March 10, 1944

LIB

Douglas Charles Abbott (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. ABBOTT:

For ten years?

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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LIB

Gerald Grattan McGeer

Liberal

Mr. McGEER:

For any length of time

they will take them.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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LIB

Douglas Charles Abbott (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. ABBOTT:

No, no.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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LIB

Gerald Grattan McGeer

Liberal

Mr. McGEER:

My hon. friend says no.

Well, do not make any mistake about it, that if you can get your money from any other place you are not supposed to go to this bank. That is abundantly clear in the sections of the bill.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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LIB

Douglas Charles Abbott (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. ABBOTT:

At reasonable rates.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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LIB

Gerald Grattan McGeer

Liberal

Mr. McGEER:

At reasonable rates, yes. But on what grounds do you assume that, with the enormous volume of currency, credit and capital available, if you have a sane proposition anyone cannot get reasonable rates? And if that is so, are those chartered banks entitled to hold their charters any longer?

Let me carry a little farther my explanation of what the Canadian Bank of Commerce is doing. My hon. friend says that it does not lend small amounts for ten years?

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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LIB

Douglas Charles Abbott (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. ABBOTT:

No.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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LIB

Gerald Grattan McGeer

Liberal

Mr. McGEER:

I happen to know of some small accounts that have been there longer than that.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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LIB

Douglas Charles Abbott (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. ABBOTT:

That may be, but I know of no Canadian bank which lends money on a ten-year loan. They may be stuck for ten years, but they do not lend it for ten years.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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LIB

Gerald Grattan McGeer

Liberal

Mr. McGEER:

That may be true. I do not believe Mr. Towers is outside of that category. But how could Mr. Towers lend where all the others refuse, even on a longterm proposition? What kind of example would he set? Mr. Towers is a banker, an orthodox banker.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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?

An hon. MEMBER:

A good banker.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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LIB

Gerald Grattan McGeer

Liberal

Mr. McGEER:

A good banker; that may be true. And if that is true, from my understanding of the term "good banker" then I say, "Heaven help the industrial development of the Dominion of Canada."

Industrial Development Bank

There is one other feature. To this bank we issue Bank of Canada bills, and we also issue bonds. But let us for the moment assume that we do not issue bonds, and that we float the bank, as was suggested by the hon. member who introduced second reading, by the issue of $100,000,000 of Bank of Canada cash. That $100,000,000 is going to be spent; it will find its way into the chartered banks and, under our law, they will have power to expand that $100,000,000 of Bank of Canada cash into $2,000,000,000 of bank deposits. Here we have what the Minister of Finance (Mr. Ilsley) has repudiated as inflation of the kind that would blow the lid off. Either you are going to move against Liberal principles and against Liberal policy, or you are going to move into a dangerous condition of inflation.

I think it is well that this bill should go to the committee on banking and commerce. What I am saying to-night is an indication of the stand I propose to take when the bill is before that committee. From the very beginning we should have with us the report of the Bank of Canada for 1943, and I do not think the committee should undertake to deal finally with any measure of this kind until all the financial measures of the government are before the banking and commerce committee, so that we may come back to parliament with a full and complete report.

Let me, in closing, say that this is a year of great decisions. No group in any parliament of any nation has a greater opportunity to do something really worth while than the men who are privileged to sit, let us hope, on the eve of a united nations victory, in the parliament of Canada.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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NAT

Ernest Edward Perley

National Government

Mr. E. E. PERLEY (Qu'Appelle):

Mr. Speaker, when the house met at eight o'clock the hon. member for Moose Jaw (Mr. Ross) took the floor.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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?

An hon. MEMBER:

We are getting back to Saskatchewan.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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NAT

Ernest Edward Perley

National Government

Mr. PERLEY:

sideration will be given to that. When these men return I do not think they should have to get down on their kness for a permit to establish themselves in any line of business, in storekeeping or anything else. Many of the men will go back to businesses with which they had some connection in western Canada before they went to the war. Due consideration should be given to these men to reestablish themselves. If necessary, small companies should be organized and receive assistance.

Section 5 of the bill sets out who the officers shall be. I believe we should have more detail. Of course, we may get that information in committee. The governor of the Bank of Canada, the deputy governor and his assistant will be directors. I believe we should know the other directors before the bill goes to the committee. I should like to know if a shareholder or a director of any of those companies can be on the board of directors of this bank. That is something that has not been answered and I think it should be.

I would suggest further that some pressure should be brought to bear on the chartered banks to induce them to fulfil their duty with regard to financing small industries and producers in the west, if you like. That is important.

In closing, may I say I do not think it is necessary to hold up the measure at this time. There has been a general discussion. Many points have been brought forward. I happen to be a member of the banking and commerce committee to which this bill will be sent. I look forward to a complete statement being made when it comes before that committee, much more so than we have had in this house, with respect to how the whole plan is to work out, who will be responsible and who will be on the board of directors, other than the three names given in the bill. That is important. I hope that agriculture will have some representation on the board. I am waiting with interest to get more detail on the bill when it comes before the committee.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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CCF

Angus MacInnis

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

Mr. ANGUS MacINNIS (Vancouver East):

I did not anticipate when this measure was brought before the house that it would lead to so long a debate as we have had. I thought at the time that when the leaders of the various groups had indicated their attitude toward the bill it could then go to the banking and commerce committee and that we could dissect it there and get all the information required. However, I am not sorry that the debate has taken place and continued as it has. Some of what we have heard has been very informative, and, some not at all relative.

I agree with hon. member for Van-couver-Burrard (Mr. McGeer) that the bill is an exceedingly important one. It is

important because credit and finance will of necessity be an important part of our peace economy, as it has been an important part of cur war economy. But the bill is important for another reason. It is the first of the measures mentioned in the speech from the throne that has been brought to the floor of the house in a concrete form. If the bill as it now stands is any criterion of what the other measures mentioned in the speech from the throne are to be like, then I think my first impression of the speech was correct, that the proposals in it were put there for windowdressing.

I think several things should be clear to members of the house by this time. We have gone through two periods that should have, if we are capable of learning or capable of understanding, taught us something. Since the last war we had the period from 1929 to 1939 which can be described as the depression of plenty, and we have had nearly five years of war. Despite the fact that about one and three-quarter millions of our most productive workers are taken out of production, the Canadian people have lived better during the past five years than they have in any other time in history. Surely those facts should make us think and think to some purpose. If the period from 1929 to 1939 has taught us anything it is that so-called free enterprise has demonstrated its inability to feed, clothe, house and educate the people of this country at anything like a decent standard. On the other hand, five years of war have demonstrated that we can produce and distribute as long as we have three things: material,

machines and labour, and, of course, the will to use them. Purchasing power accrues from the operation of these factors, and the government of the day should be prepared to give us something at this time that would hold out to the people of Canada more hope than they can get out of this bill.

During this debate we have heard- a good deal about socialism and- free enterprise, but I believe one thing is definitely accepted today: that is, that no one, I do not care whether he is an employer, a business man, a banker or anyone else, expects private enterprise to give full employment and a high standard of living when this war is over. Every statement I have seen so far says, in effect: leave it to free enterprise, and to the extent that free enterprise cannot provide full employment, then the government will step in. That is another way of saying, leave the cream to the skim milk. The only question, there-

Industrial Development Bank

fore, that faces us now is when and to what extent the government should intervene; and Let me say again that if this measure is any criterion of what we may expect from the rest of the government's programme, the speech from the throne was indeed a barren one.

When the hon. member for Lake Centre (Mr. Dicfenbaker) spoke this afternoon he said that the bill would not give assistance to small business, though that is said to be one of its purposes. I am' afraid it is going to be extremely difficult to contrive any sort of scheme that will enable small business to continue side by side with monopoly and big business. In a competitive system the strong always survive and the weak always go under. That is the law of competition, and as long as we accept competition we must accept its law. The process that has gone on between big business and small business, if you like, the process of the elimination of small business, has been steady and relentless since the time the handicraft workers were deprived of their livelihood and driven into the factories by the new power machines. The same process is still going on to-day.

I should like to give a few examples to show what has happened in our own time, during the life time of everyone here. I will begin with the chartered banks. In 1911 we had twenty-eight chartered banks in Canada with total assets of $1,390,000,000. In 1942 we had ten banks, but with total assets of $4,008,000,000. Since 1911 the number of chartered banks has decreased by eighteen, but the assets of the ten remaining banks are almost four times greater than the assets of the twenty-eight banks rvere in 1911.

What has happened in the banking business has happened all the way down through our industries. Let me give a few more examples. The figures I am about to quote are taken from the report of the royal commission on price spreads and mass buying, which sat in 1934 and 1935. According to that report, in 1933 there were 127 tobacco firms in Canada. One of these firms, the Imperial Tobacco company, controlled seventy per cent of the business while another, the Macdonald Tobacco company, controlled the greater part of the remaining thirty per cent. This is what the commission found with regard to the Imperial Tobacco company; this is what happens to small business when big business is in control. The volume of sales during the depression was maintained by beating out competitors; prices were maintained by what the commission termed "oppressive tactics and unethical methods." Here are some of the ways in which competition was eliminated: (1) Refusal to sell to dealers who cut prices; (2) Forced

on them written contracts to maintain prices of tobacco supplied by all firms; (3) Offered ten per cent discount to certain retailers to buy directly, thus eliminating the wholesaler and increasing control; (4) Insisted on preference in display advertising over other firms, and intimidating dealers. May I point out again that this was the finding of a commission composed of members of this house, the chairman of which in the latter stages, if I am not mistaken, was the hon. member for York-Sunbury (Mr. Hanson).

Then we come to meat packing. With the exception of bread perhaps no article of food goes into so many homes as meat. In the twenty-five years prior to 1933, through merger and consolidation, the meat packing industry came under the control of very big business companies. In 1933 the two largest, Canada Packers Limited and Swift Canadian Company Limited, did eighty-five per cent of the business. Canada Packers, the largest, is a typical example of this sort of monopoly. It results from the merger of four packing concerns in 1927. In 1934 Canada Packers controlled seven creameries, six packing plants, twenty branch houses, two cold storage plants, one wool pulling plant, three canning plants and three fertilizer plants. In view of this, may I say again that those who hope to resurrect small , business and keep it in competition with such monopolies as these are surely optimistic. I could go down through the list: furniture, oil, milling, baking and a score of other businesses, and .the story would be the same.

I wish those people who call us socialists would stop calling names for a little while and read history. They would then understand that it is not people like myself and those behind me who are bringing socialism to Canada; it is the unrelenting development of the economic means of production. I want to make it quite clear that we are socialists. We do not deny it, we are proud of it, and in the not too distant future we are going to be in a very large and worthy company. I have not the time to go into it to-night, but if we would give a little thought to what is happening in various parts of the world to-day we would realize that our hope of victory in this war is based to a large extent upon the building of socialism in the occupied countries of Europe. The united nations as a whole are not doing that and, consequently while we are winning the war in a military sense, we are losing it in a political sense. This does not come within the scope of this debate, but there is a story there that could be told.

Industrial Development Bank

We are told of the benefits that the world has derived from free enterprise over a period of years. No one denies that. But it is of no consequence now. What we are concerned about is what can it do for us to-day and what it is going to do for us to-morrow. If there were any further proof required of the correctness of the direction in which the C.C.F. is going, it is given by this bill which has been reluctantly brought into this house by a government which opposes its very principle.

When he was speaking the other day the hon. member for York-Sunbury (Mr. Hanson) said that the bill was semi-socialistic. Whether it is "semi" or more than that is not material; it is in that direction. The hon. member for York-Sunbury thought that since it did not go far enough this group would reject it. As I have said, we are socialists, but we are not the "socialism or nothing" variety some are accusing us of being. These same people, however, a few weeks ago were accusing us of not being socialists at all.

When I contemplate the accusations hurled at us in the debates that have taken place in this house during the past few weeks, I am reminded of a story the late Clarence Darrow, the famous criminal lawyer, tells on himself. He was going to debate the question, "Has life any meaning?" When he started to prepare for his talk he got his pad of paper, his pencil and he began to think. The first name that occurred to him was that of William Jennings Bryan, and he wrote, "No". I do not want to mention names, particularly when hon. members are not in the house, but when I think of some of the speeches made in this house I also am compelled to say, "No, life has no meaning".

We are told that the good old capitalist system has worked well down through the years. Possibly it has. The old Ford car worked pretty well when it was new, but eventually it became worn out. A brochure came to my desk the other day entitled, "The foundations of national well-being". The author is John L. McDougall, and there is something in it that I believe is of great significance. I do not agree altogether with Mr. McDougall, but facts are facts and when we meet them they must be recognized. On page 17 he gives the populations of the chief English-speaking countries, Great Britain, the United States, Canada and Australia in the years 1801, 1861 and 1931. Taking the United States and Canada we find that in 1801 the population of the United States was 5,300,000 in round figures, and that of Canada, 250,000. In 1861 the population of the United States had increased to 31,400,000 and that of Canada to

3,200,000. In 1931 the population of the United States had increased to 131,700,000 and that of Canada to 10,400,000. That was in the heyday of capitalism. Not only were we able to take care of the natural increase in population here, but we were taking people by the million from every part of Europe. The population of Europe itself was increasing during the same time. From 1801 to 1931 the population of Great Britain increased from 10,500,000 to 44,800,000, and the same thing was happening all over the world. On the American continent capitalism kept expanding by moving the frontier farther and farther west. When we filled up one area we moved cur frontier farther west. But at the beginning of the twentieth century we had reached the end of the frontier and, from that time on, capitalism, instead of expanding, has been contracting. Population, instead of increasing rapidly, has been increasing very slowly, and in some parts of the world where it was increasing fast it has stopped growing altogether. These are facts the import of which we should try to understand. It is because there are no further outlets for new investments that capitalism, so-called free enterprise, has come to a standstill and can no longer feed, clothe and shelter the people, although there is an abundance of the wherewithal to do that. Let me tell my hon. friends opposite and my hon. friends to my right that these are the facts with which we are confronted, and our economic system must be so reorganized that we can produce and distribute for peace in the same manner as we produce and distribute for war.

I draw this to the attention of the house. When we were training our men for the armed services we found the money to give them all the training that was required. We found the money to give them all the clothing, all the food and all the tools and equipment- everything they needed. We did all that without any great difficulty because we had a national objective-the winning of the war. We can continue to do it so long as we have that common national objective. But the moment a man is let out of the armed services, then in greater or less degree his troubles begin. Surely it is as important that we should plan to clothe, shelter, train and educate a man for peace as it is to educate and train him for war. Why can we not do it? Because we are divided as to the way in which it can be done. We are divided as to the objectives to be attained. So long as we have contradictory objectives; so long as some persist in saying that the only way in which our economy can be carried on is to allow certain individuals to make a profit out of

13S5

Industrial Development Bank

feeding, clothing, housing and educating the rest, it will be difficult, yes, impossible to plan.

Let me, in conclusion, say something to those who are opposed to socialism and to the socialization of the means of production. We live by getting access to the means of production, to those things that produce food, clothing, shelter and the other things we must have in our everyday life. Which is the better way, to leave those things in the hands of a few irresponsible people, or to put them in the hands of those who are responsible to the people and to parliament? That is your choice and you have no other.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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ND

Walter Frederick Kuhl

New Democracy

Mr. KUHL:

Oh, yes, you have.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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CCF

Angus MacInnis

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

Mr. MacINNIS:

My hon. friend says that we have, that you can leave the means of production in the hands of a few people and through the magic of money distribute goods and services to all the people.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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ND

Walter Frederick Kuhl

New Democracy

Mr. KUHL:

I want production, not the

means.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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CCF

Angus MacInnis

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

Mr. MacINNIS:

If you want production you must also have the means. The two must go together.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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March 10, 1944