[Stage Direction]
Third and fourth reports of standing committee on agriculture and colonization.-Mr. Weir.
Eighth report of standing committee on miscellaneous private bills.-Mr. Donnelly.

Mr. HUGHES CLEAVER (Halton) moved:: That the first report of the special committee on war expenditures, presented to the house on Monday, July 19, be concurred in.


Mr. GORDON GRAYDON (Leader of the Opposition):: I realize that this motion requires the unanimous consent of the house, by reason of the fact that the necessary time has not elapsed. However, I wish to facilitate the passing of the motion and therefore I do not raise any objection on that score. I would call the attention of the hon. member who has moved the motion to its phraseology as recorded in Votes and Proceedings No. 114, which we have received this morning. There is in paragraph 3 a typographical error which should not pass the house: "to acquaint subcommittees." I presume this is meant to be " to appoint subcommittees."
Paragraph 4 of the report reads:
To employ such secretarial, reportorial, clerical and other assistance as it may deem necessary.
I take it this is similar to the wording of previous reports of the committee in former sessions. I suggest that the committee ought to consider, in a subsequent report before the house rises, whether the question of assistance, which was mentioned while the debate on the constitution of the war expenditures committee was in progress - I refer to legal assistance, assistance in the way of accountancy, and other expert assistance-should not come within the purview of what is described as "other assistance" in this particular paragraph. It was pointed out by members of the committee that one of the difficulties experienced by those who were attempting to investigate various accounts was that they were handicapped through lack of that type of expert assistance, which they felt was essential if they were to make a proper inquiry into the matters which came before them.
Paragraph 5 of the report reads:
In cases where considerations of national security preclude the publishing of certain

recommendations and of the arguments upon which they are based. . . .
I take it that this is "evidence" rather than argument, but I leave it to those who drafted the motion to see whether or not they require that change to be made in order to carry out their wishes in that regard.
I take it also that paragraph 5 follows the report which has been made by a similar committee in the United Kingdom. I am hoping that the matter of national security will not be taken by the committee or by the house as meaning that we are to have, during the sittings of this committee, a maintenance of that secrecy to which such objection was taken during the debate. With these observations I am quite content that the motion pass.


[Stage Direction]
Motion agreed to.


Mr. M. J. COLDWELL (Rosetown-Biggar):: Mr. Speaker, I ask leave to move the adjournment of the house under standing order 31 for the purpose of discussing a definite matter of urgent public importance, namely, grave irregularities in connection with the compiling of voters lists in the Cartier division of Montreal where a by-election is to be held on August 9, 1943, nomination day being August 2, 1943, and where hundreds of names of non-existent persons have been placed on the lists, some of which irregularities have been admitted publicly by one Lazarus Bavitch, returning officer for the electoral district of Cartier. If I am given leave, Mr. Speaker, to introduce this motion, I have the necessary proofs on my desk.
And leave having been granted:


Major James William Coldwell: I would not have introduced this matter at this time in the closing days of the session did I not believe it is a matter of urgent public importance, and I do so to facilitate the conduct of the business of the house because otherwise it would have been necessary to move a motion on going into supply, and that might have delayed the business of the house indefinitely.
The preliminary voters lists were made available to the public only last Thursday. Hence the checking of the lists has been done on a relatively small number of polls, fifteen in all. The addresses of persons who, I shall contend in a moment are either non-existent, improperly on the list or their address not that given on the list, were picked at

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random and only a small part of each of the fifteen polls was therefore checked. There are 112 polls altogether in the division, and the findings which I shall present to the house in a few moments are illustrative rather than exhaustive. There is no reason to doubt and every reason to believe that the information which I have is merely representative and that the same story could be unfolded as to every one of the polls; all therefore should be investigated.
Altogether some 2,000 names have been checked since last Thursday, checked carefully by persons who are reliable and are in some instances supporting their checkings by affidavits which I have on the desk beside me. Out of some 2,000 names, 650-I repeat, 650- were found to be false or improperly on the list, a proportion of approximately one third.
I said I had some of the affidavits. Not all the checkers were available in the short time at the disposal of those who gave me this information to supply me with affidavits covering all these names, but I am reliably informed and therefore believe that the information I have just given is correct.
The following are among the more striking and in some respects perhaps the more ludicrous findings about which it is worth while to inform the house. For example, a baby seven weeks old listed as a bookkeeper; a little girl five years of age listed as a retired spinster, whatever that may be; a number of non-existent addresses which would make the voter reside over a railway or street intersection; seven voters listed at a United Cigar store; seven voters listed for the store which is now the Liberal candidate's committee room; eleven voters listed in a barber shop; six voters listed at a restaurant. The waiter at the restaurant laughingly told the person who made the inquiry that the enumerator took the names of the persons sitting at the counter.
There are also names of persons who are dead, persons who have moved away for more than a year, fictitious names, fictitious addresses, and the names of persons who are not citizens of Canada. The most common occurrence was the enumeration of an entire family without any regard to age. Indeed it seems as though the enumerators in the Cartier division enumerated everybody from the cradle to the grave, perhaps in anticipation of the government's social security programme. If a complete check were made of the 42,000 names on the lists we believe that at least 10,000 would prove to be false or improperly on the lists. From the information we have already it is
obvious that hundreds, perhaps several thousands. of names are improperly left off the lists.
In short, Mr. Speaker, I want to draw to the attention of the house my opinion that the lists are entirely useless at best, and at worst-and in Montreal, as I think hon. gentlemen will agree from the evidence that has been presented to this house from time to time -it is always the worst because Montreal has been a telegraphers' paradise-


Mr. WHITMAN:: On a point of order,
Mr. Speaker, I ask that the hon. member withdraw that insinuation. I insist on it being withdrawn.


Mr. COLD WELL:: I am quite willing to
withdraw the statement I have made if it is proved to be incorrect. But may I refer the house to a statement-


Frederick Primrose Whitman: Mr. Speaker, I ask that
the hon. member withdraw his statement unconditionally.


Mr. SPEAKER:: There is no point of
order. He is making no attack upon the hon. member. He is making a general statement.


Major James William Coldwell: I refer hon. members
to Hansard of June 29, 1934, page 4469, where an hon. gentleman whom I regard as being one of the ablest men who ever sat in this house made this statement:
I have had some experience in running elections in the city of Montreal, and as a matter of fact I do not employ voters in my own constituency; I employ voters who reside and vote in other constituencies, which is perfectly legitimate. As a matter of fact, if I am to conduct an election in the constituency of St. Lawrence-St. George, first I must have an inquiry to ascertain that the alleged voter resides where he says he resides. Then I must have some description of him so that he can be identified, and usually in order to identify him by questioning I wash to know his telephone number; if he has an office I wish to know where his office is situated and his office telephone number. I cannot run an election otherwise. In one of my elections a thousand voters were impersonated before they got to the polls. You must have means for a complete identification, and your representatives at the polls must be thoroughly informed so that they may prevent impersonation. At election time I employ people who do not vote in my constituency to do that clerical and protective work.
You must remember that if you are running an election in the city of Montreal you can go to an association in New York who will supply you with fifty or one hundred or two hundred or three hundred impersonators. These men will come to the city the day before the election, supplied with cards stating whom they are to impersonate; they will go from poll to poll impersonating voter after voter. In one election the only way we succeeded in preventing it was with the aid of a number of young men belong-
Dominion Elections

ing to athletic clubs, some of them associated with McGill university, who were active supporters of mine. They saw an automobile carrying five or six men; it would stop at one poll and one man would get out and vote; it would go to the next poll and another man would get out and vote; and we then discovered that they were imported personators. We took the law into our own hands and disabled each one of those automobiles, and defied the police to take charge of us for breaking the law in that way. So we were able to smash the combination. But there must be some way whereby money may be legitimately spent in investigating and informing ourselves with regard to prospective voters, in order to secure such information as will enable us to identify each and preserve his right to vote. I can only avoid the present law by going to some other constituency and engaging men there to do that preventive work for me. . . .
In one case I think we secured thirty or forty detectives from another province and some twenty or thirty others elsewhere. Strange to say, before the election I learned that even they were being bribed. We brought some sixty of them into the main committee room, told them we knew they were being bribed and were working for the opposite party and asked those who admitted it to take two paces to the front. Two-thirds of those men took two paces to the front, admitting that they were working for the other party and not for us. Such a situation is difficult but some way must be found to remedy it. I have evidence that at least fifty or sixty blank warrants were issued for use in my constituency. They were signed by a judge to be filled out when necessary. One committee in the St. Lawrence ward of my constituency of St. Lawrence-St. George, composed of respectable men, were arrested and put in gaol before the poll opened, through the use of blank warrants ostensibly signed by a judge in the city of Montreal. I have had police officers come to my main committee room where most representative women of the city were engaged on the telephones to persuade the voters to come to the polls. Those police officers had blank warrants which had been filled out on the street, -with which they attempted to come in and arrest the most representative people in the city. We have stood at the door and said we would use strong measures if they attempted to carry these warrants into effect, because we knew they were false and fraudulent. That sort of thing is carried on, and it is not surprising to find that in the constituency of St. Lawrence-St. George the election expenses have run up as high as $120,000 or $125,000 in a single election. I know of one case where the candidate contesting the election spent $75,000, and there was a contribution of $25,000 to the election fund which had never been reported to him.


Frederick Primrose Whitman: The hon. member has referred to the constituency of St. Lawrence-St. George, but his statement was that the city of Montreal is a hot spot for telegraphing. I wish that statement withdrawn unequivocally, for in my division of Mount Royal I know for a fact there was no telegraphing.


Thomas Vien: In Beauchesne, second edition, citation 294 reads:

If a member should say nothing disrespectful to the house or the Chair, or personally appro-brious to other members, or in violation of other rules of the house he may state whatever he thinks fit in debate, however offensive it may be to the feelings, or injurious to the character, of individuals; and he is protected by his privilege from any action for libel, as w'ell as from any other question or molestation.
The hon. member has not made any particular reference that I could say was disrespectful to the house or to the Chair, or personally opprobrious to other hon. members; therefore there is no question of privilege.


Major James William Coldwell: I am quite willing to say this, that I know there are a good many honest people in Montreal in all parties who deplore this very kind of thing.


Mr. DUPUIS:: May I ask the hon. member a question?


Major James William Coldwell: No, Mr. Speaker; I should like to proceed with my remarks.


Vincent Dupuis: I should like to ask the hon. member-


Some hon. MEMBERS:: Sit down.


Vincent Dupuis: if he is referring only to Montreal. In all fairness the hon. member should say that there is telegraphing in large centres all over Canada.


Thomas Vien: The hon. member may not be interrupted without his consent.


Major James William Coldwell: I am quite willing to answer that question.


Vincent Dupuis: You seem to be afraid.


Major James William Coldwell: T am not a bit afraid. I know of no telegraphing in the part of Canada where I reside.


Vincent Dupuis: Why single out Montreal?


Major James William Coldwell: Because that is the only place where I have any evidence before me to support such a charge. On Tuesday, July 6, there appeared in the Montreal Star a letter which was signed "Fair Play" complaining about the padding of the voters' lists. I have the clipping here, and I should like to put it; on record:
Sir,-I was greatly surprised the other night on reading the electoral list in my district to find, instead of two people in my house there are eleven listed. My neighbours next door have four people, and I saw fifteen names. Also there is a number added which does not even exist. Now, I ask you, does this mean all those people will vote under my address when there are really only two of us? We are not alone-

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in this. Another person in this block is alone and yet five are shown by the list on the pole.
I think we ought to have some protection and also I think the people who canvass for names ought not to be allowed to do so unless they can spell properly as directed.
Then the reply by the returning officer for the electoral district of Cartier, Lazarus Bavitch, appeared in the Montreal Star of July 13, as follows:
Sir,-In connection with the recent complaint in your column by a voter in a certain poll in the electoral district of Cartier, with respect to the alleged padding of the list of voters in this poll, I desire, in my capacity as returning officer for the above electoral district, to draw to your attention the fact that I have personally investigated the poll in question in order to determine the accuracy of the complaint.
Upon investigation it was discovered that the pair of enumerators who had made up the list of this poll had unduly added to the list of names. The result of this investigation was forwarded by me to the chief electoral officer at Ottawa, who instructed me to appoint two new enumerators, in order to get an accurate list of names made of this poll. This enumeration is in the process of being completed. The fees of the original enumerators, which amounted to approximately $35 for each, have, accordingly, been forfeited.
These cases were brought to his attention, and he admits that the padding occurred; and apparently the only punishment that has been meted out to the persons who did this improperly, and against the law, is that they are to forfeit the $35 to which they were otherwise entitled. There are certain polls not referred to by the returning officer which are among the worst. A few moments ago I mentioned the situation that has arisen in certain of the divisions of Montreal. I quoted the words of Hon. C. H. Cahan and the admissions that were made before the parliamentary committee which sat during 1930 to 1935. Anyone who knows anything about the proceedings of that committee will recall that several outstanding cases of impersonation were mentioned. One other that is authenticated and often mentioned in Montreal is that on one occasion the Anglican bishop of Montreal, Bishop Farthing, appeared at his poll early on election day to vote, and was blithely informed that they were out of ballots, that all the ballots had been used up already, and, as it transpired, improperly; and that Bishop Farthing himself already had been voted for, that someone had voted in his name.


Mr. MACKENZIE (Vancouver Centre):: When was that?


Major James William Coldwell: In 1935. The present lists are an invitation to dishonesty on election
day, an invitation of which some election machines are not in the habit of refusing to take advantage.


Vincent Dupuis: Would the hon. member say who signed the affidavits?


Major James William Coldwell: I have the affidavits here, and I shall come to one or two of them in a moment. Perhaps I might place them on record now. One of them, for example, States this:
I,	the undersigned, Estelle Gahan of the city of Westmount in the district of Montreal, clerk, being duly sworn, do hereby depose and say:
1.	I reside at 4378 Western avenue.
2.	For some days I have been engaged in checking the preliminary lists prepared for the by-election pending in the riding of Montreal-Cartier.
3.	I am credibly informed, have reason to believe, and am furnished w'ith evidence leading to the conclusion, that there has been systematic padding of the said lists.
4.	Details of cases of padding investigated by me are set forth in a sheet attached to this affidavit, to form part of it, and initialled, by myself and the ministerial officer taking this affidavit from me.
And I have signed,
Estelle Gahan.
Sworn before me at Montreal on the 18th day of July, 1943, whereupon the affiant and myself have initialled the annexed sheet ne varietur.
R. L. Calder,
A commissioner of the Superior Court in and for the District of Montreal.
This is what the young lady says:
I have checked the major part of poll No. 94 and found the following to be true:
Out of 51 addresses visited I found:
196 names of people who did not live at the addresses indicated;
8 names listed at an address that does not exist;
17 names of people under age, including a baby of seven weeks, who is listed as a bookkeeper.
And it is duly initialled. Then, here is another affidavit:
I, the undersigned, Samuel Wachtvogel, of the city of Montreal in the District of Montreal, being duly sworn, do hereby depose and say:
1.	I reside at 5688 Esplanade avenue.
2.	For some days I have been checking the electoral list for poll 94 of the Montreal-Cartier Division, and I have found the following:
Seven voters were listed at 4500 Park avenue. Upon investigation 4500 turned out to be a United Cigar Store, with no residents.
Seven voters were listed at 4502 Park avenue. This is a store which was vacant at the time of the enumeration, and is now the Liberal Committee Room of Mr. Lazarus Phillips.
Dominion Elections

Eleven voters were listed at 4506 Park avenue, which is a barber shop, with no residents.
Six voters were listed at No. 4512 Park avenue which is, and has been a restaurant, with no residents.
At 4516 Park avenue there were nine persons listed who do not live at that address.
At 4520 two persons were listed who do not live at that address.
At 4522 six persons were listed none of whom live at that address.
So that in seven houses or stores there were forty-eight bogus voters listed.
And I have signed,
S.	Wachtvogel.
Sworn to before me at Montreal, the 19th day
of July, 1942.
R. L. Calder,
A commissioner of the Superior Court
in and for the District of Montreal.
I will table these affidavits, with others which I have, but which I feel it unnecessary to read.


An hon. MEMBER:: Read them all.


Major James William Coldwell: I have made the statement, and I wish to repeat it, that allowing an election to be stolen and to be filched improperly is just as bad as setting aside elections altogether, that there is no difference between the robbing the people of the right to choose their own representatives freely, and the methods pursued by Adolf Hitler in Germany. The responsibility is on this House of Commons, and particularly on the government which is responsible for the conduct of affairs in this country, to take the appropriate action in these cases.
It may be said that revising officers are correcting the lists. As we know from experience, at this date that is a practical impossibility, when a situation as wholesale as this is revealed. Revising officers would quite properly require evidence before striking names off the list. It is patently impossible for all the electors themselves to check the lists and to appear before the revising officers for the necessary affidavit, and other evidence. Only a complete reenumeration of the constituency in question will meet the situation.
I would make the point quite strongly that unless the government does act it will have to take the responsibility for the irregularities in this forthcoming election. And now, knowing the facts, or at least some of the facts, it would be accessory to the crime both before and after the fact. It seems to me it is the duty of the Prime Minister (Mr. Mackenzie King)-and I know the Prime Minister does

not countenance this sort of thing for a moment-to see to it that we cleanse this blot upon the record of democracy in Canada.
What can the government do? I am going to make some suggestions. I suggest that since the present returning officer-and this surely is quite improper-is a nephew of the Liberal candidate, and since he has already shown his complete incompetence in connection with this work, another returning officer or an assistant returning officer should be appointed, the latter to be selected by one of the other candidates. I suggest that the candidate first nominated or associated with a recognized party in this House of Commons might choose the assistant to the returning officer and, if you will, there should be a complete and immediate reenumeration of the constituency. This need not cause any delay. The new enumeration could be brought before the revising officer and, after taking the necessary legal steps as to evidence and so on, the revising officer could use the evidence so gathered to establish the official list for the election of August 9. The enumeration should be carried on in accordance with the law, by two enumerators at each poll, each representing an opposing party. If we look up the Dominion Elections Act, we find that section 17 of the Dominion Elections Act provides for this. This means that one enumerator per poll would represent the Liberal party, and one would represent the Cooperative Commonwealth Federation, or the other national party in this by-election.


Vincent Dupuis: Would the hon. member allow me to ask if there was not a representative of the Cooperative Commonwealth Federation?


Major James William Coldwell: No.


Vincent Dupuis: As enumerator?


Major James William Coldwell: No.


Vincent Dupuis: What was he doing, then?


Major James William Coldwell: We had no candidate there at the time of the last election.


Vincent Dupuis: Was there no enumerator of the other party?


Major James William Coldwell: No.


Vincent Dupuis: Were there two enumerators?


Major James William Coldwell: Not to my knowledge.


Frederick Primrose Whitman: There was a communist who ran in the last election in Cartier.

Dominion Elections


Major James William Coldwell: I cannot say. I think there was an acclamation in a recent election in the Cartier division.


An hon. MEMBER:: No.


Major James William Coldwell: Yes, when Mr. Bercovitch was elected.	[DOT]


Mr. BERTRAND (Laurier):: Mr. Bercovitch was elected by acclamation at a byelection. A gentleman called Ainey ran against him in 1940.


Major James William Coldwell: I am simply submitting this to the house, and I hope-


Mr. ROSS (Moose Jaw):: The hon. member made a statement a moment ago-


Major James William Coldwell: I have given enough evidence this morning to show the corruption and the impropriety of the whole thing. I think it is indefensible, and it should shock any hon. member in this house.


John Gordon Ross: The hon. member said there were two enumerators.


Major James William Coldwell: I said I was not sure.


John Gordon Ross: The hon. member gave a statement in which he said they were dismissed.


Major James William Coldwell: No; enumerators were dismissed, but whether there were two in one poll, I cannot say. They probably were; it could be read that way.


Vincent Dupuis: He was lax in his duty, then.


Major James William Coldwell: After what Mr. Cahan said in his evidence, as to the way in which his own detectives were bribed and corrupted, I think we should look very carefully into the choosing of an enumerator.


Vincent Dupuis: The electoral law was changed since then.


Major James William Coldwell: May I proceed, Mr. Speaker? The third point is that the government or the proper minister or officer should issue instructions requiring each voter to show his registration card at the poll. That might assist very materially.
I hope that the government will take steps which while they would be no guarantee of honesty would at least show that an attempt was being made to secure an honest election in the constituency of Cartier. Otherwise from what I have said this morning I think that the electors of that constituency will be overwhelmed by a corrupt and crooked election machine. I am not placing the responsibility upon any political party for that machine, but I am saying that it is the duty of this house
at this time to see that the forthcoming election in Cartier is as honest as we can make it and that those who have been responsible for this corruption and the placing of names improperly upon the voters' lists shall be prosecuted to the utmost extent of the law. To simply say to people who have padded the lists, "We are not going to pay you for the enumeration," is entirely insufficient. We have to safeguard democracy in this country and there is no way of bringing our democratic institutions into greater disrepute than to have the knowledge go abroad that this house, having information regarding the condition which exists in a constituency, does not take the proper action.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: May I first of all say to the hon. member that I am obliged to him for having brought up this matter as being one of urgent public importance. It certainly is and my hon. friend is quite right when he says that it affects the privileges of the entire house. I so regard it myself and I am sure that every hon. member in the house equally so regards it. I am not in position to say to what extent his representations may or may not be correct, but he has certainly given enough in his statement to make it clear that there is a necessity of having the matter fully and carefully looked into.
He has made some references which I think are irrelevant. He referred to a statement made by Hon. Mr. Cahan when he was in this house in relation to one election which took place when he was a candidate. If my hon. friend had wished to be fair in that matter I do not think he would have singled out the city of Montreal as being the one centre of political iniquity. Had he really known the whole situation he might have gone to other constituencies where other people have also had experiences in general elections.
I think myself at the moment of an election. when I was a candidate in York North a few years ago and busloads of voters were brought up from Toronto to poll votes against me and did so although not one of them had even his name on the voters' lists.


Major James William Coldwell: May I say to the
Prime Minister that the only reason I referred to the constituencies I did was that I had the information before me. Had I had other information, I would have given it.


William Lyon Mackenzie King: I heard the
statement made by Mr. Cahan in this house and he and I frequently talked together about the best methods of meeting some of these wholly improper and wrong practices which are adopted by certain people in elections,
Dominion Elections

but which certainly do not represent the wishes of members of this House of Commons. My hon. friend was good enough to say that he knew I would not approve of these methods. I think he might have said that with equal truth of every hon. member of this house. I believe that every member of parliament is interested in having honest elections, and I think every member of this House of Commons would be prepared to assist in seeing that elections are made as clean as it is possible to make them. My hon. friend says that if elections are to be stolen or filched, it is as bad as having no election at all. I would go further than that. I would say that it is worse than having no election at all because it is encouraging a form of wrongdoing that cannot be too quickly stamped out entirely, if representative institutions are to be respected in our country.
I did hear a day or two ago that some irregularity had occurred in connection with one of the enumerators or returning officers, but the particulars I do not recall at the moment. My colleague, the Secretary of State (Mr. McLarty), and I conferred about it at once, and the Secretary of State took steps immediately to have the chief electoral officer investigate the matter. This is the first intimation that I have had of anything of the kind to which my hon. friend has referred other than the one case I have just mentioned.
I wish to make it clear that the law under which elections are held, by-elections as well as general elections, is a law that was made by the parliament of Canada. I assume there is within the law itself the means of meeting a situation of this character. If there is not, then the House of Commons as a whole has been remiss in not seeing that the law was made sufficiently comprehensive to deal with anything of the kind. I shall be surprised if it is not, but I agree with my hon. friend when he says that there may be reasons why the government should insist where there are offences, where people are not complying to the full with the provisions of the law or taking steps which would defeat the purpose of legislation of this house, that everything possible is done to see that the situation is rectified and that wrongdoing is prevented as largely as possible.
I cannot say, speaking offhand at the moment, what is involved in the suggestions which my hon. friend has made as to the manner in which this situation can be most effectively dealt with, but I will say now that I shall take up the matter immediately with Other members of the government and that, as far as it is possible for the government so to do, steps will be taken to see that the 
election in Cartier is made as fair and square as it can possibly be made. I cannot express too strongly, not only on my own behalf but on behalf of my colleagues, and, may I say, on behalf of every member of this House of Commons, that not one of us in this House of Commons shall view as being warranted any situation with respect to by-elections that is not creditable to the country. I shall go further, and say that I do not care who the man is, whether he calls himself Liberal, Cooperative Commonwealth Federation, Social Credit or by any other designation, if he lends himself to practices that are wrong, he should be dealt with summarily without regard to anything except the offence of which he is guilty and circumstances relevant thereto. I shall be happy to assist in1 any way in my power toward seeing that, not only this election, but all elections, as far as possible, are conducted in a fair and honourable way.


Hon. N. A. McLARTY (Secretary of State):: In view of the Prime Minister's remarks, perhaps I should say a few brief words in connection with this matter. Naturally, this is the first intimation that has come to me of irregularities of the kind alleged. I am sure that if they had come to the attention of the chief electoral officer he would have immediately communicated with me, and the fact that he has not done so-


Mrs. NIELSEN:: May I correct the minister? I also received a telegram on July 14 about this matter, giving exactly the same information as that given by the hon. member for Rosetown-Biggar, and I immediately telephoned the chief electoral officer. Therefore he has had that information.


Norman Alexander McLarty: If the hon. member had allowed me to finish she would have heard exactly what I intended to say. I stated that this is the first indication as far as I am aware as to any facts of padding of the enumerators' lists. I was going to say that late on either Thursday or Friday night a wire was received, I believe from Fred Rose, who is a candidate in the election. I do nut know for what party he is a candidate or on what platform he is running. It was too late to get in touch with the chief electoral officer that night, but the first thing in the morning I had a consultation with him, and, after discussing it with the Prime Minister we sent the assistant chief electoral officer to Montreal to investigate the accuracy of the allegations which were there made. So far his report has not been received, although verbally I was advised this morning that allegations contained in that telegram were not substantiated. But, for the benefit of the member for North Battleford (Mrs. Nielsen), if my memory is correct, there were

Dominion Elections
no facts in that telegram indicating that the enumerators' lists had been padded, and it was to that phase of the election', which was the most serious phase dealt with by the hon. member for Rosetown-Biggar, that I was intending to refer when I was interrupted.
There is one thing which is a little difficult to understand and to give credence to. The Dominion Elections Act provides that there shall be not one but two enumerators; and under the act those enumerators are nominated by the successful candidates in the preceding election and the candidate getting the next largest number of votes. In other words, in order to enable to happen what is alleged to have happened-to do justice to the election act-there would either have to be some measure of conspiracy, or the enumerators would have to be under the impression that they were taking a census, not making an enumerators' list.


Gordon Graydon: May I ask my hon. friend who appointed the second enumerator, besides the winning party in the last election?


Norman Alexander McLarty: Mr. Speaker, a note was forwarded to me a couple of minutes ago. In the last election Mr. Bercovitch, who has passed away, polled 18,000 votes. The only other candidate, Mr. Ainey, listed at that time as " National Labour," polled 2,000 votes. Now Mr. Ainey is on active service, and I am advised that the political representatives of Mr. Bercovitch's party and the political representatives of Mr. Ainey's party would appoint the enumerators.


Major James William Coldwell: And who are they?


Norman Alexander McLarty: I have no idea, Mr. Speaker. Mr. Ainey is described as "National Labour". He may be, so far as I know, C.C.F.


Major James William Coldwell: No, he is not. I think he is another Liberal.


Norman Alexander McLarty: I have no idea who he is. What is more, I have no idea what candidates are running in Cartier to-day.


Major James William Coldwell: He was certainly not a candidate of the C.C.F. I do not know what he is-possibly another Liberal.


Vincent Dupuis: He must be a C.I.O.
candidate.


Norman Alexander McLarty: I do not know what he is. I assume the returning officer would act fairly in the appointment of the enumerators. If the evidence read by the leader of the C.C.F. is correct, certainly if the enumeration was fairly done, it was carelessly done. But
in the absence of any more definite information it would be very difficult on the spur of the moment to give a decision on a purely ex parte statement. I can assure my hon. friends, however, had any such information been available to us prior to this time, an immediate investigation would have followed.


Mr. ROSS (Souris):: May I ask the minister, in the matter of these by-elections, what arrangements if any are made to take the soldiers' votes, that is those serving in the armed services whether in Canada or overseas?


Norman Alexander McLarty: Unfortunately in the case of by-elections, no arrangement can possibly be made.


Thomas Vien: Order.


Norman Alexander McLarty: I know my hon. friend will be fair enough-


Thomas Vien: The question cannot be
asked in this debate, which is confined to one subject, and that is the Cartier by-election.


Mr. BROOKE CLAXTON (St. Lawrence-St. George):: Mr. Speaker, in support of his
argument the hon. member for Rosetown-Biggar (Mr. Coldwell) referred to conditions in St. Lawrence-St. George. I think hon. members would expect me, and I feel it my duty, to say something about those conditions.


Thomas Vien: Order. May I point out
to the hon. member that the hon. member for Rosetown-Biggar (Mr. Coldwell) did make reference to the city of Montreal, which I think was irrelevant to the argument which he was using. I will allow the hon. member to reply to that, but the debate cannot be extended to include either the election act or election laws, or happenings in other constituencies. However, I shall allow the hon. member to reply because I rather think I should have called the hon. member for Roestown-Biggar to order when he introduced something other than the subject matter of this debate.


Brooke Claxton: I quite appreciate the
difference, Mr. Speaker, and I will limit my very few remarks to the point made by the hon. member for Rosetown-Biggar. He cited in support of his description of conditions in St. Lawrence-St. George the remarks of my predecessor, Hon. C. H. Cahan. These remarks were made in this house and before commiteees of this house, as I recall it, in 1934, and I have to remind hon. members that Mr. Cahan, for whom I had and have the utmost respect, used consistently to complain about the condition of affairs in St. Lawrence-
Dominion Elections

St. George, and equally consistently used to get elected there. He was elected in 1925, in 1926, and in 1930, and all that time he kept complaining steadily about conditions there. He said in his remarks quoted by the hon. member for Rosetown-Biggar that he understood that some elections there had cost as much as $120,000 to $125,000, and the inference was always made that this money was spent in corrupting the electors. Well, I have to recall that in the last election Hon. Mr. Cahan was defeated by a not inconsiderable majority, and the expenses on both sides of the election on that occasion were lower than at any time in the history of the division, so far as expenses are known at all, and the expenses on the winning- side were considerably lower than those of the defeated side. Now, when the election began, when I was nominated, I went to Mr. Cahan and expressed my respect for him. I said, "This will be as clean a fight as we can make any election fight," and he agreed with that course. So far as I know, both of us lived up to that agreement completely. I never heard from anyone, Liberal or Conservative, inside or outside the constituency of any corruption or alleged corrupt practices during the election of 1940; and I think it is stretching a long bow to support an argument with regard to the Cartier division by making references to something said about St. Lawrence-St. George in 1934 by the member for that time.
I only conclude by saying that I think the people of St. Lawrence-St. George would support what I say, and that is that no election could have been cleaner than the last one, and I believe the hon. member for Rosetown-Biggar, who knows me pretty well, would agree that if I had anything to do with it that would be the case. I therefore submit Mr. Speaker, that the argument drawn over the boundary line from one division to another will not hold water for a minute.


Gordon Graydon: I have no desire to take any lengthy part in the debate which has been initiated by the ihon. member for Rosetown-Biggar (Mr. Coldwell). However, I should like the house to know that my view is that the launching of this move to adjourn the house to discuss a matter of urgent public importance has served a useful purpose at an appropriate time.
As the Prime Minister (Mr. Mackenzie King) well pointed out, every member of this house, as every citizen in Canada, should be and is interested in seeing that we have honesty in our elections. That is a matter that goes to the very root of democracy, as the member for

Rosetown-Biggar pointed out. He went a good deal farther than that, indicating that this was the kind of thing which might perhaps be called a parallel to the disfranchisement of citizens generally and which, as he suggested, might lead to dictatorship. These are things which the average citizen and members of parliament must guard against with great jealousy, and the launching of this motion has brought to the house again the necessity for cleanliness and purity in our public life and in elections in Canada.
I was greatly surprised, indeed alarmed, to hear of the evidence which had been brought in affidavit form and otherwise by the hon. member for Rosetown-nBiggar. It indicates a situation which I can see, by his attitude, that the Prime Minister and others are anxious to clear up. This party takes the stand that matters of this kind must be cleaned up in the public interest, and we take that stand unequivocally.
I was interested in what the Prime Minister said in one of his asides, with reference to the historic constituency of North York, where he exhumed one of the old election corpses to bring it before the house, saying that there were some bus loads of people brought from Toronto, although he did not make it clear how they voted. Those who came by bus loads did not all vote for him. In any event I was pretty young at that time and was not able to take the keen interest that I do now in elections. It would be strange indeed, however, if all the wrongs were on one side, if all the sinners belonged to one political party, even in North York. I do not want to criticize the Prime Minister unduly for bringing up this matter, but the man against whom he ran in that election, and who perhaps was indirectly spoken of by the Prime Minister-I do not believe he meant it in that way-has passed away and he may be said to have left an excellent record in public and private service in Canada.
I wish to associate myself with those who have spoken in the interests of cleaner elections for Canada, and I suggest to the government that they should do all that lies in their power to go to the very root of the difficulties which have been brought before the house, to see that an example is made of this instance and to ensure that if such things occur in the future they will be dealt with to the full extent of the law.


William Lyon Mackenzie King: May I say at once to my hon. friend that I cannot imagine by what construction of thought he has brought in a reference to a former member of parliament who ran against me. I made no reference whatever to any individual, and the

Dominion Elections
last thing I would wish to do in this house, a thing that I have never done at any time, would be to reflect upon one who has passed away and is not in a position to answer for himself. I made reference to something that had been done by a political machine, and my hon. friend knows as much about political machines as I do.


Mr. ROWE:: That is a great compliment to him.


Gordon Graydon: May I say to the Prime Minister that in this, as in many other things in this house, I am listening at this moment to the voice of experience.


An hon. MEMBER:: Listen to it and you will get somewhere.


Mr. T. L. CHURCH (Broadview):: I would point out that the chief electoral officer has all the jurisdiction that is necessary to control this election, and if there have been such irregularities, as the hon. member who has moved the motion (Mr. Coldwell) has indicated, the writs should be cancelled or postponed and registration verified by the chief electoral officer and his deputies in the island of Montreal. With regard to the allegations made by the mover of the motion concerning the telegraphing of votes, people being left off the lists, and dead' voters, that is something that has gone on in almost every election that I have known of, because elections, as has been said, are not won with prayers. Registration cards should be produced by the voters. I suggest that anyone who cannot read or write should not be on the list.
In 1934 the then member for St. Lawrence-St. George headed a committee which revised the electoral law of the country, and many of the matters that have been referred to by the mover of the motion, which were prevalent throughout Canada, were thoroughly investigated. In 1930 in the constituency of St. Law-rence-St. George and west centre Toronto, some of these very things now complained of went on, and the particulars appeared in the daily press for a month after the elections. In Britain they have recognized, apart from two or three elections in Scotland, the principle of allowing a candidate representing the same party in a constituency to be elected for the duration of the war, but that practice will be prevented in Canada so long as anyone is a British subject and can deposit $200, an election will be held.
I submit that the chief electoral officer has absolute power, he is a thoroughly competent official and if there are irregularities as alleged,
the election could be postponed. The government has the power to suspend the election for thirty days or to cancel the writs until this situation is cleared up, if after investigation the complaints are justified.


William Lyon Mackenzie King: Does not the hon. member for Rosetown-Biggar feel that the matter has been sufficiently discussed to justify his withdrawing the motion now so as to enable the house to get on with its regular business?


Major James William Coldwell: I am glad to withdraw the motion. The purpose has been served, but we shall ask in a few days what steps the government has taken.


Mr. E. G. HANSELL (Macleod):: I am not going to prolong the debate at any great length, but the matters that have been revealed this morning and which look rather damaging are the sort of thing that makes politics dirty. They are the sort of thing that makes democracy weak. Matters of this kind should be looked into with all sincerity and with a good purpose in view, and I do not think the purpose is served by merely blaming some enumerator who may not have carried on his work well or may eventually be proved to have padded some lists. I am inclined to think that where there are election corruptions the blame may be attached to some huge political party machine, and I suggest that in dealing with matters of this kind there should be such punishments as fit the crime. If we are to have honesty in our electoral system, then penalties must be imposed for breaking the law.
The Prime Minister has referred to this matter and has expressed his alarm and more or less indicated that it does not matter whether it is a Liberal candidate, a Cooperative Commonwealth Federation, a communist or any other candidate that is running. I am inclined to think that the responsibility should not always be attached to the candidate, but rather to the machinery that is behind, operating in these electoral campaigns. The matter brought up this morning casts the suspicion upon every member sitting in this house, not only from Montreal and district but from every other large metropolis in Canada, whether he is eligible to sit as the properly elected representative of the people.
The hon. member for Rosetown-Biggar (Mr. Coldwell) has suggested'a way in which this matter can be dealt with, but I am not so sure that it goes far enough. I am wondering whether a thing of this kind should not be investigated more fully by the privileges and elections committee of this house.


Major James William Coldwell: There is not time.
Dominion Elections


Ernest George Hansell: The hon. member interjects that there is not time. But a matter of this kind is serious enough to warrant postponing the by-election. It is serious because it is an encroachment upon our whole democratic system.


Thomas Miller Bell: That is right.


Ernest George Hansell: It might suggest a doubt whether the government was sitting there by reason of corrupt electoral practices. I am not saying it is; of course not, but this matter is tremendously serious, so serious as to justify postponing the by-election until there has been a thorough investigation. And when that has been done, those found guilty of corrupt practices should not simply be allowed to run away, laughing up their sleeves. The strength of a law is to be found very often in the penalties it prescribes. Where there are no penalties and no punishment the law is often weak and ineffective.
The matter of registration cards has been brought into the discussion. I am not going into that in detail, but I do believe that a registration card should be shown- before a person is permitted to vote.


Mr. FRASER (Peterborough West):: That would not do any good; you can get a bushed of them.


Ernest George Hansell: The hon. member says it would not do any good, and I am inclined to think he is right. These little registration cards that we carry around in our pockets signed by somebody that nobody knows as deputy registrar, I am inclined to think are not worth very much. I believe a registration card should be issued under seal and be a document of value.


Thomas Vien: Order.


Ernest George Hansell: I do not blame you, Mr. Speaker, for calling me to book. I know that was out of order. When the plebiscite was discussed we brought the same matter up and were told that we could not use registration cards on that occasion.
I will close by saying this. If our democratic system is to survive, our electoral system must be so framed that corrupt practices will be rendered well-nigh impossible, and until that is done we have not a democratic system at all. We are told that our boys are fighting to preserve democracy. Well, we had better get democracy here at home first before we talk in those terms, and if our democratic system is to be preserved, our electoral system must be safeguarded in every way so that corrupt electoral practices will become practically unknown.

Hon. L. S. ST. LAURENT (Minister of Justice): May I say a word to reassure the hon. member. The act provides penalties. Rule 11 of Schedule A to section 17 of Special Election Instructions says:
Enumerators who, wilfully and without reasonable excuse, omit from their list of electors the name of any person entitled to have his or her name entered thereon, or enter on the said) list the name of any person who is not entitled to have his or her name entered thereon, shall, in addition to any other punishment to which they may be liable, forfeit their right to payment for their services as enumerators.
Then section 70 (4) says:
When it is made to appear to the chief electoral officer that any election officer has been guilty of any offence against this act, it shall be his duty to make such inquiry as appears to be called for in the circumstances.
And he has further powers to intervene and incur such expenses as may be necessary for these purposes. Then subsection 5 provides:
The chief electoral officer shall have the like powers in the case of any offence which it is made to appear to him to have been committed by any person under section 17.
That is the section dealing with the enumeration. So that there are penalties provided by the act, and I can give the hon. member the assurance that all the facilities of the Department of Justice will be at the disposal of the chief electoral officer to see that prompt and appropriate penalties are meted out to anybody who may have violated the provisions of the act.
Hon. L. R. LaFLECHE (Outremont): Mr. Speaker, I wish to associate myself without any reserve with what has been said this morning by the Prime Minister (Mr. Mackenzie King). There is no doubt that elections, if we are to be a free and independent democracy, must be carried on honestly.
We have heard reported to this house this morning by the hon. member for Rosetown-Biggar (Mr. Coldwell) what I take it at the moment are allegations, and I believe ex parte.


Major James William Coldwell: Supported by affidavits.
Mr. LaFLECHE: Quite right, but which have not been put to any test. Whether the allegations are correct or not remains to be seen. I recall to the members of the house the words of the Prime Minister and the Minister of Justice (Mr. St. Laurent) to which we have just listened. I fear that what the hon. member for Rosetown-Biggar has said this morning will be taken as gratuitous insults. He had his opportunity of making une amende honorable, and I am very sorry that he did not acquit himself as one might have expected.

Dominion Elections


Major James William Coldwell: The hon. member says that I have not made honourable amends for what I have said. I produced certain evidence here this morning, and if the minister intends to defend electoral corruption in the city of Montreal, he is at liberty to do so.
Mr. LaFLECHE: The hon. member evidently cannot stand to be taken to task even according to the rules of the house.


Major James William Coldwell: I do not intend to be insulted.
Mr. LaFLECHE: I do not intend to defend what is wrong.


Major James William Coldwell: I do not intend to be insulted by anyone, least of all by the Minister of National War Services (Mr. LaFleche).
Mr. LaFLECHE: I do not desire to defend anything that is wrong. If the hon. member for Rosetown-Biggar is so deeply bitten by the necessity of defending what is right, then I should remind him that red warfare is being carried on in other places in this world-


Major James William Coldwell: For democracy.
Mr. LaFLECHE: Yes, for democracy-but where is he?


Major James William Coldwell: The hon. gentleman has asked me the question, where am I. I am in this house doing my duty as a loyal member of his majesty's parliament and I intend to continue to do my duty here.
Mr. LaFLECHE: That is very good to hear, Mr. Speaker; now may I carry on. I have the honour to represent the honest and proud county of Outremont-


Major James William Coldwell: I have not said a word about it.
Mr. LaFLECHE: -which is a county within a cluster of equally honest and proud constituencies. I want to make it very clear that I have never had any knowledge of this practice that is termed telegraphing, nor have I heard the slightest suggestion that it has been carried on. I want to make that definite statement so that the matter may be crystal clear. I want to express very deep disappointment that any hon. member of this house should have seen fit to allow it to appear, through his words, that a whole cluster of constituencies has been tarnished by this so-called practice of telegraphing; and moreover it is repugnant to all men that this brush should be applied to a particular locality in this country.


Mr. A. R. ADAMSON (York West):: 1 would not have said anything during this debate if the Minister of National War Services (Mr. LaFleche) had not interjected his remarks about Montreal. I happen to know something about this riding, as I ran against the Cooperative Commonwealth Federation candidate in 1940 who is running there.
I have discussed the present campaign with him. The hon. member for Rosetown-Biggar (Mr. Coldwell) has explained exactly what has been going on in the Cartier division. However I would suggest to the hon. member that something more than a registration card should be demanded by way of identification.
I was able to purchase registration cards quite openly an the city of Montreal, and I see no reason why other people would not be able to do the same thing.


Some hon. MEMBERS:: Order.


Thomas Vien: The hon. gentleman is introducing a subject which is not before the house in this debate.


Agar Rodney Adamson: Speaking to the point of order, Mr. Speaker, may I say that the hon. member for Rosetown-Biggar brought up the question of registration oards and suggested that these should be used for the identification of the voters in this electoral district. Your Honour allowed that as perfectly permissible. Now I am merely pointing out that in my opinion that is insufficient because registration cards can be bought in Montreal, as I have bought them.


Some hon. MEMBERS:: Order.


Thomas Vien: The hon. gentleman is introducing another subject. Under standing order 31 the debate on the motion before the house must deal with one matter only and no other matters may be introduced. The hon. member is now saying that registration cards may be purchased in Montreal. That is a matter which is not before the house and which is not relevant to the motion under discussion.


Agar Rodney Adamson: The only statement I wished to make was directly in connection with what the hon. member for Rosetown-Biggar had to say with regard to the identification of voters in this division. I wanted to suggest that something more than registration cards should be required. That was the point I wished to make, and that was all.


Thomas Vien: Is it the pleasure of the house that the hon. member for Rosetown-Biggar shall have leave to withdraw the motion?
Motion withdrawn.
/
5104	COMMONS
Ontario Elections



ONTARIO ELECTION


[Stage Direction]
On the orders of the day:
Gordon Graydon: Have any arrangements been made between the Department of National Defence and the provincial authorities of Ontario to enable Ontario voters in the reserve army who may be at camp on election day to exercise their franchise in the forthcoming provincial contest?


Hon. J. L. RALSTON (Minister of National Defence):: This matter was brought to the attention of the department yesterday by the district officer commanding military district No. 3, at Kingston; and the hon. member for Broadview (Mr. Church) also sent me a note asking about the matter and referring to an article in this morning's newspaper. On inquiry I find that the department communicated immediately with Major Lewis, who is clerk of the legislative assembly and, I am told, chief electoral officer, to ascertain from him what arrangements he had made, because it seemed to the officers concerned that the arrangements would have to be made by those who were in charge of the election procedure and machinery. No reply has been received as yet, and I can only say that the department has already indicated to Major Lewis that in connection with matters affecting the election officers will cooperate just as far as that possibly can be done. However, I think the arrangements for voting would have to be made under the direction of Major Lewis.


Gordon Graydon: Under the present arrangement it looks as though quite a number of Ontario citizens will be disfranchised, unless something is done in connection with this matter.


James Layton Ralston: We realized that when the matter was brought to our attention by the officer commanding military district No. 3, and we communicated with Major Lewis.


Mr. TUSTIN:: From my constituency alone I think perhaps six or seven hundred men will be going to camp next Sunday, and they will be in camp at the time of the election.


James Layton Ralston: I still point out that it is a matter primarily for those in charge of the election machinery to arrange, so that these men may exercise their franchise perhaps by voting at advance polls, or by proxy, or in some other way.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Gordon Graydon: Would the Minister of Labour make a statement to the house concerning the strike at the plant of Marine Industries Limited at Sorel, Quebec, and inform the house as to what steps are being taken by the government to settle the dispute?


Hon. HUMPHREY MITCHELL (Minister of Labour):: There is a strike at Marine Industries Limited at Sorel, which has taken place against the advice of the men's leaders. It has to do with the application of the cost of living bonus, and it was a spontaneous affair. As soon as we heard of it in the department, one of our senior industrial relations officers was dispatched to Sorel, and I am hopeful that the men will be back at work in a short time. I would add that the matter is in the hands of the war labour board, and nothing will be done until these men go back to work.



APPOINTMENTS AND PROMOTIONS ON WELLAND SHIP CANAL

[Stage Direction]
On the orders of the day:
Gordon Graydon: I have a further question to direct to the Secretary of State. I have received some complaints relating to appointments and promotions in the operating and administrative departments of the Welland ship canal, coming from representatives of certain ex-service men. I am going to hand the correspondence over to the minister with the request that before the house adjourns he will be good enough to investigate the matter and, if possible make a report upon it.


Norman Alexander McLarty: If the leader of the opposition will forward to me the correspondence he has I shall be glad to look into the matter and advise him.



WARTIME PRICES AND TRADE BOARD


[Stage Direction]
On the orders of the day:
Mr. MAURICE LALONDE (Labelle):: Has the government reached any decision following the request I made on the floor of this house on July 6 for the setting up of an impartial and thorough investigation into the administration of the office of the wartime

Wheat
prices and trade board at Mont Laurier, county of Labelle; and, if so, what is its decision?


Hon. J. L. ILSLEY (Minister of Finance):: It is my intention to recommend to the government that a commissioner be appointed to investigate the charges which the hon. member, on his responsibility as a member, made on the floor of the house.



PRIVILEGE-MR. WEIR REFERENCE TO PRESS REPORT OF AGRICULTURE COMMITTEE MEETING

[Stage Direction]
On the orders of the day:
Mr. W. G. WEIR (Macdonald):: Mr. Speaker, I feel bound to rise to a question of privilege, as the result of a Canadian Press dispatch in the Winnipeg Free Press of July 17, in the following words:
Ask Board to Control Grains
Otawa, July 17 (CP)

The House of Commons agriculture committee, during a heated meeting in camera, approved yesterday a motion by E. E. Perley (Prog. Con., Qu'Appelle) that the Canadian wheat board be authorized to handle all oats and barley on a pooling basis according to grade, it -was learned last night.
The meeting approved a report to be submitted to the house, which will recommend additional encouragement to essential foods production.
Mr. Perley, supported by P. E. Wright (C.C.F., Melfort) and Robert Fair (N.D., Battle River), urged the committee to recommend a changed system of allocation of railway cars so that pool elevators in Saskatchewan would receive better treatment. The members claimed' there was discrimination against these cooperative elevators.
I tabled the reports of the committee on agriculture and colonization this morning, and I wish to say, first, that I did not give out any report of the meeting referred to in the press, or disclose the contents of the committee's report to any member of the press. In fact, no member of the press ever approached me with respect to it. Second, the report which I tabled to-day, which is the committee's report, does not recommend that the Canadian wheat board be authorized to handle all oats and barley. Third, the meeting, while held in camera as are all committee meetings when considering draft reports, was not a heated meeting, as the dispatch implies. Fourth, according to a letter from the chairman of the wheat board, and read to the committee, no complaint had been received that the distribution of cars was unsatisfactory until June 18, following his appearance before the committee; and that since then several conferences had been held in an attempt to bring about a more satisfactory and workable system. Otherwise the report and records of the committee will show exactly what took place.



ALLOTMENT OF FREIGHT CARS TO WESTERN CANADA -LABOUR-AVAILABILITY OF ELEVATOR SPACE

[Stage Direction]
On the orders of the day:
Mr. J. G. DIEFENBAKER (Lake Centre):: Mr. Speaker, I should like to ask a question of the Minister of Trade and Commerce by reason of the approach of the new crop season. My question has to do with what is being done with respect to the proper allocation of freight cars, particularly in areas in the prairie provinces where all or part of the threshing was not completed last fall, with the result that many of the farmers in those areas are unable to dispose of their wheat. I believe I should give the minister an example setting out the situation in one particular area, namely, Davidson, Saskatchewan. During the past twelve days only ten cars have been loaded at Davidson. There are 125,000 bushels of wheat to be marketed on the fifteen-bushel quota. Those who did not get threshed until this spring have been able to market very little, and it is going to be a great hardship on them if they cannot get their quota on the market before the new crop comes in. I am informed that in other areas where marketing has taken place, cars are still being received. My question is this: What is being done in this regard to assure an equitable and fair allocation of cars, and in particular is preference being given to areas in which farmers were unable to sell wheat last fall, because of the lateness of the threshing season, or in which threshing was not completed until this spring?


Hon. J. A. MacKINNON (Minister of Trade and Commerce):: Mr. Speaker, the hon. member's question has to do with a situation which is causing us very considerable concern at the present time. I refer to the matter of the aceptance of farmers' quotas in western Canada. A great deal of the difficulty at first was that of transportation. That has been a serious situation, and has developed to the point where at the present time there are some 4.500 railway cars loaded with wheat at Fort William waiting for emptying. Including that 4,500 there are a total of some 13,000 cars at Fort William and elsewhere loaded with some 18,000,000 bushels of wheat. This situation, as I say, was at first a transportation difficulty. Recently however it has developed largely into a matter of labour. The ability to get labour at the head of the lakes is the difficulty. My department, the Department of Labour and other branches of goverment concerned have, obviously, been giving this matter anxious and serious attention. I am informed that the labour situation looks as if it will reach an early solution.
Wheat


John George Diefenbaker: What ia selective service doing about it?


James Angus MacKinnon: In addition to this situation, and arising out of it, there is the question of accepting wheat from the farmers at many points in western Canada where elevator space is not available. This is a matter which is in the hands of the wheat board, and one which has been receiving its close attention. So far as possible, they are arranging for the placing of cars at these particular points, to move the wheat.


John Gordon Ross: May I ask a supplementary question? The minister says the wheat board are arranging to have cars placed. But may I point out we are only about two weeks away from the end of the crop season. In some cases there are elevators without any space for grain to-day, and there are other elevators which have some space, but only for certain grades. In those instances it will be impossible for farmers to deliver the balance of their fifteen-bushel 1943 quota. In such cases where through no fault of his own, but rather because of lack of space in the elevtaors, the farmer has been unable to deliver his 1942 quota, will the minister undertake to see that that farmer's 1942 quota is added to his 1943 quota, after August 1, if he has been unable to deliver up to that time?


James Angus MacKinnon: I can give the hon. member for Moose Jaw (Mr. Ross) and all interested the assurance that where the difficulty does not arise from the farmer's own reluctance or where, for reasons beyond his control, a wheat producer is unable to deliver all of the fifteen-bushel quota of this year's crop, arrangements will be made to enable him to deliver the deliverable portion after the end of this month, the end of the crop year.


Mr. CASTLEDEN:: Will anything be done to see that the farmer is given an opportunity to get some advance on the grain he is forced to hold?


James Angus MacKinnon: That is a matter of government policy; it is being considered.


Mr. DOUGLAS (Weybum):: Some time before the house adjourns will the minister make a statement as to the basis of allocation agreed upon in connection with the distribution of cars? When the agriculture committee were discussing this matter the whole question was under consideration but no plan has been definitely worked out.


James Angus MacKinnon: This is a matter of considerable interest. I may

say that when the wheat board officials were before the agriculture committee the statement was made by the chairman of the wheat board that as far as he knew there were no definite criticisms or charges of discrimination with regard to the allocation of grain cars.


Mr. DOUGLAS (Weyburn):: That has been denied since.


James Angus MacKinnon: No. Shortly after that there were criticisms or possibly charges of discrimination received from parts of western Canada. Meetings were immediately called by the wheat board, I believe with the Saskatchewan pool, the Alberta pool and the Manitoba pool elevators for the discussion of this matter, and an effort was made to arrive at some mutual understanding as to the allocation of cars. My information is that at the last meeting each of the three organizations to which I have referred offered a separate and distinct plan. There has been no unanimous agreement arrived at as yet.


Thomas Clement (Tommy) Douglas: If a plan is formulated before the house adjourns, will the minister acquaint us with its terms?


James Angus MacKinnon: Certainly.



REPRESENTATIONS OF POOLS RESPECTING HANDLING OF WESTERN WHEAT CROP

[Stage Direction]
On the orders of the day:
Mr. E. E. PERLEY (Qu'Appelle):: Mr. Speaker, I should like to ask a question of the Minister of Trade and Commerce. Not long ago representations were made to him by the three western pools. I believe some of the representations in their brief were embodied in the report of the committee on agriculture, tabled in the house to-day. Will the minister give consideration, or is he giving favourable consideration, to the representations by the pools with respect to the handling of the 1943 crop, and the balance of the crop of 1942?


James Angus MacKinnon: Mr. Speaker, naturally, these reperesentations have been receiving the earnest consideration of the wheat subcommittee of the cabinet.



REDISTRIBUTION


[Stage Direction]
On the orders of the day:
Hon. P. J. A. CARDIN (Richelieu-Ver-cheres):: Mr. Speaker, at this stage of the session a certain amount of leniency is shown

Canadians in Japan
to hon. members in connection with the application of the rules of the house. In view of what we have been listening to this morning before the orders of the day were called, may I be permitted, even though I may not be strictly within the rules of the house, to ask a question of the government? Have any representations been made to the federal government by any provincial authority, outside of the province of Quebec, with regard to the deferment of the redistribution to be based upon the last decennial census? If such representations have been made, will they be tabled before the session is brought to a close?


William Lyon Mackenzie King: My hon. friend's question can stand as a notice and I shall make a reply later.



CANADIANS IN JAPAN


[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: A week ago to-day the hon. member for Yale (Mr. Stirling) asked for some information with regard to Canadians resident in Japan in order to be able to compare the conditions under which they live with the conditions under which Japanese live in Canada. The matter has been looked into carefully by officials of the Department of External Affairs, and I should like to make the following reply.
Of the 1,000 Canadian civilians known to be in Japan and Japanese occupied China, 163 are known to be interned. Others are detained in certain areas and the remainder ire at liberty, but the number in each category is not known. Inquiries have been made through the protecting power as to the nature of the restrictions on movement of Canadian nationals in Japan and Japanese occupied territories, but definite information has not yet been obtained. So far as is known, Canadian civilians in the far east have not been forced to work. I may say to my hon. friend that there are a number of reports in the Department of External Affairs which have come from officials of the International Red Cross. If he or any other hon. member of the house would wish to look over those reports, they will be made available to them at the Department of External Affairs.



CANADIAN ARMY


[Stage Direction]
On the orders of the day:
Mr. T. C. DOUGLAS tWeyburn): I should like to ask the Minister of National Defence if he has received a report on the fire in the military barracks at the exhibition grounds, Regina, which did some $250,000 damage? When the minister receives it, will it be made available to hon. members?
James Layton Ralston: I received a preliminary report, but I do not remember about any subsequent report having come to my attention so far.



PRIVILEGE-MR. FAUTEUX

[Stage Direction]
On the orders of the day:
Mr. GASPARD FAUTEUX (St. Mary) (Translation:	I wish to raise a question
of privilege. It is reported in the July 19 issue of .the newspaper Le Devoir that the leader of the Bloc Populaire, the hon. member for Beauharnois (Mr. Raymond), has made a statement to the effect that the right hon. Prime Minister (Mr. Mackenzie King) achieved a constitutional coup d'etat in postponing redistribution until the end of the war. The hon. member for Beauharnois suggests that the province of Quebec should send an emissary to Westminster.
I wish to protest against the use of the expression "constitutional coup d'etat" and to tell the hon. member for Beauharnois how unfortunate it was that at the time that resolution was passed not a single member of the Bloc Populaire was present in this house to vote against the measure.
At one o'clock the house took recess.
The house resumed at three o'clock.


[Stage Direction]
The house resumed from Monday, July 19, consideration in committee of 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.
Mr. EDWARDS:: Mr. Chairman, at the outset I wish to say that this question, of farm debts bids fair to remain, as it has been since 1935, a political football. I am not unmindful of the fact that one provincial government in this dominion obtained power by promises of what it would do if put into
Farmers' Creditors Act

power in that province: I refer of course to Alberta. If the farm debt question was not regarded as a vote getter, much of the talk which we have heard on this bill would never have taken place, and I feel confident that the vast majority of farmers in western Canada will appraise at their true worth the adulatory remarks which have been made with respect to them by certain hon. gentlemen connected with the Social Credit and Cooperative Commonwealth Federation parties. I was astounded at the lengths to which some hon. members have gone in fulsome praise of all farmers in western Canada. One hon. member was so good as to say that all of them were honest, efficient and industrious. I recommend to those hon. gentlemen that when they go back to their constituencies they talk with some of the farmers there about their neighbours. They know very well, and the records prove, that such a statement is wholly false in fact. I for one do not believe, speaking by and large, that farmers as such are any more honest than lawyers-that is, members of my own profession-and I do not believe that all lawyers are honest. The same is true equally with regard to preachers-


Mr. McIVOR:: I question that statement.


Mr. REID:: You would not be willing to debate it, though?


Manley Justin Edwards: and teachers, and business men, and insurance men; not all of them are honest. Fortunately we have laws of general application which take care of the dishonest, the lazy and the unthrifty, and where such laws are not applicable, nature often steps in and takes care of the situation. I suggest that hon. members approach this problem with a practical sense of its implications, and of the damage which may be done to those who do not now and never will claim the alleged benefits of this legislation.
Circumstances do arise in which by reason of unpredictable conditions, special legislation is necessary. This condition arose so far as agriculture is concerned in western Canada in the late 'thirties, when the then leader of the Conservative party, a man whom I delight to honour as my predecessor, the hon. member for West Calgary, and a former prime minister of this dominion, introduced and passed with the approval of this house a farmers' creditors arrangement act to take care of those special circumstances and conditions-conditions whose effects were spread not only over the west but all through agricultural Canada. The act as then passed was made of general application. It was designed to help whom?

Everybody? All farmers? No; only those who could satisfy a tribunal, set up for the purpose of adjudicating thereon, that they were unable, through circumstances beyond their control as efficient, industrious and honest farmers, to meet their debts as they came due. That act has been in operation for nine years in the provinces of Alberta and Saskatchewan, and despite that fact, despite the fact that the door was wide open to any and every farmer who felt that he could comply with the simple conditions set forth in the-act, despite the availability of these boards and the simplicity of the procedure, less than ten percent of the farmers have availed themselves of the privilege or opportunity presented by this legislation.
Now, why be so much concerned about the ten or at the very outside fifteen per cent of your farming population being unable to meet their debts as they become due? Have we similar special legislation with regard to other sections or classes of the community? The answer is definitely in the negative. I suggest that the fact that the other provinces of' Canada took early steps to have the act removed from application to their provinces should make us pause and consider. The fact that, as I now understand!, there are so few applications before the boards at the present time should give us reason to pause and consider whether or not this legislation should be passed at all. I may say quite frankly that but for the limitations in the bill as to the debts to which it will apply, I for one would not support the passing of the bill. I believe that in our attempt to help ten per cent, or fifteen per cent at the very outside, of our farming community in western Canada, we may do irreparable harm to the other eighty-five or ninety per cent of the farmers of the west, and it is on their behalf that I am prompted to speak as I do this afternoon. All the implications of this bill will be felt in our post-war period so far as the vast majority of our farming population is concerned.
As the member for Brandon (Mr. Matthews) so well said last night, and as the premier of Manitoba eloquently and logically stated in the address which the hon. member quoted, credit is based upon confidence. That is the keystone of the arch, not only of commercial and industrial but of agricultural relations and in all our business relations generally. It is not difficult for you and me to find out what our credit is. If you have any doubts about that, ask your friend, ask your neighbour how much he will lend you.

Farmers' Creditors Act
I do suggest that credit and confidence are based on knowledge, character and past dealings, and if we are dishonourable, if our record is bad, then our credit as such is gone. If it is to be bruited abroad that a first mortgage or an agreement fo" sale has no validity in a court of British justice, by reason of an act of this parliament interfering with contractual obligations, then I for one would not want to invest my money or my savings or earnings in any venture founded on real estate security in the province of Alberta.
The implications of this bill go farther than one individual case. I dare say we are all aware that in years gone by people have invested their money or saved it by buying life insurance, and they look to those policies to provide for them, for those whom they love and who are dependent upon them in their later years, or when they are gone and1 yet I know, as does everyone here, that the insurance policy which is to be a protection for me in my old age, and for my dependents, cannot be paid, it cannot be matured unless the mortgages in western Canada are paid with interest. I wonder how many of us would be in favour of this legislation if there were introduced concurrent legislation to provide that the life insurance companies, which are the great repository of trust funds in Canada, were to be relieved of their contractual obligations, to pay your wife or your dependent children, or yourself in your old age, the amounts stipulated for in the contract.
I say therefore that this legislation has a much wider implication than the province of Alberta, or Saskatchewan or Manitoba. I for one would like to believe that the insurance companies with whom I have been depositing my premiums from year to year were spending some portion of that money in helping responsible farmers, business men and industrialists in the province of Alberta; and yet I would be the first to rise and condemn them if under existing legislation, or legislation as we have had it in that province for the last ten years, any insurance company had invested my life savings in a first mortgage in Alberta, or in an agreement for sale, or even in provincial government bonds. I am sure that upon a realization of that fact the same criticism would fall from your lips. This is extraordinary, exceptional legislation. It interferes with contractual rights and obligations, regard and respect for which go to the very roots of our economic system in the English-speaking world. This is essentially class legislation, and as such should be viewed not only from the standpoint of the comparatively few citizens of the
class who will benefit, but from the effect which it will have on the rest of the class, on the rest of the farmers who constitute the vast majority of the people of western Canada, and upon our citizenry as a whole.
Confidence is the basis of all credit. Without credit western Canada would not have developed as it has in the last thirty years, and without credit western Canada cannot hope to keep pace with the rest of the dominion in the post-war years.
Coming to the farmers of western Canada themselves, while I do not and have not acted for many years for any so-called investment companies, mortgage or life insurance companies, I did have in the earlier years of my practice, in the years succeeding 1920, from 1921 to 1925, considerable to do with mortgage foreclosures. I did act for one mortgage company and that experience served to confirm me in my belief in one thing, and that is the absolute impartiality and fairness and essential justice of our courts in dealing with mortgage foreclosures. I foreclosed from one hundred to one hundred and fifty mortgages in that time. That is a conservative estimate. In no instance was the foreclosure opposed. In no instance was there by any stretch of the imagination one dollar of equity in the land for the borrower. In every instance the mortgage company took losses varying from a few hundred to several thousands of dollars.


Thomas Clement (Tommy) Douglas: Where had the farmers' equity gone?


Manley Justin Edwards: The farmers' equity had gone, if you will, "with the wind". In many instances the farmer had abandoned his land. It was my usual practice to make inquiries of the secretary of the municipality, the school board or the reeve of the municipality in regard to the character and ability and industry and thrift and honesty of the farmer whose mortgage was being foreclosed. In no instance that I can recall was there any protest by any neighbour or by any responsible man in the community as to the impropriety of the proceedings which had to be taken. It is not surprising to know that that mortgage company is no longer in business. It failed-and there is no legislation to take care of it.
My second observation is this. I have amongst my clientele numbers of elderly people, retired farmers, if you will, men who sold their farms because of age or infirmity. One of the most distressing things to me is to find an old couple who have spent their years in developing and paying for a farm in Saskatchewan, in one instance, in Alberta
Farmers' Creditors Act

in another, now living on relief and charity by reason of the application of this act, which wiped out their equity in their farm and left them without a roof over their heads that they could call their own. They are now dependent on the bounty of the province. In the one instance that comes most vividly to my mind a farmer came in from across the line, not a Canadian citizen, and bought this farm for $2,000 cash and a promise to pay the balance, not in cash but in so many thousands of bushels of wheat in succeeding years. And now he carries on secure in his tenure on a farm on which he has lived for only four or five years. He has changed his method of farming and gone into live stock, cattle and hogs, and lives in comparative luxury on the farm which the farmer and his wife homesteaded while they exist in homeless penury. .
It works both ways. There are not a few farmers in Saskatchewan and Alberta who would gladly sell their farms but for this act and similar legislation that has been in existence in the province. Now, perforce, they will not sell unless they get all cash. Young men are growing up in our province to-day who would willingly and gladly buy a farm and establish a home, but they cannot do it because they cannot get the credit. Their neighbours, men who have known them all their lives, older men, say: I cannot sell to you for fear of this very legislation. The result is that we are doing the very thing that some hon. gentlemen who spoke last night deplored. We are creating a condition in those western provinces which can lead to nothing but a population of tenant farmers. I could name a dozen men to-day in good districts in Alberta who would gladly sell their farms but for this and similar legislation. But now it is "all cash or nothing". And why? Because the farmer who owns his land says: This farm is all I have to take care of me, and you may make an agreement to pay me one-third of the crop up to five or ten thousand, or whatever the case may be. But to-morrow or next year you may walk into the debt adjustment office and take advantage of this legislation, and I shall no longer have my home or security; the payments on which I was relying to keep me in my old age will not be forthcoming, so that I prefer not to sell, and I shall rent my farm instead, as so many other farmers have done and are doing. The same thing is true in connection with the lands which have been foreclosed in years gone by; no mortgage or investment company will lend money on farm mortgages 
or discount agreements for sale, for the very reason I have mentioned. What, is the foundation of all credit? It is confidence.
I commend the minister for the legislation he has introduced. I commend him on the limiting clauses which are contained in that legislation for, as I see the prospects ahead, with the prosperity we have in western Canada at the present time, with the record now before us as to the reduction and liquidation of farm debts and obligations, in another three, four or five years this legislation will go into the discard, because no longer will it bj necessary. Then I trust that the confidence of the investing public in western Canada will be restored and that we shall go ahead side by side with our sister provinces, participating to the fullest extent in the prosperity which I believe lies ahead of this the finest country in the world.


Ernest George Hansell: I think I can say I take just a little pleasure in following the hon. member for Calgary West. The hon. gentleman has made one or two very singular statements. To me he seemed particularly interested in the welfare of insurance companies and other financial institutions, and I wondered if he had forgotten that the legislation we are now discussing is supposed to be designed to settle debt, not to protect any investment funds he may have in the form of premiums deposited with insurance companies. The unfortunate thing about his exposition this afternoon is that evidently he is in a happier position than many others, in that he has some little investment in the form of life insurance premiums. As I understand it, this debt legislation is designed to protect the unfortunate farmer who never in the wide world will be able to build up any security for his o'ld age in terms of insurance.
The hon. gentleman said that he has never represented any financial institution. Well, I should say that he could not have done a better job of representing them than he did in his speech this afternoon. I believe the hon. gentleman should have thought a little more deeply than evidently he has been thinking in the past. He had a good deal to say about the credit of Alberta; in the first place he had a good .deal to say about confidence. The very word "confidence" is a misnomer unless we are told in what we are to have confidence. The hon. gentleman uyas speaking as though the investment corporations had no confidence in the Alberta government. Well, I am not going to say whether they have or have not; if the hon. gentleman wishes to speak in those terms, that is all right with me. While he was speaking, however, I rather fancied that he imagined himself on the opposition side

Farmers' Creditors Act
in the Alberta legislature. The hon. member for Acadia reminds me to ask the hon. gentleman whether he has ever read the report of the Bank of Canada following the investigation it made into the Alberta situation a few years ago. I have not the exact words before me, but that report placed almost the entire blame for the loss of credit upon former administrations in that province, particularly those administrations under the Liberal regime. However, I shall not now bring up that old stuff. I should like to know, however, in what the hon. gentleman means we should have confidence. Surely there is not a mortgage company which would not have confidence in an agricultural policy which gave farmers adequate prices for their produce. I suggest that the hon. member's thinking is a little shallow there, and I believe he should go a little further under the surface.
Let us look at the matter in this way. If in Canada there could be an agricultural policy which would keep agriculture solvent, therein would lie all the confidence of which any investors would ever have need. I suggest that if in the past the Alberta government took certain action to protect the farmers, it was not because it had any grievance against the mortgage companies or lending institutions, but because this Ottawa government, which is responsible for national policy, never had a national agricultural policy that kept agriculture solvent at all times. I think the hon. member should look at matters in that light, instead of playing politics to the gallery. Let me remind the hon. member of this: If agriculture in Alberta had been solvent there would have been no need for the government of that province in days gone by to tackle so vigorously the debt situation as it existed there. The only reason they tackled it was that the farmers were being driven off their land and out of their homes. Surely the sanctity of a farm home is as sacred as some sort of financial scheme. That is the way we must look at the operation of the present fiscal policy of the country.
We have no quarrel with the lending institutions. They are all well and good in their proper place. Our quarrel is with a bad financial policy, with finance itself, with monetary arrangements which have existed and continue to exist. I believe I can say that, after all, the basic trouble of practically all our problems, even to the extent of1 our international problems, is one of finance.
Since the hon. member for West Calgary has mentioned Alberta, may I point out that ever since it took office in 1935 the Alberta government has laboured hard and battled well to alleviate the most distressing agricultural debt situation one could imagine. As
early as 1937 the government of that province passed what was known as the Credit of Alberta Regulation Act. This was basic legislation which, we believe, would have enabled the government of Alberta to deal with the debt problem. But what happened to this legislation? It was immediately disallowed by the central government here at Ottawa. Following that the Alberta government passed a measure known as the Reduction and Settlement of Debt Act. This act would have established a basis of settlement for all outstanding debts. But what happened to that legislation? It was declared by the courts to be ultra vires of the province. Then came what is known as the Home-Owners Security Act. This was passed because, under the stress of world conditions and, shall I say, a falsified financial system over which individuals had no control whatsoever, many were forced to mortgage their homes, and were then in danger of losing them. Surely it should be recognized that there can be no sanctity of contract which does not also recognize the sanctity of human life and homes. Surely the sanctity of homes has as least as much value as the consideration of a faulty money system. This act, too, was disallowed by the central government at Ottawa. If it had been allowed to stand it would have brought debtor and creditor together to seek an equitable basis of settlement through the medium of a debt adjustment board. The farmers of Alberta would not have been faced with the present situation had that act not been disallowed.
That is our contention, and has been from that day to this. The argument has gone on as to whether or not the debt adjustment board had the right to settle debts. This issue was thrown out, not only by the courts of Canada but by the privy council. This, Mr. Chairman, is the record of a great battle against a great power. And I will say this, that the late William Aberhart started the battle for the emancipation of the people from slavery and debt. That battle is not yet won, but, may I say to the committee through you, Mr. Chairman, the battle is not yet lost, either. We are going to continue to fight on against a faulty money system, a financial power which, after all, is the greatest power and enemy of the people in the world.
I believe I should say that the responsibility in connection with farm debt does not lie altogether upon the shoulders of the farmers. It seems to me that the lending institutions must bear their fair share of the responsibility. The farmer is no more responsible for the weather, for the drought, for the grasshoppers,

Farmers' Creditors Act

for the hail or for the frost than is the lending institution. But of course the lending institution must be protected in some way or another, while the farmer is left to do the best he can, under conditions of uncertainty.
I bold in my hand a brief entitled "Abuses of Arbitrary Debt Adjustment," put out by the Dominion Mortgage and Investments Association. I believe it was referred to a few days ago. In this brief we find set out a number of examples, and I should like to read only a few words for purposes of illustration. This is what I find at page 7:
A loan of $800 was made on a quarter-section (160 acres) in 1928. In the 12 years prior to the Board of Review hearing, the borrower paid $131 to the mortgagee and $31 on account of taxes, an average of $13.50 a year. At the end of 12 years, in addition to the $800 which had been loaned him. he owed $119 for insurance premiums, etc., $623 interest and $366 tax arrears. If he had had no mortgage he would have still gone behind more than $200 on his taxes alone.
Before going further I would point out that the lending institution lent the money to this farmer. Surely they would know something about him, the location of his farm and whether or not it was productive. But notice what happens. The brief goes on to state: Neither the amount of the loan, the interest rate nor anything else in connection with his mortgage has any material bearing on this man's difficulties.
Well, that is all right; we agree with that statement. I believe it would be true in almost every case. Perhaps farmers have been treated fairly well; perhaps mortgage companies have attempted to settle debts equitably, so long as they were protected and did not lose any money. I am not saying they did not. So that phase of the brief is quite all right. But notice this part:
The facts speak for themselves. Evidence tendered showed that the debtor was an inefficient farmer unable to manage bis farm or personal affairs.
Yet the lending institution lent money to this farmer. Surely they should have known something about the farmer at the time. Then it goes on to say:
His land is admittedly poor and low grade. Did the mortgage company not know that before they lent the money?
As a productive self-contained unit it is never likely to produce sufficient to maintain this family, let alone pay off any debt or taxes.
Yet the lending company lent the money.
It has, however, a value of at least $1,100 as an adjunct to an adjoining farm.
It would appear from that simple statement that just so long as the lending company is secured, it is not very much concerned about 
the welfare of the farmer or the question whether or not he can pay his debts. If it had been, it would have safeguarded its interests before it ever lent the money. When companies do that sort of thing surely they have some responsibility if it works out that the farmer, doing the best he can with poor land and gambling against the price of wheat, frost, drought, grass-hoppers and all the other things that enter into the uncertainty of farming, cannot meet his burden of debt.
The hon. member for Acadia (Mr. Quelch) has handed to me a Bank of Canada report on the financial position of the provinces of Manitoba, Saskatchewan and Alberta, 1937. This is what that report says in respect of Alberta on page 34:
After making full allowance for the rapid economic development of the new province, and the legitimate cost of facilities provided by the government to aid and stimulate this development, it remains the case-in our opinion- that the 1905-22 period was characterized by waste, loose administration, and incurrence of debt to an extent which could not be justified even when allowance is made for the optimistic spirit of the times.
That period of the provinces' history was governed by a Liberal administration. I thank the hon. member for Acadia for handing me that report. The hon. member for Calgary West can think over that should he ever be suffering from insomnia any of these nights.
I should like to say something that perhaps has been said already. I am at a loss to know why the Minister of Finance has evidently ignored the recommendations of the debt- conference which was called by the three western provinces. The premiers of these provinces met together and forgot politics. Mr. Bracken who was then premier of Manitoba, Premier Aberhart of Alberta and Premier Patterson of Saskatchewan, forgot their political differences and joined hand to hand in a debt conference. They arrived at certain conclusions and they presented a draft bill. Those premiers subsequently came down and interviewed the government, but so far as this present legislation is concerned it would appear that their representations have been entirely ignored. Since we are in committee I would ask the minister to tell us why he ignored the recommendations of that conference of premiers. In addition to that, farm organizations have submitted briefs of one kind and another, but evidently they have been ignored in this legislation.
This whole situation will never be cleared up by simply passing debt legislation of this kind; the whole debt problem will have to be tackled in a different way. Last fall

Farmers' Creditors Act
a conference was held in Winnipeg on postwar reconstruction, and one paragraph of the resolution dealing with private and industrial debts reads as follows:
Therefore, be it resolved that all agricultural mortgage debts be taken over by an agricultural credit bank operating under a national monetary authority, on the following basis:
(a)	The principal amount of debts to be reduced to the original indebtedness less all payments made in excess of three per cent. The farmer will be required to pay this to the agricultural credit bank in equitable instalments on a crop or production share basis.
(b)	The agricultural credit bank will repay creditors on equitable terms which will ensure that individuals incur no loss and corporations can meet their liabilities in full.
If something like that were done, the hon. member for Calgary West would need to have no misgivings that any insurance company, mortgage company or any other lending institution would go broke.


Mr. JOHNSTON (Bow River):: Or run away with the premiums.


Ernest George Hansell: The hon. member for
Bow River says, "or run away with the premiums." I think the debt situation ought to be tackled in some such way, and I believe it can be. What the government is attempting to do is to tackle the debt situation under the present fiscal policy of Canada.
I am disappointed that this bill was not referred to the banking and commerce committee. Perhaps as a private member I should take a little blame for that, but I think the minister could have initiated the matter. I see no reason why the bill could not have been sent to that committee. Some while ago the government found this debt situation left on their doorstep; they had to wrestle with it, and what did they do? For week in and week out the members of this house were urging that legislation be brought down, were asking when it would be brought down. We were, told it would be brought down when the appropriation bill was passed, and it is brought down in the dying days of the session. There is no reason why a bill of this kind could not have been brought down earlier and referred to the banking and commerce committee, which would have had an opportunity of calling witnesses from the western provinces, from agricultural organizations and from mortgage companies too. They could all have placed their cards on the table face up. Then the banking and commerce committee could have reported to the house, and I have no hesitation in saying that the recommendations made would have fitted the situation-that is, if they had reported correctly upon the evidence submitted. The result is that we
72537-323}
are not informed of the briefs, which were submitted. The premiers have come down and spoken to the government; the government have said, "Thank you, gentlemen, you can now go home." But we do not know what their submission was.


Mr. HLYNKA:: They went home.


Ernest George Hansell: They went home, anyway.
I think something of that kind should have been done. I do not know what the rules and regulations of the house are on this point, but if there is any possibility of it,
I believe the minister would do a service to his government, to the country, and particularly to agriculture and lending institutions, if he would have the bill go to the banking and commerce committee, which could fully investigate the whole matter, whose proceedings would be known to all hon. members and to the country; have them report accordingly, and have a bill based on the work of the committee placed before the house.
I recommend that. I have nothing to add at this particular stage of the debate.


Mr. LACOMBE (Translation):: The shortsighted policy of the government has led them to another breach of right in introducing this measure. In spite of our constant protests, they have called and keep on calling farmers to serve in the armed forces. It is not at all surprising that they must now have recourse to extraordinary remedies in order to save what can still be saved of our agricultural economy sabotaged by the present administration which must bear the blame. Moratorium and delay are synonymous. Postponements never did cure an evil, but on the contrary, always made it worse. The government says: let us put off until to-morrow the action which must be taken. It is difficult to face duty squarely. Mr. Bennett established a moratorium in peace-time. Why should we not have our own war moratorium, thinks the government.
This arrangement act which they criticized, they adopt it to-day as their favourite child. Thus you see how far an unwholesome and hypocritical policy may lead. In the past few years, we have witnessed the worst contradictions and the repudiation of the most sacred promises. At present, we witness the desperate attempt of an administration which has placed agriculture in a deplorable position because it always rejected the amendments which I moved so often asking that farmers be given complete and final exemption from military service. The government is doing even worse than that. They pay the western farmer to-reduce his production and rudely tell the mort-
Farmers' Creditors Act

gagee who has a right to complain: Evil rich man, you can just wait and pay me your taxes.
Thus the phantom government which presides over the destiny of the country speaks to the people they administer. In fact, Mr. Chairman, it is not Ottawa which governs here, but London and Washington. Yet Canada, an agricultural country, supplies Britain with innumerable quantities of food, just as she exports enormous stocks to the United States. The remainder of agricultural manpower is mobilized for those purposes, while rationing spreads its tentacles over our civilian population and our army. In spite of all the sacrifices made so far by Canada, when the Prime Minister of the country wishes to tell the world that thousands of our countrymen are shedding their blood in Sicily, he must ask permission of London, and London flatly refuses. He secures this signal favour only by kneeling at the feet of Mr. Roosevelt. The government will, nevertheless, keep on sending our youth, our food, our munitions and billion dollar gifts to that mother country which is scandalized by the heroism of our soldiers.


Mr. ABBOTT:: Mr. Chairman, I rise to a point of order. What have my hon. friend's remarks about gifts of millions of dollars to Britain, and sacrifices in Sicily, to do with the bill which is before the committee?


The CHAIRMAN:: The point of order is well taken. Surely there is enough scope within the orbit of the bill at present before the committee to enable an hon. member to keep away from the questions and problems the hon. member is bringing before the committee at this time.


Liguori Lacombe: Mr. Chairman, I believe the hon. parliamentary assistant who raised a point of order did not grasp my remarks at all.


Douglas Charles Abbott: I grasped
them very well.


Liguori Lacombe: My remarks have a bearing on the bill before us. We are now discussing a moratorium bill concerning agricultural mortgages. Under this bill, I have a perfect right to deal with considerations which other members are allowed to bring up in the house. At any rate, I have just about finished my remarks.
As far as we are concerned, in these supremely humiliating circumstances, we shall have to face scarcity, perhaps even famine which already threatens us, for lack of a sufficient harvest in Canada.
TMr. Lacombe.]


Douglas Charles Abbott: The same objection, Mr. Chairman. This has nothing to do with the bill which is before the committee. Whether or not we are faced with a famine can have no possible relation to the clause we are considering.


Joseph-Arthur Bradette: The hon. member for Laval-Two Mountains, who is an experienced parliamentarian, ought to know that he should confine his remarks to the bill under discussion, and I trust he will abide by the ruling of the committee.


Liguori Lacombe: Mr. Chairman, since I am addressing the house in my mother tongue, I would ask the parliamentary assistant to the Minister of Finance to be so kind as to speak French the next time he raises a point of order.


Douglas Charles Abbott: With pleasure, Mr. Chairman. The remarks just made by the hon. member have no connection with the bill which is before the house.


Liguori Lacombe: Mr. Chairman, I was discussing a few moments ago the threat of scarcity and famine with which we are faced. I respectfully submit that in discussing the Farmers' Creditors Arrangement Act I have a perfect right to deal with these questions. I believe, moreover, that the parliamentary assistant to the Minister of Finance has not at all grasped the essential points of my remarks. I was saying a while ago that we shall be face to face with famine. Then it will be the valley of humiliation, not only for the leader of the hon. member who has just raised this point of order, but also for all the true Canadians in the population of the country. As for the others-and this is my last word-history shall hold them responsible for having sacrificed our fatherland in adventurous undertakings which already cast ridicule upon our country and undermine its very social and economic foundations.


Joseph-Arthur Bradette: Order. The last words of the hon. member for Laval-Two Mountains certainly have nothing to do with the subject under discussion. It is my duty to see that the rules are enforced. I am convinced that the hon. member himself knows that the remarks he has just made have no connection whatsoever with the bill now before the committee.


Douglas Charles Abbott: He knows it full well.

Farmers' Creditors Act


Thomas Langton Church: Representing a province which is both industrial and agricultural, I wish to say a few words on the inequality of this proposed national policy for debt reconstruction in Canada, growing out of the principle laid down in the Farmers' Creditors Arrangement Act which was passed by parliament in 1934 during the period of depression and drouth. The government of that day adopted a courageous course in an endeavour to help the farmers on the prairies, and in 1938 all the provinces were excluded with the exception of Alberta and Saskatchewan.
I have been a critic of the loan companies, insurance companies and mortgage companies in this country, and when I saw the amendments that were introduced in 1938 in connection with the Farmers' Creditors Arrangement Act, and saw at the same time that war was almost inevitable, I predicted that the provincial debt legislation would be upset on appeal to the privy council. That prediction was fulfilled, as everyone knows.
What I object to with regard to this whole question is this. It would be far better for the government to adopt a truly national policy of debt readjustment to protect the equities not only of the farmers of western Canada but of other classes of the population. A policy of debt reduction and the conservation of equities, as well as the readjustment of differences between mortgagors and mortgagees, would be a truly national policy if it brought within its scope all classes from coast to coast including farmers, fishermen, industrial workers and the white collar workers in the cities and towns, and market gardeners. Ontario seems to be the forgotten province of confederation. It is a large agricultural province, as well as a large industrial centre, but it has been entirely overlooked by the government in the matter of debt readjustment.
The Farmers' Creditors Arrangement Act has been administered in a haphazard manner by the various boards throughout the country, so that there has not been equality in the attempt to relieve the burdens of those who have been suffering from debts. When the war began I had a motion on the order paper in which I proposed a national moratorium in Canada, and I suggest that it would have been far better as a means of protecting the equities of the Canadian people, because the system which we are now considering protects the equities of some and ignores the equities of other classes. I proposed a truly national policy of debt reduction instead of the system we have here, which is one of state socialism for a section of the community and not for others. This is a federal measure, and if we are going to conserve the interests of some
people in Canada we should do the same for the whole population, in a real national policy, including those engaged in industrial pursuits. It should apply particularly to the primary producers-lumbermen, fishermen, farmers and those engaged in the industrial life of Canada. The bill before us, however, does not aim at anything so equitable.
It is proposed that certain judges shall take charge of the administration of this bill when it becomes law. This, I suggest, will prove as fatal as the mistakes that were made under the original Farmers' Creditors Arrangement Act. The purpose is to rescind the 1934 act, which now applies only to Alberta and Saskatchewan; the explanation given in the explanatory note is that it is intended to consolidate and re-write the act so as to make it applicable to certain classes of farmers, namely, those on the prairies, and to include Manitoba in the new debt adjustment scheme.
In the past I have also made certain proposals, which I thought would prove of benefit to the Canadian people, with regard to the shark loan companies. I suggested that there should be a national moratorium on all equities and that the rate of interest should be fixed at 5 per cent or less, or in any event that there should be a lower rate than those which were being charged. Just consider the lot of our industrial workers in the cities and towns. What is going to become of these people at the close of the war? They are going to lose their jobs altogether, their equity will be gone, and during the period of conversion from war-time to peace-time standards over a number of years there will be a large number of Canadian workers without employment. We know what happened after the last war. At that time nearly 600,000 people from the farms and from various occupations in the cities and towns of Canada found it necessary to migrate to the United States to look for work. I am afraid the same thing will happen after this war, but the situation will be more serious. The government, therefore, should try in a national scheme to preserve the equities of all our people and not just those of a particular section.
I quite appreciate the condition of the farmers on the prairie. They have had to face long years of drought and depression, and two wars, and they have seen the prices of their products fall to an alarming degree; wheat had gone down from $1.50 to 34 cents or thereabouts, and they have had to pay high prices for the things they have had to buy. I deeply sympathize with them, and so did the Conservative government in 1934 when they brought down the Farmers' Creditors Arrangement Act to meet the condition that
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prevailed at that time of depression and drought.;' That act had been weighed in the balance and found wanting, but I do not think that the new proposed measure will help matters vefiy much.
I have received a number of pamphlets from mortgage and loan companies, and I admit that there is a degree of justice in some of the statements they make. I quote:
The debt legislation suggested by the governments of the three prairie provinces is so drastic in character that it would completely destroy western farm credit and would mean that for alt, practical purposes there would be no such tHihg as a farm mortgage.
There is need for curtailment rather than an extension of farm debt legislation. The Farmers' Creditors Arrangement Act was passed in 1934 as a temporary measure to meet a temporary emergency, but the emergency has passed and the position of western farmers has improved very materially. Cash income of Manitoba and Alberta farmers is greater than in the prosperous 1926-1929 period.
The farm debt situation is greatly exaggerated in some quarters in western Canada. Half of the farms have no mortgage debt and only a small percentage are burdened with debt. Deserving borrowers already have ample protection from harsh creditors and there is no danger of a flood of foreclosures.
The real owners of farm mortgages held by a savings institution such as a life insurance company are the policyholders. There are far more policyholders than there are borrowers on a mortgage and this is true not only for the country as a whole but for western Canada itself. Unnecessary losses brought about by debt legislation come out of the pockets of policyholders.
Let us not forget that some of the mortgages are held by private persons, widows and others. I have no objection to the principle of the bill, but, I repeat, there are other people in Canada who need similar assistance. Our industrial workers will suffer when this war is over, if not before. But the owners of real estate are also faced with a problem and there is no similar protection for them. Nearly everyone in this house has real estate of some description. In our cities and towns to-day no one wants to own real estate because there is no protection for the owner. The minister comes along and appoints a rent controller and makes it impossible by the regulations . he passes for any man to administer his property as he should from the commercial aspect. He cannot get any real revenue from it because he is hemmed in by controllers and subcontrollers. Why is his equity also not included in this bill? Some of the mortgagees in the cities and towns are charging 61 per cent and we know that for years the shark loan companies have been charging two per cent per month and sometimes three per cent. They have also asked for chattel mortgages and bills , of sale as

collateral, and have been in effect a lot of tax collectors. What chance has the industrial worker, the urban or suburban worker, and the market and truck gardener?
This pamphlet, "The Prairie Farmer and His Debts", says at page 9, that the borrowers need a sound mortgage law. If I had my way I would have a sound mortgage law under which the rate of interest would be four and a half or five per cent, with a national moratorium for everyone for the war period, if necessary, because everybody wants to pay his debts. But some of these mortgage companies are charging six and a half per cent, and that should be impossible to-day. Speaking of the legislation which has been proposed to the dominion government for the adjustment of farm debts in the prairie provinces and its defects and dangers, this pamphlet says:
If enactedi, it would destroy western farm credit. It would also have very far reaching effects on existing farm mortgages in western Canada. For all practical purposes it would mean that there is no such thing as a farm mortgage. Present and future mortgages and agreements for sale would be nothing more than a promise to pay-
They mean it will become a scrap of paper, no doubt.
-the amount and conditions of payment to be determined by a non-judicial tribunal from whose arbitrary -decision there will presumably be no appeal as is the case under the Farmers' Creditors Arrangement Act.
The effect of the legislation would be to make all contracts with western farmers one-sided. A mortgage or other written contract would have little meaning. There would be little point in making a loan to a farmer by way of a mortgage or in selling a farm under an agreement for sale. The creditor or vendor would be bound, but the debtor or purchaser would not. No matter what contract was executed by the debtor, the creditor would have no security though he will have parted with his money or property. Such legislation would make mortgages a nullity and' would in fact abolish mortgages by removing every vestige of the legal rights which have always characterized them.
Western farmers themselves would suffer from such legislation. Farmers desiring to retire would hesitate to sell their farms, except for all cash or with very substantial cash down payments. The risk of doing so would be too great for the amount and terms of payment would be uncertain. Would-be purchasers, except those with substantial capital, would be unable to buy farms. This, in fact, is very much the situation which prevails to-day though existing debt legislation does not apply to new contracts. The reason for this is the fear that the legislation may be changed to apply to new as well as old contracts. It is now apparent that this fear is justified, the proof being the legislation which has -been proposed to the dominion government. This proposed legislation would place restrictions on the rights of creditors under all contracts whether existing or future.

Farmers' Creditors Act
I say in all fairness to the workers of this country that there should be equality of treatment between the urban and suburban workers and the workers on the farm, instead of letting one man's equity be wiped out while the other man's equity has the protection of a statute. That is not a fair proposition. There should be equality of treatment. That was one of the weaknesses of the act of 1934, and I raised this very question when our own government was in power. I said that it was most unfair and unequitable to the industrial workers in our cities and towns that they should not be given the same equality of treatment as was afforded to the farming population-and in 1935 fishermen were added-under the Farmers' Creditors Arrangement Act. But the industrial workers are given no such relief.


Mr. WOOD :: This legislation does not apply particularly to Ontario, because we freed ourselves from it back in 1938, and I am sure it is a good thing for agriculture that we did; for I consider this bad legislation. After all, Canada is a young country and we would do well to look very carefully at this type of legislation which more or less legalizes dishonesty. We are trying in this young nation to develop a character for honesty and traditions of good citizenship to hand down to posterity, and I sometimes wonder what they will think of legislation of this type which does not honour contracts. I make my appeal not only from the point of view not only of the good of the nation but also of the good of the honest-to-goodness farmer who many find himself deprived of credit because of the record established by those who have taken advantage of the Farmers' Creditors Arrangement Act. No doubt some good has been accomplished by the act, but we have paid very dearly for it. When someone has been kind enough to lend his substance, an honest effort should be made to repay the loan, and I do not see why a loan should not be repaid to a mortgage company just as much as to an individual. Unfortunately one can hardly speak of financial institutions if one comes from Ontario without being branded as a defender of the big interests. Let me say that I have no interest whatsoever in any loan company. I am thinking only of the welfare of the honest-to-goodness farmer who may need some credit in the post-war period, and from his point of view I say that this legislation in the main has been bad legislation.
The Minister of Finance is to be congratulated upon having removed from the act some Of the vices which brought discredit on agriculture. I yield to no man in my diesire to
serve the agricultural industry. But we' must take a long term view of it. We as farmers cannot be continually branded as people who refuse to assume our obligations if we expect to retain our dignity and self-respect. I say that this legislation was a great handicap to the prosperity of agriculture in Ontario.
I listened with interest to the hon. member for Macleod. He felt there should be some way of tackling this debt problem. I say frankly that the only way of tackling the debt problem is by sacrifice, thrift and honesty, and restoring the loans to- those who have been kind enough to lend of their substance. There may be those who through unfortunate circumstances get into a position where they cannot pay, but it must be remembered that the loans which have been made to agriculture created assets in those farms if the money was wisely spent, and those farms should in consequence have increased in value.
I listened with interest to the hon. member for North Battleford. She mentioned the case of a man who had homesteaded on a farm and had raised fourteen children and afterwards became insolvent and could not retain his home. But, after all, that person had the use of that land, and is there any hon. member who would not exchange one hundred acres of land for fourteen children? I think he did get some value after all, because while he was on that farm he raised fourteen children. We must look at both sides of the question if we are to be fair.
I read the remarks which the hon. member for Yorkton made on this bill. He said that debt is the natural result of the capitalist system, and that under this system the reward of capital always comes first, and the reward to labour has to take care of itself. Well, Mr. Speaker, what is capital? As I see it, the,difficulty in many of these controversial questions is that it depends on whose ox is being gored. After all, capital is nothing but stored up labour; and if the nation is to be served by capital it is necessary to put that labour to work, whether it is in the form of money or in any other form. After all, it is necessary for this country to be developed, and it is necessary that this stored up labour be used. The unfortunate thing is that as long as this world is peopled by human beings there will be envy and jealousy. The man who made sacrifices, who in his early days went without things; the man whose father or grandfather pioneered with the idea of making the world1 a better place in which his descendants might live, now is looked upon with envious eyes by those who think he is travelling rather an easy road,
Farmers' Creditors Act

when the very people who criticize him very often are the ones who would refuse to make sacrifices themselves in order to store up some of this labour, to put themselves in the position of a creditor instead of that of a debtor. This may be hard language to use to hon. gentlemen across the way, andt I should be rather reluctant to make these statements but for the fact that on almost every measure that comes up in this house we have to listen to pious, hypocritical expressions in regard to honesty and dishonesty; and then it turns out that they want some back-door method by means of which dishonesty may serve their purposes, when they have not enough stamina to make the sacrifices that have been made by others. These things may serve their own purposes, but they do great harm to the industry of agriculture.
I am satisfied that the farmer himself can usually handle his own problems. I do not understand why in the western provinces so many of these loans have come into the hands of the large corporations. Surely there are individuals who have saved money. Why do they not lend to their neighbours as we have done in Ontario? By virtue of their sacrifices the pioneers in this country accumulated funds which they were able to lend to their neighbours, and the honesty and integrity of those neighbours had a great deal to do with maintaining the credit of our people. If that honesty and integrity are destroyed, then your credit is destroyed also.
The remarks of the hon. member for Calgary West were refreshing and, I think, timely. He said some things that needed to be said. I am not so far removed from the pioneer stock. I happen to be the grandson of an old pioneer who left a comfortable home in the old country to settle in Canada. If he had been looking out for his own interests I would not be enjoying the privileges that are mine to-day. Perhaps I am reaping the benefit of that stored up labour and energy which my grandfather was prepared to sacrifice in order to accumulate, but I think that point ought to be emphasized. I will admit that I was born in the horse and buggy days, but I have seen some of the virtues of those pioneers. Let me tell my hon. friends across the way that those who have achieved success have not done so by taking advantage of some of these legalized back-door methods of practising dishonesty.


George Hugh Castleden: Is that the way you describe this legislation?


George Ernest Wood: That is how I describe anything that legalizes dishonesty. It must be remembered that this measure originally was

passed in 1934, and it is not possible to correct all the errors and irregularities of society at once. I am glad the minister has taken steps to insert some provisions in the bill which will ensure a certain amount of fair play on both sides, so that the credit of the farmers may be established and the dishonest farmer may not take advantage of this measure. I do not want to be understood as saying there is any more dishonesty among farmers than among any other class; as the hon. member for Calgary West has said, farmers are as honest as any other group, but after all they are only human. I know there is the odd farmer who will put his small apples in the bottom of the basket. I have known farmers who would paint up the crack in a horse's hoof when taking it to market, or who would put a little oil on a spavined horse. There is no doubt farmers are just as astute in their own business as any other class, but in the main I think they will compare favourably with any other group of men in the country. I live in one of the smallest townships in Ontario, in which there are two hundred farmers; and in spite of all the difficulties they have had to face, in the last year they subscribed $125,000 to the victory loans. They know their business. When they want a harness they tell the harness maker just what they want, and see that they get it. He does not sell them just whatever he has hanging on the peg; they get the kind they want or they do not do business with him. That is the sort of people I represent, people who pay their debts. I am aware of only one case among those two hundred farmers in which the Farmers' Creditors Arrangement Act was taken advantage of, when it was in existence in Ontario.
I should like to comment for a moment on some of the homely virtues which I think we should endeavour to restore. In the early pioneer days individualism predominated, with the majesty of hard work and the glory of accomplishment.


Thomas Clement (Tommy) Douglas: What has
that to do with this section?


George Ernest Wood: I could not hear what the
hon. member said.


Thomas Clement (Tommy) Douglas: I was merely asking what that had to do with this section. A short time ago, when one hon. member down in this corner was speaking, unfortunately in a language which I could not follow, the parliamentary assistant complained that he was not keeping within the ambit of this section.


Douglas Charles Abbott: Not within the ambit of
this section; he was not keeping within the ambit of the bill. What that hon. gentleman

Farmers' Creditors Act
was saying had no relation at all to the bill.
I was not criticizing his language because it did not apply to the section.


James Lester Douglas: I do not
think what the hon. member for Brant is saying has any relation to the bill, either.


Douglas Charles Abbott: It is about as relevant as
some of the speeches we have heard from across the way.


George Ernest Wood: If that remark had been made by anyone but the hon. member for Weyburn I would take it in a kindly way, but I do not think there is any hon. member of this house who has taken up more time in discussing the matters that have come up in this chamber. Personally I try not to speak unless I have something to contribute. The hon. member speaks on everything. I do not know how one man can have such a general knowledge. I would rather know one or two things well than attempt to express my opinions on a great many things and make the job of it that the hon. member does.
In regard to the payment of debts, I believe that the majesty of hard work and the glory of accomplishment still applies to this type of legislation. Sometimes I think we are wandering a long way away from that. I believe that if by accident some hon. members who have spoken were placed in a position to form a government it would be a most unfortunate thing for those people who still believe in honesty, integrity and in paying their debts.
I have other observations I should like to make in this connection, but I shall be content with making an appeal, not for that 10 per cent who go into bankruptcy through this legalized method of getting out of assuming their obligations, but for the remaining 90 per cent of the people. I have in mind the postwar period when farms will be for sale and when, if hon. members have their way, credit will have been scared away from agriculture.
I am happy to know that the minister has afforded this opportunity to the three prairie provinces to get out from under their difficulties. It would be to their advantage to accept it. I believe it was only a week or so ago I placed on record the figures supplied by the farm loan board showing payments from 1938 to 1943. Perhaps it is because we have not had the Farmers' Creditors Arrangement Act functioning in Ontario, but the fact remains that we have made the greatest contribution toward the payment of loans in Canada. For every dollar paid in 1938, $1.73 is being paid in 1943, and not only that, but about two and a half times as many payments are being made.
As I pointed out the other day, Alberta is not doing nearly so well. Where they paid $1 in 1938, they are paying only 84 cents to-day. One point came to my mind1 when the hon. member for Macleod was extolling to the house the virtues of the Social Credit government in Alberta. Perhaps it may be indiscreet of me to refer to the late premier of that province, but I read with interest his will, and I found that of an estate of around $33,000 only $1,500 was invested in his own repudiated bonds. It did not look very consistent, to my mind. Probably that has no bearing on this matter, but I thought it well the country should know that apparently he did not have even his own money invested in his government, of which he was premier.


George Hugh Castleden: What has that got to do with it?


George Ernest Wood: I admit it has nothing to do with it, but it is a fact that the people of Canada might like to ponder, especially with these new schools of political thought being placed before the public. They might come to some understanding as to what the future would have in store for them, if these new political ideas were adopted.


Joseph-Arthur Bradette: A few minutes ago a point of order was raised, one upon which I did not have to render a decision. However I would point out to the committee that yesterday the second reading of the bill was moved, at which time there was a fairly general discussion. When we are debating the second reading of a bill a general .discussion is allowed. Then in committee we called section 1, short title. Again there has been a general discussion, which lasted well over a day. I would express my personal opinion, one which is founded upon an experience of some years in the house, that the discussion on this section should be more to the point, and on the bill itself. In making this observation, of course, I do not cast any reflection on hon. members who have spoken or who will speak. I am not rendering a decision; I merely express an opinion. I know hon. members will accept it as such, for what it is worth. I have before me a long list of speakers, and I believe the hon. member for Wetaskiwin is next.


Mr. JAQUES:: I shall require only a very few minutes to say what I have to say. My experience, both as a rancher and as a farmer in western Canada, goes back over forty years. As I represent farmers and small business men, I thought I should like to say a few words on this debt bill.

Farmers' Creditors Act

I have not heard all that has been said in the debate, but one peculiar feature which has occurred to me-possibly I am wrong- is that this government bill is receiving rather less support from the government side than from the opposition side of the house. Some hon. members seem to doubt the necessity, the wisdom or even the rightness of government protection of debtors at this time. I do not know what prompted the Minister of Finance to take this action, but possibly it is the view that a healthy agriculture transcends the mere relationship between debtor and creditor, and that the very existence and future of the state depend upon a healthy and thriving agriculture.
I do not know whether this further thought has occurred to him, but it has occurred to me-and I am not blaming this government more than others-that parliament, all parliaments, are at least partly responsible for the state of affairs with which agriculture finds itself faced to-day. My mind goes back, not 1,900 years, as someone suggested the other day, but at least to the years immediately following the last war, when things were very prosperous, and the agriculturists felt justified in expanding their operations and in borrowing money for that purpose. Then, when they got things going nicely, suddenly the bottom fell out of everything. Prices went down to nothing. I have occasion to remember that, because in the winter of 1919-20, the longest on record in Alberta, either before then or since, I brought a bunch of cattle through without loss. I was quite proud of that achievement and looked forward to a worthwhile reward. But when I went to market I found that cattle which had been worth in the neighbourhood of eight cents a pound were being offered at one cent a pound. For no apparent reason-I certainly did not know the reason then-the price of cattle, and in fact all other agricultural prices, had utterly collapsed.


Mr. EVANS:: When did the hon. member sell them?


Norman Jaques: In the fall of 1921. I remember being in the stockyards of a small local town in which 700 head of cattle had been delivered for sale that afternoon. One cent a pound was the best price at that time.
Again in the early thirties prices were very low. I can well remember the winter of 1930-31 when eggs sold at three cents a dozen delivered. A dozen eggs would buy one bootlace. As someone said this morning, cattle did not pay for the cost of the freight, and wheat fell to twenty cents a bushel. At that time I did not have a very clear idea of the basic reasons for this collapse. I regarded

it, as now do so many hon. members of this house, as something inevitable, something in the nature of an act of God, like the weather, like a hailstorm or frost. But I have since spent the greater part of my time studying the reasons for these extraordinary differences in price levels. I know now that they are not due to natural causes, that they are artificial. In my opinion they have been deliberately brought about. I am not blaming this government any more than any other, but I do submit in all seriousness that governments and parliaments have allowed money control to get into the hands of men who are responsible to nobody but themselves, and they have manipulated it to their own great advantage. Let me read one quotation as follows:
The volume of credit in this country

In Great Britain.
7-is to a very large extent in my hands, and is related to the enterprise of the country and therefore to the encouragement or discouragement of enterprise.
And again:
Yes, I reduced credit and the purchasing of the public by 63 million pounds in the last twelve months for the reason I believe to have been sound. I am not prepared to make any suggestions how the bank could check the increase of unemployment. The bank was not unduly worried in 1925 by the possibility that the return to the pre-war gold standard would unduly interfere with British industry.
If anyone feels inclined to dispute the authority of that statement, let me say that it was made by Mr. Montagu Norman, the governor of the Bank of England, in his evidence before the Macmillan committee which I believe sat in 1930. But there is another authority, perhaps an even greater one. I quote from British Hansard of the House of Commons of April, 1932, as follows:
The price of gold has risen since then by more than 70 per cent. That is as if a 12-inch foot rule had suddenly been stretched to 19 or 20 inches; as if the pound avoirdupois had suddenly become 23 to 2! ounces instead of- how much is it?-16. Look at what this has meant to everybody who has been compelled to execute their contracts upon this irrationally enhanced scale. Look at the gross unfairness of such a distortion to all producers of new wealth, and to all that labour and science and enterprise can give us. Look at the enormously increased volume of commodities which have to be created in order to pay off the same mortgage debt or loan. Minor fluctuations might well be ignored, but I say quite seriously that this monetary convulsion has now reached a pitch where I am persuaded that the producers of new wealth will not tolerate indefinitely so hideous an oppression.
Does anyone care to question the authority or the validity of that statement? Nobody does. Those are the words of Right Hon.

Farmers' Creditors Act
Winston Churchill when he was speaking in the House of Commons as a private member in 1932. I do not know anything about agriculture in eastern Canada because I have never lived here except as a member of this house, but I do know something about farming generally in western Canada, and particularly in Alberta. I realize that this state of affairs has created a hardship not only for the debtor but also for the creditor. As the hon. member for Calgary West said, it has led to a loss of confidence as between the borrower and lender. But I do not think any good purpose is served by the creditors accusing the debtor farmers of dishonesty, incompetence or laziness. From a lifetime experience I am positive that the dishonest, incompetent and lazy farmers constitute a tiny minority. I think harm can be done by criticizing too strongly the creditors. Both sides have been victimized by a state of affairs which has no business to exist, and never would have existed if the government and parliament had exercised the right which has been vested in them.
This problem goes beyond the mere state of health of our farming industry; it affects the foundations of parliament, yes, of democracy itself. Nothing is more certain that unless parliament can bring about conditions satisfactory to the majority of the people, it will be only a question of time before the people will lose confidence in parliament. A great many people to-day have not the confidence in it they should have. Therefore I should like to impress upon hon. members as well as upon the government the absolute necessity of looking at the problem beyond the point of view of the debtor and the creditor. You can bring in temporary measures of relief for the assistance of both the creditor and the debtor, but that is not a cure; it is just a drug. I agree with the hon. member for Calgary West when he speaks of the confidence which must be restored. The confidence of the borrower must be restored if the people are to undertake to produce the wealth of this country, or the food, if you like. If they are to mortgage their future for this purpose, they must be assured of this, that if they borrow a dollar when wheat is a dollar a bushel they can repay the loan with the proceeds of one bushel of wheat, not of three or four, as the case has been in the past. Until that is done I see no remedy for the plight of the farmer. It can be done, and I say that if parliament is to endure-yes, if democracy is to endure, it must be done.


Mr. ROSS (Calgary East):: I had not intended to take part in this debate until I heard the speeches of the hon. members for Calgary West, Broadview and Brant. In
72537-324 J	.
view of the sentiments voiced by these hon. gentlemen, I feel that I must take issue with the views they have expressed.
First, however, may I compliment the minister upon the excellence of the bill which he has presented to the house. He has had a difficult task and he has done it well.
We have in the west many of the best farmers to be found anywhere. They come from all parts of Canada, from many sections of the United States, and from various countries of Europe. They left comfortable homes to pioneer and build up new homes in the west. Persons who will do that kind of thing make the best farmers and the best citizens. When they came to the prairie provinces they brought with them modern and up-to-date ideas; they discarded such methods as experience proved obsolete or undesirable, pooled their best ideas and put them into practice. I repeat that some of the best farmers to be found anywhere are in the prairie provinces.
Many of the best farmers on the prairies are most in need of the Farmers' Creditors Arrangement Act. During the last war western farmers were urged to increase their holdings and produce more in the war effort. The good, the efficient, the patriotic farmers responded to that appeal, increased their holdings and went into production on a very large scale. For this purpose they were compelled to borrow money.
During the last war there was a great deal of inflation. These farmers extended their holdings and bought stock and property of one kind and another at the height of the inflation period. When the war ended and the crash came they suffered heavy losses. I remember very wrell in the fall of the year farmers buying, some ten, some a hundred, some several hundred head of cattle to put in feed lots and feed during the winter. They bought them at $75 to $100 a head for feeders, fed them grain during the winter, and were very lucky to sell them at $25 and $30 a head in the spring. It is that kind of thing which has wrecked the fortunes of many farmers in the prairie provinces.


Thomas Clement (Tommy) Douglas: That is what destroyed their confidence.


George Henry Ross: That destroyed the confidence of many western farmers.
Again, during the depression, prices of farm products were very low for a number of years. The price of wheat fell to twenty cents a bushel, barley to ten cents a bushel, 3 C.W. oats to eight cents a bushel. But the farmers stayed with it; they hoped that the following year they would be able to do better than

Farmers' Creditors Act
they had done in the preceding year. The best farmers continued to do intensive work on their farms, in the hope of getting better returns in the future. So, that, again, it was the best farmers who suffered, those who did the hardest work and put the most in the soil, because they got very little returns. This was due not to low prices alone, but to drouth, grasshoppers and pests of various kinds.


Mr. FAIR:: Including the mortgage
companies.	.


George Henry Ross: These were causes which made the farmer lose out and lose heart.
As I have said, there are no better farmers in the world than we have in Alberta, but in many cases it is the best of our farmers who were driven to the wall by this state of affairs. It is many of the best of these farmers who should have an opportunity of benefiting by the Farmers' Creditors Arrangement Act. There is a Canadian Bankruptcy Act which is quite suitable for manufacturers and business men in all lines of industry other than farming. It is not suitable for the farmer, and I wish to point out why. The manufacturer or the general business man has his home and his place of business. If he becomes involved and his business is mortgaged he may lose it, but his home generally remains untouched; it is preserved under the exemption provisions of the Bankruptcy Act.


Douglas Charles Abbott: Not in Quebec.


George Henry Ross: Under the general bankruptcy law his exemptions are protected.


Douglas Charles Abbott: That may be so in Alberta, but in Quebec his home is not exempt.


George Henry Ross: The hon. member should look up the act.


Douglas Charles Abbott: No; I have had a lot of bankruptcy experience.


George Henry Ross: When hard times come, when a depression hits the business man, he can close down his plant or a part of it. While the plant is closed down, it is not eating oats or otherwise costing him a great deal of money to maintain as a going concern. It is different with farming. His home and his outbuildings constitute a large part of his plant, and when he goes into bankruptcy under the Bankruptcy Act his home goes as well, for the reason that it is mortgaged and he cannot get the benefit of the exemptions under the Bankruptcy Act. In 1934 the Right Hon. R. B. Bennett introduced this legislation into

this house and he deserved a great deal of credit for that. It was a splendid idea. The object was to keep deserving farmers on the land and it extends only to deserving farmers, because no farmer can get a compromise unless he deserves it. It has worked splendidly in keeping such farmers on the land and I submit that the act should be continued. Many farmers who are discouraged by the burden of debt, if they can get relief as regards a certain portion of that debt, will be able to carry on, because it will give them a great deal of encouragement and make for better morale among the farming community.
As I said before, the minister has introduced an excellent bill. The act introduced by Mr. Bennett has been tried out and its weaknesses have become apparent. They have been strengthened and the present bill is highly desirable, improving the old act to a considerable extent.


Thomas Clement (Tommy) Douglas: Before we go through the sections one by one I think the minister ought to make a more elaborate statement than he did yesterday. In moving the second reading of the bill he gave a terse statement outlining the terms of it, but most of us expected that before the debate was concluded he would make a more general statement. I think it would help if, before we begin to go over the bill, he would make such a statement as I suggest.
Yesterday I called attention to the fact that a draft bill was presented to the government by the western debt conference. That document was contained in sessional paper 335A. Those submissions are signed by Mr. Lucien Maynard, Attorney General of Alberta, Mr. J. W. Estey, Attorney General of Saskatchewan, and Mr. Garson, Premier of Manitoba. When some hon. members, particularly the hon. member for Brant and the hon. member for Calgary West, wish to give the impression that members in this comer are trying to legalize the dishonesty by gsking for legislation that will allow some people to get out of paying their just debts, I would point out that the proposed debt legislation submitted to the government on March 15 was drawn up by responsible individuals, and two of the men who signed the submissions are prominent leaders of the Liberal party. Those submissions, therefore, ought to have been given and, I suppose, were given, some serious consideration; but no statement has been made by the minister or by any other member of the government as to why the submissions were not acceptable to the government.
As I pointed out yesterday, there are five serious omissions: (1) The transfer from the

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board or tribunal to the court; (2) failure to include any clause guaranteeing the farmers' equity and making provision for the maintenance of himself and his family; (3) the insertion of a crop-failure clause in the legislation; (4) provision that there might be a revision of the board's decision from time to time; and (5) that a farmer might come within the purview of this legislation irrespective of when his debts were incurred. None of these important principles are involved in the legislation. There is involved in it something that seems to be a direct concession to the representations of the creditor class, namely, the right of appeal to the appeal courts of the three provinces.
On its face, the bill looks like an affront to the debt conference, to the three prairie provinces who participated in it and to the farmers' organizations that were-represented. I would hardly think that the minister, speaking in this case for the government, would merely wave these proposals aside without giving this committee some reason why it was impossible for the government to accept them and incorporate them in this bill. I feel that the reason why these proposals are not in the bill is that the pressure from other groups was too strong. If the minister has some good reasons why these proposals were not incorporated in this legislation, he ought to give those reasons to the committee in fairness to himself, to the committee and above all to those of that debt conference who took so much trouble to formulate the proposals and to place them before the government. The minister would help the discussion if he would tell us why those proposals were not included in the legislation now before the committee.


James Lorimer Ilsley: I think the request is a reasonable one. Three governments did join in the presentation to the government and represented that a new type of legislation should be enacted by this parliament; I mean new in the sense that it had never been enacted in any province of the dominion, or in the Dominion of Canada or, so far as I can find, in any other country in the world. The main new feature was this, that instead of recognizing the emergency aspect of the debt situation in western Canada and framing legislation with a view to meeting that temporary emergency, it was proposed for the first time that the boards to be set up, which would continue to function through the years, should deal with debts whether incurred in the past or to be incurred in the future, and that these boards would have the power to write down debts without obliging the debtor to divest himself of his assets. That is a right which no other person in the Dominion of Canada has. It is
a right which the farmers of eastern Canada do not want. It is a right which business in eastern Canada would not ask for. And as to its being an affront to the western governments and the western debt conference, my only answer is this, that this government must take its responsibility and this parliament must take its responsibility for enacting legislation of a type which they can defend and for what they can answer to the electors.
Bear in mind that the main feature, the startling feature, of the proposal which came from the debt conference in western Canada was this, that instead of proceeding on the principle which underlay the debt adjustment acts of all the provinces, which had a date limit in them, a date limit which was moved, I believe, in three acts, perhaps under pressure-I do not know-instead of having a date limit and regarding this extraordinary legislation as being emergency legislation to meet a temporary situation, the western governments for the first time requested this government to do something which none of them had ever done, and that was to set up open-ended legislation which would allow debt adjustment boards to sit for all time to come and whittle down and reduce the debts through the years and decades and centuries regardless of whether there was any emergency or not.
When that proposal was presented to me I took a very serious view of it, and I can assure hon. gentlemen that I did not communicate with the mortgage companies or with any lending institution. I simply searched in my own mind for some principles by which to test it.


James Lester Douglas: Did they communicate with the minister?


James Lorimer Ilsley: Not then. Later they did. I gave them an opportunity to make representations, and I told the representatives of western Canada that I was going to give them an opportunity of making representations.
I searched in my own mind for some principles to go on. I think the fundamental difference between the two types of legislation that are contended for in this house, the fundamental difference of view is this: Is farm credit worth preserving or not? There are some people who think it is not. I have had persons who in talking to me said it was not, that it did not make much difference whether the farmer could borrow money from private lenders in the future, that credit had been bad for him in the past, and that he does not need credit, should' not have credit, but should be obliged to pay cash for the land and other things he wants to buy. But no one in this debate- and I have heard a wide variety of opinions
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expressed and all schools of thought here- not even the wildest-eyed speaker, has gone to the length of saying that the farmer should be deprived of his credit standing. But I am satisfied that if we were to set up boards and let it be known that we were setting up boards which would have the power of reducing debts at their own discretion, regardless of the security taken, regardless of the ability of the debtor to pay -if we were to do that, people would not lend farmers money at all. Why should they? I have had some arguments about that. ^ I have said: Well, perhaps they would size the farmer up and say that man is a good fellow, an honest man who will pay if he can on account of his moral qualities. If he has high moral qualities, some people would take a chance on him. Some individuals might lend him money, but certainly no trust funds would be lent under a law like that.


Thomas Clement (Tommy) Douglas: Was not one of the principles in the draft bill that the farmer's ability to pay should be taken into consideration in 'making adjustments?


James Lorimer Ilsley: Yes, certainly, it should be taken into consideration, but bear in mind what the lender is lending on-not on the security of property, as in the past. In the past he has been assured that if the value were there the value would be pledged to the extent of his security. But he is lending, not upon property, but upon the discretion of a board, upon what the board thinks about it. He naturally does not know what kind of members will be appointed to the boards through the years. Perhaps you could get a high calibre of board; perhaps you could not. There is a tremendous difference in the judgment of the members of these boards, and the result is that he would not have any solidity to his security.
If hon. gentlemen think, and they may, that is not a worth-while objective to strive for, to preserve a system under which there will be some credit extended on the security of land; if they do not think that is worth while, I do not know that I have a great deal of fault to find with their position. Perhaps they would set up some system whereby the state would lend money. I am sure that if that system were set up many bad loans would be made under the pressure of agitators. Nevertheless they may think that is a better system. But I frankly say-it may be background or the way I was brought up or something like that-I believe that people should pay their debts if they can. I believe that when they sign a note or sign a mortgage the

security they give should be applied to the satisfaction of the first charge on the property. That is what I think should be done.


Thomas Clement (Tommy) Douglas: Does the
minister think that Mr. Estey and Mr. Garson do not believe that credit should be maintained and that people should pay their debts?


James Lorimer Ilsley: I disagree with Mr. Estey and Mr. Garson and Mr. Maynard on that feature of their presentation. I agree with them on some things, but I disagree with them on that, and I venture to say that the great majority of the members of this house, if we were to have 245 members of this house here, would agree with me instead of with the representations that were made in that regard.


Mr. QUELCH:: May I ask a question?


James Lorimer Ilsley: I have been asked to make a statement and I want to make it.


Victor Quelch: Only one question.


James Lorimer Ilsley: You have no idea how many questions I have been wanting to ask and refrained from asking.
There are two possible principles of any legislation that could be introduced into this house. One principle is this, that you should set up a board that would do a thing which has not been done by anybody else, which was never done by any province, which was never done by the dominion, and never done, I believe, by any other country, and that this continuing court, for that is what it would be, would place the security of creditors at the mercy of boards so that a creditor would never know whether you could apply his full security to the satisfaction of his debt or not, but would have to rely on the discretion of the board as to whether his full security could be applied for the satisfaction of his debt-and that to go on throughout the years continuously. The other principle is this, whether you should confine the character of this legislation to what it was in the beginning, emergency legislation.
We stuck to the original principle of this bill. It is based on the theory that in the twenties, probably in the teens before, when there was a great demand for land in western Canada, and when very high prices were paid for land in western Canada, higher prices than the farmers could pay as subsequent developments showed, these mortgages were put on and these agreements for sale were outstanding. Then, when the thirties came along it was discovered that the farmers simply could not get out of debt, so that something had to be done.

Farmers' Creditors Act
Under the old legislation only the debts that existed before May 1, 1935, could be adjusted ; no debts incurred after that date could be dealt with by the board, except by consent. That was very unsatisfactory. It meant that a farmer would go before a board of review and that part of his debts could be adjusted1, while part could not. We changed that and said that if two-thirds of his debts were incurred before May 1, 1935, then all his debts could be adjusted up to date, whenever they were incurred.
That is one thing we have done. We might have left it there, but we realized that there was a great deal of inconsistency in the treatment individual farmers received at the hands of these boards of review in the years 1935, 1936 and 1937. I think those were the years when there was the greatest difference in the treatment, as compared with subsequent years. Up to about the end of 1937 they did not get very many concessions from the boards of review, but were debarred from making a second application. As a result, some of those people are still weighed down with those old debts, so that by this legislation we have allowed them to come in again and make a second proposal. That applies to those whose compositions were made not later than the end of 1938. We gave a great deal of consideration to the date we should fix, and we thought December 31, 1938, was late enough. We had considered for a while making it the middle of 1937, but we thought we would err on the other side and bring it down to the end of 1938. Mind you, the creditor cannot reopen the matter, but the debtor can. When I hear hon. gentlemen talking about this legislation having the mark of a surrender to the mortgage companies, I can point out feature after feature of this legislation certainly not in the interests of the mortgage companies, narrowly considered. I wish to say that the mortgage companies are not suited with this legislation. They never saw it before last Saturday, and their reaction to it has been anything but favourable. However, I think the legislation is reasonably just, if we accept the principle that this is emergency legislation and not continuing legislation to meet both past and future debts. I do not see how we could justify that; I do not think it would pass this house and, if it did pass this house, there are other places I do not think it would pass.
Let me mention some of the features that are unfavourable to the companies. It must be great political stuff in -western Canada to talk about these companies; I never realized that it was such good political material until
yesterday. Here is the hon. member for Acadia, for whom I have a great deal of respect and who argues in a fairly consecutive sort of way in this house, particularly on financial matters. Yesterday he could not help calling the mortgage companies bloodsuckers. Well, Mr. Chairman, what is this forum? Is it a place for the discussion of principles, or is it a place for making political speeches? I do not have any brief for the mortgage companies, certainly, but I do not believe in the abuse of any class of Canadian citizens or Canadian institutions. I want to say this, and it was brought out by the hon. member for Calgary West. It must be remembered that the insurance companies, which are the heavy lenders on these mortgages, are the trustees of the savings of the people. There are millions of small policyholders in this country, and the money these insurance companies are putting out is the money of these policyholders. That is all brushed aside, however, as though the policyholders were in the bloodsucker class too; as though they were not worthy of consideration, and as though the ordinary principles of British justice should not apply to those people because they are not western farmers. I must express my dissent from that sort of approach to the discussion of these questions. We must tiy to work out something here which will be fair and just, which will recognize that all classes of individuals and institutions in this country have certain elementary rights based on what we call British justice.
Let me point out some of the features of this legislation. Had we been trying to please the mortgage companies, certainly we would not have provided for the reopening of those cases which were adjudicated between 1935 and the end of 1938, and certainly we would not have provided that the farmer could reopen them while the company could not. We would not have inserted the section about appeals, to provide that the companies cannot possibly recover any costs on appeal, except where the debtor brought a clearly unreasonable appeal. We were very careful in drafting the section on appeals to make it as far as possible a section which would not favour the wealthy litigant, or the litigant who had funds with which to carry on his appeal.
This legislation must be taken in conjunction with the order in council which, as the hon. member for Swift Current pointed out, is an integral, essential and most important feature of the debt legislation of this parliament, passed under the War Measures Act. That order in council, which we intend to continue
Farmers' Creditors Act

for the duration of the war, carries out the essential provisions of the Saskatchewan debt adjustment legislation, which in proper cases enables debtors to secure postponement of foreclosure proceedings which would put them off the land. That must be taken in conjunction with this legislation. We have transferred this matter to the courts. I have not very much to say about that. I agree with what the hon. member for Peace River said yesterday about the courts as compared with the boards of review. I do not know that I would put it just on the grounds he did, that the courts will work for the debtor to a greater extent than the boards did, but I think the courts are a better forum than the board. We have had these boards now since 1935. I have been the minister responsible for their operation and I never knew what control I had or did not have over the boards. They were judicial, but not wholly so. They were administrative boards, and it seemed to be assumed by a great many persons in the country that if they got what they considered a raw deal at the hands of these boards, they could appeal to the minister, who could step in and change it just as he would be able to overrule an administrative official. I never knew whether I could or could not do that. These boards were headed by supreme court judges of the'provinces, and there was always pressure of this kind and the other to appoint a man of this type or of that type to the board, so that he might give this type of decision or that type of decision. Of course the government has to take that responsibility, but it is disagreeable to have to make choices of that kind all the time, between this suggested appointee and the other. Now there is no doubt that the operation of this measure is not in any way under the control of the minister. It is within the courts; it is a wholly judicial procedure. We have tried in this measure to lay down principles for the guidance of the courts, as far as that could be done; but, once we have done that; once we have made -the best possible selection of appellate judges, the legislation will have to take its course, and I think that is a very much more satisfactory way to have it.
I do not believe there should be the power for debtors to get adjustment after adjustment. There must be some finality in this matter. That is a different subject from the one I mentioned before, the power to come in with future debts. But it seems to me that one adjustment is enough. It seems to me that if we were to go on the principle that there are to be repeated adjustments, then repeated adjustment in favour of the creditor would have to be granted, too. We did not do that for the period between 1935

and 1938. We made it one way, because the whole aot is based upon proposals by the farmer. But if we were to allow or to lay down the general principle that the farmer can go time after time for adjustments, it seems to me only fair that the creditor could do it, too. And that would not be good for the farmer, let me tell you.
There are some features in this measure with which I shall deal as the sections are reached. But I must point out that great care has been used in the drafting of it. I am satisfied that this is as far as we could go. I do not agree with the extremists, who have expressed their views either on one side or the other in this debate. I think something should be done to lift this load of old debt which proved too heavy to enable the farmer to cope with the adversities of the thirties. I think something should be done to enable those situations to be dealt with, and that emergency to be cleared up. In other words, I think we should stick to the emergency character of the legislation, and stick to the essential principle of the legislation; but we should keep it so that it will be more workable. We have made a number of changes to overcome the result of decisions by courts which have been in favour of the creditors. That will be seen, as we go through the sections of the bill.
There are a number of remedies of that kind. I must repudiate the idea that we have been dictated to or that to any considerable extent we have been influenced by either one faction or the other in this matter.
No one could listen to the speeches in the house without seeing at once the wide variety of opinions held, even among ourselves. And that wide variety of opinion exists throughout the country. Certain hon. members have read letters from farmers who have had a hard time. Well, I could read letters from women, widows, who have sold farms and taken mortgages, and then been taken in before the boards and had their mortgages cut away down by boards of review under conditions which, to my mind, would appear entirely unjust.
I believe that what the hon. member for Calgary West has said is true. This is legislation of a continuing character, and applying to most debts. But I believe it can be said truly that a man in his advancing years will rent his farm to a young man rather than sell it. That is the condition, unless that man can get practically the full cash price. In other words, I think it hurts credit, and it would be a bad thing to adopt legislation on any different principle.

Farmers' Creditors Act


Robert Fair: One fundamental principle has
been entirely ignored. I believe we have every justification for asking that these appeals be of a recurrent nature. I have particular reference to prices for farm production. Looking back over the years I can remember wheat at $3.60 a bushel, and I also know of some farms which were bought in those days. Then, looking ahead twelve or thirteen years later than the period I have mentioned,
I remember wheat selling for twenty cents a bushel in western Canada. To-day we have no assurance of any guaranteed price for wheat. Until that is guaranteed, or until some provision is made under which the products of the farm can be sold at a profit, then I say the farmers are entitled to the protection for which they have asked through the medium of appeals from time to time for the adjustment of their debts.


Victor Quelch: I believe the minister
thought I had been somewhat extravagant in one of the terms I have used. But he must remember this, that I lived on the edge of the drouth area. I have seen the farmers who came to that area, and lived on those farms for perhaps twenty years. Then I have seen them driven off their farms by the mortgage companies. The treatment they have received in the past has been merciless. I fancy that if the minister had seen what I have seen out there, he would probably appreciate the reason why I used those terms. That is why in the past provincial governments were forced to take action. They had to take action to prevent that sort of thing from taking place. I have heard it said that interest rates are high on account of the type of the debt legislation, and the manner in which it operates. But those high rates of interest were in existence long before debt legislation was introduced in 1907, 1908 or 1909.


An hon. MEMBER:: What about the risk?


Victor Quelch: The hon. member refers .to risk. I say that when you obtain a high rate of interest you must not squeal when you lose. You are charging that high rate of interest in order to take care of your risk. Those mortgage companies were charging 8, 9, 10 and even 12 per cent in those days, and if they lost something on their investment they certainly had no right to squeal, because they were getting their high rate of interest. If the mortgage companies had been prepared to lend money at 4J or 5 per cent, I would have agreed that they perhaps should have had better security. But any concern which considers
itself justified in charging 10 or 12 per cent interest had no right whatsoever to squeal if it lost on its investment. That is all part of the game, and part of the gamble.


Mr. BLACKMORE:: Mr. Chairman, before the section is passed, I believe it would be well to say a word or two with respect to this measure, perhaps by way of summing up. I listened to the words of the hon. member for Calgary West. He took the orthodox stand of those who must protect credit, just as the minister did. I think the minister will find there is no hon. member in my party, or perhaps in any other party in the house, who does not agree that there must be a protection of credit. I believe that would be accepted by everybody. The difficulty lies, however, in taking the whole thing out of the farmer.
It has been brought out several times by various speakers to-day and yesterday that there is an extremely unsatisfactory agricultural policy in Canada. The debt situation is largely the result of that policy. And we are looking to debt legislation to adjust or to make amends for the flaws produced by or the evils resulting from that agricultural policy.
I shall spend only a moment or two in a discussion of that policy. I have referred to it once before, in the discussion with respect to wool. I do not propose to repeat what I said on that occasion, but somehow or another the minister has to have somebody teach him that there is something radically wrong with the whole agricultural policy of Canada. And if someone does not get it into the minister's head, then I am telling him that he is going to wreck the country. It will be altogether too late to talk about it, when the thmg is accomplished. I shall point out briefly to the minister the chief flaws in the agricultural policy of Canada.
In the first place there simply must be a scaling down of agricultural debt. I am not in favour of mortgage companies losing their money. I am not in favour of seeing lenders lose their money. But what are we to do? Obviously, the sensible thing is not to let the farmers be ruined on the land. What is to be done? I am informed that in the United States and in New Zealand they are adopting a systematic, comprehensive scheme of scaling down debts. Just how that should be done will cause some doubt, but I believe that ultimately the Dominion of Canada will have to step in as a nation and absorb the shock. If the Dominion of Canada, as the hon. member for Acadia (Mr. Quelch) suggested yesterday, allowed men by the tens of thousands to come in and settle in the Palliser triangle
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and then, when those men have accumulated debts, washes its hands of responsibility in the matter, then obviously the Dominion of Canada is failing in its responsibility to the people it had brought into the country.
What is to be done about it? Suppose a man comes into the country, as I have seen men do, with $20,000 and invests that money in a piece of land in the Palliser triangle after there have been years of good crops and without knowing how uncertain the weather is in that area; what is to happen when he has four or five bad years and his debts accumulate and become unpayable as they inevitably will? What would the minister's stand be in connection with that man who has brought $20,000 into the country to invest along with five, six or seven years of his life? Must that man lose everything? Is that the stand the minister takes? If it is, then he is taking a most extravagant stand, one more extravagant by far than that taken by the hon. member for Acadia.
The question the minister will immediately ask the member for Lethbridge is, "Should the person who lends that man another $20,000 on his land lose his money?" My answer would be that it is not right that either of them should lose his money. But certain it is that the man who came into the country with $20,000 and invested it in a piece of Canadian land has a right which this country ought to protect. If it does not protect that right, then the government is destroying the credit of the country in another way. If the minister asks where he is going now with his agricultural policy, let me say that the time may come when they will nretty nearly have to hire men to go farming on the land.


Mr. CRERAR:: Would my hon. friend apply that principle to the man who invested $20,000 in a mining venture and lost it? Should the state reimburse him?


John Horne Blackmore: I would say that perhaps there is a little difference between a mining venture and an agricultural venture. Nevertheless I believe the time is rapidly coming when men are beginning to argue that the government should guarantee them protection before they put their money even into a mine. That is being done at the present time. The government has already found it necessary to guarantee loans for the development of mines, to pay for the development of mines and to allow concessions in taxation. The government has had to resort to a great many expedients to encourage private capital to go into industry. Farming is an industry, and the government 
must do something like that to guarantee a man his security in farming. I doubt very much if in 1935 Liberals would have favoured the creation of as many crown companies as the Liberal government has established in Canada to-day. I doubt very much if in 1935 the Minister of Finance would have favoured the various advances of money which have been made by the dominion government to different companies to encourage them to produce war needs. A new concept has grown up with the years. The new policy is the result of the new concept. The new policy when applied to farming will result in an altogether different way of treating the farmer. I wonder if the Minister of Mines and Resources is answered; does the minister feel that his question has been answered?


Thomas Alexander Crerar: I am sorry; my colleague was speaking to me.


John Horne Blackmore: I have been answering the minister's question for the past three minutes and I was just wondering whether he considered it is answered.


Thomas Alexander Crerar: I got part of it.


John Horne Blackmore: I believe it is
answered. If it is not, the minister can ask me another. The point is that we have reached the place where we must realize that in order to secure the state we must do things which have not been done before. The United States has found it necessary to scale down debts, and I would not be surprised if the United States treasury has reimbursed those who have lost in the scaling down. I would not be surprised if the Dominion of Canada should find it necessary to do a similar thing. I am not in favour of having the mortgage companies lose their money. I am not in favour of the people who have placed their savings with the life insurance companies losing their money. No member of the Alberta legislature or of this Social Credit party would favour that. I doubt if there is one member of the party who could be found to subscribe to that view.
What Social Crediters found in Alberta was an impossible situation. They found that the claims of the money-lenders and the claims of the human element were in conflict, and as a result of that conflict the human element was toeing destroyed, just as the hon. member for Calgary East (Mr. Ross) so well said. I think he did his province a service this afternoon. He is a man Who has come in contact with reality. I am not saying that the hon. member for Calgary West (Mr. Edwards) was extreme in his views because he

Farmers' Creditors Act
represented one point of view. But the hon. member for Calgary East showed quite clearly that he realized there was another point of view, and that the two points of view must be reconciled. How to reconcile them is the problem. The only way they can be reconciled as far as I can see is to have a scaling down of debt. This will involve the advance of money from the dominion treasury to reimburse in some measure those who may be caused to lose money.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


John Horne Blackmore: Just before the
committee took recess I was discussing the faults in the agricultural policy as it is at present applied in Canada, and pointing out to the minister that one reason why we encounter so much difficulty in drafting a bill of this sort is that we are trying through the bill to rectify abuses which develop naturally through a faulty agricultural policy in the country, and I said that it would become necessary, in order to adjust the onerous debt situation which has developed in western Canada, for the dominion government to step into the picture and absorb the shock, actually reimbursing in considerable measure those who have lent the money, and also reimbursing in considerable measure those who have borrowed, to overcome a situation which is otherwise intolerable.
So that the stand of the Social Credit party may be made completely clear on this matter, and for the minister's use, I am going to read a passage from a booklet recently published and issued from Edmonton just prior to Premier Aberhart's death. This little booklet is called "Prepare Now: A Suggested Policy for Post-War Reconstruction". On page 43 of this booklet I read as follows:
All agricultural mortgage debts to be taken over by an agricultural credit bank operating under the national monetary authority, on the following basis:
(a)	The principal amount of debts to be reduced to the original indebtedness less all payments made in excess of three per cent. The farmer will be required to pay this to the agricultural credit bank in equitable instalments on a crop or production share basis.
(b)	The agricultural credit bank will repay creditors on equitable terms which will ensure that individuals incur no loss and corporations can meet their liabilities in full.
I propose to deal briefly with what is suggested there, elaborating in some measure. It will be noticed that the principle laid
down is that the interest rate should not exceed three per cent. I believe the minister in his bill and in the operation of the bill should have in mind the idea that the interest rate should not exceed three per cent. We have heard mention made of exorbitant rates such as eight, nine, ten and eleven per cent. All such rates are deleterious to the country and will result in hardship and destruction of our vital resources. If the original loan to a given farmer is allowed to stand and the lender allowed interest at the rate of three per cent from the time when the money was lent, and the debt is taken over by the agricultural credit bank and provision made that the lender shall receive his principal with interest at the rate of three per cent, the lender, I think we shall agree, will not suffer seriously by such an arrangement and the farmer will be required to pay this to the agricultural credit bank in equitable instalments on a crop or production share basis. We have found in Alberta that a satisfactory way of dealing with agricultural debt is to allow the farmer to pay a certain portion of his crop each year. If he does this, he does not have the anxiety of having to sell the crop, turn it into money and pay the money. The person to whom the money is owed knows he is getting a certain percentage of the crop, and he knows that is fair; he feels much better about it, and the farmer feels much better about it. The first thing you know, the debt is beginning to be liquidated. This principle is suggested in what I have read. It goes on to state:
The agricultural credit bank will repay creditors on equitable terms which will ensure that individuals incur no loss. . . .
The hon. member for Calgary West, with an arrangement like that being worked out, would have no cause to worry about the money which had been put into life insurance companies. Any life insurance company which had lent money to a farmer would be guaranteed the money it lent him together with three per cent interest, which would certainly enable the company to discharge the obligations to the people who had insured their lives with it. Probably that little passage will help members of the committee to understand what I meant when I said that the government would step in and reimburse, not necessarily permanently, probably just temporarily-for twenty years or so, the idea being that ultimately the government would recover its money, the farmers would get out of debt, the people who lent money to
Farmers' Creditors Act

the farmers would get their money back, and the country would be restored to a sound, healthy condition with respect to debt.
I mentioned a minute ggo the question of refunding. I see no reason why the minister should not adopt the policy of refunding to enable farmers to borrow at low rates of interest the money with which to discharge their obligations over a long period of time, say twenty or thirty years, which would enable them to get out from under their indebtedness and would enable the people who have lent money to the farmers to recover their money without too much hardship and inconvenience.
The matter of price must be taken care of, and the minister has not made allowance for that in drafting the bill. As the hon. member for Battle River pointed out, prices simply must be guaranteed from year to year, so that farmers will know where they stand and the people who are lending the money will know where they stand; otherwise the credit which the minister was so anxious about will be lost. If the lending companies come to find by and by that, no matter how good a farmer a man may be, if they lend money to him and prices go down they lose their money, they will certainly lose confidence and the country will lose credit in spite of such legislation as this. There can be no question about it. So that this bill will not protect the credit of the country, even though the minister believes it will.
Just to show the minister that prices in Canada are not where they ought to be, may I quote briefly from a statement made at Brandon, Manitoba, on June 24, and reported by the Canadian Press:
William Bryce, of Dugald, Manitoba, urged the cost of production plus ten per cent for farmers, the same as industry, in his presidential address to the Manitoba Federation of Agriculture meeting here yesterday.
Farmers all over the country are beginning to talk about being paid on a cost-plus basis rather than on a cost-minus basis as they are being paid at the present time. May I tell the minister that no matter how carefully he drafts this bill, unless he looks after the matter of price in the agricultural economy of this country he cannot possibly sustain the credit of the farmer.


Charles Robert Evans: Will the hon. member tell
us how he would establish cost of production on the farm?


John Horne Blackmore: The hon. member
has asked a pertinent question. I would say that probably in Canada the thing to do would be to start with wheat. I fancy our whole agricultural economy is built around
[Mr. Blackmore.J
wheat. The cost of wheat, the price at which it ought to be sold, could be determined, I believe, by a group of experts similar to those now working on the wartime prices and trade board. Three years ago a good many things which now look thoroughly feasible would have seemed impossible, and I think the hon. member for Maple Creek will agree with me that a group of men such as Donald Gordon has in his employ could determine after a while the price at which wheat should be sold.


Charles Robert Evans: It might be pretty cheap.


John Horne Blackmore: It should not be
cheap. If they determined a price for wheat which was cheap they would be cheap themselves, because the whole country would be based upon a cheap economy. In fact, that is the trouble with us now. The price of wheat, I should say, should be between $1.25 and $1.50 if it were set where it ought to be to enable the farmers to carry on year after year and to build fences when they break down and barns when they are worn out. Then, having wheat as the pivotal point, they could set for other primary products like barley, oats, rye and other commodities, such prices as would enable the growers to produce those commodities as economically as they could produce wheat. Does that indicate to the hon. member how he ought to proceed? This could be done with regard to all the various agricultural commodities. A fair price could be determined for them. In a general way this ideal should obtain. The object should be, in the economy of any country, to enable the people on the farms to buy from industry the products they need and to enable those engaged in industry to buy from the farms their own requirements. With that general idea in mind, and with the technique I have indicated, I am sure that any group of experts who went to work seriously on the problem could determine fair and profitable prices for all primary products, and then arrive at the prices of the secondary commodities by a similar device. I am not discussing that matter to-night, but I have shown in a general way how one could proceed.
I believe there are just two other matters the minister should bear in mind. First of all, he should see to it that the farmers get credit where they need it, the credit which they cannot now obtain; and he should make ample provision for stability of prices and of markets for the next three years. If he would do that, there would not be very much difficulty about the bill he has introduced. I am not sure that there would be great objection to it in

Farmers' Creditors Act
its present form if the inequalities and injustices that are inherent in the whole agricultural economy were removed.
I believe that the hon. member for Acadia took a sound position. He said that the bill was deficient in at least three respects, in a general way. First, the boards are done away with and courts substituted. Although there is disagreement among the members regarding the desirability of boards as compared with courts, in my opinion the boards have done very good work. We found in Alberta that there was not much complaint on the part of the farmers with reference to the work of the boards, and I am not sure that the loan companies suffered much at their hands. I believe also, as the hon. member for Battle River has emphasized two or three times, that the debt situation must be dealt with on the basis of its being recurrent. In southern Alberta, south of Calgary, there is drouth this year. The hon. member for Medicine Hat the other day brought this fact to the attention of the house. That drouth will cost hundreds of thousands of dollars to farmers all over that country. The farmers are not responsible for it; there is nothing they can do about it. The farmer put in his grain in perfectly good faith, but he will not have anything to live on this year, or at any rate very little, and debts will accumulate. Even the Minister of Finance, with his orthodox mind, would hardly blame -the farmer for the debts that- will accumulate in consequence of what has happened this year through an act of God. It is that very thing that creates the situation for which there must be a remedy, some means of absorbing the shock. To go to that part of the country and tell the farmers that they should absorb the whole shock of that terrible drouth from Calgary south, is to make oneself ridiculous. The minister sees, I believe, that what the farmers are suffering from all over the three western provinces is a long period of years in which incidents similar to this drouth have impaired the economic stability of the farmers and thrown them into debt. The debt situation therefore must be dealt with as a recurrent problem; and when the minister says that he does not believe there should be more than one or two decisions on the debt question, I reply that he is out of contact with realities. In fact, he made the statement that there was to be only one proposal. Well, one is not enough. Hundreds of farmers in southern Alberta alone this year will have to have a readjustment from the adjustment they made last year. How else will they meet the situation which will
develop as a result of the drouth which destroys their crop? Surely the debt situation must be dealt with as a recurring problem.
There is injustice also in requiring that the debt should be such that two-thirds of it had been contracted prior to May 1, 1935. From what I have said I think it must be clear that the question of debt is one that is likely to come up at any time. The terrible hail storms that sometimes sweep across that section of the country will put the farmers in a position where they cannot discharge their obligations. If they contracted debts when the stores gave them credit, how will they discharge those debts if next year there is frost or a drouth? How will they adjust themselves? We have had many experiences of that kind in Alberta, and therefore we know that some of the things the minister has said are more or less doctrinaire and are not the result of facing realities.
I would say that there are three main flaws in the bill which should be remedied to bring it up to that standard which would be thoroughly acceptable to the people in- the west.


George Hugh Castleden: This bill is for the purpose of facilitating compromises and arrangements between insolvent farmers and their creditors. But is it possible to do anything for those who are insolvent, or is the definition of the word "insolvent" to be extended and given such a wide interpretation as to take in those who merely want readjustment of their debts?


James Lorimer Ilsley: They must be unable to meet their debts as they fall due; otherwise they do not come under the legislation, We would not have the jurisdiction to deal with the others, because the basis of our jurisdiction is that section in the British North America Act which gives this parliament jurisdiction over bankruptcy and insolvency.


George Hugh Castleden: In the draft bill presented by the debt conference there were one or two things which were asked for, which seemed to be basic but which apparently have been entirely neglected in the bill before us. In paragraph 15 they point out particularly that they want the boards to protect the farmer's interest, to evaluate the farmer's interest in the farm land as represented by the amount of money, principal and interest, which he had paid, and, second, the amount of cultivation and improvements he had made and the labour he had expended in bringing the lands into an improved condition. That is one thing I wish to bring to the minister's attention.
farmers' Creditors Act

Another point is this. In protecting the farmer's interests they want to base the adjustment on the ability of the debtor to pay, and I believe that has been taken care of. They say in paragraph 15 (3):
15. In exercising its jurisdiction 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:
(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.
I think that is fundamental, and if this bill is to be an effective instrument, those things should be taken into consideration. A number of the other proposals made have been incorporated in the bill.
The minister this afternoon argued that if revisions or adjustments as asked for by the debt conference were provided for, it would destroy farm credit and cause tenantry in this country. I would point out to the minister that when agriculture or any other industry suffers the losses which were suffered by the farmers of the west whom this bill is supposed to protect, someone has to take the losses, and where such loss is suffered credit is bound to be destroyed, and to accept this proposal would not prevent that.
As regards tenantry, the records show that it is increasing rapidly in the west, and the reason why it has increased more rapidly over the past few years is that it has not paid the creditor to foreclose on the farm because he could not go in himself and operate the land and make any more profit out of it than the farmer did. About eighty per cent of the farms of my province are already mortgaged, and if prosperous times should ever come to agriculture again, there would be so many foreclosures that tenantry would be widespread.	,


[Stage Direction]
Section agreed to.
On section 2-Interpretation.
James Lorimer Ilsley: There is a very slight amendment to be made to paragraph (i), which I shall ask my colleague to move.


Mr. GIBSON:: I move:
That subsection 1 of section 2 be amended by adding after the word "assumed" in line 39, the words "or otherwise incurred".


[Stage Direction]
Amendment agreed to.
Thomas Clement (Tommy) Douglas: Paragraph (e) says:
(e) "creditor" includes a secured creditor and any person to whom a farmer owes any debt and includes the crown, as well in right of any province as in right of Canada.

Is there any necessity to include municipalities or are they already covered? I notice in paragraph (f) at the top of page 2 of the bill, "or any municipality or other person." Should "municipality" be included in. the definition of "creditor?"


James Lorimer Ilsley: The word "person" includes "municipality" by the ordinary principles of interpretation. It is not necessary to name the municipalities expressly, but it is necessary to include the crown by express words.


Thomas Clement (Tommy) Douglas: "Person"
would cover "municipality?"


James Lorimer Ilsley: Yes.


Thomas Clement (Tommy) Douglas: Referring to
paragraph (f) which defines "debt," there has been, as the committee knows, some difficulty under the Farmers' Creditors Arrangement Act, and some cases went before the supreme court of Ontario a few years ago. Since then, cases have arisen in Saskatchewan in which it was declared that there was an absence of privity of contract, and some cases were thrown out on that ground. Mr. Dunning then brought in an amendment in 1938 to meet that difficulty, but cases have been thrown out since. Has provision been made for that?


James Lorimer Ilsley: Yes. That has been provided for.


George Henry Ross: Paragraph (h) defines " farmer." Apparently this definition has been copied word for word from the old act, and our judges in Alberta have held that a rancher does not come within the meaning of "farmer" as defined in the old act. We have a great many ranchers in Alberta who, I submit, should have the benefit of the act. I presume the minister would have no objection to an amendment making the definition broad enough to include ranchers.


James Lorimer Ilsley: I just followed the timehonoured language which is used in the Bankruptcy Act and in the Farmers' Creditors Arrangement Act. I do not think I would like to broaden the definition.


Ernest Edward Perley: I think the definition of "farmer" should be broadened to include men who, while not actually residing on the farm, are operating the farm and making it their chief occupation. They pay all the expenses and taxes and hire the labour for the farm. I think that class should be included in the definition.


John George Diefenbaker: I would ask the
minister whether the definition of "farmer" as it now stands would cover a person who had

Farmers' Creditors Act
been engaged in farming but is now retired from the farm and relies mainly upon his returns from the farm for his support. Personally I think the definition, as was pointed out by the two hon. members who have just referred to it, is not sufficiently wide to cover the various situations that have been found to arise since the definition was first incorporated in the original act. I would suggest to the minister that ranchers be included within the ambit of the expression " farmer." There are many who are engaged in ranching, as was pointed out by the hon. member for Calgary East, who, I believe, are entitled to be included under the act but have been excluded under the judgments to which he made reference. If my memory is correct, the definition has been held inapplicable to the case I mentioned, namely, persons who at one time or another have been farmers but have retired from the farm and are farming it indirectly under lease. Such a person does not come within the definition as it now is and has been since 1934. I would suggest that the experience of the past nine years has amply demonstrated the need for the inclusion of these two classes, and I believe the definition should be widened accordingly.


Charles Edward Johnston: I wish to associate myself with the remarks of the hon. member for Calgary East in regard to the definition of "farmer". I think it was found necessary, either under the Prairie Farm Assistance Act or the wheat acreage reduction scheme, to change the definition of the word "farmer" so that ranchers would be included. I believe a rancher was defined as a man with so many head of stock per acre, or on some similar basis, and I believe the minister will find that this definition must also be changed. There will be a great deal of dissatisfaction if it is left to include only those whose main occupation is farming or the tillage of the soil. I believe some qualification will have to be made so that ranchers will be included, perhaps so many head of stock for each acre of land or something like that.


James Lorimer Ilsley: What is the case for bringing ranchers under the legislation? My hon. friend assumes that ranchers should come under it, but what is the case for making it apply to ranchers? The great complaint from ranchers recently has been in connection with the excess profits tax.


Mr. JOHNSON (Bow River):: The situation is quite clear in some districts, particularly in the southern parts of the prairie provinces. You may find the case of a man who has been farming and who has changed over to
ranching. If a farmer is in that position, he has every right to come under this legislation. Of course, if you are going to have it apply only to those who are bankrupt now, instead of making it a debt adjustment act, this definition may be all right, for those who are going to be sold out will be sold out anyway. If it is to be a debt reduction act, however, to assist these ranchers and farmers, the definition must be widened to meet the case.


Victor Quelch: It all depends upon how you define a "farmer" and a "rancher". As the hon. member for Bow River says, under the Wheat Acreage Reduction Act anyone with more than fifty head of stock, or more than two head of stock for every acre of wheat, was called a rancher. The minister is not going to suggest that a farmer with fifty-five head of cattle will be very much worried about the excess profits tax. During the years from 1932 on, when stock was selling for as low as a dollar a head, many of these small ranchers got into serious financial difficulty, and it will take a number of years for them to get back on their feet. When we come to section 7 I intend to refer to a point which will very much affect the ranchers; that is, in connection with the deadline of 1935. The ranchers who had to sell off their stock in 1937, in order to become eligible for feed under the dominion regulations, certainly need help to-day. Many of those ranchers were out of debt in 1935; then when the drouth hit them they had to sell most of their stock and take whatever they could get for them. Now they get no consideration at all under this measure. However, that will come up when we reach section 7. I am only pointing out now that many ranchers have suffered heavy financial losses, and certainly I think at least the small rancher should come under this legislation. I believe the minister was referring to what one might call the business rancher or the syndicate rancher, but under the provisions of the Wheat Acreage Reduction Act a farmer with over fifty head of stock is called a rancher.


James Lorimer Ilsley: It seems that the courts of Alberta have decided that a rancher is not a farmer within the meaning of this measure.


Victor Quelch: How is a rancher defined?


James Lorimer Ilsley: I do not know. I did not know the courts had made that finding, but I have the word of the hon. member for Calgary East for it, and that is confirmed by the official in charge. Certainly the definition in thp wheat acreage reduction regulations would have no bearing at all on the case. I am not familiar with the decisions of the courts of Alberta, but this measure is designed to assist
Farmers' Creditors Act

persons whose principal occupation is farming or the tillage of the soil. I do not know the difference between farming and the tillage of the soil; I questioned that when I was going over the bill, but I was informed that this language had been interpreted by the courts, that it is the language of the old Farmers' Creditors Arrangement Act, and that it is the language of the Bankruptcy Act. It is the standard definition of a "farmer".


Victor Quelch: What is that definition
again?


James Lorimer Ilsley: A farmer means a person whose principal occupation consists in farming or the tillage of the soil. That is what a farmer is within the meaning of this measure and, I am informed, within the meaning of the Bankruptcy Act as well, and that has been the case since the old act was brought in. I suppose there comes a stage where a person's principal occupation is not farming or tilling the soil at all. He does not touch the soil; he just turns cattle out to graze. If that is his principal occupation he is a rancher, I suppose; he is not a person whose principal occupation consists in farming or the tillage of the soil. This legislation does not extend to him, and never has extended to him.


Victor Quelch: Surely this definition should be a rancher or tiller of the soil, because it is very hard to imagine a farmer who does not till the soil but you could have a rancher who did not till the soil, though I think the majority of them do till a certain amount of soil. You hardly need to say a farmer or a tiller of the soil, because I think all farmers do till the soil.
Mr. ILSLEY; Under this legislation a person whose principal occupation was not farming or the tillage of the soil would not be eligible for the benefits of the legislation. He would be regarded as a person in a different kind of business, and why not? It is just a question of where the line should be drawn. We cannot extend this measure to include everybody; it has just applied to those whose principal occupation consisted in farming or the tillage of the soil.


Victor Quelch: Then I think the measure should definite the difference between a rancher and a farmer. We ran into that problem with the Wheat Acreage Reduction Ac't. Many farmers were denied the bonus on the ground that they were ranchers; finally the Minister of Agriculture stated that the regulation was ridiculous, and he wiped it out. Now ranchers are eligible for the wheat acreage reduction bonus. If a rancher can be

eligible for the wheat acreage reduction bonus, he must be a tiller of the soil; therefore he should come under this legislation.


James Lorimer Ilsley: But that is not his principal occupation. If his principal occupation is the tillage of the soil he comes under the legislation.	*


George Henry Ross: I do not think the minister understands the situation in the ranching country. Most of the foothills country is ranching country, and the chief occupation of the people there is raising live stock, cutting hay, looking after cattle and sheep, and so on. They do a certain amount of farming; they grow coarse grains for their cattle, but 'their chief occupation is ranching and not tilling of the soil. There is also a great deal of ranching done in the dry areas, where this legislation is intended to apply. I submit that it should apply to them.
A few moments ago the minister raised the objection that the farmers were kicking against the excess profits tax.	.


James Lorimer Ilsley: The ranchers.


George Henry Ross: Yes, the ranchers. The cattle raisers have had a strenuous time during the standard period which forms the basis of the excess profits tax. None of them were making money at that time. They could not. Now when they come to pay the excess profits tax it hits them so hard that they are complaining. And they have just ground for complaint, because everything they make is being taxed away from them. They have no chance to pay off their debts incurred during the strenuous times through which they have passed.
This afternoon I referred to the fact that during the years of depression the ranchers were hit very hard. Very often cattle were sold at a dollar a head, as one hon. member said a moment ago. One could buy the best of feeding cattle for a cent a pound on the prairies at that time. The ranchers were losing money. But they stayed with the game, borrowing money, for the purpose of trying to carry on.
When this standard was fixed for the excess profits tax it was fixed so that the ranchers are having everything taken away from them that they made. They have no chance in the world to pay off their past debts. I submit that this measure should certainly apply to ranchers, as much as to farmers.


Thomas Clement (Tommy) Douglas: Would the minister consider expanding the definition of "farmer" to cover farmers who retire but who still own their farms, and supervise the opera-

Farmers' Creditors Act
tion of those farms? The minister will recall that the debt conference suggested this definition for "farmer":	[DOT]
"Farmer" means (1) a person whose principal occupation consists in farming or the tillage of the soil; or (2) a person whose principal occupation was farming but who has retired therefrom, and is not engaged in any other occupation and has either leased his farm property or sold it under an agreement for sale or transferred it and taken a mortgage thereon for purchase money on which payments are owing to him. "Farmer" includes the legal representative or representatives of a deceased farmer.
It seems to me there might be some argument based on that paragraph. A great many people up in years retire to the little towns and rent their farms, or operate those farms by having a hired couple or a hired man on them. Under the present definition they would be barred from the benefits of the legislation. Would the minister give some consideration to extending that definition so as to include them?


James Lorimer Ilsley: They are investors. They have, an investment. They are not on the farm, nor are they engaged in farming.


Thomas Clement (Tommy) Douglas: But their livelihood comes from the farm.


James Lorimer Ilsley: That is what my hon. friend says, and he also said that that applied to mortgage companies. But we must draw the line somewhere. The object of the measure is to keep efficient producers on the land, and I do not think it should be extended to persons who are not producing, but who just have their money invested in farms.


Thomas Clement (Tommy) Douglas: They have more than their money in those farms. They probably have the work of a lifetime in them. The definition states distinctly "whose principal occupation was farming but who has retired therefrom". That is, a man has a farm in which over a number of years he has built up an equity. Debts accumulated during the bad years. Surely he has as much right to an adjustment as the man who is still young and is on the farm. His livelihood comes from that farm. It represents his toil and his work of a lifetime. Surely he has the same right to benefit from the legislation as he would have if he were still young enough to operate the farm actively. This is not an investment. This was not surplus money put into an investment, at all. It represents the toil of a man's lifetime. Now he depends upon a return from that farm to maintain him and his wife.


Robert Fair: I think I could point out several instances where a man's sons have joined the army, where the man himself might not be able to operate power machinery, and
for that reason he has had to have his work done by hired help. What would be his position?


James Lorimer Ilsley: He has to be a farmer, if
he is to benefit. If his principal occupation consists in farming or tillage of the soil, even if it be by a hired man, he is still a farmer.


Robert Fair: Even though he does not live
on. the land? Let us suppose he moved to a small town.


James Lorimer Ilsley: He does not necessarily have to reside there physically, so long as he is operating the farm. If he does so, he is a farmer. If he is directing the operation of the farm, through a hired man, and that is his principal occupation, he comes within the definition of a "farmer."


Thomas Clement (Tommy) Douglas: If he has
leased the farm?


James Lorimer Ilsley: No. If he has leased the
farm he is not running it. The lessee is running it.


Robert Fair: With respect to farmerranchers, may I say we have had a lot of trouble under the Prairie Farm Assistance Act and the wheat acreage reduction legislation. It might be pointed out that a number of farmers have a section or two sections of land, that they are farming 500 or 600 acres of it, and at the same time running a number of cattle or horses. Because they have those cattle or horses, even though they farm 500 or 600 acres an attempt is made to debar them from the benefits of the Prairie Farm Assistance Act, and from the wheat acreage reduction legislation. How do they fare in this case?


James Lorimer Ilsley: I understand the hon. member is asking just where the line is drawn between a farmer and a rancher?


Robert Fair: Yes.


James Lorimer Ilsley: Well, it is just a question
of fact as to whether his principal occupation consists in farming and tillage of the soil.


Robert Fair: But it is fifty-fifty.


James Lorimer Ilsley: That is just one of those
things the tribunal has to decide.


Victor Quelch: The bill submitted by the western debt conference evidently recognized that difficulty, because their definition reads this way:
A person whose principal occupation consists in farming or tillage of the soil; or in raising for sale or market any live stock or dairy products.
Apparently they put that in there to cover this very thing.
Farmers' Creditors Act

i Mr. EDWARDS: I should like to support the coutention advanced here in. regard to the definition of the word "fanner." That has caused, a great deal of heart-burning and dissatisfaction on account of its ambiguity. I do not know why we should pass on to a judicial tribunal the difficulty of interpreting an act which is not clear, and which is in fact ambiguous to ourselves. We ought to make Up our minds who is to have the benefit of this legislation. I believe there have been one or two cases before our courts in which decisions have been made in connection with entitlement. Mention was made of this by the hon. member for Calgary East. As I recall, one. rancher. was being questioned on this matter. As everyone from the foothills knows, every rancher does have some land under tillage. A rancher may have far more land under tillage in connection with his ranching operations than would the ordinary farmer. That is common knowledge and common observation. There can be no gainsaying the fact that the ranchers as such suffered more adversely, if that were possible, than did the ordinary grain or wheat farmer in the depression years which are the occasion for this legislation.
.1 should like to second with all the force of which I am capable the suggestion of the necessity and desirability of giving a proper interpretation to the word "farmer," so that it will include those whom we commonly designate and who delight to be known as ranchers rather than farmers.


Robert Fair: The hon. member for Calgary East has some good friends in the position of the man I described a few minutes ago, who happens to be a neighbour of mine. The hon. member for Calgary East has, I think, succeeded as a lawyer in that little community there on account of the fact that he understands farming conditions, and possibly on account of the number of his very good friends. I would hate to see this section go through without some provision being made to include the ranchers. These people suffered during the years from 1930 to 1939. The Minister of Finance says that the excess profits tax is giving more trouble than anything else at the present time, and I submit that these people are suffering a great injustice in having to pay an excess profits tax when they should be using this money to pay off the debts they incurred during the depression period'. I hope the minister and his advisers will see that some provision is included in this section to include ranchers.


Charles Edward Johnston: The minister has said that the meaning of this definition would be decided by the court. The definition is:
"Farmer" means a person whose principal occupation consists in farming or the tillage of the soil.
I assume that the minister means that the court will decide that after hearing all the facts of the case. I am concerned over the word " occupation." In deciding whether a man is a farmer or a rancher, will the court use as a basis the man-hours employed in cultivating the land or caring for the stock, or will it use the financial report in connection with the cultivation of land or the sale of stock. I can conceive of considerable difficulty if you are going to base it on the financial report, especially when there is only one proposal allowed under the measure. One year a man may have a financial return showing that his major income came from the raising of stock-he would be classified as a rancher. The next year stock prices might fall and his major return be from his farming operations- he would be classed as a farmer. On the other hand, as has already been pointed out, as a rancher he will necessarily have to have a large acreage under cultivation. I think the minister should make clear the difference between the terms "farmer" and "rancher" in order that there may be no misunderstanding.


James Lorimer Ilsley: I do not think this is a change that should be made hastily in committee. Perhaps the section could stand and I will give consideration to the suggestions that have been made. Perhaps we could pass the section with the exception of paragraph (h).
Section stands.
On section 3-Clerk of the court to be official receiver.


Thomas Clement (Tommy) Douglas: Some judicial districts are quite large and it may be impossible for the clerk of the court to handle all the cases. At the present time there are three or four official receivers in some districts. Is it the intention to have several official receivers and, if so, will they all reside at one point or will they be scattered at strategic points?


Douglas Charles Abbott: If the clerk of the district court feels that he can handle the cases in that district, he will be the official receiver. It is the intention to appoint official receivers, if necessary, in the outlying points when there is a demand for -these services and when-it is felt that the locality is too remote from the place where the court sits and where the clerk of the court would be located. That is the

Farmers' Creditors Act
reason why power is taken in subsection 2 to appoint official receivers in addition to the clerks of the court or in substitution thereof.


Thomas Clement (Tommy) Douglas: Subsection 3 sets out the functions and duties of the [DOT]official receiver. Under the old act I believe the official receiver had the power to formulate a proposal after consulting with both the debtor and the creditor, and placing the matter before the board of review. I am not clear whether under this bill he will have the power to formulate a proposal, or whether he merely receives a proposal filed by the debtor, which has been formulated by the debtor and his lawyer or his representative.


Douglas Charles Abbott: Under the existing regulations the official receiver is empowered to assist the debtor in preparing the proposal. It is not contemplated that there will be any change in the regulations put into effect under the new legislation.


Thomas Clement (Tommy) Douglas: He will be able to assist under this measure?


Douglas Charles Abbott: That is right.


[Stage Direction]
Section agreed to.
On section 4-Jurisdiction on assignment or petition.
George Hugh Castleden: The western debt conference urged that instead of a single judge there should be farm debt boards. They suggested that:
The board shall consist of a chief commissioner and two commissioners who shall be appointed by the governor in council. The chief commissioner shall be a judge of the court of the province invested with superior jurisdiction in trials in the province, and one commissioner shall be appointed as a representative of creditors and one commissioner shall be appointed as a representative of debtors.
I think that would prove more satisfactory than placing this entirely in the hands of one official. It seems to me it is giving too much power to the one person. I believe the wishes of the debt conference should be recognized and granted, and I should like to know why they have been disregarded in this respect.


Douglas Charles Abbott: That matter was fully considered when the bill was under consideration, and it was decided to get away from the idea of boards and to use the machinery of the courts. For that reason the initial court is the district court, with one judge, and the appeal is. to the special appeal court set up under the bill. As I say, it was decided after careful consideration to discard the system of boards, That is the fundamental feature of this new bill.


Mr. GRAHAM:: I do not know whether the rules of the committee will permit me, but I happened to be out of the chamber for a few moments, and it seems to me that section 2, subsection 1	(d), definition of "court of
appeal", is unnecessary under the bill. I would suggest, in order not to cause lawyers any sleepless nights over an unnecessary provision, it might as well be deleted from the measure.


Joseph-Arthur Bradette: I must point out that section 2 has been carried.


Thomas Clement (Tommy) Douglas: With unanimous consent.


Douglas Charles Abbott: Just to answer my hon. friend's point, at first it would, seem as though a definition of "court of appeal" would not be necessary, but in section 26 of the bill a reference is made to "the court of appeal of the province in which the appeal court has jurisdiction," and it provides in substance that the appeal court under this bill shall exercise on any appeal all jurisdiction, powers and authority of the court appealed from and of the court of appeal of the particular province in which the special appeal court under this bill is sitting. So that I think the insertion of a definition of "court of appeal" in the interpretation section is necessary.


Roy Theodore Graham: Yes, I agree.


Thomas Clement (Tommy) Douglas: I do not want to labour the point, but I believe that the removal of the power from the board of review to a court is a retrograde step. We listened yesterday to a good deal of tubthumping about British justice in Canadian courts-which, of course, is not at all the point in question. The judge is competent to deal with the legal aspects of a case; but there are aspects other than the legal one, as is shown by the fact that later on you will have land appraisal, and men who have some idea of the value of stock and of the value of buildings, some idea of the implications of farm transactions, and it is doubtful if you can get a judge who will have the necessary background to deal with all the implications of the financial arrangements between debtor and creditor. It seems to me that a system whereby there was a representative there for the farmers, presenting their case, interpreting some of the data placed before the judge, who in the light of the evidence presented to him would then interpret it from the legal viewpoint, would make for a much more sympathetic hearing and a much better understanding. I do not think any reasonable argument has yet been advanced by the minister or any other member of the government for transferring these powers from the board of review, on. which there will
Farmers' Creditors Act

be farmer representation, to a court. After all, the board of review was not some irresponsible body, as one may have gathered from the minister's statement this afternoon; the board of review is a quasi-judicial body presided over by a judge, with someone there to interpret the facts from the farmer's point of view and present his case in a sympathetic manner. I think we would be very well advised to include that feature in the legislation.


Robert Fair: I think the hon. member for Weybum has made a very good point. I think experience over the years, and particularly the experience we have had with different boards administering government policy under war restrictions, has shown us that as a result of lack of farmer representation, many grave mistakes have been made and grave injustices done to the farmer. While we shall have the benefit of judicial interpretation of points of law, I think we should also have the benefit of other representatives as we had under the old board.


[Stage Direction]
Section agreed to.
Sections 5 and 6 agreed to.
On section 7-Proposals by farmers in Alberta, Manitoba and Saskatchewan.
James Lester Douglas: I should like to know whether the minister thinks that under this section power is actually given to reduce debts, to alter the terms of payment and to reduce rates of interest. It will be noticed that all the section says is that the farmer "may make a proposal under this act for a composition." "Composition" has already been defined as "a composition in satisfaction of debts". The court may make a composition, extension of time or scheme of arrangement either before or after an assignment under the Bankruptcy Act. I am not a lawyer, and I wish to ask the minister if in his opinion and in the opinion of the Department of Justice who have been advising him, that provision grants to the court full power to reduce debt, not merely to extend it over a period of time, not merely to postpone it or to make some arrangement about payment, but to reduce it, to alter the terms and reduce the rates of interest.
I noticed in the proposed legislation which was placed before the government by the debt conference, under section 9, subsection 2, they state:
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.
These powers are specific. I am a little afraid regarding the powers in section 7 when the court is only authorized to make an extension of time and a scheme of arrangement. If the minister is convinced that that terminology does give them power to reduce debt and to reduce the rates of interest, of course I am prepared to accept his interpretation, because he is in the legal profession. Certainly to me it looked like vague language and does not look as though strong powers are given to a board that is supposed to do what this bill proposes.


Douglas Charles Abbott: I think my hon. friend is not on the section at which he should raise this point. Section 7 simply sets out the conditions under which a farmer may make a proposal under this, and I think the question to which he has referred, as to the powers of the court to formulate a proposal and to reduce debt, could more properly be discussed under sections 15 and following, under the heading, "Formulation of proposal by court". Perhaps if he does not mind, we can let his question stand until we reach those sections.


Victor Quelch: I should like to ask why the minister deemed it necessary to have that date line of 1935 in there. Take, for example, a stock man or a farmer with a certain amount of stock who managed to struggle along fairly well until 1935; then, owing to drouth and heat and rust in 1936 and 1937, he was forced into debt and went through the Farmers' Creditors Arrangement Act procedure. Are we to refuse the right to that farmer to make a proposal? Surely it does him more credit that he was able to struggle on until after 1935 without going under the Farmers' Creditors Arrangement Act. Why should we say, because he was forced to go through the act in 1936 or 1937, on account of a severe drouth hitting western Canada, he shall not be allowed now to make a proposal?


James Lorimer Ilsley: 
Charles Edward Johnston: In subsection 1, does that mean that if a farmer did not make a proposal at all, he can come in under this, provided the debt was incurred prior to that time?	/


James Lorimer Ilsley: No. To qualify, two-thirds of the debt must have been incurred prior to May 1, 1935.


Charles Edward Johnston: Whether he made a proposal or not?


James Lorimer Ilsley: Yes.


Charles Edward Johnston: That was
my understanding, but it was suggested to me that it was not so.


James Lorimer Ilsley: The hon. member's understanding is correct.


Charles Edward Johnston: I cannot understand why the debt must have been incurred prior to May 1, 1935. It seems to me that that is going back a long way. The cutoff date should be 1938 anyway. This will be a great hardship on some of the farmers, because there was a depression in 1937 and 1938.


James Lorimer Ilsley: That was not the period when the debt was incurred. The great bulk of the debt was incurred before 1935. This is
the date in the old act, and if that date is moved down, as has been suggested by some in this house, and outside the house, it certainly unsettles confidence in the finality of this legislation. It is an advertisement to the public that under pressure they will be moved down and down. That is what happened, I am told, in connection with the debt adjustment acts of western Canada. While it was provided that the debts must have been incurred before a certain date, later on that date was advanced; it was moved further ahead to another date. Undoubtedly that would happen; there would be pressure developing here, and if we changed our act from an act to clear up an emergency it would become a continuing act. That is what hon. gentlemen have been asking for, but that is the kind1 of act which I would not approve and I do not believe that parliament would approve it.


Charles Edward Johnston: It need not necessarily become a continuing act, being extended every year. But the fact is that in 1937 and 1938 there were difficulties. Those were hard years, and by making 1935 the fixed date you are cutting out the difficult years over which the farmers had no control. You are making it impossible for those two years to be covered by this legislation.


Douglas Charles Abbott: It does not eliminate those two years if two-thirds of the farmer's debt had been incurred prior to May 1, 1935, if he did not make any further borrowings after 1935 and the arrears of interest accumulated. That comes within the definition of debt incurred prior to May 1, 1935, and he can take advantage of the provisions of the legislation.


Victor Quelch: The minister states that the date in the old act is 1935, but they did not visualize then the type of drouth we had later. Furthermore, it must be remembered that at that time we also had a wheat board act which set the price of wheat at 87i cents, and after that it went considerably below that figure. The farmers had a lower price plus a drouth, and there was a serious condition in the west. Many farmers did go into debt who had been able, I would not say to keep out of debt, but at any rate to keep going prior to that time. But many increased their debts in 1936, 1937 and 1938. When the act was formulated the date was set at 1935; but that is no argument, for the simple reason that the conditions which prevailed in 1936 and 1937 were not then anticipated. In 1936 and 1937 we had one of the most serious drouths on record in western Canada, and in addition to that the price of wheat dropped from 87i cents to 70 cents.
*
Farmers' Creditors Act

Those two factors should be taken together, because they had a disastrous effect on western Canada.


James Lorimer Ilsley: With regard to the percentages, I said that the average of the debt, from the cases examined, was divided in the two proportions I mentioned; 73 per cent or thereabouts was incurred prior to May 1, 1935, and the rest of it was incurred since. I am assured from inquiries I have made that, in the great majority of cases, with that two-thirds figure the persons who are really designed to be benefited by the legislation will come in. It must be borne in mind that under the old act there was no power in the board to adjust any debt incurred after May 1, 1935, but under this bill all debts down to the date of application, whether in 1943 or 1944 or 1945, may be adjusted, provided two-thirds of the indebtedness was incurred prior to the date in the old act. I am averse to changing the original date, because I know it gives the appearance of instability to the whole thing if we do.


Victor Quelch: In 1937 the government passed certain regulations under which the farmers had to reduce the amount of their stock to three or four head per family in order to get feed or relief, and a large area was affected by those regulations. Farmers who, prior to that time, had been able to carry on, by selling cream to the stores, found themselves in the position where they had to sell their live stock, and they received at that time only three or four dollars a head. After they had lost their dairy cattle they were no longer able to buy at the stores and they went into debt, so that from 1937, 1938 and 1939 their debts increased considerably. Those farmers will not be helped, except where two-thirds of their debts were incurred prior to 1935.


James Lorimer Ilsley: Had they no debts incurred prior to May 1, 1935?


Victor Quelch: Some had, but some were able to carry on. I would not dare to say how many did, but even if there were only a small percentage whose debts were incurred prior to 1935, they are entitled to justice the same as anybody else. I do not see why they should be excluded, no matter how few they may be. Why leave the date at 1935?


Roy Theodore Graham: Would the hon. member for Acadia agree with me that farmers who incurred their debts to local merchants in 1937 or 1938 have no desire to have that particular type of debt cut down? When better times come they wish to pay the merchants who carried them through that period. Does my hon. friend not agree with that?


Victor Quelch: I would say that every farmer would like to pay his debts in full. Generally speaking, the farmers are every bit as honest as every other man, but when a man finds himself in a position where he cannot pay his debts, if he comes under the measure, store debts will have to be cut down with other debts.


Thomas Clement (Tommy) Douglas: The point is not whether a man wants to get out of paying his store debts. The point is that if the farmer is insolvent, if sixty per cent of his debts were incurred before May il, 1935, he cannot come within the benefits of this legislation. If only sixty per cent of his debts were incurred prior to May, 1935, he may not get the benefits of this legislation; that means he cannot pay his store debts at all. What will happen is that proceedings will take their normal course and he will be foreclosed. In view of this limitation, I think the minister should tell us the number of farmers in the three prairie provinces who will come within the ambit of this bill. Has the minister any figures on the number of farmers, two-thirds of whose debts were incurred prior to 1935? This bill will exclude thousands of farmers, because, as has already been stated, 1937 was one of our worst years in Saskatchewan. Agriculture in Canada was at an all-time low, and in Saskatchewan, besides low prices, we had adverse weather conditions. Farmers had to get rid of their live stock except for a few head. They were required to do so in order to get relief and comply with the regulations. During that period taxes and store debts piled up, and I presume seed grain advances will also be included when the court comes to compute the farmer's total obligations. If seed grain advances are included with tax arrears, debts to the storekeeper, debts to the implement company, how many farmers in western Canada will be able to say that only one-third of their debt was incurred since 1935? I think this section will exclude thousands of farmers. That is the point we ought to be taking cognizance of. This bill will not meet the situation of the insolvent farmer unless two-thirds of his debt were incurred prior to May, 1935. There will be many farmers, sixty-five per cent of whose debt was incurred prior to 1935 who will be left out in the cold.


James Lorimer Ilsley: Just consider the situation of these farmers. They have had up until the present time to apply, and presumably they have not applied. We are now in 1943. Moreover, they have the benefit of an order in council giving them the right to apply for postponement of foreclosure proceedings.

Farmers' Creditors Act


Thomas Clement (Tommy) Douglas: Good for the duration of the war.


James Lorimer Ilsley: Yes, and that meets the present situation at least. I do not know what will be done in the future. We never know. But there are two things that must be borne in mind. These persons have had nine years of this Farmers' Creditors Arrangement Act in which to make application. If they have not done so, I do not think there will be very many of them apply now, except perhaps those who had their debts adjusted in 1935, 1936 and 1937. Perhaps some will come in, because they have not had the option of making a second application for a proposal. Those who did not make application have let this go for nine years, so that I do not think there will be many of them. If we strike some sort of percentage, it may exclude some, -but this will take in most of them.


James Lester Douglas: Is it not possible that the reason why many of them did not apply was that the boards could not deal with any debts except those incurred prior to 1935? The very debts that are most embarrassing and that the farmers are most concerned about could not be dealt with under the old act and cannot under this bill unless two-thirds of the total debt were incurred prior to 1935.


James Lorimer Ilsley: That may be the case, although I do not know that it is.


Robert Fair: I wish to bring a matter before the government for action upon it before this bill passes. With respect to farmers who may have their debts adjusted or have a proposal made and agreed upon, is there any assurance that they will be guaranteed the cost of production for the products they raise in order to enable them to pay off their debts?


Joseph-Arthur Bradette: I am not going to tolerate a question of that kind at this stage of the deliberations of the committee. Surely we cannot discuss economics now after we have deliberated the principles of this bill for two days.


Robert Fair: Unless they are guaranteed the cost of production, they will be unable to carry out their contracts and we shall have to have another debt act in the very near future. If the farmers are to be in a position to pay off their debts, they must be guaranteed the cost of production just the same as other industries are.


Mr. POTTIER:: Ask them to pay their
bills and there will be no trouble.


Robert Fair: If the hon. gentleman would
speak up for himself, we could perhaps hear him, but I could not.


[Stage Direction]
Section agreed to.
On section 8-Representative of deceased or mentally incompetent farmer may apply.
John George Diefenbaker: I have particular
reference to subsection 3 of this section which I believe is not properly worded, in that in line 24 the word "may" appears. I think it should read "shall," for the following reasons. The section as it now stands reads as follows:
If the court is satisfied that a member of the family of the decedent or of such farmer resides and will continue to reside on the farm of the decedent or of such farmer, who intends and is able to operate the same, the court may, ex parte . . . grant such application.
The section as it now stands with the permissive "may" therein will, I submit, hold out hopes that farmers who live on the land following the death of the owner would have the right and the opportunity to come under the provisions of this bill. The use of the word "may," being permissive, means that a discretionary order will be made which will, if the ordinary rules are followed, not be altered on appeal. As the bill is drawn, I think the result will be that a land court jurisprudence will be established, and we shall find ourselves in the position that each district court judge will determine applications from the sons and daughters of deceased farmers according to his own whims and wishes. Provision for appeals is to be found in section 24, which provides:
An appeal may be taken from any judgment or order of the court made in any proceedings under this act pursuant to a proposal, including an order approving or confirming a composition, extension of time or scheme of arrangement or declining to formulate a proposal, to the appeal court in the province in which the court has jurisdiction, and shall be asserted, heard and decided according to the ordinary procedure governing appeals from judgments or orders of the court to the court of appeal in such province, subject to any special rules of practice and procedure relating thereto made under this act.
The ordinary rule is that a discretionary order is not reversed on appeal. The fact that the district court judge may make an order shows that the order he may make will be discretionary; and where he refuses the right to the sons or daughters, as the case may be, of a deceased farmer, their right will not be altered on appeal in view of the fact that the ordinary principles of Jaw will apply. I suggest to the minister that the right should be absolute; that where a member of the family of the deceased will continue on the farm, and intends and is able to operate the same, he
Farmers' Creditors Act

should enjoy the right to apply under this bill. Therefore I suggest for the minister's consideration that the permissive word "may" be deleted and the mandatory "shall" substituted therefor.


James Lorimer Ilsley: The intention was that the court shall, upon such terms and conditions as it deems fit, by order grant such application, and may do so ex parte. That was the intention; the word "may" was directed to the words "ex parte", but I will admit that it is not worded in such a way as to carry out that intention.


John George Diefenbaker: Then would there be any objection to changing it to "shall"?


James Lorimer Ilsley: I am quite willing to take out the words "may ex parte" and substitute "shall." The word "shall" does not go with "ex parte" very well, so that I am quite willing to make the change.
Mr. ST. LAURENT: I move that subsection 3 of section 8 be amended by striking out the word "may" in line 24 and the words "ex parte" in line 25 and substituting therefor the word "shall."


Manley Justin Edwards: I do not wish to speak to this amendment, but there is another matter-


Joseph-Arthur Bradette: Let us dispose of the amendment first.


Roy Theodore Graham: Does the Minister of Justice not think that would involve the giving of notice to other parties concerned, that it would make such an application other than ex parte?
Mr. ST. LAURENT: We have considered that. The section provides that the court has to be satisfied that a member of the family of the decedent or of such farmer resides and will continue to reside on the farm, and I would imagine the judge would very often require some notice to be given to someone before he would declare himself satisfied that this was going to be the case. I think in most cases the judge would want someone to get notice that he had that application before him, to give an opportunity of contesting the fact that there was a member of the family who would be likely to reside there.


Roy Theodore Graham: It will be recalled that there was an amendment after 1934, and so far the application under the act has been ex parte.
Mr. ST. LAURENT: Yes. There is nothing here that would require notice to be given, except that the judge must make a finding on a question of fact.


Roy Theodore Graham: Is not the rule of law that if it is not stated to be an ex parte application, it is not an ex parte application?
Mr. ST. LAURENT: It is not intended that it shall be obligatory upon the judge to require notice; I think that can be taken care of very well in the regulations. The bill as drawn showed that it was the intention to have it even an ex parte application, and it is only on account of the objection raised by the hon. member for Lake Centre that we are substituting the word "shall". I do not think we should go so far as to say "shall ex parte".


Roy Theodore Graham: Could you say, "shall on an ex parte application"?
Mr. ST. LAURENT: I do not think so; I do not think the judge should be precluded from requiring notice if he has any doubt about the fact he is required to find. I think it should be provided in the regulations, however, that an application of this kind can be made ex parte, unless the judge decides that notice must be given.


[Stage Direction]
Amendment agreed to.
Manley Justin Edwards: I do not know whether other hon. members had the same understanding, but when I first read the bill I contemplated that the personal representative or the immediate member of the family would reside on the farm and carry on operations. As this section is drawn now, it is only necessary to have a member of the family residing on the farm and carrying on operations; yet he might have no jurisdiction or control over the estate of the decedent or the insane person. I should think the personal representative, or the executor or administrator, should be the person to reside on the farm.


Thomas Clement (Tommy) Douglas: Would it be
possible that the personal representative might be the wife of the deceased farmer, who might want her sons to carry on the farm?


Roy Theodore Graham: Or a trust company.


Thomas Clement (Tommy) Douglas: Yes, or a trust company. When this amendment to provide for deceased farmers first came in, it was brought to the attention of Mr. Dunning at that time because there were many cases where farmers had died, and where their widows had sons who were not old enough to inherit the farm or to carry on the farming operations, and therefore did not come within the benefits of the legislation.

Farmers' Creditors let


Manley Justin Edwards: Why make it insistent
that a member of the farmer's family should continue to live on the farm. All he has to do is merely live there.


[Stage Direction]
Section agreed to.
Section 9 agreed to.
On section 10-Preservation of property.
Thomas Clement (Tommy) Douglas: I have been
comparing subsection 2 of section 10 with section 33, which makes it impossible for the farmer to sell, after he has had a composition. This, I take it, is to prevent his selling prior to the composition being filed in the court.


Douglas Charles Abbott: Prior to its being approved.


George Hugh Castleden: He has no possibility
of refusing the composition, has he? The farmer has no option in the matter. Once he has made his proposal, and they make a composition, he has no opportunity to refuse?


James Lorimer Ilsley: He cannot refuse it.


[Stage Direction]
Section agreed to.
On section 11-Stay of proceedings by creditors.
John George Diefenbaker: There is something in connection with this section on which I should like to secure some information. Is it intended that under this any person who is the creditor of a farmer in respect of whom a proposal has been made shall be, without leave of the courts, denied the right to take judicial or extra-judicial proceedings to recover the debt? I have this in mind:	After the
proposal has been made and has been approved, we will say in respect of a farmer who purchases live stock under a lien note or conditional sales agreement, and fails to make payments, is the creditor who was not a party to the proposal to be debarred from taking proceedings?


James Lorimer Ilsley: Yes; it ties him up. He
cannot take any proceedings, because the farmer has filed the proposal, and that stays proceedings by all creditors, whether secured or not.


John George Diefenbaker: But that is not the point I have in mind. After the proposal is accepted, what happens? Let us suppose the proposal is made in 1943, and that in 1944 the farmer buys certain necessities such as machinery and live stock, under a conditional sales agreement. Is that creditor to be debarred from his rights, even though he was n it connected in any way with the proposal?


Douglas Charles Abbott: Does my hon. friend mean after the proposal has been confirmed by the court?


John George Diefenbaker: Yes.


Douglas Charles Abbott: Sections 10 and 11 do not
apply in that case. These sections, as I understand them, are only to cover a case while a proposal is pending and prior to acceptance and confirmation by the court, or the formulation of the proposal by the court. There is the same provision in the Bankruptcy Act and the Companies' Creditors Arrangement Act, preventing a creditor from taking proceedings without leave of the court, while a proposal for composition or arrangement is pending.


[Stage Direction]
Section agreed to.
On section 12-Meeting of creditors.
Charles Edward Johnston: Is this to be considered a review of the case, where the official receiver shall call together the creditors, for discussion, and the debtor would not be present?


Douglas Charles Abbott: As my hon. friend will see in another section, the provisions of the Bankruptcy Act apply to the Farmers' Creditors Arrangement Act, except in so far as the special provisions of the act vary the provisions of the Bankruptcy Act. This section simply says that the official receiver under this bill will perform the duties and functions required by the Bankruptcy Act "to be performed by a trustee". So that the provisions of the Bankruptcy Act relating to creditors do not apply in respect of farmers who avail themselves of the provisions of this bill. And the official receiver assists the debtor in formulating the proposal, and arranges to call together the creditors to consider the proposal and decide whether or not they are willing to accept it.


Charles Edward Johnston: Why would the debtor not be there?


Douglas Charles Abbott: He would be.


Charles Edward Johnston: It does not
say so.


Douglas Charles Abbott: It does not have to say so; he would be there.


[Stage Direction]
Section agreed to.
Sections 13 and 14 agreed to.
On section 15-Proposal by court in certain
cases.
Thomas Clement (Tommy) Douglas: I should like to ask a question with respect to the powers

Farmers' Creditors Act

of the board. Again, it seems to me, the phraseology is quite vague. The section states:
On the written request of a creditor or of the farmer, where the official receiver reports that the farmer has made a proposal but that no proposal has been approved by the creditors or where the court has refused to approve a composition, extension of time or scheme of arrangement submitted to it by the official receiver pursuant to a proposal, the court shall endeavour to formulate an acceptable proposal to be submitted to the creditors and the farmer.
May I emphasize the words, "to approve a composition, extension of time or scheme of arrangement". Does that give the powers asked for by the debt conference? They asked that they may have power to (a) alter the terms of the payment of a debt, (b) reduce the principal of the debt and (c) reduce the rate of interest. Does this grant that power?


James Lorimer Ilsley: Yes; it does. The words are the same as in the Farmers' Creditors Arrangement Act which has been in force since 1934, and there is no doubt of any power to approve an arrangement whereby principal may be reduced, interest may be reduced and terms may be altered. I have forgotten the words the hon. member read, but that can be done.


[Stage Direction]
Section agreed to.
On section 16-How court to base its proposal.
Thomas Clement (Tommy) Douglas: This is the only section I can find which sets out any principle to be used as a basis for making this composition by the court. It states:
The court shall base its proposal upon the present and prospective capability of the farmer to meet his debts as they become due and the productive value of the farm.
It will be noted that it is based on two things: first, the ability of the farmer to meet his debt and, second, the productive value of the farm. It seems to me that two vital principles have been left out, principles which ought to guide the court in making this composition. They were both mentioned in the proposed bill submitted to the government. The first was that there should be something there to provide for the preservation of a farmer's equity. The minister made a strong speech this afternoon about retaining confidence. He pointed out that he did not wish to have legislation that was wide open, because creditors would not be prepared to advance money unless they felt they had some security behind the money they advanced. Well, there are two sides to that question. When a creditor lends money to a farmer he is entering into a business partnership. One man

is doing a piece of work with his machinery and his farm; he is putting up the best years of his life. On the other hand, the creditor is putting up some money. If, in the passing years, owing to circumstances beyond the control of both parties, there are no proceeds, what happens? While the equity of the one partner is maintained, the equity of the other partner disappears. If the minister will go over the many cases which can be submitted, he will find that whereas a farmer may have worked for twenty years, may have paid a considerable amount of money in interest, may have put in years of hard work, may have improved his equipment and buildings and increased the number of acres broken, yet at the end of that period his equity has actually shrunk, whereas the equity of the other person is maintained, if not actually increased. The money he invested may have been invested during an inflationary period when the purchasing power of his dollar was much less, and he may be foreclosing at a time of deflation when the purchasing power has greatly increased. The result is that his equity has greatly increased.
It seems to me that one of the weaknesses of this bill is to be found in this section. No provision has been made for attempting to assess the farmer's equity. If these two partners, the creditor and the debtor, are both to suffer a loss on account of bad prices and adverse weather conditions, the loss ought to be shared between them rather than have one party accept all the loss and the other party have all the security. I am in favour of the proposal which was made by the debt conference. They proposed that one of the principles underlying the adjustment of these debts should be:
15. (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, encumbrances, 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.
I think that ought to be recognized in making the adjustment. The second vital principle which it seems to me has been overlooked was also suggested by the debt conference. It reads:
(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.
The farmer is not in the same position as a business man. The farm is not only his instrument of production; it is his home. There are cases where a business man may

Farmers' Creditors Act
have his home in his place of business, but that is not the general rule. If, as a result of this business arrangement, he finds at the end of a period of years that the partnership has lost, one partner will get the business, but the other will lose not only the business but his home and the place where his family resides. I think the debt conference made a worth-while suggestion, one worthy of the minister's consideration. They suggest that in any proposal which is made in arranging for the payments to be made by the debtor, sufficient should be left to take care of the farmer and his family. If they cannot stay on the farm as efficient producers; if he cannot maintain his family at a reasonable standard of living, it will be impossible for the farmer to fulfil his part of the obligation.


Roy Theodore Graham: Does my hon. friend not think the judge will know that as well as he?


Thomas Clement (Tommy) Douglas: My hon. friend knows better than that. If the judge will know it without anybody telling him, why is section 16 in the bill? Why does it say:
The court shall base its proposal upon the present and prospective capability of the farmer to meet his debts as they become due and the productive value of the farm.


Roy Theodore Graham: Do not the words "prospective capability" cover the very point brought up by the hon. member for Weyburn? Surely that would include a reasonable proposal based upon the farmer's ability to pay under the circumstances in which he finds himself, not only in that year but during the years the proposal might run.


Thomas Clement (Tommy) Douglas: It deals with the farmer's ability to pay; it does not guarantee that in the proposal the farmer's equity will be preserved.


Roy Theodore Graham: I am speaking about the other point.


Thomas Clement (Tommy) Douglas: It does not guarantee that in the proposal; it does not say that there shall be sufficient allowance for the farmer and his family; that is not considered in the compromise proposal under which the farmer has to pay an amount to the creditor which may make it impossible for him to maintain himself and his family. Under those circumstances the terms of the proposal would be such that he could not fulfil them.


Roy Theodore Graham: It would be a very stupid judge who would do that.


Douglas Charles Abbott: The suggestion, put forward by my hon. friend attacks the whole basis of fixed money obligations. He has suggested 72537-325}
that a man who is a creditor in a certain amount has an equity in the property. He has not any such thing. He has a claim against the property, which may or may not be secured-if it is in the form of a mortgage it is secured-but he has no opportunity to participate in the increased value of the property. My hon. friend is suggesting that he should participate in the losses. In other words, in the case of a fixed money obligation, the creditor puts up, say, $2,000; the debtor borrows that and the obligation is secured on the real property. Ho puts in a lot of sweat and work over a period of years and for one reason or another the property depreciates in value. The creditor has had no opportunity to participate in any increased value. In other words, my hon. friend has asked that the creditor should transfer to the debtor a portion of the debt. That is what it amounts to. It attacks the whole basis of obligations fixed in terms of money. You may as well say that if a man promises to pay $200 or $300, his legal obligation to pay will depend upon whether or not he is successful in operating a particular property or business in connection with which he has borrowed the money.


Charles Edward Johnston: What about his physical obligation? The parliamentary assistant has stated that there is a fixed monetary value.


Douglas Charles Abbott: I did not say anything about fixed monetary value; I said that his obligation was expressed in terms of money.


Charles Edward Johnston: That
obligation is fixed under the proposal as a payment of so much a year. He may have to pay $100 a year, which is his fixed money obligation. It is quite true that the creditor may not participate in any increased profits and that the hon. member for Weyburn is expecting him to participate only in the losses, but the minister is not taking into consideration the fact that once the money obligation is fixed and a condition then comes about over which the farmer has absolutely no control, it may be physically impossible, on account of hail or drouth or something else, for him to carry out that obligation. Then his contract is broken and he cannot possibly help that. The proposal cannot be changed; there cannot be any revision of the proposal, because only one can be made.


Roy Theodore Graham: Read section 29.


Charles Edward Johnston: That covers the annulment of a composition, which brings up an entirely different point. I shall have something to say about that when we reach the section. When the court is to base the proposal upon the present and there is to be only
Farmers' Creditors Act

the one proposal allowed, I think the obligation should be elastic enough to overcome a condition for which the farmer may not be responsible.


Victor Quelch: I think this section is altogether too vague. It has in the past and will no doubt in the future be interpreted in many different ways and may easily destroy the efficiency of the farmer. In the bill presented by the western conference, section 15 reads:
In exercising its jurisdiction 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. . . .
(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.
In Alberta the importance of this was realized to such an extent that it became the law of the province, and the first charge against a farmer's production was the amount of the crop which was necessary to carry on the farmer's expenses for the current year. If a farmer is not allowed a sufficient amount from the revenue of his farm to meet these expenditures, he cannot carry on efficiently, and once he has gone under this bill his credit is practically destroyed. It surely must be the aim of the government to allow the farmer to carry on efficiently, and yet this clause as it stands may easily be interpreted in such a way as to allow him just enough to pay certain expenses, without taking into full consideration his costs of living for the family. I had a certain experience years ago, and I do not mind mentioning it, back about the years 1933 or 1934, right in the heart of the depression. A collector was trying to collect a certain bill which at the time I could not pay, on account of crop conditions, and he started to lecture me. He said, " The trouble with you British is you are not satisfied to reduce your standard of living. Central Europeans make better farmers than you do; they are willing to reduce their standard of living down to practically nothing." Is that what we want to do in western Canada- put our farmers there on the plane with the peasants of central Europe? That is what will be done by the bill under this clause; not sufficient provision will be made for the farmer to maintain his farm in a decent state and, in addition, pay the expenses of his

family. It is not necessary for me to say that when the collector took that stand we rapidly parted company.


Douglas Charles Abbott: Will my hon. friend permit a question? Who does he think should pay these costs to which he is referring?


Victor Quelch: I think the farmer should be allowed to pay these costs out of the revenue of the farm.


Douglas Charles Abbott: At whose expense?


Victor Quelch: At no expense; at the cost of the farm. The creditor would have to take less for a year; the debt would be postponed. For instance, if a farm is a total loss, you might say, at whose expense? Well, it is at the expense of the farmer, because that amount is not wiped off the debt; it just means the payment he has to make is postponed until the future. It is always at the farmer's expense until he has to default.


John George Diefenbaker: There is a question I should like to ask in connection with this particular section in order to be in a position to discuss intelligently the meaning and effect of the section, which, I may point out, is identical with the words of the present section 12, subsection 8, of the Farmers' Creditors Arrangement Act. Under that section there has been a board which writes off the principal and interest in connection with secured and unsecured debts which have come under the jurisdiction of the boards of review. If the information was already given, I confess that I was not present at the time it was given. I should like to have a statement from the minister showing the total amount of the write-off in secured and unsecured debts in each of the years from 1935, when the act came into effect, until the present time, and what is more important, the percentage of reduction in principal and also in interest during those years. This section has been interpreted by the courts of appeal in the various provinces, not directly but indirectly, through appeals which have been made to the several courts of appeals from orders which have been made by boards of review. As I read over this bill as a whole and this section in particular, I think it actually aims at doing what the land court act of Manitoba endeavoured to do, a statute which was passed on April 17, 1939, but did not come into effect on account of the oncoming of the war. The general purpose of this act, as stated in section 133, is:
.	.	. to retain all honest, industrious and
efficient farmers in the use and occupation of their farms as efficient producers and to make such orders that, after allowing for all normal

Farmers' Creditors Act
current expenditure and providing for the maintenance of themselves and their families in a reasonable standard of comfort, such farmers may be reasonably expected to meet their liabilities as they become due, and to protect in so far as possible the rights of mortgagees and vendors of farm lands.
That, 1 submit, is exactly what has been done under the Farmers' Creditors Arrangement Act-I speak now of Saskatchewan during recent years-in its administration. It is impossible for any judge or any board to foresee what the prospective capabilities of a farm may be. Eventualities will arise. I think it was the hon. member for Weyburn who mentioned the possibility of drouth or hail. I bring that up in connection with this item, for the reason that, for some years now, the boards of review have been making orders which provide that in any one year, irrespective of the order that has been made, if climatic conditions or drouth, frost and the like make it impossible for the farmer to make the payments provided for under the order or the proposal, the sheriff of the judicial district in which he resides may make an order the effect of which is that for that year the order made by the board of review need not be lived up to. That provision has been declared beyond the powers of the board of review.


Roy Theodore Graham: May I ask, is it not only the delegation of the powers that is so declared?


John George Diefenbaker: Yes; that is true. I was not going into the details. What was actually declared to be beyond the powers of the board of review was the delegation of that right to the sheriff.
In making regulations effectually to carry out the provisions of section 16, I suggest to the minister that provision be made in these regulations to permit of the delegation of that power to be made by the district court judge to the clerk of the court or the sheriff of the judicial district. I do not know how this section could be worded in order to cover what the hon. member for Weyburn has in mind with respect to prospective capabilities, but I feel that, with a district court judge being in charge of the administration, every consideration will be given to farmers who are efficient, farmers honestly endeavouring to carry out their obligations. It might be that the section could be widened to cover what the hon. member who has just spoken has in mind, but I think the section as it now stands will cover these eventualities, provided that what I mentioned the other day is done, namely, that a judge is appointed as an appeal court who has a complete grasp of the debt
situation in the western provinces and who is, therefore, in a position to establish jurisprudence fair alike to the farmer and to the creditor, always having in mind that the primary consideration of this legislation must be the keeping of efficient and honest farmers on the farms, farmers who have found, owing to conditions over which they have no control, that at certain times they are unable to meet their debts in full.
I think we should have the regulations, and I mention that at this time. The regulations will be as important as, if not more important than, the wording of the bill, and I should like to see those regulations that are to direct the administration of this bill, to the end that we may see to what extent the court may go and the considerations it shall take under advisement in determining the question as to the present and prospective capability of the farmer to meet his debts as they become due, and the productive value of the farm. Have the regulations been made yet? If so, I should like to have them brought before the committee. They would go a long way toward clarifying what I believe are the doubts of the hon. member for Weyburn and other members who have spoken. If the regulations are wide enough, this section is wide enough; if the regulations are narrow, this section can be interpreted narrowly.


[Stage Direction]
Section agreed to.
Section 17 agreed to.
On section. 18-Representations to be considered.
John George Diefenbaker: I should like to
have an answer to the question I have asked regarding the regulations and also in regard to the write-down of debts during the years in question.


James Lorimer Ilsley: The regulations have not
been prepared, and I do not anticipate they will be prepared until there is some consultation with the judges in some way. I do not know just what form that consultation will take, but there will have to be some consultation. At any rate, the regulations are not prepared.


John George Diefenbaker: Is it intended to
change the regulations that have been in effect?


James Lorimer Ilsley: Yes; they will have to be
changed. The regulations at present are adapted to the boards of review. As the hon. gentleman has said, section 16 is in this form
Farmers' Creditors Act

in the old act; it just repeats the language of the 1934 act. It was thought better to stick to that language, because it has worked well and I do not know that there has been very much dispute as to what it means. The hon. gentleman referred to the fact that it had been held that there could not be a delegation of a right to suspend payments, the right to make a finding that would suspend payments. The justice department is of the opinion that suspension of payments, in the event of crop failure or of some similar circumstances, can be provided by a ministerial finding by an officer of the court of certain facts.


John George Diefenbaker: Just what does the minister mean by that statement?


James Lorimer Ilsley: I am not too clear as to just what the clause was that was held ultra vires, beyond the powers of the boards of review, but I believe the principle of it was this, that the payments would not be made if a certain state of facts came into existence in a certain year. I really cannot discuss it. Perhaps the hon. gentleman would know what was decided there.


John George Diefenbaker: There was no power of delegation to determine that in any particular area there should be a suspension of payment by reason of crop failure and the like.


James Lorimer Ilsley: What the officers of the
Department of Justice have in mind is something like this. A proposal might be drafted in such a way that, if there were a crop failure, payments would be suspended. Then there could be a finding of fact by the court that there was a crop failure, in which event the suspension would take place and the necessary action could be taken by an officer of the court. They say that under a properly drafted proposal that contingency could be provided for.


Roy Theodore Graham: From my point of view,
and, I am sure, even from the point of view of members on your extreme left, Mr. Chairman, the important thing is that the bill presupposes that a proposal may contain a clause dealing with crop failure or other disasters that come during the currency of the proposals, and it is not an important matter for us tonight to know just how that will be accomplished. I am pleased to hear the minister indicate so clearly that the intention is to find a reasonable means of permitting that in the proposal and to get over the question of the legality of the manner in which boards of review were dealing with that particular question.


George Hugh Castleden: Under the Farmers'
Creditors Arrangement Act many of the adjustments that were made called upon the farmer to pay fifty-five per cent of the principal, and the balance of interest was due in the tenth year. Is there anything in this clause which would prevent that kind of thing from being done?


James Lorimer Ilsley: There is nothing to prevent it.


George Hugh Castleden: Under the Farmers' Creditors Arrangement Act some of the proposals that were brought forward required the farmer to pay fifty-five per cent of the principal in the tenth year, and the interest that was due in that year-that was the final year-had to be paid in that year. Has the minister before him any of the proposals formulated by the boards of review under the Farmers' Creditors Arrangement Act?


James Lorimer Ilsley: I have not that information before me.


George Hugh Castleden: That provision was in many of the adjustments, and when the farmer sees that burden at the end of the tenth year of his operations he decides it is almost useless to carry on, particularly when the control of his production is left in the hands of his creditors. Such an arrangement might be possible under this bill, and I was wondering whether anything could be done to prevent that.


James Lorimer Ilsley: It would be left to the courts.


George Hugh Castleden: And the only thing the farmer could do would be to appeal?


James Lorimer Ilsley: That is right.


[Stage Direction]
Section agreed to.
Section 18 agreed to.
On section 19-Court may decline to formulate a proposal.
Robert Fair: This section reads:
The court may, by order, decline to formulate a proposal in any case where it does not consider that it can do so in fairness and justice to the creditors or the farmer or where it finds that the farmer has not acted in good faith in his conduct in relation to the creditors in the management of his farm or the disbursement of his income.
Who is to be the judge of whether the farmer is managing his farm efficiently or otherwise?


James Lorimer Ilsley: There is nothing about efficient management in the section. The court is the judge of whether the farmer has acted in good faith in his conduct in relation to the creditors in the management of his farm or the disbursement of his income.

Farmers' Creditors Act


Robert Fair: There are many different
opinions as to what is efficient management of a farm. Quite a number of farmers work their land, one in one way and others in a different way, and they raise different kinds of live stock. What sort of judge will be able to say whether the farmer is managing his farm efficiently?


James Lorimer Ilsley: The section does not use any language such as the hon. gentleman has used. The court has to determine whether the formulation of a proposal can be made in fairness and justice to the creditor or the farmer. The other thing the court has to decide is whether the farmer has acted in good faith in his conduct in relation to the creditors in the management of his farm or the disbursement of his income. These are matters which can properly be left to the court.


Robert Fair: It is quite easy to judge whether he has acted fairly in the disbursement of his income. But to judge whether he has managed his farm efficiently is a different proposition, and I am afraid that some judges will not be competent to decide that question.


[Stage Direction]
Section agreed to.
Sections 20 and 21 agreed to.
On section 22-In case of refusal.
George Hugh Castleden: This section reads:
If the creditors or the farmer decline to approve a proposal formulated by the court, the court may, nevertheless, by order, confirm the composition, extension of time or scheme of arrangement therein proposed or as amended by it, and, upon such confirmation, it shall be binding upon the creditors and the farmer.
This means tliat the farmer is entirely at the disposition of the court.


Douglas Charles Abbott: So are the creditors.


George Hugh Castleden: Yes. So are the creditors. If the judge happens to be one who has done some farming in the last few years and knows what adversity is, he may have some sympathy for the farmer. But let it be clearly understood that once the farmer makes a proposal and it is confirmed by the court, the farmer has no opportunity for refusing it.


Douglas Charles Abbott: He has an appeal.


George Hugh Castleden: Other than an appeal.


[Stage Direction]
Section agreed to.
On section 23-Appeal courts in provinces.
John George Diefenbaker: In connection with this section, when I spoke the other day I said that in order to have an effective administration of this bill there was one important thing, namely, the identity of the judges who are to be appointed as an appeal court in each of
the three provinces. The other important thing is, of course, the regulations which will effectuate the carrying into effect of this bill. But, however complete the regulations may be, and I regret that we are not to have them before the house and the committee, and however complete the provisions of the bill may be, we are entering upon a new system of land court jurisprudence where the ordinary rules of law will be insufficient to guide the appeal court with respect to the capability of the farmer and the productive value of his farm and in deciding whether the farmer has acted in good faith in his conduct in relation to his creditors in the management of his farm or the disbursement of his income. It will depend in large measure on the breadth of vision and the training and the confidence enjoyed by these men in the provinces where they are appointed. I would ask the minister who these judges will be, and if a decision has not been made thereon as yet, will the parties most affected by this legislation be consulted-the farm bodies, the loan corporations, and the attorneys-general particularly of the three western provinces? I think there is no more important matter than the identity of the judges who are to comprise the courts of appeal. If this legislation is to be administered in the light of the strict application of legal principles, I doubt whether it will be successful. But if men are placed in the position of judges of appeal courts in the various provinces who are able men with experience and wisdom and appreciation of what conditions have been in the west and. may continue to be in the future, there can be built up a body of jurisprudence that will make this legislation effective and assure to our farmers a continuation of efficient production and assure payment in the future to those who have advanced their money. I therefore ask who the judges will be.


Roy Theodore Graham: I agree largely with what the hon. member for Lake Centre says. But, as he knows well the judges of the appellate division in Saskatchewan, would he care to assist the minister by recommending particular judges?


John George Diefenbaker: I have never been in a position where I could make any recommendations.


James Lorimer Ilsley: The hon. gentleman has asked an important question. I do not know whom we are going to appoint; no consideration has been given that matter by the government. I have a few ideas, but they are in an incomplete state. By that I mean that naturally I have given a little thought to the question, but have come to no decision, even
Farmers' Creditors Act

in my own mind. I cannot give any undertakings about consultation. The appointment of these appellate judges is a matter for the government, which must assume responsibility. In appointing judges who will really constitute a new dominion court or courts, I do not think the government should give any undertaking as to consultation. If I were doing it, I could not quite see myself going to either the mortgage companies or the farmers' organizations and asking whether they thought such-and-such a judge of the supreme court would suit them. I could not quite see myself doing that.


John George Diefenbaker: Or to the attorneys-general ?


James Lorimer Ilsley: That is a little different thing. I might do that, but I should not like to give any undertaking.


Thomas Clement (Tommy) Douglas: I think this bill would be immeasurably strengthened if sections 23 to 27 were struck out, this whole provision for appeal to the appellate court. Every appeal that is permitted is bound to increase the expenses of the litigant. Here is a farmer who finds that he cannot meet his obligations when they become due. Before he can file a proposal he must have some assistance, for very few farmers are in a position to set out their affairs in documentary form. Therefore the farmer must hire a lawyer to prepare a brief, which of necessity costs him money. The lawyer acts as his representative and presents the brief to the county court clerk, who is the official receiver. Then it goes to the district court judge. If that judge gives a decision which to the creditor seems unduly generous to the debtor, all the creditor has to do under this section is to appeal. That means the farmer will have to hire the lawyer over again.


Douglas Charles Abbott: He does not have to.


Thomas Clement (Tommy) Douglas: Surely the hon. member is not suggesting that the average farmer could appear before the appellate court himself, or that he should merely let [DOT]the matter rest with the appellate court on the basis of the written decision of the district court judge.


James Lorimer Ilsley: I think in most cases he would be better off if he did; I think he would get along better.


Thomas Clement (Tommy) Douglas: If that is the minister's opinion may I make the suggestion that if there is to be an appeal, no counsel be allowed to represent either party before the appellate judge. Let the appeal court 
decide entirely on the basis of the written brief submitted by the district court judge, and let no counsel appear for either side.


James Lorimer Ilsley: I do not think you can deny litigants the right to counsel.


Thomas Clement (Tommy) Douglas: Certainly not; therefore the people who will be able to be represented by counsel will be the creditors; the debtors either will have no representatives there, or they will have to pay legal advisers to go to where the appellate court sits and make their representations, which will mean an additional expense of perhaps several hundred dollars. If the debtor is not in a position to make that expenditure, it means that he might as well throw up his hands in the first place.
Mr. ILSLEY': When these farmers appeared before the boards of review did it cost them several hundred dollars? I did not know that it did; I thought they went there and told their story, and I think that is what they will do when they go before the county court judge. If they have to go before the appellate judge I am quite sure he will listen to them and give them full justice.


Thomas Clement (Tommy) Douglas: I am quite sure he will listen to them, but everyone who is familiar with court procedure knows that the case will be much better presented if the debtor has someone there who is familiar with the law, who can present his case in a much better manner. Consequently he will be handicapped if he has not a legal adviser. This will mean for him and his representative a trip from whatever part of the province he may live in all the way to the appellate court and an appearance there, waiting for his case to come up, with all the expense involved, which will amount to a considerable sum. Then all that is provided in this bill is section 37 under which, if in the opinion of the court there was no reasonable ground for the appeal, the one party may be required to pay the costs of the other party. I should think the chances of that section being brought into effect would be fairly small.
This is what it is going to mean. The farmer will realize that he faces the possibility of two cases, one before the district court judge and the other before an appellate court judge. The likelihood is that, if the first decision is appealed, the debtor will simply throw up his hands, unless he is in a financial position to hire somebody to plead his case. So that I think the minister would be well advised to do one of two things. Of course I should like to see this provision wiped out entirely; but if the minister is going to insist on retaining

Farmers' Creditors Act
the right of appeal, either the written brief of the county court judge, outlining the facts upon which he based his decision, should be the only thing before the appellate court judge or, if legal representation is permitted from both parties, the government should be prepared to supply legal advisers to appear on behalf of either party if they request that the services of such advisers be -made available to them. What you are doing at the present time is making this class legislation, discriminatory legislation, because one party cannot afford to make the best possible representation to the appellate court judge and will be handicapped from the very beginning.


Victor Quelch: I criticized this provision when I spoke on second reading, because it is placing an expense on the farmer that certainly he will not be in a position to meet, at a time when he is forced to come under the provisions of this legislation. The minister suggests that a farmer might be better off to go without counsel. He knows very well that many of the farmers who are foreigners have a great deal of difficulty in making themselves understood, and even with a lawyer it is hard for them to make their position clear. On the other hand, as the hon. member for Weyburn suggests, if it is better for the farmer to appear without counsel, then make the ruling that both parties, -the creditor and the debtor, shall appear without counsel. Someone has said that the provincial government provides counsel where required. Does that cover an appearance before the appeal court? Whether or not that covers the point, this is the responsibility of the federal government, and there is no reason why the provincial government should have to provide counsel in connection with a federal act. I think provision should be made for counsel for these people. I do not know what the legal term is; in the army we called them soldiers' friends when free counsel were provided for soldiers. I think under this measure there should be what one might call farmers' friends, to provide free counsel for these debtors. Allow a rate of so much per diem for all counsel appearing on behalf of the farmers; then lawyers would have to take it and be satisfied with it, even if it were not the normal fee. I do not think any lawyer could very well turn it down; if that were the rate set, he could hardly refuse to take it on the ground that the fee allowed was too small. I think a great injustice will be done if this provision is left as it is now, because it will mean that the farmer will be without counsel, while the creditor will have counsel, and the dice will be loaded against the debtor.


James Lorimer Ilsley: That is not so in Alberta, because by provincial legislation the farmer is furnished with legal assistance.


Victor Quelch: The federal government will be evading their duty, and relying upon the province to do something that the federal government should do.


James Lorimer Ilsley: Why does the hon. member say that it is the duty of the federal government?


Victor Quelch: Because it is a federal act.


James Lorimer Ilsley: But it does not follow, by any means, that it is the federal government's duty to furnish assistance to one litigant.


Victor Quelch: I say it is still the federal government's duty, because the farmer is in that position on account of the failure of the federal government to introduce a sound agricultural policy.


James Lorimer Ilsley: That is a little far-fetched, I think.


Victor Quelch: I do not -think it is.


John Horne Blackmore: Not at all; it is very proper and vital.


James Lorimer Ilsley: Perhaps we should start on that again and talk about parity prices for a while.


Robert Fair: I was going to point out to the minister that the Liberal government is not the only one that permits farmers to be ruined by ruinous prices.


Charles Edward Johnston: It seems to me the minister's statement that he hardly thought it was a federal responsibility because the province of Alberta had made provision for providing counsel-


James Lorimer Ilsley: I did not say that.


The ACTING CHAIRMAN (Mr. Golding):: Can we stick to the section?


Charles Edward Johnston: We are sticking to it. If we are not, then I do not know what we are talking about.


Thomas Clement (Tommy) Douglas: We are stuck with it.


Charles Edward Johnston: Yes; that is true. It is an unfortunate fact that we are stuck with it. The very fact that Alberta has provided counsel does not relieve us of the responsibility of providing counsel for the other provinces, as a federal responsibility.


James Lorimer Ilsley: I did not say that because Alberta had done this it was not a federal government responsibility. I challenged the

Farmers' Creditors Act

proposition, that it is a federal responsibility, for other reasons entirely. The dominion parliament comes into this, because only the dominion parliament can legislate in respect of insolvency and bankruptcy. That is the reason why the dominion parliament is involved. This parliament sets up courts. And then it may very well be argued that it has discharged its responsibility. If a provincial government wishes to assist one class of litigants, because their conditions are not as affluent as those of another class of litigants, then I do not see why that is not the responsibility of that province. And that is what they have done in Alberta.
My parliamentary assistant suggests to me that it may be a matter of property and civil rights. These persons are not part of the court. Our courts, which we are setting up, consist of district court judges and an appellate judge. We make the rules upon which they decide cases. Then, if for social reasons, or for reasons which commend themselves to the government or the legislature of a province, that government or legislature wishes to assist one class of litigants, or give them assistance that they do not give another class, surely that is not a matter pertinent to the setting up of a court, or a matter pertaining to bankruptcy or insolvency. I would say it is a matter of provincial policy. I do not know why, because I have not given it much consideration. But the alacrity with which the hon. member for Acadia bounded in to say it was a matter of federal responsibility prompted me to examine his proposition; and I am not convinced.


George Hugh Castleden: Will the minister admit that in one case you have a bankrupt litigant, and in the other case you likely have a corporation or a mortgage company? In this instance the debtor is bankrupt, to start with.


Thomas Clement (Tommy) Douglas: He will be, after this.


George Hugh Castleden: He does not come
under the legislation unless he is bankrupt.


James Lorimer Ilsley: Insolvent.


George Hugh Castleden: Well, that is practically the same thing.


James Lorimer Ilsley: Oh, no; it is not.


George Hugh Castleden: He cannot pay his
debts; it is the same thing.


John George Diefenbaker: I should like to make a suggestion at this point in regard to the sittings of the appeal court. Very much

has been made this evening about the cost of proceedings, and the difficulty of securing justice unless both sides are represented by lawyers. Under those circumstances a suggestion in regard to the sittings of the court might not be amiss. No doubt those sittings will be fixed by regulations.
Under the present administration of the Farmers' Creditors Arrangement Act it is seldom that either side is represented by a lawyer. As a matter of fact, the corporations are generally represented by their officials and, so far as the farmer is concerned, it is only in the exceptional case where he is represented by counsel at all. As a matter of fact, the experience of counsel appearing before the board was that the farmer was better off without representation by counsel.


An hon. MEMBER:: Oh, oh.


John George Diefenbaker: Yes, and that answers the argument hon. members to my left are always raising, to the effect that lawyers will act only when they receive payment.


George Hugh Castleden: I did not say that.


John George Diefenbaker: That is the suggestion being made all the time.


Charles Edward Johnston: And it is pretty nearly right, too, is it not?


John George Diefenbaker: No, it is not pretty nearly right. All I have to say to the hon. member is this, that if any man in this country has a just action or a just cause of defence, there are lawyers in every province who will undertake his case in order to see that justice is done. Let me say that. It is all very well to regard members of the legal profession as the big boys who represent the big corporations. But the record of the legal profession needs no defence by me to-night. What I have said is merely by way of answer to certain statements made from time to time.


Gordon Graydon: The Moose Jaw declaration will have to be revised on that score.


John George Diefenbaker: My suggestion is
this: In Manitoba the appeal court for the province sits in Winnipeg; in Saskatchewan it sits in Regina, and in Alberta it sits in Edmonton and Calgary. It might be costly if the appeal judge were to sit at the seat of the appellate court for the province. My suggestion is that provision be made in the regulations from time to time that at stated periods he shall sit at certain judicial centres. There are twenty-one judicial centres in Sas-

Supply-National Revenue
katchewan. I do not know the number in Alberta and Manitoba. In this way the farmers would have the opportunity of appearing personally, if it were necessary for them to do so. A farmer could be present without any unnecessary cost, and he would have an opportunity of hearing personally the arguments advanced by the other side. I feel on the other hand, that unless such a system of sittings is established it may very well be that the cost to the farmer will be prohibitive.


James Lorimer Ilsley: I had in mind that the judge would travel and sit at the various places in the province. In fact that was one of the reasons why the court of appeal was one judge, ' rather than a full court. It would be expensive if the appeal were to the court of appeal of the province. This was suggested in another place two or three years ago, but I opposed the proposal, and that led to the falling by the wayside of certain legislation. But with one appeal judge I do not see any reason why he should not travel.


[Stage Direction]
Section agreed to.
Progress reported.
[Stage Direction]
The house in committee of supply, Mr. Bradette in. the chair.

[Stage Direction]
858. Departmental administration, $408,123.
Item stands.

[Stage Direction]
1SS. Customs and excise divisions-General administration, $1,033,725.
John Horne Blackmore: This is not quite fair, because it was understood last night that a number of these departments would be left. It is now proposed to bring in more.


Mr. MacNICOL:: The agreement was that
four would be introduced to-night and one left.


Thomas Alexander Crerar: The understanding was
that we would call the other departments tonight and leave one open.


John Horne Blackmore: That was not the
understanding I got. I must say that when these statements are not made loud enough we cannot hear them at this end of the chamber. I think a member of parliament has a right to hear what is being said and it should be spoken loudly enough that he could
hear it. I am strongly opposed to introducing more departments until the others have been taken care of. There are matters that could have been discussed all during the year, and we have not had a motion to go into supply so that we could deal with serious problems. I think there ought to be one or two departments left, because there are plenty of other items to be considered.


Vincent Dupuis: I agree with what the hon.
member for Lethbridge has said. At this end of the chamber it is most difficult to hear what is going on. However, I was sitting in another seat last evening and heard what was said, and it was as stated by the minister. I think the hon. member for Lethbridge should allow this item to be introduced, but in future I think the chairman or other hon. members at the other end of the chamber should speak more loudly, so that we may not be precluded from hearing what they are saying.


Joseph-Arthur Bradette: I believe I have a
fairly strong voice, and this is the first time I have been asked to speak more loudly. I always speak in a fairly strong tone.


Mr. POULIOT:: You have a powerful voice, Mr. Chairman.
Item stands.


Thomas Alexander Crerar: We should like to introduce one more department, which was the understanding last night.


Charles Edward Johnston: Mr. Chairman-


Thomas Alexander Crerar: If my hon. friend will be good enough to sit down while I am on my feet.


Charles Edward Johnston: If you want to get another department introduced, perhaps I can assist you; otherwise, we may object.



DEPARTMENT OF THE SECRETARY OF STATE

[Stage Direction]
S2J/. Departmental administration, $96,826.
Item stands.
Thomas Alexander Crerar: So that there may be no misunderstanding, I may say to my hon. friends that there is another department, the Department of National War Services, still to be brought into supply, so that they may make a motion if they so desire.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
5154
Privilege-Mr. Pouliot
[Stage Direction]
Wednesday, July 21, 1943