April 19, 1932

CON

Arthur Sauvé (Postmaster General)

Conservative (1867-1942)

Mr. SAUVE (Translation):

I regret that

my time has expired.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Joseph Oscar Lefebre Boulanger

Liberal

Mr. BOULANGER (Translation):

May I put a question to the hon. Postmaster General? What has the Highway Act of Quebec-

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Arthur Sauvé (Postmaster General)

Conservative (1867-1942)

Mr. SAUVE (Translation):

I shall answer my hon. friend when he has obtained the Speaker's consent.

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LIB

Joseph Oscar Lefebre Boulanger

Liberal

Mr. BOULANGER (Translation):

Can the hon. Postmaster General inform me what the Quebec Highway Act has to do with the Dominion government's policy on agriculture.

An hon. MEMBER (Translation): A great find!

Mr. E. C. ST-PERE (Hochelaga) (Translation) : Mr. Speaker, my first word will be

one of congratulation to our new Finance minister (Mr. Rhodes) on the clear-cut and, may I add, courageous, first budget he has presented to the house. The budget itself, however, brings none of that prosperity promised us by the Tories at the last Dominion election.

I wish to congratulate also my old friend, the hon. Postmaster General (Mr. Sauve) for having-ever faithful to his principles-persevered in the old protectionist policy which he has never ceased fighting for.

I believe that when he stated awhile ago that certain opposition speakers used abusive language he surely was not alluding to the member for Hochelaga who neither in his election campaigns nor in the federal parliament at Ottawa nor elsewhere, has ever struck his opponents below the belt.

This new budget is crammed with statistics which show that our country is in a pitiable state. Our new Baron Louis, the hon. Minister of Finance, asks for money in return for the bad policy, viewed economically, his government has followed up till now. He demands funds from this house repeating the request that the former Baron Louis was wont to make to his partisans: "Give me good politics, my dear friends, and in the future I shall give you good finance."

A moment ago, my good friend the hon. Postmaster General said that for years the members of the opposition have been asking for a free trade policy. At times my good friend can joke without displaying a smile. He well knows, since he comes from the province of Quebec, that the old Liberal party in our province has never asked for free trade, but was content with the economic policy put into practice by Sir Wilfrid Laurier and his sup-

The Budget-Mr. St-Pere

porters, based on a tariff for revenue which afforded protection at the same time to our large industries and to the general economic interests of Canada. Like all governments that are hard put to it-and our Canadian government finds itself to-day in the very same position as the governments of many other countries-our government first sets about practising certain economies: the ten per cent cut in the salaries of our civil servants. I am opposed to this false economy and my main reason is that I represent one of the largest workingman's ridings in Canada. I am against this reduction in salaries for the very good reason-and in this I am not moved merely by preoccupations of political expediency-many of our foremost economists take the same attitude-that a reduction in salaries is inevitably followed by* a weakening of the purchasing power of the country's citizens; and the Lord knows this reduction in purchasing power has, in the present instance, caused innumerable disasters in different parts of Canada and throughout the entire world. I quote Mr. James Klyne, Assistant Secretary of Commerce in the United States:

In the period comprised between 1921 and 1929, wages really increased by 13 per cent; during the same period the profits of industry rose 72 per cent; and these same industries gained in dividends 256 per cent.

I wonder, Mr. Speaker, if this discrepancy does not absolutely justify our large labour organizations who never cease protesting any reduction in wages.

I have never had faith in these plans of work for the unemployed as a solution of the economic difficulties of our population. Such works as have been undertaken have served, with certain exceptions, merely to enrich a large number of contractors, of partisans; and I even venture to say, representing as I do the opinion of the workingmen of my district, that our people would be better off if these relief works were stopped altogether. Direct relief will ensure far more improvement in the economic situation of Quebec, and the other provinces than have these undertakings for the benefit of the unemployed, which have cost $150,000,000.

These works, Mr. Speaker, should be replaced by direct relief. This latter, unfortunately, appears to be misunderstood by the public. This direct relief will not be a "dole" as applied in England; I consider that it will be simply returning to the workers a part of the wealth that industrial and other exploiters, thanks to high protection, have been despoiling them of for a number of years.

No more guarantees for wheat pools! We have there another false principle that has been applied for years. And direct aid, bounties and subsidies granted to industries are no more than another form of protection which puts these same industries in a very advantageous position when it comes to competing with the products of other countries in the markets of Europe. For the love of the Almighty, let us legislators have done with political prejudice, face the real situation, and understand our duty to enable Canada to compete efficiently with foreign products on the great European markets.

The reduction of the expenses incurred by the Canadian National-

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CON

Joseph-François Laflèche

Conservative (1867-1942)

Mr. LAFLECHE (Translation):

Exactly.

Mr. ST-PERE (Translation): Are you

willing that we should make a brief examination of conscience? What have we witnessed in this house within the last few years? Members, both Conservative and Liberal, have never ceased asking for branch lines in all parts of the country, supposedly to satisfy a public need. We have played politics with our national railways; and now we have to pay the cost, I will not say of the folly, but of this overzealous ambition to prove to the world that Canada had the greatest known railway system. This railroad problem is to-day a burning question in alii countries. In the United States it is the question of the hour and even in France the state railway is face to face with an extraordinary deficit. The statesmen of the latter country are striving their utmost to put an end to such an abnormal situation.

Now let us see what the government intends doing to remedy the present state of affairs. Yielding to repeated outcries in our large financial journals the government is thinking seriously of balancing the budget. The politicians of the neighbouring republic are inspired by the same thought. And, following the wake of Mr. Hoover's government, the government of the right hon. Mr. Bennett believes that the most tangible and the most economical way of improving the situation is to impose taxes. No doubt, taxes are always unpleasant. As an old saying has it: the most agreeable taxes are those that one is not called upon to pay. But there is one tax that strikes me as not only unworthy, that the worker, the consumer, the people of the middle class and even of the industrial class, will find it hard to pay: I mean the 6 per cent sales tax. A tax, like every other measure put forward, should in the minds of those responsible for it, bring about some tangible, some practical result. Can the government reasonably expect,

The Budget-Mr. St-Pere

conditions being what they are, with hundreds of thousands of people out of employment, that these people will continue to buy on the same scale as they did when times were pros-[DOT] perous? I say no. Can the government hope that the income tax, as now proposed, will bring the state more revenue than was paid in last year? I say no.

If I take this rather negative attitude it is after having consulted numerous friends, financiers, members of both parties alike. With them I have reached the conclusion that in view of the present depression the government cannot, logically and practically, hope to improve our economic situation.

I refrain from quoting the comments of the Financial Post in its issue of April 16th: it would take up too much time. Whoever wishes to read and study this article will find there a denunciation of the government's new fiscal policy and, further, which will be probably somewhat in the nature of a surprise, a prediction that the present fiscal year will show a deficit of 864,000,000.

Our friends across the way seem to have boundless faith in the coming imperial conference; the name by the way should be changed since, thanks to the recent Westminster Statute there is no longer any empire, but only a "commonwealth" of British nations. Let us, members of this house, read the latest comments of that great English review "The Nation", on the subject of the forthcoming imperial conference.

Of necessity this voice, I will not say of the British government, but of British opinion, expects benefical results from the conference. The article finds a clever way to introduce the idea that England is quite ready to grant the other members of the British commonwealth a certain preference in her markets; but to the reader who knows the use of "distinguo" and can analyse the author's thought it is clear that although England may be willing to make certain concessions, nothing in the world will induce her to adopt an attitude that might prove harmful to her government in its trade relations with foreign countries.

We are told that our industries have increased in number. As to that, I have not looked up the statistics; but concerning the latter I recall what was said by a great French economist: They are often lies published in figures. If this customs tariff adopted by the government, or rather modified by order in council at every meeting of the cabinet, if this tariff, I say, has met with so much success in attracting new industries to Canada, how are we to reconcile such a practical result with the fact, which is there for all to see in our large cities, that industries established for 20 or 25

years, are closing down? We would do far better it seems to me, to keep these factories going rather than try to attract American branch factories to Canadian territory, the profits from which will go to swell the fortunes of certain big American capitalists.

Now let us talk of Canada. It is a good thing as I said a while ago to look towards the past. I believe-and I am not alone in this belief-that we went ahead a little too fast, that we wanted to practise economic modernism at a time little suited to any such design: we have been seeking a rainbow. Certain speculators-and my friends to your right, Mr. Speaker, have heard something about this, particularly those who represent rural ridings- certain speculators, under cover of patriotism, overran our countryside selling worthless stock to our farmers; if the credit of the farmers in our province has suffered Slightly in consequence we must blame those who succeeded in making the farmers believe that their money would be more profitably invested in new industries, which had no prospect of success, rather than in lands which would continue to increase the family holdings.

It has been repeatedly stated that Canada is the granary of the Empire. What became of this granary when, after the Great War, the countries of Europe, Germany, Czechoslovakia, Transylvania, Hungary, determined to produce at home the wheat they had been buying from Canada?

We were in too much of a hurry, we forged too far ahead, and more than once we showed lack of discernment, of vision, of economic sense... Take another example: excessive immigration. What does it matter to me that both governments practised it? They sought to attract too many immigrants to our shores; why, only a few days ago I heard the hon. Minister of Immigration (Mr. Gordon) say that he hoped he would never see the day when a British citizen would be refused admission to Canada. Citizens of all countries should be welcomed here and, in Quebec province especially, we may say that we know how to receive them; but at a time like the present when the unemployed from all parts of the country are concentrating in our large cities we should, more than at any other time, close our doors to all immigrants, whether they come from England, France, Italy or other Nordic countries. "Canada First" should be the immigration policy of the new Minister of Labour in the cabinet of the right hon. Prime Minister (Mr. Bennett).

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Charles Napoléon Dorion

Conservative (1867-1942)

Mr. DORION (Translation):

Hear, hear.

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Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Joseph Arthur Barrette

Conservative (1867-1942)

Mr. BARRETTE (Translation):

That's the policy we intend to follow.

The Budget-Mr. St-Pere

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LIB

Jean-François Pouliot

Liberal

Mr. POULIOT (Translation):

You follow

it from a distance.

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LIB

Lucien Dubois

Liberal

Mr. DUBOIS (Translation):

With 500 immigrants on the way. .

Mr. ST-PERE (Translation): "Propheta

altissimi vocaberis." Our arm-chair economists talk of overproduction and underconsumption. To my mind what we are suffering from just now in Canada is overproduction. Why not make known to our people the true state of affairs? Why not admit the unrest that is found to-day among all classes of our population? Oh, the appeals to communism! I have lived my entire life among the workers, and those of the province of Quebec, be they English, Scotch, Irish, French, Canadian, Jewish, or of any other nationality, have no faith in the principles of communism. As I stated in a former speech, they are not even interested in finding out what the word means. Here is a typical example. Quite recently one of my worthy constituents asked me at the comer of Ontario and Davidson streets: "Will you tell me, my dear St-Pere, what the word communism means?" I thought I should try and explain to him, in my own way: "You see that house there that I built with my own savings? Well, if communism were put into practice I would have to share it with you." His good sense made him answer: "What a

crazy idea!"

Let us have no faith in communism; but we must strive towards one end: improving the lot of the masses. From an economic standpoint the situation in our cities is distressing. At the present time a great many small owners of realty built with the savings of the working class, are wondering if to-morrow, with all this unemployment, they will still possess their property. Mention is made of a moratorium on mortgages. Since we talk of high finance in this house you will no douibt be interested to know that a certain prominent financier whom I met recently asked me to have a moratorium declared on loans due the banks-

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Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Charles Napoléon Dorion

Conservative (1867-1942)

Mr. DORION (Translation):

It would be a good thing.

Mr. ST-PERE (Translation): -with the understanding that the borrower would continue to pay interest. There you have the true situation, the uneasiness that is gnawing at our people to-day.

Quite frequently the United States are pointed to as an Eden, a terrestrial paradise, in the present crisis. The eldest of my brothers, who died last year, held a very important position with Western Electric in Chicago; and for the last four years he foretold the

muddle we are in to-day. When times were prosperous this great company employed some

45.000 people; only 12,000 are employed there now. It is rather odd that in the United States all economists, all university professors and all important industrialists are at one in blaming the present crisis on the high tariff that had been in force for a number of years. What are we to do? In the light of my own personal experience I, a Liberal, do not consider that the only way of reaching a solution is to declare, as the right hon. Prime Minister of Canada did recently, that in a protected world we must have a protected Canada. I say that, in a protected world we need governments with courage enough to espouse the cause of lower tariffs; I believe with M. T. Chadbourne, who organized and controlled southern trade, that the various countries should work in harmony, that a lowering of tariff barriers is imperative, that me must get away from economic nationalism, take a broader view, and acquire a more complete understanding of what the future holds.

We are told that in any country the only road to national well-being lies through a system of protection. I intend quoting certain statements made by Mr. Etienne Fougere, one of the foremost economists of France, in an article which appeared in "L'Europeen", issue of September 18, 1931. Speaking of the invasion of protectionism, he writes:

A new invasion, which it will be hard to withstand, threatens the World, and especially Europe; I mean protectionism. It has already penetrated everywhere and we are beginning to feel its ill effects. But up to now one great country, England, had withstood it and had fought against it at all international assemblies.

To-day our neighbour and friend has been almost won over to the protectionist cause; and like all neophytes, certain British statesmen have shown themselves overzealous. Indeed, Mi'. Runciman, a former liberal minister, and a champion of free trade at Geneva, wants to forbid the importation of all articles of luxury, which amounts to no less than an economic break with France, and a return to mediaeval ways.

For our part we do not expect things to reach such an extreme pass. However we must be prepared for a customs tariff in Great Britain.

What one might call fate has urged the nations along this road since the war. They had the choice of two ways:

A greater measure of freedom in trade which would have lowered customs barriers as political animosities died away; or else a policy of national isolation which would bring about the erection, around each country, of a sort of Great Wall of China, destined to rise higher and higher.

The second of these two roads was chosen. It has a steep incline and it is difficult to find brakes powerful enough to control what excess there may be- Hence the alarming progress of protectionism.

The Budget-Mr. Duguay

There is but one way, one, to limit or arrest this progress: economic agreement among nations. Can it be 6aid that we are headed in this direction? The dull and hypocritical debates at Geneva assuredly lend us no encouragement.

If we fail to reach some such understanding we are on the eve of an era of tariff insanity. Already Russia, Germany and other countries are evading established duties. The realization of this will provoke new restrictive measures, and so new sources of irritation and of conflict will be added to those already existing.

The end of the year 1931 will find France with an adverse trade balance of fifteen billion francs, while Germany will have a favourable balance of eighteen billions.

The mere mention of these figures suffices to show that France will have to adjust her tariff policy. But will this unavoidable necessity make for Peace?

Etienne Fougere.

In closing, Mr. Speaker, I ask the government to adopt Mr. Etienne Fougere's attitude.

During the debate which has been going on in this house for the past few days stfme of our friends on the other side have introduced provincial politics. I will add my own comment: my friend, the hon. Mr. Tasche-reau, has no need of my weak voice to defend his policies; but there is one thing that we must take notice of, and that is that the good old province of Quebec unlike other provinces of this dominon, has enhanced our adherence to the declarations made against confederation in olden times by Sir Antoine Aime Dorion, Liberal prime minister, elected from the constituency that I have the honour to represent in this house. The other provinces have appealed to the federal government for aid. The good old province of Quebec, which is not perfect but which strives to reach perfection, has this merit, during the present crisis, that it has not come to Ottawa to beg, neither for sympathy nor for federal funds. The province of Quebec, now a part of confederation will continue to be what it has always been, a broad-minded province, at times too open-handed in the matter of concession; but whose people, side by side with those of our sister provinces, will work for the return of that prosperity, that economic and social well-being whose loss Canada has had to mourn these last few years.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Joseph Léonard Duguay

Conservative (1867-1942)

Mr. L. DUGUAY (Lake St. John) (Translation) :

Mr. Speaker, may I, in my own name and that of my constituents, sincerely congratulate the hon. Minister of Finance (Mr. Rhodes) on his .budget speech. I sincerely congratulate also the hon. member for Shelburne-Yarmouth (Mr. Ralston) on the extremely arduous task he accomplished with such imposing success. The hon. member for Hoche-laga (Mr. St-Pere) also may well be proud of

his magnificent examination of conscience. I am convinced that after such proofs of perfect contrition his constituents will not hesitate to give him absolution and will not hold against him the fact that he thought rather late of the remedy he should have suggested in 1926 or 1928. '

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LIB

Joseph-Arthur Denis

Liberal

Mr. DENIS (Translation):

Change the dates.

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CON

Joseph Léonard Duguay

Conservative (1867-1942)

Mr. DUGUAY (Translation):

Mr. Speaker, allow me to tell you a little about my riding which may not have been very much talked of in parliament but, on the other hand, has been discussed quite a lot elsewhere by numerous .people, mostly financiers. Perhaps it will interest you to learn how my county developed from 1921 to 1931. In 1921 Maligne Island was without electric .power; neither Riverbend nor Dolbeau had a factory. Its population was then only 35,539, while to-day it has attained 50,253; an increase of 14,714. This industrial development has left bitter memories in the hearts of the older settlers of Lake St. John county; the expansion forced a number of the oldest citizens of the county -the pioneers of the district-to leave their farms on the shores of lake St. John and settle further inland or to go and spend their savings in the little industrial towns which were springing up.

The hon. Prime Minister of Quebec province gave magnificent praise, from 1923 to 1928, to this industrial expansion of Lake St. John county; but he lost sight of the fact that this industrial expansion left in its wake a sorry state of affairs. To-day it becomes our duty to recall to the hon. members on the opposition side that their party is responsible, for the present severe crisis and that they should be the last ones to reproach the federal government for having loosened its pursestrings, especially in 1931-1932, in an effort to undo a little of the havoc wrought by these new industries.

Here are the amounts expended by the federal and provincial governments, and the municipalities, for unemployment relief work in Lake St. John county. The municipalities spent $279,100, of which the federal government advanced $122,575; federal and provincial undertakings, in which the municipalities had no part, cost $12,600; the provincial highway between Quebec and Lake St. John took $126,000, of which the federal government paid 40 .per cent, or $50,000. To these figures should be added the further amounts granted since parliament passed the bill extending to May first the operation of the Unemployment Relief Act. It is pleasant to recall in this house the large sums given by the federal and provin-

The Budget-Mr. Duguay

cial governments to help the farmers of my county in particular and the agricultural class in general; but we must inquire, too, how this money was spent. Let me say, first of all, that in some of the municipalities in my constituency-and I believe the same carelessness was evident in most parts of the province-the money was divided per capita, which means that a wealthy family, composed of the father, the mother, and eight children, received the same amount as the family of the poorest citizen in the parish, made up also of the father, the mother, and eight children. I leave it to the hon. members of this house to judge of the efficacy of any such distribution of funds. Other municipalities went about it in another way, giving the necessary money to those who were really in need of it. Now, certain municipalities which should have received money, got none. Why? Because the mayor was a Conservative and the provincial government had the power to distribute this money as they saw fit. The federal government never refused a cent to a single municipality in Quebec province; but I say that the government of the province took it upon themselves, not to give any funds to certain municipalities in my riding where the mayor was a Conservative. To-day our hon. friends of the opposition criticize the way this money was spent for unemployment relief. Well, I think that as far as Lake St. John county is concerned, the blame rests chiefly with the Liberal party of the province. I fail to understand how the hon. members to your left, Mr. Speaker, can preach this policy in the house, as they did before the people of the province during the last provincial campaign in 1931.

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LIB

Joseph-Arthur Denis

Liberal

Mr. DENIS (Translation):

-But that is false.

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CON

Joseph Léonard Duguay

Conservative (1867-1942)

Mr. DUGUAY (Translation):

I say that this industrial expansion led the government to try a new tack, to preach a new intensive policy; and that brings me to the subject of colonization. In Lake St. John county, from June to August, 400 new settler families had to be established. I simply call such a policy "electioneering colonization." Several members-I mention no names-have skilfully defended on the floor of the house, this colonization program in my district; but their attitude has not been justified by results. I visited several townships in my riding, and I tell these members that they have no right tc uphold any such colonization policy, the chief result of which has been to enrich the big lumber merchants. The settlers were set up in magnificent houses; and this colonization policy afforded to friends of the provincial

administration an opportunity to reap exorbitant profits. I am not opposed to colonization-quite the contrary-but the farmer who for some reason or other must abandon his farm, or the individual living in a small industrial town, should be able to settle on a farm where a proper income is assured.

On the first of November last year, 1931, several prominent citizens of my constituency held a meeting at Roberval and signed a petition asking the federal government not to advance one cent for settlement purposes in the county of Lake St. John, until a serious investigation had been held; and to ensure that the money be spent for a better purpose.

Besides this matter of colonization, Mr. Speaker, we must speak of our farmers. They comprise three-quarters of the population of Lake St. John county. I will take the liberty of reading to the house a letter sent me by the Mayor of St. Gedeon.

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LIB

Vincent Dupuis

Liberal

Mr. DUPUIS (Translation):

A Liberal?

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CON

Joseph Léonard Duguay

Conservative (1867-1942)

Mr. DUGUAY (Translation):

I do not think so: the Liberals of my county cannot be overfond of me when they write me letters like this one.

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CON

Charles Napoléon Dorion

Conservative (1867-1942)

Mr. DORION (Translation):

It is the Liberals who do not like him.

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CON

Joseph Léonard Duguay

Conservative (1867-1942)

Mr. DUGUAY (Translation):

As I read this letter to you, you will realize how critical is the position of the farmers in my riding:

March 31, 1932.

Dr. L. Duguay, M.P.,

Parliament Buildings, Ottawa.

Sir:-

The Catholic Farmers' Union of Quebec forwarded, within the month, a petition to the federal members concerning the needs of the farmers of Quebec province. One of these needs is for borrowing facilities. At the last session of the provincial legislature fourteen thousand farmers signed a petition to the Tasehereau government asking for a rural credit system. \Ve had the painful experience to learn one fine morning that all action on this petition had been indefinitely postponed. And that's that. The banks refuse to loan us any money. . . .

Some may find the contents of this letter absurd.

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LIB

Joseph-Fernand Fafard

Liberal

Mr. FAFARD (Translation):

Hear, hear.

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April 19, 1932