If the hon. member for York South (Mr. Noseworthy) wishes to justify his remarks he is entitled to do so at some other time, but for the present I challenge his statement.
Therefore the industrial development bank, like the Ontario hydro electric commission, may very well find itself perfectly safe and free from politics for a number of years; yet almost inevitably there comes a time when the
Bank Act-Mr. Jackman
most vital force in our community, namely the political force and the attainment of power, overrides all other considerations. What was the situation in Ontario? For a very short time during the depression we had a temporary excess of power, and the contracts we had with Quebec power companies were cancelled by the then premier and the then attorney general, now the hon. member for Trinity (Mr. Roebuck). If these contracts had not been made originally; if the power companies had not been developed to the extent they were, our present war effort would have been greatly handicapped. So that it is not only likely but inevitable in connection with some of these public institutions which should be maintained under a private system-true, under government regulation where necessary -that when they come under government administration temporary political considerations will outweigh economic planning which is designed only to serve the people and not to wrest power for some political purpose.
So much for political influences. One fears for the life of this industrial development bank because it is so entirely under the control of the government. But just as the government cannot argue both ways, so the C.C.F. cannot argue that the financial system of this country- has battened on its ill-gotten gains- which I do not admit for one moment-and at the same time argue, like the devil citing scripture for his own purposes, that the financial system is no good because in a time of stress the government had to give it assistance. The leader of the C.C.F. made much of the order in council which was passed during the depths of the depression and which established conventional values for certain securities held by some of our large institutions. The purpose of this order in council was, of course, that public confidence should not be lost; and these conventional values which were established, at a level somewhat higher than market values, were more representative of the inherent value of the securities themselves than were the market prices, which were merely the prices in the open market at a particular time. It is very much the same as wheat selling at forty cents, when every hon. member knows that is by no means a fair price for that commodity and does not represent the inherent value of it. As was pointed out in the house the other day, the government also had to come to the assistance of the wheat pools because the initial payment was larger than the price to which wheat subsequently fell. I was amused to hear the statement made that the bankers had wrongly advised the heads of the cooperative pools by telling them to make a larger initial payment than
they should have made, and that when the market fell below the amount of the initial payments the bankers drove a hard bargain. ,1 can scarcely imagine that any member of the C.C.F. party would have advised a smaller initial payment than that which was made and which was recommended by the chartered banks, according to what I have heard.
The C.C.F. cannot at one and the same time say that the financial system is an octopus which feeds gluttonously, and then say it is so weak that it needs a blood transfusion. The only purpose of the order in council establishing conventional values was to endeavour to reestablish confidence on the part of the people; and the fact that the order in council was needed merely goes to show that finance suffered during the depression just as much as did business or labour. It has been pointed out also that the people who make up the financial community are drawn from all classes in this country, the same as with most other occupations, and that they are motivated by the same reasons. Indeed I have found little difference in human nature wherever I have come in contact with it. Everywhere there are good and bad; everyone must be responsible to some higher authority, just as parliament must be responsible to the people. I believe I heard the leader of the C.C.F. party quote Lord Acton in these words:
All power corrupts, and absolute power corrupts absolutely.
The banking system is not only responsible to parliament; it is responsible also to relentless and inexorable economic laws.
At six o'clock the house took recess.
The house resumed at eight o'clock.
Subtopic: CONDITIONS GOVERNING TEN-YEAR EXTENSION OF BANK CHARTERS