[Stage Direction]
Third and final report of standing committee on miscellaneous private bills.-Mr. Maybank.

[Stage Direction]
Mr. II. R. EMMERSON (Westmorland) presented the first report of the joint committee of both houses on the printing of parliament.
Mr. BLACK (Cumberland):: May I ask the hon. member if this means that the report on the Petitcodiac power development is not to be printed?


Mr. GLEN:: Inquiries with regard to the cost are now being made from a private firm. We have not yet received the estimate, but we expect to have it shortly.



QUESTIONS

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

Mr. BURTON:: 1.	Has the Swift Canadian Company erected an egg-drying plant at Melville, Saskatchewan?
2.	If so, did they receive any assistance from the federal government towards the construction of this plant?
3.	Are they receiving any assistance from the government by way of subsidy or otherwise in connection with this plant?
4.	If so, in what amount?


Mr. GARDINER:: 1.	The Swift Canadian Company has erected an egg drying plant at Melville, Saskatchewan.

2.	No direct financial assistance is granted by the federal government toward the construction of this plant. The same indirect assistance is allowed them by agreement as was granted other egg drying plants for processing eggs for the British Ministry of Food. This consists of a partial rebate of customs duties and the customary depreciation of 20 per cent on annual income.
3.	No assistance is received from the government in the way of subsidy or otherwise in connection with this plant.
4.	Answered by No. 3.	[DOT]


INDIAN AFFAIRS-BRITISH COLUMBIA.
Mr. ROSE:: 1.	How many agents are employed by the Indian Affairs branch in British Columbia?
2.	How many such agents are employed in each of the various districts of the province?
3.	How much money was paid in salaries and wages to agents in various districts in the fiscal year ending March 31, 1945?


Mr. GLEN:: 1.	Eighteen.
2.	One at each of the following agencies: Babine, Bella Coola, Cowichan, Fort St. John, Kamloops, Kootenay, Kwawkewlth, Lytton, New Westminster, Nicola, Okanaga, Queen Charlotte, Skeena, Stikine,- Stuart Lake, Vancouver, West Coast, Williams Lake.
3.	Salaries, cost of living bonus and allowances in cash, $45,309.33.
VETERANS* LAND ACT-SASKATCHEWAN


Mr. DIEFENBAKER:: 1.	Has any order been made by the administration of the Veterans' Land Act denying returned service men the right to settlement under the Act in certain rural municipalities in the province of Saskatchewan?
2.	If so, what rural municipalities are in that category ?
3.	Why was'the decision made in each case, and by whom?


Mr. TUCKER:: There is no general order denying returned service men the right to settlement under the Veterans' Land Act in any area in Canada. The ground taken has been that the administration could not draw an arbitrary line around any particular community and forbid settlement therein. Any veteran who derives from a district-including the dry area of southern Saskatchewan-and wants to go back, and can satisfy the administration that his land establishment proposal is of a nature that promises some reasonable degree of success, is assured of full consideration being given to his application. But veterans whose experience has been in other parts of Canada are not encouraged to move into a

Questions As Orders for Returns
district with a hazardous record. This statement is the substance of evidence given by the director, the Veterans' Land Act, before the special committee on veterans affairs on November 22, pages 830 and 831.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. CHURCH:: .
1.	How much money was expended annually during the war and to date in 1945 on account of the grade separation fund?
2.	What amount was spent in each province and on what work?
3.	What is the appropriation for the current year ?
4.	Has the government yet recommended any additional expenditures after the war for reconstructing grade separation throughout Canada?


Mr. CHEVRIER:: Return tabled.
king's PRINTER-PRINTING OF PETITION FORMS


Mr. STEWART (Winnipeg North):: 1.	Has the king's printer, at any time during the last two years, printed any petition forms on behalf of any government body, or other group of individuals?
2.	If so, for whom?


MEMBERS OF PARLIAMENT-TRAVEL OUTSIDE CANADA
Mr. GAGNON:: 1.	What ministers or members of parliament have travelled outside 'Canada since 1941 at the expense of the government?
2.	Where did they go and for what reason?
3.	What expenses for each of them were paid in whole or in part by the government?
4.	What was the aggregate cost to this country of such trips?
5.	How much, individually for (a) the minister or member; (b) the secretary or secretaries; (c) the personnel accompanying the member or minister?


Mr. MARTIN:: I believe this question is to be dropped by the hon. member, pursuant to a discussion that he and I had on the matter.
Question dropped.


MUSICAL INSTRUMENTS
Mr. HAMEL:: 1.	How many musical instruments have been
purchased by the government from 1939 to 1945?	.
2.	What was the total amount appropriated for such purpose?
3.	Have any of such instruments been declared surplus assets?
4.	If so, how many; on what date, and how many have been sold to date?
5.	If not. when will such instruments be declared surplus assets?
6.	Has the government incurred any obligation to musical instrument dealers, or anybody else, limiting its rights to re-sell such instruments?


SURPLUS WAR ASSETS-MILITARY CAMPS, PROVINCE OF QUEBEC
Mr. GAGNON:: 1.	Have the military camps located at _ St. Honore, Bagotville, Arvida and Chicoutimi, county of Chicoutimi, province of Quebec, been sold?
2.	If so, to whom and on what terms
3.	Were any tenders invited; if so, from whom ?
4.	Who submitted tenders?


MEDICAL AND DENTAL CORPS-COMMISSIONS
Mr. BENTLEY:: 1.	How many doctors and nursing sisters were granted commissions in the It.C.A.M.C. from, (a) military district 3; (b) military district 4; (c) military district 12, from September 1, 1939, to June 1, 1945?
2.	How many dentists were granted commissions in the Canadian Dental Corps, from (a) military district 3; (b) military district 4; (c) military district 12; from September 1, 1939, to June 1, 1945?



VETERANS' LAND ACT


[Stage Direction]
Hon. IAN A. MACKENZIE (Minister of Veterans Affairs) moved that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to present a measure to amend the Veterans' Land Act, 1942, to make it conform in several respects with the Act to amend the War Service Grants Act, 1944, passed at the present session of parliament, by incorporating in the measure the provisions of certain orders in council passed under the War Measures Act and by extending and clarifying in several other respects the application and operation of the Act, as recommended and reported by the Special Committee on Veterans Affairs.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. T. A. KIDD (Kingston City):: of the air force whose apiplications to enter university have been accepted, and who have applied, for discharge or release from the service in order that they may attend or reenter university? This matter is urgent in view of the few days that are now left in which they must make arrangements for the commencement of their studies after the Christmas holidays.


Hon. COLIN GIBSON (Minister of National Defence for Air):: The hon. member was good enough to send me a copy of the question. A large number of students have already been released in cases where they were surplus to requirements and their services could be spared from the R.C.A.F.; but at the present time certain trades are necessary in order to carry out demobilization efficiently and we cannot grant accelerated release in the case of students who are in a trade which has not a surplus. If we did so it would mean that others with longer service who wished to be demobilized would be held in the service beyond their proper time for release. Where it can be done, students are being released whose services can be spared, but otherwise it is necessary for them to take their ordinary turn in demobilization.


Mr. COCKERAM:: May I ask a question supplementary to that put by the hon. member for Kingston City? Will the minister reconsider the whole question of discharges from the R.C.A.F.? A great many young tnen are being retained in the service who should be released if they have jobs to go to.


Colin William George Gibson: The
demobilization policy of the R.C.A.F. does not take into consideration the fact that a man has secured a job to go to. It does give consideration to a man returning to former employment, but if it were possible for men in the service while on leave to obtain jobs and then come back and be released in priority to men with longer service it would be most unfair to those with longer service, particularly those overseas.	*



BOUNDARY BAY AIR FIELD


[Stage Direction]
On the orders of the day:
Mr. THOMAS REID (New Westminster):: I should like to direct a question to the Minister of National Defence for Air. My question has to do with the accident which occurred at Boundary Bay through the finding of shells from the Boundary Bay air field. Is the minister in a position to make a report regarding that accident?


Colin William George Gibson: I received a copy of the proceedings of the court of inquiry which indicated that there was some negligence in the disposal of explosives on the Boundary Bay site. However, the proceedings did not indicate the persons who were guilty of negligence. I am having further inquiries made so that I may ascertain the names of the officers or persons who were guilty of the negligence.



AGRICULTURAL CONFERENCE


[Stage Direction]
On the orders of the day:
Mr. M. C. SENN (Haldimand):: I should like to address a question to the Minister of Agriculture. Now that the dominion-provincial conference on agriculture has ended, will the minister acquaint the house with the result of their deliberations? If he is not prepared to do it to-day, when may we expect such a report?


Hon. J. G. GARDINER (Minister of Agriculture) :: Just as soon as I get back into my estimates I shall be prepared to make a report, but we shall follow the usual practice of having the findings printed and distributed.



NATIONAL EMERGENCY


[Stage Direction]
The house resumed from Wednesday. December 5, consideration in committee of bill No. 15, to confer certain powers upon the governor in council during the national emergency following the war-Mr. St. Laurent- Mr. Macdonald (Brantford City) in the chair.
On section 2-Continuation of national emergency.	,
Thomas Langton Church: Last night I was referring to section 2 of the bill, which confers certain powers upon the governor in council. I pointed out that these powers are greater than the governor in council had in time of war. One of the paragraphs refers to assisting the relief of suffering, the restoration and distribution of essential supplies, and so forth. For many years past I have objected to these controls and the people who are in charge of them. Some of those controllers have no knowledge of the business they seek to control; they have never had any training in any competitive business.
In Australia the control system has been abolished. In the United States President Truman has said that controls placed upon the

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country in time of war should be removed. Irksome controls which make it utterly impossible for a small man to conduct his business should be removed. A great many men are returning from the war and are trying to set up little shops where they can conduct their business, but they are unable to do it.
The original bill not only gives the minister the powers of the War Measures Act but has added a whole lot of controls nobody ever heard of, virtually abolishing the high court of parliament. Under this new bill whole spheres of activity, involving the livelihood of every man, woman and child in this country, have been removed from the jurisdiction of the law and of parliament and reserved for the determination of tribunals, irresponsible, irremovable, governed by no control and subject to no appeal. I object to that. It is done over the head of parliament, although they say parliament is supreme. That is only a myth; every business man knows it is a myth, with the result that parliamentary institutions are criticized by the people to-day, since we are to blame for the appointment of all these controllers.
I was saying something about a young soldier who came home and wanted to get a store. He went to a real estate man in my constituency and applied for one. The real estate man said:	'T cannot do anything for
you." The soldier said:	"I can finance a
little store right now"; but because of those irksome controls over business and real estate he was not permitted to start that little business. I do not know who wants to own real estate to-day.
I visited Cleveland and other cities a short time ago and I found that they are removing and relaxing those controls with the result that large and small businesses are expanding, not only in real estate, but in building and everything else. The other day they abolished meat rationing, if you please. We have been hanging on to the coat-tails of Washington all the time. One of the greatest mistakes we made in this war was the surrendering of too [DOT]much political, economic, social, financial and military initiative to Washington, with the result that we are simply hanging on to the coat-tails of the United States to develop our economic system. You go to the Minister of National Health and Welfare, and the Minister of Labour, and what do you get?
I wish to refer to the section dealing with assisting the relief of suffering. One of the local newspapers, the Journal, had a long editorial yesterday on what is being done to get domestic and nursing help. In the session of the spring of 1944 I referred to what has been done in the old' country. Go to any hospital,
and you cannot get a nurse. Go to any large hotel and ask for a nurse. Can you get one? No. I know some of the large hotels have them on duty twenty-four hours a day, but in the average city throughout Canada you cannot get nursing service if you happen to be sick while at a hotel.
I asked a question in the house about the scarcity of domestic help and nurses, and here is the return that was brought down. Go and ask any business man who is connected with a hospital about the difficulty of getting nurses; go and ask any person who wants domestic help. They cannot get them, and they blame these controls. Go around the country and see the great number of people travelling on the trains and crowding the stations, and you will see why we can get no relief. In Britain, the United States, New Zealand and Australia they have adopted policies to provide domestic help and nurses, but we have done nothing in this country. Take the awful horror of the motor car; this year 85 people were killed in automobile accidents in the city in which I live. Take the number of accidents on the highway, and you will find that the number of people killed and injured in automobile accidents during the war almost equalled the number lost in the war itself. When those who suffer these accidents are taken to hospitals where there is a shortage of nurses, it is a burden oq the hospital. When I ask questions on these matters in this house, what is done? Ask any business man who is to blame for these conditions, and he will tell you. We have a large number of people still in the armed forces who should have been released long ago. Under this particular clause I cannot refer to the Department of Labour, but I can mention these matters under this paragraph dealing with the relief of suffering. They are spending $13,000,000 on national selective service, a system that might as well be dumped in the sewer. The minister is not here, and I do not wish to be unfair to him, but that is one of the reasons there is no domestic help available.
I asked a short question, covering only three lines, as to what was being done by the government to provide domestic help and nursing services for those with large families and for the sick. In England they have remedied that situation. Part of the reply came from the Department of Health and Welfare, the health part of which is only a skeleton branch because the municipalities and the provinces pay for health. What do they say about the lack of nurses?
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The proposals by the government of Canada placed before the dominion-provincial conference on reconstruction-
Castles in the air!
-would provide financial assistance to provinces which adopt health insurance to provide visiting nurse service and other services for all persons qualified	
Then with regard to domestic health:
The offices of the national employment service throughout the country are making every effort to meet the demand for domestic workers.
I should mention the list of telephones that selective service has in the city of Toronto. One morning I wasted nearly forty-five minutes calling about eight different numbers, and I could not get anybody who knew anything about what I wanted. They would simply hang up the receiver. That is the kind of service we are getting there, and it might just as well be closed up. The member for Danforth (Mr. Harris) is chairman of the splendid East Toronto hospital board, a man who has worked hard for my city in many capacities, and I cannot speak too highly of his services. He knows of this scarcity. No hospital board can put up with this sort of thing any longer. You cannot get a room in a hospital; you cannot get a nurse; you cannot get domestic help. What is the reason? It is national selective service, and keeping people in the forces.
Let me point out to the committee the reason for that. I am speaking extemporaneously and without notes, but I can give you one reason. Most of these people travelling on the trains are members of the armed forces and their families. As the hon. member for Temiscouata (Mr. Poulioty said the other day, speaking of Sparks street, you cannot go out into the highways and by-ways; you have to stay in the middle of the road because so many of the armed forces are kept there who want to return to business. Let us do what they are doing in the mother country; let us try to get rid of some of these irksome controls. I will admit that some controls are necessary to guard against inflation, high prices for food and all that sort of thing, and I will admit that the Minister of Finance has done very excellent work in that connection. The controls required to regulate the prices of the necessaries of life should be continued; but the controls essential during the war, when the majority of the orders in council were passed, were dictated by the needs of the state. In peace time, as a Conservative committee in England said, the preference of consumers is the mainspring of economic activity. Although controls will be essential

during a transitional period for organizing the reversion from war to peace time conditions they must be .removed as soon as conditions permit. That is Mr. Churchill's policy, and the policy of his party; and the committee goes on to say that since controls have no intrinsic value in themselves they are liable to lead to hold-ups and thereby slow down the speed of industry to adjust itself to consumers' needs. That committee went on to make these specific recommendations:
(1)	Controls will be required in the immediate post-war period for the orderly disposal of accumulated stocks throughout the world, whether of foodstuffs or materials; for helping to right the adverse balance of payments and for dealing with shortages, but not otherwise.
(2)	A practical measure of control over the location of new industrial undertakings in Britain is desirable as a permanent feature of the post-war world. It may thus be possible to secure a balance of different types of industry in each main region of the country, thereby lessening the risks of severe unemployment in any one area.
(3)	A continuous survey must be carried on by a properly qualified national advisory body with local assistance, which will draw the attention of parliament to the emergence of dangerous features in the industrial situation of any particular area, and will formulate proposals for remedying them.
So you see they are trying to do something over there. In Britain the government proposed a term of five years, while the Conservative opposition suggested two years. In this country it should be no longer than six months; it should be well over by Easter at the very latest. In the early days of this war, when controls were being established, I asked the Minister of Finance a question as to whether he sees the orders issued by the control boards, in reply to which he made a lengthy statement in the house. I asked if he ever saw these piles of orders in council issued about food, clothing and all these other things. I believe his reply was no, that a general direction of policy was given and that was all he had to do with it.
By passing clause 2 we are paving the way for the return of the conditions we had previously. I blame the government because they are afraid to release those who should be released under the national service act, so these irksome controls may be abolished. It is either inefficiency on the part of the government or it is fear of turning these people out because of the effect it may have on the labour market. The government of the day should have far more courage than they have shown so far in seeking to relieve the conditions from which we are suffering, by returning to industry larger numbers of men and women. Now real estate is going to be

National Emergency
controlled for two years under this measure. No one will want to own real estate. The hon. member for Eglinton, is not here, but it will be remembered that some days ago he spoke about housing. People in his riding cannot hold their real estate and use their property. Soldiers who are buying properties cannot move into them, owing to irksome controls on real estate, with the result that they find themselves out on the streets, with the bailiffs after them. Others are under eviction orders and have nowhere to go.
I would ask the government to look at the picture as we find it throughout the country in the cities and towns. There is not a neighbourhood in Canada where families .are not having difficulty in connection with housing, and if this bill is passed they will be tied up for one or two more years. In all our cities and towns men and women wish to end all the confusion and get back to their homes so that they can enter into small business enterprises.
I say this bill is much worse than the old one, because in it there is no control whatsoever which can be exercised by the courts. I pointed out on September 11 that any order in council can be revoked by the high court of parliament, through the process of some hon. member moving in the house that such order in council be annulled. But that is not so under the War Measures Act.
In my opinion the left was never right, either in war or in peace. We know that those belonging to the left went up and down this country, saying that we could depend upon collective security and league pacts without defences and armies, and all that sort of thing. But what happened when war came along? What was the result? We had no army, no navy or air force. Our navy was scarcely any size-less than a total of
10,000	tons. I do not say this in an*' spirit of disrespect for those who sit to my left, because they are pleasant gentleman, always courteous in debate, and I wish to show them the same courtesy, as we cannot all think alike on public matters. I must say however that I believe they are and were wrong. Everyone is entitled to his opinion, and that is mine. Some go-around the country posing as supermen, and it was they who supported pacifism in the past. If this section is passed, then that will just about finish everything.
Since the beginning of this session we have heard a lot from the left about internationalism and almost nothing about the empire. Well, we know what it did for us in two great wars in our generation, and we think we can see what it will do for us now in this time of reconstruction. Let us wait and see what will be
done by collective security and a new league. It will mean the dissolution of the British empire which saved the world in this war.
Paragraph (a) of this section provides for the maintenance of the armed forces, and all that sort of thing. I can tell you this, that there is only one way to solve this question, and that is for the dominions and the mother country to hold together. If we do not hold together historically, geographically, economically and from a military standpoint, we will not be able to go it alone and we will hang separately. We must, as an empire, hold together if we are not to perish. In Britain they have always been our best customers, and in the dark days they were our only friends. But it would seem now that we are willing to toss them overboard, through certain international agreements which can be made under order in council. I protest against that sort of procedure, as I have protested against it many times in the past. I continue to do so.
The plan set out in this bill is the Donald Gordon plan, and the plan to which the dominion-provincial conference objected. If that is the plan, then it is one which will have the effect of abolishing the high court of parliament. In my opinion Donald Gordon should have been dismissed long ago and irksome controls removed.


Mr. DIEFENBAKER:: Mr.	Chairman, I
return to section 2, subsection 3, with which must be read-if you will allow me-section 4. Both are part and parcel of the same transaction. As has been stated before, new regulations which will be passed under this measure as now constituted will be laid on the table of the house; but the great mass of orders in council that have been passed during the war under the War Measures Act will be incorporated into the law of the land, Regardless of their nature, their interference with the rights of justice, or their unfairness, parliament will be approving those orders in council and will have no opportunity of annulling them, as it will in respect of new orders in council passed after this date.
I am not going to discuss again the situation respecting these orders in council. The minister explained last night that they were in six volumes.
Mr. ST. LAURENT: No; I think there are eight volumes of orders and proclamations, and there must be a larger number of war orders and regulations.


John George Diefenbaker: I appreciate that. But there were six large volumes, and then every few weeks a further assortment of orders comes out and is published in these periodicals.

National Emergency
The minister showed what they had in Great Britain, and, producing the volume, he said: This is,.the volume of the orders in council passed in Great Britain. Compare this with the depth of the volumes passed by this government, and you have some appreciation of the far more extensive use of orders in council by this'country.
Among the orders in council to which objection has been taken during the period of the war, which we have been unable to annul or amend, and concerning which we could do nothing but take objection, there are some which, although possibly justifiable during the war, deny recourse to the courts on the part of anyone who feels himself unfairly dealt with or discriminated against. There are orders in council which amend and abrogate statutes passed by parliament. These, if this measure is passed, now become the law of the land. Why should not parliament have the right to amend, abrogate, suspend or annul such orders in council as have been passed during the period of the war, and which from this day forward will become part and parcel of the legislation of the country?
I cannot see why the government is so resentful, if I may use that expression-and I believe I am justified in doing so, because of the speech made last night by the Minister of Justice-of any suggestion that parliament should have the right to annul such orders in council. Is it because it is realized that if they are looked into, unfairness will be brought to light? Is it because injustices would be revealed? There is not an hon. member who has not received strong objections respecting unfairness in connection with some of these orders. Is it because the government is afraid that the whole situation would be brought into parliament? If not, then why the objection to incorporating into this measure the right of parliament to annul orders in council passed during the war? What of the secret orders in council that we are going to pass under this section? How many are there? We got the answer some months ago that there were none, and then out came one with regard to Eldorado and then another concerning seamen's regulations. That was an order in council that denied recourse to the courts, denied a man the right to have counsel; and now we are asked to give a blank cheque -an expression to which the minister objects to the governor in council to deny to the individual seeking justice in this land the right to be represented by counsel. Its secrecy cannot be explained on the ground that there was need for secrecy in connection with the production of atomic energy, because this order had to do with seamen's regulations.
[Mr. Diefenbaker.l
This is one type of regulation we are asked to incorporate as part of the law of the land under section 4. The minister says: We will not use these powers; we just want them, that is all. What do they want them for if they are not going to use them? There is an important principle at stake here, and I cannot understand the resistance of the government to allowing parliament the right to look into these things. I am asking the minister whether even now he will accept a further amendment of this section. He says he gives an undertaking that if any hon. member wishes to attack any of these orders in council, either those that are being moved forward under the provisions of the War Measures Act or those that will be passed hereafter, the government will give assistance, his voice being heard in the house. I accept that statement, but I ask: Why not, so far as those old orders in council go, give us our rights under statute so that the people of this country will know, not only that we have an undertaking but that we have the right within a period of fifteen days after the beginning of the next parliament to demand the rescinding of unfair orders in council? I do not want the right to be extended indefinitely, but let us be given the opportunity for the first fifteen days of the next parliament to move to bring unfair orders in council before the house. I will give one example in connection with rentals as it affects men coming back from overseas. In two instances while the husbands were overseas the wives built houses, rented them and moved into small flats in order to earn a little extra income. Now that their husbands have come back they are denied the right to go into their own homes. When I got in touch with the rentals controller the answer I received was that it was thought to be in the public interest that the tenants remain. We should have the right in parliament to discuss, to consider and where necessary to abrogate unfair and unnecessary powers under existent orders in council.
I suggest an amendment to section 2, subsection 3, which would cover the situation. I submit that it cannot be objected to by the government, if the principle of review by parliament is accepted now which was not accepted two weeks ago until strong objection was raised against this unfairness. I suggest that all orders in council should be laid on the table of the house and an opportunity given to members to raise objections by way

National Emergency
of motion to the operation of any or all of them. I therefore move, seconded by the hon. member for Vancouver South:
That after the word "thereof" in line 32 of section 2, subsection 3, the following words be added:
"and as to orders and regulations passed under the War Measures Act as shall be continued in effect under this act within fifteen days after the commencement of the next session of parliament."
Under this amendment any hon. member would have the right within fifteen days of the commencement of the next session of parliament to move for consideration by the house of the annulment of such orders in council passed under the War Measures Act as will be carried into effect and become the law of the land under section 4.
Mr. ST. LAURENT: The hon. member, perhaps inadvertently, has misstated what the effect of his amendment would be. He gave the impression that within fifteen days from the opening of the next session of parliament the matter of whether or not orders in council passed under the War Measures Act and continued, in force under this bill should remain, would be a question settled. That would not at all be the effect of the amend-meht. The effect of the amendment would be that there would have to be a new tabling of the orders in council that have already been tabled and 'published, and that tabling would have to be done within fifteen days. Then there would be forty days from that date in which any member of the house could move that one of them be annulled, not by a legislative act but by resolution.
These orders in council are in force at the present time and to bring about a situation where they would cease to operate would require legislative action. That legislative action is open to any hon. member of this house. On behalf of the government I gave last night, and I repeat it to-day,, the undertaking that not only within fifteen days or within forty days, but at any time while parliament is in session, if any hon. member takes the position that there is an order which is unfair or unjust-the hon. member for Lake Centre assumes that admittedly there are orders which are unfair and unjust-


John George Diefenbaker: The courts have so held.
Mr. ST. LAURENT: If any hon. member wishes he can come into the house and say, not in general terms and not for the disturbing effect it may have, with respect to something special, "In my opinion that order is unfair and unjust and should not continue in operation." The government has undertaken that it will do everything within its power to bring as expeditiously as possible a bill to that intent to a decision, both in this house and in the other place.
If that is not sufficient, well, I am sorry that under the circumstances I cannot accept the suggestion made here. This system which has been built up does not consist solely of the passing of orders. It has taken many months of trial and decision by the courts to bring about the situation where there is very much less effort than there was before to evade 'the real intent of the orders. For instance, take the orders concerning rentals, the fixing of ceilings on rentals. How many devices were attempted to thwart, the real intent of those regulations? A man would rent an apartment at the ceiling price, but in order to get in the tenant had to pay $100 for the key, or he had to buy some furniture at a price ten, twenty, fifty times its market value, or he could not get a lease unless he got it through Mr. So-and-so, who was the exclusive agent to rent the premises, and in order to get any consideration from him one had to pay him a fee. Now these things have gradually been eliminated by amendments and court decisions; and if there is anything done to create the impression that the old system has gone and that something new has taken its place, all that will have to be gone over again. That is not in the interest of good administration of these controls, if they are proper controls, and should be enforced in the interest of the general public. But if there are any of them to which any hon. member can point his finger and say, "That one is bad," and "I wish to have the judgment of the high court of parliament on that one," let him say so, let him particularize what he wants dealt with, and as far as the government is concerned everything that can be done to facilitate the bringing of that to a decision will be accomplished.
If that is not looked upon as sufficient, I cannot take the responsibility of accepting the suggestion of the hon. member. I should have to ask the Minister of Finance to give it consideration, because he is the minister responsible for the administration of these controls, and I should have to confer with him as to *whether or not that would be disturbing to the proper administration of the controls. Perhaps the hon. member would allow the matter to stand and let the Minister of Finance give it some consideration, unless he is satisfied with that undertaking, and I make it seriously and formally. If he or any other hon. member will at any time during the next session of parliament point his finger at something which he says is wrong and which he
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says should not continue to operate, the government will do everything within its power to facilitate the bringing of that matter to a decision by this house and by the other house. If that is not sufficient, I shall have to ask that this stand, to be given further consideration.


Mr. HACKETT:: I should like to ask the minister if the very reasons he has advanced are not reasons which show the gravity of the situation in which we find ourselves at the moment. He has told us of abuses that were petrpetrated under the regulations. The regulations enacted by the cabinet, instead of by parliament, have been drastic and far-reaching. They are so drastic and so far-reaching that they cannot be enforced unless there be a whole range of control.
I should like, at the expense of being charged with repetition, to draw to the attention of the minister the nature of the legislation forecast in the speech from the throne. The words are:
You will be asked to approve a measure to extend certain specified emergency powers to meet emergency conditions in the period of reconstruction.
What I in my innocence understood was that parliament might be asked to enact another statute similar to that which was passed in 1919, as pointed out by the hon. member for Beauharnois-Laprairie, dealing with a specific item, dealing with the control of pulp and kindred matters. Now the position is entirely changed. The minister says: If an hon. member will pick out something from the universal control which he considers is unfairly controlled, the government will do what it is able to do to give relief. The point is, Mr. Chairman, that the minister is reversing the position. The position was to be that the government was to pick out one or two-there may have been more-controls, and release all the rest. That was the significance, that was the purport, I submit to the minister, of the intimation in the speech from the throne:
You will be asked to approve a measure to extend certain specified emergency powers to meet emergency conditions in the period of reconstruction.
That is not what we are asked to do to-day.
The minister does not deny that the bill which is before the committee goes far beyond the powers that were granted by the War Measures Act; and-to open a parenthesis here -one can say that each-bill conferring powers that has been enacted since the original bill has contained broader powers for the cabinet. The reason for that is clear. It is the reason
[Mr. St. Laurent.)
which the minister gave. I am not particularly trying to score off anybody; I am merely trying to show that a control must be an entire control if it is to be an effective control. The minister said that in his speech on November 23, reported on page 2452 of Hansard:
The whole of these controls are integrated, and each part is necessary to the harmonious functioning of the whole system.
He has told us that it took five or six years to build up the system whereby control could be made effective. I can tell him here that a judgment was rendered by the chief justice of the superior court in Montreal a couple of weeks ago in a case in which a most arbitrary decision was reached by the rentals controller without summoning or hearing the adverse party. The judge merely said, "This is regrettable, it is alien to our whole system of laws; but I am bound, I am helpless." I will give the minister the reference to the case; but let me go on. We are confronted with the decision of perpetuating this type of control, this manner of life, or of getting back to the freedom of contract, the freedom of negotiation to which we still think we are attached.
The suggestion I attempted to make the other day, and which I make again, is that these controls are not universally required. I think that, without arousing any contention at all, I can say that rental controls are possibly more difficult and possibly more necessary in the large urban centres of Toronto and Montreal-I know less about Winnipeg and Vancouver-than they are in the smaller centres of the far east or on the prairies. Why not let the legislatures of those provinces deal with these questions? They are primarily within the ambit of their powers; they fall under the exclusive jurisdiction of provincial legislation. Why do we not say that after reasonable notice we will release these controls? The legislatures are or will be in session within the next month ot two. Afford them the time necessary to meet the situation. I am not sure that it is beyond the power of a city like Toronto or Montreal to meet a situation such as this if it is properly empowered by the legislature of the province. Then we shall be getting the question home where it can be dealt with full knowledge- en pleine connaissance de came, as they say in some parts of Ireland. That I believe is one way of relaxing the strangle holds which these controls have upon our whole economy today; because, if something like that be not done, if we take the words of the minister

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himself, we shall see months go by, a year go by, and we shall be no further advanced than we are to-day. The minister said:
That the whole of these controls are integrated and each part is necessary to the harmonious functioning of the whole system.
If that is true-and no one doubts it; it took five or six years to complete them and give them the effectiveness they have- if that is so, the only way of releasing them is to give them back to the provinces and let the provinces wrestle with them where it is necessary. I am sure there are a number of provinces where a great many of these controls are not required at all. I will not weary the chamber with a reiteration of what I said about prices and similar topics -the minister and I apparently have not the power at all times to charm those who will not listen.
Mr. McDONA'LD (Pontiac): We are not obliged to listen.


An hon. MEMBER:: We have heard your speeches before.


John Thomas Hackett: Yes, and you will hear them again.


Mr. McDONALD (Pontiac):: We can take it.


John Thomas Hackett: I am sure that every man in this house is anxious to see freedom of commercial and personal relations again established, and there is no possibility of bringing that about in an effective way until these centralized controls are terminated.


Mr. GREEN:: May I ask the minister to clarify the statement he made a few minutes ago? As I understand it, there are two groups of orders in council dealt with under this bill. In the first place, the bill itself makes provision for orders in council to be passed under it. That is found of course in section 2, and with regard to that group of orders in council there is provision that within forty days after parliament meets-
Mr. ST. LAURENT: After tabling.


Howard Charles Green: Within forty days after
tabling, a motion may be made to annul any one or more of those orders in council that are passed under this particular measure. There is another group of orders in council which have been passed under the War Measures Act, and under section 4 of the present bill they are continued in effect. But as I read the bill, there is no provision whereby the
house has the same right to move for the annulment of those, orders in council passed under the War Measures Act.
Mr. ST. LAURENT: Correct.


Howard Charles Green: I understand further that the amendment, of the hon. member for Lake Centre would provide that right. Can the minister explain why there should not be the same right with respect to the second group of orders in council? That is the question that is bothering me at the moment. I suggest that both groups should be treated in the same way. There should be the same facilities for pointing out the need for removing an order in council no matter whether it may come in one group or the other.
Mr. ST. LAURENT: The reason for the difference is the fact that as to one set they are the law of the country to-day, and if anyone says they should not be the law of the country the government will undertake to facilitate consideration of a bill to change the law. As to the others, they have not yet been made. We are asking the houses of parliament to delegate to the governor in council the right to make new legislation on the assumption that what he will do would have the consent of the Senate and of the House of Commons, and with respect to that new legislation we say that we are prepared to table it in parliament and to allow the houses of parliament forty days in which to declare that we made a mistake when we assumed that we had their consent.


Howard Charles Green: But in the meantime the orders in council passed under this new act would be the law of the land the same as the others.	'
Mr. ST. LAURENT: They would be in operation but subject to cessation if there were a resolution of the houses of parliament that they should no longer operate. That is a proposal that is being made for the purpose of recognizing the supremacy of the houses of parliament in that regard. With respect to the others which are in force, the statement is made that there are some that are unfair or unjust. We say: Indicate which ones you consider are unfair and unjust and introduce a bill to repeal them, and we will see to it that that bill gets consideration just as speedily as can be made possible-not only within a limited time, but at any time. The reason for being careful about that system is that we do not expect this body of controls to remain in effect very long. It has taken quite a long time to cause the people to know that there are certain things which they cannot do
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without being subject to prosecution. Each time an order is made there are found methods of doing something which is against its real spirit and intent, but which is still outside what is specifically mentioned in the order; just as it took years to get an income tax act in which there were no loopholes permitted that were not illegal evasions. The courts have held that a man has a perfect right so to arrange his affairs as not to attract taxation, but to have legal avoidance of taxes. It took years to deal with the things that could be done without becoming subject to the faxes which were intended.
The administrators of those controls are not themselves the power-hungry people they have been represented to" be. I know a few of them, and I know that there is nothing they are looking forward to with more pleasant anticipation than the time when they will not have' to do those things. That I know to be the case. They say: If we are to have the responsibility of achieving the results which you want, do not take the proper instruments from us. We are quite willing to do our best to achieve those results, but do not deny us the proper instruments in that regard. That is the. reason for the suggestion that all these things that we are going to ask to have continued in effect, and which have been tabled, be attacked specifically. If there is anything wrong with any one of them, let that one be mentioned. The hon. member mentioned a secret seamen's order. I wish he would give me more information, because I have inquired from all my colleagues around me and no one seems to know anything about that kind of order.


John George Diefenbaker: That is exactly my point. It has been before the court of appeal in British Columbia, following its extraction from the records in this house. It is an order that was kept secret. It denies the right of counsel to appear on behalf of any man examined before the commission set up.


Mr. CLAXTON:: What is the reference?
Mr. ST. LAURENT: Could the hon. member give us the reference? He says it has been extracted in this house. He may have had a hand in the extracting. I should like to have some reference number so that we shall be able to look into it and inform the hon. member whether it is still in existence or not.


John George Diefenbaker: It was still in existence on November 5. I asked for a return of those orders which deny the right of 
counsel to appear on behalf of men charged or being investigated. I asked for that on October 5.


Mr. MACKENZIE:: Was it produced?


John George Diefenbaker: Yes, it was produced. It was passed last May and produced on November 5. The minister says he does not know of the existence of this order. Will he tell us how many more secret orders there are which have not been produced?


Ian Alistair Mackenzie: It is not secret.
Mr. ST. LAURENT: That is not a secret order, and there are no secret orders. The hon. member says that it was tabled in the house. Well, if it was tabled it is not a secret order.


John George Diefenbaker: No longer, no.
Mr. ST. LAURENT: And if the hon. member thinks it is a bad order, it will be open to him under the undertaking I have given to say so and to move for leave to introduce a bill, to repeal it. It is not true in fact that every order which says that there shall not be counsel attending witnesses called to testify in an investigation is necessarily bad. Here the witnesses are called for the purpose of giving information. They have no traditional or constitutional right to be represented by a lawyer. They do not require to have a lawyer with them when they are asked questions on which they are only being requested to give true answers. One does not need a lawyer for that purpose. If the orders go beyond that, if the orders deny defence counsel to someone being prosecuted, of course, I would consider, as does the hon. member, that it would be an abridging of his rights. These broad all-embracing statements may create an impression, but it is not the kind of impression that makes for proper administration. If the objections are directed at something specific which can be looked at and considered, it will be looked at and considered and every facility will be afforded for taking the judgment of the house upon it.


Howard Charles Green: As I read subsection 3, in order to bring about an annulment of an order in council passed under the act there has to be a resolution brought in by a-
Mr. ST. LAURENT: I hope the kind of orders we shall make will not be the occasion for resolutions.


Howard Charles Green: That is getting away from the point. I want to make certain of the procedure which would have to be followed in order to bring about the annulment of one of the orders in council passed under this act.

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Will that procedure be for a private member to bring in a resolution, or must he bring in a bill? Just what procedure will have to be followed?
Mr. ST. LAURENT: I submit that the section is perfectly clear. It merely calls for a resolution. If the. Senate and House of Commons resolve that it be annulled, the mere passing of the resolution will bring about the effect.


Howard Charles Green: In dealing with the orders in council passed under the War Measures Act, which are continued in effect under this act, the minister said a few moments ago that they could only be attacked by a private member bringing in a private bill-
Mr. ST. LAURENT: No, a public bill.


Howard Charles Green: Well, a public bill. I do suggest to the minister that both types of orders in council should be treated in the same way, and that is what we are asking. We are asking that, there be the right to bring in a resolution for annulment of an order in council passed under the War Measures Act.
The minister said something about the breaking down of respect the public have for the whole system of controls. I think he is putting it on the wrong basis. There would be far more respect for the controls, and far less trouble, if some provision such as I suggest were made," so that the public would feel, in any event that their representatives in parliament have the right to move a resolution to have those orders in council discussed. That would help the government in enforcing the controls. I suggest to the Minister of Justice and to the Minister of Finance , that they give some consideration to making an amendment to section 4 so that the orders in council passed under the War Measures Act can be dealt with just as readily as the orders in council which are to be passed under the legislation now before us.
Mr. ST. LAURENT: The Minister of Finance, the Minister of Justice, and other ministers have given consideration to that very question, and have given it consideration in discussions with those who Lave directly to administer the regulations. The conclusion that was reached, whether it be the right one or the wrong one, was that provided for in these proposals.


Mr. COLDWELL:: May I ask the minister one question in connection with the answer he has given the committee? He says the government will facilitate the introduction of a bill or resolution. How can that be done under the rules of the house? That is one thing that bothers me.
Mr. ST. LAURENT: Probably there will have to be.motions to waive the existing, rules which set aside only specified time for the consideration of the legislation of private members.


Major James William Coldwell: That is satisfactory.


Mr. FERGUSON:: money through that occupation. He believed he had as much right to justice in this country as any other man, so he proceeded' with his building for the second time; he did not change his counsel, and last week was fined in court another $700.
That is all right; I approve of that procedure, but I do not approve the situation brought about by these controls. The intention is probably all right, but the way these controls are carried out is disturbing the minds of the people of Canada. They are definitely unnecessary, and I appeal to you people as representing those in your constituencies, because you must have the same troubles I have. My people are experiencing the same miscarriages of justice that your people are experiencing, and the sooner these controls are abolished and people know they can go ahead with a free rein and appeal to the ordinary courts of this country, the better it will be. In these matters the controllers may be all right but their agents are wrong, because no two of them can see eye to eye. We are getting one kind of justice in one part of Canada and another kind in another part; we are being treated in one way on one side of the street and in an entirely different way twenty-five feet across the street. That is the trouble with controls. The sooner they are abolished and no new controls introduced, the better off we shall be.


The CHAIRMAN:: Order. May I remind the committee that we are now considering section 2 of the bill. I would also remind hon. members that according to subsection 2 of standing order 58 speeches in committee of the whole must be strictly relevant to the item or clause under discussion. Therefore I would say hon. members should not discuss controls generally, but that their remarks should be strictly relevant to section 2.


John Thomas Hackett: During the period which elapses while parliament is not in session will any remedy be afforded under the section that has been discussed?
Mr. ST. LAURENT: From the looks of things for the last several days parliament is going to be in session nearly all the time.


John Thomas Hackett: That is not quite the answer I should like. It is admitted, is it not, that there is no means of obtaining relief from any order an hon. member may think objectionable if parliament be not in session?
Mr. ST. LAURENT: No other method than bringing his reasons for feeling there should be relief to the attention of the minister in charge of the department in which the con-
[Mi. Ferguson. 1
trol happens to be; and he will find that each of the ministers who have to do with these controls is having his staff constantly at work reviewing them, trying to bring them down and unwind them in an orderly manner in order to get back to the situation which both the hon. member for Stanstead and I wish to see restored just as rapidly as that can be done without having this turbulence the hon. member feels is necessary as a price for having had the controls during the war.


William Ross Macdonald: Does the hon. member for Lake Centre wish to have his amendment to the amendment put to the committee?


John George Diefenbaker: Yes.


Mr. COLD  WELL@: I thought it was to stand.


Mr. ILSLEY:: No, Mr. Chairman. I agree with the Minister of Justice; I do not want to prolong the debate by giving my reasons.
Amendment (Mr. Diefenbaker) negatived on division.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 3-Powers of governor in council.
Mr. ST. LAURENT: I would ask some hon. member to move that there be substituted for this section the section that has been inserted in the reprint, with proposed amendments.
Ian Alistair Mackenzie: I move accordingly.


William Ross Macdonald: Does the committee
wish me to read the section as amended?


Mr. McMASTER:: Is the section the chairman has the same as the one which appears in the printed form which has been handed to us?
Mr. ST. LAURENT:	Yes.


William Alexander McMaster: Then I should like to
speak to it. I* am not quarrelling seriously with subsection 1, but I do suggest that so as to carry out the wishes of the minister, the drafting of subsection 2 might be changed. For instance, in subsection 1 we find reference to fine and imprisonment, and there is reference to which courts shall try certain cases. Then subsection 2 reads:	[DOT]
Any goods, wares or merchandise dealt with contrary to any order or regulation made under this act may be seized and detained and shall be liable to forfeiture at the instance of the Minister of Justice, upon proceedings in the Exchequer Court of Canada, or in any superior court.

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I believe the ordinary procedure is that the court which tries the action would decide whether or not the goods would be forfeited. If this is not so, the minister will understand that another separate action would be necessary in a superior court or in the exchequer court. If the articles in question are not of great value this would seem to be a useless expense. Why have the provisions respecting forfeiture been worded in this way? If a satisfactory explanation cannot be given I should like to offer an amendment.
Mr. ST. LAURENT: It sometimes happens that the Royal Canadian Mounted Police have to assist in the enforcement of these regulations in respect of stocks of merchandise accumulated in violation of the regulations. Subsection 2 is to give them authority to seize such merchandise, then to have court proceedings for the purpose of considering the question whether or not they were held in violation of - the regulations, and if so whether they should not be forfeited to the crown.
The hon. member will recall, as I do, stories which appeared in the newspapers about quantities of sugar that had been seized. Occasionally there are quantities of merchandise accumulated under conditions which show a violation of the regulations in force. The procedure here suggested is the one which seemed appropriate, in respect of seizures of substantial importance. In respect of ordinary violations a fine or imprisonment might be sufficient deterrent. However, there may be cases in which substantial quantities of goods and merchandise have been the object of illegal transactions, and should be forfeited to the crown. The only inconvenient feature would consist of there' being the possibility of one court dealing with the offence, and the other court dealing with the forfeiture of the merchandise.
However, that is not something entirely new. I believe it happens in connection with excise matters. What is contemplated here is something in the nature of proceedings in rem. The owner might be quite unknown; it might be that there is no individual who could be prosecuted successfully. And what was desired was something to meet the possible objection that we were not going to have the courts pass upon the enforcement of these regulations.


William Alexander McMaster: After hearing the minister's explanation it would seem to me that if a substantial amount of goods was seized and detained, and a trial took place before a magistrate, this would involve cumbersome procedure which would subsequently have to be followed. Why not cover the whole
thing, and cover what would be the ordinary case where a violator is being tried? The same court which tried the violator would, if that were the intention of the measure, order forfeiture of the goods. We could have another section to provide particularly to cases where goods or merchandise are dealt with under orders and regulations.
An order something after this style could be made, that they should be liable to forfeiture and that the case would be tried before the Exchequer Court of Canada. To have a case come all the way to Ottawa from some other part of Canada is a cumbersome procedure unless a substantial sum is involved. I suggest that even in respect of cases where any considerable amount of goods is alleged to have been used in violation of the act, trials should take place in courts more convenient for those who would have to give evidence.


John Thomas Hackett: Is there any reason for increasing the severity of the penalties? I notice that under the War Measures Act the penalty was a maximum of five years and a ma^jmum fine of So,000. Under the present measure the penal servitude is limited to five years, but there appears to have been no ceiling placed upon the fine. Are we becoming more vicious?
Mr. ST. LAURENT: I do not know to whom the "we" would apply. I do know, however, that there have been cases of violations in respect of which the pecuniary benefits flowing therefrom ran into a great many thousands of dollars, and where a pecuniary penalty of $5,000 would not prove to be a deterrent. There are violations in connection with these quotas which are deeply resented by some industrialists, and which have produced substantial profits. Here the fines have to be fixed by the courts, and I believe this is one instance in which the punishment should be made to fit the crime.


John Thomas Hackett: Is it left to the discretion of the court to determine what the fine shall be?
Mr. ST. LAURENT: It would be within the discretion of the governor in council. But that discretion would always be subject to the tabling of the order and to the right of the houses of parliament to interfere with its operation, when parliament was in session.


William Alexander McMaster: I wish to speak again respecting subsection 2, because as I read it there would not seem to be any enacting clause. If the minister, we will say, were a judge trying a case, I believe he would look
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in vain for any authority to a superior court to order forfeiture of the goods. This is what
it .says:
Any goods, wares or merchandise dealt with contrary to any order or regulation made under this act may be seized and detained and shall be. liable to forfeiture at the instance of the Minister of Justice . . .
I suggest that there should be some clause providing for forfeiture under proceedings before a superior court or the Exchequer Court.
Mr. ST. LAURENT: That was considered, and the law officers of the department came to the conclusion that if the courts were to be left free to declare whether or not there had been goods, wares or merchandise dealt with in a manner contrary to order or regulation, they should have the right to decide whether they should be liable to forfeiture. The forfeiture would date only from the decision of the court. The court would not be obliged to declare the forfeiture in every case of seizure but would declare forfeiture if it were established to its satisfaction that the goods, wares or merchandise had been* the object of wrongdoing.


William Alexander McMaster: I should think that there should be one law; if they had been dealt with in violation of this statute they should be forfeited. Then the judge would have only one thing to decide, that is whether there had been a violation of the statute. Otherwise the court could decide that a man was liable and not forfeit the goods. If it is the intention to leave it to the opinion of the judge trying the case, then I say that is contrary to all British ideas of justice so far as I understand them.
Mr. ST. LAURENT: That language was taken from the War Measures Act, which has been in force during two wars and which has had the test of a great many court decisions.


John George Diefenbaker: Will the minister make provision for recourse to the courts on the part of any individual who, as distinct from the class to which he belongs, believes he has been aggrieved by a discriminatory order? I am not asking that the right of appeal to the courts be given to all individuals within a class when they are all treated alike, but in many of these orders in council there is no right of recourse to the courts regardless of how unfairly and unjustly one may be dealt with personally as distinct from the class to which he belongs. I suggest that no harm could possibly be done by granting that right. The minister is asking for extraordinary powers for a period of one year, with the possibility, and, according fMr. McMaster.]
to some statements which have been made, the probability, of them being extended, in
part or in whole, beyond that time, provided parliament so directs. Will the minister not give consideration to granting such right of appeal in order to remedy manifest injustices in the case of individuals, and, again I repeat, as distinct from the class to which the individual belongs?
Mr. ST. LAURENT: If the hon. member wishes to know whether the department would give consideration to any representations made in that behalf with a view to determining whether or not something should be done in that respect, I shall gladly give the undertaking. If it is to be an undertaking that something be done by this bill before it goes through to deal with the situation, I canuot give the undertaking. If the hon. member will submit the facts of some concrete case which show that an injustice has occurred and make suggestions as to there being some provision made to deal with cases of the kind, I will have the officers of the department try to do something that would give recourse to the courts under such conditions. But I cannot undertake to hold up this bill until that has been done.


John George Diefenbaker: For the life of me I cannot understand the minister's attitude in some of these things, especially as he is a former president of the Canadian Bar Association. All I am asking is that certain requests of the bar association and of the people of Canada as a whole be carried into effect to provide the necessary safeguards designed to assure justice. We are being asked to accept everything the government has done during the period of the war; under section 4 we are being asked to incorporate those things into this legislation. When we are being asked to do that I think we have the right to request on behalf of the people as a whole that unfair denials of justice shall not be perpetuated by an act of this parliament.
What the government is asking for under this section is simply the right to claim in answer to criticism that parliament adopted and accepted everything they did during the period of the war by order in council. The minister says they could not possibly pass an order in council adopting all orders in council to be carried forward that that would interfere with continuity of enforcement. If the government were not endeavouring to get parliament to adopt everything it has done during the period of the war, just and unjust, under the War Measures Act, all that would be necessary to maintain the continuity of enforcement and the psychology of enforcement-I think that was the expression used-

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necessary to enforcement of the regulations would be on the last day of this year, or the first day of January when this act comes into force, to pass an order in council adopting all the orders in council that had been passed during the period of the war. Then the responsibility would rest on the governor in council.
What the government is endeavouring to do here is to place on parliament, on all the members of this house, the responsibility for the orders in council that were passed during the period of the war, and without their having been seen. I noticed the minister took offence a moment ago, as did some of his colleagues around him, to the question I raised about secret orders in council. There are some orders that have yet to be brought to light and tabled in this parliament. We are asking even at this late date that all orders in council be produced and tabled here. There are some that have not been seen as yet by the members of this parliament. Those are the ones I am asking to be produced so that when we approve of them we shall know what we are approving.


William Ross Macdonald: I take it that the hon. member for Lake Centre was discussing section 4 of the new bill. Do I understand that the amendment to section 3 is carried?


Mr. MACDONXELL (Muskoka-Ontario):: It seems to me that this house is entitled to have the opinion of the Minister of Justice as to whether the suggestion made by the hon. member for Lake Centre is or is not in the interests of justice. I was surprised' to hear him say, if I understood him correctly, that he was not considering the request made by the hon. member for Lake Centre because he could not hold up the passage of the bill. If I misunderstood the minister, he will correct me. Frankly, that is not my understanding of the reason we are sitting here. I ask him again if we are not entitled to have his opinion as to whether or not the suggestion which has been made is a reasonable one and entitled to consideration?


William Ross Macdonald: Before the minister
answers, may we get the record straight? I understand that section 3 as amended is agreed to.


Some hon. MEMBERS:: Carried.


Some hon. MEMBERS:: No.


William Ross Macdonald: We are now considering section 4. I declare section 3 agreed to.


[Stage Direction]
Section agreed to.
\
At one o'clock the committee took recess.
The committee resumed at three o'clock.
William Ross Macdonald: When the committee
rose at one o'clock we had carried section 3 as amended and were about to consider section 4. I understand there is an amendment to section 4.
Mr. ST. LAURENT:	Yes, Mr. Chairman.
I would suggest that an hon. member propose that section 4 of the bill be replaced by a section 4 in the form of the reprint with proposed amendments.


Ian Alistair Mackenzie: I move accordingly,
Mr. Chairman.


John George Diefenbaker: In view of the fact that this section is amended, there is a question I should like to ask the minister with the leave of yourself, Mr. Chairman, and the committee arising out of an answer which he gave yesterday afternoon to the hon. member for Beau-harnois-Laprairie, as reported on page 3010 of yesterday's Hansard:
Mr. Raymond (Beauharnois-Laprairie):	Mr. Chairman, I should like to direct two questions to the honourable the Minister of Justice. Does he consider that the powers requested in Bill No. 15 as reprinted are less extensive than those that were set forth in the original bill? That is my first question; if the minister will kindly answer it I shall ask him the second one.
Hon. Mr. St. Laurent:	Yes, I consider that
the powers requested in Bill No. 15 as reprinted are less extensive than those set forth in the original bill.
A little further down the minister is reported as saying:
I shall tell him quite frankly that what was requested in the bill introduced on November 23 implied things that are not asked for at this time, but which we have not forgone and will request from parliament through other measures.
I should like the minister to explain what are the powers which were foregone in this act and what are the other measures which are to be brought before parliament in order to implement the powers which were withdrawn from the original bill?
Mr. ST. LAURENT:	Mr. Chairman, I
shall not attempt to make an exhaustive comparison of the powers in the original bill and in the bill as reprinted; but what I had in -mind in giving that answer was the fact that subparagraph (g) of section 3, subsection 1, had been dropped, but that that did not imply any change in government policy, and that if any further legislation was required in that regard it would not be in this bill but would be something dealt with by separate legislation to be introduced into the house.


John George Diefenbaker: That is the only
other measure to be introduced?

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Mr. ST. LAURENT:	That was the only
thing to which my mind adverted when the question was put.


John George Diefenbaker: I do not suppose
that any amendment will be accepted, but, again. asserting the attitude of this party on section 4 and our desire not to be placed in a position where we shall accept holus bolus all the orders in council which have been passed during the period of the war, whether fair, just or arbitrary; believing that we should have the power to annul any of these orders in council under the law, I move, seconded by the hon. member for Vancouver South:
That the words "amendment or revocation" in line 30 be deleted, and that there be substituted therefor the word "annulment."
I understand the distinction to be this: annulment of orders in council is the result of a resolution of this house; amendments or revocations are acts of which the governor in council alone is capable. Am I correct in that?
Mr. ST. LAURENT:	That is the intent
of the language as contained in the section.


John George Diefenbaker: That is what I took it to mean. That being so the only power of amendment or revocation of the orders in council which were passed during the period of the war will remain in the governor in council and will not rest in parliament under the provisions of this act. The minister has assured hon. members that any member may rise in his place and move a resolution to annul orders and regulations made under the War Measures Act which become part and parcel of the law of this land when this bill becomes law. But. regardless of that assurance no hon. member would have the right without the unanimous consent of the house to do something which is contraiy to the terms of a statute. The member would find himself in this position: first, if he moved in this house for the annulment of one of the orders in council which was passed under the War Measures Act, the question which would naturally be asked would be "Under what authority do you do that?" One would turn then to the statute and would have to admit: I realize that under the statute I am not entitled to make this motion, but I had the assurance of the minister-and, given conscientiously-that this right would be presented to a private member of the house although not contained in the statute.
Mr. ST. LAURENT: Will the hon. member permit me?


John George Diefenbaker: Yes,

Mr. ST. LAURENT: I think he is under a misapprehension. I did not give the undertaking that the orders in council or regulations made under the War Measures Act could be annulled by a resolution, but I said that if any hon. member chose to bring in a bill the government would facilitate the consideration of the bill in the shortest possible time.


John George Diefenbaker: Yes, that is proper. The case is even worse than I expressed it. In other words, regardless of what these orders may be, regardless of how desirous the membership of this house may be to repudiate or annul any of these orders in council, such as regulations under price control, certain regulations under rental control, and any other controls, the rights of the member would simply consist of introducing a bill with the consent of the house. And then where would he be? It could not be a public bill if it were introduced by a private member; he would have to be in the position of introducing a private member's bill.
Mr. ST. LAURENT: Yes.


John George Diefenbaker: How far would he get? On certain days of the week there is one hour for this purpose.


John Thomas Hackett: During only'a certain number of weeks.


John George Diefenbaker: Yes, during only a certain number of weeks; and I have known of cases where private members' resolutions have been talked out, possibly not intentionally but certainly with monotonous regularity. I press this question no further except to move an amendment, pointing out once again that it is unfair to ask hon. members to agree to the enactment by this parliament, as substantive law, of orders in council which passed behind closed doom during the period of the war. Many of them-most of them, according to the minister-are unknown to the members of the house, however diligent they may be. The minister himself, who is charged with the administration of justice, says that he could do more useful things than reading over these orders in council, and after reading some of them I think he is right. The position is that we are asked, without the right of annulment, to accept this pile of legislation. I make my last appeal. Will you not-


Some hon. MEMBERS:: Hear, hear.


John George Diefenbaker: I am glad, sir, that there are enough members who are following the discussion with interest that any remark such as this is met with appreciation. In spite of all the arguments advanced, has any

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argument been put forward by the minister which answers the simple request that we be allowed to determine what shall be the law of the land when we are asked to adopt something of which we know nothing? The British act sets out a schedule, particularizing all the orders in council which the British government has made law as the result of the adoption of orders in council in the period of the war. They are set out in the schedule. The British house knew what they were passing. Here we do not know. I therefore suggest to the minister the acceptance of this amendment. It does not deprive the government of any power but it does vest in the members of the house the right to determine what legislation they are prepared to accept and adopt.
Mr. ST. LAURENT: I am not sure that the amendment proposed by the hon. member would bring about the result he desires. I think I understand what the desire is, that is, that the orders in council made under the War Measures Act be in the same position as such orders as may be made under this act. I am not confident that the amendment he has suggested would bring about that result, and if that result were to be agreed to I think more definite language should be used to implement the intent. The hon. member said he feared the government might not be prepared to accept, any amendment at all to this proposed amendment that is before the chair. I said last night that the government had no desire to make the house take responsibility for continuance of the orders made under the War Measures Act, and that if it were felt by the house that it would leave them in a freer position merely to authorize the governor in council to take the responsibility of continuing them in force, there was no objection to that. That would mean that an order made by the governor in council to continue them in force would be tabled and could be dealt with, and to that extent the government would 'be prepared to entertain an amendment to the amendment, placing before the words that are in the amendment the following: "Without prejudice to any other power conferred by this act, the governor in council may order that the orders and regulations made under the War Measures Act or pursuant to authority created under the said act immediately in force before the day this act comes into force shall, while this act is in force, continue in full force and effect subject to amendment or revocation under this act."
That would mean that the governor in council would take the responsibility of determin-47696-191}
ing whether or not he felt it was necessary to continue these orders in council in force, and his order to that effect-because I told the house last night that we should not hesitate to make it-would have to be tabled and could be dealt with here. I wish however to point out that that is not going the whole length that the member for Lake Centre has suggested, because that would be one order in council that would be tabled and would not provide for a selection being made among the things covered by that one order. The order would be one order continuing in force the things which are now in force and which would still be in force an December 31, 1945. It would however provide an opportunity for any hon. member to move that the order in council be annulled, and even if he did not insist upon the resolution going through it would provide him with an opportunity for calling attention to whatever order or regulation he considered was defective or no longer required. That would certainly give every hon. member an opportunity of pointing out what he had to complain about, and if he chose to follow that up with the introduction of. a bill to revoke that special bit, instead of insisting upon his resolution to annul the whole lot, he would be free to take that course.
As to the possible delays in dealing with a public bill introduced as a private member's bill, the undertaking I gave implied that if it required the waiving of certain rules of the house as to the time allowed for private members' legislation, the government would be prepared to do that. I intended that to be a serious undertaking to satisfy every hon. member that if he wanted to test the opinion of the house upon a specific thing the government would do its best to have that proceeded with and a decision made upon it even it it required departing from the standing orders governing the business of the house.
I was concerned when it was suggested to me that we should accept an amendment in this form, because I did not want to have to sit up until one minute past midnight on the first of January and pass an order to continue in force things done under the War Measures Act; and on the other hand I did not want to have a hiatus between their effect under the War Measures Act and their effect under the new bill. But it was pointed out to me by the law officers of the department, who always have these things present in their minds, that there is section 12 of the Interpretation Act which covers that point and which, after this act is passed, if it is passed and assented to, would allow the governor in council to make an order which would come into effect thd
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first minute that the act itself came into effect. So that in fact the amendment to the amendment would have no other effect than leaving it to the government to take the whole responsibility in connection with continuing those orders and regulations and of making it necessary for the government to table that order and have it open to annulment by the houses of parliament.


John Thomas Hackett: For the period stipulated, and then if it were not availed of, the full body would be beyond attack.
Mr. ST. LAURENT: It would be beyond the form of attack provided for in subsection 3 of section 2 of this bill, but of course it would still be subject to attack before the courts if there were any illegality in its enactment. If it appears to be the sentiment of the committee that they would prefer the government to take the responsibility of continuing these in force rather than having the matter done by statute, there will be no objection to accepting the amendment to the amendment by putting these words ahead of the language now expressed in the reprint of the bill.


Mr. LESAGE:: I so move.


William Ross Macdonald: I draw the attention of the committee to the fact that there is already an amendment to the amendment before the Chair.


John George Diefenbaker: While the suggested amendment does not go so far as we should like, it goes a considerable way toward removing the major objection to the sections. I thank the minister for having taken this course, and I withdraw my suggested amendment to the amendment, because the amendment to the amendment suggested by the minister removes the responsibility from parliament and places it on the governer in council, which, on January 1, will accept the responsibility for the enactment of such orders in council as are carried on from the period of the war. In moving that amendment to the amendment the minister does much toward restoring the principle for which we have been contending on this side of the house for two days, namely, the restoration to parliament of absolute control over legislation passed in this country and of such orders in council as are continued during the period of the emergency.
Amendment (Mr. Diefenbaker) withdrawn.


William Ross Macdonald: Mr. Lesage moves that the amendment be further amended as follows:
[Mr S{. Laurent.]
That there be inserted in section 4 before the words "the orders and regulations" the following words: "Without prejudice to any other power conferred by this act the governor in council may order that"


Howard Charles Green: At the time of the passing of the blanket order would it be possible to have as a portion thereof a schedule of the orders in council which will be so extended?
I realize that there are many of them, but if that could be done we should at least start off knowing what orders in council passed under the War Measures Act were covered. I am sure it would make it much easier in the future to know just what the law is at any one time.
Mr. ST. LAURENT: I am sure it would be making it easier, but I cannot give the hon. member that undertaking. I do not think it would be physically possible to have that done. It would involve something which has been going on since V-E day and more actively since V-J day. It would involve going over all these orders for the purpose of eliminating just as much as conditions appear to us to justify. But that is not completed, and a schedule would be of no use unless it were exhaustive. I could not undertake to have that kind of schedule ready for the time that this will have to be done.
I had the basic orders here to mention to the committee, and I also had a list of several pages, coming from each department and checked with the privy council office, of orders which are still unrepealed. They are being considered. I appreciate the advisability of having something that will be all-embracing for the public and the legal profession, including the bench, just as soon as we can make it available, but I could not undertake to have that for the time when we shall have to pass an order in council under this section. I can say to the hon. member, however, that I shall be just as pleased as he will be when I can come into the house and table that kind of schedule or list.


John Thomas Hackett: Does not the minister think it would be helpful to annex to the bill a schedule of the principal measures? It need not be exhaustive. He must know the principal ones, the ones on which he is relying at the present time. It is possible that he could not name them all; that can be readily understood, but the minister has a list of the principal orders. If that list were made a schedule to the bill, with the right to extend it, it would be helpful. If the minister were willing to do that it would satisfy this side of the house.

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Mr. ST. LAURENT: I do not think it would be at all helpful. I think it would be disturbing to have a schedule which would say: "Here are some of the things that are subject to continuation." It would be disturbing to have some of them mentioned and not the others. At this time I should not care to take the time of the committee to give a long enumeration, but I shall mention what I consider to be the basic orders of this system of controls so that they will be on the record.
First of all there are the wartime prices and trade regulations, established by order in council P.C. 8528 on November 1, 1941, and various amendments thereto from that time down to June 22, 1945. An office consolidation has been published and is available to anyone who wishes to have it. Then there is the wartime leasehold regulations, as established by order in council P.C. 9029 on September 21, 1941, and various amendments, commonly known as the rental regulations. They have been consolidated and are available to anyone who wishes to have them. Then there are the emergency shelter regulations, P.C. 9439, of December 19, 1944, and amendments. The original and a copy of the amendments can be secured by anyone who is interested. Next is the foreign exchange control order, P.C. 7378, of December 13, 1940, as amended. There is an office consolidation of that order and amendments. Following that is the revised regulation respecting trading with the enemy, P.C. 8526. There is also an office consolidated booklet. Then we have the wartime wages control order, P.C. 9384, of December 9, 1943. It is consolidated with amendments in a booklet which is easily obtainable. There are the war labour relations regulations, P.C. 1003, which I am sure are well known to all hon. members; the wartime salaries order, P.C. 9298 of November 27, 1941, as amended, of which there is an office consolidation in pamphlet form which can be easily obtained; the order in council reestablishing the wartime industries control board regulations, P.C. 3 of January 4, 1944, with an amendment of August 11, 1944, which is the basic order under which the controllers operating under the Department of Munitions and Supply exercised their powers. Fortunately I think most of these controls already have been eliminated, and only yesterday the newspapers carried the story of the elimination of the restrictions on the construction of buildings. Then there are the national selective service civilian regulations, P.C. 246 of January 19, 1943, with amendments, which are gradually being removed. There are the defence of Canada regulations, of which some vestiges still have
not been repealed. These are under active consideration and ere long will have completely disappeared.
The other large class are the orders in council relating to veterans and others entitled to certain benefits, which have been under consideration by the special committee of this house for the purpose of drafting legislation to put in statutory form what had been done provisionally by orders in council. Those are the principal groups. There are others, of course.


Mr. HAZEN:: Did the minister mention the selective service regulations?
Mr. ST. LAURENT: Yes. There are many others; the prize court regulations, which are still operative, but which will cease to be operative just as soon as the bill which went through this house the other day receives tbe royal assent. Then there are the regulations establishing the system of import and export permits. There are regulations which did not necessarily depend wholly upon this kind of legislation, providing for the stabilization controls which involved the expenditure of money appropriated under the various appropriation acts. Each of these things could have been done independently of this kind of legislation for each fiscal year under the terms of the appropriation act, but there are continuing regulations that w:ere made under the War Measures Act and which did not have to be repeated in respect of each separate fiscal period.
In addition there is a very long list of orders in council that have been enacted, in many of which reference was made to the War Measures Act, though that might not have been essential. But it was there; it was sufficient to justify what was being done, without looking at anything else, and therefore it was referred to.
' I have here a general statement that orders in council, including minutes of council and treasury board minutes from August 25, 1939, to November 15, 1945, inclusive, were passed in the following numbers: orders in council, 57,276; treasury board minutes, 37,603, or a total of 94,879. Orders in council passed under the War Measures Act and tabled from September 7, 1939, to November 14, 1945, numbered 4.138. Those were the orders in council which were not administrative, not directed to one separate instance but matters that wgre regarded of general public concern. There were orders in council published between August 25, 1939, and September 30, 1945, in proclamations, eight volumes from January, 1940, to October, 1942, and since that time in war orders and regulations, one volume

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every quarter or four volumes a year'. There were published in the eight volumes of proclamations and orders in council, 1,152; in Canadian war orders and regulations, 1,522; in the Canada Gazette, 1,170, or a total of 3,844. The headings under which there are orders in council which are being considered at the present time for the purpose of consolidation or repeal or abandonment have been given to me for each department. They cover twelve pages.


Howard Charles Green: Could they be put on Hansard?
Mr. ST. LAURENT: I would have no objection to them being put on Hansard, but if the hon. member will look at the list I think he will see that it would not be helpful to have it there. ' Just as an indication I have as the first chapter, Agriculture. Then it goes on: agriculture advisory committee; agriculture food board; agriculture supplies board; dairy products board; feed grains reserve stocks; fertilizers and pesticides; fibre, flaxseed and so forth. In that form it would not be in my opinion worth the space it would occupy in Hansard.


Howard Charles Green: It does not give the numbers of the orders in council?
Mr. ST. LAURENT: No. So I think it will be much more generally satisfactory to have this work continue and then bring to parliament and table something inclusive, with proper indications as to the numbers and probably also the places where they are published, so ready reference may be had to them. '	.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 5-Orders and regulations reenacted.
Mr. ST. LAURENT: I would suggest that some hon. member move that section 5 of bill 15 be struck out and be replaced by the one contained in the reprint.
Ian Alistair Mackenzie: I move accordingly.


[Stage Direction]
Amendment agreed to.
Lionel Chevrier: Mr. Chairman, before
this section carries I should like to make some observations. This morning the hon. member for Lake Centre made certain statements which affect the merchant seamen's regulations, and I think I should reply to him.
In the course of his remarks the hon. member said that certain secret orders in council affecting the discipline of merchant seamen were passed. During the course of the noon recess I took the trouble to inquire from

officers of my department, and I find that since I have been sworn in as Minister of Transport there have been no secret orders in council under the merchant seamen's regulations.
I also find that before that time there were two orders passed. One was merchant seamen's order 1941, which bears the number P.C. 11397, which was published in Canadian war orders and regulations, the issue of April 12, 1943, and was tabled on April 11 of that year.
The second concerns the merchant seamen's foreign jurisdiction order, 1944. It is P.C. 4312 of June 5, 1944. It was published in Canadian war orders and regulations of June 12, 1944, and tabled on March 19, 1945.


[Stage Direction]
Section agreed to.
On section 6-continuation.
Mr. ST. LAURENT: I would suggest that some hon. member move that for section 6 be substituted the section 6 apearing in the reprint of the bill.
Ian Alistair Mackenzie: I move accordingly.
Section 6 agreed to.
Mr. ST.-LAURENT: Then, as to sections 7, 8, 9, 10 and 111 would suggest that someone move that they be stricken out.


Ian Alistair Mackenzie: I move accordingly.


[Stage Direction]
Amendment agreed to.
On the preamble.
Mr. ST. LAURENT: I would ask that some hon. member move that for the preamble shown in the bill there be substituted the preamble in the reprint of the bill.
Ian Alistair Mackenzie: I move accordingly.


John George Diefenbaker: In view of the
amendments moved to section 4, I am wondering whether the words "and certain orders and regulations made under the War Measures Act be continued in force" might not be deleted. It seems to me .they are no longer applicable.
Mr. ST. LAURENT: I think they should still be referred to. However, it might be satisfactory if instead of the words " it is essential" with respect to the War Measures Act orders and regulations there were substituted the words " it may be necessary."


John George Diefenbaker: That would be
satisfactory.


James Lorimer Ilsley: I so move, in amendment.


[Stage Direction]
Amendment agreed to.
Preamble as amended agreed to.

Export Credits Insurance
Mr. ST. LAURENT: With respect to the long title I would suggest that some hon. member move that for the long title in the original bill there be substituted the long title appearing in the reprint.
Ian Alistair Mackenzie: I move accordingly.


[Stage Direction]
Amendment agreed to.
The ACTING CHAIRMAN (Mr. Golding):: Shall I report the bill?
Mr. ST. LAURENT: Mr. Chairman, before you leave the chair may I say through you to hon. members that, though at times this has been a strenuous debate, I should like to express my appreciation to all hon. members for the constructive criticism that has been offered in respect of various, portions of the bill and-not too modestly-to state that I think we have all contributed to the preparation of a measure which will be helpful in the transitional period through which the country has to go.
Bill reported.



EXPORT CREDITS INSURANCE ACT


[Stage Direction]
The house resumed from Tuesday, December 4, consideration in committee of bill No. 217, to amend the Export Credits Insurance Act- Mr. Usley-Mr. Macdonald (Brantford City) in the chair.
On section 1-Aggregate amount of guarantees.
James MacKerras Macdonnell: When the bill was last before the house there was some discussion as to whether it was desirable in making these advances to attempt to tie in rather tightly the trade of the country to whom advances are made, and the minister indicated that he did not think that was wise. I agree with him. Have we been satisfied that the countries to, which advances are made are not tied up with monetary arrangements which will prevent them having control over their own trade? I do not mean in respect of the advances which are being made, because that is probably taken care of; but after all, part of our aim in making these advances is to have open doors for trade. Are we satisfied that these countries have not monetary arrangements which would tie up their trade to go in this or that direction? That might be injurious to our position and might defeat one of the aims which we have in mind in making these advences.


James Lorimer Ilsley: All I can say is that I have no knowledge of any monetary arrangements between any of these countries and any other countries, and have no reason to think they exist.


James MacKerras Macdonnell: I would ask the minister to concern himself with that question, because it may be important to us. I suggest it is a thing which the department might explore. Now I have a second question. Part I of the bill concerns the setting up of what is virtually an insurance company which I understand will have a head just like any other company. The company will operate virtually under the control of that head, subject to the control of the minister. The other part of the bill dealing with advances seems to me to be a sort of foster-child. There are two departments which seem to be interested, the Department of Finance and the Department of Trade and Commerce. I should be glad to know where the responsibility lies, if in fact it lies definitely on either department.


James Lorimer Ilsley: The responsibility for making advances and making arrangements covering advances under part II of the act lies with the Minister of Finance. The responsibility for the insurance company lies with the Minister of Trade and Commerce. Some of these agreements have been tabled. The Minister of Trade and Commerce tells me that he does not sign the agreements under part II of the act. I know he has been present on nearly all occasions when the transactions were completed. The Department of Finance -is the one which settles the terms, so to speak, of these agreements. The council decides, but the Department of Finance takes the lead and assumes the responsibility with reference to terms.


James MacKerras Macdonnell: I have no desire to labour the point, but it did strike me that this might be one of those cases where there was divided authority. I would consider that very undesirable and I am sure the minister would also.


Thomas Langton Church: While I appreciate what the minister and the government have done in this bill and under lend-lease, there are certain questions which should be raised in connection with this bill. I have raised these matters in the house, often alone. The San Francisco agreement, the Bretton Woods agreement, the excise bill, our lend-lease-all these matters are interlocked and interrelated. We cannot discuss one without discussing the others and seeing the cause and effect. The
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United States abrogated lend-lease so suddenly that it left the mother country in a most dangerous position. She had lost her overseas investments and she was forced to revert back to the time when she was practically a small country.
This bill does not go far enough so far as the mother country is concerned. Last fall and again this spring I raised these same questions'. There is no use beating about the bush, there is no use shadow-boxing about this thing; there is no use just having window dressing; we must see what is in the window.
Let us see what is in the window at the present time. Up to Dunkirk the mother country was all alone except for the dominions. She had to borrow money in order to defend the United States shores. Lend-lease was one means for what purpose? It was to protect the United States shores. If it had not been for the protection given by the mother country, with the dominions, after France fell, New York would have been invaded as well as this country. The United States lend-lease bill as amended was good as far as it went, but for two and a half years they had a cash and carry policy.
The Minister of Finance has done quite well on behalf of the government with regard to the proposals concerning loans in this and in other ways for the mother country. I am sorry to see that some of the other parties in the house are not following the principle adopted by the late Mr. Fielding and Sir Wilfrid Laurier of preferential trade within the empire, in which I still believe-it will always be necessary. I believe some announcement should have been made long ago because the mother country does not know where Canada stands on trade, defence and migration. The Ottawa agreements were the greatest boon this country ever had. There are some matters I should like to refer to which may be out of order under this bill, as they were on Tuesday, but as long as discussion is allowed I think we have to discuss many things at the one time if we are to close the session in a few days.
I say, regardless of the merits of the proposals, that it is time the people knew where the empire and the dominions stand. At the present time we hear a great deal in this house from an internationalist and a leftist point of view. The government seems to be in a scramble to placate my hon. friends on the left. It reminds me of that first Easter Sunday when Peter and the other disciple had a race to the sepulchre and "the other disciple did outrun Peter, and came first to the sepulchre." That is more or less the kind of thing that the government seems to be doing in relation to the "left" views expressed by hon.

gentlemen who, I may add, are quite friendly and very courteous in debate. I say that the government has not done its duty in failing to let the dominions know where we stand on the matter of empire trade, defence and migration within the empire. I am absolutely in favour of the Ottawa agreements and of empire trade, and not the less so after reading the debates which have been going on in the senate and congress at Washington.
What we call the Export Credits Insurance Act is a most commendable measure; I have only a few further remarks to make about it.
It is time for the government to lay all cards on the table, and to realize that the export credits bill, the Washington-Britain loan, empire trade, defence and migration within the empire are all wrapped up together; they all interlock. And what do we do? We sit here and fold our arms as a parliament. Influenced by waves of leftist propaganda and international sentiment, we seem to have forgotten all about the British empire, which guarded our shores and saved civilization, and which has been left to "carry the bag". Picture the situation of the mother country at the present time, and remember that, when lend-lease was discussed among the big three, it was understood that this assistance would continue for some time.
I do not think we have gone far enough in aiding the mother country in the matter of providing credits in exchange for goods and services. Also something should have been done for empire crown colonies and empire dependencies apart from the dominions. Take the case of the Fiji islands, whose tribes gave all they had and fought bravely for the empire in the recent war. Take the case of other dependencies and crown colonies whose soldiers, in the African campaign, marched across the desert under Montgomery and Alexander. Yet they have no part in the provisions of this credit bill. I say that some allowance should be made for any of these empire possessions which wish to come in.
My last point is that I believe we as a dominion should long ago have had a conference with the mother country on matters of trade and finance. There is a new government over there at the present time. In the last election the party they represent polled 11.000,000 votes and the Conservatives under Mr. Churchill received 9,000,000 votes, out of a total of 22.000,000 ballots, so the Conservatives were not very far behind.
I tell you this, that unless we as dominions stand by the mother country and get away from much of this internationalism and so-called collective security we shall live to ' regret it. Some of the results are reflected in the pacifism and leagues causing a second world war and resulting in the finan-

Export Credits Insurance
cial burdens of this country, the billions of dollars of war loans which have had to be provided by the taxpayers. In saying this I sympathize with the Minister of Finance, and I always have, in the good work he has done in his lend-lease and export credits act.
While I believe that the policy of lend-lease and export credits was right, and that it was a great patriotic move on the part of the government of the day, I think it should go farther. As for collective security, we have seen where that led to when Britain, in order to obtain a few ships, had to surrender bases. from Newfoundland down to British Guiana.
Let me reiterate that the time has come for the government to lay down its policy as regards the Ottawa agreements. They proved a great boon to this country. The mother country has been consistently our best customer, and it spent a lot of money developing this country. What are we going to do to-day? Apparently we are to enter into bargains in the name of internationalism with a number of different countries outside the empire, many of which were unfriendly to our country, and to do so by proposals and agreements made by ministers of the crown over the head of parliament. There should be a constitutional change which would prohibit ministers from entering jnto such agreements without reference to parliament. I say that course is entirely wrong. Unless the dominions and the mother country hang together they will hang separately. Historically, economically, geographically and financially our interests are one. The handwriting is on the wall, and the war will have been fought in vain unless these foundations are maintained. Only one-third of the proposed guarantees are before us in this bill; we should know something about the aggregate of loans to be made. The government must know all about the proposed United States loan to Great Britain; there was a debate on the subject in the British House of Commons and in the senate at Washington. The cause and the probable effects are well understood by them. I urge the government to give us more' information on these financial proposals and interrelated problems. Are we members just to be a lot of yes-men and nodders to endorse any proposals which the government put forward? I say no, and that it is the duty of the opposition to examine these policies and see how they are interrelated.
I appreciate what the government has done in this export credits bill. I believe the principle is right and should be extended. We should know whether any conference has been held with the new government in the United 47696-192
Kingdom with respect to the Ottawa agreements and preferential trade. Have any agreements or understandings been arrived at over there? If they have, it is the duty of the dominions to find out. If inter-empire trading arrangements are to go by the board it will be a sorry day for this country, because the hope of the world and of civilization is that the dominions and the mother country shall hang together. If they do they will have a powerful voice in the peace terms. Separately they are no match for Russia and no match for the United States, whether in the economic, the financial, the social or any other field. United they are more than an equal. If they hang together they are economically strong enough to get along without any other country. We can use our ports and harbours to transport our raw materials to the whole world, while maintaining our place in interempire trade. It is along such lines that we should be thinking. I am utterly opposed to much of this propaganda for trade and economic internationalism and so-called collective security. Such ideas, when put to the test, failed us years ago and will fail us in *he years to come, unless we take heed. J ask hon. members to stop, look and listen to the real meaning of these policies at the present time.


[Stage Direction]
Section agreed to.
Thomas Langton Church: I should like to ask the minister if he has any reply to make to my questions. Has there been any conference with the mother country while the present United Kingdom government has been inoffice about the matters I have mentioned- the Ottawa agreements, preferential trade, lend-lease, and the rest?


James Lorimer Ilsley: There have been conferences from time to time on the official level, as it is called, but there has not been a conference between governments with reference to preferential trading. I understand that arrangements are being made for a world trade conference; at any rate that is foreshadowed in the news; but that is not exactly what the hon. gentleman refers to.


Thomas Langton Church: What the minister says is absolutely correct, but the people of Canada and members of this house know that all these questions are interlocked, and it will not do to say that they are not. The public and the house should know how we stand, what conferences have been held with tfye mother country regarding the new loan at Washington and how we are connected with it, about Bretton Woods, and about empire preferential trading.
Bill reported, read the third time and passed.

Bretlon Woods Agreements



BRETTON WOODS AGREEMENTS


[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved that the house go into committee to consider the following resolution:
That it is expedient to present a measure to grant authority to accept on behalf of Canada and to carry out the obligations of Canada under the articles of agreement for an international monetary fund and an international bank for reconstruction ^nd development prepared by the united nations monetary .and financial conference held at Bretton Woods in July, 1944; to authorize the payment of the subscriptions required from Canada out of unappropriated moneys in the consolidated revenue fund to an amount not exceeding seven hundred million dollars; and to authorize the borrowing under the provisions of the Consolidated Revenue and Audit Act, 1931, of sums not exceeding seven hundred million dollars.
He said: In the measure now before it, the house is asked to express its approval of Canadian participation in the two new international financial institutions considered at the united nations monetary and financial conference held at Bretton Woods, New Hampshire, in July 1944. This conference was held after a couple of years of intensive discussion among the treasury officials of a large number of the united nations regarding the character and machinery of post-war financial relationships among countries. It was attended by the representatives [DOT] of forty-four nations and drew up proposed articles of agreement of an international monetary fund and an international bank for reconstruction and development. These articles of agreement are printed as a schedule to the present bill. The countries participating in the Bretton Woods conference were not committed to membership as a result of such participation: the proposed institutions come into being only after membership has been formally accepted by countries providing sixty-five per cent of the resources. The articles of agreement remain open for signature on the part of the countries which were represented at the Bretton Woods conference until the end of this year.
The proposed institutions are intended to be part of the permanent framework of international collaboration in the monetary field, though-as I shall endeavour to show later- they have a special significance in the difficult years that lie immediately ahead. The international monetary fund is primarily concerned with securing orderly exchange arrangements, while the bank is intended to help in the restoration of economies which have been destroyed or disrupted in the course of the

war and, over the longer period, to encourage and facilitate the international flow of capital for productive investment.
As members who have already had an opportunity of studying the proposed articles of agreement will, I am sure, agree, the subject matter is somewhat complicated. I do not propose at this stage to attempt to analyse the articles of agreement in detail, though I shall have something to say later about the salient features of the fund and the bank. What I should like to do now is direct attention to some of the more general considerations involved in these proposals.
The main issue which is at stake in the Bretton Woods proposals is the same as that involved in the united nations charter which this house recently approved by so over-w'helming a majority. That issue is: are we and other countries to organize and cooperate for peace, or is each nation going to use its strength and resources at the expense of others in a struggle for survival? In many parts of the world there is evident a keen awareness that if peace is to be maintained and if prosperity is to be achieved it will be necessary to plan for a higher degree of international collaboration than we have ever achieved in peace time in, the past. In pursuit of this purpose, the united nations are in-process of creating a number of institutions which are to serve a9 the instruments of such collaboration. The central institution is, of course, the united nations organization embodied in the San Francisco charter. This, it is hoped, will provide the political basis of security. But it is recognized that security also has an economic basis and that economic instability and poverty and unemployment provide a background conducive to political dissension among nations. More positively, all the experience of the past has demonstrated that it is only through collaboration with others that countries can hope, over a long period of time, to achieve real prosperity. Economic isolation in the modem world is as impractical a policy as political isolation.
It is for these reasons that the Bretton Woods proposals should, notwithstanding their technical complexities, be regarded as one part of the united nations effort to create and maintain a peaceful and prosperous world. On the political side, the keystone in the structure of institutions being set up for this purpose is the united nations charter. On the economic side we have, to date, three main pieces. There is UNRRA, the united nations organization to deal with urgent problems of relief and rehabilitation, which has received unanimous support from all sides of this house. There is the food and agriculture organization,
[Stage Direction]

_______________Bretton Woods Agreements
which this house has recently endorsed and which lately held its first annual meeting at Quebec city. And there are t!he financial institutions discussed at Bretton Woods, whose long-run purposes are to help provide the monetary and financial conditions necessary for the sound and expansive development of international trade and to enable countries to cooperate with each other for this purpose without thereby lessening their ability to carry out domestic policies aimed at full employment for their own people. The structure of international collaboration will be by no means complete when the fund and the bank are established. These institutions do not look after the immediate payments difficulties of countries like the United Kingdom whose international financial position has been so weakened by the war. Nor does the establishment of a monetary framework conducive to liberal commercial policies in itself assure that liberal policies will in fact be followed. For this, separate agreement is necessary. I shall have more to say about these points later.
The objectives sought by the united nations through the establishment of these institutions are the same as those which we as Canadians seek for ourselves-expanded production, trade, employment and higher standards of living all round. The destruction and disorganization wrought by the war are so enormous that it is only through a cooperative effort that there is any hope of establishing normal conditions of trade within a reasonable length of time. We in Canada have happily escaped the physical destruction of war, but that does not mean that our participation in joint efforts to aid in the reconstruction of other countries is an act of outright generosity from wffich we shall get no material return. Quite apart from any moral obligations, the fact is that we need prosperous markets in the world if we are to be prosperous ourselves and we shall need the goods which these economies can sell us when they are reestablished once more.
The Canadian government and parliament have already recognized our responsibility and our interest in helping tide those with whom we have had a mutually profitable trade in the past over their immediate payments difficulties by making provision for direct and guaranteed loans in the Export Credits Insurance Act. The international bank for reconstruction and development will make and guarantee loans for the foreign currency requirements of reconstruction projects of the member countries. Through these two mechanisms, Canada is and will be contributing what it can to getting the war-devastated countries on their feet and getting production 47696-192J
and normal economic life started again. And in doing so, we are and shall be helping our own industries and farmers to find remunerative export markets and thereby to smooth the transition from the war to the peace economy.
From what I have said it is obvious that the Bretton Woods proposals are based in part on the immediate needs arising out of the war. But, significant though this element is, it is less significant I believe than the longer-run aspeets,of the proposals. As I have already indicated, the two institutions are regarded as part of the permanent machinery of international monetary collaboration. As such they are based on the experience of the inter-war period and they represent an attempt to avoid the errors of the past.
Members of the house will, I am sure, recall the disorganized state of international economic affairs that prevailed before the war. The international monetary standard that had been painfully reconstructed during the 1920's was built up by a piecemeal process in which each country chose its own time and its own rate for stabilization without regard to the effect of its action on others. The structure of exchange rates that resulted from the uncoordinated action of different countries was an irrational one which inevitably set up stresses and strains and weakened the system's resistance to shock. The overvaluation of sterling and the undervaluation of the franc are the most frequently cited examples. Another weakness of the system was that it did not provide adequate machinery for regular consultation among countries with a view to getting agreements on changes in exchange rates when changes were needed and with a view to getting agreement on coordinated policies aimed at economic stability. Further, there was no source of international credit to which countries had assured access. When the great depression struck, each country had to cope as best it could with the situation. For all, the prime consideration was to deal with unemployment, and the means of domestic recovery which appeared most practicable consisted of measures whose effect was to thrust the burden of the depression abroad. The result was the strangulation of world trade and the mutual impoverishment of all countries. The characteristic features of world economic relationships before the war were high and discriminatory tariffs, import quotas, export subsidies, depreciated currencies of uncertain value, discriminatory clearing agreements, multiple currency practices.
I am certain that in no quarter of the house is there a desire to see the world return to these pre-war practices. But if the nations
Bretton Woods Agreements
[Stage Direction]
of the world are left to their own devices and are not bound together in an association of mutual advantage which will set certain standards for its members, they will in my opinion inevitably revert to the practices I have described. If we want a reasonable degree of orderliness and fairness. in international economic and monetary arrangements, we must set about to create it. It would bn idle to suppose that countries will embrace it automatically. There was a period in the modern history of the world when the international gold standard ensured order and stability in the international exchanges. At the present time, however, the house can be certain that there are very few countries which would be willing to adopt this standard and to tie their currencies rigidly to gold if that meant that they were thereby committed to abandoning from time to time domestic policies aimed at stability and employment in order to follow deflationary or inflationary influences originating abroad. This does not, of course, mean that they will not use gold as a means of international payment and hold it as a reserve against such requirements.
In practically all countries today the primary objective of economic policy is the maintenance of high levels of employment and production. No international monetary system, gold standard, Bretton Woods or any other, will be generally acceptable which is incompatible with this objective. The task is to harmonize the two objectives of internal stability and international cooperation, so that we can have not only high employment but also a high standard of living through the mutually profitable exchange of goods with other countries. For any international monetary system to endure, it is clear that the technical arrangements regarding exchange stability will have to be supplemented by other arrangements looking towards the prevention, through common action, of violent fluctuations in economic conditions.
The international monetary fund represents the united nations attempt to create agreed * arrangements to which all countries can adhere without feeling that they are entering a strait-jacket and to provide international monetary conditions that will be conducive to the expansion of international trade. The articles of agreement are the result' of intensive work on the part of the experts of forty-four nations over a long period of time. Inevitably they represent at certain points a compromise. No country was able to have each article drafted exactly as it might have wished, and I am not prepared to argue that the document is a perfect one or that experience will not prove

that changes are required. But I do say that the three or four key points in the fund proposal are a realistic and constructive attempt to deal with the main sources of difficulty in pre-war international monetary arrangements.
In the first place, the fund will be a permanent organ of international collaboration on monetary matters. It will be a forum at which problems of common interest to the members can be discussed before they reach critical proportions. This may seem simple enough, and indeed it is, but the fact remains nonetheless that before the war there was astonishingly little organized machinery for international consultation on these questions. The fund will be governed by a board of governors consisting of the representatives of each of the governments which are members. The governors will meet at least once a year and between meetings their authority as regards the day-to-day operations of the fund will be delegated to an executive directorate consisting of the representatives of the five largest countries and six to eight others elected by the remaining countries. It is not too much to hope that considerable benefit will be derived from these regular meetings, through those responsible for monetary and exchange policy in the various countries becoming familiar with each other's problems and being provided with frequent opportunities for working out solutions which will reconcile the interests of all.
The second main feature of the international monetary fund is that the nations joining it recoginze that exchange rates have more than purely domestic- implications and are therefore properly matters of international concern. Countries joining the fund agree on their initial rates of exchange and, apart from a leeway of 10 per cent, undertake not to alter them except after consultation with the fund. Competitive currency depreciation is out: members agree not to propose a change in their exchange rate except to correct a fundamental disequilibrium. These are the provisions designed to ensure exchange stability. But there are other provisions which are designed to ensure that this stability does not become rigidity and that countries will not be required as a result of their membership iq the fund to maintain an exchange rate which has ceased to be appropriate and which therefore involves them in economic dislocation. One of these is the provision which authorizes members to change the initially agreed rates by as much as 10 per cent without this requiring the concurrence of the fund. Another is the provision which imposes an obligation on

Bretton Woods Agreements
the fund to approve a requested change if the change is in fact necessary to correct a fundamental disequilibrium. The fund is specifically enjoined from concerning itself with the domestic policies-political, economic or social-which gave rise to the necessity for a change in the exchange rate to restore the economic balance of a country. It may only concern itself with the question of fact: is a change in the rate necessary to restore the balance or not? Thus the fact that a country has adopted a social security programme or has socialized its major industries can be no concern of the fund's if that member should subsequently apply for a change in its exchange rate: it cannot object on the ground that it disapproves of these measures and that they were responsible for the disequilibrium it is now desired to correct. If the disequilibrium in fact exists, the fund must agree to the change.
I do not think that it can be successfully argued that the provisions regarding exchange stability go further than it is desirable to go or that they represent an undue restriction on the liberty of action of the member countries. The undertaking that members give regarding exchange rates is an undertaking to consult: there is no undertaking to accept the fund's recommendations in all circumstances.
I have referred to two of the main features of the international monetary fund, namely the opportunity it provides for continuous consultation and the provisions it embodies regarding exchange stability. I come now to the third main feature, namely the provisions regarding exchange restrictions.
Members of the fund undertake, after a transitional period, not to impose restrictions on current account international transactions and to remove the restrictions now in effect as soon as conditions permit.
These provisions mean two things, both of particular interest to Canada. They mean that countries will not be entitled to discriminate against imports from any other mem-* ber on currency grounds and that the foreign exchange which a country earns as a result of exporting to any member of the fund will be available to be used to pay for imports from any other member of the fund. When these provisions are fully in effect the Canadian exporter will be able to compete in the markets of the world with the assurance that no special exchange restrictions will be placed in his way. There is to be no question of blocked accounts in respect of any current account transaction and Canada as a country will be under no pressure to use the entire proceeds of her exports to any particular country to buy imports from that particular
country. She will be free to use them to pay for imports from any part of the world. In other words, the international currency system which is being set up is one which permits of the multilateral clearing of balances resulting from international transactions. This is a matter of special importance to Canada on account of the structure of our balance of international payments, with its chronic surplus of sterling and chronic deficiency of United States dollars. The alternative of bilateralism, that is, the attempt to balance the trade between each pair of countries engaged in trade, was developed by Germany before the war and naturally proved [DOT] destructive of international prosperity. It is a system which, by restricting the area in which the proceeds of exports can be spent, necessarily results in worse bargains for the seller than if he had freedom of choice. It is a system, moreover, which lends itself to political abuse by enabling the strong to exploit the weak.
Unfortunately, the abolition of exchange restrictions on- current account transactions and the establishment of true multilateral clearing will not come into effect as soon as the international monetary fund is established. The immediate international financial position of certain countries is such that it will be necessary for them-unless other outside assistance is forthcoming on constructive terms-to continue for a period with exchange restrictions and clearing agreements of the type that have been in force during the war. This is notably true of the United Kingdom, which drastically curtailed her export trade during the war in order to devote all her productive effort to the war, Which lost a large part of her merchant fleet and her income from overseas investment and which incurred huge overseas liabilities for war purposes. It is also true of other countries, particularly those -which suffered years of systematic looting by the enemy. These countries will have import requirements far in excess of their immediate export capacity and it is recognized that the establishment of the fund will not relieve them of the necessity of husbanding their foreign exchange resources. Until a balance is established in the international accounts of these countries through reestablishment of their export trades or through other measures of outside assistance, it would not be reasonable to expect them to drop entirely their war-time exchange restrictions. They do agree, however, on joining the fund that this will be the objective of their policy towards which they will work as rapidly as conditions permit, and the fund is entitled to express views on any restrictions remaining in effect a few years after it is
Bretton Woods Agreements
[Stage Direction]
established. And it is, of course, the case that the establishment of the fund contributes towards the speedier abolition of these restrictions both through the greater confidence which will result from the assurance of financial support and through its general effect in contributing to the expansion of world trade.
I should like to make it clear to members of the house that the exchange restrictions which countries joining the fund undertake to abolish refer exclusively to restrictions on current account transactions, that is, such things as payments for imports and interest and dividends on investments. There is nothing in the provisions of the fund which requires any member to abolish exchange restrictions on capital movements and it is recognized that in order to restrict capital movements it may be necessary to supervise and control all foreign exchange transactions. Far from prohibiting control of capital movements, the articles of agreement stipulate that the resources of the fund are not to be used to meet a large or sustained outflow of capital and that the fund may request a member to exercise controls to prevent such use of the fund's resources. Moreover, there is in the articles of agreement a positive provision to the effect that members may exercise such controls as are necessary to regulate international capital movements. I wished to make this explanation here in order to make it quite clear that an exchange control operated along the lines of our own at the present time is in no sense inconsistent with our undertakings under the provisions of the international monetary fund.
The undertakings which members of the fund give regarding exchange stability and the convertibility of their currency in respect of current account transactions are obviously important commitments. In return, members get the assurance that the fund will stand behind them in time of need. This brings me to the fourth and final aspect of the fund to which I propose to refer to-day, namely the fund's exchange operations.
Each member joining the fund is assigned a quota, which represents the measure of two things: its obligations to provide resources to the fund and its ability to draw resources out of the fund. The quotas of the countries-represented at the Bretton Woods conference were worked out there and printed as an annex to the articles of agreement. These quotas amount in the aggregate to $8,800 million. The United States quota is $2,750 million, the British 81,300 million, the Russian 81,200 million, the . Chinese, S550 million, the French 8450 million, the Indian 8400 million

and the Canadian $300 million. All the quotas are expressed in terms of United States dollars. The actual payments of tht^ subscriptions to the fund are, however, not in United States dollars but partly in gold and partly in the national currency of each member. The gold subscription is to be either 25 per cent of the quota or 10 per cent of the country's independent reserves of gold and United States dollars, whichever of these is less, with the balance payable in national currency.
The fund as originally constituted will therefore consist partly of gold and partly of national currency. It is believed that originally about $1,800 million of the fund's assets will consist of gold, and the balance of various national currencies. Members have the right to buy foreign exchange from the fund in amounts equal to their quota plus the amount of gold they originally subscribed. This right is subject to certain limitations of both a quantitative and qualitative nature. Thus, unless the fund waives this condition, purchases in any single year may not exceed 25 per cent of a member's quota, and a country having substantial international reserves of, its own must use these reserves to meet adverse balances to the same extent as it draws on its quota. Moreover, if the fund finds that a member is making use of its resources in a manner contrary to the purposes of the fund, it may, after due notice, suspend it from making further use of them. These provisions for exchange transactions with the fund are a very central part of the fund agreement. It will be seen that the fund's resources are a revolving fund, and international pool of credit which is available to member countries to meet adverse balances in their international payments and which allows time for adjustments to be made. It is this element of assured access to credits which provides the necessary flexibility in the system and which enables the countries adhering to this international standard to do so without fear that they are hereby entering a strait-jacket.
Under these arrangements, a country which suffers a temporary deficit in its balance of international payments due, say, to a crop failure at home or a recession in its. principal export markets, will know that it can draw on the fund to see it over the payments difficulties. It will therefore be relieved to that extent of the necessity of taking immediate steps to adjust its payments position -such steps, for example, as exchange depreciation, or import restrictions which would have a depressing effect abroad, or measures of internal deflation which would have a pressing effect at home. The knowledge

Bretton Woods Agreements
that the fund is there in cases of need should make countries more willing to use their own reserves to meet temporary deficits in their balances of payments. In short, by increasing the amount of international money, the international monetary fund introduces an important factor of flexibility which provides countries with the assurance that they will not, on each occasion of adversity, be confronted with the choice between cutting themselves adrift from the world economy or abandoning domestic policies aimed at high employment.
I believe that in these four points I have covered the highlights of the international monetary fund, though members will no doubt wish to have more detailed explanation of certain features at a later stage. I can deal with the international bank for reconstruction and development more briefly because, though it is no less important than the fund, it is less novel in conception.
I have already outlined the broad general purposes of the bank which are to aid in the reconstruction of war-devastated countries and in the development of economically backward areas. The bank is, of course, not intended to provide all, or nearly all, the capital required for these purposes. It is intended that private international investment should in due course supply the bulk of the funds required but it is recognized that for a while private investors in the creditor countries may hesitate to make foreign loans.
The bank is to have a capital of $9,100 million, subscribed by the forty-four countries represented at Bretton Woods. The subscription of each country to the bank is approximately the same as its quota in the fund. The Canadian subscription to the bank is $325 million. The subscription of each member is payable as to 2 per cent in gold and 18 per cent in national currency. The remaining 80 per cent of the capital subscription remains uncalled as a surety fund against obligations guaranteed by the bank or moneys borrowed by it. If it becomes necessary to call up unpaid capital in order to make good on an obligation of the bank, the call will be made proportionately on each member.
The bank will engage in activities of three types. First, it may make direct loans out of its own subscribed capital resources; second, it may guarantee loans raised through the private investment market; and third, it may make loans out of funds raised through the issue of its own obligations. Loans will be made or guaranteed only if the bank is satisfied that they increase the productive capacity of the borrower and are within the capacity
. of the borrowing country to service and each loan will have to be guaranteed by the government of the country in which the project is located or by the central bank of that country. The bank will charge a commission of 1 to 1| per cent on loans made or guaranteed by it.
John Thomas Hackett: Is that an annual charge?


James Lorimer Ilsley: No; it is what is to be paid in initially. Eighty per cent of the capital is uncalled. Only twenty per cent is called,, and that is payable as to two per cent in gold and eighteen per cent in national currency.
As regards the original eighteen per cent of the capital subscription put up by each member in its own currency, this may be loaned by the bank only to make purchases within the country concerned. No such condition may be attached, however, to loans financed by the bank through the issue of its own obligations nor is the bank authorized to impose as a condition of its guarantee that the proceeds of a loan should be spent in the territory of any particular member or members. It should be noted, however, that the bank may borrow funds or guarantee loans only with the approval of the country on whose market the funds are raised. Outstanding loans made by and guaranteed by the bank may not exceed the unimpaired capital, reserves and surplus of the bank.
The most novel feature of the bank proposal is perhaps the way in which it recognizes that while only certain countries are in a position to lend abroad, namely those which have surpluses in their current account balance of payments, the process of foreign investment, through its effect in raising productive efficiency and living standard, is one from which all countries derive benefits-and that it is therefore right that all should share in the risks attached thereto. The risks involved in the bank's activities will be shared proportionately by all the participating countries since all will be called upon to make good any losses which occur.
I wish to turn now to the specific obligations of Canada under the fund proposals and their specific advantages to us. First, our financial obligations. Under the fund our quota is $300 million in terms of United States currency; we shall be required to put up $75 million in gold and the balance in Canadian dollars. To whatever extent the fund does not require Canadian dollars for its operations we may, under the articles of agreement, substitute non-interest bearing nonnegotiable notes redeemable at par on demand. The fund woiild require redemption of these notes only when other members had an excess of payments to Canada and there was a net

Bretton Woods Agreements
demand for Canadian dollars which the fund was called upon to satisfy. In these circumstances we should be obliged to raise funds to redeem the notes and a financial burden would arise. But it is important to note that the burden arises because we have a favourable balance of payments and not because we are members of the fund. Without the fund the favourable balance would give rise to accretions to our foreign exchange reserves which also would have to be financed. Or alternatively, if there were no fund, foreign countries might reduce their purchases in Canada because they were short of means of payment here. In that case our financing problem would be reduced but our economic problem would be aggravated.
The important thing for members to bear in mind is that the only thing that can happen to the Canadian dollars which we put into the fund is to be spent in purchasing goods and services in Canada. While they are being spent in this way and the fund's holdings of Canadian dollars are being reduced, we are in effect extending credit to foreign countries through the fund. But it is credit which need not remain outstanding any longer than suits us, for if we wish to take repayment in the only practical form, namely goods and services, we shall have an import surplus which we will be in a position to finance through the fund.
As for the non-financial aspects of the fund agreement, I venture to think that there are few countries in the world which have a greater interest in securing orderly exchange arrangements and expanding world trade on a multilateral basis than Canada. Foreign trade remains a most vital element in our economic system and it cannot prosper under conditions of widely fluctuating exchanges, blocked accounts and bilateralist and discriminatory trade and currency practices. The structure of our balance of payments, with our chronic surplus of sterling and chronic deficiency of United States dollars on current account transactions, is such that we must have multilateral clearing and b6 able to offset the one against the other if we are to prosper in this country. While the Bretton Woods proposals do not ensure multilateral clearing at once, they do hold out the best hope that has been offered so far that this will be adopted by all countries as their common objective to be achieved within a reasonable period of time. .
I should like to make a few general observations by way of conclusion. I think that the house, in considering these proposals, should have a proper appreciation of the ser-

iousness of the foreign situation and of the nature of the real alternatives to the general approach towards the organization of international economic relations represented by Bretton Woods. The economic systems of half the countries of the world have been turned topsy-turvy as a result of the war. Capital equipment of all sorts-roads, bridges, factories, transport systems-have been destroyed, rich farm lands have been inundated, millions of persons have been separated from their ordinary place of employment. Currency systems have been weakened by inflation. Production has been reduced to painfully low levels. The network of normal trade relationships built up over past years has been destroyed. With regard to parts of Europe there is such a complete black-out that we can only imagine the degree of economic disorganization.
Members of the house will have clearly in their minds the way in which the economic dislocations caused by the last war remained to plague us in the 1920's and 1930's. The extent of the dislocation this time is infinitely greater and anyone who believes that it will be possible to introduce order and prosperity into international economic relations in the present state of the world by'small, unimaginative measures is living in a fool's paradise. Generally speaking, the attempts the world has made in the past generation to maintain a functioning world economic system have been of the patch-work variety: the motto has been "too little and too late." Past experience is not a good enough guide as to what we should be dbing now because the experience of the past has on the whole been unsatisfactory. There is no use relying in 1945 on the expedients that were tried and failed last time. We have to base our policies not only on an appraisal of past experience but also on an appraisal of present requirements.
Bretton Woods is an attempt to organize international monetary cooperation on a national basis for the common good. I believe that it marks a great step in advance. But it is only one step and a great deal more than Bretton Woods will have to be agreed to if we are to make real progress. In particular, some means will have to be found of dealing on a constructive and imaginative basis with the transitional balance of payments difficulties facing the United Kingdom and other countries whose foreign position has been weakened as a result of the character and extent of their contribution to victory. I do not believe that there is any economic issue under discussion to-day which involves higher stakes than this problem. If the approach to

Bretton Woods Agreements
it is hesitant and inadequate, then the world can look forward with assurance to economic conflict and economic distress for a long time to come.
What will happen if adequate steps are not taken to deal with the transitional balance of payments problems? The countries whose economic systems have been disorganized and which are short of foreign means of payments will be obliged under the pressure of necessity to impose restrictive controls of every type on their foreign transactions. They will go in for restrictive import licensing and prohibitions, exchange discrimination and every sort of regimentation to keep their foreign expenditures, particularly of the "hard" dollar currencies, within the limits that they feel they can afford. They will do everything in their power to keep consumption of foreign goods from rising and will pursue policies aimed at national self-sufficiency. These measures will ' provoke retaliation elsewhere and we shall find ourselves treading the path of which we caught a glimpse in the 1930's. The main difference as compared with the 1930's will arise from the fact that the world's knowledge of the technique of restriction and retaliation has been considerably improved in the interval.
It is difficult to believe that countries like Canada, the United States and the United Kingdom will stand ready to risk this type .of development because they fail to grasp the magnitude of the issues involved or the grievous consequences of lack of imagination and courage. There is no question here of generosity or lack of generosity. All that is required is understanding of the direction in which their own long-term interests lie. For all these countries, that direction is an expanding world economy based on liberal and non-discriminatory principles. It would be a major tragedy to have this escape their grasp because it was felt that one month's war expenditure was too high a price to pay for economic peace.
I have not hesitated to paint a somewhat gloomy picture of the world outlook. I have felt conscious of a responsibility in asking the house to approve this measure, not to promise more from these institutions than they will be capable of delivering. Bretton Woods makes an important contribution to the solution of the problems confronting us but it does only .part of the job. Surely it is not too much to hope that with the knowledge gained and the experience acquired during the past twenty years, the countries whose policies are of decisive importance will this time approach the task of world economic reconstruction
with proposals which are on a scale commensurate with the problems involved. Surely it is not too much to hope that we shall not once more fall into the trap of "too little and too late."


James MacKerras Macdonnell: Mr. Speaker, I am sure I express the feeling of every hon. member when I thank the Minister of Finance (Mr. Usley) for giving us this interesting and comprehensive statement of this all-important question.
I think it is impossible to overstate the importance of this.
I have no desire to detain the house in discussing any of the technical features, because I understand from the minister that there may be an opportunity to do that later if the need arises, but I wish to make a few remarks on the general situation.
The terms "Bretton Woods" and "Dumbarton Oaks" have been thrown freely about the world now for a great many months. I suppose Dumbarton Oaks registered deeply in our minds because it was concerned principally and primarily with the question of trying to create a framework of a peaceful world. We have all in our own persons or the persons of our families and our friends understood during these last years what war is, and we were all desperately anxious that when the San Francisco conference met and gave approval to the proposals of Dumbarton Oaks it would succeed.
However, for reasons present in the minds of us all we have gone through months of disappointment; that is not a strong enough term, we have an overwhelming anxiety. We find ourselves on the verge, in the immediate aftermath of one war and having gone through anxieties which seemed greater than we could have imagined; in some ways we feel at the moment that we are facing even greater anxieties, because we are dealing with things which are largely unknown, unpredictable and almost beyond imagination, in their scope and power.
Now w^e have the other side of the approach to peace. As the minister very truly said, are we and other countries to organize and *cooperate for peace? We all agree that economic organization can do a great deal for peace. No doubt we all agree that it is because we organized ourselves so badly in an economic way in the years between the two wars that we fell into the second war. I suppose I would be making a correct statement if I said that what we are now trying to do through this agreement is to seek to avoid the cataract of unfortunate things-I was going to say disasters-that piled on us after the last war. Let us go over them briefly.
Bretton Woods Agreements

First, there was the terrible inflation in Germany, coupled with the tremendous credits from the United States to Europe, and, most illogically, the raising of the United States tariff-two things utterly inconsistent. We go on to later events in that dismal decade: the new German mark set up in 1924, the British pound overvalued in 1925, and that uneasy five years when we seemed to be having prosperity, at any rate, on this continent and when we could not foresee what was coming, although we should have been able to foresee it, because of the things the minister has already described. In 1929 or 1930 came another raising of the United States tariff, followed by our own 1930 tariff, which must have been very unpalatable to many who voted for it but which was in line with the times. In 1931 we had Britain going off the gold standard, a step precipitated by the series of disasters, the failure of the chief Austrian bank in that year, and then the welter which followed, culminating in the ill-fated world economic conference in 1933, and by no accident, accompanied almost to the very day by the appearance of Hitler in 1933. The world was ready for him; we had done a good job to prepare the world for him.
Now we are trying through this device, as the minister said, to organize ourselves at this time for peace. Do not let us be frightened by the technicalities-sometimes we think it is the jargon-of the language of foreign exchange and imagine that it is something which does not enter into the life of each one of us. I do not think it is an exaggeration, when one considers Bretton Woods, and that this financial arrangement is based on the presupposition that there will be trade arrangements-otherwise I think the minister will agree that it has no chance of life-for us to conclude that this proposed arrangement goes to the very root of the matter, and that if it should fail our prospect will be very gloomy indeed.
What is the prospect we would have? Let us make no mistake about the seriousness of it to every nation, perhaps more to our own nation than to any other. What is the alternative? We use the terms "multilateral" and "bilateral" trade. They are long and complicated words. The minister, I think, has helped to make them clear this afternoon. We know what multilateral trade is. We had it in the years before the war and, with it, a reasonable degree of prosperity. Nations as a whole through their trade arrangements did good to each other, whereas in the thirties each was seeking to do the maximum harm to the other, or at least taking steps which had that effect. As the minister has indicated, we 
may not have any doubt about the effects of bilateralism and in particular we need not have any doubt, if this Bretton Woods agreement fails, what will 'happen to us in a regionalized world dominated by the sterling and . the dollar blocs.
Let us be clear what the sterling bloc means to us. We do not fit into the sterling bloc, but most of our competitors are in it-the Argentine, the Scandinavian countries, Australia, New Zealand. Let us be realistic about this. It means that since they are in the sterling bloc they have all the advantages, which we have learned to know only too well, of trade which comes from common currency arrangements. The minister has emphasized that already, and not a bit too strongly. He has referred to the chronic situation which we had in the past of a surplus of sterling and a dearth of dollars.
If we look back we can see that the prosperity of Canada has been based upon and has presupposed intimate and extensive commercial relations between the United States and the United Kingdom. As far as I can see, we never have and never can have prosperity if that does not exist. So that is the meaning of bilateralism; that is what the sterling bloc means; that is what we face, as I see it, if Bretton Woods fails.
What is the other side? Bretton Woods, as the minister very truly said, is an attempt to create a world where we can continue in peace some of the cooperation we had in war. I know there is a certain amount of irony in talking about cooperation when we are also going to compete. But we have the two things side by side in sport; we have them in various other fields. Cooperation and competition are not so mutually exclusive as they sometimes appear. What do we seek in a new world economic organization? We seek a world where there can be at least as great a degree of freedom in trade as there was before the first world war. How is this to be achieved? There is, as I understand the situation, only one possible way of getting it. That is why we have been all watching, I suppose with almost feverish anxiety, what has been happening in Washington, hoping that the United States have learned at long last that trade is a two-way street, and that they cannot live alone economically any more than they can live alone politically. I hope that the announcement in the newspapers this morning, which "all of us were glad to read, is an indication that they are coming to that view, although we know we cannot count on it too confidently, because there are many there who have not yet been convinced. Nevertheless I think it is fair to say we can

Bretton Woods Agreements
assume that the conversations which went on at Washington, while primarily connected with finance, and while issuing in this agreement of which we have read this morning, did not ignore trade. It would be "the play without Hamlet" for a financial discussion to ignore trade, and I think we can assume, indeed we have been told day after day in the newspapers, that the vital principles of trade were, as they had to be, constantly considered at Washington. Therefore, while the agreement announced this morning does not include trade arrangements, I hope-indeed "hope" is not a strong enough word-I pray, in the interests of the whole world, and primarily of our own country, that it does mean that various broad considerations and agreements with regard to the future of trade have been accepted, and that this substantial loan is the first step in facilitating their operation.
What are the chances of this succeeding? We used to hear a great deal in the early - days about various technical proposals. There was the White plan, which we understood involved a substantial return to the gold standard; the Keynes plan, which leaned substantially against it because of the lesson Britain learned in going on the gold standard in 1925, and other things; and then our own Canadian plan, of which we heard something, and which came in somewhere between. At any rate, I believe that we have a remarkably encouraging prospect in the fact that forty-four experts agreed. That is a wonderful thing. I have scarcely ever seen four experts who could agree, and for forty-four to have come to an agreement was a great tribute not only to themselves but to their belief in the seriousness of the problem which they were discussing.
Now there is an agreement and the Minister of Finance comes and asks us to approve it. I suppose some people will say, can we afford this large amount of money? My answer is that we cannot afford not to afford it. I say that because in my opinion-and I wish to avoid repetition-our position in this country is at present one of very great danger. I say that at the risk perhaps of repeating what I have said before, but I shall be brief about it. I say that this country has prospered bnly when we have had comparative freedom of trade and export. We are a country that has specialized. What have we specialized in? In wheat, in nickel, in aluminum, in newsprint and I suppose in a dozen other things which I cannot think of at the moment. What does that mean? It means in plain words that we produce a great deal more of these things than we can consume.
Take first of all the question of wheat. If I may, I would remind the house of what I said the other day, and I was sayng only what a hundred other people have said. When we talk about the internal reorganization of our own economy we should ask ourselves ' first of all since we can only consume 25 per cent of our own wheat what we are to do with seventy-five per cent of the people who grow wheat. I will not pursue that. I wish, however, to make the position clear. That is what I mean by saying that if we cannot have multilateral trade the prospect for this country is indeed bleak.
I come therefore to this position. I have tried to indicate what in my opinion is involved, the two alternatives. Multilateral trade means primarily that the United States is prepared to take a different tariff attitude.
I speak of the United States because that country is so much bigger than the rest of us, and I hope that the people of the United States have at last realized that even they cannot prosper without foreign trade and are therefore prepared to cast their bread upon the waters and that they are prepared to do so not only so far as Great Britain is concerned, but for the good of others as well, because China needs rehabilitation and the world needs rehabilitation;.and so far as I can see, unless peoples are prepared to face a drastic reorganization of their economies, unless we in Canada are prepared to contemplate such a drastic reorganization. I see no hope for prosperity in this country of the kind that we have had and the kind that we shall not have again until we have multilateral trade. I say no more about the sterling bloc. That is the alternative.
I now come to a few comments on the present situation. I should like to say what I think of certain aspects of our own action. For the last three months negotiations have been going on at Washington and they have been fraught with tremendous importance to us. The aim was to see whether the United States, the great "have" country, the great natural-resource country, the great financial country, was prepared to take steps which would enable Great Britain to see its way to adherence to the Bretton Woods agreement; for, as I understand it, if Great Britain does not adhere we shall not get the sixty-five per cent and the thing will not click.
As indicated by the Minister of Finance, and as indicated in the statement made by the Minister of Trade and Commerce (Mr. MacKinnon) yesterday, we have stood by. I have no intention of becoming controversial, but I wish to point out one or two things
Bretton Woods Agreements

which, in my opinion, have some substance in them. I think it is a great pity that we felt that we had to stand by in these last three months. I have seen various statements from competent people, one of them appearing in a responsible paper a day or two ago, another being that very statement which the Minister of Trade and Commerce read yesterday, with reference to the heavy and indeed the- disastrous import restrictions which Great Britain has felt it necessary to impose upon us by reason of the scarcity of dollars. The statement to which I have reference is that the alleviation of these restrictions will depend upon the amount of financial assistance coming from abroad. They did not say the United States; they said "abroad", and that was interpreted, and I believe rightly interpreted, by a competent commentator as meaning the United States and Canada. That is what I believe the word meant, and that is what I think anyone would presume it to mean.
It has been very unfortunate that we have not been in trade consultation during the last three months, but I think I know the answer. The answer made by the Minister of Trade and Commerce was that we had to await the outcome of the United Kingdom-United States conversations. Personally, I do not accept that explanation; I do not think that was necessary. I believe we made a mistake in that regard and I hope it is not a costly mistake. At any rate, I wish to say this.
I want to go back to one comment I made a day or two ago in this house, namely, that there is great danger that in these negotiations we may rely too much on meetings of experts behind green doors.
I am not decrying the experts. No one has a greater belief in them than I have. But I suggest earnestly that there is grave danger of the public being kept out of their own business. I am not suggesting that you can make a trade treaty by having a debate. I am not suggesting that at all; I have enough sense to know that it cannot be done. I suggest, however, that this trade situation with Britain has been tense. In fact, we all know that it is. Tenseness is' in the air, and now we have this sudden action by Britain. Apparently it was sudden because Mr. Attlee did not seem to know about it when he was here. The situation, at any rate, has resulted in these sudden restrictions which Great Britain has imposed.
I do not blame them; maybe there was no other way out. But the public was taken by surprise, and I am not at all sure that the responsible officials and the ministers were not also taken by surprise. Certainly, we the public, were taken by surprise.

I suggest that this is a case where public opinion should have a chance to express itself. I believe that the people of Great Britain realize the part that Canada has played with them. I am not suggesting eleemosynary arguments; not at all. I believe that the people of Britain have a great feeling against regionalism, and I think that if they had had a chance to know the situation it would have been better. It would have been better if we had seen fit to debate the matter 'in this house, but instead we have been sitting here for three months, not always profitably occupied. Had we seen fit to debate the matter, some good might have been done.
I am not overlooking the fact that in April the government issued a white paper in which they enunciated what seemed to me to be a wise attitude toward foreign trade; but that does not seem to me to be the same thing as having a debate in this house, taking the views of the house, having the press of the country express its views, and having the public apprised of the situation. I think the public was taken terribly by surprise when the thing happened a week ago. The people were inclined to feel harshly about it. I did until I pulled myself up and began to realize the situation. But when you read the memorandum which the Minister of Trade and Commerce submitted to the house yesterday you cannot blame them. You can only say, why was not something done about it?
Well, was there nothing that could be done to prevent it? My contention is that there was something that could have been done, and I repeat, it is a pity that in these last ' three months we have not been in negotiation. Maybe that part can be remedied, but I seriously suggest that there is force in the other point I made, that, after all, the people primarily interested in this are the public in Canada and in Great Britain.
Experts have their place, and it is an important place too.
Looking back on it I am not able to see why it would not have been possible tq have the policy enunciated. I asked the minister the other day whether our policy was formed.
I think he said "no." I asked him whether our policy in this matter should not be formed, and again, as I recall it, he said "no." I am coming back to that and asking-and this is really my last point-whether it is not possible even yet for the minister to give us- without disclosing any secrets, or invading the field of the experts-an opportunity before the house prorogues, to discuss this matter, which is literally a matter of life and death to us.


Major James William Coldwell: Mr. Speaker, I think in all probability the resolution which is now before us, and the bill which the resolution foreshadows, may be one of the most important matters which have come before this house in many a long day. I agree with the hon. member for Mus-koka-Ontario (Mr. Macdonnell) that public opinion should be thoroughly informed of what this agreement really means.
I have read the agreement; I have read various articles concerning it, and I confess that the complexity of the agreement is such that without the expert advice which one lacks in a party such as this, one feels that some more information is needed. I do not propose to. put any obstacle in the way of the minister getting this resolution through the house, but I hope and believe- that he will enable those of us who wish to carry out all the obligations implicit in the building of an international organization to be able to support- the bill when it comes before the house. In order to give it that support, however, I must make it very clear that I want to understand what we are doing. My colleagues and I do hot want to be in the position of voting for such an important agreement unless we are absolutely familiar with its broad principles and probable effects. Therefore I am hoping that the minister will carry out, and I believe he will, the proposals that have been made in this house not only by myself but by others that the bill will go before the banking and commerce committee where we can get the expert opinions that the experts have expressed elsewhere, regarding this matter and that they will give us the benefit of all the opinions, know-ledge and advice'which we can get. If that can be done, I can (.assure the minister that w-e shall facilitate this particular resolution.


James Lorimer Ilsley: I agree that that ought to be done. I intend to move that the bill be referred to the banking and commerce committee. I would hope it would be given second reading and referred. I do not think the house loses any rights in doing that.
Mr.-COLDWELL: No; as long as we have the assurance that this bill will be referred to the committee we are not going to oppose this rfesolution. That is the understanding I want to give the minister and the house at this time.
I recognize, as did the hon. member for Muskoka-Ontario, and the minister when he introduced this measure, that we are faced with international chaos unless we can build some international system- which will- not only
Bretton Woods Agreements
prevent future war, but prevent economic conditions from arising which will make future war more or less inevitable, and these conditions often arise. I am not going to say they always arise, because I do not intend to enter into an argument regarding the influence of economics and social developments on war, although I have a point of view regarding that matter. I merely cite it as one of those sets of conditions that from time -to time seem to lead to war.
I was present, as a delegate at the San Fraqcisco conference, and I am grateful for that experience. I know the difficulties of obtaining consent from sovereign nations to anything which may seem to impinge upon their sovereignty. If I may add this other personal experience, only last week-end I attended a conference which I considered to be perhaps even more fascinating, and to some extent more instructive and certainly more terrifying than the great conference I attended at San Francisco; At the conference" I attended in New York last week-end I had an opportunity of listening to scientists, many of whom had studied and developed atomic energy and produced the atomic bomb. I wish to say that those scientists, not politicians, came to the conclusion that many people in the political lives of our countries are being driven to, namely, that somehow or another, and as rapidly as possible, we must build a world organization which will be able to give mankind government at the international level, in order to solve the great problems of peace and war which might arise in the future.
It is quite true, as the hon. member for Muskoka-Ontario said a few moments ago, that world trade channels and conditions have changed considerably in the last quarter of a century. One reason that makes me desire, perhaps more than any other, to get a clear view of what this means is that in effect I believe we are to a large extent under this agreement linking our own fortunes as a nation and the fortunes of the world to the economy of the United States.
Before the great war, Great Britain was the principal trading nation of the world. She relied upon what was called the unfavourable balance of trade, which enabled her to make tremendous purchases overseas and to receive goods produced in every part of the world, and which gave her what appeared to be an adverse balance of imports over exports. Then the world producers were able to find outlets for the goods which they produced. But that has all been changed by two wars, and to-day we are in a very different position. The nation which to-day con-
Bretton Woods Agreements

trols, shall I say-and I am not sure of my figures in this regard-practically half the great capital assets of the world-I did not say "owns" them; I said "controls" them- and is in receipt of the highest national income many times over is the United States. After the first great war we saw the United States, having become a great creditor nation, refusing to accept the obligations of that position. She refused to accept the imports that were vital to the welfare of the rest of the world. Consequently to-day we wonder if there has been a change in the conception of international trade and if the United States is prepared to do what is necessary in order that the nations of the world may trade, and trade with her. In reality is she prepared to receive payments in the only form in which payments can ultimately be made, namely, in the form of goods and services? If she is, I think the complexion which may be placed upon this Bretton Woods agreement is a much more optimistic one than we might otherwise think.
We have to bear this in mind: When I say this about the United, States, let us remember that Canada, too, is a creditor nation, and the policy which our country must follow is that of agreeing to international trade. I think that was implicit in the remarks of the hon. member for Muskoka-Ontario, who is sitting with a party which has been historically a high-tariff party, but which to-day, if we can follow what the hon. member said, is prepared as a party to revise that point of view fundamentally. If that is so, I believe that it will be a good thing for our country. Indeed, if we can reach the unanimous conclusion that Canada is in favour of receiving payments in goods for the commodities that we export, and we use our imports to improve the standards of life of our own people we shall progress. After all, it seems to me the only object of trade is to assure results that are mutually advantageous to all who trade. If the trade of Canada is to be mutually advantageous, then the exports we send abroad must be paid for by the receipt of some things in return; and those some things, if I may adopt that phraseology, must be used not for the enrichment of a small group of people but to raise the general standards of living for all. On that basis international trade is sound and acceptable.
I have just glanced at the evening newspaper. The hon. member for Muskoka-Ontario did not have that advantage; it was brought into the chamber whileihe was speaking. I am glad to note, and it makes me feel a little easier about this agreement, that if unofficial dispatches from Britain can be be-

lieved, as I think in all probability they can be believed in this instance, there is great hope that the United States will cooperate with Britain and the rest of the. world in freeing the channels of trade to a large extent, and reducing those tariff barriers that bedevilled the world prior to the war. If that is so, then Canada as a great exporting nation must also assume her proper place as a great ' importing nation and use the imports we are able to get for the produce we export to increase our standards of living.
But I would not want to leave my thought at that, Mr. Speaker, because I think we have to look beyond our own selfish, nationalist point of view and the good of our own people. I remember one evening at San Francisco the statement was made that before the war two-thirds of the population of the world, that is two persons out of three, never had a sufficient amount of food with which to fill their stomachs day by day. That was not during the war, remember, but before the war. I believe that in a Christian civilization such as that in which we boast we live we must pay some heed to these other countries. Therefore I hope and trust that in this B;-etton Woods agreement, when we come to study it, we shall find ways and means of enabling the areas of the world where these conditions exist, which we sometimes call the backward regions of the earth, to raise their standards of living. If we do so, then we make our own standards of living more secure, because no nation and no group of people can keep up their standards of living permanently if a very large portion of the world remains on much lower standards. So that as far as this agreement seeks to achieve that end-and that is the problem I want to see investigated to some extent when this bill is before the committee-it hiay be very worthy of our support, but I want to know about that before I say that the agreement will receive our support.
Since the bill is going to committee I do not think there is very much more I wish to say now. I really rose to ask the minister the question which he answered. I am glad to have [DOT]that answer, and I hope that when we go into this bill the doubts we may have in regard to tying the world to the United States dollar or the United States economy or the modified gold standard will be resolved. Perhaps I should say that I know this is not tying the world to the gold standard as we knew it in days gone by, because the factors entering into this agreement are not the gold standard factors. My understanding of the old gold standard was that a nation's currency had a fixed -value in terms of gold, that its currency

Bretton Woods Agreements
was always interchangeable in 'terms of gold and convertible into gold on demand. This agreement, I know, does not restore that. The old gold standard compelled each nation to allow gold to move freely between itself and all other nations of the world. We do not have that here, but as the minister indicated we have something else. This agreement is in two parts. I am not going into them, although I had intended to do so if this had not been going to committee. The first part has to do with the stabilization fund, and incidentally it has been interesting to me to see where the opposition has come from in regard to this Bretton Woods agreement. The stabilization fund has been strenuously opposed by the American bankers' association. They do not like it because it places some three billion dollars ini an international pool over which the American bankers' association really will have no control. On the other hand, the more progressive elements in the world have favoured the stabilization fund. As far as the international bank is concerned, the American bankers' association and other bankers do like it, because it is more orthodox and they perhaps understand its implications and intend to use that bank for their own advantage, whale the more progressive elements have not liked the idea.


Mr. QUELCH:: Ernest Bevin opposed it, too.


Major James William Coldwell: That is quite right; I said that the more progressive forces did not like it, and if Ernest Bevin is not one of the more progressive forces in the world, I do not know who is at the present time. But the thing that strikes me is this. We may all find something in this agreement that we feel is advantageous to the world and to Canada; we may all see something in this agreement which we think is disadvantageous to Canada and to the world, but it seems to me that when this bill goes to committee and is thoroughly investigated our final judgment must be rendered on balance of its advantages and disadvantages, as I said in this house once before. We shall come to our conclusions then.


Mr. J. H. BLACKMORE (Lethbridge):: First of all, Mr. Speaker, I should like to thank the hon. member for Rosetown-Biggar (Mr. Coldwell) for the only really intelligent speech on this measure this afternoon. That may sound an extreme statement, but I believe the investigations of the committee will prove the truth of much of what the hon. gentleman said.
May I refer for a moment to the remarks of those who have already spoken. The Minister
of Finance (Mr. Ilsley) gave us an excellent dissertation on the subject and presented the case for the Bretton Woods agreement just about as admirably as	it could be
presented by the most highly skilled experts in the world. I presume he had the assistance of the very best available experts in preparing his speech. May I refer to the various things he said? In the first place, he wisely acknowledged that economics are a fundamental cause of war. Let us in this house never forget that for a moment.	If we are to
remove war from the world we must remove the economic cause of war; and fundamentally the economic cause of war is not various modifications and manipulations of a nation's money but the fact that some nations are unable to sell as much goods as they need to buy. That applies to all nations likely to be debtor nations. The other nations are able to sell far more than they buy, and they become creditor nations. The difficulty which confronts the world at this time is to achieve some equalization between such countries as the United States, with its colossal productive capacity, and such countries as Britain which, because of the exhaustion of war, finds itself in an abject position from the point of view of productive potential.
The minister said another thing which is entirely worthy. He said the main issue before us is peace. I agree. And I think this house will discover that the main objection to Bretton Woods is that there is not a single phrase in it which by any kind of interpretation can mean any move toward peace in the world. As a matter of fact, it is one of the most complete and perfect guarantees of which the mind of man can conceive, that there will be war.
The minister mentioned institutions which were to be used, and referred particularly to the united nations charter. I am not going to discuss that. We will take his word upon it.
Then he turned to the economic aspect of the world situation, and told us that thus far w<* have three measures which are designed to solve the economic problems of the world. He named UNRRA, the food and agricultural organization and Bretton Woods. I am glad he named those, because by naming them he proved the absolute mental bankruptcy of the men who provide the whole set of measures which are proposed to be used to guarantee peace; for there is not a single thing in any one of the three of them, or in all put together that will overcome the fundamental economic difficulties which confound the world at the present time.
Bretton Woods Agreements
:ommons
He said that we need prosperous economies in the world. True. Bretton Woods will not produce prosperous economies. Bretton Woods will produce absolutely ruined economies everywhere in the world, except in the United States, Canada and Russia.
He* mentioned export credit arrangements. Yes, but export credit arrangements only put nations more deeply into debt, and the thing which is destroying them at the present time is unrepayable debt.
He mentioned that Bretton Woods is designed to be permanent. That is a warning to us. He gave us the outline of the features which were involved in Bretton Woods-four of them-and I shall not refer to them in detail. He painted a - gloomy picture-yes. But one does not clear away the gloom in a picture by talk, even if the talk is in Bretton Woods.
The minister has said that Bretton Woods does only part of the job. I ask the minister, and I think the house must demand that the minister show us who and what are to do the rest of the job, and how it is to be done. That does not at the present time appear in any proposal before the house.
For a few moments I should like to refer to what was said by the hon. member for Muskoka-Ontario (Mr. Macdonnell). I wish he were in the house, because he needs a lot of instruction. He, too, talks about a gloomy picture. Once more may I point out to him that he cannot clear up a gloomy picture by talking about it. He must find some way or another by which he can enable debtor nations to pay their debts, remembering they can pay ' their debts only in goods or services. How in the world can they pay their debts to a nation like the United States,. if the United States stubbornly refuses to accept their goods? That she is likely to do exactly that, one may reasonably conclude from the fact that she persistently refused to accept goods in repayment of the debt which Great Britain had to carry as a result of the last war. And the United States was not even honest enough to tell her own people what the situation w#s. She led her people, almost the whole rank and file of them, to believe that Britain had dishonoured her debts when, as a matter of fact, the United States had dishonoured Britain's debts by putting up tariff barriers which prevented Britain's goods from entering the United States.
Is there anything in Bretton Woods which will overcome a thing like that? Is there anything which will cause any ordinary man, any ordinary elector in the United States to allow the administration of that country to

make a change in policy such as would be necessary in order that they might accept goods from Great Britain? These are questions which hon. members must ask themselves, and must insist that the minister answer.
The hon. member for Muskoka-Ontario speaks about destroying the sterling bloc. He did not exactly say that he advocated destroying it, but I gathered from the general purport of his remarks that he favoured the destruction of the sterling bloc. Well, what is it there for? It is there to protect a number of these debtor nations. And one of the fears we need to have about Bretton Woods is that it is designed to destroy the sterling bloc.
The question we must ask is this: How is the sterling bloc to protect itself if Bretton Woods does destroy its defences? Not a word is said as to how that is to be done. I challenge the minister or anyone else to show in Bretton Woods a single line which indicates how the sterling nations would protect themselves if the sterling bloc were destroyed.
He asks: What does it mean to Canada? Well, we will grant that we Canadians would like to have the' sterling bloc destroyed, perhaps, so that Canada might dump her goods, and have members of the sterling bloc more and more deeply plunged in irrepayable debt to Canada.
In the last analysis, what good would that do us? These are things we have to look at. It is purely an economic problem.
The minister should ask himself, and all hon. members ought to ask themselves what will happen to Britain and what will happen to these other members of the sterling bloc if something is not done to change the economic attitude of the creditor nations of the world. He spoke of the trade street being a two-way street. I thought the hon. member for Rosetown-Biggar (Mr. Coldwell) did admirably when he pointed out that if trade is to be a two-way street for the United States she must take measures to see to it that she imports goods, where necessary, to pay for the goods she exports. I think one could look all through United States papers and through the statements of United States public men and see absolutely no indication of any determination to change. The people of that country simply will not allow their administration to accept goods-beef and other commodities-which will compete with their own. This means that it is impossible for the United States administration to change their attitude.
At the same time, if we introduce Bretton Woods, as the United States has clubbed Great Britain into accepting Bretton Woods, we shall destroy utterly the means of protec-

Bretton Woods Agreements
lion, which is the only thing left to those debtor nations. It is true that trade must be a two-way street. But the nations in the world that are able to make it a two-way street are such as the United States and Canada. Other nations cannot do so. Therein I say, lies Canada's greatest responsibility, as we face this whole Bretton Woods question.
The hon. member for Muskoka-Ontario spoke about Canada's specializing in wheat. We grant that she has specialized in wheat; we grant that she has specialized in dozens of other things. But the impressive thing about Canada is that while she has specialized in wheat and other primary products, she also proposes to specialize in the production of automobiles, agricultural implements, textiles and a great many other commodities. We know that Canada is not prepared to accept those commodities from Great Britain or any other country, with the result that it is more and more difficult for her to accept goods in return for those she wishes to sell. The same is true of the United States.
One of the noteworthy things about the United States is that she is almost self-sufficient. I do not mean absolutely, but certainly in a large measure tha*t is so. Canada, too, is capable of being largely self-sufficient. The more capable a country is of being selfsufficient, the more reluctant it is to allow goods from another country to enter its market; and the more it is in a posiiton to forbid the entrance of those goods.
If the United States and Canada are really honest in this whole matter, then the very first thing they will do is to bring down their tariff barriers and say, "We will accept so much goods, and so many other things." Then Great Britain may take more comfort. But merely to say they wall, and at the same time to want Great Britain to sign on the dotted line is one of the most callous and wicked things any nation in the history of the world has ever done.
That may be strong language, but while I am on that subject I shall say a word or two more. I shall have something m,ore to say about the United States before I have finished. I have noticed that since 1942 there have been appearing in the ordinary periodicals of the United States outlines of the terms of victory or conquest they were going to dictate to Great Britain. One would think that the people who caused the war, who attacked the other nations, was Britain. The terms they were going to dictate to her were simply terrible. Here we have one of them-Bretton Woods. This is one of the terms dictated by a conquering nation upon a helpless, conquered foe-Britain. Britain, which as we all
know stood and defended Americans, is to be crucified by a callous administration not knowing what it does. That is what we see today. That is what we see in the statement from Washington to-day. Think of a noble nation like Britain clubbed into a position which she knows herself means her utter economic destruction. Then to have the Minister of Finance of the elder dominion in the empire advocate in this house, that Canada, eldest daughter in the British family, pick up the club and go and help the United States beat the motherland to death. That must be comforting news for the empire's centre, ail in one day!
I should like to turn just briefly to the speech of the hon. member for Rosetown-Biggar. I have no criticism to offer of his speech, but I wish to point out I believe there is in the mind of every hon. member who is doing me the honour to listen to me, as so many are, a stirring question, "What in the world are we going to do?" Do you favour having Canada discontinue the manufacture of agricultural implements, for example, so that we can import them from Britain? Do you favour Canada discontinuing the manufacture of shoes so that we may import them from Britain? '


Mr. MacNICOL:: Or sugar?


John Horne Blackmore: You could go right down a long list, and I judge that the answer from practically every hon. member would be "no." The member for Lethbridge says "no" also. Then the question arises: What are we going to do? What can the United States do? The lease-lend arrangement showed what can be done and tbe Mutual Aid arrangement which Canada used for years showed what can be done. These people will say, "You surely do not favour our embarking upon a policy of perpetual gifts to the nations abroad, do you?" May I refer to the words of the hon. member for Rosetown-Biggar, and I hope he will correct me if I have not their sense correctly. He said that trade should be mutually advantageous; that it should be a blessing both to him who gives and to him who receives. Surely selling wheat to Britain which puts Britain into an Prepayable debt position to Canada is a blessing only to Canada; it certainly is not a blessing to Great Britain. I agree that trade should be placed on a new basis. In order to understand how it can be put on a new basis, we shall need to revise our financial thinking.
I am not going to discuss the financial principles which are advocated by this group, but I am going to lay down as a sort of general
Brctton Woods Agreements

challenge at the present time for hon. members to be thinking about for the next two or three days., this problem: You tell me how the problem can be solved, unless you can learn how to finance Mutual Aid and lease-lend arrangements in perpetuity without creating debt and increased taxation for the nation. If you cannot find out how to do that without social credit, may I suggest that you promptly study social credit.
I had intended to say some other things. Possibly I had better say some of them. All these matters were just the result of my reflections when I heard some of the remarks, the desolate, gloomy and hopeless remarks, made by the first two speakers. As this house proceeds to deal with the Bretton Woods proposals involved in this resolution, parliamentary government itself is on trial. This particular Canadian parliament is on trial. The question is raised whether we are capable of finding a solution in this our darkest need; whether we are capable of clearing away the smoke-screen obstruction which has been built up to hide from us the essential features of Bretton Woods and then reject the thing as we ought to do.
On the<tlay that Canada accepts the Bretton Woods proposals she locks upon her limbs the fetters of perpetual bondage; she betrays her trust to the 650,000,000 people of the British commonwealth and empire. She fails mankind in the world's hour of desperate need. I think what I have said already indicates the truth of what I say there.
The Bretton Woods proposals centre around two main features, as the minister has pointed out. First, there is the international monetary stabilization fund, the governing body of which is galled the fund. Second, there is the international bank ostensibly set up-mark you, I said "ostensibly", and it is true-to lend money to needy nations to aid them in rehabilitating themselves.
The international monetary fund agreement is merely a device for tying up the currencies of the world to the United States dollar based on gold. The fund agreement is merely a device for forcing the world to borrow and use the huge masses of United States gold now lying idle and worthless in United States vaults. That is all it is fundamentally. This agreement is purely a mechanism for bringing the nations of the world, except Russia, humbly and helplessly, cap in hand, to beg the right to live at the feet of the little gang of questionable characters who now hold the title deeds to the gold of the non-Russian world. They have $23 billion of it down there in the United States. It is no good at all; they
tMr. Blaokmore ]
do not know what to do with it. This whole Bretton Woods thing is a scheme to put that idle gold to work.
The fund is a mechanism for binding the moneys of all the nations to the United States dollar. The United States dollar is and will be based on gold; it is tied immovably to gold. The supply of United States dollars will be completely controlled by the federal reserve system of the United States, and the federal reserve system is utterly controlled by the holders of United States gold. The setup under Bretton Woods will be perfect for the holders of gold. And those gentlemen in the main are international financiers. I would ask you to call it six o'clock, Mr. Speaker.


James Lorimer Ilsley: Mr. Speaker, before you leave the chair, perhaps the house will permit me to make a statement regarding the agreements that have been reached in the economic and financial discussions between the governments of the United Kingdom and the United States. The statement was made by those two governments at half-past five this afternoon. I have long teletype messages which I have not had time to read, but the effect of them appears to be about as follows.
These governments have made public this afternoon the text of a financial agreement between the two governments under which the government of the United States proposes to extend a line of credit of $3,750,000,000 to the United Kingdom on terms which are specified therein. They have also made public the text of a joint statement regarding settlements for lend-lease, reciprocal aid, surplus war property and other claims of the two governments arising out of the conduct of the war for which an additional loan of $650,000,000 is provided. The secretary of state of the United States has made public a document setting forth certain proposals for consideration by an international conference on trade and employment, and the governments of the United States and the United Kingdom have made a joint statement regarding their understandings on the proposals of commercial policy set forth in this document. The proposals have the endorsement of the executive branch of the government of the United States, and the government of the United Kingdom expresses its full agreement on all important points in these proposals and accepts them as a basis for international discussion. The two governments have announced that they will begin preliminary negotiations at an early day between themselves and with other countries, for the purpose of developing concrete arrange-

Bretton Woods Agreements
merits to carry out these proposals, including definitive measures for the relaxation of trade barriers of all kinds.
As I have already said, I have not yet had an opportunity of reading these documents. I do not propose to make any comments upon the substance of them, but I wish to say that I welcome and I think that this house will welcome the fact that Britain and the United States have reached agreement, both on these financial matters and on the basic principles and methods of approach to the reduction of trade barriers.
While I have not had time to read the proposals on commercial policy, they have resulted from discussions among officials that have extended over two or three years, in some of which our officials have participated, and I am happy to see them put forward as the basis for general consideration and action.
Copies of the documents have been received and will be made available, in convenient form, to the house next week; perhaps before that, if I can arrange it.
Mr. COLDW*ELL: That is a total loan of $4,400 million, then?


James Lorimer Ilsley: That is right.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


John Horne Blackmore: Mr. Speaker, before the house took recess I was dealing with the matter of Bretton Woods. The things which I had to say concerning the importance of Bretton Woods and the effect of it upon the world would lose meaning, I believe, unless I brought some evidence to show that the Bretton Woods agreement involves the gold standard. May. I read a quotation from an article reprinted by kind permission of the Daily Express from Britain of Thursday of August 10, 1944, by Paul Einzig, author of "Currency after the War." He is one of the greatest authorities on money and finance in the world to-day. The title of his article is: "1925 and All That, Only Far, Far Worse. A Plain Man's Guide to the Menace of Bretton Woods." The excerpt I desire to read is as follows:
Yet, once the plan is translated into intelligible English and is denuded of all camouflage, every layman of normal intelligence is bound to realize that it is the gold standard, the full gold standard and nothing but the gold standard.
Admittedly, it is a different gold standard from the one we abandoned in 1931, just as the gold standard adopted in 1925 was different from
the one suspended in 1914. But the changes are, for the most part, considerably for the
worse.
Then he gives five reasons to support his contention, which reasons later in the debate will be listed for the consideration of the [DOT] house. I believe we are safe in assuming that the proposals of Bretton Woods mean the return to the gold standard. Once under Bretton Woods, the greatest nations would be mere doormats for the dirty feet of the international financiers.
What the world needs is not so much monetary stabilization as trade stabilization, trade equalization. By this I mean that any given nation-France, Holland Belgium, any given nation-shall be free to repay with goods for the goods which it buys. 3lso that any given nation in the world, if it is unable to produce the raw materials which it needs, or unable to manufacture the goods which it needs to exchange for the goods which it requires from abroad, shall be free to obtain goods surplus in other nations on a lend-lease or mutual aid basis, so that the high-sounding ideals expressed in the Atlantic charter may become realities, and that a nation shall be literally free from fear and want.
Once these two conditions are observed in the world, then we can have trade equalization, that is to say, a condition in which any given nation shall be able to pay for the goods which it requires from abroad with goods of its own. Without trade stabilization, trade equalization. Continued increase in world trade, except for the United States, is impossible; rising world standards of living are impossible; freedom from want and fear is impossible; and freedom of religion and of speech will soon become impossible.
Monetary stabilization can be obtained by voluntary' conversations, understanding and conventions. There need not be any overruling, all-powerful central dictatorship with power of life and death over whole states. National money can be stabilized upon price indexes of goods. This principle has been well illustrated in what has been called managed money during the past decade. The same principle can be used to obtain international currency stabilization. Once trade is equalized and stabilized, no nation would think of allowing its money to fall out of step with the world's monetary procession. No nation would have any reason for getting out of step, for the only reason why nations get out of step to-day is that they find themselves unable to pay with their own production for the goods which their people are buying from abroad. They therefore adopt monetary devices for their own protection. Any nation would have every reason for keeping in step
Bretton Woods Agreements

if trade were stabilized. Having plenty of productive capacity to supply all its needs, any nation would be able to stabilize its price level by four simple devices, all of which have been illustrated to the house: first, plenty of production; second, price discounting with compensation; third, price subsidizing; fourth, price regulation if necessary.
A stabilized price structure means automatically a stabilized money, and if all the nations agree on a standard at which they will keep their money in step, so to speak, they will voluntarily maintain monetary stabilization.
What this house should now be considering is an effective mechanism for trade stabilization, trade equalization. The terror of all nations to-day is the 'United States. The United States has an appalling productive potential, largely developed since world war I, She towers aloft industrially, a colossal giant among the nations. She stamps about among the other nations literally a Hercules among pygmies.
The generous, noble, idealistic people of the United States do not realize their strength, do not recognize their weight, do not apprehend the fearful damage a careless move on their part can do. The people of the United States therefore do not appreciate their limitless responsibility in these times. Britain is fully aware of these things. Britain has been manoeuvring desperately to escape destruction. Lmited States officials meanwhile have been endeavouring to club Britain into accepting Bretton Woods, and the mere fact that Britain has stood out so long and so earnestly against Bretton Woods ought to be evidence that she realizes that it is certainly to her great detriment. But United States officials have at last bludgeoned and threatened to starve her into accepting the Bretton Woods proposals.
What should Canada's part now be? To take up a club and help the United States to demolish Britain, or sound the alarm, parry the blows, reason with the United States, and try to restrain her recklessness? The social credit movement is sounding the alarm. The supporters of Bretton Woods will argue: Surely the United States would never have accepted Bretton Woods merely to please a handful of holders of gold. There must have been other reasons." Well, there were. The United States political leaders dread unemployment. They have been told that' they are likely to have twenty million unemployed shortly after returning to normal. They see the possibility of dealing with this threat of unemployment only by selling abroad. Bretton Woods would break down the defences against American goods, against American investments, 
against American economic warfare, against American industrial imperialism. Therefore American politicians favour Bretton Woods. American politicians see in Bretton Woods an instrument to help the United States to export her unemployment and dump it in the luckless laps of her neighbours all over the world, no matter where or what the loss to those neighbours so long as the United States can rid herself of her problem of unemployment.
American manufacturers, too, like Bretton Woods. They see too little purchasing power among post-war Americans to buy American goods. They see too few markets. Like Canadians, they stubbornly refuse to adopt a financial system like social credit that would distribute American goods abundantly among American people, a system like social credit that would distribute American goods abroad in such a way as would help and not hinder the people concerned. They will support, therefore, a Bretton Woods to help Americans cram their goods down the world's neck, regardless of whether the world lives or dies. Yes, American industrial imperialists also favour Bretton Woods.
American rich men also support Bretton Woods. They would like to lend abroad. They would fear to lend lest they lose their money as they did in the roaring twenties. The Bretton Woods bank will lend to the poorer nations loans that might be lost. Behind the Bretton Woods bank Americans would rope in forty-three sucker nations to help absorb the losses. Then American rich men can lend to safer risks, loans that cannot be repaid, because the United States will not admit goods that will repay them.' Attractive prospect, is it not? Attractive for all but the victims. Yes, informed American rich men support Bretton Woods.
Anti-British Americans also would back Bretton Woods; those numerous millions of Americans pandered to by the Hearst publications; -those Americans who take delight in twisting the British lion's tail; those Americans who fail to appraise correctly the sacrifice of British heroism that guarded the United States in the deep, dark days of war; those Americans who fail to perceive in Britain and in the British nations the greatest guarantee of human security and freedom through the years that yet must be.
Yes, anti-British Americans also back Bretton Woods. Considering all these matters, Mr. Speaker, it is easy to see why the United States adopted Bretton Woods. Considering these same matters, it ought to be easy to see why Canada ought to reject Bretton Woods.

Bretton Woods Agreements
I have spoken plainly about the United States in relation to Bretton Woods. Plain speaking is by no means an indication of any unkindliness in me toward the United States. We are living in fateful times. Men must uncover the facts affecting one another. United States people have always been shrewd bargainers. They should take no offence if their neighbours indulge in a little critical thinking and speaking, too.
I value United States friendship. I appreciate the help she has given us through the years. I desire that British and Americans continue to be friends. To do so we must understand each other. Most Americans have no desire to hurt the British or any one else. All they wish is to help themselves. They would expect us to look after our own interests. We should be weak, if not recreant in our duty, if we permitted the Americans unwittingly to destroy their best friends. Destroying the British commonwealth they would be setting the stage for their own destruction.
Notwithstanding all the disadvantages to which I have referred, we might regard Bretton Woods with some favour if it provided any means whereby to solve the present economic problems of the world; or if it offered any worthwhile advantage to Canada. But Bretton Woods contains no hint of such a solution, no suggestion of any worthwhile advantage.
The promoters of Bretton Woods will challenge my remarks. I stand ready to prove to the hilt what I have said on the floor of this house and before the members of this house in open committee. The economic problems of the world all stem from adverse trade balances, or the fear of adverse trade balances. Adverse trade balances result in unrepayable debt, in economic conquest and ultimate eeon-A omic devastation and ruin. To guard against such disasters nations resort to protective tariffs, to exchange control, to quotas, to devaluation of currency, currency irregularities, and other irregularities which Bretton Woods is supposed to be designed to prevent or to overcome. These so-called trade restrictions are mainly, if not wholly, protective devices to ward off annihilation. In all its clauses Bretton Woods contains not one phrase suggesting how adverse trade balances can be avoided, not one stipulation that might protect weaker countries from ruinous price competition of stronger economies, not one regulation requiring stronger economies to accept goods in repayment of debts, even debts unavoidably incurred through inability to resist aggressive competition.
Bretton Woods gives all its advantages to creditor nations, those that require no advantages. To the weaker nations it offers no
appreciable help-only hindrance. Follow through Bretton Woods, read it for yourselves, you will find all the things that I have said amply justified and supported there. I and my group will point them out. It leaves the world's economic problems exactly where it found them, except that it aggravates them. Meanwhile it proposes to put the nations in a financial strait-jacket, impairing what little freedom they might have to help themselves. I know that this afternoon the minister said that it did not put the nations in a strait-jacket. We are going to give the minister ample opportunity to prove what he said before we finish this debate. .
Bretton Woods is not a happy compromise. It is the total maintenance of United States economic bargaining power coupled with complete renunciation of bargaining power of the debtor nations. It will therefore benefit only the United States, and perhaps Canada to the extent to which Canada becomes a creditor nation.
Upon the members of the house, upon the people of Canada, upon all British peoples everywhere I urge the warning:	Beware -the
menace of Bretton Woods.


Thomas Langton Church: I should like to say a few words on this Bretton Woods agreement which grew out of a conference there in New Hampshire in July last. It was not a treaty; it was a conference held at what is known as Bretton Woods. The proposal is to establish by an agreement first an international monetary fund, and second an international bank for reconstruction and development. It is a charge of over $700 million on the consolidated revenue fund of this country over the head of parliament.
These are very grave times financially for the people of Canada. I am not opposed to an international monetary mechanism being established to solve the economic conditions which are growing out of the war, but I am opposed to the present proposals and I propose to show the reasons why and give the view of two great British chancellors of the exchequer, Sir Kingsley-Wood, who died during the war, and Sir John Anderson, a brilliant administrator of many public departments in the old land before and during the war. If I mistake not, he was here the other day and sat with the Minister of Justice (Mr. St. Laurent) the day Mr. Attlee and the Prime Minister (Mr. Mackenzie King) were here. This was not, by the widest stretch of the imagination, a conference of forty-four governments. It was held at a place called Bretton Woods, away up in New Hampshire; and when history is written fifty years from now it
Bretton Woods Agreements

will refer to the babes in. the woods who formulated this proposal, because as I say, in the end it will mean the dissolution of the British empire. We are at a critical period in the history of this country and the history of the British empire. I have referred already to the extent to which the mother country suffered during the war, in common with the dominions and the whole civilized world. We had a similar proposal at Dumbarton Oaks and a new united nations policy made at San Francisco, at a conference of the same forty-four bodies which grew up together. Now they have moved on to London, England, and we shall see what happens there. At Bretton Woods there was a large delegation from Brazil; there were delegations from many other countries, but they overlooked one thing. They did not have Sousa's band with them when this agreement was being discussed away up in the woods. In the olden days hardly a public meeting was held at which on all national occasions a brass band or a fife and drum band did not put in an appearance. Sometimes we see these bands on March 17, sometimes on that other great national holiday, July 12.
I want to point out the great objection to these proposals. This was an original idea which Lord Keynes got about 1942 or 1943. He thought he could get up an international financial mechanism that would cure all the financial mistakes from which the world is suffering. Mind you, there is a very large body of public opinion in England which believes in some of the policies which hon. gentlemen to my left have supported in this house for some time. What I have to say will be in part quoted and taken very largely from a British white paper and a white paper issued in the United States, together with a few quotations from a great British financier, Mr. Richard Boothby, who has been a great economic leader in England, following the work of this and other world affairs, and who was one of the advisers to the late Churchill government, with comments of my own, on the whole agreement and the errors I see in it.
These are not at all new proposals; they have been made after other wars. Like the proposals for collective security, they have' been made from the time of Philip of Spain, Louis XIV and Napoleon, and we have heard them twice in our generation. The agreement seeks to set up an international monetary fund. Look at some of the things that have been done in the past under these international proposals. Do not forget the league of nations, Locarno, the Young plan, the Kellogg notes, the Dawes plan, and all the rest of it. Do not forget those who supported all such

agreements and, when war came, were not prepared to let off even a fire-cracker or a sky-rocket to support those who were prepared to back up the allied cause. Now it is proposed that we enter upon another financial policy that is going to cost $700,000,000. Well, as I said to my hon. friend the master of ceremonies, the Minister of Veterans Affairs (Mr. Mackenzie) the other night, when you get up into the clouds do not forget and old Scot proverb, to keep one foot on the earth. I believe the Minister of Finance would do well to heed that good Scots advice in connection with these proposals and the astronomical altitude of these figures.
As I said, this was not a conference of forty-four nations at all; it was a conference of what I would call economists. Well, the woods are full of economists. I come from Toronto, and lately I have seen more economists than ever before in my life; economists high and low, rich and poor. They have brought forward many proposals; I remember them all when I had to float bonds for $100,000.000 in connection with public utilities in our city. We hear of many financial war proposals, but when they are weighed in the balance most of them are found wanting. What did they do down at this great place called Bretton Woods? Oh, there were great financial plans and carryings on in the woods in old New Hampshire. I saw pictures of these delegates in the Saturday Evening Post, in Lije and in many other magazines, showing views of the representatives of these forty-four nations who were having the time of their lives there. Now here we are to-night, going over the heads of the people of this country and putting on a mortgage of $700,000,000 to be paid out of the consolidated revenues of this country on such a half-baked scheme. Why, we are not only going to bankrupt Canada; if this proposal goes through it will mean the liquidation of the British empire and cause dearer money, and I say that without fear of contradiction. I call to my support statements appearing in the British Hansard by members in the debate of 1943 and in the records of the senate and congress at Washington.
At Fort Knox in the United States they have all the gold in the world piled up. I saw a picture of it in a magazine. Why, the pyramids of Egypt are not to be compared in magnitude or astronomical height with the gold piled up there! That is a celebrated fort and a celebrated state, from which a great general came during the war between the north and south. You know, Mr. Speaker, this proposal reminds me of a scene from Pinafore, with act I, act II and the final act

Bretton Woods Agreements
now before us. Act I is the preliminary, to get the actors ready. I remember the non. member for Davenport (Mr. MacNicol) in private theatricals. When I was interlocutor at a minstrel show I could ask my end-man some questions. Then in this agreement they have the final act; they are going to ring down the curtain. That final act is to be performed to-night; we are to vote $700 million. Why, it gives me a headache even to think of that much money. If we have a few cents in our pockets we are very lucky. I see more gold on some of the uniforms walking up Sparks street than some Canadians ever had in their pockets. But the final act is not really the final act at all, because the proposals of Lord Keynes are not applied.
At this conference they had delegations from Bolivia, Brazil and, in fact, from all over the world. I have not heard the names of some of these countries since I studied geography in school, and I cannot pronounce them all now. No doubt these were all good people, but when you get down to brass tacks, how many of these countries are going to put any cash into the bank? Remember these countries who were in default to the league of nations. Do not forget the man who* broke the bank at Monte Carlo. He was just as good a financier as some of those dealing with this problem, and I would have as much confidence in him as a financier. The final act on the white paper now before us of these experts is one of the most confused articles I have ever read. It contradicts itself; it is obscure; and as a state paper it will cause historians to wonder what kind of parliaments we had here and in all the other forty-four countries, to pass a half-baked scheme like this under which Canada is to put up S700 million. Canada, though, is to put up $700 million. The Tupper government which in my opinion, was a very good government-and I am entitled to my opinion, the same as the educated hon. gentlemen to my left and to my right-required only $36 million to rim this whole country in 1896. But here this evening in one vote before the House of Commons, with no bill and only a resolution, we are faced with an expenditure of $700 million out of the consolidated revenue fund. If we go on piling up that kind of debts and capitalization on our consolidated revenue fund, not only will the country be bankrupt, but the banks will be bankrupt, and the so-called international monetary bank that is being proposed will not be successful.
Mr. Morgenthau, the former secretary of the treasury, is one of the very able gentlemen in Washington. He has said that San Francisco, Dumbarton Oaks and Bretton Woods are
all interrelated. So they are. Even so, I fail to see how they are going to solve the questions of international debt, international credit and international reconstruction after the war. They are not going to be able to solve by the Bretton Woods agreement the building up of the devastated countries of Europe, and countries throughout the world. I fail to see it.
Then, I should like to say a word or two about another matter. First of all, we are going to get back to the gold standard at exchange rates fixed at the level between March and November 1945. That is what the white paper says. We are not allowed to go off it again. They devalue our currency up to ten per cent-a most doubtful expedient under modern conditions. Under the old gold standard you could lose gold once and for all, and, if necessary, suspend payments by a simple decision of the government. Under the proposed gold standard we have to win back the gold equivalent that we may lose over two or three years in order to avoid charges which can apparently be fixed at the discretion of the fund. The implication is that these charges would be made penal.
If we do not do what we are told under this international authority there is power to enforce penalties and sanctions, if deemed necessary, against the people of Canada for a charge in one year amounting to $700 million, and all this for the benefit of some of the Latin republics to the south, and other peoples of forty other countries in the civilized world, some of whom may be in default themselves, as some were in payments to the old league of nations, while Canada always, paid up.
I see a banker right before me in the house, and I venture to say that if I walked into his bank I would not get money on such credit as that. The hon. member for Simcoe North (Mr. Ferguson) is a banker, and I doubt if he would lend me a dollar on that kind of credit, based on such security. I can tell you this, that if you get money into some of the banks it is extremely hard to get it out. I know that.
If we do not do what this international authority tells. us to do under the Bretton Woods agreement, we are to be penalized, and sanctions will be enforced against us. We will remember the sanctions passed against Ethiopia on similar occasions. We will recall that the Prime Minister (Mr. Mackenzie King) rose in his place and spoke in favour of imposing sanctions against Ethiopia. If sanctions were imposed the government would have had, by the covenant of the league to send an expeditionary force. That was the position
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taken by us at the league of nations. But did they send a force? No, they did not. A respected minister, and a lovable man, the late Minister of Justice, Mr. Lapointe, rose in his place and repealed all those sanctions. They were tossed out to the four winds of heaven. That was the kind of sanctions they applied, and all within forty-four hours, or forty-eight hours, I believe it was. I have not very much respect for such penalties and sanctions. This is just like those of the old league of nations when imposed.
Let us face the fact that, until the main lines of commercial policy and of reconstruction policy have been settled, it is idle even td discuss an international currency scheme. Our declared economic objectives- stable prices, full employment and cheap money-are not at present those of the Untied States. .There is bound, therefore, to be a sharp divergence of view as to what constitutes a fundamental disequilibrium.
The issues at stake are of immense importance. In 1929 do not forget Britain and we in Canada to a lesser extent were dragged to the depth of an unparalleled economic depression, simply because Britain was tied to a gold standard and therefore to Wall street. It could happen again; it will happen again, if Bretton Woods goes through. As another plan to Bretton Woods, we, through the development and consolidation of the sterling area within the empire and in western Europe, coud build up an economic unit policy, and the achievement of full employment and a rising standard of living within the empire ourselves. Any such project would be killed finally by Bretton Woods.
There was an article recently in the London Times, which stated the following:
The problem before Britain, and the world, cannot be that of a return to the status quo ante 1939, 1929 or even 1914. It is the establishment of a world economic system which, in the completely altered situation of 1944 and 1950 or 1960 can help mankind to move step by step toward the goal of rising standards of well-being and productivity which a generation twice plunged into catastrophe is resolved to achieve.
By that standard Bretton Woods must be judged. By that standard it falls. The final act of Bretton Woods invites us to throw away the only real asset Great Britain and Canada possess in the post-war world, namely the purchasing power of our own home market. That is a most important matter. Whatever else may happen, as Mr. Robert Boothby has so ably said, the Americans are not going to balance exports with imports. When all is said and done no country will depart hurriedly from that position, where it

is forced to place a most substantial measure of control on its own productive capacity in order to have international trade.
Is Great Britain going to import goods with no plan, indiscriminately in the hope that somehow7 or other she will get enough gold to pay for them, or is she going to use her purchasing power and productive capacity to ensure that she gets imports which she needs?
Is she going to subordinate the maintenance of employment and of essential services to a half-baked international currency scheme which will never work. Is Great Britain going to import goods freely with no plan and just trust to luck, and pay for them in the manner indicated? , I say no. Is she going to permit the maintenance of imports to carry out that scheme? No.
Then, another point arises in connection with bilateral trade agrerements. Some hon. members w7ill recall when Canada had preferential trade agreements some years ago. A treaty was made about twenty years ago with some thirty countries, I believe it was. All that will be extinguished if this goes through. The bilateral trade agreements w7ill be extinct.
In the future they w7ill be turned into regional agreements.
There are many other aspects of this agreement, Mr. Robert Boothby says, "that cause anxiety." I will mention only one:
The proposed agreement, if implemented, would result after a transition period of doubtful length in curtailing the existing convertibility of sterling within the sterling area. This must lead to the complete blocking of all existing sterling balances and, therefore, to the end of the sterling area which is to-day the main source of our economic strength. Here we leave the realm of pure economics for that of politics.	i
What is the long-term policy of Great Britain to be under this proposed Bretton Woods agreement? What is to be the longterm policy of the United States? We have been trying to learn what is to be the longterm policy of Canada. We have been trying to learn what the policy of this country is in connection with our relations within the empire. What is the long-term policy of Canada in connection with this agreement? Seven hundred million dollars will have to be raised, partly out of income, partly out of capital and partly from the sale of bonds. If the people of this country had known about this agreement three weeks ago it would have affected the sale of victory bonds throughout Canada.
Seven hundred million dollars is to be paid out under this agreement which like the Locarno treaty, the Kellogg pact, the Ethiopian sanctions, the Young and Dawes plans,

Bretton Woods Agreements
the league, the finance league and all the rest of them, will turn out to be nothing more than a scrap of paper after we pay in our money, if default comes. That is all we are getting under this one. They have not considered Canada's long-term policy in connection with this agreement. What are they doing by this agreement? There is an absence, as the author I quoted says, "of any directives to the Bretton Woods conference which results in the general muddle and confusion in which we now find ourselves. Are we going to get back to the economic system of the nineteenth century? Is free multilateral trade, laissez-faire and a free convertible international currency based on gold the ultimate or the most desirable objective? That system presupposed five conditions; an expanding world population, expanding frontiers, the free 'migration of human beings, a continuous reduction of tariff barriers and continuous fresh discoveries of gold. None of these exist to-day."
The British can be pretty sure that whatever else they may do the United States are not going to balance exports with imports, reduce tariffs or control the export of gold. Oh, no' after all this they will erect the highest tariff wall in the world. Devaluation is no substitute for import control. What we want is the assurance of a sufficiency of imports of raw materials to maintain our available factors of production at a high level of activity.
In conclusion, I should like to refer to what was said by the late Sir Kingsley-Wood, former chancellor of the exchequer. I intend to quote from a white paper published by the British government. Sir Kingsley-Wood said, speaking in the British House of Commons in 1943, on his budget:
We need a policy of expansion so that employment is maintained and production serves the. ends of consumption.
He went on to give the reasons for that policy. Two plans were proposed. The first was the British plan; the second was the United States plan and they had a head-on collision at Bretton Woods. That was the last of the two plans. The British plan was contained in a document entitled "Proposals for an international clearing union." This international clearing union was to be based on international bank money which would be accepted by all member states for the purposes of payments arising out of international trade. Lord Keynes was closely identified with this scheme for an international clearing union. The government decided to publish this document as a preliminary contribution to the solution of one of the problems of economic cooperation after the war. The 47696-193
government stated that any proposals for a satisfactory international monetary mechanism after the war could be framed only after full consideration of all aspects of a difficult problem.
What about the United States plan? The United States document was entitled "United States proposal for a united and associated nations stabilization fund." The plan, which was closely associated with Mr. Morgenthau, secretary of the United States treasury department, and Mr. White, an assistant secretary, aimed at establishing an international stabilization fund made up of contributions from member countries. The fund would act as a clearing house for international trade movements carrying out the functions in exchange management of the member nations, with all their accumulated knowledge and resources. Like the British document, the United States proposals were not an expression of the official views of the United States government. The introduction to the document emphasized that the proposals were in every sense tentative, intended as a basis for discussion and exchange of views.
A debate on post-war international currency took place in the British House of Commons on May 12, 1943, and the late Sir Kingsley-Wood, who opened the debate, defined as follows the three aims of the policy; First, to provide a mechanism by which international balances should be freely settled; second, to provide that national exchanges should be reasonably stable, so that goods and services can be marketed with knowledge of the value they command; third, to provide that countries, whose economy has been gravely dislocated or damaged by the war, should have some temporary international monetary facilities to enable them to start trading without undue delay.
The united nations monetary and financial conference was held at Bretton Woods between July 1 and July 22, 1944. Forty-three nations, including Great Britain, attended the conference. The proposals are before the house. The minister explained them to-day. He described the international monetary fund and the international bank for reconstruction and development. Both those proposals were recommended to congress in a message by the late President of the United States.
Sir John Anderson, chancellor of the exchequer, in the budget debate and white paper dealt in some detail with the proposals

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put forward at Bretton Woods. He was a great chancellor with the background he had. He said with regard to Bretton Woods:
The Bretton Woods doeumeftt explicitly recognized that while we might agree on objectives and methods when the world's trade was settling down, countries like our own had to face an extremely difficult period of transition in which they must keep their hands free to deal with their difficulties as they arose.
There is one point that I must brinj* to the attention of some of the critics of the final act. I mean those who appear to think that the line of safety for us after the war is to reserve our full rights to enter into discriminatory commercial and currency agreements, not only as a temporary measure during the transitional period, but permanently.
And again:
Under article VII of the Mutual Aid_ agreement, the master agreement under which we have received assistance of prodigious amount, we agreed to work for the elimination of all forms of discrimination in international commerce. The only qualification was concerned with imperial preferences. We are bound by this agreement and we are going to honour it..
Good. That last word is my own. I continue :
Quite apart from the Mutual Aid agreement, by our commercial agreement with the United States of 1938 we also accepted a policy of nondiscrimination in trade. I would ask those who recommend what is in essence a barter system as the basis for our international trade; do they really wish us to follow a course which goes back on what we have agreed with the United States and flouts one of the principles of international commerce to which the United States government attach importance, and which, as a matter of fact, I believe in our own interest is a sound principle? If we discriminate, other people can discriminate. If we indulge in barter, other people can indulge in barter.	,
I am also told that the Bretton Woods conference means a return to the gold standard. I doubt -whether those critics who use the words "gold standard" as a term of opprobrium always have a perfectly clear idea of what they mean, but perhaps one can assume that what they are thinking of is a system under which the external value of sterling was fixed, and the internal credit policy was made subservient to the maintenance of that value. To that system, if it ever existed in such a crude form, we do not propose to return.
The Lord Chancellor refers in conclusion to the problem of stability of exchange rates:
I do not go the whole way in believing that the greater part of our troubles between the wars was caused by unstable exchanges. Nor do I believe that countries with a major interest in international trade lightly alter their exchange rates. Those alterations disturb internal as well as external values. But there is no doubt that the instability of the exchange rates of some important countries at some periods between the wars was a disturbing factor in international trade.

His conclusions are expressed in the following two paragraphs:
The Bretton Woods document follows a middle course in this matter. So far from imposing a system of rigid exchange rates, it expressly recognizes the need for adjustment of exchange rates to correct disequilibrium. If we believe it is in our own interests to have a reasonable stability of exchanges but at the same time to have a method for the orderly .adjustment of exchanges when the occasion arises, I do not see very well how one could have a very different principle from that stated in the Bretton Woods document.
It is, of course, true that to a certain extent we would bring our exchange policy under review by an international body on which we 'should be represented. But so would every other country. We would not surrender any ultimate right to follow our own policy, but we would accept an obligation to recognize that the adjustment of the exchange value of sterling, or of any other major international currency, is a two-ended process, and that we owe it to the general interests of international trade to consult with an international institution before _we make a change which will affect our commercial, as well as our financial, relations with other countries.
Those are the views 'of two British chancellors of the exchequer.
My opinion, Mr. Speaker, is that the time has not arrived for such a proposal. We should deal as our first task with the great questions of trade, defence, migration, and preferential trade within the empire. I will contend first, last and all the time that the primary matter for us to- consider and predicate in any agreement that we sign in this connection is, that we shall stay within the British empire. That empire, functioning along the lines I indicated to-day, is strong enough to stand any strain or stress of war, peace or reconstruction.
I say further, in conclusion, that it will be far better to make agreements with our own dominions along the lines of the united nations council; we should then have an empire council of the same general character as the united nations organization and decide first our own empire policies. Unless we do that the states of the empire will be divided and broken up, for if the dominions do not hang together they will hang separately. Together they are the strongest in the whole world and self-contained in a financial, material way and in a constitutional, social and economic way, to withstand the world.
Where do we in Canada stand? We have heard a great deal to-day about international policies, and this apparently is one of them. They are much in favour with some hon. gentlemen. But where do we stand at this critical hour in relation to the British empire? If we are to proceed far along these separatist lines we shall, I fear, lead to the dissolution
\

Bretton Woods Agreements
of the British empire in a period of time. This Bretton Woods agreement will, in my opinion, lead to restricted trade and dearer money, and also, as Mr. Churchill has said, "to the dissolution of the British empire".


Victor Quelch: I believe this is one of the most important and dangerous measures ever to be submitted to this House of Commons. In all seriousness I say -that I look upon this measure as being an act of treachery not only to the British commonwealth of nations but to every peace-loving nation in the world to-day.
A short tim'e ago we endorsed in this house a charter for the united nations, the main purpose of which was to maintain international peace and security, to develop friendly relationships among nations, and to encourage respect for human rights and fundamental freedoms. If the measure now before us passes, I believe that wje shall be making a mockery of the charter, because you cannot make political agreements to maintain peace at the same time that you institute economic agreements to declare a form of international trade war. The result, I -think all hon. members will agree, must be international friction which will greatly menace the success of any charter of peace. Therefore, if the final act of the Bretton Woods conference is to be regarded as the cornerstone of intera-tional economic cooperation, it is essential that it receive the most careful consideration by all hon. members of this house. I am well aware that there are those who will argue that this measure has already received the careful attention of Canadian experts, and that these men are far better qualified to judge of the merits or demerits of this measure than we are. Well, as I have remarked before in this chamber, I judge a man by his record; and the record of these men is not an impressive one.


Mr. JAQUES:: "By their fruits shall ye know them."


Victor Quelch: These are largely the same men who were responsible for systematically sabotaging the resources of this country in pre-war days. These are the men who must take the responsibility for maintaining production in this country at less -than fifty per cent of its capacity, by allowing half a million people to be unemployed and a million to be on relief. These are the same men who must largely assume the responsibility for the pitiable condition an which Canada found herself upon the declaration of war, when thousands upon thousands of men were rejected from 47696-193J
the army because they w^re medically unfit, due very largely to malnutrition. I would ask, is that a record to inspire confidence?
Furthermore, their war record is no better. We have heard a number of people praise the financial record of the government in the war, but is it one which will bear close scrutiny? I recall that in 1939 the present Minister of Finance (Mr. Usley) stated that the wrar financial policy of the government was to be as far as possible a pay-as-you-go policy; and yet what has happened? We have expanded the national debt by over $1$,000 million, in spite of very heavy taxation and quite strong controls. I ask hon. members, if you were hiring experts to.run your business would you , be satisfied with references of that type, records of past failures? So that we in this group are not prepared to accept these proposals just because they are endorsed by a number of thoroughly discredited experts.
We consider that a thorough explanation of these proposals should be given to the house before second reading, because on second reading you endorse the principle. The minister has no right to ask the members of this house to endorse -the principle of a measure which he himself admits is very complex and hard to understand. I doubt whether more than two or three per cent of the members of this house understand it; I would put the percentage even lower, because I doubt very much if even the experts themselves understand it. I think this is quite evident when one finds that men like Maynard Keynes and Morgenthau disagree as to exactly what the act means. In England the people are told that it is not the gold standard; yet in the United States it is represented as the fruition of the treasury's gold policy.


Norman Jaques: Gold-plated.


Victor Quelch: The late President of the United States, Franklin D. Roosevelt, sent a message to be read before the senate on February 12, 1945, relating to the Bretton Woods agreement. It read in part as follows:
If we are to measure up to the task of peace with the same stature as we have measured up -to the task of war, we must see that the institutions of peace rest firmly on the solid foundations of international political -and economic cooperation. The cornerstone for international political cooperation is the Dumbarton Oaks proposal for a permanent united nations. International political relations will be friendly and constructive, however, only if solutions -are found to the difficult economic problems we face to-day. The cornerstone for international economic cooperation is the Bretton Woods -proposal for an international monetary fund and an international bank for reconstruction and development.
Bretton Woods Agreements

That is just about the same thing that the minister said when he was introducing the motion before the house. Therefore, if the agreement is to be part of the foundation upon which we hope to build world peace, it must be of such a nature 'as to promote friendship and good will among the nations of the world, and it is upon that basis that I intend to discuss the final act this evening. Is the Bretton Woods act likely to help to promote good will among the members? If not, I believe that all members of this Bouse will agree that it should be discarded. In article I, the purposes of the act are defined, and I should like to read the purposes of the international fund, section 1:
(i)	To promote international monetary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems.
(ii)	To facilitate the expansion and balanced growth of international trade, and to contribute
' thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives of economic policy.
All members will agree with the purposes outlined in sections 1 and 2. I wish to comment upon 3, 4 and 5:
(iii)	To promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation.
(iv)	To assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign' exchange restrictions which hamper the growth of world trade.
(v)	To give confidence to members by making the fund's resources available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity.
The questions that must come to the minds of hon. members are these: Why do nations indulge in exchange depreciation? Why do nations impose foreign exchange restrictions? Why is there unbalance of trade between nations when both parties are endeavouring to export goods? I would say that we must have the answers to these questions before we can judge of the adequacy of the proposals in this act.
Article I, section II, states that the purpose of the fund is to facilitate the expansion and balanced growth of international trade. Unfortunately, the fund concentrates on bringing about a balance of money between nations, with all the emphasis on gold and on United States dollars, ignoring the fact that in the long run you cannot have a bal-
	.
ance of money without a balance of trade, except of course by the steady growth of debt between nations, and that is provided for in article 7 of the act. I will quote section 2 of article 7:
The fund may, if it deems such action appropriate to replenish its holdings of any member's currency, take either or both of the following steps:
(i)	Propose to the member that, on terms and conditions agreed between the fund and the member, the latter lend its currency to the fund or that, with the approval of the member, the fund borrow such currency from some other source either within or outside the territories of the member, but no member shall he under any obigation to make such loans to the fund or to approve the borrowing of its currency by the fund from any other source.
(ii)	Require the member to sell its currency to the fund for gold.
That is to say, if the United States consistently refuses to accept imports in exchange for its exports, thereby depriving other nations of dollars to pay for imports, then the fund can borrow or buy with [DOT] gold, dollars from the United States to enable the debtor nations to balance their payments. But, mark you, it would be done by going into debt instead of by balancing trade and having an exchange of goods. Therefore one of my main arguments against the fund is that, in attempting to bring about balance of payments, instead of ensuring that it shall be done through a balance of trade it attains its object by expanding the debt of the debtor nation.
Let me ask hon. members this question: 'Is that a sound basis upon which to attempt to promote friendship and good will among the nations of the world, by forcing a nation to go into debt in order to obtain the goods it requires when it has goods on hand which it is willing to exchange? The express purpose of the fund is to facilitate the expansion and balanced growth of international trade. Then what is the main or real purpose of international trade?
Every time I hear the hon. member for Muskoka-Ontario (Mr. Macdonnell) speak, I get the impression that the main purpose of trade is to export goods. I have never once heard him emphasize at the same time the even greater importance of importing goods in return. Does anyone really think that a nation can become prosperous by exporting goods? You merely remove goods from the nation and lower the standard of living to that extent, so that export trade by itself cannot bring prosperity unless exports are used for the purpose of bringing imports back into the country.

Breltnn Woods Agreements
And so, reducing international trade to its simplest terms, we say that it is the exchange of those goods which we cannot consume for those goods which we cannot produce, thereby bringing about an improvement in the people's standard of living. It should be an act of mutual advantage to the parties concerned. Therefore to the extent that you expand foreign trade on that basis you improve the nation's standard of living. But when you maintain your foreign trade on the basis of trying to maintain a favourable balance of trade you are lowering the standard of living of the people to that extent. Unfortunately that has been the basis for foreign trade in the past.
Highly industralized nations have endeavoured to export more than they were prepared to take back in imports, thereby lowering the standard of living, the reason being the lack of buying power internally and not because the people do not need the goods.
I wish to quote from a statement made by Reginald McKenna to the banker's association, on October 5, 1922. I have quoted it on previous occasions, but it has a direct bearing on this question and therefore I should like to quote it again at this time:
For over two centuries, British capital, that is, credit had been lent to other countries, year by year England produced more than she either consumed herself or could exchange for the products of other nations, and she could not obtain a market for the surplus unless she gave the purchaser & long credit. Foreign loans and ioreign issues were taken up in England and the proceeds were spent in paying for surplus production. British factories land workshops were kept in good employment, but it was a condition of their -prosperity that a part of their output should be disposed of in this way.
Note that, according to Reginald McKenna, the prosperity of England depended upon her being able to sell more goods abroad than she brought back in return. In other words, that was the old idea that a favourable balance of trade maintained prosperity. But what did it really mean. It meant that owing to the deficiency of purchasing power that existed in England, and by maintaining a favourable balance of trade, the wages that were paid out in the production of those goods which were exported and for which no imports were brought back in return helped to create a demand for the goods that were left within the country and, as McKenna stated, it maintained a certain degree of prosperity in England. I would not say that it maintained prosperity for the people of England. Nobody who knew conditions in England in those years would suggest that all people were prosperous, but it did maintain prosperity for the industrialists.
It is true that it served the industrialists and the manufacturers of England well during the two centuries prior to the last war. What happened in the later years? Shortly before the last war other nations were also starting to become industrialized and to raise tariffs to keep British goods out, because they also were finding themselves in a position where it became necessary to maintain a favourable balance of trade in order to maintain employment within their own borders. The year 1914 saw the end of that type of policy. I remember in the years 1906, 1907, 1908, 1912 and 1913 watching the marches of the unemployed in the city of London. I say that any nation that attempts in the future to maintain prosperity within its own borders by that policy is bound to fail. Not only will it fail, but it will help to create throughout the world a condition which will bring about unrest, international friction and war.
That was also the policy between the two wars, the war of 1914-18 and the war of 1934-45, with the difference that after 1929 the United States, while giving credit for trade exports, demanded payment not in goods but in gold or foreign securities. We know what the policy was in 1929 and during the thirties. It caused one of the most violent depressions the world has ever seen, because at that time the nations were on the gold standard, and as gold was withdrawn from those countries their gold reserves were reduced and a general restriction of currency took place in all countries.
We find to-day that all highly industrialized nations are prepared for a fight for foreign markets after the war. For example, both Canada and the United States feel that in order to maintain the full development of their resources they will have to make large-scale foreign investments after the conclusion of hostilities.
I hold in my hand a booklet which is an address delivered by Mr. William C. Clark on post-war goals and economic reconstruction at New York university on December 15, 1943. On pages 221 he states:
We feel also that adequate arrangements are essential to make possible a substantial volume of long-term international investment, and we trust that the technical and political difficulties involved in consummating these may soon be surmounted.


Mr. HANSELL:: Who is Clark?


Victor Quelch: He is the deputy minister
of Finance. Those members who were on the reconstruction committee last year will remember that rvhen we were discussing these monetary stabilization proposals I asked him whether or not he considered foreign investments a long-term solution, and he admitted
Bretton Woods Agreements

that they were not a long-term solution. While 1 feel that at this time we should be prepared to develop policies that would be a long-term solution, on the other hand is there justification for. them even as a short-term solution? Is there any justification at the present time for Canada going into a large scheme of foreign investment. I know we have certain moral obligations, but aside from that I would say there can be no justification for such a policy until we have completed or have well advanced the development of our own country.
I think it is timq that we had a little more investment in roads in this country, especially in western Canada. Why not invest money-in the development of our north country? .Why not invest money in irrigation in western Canada? Why not invest in a real live, wide housing scheme in Canada? Why not make greater investments in the greatest asset of this country, Canadian youth?
Fortunately, Mr. Speaker, public opinion is beginning to realize the fallacy of prosperity by foreign investment. I should like to quote from a speech made on June 7, 1945, by the governor of New York. This is what he said:
We in the United States will emerge from the war with overwhelming power, financial and industrial. There is no question of the huge demand for our exports that will exist. The great question is whether we are prepared to accept payment for these goods in the only sound way that payment can be made-by baking in exchange the goods and services of other nations. The American people have made clear their determination to join with other nations in a world organization to maintain peace; but real peace cannot be achieved merely in the political field. AH of the work being done at San Francisco will mean tragically little if economic conflict is to divide the nation.
The London chamber of commerce, probably one of the greatest organizations of its kind, has emphasized this question time and again. I have quoted it in the house, and therefore I am not going to take the time to quote it again at this moment, but I should like to quote from a statement of the-London Economist because it is generally' considered an orthodox publication. I quote from the London Economist of August 11, 1945, page 182:
The condition of full employment as it is now universally recognized is that the economy should generate a sufficiently large flow of effective demand to purchase the whole of the gross national product. In simpler language, somebody has to buy the volume of goods that full employment will produce, or they will not be produced.
That is to say, if a nation's purchasing power is adjusted so as to enable the people to buy the total production of the nation, or at least all the goods that they desire, then a

nation will be willing to accept imports in return for its exports. So that the, first step toward any sound scheme for international trade is for each "and every nation to set its own house in order and expand the purchasing power of the people to the point where they are able to buy' the total production of the country, or the production of other nations for which their own production can be exchanged. It is futile to hope that any form of international stabilization can maintain international trade on a sound basis until each nation is first of all prepared to set its own house in order. Therefore I would emphasize that the responsibility must rest with the Canadian government to expand the purchasing power of the people of this country to the point where they- are able to buy the total production of the country. I am not going to take the lime to show how that can be done. When speaking the other day, the leader of this group gave a clear way in which this might be brought about. We have referred to it on various occasions, and no doubt will do so in the future. I think the house is familiar with the proposals that we have set forth from time to time by which the purchasing power can be expanded to maintain an effective demand.
Unfortunately it has been customary' in the past to regard the cause of an unbalance of trade as arising from a nation buying more than it can afford or borrowing more than it can repay. Apparently it is only recently we have come to realize that, a creditor may be and very' frequently is to blame, that it arises from a creditor nation attempting to dump its unemployment problem upon the doorstep of another nation by exporting abroad Jar more goods than it is prepared to accept payment for in imports from the world at large on a multilateral basis. Obviously, if some nations insist on exporting more than they are willing to accept in return there are bound to be some nations forced into debt in order to obtain the goods they require, even though they have goods to export in, exchange. In other words, if some nations insist upon maintaining a favourable balance of payments, other nations must find themselves in the unfortunate position of having an unfavourable balance. As a consequence, nations suffering from an unfavourable balance of trade have resorted to currency depreciation and foreign exchange restrictions as necessary protection against being forced into a state of unpayable debt. For example, a nation depreciating its currency by twenty per cent is able to undersell another nation by twenty per cent, and thereby encourage other nations to buy more of their gogds, thereby

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hoping to readjust the balance of payments. For the same reason a nation may impose foreign exchange restrictions to prevent the flight of capital, which would lead to still further unbalanced payments. Therefore we feel that before-taking these protective measures away from a nation or even curtailing them, we must take the necessary steps to remove the cause of the unbalance of trade. In other words, we must recognize the responsibility of the creditor nation to accept payment in the only way a debtor nation can make payment, namely in goods and services, unless of course the nation happens to be a producer of gold; and there are very few nations, comparatively speaking, that are producers of gold.
I wish to examine the Bretton Woods agreement in the light of those facts. The act comprises the articles of agreement of the international monetary fund and the international bank for reconstruction and development. I believe hon. members who have studied the act will agree that it is very hard to understand exactly what is meant by the phraseology used. I doubt if a single member of the house to-day, even including the Minister of Finance, would dare say he can explain exactly what every section of this act means. Therefore it is not surprising, as I stated a while ago, that different interpretations have been given by Maynard Keynes and Mr. Morgenthau. I stated in my first words that Mr. Morganthau had said what this meant. In presenting his report to congress on international finance he stated: "The Bretton Woods plan marks the fruition of the American treasury's gold policy," while Mr. Keynes in England stated it did not mean the gold standard at all. Apparently they have different interpretations of the same thing. Certainly I would suggest that any hon. member studying articles IV and V would immediately agree that it is a return to the gold standard. I do not say it is the gold standard of 1925, any more than the gold standard of that year was the same as the gold standard of 1914; but how can anyone argue that it is not the gold standard when these words are used in section 1(a) of article IV:
The par value of the currency of each member shall he expressed in terms of gold as a common denominator or in terms of the United States dollar of the weight and fineness in effect on July 1, 1944.
The leader of the C.C.F. party said in his remarks that he would be opposed to this agreement if it meant that the currency of a nation was to be based upon gold. Here it
definitely states that it is to be based upon gold, and I do not think even an .expert lawyer could wriggle out of that phrase.
To come back to the question of an unbalance of trade, article VII deals with a nation that persists in selling more abroad than it buys. Provision is made for the fund to borrow from the currency of that member nation, provided that the member is agreeable, or the fund may buy its currency for gold which, as I stated before, can only result in the nation having to obtain that currency by means of borrowing and going still further into debt. On the other hand, a very different attitude is taken toward a nation that imports more goods than it is able to pay for with its exports. Section 8 of article V imposes very severe penalties upon a nation finding itself in that awkward predicament. I should like to quote part of that section:
(c)	The fund shall levy charges uniform for all members which shall be payable by any member on the average daily balance of its currency held by the fund in excess of its quota. These charges shall be at the following rates:
(i)	On amounts not more than twenty-five per cent in excess of the quota: no charge for the first three months; one-half per cent per annum for the next nine months: and thereafter an increase in the charge of one-half per cent for each subsequent year.
(ii)	On amounts more than twenty-five per cent and not more than fifty per cent in excess of the quota: an additional one-half per cent for the first year; and an additional one-half per cent for each subsequent year.
(iii)	On each additional bracket of twenty-five per cent in excess of the quota: an additional one-half per cent for the first year; and an additional one-half per cent for each subsequent year.
(d)	Whenever the fund's holdings of a member's currency are such that the charge applicable to any bracket for any period has reached the rate of four per cent per annum, the fund and the member shall consider means by which the fund's holdings of the currency can be reduced. Thereafter the charges shall rise in accordance with the provisions of (c) above until they reach five per cent and failing agreement, the fund may then impose such charges as it deems appropriate.
Imagine any man signing a mortgage under which his interest rates will go up by one-half per cent per annum and then, when they reach a certain amount, if he cannot come to an agreement with the mortgage company the company can charge any rate it likes. Does anyone really think terms of that kind are going to bring about a spirit of good will in this world? The full weight is placed on the debtor nation; no pressure whatever is exerted upon the creditor nation, although to-day we all agree that each nation has a certain responsibility, whether it be a debtor or a creditor nation, in order to maintain an even balance of payment.	.
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Time is going, Mr. Speaker, and I wish to shorten my remarks. As I have stated, the inevitable consequence of such a policy will be that, in order to get the goods they require, certain nations, being unable to get other nations to accept their goods in payment', and not being producers of gold, will be forced further and further into a state of unpayable debt, while on the other hand the creditor nations, in order to continue exporting more goods than they are prepared to accept payment for in imports, in order to dump their unemployment problem on the doorstep of another nation, will continue to pile up foreign credits which they will endeavour to use for foreign investments. To-day I think we have a very good example of United States imperialism at its very worst.
So I come back to my original question: can such a policy as the Bretton Woods agreement create a feeling of good will and friendship? I would say that the inevitable consequence must be international friction leading to war. I have often been asked this question: "Why would nations join the fund if the conditions are as you state them to be? They say that nations join on a voluntary basis, and if conditions are as you have mentioned, surely no nation would join." I think it is true that so far only two nations have signed, but the agreement has been signed in behalf of the nations by the experts of some forty-four nations. I would say that the weaker nations joined as a result of economic pressure. I do not think it is fair to say that they have signed on a voluntary basis. They have signed because they have been practically compelled to do so, in order to exist. My suspicion regarding this question was first aroused when resolution No. 12 was first passed at Atlantic City limiting the functions of UNRRA, to all intents and purposes striking out the second "R", and making it a straight relief project, so that no help could be given for reconstruction or rehabilitation. Then, when nations wished to know where they could get help to rebuild industries they were told that they could get it by becoming members or parties to the Bretton Woods agreement.
I was very much struck by an article which appeared in the Fundy Fisherman, of August 29. 1945, which read:
The lend-lease agreements which the various nations were obliged to sign before obtaining supplies contained a provision which was not in the legislation enacted by congress. This laid down that the debtor nations were to enter into agreements directed to the expansion, by appropriate international and domestic measures, of,, production, employment and the exchange and consumption of goods, etc. The international money plan is the first of these measures. It is IMr. Quelch.]
one thing to consider the plan on its merits. It is another matter altogether to discover what the consequence of rejection will be.
I received another article of great interest from The Liberator Council of England, recognized as a monetary reform organization. Sir Charles Morgan-Webb is one of their advisers, a man of world renown as an authority on gold and sterling. This pamphlet, which was circularized among members of parliament in England, states in part:
One of Mr. Winston Churchill's secret and unpublicized actions after assuming power in 1940, was to promise President Roosevelt that he would do all in his power to bring Britain back to a gold standard suitable to American ideas.
I am not criticizing Churchill for that statement, because I realize that England was in a position of life and death in those days. England had to get supplies. And if in order to get. help under lend-lease, as is suggested in the article in the Fundy Fishermen, they had to agree to become a party to the gold standard or Bretton Woods, then no doubt Churchill was justified in giving in to the United States to get the help they required. But I do not think action of that kind redounds to the credit of the United States. It is most interesting to note that, while making an agreement of that kind, Churchill knew very well what the significance of the gold standard would be, because in 1932 he bitterly denounced it. I shall not take time to read his statement. They have been quoted in the house on various occasions.
However, I should like to quote the statement made by Mr. Ernest Bevin when he set out the attitude of the British Labour party regarding the Bretton Woods agreement. This is taken from the parliamentary debates for Monday, June 4, 1945, and he said:
One last word about Bretton Woods. I have never been finally convinced about Bretton Woods. I take the line, and my party takes the line that, neither directly nor indirectly, will we again be anchored to gold in any circumstances.
I shall never be a party to any international agreement, which, either as a result of the fluctuation of exchange, speculation or international action of that kind-which is not always of the highest moral standard-would prevent me from insulating the home market from the violent repercussions which will break down the home price Jevel when these wide fluctuations take place on the international price level. However,
I will join with anyone in finding a rational basis for an international price level, properly organized, provided it does not reflect itself in depressing the standard of life on the home market. As yet, neither the chancellor nor Lord Keynes has ever been able to persuade me that there are sufficient safeguards in the Bretton Woods proposals to achieve that object.
That was the attitude of the British Labour party in June, 1945. But, as I say, when sufficient pressure can be forced upon a nation

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:

they are likely to renounce their principles. I should like to quote from the London Economist of July 21, 1945, where it speaks about the Bretton Woods agreement:
As a matter of plain economies, there would seem to be a clear balance of argument against the Bretton Woods scheme-that is against the monetary fund.
Mind you, the London Economist is a most orthodox paper. Yet they say there is a clear balance of argument against the Bretton Woods agreement on economic grounds. The article continues:
But as a matter of politics or, if the word is taken to imply something sinister, of amicable relations between governments, there is almost everything 'to be said in its favour. How much economic hazard is a reasonable price for continued generosity and friendship or at the least for avoidance of American disappointment and resentment. It all depends upon the size of the hazard and the intensity of the friendship.
One	might interject, what friendship!
Apparently the price Great Britain has had to pay to get three and a half billion dollars has been the signing of the Bretton Woods agreement-although it has been condemned by the party in power to-day, through Mr. Ernest Bevin.
In closing, I wish to ask this question: Did the Canadian government help the British government to resist coercion in regard to the signing of the Bretton Woods agreement? Is it fair to say* that the Canadian government added its pressure to that of the United States government in order to try to persuade the British government to become a party to the Bretton Woods agreement.? I understand that the Canadian government is one of those governments which to-day are pushing forward the Bretton Woods agreement. In other words, we have merely become the Charlie McCarthy for Uncle Sam.
Some people will argue, "Well, why worry? Even if a nation joins, it can withdraw." That is true. That is mentioned in the act in several places, namely that a nation can withdraw. But what happens to a nation that withdraws? Article XI deals with that and, although I have not time to quote it, I suggest that every member should read it. It would be seen that the article states that if [DOT] a member withdraws and is no longer a member of the organization, other members may be advised to institute a boycott against that nation. Just visualize what would happen if England were forced to withdraw from this fund, and were no longer to be a member, and the rest of the nations in the British empire placed a boycott against Great Britain!
Was I exaggerating when I said that to my mind this act is nothing more or less than an 47696-194
act of treachery against the British commonwealth of nations? What effect will the act have upon a nation's sovereignty? I am not prepared to say that Bretton Woods will to any extent affect the sovereignty of a creditor nation or a nation that is a gold producer. But in the committee stage I shall prove, I think, without shadow of a doubt, that it does destroy the sovereignty of a debtor nation. Just because she will not suffer loss of sovereignty as a result of this act, so long as she can maintain adequate gold reserves, is Canada justified in trying to impose upon other nations a conditon which will mean the destruction of their sovereignty?
Then, in closing, to those hon. members who have emphasized-especially the hon. member for Muskoka-Ontario-that it is a matter of Bretton Woods or chaos, or the setting up of a bilateral system which in his opinion would be chaos-and probably it would be

I would say that there is a logical alternative. This is an alternative that has been put forward by the London chamber of commerce, which is undoutedly the greatest organization of its kind anywhere in the world. And if this matter is referred to the committee on banking and commerce we should call Mr. Leigh the secretary, before that committee, as a witness.
When the deputy minister of finance appeared before the committee on reconstruction, I asked him if he,would be willing to tell us what his views were on the London chamber of commerce proposals. He was not prepared to do that then, but I met him in the corridor afterwards and I asked him again what his views were. He said that the proposals were quite good but that the main difficulty would be to get other nations to agree to them. I asked him what nations he thought would disagree with what was known as the twentieth century system. I asked if he thought Russia would disagree, and he said he did not. It finally boiled down to this, ' the nation which he thought would not agree to them was the United States of America. In other words, the nations of the world are binding themselves to the gold standard in order to meet the good will of the United States of America. The proposal put forward by the London chamber of commerce-


The ACTING SPEAKER (Mr. Tremblay):: I am sorry, but the hon. member's time has expired.


Victor Quelch: I have about eighteen words to complete my remarks. The proposal put forward in the twentieth century system is a

307:
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multilateral system of trade using the national currencies of the nations concerned based upon the price index level of their goods.


James Lorimer Ilsley: What is the authority for the hon. member's statement that the United States forced a promise from Mr. Winston Churchill that he would lead the United Kingdom back to a gold standard satisfactory to the United States?


Victor Quelch: I explained at the outset what my authority was. I was giving it for what it was worth.


Some hon. MEMBERS:: Oh, oh.


Victor Quelch: Before you laugh, listen. The pamphlet was signed by Mr. Eric Troward, president of the liberator council and it is headed:
This memorandum has'been specially prepared for the benefit of new members of parliament, many of whom have not had the opportunity of studying the trend of international financial development during the past two years.
In regard to the liberator council, I would just like to point out that the chief adviser is Sir Charles Morgan-Webb, late chief secretary of the Burma government, who is a world authority on gold and the sterling group. So it is not a pamphlet that can be dismissed lightly. I do not think a man like Sir Charles Morgan-Webb would have anything to do with an organization distributing a pamphlet making that charge unless there was some proof of it.


James Lorimer Ilsley: My hon. friend is basing its authenticity upon the alleged standing of the adviser to this liberator council. As to who the gentleman is who made the statement, I do not know. I just want to say that I do not believe the statement.


Victor Quelch: The minister will agree that the fact that Britain has agreed to Bretton Woods is pretty good backing for that statement.


James Lorimer Ilsley: No, I do not believe that the dominions of the British empire are joining in this treachery to themselves. I think that is ridiculous.


Victor Quelch: They are being forced by the United States to join; pressure is being sxerted.


Mr. RODNEY ADAMSON (York West):: Mr. Speaker, in view of the violent language that has been used against this resolution it would seem that one is at some personal danger in supporting it at all. However, I feel that Bretton Woods is a pious hope to establish multilateral trade by the establishment of an international exchange medium.
I Mr. Quelch.]
It hopes to overcome the international monetary chaos which led directly to the restriction of trade which brought about unemployment, despair and eventual dictatorship, and of course war, in the despair decades of the twenties and thirties of this century.
Naturally any agreement of this nature must impose restrictions upon the signatories to the agreement. No matter what agreement you enter into, by the very nature of its being an agreement you agree with certain other people to do certain things. By its very nature there must be certain restrictions. One of the great visions is the hope that the international trade banditry as practised after the last war will be put an end to.
Probably it will be impossible completely to curtail international trade banditry; it will probably be impossible to overcome many of the dark practices in which international trade indulges from time to time, but this at least is a hopeful step in the right direction. During the period following the last war all kinds of methods were used to import goods, to cut prices, to give drawbacks, and to make secret agreements. One instance was in the timber industry. The Soviet Union said that during the year they would meet any price at which importers could buy in any other * country in the world. That is just typical of the practices that went on.
A little later on we had^the sale of South American securities in the United States, securities which in many cases represented no real value. They were sold, not because they were going to purchase real goods or provide real services, but because in many cases the vendors could find a market for the securities. I happened to be in Vienna when the Oster-reich-Credit-Anstalt failed, and that brought about the failure of one bank after another and eventually caused the bank holiday in the United States in 1933. It was all brought about by a desire to export ^nd not import, and the sharp practices which resulted, that were carried on in international trade and the type of trade that was done. The restrictions of imports, high tariffs, blocked currencies, different types of currencies, all had a part in bringing about the eventual complete destruction of international trade at any level or the, eventual cessation of international trade of magnitude at any level. United States banks failed, and thus the richest country in the world found itself with a bank holiday and a real condition of panic.
In his first inaugural address the late President Roosevelt said that the only thing we had to fear was fear, and yet the entire world was in an economic panic. I do not think there is any other word for it. It was in an

Bretton Woods Agreements
economic panic because there was no international regulation. This is at least an attempt to prevent history from repeating itself. As such I think it is a step very much in the right direction.
We had as we know an entirely fictitious value put on the money of European countries. The German mark, the Italian lira and the Russian ruble may have been worth anything, but as exchange media they were virtually valueless. They were used by the governments of the countries in question for unfair practices and international trade banditry. That is the only word I can think of to describe the practices that went on during that time.
We at the present time may fall into the danger of comparing conditions after the last war with conditions now. While history repeats itself, it does not repeat itself exactly; and while there are many similarities between conditions after the last war and conditions after this war, there are sufficient differences, 1 believe, to be worth mentioning and seriously considering at the present time.
The first difference between the aftermath of this war and that of the last war is that after the last war the United States put on one tariff after another; first of all the emergency tariff, then the Fordney-MeCumber tariff, and then the Hawley-Smoot tariff, and they virtually excluded the goods of the world from their country. This was the first really retrogressive step. Then, with the restriction of imports, they followed a course of extreme isolationism. They refused to sign-this is ancient history, everybody knows it-the Versailles treaty, and they declined to join the league of nations and withdrew' completely into isolationism. From then on things went from bad to worse, and little hope remained of world trade.
At the present time conditions are quite different. The United States is no longer the abundant storehouse she- w7as in 1918; she is becoming a "have-not" country; she is beginning to notice her great depletion of raw materials and to be frightened about it. I refer particularly to some of the non-ferrous metals, copper, lead, zinc and manganese. Of these, the United States, at the rate of consumption which prevailed from 1935 to 1938, has between two and thirty years supply; in most cases, much less than thirty years. The United States will find that she must have these metals for her industries; and we in Canada are, in every case excepting manganese, the greatest producer or potential producer, or at any rate our potential is as great as that of any other nation. Therefore, 47696-194J
instead of our being excluded from the United States market as we were after the last war, it is probable that the Americans will need our base metals.
Further, the Americans have now become almost completely deficient in such vital metals as tin, antimony, chrome and nickel. Of course they never did have any nickel, but they had some of the other metals. They must now import these things in order to carry on their industries. It is possible that the natural source of some of these metals will be Canada, and our past desperate need for United States dollars will probably not be as great as it was after the last war. There used to be a saying in the United States, which had an almost world-wide circulation, "export or die". The present condition is very nearly the reverse; it is "import or perish", because, with these great deficiencies, the United States finds she must import not only for her own safety but to run her industries in general. I submit, therefore, that there is a very great difference between the situation after the last war and the situation at the present time.
Another singular fact worth noting in this connection is that at the present time fewer than two million Americans are working in industries protected by a tariff. We used to think that all United States industry had tariff protection, and during the Hawley-Smoot era most of it had. But now-I will quote my authority for this in a minute-there are fewer than two million Americans w'ho are working in tariff-protected industries, which is a significant figure. So that I think we can discount the theory that this agreement of Bretton Woods is some scheme by which the United States hopes to "put a fast one over" the rest of the world. I do not believe that that is so; in fact I am certain that it is not so. I wish to quote one paragraph from an article from Percy W. Bidwell about the United States deficiency at the present time. It appears in the current issue of "Foreign Affairs" at page 98:	,
Americans will not die, nor Will the United States cease to exist, if we fail to increase our imports. But we shall not live as well as we mighty nor as safely. This is a rich country. The high productivity of our industry gives us abundant supplies of purchasing power in foreign markets.- Unlike Britain, we are under no pressure to restrict imports in order to bring our international accounts into balance. On the contrary, we cannot hope to balance them without expanding our purchases abroad. Yet, with all our riches, we have persisted in playing the miser, spending in normal years less than one per cent of our national income on consumers' goods of foreign manufacture. Instead of reaching out for the useful, appetizing and beautiful things which foreigners are so eager to supply,

Bretton Woods Agreements
we put up tariff walls to protect ourselves against prosperity and abundance. If we will adopt a new attitude toward imports, if we will accept them and make the most of them, we shall increase national security, we shall provide the competitive stimulus necessary to maintain our free-enterprise system at a high pitch of efficiency, and we shall enable our people to attain the high cultural standards befitting a rich and powerful nation.
I do not think that policy sounds as if this Bretton Woods agreement was a sinister United States scheme to restrict imports. They are beginning to realize that they have to "import or die".
Let us now look at the peculiar position of Canada. Canada, as has been so frequently said, was during the war and is at the present time probably the greatest per capita producer of goods for export. I have not the statistics before me, and the minister will correct me if I am wrong; but in normal times, on a per capita basis, Canada was the greatest exporter in the world, with the possible exception of some smaller countries which had greater agricultural exports. I am referring to our exports among manufacturing countries. There were smaller countries that had greater agricultural exports.


James Lorimer Ilsley: Such as New Zealand.


Agar Rodney Adamson: Yes. But-and this is a very singular fact-Canada is also a great , exporter of capital. Canadian enterprises supported by Canadian capital are world wide.
I need mention only one or two. The International Petroleum company, while its capital is largely American, is nevertheless a Canadian company with a good deal of Canadian capital, and the Brazilian Traction company is another concern I might mention. It is probably the largest single unit among public utilities in the world. All through South America you will find Canadian capital. You will also find that not only does Canada export capital; she is an exporter of services. Take her trans- . port services, for example. One might cite the Canadian Pacific Steamships on the Atlantic and the Pacific, and Canadian cargo vessels ply the waters of the Atlantic on a competitive basis. While they may be registered in London, nevertheless the bottoms are Canadian.
As a small country we have built up great services. Our Canadian banks, our international banking system, which astounds many of the Americans, has branches all over the world. The same is true of Canadian insurance. One of the amazing things about Canadian insurance companies is the amount of business they do in the orient. These are peculiar things about our Canadian economy, and in order to maintain this very high level 
of international trade, we need some kind of control of currency, or some kind of international stabilizing agreement; otherwise we shall suffer in Canada far more than any other nation in the world.
We have been singularly blessed in that we have given to our workers a great amount- of power. The Canadian workman has at his hands many more horse-power than virtually the worker of any other country. Productivity per man is high, and we have been able to produce per man-hour a very large quantity of goods.	-
The great problem with us in Canada now, as it will be for some time, is how to balance our imports with our exports. By reason of our peculiar position we are far more of an exporting country than an importing. We export many times the quantity of goods that a country of slightly over twelve millions could ever expect, under present conditions, to consume at home. That is, of course, a problem of population.
I should now like briefly to mention one or two of the clauses in the Bretton Woods agreement. I am not on the banking and commerce committee, so that this will be my only chance to discuss this vital matter. In the preamble six basic purposes are set out. I will quote only the first sentence of each:
(i)	To promote international monetary cooperation.
(ii)	To facilitate the expansion and balanced growth of international trade.
(iii)	To promote exchange stability and maintain orderly exchange arrangements.
(iv)	To assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions which hamper the growth of world trade.
(v)	To give confidence to members by making the fund's resources available to them under adequate safeguards . . .
(vi)	In accordance with the above, to shorten the duration and lessen the degree of disequilibrium in the international balances of payments of members.
Nothing could be more praiseworthy than these objects, and in the final clause of the agreements in annex C, under the heading, "the international monetary fund", it is stated:
Since foreign trade affects the standard of life of every people, all countries have a vital interest in the system of exchange of national currencies and the regulations and conditions which govern its working. Because these monetary transactions are international exchanges, the nations must agree on the basic rules which govern the exchanges if the system is to work smoothly. When they do no-t agree, and when single nations and small groups of nations attempt by special and different regulations of the foreign exchanges to gain trade advantages, the result is instability, a reduced volume of

Bretton Woods Agreements
foreign trade, and damage to national economies. This course of action is likely to lead to economic warfare and to endanger the world's peace.
Those are the basic purposes of the agreement, and surely no one will quarrel with them.
Fault has been found with the method of establishing currencies on a gold basis or on. a basis attached to gold. Well, what does the agreement say with regard to par values of currency? Article IV states:
The par value of the currency of each member shall he expressed in terms of gold as a common denominator or in terms of the United States dollar of the weight .and fineness in effect on July 1, 1944.
That is merely another way of saying "gold". Then it says that all computations relating to currencies shall be on the basis of their par value. It states that foreign exchange dealings shall be based on parity.- section 3-and that gold purchases shall be based on par value. Then section 4, article IV deals with obligations regarding exchange stability. Each member undertakes to collaborate with the fund to promote exchange stability. Each member undertakes, through appropriate measures consistent with the agreement, to promote within its territories exchange transactions between its currency and the currencies of other members. All these are basic fundamental rules of international trade.
There is, however, the method by which the parity of exchanges shall be fixed, and that appears in article 20, section 4. It merely states that each country shall settle its own parity of its own exchange. That is to me, Mr. Speaker, the crux of the whole question- the method of arriving at parity or of arriving? at the currency exchange value in gold of the various members of the agreement. At the present time the huge majority of currencies have a fictitiously high value in. terms of the United States dollar, in terms of gold and in terms of the Canadian dollar. I believe the franc is valued at two cents; but its actual purchasing power, according to the soldiers who have come back, is about one-eighth of a cent,. The lira and all the other European currencies have been given, I think unwisely, a fictitiously high value.
Before we can arrive at some degree of currency stabilization, there must be a period during which the currencies will be allowed tc. find their own value in terms of gold. I do not believe this can be done quickly; in fact it is a comparatively long-term operation; but before the agreement can become operative that has to be done, and it will be an extremely
difficult matter to arrive at. To me that is the great difficulty in the whole working out of the Bretton Woods agreement.
When the last workable gold parity was arrived at by the Herschell committee in the seventies of the last century there was a free gold market. That free gold market had been working for twenty or twenty-five years. They tied the pound and the dollar to gold at the then level of eighty-four shillings and sixpence, which had been the approximate mean value for some years past. That became known as the gold standard and brought tremendous prosperity to the countries which adopted the gold standard at that time. I think they were Great Britain, the United States, Germany and France. I do not know whether Italy came in or not; I think she did later, to a degree. But the gold countries virtually ruined or did not allow the great expansion they enjoyed because of their expanded international trade to the, rest of the world which lived on the silver standard, namely, the continents of Asia, Africa, India and certain parts of South America. There was not the tremendous industrial expansion; there was not the great trade boom in the silver countries that there was in the gold countries. Silver was manipulated, changed in value, and many times there were great crises in China and in India because of the manipulation and variation in prices of silver as compared with gold.
I do not propose at this time to talk about bimetalism, but I wish to say this, that while the monetary conference at Bretton Woods put in one paragraph concerning bimetalism, serious consideration must be given to providing the rest of the world with stable currencies convertible into the hard currency which will eventually be arrived at under this agreement. It is going to take many years, but it must be considered on this Norths American continent, particularly by Canada, which is a large gold and silver producing country and also a country which trades to a large extent with the silver standard countries of the world, Asia and China.
We in Canada are dependent upon a stable exchange. Probably we are more dependent upon stable rates of exchange than any other country in the world at the present time. We are in the focal point, situated between the sterling bloc, the gold exchange currency of the United States, and,, by geography at any rate, the closed economy of Russia. If we as a small country cannot come to some arrangement by which our currency and our trade is not at the behest of the great trading nations
Bretton Woods Agreements

which can control managed currencies, and which, because of their great wealth, can jockey with international currencies to our disadvantage; if we as a long-term exporting country cannot be sure that we trade in a currency which is convertible, stable and exchangeable, our future is extremely dark. Therefore I say that the Bretton Woods conference and the working out of the Bretton Woods proposals probably mean more to us than to any other country in the world. If we cannot get stable exchange; if we cannot provide our industries and primary producers with a medium by which they can make' long-term contracts, then we are going to live from hand to mouth, be at the beck and call of managed currencies, return to international banditry, and as a great producer of primary products and capital goods we shall suffer more than any other country I can think of.


Ernest George Hansell: Mr. Speaker, in the present debate on the Bretton Woods agreement I do not hope to be able to add a great deal more to the arguments which have been advanced by my colleagues, the hon. member for Lethbridge (Mr. Black-more) and the hon. member for Acadia (Mr. Quelch). I regard their arguments as indisputable, and I believe that we have a tight to expect, before this debate closes, that the Minister of Finance (Mr. Ilsley) will attempt to answer the arguments of both these hon. members. If he does not then he is not doing justice to the people of this country.
Leading off in the debate the Minister of Finance gave an excellent speech. He certainly did impress the house with the immense importance of this Bretton Woods agreement. I cap only state that if the Bretton Woods agreement is as important as he led us to believe it to be-and I am inclined to agree with him-then, he owes it to the people of this country to permit this house to go to any length, leaving no stone unturned, in the most thorough investigation of everything involved in this agreement. I said the other day in another debate I was convinced that_ the present financial system, which is international and knows no boundaries, was on its last legs. There is no question but that prior to the war circumstances proved that the present international financial system was a failure in this modern age of scientific production. I have no doubt that as a result of the breakdown of this system the war was brought on. I am not satisfied that the root cause of war i3 simply a lust for power on the part of some individual, just arising at the moment. The reasons for war are deep-rooted. War has a background; there is a cause for it, and, as

the hon. member for Lethbridge adequately expressed it this .afternoon, the cause lies in the economic field.
In saying that the present financial system is on its last legs, that it has perhaps destroyed itself, I am reminded of a snake attempting to eat its own tail until it eats itself all away, if that could be possible. That is the way the present financial system seems to have worked. But those in charge of high finance say, "No; we must save this system. We must bring about something or other that will force it to work." I believe an attempt is being made throughout the world to force what I regard as an obsolete financial system to work. My logic, which I do not think is faulty, would lead me to believe that if we are to force the present financial system to work, then we must force people to obey its dictates; and as , we do so, we take from the peoples of the world their right to freedom. There is no question about that. I am perfectly convinced that the various world moves that are being made, dovetailing as they seem to do into each other are an attempt to set up a dictator-., ship which will be nothing more or less than a glorified world state. Speaking from the economic viewpoint, I regard the Bretton Woods agreement as part of the machinery to bring into being that glorified world slave state.
May I now make another and slightly different observation. I have always regarded the British empire as a bulwark of Christian democracy. Some people ridicule that statement. I am not concerned about their ridicule; a conviction is a conviction. As one lives, as one thinks, as one reads and studies, one forms certain convictions. One conviction I have formed is that the British empire is a bulwark of Christian democracy, which means freedom of the people. There is no doubt in my mind that there are forces abroad , in the world to-day-I do not know how one could personify them-which may be involved in systems or movements, things like this measure, which are brought into existence for the purpose of destroying the British empire; for as long as the British peoples stand for justice and freedom and the kind of Christian democracy I visualize, then there cannot be a world slave state.
At the present time I do not despair of the situation, but there is. no doubt that Great Britain is in most terribly straitened circumstances. She had the fortitude to suffer and come through the war on top. She has been pounded almost to death. If the same thing had happened to some other nations I am sure they would have gone under long ago. The industries of Great Britain have

Bretton Woods Agreements
been almost destroyed, and it will be a long time before #they are rebuilt. Her production is low; the capital equipment of her factories has been largely destroyed. Although in the early days of the war she stood alone, she has emerged as one of the victorious nations. Yet to-day as far as Europe is concerned Great Britain is in danger of becoming a second, third or fourth-rate power. That is one danger. The other danger is that under such measures as we have before us to-night she may become a second, third or fourth-rate economic power in the world. If that be so, I ask: can the Canadian people, as part of that commonwealth of nations, think for one moment of aiding and abetting the destruction of that empire? I do not see how we can. I say to the minister that he should do everything in his power to give this agreement the closest scrutiny and to give this parliament an opportunity to investigate it thoroughly. After all, I think the experts are doing work upon it and have been for some time. Parliaments come and parliaments go, but the experts seem to remain forever. Finance ministers come and finance ministers go, but their deputies and their experts behind the scenes seem to remain forever.
It is all very well for the minister to place upon the doorstep of parliament at this late hour a measure such as this and say, "Well, the experts have gone through it, and my advisers have advised me that everything is all right." But, remember, it is parliament that has to act and to say whether or not Canada is to subscribe to the agreement. The experts are absolved from that responsibility. Since we are talking about experts and about responsible government, it surprises me that the present government is so anxious to do things on an international or a world scale, when I do not believe the minister can point to one thing the government has solved successfully on a national scale.
We did a magnificent job during the war; I know all about that. The minister is quite likely to say, "See what Canada did in the matter of finance during the war." Well, what happened was this: A war breaks out, and the green light is given to the financial institutions to expand their credit. And of course, when there is an expansion of credit through a process of debt, you can do almost anything.
It is true we 'have done a magnificent job and, we might say, in a way, a magnificent job financially. But our problem is not solved, because the minister has done that job by plunging the nation into irreparable debt. Personally I hold no hope whatsoever that
the national debt of Canada will be ultimately paid. I do not wish to be misunderstood. I do not say that Canadians who hold war bonds will not be paid. Of course those bonds will be retired through some sort of process of refunding; eventually the banking institutions of this country will hold the debt, and the people of Canada will pay toll for the rest of Canada's existence. That is my personal opinion.
I say that I do not see one national problem in the financial field the government has ever solved. One hon. member whispers to me: Look at old age pensions. Well, that is a financial problem. Is it solved? One could go on and on naming them. Yet the government seems so anxious to launch out into some great international scheme, apparently supposing that by making the problem larger they can solve it more easily.
Well, one does not wipe out crime by joining together two penitentiaries. One must get at the root of the problem, and tackle it at home first. Make a success of it at home, and then the government will be able to say, "We are now qualified to tackle things on an international scale."
As I said a minute ago, I urged the minister to make way for the house to give every possible consideration to every possible detail of the measure. I am suggesting that he should send it to the banking and commerce committee. I do not know if that is his intention.


James Lorimer Ilsley: Yes.


Ian Alistair Mackenzie: He said so earlier to-day.


Ernest George Hansell: I thought possibly the minister meant committee of the whole.


James Lorimer Ilsley: No; the banking and commerce committee.


Ernest George Hansell: Very well. That satisfies me, and I can shorten my speech by another ten minutes. However, the hon. member for Acadia points out to me that the intricate problem with which we are faced is that we shall be asked to endorse the principle of the -measure before it goes to the committee. We absolutely do not like the principle.
When at the last session of parliament we were discussing the San Francisco conference- not the charter-I asked the Prime Minister (Mr. Mackenzie King) a number of questions. While in the main those questions did refer to the proposals of the San Francisco conference, they were closely entwined with the Bretton Woods agreement. I should like at this time to quote from Hcmsard one or two of the questions I asked.
Bretton TFoods Agreements

At page 309 of Hansard for March 28, 1945, the Prime Minister, answering certain questions I had asked him, said:
I think I have come to the end of what I have found it necessary to say this afternoon in answer to questions raised in this debate; but I recall that my hon. friends of the Social Credit group also directed a number of questions to me. Last evening the hon. member for Macleod (Mr. Hansell) asked a number of questions and requested that I reply to them to-day.
Then the Prime Minister made certain answers, for which we thank him. Here are some of the questions and answers:
If the proposals are adopted, would the control of this nation's currency and credit remain within our own power? In other words, would we retain absolute control over-our own currency and credit?
The Prime Minister answered as follows:
I might say that before my hon. friend asked that question, I had prepared an answer to give to his leader in relation to what he had had to say on the Bretton Woods proposals, and I will give this answer to both hon. members and to their party at this time.
A word as to the speeches made by the hon. member for Acadia (Mr. Quelch) and the hon. member for Lethbridge (Mr. Blackmore). The contribution of these hon. members to the debate consisted very largely of an attack on the resolutions of the united nations monetary and financial conference, generally known as the Bretton Woods proposals. I confess that I am somewhat surprised to find the Social Credit party bringing aid and comfort to the more reactionary international bankers who have been the chief critics of the Bretton Woods proposals.
' I might say that the hon. member for Lethbridge answered that later on. Then the Prime Minister continued:
The hon. member for Acadia asked: Does approval of section 3 of the resolution before the house imply an endorsement of the final act of the Bretton Woods agreement? The short answer to that question is, no-
Of course it refers to the San Francisco conference.
-the house is not in this resolution being asked to endorse the Bretton Woods proposals. At the same time, I am convinced that collaboration among nations in the economic and financial field is a vital part of any effective system of international security.
He does not say that we are being asked to endorse Bretton Woods; but he certainly says, by inference at least, that he is in favour of the proposals. I shall not take the time to Tead the whole column, but later on-I am not taking it out of its text-he goes on to say:
We should be making a very poor approach indeed to the great problems to be dealt with at San Francisco, if we failed to 'take a constructive attitude toward the proposals which the
[Mr. Hansell.l
delegates of forty-four united nations assembled at Bretton Woods have, after long study and deliberation, put forward for the consideration of governments.
The next question is:
Do any of the proposals and principles involve the return to the gold standard?
I know that technically the Prime Minister is talking about San Francisco, but the two have become so linked together that I do not see how you can separate the one from the other. At least this is what the Prime Minister said:
The answer to that question is, no.
Then a little later on in the same page:
Mr. Mackenzie King:	The next question is:
If so, will the government, as far as it is concerned, oppose such a step?
What did the Prime Minister say? Here are his words:
So far as I am concerned that is answered by
the previous reply.
So that he was going to oppose any step if it meant a return to the gold standard. I think the hon. member for Lethbridge and the hon. member for' Acadia have to my satisfaction, and I think to the satisfaction of anyone who will look into their arguments, made out a case for these agreements meaning an absolute return, to the gold standard.


James Lorimer Ilsley: What does my hon. friend mean by the gold standard?


Ernest George Hansell: I know the minister will try to get me on some technical point.


John Horne Blackmore: We will say, whatever ii means.


Ernest George Hansell: Whatever it means, I do not care.


John Horne Blackmore: We do not want gold at all.


Ernest George Hansell: It is in the agreement, as was noted by the hon. member for Acadia. I think it will stand repeating. Article IV on page 20 which is headed "Par values of currencies", reads:
Section 1. Expression of par values.
(a) The par value of the currency of each member shall be expressed in terms of gold as a common denominator or in terms of the United States dollar of the weight and fineness in effect on July 1, 1944.
If it is not a return to the gold standard, why is that clause in there? The minister may ask me a technical question, but let him answer that question when we are in committee.


James Lorimer Ilsley: I certainly will.

Bretton Woods Agreements .


Ernest George Hansell: I should like to quote now from a man who should know. The minister questioned one authority who was quoted to-night, but I should like to quote Paul Einzig. I think he is well known as one of the experts, and in an article which appeared in the Daily Express of August 10, 1944, entitled, "A plain man's guide to the menace of Bretton Woods"-evidently he regarded Bretton Woods as a menace

he made this statement:
It must be clear to those who understand the meaning of the report of the Bretton Woods international monetary conference, published in a white -paper before the bank holiday, that the experts of forty-four nations have agreed on -a return to the gold standard -after the w-ar.
The minister had better ask Professor Einzig what he means by the gold standard. He goes on to say:
Unfortunately, very few laymen can possibly understand the report. If the public were to realize what it is being led into it would raise its voice in a powerful protest, instead of allowing -the experts a free hand to do their worst, as they did in 1925.
Perhaps I had better say who Paul Einzig is. He is a doctor of science in political economy. He was, educated at Brasov, the oriental academy of Budapest and the university of Paris. He was Paris correspondent of the Financial News in 1921; foreign editor in 1923; political correspondent in 1939. He became a British subject by naturalization in 1929. His publications are: "Le Mouvement des Prix," 1923; "International Gold Movement," 1929; "The Bank for International Settlements," 1930; "The Fight for Financial Supremacy," 1931. I will not read all the dates. He wrote the "World Economic Crisis", "Behind the Scenes of International Finance," "The Tragedy of the Pound", "Finance and Politics", "Finance and Politics a year later", "Montagu Norman", "The Comedy of the Pound," "The Economic Foundations of Fascism," "The Sterling-Dollar-Franc Tangle", "Germany's Default", "France's Crisis," "The Future of Gold," "World Finance since 1941", "Bankers, Statesmen and Economists", "Exchange Clearing", "Monetary Reform in Theory and Practice," "The Theory of Forward Exchange". I am just half through. Is the minister satisfied?


James Lorimer Ilsley: I did not think my hon. friend liked experts.


John Horne Blackmore: It takes an expert to catch an expert.


Ernest George Hansell: We have to pit one expert against another. His recreations are given, but I do not think we need go into that. It is stated fhat this gentleman likes music, reading and walking. He certainly has gone places anyway. In -the same article he makes this strong statement:
In 1925 the gold standard was, at any rate, restored in the full light of publicity. The public knew what was happening. It had only itself to blame for having failed -to heed the advice of the lone voice crying in the wilderness

that of the Daily Express prominently among them-warning the country against the consequences of the proposed step.
In 1944, on the other hand, the -public is only too well aware that a -return to_ the gold standard would, be unmitigated evil, spelling ruin and misery. It would now be politically impossible to reintroduce the gold standard openly.
But it is being introduced just the same, this time in disguise, under another name.
The public is lulled into a false feeling of security by being told again and again that the new system is not the gold standard.
And again:
Yet once the plan is translated into intelligible English and is denuded^ of all _ camouflage, every layman of normal intelligence is bound to realize that it is the gold standard, the full gold standard, and nothing but the gold standard.


John Horne Blackmore: Explain that away, now.


Ernest George Hansell: Now, Mr. Speaker, it is nearly eleven o'clock, and the next part of what I had to say would lose its continuity, if I stopped at that hour, but I once again urge the minister to help us. We are not here merely to put over some particular theory; all of us, I am sure, are interested in the preservation of our people and in the maintenance of real democracy in the world-; and if it is probable, as Paul Einzig and others say it is, that this document is dangerous, let t!*e minister not. be a victim any more than the rest of us; let us in the banking and commerce committee give the act the full light of day. I would- ask him to consent to call the greatest experts. Let us call, if need be, Mr. Morgenthau, who was one of the United States representatives. I refer to him because he is near at hand; I do- not expect they are going to send to Norway, or the Netherlands, or some other remote place. But let. them call Lord Keynes.
One other thing I wish to say in the minute or two I have left. Is it not surprising, since the minister has told us of the tremendous importance of this document, that he has left it until now, December 6, to bring it before parliament, when it should be signed before the end of the year, and the deadline for the closing of parliament is supposed to be December 15^ I do not want to impute motives, but does it not seem strange that this act was printed by the Printer to the King's Most Excellent Majesty in 1944 f yet
War Finance Committee

the matter has not been open for discussion; it was not sent to the banking and commerce committee, which in the spring of this year did not have anything to do, and now, at this late hour, such an important document as the minister himself claims' it to be is left on our doorstep. That proceeding should be resented by every member of this house, and the committee should call the greatest experts, no matter where they have to be brought from.


John Horne Blackmore: Experts on both sides, too.


Ernest George Hansell: Yes, let us have the facts and nothing but the facts. I urge the minister so to do.
On motion of Mr. Case the debate was adjourned.
On motion of Mr. Mackenzie the house adjourned at 10.56 p.m.
Friday, December 7, 1945.