May 11, 1933

LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):

Mr. Speaker, there has been intimation in the press of the names of certain gentlemen likely to accompany the Prime Minister to the World Economic and Monetary conference. Might I ask the Prime Minister if he is in a position to state who will accompany him, and will he so inform the house, if not at the moment, before we adjourn?

I notice also that the Prime Minister of Great Britain has intimated to the British house the attitude he intends to take with respect to some questions coming up at the conference. Does the Prime Minister of Canada intend to make a similar, or any, intimation of his position?

Topic:   WORLD ECONOMIC CONFERENCE
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CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Right Hon. R. B. BENNETT (Prime Minister):

No, Mr. Speaker, the matter of who shall attend the economic conference has not been considered.

As to the second question, it was not the intention of the Prime Minister to make any statement.

Topic:   WORLD ECONOMIC CONFERENCE
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GOVERNMENT LOAN, $750,000,000 REDEMPTION OP OBLIGATIONS AND PURCHASE OF UNMATURED SECURITIES


Hon. E. N. RHODES (Minister of Finance) moved that the house go into committee to consider the following proposed resolution: That the governor in council be authorized to raise by way of loan under the provisions of the Consolidated Revenue and Audit Act, an amount not to exceed in the whole the sum of seven hundred and fifty million dollars, for paying or redeeming the whole or any portion of loans or obligations of Canada, and for purchasing and withdrawing from circulation unmatured securities of Canada.


LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):

Mr. Speaker, has the Minister of Finance any intimation to give to the house as to the reason for desiring the amount which is named in the resolution; also as to what he has in mind with respect to conversion?

Topic:   GOVERNMENT LOAN, $750,000,000 REDEMPTION OP OBLIGATIONS AND PURCHASE OF UNMATURED SECURITIES
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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

Mr. Speaker, this sum is similar to the sum which was sought in 1931 prior to the refunding which followed. Perhaps in this connection I cannot do better than quote one paragraph from my remarks on the budget:

When the opportune moment arrives, rye propose to offer a conversion loan to the public of this country. But it will be on a basis that -will keep faith rvith investors and will not in any sense involve repudiation of existing contracts. Under such conditions, the issue can be made, it is believed, at a rate which will involve a substantial saving to the public treasury.

We will in any event this year have to refund 4i per cent treasury bills maturing on August 1 in Canada, amounting to $50,000,000, and on October 1, we have a 4 per cent one year issue of $60,000,000 due in New York. There is also to be refunded on November 1 a residual of the 1933 issue amounting to $169,971,850.

Topic:   GOVERNMENT LOAN, $750,000,000 REDEMPTION OP OBLIGATIONS AND PURCHASE OF UNMATURED SECURITIES
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LIB

Charles A. Stewart

Liberal

Mr. STEWART (Edmonton):

Are those

tax-free?

4S56

Government Loan

Topic:   GOVERNMENT LOAN, $750,000,000 REDEMPTION OP OBLIGATIONS AND PURCHASE OF UNMATURED SECURITIES
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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

Those are tax-free. The

total of those three which in any event will have to be refunded this year is $279,971,850.

There will also have to be money provided to meet the deficit on the Canadian National Railways and for the amount expended under the Unemployment and Farm Relief Act. So that in round figures we may say that in any event we will have to fund and refund a minimum of $375,000,000 for this year.

The balance we require for the purpose of being able to put through a refunding operation. No date has been set when that will be effected, but it will be our purpose to bring it about at such time as will enable us to secure as large a sum as we can at the lowest possible rate, with a view, through this refunding process, of saving a substantial sum in interest.

Topic:   GOVERNMENT LOAN, $750,000,000 REDEMPTION OP OBLIGATIONS AND PURCHASE OF UNMATURED SECURITIES
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LIB

Charles A. Stewart

Liberal

Mr. STEWART (Edmonton):

Might I ask the Minister of Finance if the odd $100,000,000 mentioned is all of the loan he will require to cover deficits on account of current debts?

Topic:   GOVERNMENT LOAN, $750,000,000 REDEMPTION OP OBLIGATIONS AND PURCHASE OF UNMATURED SECURITIES
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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

Perhaps if it is agreeable

we might go into committee before I answer.

Mr. H. E. SPENCER (Battle River). The finance minister has informed the house that the refund will be made at the lowest possible rate. I hope he means therefore that the rate will be a good deal less than 4 per cent. At no time in the history of Canada has it been more necessary that the rate of interest should be brought down to a point below that prevailing to-day. I would like to remind the minister that under the Finance Act the government of Canada have advanced large amounts to the banks of Canada at very low rates, some at 4 per cent, some at 3 per cent, some as low as 2J per cent. I hope therefore that for the refunding of the large amount he mentioned a very low rate will be set, and if it is not all subscribed I trust he will have no hesitation in making up the difference by a direct issue of money from the treasury. We have an example set by our neighbours to the south where the president has been given power to put out no less than three billion dollars of direct issue for the purpose of meeting obligations. I therefore hope the finance minister, if the amount is not fully subscribed, will make up the balance by a direct issue from the national treasury of Canada.

Motion agreed to and the house went into committee, Mr. Hackett in the chair.

Topic:   GOVERNMENT LOAN, $750,000,000 REDEMPTION OP OBLIGATIONS AND PURCHASE OF UNMATURED SECURITIES
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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

Will my hon. friend from

Edmonton submit his question?

FMr. C. A. Stewart.]

Topic:   GOVERNMENT LOAN, $750,000,000 REDEMPTION OP OBLIGATIONS AND PURCHASE OF UNMATURED SECURITIES
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LIB

Charles A. Stewart

Liberal

Mr. STEWART (Edmonton):

I was asking if with the $280,000,000 in round figures needed for outstanding treasury bills plus the other 1933 needs, he estimates that he will have in the neighbourhood of $375,000,000 of the $750,000,000 asked for, to use for refunding? My question was whether that odd 8100,000,000 -will cover your floating outstanding capital obligations for the year 1933.

Topic:   GOVERNMENT LOAN, $750,000,000 REDEMPTION OP OBLIGATIONS AND PURCHASE OF UNMATURED SECURITIES
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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

We will still have ample

legislative provision, which is customarily contained in the appropriation bill, to enable us to take care of all obligations of that character. This sum to which I had reference, apart from the refunding and funding of which I have spoken, has to do entirely with a conversion loan.

Topic:   GOVERNMENT LOAN, $750,000,000 REDEMPTION OP OBLIGATIONS AND PURCHASE OF UNMATURED SECURITIES
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LIB

Charles A. Stewart

Liberal

Mr. STEWART (Edmonton):

What I was trying to get at was the direct obligations of the government for which they must borrow money this year, in addition to their floating treasury bills. My hon. friend has just stated that those obligations amount to approximately $375,000,000, and I am asking if that is all that will be required and if the remainder will be directly applicable to refunding.

Topic:   GOVERNMENT LOAN, $750,000,000 REDEMPTION OP OBLIGATIONS AND PURCHASE OF UNMATURED SECURITIES
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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

I think I have already told the committee the total amount we will have to meet by way of maturities and funding this year. If there should be an additional sum required it will be cared for by the borrowing power contained in the appropriation bill, but there is no other funding that we must do this year.

Topic:   GOVERNMENT LOAN, $750,000,000 REDEMPTION OP OBLIGATIONS AND PURCHASE OF UNMATURED SECURITIES
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LIB

Ian Alistair Mackenzie

Liberal

Mr. MACKENZIE (Vancouver):

I should like to direct two questions to the minister. First, what is the total internal debt of the dominion, as such; second, in addition to the $169,000,000 of tax free bonds maturing this year, what amount is still outstanding?

Topic:   GOVERNMENT LOAN, $750,000,000 REDEMPTION OP OBLIGATIONS AND PURCHASE OF UNMATURED SECURITIES
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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

We have payable in Canada outstanding bonds to the amount of $2,013,201,570.85. It is not possible, of course, to say whether that is all domiciled in Canada, but that is the best answer I can give my hon. friend. As I understand it, the second question is how much remains outstanding of the tax free issue?

Topic:   GOVERNMENT LOAN, $750,000,000 REDEMPTION OP OBLIGATIONS AND PURCHASE OF UNMATURED SECURITIES
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LIB

Ian Alistair Mackenzie

Liberal

Mr. MACKENZIE (Vancouver):

Yes, after the $169,000,000 mature this year.

Topic:   GOVERNMENT LOAN, $750,000,000 REDEMPTION OP OBLIGATIONS AND PURCHASE OF UNMATURED SECURITIES
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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

In round figures the total is $774,000,000.

Topic:   GOVERNMENT LOAN, $750,000,000 REDEMPTION OP OBLIGATIONS AND PURCHASE OF UNMATURED SECURITIES
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LIB

Ian Alistair Mackenzie

Liberal

Mr. MACKENZIE (Vancouver):

Including the $169,000,000 coming due this year?

Topic:   GOVERNMENT LOAN, $750,000,000 REDEMPTION OP OBLIGATIONS AND PURCHASE OF UNMATURED SECURITIES
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May 11, 1933