February 20, 1950

PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

Would the

Prime Minister permit a question?

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LIB

Louis Stephen St-Laurent (Prime Minister; President of the Privy Council)

Liberal

Mr. St. Laurent:

Certainly.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

Do I understand the Prime Minister to say that that is what I think he called the retracted statement? Is that the corrected version of what was in the press attributed to the Minister of Justice?

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?

Mr. Si. Laureni@

That is the statement

which was given to the press before the wrong version was put in.

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PC

William Earl Rowe

Progressive Conservative

Mr. Rowe:

It is too bad that the press is not fair to you.

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?

Mr. Si. Laureni@

The hon. gentleman is not the only person who we think is sometimes unfair to us. With respect to communist activities, in our understanding measures are other things than mere words, and we think that actions speak louder than words. When action was required, action was taken; and I was obliged to submit to fairly severe criticism from the other side of the house for the action that was taken. I did not regret it then and I do not regret it now. But when action requires to be taken, we think that

The Address-Mr. St. Laurent we shall have the courage, as we had then, to take it and to carry it to its full implementation.

I should like to close by calling attention to an editorial in the Montreal Star, because it is not everybody in Canada who has this gloomy view of what this year 1950 portends because it happens to be a year when the affairs of the country will be under the direction of a Liberal government. The article is entitled, "1950, A Year of Adjustment". This article appeared in the Montreal Star of February 17, and it reads as follows:

The probable pattern of future parliamentary debate can be seen more readily in the pre-session speeches of opposition leaders than in the studiously colorless language of the speech from the throne.

Perhaps it was studiously colorless because we did not think the occasion required any flamboyant language. The article continues:

It can be predicted therefore that the storm of criticism shortly to descend on the government will concentrate on two points-the rise in urban unemployment and the decline in farm prices.

It is important not to add fear to the factors which contribute to any period of adjustment, for fear can induce declines greater than the basic economic situation calls for.

We know from experience that fear added to the motives which induced the pulp and paper companies to reduce their cut of pulp-wood substantially during the last season in spite of the fact that their sales are at higher levels than ever before. The article continues:

A pendulum swing can be created instead of a minor oscillation. For this reason it may be hoped that the public will keep its head when the oratory starts. We have had rising employment and rising farm income every year now since 1939. The Bank of Canada statistics show that we have safely absorbed our'increase in population and that the actual net production of wealth has been steadily going up.

Without minimizing the difficulties that arise from unemployment and lower prices, it is important to remember that things are not going badly with Canada, There is no reason to doubt the fundamentally optimistic statements in the speech from the throne. Judged by any reasonable standard, 1950 should be a pretty good year.

On the other hand, it would be idle to play ostrich and pretend that there are no clouds on the horizon. There are. Canada remains fundamentally a country built upon its export trade. Its farm and industrial capacity both are far greater than any required for domestic needs, and the international trading world is in a sorry state. The first stage of post-war reconstruction has been completed. Production is rising steadily and this means stiffer competition in export markets.

On top of that is the basic difficulty in creating a sound balance of international accounts. The world is being divided into trading blocs, and the Canadian position in it is obviously an uncomfortable one. We buy in one bloc, and we sell in another, and there is no quick solution for this problem. Very slowly certain new trends and patterns of trade are being established but this involves transition, and that kind of change is not easy to effect.

It is, we think, in the light of that basic fact that the government's policy should be judged. We are not likely to see introduced into parliament any fine, hew, permanent cure-all of our difficulties. More likely we will see remedial measures of one kind or another, and these should be judged by special standards. On the one hand, do they help us over an immediate hurdle? On the other, do they tend to create a situation which will make eventual solutions more difficult of attainment? If the answer to the first question is, Yes, and the answer to the second question, No, it would be rash to reject them.

The situation is one that calls for moderation in both policy and the criticism of it. The impatient prince in ancient days who complained to his tutors that they were making him work too hard was told that there was no royal road to knowledge. There is no easy, royal road to a stable and prosperous world either. We must work our way along it, step by step.

I think we shall take the proper steps during this session of parliament.

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CCF

Major James William Coldwell

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

Mr. M. J. Coldwell (Roseiown -Biggar):

May

I, Mr. Speaker, join with the Leader of the Opposition (Mr. Drew) and the Prime Minister (Mr. St. Laurent) in congratulating the mover and the seconder of the address. I think it is always well and acceptable to the house when two young men, recently come into this chamber, are given the honour of making this motion. It is both a privilege and an honour to be selected for this purpose, and I congratulate them.

With most of the criticisms made by the leader of the opposition this afternoon I find myself in agreement. Last session we had before us the matter of the flour-milling report and it was discussed fairly thoroughly. We raised the matter first because we discovered that the report had not been made public. Consequently I agree with the criticism made by the leader of the opposition this afternoon with regard to that episode. The same thing, of course, applies to the rising unemployment, the loss of markets, the lowering of farm prices and so on. Because of the fact that my time is limited by the rules of the house I propose to deal with only two or three matters this evening. Before I do so, however, I want to comment on the omission from the speech from the throne, which we immediately regretted, of any reference to old age pension legislation. It is true that a resolution to set up a committee of both houses of parliament to review old age pension legislation and to consider the means test has been placed on the order paper by the Minister of National Health and Welfare (Mr. Martin). As the Prime Minister has just indicated quite clearly, this matter has been under discussion in this house for a good many years. In fact, largely owing to the efforts of the first leader of the C.C.F. movement, Mr. J. S. Woodsworth, the first old age pension bill was introduced into this chamber

in 1926. We have taken great interest in the matter ever since and have raised it at practically every session of parliament since we have been here. Hence it seems to me that the proposal to set up another committee to consider the matter of old age pension legislation in all its aspects may be criticized in language used by the former prime minister of Canada, Right Hon. W. L. Mackenzie King, when Right Hon. R. B. Bennett set up a committee some years ago to consider the matter of current price spreads, a matter which was fairly well understood across the country. Mr. King said this as reported at page 190 of Hansard, February 2, 1934:

The motion is in large part one of postponing action. What the country is interested in is not so much further inquiry with respect to matters about which nearly everyone knows a great deal, but legislation, if more is required, to meet a situation that is already understood.

That is a very apt quotation and could be applied to the old age pensions legislation and to the proposed resolution of the Minister of National Health and Welfare (Mr. Martin).

I was amazed just now to hear the Prime Minister (Mr. St. Laurent) contradict the statement made by the leader of the opposition (Mr. Drew) and by the hon. member for Winnipeg North Centre (Mr. Knowles) when he questioned the Prime Minister concerning the proposals that were actually made by the federal government in 1945 to the dominion-provincial conference. One of my colleagues went upstairs and got me the green book containing the official proposals of the government of Canada. What did the government say? At page 37, under the heading "Summary of the federal government proposals", the following appears:

The federal*government's proposals are twofold:

(a) National old age pensions at age 70.

As part of the general proposals now put before the conference, it is proposed that the federal government would establish a system of national old age pensions entirely financed and administered by the federal government, and paid at the uniform rate of $30 per month regardless of means to men and women aged 70 and over in all parts of Canada.

Then the proposal went on to say:

The cost of national old age pensions by 1948, for example, is estimated at $200 million. (For details see table I below.) There would be a partial recovery from people over 70 paying income tax.

The other proposal was that the age for old age pension should be reduced to 65 but that from 65 to 69 the pension would be shared fifty-fifty between the provinces and the dominion.

There are the proposals.

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?

Jean-Paul Stephen St-Laurent

Mr. SI. Laurent:

That is not the whole- 55946-5

The Address-Mr. Coldwell

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CCF

Major James William Coldwell

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

Mr. Coldwell:

I know of no other proposals placed before the dominion-provincial conference in August, 1945. I believe these were the last proposals. May I say this? From time to time during election periods advertising has appeared put out by the National Liberal Federation which clearly promised old age pensions without a means test. As a matter of fact I have a copy of one of them.

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LIB

Alcide Côté

Liberal

Mr. Cote (Malapedia-Maiane):

What year?

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CCF

Major James William Coldwell

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

Mr. Coldwell:

The one to which I referred was published in all the metropolitan daily papers of Canada on June 5, 1945. This one says, "Old age pensions, higher pensions, lower age limit, no means test." But the proposals that were placed before the dominion-provincial conference were placed there as I have read them from the official record of the government at the time.

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LIB

Louis Stephen St-Laurent (Prime Minister; President of the Privy Council)

Liberal

Mr. St. Laurent:

If the hon. member is not using the book, would he mind sending it across to me?

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CCF

Major James William Coldwell

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

Mr. Coldwell:

Certainly. This evening I am going to discuss two or three problems which should receive the consideration of the house. I take it that thoughtful Canadians, like thoughtful people everywhere, are worried at the present time about the international situation. Economically, clouds have been gathering on the horizon, but more disturbing still, I think, is the intensification of the so-called cold war and the dangers of it developing into a staggering and devastating conflict, a development which the plain ordinary common people in all places dread and fear.

One phase of the problem of peace is uppermost in many minds, the international control of that mighty power inherent in atomic energy, of atomic bombs and of radioactive material which exists in quantity and indeed in sufficient quantity to wipe out all life over wide regions of this earth. But I doubt whether more than a few people have yet grasped the significance of President Truman's announcement that he had authorized scientists to proceed with the production of the hydrogen bomb. Scientists are endeavouring to tell the world what this really means. Two weeks ago twelve of the leading physicists of the United States issued the warning that the hydrogen bomb is not a weapon of war but an agent of mass destruction. They said this:

The thermo nuclear reaction on which the H-bomb is based is limited in its power only by the amount of hydrogen which can be carried in the bomb. Even if the power were limited to one thousand times that of the present atomic bomb the step from an A to an H-bomb would be as great as that from an ordinary TNT bomb to an atom bomb. New York, or any other of the greatest cities of the world, could be destroyed by a single hydrogen bomb.

66 HOUSE OF

The Address-Mr. Coldwell

Then they went on to say that, in case we believe we can rely on our security because our side is making it first:

It is certain that the Russians will be able to make one too.

They added that it was indeed possible that the Russians were engaged at the present time in making such a bomb. Those of us who have had the privilege in this house of knowing something about atomic energy through visiting Chalk River and sitting on the committee that was set up and, I hope, will be re-established, and who followed the developments and the discussions on atomic energy since the first bomb was dropped on Hiroshima, can be under no illusions as to what or who has blocked an effective international control of atomic weapons until now. Putting it baldly, it has been the insistence of the Soviet union on complete national sovereignty and their refusal to agree on more than limited and therefore ineffective control and inspection by an international body under the United Nations. The new developments make the outlawing of atomic weapons more urgent than ever. But any outlawing of these weapons must be accompanied of course by effective control, effective inspection and control such as will remove any possibility of atomic weapons being made secretly in any country in the world. I say that up to the present time all efforts to achieve this desirable end have failed; but I believe that new attempts should be made to secure an agreement now. I say to the Secretary of State for External Affairs tMr. Pearson) that I believe Canada might take the initiative in this regard. At the same time, if that is done, it should be accompanied by a new crusade for world peace, which I believe can be secured to all mankind only by the abolition of war itself as an instrument of national policy. That was the idea behind the United Nations when it was organized. Now that the Russians at least have the atomic bomb and the monopoly on our side has gone, perhaps there may be greater chances of success in reaching an agreement than there were before; I do not know. But let us hope so. In any event it seems to me we are now faced with two alternatives: One is to despair, to organize our side of the iron curtain and engage in a furious and intolerable armament race; the other is to bend every effort to find an acceptable plan for international control and inspection, and proceed at the same time to remove from the world the age-old causes of war.

In support of the second alternative no less a person than the joint chairman of the United States congressional committee on atomic

energy, Senator McMahon, has made a significant and worth-while proposal. He calculated that at the present time the United States is spending $15 billion a year on armaments and war preparedness. He therefore proposed publicly the other day that the United States might begin by offering the world, through the United Nations, two-thirds of that sum for five years-and on two conditions: the first condition was a general acceptance of a satisfactory program for the effective control of atomic energy and, the second, an agreement by all countries, and enforced by inspection, that two-thirds of their present spending upon armaments would be devoted to constructive ends.

This proposal received amazing support, as I think, from members of all parties in the United States. Even an old and unyielding isolationist like Senator John Bricker of Ohio said this:

If we can get an agreement for air-tight control and true international inspection for $50 billion, I would grab at the chance.

Senator McMahon said that he desired the development of atomic energy everywhere for peace and that he was prepared to give general economic aid and help to all countries which would accept the two conditions he made, and he included Russia. Then he added:

Such a global Marshall plan might combine with the marvellous power of peacetime energy to generate universal material progress and a universal co-operative spirit.

Such a proposal surely is one which, if we have the opportunity, Canada should support, both from the idealistic standpoint and, to place it on a lower level, for selfish reasons. Because of world impoverishment we face a grave crisis both in agriculture and in labour. It is no good saying that we should not fear. If we do not fear we may not find any solution, and indeed we may find ourselves in the position of the ostrich, with our heads buried and not seeing what is threatened around us.

I have said that this is a crisis in both agriculture and labour. But of course, in reality, the welfare of all Canadians is involved, and the problems faced by farmers and industrial workers are a part of a single problem, not two separate problems.

At present we are told, and told authoritatively, that only one-third of the world's two and a quarter billions of people receive sufficient food. The other two-thirds, as they did before the war, live on a marginal level of existence, a state of semi-starvation. We now have, as never before, the possibility of removing from men this age-old struggle against undeserved poverty, misery and want. That is what the right use of this challenging new power offers as the alternative-to what? -to war and mass destruction. Stealing across the world today, feeding on the misery

of the exploited and the distressed masses, is what?-the promise of improved conditions in exchange for those freedoms of thought, speech and worship which we believe to be essential to the good life.

This explains of course what' has happened in China. It may happen elsewhere if the democratic nations fail to take effective steps immediately to feed the hungry, clothe the naked and rescue the exploited. Of course the former policy of giving unconditional aid to corrupt regimes, as in China, has played right into the hands of the communist leaders, and scattered in the Far East seeds of distrust against the west.

I believe we must now try to undo as much of the evil of the immediate and the distant past as we can. I say to the Secretary of State for External Affairs (Mr. Pearson) that I do not think any gain can be had by cutting ourselves completely off from the teeming millions of China and a large part of the Far East. In other words, I think we shall lose, rather than gain, by refusing to recognize that the Chinese have a new, if revolutionary, government. Recognition, as we well know, does not in fact involve the approval of any regime. We have recognized, and properly so, governments of countries whose people assisted in winning the war against the fascist, nazi and Japanese aggressors, as did the Chinese, even when we have disliked or abhorred their political philosophies.

Hence we should make no exception in the case of China. In our opinion the government should grant recognition at an early date. As the Secretary of State for External Affairs is reported to have remarked recently, the centre of world interest is now Asia, and perhaps more explicitly southeast Asia. At the moment Indo-China, Burma, Indonesia and other countries are feeling the impact of a new and threatening conquest. The offensive is largely ideological-in the realm of ideas, which fall on fertile ground because of age-old poverty, suffering and exploitation.

This cannot be met with military might. Soviet communism, fascism, or any other totalitarian threat, cannot be stopped by guns and bombs alone. I am not implying that, with the dangers existing all around us, we should not, until we get proper collective security, take measures to protect ourselves. But surely we should understand by now that communism, like fascism, feeds on poverty, hunger, misery and insecurity. The best and, indeed, the only way eventually to defeat communism or any of these other totalitarian cults is to offer and establish conditions so that people are well fed, healthy, properly clothed and housed and- I add one other-free.

The Address-Mr. Coldwell

So we say we believe that unless economic assistance is forthcoming, perhaps particularly for the people of southeast Asia, and soon, we shall have lost the cold war in that part of the world. That is why I think a new attempt to stop the armament race and the acceptance of proposals to utilize our common resources for human progress should appeal so strongly to all of us, particularly if we can hope to succeed in bringing such an idea to fruition.

I noted that the Secretary of State for External Affairs (Mr. Pearson) was reported to have said that Canada had already overextended herself in giving economic aid. I am glad he shakes his head, although that is what the press report indicated. If that were said, may I say that we and the United States are the only countries with surpluses of food and raw materials so necessary for the winning of the war against poverty. As long as we have farm surpluses, as long as we have unemployment, we have the means, if we will use them, of making a still greater contribution to the winning of the cold war which is, as I have said, made possible by widespread poverty, misery and want. I am not implying, nor have I implied, that we can do this alone, but we should be pressing and urging on every occasion for the acceptance of an international economic plan or plans for meeting the needs of the undeveloped, war-devastated and impoverished countries of the world.

By international planning I do not mean planning primarily for private gain but international planning for the common good. Such planning, democratic and socialist, is as essential to us as it is to other people. The plight of our own primary producers and of nearly

400,000 workers reported a day or two ago to be unemployed underlines the necessity of out taking a vital and direct interest in the making of such a plan. As I have stated several times, we believe that the proper solution of world economic problems is essential to the solution of the dangerous political problems which face the world at the present time. Even without a comprehensive international plan we should devise ways and means of protecting our own people from depressed farm prices and lack of remunerative employment. After all, settlement in the international sphere will, 1 readily admit, take time, but our domestic difficulties are immediate and require immediate and maybe short-term solutions.

I think everyone will admit that our Canadian economy is particularly vulnerable because of the manner in which it has evolved. Until recent years we were in the happy position, as the Prime Minister (Mr. St.

The Address-Mr. Coldu'ell Laurent) indicated in his remarks today, of being able to sell our surplus commodities in one area and buy most of the supplies that we needed in another area. Two world wars have changed this picture. That is the basis of what we are apt to call the' dollar problem. Some people say that henceforth we must sell more in the United States in order to obtain dollars to pay for imports from that country, and we should do this if we can. Unfortunately the main commodities upon which our farmers and certain other primary producers depend are competitive with the same commodities in the United States. The figures the Prime Minister used this afternoon confirm that it is upon agriculture and other primary products that the majority of our ,eople on the land, in rural towns and villages, in the distributing centres, and indeed in the industrial cities, depend. The lack of markets for these commodities will be reflected in general depression and unemployment everywhere in Canada. Already there is genuine alarm at accumulating surpluses due to shrinking markets for primary products, and of course the rising number of unemployed. The two things are related.

What do we suggest should be done to offset the difficulties that are arising? First, of course, steps must be taken by parliament to maintain and increase domestic consumption by planning for full employment and widely distributed purchasing power. Our best market is still our domestic market. At present we are told we have some 375,000 persons unemployed and seeking work. Yet what is the government offering to relieve this situation? An extension of unemployment insurance is the solution mentioned in the speech from the throne. That is a palliative. I agree it is a necessary one under certain circumstances, but surely in this country it is a confession of failure when there is so much to be done. Tonight we learned what has become of the public works shelf of which we heard so much in 1945, and which was recommended in the white paper dealing with post-war employment plans which I believe was placed before the house in that year. If we are to achieve full employment I say first that this country cannot possibly allow primary products to fall drastically in price. Consequently farm purchasing power will require the establishment of adequate floor prices based on parity with the goods farmers must buy. I submit that is of immediate concern not only to the government, but also to this parliament, and this parliament must grapple with it.

I imagine whatever we do now will be in the nature of expedients to meet a threatening crisis. Expedients are what we have usually adopted throughout the years. In the light of

a completely new world situation what we need and must have is a properly planned and comprehensive farm policy for this country, something we have never had. Such a policy should be formulated in conjunction with a national economic plan for the development of all our resources having in view the maintenance of full employment and improved standards of living for Canadians generally. I do not suppose that will be undertaken immediately, since agriculture may be faced with increasing difficulties at once. But at least an outline of a comprehensive plan for agriculture should be formulated. That should be the subject of a conference of representatives of farm organizations, provincial governments and the federal authorities. Therefore we urge that, while taking short-term steps to relieve the situation now, Canada should be formulating a long-term policy for this basic industry. Because the government failed to take effective steps to protect agriculture from the severe dislocation with which it is threatened, or to meet rising unemployment, I had intended to move an amendment in simple terms condemning the government for its failure in these two particulars. The official opposition has moved an amendment; but because some of the phraseology and some of the statements are not altogether acceptable to my colleagues and myself I am going to move an amendment to the amendment, seconded by the hon. member for Vancouver East (Mr. Maclnnis), as follows:

That the amendment be amended by deleting from subparagraph (2) thereof all the words after the word "inaugurate" and substituting instead thereof the words "an over-all social security program Including national health insurance and the removal of the means test from the old age pension"; and also by inserting in subparagraph (4) thereof, immediately after the word "measures," the words "to protect civil liberties and at the same time," and also by inserting, in the same subparagraph, immediately after the word "communists," the words "and fascists."

Standing by itself that is rather incomprehensible, so I shall read the amendment as it will appear if the subamendment is adopted:

We respectfully submit to Your Excellency that Your Excellency's advisers have:

(1) failed to take adequate measures to preserve and expand markets for Canada's surplus products of farm, forest, sea and mine, and to deal with the problems of increasing unemployment and reduced income to Canadian farmers and other producers; and

(2) failed to take steps to inaugurate an over-all social security program including national health insurance and the removal of the means test from the old age pension; and

(3) deliberately violated a law of this parliament by illegally suppressing the report of the commissioner under the Combines Investigation Act on the flour mill industry for ten months, including the period of the recent general election campaign, and denied to parliament information essential to the performance of its duty and the maintenance of responsible government; and

The Address-Mr. Coldwell

(4) failed to take adequate measures to protect civil liberties and at the same time curb espionage and other harmful activities of communists and fascists in Canada.

Through the years our best market for primary products has been the United Kingdom. They still badly need our foods. They can only buy from us if we make that possible by buying from them. As has been said already by the Prime Minister (Mr. St. Laurent), Canada cannot continue to make gifts to Great Britain. One of the barriers against the exchange of goods to which he referred this afternoon has been the Canadian tariff and other prohibitions and quotas. I hope the recent announcement of the removal of some of these quotas and prohibitions will result in an increase in Britain's supply of Canadian dollars, which will enable her to buy more Canadian goods. But we should give attention to the removal or lowering of tariffs against many classes of goods from the United Kingdom and the sterling area, even if this means temporarily discriminating against the same kind of goods coming from the United States.

Under present conditions we cannot expect to sell Britain two dollars' worth or more of goods and take in return only one dollar's worth from the United Kingdom. She cannot find the funds now, as she once did, to balance the account. Nor can we, under similar circumstances, buy two dollars' worth or more of goods from the United States and sell that country only one dollar's worth. Recent announcements from Washington indicate clearly that with the temporary exception of beef, malting barley, seeds and perhaps some fruits, the agricultural products we wish to market are surplus in that country, and there is no outlet for them there.

There is no doubt that many of the goods we import from the United States could be obtained just as well, and perhaps sometimes even better, from the United Kingdom. I do not mean to imply that there can be a complete or absolute balance between our two countries. It is improbable that this could happen. That being the case some other method must be found of meeting the immediate situation, and I want to deal with that point as briefly as I can.

We are suggesting that instead of demanding payment by the sterling area in dollars, it would help bridge the immediate gap if we accepted more goods and then part payment in sterling. This sterling could be used to buy some of the goods we shall need in future from Britain's ever-increasing production; but what is much more feasible and important, it could also be used for Canadian investment in the sterling area. In that way we would not be giving credit to Britain; we

would be establishing an asset somewhere else in the world. The countries of southeast Asia and the underdeveloped areas of Africa, controlled as they are by sterling area countries and particularly by the United Kingdom, are trying to build up and expand their economies. They need machinery of all kinds, and I can see no reason why Canada could not export to Britain foodstuffs and other commodities which we have in surplus supply to feed and house the British workers, who would produce many of the machines needed in the underdeveloped areas. Thus payment to Canada could be made in the form of capital investment in the underdeveloped areas. In this way each country could specialize in the kind of production for which it is best suited, and at the same time help build up the underdeveloped areas of the world.

In this way too we would assist the British people to obtain badly needed food and other supplies and at the same time assure Canadian producers of badly needed markets, at least in the immediate future, for the vast surpluses which otherwise will accumulate and become a burden on our economy. Not only will they be a burden on our economy; inevitably they will lead to drastic curtailment of purchasing power on our farms and unemployment in our cities. A plan of the kind we suggest-and we are suggesting it for the consideration of the government and of this house-would not only be beneficial to the Canadian economy but would secure for us the good will of old and new territories containing millions of potential customers for Canadian commodities.

The proposal we are making does not involve the accumulation of frozen sterling balances which one day Britain or other countries in the sterling area would have to redeem in dollars. If that were so the proposal, as the Prime Minister has said, would be unacceptable to the British. Last fall at the food and agriculture conference their spokesman, Mr. Harold Wilson, stated, according to his official text, that-

-the accumulation of large and growing amounts of inconvertible currency on the assumption that they would one day be made convertiblewas a policy which he could not accept. What we are suggesting is that sterling accepted as part payment for Canadian exports should be used for investment purposes in the sterling area, or in payment of goods to be delivered as production increases in Britain.

The point is often ignored in a discussion of this matter that every responsible economist whose opinions I have been able to read has underlined the importance of the flow of investment funds from North

70 HOUSE OF

The Address-Mr. Coldwell America to the sterling area and the territories controlled by the major sterling countries.

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LIB

Alcide Côté

Liberal

Mr. Cote (Malapedia-Malane):

Would my

hon. friend permit a question?

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CCF

Major James William Coldwell

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

Mr. Coldwell:

I would prefer to continue

for the time being. Last September the Washington conference stressed the need for both public and private investments from the dollar area to the sterling area. Quite recently, at the meeting of the commonwealth foreign ministers in Ceylon, this phase of our commonwealth relationships I understand was again underlined. Indeed, in the very speech to which I have referred, that of Mr. Harold Wilson last September, the importance of international investment by North America, that is by Canada and the United States, was emphasized, in these words:

. . . since it is one of the most hopeful and speediest means of increasing the flow of scarce currencies into the rest of the world.

Hence the suggestion we are making in respect to sterling balances being used for investment purposes is strictly in line with these suggestions. Moreover, early this month a Canadian Press dispatch from London quoted a British treasury official to the effect that Britain would be prepared to extend her purchases in Canada if we could consider accepting sterling in payment.

The development of such arrangements of course would require agreement between us; but we are trying to suggest some basis of discussion to enable us to maintain those external economic relationships upon which I firmly believe the welfare and prosperity of our own country depend.

Let me make this clear. This is not a plea for aid to Britain. That must be an incidental consideration to a Canadian primarily interested in the welfare of his own country. I believe, however, that if a solution along these lines could be worked out it would be a measure which would be helpful to the British people and would assure Canadian primary producers of badly needed markets. One of the points I think I should make is that we are not suggesting that the purchase of United States goods should be denied to Canadians. We suggest nothing of the kind. We do suggest that our balance of payments to the United States is, under present world conditions, a burden which is difficult for Canada to bear.

We suggest, too, that there are some Canadian expenditures for United States products and services which could be curtailed without causing much hardship to the Canadian public. Canada's prosperity in the future, as in the past, depends, in our opinion, upon our ability

to trade as freely as we can with the rest of the world, and particularly with the sterling area including our best customer, the United Kingdom.

In so many respects our economy is competitive with that of the United States. In the same respects, it is complementary to that of the United Kingdom, and indeed of other countries in the sterling area. Apart altogether from sentiment, apart from the desirability of maintaining our commonwealth associations-and that is desirable-our material and economic interests lie in maintaining and expanding our economic relationships with the United Kingdom. To assure the maintenance, and indeed the expansion, of this vital economic relationship must be, I believe, a primary purpose of Canadian public policy.

I have therefore outlined at some length suggestions which we believe to be worthy of consideration and discussion. In conclusion, I should like to say this. Only by examining every possible channel can this country's producers, and the people dependent upon them, be protected from grave hardships, and of course that means practically all our people, because we are all dependent, more or less, on the prosperity of our primary producers.

How simple it would be if nations could exchange goods freely, and settle their balances in a universally accepted currency under an international economic plan. Of course, one realizes that that plan would involve the exchange of goods, which alone make any currency acceptable at any time. How simple it would be if we could pay our debts to the United States in pounds sterling. But since the United States demands dollars, and her own dollars, instead of goods or sterling from Canada, the United Kingdom, and indeed all countries, we must devise other ways and means of maintaining farm prosperity and full employment.

These are two problems that are really one problem and one which, obscured by the war and post-war demands, including Marshall aid, is again casting its shadow across this country from one ocean to the other. So, Mr. Speaker, I hope that during this session we shall give every attention to the wider international matters, both economic and political, that we shall try to solve the problems that face our own farmers and workers in the form of depressed prices and unemployment, and that we shall find policies that will assist this country to go forward, prosperous and free.

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LIB

Alcide Côté

Liberal

Mr. Cote (Malapedia-Maiane):

May I now

ask my question? After listening to my hon. friend, and on the eve of a general election in England, may I ask my hon. friend whether he would be in favour of something he has not mentioned as yet: that is, everything being

The Address-Mr. Low

equal in England and this country, would he suggest that the shares of the Canadian Pacific-

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PC

Julian Harcourt Ferguson

Progressive Conservative

Mr. Ferguson:

How about the crown jewels? They don't need them.

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LIB

Alcide Côté

Liberal

Mr. Cote (Matapedia-Malane):

Just let me finish. Would the hon. member be in favour of repatriating the shares of the Canadian Pacific?

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CCF

Major James William Coldwell

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

Mr. Coldwell:

I think the answer to that question can be found in a speech I made some years ago, and which appears in Hansard. I advocated bringing back all Canadian securities to Canada in payment of loans that were made some years ago. In the interim, however, I believe that many of the Canadian Pacific securities have found their way into the United States, and are not now available to us.

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SC

Solon Earl Low

Social Credit

Mr. Solon E. Low (Peace River):

Mr. Speaker, before entering upon a discussion of His Excellency's speech, there are three pleasant tasks that I should like to perform. I wish first to offer my congratulations to the mover (Mr. Larson) and the seconder (Mr. Dumas) of the address, upon their tempered and very eloquent addresses. Second, it is my desire to congratulate the Prime Minister (Mr. St. Laurent) upon what I thought was a most skilful and creditable job in presiding over the recent dominion-provincial conference, which I had the privilege of attending as an onlooker. In my judgment, the success of that conference was, to a very great measure, due to the way in which the Prime Minister handled the chairmanship, and steered the provincial delegations along their course with finesse and quite obvious sincerity. Let us hope, then, that the work so well begun by that conference can be carried to an early and successful conclusion.

Third, may I tender my congratulations to the hon. member for Grey-Bruce (Mr. Harris) upon his appointment to an important post in the government. Mr. Harris was a popular choice for the new Department of Immigration and Citizenship. If he gets the support that he should get from his cabinet colleagues, I feel quite confident that this long-neglected orphan department will receive the type of leadership it has deserved for many years. Immigration has long been kicked around, and has been left without anything that could remotely resemble a policy. The people of this country from coast to coast are now expecting something different, something in the way of an announcement of a definite design that will make it possible for the officials of that department to know what to

do with the thousands of cases that have had to remain suspended for lack of specific direction from the government.

Now, Mr. Speaker, from a study of His Excellency's speech one receives the impression that the government thinks it has made quite elaborate provision for Canada's security. A close examination of the terms of the speech reveals that considerable emphasis has been placed on our external security, our relationship with the other countries of the world. But there are plain indications of serious neglect of many of those things which do constitute our internal security.

I cannot deal with all of them tonight in the limited time at my disposal, but I do intend to deal with three or four examples of that lack of consideration. In the course of the last session in the fall of 1949, there was such universal recognition of the need for federal aid to education, and indeed such widespread demand for it that the people of Canada felt justified in expecting that something would be done about it this year, that some provision would be made. In my estimation such a thing would be important enough to warrant mention in the speech from the throne. I can, however, find no reference whatever to it there; and I feel let down as I am sure a good many thousands of other Canadians will feel let down because they have found in the speech from the throne no reference to federal aid for education.

Nothing can contribute more to the internal security of our country than a broad understanding on the part of its citizens. If a democracy is to work properly and yield the results which the people want from the management of their affairs, there must be a high general level of educational achievement amongst the people. In a country as large as Canada, with such widely varying resources and productive possibilities, there are bound to be areas of much lower incomes than others. One can find almost every degree of prosperity amongst our provinces and municipalities. As a result, and also because we have got into the habit of raising the bulk of educational costs from taxes on real property, there is a wide divergence of educational opportunity for Canadian girls and boys. Enough facts and figures were put on Hansard in the 1949 fall session to convince anybody that this is so. For that reason I do not require at this time to repeat what was impressed upon us in that respect during the last session. As Canadians our aim should be equality of educational opportunities for all our people. Boys and girls who live in rural areas should not have less opportunity to develop, grow and mature than have their fellows in the cities and towns. The residents

The Address-Mr. Low of those districts where production is usually low and incomes therefore small should not have lesser opportunities to become good and useful citizens because of lack of education and training. We must realize the need for some equalization of opportunities. We must also recognize the danger of continuing to take seventy per cent or more of the cost of education out of taxes imposed upon the farms and homes of the people.

We cannot possibly achieve equality of educational opportunity across Canada without definite and substantial federal aid. I could talk for some time about the teacher situation and the need for higher salaries to attract and hold the best teaching material. I could talk at length about the need for higher qualifications on the part of teachers and for better equipment in the schools; but of course the government would probably accuse me of advocating the spending of moneys from the federal treasury while at the same time seeking tax reductions. With the high cost of defence during these uncertain and fearful times, with fixed government costs running at the highest level in our whole history, I know that the government is going to find it exceedingly difficult to balance its budget. But I charge that the government has failed to do anything like what it is perfectly possible to do, or to use its imagination. Otherwise it would easily have seen that aids to education could have been provided this year without in any way impairing the financial or economic soundness of our country.

One of the most pressing educational needs of this day is for proper school plants and capital equipment. There are, unfortunately, still many hundreds of school districts and divisions in Canada that are forced to carry on with obsolete and rundown buildings and equipment utterly unfit to be used for the purpose of education. There was a time when school district debentures were considered to be a good investment and they were rated amongst trustee securities, but in a great many areas in Canada they are no longer considered to be trustee securities. Most of the school districts therefore must finance building and capital equipment out of current revenue. This situation puts a severe strain on the taxpayers as well as a short limit on the salaries that can be paid and the educational services that can be given. As a result, education languishes in many parts of our country. The sad part of it is that it does not need to languish. We have in Canada plenty of building materials and a sufficient amount of labour to do the building. If the federal government would give some help to

fMr. Low.]

the provinces to meet the terrific need for new buildings they would be rendering a real service to general education in this country.

I suggest there are several practical ways by which this aid can be advanced without having to dip into the treasury. The first one is this. In the late thirties an act called the Municipal Improvements Assistance Act was passed through this house. It provided for loans to municipalities and school divisions for self-liquidating projects, at a low rate of interest, namely two per cent, and covering up to twenty years in time. The loans were guaranteed successively by the municipalities, the provincial authorities and the federal government. To my knowledge and in my experience this act worked well until loans under it were suspended as the war situation became more intense. I suggest that the act be taken out of the mothballs, and that the federal government make some contribution to the welfare of education in the provinces by resuming the loans for self-liquidating projects under that act. Certainly school plants and improvements could be classed as self-liquidating projects to qualify for such loans.

Another way by which aid could be advanced is this. In certain provinces, notably Saskatchewan and Alberta, it would be possible for the federal government to give substantial aid to the cause of education by agreeing to release all or substantial portions of the school lands trust moneys for the purpose of setting up a capital loan fund from which school districts could borrow at low rates of interest in order to provide new school accommodations that are so urgently needed in those two provinces. The Alberta fund, which is administered under this government, now amounts to more than $12 million. It is invested in dominion securities, the income from which is supposed to be paid over to the province for educational purposes. Since the cost of education has grown to such large proportions, I can see no logical reason why the provinces and the dominion should not revise the school lands trust fund agreements so as to make available the substantial moneys as a revolving loan fund for capital purposes in the field of education. I urge the federal government to give sympathetic consideration to this proposal and even to go so far as to find out if the provincial governments that are concerned, notably Saskatchewan and Alberta, would be ready to revise those agreements.

There is a third way by which federal aid could be extended to education. Many school divisional and district boards, especially in rural areas, are making commendable efforts

to provide better educational facilities through setting up centralized schools. It becomes necessary for them to buy vans and school busses to convey the pupils to those .centralized schools. Such purchases are increasing in number year by year, but the federal government continues to impose sales and excise taxes on these vehicles; this action puts a heavy penalty on the educational facilities that are to be provided. Here then, I say, is a place where the government can do something for education; and I urge that at this session there be brought in an amendment to the various excise and taxation acts providing that the purchase of busses and vans by school boards be made tax free. Surely, Mr. Speaker, if we are not prepared to make grants in aid for education, we can at least get off the backs of the school districts; and here is a good chance to do it.

There is a fourth way of course. This one would involve some moneys out of the treasury. The best way to help the provinces to carry their educational burdens would be by grants-in-aid on a weighted basis to favour the poorer localities. Surely, a country as wealthy as ours should not find it too difficult to provide some money for this purpose. No argument to the contrary can possibly be valid as long as Canadians spend hundreds of millions of dollars on intoxicating liquors and other things with which we are trying to destroy ourselves.

The Social Credit Association of Canada declares that no financial consideration should be allowed to stand between any worthy Canadian boy or girl and the utmost in educational attainment he wants and is prepared to achieve and is capable of achieving.

Closely related to this whole business of federal aid to education is the problem of public relations. During the past two years this government has made a wretched failure of its part in the democratic process. I agree with what the leader of the opposition (Mr. Drew) said this afternoon in this respect. The government has failed to keep the electors informed about the facts of the situations that have developed. Somehow or other the ministers of the crown have come to feel that there is no obligation on their part to keep the electors informed about the real facts of trade, agriculture, unemployment, and the many other things that do develop from time to time. These things affect the lives of the people most materially. A good many people now feel that the government has not only failed to keep them informed about things they are entitled to know but that various ministers at various times have actually misled them and tried to lull them into a sense of false security.

The 'Address-Mr. Low

All during the general election of last June and during the fall session of 1949 government spokesmen contended that all was well with Canadian trade and agriculture. The fact is that we faced at these very times a serious trade crisis which kicked back on our farmers as well as on some of our manufacturing industries, so that they too now face a serious crisis. We only have to recall the press reports for the months of December and January last to know how Canadian farmers feel. In many of their forums and conventions they were actually advocating production strikes in protest against conditions imposed upon them as a result of this government's bungling and vacillating policies. Thousands of farmers feel that the government is now trying to crawl out from under their responsibilities. During the period from 1942 to 1948 the Liberal government imposed certain policies upon our farmers under which the latter had to accept much less for their products than they would have received if those policies had not been imposed upon them. The Minister of Agriculture (Mr. Gardiner) has said so himself. The farmers did not complain because they were given to understand that these policies were part of a long-range stabilization program. Now the farmers are beginning to realize that Liberal talk and promise were unadulterated anaesthesia. There is general restlessness amongst them because they cannot now see any possibility of realizing the stabilized prices the government promised them. It will certainly be a serious breach of faith if this government of Canada does not keep its promise to provide stabilization for agriculture.

I wish to repeat, there is restlessness amongst Canadian farmers and many of our smaller manufacturers. Why is it?

This government has complicated and further confused Canada's already serious trade and agricultural problems, and has put us in that position where the possibility of depression stares us in the face, by refusing to face up to realities and to take independent action based upon the facts of the situation. Let me repeat that-by their refusal to take independent action based upon the realities of the situation. How can this fail to affect our security? As an example, the government has steadfastly refused to accept non-convertible sterling in payment for those foods and other things which Britain did not have the dollars to buy. I quite agree with the hon. member for Rosetown-Biggar (Mr. Coldwell) that right from the beginning we should have attempted to preserve our traditional markets in Britain and in Europe by accepting sterling for these balances for which the British and other markets in Europe could not find dollars.

The Address-Mr.'Low

Canada could have used blocked sterling to shop around the sterling area for goods we need and can use. This is not to say that we should neglect the full development of the United States market or, for that matter, any other possible market for Canadian goods. But the fact remains that we have lost a substantial part of our traditional British and European markets which we could very well have kept, and it is going to be most difficult to get it back.

Some critics of this proposal say that Britain is not willing to buy Canadian goods with non-convertible sterling. Recently food minister Strachey made it quite clear that he was ready to buy more Canadian and United States produce if we would buy more from the sterling area. In his recent interview with Reynolds News Mr. Strachey's statements indicate quite clearly that Britain would be glad to buy more Canadian foods and other things if we would accept the only :orm of currency they have got, namely, nonconvertible sterling, which could be exchanged for goods at any time in the future.

The Minister of Agriculture and his colleagues have not given support to the proposal for an international commodity clearing house for disposing of surpluses which could not be sold for convertible currency in world markets. As a matter of fact the minister has discouraged it. Here is one international organization which really offers some good and effective results. But whereas, since the war ended, the Canadian government has blindly plunged into all other proposed international organizations, some of which have proved to be merely interesting pastimes, they now say through some of their ministers, notably the Minister of Agriculture, "This problem of marketing surpluses is one which can be best taken care of by each country by itself." If that is the case why have not they been doing it? The international federation of agricultural producers' committee, which met last autumn to consider the international commodity clearing house proposals, reported in October in these words:

The problem of surpluses can be tackled by operations that bring together marginal supplies and marginal needs, and normal trade can continue unimpeded and even strengthened by such operations.

The committee then proposed the international commodity clearing house which provides a world pool of surpluses from which the countries of the world can make purchases using their own currencies. This is along the line of the international pool of such surpluses that we Social Crediters have been advocating for several years.

It is true that the food and agriculture organization committee, at its meeting held in Washington in November and December

last, temporarily turned down the international commodity clearing house proposal. But it is noteworthy that the conference was guided to its decision by the financial advisers of the international monetary fund and the international bank for reconstruction who were present. These world financial organizations thus indicated their determination to prevent the distribution of commodity surpluses on a mutually satisfactory basis of exchange of goods for goods, or of goods for non-convertible currency, which amounts to the same thing. Evidently they insist on forcing all exchanges of goods to continue on a basis of convertible currency through financial channels which they themselves control. Everybody knows that the Bretton Woods proposal for a convertible currency pool of the world is a fool's dream of paradise under present circumstances, and will continue to be until such time as the great creditor nations like the United States and Canada are prepared to buy, in the markets of the world, goods in dollar volume equal to the goods they sell to the world. Of course Canada has become a comfort to their plans, the plans of these internationalists to control the exchanges of the world, by her failure to give support to the international commodity clearing house proposal.

I will say this, that until such time as some such idea as the ICCH-the international commodity clearing house-is adopted, Canada will find plenty of difficulty in disposing of unsalable surplus foods and other things which are now beginning to appear. It will be a sad reflection upon the intelligence of responsible officials of government if we ever begin the wholesale destruction of food products, or the restriction of their production, so long as there are on the earth people who need those things to keep them living in a state of health and happiness.

Dr. Kenneth Galbraith, professor of economics at Harvard university, and guest speaker at a recent conference of the Canadian Federation of Agriculture at Niagara Falls, stated he doubted if Canada and the United States will be able to expand, to any great degree, the flow of agricultural products abroad, because most European nations are striving hard toward self-sufficiency. Already they have made great strides in that direction.

Professor Galbraith declared that Canada and the United States must take a large share of the blame for that situation, and for two reasons: First, we priced ourselves out of the European market, and, secondly, we failed to provide the machinery by which Europe might be able to buy our products. Professor Galbraith further stated at Niagara Falls that, before we are justified in asking

Europe to put an end to their policy of selfsufficiency, Canada and the United States must do a number of things among which are these. First, we must assure Europe of the means by which she will be able to buy our goods after Marshall aid ends in 1952. If convertible sterling is not available, then we will have to accept non-convertible sterling.

Then, secondly, we must remove and reduce certain tariff barriers. At the present time agriculture in Canada is taking the rap for what the secondary industries have done. Secondary industries have maintained excessively high prices which, in turn, increased farm costs. Our government must share the blame for the fact that these barriers have been allowed to exist and To continue. The government must know that the inevitable consequence _would be that we would price our farm products completely out of the European markets.

The third point made by Professor Galbraith is that some program to expand the internal consumption of farm products must be adopted both here and in the United States. We contend-and I am speaking of the Social Credit Association of Canada- that the best program for bringing about this expansion would be one based upon the social credit compensated price-discount mechanism. This would be especially valuable and effective when applied to those surplus products where just a slight increase in per capita consumption would cause the surplus to disappear entirely. Let me give an example: If each Canadian were to consume

just one more egg per week than he or she is now consuming, they would use up an additional 60 million dozen eggs this year, and the poultry producers would not have to worry about surplus eggs. But the Canadian people have to be able to buy those additional eggs if such a happy condition is to be made possible. Our proposal assures them the purchasing power.

The social credit compensated price-discount mechanism will do more to extend the internal consumption of farm products than any other mechanism now known, and it is worthy, I suggest, of the closest study in connection with the problem posed by Professor Galbraith.

The fourth suggestion made by Professor Galbraith, along with the three I have already mentioned, is this one, that for the present at least some form of two-price system will have to be adopted by which Europe can be allowed to buy our goods at a lower price than the existing internal price level, and this notwithstanding Geneva.

The Address-Mr. Low

The implications are clear. We will have to adopt some system of seeing to it that our farmers have an internal price based upon parity with the cost of goods they have to buy; and secondly, we will have to see .to it that exporters are compensated for any loss they may take by selling their goods or farm products, particularly in European markets, at a lower price than they can be sold internally.

I wonder if this government has independence and imagination enough to take the action required to meet the situation? The speech from the throne does say that the Agricultural Prices Support Act will be brought before the House of Commons for amendment, so that it' can be continued. There is no indication, however, whether it is the intention of the government to make the act' permanent; nor can we take much comfort from the declaration in His Excellency's address until we see what kind of bill it is going to be.

We fervently hope it will not be a mutilated shadow of a thing, another attempt' at window-dressing. Canadian agriculture must be kept prosperous. If that is assured, then all other elements of Canadian life can be kept prosperous.

For a moment I should like to turn to the consideration of a fourth matter of great importance to Canada's future internal security. I have in mind the prospects for continuing high employment and prosperity. The speech from the throne says this:

* Employment and prosperity remain at a high level in Canada. The prospects are good for continued private investment in construction and capital development throughout the present year.

Then follow some statement's about unemployment and unemployment insurance which not only cast some doubt on the optimism expressed in the part I quoted, but also serve to mislead the people. Actually, and just to review what has already been said for the purpose of what I wish to say in this connection, as of February 2 it is indicated that ten and four-tenths per cent of the total number of Canadian wage earners were out of work. The consequent strain upon the unemployment insurance fund is very heavy. I wish to emphasize however that the more serious aspect' of the situation is the feeling of restlessness spreading among the people who cannot help remembering the sequence of events which led up to the hungry thirties.

They see in the present combined situation too close a parallel to feel anything but grave concern about the future. I remember well that in 1929 very optimistic declarations were being made about the future, exactly as they were made today by the Prime Minister (Mr. 55946-6;

The Address-Mr. Low St. Laurent). Let me say here a word about the Prime Minister's speech delivered this afternoon. First let me compliment him, especially upon that part of his speech in which he dealt with the state of the nation. I compliment him particularly for demonstrating that he can face facts-for he was doing it pretty well this afternoon. I think his forecast for 1950 was most reassuring, especially when he mentioned, as I believe he did, that the anticipated investment in new developments for 1950 was estimated at 22 per cent of the gross national production-a figure which is much higher than that of last year.

This is remarkable, and we fervently hope that it comes to pass exactly as anticipated. But let me point out that the investments he mentioned will be made only if there is confidence that the production resulting from them can be sold. I would point out to the Prime Minister that a very large part of the $16 billion of gross production is still financed through production loans obtained from the chartered banks by acceptable borrowers. Moreover, the proceeds of these loans filter through long chains of transactions, to become the purchasing power with which consumers must buy the food, clothing and shelter they require. If anything should interfere with this flow of consumer purchasing power as, for example, curtailment of production loans by the chartered banks, and perhaps calling in old demand loans for repayment, then very quickly the whole outlook as presented to us this afternoon by the Prime Minister (Mr. St. Laurent) could be changed. Such a thir^g could happen again as happened in the years 1930 to 1933. During that period the chartered banks withdrew and cancelled out of existence $932 million of purchasing power in the manner I have indicated. We all know of the disastrous results in those years and the years following. That power still rests with the chartered banks, and I see nothing to prevent the shrinkage of substantial portions of consumer purchasing power if the banks should again begin to feel that their usual customer borrowers could not repay their loans within the usual short-loan term. Thousands more people now know that fact than ever did before. Therefore, as markets abroad are lost, as primary production prices begin to skid, and as even as little as 10-4 per cent of Canada's labour force begins to find itself unemployed, it is only natural that considerable restlessness would be evident amongst people who have experienced a few of the difficult periods of the past.

There is a way by which the government can reassure the people and thus keep up the confidence on which the prosperity of the future must be based. It will not help to tell

the people of Canada that we will continue sending more goods abroad than we bring back in trade. The use of a foreign investment program to balance trade is no longterm solution. I disagree strongly with my hon. friend from Rosetown-Biggar (Mr. Coldwell) when he advocates that such a course be taken. It is a palliative for the immediate years ahead. It may be used successfully for a short time in an effort to give help to certain countries of Europe and southeastern Asia that require our help, but it is no long-term solution. We would be opposed to its introduction as a long-term solution. All we have to do is to look at the situation in the United States today to be frightened away from it. That is what the United States of America has been doing for a good many years, and that is why they find it impossible today, because of the flow of interest from these investments, to buy as much from the other countries of the world-and therefore balance their payments with the rest of the world-as they export in goods and services to them.

The use of a foreign investment program therefore does not offer any long-term solution, but what would be really effective would be a positive declaration by the government that they will revise the laws and practices governing financial policy so as to definitely assure the people that never again will they allow wanted goods and services to be destroyed or remain unproduced or unsold from lack of effective purchasing power in the hands of Canadian consumers. When that positive kind of assurance is given to the Canadian people, there will inspire them a confidence in the future that will make Canada the greatest and happiest country in the world.

I read with some interest just the other day an editorial on the front page of the Financial Post for February 18 under the caption, "Let's not be panicked by the gloomsters." I presume that was what the leader of the opposition (Mr. Drew) was referring to this afternoon, and I commend him for the strong terms that he used. I will use some a little stronger. There was some pretty good sense in the editorial, but there was also some stupid nonsense such as this sentence, for example:

The socialists and the little clutch of Social Crediters are, of course, intent upon destroying the economic system.

I cannot speak for the socialists-they will speak for themselves-but I can for the little clutch of Social Crediters, as these apologists and pundits of high finance call us. There is an old trick which the guilty have used since time began. When their nefarious practices

are about to be exposed they resort to accusations against others to try to divert attention from themselves. I wonder who it is who is intent upon destroying the economic system? Who is it that has caused society to suffer through twenty-three depressions in the past 100 years?

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February 20, 1950