[Stage Direction]
Mr. HUGHES CLEAVER (Halton) presented the first report of the special committee on war expenditures, as follows: Your committee recommends that it be empowered:
1.	To sit while the house is sitting and notwithstanding any adjournment of the house, and to adjourn from place to place.

War Expenditures Committee
2.	To determine the manner and extent to which the evidence, proceedings and reports shall be printed or typed, and that where the same are ordered to be printed there be printed 500 copies in English and 200 copies in French, and that standing order 64 be suspended in relation thereto.
3.	To appoint subcommittees, to fix the quorum of any such subcommittee, and to refer to such subcommittee any of the matters referred to the committee; any subcommittee so appointed to have power to send for persons, papers and records and to examine witnesses under oath or otherwise, to sit while the house is sitting and notwithstanding any adjournment of the house, to adjourn from place to place, and to report from time to time to the committee.
4.	To employ such secretarial, reportorial, clerical and other assistance as it may deem necessary.
5.	In cases where considerations of national security preclude the publishing of certain recommendations and of the arguments upon which they are based, to address a memorandum to the Prime Minister for the consideration of the war cabinet, provided that the committee shall, whenever it has exercised such powers, report the fact as soon as possible to the house.
Your committee further recommends that during any adjournment of the house, its reports shall be deemed to have been tabled when filed with the clerk of the house and seven days have elapsed after the date of such filing.
Your committee further recommends that six members constitute a quorum, and that standing order 65 (3) be suspended in relation thereto.
All of which is respectfully submitted.
Mr. CLEAVER moved that the report be concurred in.
Mr. GRAYDON:: The hon. member for
Halton, who presented the report and now has moved concurrence in it, was good enough to speak to me this morning privately with request to the facilitation of the passing of this motion. At that time I did not know that there would be quite such a comprehensive report of the committee, and in view of the fact that it deals with a number of subjects, and that the committee has asked leave to continue to sit while the house is sitting and also in the adjournment, I would ask that the motion stand over in the usual way, so that the notice which is ordinarily required can be given.
Motion stands.



JAPANESE NATIONALS


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, I desire to table three copies of the supplementary agreement on immigration between Canada and Japan concluded in 1928-29. This was asked for by the hon. member for Vancouver South (Mr. Green).



BUSINESS OF THE HOUSE


Hon. N. A. McLARTY (Secretary of State):: Mr. Speaker, on Saturday the hon. leader of the opposition asked for a statement on the number of orders outstanding. The orders passed this session number 527, and the returns tabled 475. The returns outstanding are 52.
I now table a specific list of the outstanding returns to orders.


Gordon Graydon: May we expect the rest to be tabled before the end of the session?


Norman Alexander McLarty: There is certainly no intention to hold baok any information. Every possible effort is being made to see that as many as possible of the returns are tabled before the house adjourns.



QUESTIONS

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

Mr. BLACKMORE:: 1.	Has Major H. C. Singer, of Lethbridge, Alberta, preferred charges against Lieutenant W. C. Newman, a staff officer under Major-General Victor Odium, D.S.O., C.M.G., formerly of the 2nd Canadian Division?
2.	Have the appropriate officers notified Lieutenant W. C. Newman of the charges?
3.	Have the appropriate officers called a court-martial to try Lieutenant W. C. Newman?
4.	If so, has the date been set for the court-martial to be convened?
5.	If not, why not?


Mr. RALSTON:: 1.	Mr. H. C. Singer, formerly a major in the Canadian, Army, who had been dismissed from His Majesty's service by a sentence of general court-martial, in a letter dated November 20, 1942, from Lethbridge, Alberta, to the Officer Commanding Second Canadian Divisional Artillery, Canadian Army Overseas, made what such letter describes as "a set of charges against Lieutenant W. C. Newman" (now Captain W. C. Newman). The complaints were in connection with the performance by Lieutenant (now Captain) Newman of his duties as a Courts-Martial Officer of the 2nd Canadian Division and in connection with the evidence given by him in the court-martial proceedings against Major (now Mr.) Singer. The general officer commanding, Second Canadian Division, reported to Canadian military headquarters, England, that he was satisfied that all the charges made by Mr. Singer were without foundation in fact. The appropriate military authorities took no action against Lieutenant (now Captain) Newman.
2.	3, 4 and 5. Answered by No. 1.
Questions



SELECTIVE SERVICE-LABOUR SUPPLY BRANCH


Mr. CASTLEDEN:: 1.	What was the total amount paid by way of freight assistance on western feed grains during the fiscal year 1942-1943?
2.	What flour milling companies were paid freight assistance on western feed grains?
3.	How much was paid to each of the above companies under this item?


Mr. GARDINER:: 1. 89,963,161.66.
2 and 3. Flour milling companies receiving
freight assistance payments direct from department-
Amount
paid
Name and address	1942-43
Alliston Milling Co., Alliston,
Ontario	$	2,357 40
Almonte Flour Mills Co., Almonte,
Ontario	 11,414	23
Aurora Flour Mills, Aurora, Ont..	5,802 62
Acton Estate (Smithville Flour
Mills), Smithville, Ont	 783 79
Barrie Flour Mills, Barrie, Ont... 7,002 73 Brigden Milling Co., Brigden, Ont. 3,140 51 Caledonia Milling Co., Caledonia,
Ontario	 9,445	00
Campbell & MoNab, Douglas, Ont.	3,501 57
Chalmers Milling Co. Ltd., 10
Dawes Road, Toronto, Ont		2,724	51
Cherry, S. J. & Sons, Ltd., Preston,
Ontario	
12,360	66Collingwood Milling Co., Collingwood, Ontario	
2,537	15
Copeland Flour Mills Co. Ltd.,
Midland, Ontario	 60,421	83
Eclipse Milling Co., Cheltenham,
Ontario	 77	37
Elder Flour Mills Ltd., 1050 King
St. W., Toronto, Ont	 693	77
Godbout Milling Co., Dundas,
Ontario	 837	37
Great Star Milling Co. Ltd., St.
Marys, Ontario	 27,025	40
Hawken Milling Co., Wallaceburg,
Ontario	 4,455	92
Hayhoe Brothers, Pine Grove, Ont.	863 04
Hunt Milling Corp. Ltd., London,
Ontario	 4,590	69
Wm. Knechtel & Sons Ltd., Hanover, Ontario	 33,048 65
King Milling Co. Ltd., Sarnia, Ont. 9,713 07 Lake of the Woods Milling Co.
Ltd., 460 St. John St., Montreal 511,506 46 Lakeside Milling Co. Ltd., Halifax, N.S	 80,251	12
McCarthy Milling Co. Ltd.,
Streetsville, Ont	 30,793	62
McDonald & Robb, Valleyfield,
Quebec	
7,965	77Maple Leaf Milling Co. Ltd., 309 Dominion Bank Bldg., Toronto.	594,239	01Milton Flour Mills, Milton, Ont..	9,026	09
Ogilvie Flour Mills Co. Ltd., Sun
Life Bldg., Montreal	
579,112	02Orillia Milling Co., Orillia, Ont...	368	81
Quaker Oats Co., Peterborough,
Ontario	 404,071	52
Reid Milling Co., Streetsville,
Ontario	 2,577	18
Robin Hood Flour Mills Co. Ltd.,
Board of Trade Bldg., Montreal	755,922	94Royal Milling Co., Chesley, Ont.	5,987	65
Saint John Milling Co. Ltd., Saint
John, N.B	 199,854	56
St. Lawrence Flour Mills Co. Ltd.,
2110 Notre Dame Ave. W.,
Montreal	'	 224,138 84
Snider Flour Milling Co. Ltd.,
St. Jacobs, Ontario	
20,550	43Strathroy Flour Mills Co., Strathroy, Ontario	
8,568	68
Swift Current Flour Mills Ltd.,
Swift Current	
836	90Tavistock Milling Co. Ltd., Tavistock, Ontario	
27,159	76
Taylor, T. H. & Co. Ltd., Chatham,
Ontario	
6,108	44Treleaven, W. E., Lucknow,	Ont.	5,985	66Tuer Milling Co., Alliston,Ontario	171	54
Vanstone, F. C., Bowmanville,
Ontario	 5,763	22
Western Canada Flour Mills Co.
Ltd., McPherson Ave., Toronto	630,351	41
Wiarton Flour Mills, Wiarton,
Ontario	 617	20


$4,314,726 11 COURT-MARTIAL OF MAJOR H. C. SINOER- BRIGADIER-GENERAL C. B. TOPP
Mr. BLACK MORE:: 1.	Has Major H. C. Singer, of Lethbridge, Alberta, preferred charges against Brigadier C. B. Topp for dereliction of duty in connection with the court-martial of Major H. C. Singer?
2.	Have the appropriate officers notified Brigadier C. B. Topp of the charges?
3.	Have the appropriate officers called a court-martial to try Brigadier C. B. Topp?
4.	If so, has the date been set for the court-martial to be convened?
5.	If not, w*hy not?
Questions


Mr. RALSTON:: 1.	Mr. H. C. Singer, formerly a major in the Canadian Army, who had been dismissed from His Majesty's service by a sentence of general court-martial held in England and of which Brigadier C. B. Topp was president, in a letter dated July 11, 1942, from Lethbridge, Alberta, to district officer commanding, military district No. 11, Victoria, B.C., and to the judge advocate general, Ottawa, Ontario, (information), enclosed what said letter described as "a charge sheet and particulars against Brigadier C. B. Topp". The letter went on to state that "they will furnish a basis for investigation or court of inquiry; the matter of which is left in your hands". The judge advocate general considered that there was no foundation, either in law or in fact, for the so-called charges made by Mr. Singer. The appropriate military authorities took no action against Brigadier Topp.
2,	3, 4 and 5 answered by No. 1.


SUGAR FOR CANNING PURPOSES
Mr. EMMERSON:: 1.	What quantity of sugar for canning purposes was provided by the government for the people of Canada for the year 1943?
2.	Was this quantity estimated on a per capita basis?
3.	Into how many sugar rationing areas was
Canada divided?	.
4.	Did all sugar rationing areas receive their allotment on an equal per capita basis?
5.	Into how many sugar rationing areas was New Brunswick divided?
6.	What are the names of the members of the sugar rationing board for Westmorland county?


Mr. ILSLEY:: 1.	One hundred million pounds.
2.	No. This quantity was determined by the available supply.
3.	Sugar for canning was distributed through 555 local ration boards.
4.	Each area received its allotment on a pro rata basis of the number of persons in the household of those applying.
5.	Fifteen.
6.	There are two local ration boards in Westmorland county, one at Moncton and one at Sackville. The names of the members of the boards are as follows:
Mayor H. A. Beale, chairman, Sackville, N.B.; Mrs. Doris.Gass, secretary, town office, Sackville, N.B.; Mrs. Gordon O'Brien, member, Bridge st., Sackville, NJJ.; Mrs. R. E. Scott, member, Main st., Sackville, N.B.; F. Roy Durling, member, Charlotte st., Sackville, N.B.; Albert J. Colpitts, member, Mount Allison University farm, Sackville, N.B.; Fred Locke, member, Main st., Sackville, N.B.; George Moore, member, Port Elgin, N.B.; A. Floyd Atkinson, member, Weldon st., Sackville, N.B.

Mayor F. W. Storey, chairman, 49 Bromley st., Moncton, N.B.; J. E. Hoover, vice-chairman, 119 Givan dr., Moncton, NJB.; L. T. Tingley, secretary, City Hall. Moncton, N.B.; Francis Murphy, member, 142 Alma st., Moncton, N.B.; Mrs. M. F. Tompkins, member, 1218 Main st., Moncton, N.B.:	J. Edgar
Surette, member, 759 Main st., Moncton, N.B.; B. E. Bent, member, Shediac, N.B.; E. C. Rice, member, Petitcodiac, N.B.; Mrs. Aida McAnn Bullard, member, 63 Bonaccord st., Moncton, N.B.; Robert Duncan, member, 123 Broadview, Moncton, N.B.


EGGS-BRITISH COLUMBIA
Mr. CRUICKSHANK:: 1.	How many eggs have been shipped from Alberta to British Columbia since the beginning of the year?
2.	How many eggs have been shipped from British Columbia for dehydrating purposes outside the province?
3.	Did the request for the importation of eggs from British Columbia come from the wholesalers? If not, on whose advice was this action taken?
4.	How many eggs are there in storage in British Columbia at the present time?


Mr. GARDINER:: 1.	Inspected shipments of eggs from Alberta to British Columbia from January 1 to June 30, 1943, were 556,020 dozen.
2.	36,000 dozen in 1943.
3.	The movement of Alberta eggs to British Columbia would result directly from orders from British Columbia buyers to Alberta shippers. The government exercises no jurisdiction.
4.	The July 1st report of the Dominion bureau of statistics lists no eggs in storage in British Columbia. Stocks on June 1st were 92,880 dozen.


SALE OF WHEAT TO CANADIAN MILLS
Mr. PERLEY:: How much wheat has the wheat board sold to the mills in Canada since 1st September, 1942, to date, and at what price per bushel for No. 1 northern basis Fort William?


Mr. MacKINNON (Edmonton West):: The Canadian mills buy the great bulk of their wheat requirements on the Winnipeg grain exchange. The Canadian wheat board is one of the sellers on that market and makes its sales at the ruling market prices. Therefore, it is quite impossible for the board to separate its sales to mills from sales made to other buyers in the futures market. Likewise, the mills buying in the futures market could not separate purchases from the board and purchases from other sellers.

Questions as Orders for Returns


PURCHASE OP GOLD FROM PRODUCERS
Mr. MacINNIS:: What amount of gold, in ounces, was purchased by the government from the producers in each year, 1932 to 1942?


Mr. ILSLEY:: Calendar Year	Fine Ounces
1932		 2,817,505-908
1933		 2,484,581-421
1934		 2,849,483-047
1935		 3,158,767-230
1936		 3,603,329-943
1937		 3,933,446-326
1938		 4,398,254-776
1939		 4,869,238-400
1940		 4,990,845-179
1941		 5.092,604-010
1942		 4,611,980-913
Note: Includes small amounts of scrap gold purchased by the Royal Canadian Mint.


SELECTIVE SERVICE-OPEN PERMIT SYSTEM
Mr. MacKINNON (Kootenay East):: 1.	When was the open permit system first adopted under the national selective service regulations, and why?
_ 2. How many of such open permits have been issued since the system was first put into effect?
3.	Is a record kept of each open permit when issued and when returned?
4.	If so, how many of such permits have been returned to date?
5.	What steps have been taken to check up on those to whom open permits have been issued and which have not been returned?


Mr. MITCHELL:: 1.	The introduction of open permits came into being in September, 1942, when all persons had to have permits to secure employment. The open permit idea was largely due to the volume of people going to offices to obtain permits, in some offices particularly. Other offices which had sufficient staff would not issue so many open permits.
2.	No figures available, since information is not kept separately from information as to ordinary permits. They are not widely used at present and policy is to keep number down.
3.	The usual record of all permits is kept.
4.	Information is not kept separately from information as to ordinary permits.
5.	Usually the permits are issued for a certain duration of time only and automatically are cancelled at the end of that time, very often good for only seven days.


SELECTIVE SERVICE-UNIVERSITY AND HIGH SCHOOL STUDENTS, BRITISH COLUMBIA
Mr. CRUICKSHANK:: 1.	Have any university and high school students in British Columbia been placed by the selective service board, between May 1 and July 1, 1943, (a) on farms; (b) in coal mines;
(c)	cutting wood fuel; (d) in sawmills; (e) in logging camps; (f) in shipyards; (g) in airplane plants; (h) in any other war industry?
2.	If so, how many iu each category?
3.	Have any men been laid off in war industries during the same period? If so, how many?
4.	Were these men transferred to shipyards or other war industries?
5.	If not, why were they not so placed?


Mr. MITCHELL:: 1.	Yes.
2.	Detailed information not available.
3.	No general lay-offs.
4.	All available men have been referred to shipyard and war industries.
5.	Not applicable.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. HANSELL:: 1.	What are the regulations, if any, in respect of embarkation leave to the armed forces?
2.	Is there any distinction made in the length of leave given according to location of the men in relationship to their homes?


FLOOD CONDITIONS-EASTERN TOWNSHIPS
Mr. POULIOT:: 1.	Did the government come to the relief of those who have suffered from a recent flood in the eastern townships, particularly in Coaticook?
2.	If so, what has been done?


R.C.A.F. PROMOTIONS
Mr. CASTLEDEN:: 1.	What is the basis for granting promotions to commissioned officers of the R.C.A.F. who are prisoners of war?
2.	Are promotions granted to n.c.o's who are prisoners of w-ar?
3.	How many promotions were granted to R.C.A.F. prisoners of war, (a) commissioned officers; (b) n.c.o's, during 1942?


PRODUCTION OF ALCOHOL FROM WHEAT, POTATOES, ETC.
Mr. WINKLER:: 1.	Has the government conducted experiments in the production of alcohol from wheat?
2.	If so, what would be the cost per gallon?
3.	What would be the cost using the cheapest suitable wheat on a basis comparable to the experiment?
4.	Have tests been made for the above, using potatoes? If so, what was the production cost of alcohol?
5.	Have tests been made using the by-products of the manufacture of paper? If so, have costs been worked out?

Questions as Orders for Returns


SELECTIVE SERVICE-COAL MINERS
Mr. ROSS (St. Paul's):: 1.	How many persons in Canada were designated as "coal miners" and actually were occupied as such, (a) at the outbreak of the present war; (b) on May 17, 1943?
2.	During the period from the outbreak of war until May 17, 1943, how many such coal miners, (a) enlisted for service in our armed forces; (b) left the mines to go into other occupations?
3.	Since May 17, 1943, how many coal miners have gone into, (a) the armed forces; (b) other occupations?
4.	From May 17, 1943, to date, how many coal miners have been returned to the mines, (a) from the armed forces; (b) from other occupations?


COLONEL 0. M. BIGGAR
Mr. BENCE:: 1.	Has Colonel O. M. Biggar acted as counsel and/or solicitor for the dominion government or any corporation owned or controlled by the government since September 1, 1939?
2.	If so, in how many cases?
3.	Did any of such cases involve questions of patents? If so, how many, and what was the style of cause in each case?
4.	What is the total amount of fees paid to him by the government or by corporations owned or controlled by the government since the above-mentioned date?
5.	What salary and expenses does he receive as director of censorship and what are the total amounts which have been received by him since he was appointed to that position?
6.	What salary and expenses does he receive as a member of the permanent joint board of defence and what are the total amounts which he has received since his appointment to the said board?


TORONTO SHIPBUILDING COMPANY
Mr. COLDWELL:: 1.	Did the government engage a prominent engineer to report upon the Toronto Shipbuilding Company?
2.	If so, has this report been received?
3 Was the report favourable or unfavourable to the company?


SYNTHETIC RUBBER-OFFER OF EXPERT ASSISTANCE FROM RUSSIA
Mr. WINKLER:: 1.	Did Russia in 1942 offer to send experts to Canada to direct technicians of Canadian government in the production of rubber from wheat?
2.	Did the Canadian government have possession of facts showing rubber could be made cheaper from wheat than from petroleum?
3.	Was the Russian offer, if any, refused?
4.	Has the government possession of the cost of alcohol derived from the following materials, (a) wheat; (b) potatoes; (c) imported molasses; (d) by-products and waste from the manufacture of paper? If so, what are these.


CONVERSION OF WOOD INTO FODDER AND ALCOHOL AND WOOD WASTE
Mr. COLDWELL:: 1.	Has the government been informed of processes discovered by Dr. Egon Glesinger and Schoeller Torensch for the conversion of wood and wood waste, through wood sugar, into fodder and alcohol?	_
2.	Has the government inquired into the production of a fifty per cent protein yeast manufactured from wood sugar?
3.	Has the government any information regarding the production of pure protein in Germany and Sweden by similar processes?


E. P. TAYLOR
Mr. COLDWELL:: 1.	Is Mr. E. P. Taylor, deputy to the Minister of Munitions and Supply, on the combined production and resources board of the united nations?
2.	Has the government bought any property
situated in the city of- Ottawa from Mr. E. P. Taylor?	.	.	, ,
3.	If so, what properties, when, and at what prices?



MOTIONS FOR PAPERS


Mr. FRASER (Peterborough West):: For a copy of all censorship orders, regulations or instructions issued under government authority since the outbreak of war.
Mr. LaFLECHE: For security reasons, and because our censorship works with censorships of other countries, while I should be very happy to supply this answer, there must be some reservations.


Gordon Graydon: This matter has been
before the house for some little time. I think the minister has spoken to this motion at least three times, asking that it stand over. This is the first intimation we have had that for security reasons or for any other reason than that the minister was waiting for someone in the censorship department to come back, the matter would not be.fully answered.
So far as security reasons are concerned, in view of the fact that the whole matter of censorship is one which is brought to light by a letter published in a newspaper from one who was prominently identified with the division of censorship in Ottawa, and that one of the directives was actually published at that time, surely the minister should be in a position to table these regulations and orders. The public has a perfect right to know what is being censored so far as this country is concerned. Even in war time there cannot be

Motions jor Papers-Censorship
any real objection to tabling the regulations, the instructions and the censorship orders, because, though there may be security reasons in respect to what is being censored, there can be no objection to tabling the regulations and orders and instructions issued under government authority and no possible reason why the government should decline to produce them. The public has a right to know what the government is doing with respect to censorship. There is confusion and conflict on every hand with regard to this matter. Even the Minister of Justice stated the other day in this chamber, in connection with a candidate in the provincial election in Ontario having made some remarks about judges in this country, that he was going to have the censorship applied. Surely the public is entitled to know what is going on in the censorship department. If it is suggested that there are security reasons behind it, that is an excuse and not a reason. The minister ought to take a different attitude from that.
Mr. LaFLECHE: I must reject the reasons or many of the reasons given by the leader of the opposition in his remarks just made. The position I take is that censorship is one of the arms of the services with which we cannot possibly win this war, and-


Some hon. MEMBERS:: Oh, oh.
Mr. LaFLECHE: Laugh, if you like. Evidently you are not particularly intent on winning the war.


Mr. COLDWELL:: I object to that. The minister made an error in his first sentence, which was rather amusing, and members laughed, and I object to the interpretation which he is putting upon it.
Mr. LaFLECHE: I am very sorry; of course the word should have been "without". I should have laughed with hon. members at myself, and I am capable of doing so. May I suggest to the members of the Cooperative Commonwealth Federation party that it is good to be able to laugh at oneself. I find that very amusing in regard to my own slip of the tongue. I come back to the serious matter of winning the war, and the necessity of censorship working properly. I wish very much that the leader of the opposition should understand that censorship is as necessary, as essential as battleships, aeroplanes and cannon.


Some hon. MEMBERS:: No.
Mr. LaFLECHE: I told him originally this morning-


Mr. SPEAKER:: Order. This is a nondebatable motion. It is not in order for the minister to make an argument but only to give his reasons for not making the return.


Major James William Coldwell: I think the house should press this motion as it stands. We are not discussing the advisability or inadvisability of censorship. We are asking for the tabling of orders, regulations or instructions under which censorship is done. This house has a right to know what those orders, regulations and instructions are. W.e have no right to ask for censored documents but we have a right to ask for the orders, regulations and instructions in question. May I say this while I am on my feet. Ministers have no right to say that they are exercising the usual reservations. There are no usual reservations.


Gordon Graydon: If the minister takes the position that he does not intend to table these orders, regulations or instructions, this party wishes to vote against that decision in order to show what its position is with respect to the whole matter involved.


Mr. BLACKMORE:: We have altogether too much resistance to the desire of the house for documents. We are in a position to judge what is in the public interest and we should have these orders returned.


William Lyon Mackenzie King: This is a very important motion. There is no intention on the part of the government to deny the house any information it should have, but I do know that there are some orders and regulations that have been a matter of correspondence between the British government and our own touching upon subjects that should not be made public at this time. What I would ask is that the house do not press this motion to-day but allow it to stand, and the leader of the opposition, the leaders of the other parties, the minister and I could have a talk about the matter together and we could bring it up again to-morrow.


Gordon Graydon: In answer to the Prime Minister, I have no objection to acceding to a reasonable request with respect to anything which might involve secrecy and security in connection with arrangements between the United Kingdom government and our own; but the Prime Minister will readily understand the position we take to-day on this question. The motion has been on the order paper for some considerable time, and

Motions for Papers-Censorship
what should have been done in the first instance by the minister responsible was to make the answer he has now made. 'Had that been done we should have had an opportunity at least of giving the matter some consideration. I would agree with the Prime Minister's suggestion on one ground only, that is, that this matter be dealt with by the house to-morrow. We are getting near the end of the session and cannot have delays because these matters cannot be deferred from day to day. , We have delayed far too long on this motion as it is and the debate on the war appropriation estimates may come on at any moment. We are now denied even such information as might normally be given apart from considerations of security in relation to the United Kingdom. In the meantime, I do not think it is fair to ask us to postpone the motion any longer than to-morrow. On that basis, perhaps I would be in agreement with the Prime Minister.


William Lyon Mackenzie King: Notices of
motions do not appear on the order paper to-morrow.


Gordon Graydon: I realize that, and that is why I raised the question.


William Lyon Mackenzie King: Notices of
motions appear on the order paper on Wednesday, and I do not wish to change the order of procedure; it might involve some other matters. I wish the house to understand that there are certain reservations that have to be made in the public interest in regard to this motion. I should be quite prepared to have the motion pass with those reservations.


Gordon Graydon: I am sorry to have to reply so often. Do I understand it this way, that the government is prepared to allow the motion to pass to-day on the condition that those matters which affect the United Kingdom in its relations with this country shall be subject to the reservation indicated? If that is so, I suggest that scarcely anything will be brought down. For security and other reasons which the government may advance, this motion would be rendered almost a negative one so far as we are concerned.


William Lyon Mackenzie King: I said I knew specifically about the United Kingdom. There are equally, I am perfectly sure, some reservations that would have to be made in connection with communications that relate to the United States and other allied countries. Anything that must be reserved

in the public interest, for reasons of public security, should be reserved under this motion. I am quite prepared to have the motion carry now, or be voted upon now, with that reservation. That is what the government is prepared to have done, to have the motion pass subject to the reservation of the right not to bring down anything which is not in the public interest in relation to the war and matters pertaining thereto.


Gordon Graydon: There is one matter the Prime Minister mentioned to which I would refer. We regard this as one of the most important questions that have come before the house for some time, and I suggest that rather than carry the motion on the terms suggested, it be brought up on Wednesday, seeing that it cannot be raised to-morrow, and that it should be the subject of conference among the leaders of the various parties; because I am not satisfied to allow the motion to go through with such a wide reservation as is asked , for. There would be nothing left but a skeleton by the time the meat was all taken off it.


William Lyon Mackenzie King: If the hon. gentleman has no confidence in the government and in my words as Prime Minister, let him vote on the motion at once.


Thomas Vien: Mr. Fraser (Peterborough West) moved, seconded by Mr. Ross (Souris):
That an order of the house do issue for a copy of all censorship orders, regulations or instructions issued under government authority since the outbreak of the war.
Those in favour of the motion will please rise.


Mr. MACKENZIE (Vancouver Centre):: On a point of order, before the count is called I suggest that the question be put to the house, first, on the motion and, second, on the motion as amended with the reservations that are necessary in the public interest.


Mr. STIRLING:: Can that be done?


Thomas Vien: The motion was put and the reservations were made by the Prime Minister. No amendment was moved to the motion. The reservations were refused by the leader of the opposition, therefore, only the motion is before the Chair.


Ian Alistair Mackenzie: So long as that is understood by hon. members, I am quite satisfied.


Gordon Graydon: If I may say a word in reply to the Prime Minister, the objection I had to the original proposal was based largely upon his own suggestion that the leaders of the parties might get together and see what was or was not in the public interest. Having in mind the fact that this suggestion was made, the Prime Minister at once jumped to his feet and said that we were impugning the honesty of the motives of the government, which of course no one had any desire to do, and the matter was put to a vote. I do not think there is anything very much separating us on that point.


William Lyon Mackenzie King: The record in Hansard will speak for itself. I think I made it perfectly clear that the government was prepared to accept the order immediately, subject to the one reservation that we would withhold anything that it was not in the public interest to disclose because of the prosecution of the war. Notwithstanding I had made that perfectly clear, my hon. friend pressed the matter further and said he was not prepared to accept what the government was prepared to give.


Gordon Graydon: But the Prime Minister must not forget that he suggested the leaders of the parties would get together to decide on that point, and I was perfectly agreeable to that.



NATIONAL SELECTIVE SERVICE-RESIGNATIONS

Gordon Knapman Fraser: For a copy of all letters, telegrams, correspondence, memoranda and other documents exchanged between the Minister of Labour, the deputy minister of labour, or any official of the Department of Labour, and any or each of the following persons:	S. T. Garside,
E. L. Grabill, L. Holland, L. McGillivray,
K.	McTaggart, Carl Reinke, Robert Taylor and
L.	A. Wright, since November 1, 1942, relating to the resignations of the said persons from the national selective service branch of the said department.
Physical Fitness Act



NATIONAL PHYSICAL FITNESS ACT


[Stage Direction]
Hon. IAN A. MACKENZIE (Minister of Pensions and National Health) moved that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to introduce a bill to provide for the promotion of the physical fitness of the people of Canada, the constitution of a national council on physical fitness to carry out such purpose, the establishment of a special account in the consolidated revenue fund out of moneys appropriated by parliament and the disbursement from such account of moneys required for the purposes of the act, including grants to the provinces under agreements that may be entered into.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.
Gordon Graydon: I realize that I am out of order in saying anything at this time, but I thought perhaps the minister would wish to make some statement with regard to the matter.


Ian Alistair Mackenzie: At the next sitting of the house.


Gordon Graydon: That will suit me fine.


[Stage Direction]
Motion agreed to.


William Lyon Mackenzie King: That when this house adjourns, on completion of current business of the session, it stand adjourned until Wednesday, January 26, 1944, at 3 o'clock in the afternoon, provided always that if it appears to the satisfaction of Mr. Speaker, after consultation with His Majesty's government, that the public interest requires that the house should meet at an earlier time during the adjournment, Mr. Speaker may give notice that he is so satisfied, and thereupon the house shall meet at the time stated in such notice, and shall transact its business as if it had been duly adjourned to that time.
He said: Hon. members will observe that except as to the date mentioned this motion is in identical terms with the motions which were carried at a similar stage during the last two sessions of parliament.


[Stage Direction]
Motion agreed to.
tMr. G. K. Fraser.]


[Stage Direction]
On the orders of the day:
Ernest Edward Perley: I was anxious to direct a question to the Minister of Munitions and Supply (Mr. Howe), but when I got in touch with his department I found that he would be unavoidably absent to-day. Therefore I desire to direct the question to the Minister of Finance, and I wish he would see the proper authorities and perhaps make a statement to-morrow. It is with respect to a serious situation which has developed in western Canada in regard to binder twine. I have received letters from two different firms, one an implement company and the other a hardware company, and to put the case clearly I should like to quote briefly from one letter, coming from a merchant at Langbank, Saskatchewan:
I have to-day received a letter from the Brantford Cordage Company, Winnipeg, regarding a car of binder twine which was ordered in June for immediate shipment. The company states that the dominion government have un expectedly and without previous notice taken over from the Canadian manufacturers four million pounds of binder twine . . . and that it was necessary for this company to turn over all stocks of twine already at the head of the lakes.
He goes on to say that fall rye will be ready to harvest early in August, and that the situation will be serious if they cannot get binder twine. Will the minister look into the situation and make a statement?


James Lorimer Ilsley: I understand the acting minister has a reply ready.


Hon. J. E. MICHAUD (Acting Minister of Munitions and Supply):: The hon. member sent notice to the department, and a reply was prepared and placed in my hands, as acting minister.
At the beginning of July an urgent request was received from the British raw materials board for the supply of 4,400,000 pounds of binder twine to meet a shortage which had arisen in the United Kingdom owing to an exceptionally early and heavy crop. The Department of Agriculture agreed to the release of this binder twine, and immediate steps were taken by the general purchasing branch of the Department of Munitions and Supply to requisition the necessary amount. It was found that insufficient quantities were on hand in the plants in eastern Canada, and large amounts had to be shipped from the head of the lakes. This caused a temporary

Farmers' Creditors Act
dislocation of distribution in the western provinces, but will not result in any delay in deliveries to the farmers when the binder twine is needed. The British authorities have agreed to release immediately to Canada sufficient fibre to replace the twine shipped to England, and Canadian manufacturers are making every effort to increase their production of binder twine to avoid any possible shortage in Canada for the 1943 crop.



ROYAL CANADIAN AIR FORCE


[Stage Direction]
On the orders of the day:
Mr. J. A. ROSS (Souris):: I should like to direct a question to the Minister of National Defence for Air based upon press dispatches from Brandon, Manitoba, which indicate that one man was killed and several injured when a night practice bomb was released from an R.C.A.F. machine and fell in the midst of one hundred civilians who were attending a Red Cross dance on a farm near Roseland, Manitoba, on Friday night. Will the minister inform the house what steps are being taken to investigate this matter, and I should be glad if he would also give such information concerning the accident as he has been able to obtain.


Hon. C. G. POWER (Minister of National Defence for Air):: My hon. friend gave notice of this question. This unfortunate accident occurred Friday night. News of it was received on Saturday afternoon, and immediately a court of inquiry was assembled. The court has not reported as yet, and when it has reported I shall give to the house such information as I am able to obtain from it.



FARMERS' CREDITORS


[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved the second reading of Bill No. 132, to facilitate compromises and arrangements between insolvent farmers and their creditors.
He said: In February 1943, the judicial committee of the privy council held that the Alberta Debt Adjustment Act, 1937, was legislation in relation to insolvency and constituted a substantial invasion of the exclusive legislative powers of the parliament of Canada in relation to bankruptcy and insolvency and obstructed and interfered with the actual legislation of that parliament on those matters, and therefore was ultra vires. The decisions of the privy council served to confirm the decisions of the lower courts on the Saskatchewan Debt Adjustment Act and
likewise threw grave doubts upon the Manitoba Debt Adjustment Act.
As a result, representations were made to the dominion government by various delegations, including a delegation from the Saskatoon conference of representatives of the three prairie province governments and farmers' organizations and representatives of the mortgage and investment companies and insurance companies, as well as other individual creditors and debtors. Various representations were made to the government from private citizens of the prairie provinces, including a considerable number of farmers who represented the point of view of both debtors and vendors of land. The need for a means of adjusting the old and onerous debt loads of depressed farmers in the west was admitted, but various opinions were advanced as to the best method of doing this. I think it is fair to say that general emphasis was iput on the importance of safeguarding the credit of western agriculture and ensuring the necessary flow of new capital for the development of that industry. The position of the farmer as a potential creditor was emphasized, for instance, the case where an older farmer wishes to retire and sell his farm under an agreement for sale to a young man about to start in farming.
Experience has shown certain limitations of the Farmers' Creditors Arrangement Act, 1934, and it was urged upon the government by representatives of both debtors and creditors that these defects should be remedied by new legislation under the bankruptcy jurisdiction of the dominion. Manitoba pressed for the extension of the act, or similar legislation, to that province as well as to Alberta and Saskatchewan, and indeed the Saskatoon conference suggested that there be enacted legislation which would provide for continuous adjustment of farm debts.
The government has given careful consideration to these representations and to the question of the best way of meeting the problem that existed in the three prairie provinces without doing irreparable harm to the credit of western agriculture. After careful deliberation, the government reached the decision that it was inadvisable at this time to reopen the fundamental issues of the western debt problem. To embark upon legislation so highly controversial during the stress of war, when the energies of parliament and the country as a whole are being taxed by immediate war emergencies, was felt to be unwise. A constructive solution of the particular problem of western debt, and of the problem of agricultural credit generally, should be attempted only when we can see more clearly the conditions that are likely
Farmers' Creditors Act
[Stage Direction]
to prevail after the war. Moreover there is already on the statute books the Central Mortgage Bank Act, passed in 1939, and designed to provide a permanent solution of the farm debt problem, while at the same time safeguarding the credit of the farmers and ensuring that the future capital needs of the farming industry would be met and at moderate interest rates. Owing to the outbreak of war in September 1939, this act has never been brought into force, and it was considered inadvisable to implement it during the war years because of the uncertainties which the war interjected into such fundamental matters as the values of farm lands and the real value of farm income. Moreover, it was considered that the national credit must be utilized to the full in the prosecution of the war.
The government, however, felt it desirable to meet the immediate need of preventing farmers from being dispossessed of their lands when food production was of such vital importance to the nation, and to that end an order in council was passed following the announcement of the privy council decisions, which provided that in any action by a mortgagee for foreclosure, or by a vendor under an agreement for sale or cancellation of the agreement, the court may stay the action, postpone the payment of any moneys due, vary or extend any order previously made with a view to retaining on the land during the state of war now existing an efficient and industrious farmer and at the same time protecting all other persons having any interest in the land of the debtor.
At the same time the study which has been made of the operation of the Farmers' Creditors Arrangement Act, 1934, and of the representations received earlier this year, has induced us to introduce the bill which is now before the house. This bill is designed to rescind the 1934 act and substitute for it an act which will continue, with important changes, the system of farm debt adjustment which has on the whole worked successfully in the past. I shall call attention to the more important changes. The bill extends the system of farmer-debt adjustment to Manitoba, retains the limiting date line of May 1, 1935, but provides that if two-thirds of a farmer's debts were incurred prior to that date he may seek an adjustment of all his debts including those incurred subsequent to that date; allows cases to be reopened where farmers made a composition prior to January 1, 1939, and establishes a new machinery for the administration of the act by substituting for the boards of review the county or district courts of Jhe provinces with appeals to a single judge of the superior or appeal courts of the province.

That is a brief statement of the principles of the bill. I presume there will be some discussion of those principles, and at the conclusion of the debate, if it is not too long, I may have something further to say.
Mr. J. G. DIEFENBAKER (Lake Centre):: Mr. Speaker, following the example of the Minister of Finance (Mr. Ilsley) I do not intend on this occasion to speak at length. Taking the measure as a whole, I believe it represents an endeavour on the part of the government to meet a condition the seriousness of which has not been much lessened in western Canada with the passage of years. With the point of view he expressed, that there is a desire to assist a farmer who may find himself in a difficult position owing to circumstances over which in the main he has had no control, I agree. I agree also with the principle that the credit of the farmer, in his own interests, should be considered.
This is a most important piece of legislation, in that it is intended to bring up to date legislation introduced by Mr. Bennett in the house on June 4, 1934. At that time he pointed out the purposes for which it was intended. This is what he said:
We should endeavour to secure a cheap and speedy method by which a farmer in difficulty could provide some arrangement or composition with his creditors. It is a well-known fact to members of the house engaged in business that under the common law no compromise could be made with a man by his creditors to pay less than one hundred cents on the dollar unless all creditors agree.
Later in his speech he said:
The object, of course, is to keep the farmer on the farm; if possible to keep him cultivating the land upon which he has lived. In making the arrangement we contemplate, through the assistance of those who have loaned him money, it follows of course that we can go only a certain distance in determining how his security can be dealt with.
When the bill came before the house certain changes were made in it, and during the years in which it has been in effect since 1934 it has afforded much assistance to the western farmer. In many cases it has spelled the difference between continuing or discontinuing farming operations. We had difficulties in Saskatchewan during the years 1931-1936 by reason of crop failures, low prices, which placed the farmers in such a position that they could not pay their debts. Conditions were not as acute subsequently as they had been prior to 1934 when the act was passed; nevertheless, however honest a farmer may have been, and however desirous he was of paying he could not during these years meet his liabilities. And I want to say here and now to some who assert that the western

Farmers' Creditors Act
farmer has not been honest in his debt relationships, that there is no foundation for the suggestion; for during the past year or two, when the farmer has found himself in a better financial condition than he had been in for a period of years, he has been meeting his debts in a manner and to a degree that has not been excelled in any other part of this country.


Gordon Graydon: He will always pay when he can.


John George Diefenbaker: As the leader of
the opposition says, the farmer will always pay his debts when he can. But during a period of eight or ten years such as he passed through, with no crops or small crops in some years, and with low prices in the years when he had good crops, it was impossible for the farmer to pay.
Now we come to the war period. While there has been an increase in the income of the farmer since the war began, that increase does not assure him of an income equal to what he had in the years 1926 to 1929. This legislation is important because it is one method whereby the war effort of this dominion may be assisted. It is actually in the nature of a war measure, although it will be effective after the war. Production must be kept at a height commensurate with the great demands of our army overseas, of our people in Canada, and of the other nations. The overwhelming load of debt that even now rests on the western farmer is in its nature detrimental to maximum production.
I shall not go into much detail, except to say that up to April of 1940 there were 5,094 proposals made under the act since 1935; secured debts were reduced by 118,547,051 and unsecured debts by $1,926,819 during that period, or an average reduction of 41-9 per cent per farm. In the province of Saskatchewan there were 142,000 farmers with a debt load in excess of $482,000,000 according to a computation made some time ago by Doctor Hope of the university of Saskatchewan. That is a tremendous load of debt, and the result of it has been to destroy hope in the hearts of many who would have desired to continue as farmers. They have had the opportunity of coming before the boards of review in Saskatchewan and in the western provinces, other than Manitoba. Manitoba has not been under the act for some considerable time, and debts have been written down. But the act up to the present time has not covered certain situations that it should cover. So intense has the movement become in the western provinces for a reconsideration of the debt problem that the submission to the federal government in
1943, to which the minister referred, asked for the setting up of a tribunal or tribunals, to be created by proper legislative authority, in order to:
(a)	Write down the principal of farm debts, secured and unsecured.
(b)	Reduce the interest rate on farm debts, secured and unsecured.
(c)	Alter the terms of payment of farm debts, secured and unsecured.
(d)	Review and revise its own decisions in the light of events subsequent to the making of the decision.
(e)	Extend to individuals in any particular year or circumstances, the protection of any of the provisions of this legislation available to any debtor whose affairs are being administered under it.
(f)	Stay proceedings arising on debts or securities after an adjudication has been made.
(g)	Make the foregoing remedies available with respect to any farm debts regardless of the time at which they were incuri'ed.
That submission was made in March, 1943.
The minister has mentioned that the debt adjustment act of Alberta was declared beyond the powers of the legislature. It was felt that the debt adjustment acts of Saskatchewan and Manitoba would be in the same position; therefore the government was requested to consider legislation in the form of an order in council to be passed under the War Measures Act in order to protect farmer debtors against foreclosure and cancellation. An order in council was passed by the governor in council along the lines of section 15 of a Saskatchewan statute known as the Limitation of Civil Rights Act. I shall not discuss the details of that order in council, but under it provision was made that in actions by a mortgagee for foreclosure or by a vendor of land for cancellation of an agreement of sale the judge might, after making inquiries con-, cerning the income and assets of the parties and all other relevant matters, grant a stay of execution, postpone payment of any moneys due, and prescribe terms and conditions to which any order shall be subject.
I believe that the legislation before us, except for some changes that I should like to suggest, will go a long way towards meeting the farmer-debtor's position in the western provinces, provided that the order in council is kept in effect to operate alongside of the new act. I repeat the order in council must be retained. I would rather it were incorporated as part of the present statute, but if the government refuses to do that and wishes to continue it in effect under the War Measures Act, I shall have no serious objection to that course. It will be in effect only for the period of the war, and it may be justifiable under the circumstances to have it in the form of an order in council. But I would

Farmers' Creditors Act
point out that if the order in council is allowed to lapse-and in the province of Saskatchewan there is no effective debt adjustment act; the Alberta Act was declared ultra vires-serious results wil' follow in the matter of the loss of land by foreclosure and cancellation, in eases where the farmer is entitled to be kept on the land as being an efficient producer, although his inability to pay is due to conditions under which he has no control.
I think commendation is due for making provision for an appeal from the decision of the district court judges, who now will take the position of administering the act. One principle which must be upheld is the right of an individual to appeal, for the purpose of having his rights established and his rights secured from administrative bodies, whether headed by a judge or any other person; otherwise orders arbitrary in their effect may be made. To make no allowance for appeal would be a denial of justice. Provision has been made for that, and I think it is a worthy provision. I also think that the inclusion of estates, by allowing executors or administrators to seek adjustment of debts, is also worthy of commendation. I feel however 'that provision should be made whereby executors or administrators, the personal representatives of deceased estates, should be permitted to apply for a readjustment irrespective of the date of the death of the decedent in the estate.
He has just mentioned the fact that the date line for the application of the act to personal representatives goes back to July 3, 1934. I ask him to give consideration to extending that date line still further beyond that date. He has mentioned that provision has been made for allowing the reopening of cases which came before the board of review prior to January 1, 1939. That, too, is a worthwhile step. The great difficulty in connection with the administration of the Farmers' Creditors Arrangement Act has been that there has been no general principle, or body of jurisprudence -if I may be allowed to apply that to the orders of a board of review-brought into being. One of the great objections to the board has been that in certain cases there have been tremendous writeoffs and reductions and in other cases in the same locality, where farmers were entitled to similar writeoffs, the reductions have been less. The result has been a feeling of inequality and inequity which will now, I believe, be done away with by reason of the fact that a right of appeal has been set up which will ensure uniformity of administration all over the province. This provision for appeal is worthy of high commendation. I

repeat that if one thing is more important than another in an act such as this, and for that matter in all legislation, it is that there shall be equality of application and administration as much as is humanly possible.
I shall refer to various other matters when the sections are taken up; we shall come to that in the discussion in committee. With the general principle of the bill I agree. With the changes which have been made, the alterations in set-up, I feel that a forward step has been made. I think that if the act is properly applied, if an invitation is given to farmers who, through no fault of their own, find themselves unable to meet their debts, to take advantage of the act, it is-subject to certain objections which I shall take later on-a measure which goes a considerable way towards relieving the difficulties of farmers who are in debt in the western provinces. I know there are those who will say it should go much further. I too could say that, Mr. Speaker, for I feel that in certain directions it does not go far enough. But having regard to all the circumstances, to the need of legislation being passed, to the fact that the government has seen fit to go so far and will, I suppose, go no further, and that there is in this legislation some hope for the farmer who is in difficulty, who is honest and straightforward and desires to pay his debts if only he has the income so to do, I am going to support this bill. It is a step in the right direction.
The government should appoint the most outstanding judge in each of the provinces who can be made available for the purposes of administering this act by way of appeal. It will depend in its application and its administration, not so much on the letter of the law, but rather upon the judge who will be charged with being the appeal court, whose decision will be final. It places a large responsibility in the hands of one judge. If the judge who is chosen is an outstanding judge, appreciative of the terrible difficulties through which the western farmer has passed through a period of some twelve or fourteen years, realizing the necessity that something must be done and that a liberal interpretation should be given the provisions of this act, then I feel that much good will be done. On the other hand, if the administration of the act is placed in the hands of a judge who will not give a liberal interpretation, while the act may promise much, it will effect little actual good. I do ask that the minister give us during the debate, an opportunity to find out who the judge will be in each of the provinces. I do not think there is anything unfair in that suggestion. The judge will be

Farmers' Creditors Act
charged with being the custodian of the future of western agriculture, and in Saskatchewan there are 140,000 farmers. In setting up the administrative boards, in setting up an appeal court, parliament has the right to know who will be appointed, the right to discuss the appointee's qualifications, and the right to inform the minister and the country whether or not the appointees whom the government has in mind will meet with the approval of those who will be most affected, namely, the farmers.
I ask the minister to give the house and the country an assurance that the order in council passed under the War Measures Act will be continued in effect until the end of the war. For unless that order in council is continued in effect, while there will be legislation provided for the writing down of debts, and for the granting of extensions where the farmer comes under the act, there will be no protection for the farmer such as was guaranteed to him under the provisions of the debt adjustment act.


Mr. VICTOR QUELCH (Acadia):: In considering the problem of farm debt it is well to remember at all times that this problem exists to a very large extent as a result of the failure of federal governments in the past to maintain a sound national policy, especially in its relationship to western agriculture. I think it is well also to remember that western Canada was not opened up especially for the benefit of the people who settled there, nor for the benefit of the west, but to a considerable extent for the benefit of the central provinces, and if you will read Hansard of 1903 and 1905, taking the speeches of Clifford Sifton and Frank Oliver, that becomes perfectly plain.
I would say that a national policy which forces any class of society, and I have the farmers in mind, to sell their products at world market prices, while on the other hand incurring their costs in a highly-protected market, brings about a condition that is almost certain to lead to the bankruptcy of that class of people. And that of course is exactly what happened in the years from 1930 to 1939. The failure of the federal government in those years to pass legislation to protect the farmers against those conditions brought the provincial governments into the field, and protective legislation was put into effect for the purposes, as far as possible, of guaranteeing the security of tenure of the farmers. That legislation, -while it was incapable of bringing about a compulsory reduction in the amount of debts owed, did nevertheless give the farmers a bargaining power, and as a result of that legislation, many farmers were able, by mutual agreement with
their creditors, to get a reduction of their debts, because the creditors did not have the power to force farmers off their land or to seize their chattels.
The decision of the privy council in wiping out the provincial debt legislation has, I am afraid, a little weakened the people's faith in the administration of law and justice in western Canada. In that regard I would quote from the Hanna Herald, which by no stretch of the imagination can be called a radical paper. It is a very orthodox one. In the edition of March 11 appeared this editorial:
Nevertheless it must be admitted that the disallowance of the Alberta debt legislation has not been received with approbation by the majority of Alberta people. Whatever the defects of the method undertaken, the people of this province always had the idea that they had the right to run their own aifairs in this respect at least. A large number of Alberta people are coming to the conclusion that the courts of justice are always on the side of property rights in that they will consider such rights ahead of the welfare of the people. It may be that is what the law says. We do not know. But we do know that it will be an unfortunate day for the whole judicial set-up in Canada if the people of the west come to the conclusion that the courts will always be against them when concentrated wealth is on the other side.
I would add, Mr. Speaker, that when the people's faith in the administration of law and justice in any country is destroyed, you are paving the way for internal strife.
Now it is up to the federal government to deal with the matter. The provinces apparently, for the time being at any rate, are out of the picture. And so we come to this bill. In my opinion, after reading the bill through very carefully, it does seem that the government has almost entirely disregarded the recommendations of the western debt conference and given way to the recommendations or pressure of the mortgage companies.
I will give three examples to show where, in my opinion, the federal government has definitely sided with the mortgage companies against the three western provinces: Substituting courts for boards of review, thereby increasing costs to the farmers, and also doing away with a great deal of the sympathetic consideration which they have received of recent years from the type of commissioners appointed to these boards. Failure to treat debt as a recurring problem, and that was strongly emphasized by the western debt conference, and it was also fought quite strenuously, on the other hand, by the mortgage companies. The government apparently has decided to side with the mortgage companies on that question. Then the right of appeal against the decision of the court. That will further add to the costs of the farmers. The inclusion of Manitoba is
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they come home, they find that as a result of their enlistment their fathers were not able to carry on efficiently and the farms were sold over the heads of the older men? I am satisfied they will feel that they have done only half their job in fighting overseas, that there is another battle to be fought out in this country. Why should any boy be asked to go overseas and perhaps sacrifice his life for his country while we have a bunch of bloodsuckers of this kind doing everything in their power to have the government give them the right to seize the farms of men who, just because their sons have gone away, are not able to operate efficiently? Neither of these pamphlets contains one word in regard to the situation which has been brought about by the enlistment of these boys throughout the west, and the recommendations coming from the west in this regard have been ignored. I should say that the only justification for refusing to deal with a debtor should be either dishonesty or rank idleness; those should be the only two reasons.
The mortgage companies very bitterly oppose permanent debt adjustment machinery. In this connection I would quote from page 7 of another pamphlet issued by these companies, entitled "The Prairie Farmer and His Debts," as follows:
It is often urged that peculiar and specialized western conditions make the lot of western farmers more difficult and uncertain than that of the farmers in the maritimes, Quebec, Ontario and British Columbia, and that, for this reason, permanent mortgage debt adjustment machinery, having power to revise and reduce debts indefinitely or periodically, must be provided. This argument will not stand up under examination. . . . The contention that western agriculture is more hazardous is based on the assumption that all western farms are almost entirely dependent upon wheat production and are what are generally called "grain" farms. The production figures and the 1936 census classification of farm holdings disprove this. The majority of farms in Manitoba and Alberta are certainly not grain farms.
Manitoba farmers secured only 21-7 per cent of their 1942 cash income from wheat; Saskatchewan farmers, 39-4 per cent; and Alberta farmers, 24-2 per cent. According to the 1936 census, 125.583 farms, or 42 per cent of the total, are under 200 acres in size. These farms, comparable in size to eastern farms, should be considered as diversified farm units and as economic units are similar to mixed farms in eastern Canada. Many of the larger farms are also engaged in mixed farming. There are 45.939 farms over 640 acres in size. These are essentially large-scale business enterprises.
Well, I think it would be hard to find anywhere a paragraph as short as that one containing as many completely misleading statements-in fact, I might say so many misstatements of fact. It states that the
majority of farmers to-day are not grain farmers. But in making that statement the reference is to the year 1942, when, as all hon. members know, there was a quota on wheat; therefore the farmer was not able to sell the total amount of his wheat in any one year, and naturally his income from wheat was reduced. If a comparison between wheat and live stock income in western Canada is to be made, then surely the comparison should be with income from these sources before the wheat quotas were put into force. If we do that, again referring to the pamphlet issued by the Manitoba federation of agriculture, we find at page 10 that in 1939 sixty-three per cent of the farmers' income was derived from wheat. That is very different from the 21 per cent stated by the mortgage companies.
That, however is not my chief point. I have dealt with it only to. refute their suggestion. My main point is that the mortgage companies try to stress the point that the majority of farms are diversified, and that therefore in respect of hazard they can be compared favourably w'ith farms in eastern Canada. I wonder what the people who drew up this pamphlet really think that stock in western Canada lives on. Do they think stock lives on hot air? When there is a drought the grain crop and the hay is destroyed. What do these individuals think the stock lives on? It cannot live on stones and water alone. It is only necessary to go back to the years 1936 and 1937, when the great drought hit western Canada, and when live stock became a distinct liability, to understand the situation. What happened? The situation became so serious that a lot of stock had to be moved out. Feed had to be moved into that area. Before the federal government would move feed into the drought area for the farmers, every farmer obtaining feed was forced to cut down his stock to three or four head per family.
What did he get for that stock in those days? What did he get for it between 1935 and 1937? Perhaps in that connection I might read from a statement which appeared in The Budget, issued by the Alberta Wheat Pool on May 29, 1943. This is what they say: Cattle Prices Then and Now
Good money is being obtained for cattle at the present time but during the 1930's cattle raising was most unprofitable and those who were engaged in it suffered heavy losses. As proof we reprint the following dispatch which appeared in newspapers some eight years ago:
"Edmonton, February 22, 1935-An average net return of only $1,174 a head was obtained by the provincial government on sales of 9,881
(Mr. Quelch.]

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head of cattle purchased in the drought areas of the province last year, it was revealed in a return brought down in the legislature by Hon. F. S. Grisdale, minister of agriculture.
The return showed that 6,535 of these cattle were brought to Edmonton at a transportation cost of $13,050 and sold for $20,856, or an average of $1.19 a head. Total number of cattle shipped to Calgary was 3,346 at a transportation cost of $7,284. Sales of these cattle yielded $11,319 or $1.22 a head."
When the mortgage companies suggest therefore, that since western Canada is now becoming diversified there is no longer any hazard, it shows just how little they understand the western situation.
The last sentence of the paragraph I read a moment ago is just as misleading as the rest of it, when it says that there are 45,939 farms over 640 acres in size, and that these are essentially large-scale business enterprises. Anyone familiar with the dry belt of the west knows that practically all the farms in that area are of 640 acres or over, and that many of them are over 3,000 acres. And, they are not large business enterprises; they are just ordinary farms. If one is farming in that area he has to have a large one, if he is to make a living at all. And those men need consideration, just as much as the farmers on the half-sections in the park belt, or elsewhere.
Therefore I say it is quite evident that unless the government is prepared to stabilize prices at a fair level, bring down a comprehensive scheme of crop insurance and take steps to adjust debts at the present time, debt legislation to deal with debt as a recurring problem will have to be brought down. If that were done I would be willing to see all farm debt legislation done away with. I should be glad to see the Farmers' Creditors Arrangement Act repealed, and no more debt legislation brought down, in the event of those measures being taken, because I believe we would then have solved the problem. But until that problem is solved, the question of debt will have to be regarded as one which will recur from time to time.
Another point, and one which the minister referred to and which is emphasized by mortgage companies, is that mortgage debt legislation destroys credit. It is well to remember that debt legislation is an effect, not a cause. The cause is depression and drought. Stabilize farm prices, institute crop insurance, and to a very large extent you will be stabilizing credit, because you will be removing the hazards connected with lending money in western Canada. But until that is done it will continue to be a hazardous procedure. Do not place the blame upon debt legislation; place it where it fairly belongs, namely upon
the hazards to western Canada as represented by low prices, drought and the like.
At one o'clock the house took recess.
The house resumed at three o'clock.


Victor Quelch: Mr. Speaker, in closing I wish to make a few remarks regarding the funds of the mortgage companies. It is generally said that these funds represent the savings of the people and therefore should receive special consideration. But investments are placed where returns are high, and generally speaking the higher the returns the higher the risk. Money is not placed on farms from philanthropic motives. Mortgage funds are placed there because in the past the returns have been high. The interest rate on mortgages has run all the way from eight to as high as twelve per cent, nine and ten per cent being the general rule in the early days. A farm mortgage is a commercial venture and should be treated as such. Commercial failures have access to the Bankruptcy Act and to the Companies' Creditors Arrangement Act. The farmers should be entitled to similar legislation to suit their special type of business. But the farmer's is the one type of business for which no suitable legislation has been provided by which arrangements may be made to liquidate debts incurred through no fault of his own. A permanent solution, therefore, must be to remove as far as possible the cause of these debts. That is a federal responsibility. Until then suitable debt legislation must be maintained to deal with debt as a recurring problem, and in my view this legislation does not take care of that.


Mr. T. C. DOUGLAS (Weyburn):: Mr. Speaker, ever since the Supreme Court of Canada declared the debt adjustment legislation of Alberta to be ultra vires, those of us from the west have been most anxious that the federal parliament should pass legislation to give a measure of protection to the farmers of Canada and particularly the farmers of the prairie provinces. The legislation which is now before us is in my opinion a pitiful reply to a crying need for some action in this regard.
The whole question of debt legislation for the prairie farmers is of long duration. It is a problem which has grown over the years. I do not intend to make a long review of the debt situation. I had intended doing so, but in view of the fact that the session is nearing its close and members are naturally anxious to go home, I think it is unnecessary to make a long review of the debt situation, with its cumulative effects piling up over the last thirty or forty years. Suffice it for me to draw

Farmers' Creditors Act

the attention of the house to the submission made on March 15, 1943, to the federal parliament by the western debt conference. That was not a political conference; it was not made up of persons who could by any manner of means be described as radical. It was made up of representatives of the governments of the three prairie provinces, one a liberal government, another a coalition government, and the third a Social Credit government, and representatives of farmers' organizations from the three western provinces. I think that conference represented a fair cross-section of the opinion of western Canada on this debt problem and they placed their views succinctly before the government.
They point out first of all that this debt problem was attributable in part to the rapidity with which land settlement took place in western Canada from 1906 onwards. They point out that most of the equipment and land and buildings were obtained at high prices on borrowed money; that land was purchased at inflation prices; that interest rates were uniformly high, as is characteristic of any pioneer area.
They point out, in the second place, that the ten depression years had their effect on this debt problem, and that the average gross cash income on the prairies from 1926 to 1929 was $537,913,000, while the average corresponding figure from 1930 to 1941 was $260,600,000. They point out that while the index of prices dropped from 100 to 86 in the protected industries, in agriculture it fell from 100 to 48. They also point out that during the drought years, five years and in some parts of Saskatchewan ten years, drought was a contributing factor to debt accumulation and that during that drought period agricultural income in certain areas of the west declined very materially.
Another thing which this debt conference pointed out was that in spite of the fact that
farm prices were better during the war, agricultural income on the prairies for the year 1942 amounted to $462,200,000, and comparing this with the average agricultural income for the three prairie provinces from 1926 to 1929, amounting to $537,913,000, they point out that there is still a deficiency to make up of some $75,000,000 before farm income for the prairie provinces is brought up to that of the average period.


James Lorimer Ilsley: They do not include the bonuses, the wheat acreage bonus and the prairie farm assistance, in the $462,000,000, do they?


Thomas Clement (Tommy) Douglas: No, they do not. But they say in the next paragraph that the bonus is more than offset by the. increased cost of living from 1926 to 1929.


James Lorimer Ilsley: The index was higher.


Thomas Clement (Tommy) Douglas: They point out further that at the present time there is a definite limitation on the amount of grain which the farmer may deliver, and consequently a decided restriction of his income.
These have been some of the factors which have contributed to the present debt situation. It would surprise most people to go over the tables which are found in appendix 4 of the Sirois report entitled "National Income", which was a study prepared for the royal commission on dominion-provincial relations. I have put together three of these tables which show the farm debts of the provinces respectively in 1931, 1936 and 1937, as being typical years, and with the permission of the house I [DOT]should like to put these figures on the record in tabular form.


Thomas Vien: Has the hon. member unanimous consent to have the tables appear on the record?


Thomas Clement (Tommy) Douglas: Thank you, Mr. Speaker. The tables are as follows:
Prince Edward Island
Nova Scotia	
New Brunswick	
Quebec	
Ontario	
Manitoba	
Saskatchewan	
Alberta	
British Columbia ....

Farm Debts by Provinces 1931
(In millions of dollars)
12 3
Interest on mortgages and	Total cash operating	Percentage	Grand total	Percentageother debts	expenses	of 1 to 2	cash receipts	of 1 to 3$	$	%	%	%0 72	3 90	18-4	5 01	14-41 01	8 91	11-4	12 69	8-00 88	7 77	11-3	9 04	9-78 87	40 65	21-6	62 19	14-317 64	89 91	17-4	162 88	10-87 19	25 14	28-6	30 49	23-628 89	74 40	38-8	69 85	41-417 55	53 04	33-1	69 44	25-31 98	13 39	14-8	18 39	10-8
Farmers' Creditors Act
Farm Debts by Provinces 1936
(In millions of dollars)
	1	2		3	
	Interest on				
	mortgages	Total cash			
and	operating	Percentage	Grand total	Percentageother debts	expenses	of 1 to 2	cash receipts	of 1 to 3$	$	%	$	%Prince Edward Island 	
0 66	3 19	20-7	5 18	12-7Nova Scotia	
0 91	8 84	10-3	14 30	6-4New Brunswick 	
0 76	7 28	10-4	10 49	7-2Quebec	
7 34	38 46	19-1	72 32	10-2Ontario	
14 61	83 19	17-6	185 28	7-9Manitoba	
5 57	22 08	25-2	45 47	12-3Saskatchewan	
19 58	63 22	31-0	118 73	16-5Alberta	
12 83	45 30	28-3	90 78	14-1British Columbia	
1 69	13 40	12-6	20 88	8-1Farm Debts by Provinces 1937 (In millions of dollars) 1 2 Interest on mortgages Total cash and operating Percentage	3 Grand total	Percentageother debts	expenses of 1 to 2	cash receipts	of 1 to 3$	$	%	$	% 'Prince Edward Island	
0 65	3 49	18-6	5 01	13-0Nova Scotia	
0 90	9 48	9-5	16 65	5-4New Brunswick 	
0 76	8 22	9-3	11 08	6-9Quebec	
7 33	42 91	17-1	84 23	8-7Ontario	
14 58	90 88	16-0	213 31	6-8Manitoba	
5 55	26 83	20-7	77 22	7-2Saskatchewan	
19 73	66 41	29-7	85 27	23-1Alberta	
12 74	50 08	25-4	116 47	11-0British Columbia 	
1 69	14 32	11-8	23 36	7-2
These tables show first of all the interest payable each year on mortgages in each of the provinces of Canada. They show, secondly, the total amount of operating expenses. It will surprise most hon. members to realize that in 1931 28-89 millions of dollars or 38-8 per cent of the operating costs of the Saskatchewan farmer, was interest; in 1936 it was 31 per cent, and in 1937 29-7 per cent. That is a tremendous charge on operating costs. It is even more alarming to find that, as related to the total cash receipts in the province of Saskatchewan, in 1931 41-4 per cent of the farmer's total receipts went to pay interest, 16-5 per cent in 1936, and 23-1 per cent in 1937. I think hon. members will recognize that in a fluctuating economy such as ours in the west, with incomes varying from year to year, and with so large a percentage of the farmer's operating costs and so large a percentage of the total income going to pay interest on mortgages, the problem is a very serious one indeed. That is why all the prairie provinces have been 72537-319}
forced by the pressure of public opinion and by the needs of the situation to pass some debt adjustment legislation.
In 1934 the Farmers' Creditors Arrangement Act was passed by the dominion parliament, and amendments have since been enacted from time to time. The creditor class of this country have always been opposed to the Farmers' Creditors Arrangement Act; they have done everything in their power to have the scope of its activity limited, and it was limited in 1938, with the result that for some years only the provinces of Saskatchewan and Alberta came within the benefits of that legislation. As public opinion developed in western Canada and it became more and more apparent that every government in the west was going to pass debt adjustment legislation which would give greater benefits to the debtor class, this legislation was taken to the courts, and last year the Supreme Court of Canada declared the western debt adjustment legislation to be ultra vires. I think it is significant that there
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was no question of challenging the validity of that legislation until such time as it became apparent that the pressure of public opinion was going to force that legislation to become more and more useful in the interests of the debtor class. As that became apparent the power has been taken away from the western provinces where the pressure of public opinion in that direction is so strong, and is now to be vested in the dominion parliament.
When it was learned that the matter was to be referred to the dominion parliament, the three prairie provinces joined together for the purpose of making representations to the government, and this they did last summer, last fall, and again this spring. They presented "an act to provide for the adjustment and settlement of debts of farmers." I think it is interesting to notice the difference between that title and the title of the legislation now before the house. The legislation which this house is about to decide upon is "an act to facilitate compromises and arrangements between insolvent farmers and their creditors." It might better have been called "an act for the liquidation of farmers."
It is significant to read the proposed act which was submitted to the federal government by the debt conference and compare it with the legislation which is now before the house. I wish to draw attention to some of the differences in the two pieces of legislation.
First, may I draw attention to the difference in the powers which it was proposed should be given under the debt conference proposal and the powers which are to be given under the legislation before the house at this time. The act recommended by the conference suggested, under a proposed section 9, that-
(1)	Upon application of any farmer who is unable to meet his liabilities as they become due, the board shall have the power to formulate a plan of settlement with respect to any debt or debts of the farmer which will, in the opinion of the board, ensure that the farmer will continue to farm the land and be an efficient producer.
(2)	Without derogating from the generality of subsection (1) and regardless of when the debt was incurred or whether the debt is secured or unsecured, the board on formulating the plan of settlement may:
(a) alter the terms of payment of any debt;
. (b) reduce the principal and/or interest of any debt;
(c) reduce the rate of interest on any debt. . .
In the proposed act the powers which were to be given to the board that was to settle and adjust debts are definitely set out. Under the bill now before the house-I shall not read from it, because we will do that in committee-the matter is to be referred to

the courts with power to compose, arrange or extend. This is a serious departure. The board which was set up in 1934, headed by a judge, started out with a judicial aspect on this question, with all the sense of property rights peculiar to the judiciary. The result was that the adjustments in the first few years were pitifully small and inadequate. The government itself recognized that. Later a new board was set up, and as that board went around the country and became familiar with conditions its adjustments became more generous, with the result that some of the adjustments made in recent years have been fair and proper. The reasons to my mind are twofold. First, this was a board which had moved around among the people and become aware of conditions. I personally have listened to cases being heard before them, and that in places where the atmosphere of the neighbourhood would have its influence upon the decision. Second, on that board there would be other than the judiciary and it would be possible for the farmers' representative to present the farmers' point of view. But under this new act the whole matter is to be left to the judge; there will be no farmer representation sitting in, no board which has been able to develop a liberal and sympathetic view over a period of years. I think that the setting up of this court with its limited powers is a retrogressive step.
In the next place I want to point out that under this proposed legislation which was placed before the government there was a provision by which the farmer's equity would be preserved in the event of any adjustment which might take place. In section 15 of the proposed act we find this:
In exercising its jurisdiction and powers and powers to formulate a plan of settlement and without limiting its discretion in any -way the board may consider and determine inter alia the following matters:
(1)	The value of the farmer's interest in the farm lands as represented by the amount of money, principal and interest paid by him to the vendor, mortgagee, encumbrancee, or other creditors in respect of the land, and the amount of cultivation, improvements or labour made or expended by him in bringing the lands to their present productive capacity;
(2)	The ability of the debtor to pay and to that end to arrange the payments of his creditors in such amounts and at such times as the debtor may reasonably be expected to meet, having regard to his present and prospective capability to perform the terms and conditions of the plan and having regard to the productive capacity of his farm;
(3)	The cost of maintenance of the debtor and his family at a reasonable standard of living and the current expenditures reasonably necessary in the operation of his farm.

Farmers' Creditors Act
There are three fundamental principles: (1) that in the adjustment of any debt the farmer's equity shall be preserved and guaranteed; (2) that his ability to pay shall be taken into consideration on the basis of the productive capacity of his land; (3) that the cost of maintenance of himself and his family shall be regarded as one of the vital considerations in making an adjustment. I find nothing like that in the proposed legislation. The whole power put into the hands of the court shows an ingrained sense of property rights, with no provision at all to guarantee that the farmer's interests and his equity shall be maintained.
I call attention to another point, and that is that in the proposed act submitted to the federal government there was a recommendation that would take care of future contingencies. No board and no judge can say to a debtor and a creditor: "Here is a settlement. You, the debtor, will pay to the creditor a certain amount of money per annum. This case is now closed once for all." That cannot be done because such a settlement is based on the assumption that the farmer's crops will continue to materialize and that his income will remain more or less stable. But we know from sad experience in the west that that does not happen. We have had periods of drought and periods of depressed prices, and an adjustment made to-day may be impossible of fulfilment five years from now.
The proposed act placed before the federal government dealt with that contingency. Section 24 provided:
A farmer, in any year in which his income from agriculture together with any other income he may have is not sufficient to meet his liabilities payable in that year as they become due, may apply to the board for directions as to how he shall distribute that income. The board, after allowing for the reasonable needs of his family and the requirements of farm operations until the next harvesting season commences, may direct how his income from all sources shall in that year be applied, and upon the farmer's compliance with these directions, the farmer, notwithstanding any contracts he may have made, shall not in law be regarded as in default with respect to that year's liabilities, and unless with the consent of the board no action or proceeding shall be taken in respect of such liabilities and the farmer's said income shall not be subject to garnishment or attachment or seizure or any legal process.
I submit to the Minister of Finance that the absence of any provision such as that in this bill, or in the regulations which will be issued under the act, will jeopardize the success of this legislation. I refer the minister to a statement which appears in "Prairie Population Possibilities:	A study
prepared for the Royal Commission on
Dominion-Provincial Relations by W. J. Waines." I call the minister's attention to the following, on page 54:
Farm Debt-the need for a more flexible instrument than the Mortgage.
The burden of this rigid interest cost fluctuates greatly from year to year. Since 1928 it has varied from less than a tenth to nearly a third of the total gross cash receipts (8 per cent in 1928, 31 per cent in 1932 and 14 per cent in 1937). It is, however, net operating income, not gross income, out of which interest on debt and the living expenses of the farm family have to be met. Between 1928 and 1932 the share of the net cash operating income taken by interest rose from a tenth to nearly three-quarters. In 1937, after considerable amounts had been written off and interest rates reduced, it still amounted to about one-quarter of net cash operating income. In years of good crops and higher prices, the interest cost can be met relatively easily; in years of low income, resulting either from poor crops, low prices, or a combination of both such as was experienced" during the depression it becomes an almost impossible burden. Defaults and the accumulation of arrears are the ways of escape. Under these circumstances there is a very strong case for the use of a more flexible instrument of farm finance than the mortgage-an instrument which will give the "lender" a proprietary share in the income of the farm enterprise rather than a fixed annual claim against it.
Failure to provide some flexible instrument for future settlements will condemn this legislation before it is many years old.
Let me indicate another serious omission. Subsection 2 of section 18 of the proposed act submitted to the government by the debt conference had this provision:
(a)	Every proposal under the Farmers' Creditors Arrangement Act may be revised by the board upon the application of the debtor within five years of the date of this act coming into force.
(b)	Upon the application of the debtor to revise a plan of settlement made under the Farmers' Creditors Arrangement Act. the board shall have the same powers and the revised plans shall be subject to the terms and conditions as if made in the first instance under the provisions of this act.
That was a good suggestion. I do not know that five years is the right length of time; it might be longer or shorter; but if we are to allow for a probationary period during which they could see how the settlement worked out, and if in the first five years it were found impossible to fulfil the conditions and terms of settlement, the creditor could bring his case once more before the board and have some adjustment made. If, however, the plan of settlement operated successfully for five years, they suggested that from there on it should be accepted as a fixed settlement. But they did provide for some probationary period.
I see no provision of that sort here, and I think that is a serious omission. That is
Farmers' Creditors Act

certainly what ruined the Farmers' Creditors Arrangement Act in the early years. Proposals were formulated when those who were formulating them had little or no experience in administering -legislation of the kind. The result was, if I remember rightly, that the average cut in debt was about 16 per cent in the first year or two. That grew in some instances to as high as 47 per cent in later years, because the first boards were timid and were feeling their way. But the fact remains that the people who came before the boards were penalized because they happened to be the first to come under the legislation. The settlement was final. I appreciate the fact that under the new legislation those people who came in prior to 1938 will be able to have their compositions reexamined, but I do suggest to the minister that there should be some provision for a revision of a case in which the debtor finds that the terms of settlement are beyond his powers to fulfil.
One more observation I have to make with reference to this bill. There is a provision of the bill now before the house which does not appear in the proposed legislation placed before the government by the western debt conference. I should like to know who is responsible for it. I refer to the right of appeal to the appeal court. It is no secret that ever since the proposed act to which I refer was placed before the government by the western debt conference a persistent and determined lobby has been carried on throughout this country in editorial columns of the newspapers, and in the form of brochures that have been sent to members of parliament and scattered widespread throughout the country, against the type of legislation proposed by the debt conference and seeking either to prevent any such legislation being passed or so to weaken and dilute it when it did come to the house that it would have little or no value.
In my opinion section 23 of the bill is nothing more or less than a sell-out to the lobby that has been carried on by the creditor class across Canada. Who is going to receive benefits from this provision? Certainly not the debtor class. The people who can best afford to appeal, the people who can best afford to wait, the people who can best afford to go through the legal procedure will always be the mortgage company and the trust company. I think this measure can be condemned on that section alone, because it would appear that the only proposal that w'ill be formulated is the proposal in which the creditor feels he has more than an even break. When he feels that he has not more than an even break, he will put the debtor to fMr. T. C. Douglas.]
all the trouble and expense of taking this matter to the appeal court. No matter to what extent you may try to save him legal expenses by providing legal services, there are other expenses which must be met by a farmer travelling to town when, his case is to be heard. Other trips will have to be made to see other parties; he will have his travelling and living expenses when he has to stay in town a few days while his case is pending. These things may not seem important, but they are important to people who have not much money to travel long distances. Every time,you grant the right of appeal, that is a privilege to a privileged group rather than to the people whom this legislation is supposed to assist.
In my opinion the farmer has become the victim of both ends of the economic process. He has become the victim at the one end because we have failed to give him parity prices for his products, and at the other end we have failed to give him adequate protection against the loss of his home. All that this bill proposes to do is to provide debt postponement. It is not a solution; it is simply debt postponement which will put off the day of reckoning so that the farmer may be kept on the farm -as a producer and as one upon whom the creditor class may levy a tribute. But in the way of solution by removing the debt, in the way of reinstating a farmer on his farm as the owner or operator of that farm, there is nothing in this measure to provide for that. I agree with the hon. member for Acadia (Mr. Quelch) when he says that if the government established a system of parity prices and crop insurance for the farmer we would not need debt legislation, because the farmer could take care of himself. I maintain that as long as the government is going to continue to make the farmer the orphan or the stepchild of our economy, he has a right to expect legislation which will not -merely postpone the day of reckoning but which will deal with the fundamental problem of debt. I fail to see anything of that nature in this bill.


Ernest Edward Perley: Mr. Speaker, the very important part which the farmer plays in our economy entitles him to any adjustment of debt which was incurred during those difficult times known as the depression. Reference has been made to the conference held by the three prairie provincial governments. I propose to take only a few minutes to make some general remarks, and then when the bill is in committee I shall probably ask a few questions with respect to some of the sections. I think the proposals put forward by this conference should have

Farmers' Creditors Act
received a little more consideration, because they represented the general opinion, not only of the farmer of western Canada but of the merchant and the other classes which are dependent upon the success of the farmer.
I do not think it is necessary to give any figures with respect to farmer debt or the portion the farmer receives of our national income, because these figures have been placed before the house on many occasions. I think we are all agreed that the farmer should receive a little larger share of the national income. It is generally recognized that there must be some means of adjustment by which the farmer may be taken out of his debt difficulty. All we want is something that is fair. When we consider this bill we realize that it will mean bankruptcy to many farmers. They might just as well go bankrupt and be done with it. I admit that a number of reasonable adjustments have been made under the previous aot, but that was due to a great extent to the fact that the farmers had representation on the board of review; that the proposals were made by someone representing the farmers and who had had personal experience in farming and knew the difficulties under which agriculture was being carried on.
As the previous speaker (Mr. Douglas) has said, this bill substitutes a district court for the board of review when the creditor and debtor cannot come to an agreement. There is an appeal to the appeal court. I think there must be some final appeal, and there is no question that it should be to a court. Debts incurred prior to 1935 are really in a special class. They were incurred during the previous ten years, or at least during the previous eight or nine years when farmers were passing through a most difficult period. This bill provides that if in making a proposal two-thirds of the debt has been contracted prior to 1935 and is taken into consideration in the proposal, then they will consider all debt up to the present time. I think that is good as far as it goes, but some special consideration should be given to this debt, or there ought to be some means of handling debts contracted prior to 1935 because they are in a different class.
There are one or two principles in the bill with which I cannot agree. One is that the farmer cannot sell his farm within five years after a proposal has been made; if he happens to find a purchaser he cannot sell without the approval of the receiver. Also he cannot sell any of the products from his farm unless he accounts to the receiver. Therefore he is practically in the hands of the receiver in regard to selling any of his farm products.
The rate of interest is dealt with at page 14 of the bill, and I feel that this section must be revised and a lower rate substituted.
I want to make a plea also for those in the west who are operating farms though not residing on them. Many men who have retired, either because of age or as a result of physical disability, are living in towns but are still operating their farms, and the definition of a resident farmer should be cleared up. As I understand the bill, a man must actually reside on the farm. I recall that in 1934, when the first Farmers' Creditors Arrangement Act was being considered, I made a special plea on behalf of these people and received quite a good deal of support from various hon. members of the house. Men who, though not residing on the farm, pay all the expenses, own the machinery and have to meet the debts incurred in previous years, cannot take advantage of this bill, as I understand it, and they should be given some consideration.
The bill also provides that no farmer shall be entitled to make more than one proposal, and I believe that provision should be repealed. As I have said, I am not going to take much time in this debate; I desired to speak generally just for a moment or two. However, I have received some letters in this connection, one of which I have in my hand, coming from the council at Balgonie, in Saskatchewan, asking me to make certain representations in regard to the interest rate, which I have done. These letters, I may say, were written before the bill was printed. They also suggest that applications be accepted from executors, which I think is provided in the bill, and they think the farmer should be permitted to make^ a second proposal. These letters also mention one or two further suggestions which I do not think are quite reasonable; therefore I am not presenting them at the moment, though I may do so at another stage. All I have to say now is that I hope the minister will give consideration to amending some provisions of the bill as we go through it in committee.


Mr. ROBERT FAIR (Battle River):: We have waited quite a long time for the bill now before the house, and I must say that I am just as much disappointed in it as any of the hon. members who have already spoken. Being one of the victims of circumstances over which I had no control, I feel that I might give a few instances that would be of interest to the house. I started in western Canada in 1914, working on a farm to get experience while somebody else
Farmers' Creditors Act

got the profits. I worked on that farm during 1914 and 1915. In 1916 I started on my own, and during 1916, 1917, 1918 and 1919 I did
not thresh as much grain as I had put into the ground for seed. That was the start I had as a practical farmer; and over that period1 I had to work at anything and everything I could get to do in order to pay the interest on the money I owed. Needless to say I was much further in debt at the end of that four-year period than I was when I began, though I had put in four hard years and somebody else had reaped the benefit.
I do not think there is any particular need for me or anyone else to waste much time in telling of the trials and tribulations through which the farmers have gone, because the representatives of the three western provinces laid their case plainly before the government, backed by all kinds of statistics. But we find that another group has been to the government and presented its case, and from the make-up of the present bill I feel that this group must be the power behind the scene. The farmer is being used to produce, and somebody else reaps the profits. From my own experience I can truthfully say that if I had not worked at anything and everything I could get to do outside of the farm, I would have been on the road many years ago. However, I built up the most economical farm unit I could; I made use of every bit of help I hired. I woi^ced every hour I could, more than once going for thirty-six hours without sleep, and I am still on the farm; but if it had not been for money I earned in other work I would have been on the road with hundreds of others who have had that unpleasant experience during the years I have been in Canada.
When I was home on my last visit, just before getting on the train to return to Ottawa a farmer told me his latest experience with the mortgage companies. He had obtained a loan of $9,500 on his land and buildings; he had paid back $6,500 and made improvements to his farm worth $1,200, but finally was forced on the road. To show that land values change very drastically, immediately after this farmer was put on the road, his farm was sold for $2,400, though some time previously he had been able to get a loan of $9,500 on it. Only this morning I received a letter from a soldier settler who has been served with thirty days' notice to vacate. He gives a little of his history, and then says:
Following the 1929 crop failure, I was clear of debt in the spring of 1930 and had $600 cash. Although I had five thousand bushels of wheat that year. . . .

I know the district in which this man resides, and I know there was a crop failure in 1929.
... I went $1,500 in the hole on the crop; 174 cents for wheat, 9 cents for threshing, 5 cents for hauling, leaving 3J cents for all other expenses. Before I got over that I had lost a new' binder and a threshing outfit I had bought, and the years of low prices which follow'ed, combined with the outside wrork I had to do to keep the farm running at all, broke my heart and I was in hospitals and bed for two years and couldn't u'ork for tw'o more. But I am just naturally optimistic. This spring I went to work against doctor's orders and I put in 250 acres of crop with very little help. And although I am played out right now I think I will get over it in time for harvest.
This is only one of the instances which could be cited to show the adverse conditions through which the farmers have been passing.
I	remember distinctly that in 1930 on my own farm I threshed 10,600 bushels of wheat and over 5,000 bushels of oats. The wheat averaged me 121 cents a bushel, and it cost
II	cents a bushel to thresh. I believe we paid 7 cents for threshing the oats, and sold them for 14 cents. While those things were happening I continued to pay eight per cent interest, and nothing was said about it. A number of other farmers were paying exactly the same rate. The bill before the house to-day is one of the results of the policy carried on at that time, and the condition then allowed to develop.
While we were getting those prices for our grain and other farm produce, when we were selling hogs for two cents a pound, eggs for three cents a dozen and butterfat for nine cents a pound, when we were receiving prices of that kind for our products, the price of our farm machinery climbed every year, with one exception. In that year there was a reduction of about $5 in each implement we had to buy. So that I do not feel that the bill introduced to-day goes far enough. At present we have a ban on communism, and unless something is done perhaps we will need one or two other bans in the very near future; because from the way farmers are being treated to-day, and have been in the past, there is no possibility of their getting out of debt. When the farmer is compelled to produce below the cost of production, and pay up principal and interest on debts accumulated some time ago, during depression and previous years, there is no possibility whatever of his getting out of the hole, despite the fact that he works 150 per cent of the time worked by other labourers in Canada. Before farmers can even begin to put their house in order they will have to have an equitable debt adjustment act. In addition we must have parity prices

Farmers' Creditors Act
for agriculture, because, as I pointed out on several occasions, regardless of what conditions may be brought about, when the farmer is compelled to produce below the cost of production he must of necessity go on the rocks.
As the hon. member for Acadia (Mr. Quelch) made out a strong case this morning, I do not intend to add anything further at this time. I shall content myself with dealing with the sections of the bill when they are before the committee.


Mr. W. G. WEIR (Macdonald):: Mr. Speaker, I should like to say a -few words respecting the general principles of the bill introduced a few days ago by the Minister of Finance (Mr. Ilsley). The measure is a new one, but it seems to me it follows closely the previous act known as the Farmers' Creditors Arrangement Act. This it seems to me is a desirable feature in that the principles of the Farmers' Creditors Arrangement Act, so far as it was applicable in the different provinces of Canada, are reasonably well understood. Under these circumstances the machinery of the organization now to be set up will also be understood before it begins to operate. The fact that people are familiar with the operation of the old act will assist in the operation of the new one when it becomes effective.
I do not think any useful purpose would be served at this time in going over the history of the Farmers' Creditors Arrangement Act, and what has happened in connection with its operation, particularly as it has affected different sections of Canada. When that act was first introduced it was applicable to all of Canada. At different periods, from then on, action was taken by which various provinces were removed from the application of the act, and eventually it reached the point where it was applicable only to the three western provinces. In 1938 its operation in Manitoba was discontinued. That, however, was not because of any action on the part of the House of Commons, but because of one particular feature which has been attended to in the present measure.
The new legislation differs from the old in that it provides a change in the machinery of administration from the principle of using official receivers and boards of review to that of using county clerks and the judiciary. So far as I am concerned, I am bound to say I would much prefer to a continuance of the use of official receivers. I believe official receivers, when carefully selected, would have a different approach to the matter than would many of the county court clerks. Moreover, as I understand the set-up of judicial districts, 72537-320
particularly those in western Canada, they cover large areas. So that if there is to be only one county court clerk in a judicial district, to act as an official receiver, it will cause great inconvenience to many farmers who would have to reach a particular centre to make application under this measure. I submit therefore that that particular feature of the machinery should have further consideration. I understand that for certain purposes provision is made for additional appointments; but I submit that in this particular regard judicial districts are too large for administrative purposes, and particularly for farmers wishing to have their cases in order.
The other change in the measure, having to do with the arrangements for appeal, presents the difficulty which developed when the old act was under consideration, and particularly when it was considered in another part of this building. There should not be any objection to the right of appeal. It has many things in its favour, and while some may believe that to some extent it is a hardship on the farmer to have him subjected to further appeals in that regard, yet it has the advantage of at least assuring greater uniformity. So far as additional costs are concerned, as I understand the provisions of the measure such costs need not be charged up against the farmer. It is more likely that they will be charged against the mortgage company or the creditor who will exercise the right of appeal. So that I do not believe the farmer's position is prejudiced to any great extent in that regard.
The other change appearing in the new measure which is of great importance to Manitoba is the provision through which that province may be brought within the scope of the act, along with Saskatchewan and Alberta. This has been one of the controversies among farmers in Manitoba for some time. They claim, and with sound grounds I believe, that Manitoba has just as much entitlement to the provisions of the act as the other two western provinces. We are therefore gratified to see that this measure is made applicable to Manitoba.
Like the earlier legislation, the principle of the measure is founded upon the idea that the efficient farmer shall be maintained on the land. It might be just as well, when we are considering the bill, to refer to some of the declarations that were made when the act was under consideration in the session of 1938. Following some observations I had made at that time, Mr. Bennett used these words:
It was predicated upon two considerations. The first was that it was desirable to keep the farmers on the land. That was part of the

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preamble of the act, that they should be retained in possession of their farms. The second was that inasmuch as under section 7 of the Bankruptcy Act a farmer could not take advantage of the provisions of that statute, we should without making him bankrupt give him all the benefits which would accrue if he were able to take advantage of that statute.
Later on the same hon. gentleman used these words:
Just as soon as it was apparent that this legislation was on the statute books, these voluntary arrangements became the order of the day. As soon as it was apparent that by voluntary effort and cooperation these arrangements could be carried out, when the extent to *which the statute went was not generally known, these settlements were made.
That is a principle of this legislation which I think it is desirable to have in mind and which I, and I think many of us, hoped would be the scope of legislation by which voluntary settlements could be arranged and then given the force of law. We have had experience in the past of voluntary arrangements being made with no provision for bringing them into effect by law, and occasionally difficulties arose with respect to them later. But with this machinery many settlements may be effected and given final approval by the court.
I recall the discussions when the previous act was under consideration. One of the things that stood out at that time was the circumstances of a farmer who had placed a mortgage on his farm and then ran into a certain amount of difficulty and found himself unable to keep up his payments, which got further and further behind until the burden became altogether too great for him to carry. We have all seen cases where the mortgage company or whoever had a financial claim on the property exercised the right of foreclosure and obliged the farmer to leave what was virtually his homestead property, the home to which he had become attached during his lifetime, the home that had a great deal of sentimental value for him, and in so many cases we have seen that farm which the farmer was forced to leave resold to someone else at a lower valuation. When one considers the sentimental attachment one has for his home, it is a pretty hard thing for anyone to be uprooted from the place where he has been living a lifetime and then see the property turned over to someone else at a lower price than that at which it would be given to him to enable him to carry on. Machinery of this kind can take care of such cases.
So far as Manitoba is concerned, I confess that from a factual point of view I am not in a position to say to what extent the legislation is required or is desirable or necessary. We have had in our province, as in the other
[Mr. Weir.l
provinces, provincial debt adjustment boards which have had a very considerable effect. They have, however, no authority, and it was not intended that they should have authority, to compel adjustments except to a limited degree. But they did have the effect of taking care to a very considerable extent of conditions that were to say the least provoking and pressing. In the main that is a very satisfactory type of legislation, particularly if it could be understood that it would be adhered to. But in view of court decisions with respect to the Alberta legislation the general feeling in Manitoba is that it is only a matter of time before our provincial debt adjustment legislation will be challenged and declared ultra vires, and then we shall have no debt adjustment machinery and no machinery at all for controlling the debt situation in Manitoba. We are therefore very anxious that some machinery shall be set up to take care of the debt situation among the farmers of that province, if for no other reason than the possibility of the provincial debt legislation being discarded. The legislation is supported, perhaps not in exactly this form, by the provincial government which joined with the western debt conference in representations to the federal government for legislation, perhaps not exactly like what we have before us, but in principle something akin to it. The federation of agriculture in the province of Manitoba has also been strong in its advocacy of debt adjustment legislation.


John Horne Blackmore: Not like this.


William Gilbert Weir: Perhaps not exactly this type of legislation, but I think we must have regard in this house to what happened to similar legislation elsewhere, and while the house may be prepared to go further than this legislation does, I am not too sure that it would result in the measure becoming law.
I want to give one or two illustrations which the secretary of the Manitoba federation of agriculture has been kind enough to forward to me. First is the case of a man who borrowed $7,500 to erect buildings. The buildings erected amounted to $9,100. He paid in principal on that loan $1,500, and in interest $6,500. Through a series of dry years he found it impossible to meet his obligations, and at the same time he was compelled to reduce the number of his live stock considerably, until finally he found himself in such difficulty that he was obliged to give up his farm before it was foreclosed.
Another case is that of a farmer who in 1909 borrowed $9,000 at seven per cent interest. He paid off in principal and interest-there is no division between the two in this

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memorandum-over $22,000, and when he tried to effect further adjustment was refused any consideration although the loan had been reduced to $3,100. So that we still have plenty of cases in Manitoba which need adjustment.
I mentioned a while ago that we have a provincial debt adjustment board in Manitoba. It has done very good work and has been of real benefit to the farmers who were having difficulties in financing their operations. I have not a full record of what they have accomplished since the Manitoba debt adjustment act was enacted, but I have before me a summary of the operations of the board for the past two years. In the year 1941 the board dealt with 315 mortgage cases, 59 agreements of sale, and 784 tax sale applications, a total of 1,149 cases, in which certificates were requested to take foreclosure proceedings but were refused. In 1942, 333 mortgage cases were dealt with, 103 agreements of sale, and 588 tax sale applications, a total of 1,024 farm cases where certificates were refused. All the board was able to do in these cases was to refuse a certificate to allow a sale, whether it was a tax sale, or foreclosure proceedings were to be instituted. In addition to that the board has been able to effect many compromises and agreements with the creditor class. In all, with the cases dealt with by them over a two-year period, they claim to have effected, in principal and interest by mutual arrangement, reductions to the extent of $444,000. So that while some may argue, and I suppose they will, that Manitoba, having got along without this debt adjustment legislation for some time, can continue to do without it, that is not the case; I contend that Manitoba is just as much entitled to legislation of this kind as are the other western provinces.
The hon. member for Weyburn (Mr. Douglas) referred to what he called the propaganda which had been instituted by different organizations in connection with debt adjustment legislation, and particularly the application of the act with respect to certain cases. The pamphlet to which he referred, published by the Mortgage Loan association-


Thomas Clement (Tommy) Douglas: There are several.


William Gilbert Weir: -has cited cases in which it contended that there was extreme unfairness and lack of stability in types of settlement which were arrived at. I just want to say that I hope it will not be thought that an accusation of this sort was directed to the application of the act in the province of Manitoba. In support of that submission I
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would quote the following from an editorial article in the Winnipeg Tribune of May 29, 1943, dealing with Manitoba farm credits:
In Manitoba it is generally conceded that administration of the act up to its termination in this province on June 30, 1939, was eminently satisfactory. Of the forty cases cited in the pamphlet, "Abuses of Arbitrary Debt Adjustment," not one occurred in Manitoba. This pamphlet, issued by the Dominion Mortgage and Investments Association, is based on representations made to the Dominion government by the association in answer to submission made by the three prairie provinces governments.
The cases cited, therefore, do nothing to refute the Tribune's contention that the operation of the act should be restored in Manitoba as requested by the government of Manitoba. In view of the excellent reputation of the government of Manitoba in the matter of safeguarding credit and upholding the fulfilment of contracts, its request for restoration of the Farmers' Creditors Arrangement Act in this province should be met by parliament.
I just refer to that as an assurance that in the general opinion the act has been fairly administered in Manitoba, and that no cases have come to our knowledge wherein abuses in its administration could be charged.
I believe the chief value of legislation of this kind is the settlements which can be made under voluntary arrangements. When these voluntary arrangements can be arrived at and given the effect of law, it is a desirable method of effecting adjustments of debt- which after all, is a pretty serious matter.
I want to say just two or three other things with respect to the set-up proposed. Provision is made for an appeal to a judge sitting as an appeal court. I hope the minister will exercise great care in the selection of men for these positions. I confess I am not sufficiently familiar with the personnel of our provincial courts to make any particular comment, but it seems to me that the successful operation of this act will depend a great deal on the type of men who constitute the appeal courts. I suggest that this question is sufficiently important to justify the minister in going further than he has done with respect to dealing with appeals. I have no knowledge of the set-up of the judiciary even in Manitoba, let alone the other provinces, but I submit this is an important enough feature of the administration of this act to place it in the hands of a board. Leave your judge on it if you will; I think that is quite proper; but let there be associated with the judge experienced, practical agriculturists, persons who will give some assurance of a wider background including the agricultural set-up in the province. It would mean a good deal to the administration of the act and would constitute, I believe, an important improvement in the general administration.
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I would even go so far as to say that the minister might well consider providing for the supervision of cases after adjustment. We have in the west mortgage companies which are using agricultural field men; they have found it profitable to do so. These men are advising their tenants or land operators on methods of farming and matters of the kind. We also have in all the western provinces agricultural representatives who are in a position to give practical advice on farm administration and kindred matters. In addition there are farm loans appraisers in Manitoba, and soldier settlement board representatives in the various provinces. Therefore I think it would be quite proper to include a provision in this legislation that men whose debts are adjusted under it shall be placed for a period of years under a measure of supervision by some responsible organization such as I have suggested.
That is all I desire to say in this respect. I repeat that I am glad that the legislation is to be made applicable to my province.
Mrs. DORISE W. NIELSEN (North Battleford): I do not wish to take up the time of the house in repeating what has been said, but I should like to support entirely what has been said by the hon. member for Acadia (Mr. Quelch) and the hon. member for Wey-burn (Mr. Douglas).
I regret very much that the minister has waited until the dying hours of the session to bring in this bill, because it affects many hundreds of thousands of people and is of tremendous importance to our people in the west. It may appear to the minister and to the government that the type of legislation which they are bringing down at this time fulfils a certain need, but that if a longer range view is taken of this question it will be found that you are destroying the fundamental faith of our people in the land. We in Canada have always considered that agriculture is our basic industry, that it supports large numbers of people, and that the general prosperity of the country depends to a very great degree upon that foundation of our agricultural popu-iation. I know that in the future we are going to become a far greater industrial country, but still there is a future also for the vast prairies and the people w'ho live on them.
I have received much correspondence on this question and it seems to be always the same type of complaint more or less that is voiced. Only on June 30, from someone living in my own part of the country, I

received the following letter. My correspondent ' is a w'oman. After a few introductory remarks she says:
We have just received a summons from the Saskatchewan farm loan board re foreclosure on our homestead filed thirty years ago in 1913. There is no need to tell you what we have gone through these last years-depression and relief. Of course, payments were not made and interest accumulated. We began on this land with four children and no cash at all. We were glad to work out to keep the family, and have worked on the land with the time we have had left. Together we have raised fourteen children. We have one hundred acres broken now and we are going to lose all that and the work we have done through the years, because the years were lean and the crops failed. There does not seem to be much relation between a thing like this ahd the words spoken in mid-Atlantic by those two men. Churchill and Roosevelt-that all men should have the privilege of living their lives in freedom from fear and want. Do you know what will happen to this land of ours? It will be sold for a hundred dollars or so to land-grabbers who happen to have the ready cash. It has been done in three instances. One farm was sold for $25, another for $75 and a halfsection, nearly all broken, for $400. But we who have done all the work-not a penny will be left for us. We have to pay in full or lose our land.
This courageous couple who raised fourteen children are going to make a start now in their old age in a new part of the country and build a new home for themselves. It seems to me that rural children and the farm people have supplied, and will continue to supply, and continue to be the reservoir for the supply of many fine citizens to this nation. But in the bill we have before us at the present time we are destroying the faith of the people in their ability to live and make and maintain a home on the land. This particular couple raised fourteen children- what a contribution to Canada that in itself was. We say we want more Canadian-born people in Canada-Canada for Canadians; but is this any encouragement to people to raise large families? In the future our fariji people will not go in for large families. If this couple had not had fourteen children they might have been able to get along better, to maintain themselves and keep their home. But they did their best to feed, clothe and bring up fourteen children, and to make them decent and law-abiding citizens, and now in their old age they find that their home is gone 

everything is gone.
I cannot help feeling that the scheme embodied in this bill, although in a short-range view it may appear to satisfy the needs of the moment, will be found in the long run to be one of the most disastrous measures brought into effect for the rural people of Canada.

Farmers' Creditors Act


Mr. ANTHONY HLYNKA (Vegreville):: I rise to make a few observations on the proposed debt act now before the house. The farmers of Canada, I am sure, have been waiting with a great deal of impatience for the federal government to pass adequate debt legislation which would once and for all time solve their debt problems and offer them some means of protection. But as we see it this afternoon, and judging by the bill which has been brought in, the proposed legislation was drafted not for the protection of our farmers but for the protection of the interests of finance. I should like to make that statement as plain as I possibly can, because members who come from western Canada have to deal with a great number of debt cases. It is almost impossible for one to realize that farmers, who have given their best to the upbuilding of Canada, are finally thrown out on the road. The people of western Canada in particular will be greatly disappointed that the government did not see fit to bring in a measure which would adequately take care of the debt situation in Canada for all time.
It seems futile to argue with the minister or with the government or to point out that this debt legislation falls far short of what our people were expecting and to what they are entitled. The government seems to follow a traditional policy of ignoring the pleas and the demands of the farmers. Let me read a short clipping from the Calgary Albertan of May, 14, 1943. I believe it will throw light on the subject:
Farmer Evicted. Gaoled. Goods, Family, Left on Road
Edmonton, May 13.-Edwin Broder, 51-year-old farmer of Edmonton went to gaol for seven days to-day at the order of Police Magistrate A. I. Millar on conviction of a charge of obstructing eviction proceedings which left his furniture piled on a public highway and his wife and eight children without a home. The eviction order was made in the supreme court. The evidence indicated Broder tried to stop the sheriff's bailiff from carrying it out. "You had been told to get out?" asked the magistrate. "Yes," replied Broder, "but no one likes to lose his home. He will stay as long as he can." "The supreme court must have had a good reason for issuing the order," said Mr. Millar. "There may have been a reason and there may not have been a reason," the farmer answered. "I bought a quarter section of land for $4,800 on time in 1916. I raised a family of eight children, paid the owner of the land $5,600, and I still owe $5,600. I had to go through the depression years and I was hailed out a year ago." Neither Broder nor the court disclosed the circumstances surrounding the eviction order. Meanwhile the farmer's wife and family were taken in to be cared for by neighbours.
That is the sort of thing we have to contend with in the prairie provinces. The proposed
act brought in by the minister is not good enough. It may have been a good start ten years ago, but to-day, after our farmers have been struggling for more than ten years under the most adverse circumstances, it is not good enough to bring in a measure of this sort, which does not contain a single recommendation made by the farm debt conference. Let me ask the minister this question. If he is not going to listen to our farmers and accept their suggestions, whose suggestions is he going to consider? When dealing with farm debt or with farm problems the government should take the advice of members of our agricultural communities and farm organizations. This idea of forcing anything at all upon our farmers, whether they like it or not, is entirely out of date. I am certain the farmers will not receive this bill with any hope or encouragement.
At this time, more than ever before, the farmers of Canada are expected to produce more than ever before. This they must do with depleted machinery, shortage of labour, and having to pay high prices for everything they buy. Whatever he may get in return, even though fair prices are being paid for a number of commodities, the average farmer in western Canada is still not in a position to carry on and pay off his debts. It is pitiful that, while farmers' sons are serving this country overseas, the financial institutions are taking advantage of the situation and are foreclosing upon farmers by thousands. It is most unfair.
The suggestion has been made both in the press and in this house that there are farmers who are inefficient. Anyone who dares to call our farmers inefficient, I do not care who he is, does not know what he is talking about. The farmers of Canada have produced all the foodstuffs that were required, and they are producing all that is required to-day. They are carrying their burden nobly and at great sacrifice. Yet some men even dare to suggest that there are inefficient farmers. Surely the farmers have never failed this country. For many years they were placed in such a position that they could hardly exist, and this would discourage anyone from continuing to- produce without a fair return to which one is entitled.
I have clippings here which show that the farmers of Canada have done their best to meet their debt obligations. The Globe and Mail of May 9, 1942, contains an article by Mr. Wellington Jeffers, financial editor, which reads:
Farmers in both the United States and Canada have been paying off their farm debt as a result of better prices received during the war. The figures are not available, but insurance men who have this situation always under
Farmers' Creditors Act

their eyes report that a considerable effort has been made in the last three years by farmers. Even in Alberta, in spite of moratoria, farmers have been coming forward of their own free will and paying what they owed whenever they could.
That is a fair indication of farmers' willingness to pay their debts. I maintain that whenever the farmer has undertaken a debt obligation he has done his best to meet it. I have here another clipping from that great Canadian daily which has always stood for the farmer and for adequate debt adjustment, the Edmonton Bulletin. Mr. Harold L. Weir, one of the editors of that paper, had this to say on March 4, 1942:
Since the year 1930, the farmers of this province have encountered a series of misfortunes, due to no fault of their own, which have now culminated in a situation which virtually amounts to their economic disinheritance.
Further down it says:
At last the Bennett government brought in the Farmers' Creditors Arrangement Act with the purpose of so adjusting the farmer's debts that the farmer could remain on the land in the public interest as a free man and not as a serf.
Everyone hailed this piece of legislation as a measure of vital interest to the farmers and to the country at large which depended upon agricultural prosperity to promote and assure its own welfare.
What has happened to this act which was designed to rescue the farmer from economic oblivion? What has been its effect in this province?
Well, the Alberta board of review started in to make adjustments and cut interest rates on loans down to seven per cent. Later on, adjustments were made with interest rates at six per cent until, finally, Chief Justice C. R. Mitchell, chairman of the Alberta board of review, announced that all future adjustments would carry interest at no more than five per cent.
It would be interesting to the public to know exactly how these adjustments are made.
The board first adds up all the farmer's liabilities, which, let us assume for the sake of example, total $7,500.
The board's inspector next evaluates the farmer's assets-his land and equipment and improvements-which, for instance, may amount to $5,000.
The board then wipes off $2,500 of the farmer's liabilities so that these may not exceed his assets. In short, the act generously provides that a man need not owe more than the value of %vhat he owns.
But the farmer, under this adjustment, must pay five per cent interest on the newly established value of his assets and since his liabilities are fixed at exactly the same level as his assets, he is not left one dollar of equity in those assets.
The adjustment may appear to be fair on the face of it. But when the farmer is required to meet his living expenses, to pay taxes and attempt to carry out the terms of the adjustment with five per cent interest, he inevitably finds that, owing to the price of his products being below cost of production, he cannot possibly meet the terms laid down by the board.
[Mr. Hlynka.l
The vast majority of more than 200,000 farmers living in the three western provinces, in spite of all the adjustments, find themselves economic slaves with no possible chance under present conditions of ever getting out of debt.
This indicates the almost hopeless situation in which a great many of our farmers in western Canada find themselves.
May I quote one more reference which appeared in the Edmonton Bulletin, the champion of the farmer, on a front page editorial on August S, 1938:
The farmers and, home owners of Alberta have been ruthlessly exploited by the highest interest rates charged anywhere in the British commonwealth of nations. Usury at seven, eight, nine, ten and1 up fo fourteen per cent has been the rule during the entire history of Alberta.
That such interest rates are legal under our laws does not alter the fact that the people of Alberta have been and are being systematically robbed by a small but powerful group of financiers in private control of Canada's monetary system.
Farm loans in the United States are on a long term basis of twenty to thirty years with interest rates of three to three and a half per cent. Home owners pay three and a half to five per cent.
This is another indication of the situation which exists in western Canada. Our munition manufacturers and others received subsidies from this government to enable them to produce with the greatest possible speed and in great volume, but no such subsidies have been given to our farmers. Some may say that many farmers received the acreage bonus, and what not. That was not enough to buy salt for their ham and eggs. Most of that money had been used up in administrative costs, and the farmers received very little. Almost all industries receive support and subsidies from the government; why not place the farmer on the same basis? Then there will be no objection to paying off outstanding debts; for if the farmers were in a position to pay off their debts, they certainly would do so. We all know that incomes of our farmers during the ten year period from 1929 to 1939 were so disgracefully low that it was absolutely impossible for any man, no matter how honest he might have been, to meet his debt obligations and carry on. Listen to what Mr. Jeffers has to say in an article which appeared in the Toronto Globe and Mail of June 8, 1943:
The census of 1941 shows that the farmers and farming in Canada are in nothing like the parlous state which might have been expected from recent propaganda at Ottawa from those who want farm credit arrangement acts stiffened in the prairie provinces, and measures taken to forgive a great deal of the debt that already exists.
He goes on to point out that there has been a decrease in farm debt, as follows: in

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New Brunswick, by 7-6 per cent; in Ontario, by 14-8 per cent; in Manitoba, by 22-1 per cent; in Saskatchewan, by 6-3 per cent; in Alberta, by 5-3 per cent and in British Columbia by 14 per cent. That decrease took place during the ten year period from 1931 to 1941. In the province of Prince Edward Island there was an increase in farm debt amounting to 22-8 per cent; in Nova Scotia an increase of one per cent and in Quebec an increase of 19 per cent. It may be all right to quote these figures, but the writer of the article overlooks the fact that the decreases he mentions have resulted largely from so many farmers being dispossessed of their land.
I am sorry I do not possess strong enough language adequately to condemn this bill. In time of war, when the farmers have sent their sons to offer their very lives for this country, there is no reason why the government should not give at least adequate protection to agriculture, our basic industry. Were it not for agriculture where would we be?	The majority of our people are
dependent upon agriculture for their very livelihood; yet we listen to complaints by members of the opposition with perhaps only a yawn from the government, and the ministers say nothing when cases are recited about people being dispossessed of their land and that they are losing their life-earnings. Surely it is time even for this reactionary government-which is perhaps the most reactionary government in the history of Canada-to see to it that no farmer is thrown off his land. Why not come out and propose a complete cancellation of interest on all debts until the end of the war and one year after? Why not propose the cancellation of compound interest, which after all is nothing more than a penalty for failure to meet a debt obligation, though we have recognized that it is through no fault of the farmer that he has not paid his debts on time? If it is not his fault, why then should we ask him to suffer this penalty? Nothing has been said about farm credit, which should be extended to farmers on easy terms; for unless the farmer has this credit he cannot meet his debt obligations.
I have only a further word to say. To my mind the most important problem facing the farmers of western Canada to-day is the question of tenancy. If you examine the latest figures available you will find that less than half our farmers own their own homes. Surely they are entitled to a more serious consideration than that. It would be a most dangerous thing that can befall this
nation if we permit our people to lose equity in their homes, which it took perhaps all their lives to build up. Yet we give them only the consideration of referring them to the courts. Well, the house heard what happened to the man about whom I have been quoting. That is what is going to happen to others, unless the minister andi the government take advice from farm organizations in the future. I appeal to the minister even at this late date to revise the whole measure, and to place it on a basis which will include some of the recommendations placed before the minister a few months ago by the farm debt conference.


Mr. G. H. CASTLEDEN (Yorkton):: Mr. Speaker, the farmer in this instance may be compared to a swimmer who is out of his depth and is drowning, with a millstone tied around his neck, and is looking to the House of Commons for assistance. He finds that instead of legislation being introduced which will relieve him of his difficulty, the minister is making arrangements for a pulmotor, or even for the funeral in the event of the body being recovered from the water.
This is a measure to facilitate compromises and arrangements between insolvent farmers and their creditors. Why wait until a farmer is insolvent? Why not do something before he becomes insolvent? I wish the Minister of Finance (Mr. Usley) could visit some of the debt-ridden farmers in my province and listen to their comments respecting this type of legislation. They know perfectly well it was in a period of high prices that they incurred much of the debt now loaded upon them. They incurred that debt during the last war, and when prices fell they found they could not meet their obligations. When another war loomed up there was the possibility that they might again be able to get some of the high prices they had obtained before. But the minister who is piloting this bill through the house is the man whose legislation has put the ceiling on prices. I am not saying that that is all bad; but I do say it is one thing which has prevented the farmer from paying his debts. Since the government saw fit to interfere at that time and to introduce legislation which has prevented the farmer from paying his debts, then that same government ought to give him more consideration than is being given under this measure in respect of his indebtedness. Particularly is that so in respect of conditions now existing in western Canada, where grain-growers are finding so much difficulty in obtaining cash with which to pay their debts.
Farmers' Creditors Act

The Minister of Trade and Commerce (Mr. MacKinnon), who is now in his seat, knows perfectly well that farmers were not allowed to deliver their grain, because he says facilities were not available for taking that grain out of the country, nor was there room in the elevators to store it. But it was cash from that grain which the farmers must use to pay their indebtedness and the interest thereon. The farmer produced the grain, but he could not possibly sell or deliver it. Did the government take steps to see that no interest was piled on farmers' indebtedness during that period? No. Did the government do as was done in the United States? Did it say to the farmers^ "We will give you an advance on the grain which you have properly stored on your farms", so that the farmer could make interest payments? No. That was done in the United States. On the basis of the security of the grain stored on farms the United States government is advancing this year an amount equal to $1.22 No. 1 northern wheat. Even when the farmer is allowed to deliver his wheat in western Canada the ceiling price is only 90 cents Fort William.
Sometimes we hear it said': "Oh, the farmer has other products." Yes, he could turn his grain into cattle, hogs and dairy products. But again this government has prevented! his earning money in that way, particularly in Saskatchewan where the national selective service board, an instrument of this government, has in some instances taken the last boy off the farm. The records prove that Saskatchewan has been badly hit in that way.
A study of the debt problem illustrates some of the basic injustices of the whole economic system under which we operate. Debt is the natural result of the capitalistic system. Under this system the reward to capital always comes first, and the reward to labour is left to take care of itself. It is not recognized. Under this system Shylock demands his pound of flesh-
" the law allows it and the court awards it." The last dollar of production is taken off the farm, whether the mother needs medical attention or the children need clothes. There should be some law in the land establishing a basic income for all families. The mortgage contract is the machination of those who have been given the power to extract the last dollar a man may earn. It has no basis in justice, in humanity or in fairness. If this bill contained the proper provisions it would be an effective agent in restoring the equity of the farmer on his farm and would guarantee to him that so long as he worked his farm well he would have the right to live in security so far as his farm [Mr. CastledenJ
debt was concerned. This bill does not touch that problem at all, and I believe the minister will admit that that, is so.
Farm debt, may I say to the minister, is a national problem from coast to coast. I have been in farming communities in eight of the nine provinces of Canada, and I find the same story told everywhere. If the government does not initiate some legislation to remedy this injustice, some day it will have to make way for a government which will do it. Democracy will not permit that state of affairs to continue much longer.
I shall never forget the story told by a medical doctor at a convention in Saskatchewan some years ago. He had to tell a mother that she was dying of cancer. He said, " Why did you not have this condition cared for a few years ago?" She replied, "I remember your telling me I needed the attention, but that year we had a short crop. We did have some return, but the mortgage company took it all. The next year the children needed clothing and I put it off again. The next year the mortgage company came along and took practically everything we had." "Well," the doctor said, "your three years' delay has cost you your life." If a farmer, his wife and family, labour all year and through no fault of their own have no return, either because of price, because he is not allowed to sell his commodity, or because of drought, rust, hail or storm, surely that man has lost sufficient for one year. Why should a mortgage company suoplying the capital required on a farm always be guaranteed a crop, irrespective of whether the farmer gets a crop or not? Surely this is basically wrong; surely it is something which must be changed. Instead of taking care of the farmer, instead of giving him some assurance that compound interest will not be piled up, instead of ensuring him that the interest in a bad year will be taken care of in some other way, the farmer is further penalized by having interest piled on him as a load of debt. Then the next year the interest is loaded on that of the year before, and interest is piled upon interest, the debt rising and rising until the farmer cannot find his way out.
There are some who say debt adjustment is not necessary. " Why," they say, " the agriculturist is in the best position he ever had." The hon. member for Regina City (Mr. McNiven) shouted across the floor to me one evening that the farmers in my district were better off than they ever had been. I have here the quarterly bulletin of agricultural statistics, and at page 200 I find that the total cash income from the sale of farm products from January

Farmers' Creditors Act
to June, 1942, as compared with the same period in 1941 decreased by 23 per cent. In spite of the fact that 1942 was one of the greatest years for the production of farm products, particularly in the west, the province of Saskatchewan shows the lowest increase in cash income of any province in the dominion, the increase in 1942 over 1940 being about twenty-five per cent, while in one other province it went as high as seventy-three per cent.
I know the argument which will be put forward by those who oppose this measure. They will say:	You have to take care of
credit and think of the widows and orphans who have put out their money in farm mortgages. I have examined some twenty cases taken at random, and I find that in only three of them was the farm mortgage held by private individuals, and that in every one of these cases where the creditor was an individual, an ordinary human being like the farmer who is working on the land, they recognized that there was such a thing as justice and made no injurious demand. But in the rest of the cases, where a mortgage or trust company were the creditors, that is where the injustice occurred.
The basis of the tremendous farm debt of the western provinces was the ten years of depression through which they went. The drought in those years should have been recognized as a national calamity, and national measures should have been taken to cope with it. There is no reason why debt should have been allowed to pile up in that period year after year. Surely the farmer suffered enough in those dried-out areas in those cropless years without having to have everything taken away from them, with no relief provided for them with regard to their debt.
Some people may say:	If you adjust farm
debt, you will destroy farm credit. Well, it could not be hurt very much more than it is under the present system. If proper measures had been taken by the federal government the farmers would have paid off every cent of this Shylock-like indebtedness. We need an entirely new set-up with regard to farm credit, and federal funds should be available to agriculture on a production basis.
The farmers will pay their debts if they can. I have known farmers who have done without the necessities of life, gone without food and medical attention, and many of the things that ordinary people consider absolutely necessary, and starved their families, in order to pay interest. I have seen too many hundreds of good farmers lose their whole life's earnings
for anyone to tell me that there is no need of debt legislation-and I do not mean bankrupt legislation.
Some people say: Leave the debt problem alone and it will work itself out. But notice this. As long as money is easy, prices are high and the farmers go into debt. As soon as money is tight, prices are low. A farmer goes into debt when wheat is worth $2 a bushel, as it was in the last war. A debt of $2,000 then means 1,000 bushels of grain to pay it off; but when grain goes down to 40 cents a bushel, to pay off his debt the farmer has to pay back 5,000 bushels of grain. There are, admittedly, some farmers who perhaps extended a little too much and who may not have been quite as saving as they should have been. But you do not need to talk about saving to the farmers of western Canada. They have saved and scrimped far more than anyone should have to do in this land of plenty. I know farmers in the west like the one who borrowed $8,000 and paid back $10,500. This particular farmer wrote to the lending company and asked, "How much do I owe now?" He got the reply "We will settle for $7,500." A friend of mine borrowed $1,700. He paid back $2,100 and I said to him, "You must be paid off now." He said, "Pretty nearly. Ah I owe now js $2,600." In the Prime Minister's constituency last fall I talked to a group of farmers and asked one how he was getting along. He said, "This is a great country. I came here thirty years ago and took a half-section of land all covered with bush, but there was no mortgage. To-day it is all covered with mortgage but no bush on it."
A debt conference of the western provinces was called which asked this government to do something to remedy the debt situation. But this legislation does not even recognize the basic causes of debt. Somebody has said something about the operation of the old act. If you study the figures, you will find that at the rate we are going, the act which has so far covered about 2J per cent of the indebted farmers during each year of its operation, will take forty years to get them all dealt with, and there will be a new crop of debtors by that time.
I have attended the sittings of some of these boards, and the kind of thing I have heard has not given me very much confidence that conditions will be much better under this setup. I sat in the court and listened to a man who was making his plea. He had hired a lawyer to present his case. The chairman said to the man, "How much is your debt?" The man replied, "It is $800 and I have paid back
Farmers' Creditors Act

$650." "How much do you owe now?" asked the chairman. The man said, "I owe $1,100". "What do you want done about it?" The man replied, "I would like to get it down to six or seven hundred dollars." The chairman said, "What would be the good of that? Can you pay it off then?" The man said, "I think so. I work hard and want to get it cleared off." "When are you going to pay it off?" And the man replied "Just as soon as I get a good crop and a good price." The chairman said "When are you going to get a good crop?" "I do not know," the man replied, "it will be as soon as the Lord sends rain." Then the chairman asked, "When are you going to get a good price?" But the Minister of Finance was not there to tell him that.
It is not the farmer's fault. He labours on his farm. Why should all the risk be taken by the farmer? Why should labour always take the risk in that way? Does the farmer deserve no protection for all he has done in those years when he did all he could? I hold no brief for the farmer who is dishonest or for the man who will not work. Those things can be proved, and if a man has been found to be deliberately dishonest or unwilling to work I would say, let the courts take action in such cases. But where it has been proved that a man is not guilty of these things, he has a right to be secure on his land and to some recognition of the fact that he has toiled on his farm for practically a lifetime. Why is it that the law will permit a man who has paid all but a few hundred dollars of his debt to be foreclosed, and the creditor to take everything, recognizing nothing of those years of labour and toil which that man has put in? The same applies to a good many city dwellers, men who having bought a home, perhaps mortgaged the place to get the money to buy it, and have paid off all but a few hundred dollars when the property is foreclosed and they receive nothing. These things are wrong.
Let me also point to some of the adjustments which have been made under the Farmers' Creditors Arrangement Act. The minister may not know what kind of contracts the board sometimes makes with farmers. Here is a typical case: first, to get the farmer where he owes a couple of thousand dollars which he cannot pay under existing conditions; they then reduce it to $1,500, which also he cannot pay under existing conditions because he is not getting parity for his produce. They say, "Well, you sign a sort of crop-lease agreement. Under this one-third of your crop for the next three years is to be delivered to the creditor; we will sell it and the value will be credited to you, part to pay interest, and if anything remains, the

balance to pay part of the principal. Then at the end of three years a readjustment of principal will be made on that basis. After that, for the next three years you are to pay three per cent of the principal and all of the interest. For the next three years you are to pay five per cent of the principal each year and all the interest. For the next three years you are to pay seven per cent of the principal and all the interest, whether you get a crop or not"-except in certain bad years where adjustments may be made-"and the next year you are to pay the balance of the principal and all the interest that is due, which is 55 per cent of the principal and all the interest." What does that amount to? Ais well as that, there are certain regulations which state that the creditor shall tell the farmer what he shall grow; how he shall farm the land; how much summer-fallow he shall put in each year. It may be that in the thirteenth year, when the farmer has to pay 55 per cent of the principal, the creditor will tell him to put in all summer-fallow so that he shall have nothing with which to pay the 55 per cent. That is a common settlement under the act, and that is why farmers do not flock to get all their debts adjusted under this set-up. It is nothing less than a thirteen-year sentence of servitude with a boss ordering you around and in the end you are to be foreclosed.
I suggest that, if you want to make this act something which will work, all farm debts, where application is made, should be adjusted after there has been a search to determine the extent to which the present debt is a result of crop failure, and in years when the farmer has no production over and above enough to sustain his family, no interest should be charged and there should be no interest charges compounded. Also, all excess charges which have been loaded on this farm debt should be carefully checked. When some of these mortgage and loan companies get a farmer in debt and send him a bill of what he owes on his mortgage, it makes interesting reading. I have here a copy of a bill which was sent to me, and which includes these items: first of all, interest, $320; interest on interest; insurance premium; another years' interest; interest on interest; interest on disbursement; interest on account January 1; inspection fees. Then he had to pay these amounts every year: interest on interest; inspection, $5; hail premiums, $29; insurance premiums, $28; interest on "loan sundries" to date-whatever those are-$320; interest on interest $37. All the inspections and other items which are set down here grow larger and larger. Interest climbs up, plus inspection

Farmers' Creditors Act
fees, solicitor's fees, long distance calls and so forth. No wonder farmers' debts grow. When not paid, these are compounded.
In all contracts there should be a clause which permits a farmer who makes his living on that land to have some basic living costs which he can hold back, something on which his family can live decently. If you recognize that claim, it will be at least a step forward. There should be no interest in those years when his production does not bring him a sufficient income for this.
Further, I would say that there should be a provision, effective while the war is on, prohibiting foreclosure on any farmer whose son or hired man has been taken away from him, as has happened in so many cases. Foreclosure should not be permitted in respect of any farm where the state in this time of struggle has had to call upon the farmer to send his boy to the armed forces, or any such man who goes voluntarily. Surely those men who are willing to go and fight should receive legislative protection at least to the extent that there should be no foreclosure or issuance of writs permitted against their farms during that time or when the farmer is not allowed to deliver the produce of his toil. I have had cases of this kind in my own district. A farmer came to me and said, "Look at this. The sheriff is threatening to issue a writ against me, and I have to deliver that grain; yet the government tells me I cannot deliver it." As a result of a little correspondence I finally got them to say that they were not going to proceed with the business of foreclosure,' because the farmer had the grain on the farm and could not deliver it, but he would have to pay the cost of issuing the writ.
I say to the minister, make some alterations in this bill in the interest of those who work and produce the good things of the world. Do something which will save these people in time of stress. Put a little real justice in this bill. If this government does not see its way to do that, it is time that it made way for a government that will.


Mr. J. H. SISSONS (Peace River):: I wish to speak briefly on the principles of this bill and to support those principles, because I believe that they are advantageous to the farmer. I acted for farmers for twenty years before I went into politics. I expect to be acting for them many years after I am out of politics. I am only a small-town lawyer; I have no interest in the big interests or financial barons or the Dominion Mortgage and Investment association;- I am interested only in the farmers of my constituency.
I was surprised at some of the attention paid this afternoon and this morning to memoranda
and statements and briefs submitted by the Dominion Mortgage and Investment association. I certainly do not think these briefs merited anything like the attention which my hon. friends have given them.


Victor Quelch: We were judging by the results in the bill.


John Howard Sissons: I am judging by the results of the bill. This is a bill not framed in the interests of financiers but framed entirely in the interests of the farmer.
The hon. member for Acadia (Mr. Quelch) interrupts. He based his stand, as I understood it, on three points. One was that the courts have been substituted for the boards of review, and that in this way the costs would be increased and the sympathetic attitude which the boards of review had displayed would be lost; second, that there was failure to consider debts as a recurring problem; and third, that there was right of appeal, which would also, according to my hon. friend, add to the farmer's costs.
I am not going to bother to deal with the second of these points, but I wish to deal with the first and third. The second point raised by the hon. member was, as he admitted, a problem really beyond the scope of this bill; it was a problem concerning the whole question of western agriculture, of a market for western produce and of credit facilities. That is a problem, and I am entirely in sympathy with him so far as that is concerned. But it is certainly not a problem that can be dealt with in the consideration of this bill, and for that very reason I feel that ninety-nine per cent of what the hon. member who preceded me had to say was quite irrelevant to the discussion of the bill.
I wish to1 deal with the first point raised by the hon. member for Acadia, as to the courts having been substituted for the boards of review. The first thing a farmer does now under this bill is to file his proposal with the clerk of the court. I do not think for a moment that any member for Alberta would object to that, bearing in mind that these clerks of court have been the local representatives of the debt adjustment board. They are the men appointed by the province who have been acting for years past in the adjustment of debts in Alberta. They are men who know the local conditions and who have had considerable success in working out adjustments. Surely there is no man to whom my hon. friends from Alberta would rather have the proposal made than the clerk of the court. Certainly that is a feature of the new bill which in my view is very much superior to the old act.
Farmers' Creditors Act

From the clerk of the court, who replaces the official receiver, the proposal then goes to the district court judge. My hon. friends from Alberta apparently feel strongly that it should not go to the district court judge. Apparently they would prefer boards of review. I have had considerable experience with the workings of this act during the last nine years and I know how it works in my own area. We have a board of review that comes into the district possibly once a year-it has been usually once every two years. That board includes a supreme court judge, a lawyer, and a member representing the farmers. They come to my judicial district and stay there for about two days. They handle a dozen or more cases a day, often nineteen or twenty. They are not acquainted with local conditions; yet they make their proposals, and then they are gone. I do not think that is as satisfactory an arrangement as to have the proposal dealt with by the district court judge who is resident in the district, who is acquainted with the district and acquainted largely with the farmers of the district, and who has a responsibility and a duty to that community.
I would point out this to my hon. friends. When they are dealing with a district court judge they know exactly what they are dealing with. They are dealing with British justice, which has been hammered down over the centuries. When you are dealing with British justice and a Canadian court you know what you can expect. You know you can expect justice and fair play. I emphasize that, because there is a fundamental difference between a judgment of a court and a decision of an administrative board. Remember that a board is not bound by rules of evidence; it is not bound by court procedure. All that a board has to do, as I recall the law, is this: it must not act in a manner offensive to the general principles of justice.
I would point out that even the boards of review under the Farmers' Creditors Arrangement Act had the right to hold and did hold meetings in secret, which is not permitted in any court of law. They heard confidential evidence, received confidential reports on the value of the land, and had the authority to receive and did receive confidential reports on the character of the farmer; and acting for that farmer you had no right to see that confidential report as to the value of the land or the confidential report as to the character of the farmer. That offended a fundamental principle of law, the main principle which all courts follow, that no man shall be tried or have his case determined without the right of seeing and hearing the evidence upon which

he is tried or upon which his case is determined. There is a fundamental difference between a court and a board, and I find it strange and hard to believe that any hon. member, or anyone purporting to speak for farmers, would say that he would prefer such treatment for his farmers to the open and above-board treatment which the farmers can and do receive and must receive in any court of law.
The hon. member for Acadia said that the cost would be increased by this procedure of taking away the board1 of review and substituting the court, overlooking entirely the provision in the bill which states that no costs shall be payable.


Mr. JOHNSTON (Bow River):: It does
not say that.


Thomas Clement (Tommy) Douglas: Read section 43.


John Howard Sissons: I will deal with the question of appeal later. Ordinarily, either in the hearing before the district court or in the hearing before the court of appeal, no costs are payable apart from exceptional cases, and the exceptional case is all to the benefit of the farmer. I will come to that later. My hon. friends also contend that the farmer would be handicapped. I would remind them that, as far as Alberta is concerned, the farmer will have assistance in preparing his case for the clerk of the court. He will have assistance, if he wishes it, before the district court judge; he will have assistance, if he wishes it, on appeal.


Thomas Clement (Tommy) Douglas: Provided by whom?


John Howard Sissons: By the provincial government.


Thomas Clement (Tommy) Douglas: We are dealing with a federal act now.


John Howard Sissons: At the last session of the provincial legislature bill No. 46 was passed, the debtors' assistance act. That provides for the setting up of a board1 to assist debtors. That board has been set up and is composed of the very men who formed the old Debtors' adjustment board.


Charles Edward Johnston: What about the other provinces?


John Howard Sissons: I am concerned only with my own province, the one I know best. Let other men worry about their respective provinces. I should like my hon. friend to pay attention to this clause, which reads:
The board shall have the following powers, duties and functions;

Farmers' Creditors Act
(a)	to advise and assist debtors in adjusting their debts and in working out satisfactory arrangements;
(b)	arrange meetings between debtors and creditors in endeavours to bring about amicable arrangements.
This is the paragraph I particularly have in mind:
(c)	to advise and assist debtors in the preparation of any plan or scheme or settlement of their debts before any dominion board or court which may have been or may hereafter be set up for the settlement of debt.
That act was passed just a couple of months ago, and I think that section clearly indicates that Alberta anticipated that when this Farmers' Creditors Arrangement Act was being amended it would be so amended as to leave the working out of the act in the hands of the courts.
Mr. DOUGLAS (Weyburn) Would the hon. member not agree that that provision ought to be in the act and should apply to all provinces?


John Howard Sissons: I should have to give some consideration to that, but it could be done under the regulations if it is desired. I am not so sure whether the farmers themselves will take advantage of that board; in fact, I do not think they will.


Charles Edward Johnston: But it should be there.


John Howard Sissons: I believe that my farmers
would much rather have me act for them before the district court judge and before the court of appeal than they would this debtors' assistance board. But it is there and will be of help to the farmer if he needs any in the preparation of his case, either for the official receiver, before the district court, or before the court of appeal.


An hon. MEMBER:: That is their privilege.


John Howard Sissons: That is their privilege; it is there. The hon. member for Acadia referred to an argument which had been advanced, I believe he said by a mortgage association, that the act should be limited to efficient farmers. He should pay no attention to a contention like that, but he submitted it to the house. The hon. member went on to say that only dishonesty and rank idleness should be barred under this act. I think the act goes even a little farther. I do not think anything short of that is barred when it states that a proposal shall be based upon the present and prospective capabilities of a farmer to meet his debt, consideration being given to the productive value of the farm. That is the principle which is laid down for the guidance of the district court judge.
The district court is an inferior court, and in rendering his judgment the district court judge must show jurisdiction upon the face of his order; he must show on the face of the proposal which he makes that it was based on these considerations. The act certainly goes far enough to take care of most of the inefficient farmers. It takes care of the inefficient farmer on a good farm; it takes care of the efficient farmer on a poor farm; it considers the capabilities of the man and the productive value of his farm. It is not the productive value of that farm as joined to some other farming unit, or some other circumstances; it is the productive value of that farm as worked by that farmer, with his limited capabilities.
I do not think there can be anything stronger or fairer than that. I would expect that those opposed to this act would say that the provision goes very far. I think there can be brought under the provisions of the act the farmer who is idle, the farmer who may be somewhat inefficient, just so long as he has not acted in bad faith in the management of his farm or the disbursement of his income. There would have to be fairly strong evidence to keep any farmer outside those provisions.
My hon. friends object to the provision for appeal. I want an appeal for the sake of the farmer. I am not interested in any mortgage company, but I do want an appeal for the farmer. If that provision to which I have referred was not loaded in favour of the farmer, I might agree that we should not have an appeal. But we have a provision which is loaded in favour of the farmer in that the district court judge must base the proposal upon the present and prospective capabilities of the farmer and the productive value of the farm. The district court judge must furnish the appeal court with a statement of all the information upon which he bases his decision. If a proposal shows on its face that the district court judge did not base his decision upon those ingredients, then I want the right of appeal. I want the right to go to the appeal court and be able to say that the district court judge erred, that he based his proposal upon something which is not favourable to my client. I do not think there is any doubt about what would happen; the proposal would be corrected until it was based upon the foundation set out in the act.
Then there is the question of cost. My hon. friend interrupted me a moment ago to say that there would be certain circumstances under which costs might be given against the farmer.


Victor Quelch: I had in mind the costs of a farmer represented by a lawyer.
Farmers' Creditors Act


Charles Edward Johnston: Which are considerable.


Victor Quelch: Could be considerable.


John Howard Sissons: Where you have dealings before the board of review or before the court, in the province of Alberta, in which my hon. friend resides, the debtors' board takes over that responsibility.


Victor Quelch: It is a federal responsibility nevertheless.


John Howard Sissons: The costs we are dealing with would be insignificant when you take the picture as a whole.


Thomas Clement (Tommy) Douglas: If you cannot pay them, they are not.


John Howard Sissons: I do not know what the farmer friends of my hon. friend are like, but I have been acting for farmers for over twenty years and they have paid me. Of course, I may have in the Peace River district farmers who are superior to those in certain parts of Saskatchewan, for I certainly could not picture my farmers as being of the type that have been referred to as living in certain parts of Saskatchewan.


Thomas Clement (Tommy) Douglas: It is a pity they did not demonstrate that when they were voting.


John Howard Sissons: They did. I want that appeal provision left in the bill, because it is in the interests of the farmers, and that settles 'the matter as far as I am concerned.
I find that in its broad principles this is a bill which I can absolutely approve, because I believe it to be in the interests of the farmer for the most part, though not entirely.
Here I come to a strange thing. I am very much surprised that the hon. member for Acadia (Mr. Quelch), the hon. member for Battle River (Mr. Fair) and the hon. member for Vegreville (Mr. Hlynka) did not draw the attention of the house to one feature which in my view is not a fair provision to have inserted in this measure. If they did mention it I shall apologize to them, but certainly I did not hear them. I refer to the entirely new principle contained in section 33, which I consider is inconsistent with the other provisions of the bill, and which I believe is bad in law. unfair to the farmer, detrimental to the public interest, and altogether impractical and unworkable.


Mr. BOUCHER:: It loads the dice the other way, does it?


John Howard Sissons: It is a principle which I do not think should be in this bill, but my hon. friends passed it by entirely. They attacked

provisions of the bill which can be well defended, but overlooked entirely a provision under which every proposal that has been made by a court of review must be brought before the courts again if a sale is made within five years from the time the proposal was confirmed.


Victor Quelch: If I may ask the hon. member a question, if he is opposed to that principle why did he not oppose a similar provision in the Veterans' Land Act?


John Howard Sissons: I admit that this provision is in that act, and that may be an argument which will be advanced in support of its insertion in this bill, but I do not think that is sound ground for adopting this principle.


Victor Quelch: But the hon. member never opposed it in the Veterans' Land Act.


John Howard Sissons: I quite agree, and an argument can be put up in favour of it. However, I do not think the position under the Veterans' Land Act and the position under this measure can be compared at all; and even if there were arguments why such, provision should be inserted in the Veterans' Land Act, I do not consider that those arguments apply with equal validity to this bill. There is that one provision of the bill which I do not like, but taking it as a whole I want to say that I most heartily approve the principles of the measure. I think they are a vast improvement over any provincial debt adjustment acts we have had in the past, and a great improvement over the old Farmers' Creditors Arrangement Act. Therefore, Mr. Speaker, I intend to support this bill.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Edwards in the chair.
On section 1-Short title.
Charles Edward Johnston: I should like to say a few words on the bill in general. I am not going to take very long at this time, because we shall be able to take up the various items in detail as we go along, but generally speaking I think this bill is not as good as the old act, for several reasons which have been pointed out already and into which I am not going in detail. The only feature that I think is perhaps an improvement over the old act is the fact that Manitoba is included. The hon. member for Peace River was speaking of the concessions that were made under a bill passed by the Alberta legislature, and he said he was not concerned about the other provinces but was primarily interested in the province of Alberta. In considering a measure of this kind, I do not think it is proper for any federal member to consider

Farmers' Creditors Act
only how it will affect his own province. Legislation of this kind should be general, and should apply to all parts of Canada. Therefore I think the minister is to be congratulated upon this one point, in any event.
One objection I should like to make is to the fact that only one proposal can be made.
I am not going to begin to recite all the cases I could mention, for I believe I could keep the committee here for a. week if I brought down my files and went through the cases of this kind that have come to my attention. Many of these personal incidents have been pointed out; I think they are very much the same in all three prairie provinces, at all events, so that I do not see that any good purpose would be served in bringing down further cases of the same kind. Supposing a proposal is made which becomes unsatisfactory to the debtor as a result of circumstances over which he has no control. For instance, there might be an emergency year, when the government would recognize that the individual farmer was not to blame for his inability to meet his debts. That possibility is completely ignored under this bill. Surely it is unjust to say there may be only one proposal, and not take into account the possibility of circumstances arising, such as drouth, hail, or destruction of the crop in some other way. Under this act only one agreement or composition can be made. It may be that the farmer undertakes to pay $500 a year in reduction of the principal and interest at five per cent; then it may happen that the farmer is hailed out. How in common sense could the farmer pay that $500 a year? On the face of it that is ridiculous, and I am sure hon. members of this committee will not permit such a provision to remain in the bill. I believe that since this has been drawn to the minister's attention, he will see the absurdity of having such a clause in the bill, and an adjustment will be made. There are many other cases in which the farmer may be placed in a position where it is utterly impossible for him to pay. For instance, in war time he may be a grain farmer, raising wheat, a delivery quota which is set by the dominion government. How can he dispose of sufficient crop to take care of that payment? "Oh, well," someone may say, "when the court is setting this proposal they will consider his quota." But the point is that the government here may see fit to change that quota. For instance, the farmer may have fourteen bushels this summer; then later in the fall the regulation may be changed to the point 'where he would have only a five-bushel quota. Yet the act says definitely that there shall be only one proposal, only one settlement, and that the farmer is obliged to comply with that.
It will ibe seen that the farmer is placed in an impossible position, and that he has no alternative. The proposal has been completed and agreed to, and therefore he has no recourse whatever. I might even go so far as to say that I think this is purely mortgage companies' legislation-and in that statement I want to be fair. As I see it, everything is set to favour the creditor.
Let us review the situation for a moment. One proposal is to be made. I believe it will be generally recognized that when the courts are setting these proposals they will take into consideration the financial circumstances of the farmer, the prices prevailing and the general market conditions. The settlement will be made on that basis. If it is agreeable to the company, they will let it go; and in those circumstances it would probably be agreeable to the farmer. But if it is not agreeable to the company, then the company will appeal. I think hon. members of the committee will understand, generally speaking, that if one has an insurance policy on his car, and has an accident, the general policy of the insurance company is to appeal, or to take the insured to court, if the owner is not satisfied with their offer of settlement. Of course they run the chance of not coming out on top, but they can afford to do that. They may lose some cases, but from the point of view of principle, they will go to the courts. They do that, because in all cases they have one or two solicitors hired continuously to handle their litigation. I am not complaining about that, because it is a matter of good business procedure. But the fact remains that in every instance the company will be in a position to appeal. On the other hand, the farmer is not in that position. It will cost him money every time an appeal is lodged, and he just cannot afford that extra expense.
I believe the principle behind the measure is wrong. Rather than forcing the farmer to pay, the purpose should be to keep the farmer on the farm. Especially in wartime the government, I suggest, should follow the principle of keeping the farmers where they can produce the goods required. One might say, "Oh, well, these will be only occasional cases." But that is not so, when one considers the number of farms in western Canada on which there are mortgages.
The hon. member for Peace River referred to costs. I shall not deal with that point other
Farmers' Creditors Act

than to say that the matter of costs is dealt with in section 37. It is true the section does say:
No costs shall be awarded on any application, motion or hearing before the court or the appeal court-
That is, no costs shall be made on any application before the court of appeal, except -and then it goes on to give some exceptions. So that there may be costs attached to this.


Mr. EDWARDS:: Read the rest of the section.


Charles Edward Johnston: It states:
. . . except that the appeal court may, if of opinion that there were no reasonable grounds for bringing an appeal. . . .
And so on. Of course that is decided entirely by the court. If they contend that there were no reasonable grounds for appeal, the charges will be allowed. So that there is -the liability of paying costs.


James Lorimer Ilsley: Would the hon. member like that exception taken out?


Charles Edward Johnston: No; I think the exception is all right.


James Lorimer Ilsley: I think so, too.


Charles Edward Johnston: But the point I am trying to make is that there is a matter of costs to consider. When we start adding costs to a farmer we are placing him in an awkward and difficult position. I shall go on to read the whole of the section, so that it may all appear on the record. It is as follows:
. ; . except that the appeal court may, if of opinion that there were no reasonable grounds for bringing an appeal, order the appellant to pay the costs of any other party appearing on the appeal.


Mr. ABBOTT:: To pay the farmers' costs, if the creditor brought a frivolous appeal.


Charles Edward Johnston: And it could be reversed the other way.


Manley Justin Edwards: It is purely discretionary.


Charles Edward Johnston: Yes, but the payment of costs depends entirely upon what the court decides in that regard. But to say there are no costs is definitely wrong. However, I shall not discuss further items in the bill, because they will be discussed when we come to them.
One other point I wish to make in passing is the lack of regard given to the western debt conference proposals by those who drew up this legislation. That is very serious, because as has been pointed out by the hon. member for Acadia, that was not a political conference,
(Mr. C. E. Johnston.]
in any sense of the word. In fact, it was about as conglomerate as one could find. There were Social Crediters from Alberta and Liberals from Saskatchewan; and the representation from Manitoba consisted of two groups. Those three governments got together, and after extended and deliberate consideration of the debt problem, from the point of view of the three agricultural provinces, and after a great deal of careful consideration, deliberation and thought, the draft bill was drawn up. I have them before me, but I shall not go into them, because the hon. member for Acadia placed them on the record.
The conference wen-t to a tremendous amount of work and, with one exception, namely where they expressed their desire that Manitoba be brought in, not one of the proposals was accepted. When legislation is especially designed for the three prairie provinces, and when at a conference are found representatives of a Social Credit government, a Liberal government, and another government of combined Conservative and Liberal members; when we find representatives of those groups getting together -and drawing up what they consider to be the type of legislation most suitable and applicable to the prairie provinces, and when we find the government at Ottawa ignoring all these facts, then it seems to me that that is the wrong way to give satisfaction to the people for whom the legislation was intended.
At six o'clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
The house in committee on -bill No. 54, to incorporate Canadian Alliance Insurance Company-Mr. Mcllraith-Mr. Bradette in the chair.
Sections 1 to 5 inclusive agreed to.
On section	6-Classes	of insurance
authorized.
Gordon Graydon: I do not see war risk insurance listed- here. Is there any reason why it should be left out?


Mr. LALONDE:: I have been asked to sponsor this bill in the absence of Mr. Mcllraith. The bill is in the standard form, and the only question raised except as to the name was with respect to the amount required to

Private Bills
carry on different kinds of insurance. The bill has been approved by the superintendent of insurance and has been drawn up in accordance with the standard form.


Gordon Graydon: Why is war risk insurance not covered by the incorporating clause?


Maurice Lalonde: I received the bill just a few moments ago. I think section 6 speaks for itself. A company cannot go outside the different classes of insurance enumerated here. War risk insurance is not among the classes of insurance covered.


James Lorimer Ilsley: War risk insurance within the Dominion of Canada is conducted wholly by the Dominion of Canada. No company on its own behalf carries on the business of war risk insurance within the dominion. It may have the power in its charter to carry on the business of war risk insurance outside the dominion, but if this company does not desire that power I do not know that we should be concerned with giving it to them.


Gordon Graydon: I was not concerned with giving them the power. I was simply asking for information.


[Stage Direction]
Section agreed to.
On section 7-Subscription and payment of capital before commencing business.
George Hugh Castleden: The first sentence of subsection 1 says that the company shall not commence any business of insurance until at least $100,000 has been paid up, and it may then transact fire insurance, falling aircraft insurance, earthquake insurance, and so forth. These are also covered by clause 6. Is there any need for this repetition, or is there something included in subsection 1 of section 7 that is not covered by section 6?


Maurice Lalonde: This is simply a restriction on the capital with respect to special classes of insurance. The company cannot commence to cover these special risks without having $100,000 in cash.


George Hugh Castleden: Can it carry on any of the business covered by section 6 before it has $100,000 paid up?


Maurice Lalonde: No; I do not think the company can carry on any other business than those included in section 6.


George Hugh Castleden: In section 7?


Maurice Lalonde: Sections 7 and 6.


George Hugh Castleden: Why, then, are the
insurances which are mentioned in section 6 repeated in section 7, subsection 1? For instance, fire insurance is mentioned in both.


James Lorimer Ilsley: It stipulates the conditions.
Mr. ST. LAURENT: I think the hon. member will find that section 6 is merely enumer-ative of the classes of insurance that the company will have power to carry on, and then section 7 says it shall not carry on insurance of any of these classes until it has $250,000 subscribed and $100,000 paid. When that is done it can carry on part of the undertakings mentioned in section 6, but before being authorized to carry on the others it has to comply with the additional conditions.


George Hugh Castleden: The hon. member will thank the minister for that.


[Stage Direction]
Section agreed to.
Sections 8 to 10 inclusive agreed to.
Preamble agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
The house in committee on bill No. 68, to incorporate the Ukrainian Fraternal Society of Canada.-Mr. Hlynka.-Mr. Bradette in the chair.
Sections 1 to 5 inclusive agreed to.
On section 6-Convention of the society.
Gordon Graydon: May I have some explanation from the sponsor of this bill as to what is meant by:
(1) The society shall be governed by a convention which shall constitute the final legislative and governing body of the society.
Is the convention a sort of executive body, or what does it mean?


James Lorimer Ilsley: It is defined in the next
subsection.


Gordon Graydon: I think subsection 2
answers my question.


George Hugh Castleden: I should like to have some further explanation as to that convention, as to how often it is going to meet. It merely mentions " a convention."


Mr. COLD WELL:: What is the meaning of "supreme arbitration court"?


The CHAIRMAN:: Shall the section carry?


George Hugh Castleden: No.


Major James William Coldwell: There are a number of unusual terms and provisions in the constitu-
Private Bills

tion and the convention, and I wonder what is the meaning of " supreme arbitration court." But I am not objecting to the bill.


[Stage Direction]
Section agreed to.
Section 7 agreed to.
On section 8-Temporary directors.
George Hugh Castleden: I am not objecting to this bill, either, but I believe that we should have some explanation of it and that the hon. member who is sponsoring it would like to have an opportunity of explaining it. I suggest that the bill be postponed until later in the agenda, so that the hon. member in whose name it stands will be here to deal with it. I believe he will be in the chamber in a few minutes.


Joseph-Arthur Bradette: The hon. member must understand that I have not the right to suspend this debate.


Gordon Graydon: The hon. member has not raised that objection; he has only asked that it be put on to the end of this discussion.


George Hugh Castleden: I am willing to let the section carry.


Joseph-Arthur Bradette: It will have to be with unanimous consent. Is the section carried?


[Stage Direction]
Section agreed to.
Sections 9 to 16 inclusive agreed to.
Preamble agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
The house in committee on bill No. 109, to incorporate Bethel Full Gospel Assembly- Mr. Reid-Mr. Bradette in the chair.
Sections 1 to 14 inclusive agreed to.
On section 15-Investment of funds.
George Hugh Castleden: May I ask the sponsor to explain the last clause?


Mr. REID:: What does the hon. member wish to have explained?


George Hugh Castleden: I think it is disgraceful that these bills should be passed in this way. I wish to object. The bills are called more rapidly than members can find the numbers of the bills, and any effort to find out where we are is met with criticism.


Thomas Reid: I hope the hon. member is not referring to me. I have been following the bill clause by clause. I am never left behind like that.


George Hugh Castleden: I was referring to the way in which the bills are put through, and I still think it is wrong. I am not referring to any remarks the hon. member made.


Joseph-Arthur Bradette: The word "disgraceful" has been used in the committee. I would point out that these bills have all been discussed on two different occasions. They have been before the special committee.


Mr. CRERAR:: I think it should be pointed out to the hon. member that all these bills we are considering were before the private bills committee and received careful consideration there. It is quite obvious that we have not an opportunity to study the bills in detail as they are passed here in this committee, but I think all hon. members will agree that the private bills committee was the committee that should give them careful scrutiny, and it did.


Mr. MacNICOL:: Were they not passed by the senate also?


George Hugh Castleden: Unless this procedure has some meaning, it is farcical to carry it on. I was a member of the private bills committee, and it happened that other committees were sitting at the same time which I attended. But even the fact that these bills have been considered by the private bills committee does not mean that members should not be given time to look through their bills to see what is being passed.


Mr. KNOWLES:: In connection with the
bill we have just dealt with, as well as the previous bill, may I say that the committee on private bills made certain amendments. Is it not possible for us to have before us copies of the amended bill. I happen to know that the amendments were made, but not all hon. members are in that position.


Joseph-Arthur Bradette: The bills were read
as amended1.


Stanley Howard Knowles: But they are not before
us.


Ian Alistair Mackenzie: Yes; they are on the file.


Joseph-Arthur Bradette: They were all distributed on July 8.


Mr. McCANN:: He needs an assistant.


[Stage Direction]
Section agreed to.
Preamble agreed to.
Bill reported, read the third time and passed.

Private Bills-Divorce

[Stage Direction]
The house in committee on bill No. 23, for the relief of Marion Ellen Topp Dore-Mr. Casselman-Mr. Bradette in the chair.
On section 1

Marriage dissolved.
Mr. CRUICKSHANK:: May I ask for an
explanation of this bill?


Joseph-Arthur Bradette: Shall clause 1 carry?


George Alexander Cruickshank: No. I have asked
for an explanation and I want an explanation. I presume the bon. member sponsoring the bill is in his seat.


Joseph-Arthur Bradette: Shall clause 1 carry? Some hon. MEMBERS:	Carried.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Bill reported, read the third time and
passed, on division.

[Stage Direction]
The house in committee on bill No. 25. for the relief of Frederick Hubert Fairbanks- Mr. Hill-Mr. Bradette in the chair.
On section 1-Marriage dissolved.
George Alexander Cruickshank: I am going to
object again. Either I am right, or I am wrong.


An hon. MEMBER:: Wrong.


George Alexander Cruickshank: When the members have had their amusement I will continue. I cannot pronounce the name, but the bill is under the name of Mr. Whitman.


Joseph-Arthur Bradette: The bill to which the hon. member refers has already been passed. We are now on Bill No. 25.


George Alexander Cruickshank: According to my
copy of Routine Proceedings and Orders of the Day, Monday, July 19, order No. 25 stands in the name of the hon. member for Mount Royal (Mr. Whitman).


Joseph-Arthur Bradette: That bill has been
passed.


George Alexander Cruickshank: I have asked for ah explanation. I should like to know who is this man Lazarowitz Cohen.


Joseph-Arthur Bradette: This evidence was taken before a committee of the senate where it was thoroughly discussed, and a decision given on all these bills.


George Alexander Cruickshank: I have been waiting for that opportunity for a long time. Can another place decide how I am to vote in this house?


Joseph-Arthur Bradette: A committee of this house has also discussed the evidence.


George Alexander Cruickshank: Is another place to tell me how I am going to vote? I want to know the details. I am interested in this. I will be frank and admit that previously I wanted to embarrass a certain member from Montreal, but now I want to know how another place is going to tell me how I am to vote? This bill will be tied up if it takes me two weeks to get an explanation, because that other place is not telling me how I am going to vote, when we have wasted the time of the House of Commons for two or three weeks on these bills.


Joseph-Arthur Bradette: Shall the section carry?


George Alexander Cruickshank: No; I have asked for an explanation.
The 'CHAIRMAN: If the hon. member objects to its being carried, I shall have to ask for a vote: Those in favour, please say, aye.	[DOT]


Some hon. MEMBERS:: Aye.


Joseph-Arthur Bradette: Those against, please say, nay.


Some hon. MEMBERS:: Nay.


Major James William Coldwell: We have no idea what this calling of "yeas" and "nays" is about. We have not heard the motion; we have heard nothing at this end of the chamber. We have witnessed a conversation going on across the benches. It seems to me that the hon. member for Fraser Valley is asking for some information with regard to this bill, and he is entirely within his rights to do so as a member of the house before he casts his vote for or against it. I should like to know what we are voting on, because I have pot heard any motion whatsoever. May we have the motion read?


Mr. DONNELLY:: The sponsor of this bill is not in the house at the present time to give an explanation. All these divorce bills have been heard by a senate committee where evidence was taken under oath. That evidence was printed and sent to every member of this house. If anyone does not know what took place, all he has to do is to look up his file and read the evidence. And not only that, but there is a private bills committee of this house. Two members of that committee attend at the sittings of the senate committee to listen to the conduct of these cases and to report back any proceedings which they do not
Private Bills-Divorce

think are being handled properly. The sponsor of this particular bill is not here at the moment.


George Alexander Cruickshank: I am referring to bill No. 25, sponsored by the hon. member for Mount Royal (Mr. Whitman).


An hon. MEMBER:: That has been passed.


Joseph-Arthur Bradette: This is bill No. 25. Bill No. 24 has been passed.


George Alexander Cruickshank: Is bill No. 25 the next one?


Joseph-Arthur Bradette: We are on Bill No. 25. Shall section 1 carry?


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Bill reported, read the third time and passed, on division.

[Stage Direction]
The house in committee on bill No. 33, for the relief of Joseph Fernand St. Louis-Mr. Maclnnis-Mr. Bradette in the chair.
On section 1-Marriage dissolved.
George Alexander Cruickshank: I presume I am in order at this time. I ask the hon. member to explain.


Mr. WHITMAN:: I am at a loss to understand why the hon. member for Fraser Valley should have such an interest in these divorces. This bill appeared before the senate committee and the evidence was fully discussed. A copy of the evidence was presented to the hon. member for Fraser Valley, and if he was interested in this particular divorce he could have got all the information he needed since it was available to him or to any other hon. member. I have not any further information to give him than was given before the committee. I am at a loss to understand why he wants any further information. If he had read the evidence he would have the full facts before him.


George Alexander Cruickshank: I appreciate the lecture given me by the hon. member for Mount Royal, but I presumed that when a bill was sponsored by a member he would be conversant with the facts, and would not base his decision upon what he had read or upon hearsay evidence. I am not a lawyer, but I know that hearsay evidence is not the law, that evidence is not what one has read or heard. I do not want to ask too many questions of the hon. member, but I think the hon. member for Rosetown-Biggar (Mr. Coldwell) agrees with the stand I am taking. I am being told

that because some evidence comes before me in a certain form from another place I am supposed to vote. Parliament is supreme and I believe I am entitled to this information. I may have been somewhat annoying to my hon. friend before, but this is really serious. I do not want to go back to my riding and tell my people that I am asked to make a decision in this chamber on some evidence that is handed to me in printed form. I do not always agree with my bon. friends to my left whom I sometimes accuse of taking up time in this chamber in discussing matters not concerning farmers, but thousands and thousands of dollars have been spent on printing such nonsense as these reports. We are asked to consider them and base our decision upon what has occurred in some other chamber or some other place. I am expected to take what they offer in the form of evidence as being right. I strongly object to doing that. I think at least my hon. friends to my left will be with me, even though my hon. friends in one or two provinces may be afraid to agree with me.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Bill reported, read the third time and passed, on division.

[Stage Direction]
The house in committee on bill No. 88, for the relief of Leo Guay-Mr. Tomlinson- Mr. Bradette in the chair.
On section 1-Marriage dissolved.
Mr. GLADSTONE:: I respectfully ask Mr. Chairman, that consideration of this bill be deferred and that you continue with the others, for the reason that in the private bills committee a vote was taken which, as I recall it, was six to five. Under these circumstances we feel that this bill should receive further consideration by the members of this house.


Joseph-Arthur Bradette: I must say to the hon. member for Wellington South that this is the last bill for consideration in committee and third reading; the other bills are for second reading.


Gordon Graydon: May I say this, that these bills have gone through quickly to-night. I* should like to associate myself with those who have made at least some token opposition with respect to the passage of some of them. I am pleased that the hon. member for Wellington South, and some other hon. members who have spoken, have shown at least that this is an independent institution, operating under our parliamentary system. If

Private Bills-Divorce
nothing else has been accomplished to-night in the great rush of legislation, at least through this medium we have established our position, so far as the independence of the House of Commons is concerned.
It is all very well to rush these bills through, but the public does not understand the situation when so many pieces of legislation are going through so quickly. They have no idea that these matters have been dealt with in other places. But, whether they have been or not, I say that does not relieve us or discharge us from our duty of dealing with these bills in this house as we see fit.
In most instances there is no need for opposition to the bills. The terms in respect of them are well understood. Nevertheless I say it is important that this House of Commons shall not take for granted decisions which have been made in other places, or made even by committees of this house. The point now taken by the hon. member for Wellington South ought to be taken into consideration by this committee, if there is any doubt with respect to it. If that does exist, then it ought to be given proper consideration.


Major James William Coldwell: I was waiting until these bills had been read before rising to make a similar protest. Some of us have protested about this procedure year after year. This practice is really a reflection upon our whole system of government. To-night I believe we have passed something like seventy-five bills in about half an hour. True, these bills have been discussed in another place, but if we pass the bills to-night we are taking the responsibility for dissolving about ninety marriages. I say that responsibility is one which should not be imposed upon the House of Commons or upon this parliament. It is about time we got down to a consideration of ways and means of removing this blot from parliament itself. I am not one who does not believe that there are occasions when the compulsory living together of people may be a crime against society. But I do say that this method of dealing with divorce cases in Canada is a scandal, so far as this country is concerned, and one which ought to be stopped. I want to join in the'protest made by the leader of the opposition.
I am not so sure that I can support the objection by the hon. member for Wellington South, because I know nothing about the matter. Someone will say, "Why do you not read the evidence?" Well, I must confess I never have had the time to read the printed evidence in these cases. I doubt very much whether any hon. member has read the printed evidence in respect of the cases we have before
us to-night; and I rather suspect that if we did read the evidence in the ninety cases, we would find that in all it was pretty much along the same lines-which, also, I think, is rather a scandalous condition.
I join in the protest which has been made. A similar protest is made year after year. As I said last year, if this were peace time instead of war time, I would demand that every one of these bills be discussed, clause by clause, and passed separately. In that way we might take up so much of the time of the house that the house might eventually decide that there could be another way of handling this problem. To-night we have made our protest again, one which I think is quite proper. As I have said, this procedure is a blot on the institution of parliament, and it imposes upon members of parliament a responsibility which only judges in our civil courts, in the provinces which deal with these cases, ought to have placed upon them. In my opinion this house, in any event, should not be called upon to assume that responsibility.


Gordon Graydon: May I just add one further word. There is no reason that comes to my mind why we should be faced with so many bills at one particular sitting of the house. That is a point which I thought perhaps the hon. member for Rosetown-Biggar might mention, but one which apparently he overlooked. We have no right to be asked in an hour's time devoted to the passage of private bills, in the last week of a session, to deal with so many bills. It is impossible to give them the attention to which they are entitled. Without directing any special criticism to the government in this respect, I say that I hope it will not permit this to happen at another session, because it is not fair to the committee and it is not fair to the public, when they read a report of a sitting of this kind.


Mr. BLAIR:: I am sure hon. members do not wish to have all these divorce bills trailed through the house, and have all this vulgarity and slander discussed before the house day after day. I believe hon. members are looking for some job which we should not have to do. These matters could be left with the senate, very easily, and with our own parliamentary committee. I would seriously object to having this trailed through the House of Commons, and taken up, day after day, before the general public. It is something which should be discussed in camera.


Gordon Graydon: Either we should deal with it, or we should not deal with it; that is my point.
Private Bills-Divorce


Thomas Alexander Crerar: I sympathize with the hon. member for Rosetown-Biggar in the point he has raised. However, I do not know that this is the proper stage at which to raise it, namely when we are discussing the passage of these bills.


Thomas Miller Bell: I do it every year.


Thomas Alexander Crerar: Undoubtedly it would be much better if some other procedure could be found for dealing with these cases, rather than have them dealt with as we deal with them in the house to-day. We could, of course, discuss each bill. There might be some merit in the hon. member's suggestion that we should so tax the patience of the house that some other way would be brought about for dealing with them. But, after all, it appears to me this is not the proper time to raise that point.
In regard to the point raised by the leader of the opposition, these private bills have stood over from time to time. Ordinarily we take an hour each week for the discussion of private bills. But the amount of work which has been brought before the house as a result of the war, including the war appropriation measure, the discussion of which has so far required over twelve weeks, has precluded the possibility of having these bills considered in the ordinary way. That is why they are being considered to-night. I do not think my hon. friend's objection is on very solid ground in that respect.


Thomas Reid: The hon. member for Rosetown-Biggar has mentioned having these cases decided in the courts. I would point out, however, when the courts are mentioned, that any who have visited the courts when these cases have been heard will realize how little consideration is given in those courts. I have seen them go through the courts in two minutes, which is far less time than when they are considered by a committee of this house.


Mr. GRAHAM:: I believe the hon. member for Wellington South was referring to bill No. 88. I would join in his request that that bill be not dealt with to-night, because there are some matters in connection with it requiring further consideration.


Gordon Graydon: In answer to the hon.
member for New Westminster I would say that the last person in public life in Canada who dared say something about the courts, and their consideration of cases, received at once from the Minister of Justice the threat that he would apply censorship. I just tell my hon. friend that he had better watch out.


Robert Fair: On behalf of this group I wish to add my protest.


Some hon. MEMBERS:: Nine o'clock.


Robert Fair: On behalf of the Social Credit
party I wish to add my protest to those who have already protested to-night.


Some hon. MEMBERS:: Nine o'clock.


Robert Fair: Since I have been a member
of parliament I have seen these bills rushed through in the same way they are being rushed to-night It is now time to take some stand, and have these bills dealt with in the proper manner.
Section stands.
Bill stands.



CONSIOERED IN COMMITTEE-THIRD READINGS

[Stage Direction]
Bill No. 67, respecting the Canada NorthWest Land Company	Limited.-Mr. Mcllraith.
Bill No. 11, for the relief of Sheila Joan Milligan Hodgson.-Mr. Abbott.
Bill No. 53, to incorporate Montreal Shriners' Hospital Foundation.-Mr. Abbott.
Bill No. 56, to incorporate the Felician Sisters of Winnipeg.-Mr. Howden.
Bill No. 12, for the relief of John Elliott Cockerline.-Mr. Hill.
Bill No. 13, for the relief of James William McDonald.-Mr. Hill.
Bill No. 14, for the relief of William James Chafe.-Mr. Emmerson.
Bill No. 15, for the relief of Nettye Steinberg Litner.-Mr. Mcllraith.
Bill No. 16, for the relief of Mollie Jaslow Mitnick.-Mr. Casselman (Grenville-Dundas).
Bill No. .17, for the relief of Eleanore Jeanne Lonm Yanofsky.-Mr. Mcllraith.
Bill No. 18, for the relief of Ada Lahn Corber.-Mr. Mcllraith.
Bill No. 19, for the relief of Bessie McKenzie Balfour Whiteley Williard.-Mr. Boucher.
Bill No. 20, for the relief of Marion Catherine Bremner.-Mr. Mcllraith.
Bill No. 21, for the relief of Feodor Karpenko.-Mr. Fulford.
Bill No. 22, for the relief of Dorothy Platt Vaz.-Mr. Whitman.
Bill No. 25, for the relief of Frederick Hubert Fairbanks.-Mr. Hill.
Bill No. 26, for the relief of Maude May Frances Adlam Clare.-Mr. Hill.
Bill No. 27, for the relief of Gladys Mae Bond Jarvis.-Mr. Emmerson.
Bill No. 28, for the relief of Max Shulman.- Mr. Emmerson.﻿JULY 19, 1943
Private Bills
Bill No. 29, for the relief of Walter Pestun, otherwise known as Walter Preston.-Mr. Tomlinson.
Bill No. 30, for the relief of Sonia Litvack Shalinsky.-Mr. Mcllraith.
Bill No. 31, for the relief of Evelyn Margaret Cooke Phippard.-Mr. Macdonald (Brantford City).
Bill No. 32, for the relief of Muriel Anna Chapman Longmore.-Mr. Maclnnis.
Bill No. 35, for the relief of Norma Mady Albert Chamandy.-Mr. Macdonald (Brantford City).
Bill No. 36, for the relief of Gerald Clarkin. -Mr. Emmerson.
Bill No. 37, for the relief of Edith Rose Smith Gendron.-Mr. Emmerson.
Bill No. 38, for the relief of Alice Bernadette Choiniere Horner.-Mr. Abbott.
Bill No. 39, for the relief of Eva Pearl Gilbert.-Mr. Mcllraith.
Bill No. 40, for the relief of Emma Cowsill Hill.-Mr. Fulford.
Bill No. 41, for the relief of David Joseph Kennedy.-Mr. Hill.
Bill No. 42, for the relief of Leopold Boucher. -Mr. Emmerson.
Bill No. 43, for the relief of Beatrice Ashwell Dyson.-Mr. Abbott.
Bill No. 44, for the relief of Freda Sybil Nisbet Baldwin.-Mr. Mcllraith.
Bill No. 45, for the relief of Sam Hadis.- Mr. Fulford.
Bill No. 46, for the relief of Carmen Hilda Olesker Gold.-Mr. Macdonald (Brantford City).	_
Bill No. 47, for the relief of Leo Rene Dore. -Mr. Hill.
Bill No. 48, for the relief of Mary Sophia Yiora St. Pierre Malhoit, otherwise known as Mary Sophia Viora St. Pierre Mayotte.- Mr. Whitman.
Bill No. 49, for the relief of Violet Victoria Green Auclair.-Mr. Abbott.
Bill No. 50, for the relief of Laurette Jobin Lalumiere.-Mr. Macdonald (Brantford City).
Bill No. 51, for the relief of Elizabeth Gunn Sparling.-Mr. Claxton.
Bill No. 52, for the relief of Bella Lerner Efros.-Mr. Whitman.
Bill No. 61, for the relief of Kathleen Ena Ball Royer.-Mr. Abbott.
Bill No. 62, for the relief of Margaret Heddrick Lieth Gauld.-Mr. Claxton.
Bill No. 63, for the relief of Elizabeth Alexandra Ida Robb Lewis.-Mr. Emmerson.
Bill No. 64, for the relief of Joseph Aloysius Lavigueur.-Mr. Casselman (Grenville-Dun^ das).
Bill No. 79, for the relief of Helen Alissamon Wheeler Baker Macoun.-Mr. Claxton.
Bill No. 80, for the relief of Adele Le Roy Fuller Hardy.-Mr. Hill.
Bill No. 81, for the relief of Constance Maxine Keating Noseworthy.-Mr. Abbott.
Bill No. 82, for the relief of Alvina Antoinette Bouchard Winterson.-Mr. Mcllraith.
Bill No. 83, for the relief of Bernice Evelyn Berman Sholomenko.-Mr. Mcllraith.
Bill No. 84, for the relief of Marjorie Florence Gray Lever.-Mr. Whitman.
Bill No. 85, for the relief of Robert Gordon Shaw.-Mr. Macmillan.
Bill No. 87, for the relief of Uuno Ojalammi. -Mr. Mcllraith.
Bill No. 89, for the relief of Marie Beatrice Arsenault Theriault.-Mr. Abbott.
Bill No. 90, for the relief of Margaret Varga Csabi.-Mr. Maclnnis.
Bill No. 91, for the relief of Frances Helen Shand Howell.-Mr. Maclnnis.
Bill No. 92, for the relief of Charles Cardin. -Mr. Ross (St. Paul's).
Bill No. 93, for the relief of Gladys Irene Harrison Mathers.-Mr. Casselman (Grenville-Dundas).
Bill No. 94, for the relief of Eileen Grace Shearer Taylor.-Mr. Macdonald (Brantford
City).
Bill No. 97, for the relief of Maitland Richardson Silvester.-Mr. Claxton.
Bill No. 98, for the relief of Agnes May Jack Jackson.-Mr. Ross (St. Paul's).
Bill No. 99, for the relief of Marie Fernande Broca Taisne.-Mr. Ross (St. Paul's).
Bill No. 100, for the relief of Samuel William Simon.-Mr. Fulford.
Bill No, 101, for the relief of Vera Venning Prestt.-Mr. Maclnnis.
Bill No. 102, for the relief of Katherine Scott Thacher.-Mr. Diefenbaker.
Bill No. 103, for the relief of Elias Shapiro. -Mr. Maclnnis.
Bill No. 104, for the relief of Fannie Rubin Segal.-Mr. Maclnnis.
Bill No. 105, for the relief of Doris Mae Sangster Webster.-Mr. Abbott.
Bill No. 106, for the relief of Charles Joseph Wilfrid Rousseau.-Mr. Macdonald (Brantford City).
Third readings of divorce bills agreed to on division.

[Stage Direction]
Bill No. Ill, for the relief of Gertrude Mantha Hore.-Mr. Fulford.
Bill No. 112, for the relief of Claire Mac-Laren' Hunter Barlow.-Mr. Ross (St. Paul's).
Bill No. 113, for the relief of Mary Constance Helena Keys Bates.-Mr. Claxton.
Farmers' Creditors Act
[Stage Direction]
Bill No. 110, for the relief of Jean Sylvia Murley.-Mr. Boucher.
Bill No. 114, for the relief of Margaret Anne Richards Johnstone.-Mr. Whitman.
Bill No. 117, for the relief of Marion Mathilda Heversage Jost Hooper.-Mr. Whitman.
Bill No. ,115, for the relief of John Whitehead Casement.-Mr. Emmerson.
Bill No. 116, for the relief of Elaine Alice McCormick Desrosiers.-Mr. Hill.
Bill No. 118, for the relief of Phyllis Beatrice Barnett Woodham.-Mr. Hill.
Bill No. 120, for the relief of Ethel Wend-man Lebenstein.-Mr. Boucher.
Bill No. 121, for the relief of John Preble Macintosh.-Mr. Abbott.
Bill No. 122, for the relief of Sonia Liben-stein Kolber.-Mr. Whitman.
Bill No. 123, for the relief of Gilberte Piche Ouimet.-Mr. Macdonald (Brantford City).
Bill No. 124, for the relief of Irene Maud Pardellian Wright.-Mr. Maclnnis.
Bill No. 125, for the relief of May Gertrude Russell McCarthy.-Mr. Hill.
Bill	No.	126,	for	the	relief	of Geraldine
Charlotte Wrangel.-Mr. Abbott.
Bill	No.	128,	for	the	relief	of Theodore
Panos.-Mr. Macdonald (Brantford City).
Bill No. 130, for the relief of Pierre Henri Honore Pare. - Mr. Casselman (Grenville-Dundas).
Bill No. 127, for the relief of Anne Marie Garon Brown.-Mr. Claxton.
Bill	No.	129,	for	the	relief	of Glendon
Malcolm Robert MacCallum.-Mr. Claxton.
Bill	No.	131, for	the	relief	of Beatrice
Belodubrofsky Schiller.-Mr. Mcllraith.
Mr. THOMAS REID (New Westminster.; Mr. Speaker, I move that standing order 105 be suspended in relation to the bills read a second time this day.
Motion agreed to.


[Stage Direction]
The house resumed in committee on bill No. 132, to facilitate compromises and arrangements between insolvent farmers and their creditors. - Mr. Ilsley. - Mr. Bradette in the chair.
On section 1-Short title.
Charles Edward Johnston: When the house rose at six o'clock I had been expressing my regret that the government had taken no notice of the recommendations of the western debt conference in drafting this bill. It seems

unfortunate now that the three prairie provinces went to all the trouble of studying economic conditions in regard to agriculture and calling a convention in Saskatchewan to confer on matters relating to debt adjustment only to find, after all their trouble, that their recommendations received no recognition except in .the one instance by the inclusion of the province of Manitoba.
I had also made reference to the fact that under this bill only one proposal is allowed. Once a proposal is made and the terms of the agreement are fixed, no matter what new conditions may arise, whether it be a crop failure on account of drought, grasshoppers, hail or for any other reason, there can be no revision of that proposal. That one proposal stands and cannot be changed.
The Minister of Finance the other day, speaking of agricultural prices, said that he believed it was next to impossible to set parity prices for farm products, because costs of production varied so much from farm to farm and from province to province. Following the minister's own argument in that regard, surely he must see the discrimination that will result from a bill such as this which provides no opportunity to>
revise a proposal from time to time as conditions change. If, as has been indicated, this bill is to put things on a business basis; if the farmers will have to conduct their agricultural operations on a businesslike basis, surely we must make it possible for the farmers to meet their obligations on a business basis. It is ridiculous to ask agriculture to be the only industry in Canada that is not working on a business basis, not because the farmers themselves are to blame, but because the government refuses to give them parity prices. We must put the blame where the blame belongs. There is no other industry in Canada that is not receiving its cost of production and a fair commission. Take, for instance, the aircraft industry, or the automobile industry, which is now producing transport vehicles for the armed forces, or take a gun factory, or anything you like, and you will find that every one of these industries is working on a business basis and receiving cost of production plus a fair commission. That does not mean that an aircraft plant in Montreal that may be making the Bolingbroke is getting the same price as a Toronto factory making the Bolingbroke, because the costs will vary with each plant. Nevertheless both plants get the cost of production plus a fair commission. Now apply that to agriculture whose costs, according to the Minister of Finance, vary from plage to place and from one province to another. The

Farmers' Creditors Act
cost of production in Saskatchewan may be different from the cost of production in Alberta or in Manitoba, and the cost of production at one point in a province may be different from the cost of production at another point. Yet, if it is possible to give the cost of production and a fair commission to other industries whose costs vary from place to place and province to province, why should it not be possible to do that for agriculture?
Now we are saying to the farmers by this bill: We are going to make a proposal and we are going to make you live up to it. Then I think in all fairness to all parties concerned we must make it possible for these proposals to be revised from time to time.
There is another thing that I think is exceedingly unfair. By section 7 of the bill the cut-off date is made December 31, 1938. Section 7 states:
Where a farmer ... is unable to meet his debts as they become due, if two-thirds of the total amount thereof are owing by him in respect of debts incurred before the first day of May, 1935, he may make a proposal under this act for a composition, extension of time or scheme of arrangement.
If you make the cut-off date December 31, 1938, it is unfair to recognize only two-thirds of the debts incurred before the first day of May, 1935. It would not be quite so bad if the government said that December 31, 1938, was to be the cut-off date for all debts incurred up to that time. I cannot understand why. when the cut-off date is made December 31, 193S, a farmer's whole debt up 'to that date is not included. The proposal here is exceedingly unfair, because agriculture has not had the same treatment as other industries in this country. Since 1938 the farmer has had to pay higher prices for the things he has to buy. He has sold his products at less than cost of production. Surely we should have brought the debt adjustment up to date and made it at least to 1942. I cannot see why we should have brought it up to the beginning of the war and then stopped there. I think the minister should consider changing this section to bring these debts up to 1942; or, failing that, the least he could do would be to make the full adjustment of the debt up to December 31, 1938.
I am not going to discuss the general principle of the bill any longer, but will content myself with dealing with the sections as they come up.


John George Diefenbaker: I assume that this is the only opportunity one will have to ask certain general questions that would not arise in connection with the several sections. I
should like to know why the Central Mortgage Bank Act, which was assented to on June 3, 1939, under which the government was given the power to cooperate with lending institutions in the reduction of debt and in providing a considerable sum of money in order to permit farmers to borrow money or to have their debts amortized at a low rate of interest, has not been brought into effect. Under that act the farmer would have been given an opportunity to have his debt written down by agreement; he would have been given the privilege of borrowing money at a low rate of interest; and in that way the measure, operated in connection with the provisions of the Farmers' Creditors Arrangement Act, would have been of great advantage to the farmers of western Canada as a whole. That act has been on the statute books now for over four years. It represented, I think, a serious endeavour on the part of the government to meet the situation prevailing in the western provinces and generally throughout Canada, and I should like an explanation from the minister why it has not been made operative. Had it been, it would1 have proved of inestimable value to farmers finding themselves in a position where they are unable to meet their debts in full. It would have given them an opportunity to consolidate their debt at a rate of interest which would have made payment possible.


James Lorimer Ilsley: In my opening statement
to-day I dealt briefly with the matter of the central mortgage bank. The language I used was, I think, this:
Due to the outbreak of war in September, 1939, this act has never been brought into force, and it was not considered advisable to implement it during the war years because of the uncertainties which the war interjected into such fundamental matters as the values of farm lands and the real value of farm income. Moreover it was considered that the national credit must be utilized to the full in the prosecution of the war.
When the war broke out it was not possible to foresee what might happen to farm values. A great deal of work was done in valuing farms in western Canada in 1939, and it was on the basis of those values that the mortgages were to be adjusted under the central mortgage bank legislation. Moreover, the act entailed a large obligation on the government. I was not Minister of Finance at that time, and I do not know too much about the central mortgage bank legislation, but my recollection is that it meant a payment of $200,000,000 or something like that to lending institutions.
Then, of course, the act was very controversial. A great many hon. members were
REVISE* EDITION
Farmers' Creditors Act

opposed to it; and it did not seem to be the appropriate thing during a war, when values were certainly not static, and when values which farm lands might take on would not necessarily bear much relation to the values set in 1939 for the purposes of the act, to go ahead with the act.
The act was a most difficult one to put into operation. It would require a large organization. My recollection is that it also involved a widespread writing-down of interest rates on mortgages in the cities. Altogether, the problems raised and the difficulties entailed were so great that it seemed to be inappropriate to proceed with the act in an unsettled period such as war time.


John George Diefenbaker: In view of the wide changes which are now being made in the present act, is it not considered appropriate now to bring that act into operation in order to render more effective the bill before the committee?
While I am on my feet there is another general question I should like to ask; it has to do with the order in council which was passed, including the terms of section 15, subsection 1 of a statute of Saskatchewan, in order to enable the provincial debt adjustment boards to protect the farmer from actions. Is it the intention of the government to continue that order in council in effect until the conclusion of the war?


James Lorimer Ilsley: Yes.


John George Diefenbaker: I would ask, if it is, why were its provisions not included in this bill?


James Lorimer Ilsley: The only way they could be included in the bill would be by fixing a period during which they would be in operation. That would be the only section of the bill which would have any such limitation in it. The bill is a continuing measure, while the other is limited to the duration of the war. That is, it must be limited to the duration of the War Measures Act. The War Measures Act will be in force until there is a proclamation by the government declaring that the war is at an end, and it is the intention of the government that this order in council shall remain in force until that time. But when I say that, I am not giving an undertaking. The terms of the order in council themselves indicate that that is the intention, because the order in council, if I remember correctly, admits the desirability of keeping efficient producers on the land for the duration of the war. But I have no right; I have no power to bind the government of Canada as such not

to change that order in council, or for that matter, any order in council. All I can say is that it is the present intention of the government to leave that order in council in force as long as the War Measures Act is in operation.


John George Diefenbaker: Has the minister secured an opinion from the Department of Justice as to whether or not the debt adjustment legislation now in effect in Saskatchewan is valid, when taken in conjunction with the order in council passed by the governor in council pursuant to the War Measures Act?


James Lorimer Ilsley: I do not think we did secure any such opinion, but the general assumption is that the privy council decision was a decision that the debt adjustment legislation of the western provinces was ultra vires. It may be that some sections of that legislation are intra vires, and while I did not go into the matter thoroughly it occurred to me, and I remember arguing at one conference, that possibly the section of the Saskatchewan act which is reproduced by this order in council was itself intra vires inasmuch as it was a step to be taken in proceeding and that it was different from the legislation which was impeached by the privy council. But my own argument did not altogether convince me and it certainly did not convince others. I do not know whether it is intra vires or ultra vires, but what is the difference? We can deal with it effectively under the War Measures Act and we did so, and there is no question about a measure passed under the War Measures Act being intra vires.


Roy Theodore Graham: On rising to speak to this particular piece of legislation, I have been wondering whether the farmers of Saskatchewan need to be more on guard against the hon. gentlemen who sit in the two parties to the extreme left of yourself, Mr. Chairman, or the so-called big interests who are pictured as such a plague to western Canada. I feel that those in this house who take the individual extreme case and upon that case paint a picture of utter destitution and utter futility of attempting to cure by reasonable methods the ills of the people of western Canada must alienate to a considerable extent the intelligent opinion of members of this house and of the people generally who reside in provinces other than the three western provinces. I am proud to say that I have followed the course of this legislation with a great deal of interest and with one desire only, namely, to be of practical use and to further the attempt to meet the real necessity that faces the people particularly of my own province.
We have heard about the necessity of this type of legislation. I think the farmers of western Canada themselves would readily

Farmers' Creditors Act
agree that it is a most regrettable fact that this special type of legislation was needed, or is needed or will be needed in the future. But I believe that any fair-minded person who studies the history of the economy of the west, particularly during that period of drouth accompanied by world-wide depression, must long since have come to the conclusion that some particular type of legislation was needed to deal with an extraordinary situation, national in its dimensions and affecting a great number of very fine citizens, and that not only in the interests of those farmers themselves, but in the interests of Canada as a whole some such legislation as the Farmers' Creditors Arrangement Act was necessary. And it was, as hon. members know, a Conservative government under Mr. Bennett who initiated this particular act.
I believe, too, that all hon. members can readily understand that at the commencement of a drouth or of a depression period it slowly comes home to all of us that the drouth period or the depression period is going to extend over any great length of time. It is a truism of human nature that hope springs eternal, We all think that this year or next, conditions will again be normal and that the necessity for some special provision will not apply. That explanation is one of the reasons for the type of proposal made by the boards of review which were set up under the act as first passed.
The hon. member for Weyburn, in the first part of his address this afternoon, suggested that it was a judicial sense of appreciation of property rights, but later I believe he gave the real reason, namely, that it was simply a combination of inexperience and failure to appreciate the job that had to be done that gave rise to the incompleteness of the early proposals. Simultaneously with the introduction of this act in fact before this particular act was passed, as one would expect, the legislatures of the three western provinces, being closer to the problem, introduced their debt adjustment legislation, which operated unquestioned for a number of years. Even to-day, despite the fact that the privy council has ruled that the Alberta act is ultra vires and, as a result, the legislation of the other two provinces is likely to be in the same position; notwithstanding that decision, I say, in my province the creditor class goes to the debt adjustment board for the necessary permission to initiate any proceedings. It is clear, therefore, the act that was passed in my province worked to the reasonable satisfaction of both the creditor and the debtor class.
There was, however, this profound differ-ance between the two types of legislation.
72537-321$
The provinces never claimed any right, except possibly the province of Alberta, but certainly Saskatchewan never did claim any right to cut down compulsorily either the principal or the rate of interest in any contract. It realized that it did not have that particular power and authority. This act passed by the dominion authority did give the tribunals entrusted with the administration the power to reduce both principal debt and interest. We all know, despite the willingness of the creditor class generally to cooperate with the provincial legislation, that it would be highly inadvisable to rely on legislation upon which the privy council had passed an adverse opinion. Some day somebody will claim in the courts the right to question the validity of the act and, as a result, will be granted a favourable decision. So that I naturally, with other western Liberal members, followed with close interest the attempt of this authority, the dominion, to deal reasonably with the problem that was thrust upon it as a result of the privy council decision.
In the first place, it has already been called to the attention of the committee that this government has passed an order in council which provides that under an agreement for sale or under a mortgage the court with jurisdiction may stay action if it sees fit, or may postpone the payment of the debt, or, if the occasion arises, may vary or extend the order, all for the purpose of retaining the farmer upon the land. That order in council was very important to us, and we are assured that it is the intention of the government to permit that order in council to remain in force for the duration of the war.
We must, therefore, consider what the' dominion government has done, under the provisions both of this bill and of the order in council which has been in force throughout the three western provinces. A number of members, particularly from Alberta and also from my own province, have referred to the submission made by the three western provinces after the conference on debt and have suggested that the government has made no or very little attempt to carry out the recommendations of that conference. Let us examine just what the three provinces recommended in principle. They recommended "that a tribunal or tribunals-be created by the appropriate legislative-authority in Canada, first, to write down the-pincipal of farm debts, secured and unsecured"; that is to be found in this bill; second, "to reduce the interest rate on farm debts, secured' and unsecured"; that principle is to be found in this bill; third, "to alter the terms of payment of farm debts, secured and unsecured";: that principle is to be found in this bill.
Farmers' Creditors Act

Fourth; "to review and revise its own decisions in the light of events subsequent to the making of the decision." Western members have pointed out frequently that one of the things that caused irritation in the administration of the act was the fact I have referred to earlier, that decisions were made by those who were inexperienced or, as the hon. member for Weyburn has said, timid in approaching the problem of actually making a proposal. It was Considered extremely unfair that those who had come before were subject to the terms of early proposals that were not properly fitted to take care of the debtor's position. It is true that *this bill does not go so far as to give to the new tribunal the power to review every proposal made by any board of review, but I think it goes a long way. It gives to the new tribunal the power to review any proposal made 'prior to December 31, 1938.
All of us know that 1937 was probably the most disastrous year that came to western Canada. Since that time our farmers have not been offered credit on anything like the same scale, and very few have been able to get into any substantial amount of debt since that particular period. In addition, a great many farmers have learned the lesson that getting into debt is a much easier task than getting out. I think, having in mind all the circumstances, the provisions of the bill with regard to review substantially grant the requests of the three provincial governments. In any event it is a distinct improvement over the old act and, if circumstances and time prove that it is not sufficient, then parliament still remains one of our institutions to which we can come and present our case again.
Fifth, "to extend to individuals in any particular year or circumstances the protection of any of the provisions of this legislation available to any debtors, whose affairs are being administered under it." This bill does not meet that particular request, and it seems to me that this legislation could not possibly deal with that. We would' have to' be prepared to bring in special legislation to deal with solvent persons who happened to meet a particular difficulty that might require assistance of this kind. Sixth, "to stay proceedings arising on debts or securities after an adjudication has been made"; that provision is in the bill.
Seventh, "to make the foregoing remedies available with respect to any farm debts regardless of the time at which they were incurred." Again the bill only partly grants the seventh proposal. As hon. members know,

that particular request would make this legislation a continuing act, applicable at any time to farmers who had got into financial difficulties. The bill provides that any debt, two-thirds of which were incurred before May 1, 1935, may be brought before the tribunal. The bill goes farther in that it gives consideration to the fact that one of the contributing factors after 1935 to the difficulties of the farmers was the accrual of interest. Possibly two items, interest and taxes, would go a long way to make iip a very substantial portion of all new debt incurred by western farmers after May 1, 1935. The bill provides that included in the computation of this two-thirds of the debt shall be not only the mortgage principal but the interest that has accrued upon the mortgage or the agreement for sale, whether it occurred before May 1, 1935, or afterwards. In connection with taxes we have provincial legislation dealing with this particular matter. It is not nearly as important as that of accrued interest on mortgages and agreements for sale. Again I submit that the government is to be commended upon going a long way to satisfy the request made in the seventh clause by the provincial governments.
I may say that when making presentations to the Minister of Finance with other western Liberal members we tried to persuade the government that the time had now come to recognize the peculiar conditions under which farming was carried on in western Canada, and while at the moment'-we had not then the news of the drouth that is now appearing in western Canada-farming conditions were reasonably good, common sense told us that sooner or later we would again have a drouth period in which the farmers might face difficulty. I have had always in mind the primary need of getting this legislation through parliament-I use that word advisedly, having in mind that parliament is more than the House of Commons-and I know that a great many people, in eastern Canada particularly, would not be in favour at this time of passing permanent-type bankruptcy legislation aimed directly to satisfy farmers' needs. When we consider the real advantages that are being offered to farmers of western Canada by the amendments contained in this bill I believe we can feel a sense of healthy appreciation of the difficulties which have been presented and a realization that the problem has been approached in a realistic way with a desire to go as far as possible along the road toward the solution of these difficulties.
I accept in toto the arguments of the hon. member for Peace River with respect to the

Farmers' Creditors Act
change in procedure. I do not look upon that as a loss to the farming community in which I live but rather as a distinct gain. I have in mind that, as he pointed out in connection with Alberta, the clerks of the court have been the provincial representatives of the debt adjustment bureau in Regina for a great many years, during which time they have gained considerable experience in negotiating settlements between debtors and creditors. They are now made the official receivers under this measure. Their experience; the fact that they are completely detached, in all personal respects, from both debtor and creditor, should enable them to be of considerable help in bringing about settlements before matters reach the district court judge or the appeal court. I believe also, with the hon. member for Peace River, that the fact of the district court judge being available to hear all such applications, and to deal with them as quickly as possible, will be of benefit as well. If, perchance, there should be any interlocutory applications necessary under the provisions of the act, he is available to hear such applications, which should be of great advantage to farmers who unfortunately have to take advantage of the protection of the provisions of this measure.
Then, as my hon. friend pointed out, and in this I wish to support the argument of the hon. member for Lake Centre, if the appeal judge is chosen wisely; if he undertakes the permanent task of going through a certain territory-my own province, for example-ironing out differences which may arise in the interpretation of these provisions by the various district court judges, making the application of the act uniform, giving every farmer who comes before him the full protection of our courts, with all the precedents that bind those courts in matters of fairness and justice, the farmers whom I represent will get a great deal more service under this particular measure than they could ever hope to get under the old act.


George Hugh Castleden: That is just for insolvent farmers.


Roy Theodore Graham: Well, of course the word "insolvent" is especially defined in the act; as the hon. member knows, it means a farmer who is unable to meet his liabilities when they come due. A crop failure, or any disaster occurring to an ordinary farmer without liquid assets, of course would bring him within the terms of this act.
To continue for a moment with the matter of judges, I think placing the administration of this act back in the centre of each judicial district will mean a great saving in time and
worry on the part of our farmers if, as I say, they are so unfortunate as to have to come under this act. We all know that the boards of review had a great deal of work to do. The hon. member for Mackenzie said they were able to deal with only two or two and a half per cent of the cases.


George Hugh Castleden: Per year.


Roy Theodore Graham: My hon. friend is quite right, but I would remind him that some eight thousand farmers only in the three prairie provinces made application under the act.


George Hugh Castleden: It was such a poor
act.


Roy Theodore Graham: I do not think that is the explanation at all. This measure has had two advantages. In the first place it has dealt with the applicant for relief, and in the second place it has acted1 as an inducement to the creditor class to make voluntary settlements with their debtors. As my hon. friend knows, I come from the very heart of the drouth area of Saskatchewan, and I can say to him that in the last year or two there have been many settlements of debts as between debtor farmers and the creditor class. I am very happy to say that. I agree, however, that when the mortgage companies say that fact alone is sufficient to justify the repealing of all such legislation, they miss the whole point, which is that a year or two of reasonable prosperity in regard to both production and price levels cannot possibly hope to take care of the debts which have accumulated over a great many years. I always regret when the finanr cial houses of this country place themselves in opposition to measures which would meet some of the real problems with which our agriculturists are faced. I am quite certain these companies do themselves no service by attempting to influence parliament from dealing fairly and reasonably with the farmer class. As a creditor myself I am absolutely convinced that it is a good thing for the creditor class as well as the debtor class for us to get this terrible structure of debt brought down to a position where the farmer may regain his hope of paying it off, by harnessing himself to that job. In the long run it will be found that the creditor class will benefit, together with the farmer class, when that position is reached, and that is what we are attempting to accomplish.
Someone in the Social Credit party, I think, said it was impossible for any farmer in western Canada to pay off his debts. Let me give the hon. member one example that came to my notice when I was home at
Farmers' Creditors Act

Easter. I recall a farmer coming to my office about four years ago, telling me his troubles and asking if I thought he should go under this act. I knew the man well; he was an old-timer and a first-class farmer. I said, "No, I do not think your financial position warrants your going under that act." Then he asked if I thought he should quit-claim title to a particular half-section of land. I said, "No. We are in the depths of the depression as far as agriculture is concerned. It can only improve; it cannot get worse. Stick to it; you are a good farmer, and if things break a little better, you will come out on top." When I was home at Easter that farmer was able to report to me that he had1 completely wiped off the debt on that particular half-section of land. This does not mean, however, that man is living in wealth and luxury. As someone has pointed out, farmers throughout Canada for many years have had to practise thrift to :a degree which I do not think is consistent [DOT]with the fine profession they follow. Nevertheless there are men in western Canada who are making progress. The situation in regard to the payment of current debts proves that; and the large reduction in past indebtedness is also an evidence of that fact. Unless we meet another period like that which we went through from 1930 to 1939, we shall find that the debt structure will be steadily reduced. Nevertheless, that problem is there; and I say to the mortgage companies and to the creditor class generally that they would be doing themselves a service if they would join with those of us who take a reasonable attitude in this matter, who do not aim for the moon but who strive for an act that will be reasonable in its provisions to both creditor and debtor, in order that conditions in western Canada may become much improved.
Finally, .while I have unsuccessfully urged upon the government the adoption at this time of a measure designed to meet permanently the conditions under which the people of my province have to carry on farming, I am aware that more and more our legislation must recognize that out west we do not work on the basis of an annual turnover but rather on a much longer cycle; that periods of drouth are followed by periods of very good production, and our economy must take that into account. I hope that some day this or some other government will recognize the need and give us legislation of the kind I have mentioned. I would say to the minister also that I endorse everything that was said by the hon. member for Peace River in regard to section 33, for I think this section detracts from what I have said with regard to this bill. I do

not think the section is wise or practicable, and I think the act would be greatly improved if this section were removed. If, however, for reasons which I cannot appreciate, the minister does not feel that this section can be wholly removed, I sincerely hope he will give consideration to amending it to make it not applicable to proposals that have been made hitherto, and that the period of five years may be reduced to two years.


Mr. SHAW:: There are certain general observations I should like to make, while this particular section is before the committee. Ordinarily one would hesitate to occupy the time of the committee, particularly at this late stage of the session; but when one stops to consider that a matter of such extreme importance as this has been introduced during the dying days of a session, then I for one feel thoroughly justified in taking whatever time I consider necessary to discuss the matter.
Those of us who come from the west represent, in the main, agricultural sections of Canada. We come in daily contact, weekly contact, yearly contact with the farmers, and we have been able to develop an understanding and an appreciation of the difficulties confronting them, not for a period of only one year but throughout the years. Personally, I would feel extremely remiss in my duty if I were to permit this opportunity to pass without expressing my views.
Before doing so, however, may I say I was surprised to hear the hon. member for Swift Current indicate that the government of Saskatchewan knew that authority to pass a debt adjustment act did not rest with that province; because I have in mind the important part the government of Saskatchewan played when the Alberta government appealed against the disallowance of the Alberta acts. If I am not mistaken, the attorney-general of Saskatchewan proceeded to England in that connection. I was also disappointed that the hon. member did not discuss more fully the recommendations of the western debt conference with respect to the recurring aspects of the farm debt problem.
If my understanding is correct, I believe the recommendation was that these debts would be reviewed every five years. When one stops to consider our general economic instability as applied to agriculture, and when one recognizes that from time to time most unexpected things occur, he will realize that it is not the proper thing to place a farmer in a position where he is obliged to accept a proposal for settlement, and then, regardless of conditions which may develop in the

Farmers' Creditors Act
future, he must still abide by the terms of that settlement. I think, when we consider this aspect of the measure, all we have to do is to reflect upon those cases which were considered shortly after the Farmers' Creditors Arrangement Act became effective, where we found farm debts reduced by approximately sixteen per cent, and where, later on, owing to experience, I have no doubt, on the part of boards of review, and also on account of conditions which had developed, the average reductions amounted to approximately thirty-four per cent.
From time to time we have protested most vigorously about the fact that those farmers who came under the act, in the early years of its operation, were not permitted later on to have a further adjustment made. I cannot agree with the point of view opposed to the recognition of the recurring aspect of this debt problem. I would have been pleased if the hon. member for Swift Current had given us some indication of how we should treat debt created during the drouth period around 1936 and 1937, since the provisions of this measure will not give any consideration to that aspect of the problem.
I consider the farm debt problem one of the most important with which we have to deal, apart from the actual prosecution of the war; although it is an integral part of our actual war effort. The future of our basic industry will depend very largely, if not almost entirely, upon the nature of the legislation we pass at this time. Every industry in Canada, every business in Canada and, I dare say, every individual depend directly upon agriculture for existence. Therefore, in the light of that statement, it is not difficult to appraise the importance of agriculture in our national economy. The history of the farm debt problem is not fiction. I believe there is not an hon. member in the committee who is not thoroughly familiar with the difficulties encountered by our western farmers, especially in the past decade. We characterized that period as our pre-war depression, when the majority of western farmers worked without pay. I say that they worked without pay because the prices which prevailed during those years hardly, and in many instances actually did not pay the cost of production. I know that during all those years practically nothing was done to correct the condition which had developed.
It is a well known fact that many of our farmers exhausted their credit and had to assume the position of serfs. That is not an exaggerated assertion. All we have to do is reflect upon the conditions which developed in our own communities, and give a moment's
consideration to the many farmers who either had to leave their farms or accept the position of tenants or serfs, operating those farms for someone else. I know that even in 1931, before we entered the most difficult part of the depression, only fifty-two per cent of our Canadian farms were free from debt. Therefore we could say that only fifty-two per cent of farms in Canada were actually owned by the individuals residing upon them. I know some may argue that if a small debt rests against a farm, that does not change the indi-. vidual's status with respect to ownership. However, I cannot agree with that.
I know also that in 1931 about one out of ten of our Canadian farmers were tenants- and I use that term because some may take exception to the word "serfs". I do not know exactly what the picture was between the years 1931 and 1942, but we do have sufficient information to come to the conclusion that fifty-two per cent of our farmers resided upon farms in 1931 upon which there was no debt. That percentage had been materially reduced by 1940. The reason for that is obvious.
I say it is evident that there are certain organizations in this country which evidently welcome a trend toward this condition which I have described. It would seem that there are some who feel that if the individual occupies the position of tenant, being less independent, he may be more easily manageable. I have a quotation which I should like to give from a bulletin issued by the United States department of agriculture, entitled "Getting established on the Land", and I quote it because I think it is quite applicable to our own country:
Thousands of farmers, large and small, have been unable to keep their heads above water under the impact of adverse forces since the world war. The small owners, burdened with debts, faced with competition, selling their products at low prices when depression hit, toppled into the ranks of the tenants. Tenants on the other hand found themselves squeezed out time and again as landlords were forced to cut them loose to find work as day labourers, if possible.
Very frequently we discover that becoming a tenant on the land which a farmer formerly owned is just one step toward having to leave the farm completely. I have always asserted that the finest situation which could develop for agriculture in this country would be to have the farmer own his parcel of land under a set of conditions which would guarantee that, as long as he was willing to play his part and do his best, he would continue to be the owner of that property.


Manley Justin Edwards: Would the hon. member concede the same for every other man in Canada?
Farmers' Creditors Act


Frederick Davis Shaw: If I say that a fanner should be guaranteed a set of conditions which will enable him, as long as he plays his part, to remain the owner of his property, I would say that it is perfectly true so far as the business man or storekeeper and others are concerned, provided, however, that the individual does not engage in practices which are detrimental to his fellow men. I have in mind probably a monopoly which develops and exerts its evil influence upon the lives of a great many of our people.
We know many of the debts of our Canadian farmers were incurred while money was plentiful and while prices of the produce they raised were relatively high. I know it is often argued that if you make money available to farmers or anyone else, they will take it whether they need it or not. But that is a weak argument. My contention is that when many of our farmers secured loans, the prices of their farm produce were high and they had every expectation, in the majority of cases I know, of being able to repay the debts even at the rates of interest they had agreed to pay, which often were exorbitant. I believe that the large majority of our people are honest, but frequently we judge them by the very few who indulge in questionable practices. Many of those persons who secured loans while money was plentiful, were obliged to try to pay it back when money was scarce. All we have to do is to contrast prices in 1929 and 1933. The farmer who borrowed money in 1929, when wheat was standing at a fair figure of $1.40, was confronted with a most deplorable situation when in 1933 the price of the same wheat had dropped to about 34 cents a bushel for No. 1 northern at Fort William, and we know many farmers received as low as ten and twelve cents for the quality of grain which they grew. We must recognize and appreciate a position of that kind.
But the farmer struggled- on. He was exploited in many respects. I should not like hon. members to take any wrong inference from my use of the word " exploited." I have in mind, for example, that farm machine prices went up and up and up, while produce prices went down. The farmer was also confronted with an increased tax burden in many instances, and I would even include in my term "exploited" what I regard as price manipulation. The farmer during that period lived in constant fear of losing his home. I had the opportunity of spending about one-third of my life in a community where the farmers were probably having more than the usual difficulties. I do not believe there was anything with which they were confronted that created

more desperation in their hearts than the fear that to-morrow or the day after they might be evicted from their property. We have heard that one of our goals after the war is to be freedom from fear, and I would be hopeful that it would apply not merely to a crosssection of our population. No industry except agriculture, manned by the hardy fighters of the-calibre of which our Canadian farmers are, could have survived the treatment they received during those years, and I definitely state that it is a credit to those people for putting up the fight which we all know they did put up during that period. The agriculture industry survives, and therefore we hear certain people advancing the argument that, if it survived once, it will survive again, and probably again and again. But while agriculture survives, there is not an hon. member here but would agree that it was badly crippled. However, in spite of the fact that it was crippled, it performed magnificent achievements when it was called upon to do so following the outbreak of war in 1939. Not only has it continued through the following years to make great achievements; it has also been committed to the tremendous task of providing foodstuffs for the countries of Europe which have been subjugated by the enemy. In spite of all that, regardless of the farmers' magnificent achievements, the best that we seem able to do is, first, pat them on the back, appeal to their patriotism, and tell them what fine fellows they are. No doubt the Minister of Agriculture has devoted a good deal of energy to patting our Canadian farmers on the back and appealing to their sense of patriotism-
Mr. LaFLECHE: Getting them markets.


Frederick Davis Shaw: -in order to have them continue to carry on this magnificent production. I am not forgetting, with regard to the interjection, the unsatisfied markets here, during the depression years, When the farmer begged to sell his produce and the people begged for it, -but we seemed unable to solve the problem. But I say we must give our Canadian farmers immediate assistance through adequate debt adjustment legislation. If this government will not do it, who is expected to? We know the provinces have tried, and we know the situation which they are confronted with. I am not endeavouring to argue as to whether the' province has the right or not; I am simply asserting that if the province has not the right, the federal government has not only the right but the duty to do it.
With respect to our western debt conference, it is significant that, as has already been indicated by previous speakers, three of our

Farmers' Creditors Act
prairie governments, supported by quite a number of organizations, submitted a comprehensive debt adjustment proposal, and I regret that the government has not seen fit to give greater consideration to it than we have done. I am not one who is going to condemn the present bill. Surely, if you cannot have all you want, it is better to take something rather than discard it all. But I am hopeful that while this bill is in the committee stage, the government will be prepared to accept certain amendments.
We hear the argument frequently advanced that farmers are now paying their debts. The hon. member for Vegreville indicated to-day that when the farmers-I speak of the great majority of them-can pay their debts they will do so. I recall one branch of the Canadian Legion indicating to me, "We are not asking for charity; all we are asking for is an opportunity to pay our debts." It is right that the farmers are under present conditions paying their debts. But is it not unfortunate that we should go along through these desperate years and then have to have a war to partly solve our problems for us? This war, we hope, is not going to last long. If it comes to an end this year, let us say, I wonder what situation may develop? When someone speaks of the farmer paying his debts during war time it brings to my mind a little report which I saw in the Ottawa Journal. It reproduces a report which appeared in the Carbon Chronicle. Carbon is a little town in Alberta. The item, reprinted from the Edmonton Journal, states:
J. A. Hannafordi, of Howie, Alberta, sold a carload of steers last week for which he received $3,000. Six years ago he sold a similar carload which netted him $300.
The Edmonton Journal comments:
No w-onder a lot of Alberta farmers are reported paying off farm debts now, and' little wonder they were unable to do much along that line some six years ago.
I read that for two reasons: it indicates that our prices have definitely improved and that farmers are paying their debts; it further gives a very fine reason why many of them plunged hopelessly into debt during those so-called depression years.
I do not wish to take a great deal more time, but I say that our debt adjustment legislation must be evolved, not in the light of these abnormal conditions which we are passing through now, but in the light of previous experience and also of the situation which we may reasonably expect to develop from time to time after the war. I am quite in agreement with those who have urged that there is only one sensible manner of preventing colossal debt within the framework of the agricultural industry, and that is for us to endeavour to lay down a national agricultural policy. Only through a national agricultural policy can we establish that industry on a sound and prosperous basis, and only by laying down a sound policy can we hope to see agriculture occupy the position which we shall expect it to occupy during the post-war reconstruction period.
I do not think it at all unreasonable that our farmers ask for parity of price. Surely there cannot be any argument against a farmer's demand that the price he receives for his produce should bear some fair relationship to the commodities which he is obliged to buy and the taxes which he is compelled to pay. I say, furthermore, that unless we can establish some scheme whereby our farmers can secure credits in order to carry on their operations at lower rates of interest than many of them have been obliged to pay, we shall have a repetition of the conditions which developed.
In addition to proper debt adjustment legislation, which must come, we must have adequate marketing facilities. I am not thinking so much of the present moment as of the period to come when I make that assertion. The hon. member for Swift Current indicated this evening that you cannot quote one case and try to arrive at some principle based upon that case. I have the particulars of one case which I believe is significant. I say it is significant because this farmer, who is a good farmer, agreed to pay, not so much cash every year, but one-half of his total crop. He lived up to his obligations 100 per cent, and what, Mr. Chairman, do you think his situation was? On October 12, 1926, this man bought a farm made up of 324 acres at a total cost of $13,766, which was approximately $42.50 per acre. He made a cash payment of $2,000, and the remainder was to be paid, as I have already indicated, over the years by giving one-half of his crop and paying interest at the rate of six per cent. *This man did not miss one payment. By 1935 he owed over $13,000. Do not forget that he had paid $2,000 to start with and was giving half of his crop; yet in 1935 he had approximately the same debt he had started out with. Prices in 1926 when he started were: wheat, $1.51; oats, 49-6; barley, 63-9. These were the average. But before 1935 had arrived wheat was 54-3; oats 26-4, and barley, 32-2. That was at Fort William, less approximately seventeen cents a bushel, and he did not grow No. 1 grain. He was forced to sell feed wheat at 104 cents and feed oats at 7 cents. In 1935 he went to the board of review under the Farmers' Creditors Arrangement Act. They were "very kind"

Farmers' Creditors Act

and reduced his debt to $12,000. Do not overlook the fact that he had paid $2,000 cash and half his crop every year from 1926 to 1935, and yet they reduced his debt to $12,000.


An hon. MEMBER:: What was the original debt?


Frederick Davis Shaw: 
James Lorimer Ilsley: Not partners in gains but in
losses.


Frederick Davis Shaw: I would say it was a partnership where one always lost and the other always gained.


James Lorimer Ilsley: Face it; do not run away from it. The hon. gentleman does not mean that if the value went up, the lender would profit as a partner.


Frederick Davis Shaw: The minister may have an argument there; I realize that. But, after all, there are few cases, in the light of the past ten years' experience, where the returns to the farmers went up and up; they have always been down and down with the exception of probably an abnormal period such as a time of war. His partner demanded full payment.
I did have one or two other things to say, but I do not care to impose myself on the committee farther. I am not one who is going to assert that I am definitely opposed to bill No. 132. It is probably in some respects better than the previous act, but in my estimation it falls considerably short of what the governments of the prairie provinces, supported by many organizations, requested as being a proper basis for farm debt settlement.


Mr. MATTHEWS:: I do not take up much time in speaking in the house, but I have listened with a great deal of interest to the discussion of bill No. 132, and while I agree with much that has been said, I disagree with some. I disagree with any implications that have been thrown out to the effect that western Canada is down and out. Western Canada is not down and out, and I think I can give a few facts that perhaps will be illuminating to some hon. members.
Hon. members from Saskatchewan have every right to speak of conditions in their province and so have those from Alberta to speak of theirs; but I claim the privilege of saying a few words with regard to debt conditions and reductions as regards Manitoba, that good old province of which I have been a resident for over thirty-two years, and which I think I know at least as well as any other member of the house.
I wish to speak first of reductions in debt that have been made by the Manitoba government, and I shall go to the best source available, to the remarks made in his budget speech

Farmers' Creditors Act
last April by the premier of Manitoba, who has also been treasurer of that province for a good many years. These are some of the facts he disclosed, speaking of the public debt. He said that on April 30, 1941, the gross public debt of the province was $126,000,000, and that during the year ended April 30, 1942, the province had paid off $2,500,000 of that debt. Then he said that on April 30, 1942, the gross public debt of the province had been reduced to $124,000,000. He went on to say that the further reduction from May 1, 1942, to December 31, 1942, amounting to $1,267,000, reduced the gross debt to $123,000,000. He added that in the thirty-two months ending December 31, 1942, the gross debt of the province had been reduced by $7,000,000. Those are the words uttered by the former provincial treasurer of Manitoba, now the premier, in his budget speech.
I should like to add a word as to the municipalities. I have not the figures for last year, which were undoubtedly more favourable than those for 1941 which I shall quote. There are 170 municipalities exclusive of cities, with an annual levy of about $8,000,000, on an assessment of $238 million, being a rate of 34 mills. During 1941 no less than 151 of these municipalities operated on a cash basis; that is, they raised the money and they paid cash. There were only nineteen out of the 170 which had deficits at the close of the year. What about their debt reduction? Records show that between 1935 and 1941 they reduced their debt by $7,000,000. Municipal reduction was $7,000,000; provincial government reduction, $7,000,000. I think that is an extremely good showing for any province, a showing of which the people of that province might well be proud. At the end of 1941 there were 108 municipalities out of the 170 which had cash surpluses of over $1,000,000; and, in addition to that, they had special reserves in cash or investments, other than sinking funds, of $661,000. The mortgage foreclosures for Manitoba were as follows:
1928	 395
1933	 397
1941		 128
1942		 106
I think those figures constitute a record of which Manitoba might well be proud. But what about discharges of mortgages? Here, again, I think the figures will be illuminating. Premier Giarson is authority for the statement that in 1942 there were 5,432 farm mortgages discharged, paid off, wiped out. In other words, in 1942 there were 106 foreclosures as compared with 5,432 discharges, a ratio of fifty to one. Why was this possible? As the people drew
72537-322J '
away from the awful years of the drouth and heart-break, they set themselves resolutely to the task of applying their increased income to reducing their indebtedness. What about farm income? They were in a better position to reduce their indebtedness, and they did it. Here are the round figures for farm income:
1938		 $ 62,000,000
1939		 63,000,000
1940		 64,000,000
1941		 80,000,000
1942		 100,000.000
We must not forget that the outlay of these farmers was considerably increased because they had been compelled to let their equipment run down during the drouth years; their buildings had got into disrepair, and many expenditures were needed. If these had not been necessary, they would have been able to reduce their mortgage indebtedness still farther.
Something might be said with regard to improved methods of farming. Manitoba, more than any other western province, has adopted diversified farming and, strange as it may seem, the farm income last year from wheat was only one-quarter of the total income. Then, again, I would not have hon. members forget that some of this mortgage indebtedness reduction is owing to the fact that the dominion government paid to the farmers of the west in the form of bonuses and payments of one " kind and another some quite substantial amounts. From August 1,1941, to July 31, 1942, $14,000,000 was paid in prairie farm assistance; $34,800,000 in wheat acreage reduction, and $18,000,000 in prairie farm income. There was a total in one year of $67,700,000, without including expenditures on prairie farm rehabilitation.
I wish to make my position clear in a very few words. I bow to no man in my support of the farmer or anyone else who finds himself down because of reasons over which he had no control. I am not one to stand idly by and see a man or his family almost down and out and treated with unfairness, sometimes with downright cruelty. We do not want that, and our citizens are not going to stand for that sort of thing. On the other hand, I am not one who will stand up and see the creditor defrauded by the double-crossing of some dishonest or oftentimes defiant debtor. We want to see fair play and justice in this country, and I am satisfied that the members of this committee will agree one and all with what I say.
I agree with the suggestion made by the hon. member for Qu'Appelle that consideration should be given to the creditor who, by reason
Farmers' Creditors Act

of age or infirmity, has taken up residence in town and is operating hi3 farm perhaps by crop lease or hired help. That man should receive some consideration for himself and his life partner. Many of them have had some crushing experiences under the old act, and we do not want to see those repeated under this act. We should protect these unfortunates who, owing to crop failures or other causes over which they have no control, are likely to suffer. We do not want to sweep away the whole fabric of confidence in this country. Manitoba, and the west in general, have developed by credit, and that credit has been based upon confidence. Any hon. member or any individual who would sweep away that confidence is doing his best to bring a tragedy upon this Canada of ours. I believe the average man is fundamentally honest. I believe the average man is a square-shooter. I ibelieve the average man wants to hold the *confidence of his associates and will agree -with the sentiments I have expressed. But in speaking of confidence let us not forget that western Canada has been built up on a feeling of confidence, and in past years perhaps there was too much credit, though I may be mistaken. In a certain committee of which I have the privilege of being a member we have heard many references to post-war problems, to the new order for which we all long, to the treatment our boys should receive when they return from overseas, and so on. I want to say, Mr. Chairman, that all these things will require money, and a lot of it. If we are to raise that money, we must retain the confidence of the people, young and old, rich and poor. I do not think I could find better support for this view than in quoting again from the conclusion of that budget speech delivered by the premier of Manitoba, who said:
We have not reached the limit of our development in this province. A great deal still remains to be done. If there were no other reason, much still remains to be done in order that we may reach full emplo3rment in the post-war period1. If we are to have rural electrification or housing or a direct connection through Manitoba with the Alaska highway to attract tourists or if we are to have a multitude of other things for which public expenditures will be required, there are only two methods by which the province can make the money available; in some cases by taxation and in other cases by borrowing in order to spread the cost over a period of years. No matter how heavily the people may ask to be taxed for these worthwhile purposes, some of the moneys required will still have to be raised by borrowing. Whether we can get this money will depend upon our credit. This is true no matter what

the means of raising it may be. Whether we can get it from the investor in the open market will depend upon- his faith in whether or not we can be trusted to repay him. If some less orthodox method of making the money available is provided by the Dominion of Canada creating credit at no interest cost, as recommended by some citizens in our country, then we still would have to be considered reliable before even on such a basis the dominion government or any other body such as the Bank of Canada, would lend us money at no interest or low interest.
Finally and most important of all, the Manitoba government must have credit with Manitoba citizens. Our own people of Manitoba must consider that their provincial government will carry out its promises and undertakings. If we are going to have any worthwhile post-war projects we cannot hope to succeed if we do not have the active cooperation of Manitoba citizens. Rural electrification, for example, will not be a success if the farmers of this province, relying upon the government's ability to carry out its plans, do not make preparations to receive and use the power which is delivered to them. We may wish to ask them to buy some of our bonds for this purpose. I suggest that if we had broken our promises and ruined our credit, we could not expect the Manitoba people to buy our new bonds in the face of our having defaulted on our old ones. Moreover, we could not then expect them to take our post-war plans at face value, because they would have a right to doubt and would doubt whether we could find anybody who would trust us with the means of financing such plans. Doubting, they would not make their own plans to cooperate with their provincial government in a project in the completion of which they had no genuine faith.
Mr. CAlSTLEDEN: Which premier was that?


James Ewen Matthews: Premier Garson; and with those principles I heartily agree. I have every sympathy for what he says, and I believe that the confidence of our people all across Canada must be maintained if we are to make this country flourish in the post-war days, as we hope it may. I wish to extend my congratulations to the Minister of Finance upon the calibre of the bill he has sponsored, which I think will receive wide endorsation from one end of Canada to the other.


Manley Justin Edwards: Mr. Chairman, it is now ten minutes to eleven, and in order to facilitate the business of the house in accordance with the understanding announced by the house leader last evening, which I understand calls for the house to go into committee of supply, since apparently we are not going to get through this section, I am very happy to waive my opportunity to speak at this time.
Progress reported.

Supply-Miscellaneous

Hon. T. A. CRERAR (Minister of Mines and Resources) moved that the house go into committee of supply.


Major James William Coldwell: How many departments are going in to-night?


Thomas Alexander Crerar: We are going to ask the house to let us get in five departments. There are nine or ten yet to go in, and we want to get in on Monday or Tuesday night. I gave notice of this on Saturday evening.


Major James William Coldwell: Yes, but I was just rising to suggest that I do not think all the departments should go in to-night. We do not know what will happen in the next couple of weeks, if we are here; and there have been few opportunities to discuss any problems on going into supply, so that I think at least some of the departments should remain.


Thomas Alexander Crerar: If these five are put in to-night, there will be five or six left, which will give plenty of opportunity for discussion.


Major James William Coldwell: Perhaps we shall not need the opportunity, but we should like it kept open.


Gordon Graydon: That ,is in accordance with the undertaking the government gave previously, as I understand it. There are nine or ten departments left, and I think we are going into five to-night.


Thomas Alexander Crerar: Yes.


John Horne Blackmore: I wonder if the minister would take us into his confidence sufficiently to indicate the departments not yet in, and which departments it is intended to put in to-night.


Ian Alistair Mackenzie: The departments not yet in are: the auditor general's office; the chief electoral officer; the civil service commission; the Department of Finance; the insurance department; the Department of Justice; the Department of Labour; the Department of Mines and Re-, sources; the Department of National Revenue, other than war; the Department of National Revenue; the Department of National War Services, other than war; public archives; public printing and stationery; Royal Canadian Mounted Police; Secretary of State; soldier settlement board of Canada, and Department of Transport.


John Horne Blackmore: How many does the minister propose to bring in to-night?


Ian Alistair Mackenzie: Five.


John Horne Blackmore: Which ones?


Ian Alistair Mackenzie: National Defence, Finance, Justice, Labour, and Mines and Resources.


Angus MacInnis: Some of those are branches. They come in under separate departments. For instance, the civil service commission is under the Secretary of State, and soldiers' settlement is under another department.


Ian Alistair Mackenzie: There are four or five main departments left.


John Horne Blackmore: Which ones will be left, after the ones brought in to-night?


Ian Alistair Mackenzie: National Revenue, National War Services, Secretary of State and Transport, with subsidiary branches.


[Stage Direction]
Motion agreed to, and the house went into committee of supply, Mr. Golding in the chair.

[Stage Direction]
174. Normal services; grants to military associations and institutes, as detailed in the estimates, $11,625.
Item stands.

[Stage Direction]
Jfi. Departmental administration, $466,942.
Item stands.

[Stage Direction]
87. Departmental administration, $162,853.
Item stands.

[Stage Direction]
99. Departmental administration, $216,613.
Item stands.

[Stage Direction]
120. Departmental administration, $152,565.
Item stands.
Progress reported.
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
War Expenditures-Report
[Stage Direction]
Tuesday, July 20, 1943