April 14, 1926

CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

What does the hon. gentleman mean exactly by that?

Topic:   QUESTIONS
Subtopic:   NATIONAL SYSTEM OF BANKING
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LAB

James Shaver Woodsworth

Labour

Mr. WOODSWORTH:

I have already suggested my meaning. I shall be glad to elaborate it. I have said there were really three kinds of money to-day-gold money, banknote money, and money that is drawable by cheque.

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Subtopic:   NATIONAL SYSTEM OF BANKING
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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

And which of those do they destroy?

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Subtopic:   NATIONAL SYSTEM OF BANKING
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LAB

James Shaver Woodsworth

Labour

Mr. WOODSWORTH:

As I said, they do not destroy gold money, nor do they destroy bank-note money; but they do control the amount of credit,-

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Subtopic:   NATIONAL SYSTEM OF BANKING
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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

And do they destroy cheques?

Topic:   QUESTIONS
Subtopic:   NATIONAL SYSTEM OF BANKING
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LAB

James Shaver Woodsworth

Labour

Mr. WOODSWORTH:

-and in that way they have the power of creating or destroying money.

Topic:   QUESTIONS
Subtopic:   NATIONAL SYSTEM OF BANKING
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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

Will the hon. gentleman allow me? I can well understand that a cheque on a bank which is met by a credit is destroyed or becomes non-effective when it is paid; and possibly the manipulation of destroyed cheques may be in the hands of the bank or of the drawers of the cheques; but I ask: How do banks destroy money by

paying cheques, or liquidating cheques, or by giving credit on cheques?

National Banking System

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Subtopic:   NATIONAL SYSTEM OF BANKING
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LAB

James Shaver Woodsworth

Labour

Mr. WOODSWORTH:

Mr. Speaker, I am sure the hon. gentleman gives me credit for understanding a little bit more about money than would be suggested by his question.

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Subtopic:   NATIONAL SYSTEM OF BANKING
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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

I suggest to the hon. gentleman that he give us a little more credit than he seems to do in his explanation.

Topic:   QUESTIONS
Subtopic:   NATIONAL SYSTEM OF BANKING
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LAB

James Shaver Woodsworth

Labour

Mr. WOODSWORTH:

I am not suggesting at all the actual destruction or creation of the credit instruments as the way in which money itself is made or destroyed. What I am suggesting is that credit itself may be extended or contracted, and that the very expansion of credit-which we call inflation-or its contraction-which we call deflation-is in effect the making or the destroying of money.

Topic:   QUESTIONS
Subtopic:   NATIONAL SYSTEM OF BANKING
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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

May I ask another question?

Topic:   QUESTIONS
Subtopic:   NATIONAL SYSTEM OF BANKING
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LAB
CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

When the credit of the country is enlarged every year for the purpose of transporting wheat from the west to foreign markets, does the expansion of that credit depress wheat prices or in any way destroy money?

Topic:   QUESTIONS
Subtopic:   NATIONAL SYSTEM OF BANKING
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LAB

James Shaver Woodsworth

Labour

Mr. WOODSWORTH:

No, because in that particular instance the larger amount of money is needed to do a particular work, and when that work is done the money is recalled; but that is not inflation.

Topic:   QUESTIONS
Subtopic:   NATIONAL SYSTEM OF BANKING
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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

May I ask another question? Is there any time in the history of banking when extensions of credit to merchants or manufacturers or others are not given for a particular purpose in commerce or manufacture or industry, whether growing fruit or wheat or producing any manufactured article?

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Subtopic:   NATIONAL SYSTEM OF BANKING
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LAB

James Shaver Woodsworth

Labour

Mr. WOODSWORTH:

Very often, as a

matter of fact, credit is so given. But I am not talking of the giving of credit in one particular instance, I am talking about enlarging the whole volume of credit.

Topic:   QUESTIONS
Subtopic:   NATIONAL SYSTEM OF BANKING
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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

The hon. gentleman must

admit that the total volume is always made up of particular instances.

Topic:   QUESTIONS
Subtopic:   NATIONAL SYSTEM OF BANKING
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LAB
CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

If the hon. gentleman would allow another interruption-is there any other application to that case than that it is inopportune to go to sleep for some twenty or thirty years?

Topic:   QUESTIONS
Subtopic:   NATIONAL SYSTEM OF BANKING
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?

An hon. MEMBER:

Better not wake up!

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Subtopic:   NATIONAL SYSTEM OF BANKING
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April 14, 1926