March 11, 1952

L L

William Moore Benidickson (Parliamentary Assistant to the Minister of Transport)

Liberal Labour

Mr. Benidickson:

Would the hon. member define dumping for us?

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PC

George Harris Hees

Progressive Conservative

Mr. Hees:

I have just defined it. If the government will stop this legalized dumping of United States textiles it will go a long way toward restoring the textile industry, and employment in that industry, to a normal level. If it refuses to take that step; it must take the full responsibility for keeping an increasing number of textile workers out of work. I sincerely hope the government will take that step without delay.

The fact that legalized dumping exists is recognized by the departmental officials responsible for the actual administration of our existing anti-dumping regulations. As evidence, I submit the reports which were carried in the press on January 23 following a meeting between representatives of a joint labour-management committee of the textile and needle trades, and government officials, headed by the Minister of Labour (Mr. Gregg), and including officials from the Department of National Revenue and Department of Defence Production.

Following the meeting held in Ottawa on January 22 it was reported in the press of January 23 that government officials had worked out a course of action to meet this dumping. This plan was submitted to the Minister of National Revenue. So that there may be no doubt about the matter, I should like to quote one short paragraph from a Canadian Press report appearing in the Ottawa Citizen of January 23.

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LIB

Louis-René Beaudoin (Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Beaudoin):

Order. I am sorry to interrupt the hon. member but it has just been brought to my attention that he has already spoken to the amendment to the amendment.

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An hon. Member:

We were thinking that.

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PC

George Harris Hees

Progressive Conservative

Mr. Hees:

No, Mr. Speaker, I spoke to the main motion. The first amendment to the amendment and the first amendment were voted on, and then I spoke.

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LIB

Louis-René Beaudoin (Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Beaudoin):

The

Hansard I hold in my hand indicates that after the hon. member for Selkirk (Mr. Bryce) moved his amendment to the amendment- and that appears at page 219 of Hansard- the following speakers took part in the debate: Mr. Catherwood, Mr. Gillis, Mr. Hees. The speech of the hon. member for Broadview is recorded at pages 229 and 230 of Hajisard of March 7. Therefore the hon. member will understand that he will have to wait until this amendment to the amendment is disposed of before he can make another speech.

[Mr. Hees.)

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PC

George Harris Hees

Progressive Conservative

Mr. Hees:

It seems that it was my error. I am practically through and if I might finish-

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Some hon. Members:

No.

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LIB

Louis-René Beaudoin (Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Beaudoin):

I know the hon. member did not do this intentionally. If it had been brought to my attention earlier I would have immediately told him he was not in order in making a speech at this time. However, the way the rules are construed no member can speak twice on the same amendment, and I will have to ask the hon. member to resume his seat at this time.

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SC

John Horne Blackmore

Social Credit

Mr. J. H. Blackmore (Lethbridge):

Mr. Speaker, I am really sorry that the hon. member was not able to finish his speech because he was doing an excellent job of showing the house and the country one of the confounding perplexities that face men in our generation, that a great neighbour nation with 150 million people and the ability to produce almost every kind of commodity it needs, with no real need under the sun to export goods, should deliberately dump its goods into the economy of a friendly nation like Canada with only 14 million people, thus threatening to destroy its economy; and should look upon that as being commendable behaviour in the international field.

At the present time that same nation is perambulating all over the world trying to tell the people of the world how to conduct their affairs in a more becoming manner so they will be able to live, and yet it is doing this outrageous thing right next door and we do not know what to do to stop it. Not only that, we have Japan penetrating our market with textiles. We have Germany ready to do so and other nations wanting to do so. All we need to do is to open the floodgates a little bit and we shall have competition with respect to pretty nearly every commodity we produce, competition so strong and effective that our own producers will be utterly unable to survive.

That poses a problem that has got to be answered by the people of this generation or they face disaster. There is no question about that. I submit that there is not a member on the Liberal side of the house, and as far as I know not a member of the Conservative party, who can give even a hint of a way around that difficulty. Yet they strut around, throw out their chests and think they are able to do a good job of governing the country in these times which are perhaps the most dangerous in the world's history. I am sorry that the hon. member did not have the opportunity to finish his excellent speech.

The subject to which I wish to address my attention for the few minutes available to

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IX. 1952


me tonight is a question which is in the mind of practically everybody in America and I suppose pretty well all over the so-called free world. I wish to say something about Canada and the struggle against communism. We Canadians and the other peoples of the nations who are pleased to call themselves free nations of the world are committing two appallingly dangerous blunders. We are basing our economics upon two major fallacies. The first is the false assumption that supply creates its own demand, in other words, the utterly erroneous notion that whenever goods like potatoes, shoes or lumber are produced, there somewhere automatically comes into consumers' hands money or effective demand sufficient to buy and consume those goods. Second, there is the equally false and perhaps even more dangerous assumption that competitive international trading, no matter how free or non-discriminatory it may be, can satisfactorily distribute among the peoples the goods and services mankind is now able and willing to produce. These two fatal fallacies have in our own generation plunged us into two calamitous world wars and dragged us through a disastrous depression. These two iniquitous doctrines have, in eight short years after world war II, driven us to the very verge of either a third world war, ghastly beyond imagination's power to envision, or a second great depression too revolting to contemplate, or both the war and the depression, only to be followed, if not accompanied by, a world wide all-engulfing dictatorship of communism, a communist dictatorship, if not in name, at least in substance. I do not know how a more disturbing picture could be drawn. Yet this is exactly what we have to look at this present moment of time in the year of our Lord, 1952. They are two utterly fallacious principles. I would like to know, if there is any way of finding out, just how many members of this house would agree with me in calling these principles fallacious, how many times they have to see these principles fail before they are convinced that there is something wrong with those principles. Now may we take a look at some of the signs around us of conditions now prevalent among men, constituting highly suitable ground for communist seed. In the first place there is scarcity in whole areas of the world, scarcity so dangerous that we almost hold our breath lest the people involved shall go behind the iron curtain of their own free will and choice. While the figures I am going to give do not exactly indicate the scarcity presently existing, they certainly do indicate scarcity in the offing unless something substantial is done. The Address-Mr. Blackmore According to the figures I have there are 2,400 million people in the world today, and they tell us only about one billion of those are able to get anything like what they need to live on. According to the figures I have from the FAO 75,000 people are born every day; that is the margin over deaths. This means the world's population is increasing at the rate of 27 million a year. Yet here we are not only failing to adequately stimulate our production; we are allowing practices to continue which are threatening to destroy that production. For example, the export of textiles from the United States to Canada is threatening the destruction of the productive capacity of Canada in respect of textiles. Those textiles should be going to Java or Malaya, or some other country where they do not have textiles. The question is how we are to get them there; and if we cannot get them there, are we going to allow these United States people to destroy part of the productive capacity of Canada and indeed part of the actual production which is now going on in the world? Surely all that is necessary is to state that tragic absurdity to impress it upon the mind of any thinking person. Something is radically wrong with the way we are managing trade in the world. At the same time we have this rapidly growing population, here is a picture of what is already actually taking place today in certain parts of the world. Paul Wiley Gordon, assistant executive director of CARE, speaking before a banquet of the 43rd annual congress of the Co-operative Union of Canada in Ottawa, is reported in the Ottawa Journal of March 6, 1952, as using these words: Saying that the past decade had brought the "awful cycle of arms to armistice to arms again," the speaker declared that a direct fight against the causes of war to be waged on "a personal level" was needed, and that the peoples of countries with an abundance of goods must share that abundance with countries not so fortunate. Further on he is reported as saying: Warning that the world food picture was still poor, he outlined conditions in many parts of the world. India, in 1952, is threatened again with famine that will be even worse than last year, when thousands were reduced to eating leaves and grass. England, rationed to meagre austerity levels for more than a decade, still has no prospect in sight of being able to eat better. More than half the human race goes to bed hungry every night. Hunger is the fundamental fact that colours their thinking and rules their lives every day they exist. May I add something I know does not need to be said, that hunger is the richest seed bed for communism. Every day we permit hunger to exist in the world when we have potential abundance we are deliberately contributing to the spread of communism, while we are supposed to be fighting it.



The Address-Mr. Blackmore Now let us get some idea as to how abundant the possibilities of production really are. In 1942 at Great Falls, Montana, if I remember correctly, there was in convention a chemical organization that spreads right across the United States. That convention was addressed by Dr. Charles M. A. Stine, vicepresident of the E. I. du Pont Nemours Company, who used these words among others: Under pressure' of the necessities of war, the inconceivables of only two years ago are today s realities. American chemists are discovering new continents of matter, and the world of 1940 has already become an antiquity. When the war is won we shall have at our command ten to one hundred times what we had before in raw materials. New and more versatile plastics ... high pressure syntheses of ammonia . . . fertilizer of such capacity that the trends of agriculture may be changed . . . glass that is unbreakable and will float . . . wood that won't burn . . . hosiery from air . . . window screens without wire . . . the war is compressing development. It would be most impressive if we could have Dr. Stine bring us up to date since 1942. All of which goes to show that the capacity of the world, with the resources available to the world and the chemical skills which have been developed in the world, are such as to justify us in believing that more goods can be produced than all the people in the world could begin to consume; and that with the rapid development of scientific progress, together with our knowledge gained from the atomic bomb, we shall be able to produce rapidly enough to keep abreast of any increase in population which may occur throughout the world. For us to contemplate limiting production as we are scandalously doing in Canada is for us to commit crimes of the very first magnitude against our generation and those to come. I have here a statement which I believe rather points up what I have just been saying. It pertains to the sugar industry. I am taking it from "Sugar Facts" of March 3, 1952. It is entitled "World sugar pact is under discussion at London, England. Canada is observer at international meetings." Representatives of governments in the sugar industry from all over the world are attending a meeting of the international sugar council in London this week. They will discuss creation of a new world convenant to avoid a world sugar surplus, similar to that which prompted the first and only previous international sugar agreement in 1937. Canadian representatives are only observers at meetings of international sugar council. At several conferences held since world war II Canada has refrained from taking a stand pro or con proposals of large exporting countries. Estimated world sugar production this year will be 41,300,000 short tons, compared with 34,516,000 in the crop years 1936-37, when the first treaty was born. Sixteen years ago Java was one of the world's greatest sugar producers, but today it is of no account. Expansion elsewhere in the same period has more than offset Java's decline. Cuba has come up from a yearly output of 3,379,000 tons to



7,000,000; Puerto Rico is now a world exporter; Mexico formerly produced only her own needs but now exports. "So far, increased population has been a factor in absorbing increased production," Lamborn and Company, New York sugar brokers observe, "but sugar exporters are anxious to develop a workable plan before production outdistances consumption. They want to hold output within such limits as will permit a remunerative price for sugar sold in the world market." Lawrence Myers, director of U.S. government sugar branch, and president Robert H. Shields of U.S. Beet Sugar Association are attending the meeting. They are definitely interested in world production because of its effect on sugar market levels at home. Current U.S. refined sugar prices are about $1.50 per hundred pounds less than what they should be, to maintain the 1947 relationship between sugar prices and consumers' price index. U.S. department of agriculture has deliberately set a low sugar import quota for 1952, to strengthen prices at home. Here is an industry, the sugar industry, which is able to produce abundantly, but we find the representatives of the sugar producers of the world meeting together to contrive ways and means of preventing increased production while the population of the world is increasing by 25 million a year. Surely, anyone viewing this world's proceedings from Mars would wonder if we had all gone completely lunatic. Yet, we calmly contemplate things of that sort. We simply must, as a generation, solve the problem of distribution, both nationally and internationally. May I read a quotation from a man who I think must be looked upon as an authority. He is R. F. Irvine, for twenty-five years professor of economics at Sydney university, Australia. In his work entitled "Afterthoughts", he uses these words-this was about 1933: I believe that the principles put forward by C. H. Douglas are not only sound, but that they provide the only practical way of escape from the tragic fate which otherwise awaits the whole of western civilization. After twenty years, have we got right up against that tragic situation? Are we now right in it? Was Professor Irvine too pessimistic a prophet when he foresaw the disastrous conditions we are facing right now? Not by any means. Back twenty years or more he warned that we would have to introduce the principles set forth by Major Douglas, which are the social credit principles. I read again from his article: The reason that most economists have scouted the Douglas diagnosis is that it calls in question the most fundamental doctrine of the classical school, and the later schools that have grown out of it. The doctrine asserts that "supply creates its own demand." As I said at the outset of my remarks, the first major fallacy upon which our whole economic thinking is based is the utterly



erroneous notion that when goods are produced the purchasing power or money to buy the goods is automatically produced and put into the hands of the people who would buy. No amount of talk, no amount of persuasion seems to serve to get into the hard heads of the men who are in control of our affairs the ghastly absurdity of that fallacy. These representatives of the sugar industry should not be meeting to consider how to shrink the world supply of sugar to conform with the world's ability to buy sugar. They should be meeting to try to ascertain how to enable the world to buy the additional sugar they can produce. In other words, they should be contemplating how to create additional financial purchasing power, and how to put it into the hands of would-be consumers so that they could buy sugar. Now, that is as simple as A, B, C. You would think a ten-year-old child could understand that. Yet, I shall wager dollars to doughnuts that you could not get that into the head of our Minister of Finance (Mr. Abbott) in ten days, nor our Minister of National Revenue (Mr. McCann). Certainly the Prime Minister (Mr. St. Laurent) is just about all the way around the world from contemplating that idea. Yet we cannot begin to solve the problems that confront us in this day of potential plenty until we all do realize the fallacy of the notion that when goods are produced, automatically the purchasing power to purchase them is produced. In the case of sugar, if the classical idea is sound, the mere production of the sugar ought to produce the purchasing power to buy the sugar. These men readily recognized that such is not the case. We are dealing with this first major fallacy and where it leads us. According to the interpretation of the passage I have just read, we must artificially create effective demand. Professor Irvine's belief is that we must create effective demand, that is money, artificially to balance the production we are able to bring into existence. Then, we must provide for the equitable distribution of that purchasing power in the hands of the people who desire to consume the goods. It will not help to put the money into the hands of millionaires who already have all the sugar and boots they wish. We have to put it into the hands of people who do not have all they want. Now, I believe it would be well for me to outline once more the principles set forth by Major Douglas, clearly, simply and comprehensively so that everyone who desires to get the facts can do so. Major Douglas set forth three major principles. The first one was that it is sound and it is practicable for the state to create money free of debt and free of interest in accordance with the surplus of goods and services available in the state. 11, 1952 The Address-Mr. Blackmore Second, it is sound and valid to use some of that money to bring about a just price structure by compensated discounts and by subsidies. Third, it is sound to use some of that money to finance consumption by granting dividends to consumers. Now, if we were to apply those principles to a world-wide situation we would see that where we can produce a superabundance of sugar it is sound to have some agency in the world creating the money which would be necessary to buy that sugar, and putting that money into the hands of the people who would desire to buy it. They might be in India or in any other country that lacks sugar. It is simple enough. Which one of those three principles will we find most disputed? The social credit principle about which the most contention prevails is No. 1, the creation of money by the state free of debt and free of interest, and the spending of such money into circulation. The minute we advocate that in this house ninety per cent of the members immediately say that that will cause inflation, that will be inflation. Now, it does not necessarily constitute inflation. If there is a surplus of goods that are not being bought with the money now in circulation, the creation of more money and putting that into the hands of poor people like old age pensioners or the permanently crippled so that they can buy potatoes, canned goods, milk and other things which we can produce abundantly, does not constitute inflation in accordance with any intelligent definition or understanding of inflation. I can see three or four members with supercilious smiles. They think that they know more about this thing than I do, after spending all these years in study. They think they know more about this than does Major Douglas, who was an excellent engineer. They think they know more about it than Professor Irvine, whom I have quoted. They think they know more about it than Mr. McKenna, whom I am going to quote. To that extent they are betraying the people of Canada by not grappling with the problem that is confronting our nation and other nations right now. I should like to quote from the Right Hon. Reginald McKenna, chairman of the Midland Bank, who was speaking to his shareholders in 1936. Hon. members who desire to check this quotation can do so by going to the January 30, 1936, issue of the London Times which may be found right down in the library here, and reading from page 23 the following words: Additional currency, however, can now be furnished by the authorities, if they choose to exercise



The Address-Mr. Blackmore their powers, without reference to the central bank's holdings of gold. Thus the nineteenth century, which brought into general use a means of payment hitherto scarcely known outside London, brought also the machinery whereby it could be subjected to intelligent control. In the same article he used some other statements which I think it is fitting to read into Hansard at . the present time: The major tests of sufficiency are to be found in comparative stability of the price level and the extent of unused productive capacity, of which the number of unemployed may afford some indication. May I stop and comment on that statement. What we have already been talking about thus far indicates the tremendous scope of productive capacity which in Canada is idle. We have not a great number of unemployed but we are not using the people we now have employed to much more than about half their efficiency. A little further on there is another statement to which 1 wish to refer. First, may I say that the hon. member for Peace River (Mr. Low) points out to me that we are getting more unemployed all the time; but of' course the Minister of Finance will say that it is just seasonal. That may be so. May 1 read this quotation: For money to be truly "sound" there must be enough of it to finance an ordinarily growing volume of trade, yet not so much as to give rise to an inflationary movement of prices.


CCF

Major James William Coldwell

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

Mr. Coldwell:

Is that quotation from the Midland Bank report?

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SC

John Horne Blackmore

Social Credit

Mr. Blackmore:

Yes. It is in the January 30, 1936, issue of the London Times. I would suggest that instead of using the word "trade", the president might have more appropriately used the words "production and consumption". It is not only a matter of trade. It is a matter of putting the money into circulation in order to enable the people to consume a growing degree of production.

I think some of the Liberals will be a little bit surprised to learn that their beloved leader, Mackenzie King, was right on the verge of teaching this very doctrine. I read from his book "Industry and Humanity", published in 1918, at page 103, the following:

Man, not nature, is now in control. The problem of the possible production of all but unlimited wealth is already solved.

That was in 1918. To continue:

Growth in human intelligence has wrought this achievement. Surely human intelligence may be relied upon to see that the problem of distribution, to which the production of wealth is a necessary preliminary, will also find an equitable solution.

The brilliant successors of Mackenzie King have not begun to nibble at the problems yet, and they are not even disposed to confront them. Again on page 130 he says, dealing with money:

Money and credit are sometimes spoken of as capital. They are such, not of themselves, how-

ever, but in virtue of what their possession commands; they indicate power of control because exchangeable for desired commodities or services. So far as the actual processes of production go,-

Here he is dealing with money.

-money is a matter of figures in books, and insignia and figures on metal and paper.

Whoever is close enough to the Prime Minister to get his ear might suggest that he give some thought to those passages from the book of his illustrious predecessor.

Last year I spoke several times, to the great annoyance of the Minister of Public Works (Mr. Fournier), on the feasibility of state-created, debt-free money. I felt last year that the information pertaining to that subject ought to be put before the members of this house, so that the responsibility from that time on might lie with the members of the house and not with me. I have put the information on Hansard. If hon. members do not get it, they are answerable to their constituents and their constituents' children who will be killed in the next war. The thing is just as simple as that.

I spoke on April 19, April 30, May 1, May 3, May 22, May 23, June 4, June 20 and June 30 during the 1951 session. On June 20 I discussed the Bradburys, and that night we endeavoured to engage the Minister of Finance in an intelligent discussion of the feasibility of state-created money; but after he had tried to answer about three questions, he got to his feet and left the room. Then on June 30, when we tried to engage him once more, he did not appear. He left the chore boy or the office boy to come in and do the job. That fact indicates quite clearly that the Minister of Finance in this house simply cannot and dare not try to answer the questions concerning social credit. He knows positively that social credit is right; but rather than acknowledge that fact, he would lead this country into any kind or degree of disaster, and the people around him who trust him implicitly are prepared to let him do so. I believe, however, that up to the present I have done my part.

I now turn to the matter of trade. As we carry it on today, trade is not the solution to the problem of international or national distribution. What the United States is doing to our textile industry this very day constitutes conclusive proof of that statement, as does what the Japanese are doing to our textile industry, the fact that Britain has limited imports this very day, the fact that France has limited imports and the fact that Australia has also done so. All these facts show conclusively that orthodox trade as a means of distribution of goods has broken down dismally and the whole fundamental

idea underlying the United Nations, ITO and Bretton Woods is a monstrous fallacy.

The question is this. Is the Canadian government going to face that fact and modify its behaviour in accordance with the facts? That is the question. On their decision depends the fate of hundreds of thousands of Canadian youth.

Trade must toe made co-operative and mutually constructive, not competitive, predatory and mutually destructive, as it has been for centuries and still is, as witness the United States efforts with respect to our textile industry. How to make it co-operative and mutually constructive is the problem. No member in this house, outside of Social Crediters, as far as I know, has any idea how to go about it. Yet it evidently can be solved if we attack the problem honestly and humbly and not with such a smart Aleck attitude that we cannot be reached even with a shotgun.

The most important facts to be borne in mind are that it is possible to solve the problems of scarcity and of distribution of abundance. It must be possible, as Mackenzie King well said in his book in 1918. The methods employed must be in some respects fundamentally different from those relied upon heretofore. I have not time to go into all the details with respect to the differences, but I have discussed them to some extent, particularly last fall when I advocated the advance of a billion dollars of credit to Great Britain for each of five years. On that occasion I spoke on November 12, November 20 and November 22. On November 22 I advocated that Britain be made a clearing house because Britain has developed to so high a degree the wholly successful device of the pound sterling which can be used as an international currency.

On those occasions I pointed out that the advance of $5 billion in five years could be made to Britain without additional taxes, without additional debt and without additional inflationary pressure in Canada. As evidence I pointed out the fact that $50 million worth of wheat was purchased with created money by the Canadian treasury in world war I and lent to Britain, and I read from the report of the royal commission on banking and currency in Canada the words in which that transaction is set forth. On page 22 we read the following words:

In 1917 an emergency issue of $50 million of dominion notes was made to finance war purchases in Canada, by the British government. The notes were secured by imperial treasury bills. In due course, this indebtedness was liquidated by payments from the British treasury and all of this issue had been redeemed by 1927, No changes have

11. 1952 343

The Address-Mr. Blackmore

since been made in the Dominion Notes Act except that by a statute passed on 30th March, 1933, the governor in council was empowered to suspend the redemption in gold of dominion notes, and an order in council to this effect was made on 10th April, 1933.

Last year when I was talking about this matter I pointed out that if the Bank of Canada today is unable to do this thing which the dominion treasury was in world war I able to do without the Bank of Canada, then the sooner we abolish the Bank of Canada the better, because it stands today as a hindrance to us in the performance of necessary duties. No one has been able to answer that argument yet.

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LIB

Elie Beauregard (Speaker of the Senate)

Liberal

Mr. Speaker:

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

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Some hon. Members:

Eleven o'clock.

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March 11, 1952