March 31, 1938

LIB

Samuel Factor

Liberal

Mr. SAMUEL FACTOR (Spadina):

I

should like to submit a question to the Minister of Transport (Mr. Howe). I have received a petition signed by a large number of employees of the Canadian National Railway

shops at Leaside, protesting against their dismissal taking place to-day. I understood from the Minister of Transport the other day that he was conferring with the railway management and the heads of the unions concerning the matter of lay-offs. I wonder if he would mind giving the house the result of that conference.

Topic:   CANADIAN NATIONAL RAILWAYS
Subtopic:   INQUIRY RESPECTING REPORTED LAY-OFF OF SHOP EMPLOYEES
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LIB

Clarence Decatur Howe (Minister of Transport)

Liberal

Hon. C. D. HOWE (Minister of Transport):

As a result of a conference held yesterday in my office between the railway management and a committee of the heads of the shopmen's brotherhood, it was decided that the situation would be again reviewed in the light of representations made by the management and myself as to the extreme undesirability of laying off men at this time. Following a quick telegraphic vote, it was decided that the reduction in work in the central and western regions would be taken care of by a reduction in hours; that is, instead of a twenty-four day month as the schedules now call for the men will accept an eighteen-day month, and no men will lose their employment.

In the eastern region, however, the shopmen decided that they must insist on the maintenance of the schedules; so there will be a lay-off at Moncton and at Riviere du Loup. However, I am happy to say that the business level in the maritime division is somewhat higher than on the rest of the system, therefore the lay-off will not be very extensive.

It was agreed that this condition shall stand until June 1. In May, all the railway brotherhoods are meeting in convention, and will review their position. If that meeting decides that the schedules must be maintained, that decision must be effective on June 1. On the other hand if the convention decides that the system now being followed is preferable, then that system will continue.

On my own behalf I wish to thank the brotherhoods and the shopmen themselves for taking care of this situation in such a way as not to increase unemployment. I fully realize that the senior shopmen in sacrificing their schedules have made a real sacrifice for the sake of the younger men who would otherwise be thrown out of employment. I think the spirit that has been shown is one that every one of us should commend most highly.

Topic:   CANADIAN NATIONAL RAILWAYS
Subtopic:   INQUIRY RESPECTING REPORTED LAY-OFF OF SHOP EMPLOYEES
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CCF

James Shaver Woodsworth

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

Mr. J. S. WOODSWORTH (Winnipeg North Centre):

May I ask the minister

if consideration will be given to the question whether perpetual bondholders are going to make any sacrifice?

1876 COMMONS

Use of Canada's Financial Resources

Topic:   CANADIAN NATIONAL RAILWAYS
Subtopic:   INQUIRY RESPECTING REPORTED LAY-OFF OF SHOP EMPLOYEES
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CON

Frederick Cronyn Betts

Conservative (1867-1942)

Mr. F. C. BETTS (London):

May I ask the minister how the situation will be met in London, Ontario, where there is a threatened lay-off of some seventy men?

Topic:   CANADIAN NATIONAL RAILWAYS
Subtopic:   INQUIRY RESPECTING REPORTED LAY-OFF OF SHOP EMPLOYEES
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LIB

Clarence Decatur Howe (Minister of Transport)

Liberal

Mr. HOWE:

London, being in the central region, is meeting the situation by reduction of hours.

use of Canada's financial resources for

Topic:   CANADIAN NATIONAL RAILWAYS
Subtopic:   INQUIRY RESPECTING REPORTED LAY-OFF OF SHOP EMPLOYEES
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ELIMINATION OF POVERTY-AMENDMENT OF MR. BLACKMORE AND SUBAMENDMENT OF MR. BENNETT


The house resumed from Wednesday, March 30, consideration of the motion of Mr. Dunning for committee of supply, the amendment thereto of Mr. Blackmore, and the amendment to the amendment of Mr. Bennett.


SC

John Horne Blackmore

Social Credit

Mr. J. H. BLACKMORE (Lethbridge):

I appreciate greatly, and so do the members of our group, the tolerance, courtesy and attention which so far have been accorded to us, not only in this debate but in the previous debates in the house. We realize, no one realizes more keenly, how strange our ideas must appear to hon. members, because all we have to do is to go back four years in our own experience and remember how we felt. We can therefore tell exactly how other hon. members feel. In the light of these things we have no fault whatsoever to find with the tendency on the part of some to scoff at our notions and treat them lightly. But notwithstanding this, we contend that when the realities of the situation and the facts of our proposals are fully comprehended, there will be on all sides nothing but respect and sympathy for our contentions, whether or not it is decided in the end that they are sound.

We have been accused of wasting time. We have deliberately refrained from participating in many debates in this house. There has been very little comment by social crediters on many measures, and little or no discussion of tariff matters; not because we have not our convictions and our beliefs, but because we were deliberately refraining from speaking so that the time we felt was rightfully ours could be devoted to discussion of the matter which we believe of greater importance to this country than anything else that could be discussed at the present time.

Yesterday the hon. member for Broadview (Mr. Church) delayed proceedings while he put on Hansard some things of which some day he and his descendants will not be so very proud.

Topic:   ELIMINATION OF POVERTY-AMENDMENT OF MR. BLACKMORE AND SUBAMENDMENT OF MR. BENNETT
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?

An hon. MEMBER:

He has no descendants.

Topic:   ELIMINATION OF POVERTY-AMENDMENT OF MR. BLACKMORE AND SUBAMENDMENT OF MR. BENNETT
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SC

John Horne Blackmore

Social Credit

Mr. BLACKMORE:

It is too bad he has none, because I think if he had he would be a wiser man. I heard of a story concerning his province; that the first telephone to be put into the office of one of the chief men in Ontario was indignantly kicked out of the office by that man and condemned as an utterly foolhardy device with which he would have nothing to do. If the hon. member has heard that story it should give him cause for thought. The hon. gentleman I believe urged that business men should be given charge of the affairs of this country, and I should like to turn for a moment to this matter of business men managing our affairs. If hon. members will turn to the Dictionary of American Biography, volume XVII, at page 514 they will find an enlightening account of the life of a certain man named William Stanley, who lived from 1858 to 1916. Of him these words are recorded there:

He devised the multiple system of alternating current distribution, together with its equipment (patent No. 372942, issued November 8, 1887), but Westinghouse-

A business man, mark you.

-refused to finance its development until Stanley at his own expense had put the system into regular commercial service in Great Barrington, installing it in several stores.

From that invention up to the present time there have developed in the United States, I am told, businesses worth thirteen and a half billion dollars. Are business men wise? It hardly looks that way, does it? It takes more than business to make a man wise. At the same time Edison was the greatest authority on electricity in the world. Edison opposed this device as an impractical piece of nonsense. It would not work; it could not work; we did not need it. Again, Edison was a business man. Mr. Stanley's invention made possible the first alternating current transmission of electricity. From his invention came to be promoted the distribution of power by an alternating current system. It threatened the direct current system, in which Edison was deeply interested. Edison and other great authorities on electricity at that time ridiculed Stanley and opposed him by every means at their disposal. With such things as this in the records of history, Mr. Speaker, let us not be greatly surprised if even to-day new ideas meet with intolerance, misunderstanding and opposition.

While we are on the question of electricity I should like to suggest a little illustration which I believe will apply to the debate which

Use of Canada's Financial Resources

has taken place up to the present time. Before men learned to use electricity produced from the energy of a stream they had to learn by painful experience that it was possible to change into electricity the energy contained in the ice cold waters pouring down from the mountains. When they were convinced that this could be done, they were prepared to consider the possibility of erecting a plant to do that thing. After they had learned the possibility of erecting such a plant it was time to consider the possibility of distributing the electricity. After that they could occupy themselves with the matter of using the electricity when it was distributed, and of safeguarding its use. In this debate we are contending in this house that pouring down the hills of the Dominion of Canada, so to speak, there are vast torrents filled with energy which can be transformed into a form useful to mankind. There is very little value in talking about the kind of plant we should erect or how to distribute it or safeguard it until we first determine whether or not the thing can be done. In this debate we have been occupied with the question, can the thing be done? Is it possible to change vast quantities of goods and services, which are being produced and consumed in this country in one gigantic stream, into money?

Yesterday the Minister of Finance (Mr. Dunning) offered us an Alberta bank. I must spend a moment discussing this proposal. Yesterday I issued to the press, at their request, a statement which I think it is only fair should go into Hansard:

The Canadian banking system can take a one dollar bill of the dominion or of the Bank of Canada and safely create ten dollars of cheque book money against it. This was definitely proved and acknowledged during the debate on the motion of want of confidence. In using this power, however, the banks have to go forward together in step, so to speak. This all well informed people know.

An Alberta chartered bank under the present set-up in Canada would have to get its Bank of Canada bills from the Bank of Canada, just as any other Canadian chartered bank would have to do. This fact would force the Alberta bank to conform to the policy of the Bank of Canada. Further, if such Alberta bank began to pursue any other policy it would get out of step with other Canadian chartered banks and so become in danger of losing its cash to them. This would of course render it likely to fail. An Alberta bank alone would therefore be unlikely to help in the introduction of social credit.

The Bank of Canada Act gives to the Bank of Canada the power to take one dollar of gold and create against it four dollars of Bank of Canada bills. If Mr. Dunning would offer to Alberta the poTver to give an Alberta bank this right then he would be conferring upon

Alberta real monetary power with great possibilities. If in addition lie would agree to recognize as legal tender Alberta one dollar bills with twenty-five cents of gold backing, as he does with Bank of Canada bills with twenty-five cents of gold backing, the possibilities would be still greater. The Alberta bank could then build upon one dollar of gold a currency and credit structure of $40, as the Bank of Canada with the Canadian chartered banks now can.

The power of creating legal tender bills, however, is not in his offer, I take it, and will not, I fancy, ever be in his offer.

I might add these words, which did not go out to the press: It is not the banks we are after, but the system which gives to them and to them only the creation of Canada's money. An Alberta bank attempting to establish itself to-day would probably have about as much chance of success as an Alberta distributing house would have in competition with the T. Eaton Company.

I turn now to a consideration of my motion.

Topic:   ELIMINATION OF POVERTY-AMENDMENT OF MR. BLACKMORE AND SUBAMENDMENT OF MR. BENNETT
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Would the hon. member permit a question?

Mr. BLACIvMORE: If Mr. Speaker will give me extra time I shall be glad to permit interruptions.

Topic:   ELIMINATION OF POVERTY-AMENDMENT OF MR. BLACKMORE AND SUBAMENDMENT OF MR. BENNETT
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

In his statement the hon. member asked if Mr. Dunning would do so and so. In that connection I wish to say merely this, if the hon. member will permit me, that the things he there states Mr. Dunning should do are not within Mr. Dunning's power. What my hon. friend asks there is that the parliament of Canada should turn over to the social credit party the complete control of currency and credit in Canada which is now vested in this parliament, and also complete control of the Bank of Canada. I cannot do that. My hon. friend may convince parliament

if he can-but it is useless to ask me to do more than I offered to do last night, something which it was within my power to do.

Topic:   ELIMINATION OF POVERTY-AMENDMENT OF MR. BLACKMORE AND SUBAMENDMENT OF MR. BENNETT
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SC

John Horne Blackmore

Social Credit

Mr. BLACKMORE:

I gathered from the remarks the Minister of Finance had previously made that in him, the Minister of Finance, rested complete control of currency and credit in Canada.

Topic:   ELIMINATION OF POVERTY-AMENDMENT OF MR. BLACKMORE AND SUBAMENDMENT OF MR. BENNETT
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

No, no; I repeatedly

denied any such thing, and have stated directly the opposite. In this parliament, and in the instrumentality created by this parliament, rests that power. I hope the hon. member will not repeat the statement, which has been made by several of his group, that I control

Topic:   ELIMINATION OF POVERTY-AMENDMENT OF MR. BLACKMORE AND SUBAMENDMENT OF MR. BENNETT
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I87S COMMONS


Use of Canada's Financial Resources currency and credit in Canada. It must be within the knowledge of every hon. member of the house that I have never said that.


SC

John Horne Blackmore

Social Credit

Mr. BLACKMORE:

This is very good. In 1935, before the Bank of Canada was formed, I understand the dominion had delegated the power to create dollar bills, and credit, to each of at least eleven chartered banks throughout the country. I am going to ask this question, sir; whether or not one of the nine sovereign provinces of the dominion would be likely to mismanage currency and credit of Canada to any greater degree than would the group of men who constitute a bank. If the power lay in this parliament to give this complete power to banking institutions, before the Bank of Canada was formed, then it looks as though that power would permit giving a similar right to a province.

However, this is beside the point, although it has been an interesting sidelight. We are now discussing a motion made by the social credit group on March 8. That was a want of confidence motion, on the ground that the present government is neglecting to use Canada's resources for the abolition of poverty in the country. It is a most remarkable thing to me that, other than social crediters, hon. members who have participated in the debate have discussed anything and everything except the motion. That is a most interesting fact. Yesterday we even got to salt fish.

Topic:   I87S COMMONS
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LIB
SC

John Horne Blackmore

Social Credit

Mr. BLACKMORE:

No defence has been made. I challenge members of this house to point to one single place where a defence was made by any member or supporter of the government against the charge that the government has not used the resources of the country to remove poverty. In fact, there have been no answers to any of my contentions concerning money. I directed the attention of the house and the country to money, and the point has been completely sidestepped. A red herring was dragged in, and the time of the house was spent discussing the red herring, while the money question remained in abeyance.

In a few moments I shall show that not a single contention was disproved. Let me recall to the minds of hon. members the points I made. I shall review them briefly.

First: Money is either currency or credit. It could and should be created by the king or by the state.

Second: Our money now is created by and comes from banks. This has been abundantly shown in the discussion.

Third: What gives money value is goods and services, and the producing and consuming power of the community. Had the attention of the house been directed to a discussion of that proposition the time would have been excellently spent. When the truth regarding that proposition is fully recognized we shall be on our way to a change which might do us some good.

Fourth: The amount of money that Canada can have depends upon the number of exchanges Canada can manage to bring to pass within the country. Not one word was said about that. Yet, sir, next to the other one I have mentioned, this is the most important question which can be brought to the attention of parliament.

Fifth: King-created money is sound.

Sixth: Canada's financial set-up now enables her to create legally $80 for one dollar of gold. That was established in the discussion. But before it was established the people in Alberta were called all sorts of lunatics and fools, and withstood a great amount of abuse, from a wide variety of people because that was our contention. It is established, sir, and a great achievement has been brought to pass.

Seventh: Canada can produce abundance for all her people. There was no question about that.

Eighth: Inflation comes from having more money than goods and services. Not a word has been said about that. Yet if we wish to discuss inflation that is the point at which we must commence. This proposition is borne out by the best authorities now living.

Ninth: Canada now has vast amounts of goods no one can buy. She is equipped to produce immediately upon demand vast quantities more of many kinds. The distribution of money would immediately call forth more production. When the almost hysterical outbursts against inflation were in process, not a word was said about that-not a word. And yet that, sir, is the all-important point. If we spent $100,000,000, and by spending that money we immediately brought into existence $100,000,000 or more of goods, there would be no chance in the world of creating inflation- except a form of financial inflation, with which we can deal later on.

Tenth: Therefore, Canada can safely create, issue and use a great deal of money. There was not a word of discussion about that-with the exception of the outburst about inflation.

Use oj Canada's Financial Resources

I said a few moments ago that not one of my contentions was met or answered-not a single one. I ask the members of the government this question: Why in the world was the whole question sidestepped? That is a vital point. Yet we have news sent clear to Australia stating how the Minister of Finance showed that social credit would result in inflation, that it would be most disastrous, and all that sort of thing. The Minister of Finance did not prove that at all, and he cannot prove it.

This debate has proved that $80 can be created in Canada for $1 of gold. It has proved that it can be created out of nothing but paper and pen and ink. That has been proved abundantly on the floor of this house. That is a wonderful achievement. The banks create all the money and they can beat the printing presses any day. We raise our hands in holy horror at the thought of printing presses, but we let the banks go ahead creating money far faster than the printing presses ever could. The banking system of Canada is the power plant that has been erected to serve the country. If we know how to use it we can change our streams of goods and services that are pouring through this country into money that can be used for the betterment of the country. But we must prove that we can do this.

A few moments ago I referred to turning water power into electricity. The first important point is to learn that water power can be turned into electricity. That was the question with which we were occupying ourselves and it had nothing to do with any of the other matters. Can we have money?

that is the question. I understand that the Minister of Labour (Mr. Rogers) rose in his place and said that it was impossible for us to get money in any other way except by borrowing or by taxation. That is the stand normally taken in Canada to-day, but it is a stand which is utterly not in accordance with the facts. As long as we continue to take that stand, we will continue to be bound and the problems of this country cannot be solved.

The next question with respect to the power plant is that the amount of electricity developed depends on the volume and speed of the water. The amount of money that we can create depends upon the. volume and speed of our production and upon nothing else. Later on we shall deal with other matters. However, the Minister of Finance attacked it in this way. He did not stop to ask whether or not goods and services could be changed into money; he wanted to know immediately how to do it. If you came into the house

ready to discuss the question whether or not water power could be turned into electricity, and you were asked about the details of constructing a power plant, would you consider that to be a fair question? I do not wish to be unfair, but I speak as I see it. This is the next question: He said we do not need electricity; in other words, we have enough coal oil and we do not need any electricity.

Topic:   I87S COMMONS
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LIB

March 31, 1938