March 17, 1937

LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

They selected my political opponent, a man who had contested the election with me in that constituency, and they sent him up to Saskatoon to hear me speak at a meeting when it was known it was not possible for me to be there. Tw'o or three

TMr. Gardiner.]

hundred people gathered in Saskatoon as a result of these gatherings to discuss this question. Some have stated that I refused to attend that meeting. They moved the meeting from a church to the hotel so that I might be present after attending another meeting which was being held in the diningroom of the same hotel. I had only a few minutes to catch my train after the first meeting, so they sent a delegation up to my room. Before I left I discussed this question with them. To say that I ran away from them or did not see them is begging the question,. I saw them and discussed the whole matter with them. I explained things very much as I have explained them to-day. As was said by the hon. member for Rosetown-Biggar the other day, two or three days later the same message was broadcast by me over the province of Saskatchewan.

Do hon. members know the number of resolutions I have had sent to me from that time to this in connection with the very issue which was up at that time? I could count most of them upon the fingers of my two hands. These men are talking in terms of four or five months ago, some of them in terms of six months ago; they are not talking in terms of how the people of Saskatchewan are thinking to-day. They are talking in terms of what some people thought on the spur of the moment. The farmers of Canada know that every political opponent of this government in western Canada, whether he calls himself a Conservative, a member of the Cooperative Commonwealth Federation or anything else, had been for twelve months previous to August last parading through the province holding up the little pamphlet, which two hon. members held up in this house last session, saying that the Liberals had promised dollar wheat to western Canada. We know what the farmer is saying to-day. He is saying, "I guess after all the Liberals were right." We have had dollar wheat for the first time since the Liberals went out of office. The Liberals did not say they were going to bring back dollar wheat by some magical means; they told the people that if they put them in office they [DOT]would reestablish the confidence of the markets of the world in the fact that Canadians were going to grow wheat to sell and not to store up. One of the reasons why wheat is selling at such a high figure to-day is that a gentleman went over to Great Britain early last summer and discussed this whole question with the milling interests.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

That is not what the milling papers say.

Wheat Board-Mr. Gardiner

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

I will leave it to the leader of the opposition to speak for the milling interests; I am speaking for the farmers. It is not what the milling interests say and it is not what Mr. Ranke says. Mr. Ranke said at that time that from the point of view of the milling interests of Great Britain it would be a mistake to put more than thirty to forty per cent of Canadian wheat in their mixture. He had a very good reason for saying that. He knew that the Canadian farmer always produces at least enough wheat to put thirty to forty per cent of the Canadian product into the mix of the flour used in Great Britain. He knew that sometimes there is difficulty in scraping up enough Canadian wheat to keep the percentage at any higher level than that; and in the interests of the British milling industry it was better, of course, to maintain the content of Canadian wheat in British flour at a point not greater than forty per cent.

Then men representing the interests of the producer, members of the government; officials of the wheat board and of advertising agencies engaged by the wheat board, went over to Great Britain. When I went to London I ate my usual amount of bread, and it remained such a load upon my stomach that I could not sleep until twelve o'clock at night. I had been used to eating bread in this country, and I made my first meal out of bread when I got to London; but I felt the effects of it for a long time, and I did not eat so much bread afterwards. A week later I went over to France. I ate some bread there, but I had only one meal containing my usual amount of bread in that country. Then I went up to Scotland. I sat down at a table where the flour in the bread was made one hundred per cent of Canadian wheat, and I ate bread just as freely as I had done back in the province of Saskatchewan and felt no ill effects.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

What about oatmeal?

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

As a result of the activities in Great Britain of those who are interested in the producers of western Canada, the content of Canadian wheat in British flour rose constantly during July, August and September, and now the British people like Canadian flour in their bread so well that they will not let even Mr. Ranke take our wheat flour out of it, and Mr. Ranke has to come to Canada and pay us premiums as high as twenty-seven and thirty cents per bushel over Argentine prices in order to get our wheat to put into his flour.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

And he is doing it.

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Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

And he is doing it, Mr. Speaker. That is not to the disadvantage of

the producer in western Canada. It may be to the disadvantage of the milling industry, although I doubt it. I believe that the milling industry in Great Britain will find in the end that if they increase the percentage of Canadian flour in their bread to seventy per cent, they will sell more; people will eat more bread, perhaps replacing some other foodstuffs, and we in Canada will be back in the position that every Liberal in Canada said at the last election we should be in. We said: " Lr : us go into the markets of the world and tell them we are willing to trade with them, and are willing to give them a product that is second to none, willing to show them that uur bread is at least as good as bread made from the flour of any other country; and having done that we can build up a trade more than equal to the best years we have had in the past."

During the first year we were in office we sold into export trade 254,000,000 million bushels of wheat, and did so without putting the price down materially. It may have gone down a cent or two as a result of selling that quantity, but if it did, it merely proved our contention, that in order to get rid of this enormous carry-over we must have an act on the statute books which in the meantime would make it possible for the government to pay a set price which would save the farmer from loss on the crop of 1935. I admit I had not sufficient confidence in our own policy to believe that we should get rid of the 1935 carry-over in time for the crop of 1936. It is true as has been said we had Providence with us. But I still believed in the saying of Sir Wilfrid Laurier that it is better to have Providence with you than against you, and it is true that, with Providence on our side, we got rid of the wheat more quickly than we thought we would.

Does our friend now tell us that the wheat board of Canada should have sold wheat from the old crop into the markets of the world every day that the farmer in 1936 was marketing his wheat? One might just as well argue that as argue the opposite-that we should have bought wheat every day. The hon. member says the act gave us the power to sell wheat; therefore we should have sold it. But the board chose, under the terms of this act, not to sell wheat during the greater part of August, nor during the whole of September, nor until after the middle of October-only small quantities were sold in October-and not to come back into the market in an effective manner until November of last year. Does the hon. member tell me that I should go back to western Canada and tell the farmer that this board was not operating during that period? The board

Wheat Board-Mr. Gardiner

was operating to hold wheat off the market and in not buying to prevent the piling up of another enormous surplus in Canada; and by operating in both those ways it was carrying out the intent and purpose of the act of 1935.

I can quite understand that some of the men who discussed the bill at that time did not understand the question. I realize that when I listen to the same people discussing it in western Canada. Many of those who have been criticizing us in the west because of the position we have taken do not live on the farms of western Canada. Those of us who do live on the farms, who have belonged to farmers' organizations ever since such organizations came into existence, who have lived with the farmer and have been of the farm, have some idea what he is thinking; and I am quite sure that the farmer would rather get for his wheat SI .34 a bushel, as he is getting to-day under a Liberal government and in accordance with Liberal policies, than have even some kind of board that meets somebody's desires, as a reason for propaganda; policy conceived of in the minds of certain people and not derived from experience. The farmer prefers SI .34 a bushel to some kind of board that might meet the principles laid down by a group of individuals, but which, from the very nature of it, could not function. What the farmer wants is a fair return for his wheat. To-day he is getting S1.34 per bushel Fort William, for No. 1 wheat. Some hon. member may say; Yes, that is for the wheat that he has yet to sell.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

He is selling a million bushels a week.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

May I tell him that the farmer is still selling a considerable amount of wheat? It is true that he delivered' more this year in the early part of the season, but he delivered it in spite of these arguments that my friends are putting up in the house, and which were presented in school houses all over western Canada. Our opponents went out and talked to the farmer as they are talking now. They said: Why don't you hold your wheat? Elevator companies' representatives went around and said: We will give you eighty cents a bushel Fort. William, advance on your wheat, and let you hold it in the elevators as long as you like. But the farmer said: No, I am going to sail, Why did'he say that? He had had enough of this policy of holding. He had learned by experience, long before some of our friends became interested in him, that the time to

sell Canadian wheat is between August and December in the year in which that wheat is produced, and to sell it in quantities. Why? Because the proper time to market Argentine wheat and wheat from Australia is in January and following months, and the farmer is not the kind of gambler that some hon. members try to lead us to believe. He does not believe that he can guess what the crop in the southern hemisphere is going to be next year. He knows from his own sad experience that he cannot even estimate the crop in his own country and he is not going to try to guess about the crops of other countries. Experience has shown him that, taking one year with another, he can obtain the best price for his wheat by getting it threshed fairly early, taking it into market and selling it early; and the only thing that might have prevented his doing that this year would have been for the government and the board to have followed the policy that the mover of this amendment (Mr. Perley) and the leader of the opposition (Mr. Bennett) suggest should have been followed in connection with one clause of the act-have insisted upon the board not only buying wheat all the time but selling wheat all the time too, and if they had sold in that market the price would probably have been kept down. But they did not sell in that market, and to-day the millers are out bidding for our wheat, and I am hopeful that we shall go into the next crop year without any surplus. We will go into it very much as we went into the market in every year previous to the war and during the greater part of the time the war was on. I hope that we shall go into the market without a surplus, but with the crop we grow this year. I am hopeful-I do not know whether it will happen but I hope it will-that we shall go into that crop year with a recommendation from the Turgeon commission which is now studying the question, and that that recommendation will be such that we shall be able to set up in the interests of the producers of wheat in Canada the best system of marketing that Canada has ever had. I am not at the moment anticipating that report and suggesting what that system ought to be; but I am here to say, along with every other member who comes from the western part of Canada-I believe I can include all members of the house-that the Dominion of Canada, through this government, should establish a system of marketing not only wheat but all the farm products of this country in a way that will bring the best returns to Canadian farmers.

Wheat Board-Mr. Coldwell

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. M. J. COLDWELL (Rosetown-Big-gar):

This debate is, of course, upon a motion which is in effect a motion of want of confidence in the government's policy for the marketing of wheat. I should like to deal very briefly with some of the things that have been said this afternoon. For example, the hon. member for Moose Jaw (Mr. Ross) has stated what in his opinion was the attitude of the Liberal candidates in western Canada in October, 1935. May I point out that the gentleman who to-day leads the government, speaking in Brandon and subsequently in Saskatoon, though in his first address he was I thought more explicit than in the second, claimed that the legislation setting up the wheat board was in reality a Liberal measure, and that the government that was then seeking reelection could not properly take any credit for it. That was interpreted throughout the whole of the wheat-growing area of western Canada as an approval of that legislation. Whether my hon. friend from Moose Jaw took that position or not, I know perfectly well that the candidate in the constituency for which I was elected, and other Liberal candidates in Saskatchewan, did tell the producers of western Canada that the wheat board system of marketing would not be endangered by the return of a Liberal government. That, I believe, all members of this house from western Canada will recollect.

The member for Moose Jaw blamed the trade policies of the former government for the wheat accumulation. I am not going to enter into any defence of those trade policies because in 1930 I stated over and over again that in my opinion steps should be taken by any government elected to open up the channels of trade, and that any steps taken in the opposite direction would have dire results upon our political economy. In fairness, however, I would point out that in 1931 it was the economic committee of the League of Nations at Geneva that brought to the attention of the world this whole matter of accumulating wheat and other cereal surpluses. It will be recalled that in consequence of their report, and because of their insistence that something must be done, a wheat conference was called. The United States attended that conference, and the conference failed largely because of the attitude of the United States, the contention being made by that country that it was legally unable to make any wheat agreement.

The other reasons that were subsequently listed by the committee were these: (1) The large number of wheat exporting countries and the difficulties of reaching an agreement

among those countries on the details of any plan regarding the world supply of cereals and particularly wheat; (2) the lack of a national organization in most countries to deal with the matter effectively; (3) the uncertainty at that time as to Russia being an exporter of wheat; (4) the possibility of setting up a British Empire plan of trade agreement.

Last Sunday evening I heard an interesting discussion between the well-known correspondent, Mr. Vernon Bartlett, and a British representative on the committee dealing with the world supply of raw material, sitting at Geneva at the present time. The British representative made this statement: We are having difficulty in reaching agreements because of types of agreement like the Ottawa agreements. In other words those agreements, in the eyes of the League of Nations economic committee, are evidently restrictive rather than expansive in their general effect. And because of the possibility of such an Ottawa agreement being reached there was a difficulty in arriving at any conclusion regarding wheat in that particular year. We recollect that some measure of agreement among the big four exporting countries was reached, but the Argentine broke the quota following a big crop shortly afterwards. In spite of what the Minister of Agriculture (Mr. Gardiner) said a few moments ago, I believe that the story of the wheat operations for 1936 will go down in our Canadian economic history as a story of opportunities sacrificed either by political partisanship or by economic blindness. If the holdings taken over by the Murray board in 1935 had not been pressed for sale as they were last year, I venture to suggest that the prices realized ought to have been considerably higher than they were. They ought to have been higher had the holdings been marketed in an orderly manner. The minister confirmed that a few moments ago in the speech he has just delivered. He said that Mr. Ranke, a British miller, was willing to pay a premium up to 27 cents a bushel above the Argentine product for Canadian grain, and yet in December, 1935, and in the weeks that followed our Canadian grain was selling below the Argentine levels. If our wheat could command a premium in 1937 it was, from the miller's point of view, worth a premium in 1935 and 1936.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

In December, when there was no Argentine wheat.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. COLDWELL:

Oh yes. there was some Argentine wheat in December, 1935, and particularly in the three or four months that followed.

Wheat Board-Mr. Coldwell

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

I hope my hon. friend

will check that up.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. COLDWELL:

But for weeks on end our wheat was selling below Argentine wheat price levels. I say that was due to the dumping policy of the Canadian Wheat Board. I believe that a proper selling policy, a policy of orderly marketing, would have brought this country millions of dollars, and the Minister of Finance would have been able to report this year a much greater return for the carryover than the $8,000,000 which he did report. As to how much the potential loss amounted to I am not going to hazard a guess. To my mind the pre-election speeches of some at least of our prominent Liberal members were interpreted as promising a fire sale policy for Canadian wheat should a Liberal government be returned to power; and the importing countries took them at their word, and I venture to say were not disappointed.

Credit has been taken by the government for acts of providence. It is true that disastrous droughts have changed the picture to a very large extent, but let us not forget that the wheat crisis was due to a glut, and that glut was turned into a shortage in a very short time by acts of nature; and, as an hon. member suggested a moment ago, the war scare also has been a contributory factor. In considering the situation in western Canada to-day we have to remember that the people there have gone through many years of depressed prices, and to-day when prices have risen, the relatively small amount of wheat which they had last year has passed out of their hands, and they have not the advantage of receiving any deferred payments by way of participation certificates. That is largely the cause of the present discontent in western Canada. The hon. member for Moose Jaw (Mr. Ross) emphasized the need for what I have called the fire sale policy of last year, which as I said was to some extent foreshadowed in the preelection speeches of some prominent Liberal candidates.

Now let us for a moment review the situation. Early in December, 1935, the wheat board took over some 300 million bushels of wheat, speaking in round figures, in various positions and forms. Foreign buyers knew that we had that wheat. In passing, let me say that to my mind it is a tragedy that an accumulation of wheat or some other raw material which may subsequently be of inestimable benefit to the world should be a depressing factor in our economic structure. That is one of the features of the present economic system which will have to be dealt

with sooner or later in an intelligent manner. Even in ancient days, in the land of Egypt it will be remembered that a great leader stored up the corn in the years of plenty so that there might be corn for the lean years that followed. It seems to me we must institute a plan of that kind. Great Britain to-day is considering the storing of food within the country as a protection in the event of war. It is unfortunate that that policy was not put into effect in Great Britain two or three years ago when it was proposed by leading men of the labour movement there. However we know that under pressure of selling by the Canadian Wheat Board, wheat dropped below 75 cents a bushel. I wonder how much we sold at that figure. And it was not due to competitive selling from the Argentine or some other exporter, because Argentine wheat was being held at a price considerably higher than 75 cents a bushel- in fact, at 90 cents. Our people have a right to feel that the policy of the government and the wheat board played directly into the hands of the great speculators in grain and other foods.

Those of us who heard the evidence given before the committee last year by Mr. James R. Murray, chairman of the wheat board, realize fully that Mr. Murray was a believer in the grain exchange method of marketing. He contended that that was the method which the legislation setting up the wheat board compelled him to adopt. He explained that all board purchases were covered by sales of futures, and that when real wheat was sold, future options were taken by the board in exchange. Hon. members will remember that. He said that although the pools had endeavoured to arrange some direct trades-not many-with British millers several years ago, he did not intend to enter into exchanges of that kind. In other words, one of the things which undermined public confidence in the wheat board established by the present government was the fact that the chairman of that board was a thorough-going advocate of the grain exchange method of marketing.

Then in July of last year it was perfectly obvious that there was going to be a great drought, not only in the southern part of western Canada but throughout the whole of the spring wheat belt of the United States of America. I motored over that country three times, as I said the other day. and at the end of June, from Minneapolis to the neighbourhood of Weyburn, between 800 and 900 miles, the wheat had practically gone. About the middle of July when I went back over the route the countryside was like a veritable desert.

Wheat Board-Mr. Coldwell

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

John Gordon Ross

Liberal

Mr. ROSS (Moose Jaw):

Was that not true of 1934 as well?

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. COLDWELL:

To some extent. But in 1935 according to the United States statistics the area was larger, and in 1936 was larger than in 1935.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

John Gordon Ross

Liberal

Mr. ROSS (Moose Jaw):

Not much.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. COLDWELL:

Yes, it extended right down into the southern states, into Kansas. That confirms my argument of course that after several years of drought, as the shortage developed the wheat board should at least not have dumped 63 million bushels of wheat on the market in July, 1936. Again may I refer to the memorandum presented to the government, or to the wheat advisory committee of the government, by the executives of the wheat pools on July 6, in which they pointed out the serious condition that was developing at that time. I never speculate in wheat; I never bought or sold a bushel of wheat on the grain exchange in my life. I do not believe in the system and I never use it, but had I been inclined to speculate last July, after what I saw I was convinced that there was a good opportunity to make some money out of such a speculation-although, as I say, I have never done it and I do not intend to begin.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

My hon. friend mentioned $1.50 for wheat, I think, if I remember correctly.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. COLDWELL:

Oh, no. At the end of August, after the trips I have mentioned and in view of the world situation, I said1 I believed a price of SI .25 for wheat was justified. To-day the price of wheat is considerably higher than S1.25, and I venture to add that if an orderly method of marketing had been adopted the figure mentioned by the minister might have been approached if not exceeded. That, of course, is an opinion which may not be sound.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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March 17, 1937