May 20, 1947

LIB

James Ralph Kirk

Liberal

Mr. J. R. KIRK (Antigonish-Guysborough):

First of all, I should like to join those speakers who have preceded me in this debate, in offering my congratulations to Minister of Finance (Mr. Abbott) on the excellent presentation of his first budget, and on the message of good cheer and hope which it contained.

The wide acclaim being accorded to the minister is indeed well deserved; and the measure of his worth is indicated by the generous manner in which he himself bestowed upon his predecessor in office much of the credit for such an inspiring budget.

An intelligent examination of the sound economic and financial status of this nation at the present time is, I submit, a remarkable tribute to the manner in which the finances of Canada were handled during the war-a period which was certainly the most anxious in our history. So, at this point, Mr. Speaker, I pay my humble tribute to the man who worked hard and long, who gave his efforts and ability unstintingly to the service of his country with such superb success as has made this budget possible, the former minister of finance (Mr. Ilsley). In extending my congratulations to a minister of the crown, it is with added pleasure that I do so, in view of the fact that he is a native of my own province.

In an effort to contribute to this debate, Mr. Speaker, I propose to invite the attention of the house to matters which are full of importance to the every-day life of many thousands of Canadians, and particularly to the section of the country which I have the honour to represent.

Two of Canada's greatest primary industries, fishing and agriculture, form a major means of livelihood to which the people of Nova Scotia daily devote their lives and efforts. I do not think that I am being repetitious, and certainly I disclaim any platitude, in stating that the farmers and fishermen of Canada must at all times be regarded as the backbone of this country. They know no fixed hours; they observe no particular holidays. Yet, Mr. Speaker, when one lives with them and among them, as I do, the conclusion is inevitable that here indeed is Canada; here are the men and women who are daily actually making the greatness of this nation. And so I state that

The Budget-Mr. Kirk

any matters which affect the daily lives of such people must be regarded with respect and assumed to be of importance by the government and by this house.

All hon. members know of our individual efforts with various government departments on behalf of our constituents, and it is true, we can often accomplish much good without inviting the attention of the whole house to the work in hand. However, what I have to say today has not, I think, been mentioned by other speakers, and I shall therefore take a few moments to place some suggestions before the house on behalf of that part of Canada usually referred to as "the maritimes".

To maritimers, it was indeed a pleasure to hear the hon. member for Davenport (Mr. MaoNicol) address this house, one week ago today, in the interests of the maritime provinces. Representing as he does not only a riding in central Canada but a riding in one of our most highly industrialized centres, the hon. gentleman's remarks were particularly gratifying and encouraging.

Few there are in Canada today who can vie with the hon. member for Davenport in personal knowledge of the outlying districts of our vast country. The interest he has shown in the problems confronting each section of Canada displays the wide viewpoint of a true Canadian-one which all Canadians might well strive to attain; and his spirit of unity and tolerance should be extolled and emulated if Canada is to find herself a truly great and united nation.

It is inspiring to those living in the maritime provinces to know that we have such a good friend in central Canada as is the hon. member for Davenport, and I am proud to pay this tribute to him.

Now, Mr. Speaker, in the fisheries industry, it must be admitted that much important progress has been made during the past few years. We are gradually approaching a point where all people directly concerned with this industry are cognizant of the necessity for scientific approach to it, whereby we may compete successfully with those countries which for many years past have been miles ahead of Canada in fisheries policies.

The present Minister of Fisheries (Mr. Bridges) is indeed to be congratulated on the fine work he is doing in the development of Canada's fisheries. I was more than pleased to learn of the expansion to be made in the department's field service. The establishing of fisheries schools and the training of young veterans in the scientific aspects of the industry will, I am sure, be most beneficial in promoting the welfare of our fisheries and our fishermen. However, in spite of whatever

progress may have been made and which is likely to be made in government policy in this sphere, I think that we must at all times bear in mind that it is the welfare of the fisherman himself which must be the nucleus of any policy for our fisheries. And no matter how many national or international conferences may be held with reference to our fisheries, or how vigorously the scientific aspect of the fisheries may be pursued, we must at all times have the general well-being of the fisherman himself as a paramount consideration. This is a reason for my having mentioned at the outset that matters which may appear to be unimportant in comparison to other major items in the budget are nevertheless of the greatest importance to the daily lives of our people. This is a function of parliament which I suggest must be borne in mind constantly by each government department and by the house as a whole.

The coast line in the counties of Antigonish and Guysborough is, as is well known, very rugged, and this makes the work of our fishermen more difficult and dangerous than it is in most other places. During the fishing season it is essential that the fishermen take advantage of every possible hour in order to secure as large a catch as possible. In the present circumstances there are days lost unnecessarily all during the season because it is not possible for the fishermen to go out in their boats. I realize that during the war years it was not practicable for the government to undertake work to overcome these handicaps. However, I have no hesitation in stating now that any post-war undertaking of the government must recognize and implement much needed and overdue construction work in this respect. I strongly urge the planning and early construction of suitable wharves and breakwaters. True, the fishermen of years ago did not have such facilities; but surely, Mr. Speaker, the fishermen of today are entitled to share in the progress of our civilization. However, sir, I have to state that rather than enjoying the fruits of such progress, our fishermen, in comparison to their fellow workers in the industrial areas, seem to have been forgotten, and the available results of our modem advancement have been denied to them. The construction of good wharves and the erection of adequate breakwaters is, I insist, an immediate necessity in many parts of the maritimes, and I trust that the representations which are being made in this respect will * bring good results. This is not a work which requires any great outlay of money, but it is one which for many years to come will react to the benefit of this great and essential industry.

The Budget-Mr. Kirk

In this connection I also urge the immediate necessity for a complete change in dredging operations in the maritimes. The present position is entirely unsatisfactory, and in my opinion it can be improved immensely. I recommend the acquisition by the government of a sufficient number of large and small dredges to do the work which at present remains undone because the dredges now in use are ineffective, or because of a lack of dredging equipment. The unfortunate result of the present position is that men are actually prevented from accomplishing their work, or are severely handicapped in their efforts to do it. This is one suggestion which would solve some of the existing difficulties, and the expenditure involved would be a wise and beneficial investment for the government to make.

In another matter of practical help for our fishermen, the policy of other countries has been to erect small cold storage and freezing plants at many convenient points. Such plants have the twofold effect of preserving the fish catch and of maintaining a sure supply of bait. The lack of bait prevents fishing activities on those days when no bait is available. The erection of such small plants as I mention would solve this problem. In those few places where there are such plants, they have been highly successful. In advocating such a policy, I do so with the knowledge that the increased return enjoyed has more than justified the expenditure involved. I say that we have long since passed the stage when such facilities are regarded as extravagant. They are now actually a necessity.

In advocating such material advantages for the fishermen, I am not unmindful of the necessity for our concern with his more personal welfare. I need do no more, I am sure, than to mention the grave hazards faced by the fishermen day by day. We have, it is true, tried to minimize these to some extent, However, I know of places where the hazards can be greatly lessened, and to this end I urge the adoption of some suggestions which I shall make-suggestions which, I may say, are the direct result of representations made to me . by the fishermen themselves.

I suggest that a more thorough system of bell buoys and whistle buoys would be highly desirable as a measure of increased safety for small-boat fishermen. I am aware that there are objections to this measure because of the possibility of confusion. However, I suggest that at many points of danger which exist at present, no confusion whatever would result. Rather would there be, I maintain, a great deal of security which in too many instances

is now absent. The cost of installing such safety measures is trifling; the benefits would be great. I know that it is not a lack of a sense of responsibility which has prevented the adoption of such measures, but I would urge the government to undertake this very simple and inexpensive work as soon as possible.

I wish to mention another item respecting aids to fishermen which has already been emphasized in this house, notably by the hon. member for Queens-Lunenburg (Mr. Winters). As I have stated, I wish to avoid repetition and so I shall content myself with voicing my support and endorsement of the proposal. I refer to the maintenance of an adequate coast guard patrol. Every year in the maritime provinces we are forcefully, and all too often sadly, reminded of the necessity of an adequate coast guard. In common with other hon. members from the maritimes and British Columbia, I look forward to early action on this proposal.

In the other great primary industry of agriculture I welcome the progressive leadership given to the industry by the right hon. Minister of Agriculture (Mr. Gardiner). Of course most of our farms in the maritimes are not comparable in size with those in central and western Canada, but we maritimers are fully aware of their vital necessity in our lives. Maritime farmers have done, and are continuing to do, a really splendid job, and are producing ever-increasing quantities of farm products. In our agricultural policy wre must continue to pursue the programme which has been given such successful impetus and direction during the past few years. Not only must we expect full and good production from our farmers, but we must also assure to the farmer a just and reasonable return from his difficult and highly important work. While maritime farmers have increased their production, especially during the war years, very often under severe difficulties, the unfortunate fact remains that they could be producing still more. Again I shall try to avoid repetition by saying briefly, and as strongly as I can, that the reclaiming of the marsh lands of the maritimes is an urgent, desirable and highly advantageous undertaking.

Perhaps I cannot do better than repeat the remarks of the Minister of Agriculture as made to this house on May 30, 1946, at page 2013 of Hansard:

We are looking for land upon which to settle men coming back from overseas, upon which to settle persons who are coming from the overpopulated areas in other parts of the world, and upon which to settle the sons and daughters of our farmers in different parts of Canada who

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The Budget-Mr. Hackett

young men and women who were in various branches of the services, need a great measure of encouragement in order to devote their best efforts, their intelligence and their ambition to the building of this great nation. I think we may take pride in the fact that our country's present economic status, and our expectation for the future in the light of Liberal government policies, will provide the encouragement which I mention as being needed. Indeed, the same encouragement is there for those of us of an older generation to help and guide the younger Canadians in their work.

And so, Mr. Speaker, I say that we have every reason, in the light of this year's budget, to look forward to the future greatness of Canada with full faith and complete confidence.

Mr. JOHN T. HACKETT (Stanstead): "We have just ended a year in which our accounts show a surplus-a surplus larger than the accumulated total of all the previous surpluses in our history. Today we see a Canada enjoying a degree of prosperity never exceeded in living memory. We look forward to a year of high production and incomes. . . . Our available manpower is almost fully employed, with some surpluses in special areas and trades and equally real shortages in others. Demand continues to outrun supply in many lines of business. Our exports remain at high levels, limited in most cases only by our own ability to supply. Imports are pouring into the country from the south in large volume, without appearing to divert much demand from our own production. Private business is proceeding to expand, repair and improve its capital on a scale so large that its plans will be severely limited by scarcity of materials, equipment and labour. Some increases in inventories are occurring but apparently not on a large scale, presumably because the pressure of demand in most cases is so excessive that neither producers nor dealers can keep ahead of it. Consumer purchasing continues to expand and there is as yet little sign in Canada of any widespread unwillingness or inability on the part of consumers to buy what is being offered to them."

Mr. Speaker, these are bold and ringing words, but they are not mine. They are the words of the Minister of Finance (Mr. Abbott).

Are they true? I assume that they are; I ike to believe that they are. But should it nappen that any of the legislation embodied in what we have been pleased to call the omnibus bill be challenged before the courts; should it come about that the right of parliament. to invade the provincial field of legisla-

tion be challenged; should someone question the right of the executive to take unto itself all the prerogatives of parliament-yea, should some citizen deny the power of parliament to surpress the elementary rights of citizenship; should someone say that those rights which have been arrogated to itself by parliament, upon the basis of a national emergency, are not properly taken because no national emergency exists, then the first witness to be summonsed to dispel the fiction and to show up the falseness of the so-called national emergency would be the hon. gentleman who has spoken so truthfully and so well of his country.

The Minister of Finance tells us that employment is complete, that trade is unrivalled, that earnings are greater than ever; that we are a happy, a prosperous and a vigorous people going forward to our destiny. And those statements are made by a responsible minister after a colleague, only a few short weeks before, had said that there exists a national emergency which justifies the suppression of the constitution of this land!

I mention this, not with any desire to be disagreeable to the minister-no. I mention it so that the fiction-I was going to say the farce-of this national emergency might show its painted face and its withered limbs once again to the scorn of right-thinking people in this dominion.

And what of the budget itself? I will not attempt to criticize it in detail. Had the minister consulted me, or had he been interested in what some at least on this side of the house think, he would have done away with the excess profits tax. I think, in the first place, that "excess profits" in this sense is a gross misnomer; the person who devised that name was a master of the art of propaganda. There is something in this unseemly combination of words that savours of selfishness, something that savours of impropriety which should not be applied to the tax. This terminology should be banished from the sober and accurate language of a taxing statute.

But I go further and say I believe that the treasury itself would have been richer at the end of the taxing period had this excess profits tax been eliminated immediately. Because the minister knows, as do others who have some acquaintance with business, that it is only natural that he who has a savoury bit in prospect would wait until his participation in the benefits therefrom would be greater than if taken under the excess profits tax legislation. I submit that even if such action were contemplated, the statement should not have been made that the tax was to be abolished. I do think there are some things which either

The Budget-Mr. Hackett

should be done or should be kept behind the walls of that vast and ever-changing reservoir of government policy.

My friends to the left probably will not share this sentiment: I am not of those who are profoundly impressed by the idea of planning. I like to plan for myself, and I am quite willing that my neighbour plan for himself, but the difficulty comes when we begin to plan for others who do not wish to be planned for. I am brought to this observation by the fact that after the war we entered upon a brave new era, and the minister of finance at that time-the Minister of Finance of today will correct me if I am wrong; I looked for the text but could not find it-went before a dominion-provincial conference here in Ottawa and outlined the government's great new plan. It was a plan to tax ourselves roundly during periods of prosperity and build up a treasure _ house into which we might delve in periods of depression, when taxes would be lowered and public works started that the people might have bread. I thought to myself as I listened to the budget speech how quickly plans vanish. My hon. friend and his party may have wished to continue in the plan that they outlined, but there is a master who has to be obeyed, however pious the wish that runs contrariwise. The electorate insisted on reduction in taxation, and reduction in taxation was made. Plans for the rainy day, plans for high taxes during a period of prosperity-and this is a period of unrivalled prosperity-plans for bad times and public w'orks then to be undertaken- all these plans went into the receptacle which in the end receives all plans, the ash can.

Now about housing. I have heard my friend to the left tell the Minister of Reconstruction and Supply (Mr. Howe) that his plans had failed, and I heard the minister the other day himself speak of one of his measures-I think it was Housing Enterprises Limited, but I am always uncertain, Mr. Speaker, when I approach these multiple activities of government; when I begin to talk about them. I feel that the night is dark and I am very far from home. But his plans, like the plan about which I spoke a moment ago, found their way one by one into the same receptacle. Until we have broken this stiffnecked Canadian people of its waywardness, of its desire to do things for itself in its own way, we are not going to fasten the collar of bureaucracy upon them. They are going to do things in their own way, and when it is attempted to force other ways of doing it upon them, those other plans will invariably fail. So I listened the other day 83166-208J

to the minister telling the story of the abandonment of that particular plan, just as he abandoned making aeroplanes and abandoned the monopoly of the air, and just as other plans must shortly be abandoned.

But I want to make this suggestion to the ministry, ere it is bereft of all its powers of doing something for the little brother, the people. It is unfortunate that all1 the housing has been done in the cities, that all the building has been done there. Oh, I know some gentleman is going to say that this act and that act provides for housing in the country, but the houses that have been built in the country, whether for the veteran or for somebody else, are so negligible in number that we can forget them right away. We have seen the already substantial industrial development of our own country greatly increased by the exigencies of war. We have added to our plant capacity. We had to make munitions of every type, and we took into this great and new plant a new army of workers. We took in the mothers and the wives and the daughters of the Canadian people to participate in the great work of urgency; they came from the land, from the villages, from the parishes into the industrial centres. This is not one of the minor tragedies of the war. There they are going to stay, and there the government has attempted to build houses for them. If the government had consulted me I would have suggested to them that they make a great effort and offer some enticement to these brave people who had come from the land into the cities, to summons them to go back home, back to the soil. I would have attempted to entice them back by building for them good, warm and attractive houses near the source of all that is rich and good in any country- the mother earth. The government has overlooked that opportunity.

I come to another point that I would like to have heard the minister deal with more fully and more effectively. I need not assure the minister that I do not hold myself out as a person of deep learning in economics, but I do know that Canada is one of the great trading nations. This country in terms of population is small, almost insignificant; yet it ranks third or possibly fourth among the great trading nations of the world. This country exports somewhere between 35 and 40 per cent of its production. What portion of it is manufactured? I do not exactly know, but if you assume that newsprint is manufactured goods, if you assume that cheese, butter and bacon are manufactured goods, I make bold to suggest that at least half our exports are manufactured goods. We can live as we are living now if

The Budget-Mr. Hackett

we can find markets, external markets, foreign markets for these goods. Where are we to find these markets? In the past always, I may say, we have bought more from the United States than we have sold to that country. To pay our debt to the United States we have relied upon the proceeds of our sales to other countries, which we have converted from pounds-sterling or other currency into dollars which the United States have accepted in settlement of our accounts. Today, outside of the United States, there are no foreign markets. There are markets to which we are shipping goods, but we are shipping goods which are paid for how? By credits that we have established. They are paid for by ourselves.

I should have been very happy if the minister had brought to bear upon that problem some of his experience and some of the information which association brings to him, because we all know that this condition cannot persist. It must come to an end, and shortly, unless there be a change. I should have liked the minister to deal with this topic, because it seems to me it is the most important question which confronts us as a people today; it is all important to our economic survival. Unless we can find markets for our manufactured products, for the products of our farms, of our forests and of our fisheries; unless we can find markets which can give us in exchange for our goods something which we can use in the United States to settle for our excess purchases there-oh, I am not one of those who thinks the world will come to an end if we have hard times-'there will be a drop in our standard of living, there will be unrest, discomfort and suffering among our people. Our people will be able to survive only if they go back where most of them came from, to the land, and any government which neglects that fundamental truth is not alert to the great possibilities and dangers which confront our people.

I should have been glad had the minister been a little more explicit, a little more careful when he talked of our reserves of United States dollars. To one who read his speech casually, to one who listened to it even with great attention, as it was my privilege to do -and possibly if too many of my party friends were not listening, I may say with a wee bit of pride for he comes from a part of Canada that is dear to my heart, he was not sufficiently explicit. I wish he had told us exactly how rapidly our reserves of United States dollars are disappearing; for we should then have been in a much better position to appreciate our plight.

I am going to ask the minister to do several things, but one thing that I want him to do, and I believe he will do it, is to tell the house exactly what inroads we made upon our United States reserves last year, and what so far this year. I understand that up to July 5, 1946, we were accumulating rather rapidly, and that after that we not only lost what we had accumulated but made heavy inroads into our reserves; that in fact we were in deficit something over $600 million. If I am wrong, so much the better; but if it be true, we should know it; we should know the full unvarnished truth whatever be the cause.

There is another matter-and this is one that is somewhat difficult to talk about because it affects our hearts as well as our heads and to many of us it affects the heart first; we are told that Mr. Towers, the governor of the Bank of Canada, is in England. We know that in the annual report of the Bank of Canada Mr. Towers has sounded a note of warning. We know that in his report on the foreign exchange control board he has sounded another note. "The testing period lies ahead." he says. He points out in guarded language, but in language that is ominous nevertheless, that there must be a change or Canada will find herself in a most difficult situation. Most people would like to know what the facts are. In this house in the last few months we have heard much about charity. In the last few days we have heard much about justice. They are great virtues. But there is one that underlies them all, and that is truth. We are entitled to the truth in this house, the whole truth, and I implore the minister to take the house into his confidence.

Topic:   THE BUDGET
Subtopic:   DEBATE ON ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

He has.

Topic:   THE BUDGET
Subtopic:   DEBATE ON ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PC

John Thomas Hackett

Progressive Conservative

Mr. HACKETT:

I am not of those who are scornful of the skilled man, of the man who has made a specialty of banking or economics and who occupies a position of trust in one or in many departments of government. I do not wish to belittle these men; but, sir, I have respect for the wisdom of the men of affairs; I have respect for the experience of this house, close as it is in the wisdom of the electorate, and I believe that however great be the perils that surround us, the best way to meet and overcome them and the best way to allay the uneasiness that pervades the whole country is for the minister to take the house into his confidence and let the house know exactly what the situation is.

The house would like to know what markets are available anywhere in the world. The house would like to know where our commodities, whether the products of the farm or the forest, of our fisheries or our industrial

The Budget-Mr. Ilackett

plants, might be sold. The house would like to know the necessities, the actual condition, of those to whom we have made advances. There appeared the other day in a government publication, under the heading "Canada's cost of war, aftermath estimated at twenty billions of dollars", a few concise and revealing statements. The statement I am reading from shows what amounts had been disposed of by gifts, by mutual aid, and by loans. Anybody who totals these figures will find that the three billions of our national debt at the beginning of the war shrink into insignificance compared with our largesse during and since the war.

I am not arguing that it was not a wise thing to do; I am not arguing that we should not go further; but I do say that this house should not be asked to take the responsibility of a decision which may involve our own survival until it has all the facts clearly stated and in a form fully intelligible not only to parliament but to the people of this dominion. I do not think I am going too far when I say that possibly owing to habits of secrecy which was cultivated, perhaps necessarily, during the war, there is a tendency today not to trust parliament. There is a tendency to do things in an arbitrary way because they have been advocated by the experts. Again, T do not wish anyone to think that I am criticizing the experts. The experts have their place. They have made special studies and investigations. But I believe that all their technical knowledge should be tried out with the touchstone of experience, and I do not think it is well that this country should further advance into the realm of indebtedness until all the facts have been clearly brought to parliament.

Topic:   THE BUDGET
Subtopic:   DEBATE ON ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

Will my hon. friend allow a question?

Topic:   THE BUDGET
Subtopic:   DEBATE ON ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PC

John Thomas Hackett

Progressive Conservative

Mr. HACKETT:

Certainly.

Topic:   THE BUDGET
Subtopic:   DEBATE ON ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

What facts does he believe have been withheld from parliament, other than the day to day foreign exchange position of the foreign exchange control board?

Topic:   THE BUDGET
Subtopic:   DEBATE ON ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PC

John Thomas Hackett

Progressive Conservative

Mr. HACKETT:

Well, I will not-

Topic:   THE BUDGET
Subtopic:   DEBATE ON ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

If I might complete the sentence, I would say that the report of the board-

Topic:   THE BUDGET
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PC

John Thomas Hackett

Progressive Conservative

Mr. HACKETT:

I do not think that the hon. gentleman's statement on our relations with the United States and the position of the United States dollar was one that- the ordinary individual could understand, and I do not think it was one which set forth in all its implications, as it should have been set forth, our real position.

Topic:   THE BUDGET
Subtopic:   DEBATE ON ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

That is a matter of opinion, Mr. Speaker. But the report of the foreign exchange control board was in strict accordance with the statute which called for it. It was a full and complete report; it gave the position as at December 31, 1946, and it was tabled at an earlier date than the statute called for.

Topic:   THE BUDGET
Subtopic:   DEBATE ON ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PC

John Thomas Hackett

Progressive Conservative

Mr. HACKETT:

That may be, but it dealt with the period of a year, and it did not break it down into two, when there were two different sets of conditions applied. There were the first six months when the Canadian dollar was at a discount of ten per cent and, as I understand, we were accumulating reserves. There was the period subsequent to that when we were eating up our reserves and we not only ate up what we had accumulated during the first six months but made vast inroads into our reserves; and as I read the report, I do not think that was set forth as amply as it should have been.

But I do not want my hon. friend to feel that I am critical in the sense of hostility. Our Canadian problem is a great problem and it requires the good will and work of everybody, be he expert, be he minister or be he humble member of parliament. I believe it will inure to the benefit of Canada; it will inure to the benefit of those whom we wish to aid, if we do not act until all the facts are before us.

Now what is the position in England? I do not know. We have varying reports. Public, men, public servants come here and they make statements which are contradictory. I am hopeful that when Mr. Towers returns we may have information which will be more nearly complete, more reliable, and which will enable us to set a course that will be for our own benefit and for the benefit of those whom we wish to aid.

If the moneys which we are advancing are serving the purpose for which we are advancing them; that is, if they are tending in those countries which are receiving them, to prime the pump, that is one situation. But if they are not serving that purpose, if there is no hope of inducing the pump to bring forth water from the well, or if the well be dry, it is well that we should know it. I am only suggesting that we take those precautions which a prudent administrator would take, which a careful merchant would take, which a successful farmer or manufacturer would' take. We want to know the facts. We want the benefit of the expert's advice. But we want to be in the position of bringing to bear upon

The Budget-Mr. Herridge

these problems the wisdom and experience of the Canadian business man and the Canadian member of parliament.

There is one other item I will ask the minister to keep his eye upon. We seem to be drawn into a great number of international organizations. I have been, I will not say horrified, but amazed at the great cost of these ventures. I should like to be quite certain that we are not paying more than our share and that no unnecessary payments are being made for these purposes.

There is just one additional word that I wish to say and I hope it will not be misunderstood. There seems to be a growing tendency on the part of the government to send forth civil servants as its emissaries to internationl gatherings. I am the first to admit that in our service we have able men. Recently in the state of New York we have seen one of them play a major role. But, Mr. Speaker, in my view that is not his place. Where policy is being made, where leadership is required for a country, there should be present the minister or his elected deputy. I am not critical of the individual, but I wish to point out that between the two German wars every country in continental Europe underwent a parliamentary crisis and there developed a powerful executive which completely annihilated parliamentary and democratic institutions. This may happen to us. I deem it my duty to point out that Caqada's growing habit of being represented by civil servants who some day may have to serve under another government is subversive of our whole scheme of government and is tending to undo the very excellent Canadian civil service.

Topic:   THE BUDGET
Subtopic:   DEBATE ON ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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IND

Herbert Wilfred Herridge

Independent C.C.F.

Mr. H. W. HERRIDGE (Kootenay West):

I am sure everyone in this house enjoys listening to the hon. member for Stanstead (Mr. Hackett). I always appreciate listening to his sincere and, should I say, charming witness to the ideas and the tempo of the mid-Victorian period. I am quite sure he is conscious of the possibility of the near future as far as the economy of Canada is concerned, and that he is fully conscious of the vulnerable position Canada occupies with regard to exports and foreign markets. But, Mr. Speaker, he is recommending to the house the orthodox policies of the past which have produced nothing but war, depression, and war again. I shall have something more to say later in that respect, but I rise first of all to support the proposals with regard to the budget placed before this house by the hon. member for Rosetown-Biggar (Mr. Coldwell). I do so because I think those proposals were consistent and logical. Why are they con-

sistent and logical? Because they represent the approach of a movement which has a conscious social objective and is moving toward a definite goal.

I am not going to take much time now to deal with other aspects of the budget except to say that so far I do not think the arguments put forward for higher exemptions have been satisfactorily answered in this debate from the other side of the house. I must say that I am one of a good number of members of this house who very much deplore the fact that this government has not seen fit to remove the restrictions still placed upon cooperatives. I greatly enjoyed the speech made by the hon. member for Swift Current (Mr. Bentley). I think he gave an excellent exposition of the cooperative movement in this country and the stand of its members with regard to present taxation of the cooperatives. Why was he able to do that? Because he knew what he was talking about. He has spent his whole life in the cooperative movement, and he knows what it means to the average workingman and to the average farmer. I think the government lacks imagination in this respect-this government which placarded the country prior to the last election and assured the people that they stood for a new social order. There is no more inexpensive way for this government to contribute to the building of a new social order, a new economic democracy, than to assist the cooperative societies and organizations by removing these restrictions.

Again I think this government shows lack of imagination even in minor matters, as for instance, in the tax on electrical energy and the tax on soft drinks and chocolates. The youth of this country are organized into various groups. In my constituency there are teen-age groups, through which young people get together to take part in social activities in the community. Yet this government has not sufficient imagination to give these boys and girls, these young Canadians, a pat on the back by making it possible for them to have soft drinks at the pre-war price. May I say that the manufacturers of these beverages in my riding have informed me that if the government will take the tax off they are willing to sell the drinks at the previous price of five cents a bottle. But the government has not imagination enough to make that inexpensive concession to these young Canadians and say: We are willing to exempt you from that taxation because we are getting plenty out of the old sinners.

This afternoon I want to deal particularly with the wider aspects of the situation which the hon. member for Stanstead mentioned.

The Budget-Mr. Herridge

First I wish to quote briefly from an editorial which appeared in the Ottawa Citizen of May 9:

War-Scared Businessmen

When the businessmen of La Chambre de Commerce of Montreal are assured in their annual report that the single "greatest psychological factor" hampering Canada's "return to normal" today is fear of another war, it is time that the rest of the Canadian business world laid that fantastic bogey. It is a product of stupid propaganda and silly hysteria-confined entirely to this continent.

Nowhere in Europe today among responsible statesmen is there any fear of war. Certainly the Soviet Union is in no posture to wage it. Characteristic of the widespread European view that the next war-if it ever comes-is a long way off, is the recent declaration of Mr. Jan Masaryk, Czechoslovakia's foreign minister and president of the world federation of the united nations association. He knows both Europe and North America as few statesmen know these continents. And he finds that the united nations delegates are far more optimistic now that world differences and world complexities will yield to peaceful treatment than they were only six months since.

What is wanted, however, is that the united nations must be backed up by the "enthusiasm of which people the world over have shown themselves capable in battle and reconstruction." In other words, not only must every kind of political, cultural, religious, labour, intellectual, and youth and other organizations rally behind the united nations and its purposes, but the businessmen of the world must come to see that it is their business too to help to remove the misgivings, misunderstandings, suspicions and hatreds which encumber the economy of the nations and check or frustrate their commerce.

I think the gentleman who wrote that article had a sound and realistic approach to the present situation. In that respect, Mr. Speaker, I may say that is not only the opinion of the editor of the Citizen, but I find it is also the opinion of a good number of progressive thinking business men and others in this country, and I want to approach the subject along those lines. There is no question but that thinking people in this country realize that we are approaching a difficult period. There is a great deal of uncertainty with regard to the future. What is our position? The hon. member for Stanstead (Mr. Hackett) asked the government to define where our possible markets lay, and he offered certain orthodox proposals and remedies. We must think of this, that at the present time the British government has completed a trade pact with Poland; that trade negotiations are going on between the British government and the Soviet Union; that there are possibilities the Soviet Union may supply other countries with food and obtain from British commonwealth countries the goods they require, the wool they need from Australia, and the machinery and

electrical equipment required from other British countries. At the same time those who know the facts realize that the United States is making terrific inroads in the South American markets. Where are the markets of the future? Regardless of our political philosophy, whether we are capitalists or socialists, if we are realistic in approaching this situation we must appreciate that, as far as Canada is concerned the markets of the future lie in war-torn Europe or in substandard Asia, and I think it is on that basis we must try to work out a solution.

I mention this, Mr. Speaker, because many people in this country are today realizing more than ever the dependence of Canada's economy on foreign trade. This afternoon I wish to emphasize the necessity for the development of foreign trade and therefore, for this purpose, the development of satisfactory international relations. In speaking on this subject, I am conscious of my responsibilities as a representative of the people. When I come to deal with this international situation as it bears on world trade, as it bears on this budget and on future budgets in this house, as it bears on the budgets of the provincial legislatures and on the budgets of the common people of this country, I am more than ever conscious of my responsibilities. In my mind's eye I can see the smelter workers of Trail in my constituency, tramping up and down to the smelter; I can see the small farmers, the fruit farmers, working their land; I can see the people living in the villages and towns carrying on their ordinary activities. At the same time I can look back and see in my mind's eye the effects of the last depression and realize, as one who served in the first war, what a critical period in history we are now reaching; and I can see, as clearly as the day I discerned them at close range, the rows of crosses at Ypres and the Somme. It is in that spirit that I approach this question. In my opinion it is essential that we approach this matter objectively, not in any ultra partisan spirit; and it is essential that in dealing with this question this parliament particularly should be a strictly deliberative assembly and not a propaganda sounding board. I believe we have to review the question as a whole, and that is a difficult thing for many people to do in times like these. Did you ever stop to think, Mr. Speaker, that in looking at even an ordinary tree no two people see it in exactly the same focus. One will see one side; another will see the other; one will see it in blossom and the other will see it in leaf. I believe that if we are to find a solution we can all work together to bring about

The Budget-Mr. Herridge

we must take what I would term a worm's-eye and a bird's-eye view of all these important questions.

In dealing with this question this afternoon,

I intend to attempt to analyse opinions, motives and situations in the spirit of objective inquiry, and on that basis I erect the structure of my argument. Before proceeding to, shall I say, the correct trading aspect of the situa- . tion, I want briefly to review the history of the past. Without question, in the field of external affairs the major concern of the British people at this time is centred on the relations of the western democracies, or perhaps I should say the western capitalist democracies, and the Soviet Union; and as far as North America is concerned, our major concern is the relation of the United States, as our nearest neighbour, with the Soviet Union. In looking back over the history of external affairs as it has been related to this house,

I think we may say without question that control of foreign policy remains one of the unsolved or only partly solved problems within our democracy. To some extent this is due to the apparent remoteness' of the question as far as the average person is concerned. Foreign affairs have in the past been very remote to the average person carrying on his or her daily activities. It is also due in part,

I think, to the fact that, in the majority of cases, democratic forms of government have been developed primarily to improve internal conditions. We are only beginning to develop an understanding of the fact that we must be directly concerned with what is happening in other countries. This has been particularly true of Canada. We have only accepted our direct responsibility in external affairs during the last twenty-five years; but the impact of the second world war and the principles enunciated in the charter of the united nations have stimulated multitudes of people in this country to take a direct and daily interest in external affairs and our relations with other countries. So when I speak on this subject this afternoon I am conscious that I, together with others in this house, represent the aspirations, the wishes, the desires and the hopes of hundreds of thousands of people in this country.

A discussion of external affairs in this house usually takes place on a resolution sponsored by the government or by a private member, or on estimates, or on particular occasions, or during major debates. I am taking this opportunity this afternoon to deal with this subject in this major debate, because I believe it is directly related and directly connected to our trading position and therefore to the development of our economy which, as I said before,

concerns this budget and future budgets in this house, as well as the budgets of average Canadians. In going over the records of this country, I find that a perusal of history indicates that this and previous governments have a record of fine sentiments rather than progressive policies in the field of international affairs, A very well known gentleman in this country, I think it was Andre Seigfried, said on one occasion that, although collective security represents a conviction, as far as Canada is concerned to date it has been a conviction de luxe. The principles of collective security have, in times past, been loudly talked about; but, as far as I can find from the records, neither this nor any preceding government has taken a strong stand for collective security when the opportunity presented itself. Today in every critical international situation precious hours of peace have ticked away without the voice of Canada being heard fearlessly throughout the world. What is our record in that respect? I do not think it is one of which we should be proud, in times of peace. AVe did not speak out in behalf of collective security on the question of sanctions during the Abyssinian war. AVe failed to speak out in support of a democratic government in Spain. Then I think the crowning achievement of this policy under which collective security was purely a sentiment de luxe, as I say, occurred just a few days prior to the outbreak of the last war, when Canada proudly recognized the then king of Italy as emperor of Abyssinia. I think that was the climax of a record which we must seek to change.

The records of this house, as I read Hansard of the past, clearly indicate to me that on many occasions when hon. members have sought to develop Canadian opinion or to arouse the Canadian public to a definite and dangerous situation, the Prime Minister (Mr. Mackenzie King) has discouraged debate on external affairs. He has asked hon. members to restrain themselves, and to limit debate.

In my opinion and, I think, in the opinion of a good many members in the house a ventilation of these great and mighty matters would have informed the Canadian people and would have given Canada the ability to speak with a stronger voice. In my opinion, as I read the history of the past, in respect of foreign affairs this government and preceding governments have depended upon time, the follies and foibles of other governments and the shortness of human memories to give the appearance of reality to a policy barren of a single definitive statement in support of collective security, until war was inevitable.

The Budget-Mr. Herridge

Our records show that when the United States and Great Britain were in agreement we were courageous enough to say, "me too." When the United States and Great Britain were in disagreement Canada was mum. My major point in this connection before proceeding to anything further I have to say this afternoon is that, according to the records of the past, Canada has allowed precious moments to pass and to tick away' without raising its voice fearlessly on behalf of collective security. I am appealing this afternoon that that policy be changed.

We are in a splendid position as a nation small in numbers and great in potential wealth. We agree that, so far as our position in the world today is concerned, we are living in one of the vital spots of the world. We are in a splendid position, as a member of the British commonwealth of nations, as a good friend and neighbour of the United States and as a neighbour of the Soviet Union, to interpret the policies of these nations one to the other, and to act as mediator in a world which offers great possibilities for those who have courage to speak. I ask this government at this time to speak up for Canada.

A second world war has been fought and has been won at the cost of terrible sacrifice in life, human suffering, human happiness and treasure. We have affirmed our belief in the charter of the united nations. And it is because of that fact, because of the history and experience of the past, and because of our position that hundreds of thousands of Canadians are expecting some action on the part of this government in support of the principle of collective security', before time ticks away, once again.

I shall go on now to deal briefly with a situation that exists in the world today, because it is of great concern to hundreds of thousands of Canadians, and that is the attitude of the United States to the Soviet Union and to the European problem. We are very much concerned in this question at the present time, because we are supporters of the united nations charter.

I am dealing particularly for a few moments with the American policy with regard to aid to Greece and Turkey, and in that connection I wish to quote brief statements from the state department of the United States government. I have very little time at my disposal. If I had more I could produce plenty of documentary evidence to support my argument. However, at the present time I shall be as brief as possible in the presentation

of the documentary evidence supporting my argument. This is taken from a state department statement with regard to the situation in Greece:

There is no indication that the Soviet Union will change its attitude of hostility toward the present Greek government.

That is the common argument that the state department takes. Here we have the basing of military aid to a nation because it cannot expect the U.S.S.R. to discontinue its verbal hostility to the present Greek government.

And then, passing on, I want to point out briefly to the house what President Truman said in, this connection, and also what the food and agriculture organization of the united nations, which we support, have recommended. President Truman said:

A militant minority, exploiting human want and misery, was able to create political chaos which, until now, has made economic recovery impossible.

And the food and agriculture organization reports:

Not until governmental arrangements can be worked out which have the confidence and support of the great mass of the Greek people can a clear and consistent economic programme be established.

Again President Truman says:

Greece must have assistance if it is to become a self-respecting democracy. The United States must supply that assistance.

And the food and agriculture organization reports:

A proposed united nations advisory mission should replace all other international and foreign economic missions in Greece.

Then again President Truman says:

. . . the united nations and its related organizations are not in a position to extend help of the kind that is required.

And the food and agriculture organization reports:

In addition to the economic and social council itself, a number of united nations agencies might be interested in such a mission, including FAO, the international bank, the monetary fund, the international labour office, united nations educational, scientific and cultural organization, the proposed international trade organization, and other specialized agencies.

Again President Truman says:

Congress should provide authority for assistance to Greece and Turkey in the amount of $400 million for the period ending June 30, 1948.

And the food and agriculture organization reports: [DOT]

Greece will need an initial international loan for 1947-48 of at least $100 million.

The Budget-Mr. Herridge

Again President Truman states:

Congress should authorize the detail of American civilian and military personnel to Greece and Turkey and provide for the instruction and [DOT]training of selected Greek and Turkish personnel.

And the food and agriculture organization reports:

Greece should reduce expenditures for military purposes as rapidly as increasing international confidence and increased reliance on the united nations make possible.

I say in that connection that a foreign office official1 of the British government admitted to a question asked in the house that something under 2,000 officers of the present Greek army previously served in a German security force. I mention that only to indicate the type of government it is proposed to assist at the present time.

The Manchester Guardian, a first-rate Liberal paper in the old country, and one which most Liberals whether they live in England or on the North American continent respect, recently straightforwardly declared that Englishmen should be ashamed of the existence of the present government in Greece, and concluded that Greece should be cleared of British troops in the very near future, because it becomes more and more difficult to justify their presence there. Let us not forget that the present British government inherited a most difficult situation on that score, and that at the present time those troops are being withdrawn.

Then, so far as Turkey is concerned, every informed person knows that Turkey is governed with an iron-fist rule. It is not a democracy. It is a country where liberals are jailed-and when I refer to "liberals" I speak in the broad sense which would apply to some of my hon. friends opposite. They are not allowed to spread their ideals. Trade unionists are suppressed. I am sure that without doubt, hundreds of thousands of Americans and Canadians are shocked by this bolstering up of the Greek government, this suggestion of help for that government on a military basis, and help for Turkey which, to date, denies freedom to her own citizens.

The great majority of Canadian people realize that the Greek people require help, and are in support of financing Greece in order to overcome the conditions existing there at the present time, and to develop self-liquidating projects.

Now, passing on, in an effort to show the situation as it really exists, I should like to point out who are supporting this policy, a policy which was commenced in 1917 and has

been continued by certain people from that date to this. I am going to deal with the record of those who are the most vehement exponents of this policy and also with the record of the opponents of this policy. First of all, I deal with the financial press of the United States. What do the Wall Street papers have to say? Wall Street opinion is well expressed in the Wall street weekly, Barrons, which, commenting on the present policy in the United States, has this to say:

He (President Truman) had to pay lip service to the Roosevelt policies with a few cliches about the united nations. Mr. Truman cannot be thanked too gratefully for his honest and straightforward presentation of reasons for embarking on a course so alien to that of his widely worshipped predecessor.

There is no question about this course being alien to the policies of the late President Roosevelt. Recently the Wall Street Journal had this to say:

Greece and Turkey are only starters, all eastern and central Europe and much of Asia could come within the active scope of such operations.

Even Mr. Bevin, on his return from the conference at Moscow, publicly announced that the press-and by that he meant the capitalist press of the world-did a great deal to hinder the progress of the Moscow negotiations. Leading oil companies of the United States are, without exception, solid in their support of this policy, and included in the list of prominent supporters is the famous Mr. Gerald K. Smith, who is always against constructive progressive action.

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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

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

Mr. KNOWLES:

You mean infamous, not famous.

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IND

Herbert Wilfred Herridge

Independent C.C.F.

Mr. HERRIDGE:

Yes, infamous.

I am not here to defend the Soviet Union. I realize the provocative statements that are made from time to time in that country and that much of their propaganda, so far as Canada and the United States are concerned, appears stupid. I would recommend that they employ good Canadian or United States publicists, because it is obvious that the Russians do not understand the psychology and outlook of the Canadian and the American people. I realize all that. At the same time a great section of the press of this country and particularly in the United States have been most unfair to Russia throughout the years. I have in my hand references and press clippings going back for twenty years, which indicate that these papers on this side have not told the truth but have done everything to create distrust, suspicion and misunderstanding and to disorganize our relationships with Russia,

The Budget[DOT]-Mr. Herridge

Whom do we find among the great exponents of this policy of protecting United States capitalism in Europe? One of the most vehement exponents of this policy, one of the leading exponents continually since 1917, has been the former President Hoover, from whose palsied hands the late President Roosevelt rescued the economy of the United States. Why is that? It is clear to anyone who has read the record and followed the speeches and statements of ex-President Hoover. In 1907, Hoover was a mining engineer employed by British interests in the far east prior to the first world war. He became a successful capitalist in collaboration with large British corporations, and between 1909 and 1910 he floated and had a major interest in eleven Russian oil companies. By 1912 he was associated with the British multimillionaire, Leslie Urquhart. He floated the Russo-Asiatic Corporation, whose shares rose from $16.25 in 1913 to $47.50 in 1914, and in that same year the corporation in which Hoover was the leading shareholder, obtained the following concession from the Czarist regime: 2,500,000 acres of land, including vast timberlands, and waterpower; estimated gold, copper, silver and zinc reserves of 7,262,000 tons; twelve developed mines; two copper smelters; twenty sawmills; 250 miles of railroad; two steamships and twenty-nine barges; blast furnaces, rolling mills, sulphuric acid plants, gold refineries; huge coal reserves. The total value of these properties was estimated at $1,000,000,000. We all know, if we read the records carefully, that, under Hoover as food administrator for the United States in Europe after the last war, food was shipped from this continent and used by Hoover for political purposes. It was given to German commanders and German generals to distribute to populations which had become politically acquiescent. On October 13, 1931,

Hoover, when president of the United States, stated in an interview with the San Francisco News:

To tell the truth, the ambition of my life is to stamp out Soviet Russia.

We place Mr. Hoover's interests and policies beside the statement made by Henry Wallace in New York when he said:

The plan to condemn Russia is really secondary to "that push for oil."

That policy has continued from 1917 down to this day. It is not related to the interests of this country or to those of Europe. It is strictly related to monopoly capitalism, and if these people are allowed to go on unchecked and to defeat the aims and purposes of the united nations the world will be plunged once again into another war.

Now let us see who is opposed to this policy of military aid to Greece and thus opposing the united nations. There are millions of progressive Americans who are opposed to this policy of military aid to Greece, and millions of British people; the cooperative organizations of Great Britain; the trade unions of Great Britain; numerous groups of veterans in the United States; large numbers in western Europe; Turkish Liberals; the federal council of churches of the United States; hundreds of thousands of Canadians; Sir John Boyd Orr, the great British scientist and forward-looking person; Senator Pepper and other senators and congressmen of the United States; the former Mayor LaGuardia, whose recent splendid article, "Don't Finance Foreign Armies," expressed a strong opposition to this policy. In addition to that, we have Henry Wallace, a former vice-president of the United States, in my opinion the most lovable and individual figure in American political life today, that great descendant of a truly great United States family. I had the honour to meet him a few hours before he left for Great Britain by air and to have a conversation with him concerning the present situation. I soon realized why he has inspired multitudes of ordinary people in the United States and Great Britain. There is a warmth and bigness in him that mark him off from all his rivals. I am certain of this, Mr. Speaker, that, should Mr. Henry Wallace decide to come to Canada he can be assured of audiences in the thousands who support his policies.

What is the record of the man? Coming from a good, progressive United States family, a Liberal capitalist, he was editor of Wallace's Farmer, serving the farmers of the middle west. As secretary for agriculture in the United States, Wallace was able promptly to bring order out of the chaos of farm misery. He effected a masterpiece of planning for the common man.

As secretary of commerce, he faced a greater task, giving effect to his belief that the greatest social objective which confronts mankind, is to lift the level of substandard peoples up to ours, as the pathway to peace. As vice-president of the United States he was frequently referred to by the late President Roosevelt as "commonsense Henry". This latest phase in his courageous career is no break with the past. He is continuing his fight for the positive constructive view of society, both at home and1 abroad. We all know he was welcomed in Britain and endorsed by many members of the British House of Commons. We all know of the reception he received in Sweden and France

The Budget-Mr. Herridge

and of the reception he is receiving at the present time throughout the western United States.

X notice that in the Ottawa Journal recently our own Prime Minister made some criticism apparently of Mr. Wallace speaking abroad. In the Ottawa Journal of April 26 the Prime Minister is reported as saying that he thought it is a most astonishing thing for the former vice-president of the United States to go to Britain, and that an unfortunate example had been set. In reply to that, I just wish to point out to our Prime Minister that we are members of the united nations, and the first words of the united nations' charter are: "We, the peoples of the united nations", and so on. It is no longer, "we, the governments of a postwar world". It is no longer, "we, the governments of the united nations", or "we, Mr. Prime Minister King," "we, Mr. Attlee", "we, Mr. Truman", or "we, Mr. Stalin", but "we, the peoples of the united nations". On that basis, Henry Wallace was fully justified in making his great bid against policies that will lead us to war.

All I am asking, Mr. Speaker, is a fair approach to this situation. I cannot do better than quote from a speech made to the Canadian club on June 20, 1945, by Mr. Dana Wilgress, at that time ambassador to the U.S.S.R. I shall quote from a copy of the manuscript he used on that day. Mr. Wilgress speaks with twenty-nine years' experience in private business, as a trade commissioner and as an ambassador to that great country. I shall quote only a sentence or two, because my time is rapidly slipping by. I suggest that hon. members secure a copy of that speech and read it. It is one of the best balanced presentations of the subject I have read to date. Mr. Wilgress had this to say:

It is the duty, therefore, of all British countries to try to understand the Soviet Union and to promote good relations with that country.

In conclusion, he had this to say:

I repeat, it is the duty of each and every Canadian to try and learn as much as possible about the Soviet Union.

I wish I could have dissertated at length on some aspects of this question, but I wish to present my concrete proposals. Now is the time of decision as to whether we are to go forward with new policies based on new ideas, or whether we are to accept the Victorian policy of orthodox ideas and trade as outlined by the hon. member for Stanstead (Mr. Hackett) who preceded me. Now we are to decide as to whether the surpluses of the North American continent are to be invested in assisting other and low-standard nations, or

whether we are to permit ourselves to be driven to economic isolation and to economic nationalism. It is a question, in my opinion, and in the opinion of many Canadians, of trading our way to peace and making preparation for that now, or of economic nationalism leading to war.

I submit the following programme as at least a signpost to peace. I do not underestimate the difficulties, but I think we must have the will and the purpose if we are to overcome the present tendencies in some parts of the world. Canada should take a very strong stand at the united nations on adherence to the principles of collective security. We should desert the policy of collective security de luxe which existed in former days.

In the near future, President Truman will visit Canada. He will be welcomed by all shades of opinion in this dominion, whether we agree with his policies or not, because he is the head of a great country, a great neighbour of ours. I would suggest that it would be a good gesture-and it is surprising what gestures can do at times in an unsatisfactory climate-for this government to send an invitation to Mr. Stalin to visit Canada. I do not know whether he would come or not, but at least it would be a gesture, and would show our friendliness. This government should initiate trade discussions-

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LIB

William Ross Macdonald (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. DEPUTY SPEAKER:

Order. I must inform the hon. member that his time has expired.

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IND

Herbert Wilfred Herridge

Independent C.C.F.

Mr. HERRIDGE:

May I have two or three minutes to finish?

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?

Some hon. MEMBERS:

Go on.

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LIB

William Ross Macdonald (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. DEPUTY SPEAKER:

With the unanimous consent of the house, the hon. member may continue for a few minutes.

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IND

Herbert Wilfred Herridge

Independent C.C.F.

Mr. HERRIDGE:

This government should initiate trade discussions with the U.S.S.R. immediately. Other people are taking an active part in that respect and I think we must.. This government should immediately commence trade discussions with the U.S.S.R. because, if we sell them goods, it will mean jobs. I know it is a complex and complicated situation, but it is essential for us to explore every field in that respect.

This government should undertake the planning and development of the Canadian north to develop friendly relations with the U.S.S.R. The government should also commence a long-term treaty of friendship with that country. I shall not outline a programme such as that, but I do think the programme is an essential if this budget and more par-

The Budget-Mr. Campbell

ticularly future budgets of the house, of the provincial legislatures and of the Canadian people are to be satisfactory in the days to come. The programme which I have enunciated to the house, Mr. Speaker, has the support of hundreds of thousands of people- make no mistake about that-in many walks of life, business, farming and working people. If action is taken along these lines; public and private investment are channelled first into social security measures at home and large-scale development of our natural resources and public services and low interest and long term trading credits abroad are instituted, budgets of this parliament are more likely to be satisfactory in the future.

The point I wish to make before concluding is that in this modern industrial world our surpluses must go first into social security, development of public services at home, and to the lifting of levels of the substandard people abroad. If we are not willing to do that, economic nationalism is inevitable, and, with that, future war. But the achievement of these objectives is not possible as a result of government action alone. In conclusion, I wish to quote from Prime Minister Attlee's speech on the second anniversary of V-E day in London. This is what he said:

We shall never get a lasting peace if it depends only upon agreements between governments. We shall only get it by agreement between peoples and it must not be a passive agreement, but an acute constructive promotion of peace. I want to see a relationship growing up between the peoples of all countries towards the united nations such as we have in our own country between the people and parliament.

I just wish to say this in conclusion: The muffled drums of discontent with present policies at home and abroad are beginning to roll in this country, and I am certain that, if this government does not change direction, those muffled drums will soon be sounding a tattoo, a call to action in support of policies that will change the social and economic climate of our times and lift the hearts of men above the fears and suspicions which envelop U3 today.

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CCF

Alexander Maxwell (Max) Campbell

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

Mr. MAX CAMPBELL (The Battlefords):

The Minister of Finance (Mr. Abbott) brought down his budget on April 29. First of all, I wish to congratulate him on the clear, concise manner in which he presented it and on the large amount of information that it contained. There were some statements in the speech that possibly have not received the consideration that they should have received in the house, and my comments this afternoon are to be along the lines of discussing these particular statements.

The first one is that Canada is enjoying a degree of prosperity never exceeded in living memory. I think we can all agree that we are living in that high degree of prosperity, at least a great many of us; but I am worried as to what the future holds regarding that prosperity, and as I go on I shall explain what I mean. The minister did not tell us directly, but he did tell us in a roundabout way that this prosperity is due to the last war. It was caused by the war; I do not think there is any doubt about that, as I believe the minister will agree. The minister also gave a warning when he said that we cannot afford to be complacent; and later he said at page 2545:

Any such forecast in these uncertain and abnormal times is subject to a wide margin of possible error and to many qualifications. In particular, we must expect that the figure will be less than that I have mentioned-

With that part I am not concerned.

-if a substantial recession should occur in the United States later this year.

There is a warning there that has not been noted to any great extent in the speeches that have been made in the house so far in this debate. If a recession does take place in the United States it will most certainly be reflected in our Canadian economy.

If anything, the minister's speech was too optimistic. He should have put more emphasis on this warning. I picked up the Christian Science Monitor of Thursday, May 15, 1947, and I saw the following:

Nation heading for "bust," former New Deal aides caution '

America's economy is heading towards a "bust" and something should be done about it quickly. That is the conclusion of an eleven-man committee on economic stability, headed by Chester W. Bowles, which made a fifteen thousand word report today, containing a nine-plank emergency programme, to Americans for democratic action. The committee declares that ominous signs of recession are increasing, asserts that never so far in history has the nation staved off an economic recession when conditions have got out of hand, but adds hopefully that the tools are available to prevent a prospective slump.

Then it details a series of drastic measures and so on. Further, it says:

The committee urges President Truman u. name at once a price-adjustment board under "an outstanding business leader" to guide the downward course of prices from their present "fantastically high levels."

It gives a list of the members of the Bowles committee. These men were probably all concerned with the planning of prices during the war. Then it goes on:

The warnings and recommendations from this New Deal voice of the recent past came as stock-market prices were sliding to a new low for

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1947 on Wall street, and as repeated reports from Russia declared the Kremlin was basing its policies on an expected American slump.

Then further on:

Sharp stock-market decline reflects pessimism. Physical volume of retail sales are 8 per cent below a year ago. Large inventories are now "highly vulnerable" to price declines. Plant and equipment expenditures are tapering off-

And so on. Then it goes on:

We must face up frankly to the fact that never before in our history have we succeeded in staving off a break-down in our economy when conditions have got out of hand. Doubts must be dispelled. The government should announce its firm intention to stave off such a recession and to underwrite a high level of prosperity.

A few days ago I picked up another magazine, Collier's, of March 29, 1947, and I found an article headed "Let's Talk Business," by Beardsley Ruml. I quote:

Frankly I see no objection to discussing in public the possibility, even the probability of a falling of business activity and of employment in the coming year. I know that many leaders in business and government are against such talk, that they would like to treat the subject as a skeleton in the closet, with the door shut and locked.

That is exactly the attitude which a great many members here take when those of us in this group discuss these matters.

The conclusion for 1947, therefore, writes itself. The unusual forces that were responsible for the high level of demand and of employment in 1946 have been weakened. No sufficient replacement forces are in sight and consequently we must anticipate a growing recession of business activity.

The United States government have thrown almost all controls out of the window and have left private enterprise to regulate itself. It has no efficient way of doing this; when prices start falling there is no telling where they will stop, and this may result in a panic and possibly develop into a major depression.

Our economy and that of the United States are kept operating by capitalists reinvesting their profits. Just as soon as they stop doing that, the trouble starts. Our whole economy depends on whether profits are held or spent, which seems to me to be a foolish way of conducting our national business. Big business has been putting great pressure on this government to remove controls, and this government has weakly given way, with the result that prices have risen so high for many things that consumers are turning away and leaving them on the shelves.

Investment capital is becoming uneasy. For example, Housing Enterprises Limited have cancelled the 1947 housing programme. They realize that houses being built and sold at

present prices can never be paid for by the ordinary working man. Once prices start to fall, factories and businesses generally are going to cut their staffs, and soon we shall have unemployment, which may affect a large percentage of our population. I am worried about this situation because we are not ready for a recession. No plans whatever have been made to meet one, and I am anxious to see a conference called between the dominion and the provinces so that plans can be prepared to cushion any depression that might come.

We are living in a world which is desperately anxious to have the leaders of the nations find a solution of many perplexing problems which face the world today. People want nothing so much as peace and an opportunity to live quietly by their own firesides, with some hope of security and a chance to live. It is more than two years since the collapse of Germany, and we have not even begun to make any headway toward the solution of the many vexatious world problems.

The Prime Minister (Mr. Mackenzie King) and this government, together with the provincial governments, can, if they only will, give some real leadership in the matter of dominion-provincial relations, and I am sure that is what the public of Canada want. They want unity in a time like this. What will happen to hundreds of thousands of our people if we should go into another recession or depression without having decided who is to be responsible for such important matters as unemployment and other problems?

Surely the political leaders of today can forget their differences and get around the table and discuss and decide upon the allocation of jurisdiction and responsibility for such matters as unemployment, health, national marketing, a labour code, the social security measures that we all want, and a programme of public works to act as a cushion against this depression that might come.

In all sincerity, I would ask the Prime Minister to reconvene the dominion-provincial conference, and with the same sincerity I would also appeal to the provincial premiers. They have a golden opportunity to give leadership here in Canada, not only to Canada but to the world. How can we expect world leaders to work together if our own leaders cannot work together? Bury the hatchet; forget any prejudices you might have, forget past differences and think for once of the people of Canada. Canadians who have the best interests of the country at heart want unity, because in unity there is strength. Canada is today calling on her statesmen for leadership, and will not tolerate for long any

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leader who, for political or any other reasons, refuses to cooperate for the good of the country. The report of the Rowell-Sirois commission on dominion-provincial relations, in its recommendations had this to say at page 275:

While the commission believes that new governmental machinery should be kept at a minimum, it nevertheless considers that special provision should be made to facilitate cooperation between the dominion and the provinces. In an earlier day, when the functions of government were relatively few and administrative organization relatively simple, it may have been possible for dominion and provincial governments to operate largely in watertight compartments. But with the great expansion of governmental functions, and the growing complexity of administration, it is no longer possible to do this without serious loss of efficiency and economy in government. Cooperation between the autonomous governments of the federal system has today become imperative. The commission recommends as the principal means to this end that dominion-provincial conferences, which have hitherto met at infrequent intervals, should now be regularized, and provision made for frequent meetings, say every year. It urges further that the conference should be provided with an adequate and permanent secretariat for the purpose of serving the conference directly and of facilitating cooperation between the dominion and the provinces in general.

I now wish to comment on another part of the finance minister's speech, in which he says, as reported at page 2554 of Hansard:

The exemption levels established last year are high enough to exempt completely from tax more than half the people earning incomes in Canada.

' Again on page 2543, he makes the statement to which I have already referred:

Today we see a Canada enjoying a degree of prosperity never exceeded in living memory.

I think it is a sad commentary on our economic system that in a time of Canada's greatest prosperity more than half of our people earning incomes get less than S750 if single or $1,500 if married; and that 96.4 per cent of our farmers are getting less than $1,500 a year. The question that I should like to ask the house is whether a million or so of the Canadian people must always remain poor, when in a time of such great prosperity they are having as low a standard of living as the minister's speech shows.

Mention has been made of the United States many times and reference has been made to the high standard of living there. It is claimed that the United States has the highest standard of living in the world. I believe that for a great many of the people in the United States that is true. I have another magazine here,

Magazine Digest of May, 1945, and in it there is an article by Senator Claude Pepper, in which he says:

During the past year, at least ten million workers in this country received an average of less than $1,300 a year. This is considerably less than 65 cents an hour straight time on a 40-hour week, 50-weeks-a-year basis. And that figure

ten million workers-doesn't include those in agriculture, the professions, or government or domestic service.

Even with an income of $1,300 a year-and many receive less than that-these families are unable to maintain life on a fair standard, in terms of today's prices. War labour board investigators find that an average family of four people should have a minimum income of $1,454.72 a year. That works out to 73 cents an hour. This is the standard, set for relief workers by WPA in 1935, given in terms of today's costs.

Then he goes on and finishes up by saying:

The much-talked of "workers' prosperity" obviously has not been felt by these ten million workers and their families.

This is in a country which boasts, as I have said, of having the highest standard of living in the world. Surely this article, together with the statement of the Minister of Finance, is a tragic admission of the failure of what we call the capitalistic system or what some people call private enterprise.

Coming back to the statement of the Minister of Finance that Canada is enjoying a degree of prosperity never exceeded in living memory, I said at the beginning of my remarks that we should stop and take a good look at present-day conditions and ask ourselves what we can expect in the future. I do not think anybody will deny that our prosperity-prosperity for fifty per cent of the population-is due to the war and conditions which have arisen out of the war. Billions of dollars were pumped into circulation during the war, and since the war Canada has been lending and giving to Great Britain and other countries close to $2 billion with which to buy the products of farms and factories. No doubt we are experiencing the greatest boom in all our historv. What I want to know is: How long will it last? That is the major problem we in this House of Commons must face. Shall we hold our position? Are we going forward to new levels where all our people have a high standard of living? Or shall we slide back into another depression?

The war has been over for more than two years and we have been in the process of unwinding our war machine and our war economy. I was very much interested in a book I ran across the other day, which was written by Stuart Chase and entitled, "For This We Fought". This is Stuart Chase's latest book and in it he tells the story of the

The Budget-Mr. Campbell

veterans in the United States. I should like to say right here that we in Canada have provided for our veterans possibly better than has the United States, but still we shall probably find that the condition which applies in the United States applies here as far as a great many of our veterans are concerned. Chapter 1 of this book is entitled, "Men in New Suits"; chapter 2, "Service Centre"; chapter 3, "What the Veterans Want"; chapter 4, "What the People Want"; chapter 5, "The Five Year Miracle". In that chapter Stuart Chase tells of the w-onderful production which was achieved in the United States and of the building up of the tremendous army which was built up there. Then he goes on to chapter 6, entitled "Let Down", which I wish to comment on. That tells of the let down of the veteran in the United States. Stuart Chase has this to say at page 57 of the book, "For This We Fought":

To unwind a total war economy is, of course, as much of a planned operation as to wind it up. American planning was good enough to build an army of 160,000 men to 10,000,000, practically overnight, while doubling gross national product. But nobody in power wanted very much to be responsible for unwinding-with the exception perhaps of Mr. Bowles. President Truman had a programme, but he was not expert in pushing it, while congress treated it with disdain. The national association of manufacturers demanded the removal of all price controls.

Pretty much the same story that we have seen here in Canada.

The New York Times led a powerful press campaign to turn the whole economy over to the unfettered forces of free competition.

That was what they did, and now they are paying for it. But here is something I am sure we do not have in Canada:

The Sentinels were organized by business men in Detroit, pledged not only to end all war controls-

And listen to this.

-but to repeal all social legislation since 1933.

I do not need to comment on that.

The mood of Civvy Street was to refuse responsibility for the changes which history had forced upon the country. Let nature take her course, and let us organize to get ours-this seemed to be the general idea. As I write, two million organized workers have been on strike or threatening to strike. Westbrook Pegler can hardly keep up with them. Many angry people would like to make strikes illegal. President Truman's threat to draft workers when they strike against the government has evoked both applause and bitter resentment. Yet millions of fellow citizens cannot be moral delinquents. There must be a human cause for this outbreak of strikes.

Of course there is a cause.

To discern the causes one needs to look coolly at the situation and keep his temper, but that

fMr. Campbell.]

is not easy, especially if one is emotionally involved in the outcome. It is easier to think that some stubborn, greedy and unreasonable persons on the other side are purposely thwarting us. Workers see managers of great corporations, bloated with war profits, standing in the way of their just rights. Managers see "communists" and "foreign agitators" standing in their way. Editors see wicked bureaucrats encouraging wicked labour leaders.

All these pictures are askew. Certainly there are wilful egotists in the labour movement, as elsewhere in the community. There are some pretty mean chaps running corporations here and there. The strike crisis in 1946, however, is the product of the rank and file-far too many of them to be written off as undesirables. Look at the telephone girls, or the locomotive engineers. If they are wicked and greedy, so are we all.

Then he asks this question:

What is troubling the workers? Chiefly fear for their security. They have vivid memories of the depression. "Am I going to lose my job again?" they wonder . . . "If the shutdown comes, can I stay in this town, or must I move again? Where do I find a house if I do move? What is going to happen to the kids?"

I could read the whole book, and I am sure all hon. members would be interested.

I should like to point out that business cycles and price levels in Canada have followed pretty closely those of the United States. In order to give the house an idea of how those cycles have operated in the past, I am going to make use of a chart which is to be found at page 455 of the book, "Economic Behaviour." This chart traces the booms and depressions that have taken place in the United States for the last 150 years, and in order to give hon. members a picture of how these price levels have varied during that time, I have had the chart enlarged. The line running through the middle represents normal prices, and of course the lines above and below represent prices during the booms and depressions. In that period of 150 years there have been thirty-one booms and twenty-six depressions. The first sheet shows the price levels for the years 1790 to 1863. If the minister is interested in this chart I will send it over to him when I have finished with it.

Topic:   THE BUDGET
Subtopic:   DEBATE ON ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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May 20, 1947