HON. R. B. HANSON BIRTHDAY GREETINGS TO THE LEADER OF THE OPPOSITION

Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, may I take the earliest opportunity to say publicly what I have just expressed in a few words personally to the leader of the opposition (Mr. Hanson). It is that, speaking on behalf of the members of all parties in this House of Commons we extend to him the warmest congratulations on another birthday anniversary, and our very sincere good wishes for many happy returns of the day. My hon. friend knows, I think, the regard in which he is held by all hon. members of the House of Commons. We are pleased indeed to see him occupying the position which he occupies at the moment, and I hope he may continue to occupy it for a long time to come.


Mr. M. J. COLDWELL (Rosetown-Biggar):: May we, too, join in these kindly congratulations to the leader of the opposition for whom, in spite of an occasional disagreement, we all have very high regard and deep respect.


Mr. J. H. BLACKMORE (Lethbridge):: Mr. Speaker, our group has admired the way

Privilege-Mr. Lacombe
in which the leader of the opposition has fought a good fight. He started under great handicaps, and I believe he has made good up to the present time. We congratulate him, and wish him many years of success.


Hon. R. B. HANSON (Leader of the Opposition):: Mr. Speaker, I am afraid that the sentiments expressed by the Prime Minister (Mr. Mackenzie King) and by my fellow opposition leaders, if I may so term them, are altogether undeserved. No one, I am sure, realizes his limitations more than I do; none the less one would not be human if one were not touched by such expressions as have been uttered to-day by the Prime Minister and the other hon. gentlemen. Last year on a similar pccasion I recall that I declared 1 would have no more birthdays. But, sir, circumstances over which I have no control have rendered that wish impossible of fulfilment. And if my succeeding birthdays are met as happily from all corners of this house, in whatever capacity I may serve this country, as has been the case to-day, I shall recant from the decision which I took last year and express the hope that I -may have many more birthdays.


Mr. LIGUORI LACOMBE (Laval-Two Mountains):: Mr. Speaker, I am pleased to congratulate the leader of the opposition also, and I hope that as a distinguished lawyer he will be very long the leader of the opposition in this country.
PRIVILEGE-Mr. LACOMBE



REFERENCE TO STATEMENT OF MR. FAUTEUX IN THE HOUSE ON MARCH 19

Liguori Lacombe: Mr. Speaker, I rise to a question of privilege. Referring to the statement made yesterday in this house by the hon. member for St. Mary (Mr. Fauteux), I formally declare that the candidate of the Canadian party at the by-election of February 9 last in the St. Mary riding has never offered his services to the Liberal party-


Mr. SPEAKER:: Order. The hon. member is not exercising his right on a question of privilege. As he has now stated, he is making a statement and offering opinions with regard to something which is not a question of privilege.


Liguori Lacombe: I will only read the
telegram which I received this morning-


Some hon. MEMBERS:: Order.


Georges Parent: Order. Will the hon.
member please resume his seat. The breach of privilege must be as against the hon. member, or against the privileges of the house. If the hon. member wishes to state to the house that
there has been a breach of his privileges as a member, or that the privileges of the house have been abused, he is entitled to make that statement; but he is not entitled to make an argument with regard to something which has nothing to do with the privileges either of himself or of the house.


Liguori Lacombe: I rise to a point of order. Yesterday the Chair permitted the hon. member for St. Mary to make a statement to this house concerning the by-election in St. Mary. I want to answer that statement.


Georges Parent: Order. I understand the
hon. member to say that the hon. member for St. Mary has made a statement on a question of privilege with regard to the by-election in that constituency. In my opinion what the hon. member now states cannot conceivably be a breach of the privileges of the hon. member now speaking, as a member, or a breach of the privileges of the house. Therefore I cannot allow the hon. member to make a statement of privilege on such a matter.


Liguori Lacombe: I rise on another point
of order. Under rule 36 I am absolutely in order when I want to read a telegram which I received-


Some hon. MEMBERS:: Order.


Liguori Lacombe: -concerning this election, because my candidate-


Some hon. MEMBERS:: Order.


Liguori Lacombe: -has never offered his services to the Liberal party-


Some hon. MEMBERS:: Order.


Liguori Lacombe: -in the provincial
elections.


Some hon. MEMBERS:: Order.


Georges Parent: I have nothing to add to what I have said already. The hon. member is not stating a breach of privilege, either in relation to himself or to the house.



AGRICULTURE COMMITTEE


[Stage Direction]
Mr. W. G. WEIR (Macdonald) presented the second report of the standing committee on agriculture and colonization and moved that the report be concurred in.
Motion agreed1 to.


William Lyon Mackenzie King: I wish to lay upon the table of the house copies in English and
Armed Forces-Transfers,

French of an exchange of notes constituting an agreement between the Canadian and United States governments with respect to the transfer to the armed forces of the United States of certain United States citizens and former United States citizens now serving in the naval, military or air forces of Canada. The United States note, which is signed by the minister of the United States, Mr. J. Pierrepont Moffat, is dated March 18, and the reply by myself is dated; to-day. I would suggest, if the house would consent, that the notes be printed in the Votes and Proceedings of to-day. Perhaps I might give the house just a brief statement of the substance of the notes.
There are now in the Canadian armed forces at home and abroad about 15,000 to 16,000 United States citizens; 9,000 to 10,000 in the army, 6,000 in the air force, and 42 in the navy. Technically they are not all actual citizens of the United States. Some of them enlisted in the Canadian forces during the first months of the war when we required an oath of allegiance and by taking the oath they lost their United States citizenship and became stateless, that is to say, citizens of no country. The present agreement, however, covers these former citizens. It treats them just as if they were still United States citizens. The agreement may be summarized as follows:
(a)	All United States citizens in the Canadian forces and all former United States citizens who have lost their citizenship as the result of taking an oath of allegiance on enlistment in the Canadian forces will be given an opportunity to apply for transfer to the United States forces.
(b)	Applications will be granted if the United States authorities are willing to accept the applicant, provided that the Canadian authorities are empowered to postpone transfer, if in their opinion, immediate transfer would prejudicially affect the common war effort.
(c)	The United States will send boards to Canada to interview the applicants, and these boards will have power to enlist the applicants into the United States forces.
(d)	Applications for transfer will be received up to April 20 from personnel serving in the Canadian forces in Canada; those serving in Newfoundland and Jamaica will, if necessary, be given a week or so longer to send in their applications.
(e)	Personnel serving elsewhere may apply for transfers within fifteen days after notice of the right to apply has appeared in the

orders of the unit with which they are serving; they will not ordinarily be transferred until they can be transferred to a United States unit serving in the area in which they are located.
(f)	Representatives of Canada and of the United States will discuss with the authorities of Great Britain, the transfer to the United States forces of R.C.A.F. personnel now serving in the R.A.F. whose transfer might affect the efficiency of the R.A.F.
What the agreement does is to give every United States citizen in our forces an opportunity to transfer to the forces of his own country if he wants to. The only proviso is that the Canadian authorities may withhold permission for a transfer if immediate transfer would prejudicially affect the common war effort.
We shall be sorry to lose those United States citizens who transfer to their own forces. We do not, however, wish to stand in their way if they feel that they would sooner serve under the flag of their own country. Whether they are serving under our flag or under the United States flag, they are serving in the armed forces of the united nations and are contributing to the common victory.
The Americans in our forces came to us when their country was still at peace. They came because they knew that Hitler was as much the enemy of the United States as he was the enemy of Canada. We were grateful to them for enlisting in our forces-grateful because of the assistance which they freely gave us and grateful because they were living proofs-if proofs were needed-of the sympathy and support of their country for our cause. We shall always remain grateful to them. These sixteen thousand men were forerunners of the hundreds of thousands, the millions of their fellow citizens who are to-day enlisted in the struggle against the axis.


Richard Burpee Hanson: Mr. Speaker, if I may be
permitted just a word, I think every one will approve of what is contained in this exchange of notes, and I desire to echo the closing sentences of the Prime Minister. However, I am just wondering if consideration has been given to the legal technicalities of declaring a man repatriated by a mere exchange of diplomatic notes. As I understand the laws of the United States, when a man expatriates himself he has to be repatriated by law in a formal manner. I am just mentioning that because there should be no doubt hereafter as to the status of these United States nationals.

The Ministry
PRIVILEGE-Mr. LACOMBE



ADVERTISEMENT PUBLISHED IN THE NEWSPAPER

[Stage Direction]
"LA presse"
Liguori Lacombe: Mr. Speaker, on a question of privilege I wish to call the attention of the Minister of Justice (Mr. St. Laurent) to an advertisement published at the expense of the dominion government in the great Montreal daily La Presse. The concluding words of that advertisement are as follows:
In my opinion, Hitler would vote "no"; Quisling would abstain from voting and the Canadians will vote "yes".
I ask the hon. the Minister of Justice to be kind enough to make a statement, so that we may know whether it is the dominion government's intention to continue such propaganda throughout the country.


Georges Parent: Motions.


Liguori Lacombe: I want an answer, Mr. Speaker.
Hon. L. S. ST. LAURENT (Minister of Justice): I submit that it is not the privilege of any member at this stage to submit a question of this kind to a minister without notice.


Mr. THORSON:: Moreover, the advertisement from which the hon. member has read has not been paid for by the government.


Liguori Lacombe: I rise to a point of order.
I want an answer from the Minister of Justice concerning the public moneys of this country. Mr. SPEAKER: Order.


Liguori Lacombe: I want an answer.


Georges Parent: Will the hon. member please resume his seat. I understand he is asking a question of the Minister of Justice. We have not yet exhausted routine proceedings. Any question may be asked on the orders of the day which is relevant and which is in order.



FURTHER SUPPLEMENTARY ESTIMATES, 1941-42

[Stage Direction]
A message from His Excellency the Governor General transmitting supplementary estimates for the financial year ending March 31, 1942, was presented by Hon. J. L. Ilsley (Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.

[Stage Direction]
AUDITORS* MEMORANDUM REFERRED TO IN THEIR REPORT FOR CALENDAR YEAR 1941
On the orders of the day:	.
Richard Burpee Hanson: Mr. Speaker, I desire to direct
a question to the Minister of Transport, which one of his colleagues may be good enough to bring to his attention.
Yesterday the minister laid on the table the annual report of the Canadian National Railway system and the report of the auditors, Messrs. George A. Touche and Company, to parliament for the year ended December 31, 1941, pursuant to the provisions of the Canadian National-Canadian Pacific Act, 1936, and the act of 1941, respecting the appointment of auditors for the national railways.
In the auditors' report, at page 3, reference is made to their memorandum to the board of directors dealing with internal matters, which it is stated will be dispatched to the minister in due course.
I desire to ask the minister (a) if he will table this memorandum when received; (b) when it may be expected to be brought down; and (c) why this memorandum is not tabled contemporaneously with the tabling of the report on the system and the auditors' report?


Hon. J. E. MICHAUD (Minister of Fisheries):: The matter will be brought to the attention of the Minister of Transport.



THE MINISTRY


[Stage Direction]
On the orders of the day:
Liguori Lacombe: Mr. Speaker, I want to direct a question to the Prime Minister. As the Hon. Pierre Casgrain has been appointed a judge of the Superior Court of Quebec, and the Right Hon. Senator Dandurand and the Right Hon. Ernest Lapointe have passed away, I would ask the Prime Minister whether it is his intention to give fair and just representation in his ministry to the province of Quebec.


William Lyon Mackenzie King: I may say to the hon. member that my intentions are all fair and just and will be towards every province in this country.


Liguori Lacombe: Mr. Speaker, I rise to a question of privilege. The answer of the Prime Minister does not satisfy the province of Quebec.


Georges Parent: Order.
Mr. MACKENZIE KING. May I say to the hon. member that as a matter of courtesy I answered his question, although I might have taken exception to his asking it on the orders of the day and requested that it be placed on the order paper. I wish to say to him that having regard to the extent to which he has interrupted the proceedings of
The Plebiscite

this house in the last couple of days, it is generally felt that he is beginning seriously to infringe upon the privileges of the house itself, and if he persists in rising and not obeying the orders of the Speaker I think steps will have to be taken whereby the Speaker's orders may be effectively carried out.,


Liguori Lacombe: Mr. Speaker, I rise to a point of order. According to standing order 41, the Prime Minister must withdraw his words absolutely.


Georges Parent: Order.



THE PLEBISCITE


[Stage Direction]
On the orders of the day:
Mrs. DORISE W. NIELSEN (North Battleford): Mr. Speaker, I should like to direct a question to the Prime Minister, and I am hoping very much that you will be lenient and allow me to ask it because it concerns a matter of urgent public importance, the taking of the vote on the plebiscite.
Georges Parent: I would point out that the hon. member has prefaced her question by the suggestion that it is not in order. I hope that she will not ask the Chair to consent to something that is out of order.


Mrs. NIELSEN:: Your Honour did rule me out of order once before on a question of policy asked on the orders of the day, but this is a question of urgent public importance having to do with the plebiscite. In arranging my work in my particular riding I must have some knowledge of this particular matter now.


Georges Parent: I had occasion yesterday and the day before to rule out of order questions asked on the orders of the day dealing, I understand, with the same matter. As to urgency, the hon. member will have to show me that there is urgency before I can permit the question to be asked to-day. If the hon. member will place her question dealing with the plebiscite vote on the order paper it will be answered in due course.


Richard Burpee Hanson: If I might be permitted, Mr. Speaker, the hon. member consulted me about her question, and it would appear to me to be a matter of urgent public importance, having regard to the fact that if she placed the question on the order paper she might not get an answer before Friday next. The Prime Minister has a copy of the question, I believe, and unless there is some particular abjection to answering it, I suggest that some leniency,

if that is the correct term, be exercised. The hon. member represents a far-distant constituency and seeks an opportunity to do something in connection with the taking of the vote on the plebiscite.


William Lyon Mackenzie King: As the leader of the opposition makes a special plea on behalf of a lady on his birthday anniversary, I think perhaps I might be pardoned if I anticipate, Mr. Speaker, your favourable attitude towards my giving a brief reply to the question as I have received it.
I gather that the question relates to action that was taken by a citizens' committee in Winnipeg, where those present formed themselves into a voluntary association to assist in obtaining an affirmative reply from the electorate to the question to be asked in the plebiscite which will be submitted in the course of the next few weeks, and the hon. member wishes to know whether I approve of action of that character. I say not only that I approve of it but that it is in accord with what I myself suggested might be an effective way of ensuring an affirmative reply to the plebiscite.
I think the other question the hon. member desires to ask is whether it is the intention of myself and my colleagues to address the electorate over the radio with respect to the plebiscite. It is my intention to do so. I have also reason to believe that some of my colleagues may adopt a similar course. I hope that many means will be found of making perfectly clear to the electorate the desire of the government to see that an affirmative reply is given to the question to be asked in the plebiscite.


Georges Parent: The question has been put and the answer given to the house. I therefore cannot quarrel with it at the moment. But I would point out to the house that the question which was asked was certainly one which should have been placed upon the order paper, and I hope there will be no recurrence of this practice, in view of the ruling which I have already made.


Thomas Miller Bell: May I rise to a point of order? It seemed to me, having heard the reply, that there was a question of urgency in relation to this particular question, because hon. members wished to make their arrangements for the Easter holidays. May I respectfully suggest to Your Honour that perhaps the tightening up of the rule regarding these questions has been carried to as great an extreme as the latitude which the house took prior to this strict enforcement of the rule. I would ask that some latitude

War Appropriation-Mr. Blackmore
be given to hon. members asking questions which are, to them, of some urgency. Perhaps the matter might be taken into consideration, because I feel that in the last few days the rule has been enforced quite properly but rather too rigidly.


Georges Parent: After all, the chair is bound by the rules; and when the latitude of which the hon. member has spoken was given, it was used so much that on one day when we began at, I believe, five minutes past three, we did not finish till ten minutes to four, with questions which certainly should have been placed on the order paper. It is necessary therefore to invoke the strict interpretation of the rule. I have endeavoured to do so and will continue to do so with fairness, I hope, but I do think that the house during these recent days took advantage of the latitude which was allowed, and many questions were asked which properly should have been placed upon the order paper. I cannot agree with the hon. member who has just spoken that we should relax the interpretation which has been given. In the case before us, if I may say so, the question of urgency does not appeal to me in the same manner as it appealed to the hon. member. The vote will not be taken until the twenty-seventh day of April. This affords plenty of time to hon. members-and I myself would be in the same position-to advise their constituents with regard to the vote on the plebiscite. I must ask the house to interpret the rule as strictly as possible and conform to my ruling with regard to questions which they wish to put, and place them on the order paper.



INQUIRY OF THE MINISTRY


[Stage Direction]
On the orders of the day:
Mr. VINCENT DUPUIS (Chambly-Rou-ville):: There was published in the Canadian
Press this morning a statement made by the Hon. R. J. Manion explaining his attitude as chief of the national government party. I would like to ask-


Some hon. MEMBERS:: Order.


Mr. HOMUTH:: The rule applies over
there, too.


Georges Parent: The rule must apply. HIGHWAYS


[Stage Direction]
On the orders of the day.
Mr. F. D. SHAW (Red Deer):: I wish to
direct a question to the government. Have
centuries, will be irretrievably lost. We simply definite instructions gone out to any or all provincial governments regarding restrictions on provincial road-building for 1942?


Georges Parent: That question should be
placed upon the order paper.
PRIVILEGE-Mr. LACOMBE


[Stage Direction]
On the orders of the day:
Liguori Lacombe: Before the orders of the day are called I want to raise a question of privilege. There was published in Le Canada of March
18,	1942, the following statement:
(Translation)
At that time also, the name of Mr. Alphonse Raymond, whom we need not introduce to our readers and whose dealings with Mr. Duplessis are well known, came before the Meighen convention in Laval-Two Mountains.
Mr. Speaker, that is absolutely untrue. Mr. Horace Michaud, a Montreal barrister, was my opponent in 1926.


Georges Parent: Order. This question, I
am informed, is in the same category as the one already asked. Therefore it must be placed on the order paper.	.



WAR APPROPRIATION


[Stage Direction]
The house resumed from Thursday, March
19,	consideration of the motion of Mr. Ilsley that the house go into committee on a resolution to provide for granting to His Majesty sums not exceeding $1,000,000,000 to assist in enabling the government of the United Kingdom to defray expenditures incurred in Canada for war purposes, and to provide for a loan to the government of the United Kingdom of $700,000,000 without interest.
John Horne Blackmore: Mr. Speaker, last evening when the house rose we were discussing the matter of this billion dollar gift to Britain. I stated that my group and those whom I represent throughout the country would approve the gift. May I state once more that we have approved it without qualifications or reservations. We were misrepresented in some respects as to this matter by the press. We approve this gift without reservations and without qualifications; all well informed Canadians must approve it, in spite of the cost.
My contention was that the gift as it is to be made is costing the Dominion of Canada too much, more than it is necessary that it should. I am ready to do anything which can be done by Canada to assist Britain in any respect in the prosecution of this war. This

War Appropriation-Mr. Blackmore
is Canada's war, and unless we win the war everything which we value, everything which has been handed down to us through the centuries, will be irretrievably lost. We simply must win the war.
But it is folly for us to make any contribution cost us more than it needs to cost. Let us give our all, but let us do it in the most efficient and effective manner. It was purely on this point that I was raising an objection.
I said that the minister, with the policy which he is adopting at the present time, is making this gift cost the Canadian people twice. First they are paying it physically and then they are paying it financially. They are paying it financially in two respects: first, by taxation, which I assume 'will amount roughly to 8500,000,000; second, by a debt which is being incurred, which will amount roughly also to $500,000,000. Thus the gift is being paid for both physically and financially, and I contend that it is unnecessary to pay for it in any other manner than physically.
I wish to be very careful in what I say; the minister will correct me if I am not exactly right; but from what the minister said it seemed perfectly clear to me that this taxation and this debt would have been levied and incurred by the Dominion of Canada whether the goods had been given to Britain or not. That is, the gift of the goods to Britain did not bring on the taxation or the debt; Canada wras buying the goods and incurring the obligation anyway.
She merely gave the goods to Great Britain, so that the gift did not cause the debt or the taxation; it was simply in a sort of way incidental. I wish to comment briefly on this $500,000,000 debt. I believe w'e shall find that $500,000,000 is the amount of the perpetual debt which is being incurred by the dominion in connection with, if not as a result of, this gift to Great Britain-and let it be clearly understood that I am not opposing it because it is a gift to Great Britain; I am opposing it because the debt is there when, in my judgment, it does not need to be there. This $600,000,000 will never >be paid by the dominion government. It will last for generations if our past performance is any guide as to what will happen in the future.
I understand that the rate of interest at the present time is roughly three per cent. If the minister himself and succeeding ministers so manage the affairs of Canada as to reduce the interest rate by skilful manipulation, I think we can safely assume that they will not reduce it below two per cent, which means that this transaction-perhaps I had better not use the word "transaction"-this incident is adding to the shoulders of the dominion an 
interest bill of $10,000,000 a year for generations and generations. It is very necessary that we face this fact squarely. It is an easy matter for us in this house to allow something like this to pass by and thereby to bring upon future generations tremendous burdens the irksomeness of which we do not even remotely conceive. If we incur for the people of Canada $10,000,000 as an annual interest burden, we shall make future generations pay this $500,000,000 debt over again inside forty years. In other words, your boys and my boys who have enlisted to go and fight this war will risk their young lives, their health and vigour, and will return and in their lifetime pay this debt over again.


Mr. ILSLEY:: If it is possible to obtain the $500,000,000 *without cost to the government or to the Canadian people, why will it not be equally possible to obtain the $10,000,000 a -year without, cost to the government or the people?


John Horne Blackmore: There will be no doubt of the validity of the minister's statement if the men in future generations have a vision surpassing that which is being exercised by the men in this house. But we have no assurance that they will have that vision any more than the present members have. After all. we are assuming the responsibility here. Why not square up to it and see if there is not some way of avoiding the debt?


James Lorimer Ilsley: I do not think there is, but I was wondering why the hon. gentleman is worried about the $10,000,000 if there is a way of getting the $500,000,000 for nothing.


John Horne Blackmore: It would probably be well to discuss the possibility of getting the $500,000,000 without debt. Then the $10,000,000 would not need to bother us. I notice in this house a disposition to disregard new ideas. The world is full of talk of a new order, but what does a new order mean? It must mean a new way of doing things. Somewhere new ideas are to be found. Why not listen to every idea which is advanced and weigh it carefully? May I read a statement dealing with the last war. Hon. members will find the passage which I am going to read in the report of the royal commission on banking and currency in Canada in 1933. These particular words appear on page 22, paragraph 47:
In the war session of August, 1914, parliament raised the partially covered issue to $50,000,000. Subsequently an issue of $16,000,000 was made against a deposit of railway securities guaranteed by the dominion government as well as an uncovered issue of $10,000,000 for governmental purposes. In 1917-
This has a particular bearing on what we are doing now.

War Appropriation-Mr. Blackmore
-an emergency issue of $50,000,000 of dominion notes was made to finance war purchases in Canada by the British government. The notes were secured by imperial treasury bills.
The transaction which is there described is so nearly analogous to the proposals which my group are making to this country at the present time that any man who disregards these facts is assuming a responsibility for which he may be called upon to answer. It is obvious from what I have read that at least $50,000,000 was obtained 'by the dominion government in the last war without cost; $26,000,000 we are sure was obtained for the mere cost of printing that $26,000,000. It did not constitute a debt, and since that time no one has paid interest on the $26,000,000.
Before I read another passage which has an important bearing on this question, may I read a quotation from the March, 1942, letter of the Royal Bank of Canada to indicate to the minister and to hon. members that I am not the only one in this country who is greatly perturbed over our gathering debt. The quotation is:
The lesson of the debt problem of the interwar period of the twenties and thirties should not be forgotten. Perhaps no other single factor played as large a part in the economic dislocation and difficulties of the period as the ever-present irritation and burden of war debt payments.


Richard Burpee Hanson: Of course
that is international debts they are speaking of.


John Horne Blackmore: 
James Lorimer Ilsley: In the speech to which my non. friend refers, my remarks about self-
1490	COMMONS
War Appropriation-Mr. Blackmore
discipline, self-organization-not self-control- were not directed to the Ontario farmers specifically; they were used generally as applying to all of us throughout Canada, whether farmers or anyone else. What I said had no specific or direct relation to inflation; I dealt with that in another part of my address.


John Horne Blackmore: Last fall the minister, I understand, made a speech which I did not hear. I am not condemning the minister; I am approving. I want to say right here and now that in my judgment the minister, under the system which he is electing to use, is doing a magnificent job; I am not condemning him in any way. As I was saying, last fall he made a speech, so it is reported to me, in which he said that inflation can and must or will be controlled. That was just prior to the announcement of the price ceiling. That statement indicated quite clearly that by that time the minister had come to use the word "inflation" in its correct meaning. That is, inflation is a rise in the price level. The eager way in which the minister, Mr. Donald Gordon and a number of others are urging the people at the present time to increase production, as a means obviously of offsetting inflationary tendencies, again indicates that they are now thinking in terms of reason and common sense. Inflation does not mean the government issue of money. Inflation is an effect; it is a rise in prices which results from a scarcity of goods, or from deliberate manipulation by someone who is handling the goods.
To show how urgent is this question of inflation, within the last week President Roosevelt made an appeal to the people of the United States concerning the necessity for resisting tendencies toward inflation. By this he undoubtedly meant rises in price owing to scarcity. Once we clear out of our minds the fallacious notion that inflation means increasing government money, or printing government money, then we are on a basis upon which we can build soundly; and knowing this about inflation we can see immediately that the printing of the Bradburys was not inflation. The printing of the $26,000,000 was not inflation. They might have caused inflation if there was a scarcity of goods, or if someone manipulated the prices of goods, or if prices were not controlled, but they themselves were not inflation.
Granted that there is an inflationary tendency, what can be done to prevent inflation?
I have already indicated one or two of the devices that may be used. The first one is evidently price control. It matters not how much money there is in circulation; if the

government insist that prices shall not go up, there cannot be a rise in price. May I pause here to commend the minister once more upon the success which has attended the very difficult experiment of price control in Canada. The prices are not all as they should) be; I am sure the minister would be one of the first to acknowledge that. Nevertheless the device appears to be working effectively, and it has great possibilities for the future. In our discussion the important thing is that this .price control was necessary to prevent inflation, even though there was no government issue of money. The nearest approach to it was the money the government were borrowing from the Bank of Canada, amounting to something more than $700,000,000 up to the present time.
All right, then; once we have laid down in our minds this concept that government issue is not inflation, that inflation is a rise in price and that inflation can be controlled in some measure or in large measure by price control, then we have made another step forward. I said a few moments ago that a rise in price results from scarcity. There is no member of this house who does not know that. For example, would someone explain the reason for the high price of potatoes at the present time, when there is not a province in the Dominion of Canada which cannot produce potatoes in superabundance, far beyond its needs? Why is that? It is that for the time being there is a scarcity of potatoes.
Mr. HANSON (York-Sunbury) ; Is the price high?


John Horne Blackmore: Unusually high, I understand.


Richard Burpee Hanson: There
have been starvation prices for the last three years.


John Horne Blackmore: I was told that in the stores of Ottawa during the last week one had to pay three and a half cents a pound, if I remember correctly.


Mr. ISNOR:: That is an increase, but it is not too hi^h.


John Horne Blackmore: I am not saying it is too high, but it is high relatively. For the last number of years people have been buying potatoes for much less than that. However, I would rather not get into any discussion on this matter of potatoes, although I am much interested. Once more no one knows just what price Should be given for potatoes. But I will say this, that in my constituency and in my province, if the government were to

War Appropriation-Mr. Blackmore
guarantee a dollar a hundred pounds for potatoes it would have so many potatoes it would not know what to do with them.


Mr. BRADETTE:: Not every year.


John Horne Blackmore: Yes, every year. I know whereof I speak; I come from Alberta.


Joseph-Arthur Bradette: I grow potatoes, and I know what I am talking about.


John Horne Blackmore: Very well. The
important thing, the matter we are discussing at the present time, is the cause of the rise in price; and the major cause of the rise in price is scarcity. If you are going to resist a rise in price, obviously the thing to do is just what the minister is now doing-get more production.


Mr. GILLIS:: Would the hon. member permit a question while he is on the matter of inflation? Is it necessary to freeze wages to avoid inflation?


John Horne Blackmore: No. There are a good many things I shall not have time to discuss in this connection, but which I could discuss.


Richard Burpee Hanson: But they have been frozen, have they not?


Clarence Gillis: Yes.


John Horne Blackmore: 
Mr. MacNICOL:: There is nothing wrong with that.


John Horne Blackmore: That is quite sound. That is a way to get production and prevent inflation.
There is one more device which the minister has used only sparingly thus far, namely, rationing. We were quite startled in England to get our ration cards, and quite disappointed with the small amounts we were able to buy, but the ration card effectively prevented inflation, because people simply could not spend their money for the commodity in question. Therefore there could not be a buying pressure on the price of the commodity resulting in a rise. All these things have a tremendously important bearing on the matter of state issue of money. If the devices which are now being used in Canada and Great Britain had been used in the last war, the calamitous rise in prices would have been prevented during that war as well as they have been during this one. It would not have mattered where the money came from, whether it was borrowed from the people or the bank of Montreal, or whether it was created and issued by the dominion government treasury under the Finance Act of 1914, as it then was.
So much for that question. I maintain, Mr. Speaker, that the evidence which I have adduced up to the present is such as to cause any man with an open mind, ready and willing to learn-as everyone ought to be in these terrible times-to reflect on whether or not some of these policies which Canadians have believed in and applied1 in the past were not grossly fallacious, and whether something new could not be introduced into our financial system.
This gift has another important aspect. Great as it is, proud as the Canadian people, generally speaking, are that it is as great as it is, it is not nearly as great as it could be. There will be need for another gift like this, a much greater one next year, and' a still greater one the following year. If these gifts can be financed without financial cost-they cannot be made without material or physical cost-look at the tremendous difference that this fact will make to the whole outlook of the Canadian people. The question will be asked why I say that our gift should be greater. I say that simply because our production in Canada does not approximate our possible production. One monstrous fallacy which for some reason or another is being spread throughout the country at the present time is that this country is nearing its peak



War Appropriation-Mr. Blackmore
of production. In his speech the other night the minister indicated( that he had been infected by the advice of someone and apparently had the idea that we were coming near to our maximum production. I read these words from page 1402 of Hansard:
As last year, we have aimed at a war programme which will represent the country's utmost capacity, the maximum which we can carry out with the physical and economic resources at our disposal.
I wonder whether the minister, when he used the word "economic", had in mind1 the amount of money which we can borrow or tax from the people and considered that to be the governing factor. I cannot tell; but if he had in mind only the physical possibilities of this country, then let me tell him that we are far from having reached our maximum. As an illustration, I refer to sugar. Will anyone in this country say that we are anywhere near our maximum production of sugar? This country which could produce twice its total consumption every year, is actually producing only about 18 per cent of its consumption? That mere statement of fact brands the minister's statement as ridiculous.
Think of our gasoline possibilities, our fuel possibilities. Think of the McMurray tar sands. Think of the possibilities of manufacturing fuel alcohol from potatoes and wheat. These have not even been considered, and then we are told that we are nearing our maximum production. Think of our iron and steel possibilities. Think of the fruits, the vegetables, we could produce, far beyond what we are doing at the present time.
Let me give an illustration by reference to milk and its products. Hon. members will remember that when they were boys, almost every family in the smaller communities had two, three or four cows. The children milked the cows and the mother prepared the butter. What has happened to-day throughout Canada in that respect? A large number of our younger people are growing up without having ever touched a cow. Let the price factor become attractive; let certain other conditions be brought about as a result of which it will be profitable to raise cows and produce butter, milk and cream, and what will the mothers and children from end to end of this dominion be doing to supplement the meagre family income? They will be producing butter.


Karl Kenneth Homuth: The boards of health would not let them.


John Horne Blackmore: That is a point. In other words, the boards of health would be helping to lose the war. That is something that I think they would hardly like to con-
IMr. Blackmore.]
template. If we want to increase production we must utilize the tremendous spare time energy of the Canadian people, the spare time of our children and our men and women who are not fully employed, our office workers who have free time after work. The hon. member for Waterloo South (Mr. Homuth) has referred to the health regulations. I am in favour of such regulations; nevertheless we lacked them when we were boys and we grew up pretty well.
If prices of wheat, potatoes and other commodities are set at a point where there is a certain profit realizable in their production, the minister will be astonished at the results. He will not need to go on the air and waste his precious time-it is precious-urging the people to produce. He will have as hard a time keeping them from producing as he has keeping the western farmer from producing extra wheat. The productive capacities of this country have hardly been scratched.
Then there is the matter of wages, referred to by the hon. member for Cape Breton South (Mr. Gillis). Our wage structure is altogether unsatisfactory. There is no justice, no logic in it, but there is gross mismanagement in it. It is producing an undesirable psychological attitude in the minds of men, for which Canada will have to pay before we have finished.
There is another aspect to this wage question and this price question. If the men who are earning wages in this dominion were paid more wages, the minister would get more money for his victory loans. If producers of wheat, fruit, vegetables, poultry and other primary commodities were getting better prices, he would obtain greater revenues. He would be able to raise more money. That ought to be obvious. The minister wishes to pay as we go. By concentrating on just rewards for the primary producers and the wage-earners of this land, the minister will greatly expand the revenue producing capacities of this country, and at the same time he will have an increased production which will serve as a safeguard against inflation.
There is another aspect to this gift which I should like to discuss briefly. I wish to say in commendation of the minister that in making this gift to Britain he has manifested magnificent leadership. I think the hon. member for Essex East (Mr. Martin) indicated that yesterday.


Richard Burpee Hanson: I hope the hon. member will recall that I made the first suggestion in this house about a gift to Britain.


John Horne Blackmore: I shall remember that to the credit of the leader of the opposition for years to come. As I say, this is magnificent leadership. First it shows how international

War Appropriation-Mr. LaCroix
debts can be cancelled. Since I think that is quite clear, I shall not labour that point. Second, it shows us how we can help Britain. When I was in England I was impressed by the fact that many English manufacturers were deeply perturbed because they saw in the rapid development of industrialization in the selfgoverning dominions a threat to Britain's markets after the war, and those markets were meagre enough before. They simply could not see how they were going to be able to make sufficient income in their country. I believe the day will come when this war is over when Canada, Australia, New Zealand, the United States and other countries which are interested in the preservation of the old land, so that she may be a benefit to our children as she has been to us, must arrange a system of lease-lend in perpetuity to provide the mother country with her required raw materials. This is a step toward that end. If we can only finance this transaction without debt or taxation to ourselves, no one in Canada who is aware of that fact would object at all, for the gift to Britain would be as good as a foreign market to us regardless of whether or not we were able to take back anything from Britain.
In this measure we have discovered a means of getting markets without having additional foreign trade. I have found in this house a sort of trade-mindedness. People are obsessed with the idea that they cannot live unless they trade. But, Mr. Speaker, this billion dollar gift to Britain proves beyond a doubt that Canada can exist without additional foreign trade, for the farmers who produced the wheat, the pork and the butter were paid just as if they had received payment from Britain herself in connection with this billion dollar gift; so also were the manufacturers and others who produced munitions paid, and paid in Canada. If this process could have been accomplished without additional debt and additional taxation, there would have been nothing in this proposal but a blessing. We should have discovered how to get markets without having additional foreign trade.
But it shows something else that is important. It shows how goods can be given away. One thing which, frankly, Mr. Speaker, annoyed me last night, was a childish tendency on the part of several members to make foolish remarks about $25 a month. I maintain that in this parliament we have reached the point where we should cease to make remarks of that sort about any such proposal as a distribution of goods. If goods can be given to Britain, they can be given to Canadians. Once they are given to Canadians, the principle is established that you can give your people goods.


Mr. DONNELLY:: Would the hon. member tell the house how much goods he would give to Japan or Germany to-day on their paper, with nothing to back it?


John Horne Blackmore: The question is a very good one, although a little off the subject, but I shall not hesitate to answer it. The simple fact of the matter is-
I almost hesitate to say this because it may not be in our best interests-that if we had had a device similar to this to help the . have-not nations and render their position less impossible, we might not be .engaged at. the present time in destroying some of the finest races in the world and ourselves being destroyed. Never mind about the paper. You are not asking for paper from Britain. Has the hon. member forgotten that we are not getting any paper from Britain for this billion dollar gift? Then why should we worry about the quality of the paper from Japan or Germany we might receive in return for any distribution we may choose to make to them?
The hon. member's question brings me to another aspect of this question. In the new order which is to be established after this awfful experience is over, some means must be discovered whereby the people who have bountiful resources will be able to contribute, without unbearable costs, to the sustenance of the people who have not bountiful resources. In other words, it must be made possible for the people who have not, to get support and assistance from the people who have, and this possibility is indicated by this fine new bit of leadership in this legislation.	.
To summarize-


Georges Parent: The hon. member's time has expired.
Mr. WILFRID LaCROIX (Quebec-Mont-morency) (Translation): Mr. Speaker, I had not intended to take part in the discussion, having already expressed my opinion during the debate on the speech from the throne at which time I stated my opposition to any billion dollar gift to the British government.
I wish first to offer my sincere congratulations to the hon. Minister of Finance (Mr. Usley), who very clearly expressed his point of view. However, after listening to the general debate and to the explanations furnished this house, I have come to the conclusion that the proposed increase does but strengthen the argument I set forth during the discussion of the throne speech. In fact, Mr. Speaker, we propose to give to Britain, that is the exact term, a billion dollars, that is to authorize the British government to purchase in Canada a billion dollars' worth

War Appropriation-Mr. LaCroix
of supplies of all kinds, food, tanks, airplanes, and so on. Now the cost of this billion dollar gift, plus the seven hundred millions we are loaning Great Britain without interest, must necessarily be borne, that is as far as the billion dollars are concerned, by the people of Canada. Now, Mr. Speaker, during the debate on this proposal, I noted that nationals of Great Britain hold about one billion, seven hundred million dollars' worth of Canadian securities, or in other words that we owe England approximately one billion, seven -hundred million dollars that must be repaid some day. Why not simply have advanced this amount of one billion to her in exchange for British-held Canadian securities?
To my mind, such a transaction would have prevented this fantastic burdening of our budget and avoided us the necessity of including in it this year a payment of about $25 million which the Canadian people will have to eifect. For we must not forget that $700 million are to be loaned interest free, and that $1,000,000,000 will be given outright.
I could not let such a proposal be adopted without officially recording my opinion in the matter. The Canadian people are already experiencing a great deal of difficulty in meeting their present obligations. These obligations, born of the war, are becoming more onerous every day, yet the people have met them without flinching. They are doing their best to [DOT]win the war, even to the extent of going without some of the necessaries of life. We all want to win this war, but I think the government should have refrained from placing this additional burden on the shoulders of our people, especially since we are giving to richer than ourselves. Indeed, it is a well-known fact that England herself recently loaned China $250 million. Canada is making an all-out effort and in our province the Freneh-Canadian element is doing its large share. Unfortunately, and this is a point I would like to stress, the fact does not seem to be taken sufficiently into account in certain administrative quarters, although recruiting figures in the province of Quebec are as eloquent of our loyalty as those in any other province.
In the civil service, our fellow citizens of Freneh-Canadian origin appear to be kept completely in the background. I have here before me a list published in February's edition of Canadian Business, entitled1: "Who's Who in Wartime Prices and Trade Board." It is a rather long list of the officials of the wartime prices and trade board. It will be noted that out of 222 positions listed, there are only about 20 held by French-Canadians. This is less than 10 per cent, and yet the

French element forms one-third of our total population. Whenever it is a matter of military enlistments, commentaries abound on our representation in the armed forces, yet when it is a question of handing out well-paid jobs, the boot is on the other foot.
Mr. Speaker, there is another matter I would like to broach in this brief address, and that is the question of friendly understanding in the country. Since we are discussing a measure concerning financial aid to Great Britain, it seems to me that just recognition should be given to the province of Quebec's tremendous effort in the financial field. Our province strongly supported the victory loan subscribing as generously as any other, and I would like to see the enthusiasm shown for the victory loan, this enthusiastic response to the government's appeal for funds in view of its war effort, more fully recognized by our army officers, especially in the higher brackets.
I have here Report No. 47, sent by the military intelligence section, Department of National Defence, Ottawa, to all district commanding officers as well as to other officers. It is entitled "Summary of Intelligence from Military Districts". Paragraph 13 includes a report from the intelligence officer of the fortress of Halifax, which reads as follows:
Unit reports contain many references to H.D. personnel. The general feeling is one of disappointment in regard to the manpower policy. This tends to undermine that confidence which is essential to esprit de corps. General opinion is that the province of Quebec is responsible for non-enforcement of conscription. This belief, whether based on fact or fallacy, is producing disunity. French-speaking Canadians are regarded with some distrust, irrespective of how patriotic they may in reality be. This distrust originates in the prevalent belief that Quebec is hindering an all-out war effort, that Quebec people are unpatriotic or spineless. If these beliefs are without foundation, the people of Quebec are being done a great injustice; if they are founded on fact, then the rest of Canada is forced to suffer at the hands of a minority. Army personnel is puzzled because "platitudes do not explain circumstances".
The military intelligence section, Department of National Defence, draws the following conclusion from that paragraph:
No matter how unfounded such views may be, the foregoing item is included to indicate the opinion of a section of the active army.
I wish to ask the government, and particularly the Minister of National Defence (Mr. Ralston) whether they intend to let such pernicious propaganda be carried on, at the expense of the country, against the French Canadians who have enlisted in the army.
In fact, those reports sent out by the intelligence service at Ottawa to all officers and district commanding officers are such as to

War Appropriation-Mr. LaCroix
arouse in the minds of those army officers hostile feelings towards the French Canadians who belong to the army. Because those reports are distributed by the government and form, as it were, the journal of all army officers, a secret journal perhaps, secretly distributed, but none the less a journal, I believe they are bound to arouse within the army feelings that make for antagonism on the part of officers against new recruits from our province. I demand that remedial action be taken immediately, and I wish to voice a formal protest against the mentality which exists in the Department of National Defence at Ottawa.
Before- concluding I must say how much I regret that the following statements should have been made in an advertisement published by the Department of National Revenue. The plebiscite is discussed therein and as a conclusion to this advertisement entitled "As I See It":
In a few weeks time, this country is holding a plebiscite, when our people will be free to answer "Yes" or "No" to a question, or not to vote at all.
As I see it,

Hitler would vote "No", Quisling would not vote, Canadians will vote "Yes".
That is signed "Colin Gibson, Minister of National Revenue."
Well, Mr. Speaker, if a plebiscite is to be held throughout the country, as well as in the province of Quebec, it means that the government are asking the people to express their opinion. The people are quite free to vote "yes" or "no." Why should a government official tell them beforehand that if they vote "no" they will brand themselves as Hitler's followers? In Quebec as indeed in all other provinces, many people will probably vote "no." I submit that those who vote "no" are not followers of Hitler but people who, believing in the justice of the cause, want victory for the allies, for democracy and for this country. That is why they want to win the war. They wish above all to ensure the defence of our own territory which is now threatened and I am convinced that whatever decision the electors take when voting on the plebiscite will be in favour of the defence of Canada, our country. I believe, Mr. Speaker, that any man whose main ambition is to defend his country is not necessarily in league with our enemies. He is not necessarily a follower of Hitler; on the contrary he wants to ensure the defence of his country against any attack by Hitler and the Germans.
We have here in Canada vast areas of land as large as the whole of Europe itself; our coastlines are fully as long as those of that continent, yet we have only a very small population to ensure the defence of the country.
Australia made the mistake of sending her troops overseas and to-day she finds herself faced with direct attack by a rapidly advancing enemy. What is her position? She is obliged to recall troops serving in Libya or elsewhere, in order to organize her own defence. In view of the sacrifices we have already made, in view of the 500,000 men already under arms, a great many of whom are at present in Great Britain, helping in her defence, I believe that our first duty at the moment is to devote all our energies to the defence of this country.
Mr. Speaker, I contend that any man who terms a French Canadian or an English Canadian voting "no" in the plebiscite a supporter of Hitler, is not telling the truth, and that he is spreading propaganda designed to ensure an affirmative vote. This, I believe, is the worst possible form of propaganda. When the government asks to be released from their commitments, they are within their rights. When they ask the people to answer "yes," they are within their rights. But, Mr. Speaker, the veiy principle of the plebiscite is freedom of expression, without any prejudice to the opinion which may be expressed at the polls by those who will be called upon to do so, whatever their answer may be. If we want to preserve mutual understanding in this country, as I ardently wish, if we want to maintain national unity, as I profoundly hope, if we want to be united in a fruitful common endeavour capable of leading us to eventual victory, if such be our purpose, then let the people decide for themselves in peace and tranquillity according to the dictates of conscience, to their own sentiment, and I am convinced that such sentiment will be truly Canadian and one which, once the plebiscite is over, shall truly represent national sentiment in this country.


Mr. J. H. HARRIS (Danforth):: I rise to support the principle of this legislation. As I listened to the hon. member for Quebec-Montmorency (Mr. LaCroix) my thoughts ran back to the time some eleven years ago when it was my privilege to occupy the same seat that the hon. member now graces. The opinions I expressed when I had the privilege of introducing a resolution having to do with the expansion of empire trade, and the thoughts that ran through my mind when I gave expression to those opinions at that time, were in, decided contrast to those which emanated from the hon. gentleman who has just taken his seat. I was one of those who realized at that time-with all due deference to my leader (Mr. Hanson), who says that perhaps he was the first to originate this idea -that if we look through the history of mankind and of civilization we can come to but one conclusion, and that is the conclusion
1496	COMMONS
War Appropriation-Mr. Harris (Danjorth)
summed up in the hackneyed phrase that the greatest agency for good which we have known in modern times, which modem history has presented to us, has been that agency for good known as Britain and the British empire. We must preserve that agency if we want to preserve our way of life. That is patent; it is obvious on the very surface. Well, here is an opportunity for every one of us to rise in his place and support this billion dollar credit which is going to make it possible for us to help hold the position we now have.
It is quite sound to issue warnings such as came from the leader of the Social Credit party (Mr. Blackmore) to-day with regard to the cost. The cost must not be excessive, he says. Of course it must not be excessive; it must be right and fair in all industries. One piece of work which we have to do here is to see that it is. We know that the minister will surround the legislation with safeguards of all kinds; but if he does not, if the safeguards are not there, then our task as members of this house is to see that they are put into the legislation.
The hon. .member for Yorkton (Mr. Castleden), speaking yesterday, quoted professors in regard to the cost of producing wheat, and he said that the farmers would probably get less than production costs. I doubt whether there is any merit in that, but we have our committee on agriculture which is studying the problem and we can make sure that they get their costs. I am doubtful whether Britain will want wheat in this billion dollar credit, or at any rate any sizeable quantity of wheat, so that perhaps the hon. member's worry in that regard will be rather unjustified. I do not think it will be as serious as he wants us to believe, from the speech he made yesterday. It is more important that we get to Britain the very best we have in planes and tanks, guns and munitions, supplies and foodstuffs.
This morning I received two letters from overseas postmarked field post office, February 28. In one letter it is stated that a young man named George Willis, who played centre-half for Western university, was in the channel show. His plane came back, and it was a pretty good plane; but the author of this letter says he is satisfied that Canada can produce better and bigger and safer planes for our boys. Let us therefore get this billion dollar credit through and supply them with better and bigger planes. He also says in the same letter that they are hearing about the plebiscite over there. My hon. friend who took his seat a moment ago also said something about that. In passing I would quote the opinion expressed in this letter, that they are extremenly perplexed about it. I wonder

whether the emissaries that have gone to take the vote might not have served a better purpose had they been emissaries who would help in our general industrial picture. I say that because I think we should see to it that we get the right kind of supplies to Britain. I shall have more to say about that in a moment, but in order to keep the discussion straight I would answer some points raised by the hon. member for Temiseouata (Mr. Pouliot) last night-and I couple him with the hon. member who has just taken his seat and my monosolo friend who represents the single-man party in the far corner of the house. Listening to their speeches I sometimes wonder what good they are doing the general cause. This letter says: "The last two nights Lord Haw-Haw has really been"-to use his own language-"razzing Mr. Churchill." Then further on:
It seems too bad the way Haw-Haw rants Churchill. It reminds me somewhat of a debate I heard on one occasion in the House of Commons.
I thought when I read that that those who have decried statesmen in the United Kingdom and elsewhere the world over who are serving their country as best they know how, even as our men are trying to do to-day, and called them names-these hon. gentlemen, like the hon. member for Temiseouata, are the Haw-Haws of Canada at the present time. Words which emanate from them find their way into the minds of malcontents and dissatisfied people, with the result that in my opinion they are not doing any service to Canada. I heard it said within the last month, by one who had spent a good deal of his time in France, that one of the difficulties France had in the ten year's before she fell was the expression by those w'ho occupied seats in a chamber similar to this of views which did not make for unity in that country. I say to my hon. friends that the views they are now expressing are not making for unity in this country.
Think of our friends in Quebec province- when I say Quebec province I mean it in the sense of the geographical boundaries, and when I refer to the maritime provinces the same applies. I say to my hon. friends from Quebec province that we in Ontario have a great deal of admiration for them. The hon. member for Temiseouata last night referred to that committee for total war "from Toronto". Just keep the record straight; hon. members know that the two hundred who happened to meet in Toronto-Toronto is a meeting place; that is what the Indian word means-might just as well have met in Montreal. And when his opinion is reinforced by one I heard expressed by the hon. member

War Appropriation-Mr. Harris (Danjorth)
for Dorchester (Mr. Tremblay), that these people from the vicinity of Toronto have been in Canada for only five or ten or fifteen years and that they should go back and defend their country while the hon. member stays here and defends Canada-sentiments of that kind do not help towards unity in this country and do not help the cause which this bill is trying to further. We have had enough of that. The time has come when we should address ourselves to an all-out war effort in accordance with the legislation that is handed to us, and if we can add anything to it in a constructive way, it is our duty, as I see it, so to do.
I am hopeful that this legislation will help our Canadian position from this point of view. The United States-United Kingdom lease-lend legislation, as the minister well knows, had some restrictions with regard to exportable surpluses from the United Kingdom. I do not think the word "preference" was used, but the United States under the terms of that agreement had a first call on those exportable surpluses, with the result now that Canada in her effort to get essentiality certificates for some materials which are not manufactured or produced here in sufficient quantities finds that the United States priority or preference is taking those exportable surpluses. This legislation and this credit which we are granting now will in my opinion help the minister and help Canada to get a fair portion of these exportable surpluses and put us in a stronger position than formerly obtained.
I hope when the minister gets this bill into the committee that he will enlarge on that point. As he well knows, the empire trade agreements, of which he was a supporter and for which we give him credit, tended to allocate blocks of production among the different units of the empire. For instance, we allocated to his constituency the matter of apples-that is on the food side. But on the manufacturing side preferences were arranged in such a way that we in Canada did not push the production of certain commodities which perhaps it is not economical for us to produce, or which it was more economical for the United Kingdom, or Australia or the other signatories to the empire trade agreement to produce, with the result that trade has got into these grooves, in quotas or blocks. Now the United States-United Kingdom lease-lend act has taken priority over this quota arrangement, and Canada in turn in many lines of industry is not able to increase production quickly enough to take up the slack, the slack being the quota which she previously imported from the United
Kingdom or Australia and which we were encouraged to import to help provide the United Kingdom with the Canadian dollars which she so badly needs. We thought we were doing our patriotic duty in that regard, and we were. But as I say, one of the brightest spots in this legislation is the fact that now we have this extra lever, as it were, to help us to get a fair proportion of the quotas which Canada was previously accustomed to receive.
These restrictions and inhibitions of one kind and another which face us from day to day also have some bearing on the supplies that we shall receive from Britain and on this particular bill. I was thinking of the gasoline restriction. Of course we have to have gasoline restriction; it really means rubber restriction. I was struck by what the hon. member for Queens-Lunenburg (Mr. Kinley) had to say about one very large item of import which comes from the United Kingdom, namely, liquor. This parliament through its gasoline controller and rubber controller controls in a measure that trade, in harmony with the different provinces. I am of opinion that legislation could be devised to control the flow of liquor-"ration" is perhaps a better word-which might be made available to our people. What applies to that applies also to beer. Something of the kind is perhaps overdue at the present time. We have to beware of the juice which comes out of the swamp or the bottom of the corn silo; we have to see to it also that the pick and shovel man, the workman who is accustomed to a glass of beer, can have it if he wants it. But I question whether clerks and other white collar folk, male and female, should be allowed to have unlimited quantities of these commodities. I am firmly of opinion that our people are improving in that regard. Looking out of my window at the Chateau Laurier at one-thirty this morning I saw only one car on Connaught square or the driveway. Peacock Alley is deserted; the mezzanine floor is very quiet. Perhaps these places could be turned into accommodation for the dollar a year men. The cocktail party rooms are very quiet, and in my opinion we are getting better and better. Our people are getting away from the Alice in Wonderland idea which an hon. member mentioned last night; they are getting around more to the Joseph in Egypt idea, and I believe the minister and all the rest of us should encourage our people to be more provident and to put away something for the difficult days ahead.
That thought ran through my mind particularly this morning, when I heard over the radio that ceiling prices might be applied
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War Appropriation-Mr. Harris (Danjorth)
to maple products, maple syrup, maple sugar and so on. I recall being at the Smithfield market in London some two or three years before the war, and seeing a complete exhibit of Quebec maple products. I would ask, Mr. Speaker, that the maple products not only of Quebec but of all parts of Canada should be developed to the full this year. Every possible tree should be tapped; every possible pound of that product should be made. The price structure is such as to encourage that; and while no details were given over the radio, I hope those administering the price ceiling will make it sufficiently elastic so that every possible pound of these products may be made, so that this year we may again decorate the Smithfield market and all the other markets of the United Kingdom with these commodities.
We have the Minister of Finance (Mr. Ilsley) who comes from the maritime provinces, as does my hon. leader (Mr. Hanson), the hon. member for Queens-Lunenburg (Mr. Kinley), who spoke last evening, and one or two other hon. members at present in the house. Referring to the maritimes as a geographical section of our country, it is simply too bad that the people of those provinces cannot produce enough meat prod^ ucts to feed themselves. They are producing only a little more than half what is required to meet their own requirements. We in Canada may have to go on rations if we hope to be able to send large quantities of some meat products to Britain under this measure. Even our friends in Quebec do not produce sufficient meat products to feed themselves. Ontario and western Canada have to send some of their surplus to feed that half of our people. We should be sending all our surplus to Britain under this legislation. I have forgotten how many million pounds of bacon and pork products we are going to be short in our shipments to Britain this year; and next year we will be short four times that amount. In the kindest possible way I say to our friends from east of Montreal: grow every possible pound of meat products you can produce, in order that you may at least come close to feeding yourselves in this regard.
Britain is delivering the goods to us, and is cutting down the home consumption of certain commodities in order to do so. I am going to make one further suggestion, which I think perhaps has some constructive merit. Most of us have had the privilege of packing boxes for shipment overseas; I think eleven pounds is the limit we are allowed to send. Very often we put in those boxes English biscuits, English marmalades, English pipes and tobaccos-this Storm King pipe, for example,

is English-English Rolls razors and razor blades, English plum puddings, and tea packed in England. Undoubtedly many of these things were sent back to England, particularly at Christmas time. The Postmaster General will know the correct figure, but I am sure at least 400,000 parcels have been sent to our boys overseas; and at the low valuation of $5 each this would mean $2,000,000 worth of products. Well, if only one-quarter of that total consisted of English goods there would be a saving in shipping space back and forth equal to what would be required for half a million dollars' worth of merchandise. Surely it would not be a very big job to set up and control, perhaps through our high commissioner's office in England, a depot from which these delicacies -and they are delicacies, because the people of no other country know how to pack these particular articles-could be distributed. There could be a clearing station there, so that we in Canada could give Britain our Canadian dollars-and we are glad to do it-and an agency there could pack and ship the goods to our boys. England must deliver goods to us, but she could do so in this way, so that these candied fruits and other things that we send our boys could be delivered there. At the Chateau Laurier to-day I picked up a package of tobacco that came from England-


Mr. REID:: Would not most of these articles have come to Canada prior to the war?


Joseph Henry Harris: I was looking at the import figures, and they are still coming in very substantial measure. I could hardly catch what my hon. friend said, because of the Scotch burr in his voice. I am quite sure the Scotch goods are coming over in ever-increasing quantities, though I hope they are not being shipped back to our boys in the overseas parcels.
Then another thought occurred to me, to which I gave expression on a previous occasion, concerning the same problem that faced us in regard to producing sufficient of certain commodities to satisfy our own Canadian requirements. That had to do with people in England in the sixty to seventy year old bracket, who find themselves without vocations due to the fact that their plants have been bombed out, and there is no hope of being able to rebuild them until after the war. Many of these people have expert knowledge, not of running machines, fol I am not thinking of mechanics, but of processes in different lines of industry such as the manufacture of soap, if you like, or something like that. At the same time similar industries in Canada are faced with a shortage of machinery and equip-

War Appropriation-Mr. Harris (Danjorth)
ment. So that the possibility of transplanting entire industries to Canada, together with some of the older or handicapped men who might be spared, in my opinion is something to which we should give thought, and to which encouragement could be given under this legislation.
I want to warn our people about the complacency which seems to possess them. As the hon. member for Vancouver South (Mr. Green) said, they seem to think that "it can't happen here." It can happen here, and we must stir up our people to greater activities in every line of endeavour. Even the people in our financial circles seem to take things for granted. I hold in my hand a card which a man presented to me in my office in 1938, the year before war was declared. He asked for his card back, but when I saw what was on it I retained it and I still have it. He earned with him an introduction from one of the banks of Canada backing him to the extent of $100,000 in any transaction that he might consummate. This cards reads as follows:
Dr. Ing. Ernst H. Bluman
Director der Vereinigte Stearinwerke G.M.B.H.
Hamburg, Germany, Tel. 34.6021/23.
That means that he was a director of the stearine manufacturing industries of Germany. His address on this continent was the hotel Gladstone, 114 East 52nd Street, New York city. This was just before the war, and yet this gentleman, who was a high ranking officer in the German army, was backed to the extent of $100,000 by one of our financial institutions. Perhaps I may explain that stearic acid comes from the manufacture of glycerine. One hundred pounds of stearine makes thirteen pounds of glycerine and eighty-seven pounds of stearic acid. I cannot help but think of the complacency of the head of that financial institution who just before the war was quite willing to introduce a German spy to industry in this country. It just shows that this complacency is not found just among our ordinary citizens; it seems to have entered into the whole fabric of the Canadian people. This illustration may not be the right sort to use, but it just shows how we are thinking.
In my opinion we are not doing nearly enough. Why not? Not only do those of us who sit on this side of the house find it difficult to find places to exercise our talents, if we have any; there does not seem to be any power emanating from this chamber which is ready to tap the people on the shoulder and tell them that they must do such and so. I think something my hon. leader said fits the occasion better than anything I can think of. We seem to be surrounded by a sense of frustration. During the sittings of the war expenditures committee last summer certain hon. members seemed to feel that at times they hac a political duty to perform. That spirit wai not apparent very much, but it was apparent too much. I see evidence in this chamber every day that hon. members think they have a political function to perform for their own particular party. They do not nail to the mast-head a really all-out war effort. If we are going to win through we must submerge our own narrow partisan viewpoints and give to Canada more and more of an all-out war effort. If we do that, others will follow our example; others will be encouraged to do likewise. The Right Honourable Winston Churchill referred to those who sit back, the slackers. The day has come when we must tap them on the shoulder and tell them what they must do.
I am satisfied that we are going to win through. I am optimistic about that. We must do away with any idea that this is a land of afternoon pink tea parties, or, as someone mentioned, a land of cocktail parties. There is no room here for pink tea Johnnies and others who attend such functions. We are in a very serious business. Therefore I entreat all members of the house, all the people of Canada, to knuckle down to a really all-out war effort.
It matters not if my grandparents came from England a hundred years ago and yours came from some other country four hundred years ago; we are equally Canadian. I implore my hon. friend, who I see has just come back into the chamber, not to talk about 1666. We will stand side by side with you, not only here in Canada to protect this country but in the first line of defence in the United Kingdom. I say to my hon. friend that the St. Lawrence river and the gulf of St. Lawrence will not always be packed with ice; there will come a bright, sunny day when something may slip up that river. Then you will be in difficulty and rve will not be nearly as complacent about what our duty is with regard to Canada. The descendants of those who came here with Wolfe's highlanders and fought on the plains of Abraham, of those who came over on the steamship Hector many generations ago- their great grandparents are buried here. They are anxious to protect this land. They realize where the first line of defence is. What obtains in the east obtains to the same degree, if not more so, on the west coast.
Our first line of defence will not be just the west coast line, although it is a line of defence; it is likely to be 'back in the Rocky mountains. We must show a united front. I want to be able to answer this letter from overseas and tell the men over there not to be perplexed about -what Canada is going to do. This perplexity comes from utterances such as those

War Appropriation

of the hon. member for Temiscouata. Let us all fight in the first line of defence so that civilization as we know it may survive and not be placed under the heel of the dictator.


Georges Parent: Shall the motion carry?
Mr. LaCROIX (Quebec-Montmorency): On division.
Motion agreed to on division and the house went into committee, Mr. Bradette in the chair.


Richard Burpee Hanson: There
were certain things which during the course of my few remarks I suggested might be explained by the minister. I think I was under a misapprehension with respect to the nature of the $700,000,000 item. Upon reading the minister's remarks I should like to ascertain whether the sterling assembled in England amounting to $700,000,000 represents domestic securities of Canada which were issued in sterling currency and held by British nationals and vested in the British government under the treasury order referred to, or does it represent dominion or dominion guaranteed securities. These securities are being held as collateral for the obligations of the British government, which are to be expressed in terms of Canadian dollars. I should like to have this point made plain.
I think the minister should tell the house and the people of Canada just how it is proposed to . spend this money-just how much will be in one category, how much will be in another, and under Whose auspices the purchases are to be made. Are they to be on requisition of supplies from the British government, or are we to be on our own in procuring these supplies? I assume that some plan has been prepared. If not, a plan should be prepared, and we should be told not only in general but with some particularity the government's proposals for the expenditure of this money. It is a huge sum of money and, as has been correctly stated, it, or at least a substantial part of it, will be added to the debt of this country. Doubtless some of the money will be obtained by taxation. I may have something to say about that method of raising the money at a later stage, but not now, because I do not want to delay the committee. But having adopted the principle of this billion dollar gift, which, after all, is not a gift but the payment of an obligation, we should have from the minister some statement of how the money is to be allocated.
First I think we should have a statement of how the minister proposes to raise the money. I am not going to follow the suggestion made by the hon. member for Lethbridge, that the money should be raised by his

particular brand of financing, but I do say we should know how much we are to borrow and how much we are to raise by taxation. Then how much does the minister estimate will flow back into the federal treasury and into provincial and municipal treasuries by way of taxation, because I anticipate that a very large portion of this money will come back into provincial and municipal treasuries and thq greater portion reflow into the federal treasury.
I am at the moment thinking of the control of this expenditure. It is important that we be told what control there is to be of the expenditure. I am assuming that the government already has a plan and that the minister will reveal it here to-day or at some stage of the proceedings.
I am wondering whether there is going to be any politics in the expenditure of this money. I hope not; but having regard to what has occurred in days gone by-not so much now as in the earlier stages of the war-we should be told whether or not there is to be any politics in this expenditure. I do know that there has been injected) into our spending the question of political expediency. I do not think there is nearly as much politics to-day in the expenditure of moneys voted by parliament for the war effort as there was in the earlier stages, but I am telling the house and the country that so far as the peace-time activities of the government are concerned, there is still a selected list and the government's peace-time expenditures are still being made on the basis of political friendship. There are still standing in the public offices of this country selected lists of persons who are to be asked to do thus and so for a consideration from the public treasury; and other people, just as in peace time, have no right even to be asked if they are willing to supply the goods.
With respect to foodstuffs, will the principle of public tender be invoked, and to what extent? I have just heard a startling rumour, and I am going to ask the minister if it is correct, that the Department of Finance is no longer giving information, after a contract is let, and after the contract is completed-[DOT] contracts that may have been let under the tender system-and I ask the minister whether it is true that they will not now give information as to what the competitive bids were. I am afraid that rumour is only too well founded, but if it is not, the minister will correct me and make the position abundantly clear. If it is correct, the ordinary peacetime modus operandi of government expenditures has now gone by the board. We no longer have details of government expenditure

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appearing in the auditor general's report. That is abundantly clear to everyone who looks at the report. How much do you know from that report about the ordinary peacetime expenditures of this country? Certain large items appear, we know, but just how much do the Canadian people know of where the money is going.
I had a communication from a distinguished Canadian to-day with regard to the moneys that were raised in the recent victory loan campaign in a particular province which had done, I thought, exceptionally well. Now that the loan is over, I think the Canadian people are to be congratulated upon having responded in the magnificent way they did to the country's call-assuming that you approve this method of financing, which I think most of us do. But this distinguished Canadian said to me: "What are you doing to see that this money is properly expended and that we get one hundred cents of value for every dollar of it that is spent?" That was a question which caused me to pause and ask myself, what am I doing? I have some responsibility; you have some responsibility; and the responsibility is on the minister above everyone else because he is the watch dog of the treasury.
I think the Canadian people ought to have from the minister a statement of government policy, and one of the fundamental things the minister should tell us is that political partisanship, political favouritism, is barred in connection with the expenditure of the money that was raised by taxation and loans from the whole Canadian people. We have still got the party system in Canada. How can a government which carries on under that system divorce itself from all the curses that go with that system? That is the question I put to the Minister of Finance. How far has the government divested itself of that in war time? We know that in the first two months of the war our war effort was a moderate effort. I am not going to go back over that, but we know that after Dunkirk and the fall of France, about June, 1940, this government increased the tempo of Canada's war effort.
What was their criterion at that time as to finance and the expenditure of public money? The only criterion was the speed- how quickly could we get this thing done?. I do not ask hon. members to take my word for it; I ask them to accept the words of the Minister of National Defence for Air, who from his place in this chamber made what was, I think, the most candid declaration I ever heard by a cabinet minister. He said that the chief thought behind the effort of the government, of his department in par-
44561- 96 V
ticular-and1 I think he was speaking more particularly of his department-was speed, and that they were not giving any consideration to the question of value received.


James Lorimer Ilsley: I do not think he said that.


Richard Burpee Hanson: Well,
probably I am going just a little too far. But I know this-


Karl Kenneth Homuth: "Less consideration", he said.


Richard Burpee Hanson: On a comparative basis, that speed andi nothing else was the motivating principle.


James Lorimer Ilsley: He did not say "nothing else".


Richard Burpee Hanson: That was the underlying theme of the minister's statement. I have not his words in front of me; these thoughts just came to me when I was speaking. But is there anyone here who heard him who does not remember that that was the factor on which he laid stress; that that was the motivating factor of the government- of his department, at all events-to get speed, without particular regard, I will say, to the question of value received?
I want the minister to be as candid with this committee as it is possible for him to be. The Canadian people, I believe, trust the Minister of Finance; most of them think he has done a pretty good job. I think so. I am candid; I want to say that. The minister has an enormous burden on his shoulders. But he is the headi of the treasury, responsible to the people of Canada. He is the man who asks them to furnish him with the money, and they look to him to see to it that they get value for their money. Are they getting it? Are the administrators of the armed forces showing an example to the people of Canada in preserving commodities which are scarce? I have a letter to-day with respect to this very question of gasoline rationing and the allied question of rubber saving, pointing out to me-what I know from personal observation-that in the army, in the administrative staffs at these various places, nobody walks: if they have to go two blocks they ride in an automobile which the government services with gasoline.


John Ritchie MacNicol: And leave the engine running.


Richard Burpee Hanson: Yes. In front of my own home in the city of Fredericton is a military hospital the use of which has been donated by connections of mine free of charge to the government. I have counted ten automobiles in front of that
War Appropriation

hospital in the winter time, several of them with the engines running. Nobody walks but the buck private.


Mr. GRAY:: 'Twas ever thus.


Richard Burpee Hanson: That is a confession of defeat-to say that it was ever thus. Somebody must take hold of this situation.


Ross Wilfred Gray: I am not condoning it.


Richard Burpee Hanson: I know. I agree; you and I are not condoning it. I cannot stop it, but I am asking the government to do something about it. To say that it was ever thus is the confession of a defeatist. Let us not be defeatist. Let us put our hands to the plough here to-day and say that waste-waste of the people's money, waste of scarce gasoline, wastage in every line-shall henceforth be taboo.
I had not intended to say anything like as much as I have said. But I want the minister to tell us how he proposes to spend this money-under what auspices, by what means -and give us a reassurance that it is not to be spent to build up the fortunes of the Liberal party.
In the days of peace we would never have thought of passing an appropriation for 810,000,000 for expenditure by order in council without having all kinds of guarantees of how it would be spent-by a public tender system and what not. But we have departed from the well-known paths of duty to the Canadian taxpayer with respect to the expenditure of public money, because of the pressure of war. My friend the hon. member for Davenport calls attention to what occurred in 1930 in this very chamber, when the prime minister of the day asked for an appropriation of $20,000,000 for relief. I see in front of me three hon. gentlemen who were sitting over here at the time. They will recall-and I am not complaining about this-how for thirty days or more that appropriation was held up, when there were people who had been denied relief and were actually hungry. I do not say that my hon. friends exceeded their duty. I always thought they went a little beyond what was necessary. But they were playing politics in a large degree at that time-


John Ritchie MacNicol: Nothing else.


Richard Burpee Hanson: -and that was part of the game. The situation is different now for all of us, and I ask the Minister of Finance to give this committee a reassuring statement with respect to the principle for which I am trying to contend in a rather haphazard and discursive way.

We support the principle of this measure. We do it with the best of good-will for the o'bjective which the government has. Now reassure us that the people's money will be properly expended. Tell us how you propose to do it.


James Lorimer Ilsley: I will begin by dealing with the earlier points. The leader of the opposition asked me about the vesting of securities.


Richard Burpee Hanson: That is a
technical matter.


James Lorimer Ilsley: All I can say is that the government and railway securities which we propose to repatriate are being vested, as it is called, in the British government; that operation will take place or be completed on the twenty-third day of this month, and we are very anxious to get the securities here as soon after that date as possible. That is one of the reasons why I asked the house to facilitate the passing of this bill before the Easter recess.
Of course there is another reason. The effective date of the beginning of this gift will be early in March, and to the extent of 870,000,000 or $80,000,000 this bill has the character of a supplementary appropriation. For that reason also I should like to have it passed by the house before the Easter recess.
With regard to the arrangements for the expenditure of the money, the ordering of goods from Canada by Great Britain will go on, so far as I know, in the coming year just as it has in the past.


Richard Burpee Hanson: Through the same agencies?


James Lorimer Ilsley: Through the same agencies. The wheat board will continue to make sales of wheat through the agencies which they use, the agency of the British government which buys wheat.


Richard Burpee Hanson: In that connection, is there any information with respect to how much wheat they will take-


James Lorimer Ilsley: No.


Richard Burpee Hanson: -having regard to what is occurring in Great Britain? The minister knows, does he not, that the British government are accelerating by bonus and otherwise the production of more wheat in England. On the other hand they are cutting down the consumption of wheat flour in bread.


James Lorimer Ilsley: I do not know how much wheat England will take. Something will depend on shipping conditions, among other factors; but no matter how much Great

TFo)' Appropriation
Britain stimulates the domestic production of wheat she will take a substantial quantity of wheat from Canada if it is possible for us to ship it. With regard to the main purchases by the United Kingdom in Canada, they are made through the agency of the Canadian Department of Munitions and Supply, which buys in Canada for the United Kingdom government, and that will continue in the future as in the past. There will be no change, so far as I know, or have heard, in the channels of supply of goods or in the arrangements for the ordering, the purchase and supply of goods to Great Britain. There will be a price on all these goods. They will be sold at prices as usual. The price of bacon will be fixed; I think I am correct in saying that it has been fixed for the year beginning the first of October, if I remember rightly. The price of cheese either has been or will be fixed; and the wheat board will make its sales of wheat having regard to the regular market considerations which affect the price.


Richard Burpee Hanson: What are those conditions to-day in regard to wheat?


James Lorimer Ilsley: That is not in my department and I would not care to go into that. I do not want to get on to wheat again if I can help it; but so far as arrangements are concerned, no new arrangements are contemplated. The hon. gentleman said something about the importance of getting value for the money that is spent by the Canadian government. Needless to say,, I wholly agree with him in that, so much so that when I get the kind of letters that all of us receive, and which he gets, pointing out instances of what is or appears to be extravagance in governmental expenditures, I always take it up with the departments concerned, and in practically all cases there is a fairly satisfactory explanation. I do not want to get deflected into petty details at all, but as an example I might mention an incident that came to my notice not long ago which impressed me. A letter was received from the secretary of an organization in one of the western cities, a lady, who said that her organization had been promoting the sale of war savings certificates and one of the main obstacles they had to encounter was the feeling among the merchants of the city that the government had been extravagant in the furnishing of officers' quarters at a manning pool in the city; and some details were given which showed a rather luxurious scale of furnishing of the quarters, or so I thought. I took that up with the Department of National Defence for Air and I found that the expenditure by the government there had been, if I remember correctly, just under $3,000 and the expenditure of donated money had been about $6,000.


John Ritchie MacNicol: Would it be excusable to squander donated money?


James Lorimer Ilsley: The money was not donated to the government and the government had no control over it.


Mr. MacINNIS:: It would be given to the officers.
Mr. ILSLEY; Yes; it was money given these, men to buy chesterfields-


John Ritchie MacNicol: They should not be allowed to do it in war time.


James Lorimer Ilsley: -furniture, and so forth. These ladies who were trying to sell war savings certificates ran into the complaint everywhere they went, that the government had spent all this money, and I was able to clear that up. I gave that as an instance to show that in a great many cases which I have taken up with the spending departments the complaint has been susceptible of explanation and has been explained. I pointed out to my correspondents that in a huge war effort such as ours there will be a great many individuals in responsible positions whose performance will be far from perfection, and whose operations are not amenable to complete control, and that therefore there will be some money wasted. But all I can say is that I believe my colleagues do the best they can to keep as tight a rein as possible on expenditures. The great spending department is the Department of Munitions and Supply and I have a great deal of confidence in that department. The leader of the opposition asked if there were not patronage lists. He did not use that term but he described patronage lists pretty accurately in the language he used. So far as I am aware, there have been no patronage lists from the beginning of the war, and I do not think that is the case. If you will look at the personnel of the Department of Munitions and Supply I do not think-[DOT]


Richard Burpee Hanson: I am not speaking of war expenditures at all but of ordinary peace-time expenditures.


James Lorimer Ilsley: Taking ordinary peace-time expenditures-


Richard Burpee Hanson: Go to
Fredericton and see where the experimental .farm buy their requirements-from Mr. W. G. Clark, who is the lieutenant-governor of the province.


James Lorimer Ilsley: I do not know about nonwar expenditures. As a matter of fact I have not felt any particular obligation to go into that question as Minister of Finance, in regard to non-war expenditures. I presume that the normal practices prevail, which might have
War Appropriation

been exceptionable in some instances. But on the whole there has been nothing to complain of. For the most part tenders were called for, the opposition criticized them in the bouse, and the government was called upon to produce papers, answer questions, and so forth. But one thing we have done which was not done in the last war-and I do not say this for the sake of making a party comparison. I say it in order to show that there has been an advance in public morale, in what the public will stand for, if I may put it that way. In war expenditures, in anything connected with the war, we have made from the beginning a strong point of the principle that there should not be any politics in it. We have had some little trouble with some of our people because they do not always agree with that. But so far as I am concerned, so far as my colleagues also are concerned, we have repeatedly taken the position that we cannot ask the people to put up huge sums of money for a war which is a war of all the people of the dominion and have any favouritism as between parties in the expenditure of that war money. And so far as I know there has not been any. There may be some instances that the hon. gentleman knows of that I do not. But as I recall it he has asked this question, and has gone so far as to make it more than a question; he has made it a statement once or twice in previous years, and I always thought the explanations he got from the Minister of National Defence and others were pretty satisfactory.


John Ritchie MacNicol: I suppose the black eye said to have been handed out a few days ago-


James Lorimer Ilsley: I do not know about that.


John Ritchie MacNicol: -when a certain gentleman called at a ministerial office, is evidence that it is not occurring in that department.


Richard Burpee Hanson: Would the minister outline the system of treasury control? The Department of Munitions and Supply get a requisition, I understand, from the Department of National Defence for certain articles which they buy. What is the method of treasury control in relation thereto?


James Lorimer Ilsley: The money is voted by parliament in the war appropriation. It is allocated to the Department of National Defence in accordance with the draft estimates submitted by that department and approved by the treasury board. The Department of National Defence requisitions the purchase by the Department of Munitions and Supply and that department makes the purchase. If the transaction is of any considerable size it is

done by order in council. If it is under $15,000-I think that is the amount now; it used to be $5,000-the Department of Munitions and Supply simply make the purchase themselves without taking the matter to council. Periodically all purchases involving expenditures of under $15,000 are reported to council.
Purchases and contracts involving more than $15,000 are extremely numerous. I do not know how many thousands of them there are a month, but the number is large. They go before the governor in council, and as an internal arrangement a committee of the ministers known as the business committee of the cabinet passes on those orders in council before they go to the cabinet proper. It is impossible for a high degree of check to be undertaken by the business committee of the cabinet or by the cabinet itself. When I sat in that committee, which I did a good many months ago,
I was always impressed by the great care which the Department of Munitions and Supply took in entering into any transaction to see that it was at least defensible. If there was anything wrong with the transaction it never appeared in what came before the business committee. It looked like a prudent and businesslike arrangement.


Richard Burpee Hanson: One would not expect them to present it to the treasury if there was anything wrong.


James Lorimer Ilsley: I do not believe there is
much if anything wrong. I think that depart-, ment has a great deal of business talent in it and no politics at all. If one looks into the political affiliations or party records of the senior officials, or the junior officials for that matter, of that department, he will find that they are not of the political complexion of the party now in power.


Richard Burpee Hanson: They must be all right, then. One thing more. There is a system of treasury control in connection with all these war expenditures. I am not sure just how it operates. These men are here, there and everywhere. I have heard of them being in factories-


James Lorimer Ilsley: Oh, yes.


Richard Burpee Hanson: -in con- . nection with cost-plus contracts. What is that system?


James Lorimer Ilsley: That is the comptroller of the treasury, the finance department, Mr. McIntyre. No money is paid out unless there is authority for the payment and evidence which justifies him in paying the money, that is proper invoices, certificates and so on. He has his men everywhere all over Canada in every department. These, while they

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appear to be officers or are technically officers of the various departments, are really officers of the Department of Finance.


Richard Burpee Hanson: How are they appointed?


James Lorimer Ilsley: They are appointed by the civil service commission for the most part- wholly I think. That staff of the comptroller of the treasury is a very large staff.
As to the cost accounting, there are certain contracts which are made on this basis by the Department of Munitions and Supply; a price is set-


Richard Burpee Hanson: A target.


James Lorimer Ilsley: There are these target price contracts; that is a peculiar type of contract. Prices are set; tenders are not asked, but the supplier says, "That is what it is worth, I think". The department thinks that is what the service or the work is worth and the department agrees to pay so much. But it is usual to have in a contract where there are no tenders a provision that the books of the company may be examined and, if the profit is excessive, it may be reduced to a certain figure, perhaps a percentage of the cost or a percentage of something. Wherever there is ground for thinking that the profit is excessive, these accountants representing the Department of Finance go and examine the company's books, and in some instances reduce the price.


Richard Burpee Hanson: Has that actually happened?


James Lorimer Ilsley: Oh, yes.


Richard Burpee Hanson: I have seen some of these contracts. I had specimen contracts delivered to me by the Department of Munitions and Supply, and as a lawyer I want to compliment the man who drew them. They were good. I happened to know of the young man who, I think, was charged with the responsibility of polishing up those contracts, if not of initiating the draftsmanship. He is the son of an old schoolmaster of mine, and I wish I had his ability as a draftsman, although I used to plume myself in days when I was practising actively that I could draw a contract. But these contracts always imply that there will be a profit. That is quite proper. As to what is the measure of the profit I do not know. Occasions have arisen, I think, when there was a question as to the size of the profit. What is the principle upon which the government goes to-day? Is the limitation 5 per cent?


James Lorimer Ilsley: I do not know.


Richard Burpee Hanson: If the minister does not know I am not going to press it. By and large I think I agree with the minister that the contracts let by the . Department of Munitions and Supply have been let without regard to politics. But I will say this-and the minister will hear more about it when he goes home-that with respect to allocating contracts to various parts of the country, our part has been overlooked entirely. His own friends in New Brunswick are complaining about it. The attorney-general of New Brunswick made a speech in the legislature on Thursday in which he deplored the fact that no war contracts had come to that province.


Joseph-Arthur Bradette: It is six o'clock.


Joseph Henry Harris: Before you call it six o'clock, will the minister indicate whether he is going to be supported by some of the other ministers in getting this measure through the committee? What I have in mind is that some of the questions which some hon. members might like to ask relate to matters concerning other departments. Will the Minister of Agriculture (Mr. Gardiner) be in and the Minister of Munitions and Supply (Mr. Howe), or is the Minister of Finance going to handle the legislation alone.


James Lorimer Ilsley: I did not think I would have to ask any other ministers to come in on this. I realized that all the ministers would have to be in, at one time or another, on the $2,000,000,000 measure, but this is the matter of a gift to Britain, and I did not think it would be the appropriate measure on which to go into all the war expenditures of the government. The leader of the opposition raised some question about it to-day, and I answered his questions as best I could. I should, however, like to get this resolution out of committee as soon as possible, and then introduce the bill and get .on. There are several other measures on which hon. gentlemen can speak. I do not suppose I could get this out of committee to-night, could I, and make the bill available?


Richard Burpee Hanson: I am
agreeable, if no one else objects. I promised the minister I would help him through, and so far as I am concerned I am approving the resolution.
Resolution reported, read the second time and concurred in. Mr. Ilsley thereupon moved for leave to introduce Bill No. 15, for granting to his majesty aid for the purpose
James S. Woodsworth

of financing United Kingdom war requirements in Canada and1 for national defence and security.
Motion agreed to and bill read the first time.
On motion of Mr. Crerar the house adjourned at 6.05 p.m.
Monday, March 23, 1942