June 17, 1935

CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

Mr. Chairman, this resolution and the bill which will be founded upon it are in precisely similar terms and amounts to the borrowing 'bill passed in the year 1933. It will enable us to take care of maturing obligations and certain refunding operations, as the opportunity may present itself during the course of the year, and projecting into the following year. It merely makes provision for the necessary legislative authority for such funding and refunding.

Redemption Loan

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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LIB

Ian Alistair Mackenzie

Liberal

Mr. MACKENZIE (Vancouver):

Has the minister before him the details of the amounts refunded by the administration during the last year?

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

I am sorry I have not at the moment, but I shall give the hon. member the information when I move second reading.

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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LIB

William Daum Euler

Liberal

Mr. EULER:

What sums actually mature?

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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LIB

William Daum Euler

Liberal

Mr. EULER:

What is the total?

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

The two amounts, that is the total of the maturities in Canada and New York, make $356,298,457.52. As a matter of fact, at the moment we have not legislative authority to refund anything like that sum. Then, in addition to that there are maturities of Canadian National Railways obligations.

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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LIB

William Daum Euler

Liberal

Mr. EULER:

I should like to draw attention to what some of us have advocated in the past, repeatedly,, namely, that the government should undertake the refunding of unmatured obligations at a lower rate of interest. I would be very glad if one might infer that with the amount over and above the actual maturities of about $400,000,000 the government intends at least to attempt to refund obligations they are not compelled to refund, with a view to getting interest rates down. I wonder if the minister would tell us whether or not in the resolution there is anything more than he has already indicated. Is it merely asking the same authority which was given last year, under which they did not exercise the powers given-powers which I would like to see exercised, no matter which party may be in power.

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

The government is eagerly availing itself of every opportunity to exercise the callable provisions in bond issues which, at the moment, it is in a position to do. The hon. member will realize that wherever

possible we have always sought to refund, and have been very successful in that respect.

I have not the figures before me at the moment, but upon second reading I shall present figures which will indicate that we have made very substantial savings in interest, and I believe we have not lost any available opportunity to refund so as to take advantage of the market situation, and we have always refunded at a lower rate of interest.

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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LIB

Ian Alistair Mackenzie

Liberal

Mr. MACKENZIE (Vancouver):

Have

any tax free bonds matured during the present year?

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

Speaking offhand I think,

not.

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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LIB

Ian Alistair Mackenzie

Liberal

Mr. MACKENZIE (Vancouver):

On

second reading would the minister give details as to dates of maturity?

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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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 believe it is 1937.

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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UFA

Henry Elvins Spencer

United Farmers of Alberta

Mr. SPENCER:

Is it the intention of

the minister to take full advantage of the clause in the Bank of Canada Act permitting us to borrow. It is well known, of course, that the only money which goes to the shareholders is the 4) per cent, and that the profits beyond that will come back into the treasury. Therefore, to the extent borrowing is done through that system it will be done in the oheapest possible way.

Then, I should like to ask the minister this question: Does he intend to do any borrowing outside of Canada? Personally I am opposed to the dominion government borrowing, at all. However if it is going to borrow I hope it will do so within and not outside of Canada.

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

I regret I was unable to

hear the first portion of .the question, but I shall consult Hansard and answer upon second reading. With respect to the second portion of the question, which I did hear, I must advise the hon. member that in every instance, where possible it has been the policy of the government to issue only in Canadia and to have our maturities payable in Canadian funds. The hon. member will realize that if we have maturing obligations in London or in New York we may not at that time be the arbiter as to the character of the new issue. The fact of the matter is that if they are payable in New York they are payable in New York funds, and if they are payable in London they are payable in London funds. However in all instances wherever possible it is the' policy of the government to refund in Canada and in Canadian funds.

Redemption Loan

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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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:

In addition to what the Minister of Finance has said wit'h respect to callaJble bonds, the hon. member for North Waterloo must also know that the price at which bonds have been sold permits such a low yield that it would not be possible to purchase them in the open market and retire them at a lower rate of interest. That condition we experienced two years ago, when the price of bonds became very high and the yield1 rate became very low, making it impossible to purchase outstanding issues, because they were then being sold on the basis of the current- value of money.

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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LIB

William Daum Euler

Liberal

Mr. EULER:

I believe the resolution provides for an amount of about $400,000,000 in excess of the amounts maturing. I take it from what the Minister of Finance and the Prime Minister have said that they will deal only with those bonds that are callable. Perhaps the Prime Minister is quite right when he states that at the moment returns are so small one cannot buy outstanding bonds and refund them. What I was going to ask was this: Is there an

amount as large as $400,000,000 that is callable? I would judge there is not that much outstanding that is at all callable, because I understand the greater part of our obligations are not callable.

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

I shall be glad to give

complete details upon- second reading.

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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UFA

Henry Elvins Spencer

United Farmers of Alberta

Mr. SPENCER:

In what are these

moneys going to be paid? Are they going to be paid in gold, or in anything the dominion government may decide to pay them?

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

Maturing issues?

Topic:   LOAN OF $750,000,000 RESOLUTION AUTHORIZING MINISTER OF FINANCE TO RAISE FUNDS FOR REDEMPTION OF SECURITIES
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June 17, 1935