Mr. J. Wilfrid Dufresne (Quebec West):

Is

the Minister of Citizenship and Immigration (Mr. Pickersgill) in a position this morning to answer my question regarding the statement made last week in London by his deputy minister, Mr. Laval Fortier?

Hon. J. W. Pickersgill (Minister of Citizenship and Immigration):

Mr. Speaker, I have now had a chance to read the item in the newspaper to which the hon. gentleman referred on Friday last and also to read a somewhat expanded report in another newspaper. All it seems to amount to is that an effort is being made to cut down on the amount of paper work that prospective immigrants have to do. I think it is a most laudable objective for any government department anywhere. We are always trying to cut down paper work in my department.

I think perhaps 1 should say just one other word about the implication in the hon. gentleman's question to the effect that in some

way this might be something applied to the United Kingdom only. There is no such intention. Of course it is known to all hon. members that we have one regime for immigrants from the United Kingdom, France and the United States, and another regime for other countries.

Mr. Stanley Knowles (Winnipeg North Centre):

Mr. Speaker, may I direct a question to the Minister of National Health and Welfare (Mr. Martin). As it is now seven years since any change was made in the amount of the old age pension, does the government intend at this session of parliament to increase the amount of the pension in accordance with the increase in our gross national product?

Hon. Paul Martin (Minister of National Health and Welfare):

My hon. friend did not give me notice of his intention to ask this question. I can say at once that the government is giving consideration to a number of matters in the health and welfare field, one of which, as he knows, will involve a discussion with the provinces on the 23rd of this month. We have to bear in mind the over-all situation when we arrive at decisions. But no one in this house should know better than does my hon. friend who made a recommendation that there should be a continuous relation between contributions made under a partially contributory system and benefits to be paid. That was likewise the recommendation of a committee of which my hon. friend was a member, and the government bears in mind recommendations made by parliamentary committees.

Mr. W. B. Nesbitt (Oxford):

Mr. Speaker, on Friday last when the debate was adjourned at six o'clock I had commenced to make certain remarks referring to the Department of National Revenue. At that time I expressed some regret that the speech from the throne made no reference to any intended changes in the Income Tax Act. At the same time I made a suggestion, which I hope the hon.

The Address-Mr. Nesbitt minister might take into consideration. I suggested that a time limit be placed on the activities of the Department of National Revenue as to the time they may go back and make reassessments on private individuals. I believe I suggested a limit of approximately two or three years. As I pointed out at that time, it is very difficult for people to keep records indefinitely and it is particularly arduous on persons who are not familiar with accounting, such as farmers and small businessmen not to mention individuals.

In this regard we all know that there are certain cases of fraud and evasion with respect to the payment of income taxes, but nevertheless I think a great majority of the reassessments that are made concern perfectly innocent mistakes. The way things are at the present time, a person virtually must have a public accountant of some kind to' keep his records. As a result most farmers and small businessmen have their income tax returns made up by persons who are not fully qualified. Very often this is done by the township clerk, a conveyancer, a real estate man or someone of that nature. As I say, these people are not always fully qualified and they make plenty of mistakes. In fact, I have heard that qualified people such as chartered accountants have made mistakes in drawing up income tax returns. If they do it I am quite sure that people less qualified are likely to do it as well.

As I pointed out, many reassessments are made on the basis of innocent mistakes. It is quite hard on a small farmer to find suddenly after a few years that he owes, on the return he made some time ago, not only a certain amount of back taxes which he did not pay but interest and sometimes a penalty. I suggest that, where there is no question of fraud or evasion, the matter of interest and penalties be dropped. Of course, this would not apply where it was a matter of fraud or evasion; but where the farmer has had his tax return made up by the township clerk it seems to me most unfair that he should be liable for considerable interest or even a penalty because of a mistake made by someone else.

There is another matter I should like to mention in connection with the Department of National Revenue, and that is the exceedingly arbitrary methods followed on occasion by the department. This seems to be increasingly so. We all realize that it would be quite impossible for the department to carry on its duties unless the onus of proof were placed on the person under suspicion to show that he was innocent. If things were

The Address-Mr. Nesbitt otherwise it would be most difficult for the department to carry on, but I think at times the department goes a little too far and I should like to cite a case which I investigated recently.

About the middle of last July a young man about 20 years of age was sleeping the sleep of the just in the house of his parents who were away on holiday. At about eight o'clock in the morning he heard a knock at the door and when he answered it he found two members of the Royal Canadian Mounted Police as well as several officials of the Department of National Revenue. They had a search warrant and when they entered the house they kept the young man on one side of the room and questioned him repeatedly as to where the family kept their safe. He told them he did not know that they had a safe in the house, in fact he was quite certain they had not.

At the same time other officials of the department visited the place of business of these people and seized their books. So far everything was perfectly in order but the books of this particular business were quite extensive and when they were taken away the people in charge requested a receipt which was refused. About two months later a form of receipt came in but it was incorrect. In addition to all this, the people had to supply their own truck in order to have the books taken up to the London office of the income tax branch. It is like providing your own car for your own execution. In due course, the business required some of the correspondence taken by the department, for certain business purposes. When it asked to have this correspondence returned, it found that the department had lost it, and this caused considerable difficulty and a certain amount of expense. These books were taken last July and they have not been taken back yet. It is a great inconvenience to this business to have its books lost.

If the Department of National Revenue has to carry out investigations like this, there is no reason why it cannot photostat the records and send them back so that the business can carry on in a normal way. As I have pointed out, the Department of National Revenue has all the advantage on its side. The burden of proof is on the accused, so to speak, and not on the department. Unless some of the extreme measures such as this are checked, they are liable to continue. This is the thin edge of the wedge. If these arbitrary methods are allowed to continue unchecked, there is no telling where they might stop.

'.Mr. Nesbitt.]

I hope the minister will deny this and say it is not so, but it is my understanding that very often the department will get books from some professional man such as a doctor or dentist and keep them for some time, not for the purpose of checking on his records, but for drawing comparisons so that it can check on some other member of the same profession.

There is another matter about which there is considerable apprehension and suspicion in the minds of large segments of the public -and I hope again the minister will say this is not the case. Very often investigations of individuals are prompted by complaints that have been motivated by a purely personal dislike. I believe the hon. member for Middlesex East (Mr. White) last session referred to the income tax division's activities as the "income tax terror". In or about the year 1791, during the regime of the French revolution, known as the "red terror", people would inscribe the name of somebody they did not like on a slip of paper and put it into a box in the shape of a lion's mouth, and the people whose names were on those slips of paper were summarily arrested and guillotined the next day. I am not suggesting that the Minister of National Revenue would do anything like that, but I do say there is a general suspicion that many of these investigations are motivated by complaints arising purely out of jealousy or some personal dislike..

As I say, I hope this is not the case. In any event, many of these methods I have outlined which are employed by the Department of National Revenue-I could speak of them for a long time but I do not wish to take the time of the house in doing so-do not have any place in a democracy. I rather hope the minister will do something to cheek the zeal of some of the junior members of his department.

Having dealt with some of the omissions from the speech from the throne, I should like to deal for the next few moments with some matters which are in it. Having carefully examined the speech given by His Excellency, I am reminded of an old rhyme I have heard from my parents. This rhyrhe has to do with weddings of another day and goes something like this: "Something old, something new, something borrowed and something blue." If we were to paraphrase that rhyme, we might say that the speech had something old, nothing new, something borrowed and benefits few.

Apparently the government has borrowed a little from some of the suggestions of the other parties. The suggestion of the hon. member for Hamilton West (Mrs. Fairclough),

which she has been putting forward for a number of years, has apparently been borrowed. It would also seem from the wording of the speech that the suggestion of the hon. member for Assiniboia (Mr. Argue) has made in other years regarding small loans is about to be incorporated in government policy.

However, I did not see anything in the speech from the throne making reference to any suggestions from the Social Credit party, which, of course, is rather a pity; but if you look a little more carefully you will see that during 1955 the government has been experimenting with at least one aspect of Social Credit policy. It has always been my understanding that one of the main aspects of Social Credit theory is the circulation of money and the creation of prosperity thereby. I do not think it can be said that the government was experimenting particularly with the circulation of money but I should like to suggest that possibly they have been experimenting with the circulation of at least one product, namely, cheese.

By this I mean that, so far as dollars are concerned, as fast as cheese was exported from the country it was brought back into the country in the form of imports. In this regard I should like to refer to an article in the Picton Gazette of Wednesday, January 11, 1956. The article appears on page 1 and reads as follows:

Statistics presented to the 23rd annual meeting of the Ontario cheese producers' association in Toronto showed that 6,500,000 pounds of cheese, valued at $3,500,000, were imported during 1955. In the same period 10 million pounds of Canadian Cheddar, worth just over $3 million, were exported. Included in the imports, were 5,500,000 pounds of New Zealand Cheddar. In his annual report, association president W. O. Coon said a request would he made to the federal government-

And so on. Of course, to be fair, some of these cheese imports consisted of fancy cheeses like Dutch cheese, Danish blue and others. They are included, but as far as dollar value is concerned there was more dollars' worth of cheese imported than exported. The cheese situation has been the source of very considerable annoyance to dairy farmers everywhere, particularly in Ontario.

For a moment let us see what the situation is at the present time with regard to cheese. The latest available figures respecting Cheddar cheese that I have been able to obtain are as follows: Stocks on hand on the first of January, 1955, were approximately 42,424,000 pounds. Production in Canada for 1955 amounted to 78,638,000 pounds. Production in 1955 was down a bit from 1954 when the amount was 84J million pounds, but the fall in production was no doubt due to the

The Address

Mr. Nesbitt very hot, dry summer in Ontario last year. Stocks on hand at January 1, 1955, plus cheese production for the year make a total of 121,062,000 pounds.

In order to see what stocks were on hand at January 1, 1956, the figure for 1955 consumption should be deducted and this amount, according to the latest figures I have been able to obtain, is estimated at 73 million pounds. There must also be deducted the 10 million pounds of cheddar cheese which were exported, leaving a net amount of 38,062,000 pounds. However, to this amount must be added the 5,500,000 pounds of imported New Zealand cheddar which would make the amount of the stocks on hand at January 1, 1956, approximately 43,562,000 pounds, a slightly higher amount than was on hand at the same time last year.

As hon. members will recall, it was just about this time last year that there was a lot of discussion in the house regarding imports of New Zealand cheese. At that time almost 2J million pounds of New Zealand cheese were being imported. As I recall the situation, at that time the Minister of Trade and Commerce (Mr. Howe) suggested that there would be no further imports of New Zealand cheese for six or nine months. He certainly hit the nail on the head because, as all hon. members know, about nine months later another 3 million pounds of New Zealand cheese were imported into Canada.

Now, as was mentioned at this time last year, this whole situation is ridiculous. It is like bringing coals to Newcastle and is a slap in the face to the dairy industry of Canada. This New Zealand cheese is saleable on the dock at Montreal at 26 cents a pound whereas the Canadian price is somewhere in the neighbourhood of 29 to 31 cents a pound. I say the situation is almost identical with that which existed at this time a year ago. At that time several hon. members in this house set out very completely and concisely some of the hardships that the importation of New Zealand cheese would bring for the cheese producers of Canada, and particularly the Ontario cheese producers who, as hon. members know, have an association of their own for the sale of cheese abroad.

I am not going to take up the time of the house to deal with all the arguments on this subject because they are set out in detail by the hon. member for Lanark (Mr. Blair) in volume I of the 1955 session of the debates of the House of Commons, page 305. The arguments which the hon. member set out at. that time certainly apply today. As has been pointed out, the cheese industry is only one aspect of the dairy industry, but what affects the cheese industry certainly affects

124 HOUSE OF

The Address-Mr. Nesbitt other things such as butter. Apparently butter is having its own problems, but that is a matter which will be dealt with by other hon. members in the course of this debate.

On this whole question of dairy products, Mr. Speaker, I submit that the government is not giving the leadership it should. It is standing by with folded arms and allowing things to slip. Farm groups have become exceedingly aggravated over this cheese question. What can the government do? I submit that the government can do one of two things. They could either raise the tariff on cheese or adopt another procedure open to them with which I shall deal in just a moment.

Now, farm groups have become very upset over this situation, and the result is that I received a resolution from the Oxford county federation of agriculture which I should like to read. The resolution is as follows:

Be it resolved that the Ontario and Canadian Federations of Agriculture make emphatic representation to the federal government asking the imposition of a tariff duty upon all imports of cheese, milk powder and other dairy products equivalent to the protection granted other industries and sufficient to allow producers of dairy products an equitable share of the national income.

I can see why the federation of agriculture would send in a resolution like that. The present one cent tariff on cheese accomplishes nothing. It certainly does not protect the dairy industry and it certainly does not provide much revenue, so I really cannot see what the purpose of the one cent duty on cheese is. I know quite well, at least we have always heard, that the present government is not interested in raising tariffs. In fact, we are told it is rather more interested in lowering them, so the government may not wish to raise the tariff on cheese. Whether or not they should may be another matter, but I do not think they will want to do it.

I would suggest there is another procedure open to the government to check further importation of New Zealand cheese into Canada. This procedure was very concisely set out last session by the hon. member for Hastings-Frontenac (Mr. White) on page 334 of the debates of the House of Commons for the 1955 session, volume I. The procedure outlined by the hon. member on that occasion has to do with the use of the Export and Import Permits Act. On one or two occasions last year I believe the Minister of Trade and Commerce (Mr. Howe) intimated that this act had no application to cheese, but in view of the remarks of the hon. member for Hastings-Frontenac I believe that possibly the minister might be mistaken. Perhaps the government has the necessary machinery set

[Mr. Nesbitt.)

up to bring the importation of cheese under the Export and Import Permits Act. I feel that before this debate is finished some statement should be forthcoming either from the Minister of Trade and Commerce or from the Minister of Agriculture (Mr. Gardiner).

The dairy farmers of Ontario and the cheese producers association of Ontario have a right to know what, if anything, the government is going to do. It must be remembered that Ontario produces three-quarters of the Cheddar cheese produced in Canada. If something is not done at once the farmers who produce cheese and other dairy products are going to suffer. As I said before, I hope that before this debate is completed we will have a statement of policy from either the Minister of Agriculture or the Minister of Trade and Commerce.

Right Hon. C. D. Howe (Minister of Trade and Commerce):

First of all, Mr. Speaker, I should like to congratulate the mover (Mrs. Shipley) and seconder (Mr. Laflamme) of the address. I was particularly impressed with both speeches; both were excellent. When the mover of the address turned her attention to northern Ontario, her burst of eloquence about that great territory thrilled me. I am sure all of the people of northern Ontario appreciated her remarks about her constituency.

This debate has taken an extraordinary turn, one which I find it hard to believe. The speech from the throne was brought down at a time when the Canadian economy is travelling in the highest possible gear. Everything and every resource is stretched to the limit. My department is concerned with finding enough steel to keep the economy rolling in the face of a world shortage of steel. The world is short of nickel, of copper, of aluminium, and a shortage is developing very rapidly in newsprint. In order to maintain progress and maintain employment, these problems require everyday attention.

Now, the debate has turned on surpluses, and what are those surpluses? They are wheat and butter, although cheese was mentioned today. I can relieve the minds of hon. members about cheese. I have been informed several times by my office that there is not sufficient matured cheese available for export to enable us to fill our quota in the British market, which is a valuable market for fully matured Cheddar cheese, which product commands a substantial premium in that market. Therefore, let us not talk about a surplus of cheese. However, it is interesting to see that the hon. member who mentioned cheese is devising ways of accentuating

a shortage. In other words, if we could have a greater shortage of cheese, everything would be wonderful.

This has been the attitude of the opposition to the supply problem. Shortages are wonderful, to be solved by simply denying their existence. We sat in this house all during last July when speaker after speaker would get up and say that there were no shortages.

I would indicate that even then there were shortages of steel, of nickel, of aluminium and of other materials. But this was denied by the opposition. What was the purpose of keeping us here during the month of July? It was to prevent the government from getting authority on a reasonably long-term basis to deal with the materials in short supply and to allocate those materials to the best advantage of the Canadian economy.

Let us return to the surpluses we have. There could have been no debate, I am afraid, if the weather had taken a different turn. If we had had a very dry spring and a very dry early summer, instead of a very wet spring and a very wet early summer, we would have had no surplus of either wheat or butter. We would have been about on balance in wheat, and butter would have been in short supply. The Conservatives, the C.C.F. and the Social Crediters would have said this is wonderful; we have no surpluses, and without surpluses I do not know what the discussion on the speech from the throne could have been. However, we have a surplus of wheat, and already it has been attacked. We must do away with this surplus. The suggestion was made by the hon. member for Prince Albert (Mr. Diefenbaker) that we immediately adopt the soil bank plan of the United States government. I suppose he thought that that would be a new plan. We in Canada invented the soil bank plan back in 1941. At that time we had an accumulation of wheat which resulted from the dislocations of war, the sinking of ships in the Atlantic and our inability to supply wheat, even though countries overseas were very anxious to obtain it. At that time we instituted the soil bank plan. We paid our producers to take their acreage out of wheat and put it into coarse grains or summerfallow. As a result of that policy, we reduced acreage in wheat from 27J million acres in 1940 to 16 million acres in 1943, a reduction of 11J million acres. During the year 1955 only about 20 million acres are planted to wheat, which is a reduction of 7 J million acres planted to wheat since 1940.

Well, we should plant at least 20 million acres of wheat. I believe that our economy requires production to that extent. I will admit at once that if we get five more wet

The Address-Right Hon. C. D. Howe years in succession, 20 million acres of wheat will produce an accumulating surplus in this country. But I think I have lived in the western country, and I think many other hon. members have lived in western Canada, long enough to know that never before in the history of western Canada have we had five very wet years in succession. Therefore,

I reject the soil bank plan or any other plan destined eventually to place wheat in the deficit column. If we cannot keep wheat supplies in balance, let us have a surplus of wheat, but let us never adopt a policy that can produce less wheat than our markets will take.

It has been said that the reason for the surplus is that exports have not been up to standard; that the government has been lax in not exporting sufficient wheat to take care of the western situation. Let us examine the levels of exports. We will go back to the good years when everyone was quite happy about wheat, when the farmers were happy, and when we had a situation that seemed to call for no criticism. We will go back to 1947-48. In that year we exported 195 million bushels of wheat; in 1948-49 we exported 232 million bushels of wheat; in 1949-50 we exported 225 million bushels of wheat; in 1950-51 we exported 241 million bushels of wheat. In other words, the average export for those four very satisfactory years was 223 million bushels per year.

Now, let us look at the last four crop years.In 1951-52 we exported 355 million bushels;in 1952-53 we exported 385 million bushels;in 1953-54 we exported 255 million bushels;

and in 1954-55 we exported 252 million bushels, an average of 312 million bushels of wheat exported from Canada per year. It is rather interesting that in not one of the good years were the exports as large as exports during the least satisfactory export year in the past four years. Last year we exported 252 million bushels of wheat. We have heard the hon. member for Assiniboia (Mr. Argue) talk that kind of nonsense about a drop in exports and suggest methods that we should adopt to correct the situation. He is quite willing to advise us on that point. But never in any of the years from 1947 to 1950 did we export as much as we exported last year.

I could go into the deliveries, which mean more to the farmers than exports. They are of more immediate importance to him. In the war years, when we had a sellers' market, when we could export anything we could produce, beginning with 1940 and going through 1944, the average deliveries by farmers to country elevators amounted to 326 million bushels a year. In the next years, 1945

126 HOUSE OF

The Address-Right Hon. C. D. Howe through 1949, the five-year average was 286 million bushels marketed. In the last five years-1950 through 1954-a yearly average of 415 million bushels of wheat were marketed by farmers. Perhaps I should give the house the figures for all grains, including wheat, oats, barley and other grains. In the five-year period, 1940 through 1944, the total marketing of all grains averaged 492 million bushels. The five-year average from 1945 through 1949 was 456 million bushels. In the five years from 1950 through 1954, the average was 656 million bushels.

We have had a great deal of advice as to how this wheat should be sold. We are told how our methods are antiquated; that the world has been moving ahead of us and that we should adopt methods of other countries in disposing of our wheat. We have had a great number of references to bartering and to selling for local currencies. What is the purpose of bartering? Barter was used centuries ago before money was invented. But today the only purpose of barter is to give a customer through barter a deal which you would not give him for dollars. The same is true of local currency. The reference is not to local currencies that we could bring back to Canada. You sell for local currencies and you leave the local currencies in the purchasing country. That is the method that has been used where wheat is sold for local currency. In other words, a form of giveaway, and the give-away usually represents up to 70 per cent or 80 per cent of the value of the wheat. These are also direct giveaways. Hon. gentlemen know we give away wheat when there is an urgent need for wheat. We have given wheat to several countries when, as a result of disaster, or crop failure, that sort of gift was a desirable procedure.

However, I wish I could persuade hon. gentlemen-it seems obvious to me-that we must treat all our customers alike. If we give wheat to one customer, barter wheat with another customer to his advantage, or accept local currencies from a third customer, then to expect to get cash from a fourth customer is of course absolutely untenable. I can give a very good illustration of that point. Two years ago the United States started their five-point plan Eor disposing of wheat. In that year about 41 per cent of their wheat exports went under programs involving give-away. Last year me of the official reports of the department )f agriculture stated that 66 per cent of their wheat exports went out under the five-point program. I have seen predictions that this pear practically 100 per cent of their wheat exports will go out under the five-point pro-

gram. There is a law of economics that I am sure most of us remember. It is called Gresham's law. That law goes back even longer than I have lived, by about two centuries. Gresham's law is that a bad currency will drive out a good currency.

That is exactly what has happened to the United States in marketing wheat. The bad currencies are those deals which sell wheat at less than its value in good currency. The result is that our competitor can no longer sell wheat in exchange for good currency. Here we have a perfect example of the working out of Gresham's law, so far as the wheat marketing operation is concerned.

I could go on at further length and talk about sales for local currency or through barter deals. I think the idea of sales for local currency should be pretty well ended by a statement made in Winnipeg by a high officer of the British high commissioner's office when he stated that if we accepted pounds sterling for wheat we would not sell one more bushel of wheat to the United Kingdom. We shall therefore not pursue that matter further.

I now come to the point at issue. We have surpluses of wheat in Canada. The delivery position was particularly aggravated this year owing to the fact that our sales in the early part of the marketing year were much below those of a year ago. What was the reason for that situation? The reason was that there was no confidence abroad in the pricing of wheat in North America. Everyone expected that, since the United States was depending on their five-point program to export wheat, Canada would be forced to do something similar, or at the very least would be forced to cut prices drastically.

The situation was further aggravated by the bearish propaganda that went out from Canada itself. Every time I would read a speech by an opposition member using extreme language about our surplus wheat, I would say to myself, "I wonder what that speech is going to cost the producer of western Canada". Every time we would get resolutions from the boards of trade in the various wheat areas, we would say to ourselves: "That postpones buying some more". But the fact of the matter is that up to the first of November there was no forward buying of Canadian wheat. When a boat was under the grain elevator spout, the buyer would buy wheat to put in that particular boat, but our advance sales were woefully deficient up to that date.

Then apparently everyone began to believe that Canada was going to maintain a price, because orders started to come in. I have never before in my experience seen buying as active and as steady as it has been since

November 1. True, our exports are behind exports of a similar date last year, and it will probably be about March before we can pass the record of exports of last year. The reason for that is that at this season we have to bring our grain out through the winter ports, a process which is much slower than when the St. Lawrence is open. However, we are selling wheat.

I told the farmers in western Canada, when I spoke to several gatherings there, that exports were down at that time but I predicted that exports would pick up later in the year. That is what is happening. I went to western Canada for one reason only, namely to see just what the situation was there and the extent to which it could be remedied. In Regina I spoke to the delegates of the Saskatchewan wheat pool. I said that I spoke. I might say those sessions last all day and everybody speaks. I was just one of many speakers. I attended the meeting of the Alberta wheat pool delegates, and I also attended the annual meeting of the farmers' union at Edmonton. Prior to that visit, and because of the lack of early marketing possibilities, I made up my mind that something should be done to assist the farmers-and particularly the small operators-to finance themselves until marketing could return to normal. I recommended to the government that the system of loans that was used in 1951 be made available again this year. Other plans were considered very carefully at that time. We considered as to whether loans could be made through country elevator agents. We found insurmountable obstacles. Loans made by chartered banks are protected by the Bank Act, which is a federal act. Loans made in any other way, except through the banks, would have little or no security. Grain on the farm comes under the heading of property and civil rights, which is a matter for the province. A government lien on grain on the farm would have to take second place to tax liens, and would be on a par with liens put on by implement dealers or suppliers of any other kind. That matter was explored thoroughly. The government decided the only practical way to handle the matter would be to arrange guaranteed loans from the chartered banks.

It has been said that the interest rate is too high at 5 per cent. I have been a borrower from banks all my life, and I have never yet succeeded in borrowing money from a bank at less than 5 per cent. I know of many periods in my life when, if the government had guaranteed my bank loan, it would have relieved me of a great deal of stress and strain. I therefore cannot be too greatly concerned about objections to guaranteed loans bearing an. interest rate of 5 per cent.

The Address-Right Hon. C. D. Howe

Recently there has been a great drive for advances on farm-stored grain. The suggestion has been for three-quarters of the value of the grain to be advanced by the wheat board. Many hon. members may think that the inspiration for that suggestion came from the farms. I can assure you there has been nothing of the kind. It came from the cities. If I had time, I could quote chapter and verse to that effect. Who are its supporters? The supporters are the enemies of marketing through the wheat board.

Mr. Nicholson:

You have all the time you want.

Mr. Howe (Pori Arihur):

I think I have only ten minutes more. Which are the two newspapers that are advocating the advances on wheat stored on the farm? One is the Winnipeg Free Press and the other is the Financial Post. The Winnipeg Free Press is a great newspaper, but its declared policy has been for many years to do away with marketing through the wheat board and to return to marketing through the grain exchange. As far as the Financial Post is concerned, it too has followed a consistent policy of attempting to end the marketing of western wheat through the wheat board.

Now, let us examine the position of the wheat board. In every market where Canadian grain is sold I think you will find people who will tell you that the ablest grain marketing organization in the world is the Canadian wheat board. The chairman of the board has been in the service of the government for 25 years, his duties associated solely with the marketing of western grain. Associated with him are three very able men who share in the work of the board. I can tell the house that, if the government instructed the wheat board to lend money on farm-stored grain and assume the responsibility for the lending of that money and its subsequent collection, the four members of the wheat board would be out of office within a matter of days.

Mr. Argue:

You made them handle box cars against their wishes.

Mr. Howe (Port Arthur):

The hon. member made his speech; may I have the next turn. It must be remembered that the money administered by the wheat board is the farmers' money. It is not the board's money, it is not the government's money. True, we provide a bank guarantee to give the board borrowing powers, but the board administers the farmers' funds, and is responsible to the producers for those funds. I have had experience in handling other people's money and I know that if you are going to

The Address-Right Hon. C. D. Howe do that successfully you must be very careful about your commitments. I have been handling other people's money for 40 years, and I have reason to know whereof I speak.

You must be careful about lending on grain where only limited security can be had. The grain on the farm would be the only security the board would have. It may be said that the farmer would have to market the grain and bring it to the country elevator eventually, when the board would be able to recover its loan; but I suggest that the farmer does not necessarily have to bring it to the country elevator. The hon. member for Assiniboia (Mr. Argue) threatened us with the situation where the farmer would refuse to do that and would feed the grain on his farm. It is perfectly legal for a farmer to sell grain to another farmer within the province. If any of these things happened the board would have no effective recourse. It is true the board would have a lien on the grain, but after the grain has been consumed it would be pretty difficult to execute the board's lien. It is not a lien that takes priority over anything, rather it is a lien that is secondary to other claims.

An effective means of taking security on farm stored grain would be just impossible to work out, and I think the people who started the propaganda knew that, and saw its possibilities as a means of destroying the wheat board. I am sure that that is the case. Why would the Financial Post advocate loans on farm-stored grain except as an effective means of destroying the wheat board?

Mr. Argue:

What about the delegates?

Mr. Diefenbaker:

That is nonsense.