I am not accusing the minister of saying that, but it has been said twice in this house, and I am asking if that is a promise or a threat. It is curious that such a statement is accepted as being quite patriotic, but a statement that we should enlist men as soon as possible because their rates of pay are likely to increase would receive a different reception. Quite a different interpretation would be put on that statement. The minister explained the methods of financing. He calls any creation of credit by the state, inflation. We are led to believe that this war can be financed mainly from the savings of the people, and we have been led to believe that this was the case during the last war. If the last war was financed from the people's savings, I should like, to know why bank deposits increased by something like a billion and a half dollars. Where did that come from? Did it come out of the people's savings? I do not think so.
I remember that as a child I was astonished at seeing a conjurer produce rabbits out of a hat. At the end of the last war, when I was fully grown, I was greatly surprised by having a bank offer me not only bonds but the money with which to buy them. So we can easily see through this little trick of financing by the people's savings. It is just a smoke-screen, because the greater part of a war is financed by the creation of credit. I am not going to take up much of the time of the house, but I should like to know why it is not considered
inflation when money is created by private corporations and then issued as a loan to the country. But if the state itself creates the credit and uses it for the purpose of prosecuting the war, that is called inflation, and that is where we in this corner part company from the rest of the house.
There is one other point. If the production of munitions of all kinds is to be increased to the maximum, surely that will require the savings of the people for investment. If their money is put into bonds, where will the necessary money come from to expand the war industries? But if the state will supply the money which they need, combined of course with a proper system of taxation, since, as the minister has said, we shall be bound to cut down our standard of living because so many men will be taken out of the production of the things we ordinarily consume and be diverted into the production of munitions, and taxation is necessary for that reason, then by these two methods by using the Bank of Canada to issue credit for the state itself, and by a proper system of taxation to prevent inflation, it will be possible to finance and win this war without adding to the debt burden of the country.
I ask hon. members to consider the burden of debt of Canada at the present time. We are told that this war is a life and death struggle and that it will continue until Germany is beaten. Some experts say that the war will last ten years. I canot say anything about that, and I am simply giving the figures I have read as having been given by British experts. I think four years was mentioned here this afternoon, and the minister said this war was likely to be more costly than the last. If that be so, consider the state of debt which we shall have to face at the end of the war if it is financed as the last war was. I am quite aware that no action is likely to follow upon any remarks which we in this corner of the house may make. Nevertheless I am making them because I wish to make my stand clear now at the beginning of the war. The results I am content to leave to the verdict of time.