Mr. MEIGHEN:

It seems to me this

measure should have been entitled " An Act to relieve the Loan Companies of Bad Loans."

Mr. FORKE:

That is all wrong.

Mr. MEIGHEN:

They were very, very

wretched loans, and I do not think the scheme has done any substantial good at all. It may not have been quite the failure the rural credit scheme was-the general impression in the province is that it is not-but, the rural credit scheme has been a grotesque proceeding in Manitoba. This government proposes to borrow ten million dollars to lend to the provinces, in order that the provinces will be ablp, I presume, to launch on the farm loan scheme, in the loaning of money in competition with loan companies. In the first place it resembles nothing so much as an attempt to ladle out the ocean with a spoon. Hon. gentlemen to my left should not take this too seriously, or be too technical in their objections to the different clauses. It will only be a waste of time. I wonder if anyone seriously thinks there will be a dollar loaned under this scheme. Look at the minister smiling. He has not the faintest notion of lending a dollar.

Mr. ROBB:

I am listening to the argument of my right hon. friend. That is why I am smiling.

Mr. MEIGHEN:

He has no notion of

lending a dollar to any province under the bill. There are clauses in the bill which give him the absolute control, and he can sit tight and do as he likes, which will make the province hang right back and not even apply.

Mr. FORKE:

What clauses?

Mr. MEIGHEN:

This measure says that the loan which the province makes is going to rank ahead of taxes and liens of any kind. How many municipalities are going to stftnd for that? However, we might as well pass the bill and get through with it. The result will be the same as if the bill were defeated. We can pass it and in that way defeat it. Hon. gentlemen probably desire to get home. This is so much propaganda, to cover the event of a possible election, so that the government will be able to say that they met the demands of the hon. gentleman from Bow River (Mr. Garland) for a rural credit scheme. That is the purpose of the legislation, no more and no less.

Mr. FORKE:

The right hon. leader of the opposition is very sarcastic this morning in regard to this bill.

Mr. MEIGHEN:

Wait and see.

[Mr. Forke.J

Mr. FORKE:

I think he is wrong in regard to the Farm Loan Association in Manitoba. I am fairly well acquainted with the work of that institution, and I think its loans have been made with just as much care as the mortgage companies loans have been made, and perhaps the association is in better condition as far as the farm loans are concerned than the majority of the mortgage corporations in Manitoba.

The rural credit scheme is on a different footing. I have no fault to find with the Rural Credit Act in Manitoba, but I have fault to find with the way it has been worked out. I do not care what laws or what acts you have, there is always a human element-that enters into it. and that is where the Manitoba rural credit scheme has fallen down. The local board has been t-oo sympathetic and too ready to make loans. There is another situation that has rather worked against the successful carrying out of the act. The act came into force at the time when prices were very high, and loans were largely made upon the valuation put upon the property by those seeking the loans. While the loan was perfectly safe at that time, according to the valuation that had been made, in a year or two, when values had shrunk very rapidly the loans were not so well secured and no doubt there has been a loss. The weakness of the whole situation has been that the local board has not been selected with sufficient care. I do not think it is wrong for me to say here that in some cases local merchants and others who were interested in collecting the debts from those who were borrowing money were on that board, and a favourite arrangement was to advise the borrower to consolidate his debt. That is to borrow sufficient money to pay off bis local debt, and then apply to the rural credit society. Hon. gentlemen can see how it worked out. He paid the debt, but left a large debt to the rural credit society, and they made failures, while the merchants got their money.

I have something to say about the trouble in borrowing money. The trouble in the west is that the security is not always good. You cannot expect to borrow money unless you are able to put up security.

Mr. MEIGHEN:

Hear, hear.

Mr. FORKE:

I think that is correct.

Sir HENRY DRAYTON:

Everywhere.

Mr. FORKE:

And that is really the crux of the whole situation. The serious state of the agricultural industry, and the difficulty in making agriculture a paying proposition

Rural Credits

brings up a serious difficulty in borrowing money for agricultural purposes. Loan societies, governments, or any other institutions like to see how their loan is going to be repaid. We find the west has got into difficulties. Farmers have got into difficulties and municipalities, provincial governments and other institutions, have tried to ease the load of the farmer as far as possible. We find the provincial government passing laws one after the other to prevent foreclosure, to make sure that those 'who have loaned money in any way can get it back at some future time. Consequently when you have that state of affairs interest immediately rises, and a difficulty in securing loans occurs. I do not think that we are ever going to have any successful borrowing or loaning institutions until we get things put on a more profitable footing.

Then the difficulty arises with regard to the occupation of agriculture. How are we going to put agriculture on a safe basis, unless we have funds? I hoped the government would have some scheme to bring before the House in order to show us some way out of the difficulty. There is nothing in the scheme that I can see to help us out, for the simple reason that if the security is good the provinces can borrow the money themselves, and if they have to become good for the money they might just as well borrow in the first place. I do not see that there is anything in this bill. I do not like to condemn it. It may be an honest attempt to relieve the situation. Ten million dollars may be only a beginning. The only point in my opinion is that if the Dominion government can borrow much cheaper than the provinces, it might be an advantage for them to borrow the money and loan it to the provinces. That is the only advantage that I can see in a scheme of this kind, but I do not know that they can borrow it so much more advantageously than the provinces. I agree with the criticism that has been made of the amount-ten million dollars.

Mr. McKAY:

What scheme of rural credit would my hon. friend advocate?

Mr. FORKE:

I am not advocating any.

I know that it is very popular in some quarters. The only plan that I think would be feasible is the amortization plan of long term loans at low interest; but you must get security to carry out that plan, and that is why we emphasize so much in this part of the House the tremendous necessity of putting agriculture on a prosperous basis. The whole question arises simply because there is so

much difficulty about security. I seriously think the ten-million^dollar proposition is just a joke; it would not begin to do anything, so far as rural credits are concerned.

Mr. McKAY:

Referring to the system

adopted in the United States, of long term credits, can my hon. friend tell me how much the United States advanced to the federal

farm loan boards?

Mr. FORKE:

I think that is a different scheme altogether and is not in the same position as this at all.

Mr. McKAY:

Why not advocate the same plan in Canada?

Mr. FORKE:

That is a different thing.

The only proposition that I would advocate in the way of Dominion government loaning would be to loan, not ten million, but probably a hundred million-I would not like to mention the exact sum-and to loan that money under the amortization plan, namely loqg term loans at low interest. Perhaps it could be loaned at five per cent for twenty or thirty years on fairly good security. In that way I think something could be done to help the west. No ten-million-dollar scheme is ever going to accomplish anything at all. The Minister of the Interior says that this is a trial. Well it is a failure to begin with, if we only start with ten millions.