the grain with our present railway equipment, unless you greatly increase your production in the west we shall still be able to carry it as we are doing to-day. While you may have another outlet at Hudson bay, you will only be taking a certain quantity of freight ,away from the two railways which are at present carrying it. I am not discussing this matter in a controversial way at all; I am simply discussing it in order that it may be given the serious consideration to which it is entitled, because at the present time we have railway problems on our hands and we do not want to take a leap in the dark and spend another fifty million dollars unless that expenditure is going to give the people of the west the benefit they claim it wall give them.
Another matter that I would like to touch on for a few moments is the question of rural credits. As a fundamental principle I do not think any government should1 be in the lending business. During the last few years a feeling has grown up that paternal legislation is a panacea for all the ills of the nation. At the present time we have insurance companies, loan companies and trust companies who are carrying on this business, and who have both before and since confederation supplied mortgage credits to the people of Canada. They have been a large factor in the development of this country, and they have helped the farmer to cultivate his land, the artisan to acquire his home,
The Address-Mr. Stinson
and the business man to develop his business. These companies, which have for investment hundreds of millions of dollars made up of ithe savings and insurance premiums which the people of Canada have entrusted to them for safe keeping, should be allowed to present their case to a committee of this House and to give us the benefit of their experience in the lending business, an experience which would be of great use to this House and to the people of Canada at large.
Denmark and Holland get the cheapest money -for agricultural purposes in western Europe at the present time. In Denmark the lending is done through credit associations. A borrower, on becoming a member, pays an initial premium of one and one-half per cent to the association. He then executes in favour of the association a mortgage bearing interest at five per cent, and the association, instead of paying him cash for the amount of his loan, delievers to him bonds of the association. These bonds are now issued bearing interest at 4| per cent, although when money was cheaper they were issued at a lower rate. The borrower has to sell his ,4i per cent bonds in the open market and they fluctuate in price the same as any other securities. These bonds were quoted in Denmark on the 21st of January, 1926, at from 85 to 87 cents on the dollar. It would therefore appear that a borrower in Denmark in the third week of January, who borrowed
11,000 on a mortgage on which he agreed to pay interest at the rate of five per cent, would receive from $850 to $870 in cash. This substantial discount would have to be borne by him over the period of his loan, consequently he is paying considerably more than five per cent on his mortgage. During the middle of last summer these Danish bonds were selling at from 78 to 80, so that the rate to the farmer wras higher at that time than it was on the 21st of January of the present year.
In 1916 in the United States the cry of cheap money was raised as being a cure for all the ills of the farmer in the middle west. In less than ten years the Farm Loans board of the United States has invested $1,500,000,000 m mortgage credits. Still the farmer of the middle west has found that that has not been a panacea for all his ills, and he is now making further demands upon the government along other lines. The money of the Farm Loans board of the United States was obtained by the issue of tax free bonds. These bonds were largely bought by wealthy individuals who escaped the income tax, and there has been a serious loss to the treasury of that
country by the issue of those tax free bonds for that purpose.
Manitoba, Saskatchewan and Alberta have also entered upon schemes of rural credits, Manitoba, according to the premier, expects a loss in the neighbourhood of $650,000 to $700,000 on an issue of $3,000,000. Saskatchewan has large arreas and has had to advance considerable sums to its borrowers for seed grain, taxes, hail insurance premiums, et cetera. In 1922, 1923, and 1924, only $91,000 was collected by Alberta under the Live Stock Encouragement Act, while during the same period the Alberta government, which guaranteed the advances to the banks, had to pay the banks $497,000. The government therefore had to make good losses to the extent of $406,000; and this came from the pockets of the people generally. If these provinces have found it difficult to collect, would not the federal government find it even more so, with the centre from which the lending was made transferred from the west to Ottawa?
In Canada there is no lack of money for lending on mortgages at present, and competition will force a reduction in the rates. When the war broke out, money was being lent in the west in approved districts at seven per cent, and during the war period the government of Ontario paid as high as six per cent for money. The average loan in Manitoba, Saskatchewan and Alberta per quarter section of land is $1,500. Supposing you get a saving of from one to two per cent in your rate of interest, that would mean a saving of $15 to $30 per annum, and surely such a saving is not a matter of life and death as some parties who are sponsoring the system claim. Western agriculturists have pointed out that by a careful selection of seed and better rotation of crops, there can be obtained a higher yield of five bushels to the acre of wheat, ten bushels to the acre of oats, seven to eight bushels to the acre of barley and rye. This increased yield at present prices woidd amount to between $300 and $400. To the owner of a quarter section who has 100 acres under cultivation, this is infinitely more important than a saving of $15 to $30 in interest charges.
The mortgage business in Canada as a whole has been fairly carried on. There have been some cases of hardship, but not many. The mortgage lending companies have played a fair and a large part in the development of Canada and we must treat them fairly. The rates which they have been charging have been determined by the rates that they have had to pay for their money, plus a reasonable charge for administration. None of the
Prince Albert By-election
companies has made excessive profits, and you must take into account the risks run and the inevitable losses which are bound to occur in any mortgage business. Before we embark on the uncertain sea of money-lending, let us hear all the evidence in a true, understanding manner, out of which there may grow a spirit of co-operation in the interest of all, so that we may be able to help the dairyman the farmer and the manufacturer.
So far as the rate of money in western Canada is concerned, borrowing has been curtailed and the rate increased as a result of some of the provincial legislation that has been passed in those provinces. Both in Saskatchewan and in Alberta certain claims by way of legislation have been made to take rank over first mortgages, and in Alberta there are ten or eleven such charges that now take priority of the mortgage. In the effort to assist the people of those provinces this policy has curtailed lending and has increased the rate of interest chargeable in that section of Canada.
What we require to-day in Canada is stability in the tariff, with protection for the farmer, the labourer and the manufacturer. We require economy in the administration of government; we require a government capable of putting into operation its own policies and not a government in the hands of a few men outside who dictate those policies. We require the utilization of all our resources for the benefit of the people of Canada, and last but not least we require a reduction in taxation generally as well as the abolition of a number of small and annoying taxes now imposed on business and which have been hampering activities in the last few years.
If given an opportunity, we are prepared to work out with our Progressive friends a clearer understanding on such matters as they are pressing for, and at the same time we want them to have a clearer appreciation of our aims and objects. If we could arrive at a co-operative arrangement on this basis I believe it would be very much in the interests of the people of Canada. Stability is the main thing in the development of Canada at this period, and in order to attain that stability in business we must have it first of all in the highest place of business: we must have stability in parliament. All business is being hampered in consequence of the present situation in parliament. Nothing is certain in connection with our fiscal policy; nothing is certain in our trade policy. Nbthing is certain but uncertainty, and until the air is cleared the progress of this Dominion is going to be retarded as it is just now.
On motion of Mr. Anderson (Halton) the debate was adjourned.
oi the House is moved I desire to make a statement. In conformity with a request made this afternoon on the orders of the, day, I communicated with the chief electoral officer and have now received his reply. For the information and the convenience of hon. members I suggest that it be incorporated in tomorrow's Votes and Proceedings. It is not bulky, so that it can easily be done. This of course is by leave of the House, inasmuch as it is irregular.
Topic: PRINCE ALBERT BY-ELECTION COMPLAINT REGARDING PRINTING OF BALLOTS