that practically all of the wheat left to be sold is under the control of the wheat board and therefore under the control of the farmer.
That wheat could all be sold to Britain to-morrow at not less than 87J cents a bushel. If it were, the farmer could now obtain at least ten cents a bushel on his participation certificates. This would make his payment more than the 80 cents which was being discussed last summer.
But the present government does not think it wise to sell all the Canadian wheat at 87 cents a bushel. The British government is not urging us to do so. If they bought it, they -would leave it right where it is in the elevators in Canada and pay the storage on it. While it would thus remain where it is, it would be entirely out of the hands of the farmers.
We believe that Britain will pay us more for our wheat when she is ready to take it for consumption in England and that the farmers would be well advised to allow the storage to oe charged up to their participation certificates.
In other words, we think we will get a better price for the wheat when Britain wants to take it, rather than by trying to force them to take it by making it a condition of anything we may do in the war.
If the government are going to get more than 80 cents a bushel for wheat of which they took delivery last year and for which they paid the farmer 70 cents, they are going to have money with which to make a payment on the participation certificates and they certainly will be in position to pay a better price than 70 cents. If the government expect to get a better price, even though they have to wait some time to sell the wheat, surely more than 70 cents would be justified in this legislation.
I come now to another matter, that of the farmer delivering his wheat. According to the statement of the minister, the farmer is going to be allowed to deliver a portion of his wheat to the wheat board, but he will have to store the remainder on his farm and receive storage payments for rendering that service. This brings up the whole question of what the farmer is going to do for money in the meantime. I should like to quote from my remarks the other day, as reported on page 1947 of Hansard. I said:
I ask the minister to tell us now or later how the financing will be done. Will the farmer who keeps his wheat on his farm get an advance on it, or will he be paid outright for it and receive a storage allowance?
Mr. Crerar:	Would my hon. friend recommend that that be done?
Mr. Douglas (Weyburn): Recommend that what be done?
Mr. Crerar:	Would my hon. friend recommend that the government buy the grain outright and store it on the farm?
Mr. Douglas (Weyburn): No, but what the government could do is pay a substantial advance.
Mr. Crerar: I am asking what my hon. friend would recommend.
Mr. Douglas (Weyburn): I am recommending to the minister that a substantial advance be made to the farmer, sufficient to enable him to finance. That is, if he is going to be allowed to sell only a certain amount of wheat in the fall, and he has to carry the rest, he can carry it only if there is a sufficient cash advancement to enable him to carry on his fall operations, be ready for his spring operations, and nrovide for his family in the winter. Is the Minister of Mines and Resources opposed to that? The minister is better at posing questions than answering them.
Mr. Crerar:	I think, if you ask me, the
suggestion is moonshine.
Perhaps that is moonshine, but it is the kind of moonshine which the Minister of Mines and Resources was sent down here to advocate nearly twenty years ago by the farmers of Canada. I heard him speak this afternoon about the difficult times of the
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pioneers. There are still pioneers on the prairies. They organized and sent the minister and other men down here to ask for just this kind of legislation. The minister did not call it moonshine then. He came down to this house, but unfortunately, as the years went by, he traded in his crusader's sword for a place in the seats of the mighty.
I put the situation to the house. The farmer is to be rationed; he is not to be allowed to sell all his wheat to the wheat board. In other words, he is to receive a deferred payment for the remainder, but in the meantime his obligations must be met. He is paying eight per cent or higher upon his indebtedness, but he is not drawing interest upon the wheat; he is getting only storage charges which will do little more than pay for the granaries he will have to build. What is the farmer going to do? Has he not a right to come to this government and ask for an advance on the wheat he is holding for the convenience of this country? I say that he has. I say that to give him that is merely economic justice. The Minister of Mines and Resources says it is moonshine. I am prepared to leave it to the farmers of western Canada to decide which is economic justice and which is moonshine. I continue to quote my remarks:
Then it ought to be incorporated in the government policy. I can assure the minister that it will be quite at home there.


John Gordon Ross: Can an hon. member re-read his speech?


Thomas Clement (Tommy) Douglas: In the same debate.


John Gordon Ross: That was not my point. My point was not that the member was reading his speech but re-reading it.


Thomas Clement (Tommy) Douglas: I am quoting from the same debate in Hansard on the same subject, and if it was moonshine, I suggest that the minister incorporate it in the government's policy. The Minister of Trade and Commerce (Mr. MacKinnon) tells us that we are going to have an amendment to this bill in the course of its passage through the house, and that the government is going to do something to finance the wheat which remains on the farmer's farm and which by virtue of this act he cannot sell.


James Angus MacKinnon: I did not say that.


Thomas Clement (Tommy) Douglas: Well, that he is considering it. In other words, the minister is now proceeding to consider moonshine. The Minister of Mines and Resources says, "it is moonshine", and the Minister of Trade and Commerce says: "We are considering it".

We are being asked under this legislation to give the board enormous powers. In past years up until last year the farmer could deliver to the wheat board all the wheat he wanted to, and last year he could deliver to the board up to 5,000 bushels. But now we are giving the board power to say just how much the farmer shall be allowed to deliver. How is that going to be rationed? Is it going to be a percentage of the wheat the farmer has? Is it going to be so many bushels an acre of the land he has in wheat or so many bushels an acre of all the land he has under cultivation? No government has any right to ask this house to give a board powers like that without first announcing the policy that it proposes to follow. How will these wheat deliveries be rationed? What percentage of his crop will the farmer be allowed to sell right away, and how much will he have to store?


John Gordon Ross: My hon. friend would not object so long as it was done equitably?


Thomas Clement (Tommy) Douglas: I would not object so long as the farmer is allowed to live during the interval and on a better standard of living than he has had for the last ten years.


John Gordon Ross: That is not the point. We are in trouble over storage.


Thomas Clement (Tommy) Douglas: If there is trouble over storage, I would not object to reducing the quantity of wheat which the farmer can deliver, provided that while doing this convenience to the country by storing wheat and carrying on a process of deferred payments, for that is what it really is, there be advanced to him on his wheat at the farm 40 cents a bushel. And why not? If the government do not want to do that, they could give him assistance in financing. That is not as satisfactory, but it is a second choice. If a farmer goes to a bank, asks for an advance on the wheat stored on his farm and cannot say when he will be allowed to dispose of it, what bank will lend him money on that basis? I suggest that the government place a guarantee behind such financing. I think we have a right before we go into committee, or when we come to that section, to have a statement from the government on how they propose to ration the deliveries, and, second, how the farmer will negotiate that period between his first month of deliveries and the time when he disposes of the rest of his crop. I know the stock answer is that this cannot be taken care of under this legislation, but I do not care under what legislation it is taken care of.

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The government is now announcing a wheat policy with reference to the disposition of the 1940 wheat crop, and we should not be asked to vote powers to a wheat board unless we are told how the farmer is going to be taken care of under these powers. Is there to be an advance, and, if so, how much will it be? Will it be sufficient to tide the farmer over the interim period? If there is not going to be anything advanced, how is the farmer going to finance? What assistance is the government going to give him?	What
guarantees will there be behind the farmer's borrowings? Will this government make arrangements with the provincial governments to see that debt adjustment legislation in the provinces will be such that the farmers will be protected during that period when they cannot sell all their wheat to the wheat board? That should be done. It is not within the jurisdiction of the federal government, I acknowledge that; but there could be negotiations between the federal and provincial governments to help out the farmers in a difficult period of economic dislocation when they are selling only a portion of their crop and storing the rest on their farms, with a view to seeing that the farmers are not unduly pressed by their creditors when they are rendering this service to the country.
Let me say this in closing. If this legislation is to be passed we should know a great deal more about it. I do not see how any of us can leave the house this week or next unless we know exactly what provision is going to be made for the wheat growers of western Canada. We -talk a great deal about winning the war, but winning the war is contingent to a large extent upon the morale of the Canadian people. What is to be the morale of the man on the farm who this winter, needing money to meet pressing current obligations, sees his granaries full of wheat that he is not allowed to sell? He sees that the munitions maker is -not waiting for his money and that the people who manufacture uniforms, shoes and Bren machine guns are not waiting for their money. Some of them have even received an advance to make capital expenditures. If we are going to keep up the morale of the people on the farm, the back-bone of this country, the government will have to enunciate a policy with reference to them that is more specific than the policy thus far outlined by -the government.


Vincent-Joseph Pottier: They will not go hungry.


James Lester Douglas: They will not go hungry, an hon. member says, but one
cannot make tea or sugar out of wheat; one cannot make shoes or clothes out of wheat; one cannot make coal out of wheat-


Mr. BERTRAND (Laurier):: Or whisky.


Thomas Clement (Tommy) Douglas: Somebody
suggests that one can make moonshine out of wheat, but I will leave that to the Minister of Mines and Resources who seems to be an authority on the subject. I merely say that the present unsettled state of the world's wheat market is a purely temporary aberration due to the war. It is easy to be glib and say that there are no markets for wheat and that we must stop growing it, but the fact is that markets for wheat will be available when the war is ended, and during the interim period we cannot allow our entire wheat industry to become bankrupt. We are therefore justified in asking Canadian economy to support an industry which is temporarily dislocated by the war but which is capable of producing stores of potential wealth and which, with the cessation of hostilities, will enable Canada to become once more one of the greatest exporting nations among the trading countries of the world.


Mr. G. T. FULFORD (Leeds):: Mr. Speaker, it is not my intention to take up much of the time of the house, nor do I wish this small effort of mine to be classed as a maiden speech. I shall leave that sweet anticipation for the house to some later time. I rise only to make a comment on Canada's all important product of wheat. The previous speaker said: "You cannot make coal out of wheat, you can make moonshine out of wheat." But the very point I want to bring out is that industrial alcohol, not moonshine, could be used to run our automobiles. Several years ago, while driving through a number of European countries, I found that they were using a type of motor fuel which, to all intents and purposes, was at least as good as the gasoline we use in Canada; in fact it was better in that it did not cause "knock". When I asked gasoline station men I was told that it contained gasoline and alcohol. The percentage of alcohol varied, according to the particular country, from ten per cent to twenty-five per cent, and it was compulsory that this alcohol should be made in the country in which the motor fuel was being sold.
It so happens that wheat is one of the best materials from which alcohol can be derived. Last year Canadians used 800,000,000 gallons of gasoline, most of it imported. Were ten per cent of alcohol required by law to be included in our gasoline, it would mean that
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80.000.	000 gallons of alcohol would be used. I base this estimate oh last year's figures; they may be higher thaa the consumption this year. Two gallons of alcohol can be made from one bushel of wheat. In other words, upon the basis of a ten per cent solution we would consume 40,000,000 bushels of wheat in the production of alcohol for this purpose. If twenty per cent were required, 80,000,000 bushels of wheat would be used. The maximum alcohol content which can be included in gasoline for use in modern carburetors and internal combustion engines is twenty-five per cent. If that amount were required, it would mean that we could consume 100,000,000 bushels of wheat in the manufacture of alcohol for the motor cars of Canada.
In 1936 France produced 91,000,000 gallons of alcohol; Germany, 62,000,000 gallons; Italy,
24.000.	000 gallons. What was the reason for this production? None of these countries had a surplus of wheat. It was: First, to encourage agriculture; second, to conserve foreign exchange, inasmuch as gasoline fuel had to be imported. I might add, while on this subject, that the alcohol produced in the countries I have mentioned was distilled, not from wheat but from potatoes and sugar beets.
The National Research Council of Canada have issued an interesting pamphlet on this subject. The big drawback to the inclusion of alcohol in motor fuel is the cost. Alcohol can be produced from 70 cent wheat at approximately 40 cents a gallon. Adding a ten per cent alcohol solution to gasoline would increase the present price of gasoline by approximately 2i cents a gallon. That is a fairly substantial increase, especially in respect of a commodity so largely used as is motor fuel. However, under the circumstances would it not be economical for Canada, rather than to bear the heavy cost of storage and other expenses connected with our tremendous wheat carryover, to bonus to a certain extent the cost of this alcohol so that, when it is added to gasoline, the price of the fuel would be but slightly more than that of the motor fuel we are using to-day? Undoubtedly the advantages to us would be substantial. To some extent our wheat surplus would be absorbed. What is almost as important when one considers how we are trying to conserve foreign exchange to carry on our war effort, it would save Canadian dollars for Canada and reduce the amount which is now going out of the country for the purchase of petroleum products from the United States and elsewhere.
Certain countries within recent times have, according to this pamphlet, gone actively into the subject of producing motor fuel from alcohol. I refer to Brazil, Cuba, the Philippine [Mr. Fulford.l
islands and Hungary; I mention that because, after 1936, in Europe less and less alcohol was added to gasoline, chiefly because in 1937 Europe had very poor crops, and after that year what alcohol was produced was conserved for war purposes.
At the outset of these few remarks I said that this was not my maiden speech. I am merely throwing out a few observations by way of suggestions to the government. Incidentally, before closing, let me say that certain chemicals can be added to alcohol for use as motor fuel so that it cannot be redistilled for beverage or "moonshine" purposes, or cannot be otherwise treated so as to evade excise tax.
I have been extremely brief; in fact, I have given only the barest outline of the possible use of alcohol made from wheat for motor fuel. I hope that my remarks will not have been in vain, and that they may give rise to some measure which will assist in alleviating this tremendous problem which is facing us all in Canada.


Mr. VICTOR QUELCH (Acadia):: Since
it is nearly six o'clock instead of proceeding to a discussion of the bill, I will make a few comments upon some of the statements made by the Minister of Mines and Resources (Mr. Crerar). I cannot go back as far as the minister went, but I can go as far as the year 1909 when I first came to Canada. The minister expressed regret that the old pioneer spirit seemed to have disappeared, and he regretted that there was a tendency among farmers to-day to be more dependent upon governments than in the past. When he made that statement he should have completed the picture and stated also that industry to-day, the privileged interests and corporations, seek more protection from the government. Surely everyone must realize that the great privileged interests, corporations and financial institutions have been built up under government protection, which is the chief reason why farmers to-day have to come to the government for protection against these very interests. The farmers for years have been exploited to a shameful degree by these same corporations and privileged interests which have been built up under government protection. It would have been only fair if the minister had presented that aspect of the subject to the house when he made the statement he did.
Another point he brought up was this. He said that farmers are not able to carry on to-day as in the past. My mind goes back to the year 1909 when, as I say, I first came to this country. At that time I took a homestead and, because I had no money, I had to work in construction camps in the

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summer in order to earn enough to keep me in the winter. Can farmers do that to-day? Have farmers been able to do it since the war? How is it that in those days we were able to carry out large capital projects in this country? Howr did we carry out an extensive railway programme in those days? We did it because we passed on to a future generation the cost of building the railways, public buildings and so on. To-day we are not able to pay for capital construction which we wish to carry out, we are still trying to pay for production which was consumed in years gone by but not paid for at the time. I would stress the fact that until such time as we get away from the system whereby we pass on to future generations the cost of production which should be paid for currently by utilizing the services of the Bank of Canada, we shall be faced with this very problem. If to-day we were able to carry on, as the pioneers in the past carried on, by passing on to future generations the debts that they could not pay; if we were prepared to carry out a large programme of public works and national projects so that the farmers of western Canada might find it possible to supplement their incomes by working on capital projects, then the farmers would not be under the necessity of coming to the government for assistance. But to-day it is not possible for farmers to supplement their income in that way; all they can do is to carry on their own farming operations, even though their returns do not cover the cost of production.
I have noticed in the past that many hon. members appear to resent the time taken up with lengthy discussions on the subject of wheat marketing. I would remind hon. members, however, that a large percentage of the population of Canada depend, directly or indirectly, upon the wheat industry, and I would also emphasize the fact that the continuance of prices at present low levels will still further aggravate the problem of the farmer. It is bound to result in the wholesale bankruptcy of the majority of western farmers. This is especially true at this time when prices of practically all the commodities the farmer has to buy are rising, while on the other hand the price the farmer receives for his product remains stationary, or is falling, as one hon. gentleman suggests. I would also suggest that the problem has been further accentuated by the budget which this house recently passed, because on account of that budget the cost of the commodities the farmer has to buy is bound to go up, while on the other hand the demand for agricultural products will be retarded or restricted. We have already lost a number of markets overseas, and the logical thing should be to try to increase the demand
of the home market for agricultural products. But as a result of the budget the demand for agricultural products in Canada is bound to be restricted, thus further aggravating the problem.
I will not take up the time of the house emphasizing that the present price for wheat is altogether too low. During the past six years that question has been threshed out on many occasions, and I am satisfied that any hon. member who is open to conviction must realize that the price is altogether too low; but I do not intend to waste either my time or the time of the house trying to convince anyone who is not open to conviction.
The bill before the house guarantees the farmer a price of 70 cents a bushel at Fort William. I understand that Vancouver as a basis will be included.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Victor Quelch: At six o'clock I was on
the point of dealing with the effect of maintaining the guaranteed price of wheat at the low figure of 70 cents a bushel. The retention of such a policy will mean that the small farmer will be driven off the farm, and the prairies will become a land of large mechanized units, largely controlled and, in many instances, owned by mortgage companies and financial institutions. I believe the Minister of Trade and Commerce (Mr. MacKinnon) will agree with that statement, that he will not say it is any exaggeration, he being familiar with the situation through having lived in western Canada for a long time and having been in a business which brought him firsthand knowledge of this matter. The Minister of Agriculture (Mr. Gardiner), speaking on the question of agricultural policy in this house about two years ago, stressed that his objective was to build up a prosperous rural community. He said that he was not interested in helping to maintain the large farmer and increase his production, that his objective was to make it possible for the small farmer to continue. Yet the result of this policy is going to be the very opposite. In support of that assertion I quote from a statement issued by the wheat pool through Mr. Leonard D. Nesbitt, publicity superintendent:
The most striking trend in agriculture in the western United States and Canada is the gradual process of enlarging individual farms and the elimination of the small farmer. This process is quite noticeable in Alberta, and particularly in the south. Comment has been made
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on a similar trend by leading United States agricultural journals through central and western United States and particularly in the midwest.
The trend is in line with an ancient economic law. Prices of farm commodities have been low as compared with the prices of other goods and services. The effect is to drive off the land the small operator whose costs are necessarily high.
Mechanization of farms, of course, has been contributory to the trend. It is a cause rather than an effect. With comparatively low prices for farm commodities prevailing farmers simply had to reduce their costs, and this meant the elimination of all possible hired labour and the adoption of the high-speed labour-saving machines.
Competent authorities state that the ideal economic farm unit in western Canada in so far as cheap production of wheat is concerned is a fully mechanized 1,280-acre farm. That means that other farms not conforming to that formula are working at a disadvantage.
The builders of western Canada envisioned a countryside composed of moderate sized farms. A quarter of a century ago 320 acres was considered an ideal economic farming unit. The man who farmed two sections was considered a very large-scale operator.
If the present trend persists the farming areas of the prairie provinces will lose a percentage of the present population. This will apply to those regions which specialize in wheat production. Large operators using mechanical equipment will predominate. Their efforts will be concentrated on lowering costs. It is easy to imagine what effect this trend will have in rural Alberta.
All farmers who are familiar with conditions in western Canada will agree with the truth of that statement. Again I stress that the effect of this bill will be still further to aggravate that problem; because a farmer farming a half section cannot produce year in and year out wheat at a price from 40 to 50 cents a bushel, and that is what 70 cents, basis Fort William, means.
On the other hand, if we were to increase the price of wheat so that the price the farmer receives would be based on the cost of production on the smaller farm unit, then I think we can agree that the result would be an expansion in the production of wheat. It stands to reason that if the price is set high enough to enable the small farmer to produce at a profit, the larger farmer would expand his .production in order still further to increase his profits, and such a policy would bring about an expansion of wheat growing. I think we shall all agree that it is not desirable at this time to increase greatly the production of wheat. A time may come when it is desirable, but I do not think anyone would advocate that policy at present.
Therefore I urge that we guarantee a price commensurate with the cost of production on the smaller farm unit, but limiting that price to, say, 2,000 bushels. That is to say, instead

of guaranteeing what one might term a parity price for all the wheat the farmers produce, we guarantee a price of one dollar a bushel for 2,000 bushels, and let the farmer sell any additional production at the world market price, or in this instance, the pegged price of 70 cents. Such action would help to retain the small farmer on the land, and on the other hand would tend to discourage the larger farm, unit.
Some hon. members might say the reason why I am advocating that, is because I represent a constituency which comprises in greater part what one might call permanent drought area. But I would stress the fact that the western part of the constituency I represent has within it some of the very finest wheat land to be found anywhere in Canada. For example, from Drumheller north to Rumsey is known as the heavy gumbo land, and I do not think there is any better land anywhere in this dominion. A crop failure in that area is practically unknown.
About a month ago I sent out a questionnaire covering the constituency thoroughly. I sent out fifty-four copies, to every part of the constituency, and in every instance the replies I got were in favour of limiting the guaranteed price to 2,000 bushels, but raising the price sufficiently to make it possible for the small farmer to continue operations. Some of the replies suggested that the price should be raised to $1.20, and some suggested limiting the amount under the guaranteed price to 1,500 bushels, but the great majority advocated one dollar a bushel for 2,000 bushels. That is taking the half section as the ideal economic unit, which of course under present conditions it is not, because at the present price the farmer on a half section cannot continue in operation except under the-protection of provincial debt legislation. If, in addition, we were to amend the Prairie Farm Assistance Act to make it what might be called a real crop insurance plan on an individual basis, then we would be going a long way toward making it possible for the grain farmer to pay his way and at the same time maintain his family on the -land, something which is not possible to-day. If we fail to face this problem realistically, the result must be wholesale bankruptcy of the grain growing industry. Neither the Farmers' Creditors Arrangement Act nor any provincial debt legislation can solve the debt problem of the grain farmer, because neither can remove the cause of debt. Unless we are going to make it possible for the farmers to obtain a price above the cost of production,, they will be driven further into debt.

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Let me quote from a statement I saw in the Albertan of December 30, referring to a statement by Chief Justice Brown of Saskatchewan:
Chief Justice J. T. Brown of the king's bench court, Regina, stated that western farmers must receive an average price of one dollar a bushel, if they are to maintain a decent standard of living, while farm implement prices continue at their present levels.
And again:
Chief Justice Brown, chairman for Saskatchewan of the board of review under the Farmers' Creditors Arrangement Act also urged that radical debt adjustment must be continued if the farmers of western Canada are to be assured economic security.
I doubt if one could think of any man better qualified to speak for those people than Chief Justice Brown, who has had first-hand knowledge of conditions under which the farmers in Saskatchewan labour. If that gentleman states that it is necessary for the farmer to get a dollar a bushel in order to pay his debts and to maintain his family in economic security, and that it is also necessary to bring about a radical reduction in debt, we may feel satisfied that there is every justification for that statement.
On the other hand, show me any concern which year after year is compelled to produce below cost of production, and at the same time is not in a position to protect itself against constantly recurring hazards, and I will show you a concern that is headed for bankruptcy, it does not matter how efficient the management may be. That is the situation to-day, and it has been that way since 1930, with the exception of two or three years, from 1935 to 1938. But even then, it was not possible for the farmers to protect themselves against the hazards of drought; and, as a result, many of those farmers became hopelessly bankrupt, even though at that time prices were fairly high.
I stress the fact that ignoring this problem is not going to solve it. Time will not rectify it, because the longer we leave it, the greater the problem becomes, and more and more farmers will have to leave the land. Therefore I say most emphatically that this bill does not deal effectively with the problem which confronts us, so far as the grain-growing industry is concerned. What is the main problem? It is to find ways and means whereby it may be made possible for the grain grower to meet his costs, to pay his way and at the same time to maintain his family on the land. The problem that we must face immediately is, of course, to make it possible for a farmer, after threshing his crop, to obtain an amount of money sufficient to meet his immediate expenditures.
I realize that this bill does make provision for a quota system. I hope, when we get into committee, the minister will be able to give us full details of how the quota operates. One or two hon. members have referred to the fact that some farmers live near towns while others live far away, and have suggested that this is why we need the quota system. That used to be true, but it is not true to-day, because, owing to the trucking system, distances have little effect. On the other hand, consideration must be given to the date or the time a farmer may thresh. In some instances the harvest is early and in others it is late. In some parts of the country grain is threshed at least a month earlier than in other parts, with the result that before the farmers with late crops have completed their threshing, the elevators are flooded. It is accordingly necessary that some form of quota should be established. I understand that already at certain points elevators are plugged. We can realize therefore how serious the problem is going to be.
We appreciate the fact that steps are being taken to pay the farmer for storage when his grain is kept on the farm. Again, I hope the minister will be prepared, when the bill reaches the committee stage, to give details of how this will work out. On the other hand, however, I believe it is absolutely vital that some kind of provision be made whereby advances may be made to the farmer against grain stored on the farm, because necessarily the quota will be a small one. It will be realized that a farmer has certain payments to meet, and that payments must be made as soon as he threshes. He must meet the costs of harvesting and of threshing, and in many instances the first claim against the grain he threshes or sells will be that in connection with hail insurance. Then, advances for seed grain may be required. If no provision is made for advances against grain on the farm, it will mean that the amount which the farmer receives from his quota will be used in paying threshing bills, et cetera, and that he will have absolutely nothing left to meet immediate expenses, including those for fuel and clothing for the winter. In my opinion, it is most necessary that the government deal with this matter.
I was pleased to hear the minister say that consideration was being given to it, and I would hope that shortly that consideration may develop into action. Some of the leading farm organizations and grain dealers in the country have studied this problem carefully, and in every instance I believe they have stated they consider it necessary that provision be made for the advance. In view of that fact I would frankly admit I was amazed
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when the Minister of Mines and Resources (Mr. Crerar) termed as moonshine the suggestion made by the hon. member for Weyburn (Mr. Douglas). I doubt very much whether he would repeat the statement to-day, because I understand it has caused a good deal of criticism in western Canada, and, of course, rightfully so. For a number of years I have been disappointed at the minister's apparent indifference to the problems of western Canada, particularly in view of the fact that in the past he has been actively connected with that part of the country. I believe we would be justified in expecting that he would have a sympathetic feeling towards the west. Yet he terms as moonshine a suggestion which is absolutely vital to the western farmer, a suggestion endorsed by the leading farm organizations in western Canada.
I remember reading in a newspaper some time ago a statement made by the Minister of Mines and Resources to the United Farmers of Manitoba. I have a copy of that statement before me, and it appears that at that time he told the farmers of Manitoba that they were not justified in asking for a guaranteed price if, as a result of that guaranteed price, the government might suffer a loss. He said the guaranteed price would have to be set sufficiently low so that no loss would be entailed. Otherwise the people would have to pay the difference, and other industries might ask for similar protection.
Surely the Minister of Mines and Resources should know, as every other hon. member knows, that to-day other industries are getting that protection; and in view of the fact that that protection is being given to other industries, I say that the farmers of western Canada are fully justified in demanding a protected price for the commodities they sell, so long as they have to pay a protected price for the articles they have to buy.
What has been the cost of protection to the farmer of western Canada? Last year, when the same matter was being discussed in the house, I dealt with it at some length, and for that reason I shall make my observations on this occasion brief. I pointed out last year that, as a result of the fiscal and monetary policies of the federal government in the past few years, the cost to the farmers and to the grain growers of western Canada had been in the neighbourhood of $79,000,000 a year. I based that statement upon submissions to the royal commission on dominion-provincial relations. In part 3 of the Manitoba case Professor Upgren shows that, as a result of our monetary policy, that is, as a result of maintaining Canadian currency at 20 per cent above the pound sterling, while, on the other hand, one of our greatest competitors

-Australia-maintained her currency at 25 per cent below the pound sterling, the cost to the grain growers of western Canada had been $47,000,000 a year, for every year from 1931 to 1936.
In regard to the increased cost of the tariff, hon. members will recall what was said by the former Minister of Labour, a statement which has been quoted in this house on many occasions. He said that, as a result of the tariff, the people of western Canada were penalized to the extent of $56,000,000 in one year. A careful analysis of this matter was made in the Manitoba brief to show the cost to the farmer. This worked out to about $110 per farmer, or $32,000,000 for the farmers of the west. The figures given by the former Minister of Labour applied to all the people of western Canada, while those compiled in Manitoba referred only to the farmers. As a result of our monetary policy and our tariff, our farmers are penalized to the amount of $79,000,000. If, as a result of the protection afforded to industries and corporations in this country, the farmers of western Canada are to be penalized to the extent of $79,000,000 a year, surely they are justified in asking in return that they should receive a price commensurate with their cost of production. They are not asking a price sufficiently high to guarantee to them profits similar to those guaranteed to various corporations in eastern Canada; all they ask is a price high enough to make it possible for them to pay their way and at the same time maintain their families in comfort. That is not being done at the present time.
I have heard the Minister of Agriculture, the hon. member for Moose Jaw (Mr. Ross), and other hon. members on the Liberal side stress the fact that the farmers of western Canada do not want to be subsidized; that, provided they can buy at world market prices, they are prepared to sell at world market prices. Two years ago the Minister of Agriculture attacked the machinery companies rather bitterly for the high prices they were then charging. This government has been in power for six years, and yet not a single step has been taken to rectify that situation. What is the use of hon. members saying that the farmers are prepared to sell at world market prices if they can buy at world market prices, if no steps are taken to bring that about? As I have said already, the farmer to-day must buy what he needs at highly protected prices, and a price of 70 cents a bushel is not sufficient to permit him to continue in operation.
I had intended to deal with the question of Vancouver being considered an alternative base to Fort William, but the Minister of Trade and Commerce has told us that this

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principle will be introduced in the bill. I am glad to hear that this situation is to be taken care of. If in normal times it was impossible to ship through that port, then perhaps the government would be justified in striking out Vancouver, but if owing to the exigencies of the war, it becomes impossible to ship through that port, then I contend the Alberta farmer has a right to expect a price on that basis. I am glad the minister has said that this change is being made.
I did not quite catch what the minister said about the processing tax. I have always felt that in demanding a guaranteed price for their wheat commensurate with the cost of production, the farmers were justified in taking this course even though it meant an increase in the cost of bread. I do not believe that any class of society has a right to expect any other class of society to produce below cost of production in order that the former may buy a product at a lower price. Our exports of wheat are used to bring imports into the country. I do not believe the people of Canada have a right to expect other people to produce below cost of production in order that imports may be brought in more cheaply. Even though this processing tax means an increase in the cost of bread, I think the government was justified in putting it on.
However, I think it is absolutely essential that the government should take steps to see that this tax is not made an excuse for raising prices without justification. I remember reading, I think it was in the Turgeon commission report, that flour constituted only 15 per cent of the cost of a loaf of bread. If that is so, we can see how little effect the price of wheat has upon the cost of a loaf of bread. In spite of what the leader of the opposition (Mr. Hanson) has said to the contrary-, there is no justification for increasing the price of bread at this time. When wheat was around 90 cents a bushel, bread was selling at the same price as it is to-day. I hope the government will take the necessary steps to prevent any undue rise in prices. I have no intention of saying anything more at this time because I intend to reserve any further remarks I wish to make until the bill is in committee.


Mr. J. G. DIEFENBAKER (Lake Centre):: Mr. Speaker, at the outset I wish to pay tribute to my leader for the contribution he made this afternoon to a solution of the wheat problem, which we all realize is a most complex and difficult one. This problem vitally concerns the welfare of the people in western Canada as well as those engaged in other industries and the country as a whole. The leader of the opposition (Mr. Hanson) treated this matter as a national problem and
said that eastern Canada would be ready to bear its share of the load for the common good. In western Canada we sometimes find people who think there is an east and a west in Canada; that the interests of the two parts of the country are diametrically opposite, and that those in eastern Canada do not realize or appreciate the difficulties faced by the west. As a result of the associations I have had as a new member during recent weeks, meeting members of all political parties from all parts of Canada, I am pleased to be able to say this evening that among members representing divergent points of view there seems to be a common desire to view the agricultural problem as one affecting the dominion as a whole. I think the Minister of Trade and Commerce (Mr. MacKinnon) will give leadership in this direction. I have been impressed with the sincerity with which he has applied himself to his new task, and I feel sure that so far as within him lies, he will do what he can toward contributing to the solution of this problem.
This afternoon the Minister of Mines and Resources (Mr. Crerar) gave a lengthy historical review of the wheat situation. I must confess that when he had finished his remarks, the government's policy was just as vague to me as it was when he commenced. He did not remind the house of the fact that when this government came into office there was a fixed price of 87J cents a bushel; he did not tell us that Canadian wheat enjoyed a six cent preference on the British market, and that there was an advisory committee. To-day the situation is that the price has been fixed at 70 cents; the preference has been sacrificed, and the advisory committee was dismissed long since, for what reason we do not know.
An advisory board is promised by this legislation. What its personnel will be we do not know and it is difficult to understand what it will advise the wheat board about because the policy has already been announced for this year. To those of us who have had difficulty in recent years in understanding the policy of the government in reference to wheat, the words of the hon. member for Portage la Prairie (Mr. Leader) the other evening brought elucidation and enlightenment. He is a man who has devoted himself to the welfare of the western farmer over a long period of years. He is a fearless man, and here are the words he used in explanation of the situation prevalent in agriculture to-day:
I have never been impressed with the government's wheat policy. I think it is recognized by the people of this country that the present government are not friendly to a wheat board. I make that statement without fear of contradiction.
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That is an enlightening statement; it is a revealing statement. It places before the house and the country the reason why the attitude of this government toward the wheat boards throughout the years has been one of indecision and inaction.
I represent an agricultural constituency, one of the most productive areas in Saskatchewan in years past. But to-day what do we find? And this cannot be too often repeated. Prosperous and successful farmers find themselves going behind in recent years, having to produce wheat, their main commodity, at a cost greater than the revenue which they have been receiving. They ask me to place before the house their wishes and their requirements. They ask this government to announce, not a wheat policy, just for the present, but a policy of reasonable permanence looking forward to the years ahead, so that they will not find themselves in the current of alternating policies characterized by delay or dawdling, *or both. To-day is the first of August; the wheat year has commenced. We have been [DOT]endeavouring in recent weeks to ascertain the policy of this government in regard to the wheat situation and have been unable "to do so. The government has repeatedly been asked when its wheat policy will be announced, and forever the answer has been one of procrastination. Now, in the dying hours of the session, legislation is introduced and certain amendments to the Canadian Wheat Board Act are being brought before the house. There is no meed for me to corroborate the condition of the western farmer or the farmer of Canada in general, but I should like to quote from a survey made by the Canadian Council of Agriculture, wherein the following appears:
While more than three million of our population live on farms and close to five million -on farms or rural areas the share of agriculture in the annual national income has fallen from 19 per cent in 1926 to approximately 8 per *cent to-day.
Further, I quote what Major Strange, the expert for the Searle Grain company, said some time ago in his report comparing conditions to-day with those that existed in this dominion in 1913 and 1914. He said:
In 1913-14-
That was in peace time.
In 1913-14 wheat was 871 cents a bushel for No. 1 northern in store Fort William, and was *considered by many to be a fair price, and by all certainly not an excessive price. The Searle index reveals that since 1913-14 the cost of all the things that farmers have to buy had increased by 31 per cent by September 1 last. (It has risen sharply since then, and will continue to rise further no doubt as the war proceeds.)
Adding 31 per cent to the pre-war price which farmers received at their local elevators, simple *calculation shows that an equivalent price
[Mr. Diefenbaker.l
to-day would be $1.15 for No. 1 northern in store Fort William for western farmers to be as well off as they were in 1913-14.
That this is a reasonable price is confirmed by the fact that the British government to-day pays for British wheat-of lower quality than Canadian wheat-the equivalent at par of approximately $1.30 a bushel. One dollar and thirty cents a bushel in Great Britain means about $1.13 at Fort William.
That quotation gives a comparison between conditions at the outbreak of the last war and conditions to-day.
I have heard the criticism made in this house that the western farmer is being bonused or subsidized at the expense of the rest of Canada, and in support of that statement it is pointed out that according to the estimate of the former Minister of Finance in his budget speech there was a loss of $52,000,000 on the 1938 crop. It is sometimes contended that the loss results from the prices paid to the farmer. To-day we have some
270.000. 000 bushels of wheat in storage in Canada and the United States, and it appears, therefore, that on the same basis of reasoning further losses are expected on the 1939 crop.
The Minister of Agriculture (Mr. Gardiner) blames the present situation on the war. He says that were it not for the war there would not be the surplus there is to-day; that markets have been lost since the outbreak of the war, and that to-day only the British market remains. In 1935, throughout the campaign, the Minister of Agriculture criticized the Bennett government for its failure to secure markets, and promised on behalf of his party that there would be a material increase and expansion in markets. It is interesting to note how well that promise has been implemented, how conditions have changed since 1935 in the matter of increased exports of wheat. Here are the figures.
From the 1930-31 crop the exports were 258,400,000 bushels; 1931-32, 206,900,000 bushels; 1932-33, 264,000,000 bushels; 1933-34,
194.000.	000 bushels; 1934-35, 165,000,000 bushels. The average yearly export during those years was 218,000,000 bushels.
What are the changed conditions since? In 1935-36 there were exported 254,000,000 bushels of wheat, and mention was made to-day by the leader of the opposition that that was the year of the fire sale. In 1936-37 our wheat exports amounted to 194,800.000 bushels; in 1937-38, 86,800,000 bushels; in 1938-39, 166,100,000 bushels, or an average export, during the four years, of 175,000,000 bushels. The war made little difference in the quantity exported. For 1939-40 the total export was approximately 190,000,000 bushels. As a result of the failure of this government before the war to

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secure markets, following the 1938-39 crop, there was a carryover of 102,000,000 bushels of wheat.
Does the price to the farmer explain the loss which has been suffered? Is that why there was a loss of $52,000,000 on the 1938 crop?
I suggest that that loss in the main is due to the tremendous toll which is being exacted from agriculture by storage corporations for storage and other charges. The danger of having the storage corporations endeavour to hold wheat in storage was realized by the Minister of Agriculture in 1937, when, speaking in the house, he made this statement as reported in Hansard of that year at page 1631: The question of how wheat is to be marketed is of great importance to all the people ot Canada, but it is of particular importance to the people who produce it. It is also of great importance to the people who have put their money into the greatest wheat storage system to be found in any country m the world We have storage capacity m Canada for 419,0uU,UUU bushels of wheat. In the year that we have just passed through we produced only 229,000,000 bushels of wheat. The people who have equipped this country with storage capacity tor 419,000,000 bushels are very anxious that wheat should go into that storage, and as in some years there is only half enough wheat grown, or a little more than over half to fill the total capacity of those elevators, it stands to leason that certain people who have an interest in those elevators will put forth an effort to obtain wheat to store in order that they may collect storage charges on it.
I was greatly impressed-I might say amazed-with the statement made by the hon. member for Wood Mountain (Mr. Donnelly) when he pointed out the degree of the exaction to-day being levied by storage corporations. He set out in detail the amount of the levy, and showed conclusively that 25 per cent of the price of wheat goes to the storage corporations for handling and other charges. In my opinion, before western agriculture can hope to rehabilitate itself, storage and handling charges must be reduced. They may have been equitable when farmers received a price ensuring them a profit. They are unjustifiable to-day. What changes have taken place under this government in so far as handling charges are concerned? In 1935 charges other than storage amounted to 2( cents a bushel, which included handling, billing, insurance and one cent a bushel for the elevator company to find a buyer.
There is only one buyer now, the British government. Is there any justification to-day for the exaction of a cent a bushel by the elevator companies for that purpose? One would have expected that it would have been eliminated. But to-day the charges are bulked at 4J cents a bushel and designated a service charge. That extra levy penalizes the western
farmer to the extent of seven and a half million dollars a year. I ask the government, why was that increase permitted? I know not what the answer will be, but I do know that the great storage and elevator companies have prospered well under this government.
This is war time. The government has secured wide powers under the act for the mobilization of national resources during the present war. Under section 2 it has the right to do such things as may be necessary for the efficient prosecution of the war or for maintaining supplies or services essential to the life of the community. My suggestion is this: Take over, under that power, the elevator and storage concerns. It will be remembered that Mr. Attlee, speaking in the British House of Commons, used words to this effect, "There will be equality of sacrifice in this nation. No one will be permitted to exact great gains at the expense of the nation as a whole." In my opinion, all these elevator and storage facilities should be taken over by the government for the period of the war, allowing the owners a reasonable interest return during the period in which the government has the control.
During the election the Minister of Agriculture replied to a suggestion which one often hears made in this house, namely, that the loss on Canadian wheat of the 1938-39 crop was due more or less to the high price which was paid to the farmer. I point out now what the minister said when he spoke at Earl Grey, Saskatchewan, on March 11, 1940. His statement did not indicate that there would be a loss. It promised a reasonable price to the farmer. It answers the argument that it was the price paid to the farmer which resulted in the loss. Apparently there was a market for our wheat. The minister is reported to have said in part:
That wheat could all be sold to Britain to-morrow at not less than 87 cents a bushel. If it were, the farmer could now obtain at least 10 cents a bushel on his participation certificates. This would make his payment more than the 80 cents which was being discussed last summer.
But the present government does not think it wise to sell all the Canadian wheat at 87 cents a bushel. The British government is not urging us to do so. If they bought it, they would leave it right where it is in the elevators in Canada and pay the storage on it. While it *would thus remain where it is, it would be entirely out of the hands of the farmers.
We believe that Britain will pay us more for our wheat when she is ready to take it for consumption in England and that farmers would be well advised to allow the storage to be charged up to their participation certificates.
In other words, in March last-and apparently that condition had prevailed from the preceding fall-the British government was willing to purchase Canadian wheat at 87 cents
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a bushel, thereby, instead of our having a loss, ensuring a reasonable profit and a participation return estimated by the minister of some 10 cents a bushel. I suggest to you, Mr. Speaker, that if what the Minister of Agriculture said in March last was in accordance with the facts-and I take it to be so-he thereby indicted the government of gross mismanagement in the handling of the wheat problem, to the detriment of the Canadian taxpayer.
In consequence of the wheat board not selling the wheat to Great Britain when it could have been sold the farmer has been deprived of some 10 cents a bushel on the basis of present prevailing prices. One industry that has benefited from the wheat situation in western Canada and throughout the country, has been the storage elevator industry under this government's policy.
Let us now look at the amendments suggested. The price this year is fixed at 70 cents, Fort William, which means an average of about 45 cents a bushel to the Saskatchewan farmer. What were the promises made during the election? I refer the Minister of Agriculture to his speech, an excerpt from which I have just quoted, wherein is contained a promise, a hope, an expectation that they would receive another 10 cents a bushel. That was the promise. What of the performance? To-day the price is fixed at 70 cents. It is unjust to ask the farmer to supply one of the important necessities of war at a loss. No other industry is required to do that. The farmer is as patriotic as any other class in Canada. He does not ask for profiteering prices, but he does ask for justice; he does ask that his morale shall be maintained; he does ask that in the economy of war he shall not be destroyed on the altar of political expediency.
I am not going to refer this evening in detail to costs of production except to mention that Professor Hope, who was referred to the other evening in the highest terms by the Minister of Agriculture and who is entitled to that praise, estimated that on grain farming with power machinery, which is the most economical, it would cost on a half-section farm 66 cents a bushel to produce wheat; and I may add that in arriving at this estimate no allowance or compensation or consideration is given for the labour of the operator or his family, and no provision is made for any form of recreation. Surely agriculture should not be singled out as the one industry in time of war to make a singular sacrifice. Either the price must be raised to a level such as has been frequently suggested by the member for Qu'Appelle (Mr. Perley) and others, or on tMr. Diefenbaker.]
the other hand something must be done to reduce the cost of production. What has the government done in that connection? Only two weeks ago it imposed a 10 per cent exchange tax which will fall on agriculture to a greater extent than any other industry having regard to the fact that it is to-day producing at a loss. By reason of the imposition of that tax on tractors and farm machinery, the load of the Canadian farmer has been increased by some $2,000,000.
Why, I ask, has the Hudson bay route not been used to any extent during recent years? Is it because of the opposition of the great storage corporations? Shipping by way of Hudson bay through Port Churchill would mean a saving to the western farmer of six cents a bushel. The facilities have been provided, but are practically unused. During the last three years only a small stream of wheat has been shipped in that direction. In 1936 the quantity shipped was 4,293,501 bushels; in 1937, 603,982 bushels; in 1938, 916,913 bushels; in 1939, 1,772,460 bushels. Why is that port not being utilized to a greater extent? It is a wonderful port. It is not open for more than three months in the year, but during the open season a large amount of western wheat could be shipped, which would ensure a. further return to the western farmer.
My next suggestion is this. In reducing the cost of production I would refer again to handling charges, and I ask the government to take advantage of its powers under the mobilization act to save the farmer at least a large portion of these charges which to-day are being saddled on the productive income of the farmer. Provision is being made under this bill, no doubt in consequence of the promise given during the election by the Minister of Agriculture, for an interim payment. The provision is that an interim payment will be made under certain circumstances which the government must realize will never become operative. The section reads in part:
To make interim payment on account of any surplus aforesaid, if such interim payment can be made without any possibility of loss or deficit in respect of the operations of the board or of cost to the government under any guarantee given by the Minister of Finance.
The hon. member for Wood Mountain (Mr. Donnelly) summarized its effect when he used these words as reported in Hansard at page 1959:
It will be a good gesture, that is all; it will not be of any value to anyone.
When I observed the gesture I thought of some of the reported speeches of the Minister of Agriculture made in western Canada during

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the last election. I realize that he has denied that he made a statement at Wilkie, Saskatchewan, on March 21, as reported in the [DOT]Canadian press as follows:
Definite promise of amending legislation to provide for a 10 or 12 cent interim payment on the current year's wheat crop was made here Wednesday afternoon by Hon. J. G. Gardiner. The Minister of Agriculture declared that, if the King administration was returned to power the present bill would be changed so that a payment might be made as soon as possible.
That was the promise, according to the press report. The amendment is the performance. The Minister of Agriculture has denied making that statement. I accept his [DOT]denial, but it seems passing strange that he should have been misreported several times by different papers, making a similar speech at different places. I read from the Regina Leader-Post of February 28, 1940:
Yorkton, February 28. Mr. Gardiner was in splendid form and has never been heard to better advantage in Yorkton. . . . He began by reviewing the agricultural legislation passed since he left the Saskatchewan premiership in 1935 to take over the federal agricultural post.
. . . He defended the setting of 70 cents as the initial payment for wheat per bushel and predicted the farmers would have an interim payment of from 10 to 12 cents per bushel shortly after the next government is formed, if the present administration is returned.
I do not know whether the minister now contends thait he did not make that statement, but so he was reported.
I quote now from the Davidson Leader of March 6, 1940, reporting a speech delivered at Davidson, Saskatchewan, by the Minister of Agriculture. This is the report:
The Canadian government can sell to Britain, through the wheat board, all the wheat they now have on hand and thereby pay those who sold to the board an additional 10 or 12 cents per bushel.
Apparently in view of the numerous times the Minister of Agriculture was misreported during the campaign, so far as the interim payment is concerned, he did not make himself as clear as he ought, particularly considering that there was an election campaign on.
That was the promise. This is the performance: an endeavour to induce the western farmer to believe that he will receive an interim payment, which, as the hon. member for Wood Mountain said, was merely a gesture that will amount to nothing.
I shall deal now with certain other matters covered by the bill. There is the matter of the removal of the 5,000 bushels limitation, which I consider proper and for which the minister is to be congratulated. I have
already referred to the advisory board, promised throughout the election, being implemented after the policy for the year has been determined. As the hon. member for Wey-burn (Mr. Douglas) asked this afternoon, are we not entitled to know who will be the representative of the producers on this board, and what public bodies representing agriculture will have representation thereon? The house is left in the dark, and no answer is forthcoming as to the personnel.
In so far as the matter of storage on the farm is concerned, I congratulate the government upon making provision for payment for storage to the farmer so long as the wheat remains on his land. For years the hon. member for Qu'Appelle has advocated that; ridiculed at one time, it becomes to-day a necessity through the exigencies now existing.
I shall refer now to the grain exchange.
I know, and I am sure the Minister of Agriculture will agree, that having regard to the fact that there is to-day only one buyer for Canadian wheat, there is no need for the existence of the Winnipeg grain exchange; and there is a demand all over western Canada that it should be closed for the period of the war. The representatives of all the western pools on September 2, 1939, requested the government, without result, to bring in legislation to this effect. In Mr. Wesson's speech of February 19, 1940, I find these words:
On September 2, 1939, the three presidents of the western wheat pools jointly sent the following wire to the Hon. W. D. Euler, Minister of Trade and Commerce and chairman of the federal wheat committee:
"To avoid complete disorganization grain markets by wide fluctuations and uncontrolled speculation wheat pool organizations recommend immediate suspension futures market and hundred per cent control by Canadian wheat board with advisory committee reappointed on basis provided by wheat board act."
He goes on to say that there is no need to-day for speculation upon the exchange, and he adds:
It should be pointed out that the British government adopted a different policy at the outbreak of the present war from the one adopted in 1914. For two years after the outbreak of the war in 1914 all markets remained open both in Europe and in Canada, and incidentally prices did not rise very materially even although the surplus wheat situation was not a factor as it is to-day. After two years all markets were closed and purchasing commissions were set up to purchase wheat from Canada and other exporting countries.
Then he goes on to establish that there is no justification and no excuse, for keeping the exchange open during the time of war. Now it may be asked, What possible advantage would there be from the closing of the grain
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exchange? I refer to what the hon. member for Qu'Appelle said in this house on June 27, 1940, as reported at page 1208 of Hansard. He said that he had had a conversation with the then Minister of Trade and Commerce, the Hon. Mr. Euler. I do not think that conversation has been denied. The hon. member said that the British purchasing agent asked that the grain exchange be closed, but the Canadian government refused to close it. I ask the government to explain the reasons for refusing to accede to the wishes of the British government. To-day the minister says that the reason why certain things are done is the request of the cereals import committee. But there has been no denial by the Hon. Mr. Euler or anyone else that the British government asked for the closing of the grain exchange last September.


Georges Parent: Order. The hon. gentleman's time has expired.


John George Diefenbaker: Might I just finish?


Georges Parent: With the consent of the house.


Some hon. MEMBERS:: Go ahead.


John George Diefenbaker: There is one question I should like the Minister of Trade and Commerce to answer: Why has not the Grain Futures Act of 1939 been implemented by the appointment of a supervisor with authority to watch trading on the grain exchange and report to the board any conditions prejudical to the public interest arising from speculation? According to a pamphet issued under the authority of the Minister of Agriculture, the board was given authority to investigate complaints in relation to transactions in grain on the Winnipeg grain exchange, and whenever it is of opinion that transactions in grain futures are causing or threatening to cause undue fluctuations in the price of grain, by order to fix minimum margin requirements and limit trading and holding of grain futures by individuals.
I conclude by saying that the farmer in western Canada does not want relief. He asks, however, for a fair price for his wheat that will assure him a return approaching parity with the prices of commodities he purchases, and to be assured of the largest possible share of the price ultimately realized for his product, by a reduction in handling charges, by a reduction in freight rates, or by his wheat being routed over the least costly routes. This parliament must do something more tangible than is provided in the amendments to the wheat board act, if the western farmer is to escape from or be emancipated from the bondage in which he now finds himself.


Mr. P. E. WRIGHT (Melfort):: Mr. Speaker, in rising to take part in this debate I should like first of all to deplore the government's lack of policy with regard to agriculture. I believe that lack of policy has been exemplified in the house within the last two days better than I could do it. Yesterday the hon. member for Weyburn (Mr. Douglas), when discussing this problem, stated that we should have a payment on wheat stored in granaries on the farms. One of the ministers of the government rose in his place and called it moonshine. To-day we find another minister of the government telling us that the government is considering the hon. member's suggestion. Surely this shows lack of unanimity among members of the cabinet, so far as agriculture is concerned.
This is a subject which should have been brought before parliament at an earlier date. We have been here for something more than two months and, with the exception of the war-and of course that is the main question to-day-the position of agriculture is of greatest importance. Certainly it should have been discussed before this late date.
Speaking this morning, the Minister of Mines and Resources (Mr. Crerar) said that the government had been very busy. We know they have been busy. We know, too, that in taking over a new department the had his hands full. But surely agriculture is Minister of Agriculture (Mr. Gardiner) has of sufficient importance in Canada to warrant a full-time minister. The government has taken time enough in reorganizing the cabinet, and in my opinion at this date it should have a full-time Minister of Agriculture.
I have this further criticism to make: We find in the estimates for the Department of Agriculture that the amount for marketing and advertising of agricultural products has been cut in half-and this at a time when we are faced with the greatest surplus of agricultural products we have ever had in our history. Surely that is a short-sighted policy. It does not make plain common sense. Several years ago when the International Nickel company were faced with a similar situation, and when after the last great war they found their markets decreasing, did they reduce their advertising expenditures? No; they spent millions of dollars in developing new uses for nickel. They advertised nickel throughout the world, and replaced their industry on a sound basis. That is what we should be doing for agriculture to-day. If we were to spend in Canada a million dollars each year in the next five years to develop new uses for agricultural products, it would be the best money we ever spent.

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Mr. WOOD:: Does the hon. member recommend advertising wheat in Germany?


Percy Ellis Wright: I recommend the development of new uses for agricultural products, and my suggestion would be in line with that of the hon. member for Leeds (Mr. Fulford) who suggested a development of the use of wheat in the manufacture of alcohol. There are many other commodities which could be developed out of agricultural products, and which would give us a market for our wheat, if we would spend the time and the money to develop that market.
Last year, when the Minister of Agriculture introduced legislation, he made the statement that he was doing it with a view to establishing the half-section farmer and the family farmer in the west. The bill we now have before us, and the bill we considered earlier in connection with assistance to agriculture, will have just the opposite effect. There is no halfsection or quarter-section farmer in western Canada to-day who can produce wheat at 70 cents a bushel. Only one farmer can do that, and he is a man who is operating a mechanized farm. The small, family farm is being discarded in the west to-day. We are developing the large farm and the share cropper by this kind of legislation.
A few years ago the government appointed a commission to examine into operations of the Winnipeg grain exchange, and that commission brought in a recommendation that a supervisor should be appointed. Has the government appointed that supervisor? If not, does it intend to appoint one? If the grain exchange is going to be operated, then a supervisor should be appointed. I do not believe that at this time that grain exchange serves any useful purpose.
If the small farmer of western Canada is to remain, then we must make some provision whereby more will be paid for the first thousand or two thousand bushels of wheat grown. My suggestion would be that there would be a set price on the first thousand or two thousand bushels, with prices arranged on a graduated scale, so that the small farmer might have a chance to exist. This might be brought about by a processing tax such as is suggested in the bill. In my opinion, however, a processing tax of 15 cents a bushel is much too small at this time.
Evidently we are to have an increase in the price of bread. In view of the fact that people who have investigated the matter state that an increase of 52 cents in the price of wheat would increase the price of bread by only one cent, I suggest that at this time we should have that full increase in the price of wheat.
Then, the price of bread should be set so that it could not increase more than one cent a loaf.
To-day the Minister of Mines and Resources made the insinuation that Mr. Sapiro was a fascist, and left the implication that the organization he organized would be a fascist organization.


Thomas Alexander Crerar: Let me correct my hon. friend at once: What I said was that Mr. Sapiro had fascist tendencies.


Thomas Clement (Tommy) Douglas: "Complex" was the word.


Thomas Alexander Crerar: I made no insinuation that the organization he helped to promote in Alberta had fascist tendencies. If my hon. friend wishes to get some information about Mr. Sapiro I would ask him to talk to the Alberta wheat pool officials.


Percy Ellis Wright: I am not arguing with regard to Mr. Sapiro, because I do not know the gentleman at all, or his tendencies. But I do know that the organization he helped to build up in the west is not a fascist organization. It is a cooperative organization.


Thomas Alexander Crerar: And I never intimated or even hinted that it was a fascist organization.


Percy Ellis Wright: That was the inference.


Thomas Alexander Crerar: No.


James Garfield Gardiner: No.


Percy Ellis Wright: Then why use the word? The organization he built up is a cooperative organization, the type of organization which would be the first thing any fascist regime would attempt to get rid of.
I do not think the present government should talk of fascism or dictatorships, because the other night in connection with the unemployment insurance bill I saw the finest exhibition of dictatorship methods I have ever seen in my life.


John Gordon Ross: Explain.


Percy Ellis Wright: The Prairie Farm Assistance Act was introduced the other day and it purported to be a crop insurance plan. I cannot see where there is any crop insurance in that legislation. Any sound insurance scheme must be founded upon an actuarial basis. A flat rate cannot be applied to the whole west in any insurance scheme, whether it be crop or any other type of insurance. It must be applied on a regional basis. Where the risks are greater, the premiums should be higher. If this crop insurance plan was a sound plan, I believe it would be acceptable to the west.
There are areas in the west which cannot afford to bear their share of the cost of a
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crop insurance plan. Those areas should never have been settled. The government have a responsibility with regard to the settling of those areas, and because of that responsibility they should be ready to help bear the cost of a crop insurance plan. There are other districts in northern Saskatchewan, Alberta and Manitoba where a sound crop insurance plan would be acceptable and where the people would be willing to bear the cost.
Agriculture, not only in the west but in the east, has been neglected by the present government. No direct lead has been given, and the result is that to-day agriculture does not know where it is going. I should like to quote from a letter which I received the other day from a man in my constituency. I think this letter expresses the opinion held by many farmers in the west. This is what he says:
As one who changed from a city profession to go farming, I had high hopes of what a farm should be, and possibly did achieve more than average success in this direction, but with the fluctuations of the past ten years, and the present hazy policy of our government to-day towards agriculture, I am wondering if a man is not in a blind alley occupation when he continues to farm under the conditions as they exist to-day. I know that farmers continue to carry on in spite of all obstacles, with misplaced energy and judgment that they endeavour to overcome by going into further debt, and application to debt adjustment boards.
Is this government going to declare a policy for farmers during this war, or, are they going to let them go along working to no purpose producing food stuff below cost of production? Farmers under such a system, and who continue to carry on, will find that their debts exceed their equities.
Personally, I have found it more profitable to do nothing on my farm since spring, than work to improve my land, and it irks me to think that we are supposed to be at war, and that at the same time one finds that the only way to survive is to do nothing.
I travelled 15,000 miles last year through the states, and England, studying economic conditions among the poorer people wherever I went, and I _ think there is room for vast improvement in the social and economic standard of our farmers, and unskilled workers compared with the States and England.
We have a war on, and wars like depressions, get bigger and better, and the slogan of sacrifice is rampant and possibly necessary to achieve victory, but let it be sacrifice for all. I figure that my contribution to the war effort this year is $1,500 by reason of too low prices, and this applies to all farmers. It makes I am sure the biggest contribution to our war efforts this year. This is real sacrifice from farmers.
Personally I am not farming next year unless there is some definite policy for agriculture, it is wasted effort, and I do not wish to lose my farm eventually through going into the red every year. Possibly one could find some other occupation, which would be more vital to our war efforts than farming, at least this is the

impression I get when I notice the government lassitude towards agriculture, and many fee] the way I do, but cannot express what they think.
I am wondering of the future, for the poor people they have little to lose, but I trust that our home problems are solved with less difficulty than those with which nations settle their grievances.
If there is no plan for agriculture this coming year, there will be no more disgusted person in this dominion than I.
That letter expresses the opinion of the-people in the west. Our agricultural production will be decreased unless this government does something. A definite plan should be offered to agriculture. This is the only industry in Canada which is producing below cost of production. I have heard the case of agriculture presented on the floor of this house by members of the government, by members of the official opposition, by members of the Cooperative Commonwealth Federation and by members of the Social Credit party, and yet we are refused our cost of production. There are other industries whose cases have never been presented on the floor of this house, but which are receiving their costs of production. What inference can the agricultural people throughout Canada draw from that fact? What opinion can they have of our democratic form of government when they send people here to present their case and they receive no consideration, while other industries, not represented here, get what they want? When it refuses to consider these matters, this government is doing more to destroy democracy in this country than perhaps some of the quislings did in Norway.
Mrs. DORISE W. NIELSEN (North Battle-ford) : Mr. Speaker, during this session many matters have come up before hon. members in connection with which opinions have been quite divided, but I think all of us are of the same opinion that the question of agriculture is one of unprecedented importance. Not only does the crisis now existing in western Canada affect the people of the west; it affects the people of the whole country. Therefore, it should have the consideration of every hon. member, whether or not he comes from an agricultural constituency. I was sorry this afternoon to hear one or two hon. members infuse a little dose of politics into their speeches. In connection with this matter we should forget party politics. This is something which has to do with the well-being of the Canadian people and we should not let party politics interfere with it.
Hon. members from all sides have tried to present the case for agriculture, but in the majority of instances they have underestimated

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the effects of the government policy. There is no need to enlarge or to overestimate these effects because the truth itself is terrible enough. When the provincial governments were presenting their briefs to the Rowell commission three years ago, the Liberal government of Saskatchewan presented theirs. I should like to quote from the brief presented by that government in 1937, as follows:
From the material already submitted, the conclusion is easily drawn that the economic well-being of the people of Saskatchewan at the present time is not high. For the farmer we find mounting debts, in large part secured upon his land, and rapidly deteriorating capital equipment with which to work. For the great bulk of the population of Saskatchewan, living conditions have been on or only just above the subsistence level during the past few years.
Although that report was made by a Liberal government, in my opinion it was a conservative report. Since that time the economic well-being of the people of the west has not materially increased. We have the Farmers' Creditors Arrangement Act; we have the Prairie Farm Assistance Act, and we have other attempts on the part of this government to help the farmer, but I submit that they are all pale palliatives, that they but scratch the surface without going down deep to the roots and causes of the distress of agriculture.
We have now had a declaration of government policy. We are to have 70 cent wheat again this year. We are to have a continuation of the grain exchange, and we are told that a part of this year's crop must be stored because we already have an enormous surplus. The people of the west are asking only for justice, and yet I would say that by a continuation of this policy, by the increased cost of living caused by our new budget and the increased cost of production which results from the increased import duties, this government is demanding as it has never demanded before, Shylock-wise, its pound of flesh from the western people.
In 1939 we had 70 cent wheat, which, contrary to the opinion that so many eastern people hold, does not bring our western farmers anything like 70 cents a bushel for their wheat. That has already been stated in the house. Our farmers who were able to produce No. 1 northern received at their western elevators last year 49 to 50 or 51 cents a bushel. Some of them, because they lacked the proper machinery, or because, perhaps, they lacked the help which they should have had in the spring to put in their crop, or lacked, perhaps, the money to buy new and better seed, got not No. 1 northern but lower grades. Some had to grow Garnet wheat, with the result that they got only from
33 to 39 cents a bushel for their wheat at the country elevators. Yet at our local stores when we went to buy provisions we found that we had to pay $3.35 for a sack of flour weighing 98 pounds. When one reckons that up, it will be found that a farmer has to pay from seven to ten bushels of wheat for one sack of flour; and if a bushel weighs roughly around sixty pounds, a calculation will reveal that the western farmers had to sell from 420 to 600 pounds of wheat to buy ninety-eight pounds of flour. If that is the basis of exchange, Mr. Speaker, which the government think can keep the western farmer on his feet, there is something wrong with their calculations. It is not a profit which the western farmer is demanding; it is a parity price which will enable him to buy the goods which he needs for more than a mere subsistence level.
We have now a 15 cent levy imposed on the milling corporations. On the surface it looks like a tax upon those corporations but in my opinion it is just one more good excuse for the millers to increase their profits. The Minister of Trade and Commerce (Mr. MacKinnon) acknowledged this afternoon that in one instance, in Montreal or somewhere near that city, bread has already increased in price. I heard that it had increased at the rate of one cent a loaf. We are hoping that it will not increase generally, but we have no guarantee that it will not. Nothing will satisfy me to the contrary except when this government will guarantee a pegged price for bread as well as a pegged price for wheat.
Is it necessary that we must starve Canadian children to win this war, and yet at the same time allow industry to make profits? Why does this government not peg bread at a price lower than it is to-day and let the millers take the rap just as the farmers have had to take it in years gone by?
We live in a country which is vast and potentially wealthy. We have roughly 11,000,000 of a population, which is very, very small compared with most of the European countries. We may also, according to the former Minister of Finance (Mr. Ralston) in presenting his budget, expect a national income this year of anywhere from four and a half to five or five and a half billion dollars. Consider that. To prosecute this war we are told that we must spend probably one billion or one billion and a half dollars of our national income of five or five and a half billion dollars, and we have only 11,000,000 people to feed and clothe. Why should we have to starve any of our people to prosecute this war? It is not logical; it is not sensible, and it is not human. I care nothing for parties or politics. I appeal to the government on the ground that they are
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men, that they know what it is to see children wanting food, and will do something and not just talk so much about these problems.
It is recorded in history that many years ago the people went to a certain queen and said to her, "The people are starving, they have no bread," and the reply which has been brought down to us in history was "Then why don't they eat cake?" Sometimes I think the callous disregard of this government toward the starving people of the west is comparable only with that example recorded in history.
This afternoon, when the hon. member for Weybum (Mr. Douglas) was speaking, a voice from the Liberal benches at the other end called out "Don't worry. The people of the west won't starve." I am sorry that there was such an expression of ignorance in this house because I contend that there are starving people in the west to-day because, let it be remembered, man does not live by bread alone. We have had starving people, and if this government continues with its policies we shall have more of these starving people. I am sorry to see a smile on the faces of some hon. members opposite. These are not smiling matters.


Mr. HOMUTH:: They are laughing at themselves.


Mrs. NIELSEN:: I hope so. I wish, Mr. Speaker, that we had members in this house who had had experience. I see that some of my hon. friends are raising their honourable eyebrows, but I repeat, I wish we had men of experience, men who knew what it was to be hungry. When I went to school I had to repeat these lines from Julius Caesar:
Let me have men about me that are fat;
Sleek-headed men and such as sleep o'nights.
Yond Cassius has a lean and hungry look.
Now that I find myself happily in that position I wish I had more men beside me with a lean and hungry look, men who knew from their own bitter experience what it was to be hungry, what it was to wonder where the next meal was coming from, men who were lean because they had lived intimately with starvation as thousands of our Canadian people have had to do in these last few years. Perhaps, then, we would have a government which would more truly represent the needs of the people than does this government.
If the government persists in its policy of giving 70 cents for wheat, I cannot see anything for thousands of our western farmers but that they will be forced to apply for relief. At the present time thousands of them have been forced to apply for relief, and a family of nine is receiving, in my part of Saskatchewan, $8 a month. I believe I heard somewhere once that the society for

the prevention of cruelty to animals made application to the Saskatchewan legislature for certain grants, and I believe it was said that when they picked a small cur off the roads it cost them around ten cents a day to feed it and if it was a large dog, about fifteen cents. That would be roughly around $3 a month. Yet we expect our people in the west to live on $1 a month, or less than it costs to keep a cur picked up off the road. That possibly, is a matter which has not been discussed in this house and has not been even thought of by many hon. members. I can see nothing for the people of the west, if the government continues its present policy, but that they will be reduced to a level comparable with that of European peasantry. They are very near that already.
At different times in this house I have heard several hon. members attempt to guard the rights of business or of various corporations. I have heard them defend the cause of certain groups within this country. I wonder whether they would lie down and keep quiet, as they expect the farmers and the farmers' representatives to do, if their own interests were being crushed and reduced as are the interests of western agriculture at this time. I feel quite sure that those same hon. members would rise in their places and protest vociferously. Not only would they speak in this house, but they would act in various ways. They would send advocates to the government; they would set up committees; they would find various means of presenting their case and insisting that their interests should be protected.
If this government persists in its present policy-and although speakers in this house have presented the case for agriculture, I cannot see that all their arguments have made this government alter its policy one jot or tittle-I feel convinced that the only reply which the western people can make is that they shall organize to protect their own industry and their own interests. They will have to do so; for it seems clear that in this house, with all the talking, no action is taken.
After all, if the farmers do this, they will be doing no more than industry has done. Industry has protected itself. It demanded that the limitation of five per cent on its profits should be removed. The western farmers are not demanding a profit; they are demanding just a livelihood, a living and a home. They must organize to protect their own interests as industry has done to protect itself. Let no hon. member on the government benches say that the farmers in doing this, will be disloyal to Canada or the Canadian people. By protecting themselves they will

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be loyal to the truest interests of Canada. In this day and age they cannot be forced down to serfdom.
If the farmers of the west were to present their case to this government, there are certain proposals which, I feel sure, they would have to make in order to enable themselves to carry on through these coming months. One cannot blame them for fighting for existence. The first law of life is that of survival. The western farmers must fight for that right in the same manner as any other group.
First, I would suggest, as a programme for the west, that the price which this government must guarantee to western farmers should be not less than SI .25 a bushel at the terminals. When one considers the increased cost of production and the higher costs of living, and when one recalls how inadequate was the price of 70 cents last year, a guarantee of $1.25 at the terminals, which would mean roughly $1 at the country elevators, would possibly be just sufficient to allow the farmers to get by.
Second, I would suggest that the government buy through the wheat board all the wheat of the western farmers. If someone asks where the money is to be obtained to buy this wheat, I would say that early in the session the house granted $700,000,000 for the prosecution of the war. There were no specific items included, and I would say that the government should take some of that money to buy western wheat; they should use that money to wage war on poverty, which is an enemy within our country as dangerous to our people as our enemies abroad. It would be part of the prosecution of the war to use money for that purpose.
Third, this government should start immediately to provide work in the west for some of our men who, contrary to the general opinion, are still unemployed through no fault of their own. The government should start to build storage elevators. Already demands are coming from the west, from the city of North Battleford and surrounding districts, and from various farmers' locals, that the government build a large storage elevator in the middle of Saskatchewan, where they believe it will be safe from enemy action, and where enormous quantities of wheat can be stored.
Fourth, there should be a moratorium on farm debts during the war.
Fifth, bread prices should be reduced, as I said before, at the expense of the millers, so that home consumption will be increased. Were every man, woman and child in Canada to have as much as they desired of this staple commodity, bread, we would increase our home consumption considerably. The present 95826-145
level of consumption merely proves that our people are not able to afford as much as they would like to have.
The sixth point, which also has been mentioned, is that when the Hudson bay route, which cost around $50,000,000, was constructed, it was understood that it should be used in the interests of western people. I believe I am correct in saying that in the first six years that the Hudson bay route was operated freight rates on the great lakes were cut from around nine cents to somewhere around 4J cents a bushel. The advantage of this to the western farmer is evident to everyone.
Another point, and one which I believe is worthy of consideration, relates to loss of markets. In my opinion, if the old markets are gone, we should seek new ones. I believe that some could be found if we had an enterprising government. First, there is China. Second, there is Russia. There are many hon. members who believe that whatever England does with regard to various matters is quite suitable for us to do. To-day England is negotiating with Russia with a view to a new economic relationship. Why should this country fail to seize an opportunity to dispose of wheat, if it can, in order to lessen the burden of the surplus which we already have?
On many occasions the government has pleaded for unity. They say that for the prosecution of this war we must have a united people. I would say to them: If you continue with this policy, how on earth can you hope to have unity? With every step of this policy you are alienating people in western Canada. How do you suppose they are going to feel as time goes on? They are asked to accept conscription, to accept registration, to be regimented; at the same time you are forcing them to submit to starvation. How do you suppose they will react to these things? They are not yet serfs. They still have some of that pioneer spirit which rebels, rightly and justly, against treatment of this kind. That spirit is not dead; on the contrary it is very much alive and growing in the west to-day; and where in the past the western pioneers went out to carve themselves homes out of the wilderness, to-day that spirit is leading them to carve a little justice out of this government. I believe that when the people of the west are called upon to register, thousands of them will register at the same time a protest that it is neither fair nor just to expect them to submit to existing economic conditions and at the same time to register and be regimented. They would be right in protesting in such a manner.
I cannot feel that talking in this house will do very much with regard to this question

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any more than it has done with regard to other questions, because, as I said before, with all the talk in this house, I cannot see where this government has once altered its policy. Therefore there is only one thing left to do. The people of the west must organize themselves to defend their own interests, send their demands to this government and make their voice heard. If their voice is too far away in Saskatchewan, then they must come to Ottawa so that it can be heard. Perhaps they would be a rather ragged army were they to come, not very well equipped for a long walk; but men, when they are hungry and their children are starving, will do many things which otherwise they would not do.
In conclusion, let me say this. The people of the west must defend themselves and organize to demand the means of their existence. This is only just and fair. The pioneer spirit which led them in the past will lead them in the future. They must cut down the trees of the economic wilderness into which this government has led them, and with courage and determination they must build for themselves a new home and a new heritage in that glorious west.


Alexander Malcolm Nicholson: Hon. members are anxious to conclude what has been for everyone a strenuous session. I have been away from the house for a few days and have seen a large group of farmers in the three prairie provinces. I would say to western members that they would be well advised to delay their return to western Canada if they cannot take back to the farmers there some report that offers more hope than has heretofore been held out to them. The members of this house will fully understand that we from western Canada are not discussing a provincial matter; we are discussing something that is of national consequence, because, as we have repeatedly stated, the farmers of Canada are anxious to make a valuable contribution to the effort to prosecute this war. The farmers of Canada have never asked for unlimited profits, but they have asked for some assurance that in making their contribution they will have the cost of production and will be able to pay their taxes and store bills, and to enjoy a decent standard of living.
Mention has been made in the house on different occasions of evidence submitted with respect to conditions prevailing in agriculture. Appendix 4 of the Sirois report tells us of the decrease in farm income in western Canada. For Saskatchewan, the net income in 1926 amounted to $203-8 millions; for the seven-year period between 1931 and 1937 that net income had been reduced to $18 millions. Can hon. members understand what it would mean

to any man to have his income slashed from $203 to $18 a month, while cost of production had remained constant or had possibly increased? The farmers of Canada, particularly the farmers of western Canada, are in no position to be asked to carry the cost of producing foodstuffs at a loss. As has been frequently stated, the time will come when agricultural products will be essential for victory. Famine faces many countries in the future. This being so, it is most unfair for the government to expect the farmers of Canada to bear the burden of carrying grains until the time they are needed.
To show that this is not a provincial problem, I might refer to the brief presented to the Rowell commission by the Manitoba government. In the eighth part they point out the different possibilities arising from unfavourable dominion policies. The hon. member for Acadia (Mr. Quelch) mentioned the unfavourable effects of the dominion tariff policy and the unfavourable effects of the dominion monetary policy. The chapters here tell us that the unfavourable tariff policy in Canada has imposed for many years a burden exceeding $100 annually on the average farmer in Manitoba. While the tax in itself is burdensome, it is pointed out, it is a fundamental weakness that the greater part is not credited to the dominion government's revenues but goes to the beneficiaries of the protected industries.
The section dealing with the unfavourable effects of dominion land policy gives facts that must be obvious to everyone. Hon. members are all familiar with the fact that for years and years people from eastern Canada as well as from various parts of Europe were urged to go west. Twenty years ago, as a young boy, I went west from Ontario in response to that familiar slogan, "Go west, young man". Thousands of others have gone. Public money has been spent for the purpose of bringing people here from various parts of Europe. Many settlers have found themselves on land unsuited for farming. Here is a problem created with the knowledge of the government.
I submit that care for agriculture is one of the national concerns at the present time. Clement Attlee, who is playing such an heroic role in the old country at the present time, pointed out something that should be obvious to everyone in this house. He said:
If we permit, as in the last war, inequality of sacrifice, so that at the end the gulf between rich and poor is greater than ever, we shall have failed in our task. If we really wish to build a new world wherein justice, mercy and truth shall replace brute force, wherein equality and good neighbourliness shall take the place of violence, aggression and domination, we must also build a new Britain worthy to lead the world away from anarchy and strife to the paths of peace.

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What applies to Britain applies to Canada. This government should be prepared to bring before us at this time really progressive legislation in the interests of agriculture. We in this group fully realize the difficulties that face the present Minister of Trade and Commerce (Mr. MacKinnon). I feel a special loyalty to the new minister because he is one of the boys from my own native county of Bruce. He has made good and is performing a responsible task in Canada. I am sorry, however, that the Minister of Trade and Commerce has not, supporting him, members of the cabinet who understand more fully the problems of agriculture in Canada. One of the most disappointing experiences I have had since coming to Ottawa was listening to the Minister of Mines and Resources (Mr. Crerar) this afternoon. I could scarcely believe my ears, that the minister was the same hon. member who some years ago led a progressive group in this house. I have before me a copy of a speech which he delivered back in 1922, on March 14. This is what he said:
There is no doubt, sir, that the condition of agriculture throughout Canada to-day is very serious indeed. The Minister of Agriculture (Mr. Motherwell) is, I am sure, well aware of that fact. After all when we survey this whole dominion from one end to the other, when we take account of the great manufacturing establishments that we have built up, may we not properly ask, upon what does the real prosperity of this dominion rest? It rests upon our agriculture; and if the farmers of this country are not prosperous, if agriculture is not thriving, then there is only one inevitable consequence-[DOT] the business of the country languishes and dies. What is the situation to-day? I venture to say that a great majority of the farmers of western Canada, that portion of the dominion with which I am more intimately acquainted, conducted their business last year at a loss.
And so on. I submit, Mr. Speaker, that the conditions described by the Minister of Mines and Resources in 1922 are much more critical in 1940. But instead of the minister rising in his place to make a plea for agriculture, this afternoon he attempted to justify a price of 70 cents a bushel for wheat, intimating that farmers could carry on very nicely on an initial payment of 70 cents. He said that if farmers applied common sense and cooperation they could solve their difficulties. There is a good deal of wisdom in what he said, but I suggest that the first thing farmers should do is to elect to parliament people who understand their problems, people prepared to speak in the interests of agriculture.
The minister spoke of his pioneering experiences in Manitoba. I have a great admiration for pioneers. My grandparents pioneered in Bruce county, as did the forebears of the 95826-145}
Minister of Trade and Commerce. My grandfather came from a northern island of Scotland where they knew real poverty, and the pioneers in Bruce county knew real hardships. But the people of my constituency who are pioneering are just as good stock as the pioneers in any part of Canada or any part of the world. The pioneers in my constituency are not complaining about difficulties in making their contribution to the welfare of Canada. They are complaining, however, about being forced to live in 1940 under conditions similar to those which prevailed in 1840, 1850, 1860. When my grandmother died in the bush, the nearest doctor was twenty miles away. There was no undertaker; the neighbours made the rough coffin used to carry her to her last resting place. The same conditions prevail in northern Saskatchewan; but in 1940 we are living in an era of plenty, we have the automobile, the radio, and we have a great abundance of all the things that people need. Our pioneers in old Ontario accepted their lot because they knew they were living in an economy of scarcity. But in an economy of plenty people are not content to live under such hardships. The Minister of Mines and Resources gave the impression this afternoon that people really could make good if they would cooperate. I point out that we are living now in a different age from sixty years ago. Pioneers in old Ontario made their shoes, their farm implements, their clothing right on the homestead. We are now living in a society in which there is monopoly control of the things necessary to sustain life.
I have here the report of the committee that investigated the farm implement business in Saskatchewan. They found that a cream separator made in Sweden cost, laid down at Peterborough, Ontario, $17.65. The freight to Winnipeg is $1.30, making the cost in Winnipeg, $18.95. But what does the farmer pay for it? He pays $44.58 for a cream separator which cost $18.95 laid down in Winnipeg. The point I make is that huge monopolies control the farmer's implements, clothing, the things necessary to maintain his life in this complex economy; and it is not an easy matter for the farmers to set up cooperatives and put these big corporations out of business.
When the Minister of Mines and Resources throws out the suggestion that during the pioneer times he knew farmers never asked help from the government and never received it, I should like to point out that he is not in a strong position to speak in that manner. Looking over the public
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accounts, I find that for the fiscal year ended March 31, 1939, the minister received for expenses $2,325.


Some hon. MEMBERS:: Oh, oh.


Mr. MARTIN:: Surely that is unfair.


Alexander Malcolm Nicholson: That is the figure in
the public accounts.


Paul Joseph James Martin: Surely the implication the hon. member is making is unfair.


Alexander Malcolm Nicholson: I shall be glad to
hear the hon. member make his speech when I have finished. The minister's salary is $12,000 a year, and his sessional indemnity $4,000, making, for the year, a total of $18,325. which works out at $50.20 a day for 365 days in the year.


James Garfield Gardiner: His salary is not $12,000.


Mr. CRUICKSHANK:: May I ask the
hon. member a question? How much has he made since he has been here?


Alexander Malcolm Nicholson: I have been receiving
the customary sessional indemnity, and I should like to assure my hon. friend that I am not sitting in this house for the sake of lining my pockets or preparing a future for myself in which I can be secure at the expense of the people who sent me here.


George Alexander Cruickshank: If I may ask the
hon. member another question, what has he accomplished?


Alexander Malcolm Nicholson: I have as often as
I had opportunity risen in my place in this house to present the problems of my people and to appeal to this government to enact legislation to provide that the wealth and work of Canada shall be distributed more fairly and equitably.


George Ernest Wood: Does the hon. member claim a monopoly of sincerity in that regard?


Alexander Malcolm Nicholson: I make no claim for
a monopoly' of sincerity.


An hon. MEMBER:: You suggest it.


An hon. MEMBER:: Would you refuse
$18,000?


Alexander Malcolm Nicholson: I cannot hear all the remarks coming from the other side of the house. I shall be glad to listen to hon. members speak when I have finished.


George Ernest Wood: The hon. member does not
give us a chance; he is talking all the time.


Alexander Malcolm Nicholson: Mr. Speaker, I point
out that a man who led the Progressive group in Canada, concerned particularly about
[Mr. Nicholson.J
establishing better conditions for the agricultural people of Canada, is not in a strong position to suggest that the farmers of this country are asking for more than their share in requesting this government to guarantee that at the end of this war the farmers will not be in the position of being the only group to supply at a loss the commodities so essential to victory.
If I might conclude my reference to the Minister of Mines and Resources, his speech this afternoon reminded me of a poem by Dorothy Parker, entitled "The Veteran." It goes something like this:
When I was young and bold and strong
Oh, right was right and wrong was wrong!
My plume on high, my flag unfurled,
I rode away to right the world.
"Come out, you dogs, and fight" said I,
And wept there was but once to die.
But I am old: and good and bad Are woven in a crazy plaid.
I sit and say, "The world is so;
And he is wise who lets it go."
A battle lost, a battle won,

The difference is small, my son,"
Inertia rides and riddles me The which is called philosophy.


James Garfield Gardiner: May I ask a question?


Alexander Malcolm Nicholson: Yes.


James Garfield Gardiner: In relation to the remarks made a few moments ago respecting the Minister of Mines and Resources (Mr. Crerar), regarding the amount of money he has drawn from the government in the last year, has my hon. friend taken his own $4,000 for the term of this session and distributed it proportionately over the term of the year, to find how it compared?


Alexander Malcolm Nicholson: I would reply to the minister by saying that I am devoting all my time to my work, 365 days in the year.


Paul Joseph James Martin: So is the minister.


Alexander Malcolm Nicholson: I am devoting all my time to serve the people who sent me here. And I should like to assure hon. members that I have not entered public life in order to line my pockets or to place my family in a privileged position. I have entered public life in order to serve the people who are pioneering in northern Saskatchewan. They believe that by sending me to Ottawa, some day we shall be able to get legislation passed so that those who produce the foodstuffs of the nation will be able to live as well as ministers of agriculture or ministers of mines and resources who, just as I am, are servants of the people.


An hon. MEMBER:: Are they not doing it?


Paul Joseph James Martin: Would the hon. member permit a question?

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An hon. MEMBER:: Sit down.


Paul Joseph James Martin: I rise to a point of order.


Mr. DEPUTY SPEAKER:: The hon. member should state the point of order.


Paul Joseph James Martin: The hon. member for
Mackenzie (Mr. Nicholson) has stated that he is not in the house to line his pockets, the implication being that every other hon. member is here to line his pockets. I suggest that the hon. member ought to withdraw that remark.


James Lester Douglas: No.


Paul Joseph James Martin: Speaking for myself, I receive the same indemnity as he does, and I am not here for the purpose he indicated.


Thomas Vien: The point of order has been stated. Does any hon. member wish to speak to it? If not, my ruling is that the implication the hon. member has mentioned in his point of order is too remote to warrant my ruling that the hon. member should withdraw his remark.


Alexander Malcolm Nicholson: I thank you, Mr. Speaker, for the ruling, and I assure hon. members that my remarks were made only in reply to a question of the Minister of Agriculture. I had no intention whatever of insinuating that hon. members are here to line their pockets.


Thomas Vien: I would point out that hon. members should stick more closely to the matter under consideration. I would remind them that personal references of the kind mentioned do not lead very far.


Alexander Malcolm Nicholson: The legislation now under discussion affects the people in my constituency more vitally than any other domestic legislation discussed so far this session; and having been in Ottawa two months, I have been greatly disappointed to find that there has not been prepared some legislation more constructive than that now before us.
In the minister's own department there are experts who have given a good deal of consideration to methods carried out in the United 'States in connection with similar problems. I would make particular reference to the work in that country under the Commodity Credits Corporation. May I, in passing, make it quite clear that I do not conclude that everything done in the United States has been good, and that therefore it should be duplicated in Canada. But the fact remains that for a considerable period of time they have realized that this is really a national problem, and have recognized the
necessity of seeing that the farmer be placed in a position where he may be able to stay on his farm and receive a cash return which would enable him to live as other people in society.
I find the Commodity Credits Corporation in the United States made loans on 160,000,000 bushels of wheat. In the Kansas City district, in connection with winter wheat the corporation is making loans to the extent of 77 cents a bushel. In the Iowa section the loans are from 78 to 80 cents, and in the Chicago area the loan is 81 cents.
When the Minister of Mines and Resources states that it is moonshine to suggest paying farmers for storage in their granaries, I would point out to him that the United States has been paying farmers in that country for the storage of several commodities on their farms. My information is that a payment of seven cents a bushel is made to the farmer for the storage of wheat from the time it is threshed until the end of April. If in the meantime a farmer sells his wheat to retire his loan, he is paid at the rate of one-half cent a bushel per month for his Storage.
I would point out, too, that farmers in the United States have been given assistance in connection with the building of granaries on their farms. I have not been able to secure precise information as to the terms under which the money is made available for the building of granaries, but I think it is only feasible that farmers in Canada who are going to have to store their grain on their farms this year should have some assistance from the federal government to enable them to build storage space, and permit them to carry their necessary expenses until the grain has been finally marketed.
There are a few definite recommendations which I believe might be made, and in conclusion 1 would summarize them briefly. First, I would recommend that arrangements be made for an equitable quota of deliveries at elevators, based on elevator storage facilities immediately available. I believe it must be recognized that in many parts of Canada threshing will be completed in one district before it is begun in another, and it must be recognized that with trucks available to haul grain considerable, distances, unless some equitable quota is arranged, many farmers will find themselves unable to deliver any grain.
In the second place I suggest that we should have a system of payment for farm storage for all grain and flax seed stored on the farm for future delivery to elevators.
My third suggestion is that we should have an adequate advance on all grains and flax
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seed delivered to elevators, or stored on the farm for future delivery, based on a parity price with prices paid for the products of other basic industries or essential war industries in Canada.
Fourth, I suggest that parity prices be established without delay for all primary products, in order that production may be efficiently continued in this time of war. In that connection I would mention that only this morning I received a letter from a flour miller in my constituency stating that at the present time conditions are worse than they have been during the 25-year period he has been in Saskatchewan. He concludes his letter by pointing out that young married men who are physically fit are joining the army, as the only alternative they can see. I realize that farmers are entitled to join the army and to make their contribution as soldiers, but I submit that it is a short-sighted policy to permit economic conditions to exist whereby people find that in order to survive it is necessary to put on a uniform.
We must realize that it does not take long for a man to get out of agriculture, but that going into the production of foodstuffs is quite different from building a factory for the production of munitions. It takes years for a farmer to become established so that he can produce efficiently and effectively. We should move slowly in adopting policies which will force people out of agriculture.
The hon. member for North Battleford (Mrs. Nielsen) referred to the relief standards that prevail. There are people in my constituency who have found that they can live on relief in the cities on a higher standard of living than they are able to obtain in the country. It is of great national concern to see that those producing foodstuffs receive a return which will permit them to have a decent standard of living. I would urge that the Winnipeg grain exchange be closed and that all grain should be marketed through the Canadian wheat board. Speaking the other day, the hon. member for Wood Mountain (Mr. Donnelly) had the following to say, as reported on page 195S of Hansard:
Since I have been in the west I have been told what a great monster the grain exchange has been; how it lias bedeviled everything; how it has robbed the farmers; how it has shaken all the money out of him; how it has robbed the country and everyone else. But I have yet to hear anyone give me a concrete reason as to why the exchange should be closed.
I hope the hon. member was in the house this afternoon to hear the Minister of Mines and Resources. If he was, he would have heard one good reason. If he was not, I suggest that on his way back to his constituency he spend a dajr in Winnipeg and ask someone

to show him the homes of those who have grown rich from operating on the grain exchange. Then I want him to compare those homes with those of the people in his constituency who produced the grain which made possible those great fortunes. I submit that these recommendations should be considered carefully by the government.



BUSINESS OF THE HOUSE


Thomas Alexander Crerar: I move;
That the house do not adjourn at eleven o'clock.
I realize that this requires the unanimous consent of hon. members, and if there is any objection we cannot proceed. However, we should like to get this bill into committee tonight, if possible.


Mr. M. J. COLDWELL (Rosetown-Biggar):: How long would the minister like us to agree to the sitting being extended? I am not raising any objection, but I think there should be some limit.


Thomas Alexander Crerar: I would hope that we might conclude the discussion by midnight or 12.30 a.m. Certainly we would not continue beyond that.


[Stage Direction]
Motion agreed to.


[Stage Direction]
The house resumed consideration of the motion of Hon. J. A. MacKinnon (Minister of Trade and Commerce) for the second reading of Bill No. 118, to amend the Canadian Wheat Board Act, 1935.
Ernest Edward Perley: Mr. Speaker, it is now August 1 and this house has been in session for two and one-half months. We are now debating the second reading of what I consider is one of the most important measures presented to the house this session. We have considered the resolution which preceded this bill as well as the motion for the first reading, but to-day the minister told us that there are still amendments to be made to the bill and he outlined one or two. First, he stated that there would be an amendment to clarify the section with reference to the processing tax. We do not know what that is going to be. Then he said that consideration was being given to the matter of financing

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grain on the farm, and I assume an amendment will be offered to provide for that. He stated that numerous suggestions had been made to the government, and I presume to himself as minister; that a number of conferences had been held, and that others were being arranged for. As I said, this house has been in session for two and a half months and we have considered this legislation in the resolution stage. We should have had definite information with regard to those matters which the minister says will be covered by amendments.
This afternoon and this evening we have had some interesting speeches. The leader of the opposition (Mr. Hanson) made a powerful and constructive speech. He outlined the present situation and agreed that this is a national problem. He contended that some provision should be made for coarse grains and referred to the operations of Mr. McFarland between 1932 and 1935. He referred also to the suggested amendments, and he agreed with most of them, in particular with the one having to do with the processing tax and the one providing for payments to the farmer for storing grain on his farm.
When I was speaking on the resolution a few days ago I quoted from a pamphlet which set out the policies I had suggested last session to the house. In a jocular way the Minister of Mines and Resources (Mr. Crerar) said that apparently I was quoting from a campaign speech. I assured him that it was the speech I had made in the house last year from which I was quoting. I said I would give him the page number in Hansard to satisfy him. I have the copy of Hansard here, Mr. Speaker, and I want the privilege of referring to it briefly. The page number is 3475 of Hansard of May 2, 1939. This is what I said:
I would set the price at 87 cents for the month of August, plus one cent a month for each additional month until the following July 31, which would make an average price of 92J cents a bushel.
Mr. Crerar:	May I ask my hon. friend a
question. Is he speaking for himself?
I assured him that I was speaking for myself and then he said:
Mr. Crerar:	If my hon. friend will permit
me, may I say that if he had undertaken that his leader and his followers would underwrite his suggestion, we might be ready to pay some attention to it.
I then outlined in detail what my suggestion meant, that it meant the storing of grain on the farm by the farmer, exactly as it is to be stored now. It is interesting for me to note that the minister is now not only underwriting this very scheme which I proposed but is
endorsing it and will vote for the bill that makes provision for it. I do not suppose the bill will go as far as I should like it to have gone, but the principle I advocated is to be embodied in the bill. So it was not moonshine but a constructive suggestion of mine, and I am glad to see that the government has adopted it and is embodying it in this bill.
We should have had this bill before the house at least one month ago, and then after a general discussion such as we have had here to-day, it should have been referred to a committee of the house, where for two weeks we could have examined its provisions carefully and have had appear before the committee the wheat board, members of the grain exchange, if you like, representatives of the farmers and others interested. I would have suggested the same sort of committee as we had in 1935 following the introduction of the bill which we are to-day amending.
This bill certainly embodies new principles with respect to marketing so far as this government is concerned. Storage of the grain on the farm, for example, is a new principle. A quota delivery is also likely to be applied. That is a new principle in the control of marketing. May I remind particularly the Minister of Mines and Resources that as far back as 1934-I will give him the pages in Hansard, pages 375, 376, and 377

I advocated a system of control of deliveries. He will find it all set out in great detail in Hansard- control of deliveries, controlled production, if you like-and I commend it to the minister because I suggest that next year the government will be embodying my suggestions in a further amendment to the act.
This legislation provides for financing the grain on the farms. That is an innovation in marketing. It is moonshine perhaps so far as the Minister of Mines and Resources is concerned, but I suggest that the government will be adopting a great deal of this moonshine before very long.


Mr. MacNICOL:: As long as he does not drink it, he will be all right.


Ernest Edward Perley: The wheat board has been in Ottawa for practically a month; the grain commission has also been here, and they have held many meetings. The minister to-day suggested that there had been conferences and that other conferences had been arranged. I think he should tell the house exactly how many meetings the members of the government have had with the board within the last month. I protest against the sort of thing that has been going on while the house is in session. The bill should have been introduced long ago and should have been
Canadian Wheat Board

sent to a committee for a thorough examination. If the bill had been introduced at the proper time, it could have been sent to a committee where, as I have said, we could have had before us the members of the board, and perhaps the members of the grain exchange; and possibly the Minister of Mines and Resources would have recited to us what happened when he was overseas interviewing the British government with respect to the marketing of Canada's wheat. We might also have had before the committee a representative of the British cereals import committee now in Canada; we could have had the chairman of the wheat board, Mr. Mclvor, and certainly we would have had before us a financial representative so that we might have examined into and ascertained the exact position in which the board stands to-day, financially and otherwise, as well as information corresponding to that contained in the reports I have on my desk. I have all the reports of the wheat board since 1935. Who knows what the financial position of the board is to-day? Who knows where this government stands in regard to wheat? Who knows who is directing the selling policy of the board? Who knows how often the wheat committee of the cabinet has met with the board? If the bill had been introduced in sufficient time to allow us to make a thorough inquiry, we could have gone into all these questions and held an inquiry similar to the one we had in 1935.
I well recall the session of 1935 when the wheat board bill was first introduced into the house. The present Minister of National Defence (Mr. Ralston) was the chief financial critic of the government of the day, and I am going to refer to the speech he made as reported in Hansard of June 12 of that year. After the bill had been introduced and had been under discussion for several days-and remember it was two weeks or more before parliament prorogued-he said, as reported at page 3580 of Hansard of June 12, 1935:
We have dealt with that policy as it affected the farmers and we have dealt with it also as it affected the country generally. We now know at last that we have over 200,000,000 bushels of a carryover this year and we do not know what are the commitments of this government to the bankers.
I contend that that is the position now. We do not know where we stand with respect to the banks or the government. He went on:
Should this wheat be marketed at to-day's price we do not know whether the loss would be $30,000,000, $100,000,000 or no loss at all. We have received no information of any kind but in the dying days of this session-
PerlevJ
That was two or three weeks before parliament prorogued.
-we are being asked to commit this country-
Listen to this:
*-we are being asked to commit this country, not to a hit and miss policy such as my right hon. friend has had in force during the past four or five years during which he has been the wheat dictator of Canada, but to a permanent policy.
Then on the following page, 3581, he said:
Let me say to my right hon. friend that the house will not accept subsection (b) of section 7 of the bill without the fullest information being furnished as to the operations of the Canadian Cooperative Wheat Producers Limited during the last three or four years under the direction of the Prime Minister.
He was asking for a thorough investigation before the bill would be allowed to pass. Then he says this in conclusion:
I say to my right hon. friend that as far as I am concerned I shall support this bill going to a committee-
He demanded the committee and he got it.
-on the understanding which was .made clear by the right hon. the Prime Minister and by my right hon. leader, that that is without prejudice to or commitment in the start that I wish to make on any of the provisions of the bill, and ... I also want to reserve the right ... of moving or supporting any amendments which I may see fit. . . .
That was the understanding; and we got the committee, and we had a careful investigation. We knew a great deal more about the bill and about the situation generally when the bill came from that committee.
On various occasions this session, when we tried to get this matter brought down earlier, the Minister of Trade and Commerce said that it was under consideration.
Reference has already been made in the discussion to-day to the promises which were made by the Minister of Agriculture (Mr. Gardiner) during the campaign. It is evident, from what has been put on record here tonight, that the farmers of western Canada were "kidded". As many of these promises and speeches of the minister have been referred to, the only suggestion I have to make, having listened to the hon. member for Lake Centre (Mr. Diefenbaker), the hon. member for Weyburn (Mr. Douglas) and others, is, that since the minister is now minister in control of information, he should see to it that the newsapapers which report him, report him correctly.


James Garfield Gardiner: I should see that the hon. member interprets the reports correctly.


Ernest Edward Perley: We have heard of "poetic licence". He might take a political licence, so that he can make a speech and can put

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upon it any interpretation he desires. I was going to suggest that he might assemble in pamphlet form many of the promises which he made during the campaign and which he has denied, that he should follow the policy he pursued in the Saskatchewan provincial election of 1934, and have them placed in the cream cans of the farmers of western Canada for their information when those cans are shipped back from the centres to which the cream is delivered. That would indicate clearly how the farmers have been "kidded". Mr. Ralston in 1935 demanded an inquiry. I have quoted from the debate. We need an inquiry on this occasion.
I may briefly sum up the policy which has been pursued by the wheat board since 1936, by saying that it has not had the effect of stimulating prices either in Canada or on the export market. I desire to quote from the publications of Mr. Sanford Evans, who is well known in western Canada. He, with Chief Justice Brown, was a member of the Stamp commission, and is known to have a clear insight into the whole marketing question. Writing on September 16, 1938, he has this to say with respect to the wheat board and the plan of marketing thereunder:
It is the way the plan is administered in practice and not the terms of the act that must establish its real character in any season. In announcing the plan this season the government went to questionable extremes in disavowing market-price motives.
Further, on September 21, 1938, he has this to say, following the announcement by the government of their policy that year; he quotes from the New York Journal oj Commerce:
Interpreting the minimum wheat price announcement by the Canadian government late yesterday-
That is, August 5.
-as extremely bearish, longs on leading North American wheat pits unloaded their holdings.
He proceeds to quote from Broomhaill's Com Trade News, of Liverpool:
As a fact . . . Winnipeg futures dropped several cents a bushel, considerable importance being given to a statement by the Canadian premier, Mr. Mackenzie King, that the wheat board's policy would not be to withhold supplies from the international market, but rather to offer competition at all times. In other words, no attempt is to be made to dictate prices to consumers and, in the prosecution of this policy, the government is prepared to absorb any loss which may be sustained.
He states in a further letter which was referred to, I believe, this afternoon, that when we have this surplus of wheat, if the board is not careful, we shall have a buyers' market. With respect to the policy adopted 95826-146
by the board, Mr. Evans terms the position "a buyer's paradise":
Continuously since August there has been a ''buyers' market"-indeed, the nearest approach to a "buyers' paradise" the market has ever seen, for even in 1930-33, the only comparable period in relative price, certain governments, notably those of Canada and the United States, were actively resisting price declines.
He goes on to show how no single act on the part of this board can be interpreted as one of resisting a price decline.
We want this board reorganized, so to speak. We want a board that can stand up to, shall I say, the Rank interests, or to the British cereals import committee. Surely we can get suitable men if we go about to get them.
Let me. make this suggestion. This afternoon the Minister of Mines and Resources gave me some credit-and I thank him for it-for having been responsible in a certain degree for the Canadian Wheat Board Act. The act of 1935 was no doubt our creation; it is still in vogue, but naturally some amendments are being put through, so to speak, to bolster it up. I desire to offer a suggestion in this connection; and may I ask the Minister of Mines and Resources, who other than myself has ever presented more concrete suggestions, with regard to the domestic price, for example, or storing wheat on the farm, or the controlling of deliveries to the market? I urge, so many suggestions having been made from this quarter of the house, that surely our party should have the naming of one or two members to this board, and certainly of two or three members to the advisory committee when it is appointed. As I said the other evening, I think I could name at least fifty men who could do a better job than those who are now in office.
This bill should have gone to a committee. I know that it is now too late for that.
This afternoon some reference was made to a "fire sale" in 1935. I am not going to take time to discuss that, but, 01 I should like to. I have here the agreement which was made with the grain exchange by the board, the agreement on which they, worked for twelve days or so after Murray took over. Of course it was cancelled after it had served its purpose.
I should like to quote the letter which was given to Mr. Lamont when he was dispatched overseas on December 14, just a few days after the Murray board took over, and which stated. "You might inform the British miller that the fixed price of 87? cents that the board pays the producer bears no relationship to the price which we are prepared to sell at."

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However, we cannot, I know, take time. We are anxious to get the bill through. But I say it is a shame that it was not introduced long ago and sent to a committee where we could calmly and deliberately consider it and have sworn evidence produced before us.
This afternoon the Minister of Mines and Resources, in a very good speech, reviewed the whole marketing system. It was not necessary to go back to 1898. He reviewed the history of the business and dealt with the twenty-two and a half years during which he himself was manager of or associated with the United Grain Growers. Those twenty-two and a half years represented the palmy days of the grain exchange; but I venture to say that during that time there was filched from the farmers of western Canada by that company and the other one hundred and fifty or more concerns associated with it in the grain business, by overages, by exorbitant interest charges, by shortages on cars at Fort William and by storage charges that were beyond all reason, as would pay one-half to two-thirds of the whole farm indebtedness of western Canada. So much for the twenty-two and a half years during which the minister was controller of that company.
He also referred to the 1929-30 period with reference to the operation of the pools. Well, that is history. It is not necessary to discuss the difficulty they got into. But he referred to the guarantee of the provinces and he dragged into the picture Mr. Bennett's stabilization operations. The province guaranteed, and rightly so, the accounts of the pool, and when the time came to meet the guarantee and the provinces could not do it they came to Ottawa and appealed to Mr. Bennett. I may say to the Minister of Mines and Resources that I am proud that I was one of the men who sat in with Mr. Bennett and persuaded him that it was necessary to take up with the provinces that guarantee which they had made to save the pools of the west.


James Garfield Gardiner: A guarantee of 60 cents.


Ernest Edward Perley: He took it all up, guaranteed it and carried them through until an arrangement was made; and under that arrangement they are paying it all back so that the government will not lose a nickel, not a cent.


James Garfield Gardiner: The guaranteed advance was 60 cents.


Ernest Edward Perley: Yes, but they did not lose
anything on the operations and did not lose their elevators-and the grain exchange had these elevators divided up. They saw the
[Mr. Perley.l
need, and Mr. Bennett saved them because of the equity that many of the farmers of western Canada had in all these thousands of elevators built up by the pool over western Canada. From 1932 to 1935 we had the stabilization operations, and we know what that meant. The Minister of Mines and Resources this afternoon referred to that and spoke of gambling and so on. I wish to put on the record exactly what these operations meant to the farmers of western Canada. I have here the evidence that was taken before the committee to which the bill was referred. I will quote from page 408 of the sworn testimony given by Mr. Mclvor, who had been Mr. McFarland's assistant. I quote:
By Mr. Perley:
Q. Mr. Mclvor, I think we all agree on one important point, what the operations have meant to the western producer, if the position at present is say we have an increased carryover of 70 odd million of bushels in the meantime, which meant the farmers have sold all the grain that has been produced over this four or five years at say an increased price, what would you estimate that increased price or the actual saving to the farmers meant, fifteen cents a bushel or twenty ?
A. I would like to be fair in answering that question. I would say fifteen cents a bushel. I want to be fair. It is only an estimate. There is no way of computing that.
Q. It is really about 1,700,000,000 bushels, is it not?
A. Well, those are not your exports, of course. Those are the crops you have grown.
Q. And that amount has been sold?
A. Well-
Q. Less what is on hand?
A. You have to take out the wheat that has not moved from the farms. To get some idea of it I will quote these figures that I gave earlier to Col. Ralston. I think we were discussing that this morning.
Q. I understand it really meant 1,700,000,000 bushels that had gone into the market, less the extra amount of surplus, the saving

A. Here are the figures here, Mr. Perley. The production during that period was 1,743,000,000.
Q. Yes?
A. That is the production.
Then he suggested that it was at least 10 cents a bushel. If I wished to do so I could read the evidence at some length. The Minister of National Defence (Mr. Ralston), who was a member of the committee, tried to break that statement down. It really meant, Mr. Mclvor said, that the farmers had been able to market all the grain they produced in those four years, 1,700,000,000 bushels, at least at 10 cents more than they would have been able to do if there had not been these stabilization operations.


John Gordon Ross: What years were those?


Ernest Edward Perley: That was 1935.

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John Gordon Ross: But what four years is the hon. gentleman speaking of?


Ernest Edward Perley: The four years prior to 1935.


John Gordon Ross: 1931, 1932, 1933 and 1934?


Ernest Edward Perley: Yes. The figure Mr. Melvor gave was 1,700,000,000 bushels odd. He gave evidence before the committee that the saving on all the wheat produced and marketed during those years of the stabilization operations had meant at least 10 cents a bushel more than would have been received if Mr. McFarland had not been there.


John Gordon Ross: Wheat must have been worth 50 cents in the fall of 1932?


Ernest Edward Perley: It was down to 40 cents, the lowest in fifty years.
The minister made charges with respect to gambling. Some evidence was submitted in that regard in 1936. From September 6 to October 14, thirty-eight days, a quantity of
10,000,000 bushels was bought, and if hon. members will go through this evidence, they will see that Mr. McFarland was forced to buy as much as 14,000,000 bushels in a week, and many days seven and eight million bushels, in order to save the market from going down under the pressure brought to bear through selling by the Winnipeg grain exchange.


James Garfield Gardiner: And sold it all back before the end of the month. Wheat went down lower than when he started.
Mr. PERLE\ :	I have here the report
showing a profit of $24,000,000 on the operations.


James Garfield Gardiner: They must have stopped before it started to go down.


Ernest Edward Perley: I was hoping that the minister would make his speech in his own time and not while I am making mine. 1 have the final report of the operations and I will give it to the Minister of Agriculture.


James Garfield Gardiner: I have one myself.


Ernest Edward Perley: It states that the profits on wheat taken over from the Canadian Cooperative Wheat Producers Limited at the market price December 2, 1935, was $24,809,000. It also states how that wheat was disposed of. They made up $9,000,000 of a loss they took on the 1935 crop, something that was not fair so far as the farmer was concerned. If there had been a square deal in connection with the 1935 crop, they should never have had to take that loss.
The Minister of Mines and Resources this afternoon mentioned that on a former occasion
95826-146}
I had referred to a memorandum which I prepared for my chief in 1935 just before the bill was introduced in the house. The minister said that I took some credit for it. I well recall those days; it was not an easy matter to sell to Mr. Bennett all the proposals we finally had embodied in that bill. There were other interests from western Canada; it is too bad we did not have at that time more men feeling as some hon. members in this parliament. I recall the wails from this side of the house. I prepared this memorandum and put my ideas before Mr. Bennett and the Conservative members of the committee, and we finally had certain provisions embodied. I am going to take credit to myself; I say without fear of contradiction that there is no living man in Canada who had more to do with the framing of the 1935 wheat board act and putting teeth in it, and some of the clauses that are still there, than the member for Qu'Appelle. I should like to have time to read the memorandum I submitted, but it speaks for itself.


An hon. MEMBER:: Self praise!


Ernest Edward Perley: The minister took some self praise to himself this afternoon, and I am taking a little.


Thomas Alexander Crerar: I gave it to the hon. member.


An hon. MEMBER:: Ironically.


Ernest Edward Perley: Ironically, yes. I have his words here. He said:
I suspect that when the information gets abroad throughout western Canada that it was the hon. member's memorandum which led up to the wheat board act of 1935 the people will want to erect throughout the western provinces as many monuments to the hon. member as there are monuments for soldiers of the last great war.
I think he could have left out that last comment re soldiers, but I am pleased to note that he admits I should have some credit.
I venture to say that there are not twelve farmers in western Canada who will ever suggest erecting a monument to the minister for anything he ever did for the farmers of western Canada. Furthermore, if there were twelve farmers who felt like erecting a monument to him, I venture to say they should get the Hon. W. R. Motherwell to write the inscription on it, and he might use for that inscription language similar to what he used on a former occasion in this parliament when he referred to the minister and his action in handling wheat in western Canada. He said, he is now the adviser to my chief.
The minister referred to garni ling by Mr. McFarland, and to certain sections. I have the bill here, and if I had time I could show

Canadian Wheat Board
it was necessary for him to buy some wheat, because under this act he had to use the facilities of the exchange. Section 8 of the original act provides that it shall be the duty of the board to sell and dispose of from time to time all wheat which the board may acquire, to utilize without discrimination such marketing agencies, including commission merchants, brokers, elevator men, exporters and other persons engaged in or operating facilities for the selling and handling of wheat, and so on. Mr. McFarland was forced to do it because he had a lot of wheat to sell. It was not all cash wheat, it was option wheat, and we know how they trade on that market. You have to take back or give options, so to speak, on certain occasions in order to do business. I think the fact that it was only ten million bushels in thirty-eight days was not so bad.
But I suggest this to the minister, that if this bill had been before the committee for the last three weeks and we had had power to call witnesses from the present board and get some information with respect to their operations during the last four years, it would give a different picture altogether from the one he paints with respect to Mr. McFarland. That is one of the things I object to; we have not any information. We have not a broker that they employed, or a commission agent or an elevator agent, we do not know what they have paid for storage or who they paid it to. There never was a bill passed in this house with so little information as we have in dealing with this bill now.
I recall the wails in 1935 from the present Minister of National Defence, from the hon. member for Wood Mountain (Mr. Donnelly), from Jack Vallance, Mr. Young and others: "no, we will not allow this bill to pass until we get information and it goes to committee." It did, and they got the information. That is the position I take now. It is just too bad.
I am not going to say any more to-night. When this bill goes into committee we will examine it. I have some further suggestions to make; I do not suppose they will be accepted; the Minister of Mines and Resources might think them moonshine. However, we will offer them. I am not satisfied with the 70-cent price; I never have been. I appreciate the fact that in setting the processing tax of 15 cents a bushel, it is a start, but it should be 50 cents, so that the baker could raise the price of his bread one cent a loaf, which would be as far as he could go, and that is about what 50 cents a bushel would amount to. As the hon. member for Wood Mountain pointed out, they may raise the price one cent a loaf anyway, so I would say, go the limit. What would 50 cents a bushel on

some fifty million bushels of domestic wheat amount to? It is just a matter of mathematics -$25,000,000. Spread that amount over what would probably be delivered to the market in a normal year, 250 million bushels, and you have quite a nice thing, and the people who have to eat the bread would not, I believe, object much if they knew the farmer was getting five cents a bushel more on his wheat, whether for export or for domestic consumption.
When the bill comes into committee I shall have many questions to ask, and the minister should be prepared to answer. I want to know what agreement they have made with the grain exchange, what agreement they had last year, how it worked out, and we want to know definitely how he is going to finance the grain on the farm, what he is going to allow for storage on the farm, and details of that kind.


James Garfield Gardiner: I do not know that I should have taken the time of the house to say anything on this occasion had it not been for the remarks of the leader of the opposition (Mr. Hanson), his reference to myself as Minister of Agriculture, and some remarks made by the hon. member for Qu'Appelle (Mr. Perley) who has just taken his seat. The leader of the opposition this afternoon said that the Minister of Agriculture was running away from wheat. It is rather a surprise to hear him make that statement, because the leader of the opposition at one time was Minister of Trade and Commerce; and if he knew the duties of that office he must have known that ever since the Department of Trade and Commerce was set up, or, -in other words, ever since we had a Canada Grain Act, wheat has been under the Department of Trade and Commerce and not under the Department of Agriculture. Never since I have been in this house or been Minister of Agriculture have I had anything whatsoever to do in my administrative capacity as Minister of Agriculture with the marketing of wheat.
Wheat has always been under the Department of Trade and Commerce. Wheat is still under that department. If I have shown any interest in wheat during the time I have been here it has not been because I have been Minister of Agriculture, but because I come from the very centre of the district in which wheat is growm in western Canada. It does not make any difference whether I am Minister of Agriculture or a private member of the house, or whether I am administering two departments as I am at present, or whether I am administering only the other of the two, during the time I remain in the

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west I shall always be interested in the marketing of wheat and in the people who grow it. I say that because I live among them; I am one of them, and my interest is in the marketing and growing of wheat to a greater extent than it is in anything else. The interests of the people who grow wheat are my interests.
Therefore my speaking from time to time in this house and in the country with regard to the marketing of wheat has not been because I am Minister of Agriculture. Nor have I had any authority to speak on it because of the fact that I am Minister of Agriculture. That authority has always been with the Minister of Trade and Commerce. I would rather think that the new position I have been asked to assume places me in a position of greater responsibility because, as was stated by the Prime Minister (Mr. Mackenzie King) in introducing the measure which created the new department, that department was to be concerned with the mobilization of the human and material resources of this country. If there is in Canada one material resource that is of greater importance than any other, in order that this war might be prosecuted to a successful conclusion, surely it is wheat. Wheat is the outstanding Canadian product which will play a very important part in the prosecution of the war, and in taking care of the people when the war is over. Therefore, in so far as the new department is concerned, my interests in wheat have in fact increased, rather than diminished, and my responsibility in relation to wheat has increased rather than diminished.
It was stated by the leader of the opposition that I had advocated increasing the production of wheat. It may not be known to most hon. members, but the fact is that most speeches I deliver are in written form, apart altogether from what the newspapers write. On occasions I read speeches, and when I read them I keep copies of them. The one speech which was delivered to the people of western Canada, and which was read over the radio, put out in mimeographed form, and sent to every one in western Canada who would read it, the one which expressed my views with regard to wheat, was sent out on November 15, 1939. It was available to every hon. member and to every person who was interested in the election held in March of the present year.
I have before me a copy of the speech which I read over the radio, and which was broadcast throughout western Canada. An hon. member came to me this afternoon and said, "You were not in the house when the leader of the opposition made his remark with regard
to your attitude respecting the production of wheat in western Canada." He added, "I listened over the radio and heard your remarks from Winnipeg in which you outlined your position, on November 15, 1939." He suggested that I read from my speech to the house to-night. I have that speech before me, and the paragraph headed "Acreage Increase" is as follows:
I am of opinion, however, that neither the demands of war time nor a return to conditions of peace suggest that our war effort or agricultural industry would benefit from an increase in the acreage sown to wheat at this time. In my opinion wheat acreage should not be increased at present. During the period when we have more wheat than we can dispose of, even under war conditions more and more of these sub-marginal lands should be got under government control through the rehabilitation plans. If ever used for wheat production during war these sub-marginal lands should be so used under government supervision, and taken out of wheat production immediately the war is over.
That was my statement of policy with regard to the increasing of acreage and with regard to wheat. I do not know how it could be more definite, and I do not know how any hon. member could misunderstand it. Then to the question, "Can a market be found for wheat?" I went on to say this:
We have often been asked, "Can a market be found for all the wheat we can grow on our present acreage?" It seems to me that this question can be best answered by an examination of the facts. We had an average annual production of 411,000,000 bushels from 1928 to 1932 inclusive. We had an average annual production of 248,000,000 bushels from 1933 to 1937 inclusive. We carried 211,000,000 bushels of wheat out of the previous years into 1933, and we carried 23,000,000 bushels out of the previous years into 1938. In other words every bushel of wheat we grew from 1928 to 1938 was needed in the most difficult period of wheat distribution we have ever experienced.
And it was the most difficult, down to that time. But we have had two years recently in which we have experienced even greater difficulty, and are still experiencing greater difficulties.
Again I say that the policy I advocated in western Canada, and placed before the people of western Canada in relation to the production of wheat was not to increase the acreage during this period, but to go on producing on the land on which they had been producing in the years preceding the war period.
During the observations of the hon. member for Qu'Appelle, I was reminded of the discussions which took place in 1935 with regard to wheat. It has been suggested by other hon. members that in that year I made certain statements with regard to wheat. It was suggested this afternoon by the Minister of
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Mines and Resources (Mr. Crerar) that there had been speculation in wheat in September, 1935. It was suggested only a few minutes ago by the hon. member for Qu'Appelle that the speculation only took the form of the usual activities in connection with the market, namely, the buying of options in order to cover up the selling of grain, or the selling of options in order to cover up the purchasing of grain.
I happen to have on my desk the record of the transaction in connection with the stabilization operations of Mr. McFarland from January, 1932 to October, 1935. What do they show? They show that in January, 1932, stocks of actual grain held by the McFarland board amounted to 711,000 bushels, and that the options held amounted to 75,651,000 bushels. Those are the stocks and options which were taken over by the board to be held off the market during the period of stabilization, in order that the marketing of farmers' crops in succeeding years would not be affected by the wheat that was taken over from the pools at the time the stabilization activities were begun. Down to October, 1935, they still held a total of options and wheat of 74,805,000 bushels, or within 2,000,000 bushels of the same amount. Throughout all that period they held either the options and wheat combined up to about
76.000.	000 bushels, or options alone up to
76.000.	000 bushels. During 1932, from January to August, they got rid of all actual wheat, while they had 76,353,000 bushels in options. They held those options without disposing of any of them and without buying any actual wheat. As the Minister of Mines and Resources pointed out this afternoon, they had no authority under the act to buy wheat from any person except the actual producers. But in March, 1934, they went into the market and bought


Ernest Edward Perley: There was no wheat board then.


James Garfield Gardiner: Will my hon. friend
wait a moment? Mr. McFarland was handling the stabilization activities; he was the only board there was. I shall deal with how he got there in a few moments. In April they bought 2,000,000 bushels; in May they held
19.000.	000 bushels and got their option holdings down to 57,000,000 bushels. In June they held only 4,000,000 bushels; in July they held 12,000,000 bushels; in August, 3,000,000 bushels, and by September, 1934, they were back to the position where they had no wheat but where their option holdings amounted to 76,117,000 bushels. I ask hon. members to remember the months and the year. The months were March, April, May, June and

July, with purchases in large volume being made in April and May. From then on, they gradually got rid of it until they had the options back and the wheat disposed of.
They held that position through 1934 down to December, and then they bought a little wheat. In January they held 287,000 bushels; in February, 287,000 bushels; in March, 287,000 bushels and then in April they held 29.000.000 bushels. In May they held 51,000,000 bushels; in June, 52,000,000 bushels; in July, 66,000,000 bushels and they had their options down to 9,000,000 bushels. In August they held 72,000,000 bushels, and they had their options down to 3,000,000 bushels. In September they held 66,000,000 bushels, with options of 8,000,000 bushels. In October they had 55,000,000 bushels and
19,000,000 bushels in options. Then they started to get out of wheat and back into options. That was in 1935. Do hon. members recall what happened in June, 1934? Do they remember what happened in October, 1935? There was a provincial election in Saskatchewan in June, 1934, and there was a federal election in Canada in October, 1935. Mr. Speaker, if you will examine the records you will find that not only was there speculation in wheat, but the price to the farmer was affected during both those periods by that speculation on the part of a man who, we have been told to-day, was of such a character that it was absolutely impossible for him to do anything detrimental to the people of this country because he was doing it for nothing.


Ernest Edward Perley: Will the minister permit a question? I am sure he does not want to be unfair. The 1932, 1933, and 1934 operations were stabilization operations. Mr. McFarland was instructed to buy wheat in order to keep the market from breaking, but the operations of 1935 were under the wheat board act.


James Garfield Gardiner: Mr. McFarland was at the head of the board in the one case, and he was handling it personally in the other.


Ernest Edward Perley: He had to buy.


James Garfield Gardiner: He did the same thing in both cases while the elections were on. I do not know whether he was instructed or not.
There are some things which are a matter of record and which have been discussed here to-day. Records with regard to these matters are usually kept, and kept very carefully. The wheat pools have always put out an annual report, and in those annual reports they have always stated quite clearly what has happened and generally why it has

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happened. Their report dealing with the 1930 crop was published, and in it will be found the following:
The 1930 season marked a change in selling policy and it is necessary to review briefly the events that led up to the change.
Negotiations were carried on throughout August-[DOT]
Remember that is August, 1930.
-for financing the 1930 crop.
I have the records before me, and I see that in August, 1930, the average price of wheat was 92 cents a bushel. I continue to quote from the report:
A meeting in Ottawa with the Prime Minister, attended by the three provincial premiers and Mr. MePhail-
He was at that time head of the Saskatchewan pools.
-was followed by other conferences in Toronto and Winnipeg, with the representatives of the lending banks. The banks agreed to finance the pool on the basis of an initial payment of 60 cents, as previously stated.
At the moment we are discussing legislation when there is no world market for wheat and under conditions which have compelled us to peg the price of wheat at 70 cents a bushel in order to prevent it from going down to new lows. Under these conditions the government have suggested to the house that they are prepared to pay, not a price but an advance to the farmer of 70 cents a bushel. They did not go to the banks and say, "You advance it and we will guarantee it." They said to the farmers of western Canada, "We will advance you 70 cents, just as we did last year when there was a market and when wheat could be sold."


Ernest Edward Perley: The suggestion was 60 cents to start with.


James Garfield Gardiner: Not this year.


Ernest Edward Perley: Last year.


James Garfield Gardiner: I am speaking about this year when conditions have been more difficult than they were last year.


Ernest Edward Perley: Surely the minister has not forgotten what happened last year?


James Garfield Gardiner: No, I have not, and I have not forgotten what certain people said who came down here recently to suggest something very different about this year. I quote:
On August 26 an agreement was signed with the three provincial premiers and the seven lending banks, by which it was agreed that all sales were to be apportioned equally as to value between the 1929 and the 1930 crops. The allocation of sales was changed on November 8, with the approval of the premiers, to 25 per
cent in respect of the old crop and 75 per cent for the new crop. This was again changed on November 15 to provide that all sales of cash grain for the period of one month be allocated to the 1930 crop. On the same date your president-
That is the president of the pool.
-together with the provincial premiers, agreed to instal a general manager acceptable to the banks until the balance of the 1929 and 1930 crops had been disposed of.


Ernest Edward Perley: Acceptable to the pools as well.


James Garfield Gardiner: Acceptable to the banks. They did not say he had to be acceptable to them; they said he had to be acceptable to the banks. I quote:
In the latter part of November your president, at the request of the board, interviewed Mr. J. I. McFarland, formerly president of the Alberta Pacific Grain Company, to ask him to accept the position of general manager of this organization, and on November 27 Mr. McFarland accepted the position offered him, on the understanding that he be given a free hand in the marketing of the unsold stocks but that in matters of policy he would consult with the board.
He was to have a free hand, without any consultation with the board, with regard to the marketing of the unsold stocks. Those were the stocks I was talking about a few moments ago, the stocks that were set aside for stabilization purposes, with which he did deal in the manner I indicated a few moments ago.
The financial crisis which developed during the early part of November and which led up to the events described was something over which we had no control and against which every precaution had been taken.
For the timely assistance rendered by the Prime Minister, the Right Hon. R. B. Bennett, and his government, in enabling us to meet a very critical situation, your board desires to express and record its sincere appreciation.
I recite that record, and I recite it in full in order to show that what the Minister of Mines and Resources said this afternoon was absolutely correct both with regard to who was represented by Mr. McFarland and with regard to the influences that put him at the head of the marketing of wheat at that time, as well as with regard to the speculation which was carried on during the time that Mr. McFarland was at the head of that board. That, I submit, Mr. Speaker, justified every member of the wheat committee of the government and every member of the government in changing the wheat board as constituted and setting up in its place another which carried on the activities in relation to wheat as the people of western Canada expected they would be carried on, and as the act provided they should be carried on, as my colleague (Mr. Crerar) suggests.
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When those activities were carried on in that way, my hon. friends of the opposition say that there was a fire sale of wheat. We have heard that said on a number of occasions; but within a short time after the leader of the opposition this afternoon had called it a fire sale of wheat-and the hon. member for Qu'Appelle has called it that on a number of occasions-the hon. member for Lake Centre (Mr. Diefenbaker) rose in his place and, in order to prove to the house that this government had not sold as much wheat since it came into office as the other government or the board under the other government, had sold, said that just three years before, they sold 264,000,000 bushels, yet we sold 254,000,000 bushels in the year when we were supposed to have held a fire sale 1 So I submit that if we put on a fire sale, somebody else also put on a fire sale.


Ernest Edward Perley: Would the minister state how much of his 254,000,000 bushels was sold in the month of July?


James Garfield Gardiner: In the month of July some 60,000,000 bushels were sold, if I remember rightly.


Ernest Edward Perley: About 63,000,000 bushels out of 254,000,000 bushels in one month.


James Garfield Gardiner: I will give my hon.
friend a few more figures.


Ernest Edward Perley: We have them in the report.


James Garfield Gardiner: There were 264,000,000
bushels exported in 1932 and 1933; 194,000,000 bushels in 1933-34;	165,000,000 bushels in
1934-35 ; 254,000,000 bushels in 1935-36; 195,000,000 bushels in 1936-37 ; 93,000,000 bushels in 1937-38, and 167,000,000 bushels in 1938-39. But those are not the most important figures in relation to the argument that was being made by the hon. member for Lake Centre. The most important figures are in another column; they are the figures having to do with the carryover. In the year when 264,000,000 bushels were sold, namely, 1932-33, the carryover was 138,000,000 bushels. In 1933-34, when 194,000,000 bushels were sold, the carryover was 219,000,000 bushels. In 1934-35, when
165.000.	000 bushels were sold, the carryover
was 204,000,000 bushels.	In 1935-36, when
254.000.	000 bushels were sold, the carryover
was 215,000,000 bushels.	In 1936-37, when
195.000.	000 bushels were sold, the carryover was down to 127,000,000 bushels. In 1937-38, when only 93,000,000 bushels were sold, the carryover was 37,000.000 bushels. In 1938-39, when 167,000,000 bushels were sold, the carryover was 25,000,000 bushels.
All of this indicates that the wheat which was being grown during the years when this

government was in office right down to the year 1939-40 that we are now in power, was being sold, whether in great or small amounts, and we sold as well the 211,000,000 bushels which the leader of the opposition stated were carried over from the previous crops into the year 1935. We sold in the first year at an average price of 84 cents a bushel, which was higher than had been obtained for wheat in any year from 1929-30 on. The next year, 1936-37, the price was $1.22, in 1937-38, $1.31, and in 1938-39 it dropped to 61-7 cents, but we paid the farmers on the basis of 80 cents although wheat was selling on a basis of 61-7 cents.
Those are the facts; and may I tell the hon. member for North Battleford (Mrs. Nielsen) who said this evening that this government does not pay any attention to the plight of the western farmer, and all the other members from western Canada, that only one government in the history of Canada has ever deliberately stepped out and paid the farmers in western Canada more per bushel for their wheat than they could hope to get on the prevailing markets. When wheat was selling at 92 cents the advice of the hon. member for Qu'Appelle led his leader to guarantee a price of 60 cents. When the price to-day would have been away below 70 cents, the present government is prepared to guarantee in advance, and not only to guarantee in advance but to pay in advance on the basis of 70 cents, Fort William. Therefore, on that basis alone we have at least done as much as any other government, and, indeed, a great deal more.
What about the other years? In 1935 we sold the wheat which had been carried over from previous years, and sold it at higher prices than had obtained in previous years. In 1937 we had the lowest crop that western Canada has grown ini recent years, and do you know, Mr. Speaker, how much this government paid out in order to assist the farmers in Saskatchewan alone? We paid out $28,000,000. Do my hon. friends who talk in this house about the plight of the western farmers know what happened in 1937? Saskatchewan in that year had an average crop of between two and three bushels to the acre for the whole province, and the total wheat crop for the whole province was
37,000,000 bushels. This government spent $2S,000,000 in Saskatchewan to help the farmers stay on their farms, and I deny the statement made in the house this evening that in that province there ever was such a relief rate as $8 a month for a family of nine. The rate is not $8 for a family of nine. But if a person happens to have milk, butter, meat

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and other supplies which bring the relief allowance down from somewhere in the neighbourhood of $20 a month to $8 a month, then that is What they receive. But if they have nothing in the way of supplies at all, the rate is not $8. People in Saskatchewan on relief on farms are never asked to live on an allowance of $8 a month, and when anyone rises in this house and makes a statement of that kind the hon. member is not presenting the facts or indicating what actual conditions are in western Canada.
What else did the government do? I was in Saskatchewan in the summer of 1938, and there was an election on in that province. Do you remember wnat we did, Mr. Speaker, in the winter of 1937-38? We went into the provinces of New Brunswick, Nova Scotia and Prince Edward Island. We went into the fishing areas, where the people are just as hard up as they are in any other part of Canada, and were then, because their markets were being lost as well as those of other people. We bought their dried fish. My colleague the Minister of Pensions and National Health (Mr. Mackenzie), who comes from the northern part of Scotland, knows that dried fish are just about as good a food as can be found, provided they are properly dried and properly cooked. We took that fish out west. We distributed it among the people. My hon. friends in the opposite corner smile. I would call the attention of the hon. member for North Battleford to the fact that they do smile, and smile out loud, and why should they not? When I was in Saskatchewan in 1938 I saw that food, which the people of the maritime provinces know to be some of the best food that can be found in this country, nailed up on sign-boards along the highways. I saw it nailed up on trucks parading the streets of Regina, and I saw written on it, "Jimmie Gardiner's fish".
Well, Mr. Speaker, it is not any wonder that we win constituencies in Saskatchewan against a group like that. Nor is it any wonder that they come into this house and talk about the needs of our people. We all know that our people have needs. We all know that they are hard up. The hon. member for North Battleford might be surprised to know how many members there are on both sides of the house who at some time in their lives have been on relief. But they do not boast about it. The hon. member might be surprised to know how many of us have been in the dust bowl, from somewhere down near the gulf of Mexico up to the far north, during the greater part of our lives. We know this, that somebody has to help our people while they learn to live in that country.
While we are learning to live there, the government of this country has been assisting us. That assistance was given under a Conservative government and under Liberal governments. Naturally we think we do it a little better than the others, but we do not say that we have any greater desire to do it well than our opponents have. We try to do it a little better. But this is a question which should not be used at any time, either in this house or outside, in order to induce people to have feelings either in favour of or against the government of the country. There is not any federal government, any provincial government, or any municipal government which can take care of people just as they ought to be taken care of. The only persons who can take care of people as they ought to be taken care of are the people themselves if the conditions are right, and the conditions have not been right for a long time.
I want to say to my hon. friend who came in recent years from across the seas that it is not anything that happened on this side of the ocean which has made conditions here what they are at the present time. The thing that has made conditions what they are in this country at present is the thing which has driven people from the continent of Europe into this country in hundreds of thousands, which has settled them in homes in the eastern part of Canada, in the western part of Canada, in the United States. These two countries have been settled by people forced by conditions in Europe to find new homes in an atmosphere of greater freedom and prosperity than they could find at home. On each occasion when we have had our greatest difficulties, whether in the nineties of the last century or in the past ten years, it has been because of the selfish, grasping power of certain people with totalitarian points of view, bent upon destroying the free institutions of government in order that they may control the peoples of the world. Now that we are in the midst of a struggle which is going to settle the position of men who take that point of view and determine the future of this and all other countries, we who were born and raised in this country do not appreciate it when those who have come here and taken up their homes here and have had the advantages which this country provides to-day, tell us that the blame is all ours.
There is another matter, Mr. Speaker, which we do not appreciate. We do not like to hear even our own people saying to those who have come here because of difficulties overseas, immediately we get into trouble, that they have not the same rights as we have. We all hope that we treat the people who come here from other countries as being on the same
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level as ourselves. I hope that, while this war lasts, hon. members and those outside this house will not say about these people some of the hard things that were said during the last war. People with whom we have lived side by side for forty or fifty years, enjoying their company, their community life, and the pleasures of discussing the hardships from which they came to this country, are still good Canadians, and we in this house accept them as such.
The government of Canada have been dealing with these problems of agricultural distress. They have not been doing all they would like to do. The people of Canada have not been able to do all they would like to do. But at least they have been trying, and that "trying" in 1937 cost them $28,000,000. I say it is not any too much; it is worth while spending that much and more in order to maintain 300,000 families on farms anywhere in Canada.
What happened during the following year? Wheat went down to 61-7 cents a bushel on an average through the year. This government made arrangements to pay SO cents, and 80 cents was paid. Let me repeat that this is the first time that any government in Canada deliberately paid the farmers of western Canada more for their wheat than they expected to get for it. We did not stop there. The next year we brought down legislation to establish some kind of policy. We had been going along, it is true, dealing ivith emergencies as they arose. The previous government had done this for four years. We did it for four years; then we thought we would try to evolve a policy which might help as conditions were arising, without people having to plead for it, and we established the Prairie Parm Assistance Act. It cost us over $9,000,000 last year, but nobody in the house complained about it; hon. members from all parts of Canada supported the measure, and it went through unanimously. I expect that it will go through the senate unanimously and come back to this house; and people in Canada, from one end to the other, will agree that, when people in those areas have poor crops, all of Canada will come to their assistance and help them. Again I say that we in western Canada, in spite of some of the things that are said in this house, appreciate that assistance.
At the time that we were providing aid for those who had small crops we established, as was said this afternoon, an advance of 70 cents a bushel for those farmers who have wheat to sell. But that is not establishing a price.
	*
A word with regard to the present emergency. We have had emergencies before, but never an emergency equal to this one. In our elevators are 250,000,000 bushels of wheat grown last year or the year before. We shall have another 250,000,000 bushels to put in storage this year after the needs of our own population have been provided for. We shall have a total of at least 500,000,000 bushels of wheat, and as against that we have only one place in which to put it.


Major James William Coldwell: I suggest that the
minister be given an opportunity to finish his speech, but the rule has been enforced and it should not be overlooked. I should like to see the minister finish his speech, but I simply want to call attention to the rule.


James Garfield Gardiner: That is all right; I
was not watching the time. I shall have finished in a few minutes. The present position is this. We have 250.000.000 bushels in our elevators and another 250,000,000 bushels showing up, to go into the elevators; and the position during the last few years has quite an important bearing on that situation. We exported to Britain in the year 1933,
102.000.	000 bushels; the next year, 68,000,000 bushels; the next year 65.000,000 bushels; the next year 95,000,000 bushels; the next year, 86,000,000 bushels; the next year,
43.000.	000 bushels; the next year, 73.000,000 bushels. Therefore every hon. member will see that the average exports to Britain for consumption there have been in all these years well under 100,000,000 bushels. In other words, if we are to market in Britain only what we have been marketing, we are going to market well under 100,000,000 bushels. As a matter of fact Britain never does import from all countries very much more than 200,000,000 bushels a year, so that if she took all her wheat from us she would take only 200,000,000 bushels a year and that would mean that it would take us two and a half years to get rid of what we have now, with a growing crop to think of, and another crop in sight during that time. It is obvious, therefore, that we are in as difficult a position in relation to wheat as we could possibly be.
There is only one way of finding a market. The hon. member for North Battleford asks us why we do not get markets? Why do we not get world markets? Well, if we put the wheat into Russia it would only cross the line into Germany. Are we to spend $700,000,000 to blockade Germany at one side and then pour the wheat in at the other? That is not sensible. We will try to hold the line where

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it is and finally drive it back on to the continent and rescue the people who are there, feed the people who are there. When it comes to that point we shall need all the wheat we have in Canada. Otherwise we shall be up against greater difficulties than we are facing now. The government, therefore, is in this position. We say to the farmers, "We will advance you 70 cents a bushel on the wheat you get into the elevators". My hon. friend says they cannot get it all in. Probably not. That depends upon how much is taken out from time to time between now and the end of the season. There are two ways in which we can deal with the problem. One is to encourage the farmers to provide storage and the other is to have someone put up additional storage at the railways. If additional storage is put up, then the 70 cents will take care of the farmer's wheat up to 52 cents a bushel to the farmer, and that is probably more than he could get under any borrowing scheme which could be devised. If some way could be found to get additional storage, then the government would be advancing at the rate of 70 cents Fort William, which would be about 52 cents at the average place in western Canada for No. 1.


James Lester Douglas: Does the
government plan to do that?


James Garfield Gardiner: That would be the simplest way if it could be done. I am pointing out the situation that has to be dealt with at the moment. When there is a situation of that kind and when world conditions are as they are, it would be impossible for any group of men, no matter how intelligent they may be, whether they be a government or a wheat board, or whether they have an advisory board along with them, to sit down and under these conditions mark out a long-time policy. We can take care of the situation in front of us; we can take care of so many million bushels at 70 cents a bushel. If some is moved out, we may be able to take care of all in storage, but somewhere along the way during the next five or six months we shall know exactly what we must do.
All I suggest is that hon. members take the record of what we have done to meet the emergencies in the last five or six years. Let them take the record of the previous government in trying to meet emergencies; let them take the record under which we have tried to meet emergencies, and would any one suggest that if people are threatened with starvation on the prairies; if people are threatened with starvation either because they did not grow a crop or because some one cannot pay to them the money to which they are entitled,
this government would allow those people to starve? Not at all. These emergencies when they arise are bound to be dealt with. Any government in office under such conditions would deal with them, and I suggest to the members of this house that the legislation before us is an attempt, a proposal on the part of the government, to deal with the situation as it exists at the moment. It is not and cannot be a final act, because no one knows what the circumstances will be in a few weeks or in a month's time. When the circumstances unfold themselves, the government no doubt will have to deal with them either by acting under the emergency legislation under which we have the power to act during war, or by having the members consulted again, if it is in the winter months, as it may be, while they are sitting in this house, as to what ought to be done. I suggest that under all the circumstances the bill now before the house is one that should be adopted.


Mr. BRUCE McNEVIN (Victoria, Ont.):: In rising at this late hour to make a few observations with respect to this bill I offer no apologies to the house, because with the exception of the new ground that was broken with regard to the wheat problem by the hon. member for Leeds (Mr. Fulford), I do not think the voice of eastern Canada has so far been heard in the discussion of this measure. I wish to make it abundantly clear at the outset that I am not approaching the consideration of this bill from what is generally regarded as a sectional point of view, very often referred to as an eastern or a western point of view as the case may be, because I have always held the view that the Dominon of Canada is all west of the Gaspe peninsula and the Atlantic ocean and is also all east of Vancouver island. However, I believe that under this bill there is a possibility that before the year's operations have been completed there may have to be a disbursement of public funds; and therefore from the point of view of taxation, it is well that we have a wide understanding of the application of the bill as it might affect all parts of the dominion.
I listened with great interest to all the speeches upon this important bill. But I am going to refer only to a very few, with particular reference to the remarks of the hon. member for Mackenzie (Mr. Nicholson) and the hon. member for North Battleford (Mrs. Nielsen). They have had a wider opportunity than I to judge of living conditions in other parts of the world, because they, I believe, lived across the water before coming to Canada. I do not think any hon. member is
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better qualified to speak regarding the difficulties affecting our agricultural industry than I am; I do not assume to have a wide knowledge of actual farming in western Canada, but I did work as a hired man on the farms there, and I worked with threshing gangs and also in the city of Winnipeg, so that I have at least some knowledge of the problems of both east and west. In spite of all that has been said about the difficulties of the farmers, I would not exchange my citizenship in this country, whether I lived in the east or the wesit, for citizenship in any other country in the world.
Without desiring in the slightest degree to detract from the importance of the wheatgrowing industry in Canada's economy, but merely to illustrate that in Canada there are other great agricultural interests and other great agricultural producing provinces, I say, as I said on a former occasion in this house, that the agricultural production of Ontario in an average year is approximately equal to the agricultural production of the three western provinces. Therefore, all the people in this great province of Ontario have a deep interest in this bill which is designed ito solve some of the problems associated with this most difficult question.
There are other important branches of the agricultural industry that affect all provinces of Canada to a greater or less degree. We have our live stock industry that produces on an average about 8450,000,000 a year. Some reference has been made to the expenditure of government moneys to assist the live 9tock industry, and the suggestion was that the larger proportion of that money was spent in eastern Canada. But I maintain that the expenditure of this money for the various live stock services is divided in proportion to the live stock population of all parts and all provinces of Canada. Therefore I do not think that should enter into the discussion of this bill.
There is one more item to which I wish to refer before discussing the main features of the bill under consideration. We are facing this situation, that the storage facilities of Canada are going to be taxed to the limit before this crop moves very far. Yet in face of that situation we have heard from every group in this parliament in this and former sessions the request that the government should bring into effect the coarse grain provisions of the grain act of 1935. But I have noted one exception. There has been no suggestion as to what the government should do with this grain if they undertook to bring it in upon a similar basis to wheat. That exception was the hon. member for Weyburn (Mr. Douglas). He suggested that the government should come

into the picture and deal in this grain in order that the group of farmers who had it to sell might use the government as an agency to sell it to the group of farmers who needed to buy it. As I view the situation, that is a proper function for cooperative organizations, of which we have so many in both eastern and western Canada.


Mr. ROSS (Souris):: The hon. member for Weyburn never suggested that the wheat board should function for coarse grains at this time. He made some reference to freight rates, if that is the idea.


Thomas Bruce McNevin: I was not referring to
that at all.
It is expected that this year's crop of wheat in western Canada may amount to between 350 and 400 million bushels. The average production of coarse grains amounts to at least 550 million bushels; that gives some conception of what the problem would be.
I should like to enter into a discussion of wheat and get down to the real kernel of the bill. There is, as has been suggested from various parts of the house, one bright spot in the situation, namely, that Canada stands at the back-door of Britain with an unlimited supply of this precious cereal. We must not overlook that fact. It is quite possible that when the dark threat of civilization's enemy No. 1 has been removed from the burdened and fettered peoples of Europe, some of this supply may be useful.
I pass on to a brief review of the marketing of this commodity. My memory goes back to the days prior to the organization of the joint stock grain companies in western Canada. I am free to admit that the grain companies as operated at that time were burdensome to the wheat producers of the west. Then, with the organization of those two great companies, western Canada enjoyed a new lease of life as far as the marketing of their wheat was concerned. That brings me to the organization of the pools. I believe the men who started out to organize the three wheat pools had high ideals, they were convinced that they were starting something which would add a great new area to the wheat growing industry of western Canada. I go further and say that I believe the pools were a mushroom growth in the earlier years. It is quite possible that the pool grew faster than the knowledge and the experience of those who were charged with the responsibility of managing it. That may have assisted materially in its difficulties with the banks, and so far as the great selling organization is concerned, its disappearance in that field of activity.

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231?
There has been much discussion as to the merits of Mr. McFarland's management of the wheat business as compared with that of the present wheat board. I wish to make only one brief reference in that connection. Mr. McFarland came into the wheat picture in November, 1930, and was associated with the wheat business of western Canada until December, 1935. No doubt he was very close to the administration which held office from 1930 to 1935. As an outside observer I cannot help being impressed with this fact: If the government of that day was so greatly interested in the establishment of a wheat board, why did it wait until July, 1935, to get the legislation through?
I do not believe a discussion of this problem would be complete without reviewing some of the difficulties associated with the present condition. Each member has his own computation of figures. However, from the information I have been able to obtain there will be approximately 280,000,000 bushels of wheat in Canada as of July 31. With the prospect of a new crop of 400,000,000 bushels, we would suppose that at least 325,000,000 bushels of that amount would play a part in commercial enterprise, allowing 50,000,000 bushels for home consumption. Then, we might deduct another 25,000,000 bushels for feed and seed. If we study these figures we must admit that even if we have a successful period of marketing in the next twelve months, there could not be much less than 400,000,000 bushels of wheat on hand as of July 31, 1941. That is a tremendous quantity of wheat.
There is another matter which greatly affects the disposition of this important commodity. I shall now give the world's commercial wheat for a five-year period from 1928 to 1932, and for a six-year period-the latest figures available-from 1933 to 1938. When I refer to the world's commercial wheat I mean the amount of wheat exported by exporting countries and imported by importing countries. In the first period, namely the five-year period, the average world's commercial wheat amounted to 869,000,000 bushels. The figures for the six-year period are as follows:
Year
1933.
1934.
1935.
1936.
1937.
1938.
Bushels
707.000.	000
660.000.	000
642.000.	000
622.000.	000
629.000.	000
640.000.	000
Hon. members will see that in the second period there is a drop averaging about 220,000,000 bushels of commercial wheat. That adds greatly to the problem confronting Canada.
Then, we have the imports of wheat by Great Britain, the last important open market for Canadian wheat. It is true that on an average we sell the United States of America about 20,000,000 bushels. Some of that is imported in bond, and of course is reshipped out as flour. It is generally estimated that about one-half of that amount enters into the mixing process connected with the United States wheat. A few bushels for home consumption are sent to Jamaica, and other points here and there; but so far as large amounts are concerned, they are negligible.
Figures given to me, covering our exports to Great Britain, not including those for Eire, which imports about 4,000,000 or 5,000,000 bushels a year, show that the British market absorbed the following amounts:
Year 103fi 		Bushels 	 133,000,000
1937 			 155.000.000
1038		 69,000,000
1030 			 64,000,000
1940 			 69,000,000
The figures I have given are for fiscal years. It will be understood that there are three methods of compiling wheat statistics. First, there is the wheat year which runs from July 31 to August 1 of the following year. Then, there is the calendar year; and the third method is the fiscal year. The figures I have given are for the fiscal year, which, after all, is the government year. I believe those figures illustrate clearly the contracted condition of the wheat market.
I now pass on to the 70-cent price. I am in full agreement that 70 cents is a low price. In fact, it is a very low price. I am not stating that the average farmer is in a position to produce wheat and live under proper conditions, on that price; but I believe there are a number of farmers in western Canada who can produce wheat at 70 cents and make money out of it. I am referring to the large mechanized units.
I come now to the point where I must voice my objection to the deletion from the measure of the 5,000 bushel limit which was included in last year's bill. I am well aware that the wheat board, which has the responsibility for marketing the wheat, maintains that that wheat, amounting to between 30,000,000 and
40.000,000 bushels outside the control of the board, would have a depressing effect on the market, and that it would be more difficult to handle outside than it is inside. But I maintain that if we continue with that policy we are placing a penalty upon the small farmer who, after all, is the back-bone of Canada. We are placing a premium upon the large, mechanized units which in my view are an unstable and
Canadian Wheat Board

unsound development in the economy of our country. I am of opinion that after we have taken care of a man to the extent of 5,000 bushels at 70 cents a bushel, then the larger deliveries should be accepted at a lower price level.	Because, let us not forget,
that from the Atlantic to the Pacific there are hundreds of thousands, yes, millions of citizens who are not in the happy position where they can grow 30,000 or 40,000 bushels of wheat. They are working in the lumber camps, on the small farms, engaged in mixed farming, in the fishing industry, in the mining industry, in merchandizing and in many other occupations. They consider that the man who can produce 10,000, 20,000, 30,000 or 40,000 bushels of wheat is not entitled to receive large sums from the public treasury.
I believe it was the hon. member for Broadview (Mr. Church) who stated in the house the other day that Toronto pays more taxes than any other municipality in Canada. That may be true as far as the total taxes are concerned, but actually the large corporations and income taxpayers in that city are only collectors of taxes for the treasury. It is the cottagers, the fishermen and the farmers throughout the length and breadth of this land who are the real taxpayers. We must keep this fact in mind when we ask ourselves whether the central governmental authority should take full responsibility for the marketing at a pegged price of all the wheat produced on the large mechanized farms regardless of where they may be located.
A man who produces more than 5,000 bushels of wheat should accept some responsibility for the disposal of that additional wheat.
The suggestion has been made that the farmer be paid for storing wheat on the farm. This may be warranted up to a certain point, but I think a limitation of the amount should be applied. Suppose a man produces 30,000 bushels of wheat; he delivers 6,000 bushels and has 24,000 bushels left, for which he receives storage charges of three-quarters of a cent a month. I have not figured it out with pencil and paper, but I believe that comes to about $180 a month. If he stores the wheat for ten months he would be entitled to $1,800. I maintain that there should be some limitation as to time and amount in connection with these storage payments.


Charles Edward Johnston: Are the
elevators limited?


Thomas Bruce McNevin: No man can deliver all
his wheat, and under such conditions a large portion would have to remain on the farm. 
I have stated my objections to this bill. I cannot reconcile myself to the fact that very large producers of wheat should be able to come to the federal parliament and say, "There is the product of my labour; it is your responsibility to dispose of it or to pay me for storing it on my farm." We must not overlook the fact that it might prove more profitable in large operations to store grain for seven or eight months than to grow it. That would not be a sound economy for this dominion.


Charles Edward Johnston: That is
what the elevator companies do.


Thomas Bruce McNevin: I think the elevator companies are paid far too much for storage.
I come now to a further point. The threat has been held over the heads of the eastern Ontario farmer that unless large subsidies are paid to the western wheat grower, he will enter mixed farming and crowd the Ontario farmer out. Can any hon. member rise in his place and say that it is sound economy to bonus a man to stay out of mixed farming in Canada? Mixed farming is the back-bone, the very foundation of a balanced economy in the agricultural industry.
In closing may I suggest that the bill should be amended to conform with some of the suggestions I have made.


Major James William Coldwell: I think it was agreed
that we would sit only until half-past twelve o'clock. It is now two minutes to that hour, so I suggest we call it half-past twelve.


Thomas Alexander Crerar: I certainly do not want to deprive anyone of an opportunity of speaking on the second reading, but we should like to get this bill into committee to-night. May I suggest that there will be opportunity for discussion on the various clauses of the bill when it is in committee. However, if it is the desire of some hon. members to speak on the second reading, then I think we can call it a day.


Major James William Coldwell: We listened for an hour to the Minister of Agriculture (Mr. Gardiner), and for another hour to another minister. I come from one of the largest wheat producing areas in Saskatchewan, and so far I have not had an opportunity of discussing our wheat problems. I had intended to say something on the second reading of this bill, and therefore I would move that the debate be adjourned.
Motion agreed to and debate adjourned.
On motion of Mr. Crerar the house adjourned at 12.30 a.m.

National Defence-Recruiting
Friday, August 2, 1940



MISCELLANEOUS PRIVATE BILLS

[Stage Direction]
Third report of the standing committee on miscellaneous private bills.-Mr. Fournier (Hull).