March 20, 1941

SC

Victor Quelch

Social Credit

Mr. QUELCH:

Certainly not. I regard

that as the business of the chartered banks. I believe, however, it is the business of the Bank of Canada to act as the nation's bank, and our expenditures should be financed through the Bank of Canada without borrowing a single dollar.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

I thought my hon. friend said he was in favour of the Bank of Canada buying up the shares of the chartered banks.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
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SC

Victor Quelch

Social Credit

Mr. QUELCH:

I am in favour of the

government buying up the shares of the chartered banks, but the people who manage them would continue to do so as now. The chartered banks would be under the control of the Bank of Canada and would be making commercial loans.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

That is, the government would be in the banking business.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
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SC

Victor Quelch

Social Credit

Mr. QUELCH:

Not any more than one can say that the government is in the wheat board or in the post office. The board of the Bank of Canada would be looking after the whole banking system. I know some people claim that every time an election took place, the bank management would change. I hope we are not quite so rotten as that. I know that sort of thing may happen in connection

War Appropriation Bill

with some post office appointments, but I will frankly admit that in so far as western Canada or Alberta is concerned, I have not noticed it, and I hope it will never occur. It is certainly not a nice charge to make against any government that it finds it necessary to change all the postmasters every time there is an election; and I hope it would be possible to leave the administration of the banks entirely under the control of the Bank of Canada.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
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NAT

Karl Kenneth Homuth

National Government

Mr. HOMUTH:

But the government of Canada would then be making the commercial loans.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

We would be right in the business.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
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SC

Victor Quelch

Social Credit

Mr. QUELCH:

I see the hon. gentleman's point in that regard, that in view of the fact that the chartered banks would then be publicly owned, the loans would be made by an institution of the people. But the people of Canada would be handling their own business, because that institution would be directly under the control of the government-although I admit that in these days we have not very much control of the government. Unfortunately, there are, outside of government, forces which largely control us at the present time.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
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?

An hon. MEMBER:

What about the

government of Alberta?

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
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SC

Victor Quelch

Social Credit

Mr. QUELCH:

If this government will give Alberta the power to have a bank, I think that province will indicate many advantageous ways in which that bank could be utilized. It seems a pretty hard thing for Alberta to get a bank. I believe the dominion government would be well advised to allow our province to have that charter, and let us see what we can do.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
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NAT

John Ritchie MacNicol

National Government

Mr. MacNICOL:

Conditions are bad

enough now, without it.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
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SC

Victor Quelch

Social Credit

Mr. QUELCH:

I will now deal with a

slightly different angle of this subject, the pay-as-you-go policy. The minister, in a statement in September, 1939, frequently repeated that he believed in adopting as far as possible a pay-as-you-go policy. The minister will admit, I think, that if we maintain production at its maximum level, utilizing a certain portion of the production for war purposes, the standard of living of the people cannot be higher than the portion that is left of the production.

No matter how the war is financed, the standard of living of the people cannot be higher than that portion of the production which is left after the rest has been utilized

for war purposes. Therefore, if we utilize taxation alone for the purpose of reducing the people's spending power and make up the remainder of the required revenue, from the Bank of Canada, the standard of living of the people will be no lower than if we financed by the issue of bonds to the public. It could not possibly make any difference. On the other hand, however, there would be this vast difference, that a real pay-as-you-go policy would have been adopted and there would be no increase in debt. That would make a very great difference in the standards of living of the people after the war. We would not have to increase taxation to pay interest.

The Minister of Finance, however, has contended that people should be allowed to put aside a little for a rainy day. He stressed that point in his budget speech in September. I agree with that; and for that reason, we are not opposed to the sale of war savings certificates, but we believe that the amount each individual is allowed to purchase should, be definitely restricted. It is now restricted, I understand, to $600, but in the case of a family of five or six people, that family is allowed, in my opinion, to put aside too much for a rainy day; in that instance, it is $3,000 or $4,000. That people should be allowed to put aside a little for a rainy day does not justify the sale of large amounts of bonds to the public. In my judgment we shall have a lot of days of drought, rather than rain. I do not like that expression "rainy day"; "drought" would be a more accurate term, so long as we carry on the policy which has been in operation since the present government came into power in 1935.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
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LIB

Paul Joseph James Martin

Liberal

Mr. MARTIN:

Is the hon. member opposed to all savings?

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
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SC

Victor Quelch

Social Credit

Mr. QUELCH:

I am not opposed to anybody putting aside a certain sum for a rainy day'. I am, however, opposed to this government saying that in order to provide a person with an investment, they are going to put the people into debt, because just so long as the government adopt that policy, the consequence is that a large amount of bonds are sold to a comparatively few individuals. A national debt is being formed1, which the governor of the Bank of Canada says is a national asset; but remember that it is the asset of only a comparatively few people, and it is a liability of all the people. Therefore the government must make a levy against all the people in order to pay tribute to a comparatively few people.

Let people save and invest their money in industry. Why should this government be

War Appropriation Bill

obliged to provide an investment for them? By all means save, but do not penalize the rest of the people when yon are doing it.

Let us at all times remember, especially in view of the conditions which are existing in Europe to-day, that war is a scourge.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
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LIB

Paul Joseph James Martin

Liberal

Mr. MARTIN:

Are we not saying this with regard to the war savings certificates? First of all, they are not restricted to any particular group; there is a wider diffusion than in the case of bonds. We are also saying, "You save this money so that at a future date production may be enhanced as a result of this investment; but we now want a curtailment of production, or rather, to confine production to certain very necessary channels for war purposes."

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
Permalink
SC

Victor Quelch

Social Credit

Mr. QUELCH:

I would ask the hon. member how production in the future can be enhanced by issuing a lot of war savings certificates now; because when you get in a depression, the only way by which you can pay off the certificates under the present government's policy is by taxation, and that would increase the depression. You would require to have monetary expansion, and if you are going to have that, you might as well have it now; now is the time we need it.

I have pointed out to the hon. member that I am not opposed to the issue of war savings certificates so long as it is understood that the object is to reduce the spending power of the people, not to provide revenue for the government. I remember Professor Plumptre made that plain. He stresses the point that war savings certificates are needed, not to provide revenue, but merely to prevent spending.

Let us remember that war is a scourge and not a carnival, and no one should hope or desire to profit materially as a result of war. I am sure the minister would agree with that. When we bear in mind the terrible sacrifices that are being made in England and Europe at present, not merely from day to day, from week to week, but from month to month, j'ear in and year out, then I think we are all agreed that no one should hope to profit in any shape or form as a result of such suffering. Recognizing that fact, if people can go through this war in a state of comparative safety, enjoying a decent standard of living and being no worse off at the end than they were at the start, then I say they should consider themselves exceedingly fortunate. I am sure the government will agree with that.

When I read and listen over the air to statements urging people to be patriotic by investing their money in gilt-edged securities, that is, dominion bonds at 3 per cent; when I

see that type of profitable investment eulogized as patriotism, I feel positively nauseated to think we should be guilty of such rank hypocrisy in this country. Let us keep in mind, Mr. Chairman, that, apart from external loans, the real cost of war must be met out of current production. The Mniister of Finance emphasized that time and again when speaking in this house in September. I wonder whether he realized what his statement really meant at that time, because I do not think he would suggest for a moment that we are even trying to adopt a pay-as-you-go policy to-day. Let me read what he said- because it is so easy for someone to rise in his place and say that I am misrepresenting a certain person.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
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LIB

Thomas Vien (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The CHAIRMAN:

I am sorry, but I must remind the hon. gentleman that he has already exceeded his time.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
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SC

Victor Quelch

Social Credit

Mr. QUELCH:

I have had a large number of interruptions.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
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?

An hon. MEMBER:

Let him go on.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
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LIB

Thomas Vien (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The CHAIRMAN:

Shall the resolution carry?

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
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March 20, 1941