June 14, 1935

CON

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

Conservative (1867-1942)

Mr. BENNETT:

I will finish it. The hon. gentleman desired that the witness should give a statement on it, and what happened was that by a vote, which I have just mentioned, that statement was not given though Mr. McFarland said he was ready to give it.

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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LIB

John Vallance

Liberal

Mr. VALLANCE:

Would the Prime Minister permit me to state what I really did say?

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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CON

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

Conservative (1867-1942)

Mr. BENNETT:

No. I have the record here and if necessary I will read it.

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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LIB

Ian Alistair Mackenzie

Liberal

Mr. MACKENZIE (Vancouver):

What page?

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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CON

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

Conservative (1867-1942)

Mr. BENNETT:

I will come to that presently, as I go along. That is the position. Yesterday the hon. gentleman had the fullest opportunity to make a statement, and I am going to show how inaccurate were the statements he made at that time, whether or not intentionally I cannot say, because in the one instance it is quite clear that he knew what he was talking about, and in the next instance he left out the information that would indicate that he did know. Now let us proceed further with respect to what was

said by the hon. member for Shelburne-Yar-mouth in dealing with this problem. I am not going to deal with the remarks of the hon. member at any great length, but for the moment I would like to deal with one problem which was dealt with by the hon. gentleman. At page 3595, column 2, he said:

Let me give the house the Canadian exports for the first ten months of this crop year as they appear in the Montreal Star of last night. For the ten months, ending I presume with April, 1935

That would be only nine months.

-the exports from Canada were 113,802,184 bushels. For the corresponding ten months of 1934 they were 140,709*966, or a decrease this year of some 27,000,000 bushels.

The hon. member complained that I did not give those figures, which made it necessary for him to give them. As a matter of fact I gave the correct figures, which will be found in Hansard at page 3564, in the second column, showing that at the end of May the exports were 146,387,083 bushels. The amount exported for the corresponding period a year ago was 159,553,797 bushels, an excess over this year of only slightly more than

13.000. 000 bushels. Again at page 3594 of Thursday's Hansard the hon. member for S'helburne-Yarmouth referred to the carryover to-day as between 220,000,000 and

225.000. 000 bushels. There can be no such use of the word carryover until the end of the crop year. There is no carryover until then, and I was at great pains the other day to explain the factors that make up a carryover, because I realized that many members were not familiar with them. Apparently, however, the brief was silent in that particular; the friends of t'Hfe grain exchange had not given adequate explanation as to what constitutes the carryover. So instead of it being a carryover, properly used, the word should have been our surplus. The surplus of wheat, that is the quantity on hand at the present moment, is nearly 225,000,000 bushels. I said it was somewhere between 220,000,000 and 225,000,000 bushels, because sales are taking place every day and I did not know what might have been sold during the twenty-four hours prior to my speaking. So I said the surplus was between 220,000,000 and 225,000,000 bushels. For the sake of argument I will take the larger figure, 225,000,000 bushels, and in order that there may be no misunderstanding on that point I desire to point out further what was said by the hon. member for Macdonald (Mr. Weir) later yesterday, as well as what was said by the hon. member for Shelburne-Yarmouth who, when referring to our carryover, spoke of it as between

220.000. 000 and 225,000,000 bushels.

Grain Board-Mr. Bennett

The hon. member for Macdonald, who had had considerable experience in conection with these matters concerning wheat and grain, and some knowledge of them, because of his desire to support the orderly, cooperative marketing of wheat on the one hand and at the same time to retain the goodwill of what is called the trade on the other hand, as indicated by his looking two ways yesterday, said, "I estimate that the carryover this year will be from 170,000,000 to 185,000,000 bushels." When this government came into power there was a carryover of 127,000,000 bushels, so that in five years, with the third largest crop in the history of the country, with the bonusing that has been going on in all the countries of the world in the manner I have indicated and with the depreciated currencies in the buying countries to which reference was made yesterday, all this violent attack takes place, if the estimate of the hon. member for Macdonald is correct, with respect to the difference between 127,000,000 bushels and 170.000,000 or

185.000. 000 bushels. If the figure be 170,000,000 bushels the increase will be 43,000,000 bushels; if it be 185,000,000 bushels of course the increase will be 57,000,000 bushels.

There are the facts. I merely take the figures used by the hon. member for Macdonald, speaking with knowledge of the operation of these matters in Manitoba, and those were the figures he gave last night. There is his statement, which you will find at page 3631 of Hansard, in which he estimated the carryover at 170,000,000 to 185,000,000 bushels. In that regard I think it very desirable that I should immediately point out to the house that the carryover of 225,000,000 bushels-* which is not the carryover as the word was used by the hon. member for Shelburne-Yar-mouth, but I am using that word in order that there may be no misunderstanding-that quantity, that surplus at this moment of

225.000. 000 bushels of wheat, is 25,000,000 bushels more than the estimated visible supply of wheat in Canada. I wonder if the true significance of that fact has dawned on the members of this house. The hon. member for Rosetown (Mr. Loucks) had it in his mind last evening when he was speaking. This is what it means: If the farmers and millers have 10,000,000 bushels that means that the visible supply must be reduced by that amount, leaving 190,000,000 bushels of wheat, and there are 225,000,000 bushels held by Mr. McFarland in the form of cash wheat and futures. In other words somebody is

35.000. 000 bushels short on the Winnipeg market. That is what it means.

WThat happened last fall? I am going to recite my own experience. At three o'clock in the morning I was gotten out of bed in my

hotel in London because on the day previous there had been thrown upon the market at Winnipeg, from what source no man knows because it came into the wire houses, millions of bushels of wheat, just before the exchange closed. Someone sold one, two, three, four five million bushels of wheat short; somebody who had no wheat was offering wheat for sale, That is what was happening. What were we to do? The limit mentioned by Mr. McFarland, in his evidence before the committee, as to the amount of bushels for which he might become responsible under his credits, had been exhausted. My colleagues desired my view. I picked up the Daily Herald of London that day and read what I expected to see from the moment I received that cable, namely, that a raid had been contemplated by international dealers in this commodity, and for what purpose? Do I have to indicate the purpose when I indicate to you the present shortage? Before my message which was dispatched and which reached Ottawa at nine o'clock in cipher could be deciphered and telephoned through and the banks communicated with, there was thrown upon the market an additional quantity of wheat amounting to millions of 'bushels and the price fell six cents. Let us take the facts, Mr. Speaker. Let us realize clearly the gravity of the problem with which we are dealing. I said then what I sa.y now, that I do not propose so long as I can help it that the Dominion of Canada wheat producers shall become the play and sport of international speculators.

Let me proceed a step further. What wrecked the Bank of England; what drove the Bank of England off the gold standard?

Mr. MACKENZIE (Vancouver); It did not wreck the Bank of England.

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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CON

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

Conservative (1867-1942)

Mr. BENNETT:

It wrecked it so far as its ability to provide gold for its obligations was concerned because they had to pass a new statute to deal with the situation.

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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LIB

Ian Alistair Mackenzie

Liberal

Mr. MACKENZIE (Vancouver):

That is not wrecking it.

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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CON

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

Conservative (1867-1942)

Mr. BENNETT:

It is, unfortunately. What happened? A gang of internationalists were operating. What happened the other day in France to their franc? Why did they have to deal with that situation? What did they try to do in this country with respect to our wheat? Now who holds that short interest? It is no wonder that the hon. member for Macdonald said that the carryover would be the figure he mentioned. I had not thought that it was perhaps wise to make a statement of this kind the other day but I am compelled

Grain Board-Mr. Bennett

to make it in view of tihe misrepresentations and misstatements that 'have been made in this house.

There you have your visible supply, known to all people, published to the world, 200 million bushels. There you have this wheat organization holding in cash wheat and futures as Mr. McFarland has indicated, 225 million bushels, and entitled to receive wheat for payment; the farmers, millers and other interests are estimated to have 10 million bushels or thereabouts. That would mean a shortage of 35 million bushels, or if you disregard the 10 million bushels, a shortage of 25 million bushels. Is it any wonder that they are looking with joy to see if we are going to dump Canadian wheat on the market? Is it any wonder that they are getting joy from that editorial in the Free Press in which it says:

Any sensible business would say that the right course now is to remove the controls and see what can be done, in the way of speeding up trade and getting back lost markets by free selling.

Is it any wonder that this journal of the Siftons says that?

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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?

Mr. BOTH WELL@

May I ask a question?

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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?

Some hon. MEMBERS:

Sit down.

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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CON

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

Conservative (1867-1942)

Mr. BENNETT:

Sit down. If, when I have concluded, the hon. gentleman desires to ask a question I shall endeavour to answer it, but I am dealing now with an argument. There is the statement made by the Free Press on the day this bill was introduced when they thought the Liberal party was going to oppose the legislation. That is the position known to everybody, known to people on the streets of Ottawa. This is the contingency the hon. member for Shelburne-Yarmouth was no doubt alluding to.

I ask this house whether or not they are prepared to dump Canadian wheat on the market to satisfy the greed of the exploiter and the international speculator. That is the problem; that is the explanation. Who is trying to drive down the price of wheat below 80 cents? Who sold short upon the exchange last fall? Who endeavoured to sell vast millions of bushels they did not own? Who were they? All we can ascertain is that over the wires there came the orders to Winnipeg brokers to sell. Have you ever seen a wheat pit operate? Do you know what it means to have, in the closing minutes, sellers rush in to the exchange and offer wheat at any price-five cents below the market, seven cents, ten cents. Then the market closes. It opens in the morning, and to make the debacle complete, more selling orders pour in and the price goes down still further.

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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LIB

Edward James Young

Liberal

Mr. YOUNG:

Why was not that matter

investigated when Mr. McFarland asked for it?

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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CON

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

Conservative (1867-1942)

Mr. BENNETT:

Your friends the grain

exchange can give the explanation. That is the reason.

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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LIB

Edward James Young

Liberal

Mr. YOUNG:

It is up to the government to explain it.

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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CON

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

Conservative (1867-1942)

Mr. BENNETT:

Sir, I put this to the

house. As Canadians I ask you whether you are prepared to hand over to the speculators from abroad, the internationalists, the wheat business of Canada. That is the question. Now, if the hon. member for Swift Current (Mr. Bothwell) desires to ask his question-

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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LIB

Charles Edward Bothwell

Liberal

Mr. BOTHWELL:

I understood from the right hon. gentleman's speech the other day that Mr. McFarland was in the market for the purpose of buying hedges because there were no speculators in the market. If he was only buying hedges, how was it possible to buy 35 million bushels of wheat that was not there?

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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CON

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

Conservative (1867-1942)

Mr. BENNETT:

My hon. friend was one of those who examined Mr. McFarland last year, and one of the very questions he asked Mr. McFarland was why he was buying wheat, and Mr. McFarland said he was buying wheat to protect the market. If speculators threw it on the market, he either had to buy it or see the market destroyed and chaos result. That is the very point. Somebody went on that exchange and sold 35 million bushels of wheat they did not own, and Mr. McFarland to protect the honest Canadian producer from ruin bought their wheat, and now they are trying to destroy the market and have a fire sale so that they can buy the wheat back and escape a loss. I want to make clear to this house and to this country what I had not intended originally to state with respect to this situation but which I regard it now as my duty to do in view of what has been said, in order that there may be no misunderstanding with respect to it.

Let us proceed a step further, and see what was said by the hon. member for South Battle-ford. He, with a great show of fairness, said that he was going to read figures that he obtained from the bureau of statistics. That is true. They are set out at page 3607 of Hansard, but Mr. Speaker, I cannot think that the hon. gentleman is so lacking in knowledge of the wheat business as to talk about the sale of 229 million bushels of wheat to Great Britain in the year 1929, for Great Britain's entire importation in any one year from all quarters does not exceed 200 million bushels.

Grain Board-Mr. Bennett

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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LIB

John Vallance

Liberal

Mr. VALLANCE:

You want to be fair;

did you read the letter?

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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CON

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

Conservative (1867-1942)

Mr. BENNETT:

I know the letter. The

figures are set out at page 3607 of Hansard. They are the figures for the fiscal years ending M-arch 31 of each year. They are the customs figures from this country, showing the clearances of wheat to the United Kingdom. Keep that in mind. They are the clearances from Canada to the United Kingdom of wheat. They include all the wheat that is re-shipped from Great Britain to the different countries of Europe.

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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LIB

John Vallance

Liberal

Mr. VALLANCE:

That is an entirely different argument.

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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June 14, 1935