Mr. TUCKER:

And you never attack anybody else!

Mr. GILLIS:

The minister, during the course of his remarks-

Mr. SPEAKER:

The hon. member's time

has expired.

Mr. DOUGLAS (Weyburn):

Is that your time or their time?

Mr. GILLIS:

Their time.

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

I have listened for three or four days to this debate, and the other day I listened to the minister when he read his long brief to the house. To-day I listened to speeches made from the government side by the hon. member for Vancouver-Burrard (Mr. McGeer) and the hon. member for Parry Sound (Mr. Slaght), and if anything I think one is more confused than he was right after the minister made his statement.

I have not taken up much of the time of the house this session. It seems to me that a great deal of time is wasted in debate on some of the questions which have been under review, and I intend to occupy only a few minutes in making a few observations and putting a question or two to the minister.

The purpose of this bill is, of course, to extend for another ten years the charters of the banks, and it is understandable that there should be a few amendments, because when a bill of this kind is revised only once every ten years conditions arise, especially in these changing times, which make certain amendments necessary.

I was a member of the banking and commerce committee in 1934 and I have the honour of being on that committee again this year. The bill will go in due course to that committee, and I shall say very little about it at this time, reserving to myself the right when it comes before the committee to discuss in some detail the questions it raises and the information we may get from some of the witnesses who will be called. On the previous occasion we had some splendid witnesses. The general managers of the different banks attended, as I assume they will do again, in order to explain their points of view.

As I say, when the bill goes to committee I may present a few amendments which seem to me worth while. I made an amendment or two on the last occasion and supported some amendments of other hon. members, but we could not get them adopted at that time, and I venture to say that we shall have no better success this year. The bill is the same as the measure we had in 1934. The then government was strong enough to put it through in the form they wished, and this government is strong enough to do the same. We shall

Bank Act-Mr. Perley

have to acquiesce and I venture to say that some of the amendments will not get very far.

The revision is more or less routine. The changes are not of much importance, and they do not go so far in certain respects as I should like.

I wish briefly to review the banking situation as it has prevailed in western Canada from 1900 to the present time. I divided it into three periods of fifteen years.

First, the period from 1900 to 1915. It is during that time that the banks opened up, one may say, in western Canada. The country was new and the banks rushed in and established themselves. Their main offices were in the bigger cities, such as Winnipeg and Regina. Considerable competition took place in opening branches in the towns and even in some of the villages, and they were really after business. While apparently there was plenty of money to lend, in many cases the interest rate was exorbitant, and beyond all reason. I might mention a little experience of my own. I got my first loan from the bank in 1900, when I had taken up a homestead and preemption, and, wanting some money to buy horses in the spring of the year, I went to the bank and got my loan on a basis of ten per cent, discounted. Before I got through paying that loan, renewing it every three months, I had paid between twelve and thirteen per cent.

We then come to the period from 1915 to 1930. At the close of the last war there was a depression with respect to prices and serious conditions prevailed in western Canada. The banks were in some difficulty; they were not free to lend money, and that part of their business was taken over by the loan companies. It was later in that period, in 1927, that we had the farm loan board established, which has been referred to in this debate. It was established because the government found it necessary to come to the rescue of some of the loan companies and provide a certain class of loans which neither the loan companies nor the banks would touch.

Then we had the period from 1930 up to the present time. We have a situation to which it is hardly necessary to refer. In recent years land values have declined. The loan companies will not make loans to the, same extent that they did formerly; the banks have tightened up, and now the minister is proposing amendments to the act to meet the conditions that have been referred to in this discussion. The minister himself admits that changes are necessary and is endeavouring to meet the changing conditions by certain amendments which he is proposing, but I do not think those amendments meet the situation.

There is certainly nothing in this measure which in any way forces the banks to do anything different from what they have done practically since their establishment in western Canada. They are still allowed to be their own judge with respect to loans, and I have no fault to find with that. I think they should have that right. But they are given greater powers than before, because they are empowered to take certain security which they have not been allowed to do up to the present time,

Under this bill ten per cent of certain loans will be guaranteed under certain conditions and the interest rates are reduced by this amendment. There is a reduction from seven per cent to six per cent, and I am in accord with that. I think it should have been a little more. If you will look up the records for 1934, when the Bank Act was before the committee, you will find that the hon. member for Moose Jaw (Mr. Ross) at that time made a motion that interest rates be lowered to six per cent. I recall that some of the members sitting in the house at that time opposed us when we tried to put that through. I supported the motion. The hon. member who moved that motion proposed that the banks should not be allowed to charge more than that, and that if they did so the borrower would not be liable for principal. I propose to move something similar in connection with this bill, but of course I cannot do so to-night, this not being the proper place.

There is nothing in the amendments proposed by the minister that further assists in the marketing of the crop. I have opposed the system with respect to interest, which reacts unfavourably on the farmer in connection with the marketing of the crops in the west. Before the wheat board came into operation and took over the whole situation so far as crops are concerned, the elevators were doing business and I was in the elevator business myself, as I have been since 1906. I know, therefore, something about this matter. I know what advances were made to the farmers. The elevator companies charged a good rate of interest. In many cases it was eight per cent and sometimes a little more, but in recent years they have been charging seven per cent. The banks financed the elevator companies. They advanced that money to them at a much lower rate than the elevator companies charged the farmers, and we had the banks guaranteeing elevator accounts. Now the wheat board is handling the matter and the government backs the board in financing the elevators.

Bank Act-Mr. Perley

We have, therefore, an exorbitant charge in that respect, and there is no provision in this bill to take care of the situation when the war is over and we get back to what some hope will be a normal state of affairs in connection with the marketing of crops. The Bank of Canada should finance the wheat board, and through it we should have full control of all marketing and financing and do away with the method that I have indicated.

The banks have not taken any risks. They have always been able to pay nice dividends. They have set up reserves, and we have listened this afternoon and evening to a discussion with respect to matters of that kind. I will not go into details at this late hour, but there is one point to which I should like to refer, which was mentioned by the leader of the C.C.F. party. The provincial governments in 1930 had to guarantee the accounts of the wheat pool in Saskatchewan. The hon. gentleman was right in saying that they did that. Prices had dropped considerably in 1930 and the wheat pool was in difficulties. They had made advances to farmers. The price was very good when they made the advances, but there was a severe drop and the provincial governments had to come to the assistance of the banks. The banks refused to carry that load when it got below the advances that had been made and security was not so good. True enough, as the hon. member for Rosetown-Biggar (Mr. Coldwell) said, the provincial governments guaranteed the account, but they in turn, when they were expected to come through, refused to do so and came to Ottawa to get the government here to take over that guarantee. I am going to say that if any one person is more responsible than another for the fact that the wheat pool is in business to-day and is in a good financial position-and it is to its credit that it has been taking on a considerable amount of the victory loan-that person is the Right Hon. R. B. Bennett, as he was then. He does not happen to be in this country now, but he is the one who is responsible for the fact that that concern is doing business now. The credit goes to Viscount Bennett. I can recall when they came to get the government of that day to take over the account, which the government did. some of the members opposite me, who at that time were sitting over here, opposed the move and made trouble for the Bennett government in making that guarantee. Mr. Bennett, however, did have it made, though they endeavoured in every way possible to raise every difficulty in his way. I know for a fact that the elevator companies thought matters had gone so far that the wheat pool would become insolvent and the elevators

TMr. Perley.]

would be divided up among the other elevator companies. I was close to a number of elevator companies at that time and I knew what was going on. They practically sat down at the table to divide up the pool elevators, and it is to the credit of the government of that day that they took over the guarantee which the provincial governments could not carry through in order to keep the company in business. Prices came back, and eventually there was not a loss but a profit when the present government took over in 1935. They tried to carry on and sell the 560,000,000 bushels that had accumulated. They tried to sell at a loss. We have heard of the fire sale, and they could not sell it fast enough.

I am proud of the fact that I was one of the members from western Canada who, in the face of great difficulties, persuaded our colleagues in the east, on our side of the house, to support the Right Hon. R. B. Bennett in what he did at that time. There is nothing in this bill that will assist very much in that regard. However, as I have said, we shall have interesting witnesses before the committee.

I wish to ask the minister one or two questions. Why did he not introduce the farm improvement loan bill at the time he introduced the industrial development bank bill? In reply to the leader of the opposition (Mr. Graydon) the minister said to-day that the bill was ready to be introduced and would be introduced as soon as possible and be sent to the committee. I wish to ask the minister why he did not introduce the bill at the same time if it was ready?

Mr. ILSLEY:

It was not ready then.

Mr. PERLEY:

Quite a lot of time has elapsed since the industrial development bank bill was introduced. If the farm improvement loan bill is ready now, the minister certainly could have given us some indication of what the bill contained at the time he spoke of the amendments to this bill.

Mr. ILSLEY:

I did.

Mr. PERLEY:

The minister did not go far enough. I think we should have that measure now, and we should know what is in it in order to make a fair appraisal of the value of the amendments to the Bank Act and to make a comparison. I say that because if the other bill does not go a lot farther and do more for the western farmers than the amendments to this bill the minister will have quite a lot of trouble when the bill is brought down to get it through. I warn the minister that if the bill when it is brought down is not what we think it should be and what we hope it will be, then 'he is going to have a little difficulty.

The late Eugene Durocher

There will be some criticism and possibly some amendments made by hon. members on this side of the house. I was glad to hear the minister in reply to the leader of the opposition to-day say that he was going to bring the bill down as soon as he could. I warn the minister to-night that it must be something worth while and that it must go a lot farther in the way of assistance to the farmers of western Canada than the amendments to the Bank Act that we are now considering. I agree with the statements made by some who have spoken, that the winning of the war is the all-important thing. That is the one thing we must consider now. We know the difficulties the government may have with that. We are all possessed of that idea. We all believe that the winning of the war is the main thing and we should approach all these questions from that angle. In the few remarks that I made to-night that is what I wanted to express. But I reserve the right to go a little more fully into it when this bill is before the committee. There is not time to do that now. I hope the bill to which the minister has referred will meet the requirements and conditions of the people of western Canada.

On motion of Mr. Hlynka the debate was adjourned.