July 15, 1942 (19th Parliament, 3rd Session)


Arthur Graeme Slaght



If it became depreciated?
If the countiy were blasted to pieces with a volcano, what would any of us do? Let my friend show me how this money will become depreciated. I am suggesting a national currency, which does not mean debt, instead of debt-bearing obligations. Suppose a foreign country is looking at Canada's financial position and Canada's bookkeeping. Do you think that Great Britain or the United States will think less of Canada if she increases her national currency by $1,200,000,000 in one year, instead of increasing her national debt by $1,200,000,000 of bonds, plus $55,000,000 of interest-bearing coupons every year? If you were a country merchant and you were looking at a customer who had an obligation of a straight. $100 to pay at some time when his creditor pushed him, would his credit be any worse than if he had an obligation of S100 at 3 per cent interest for twenty years, which would make his total debt $100, plus three times twenty, or a total of $160? There has been a lot of bogeyism about this matter and a lot of well-meant nonsense.
There have 'been many false premises; there have been many unsupportable statements; but I challenge anyone to show me where there would be inflation by the same issue of national currency, if carefully each year you take care of your maturing bond obligations that mature in that fiscal year. We started off under a foolish policy, and we cannot ruin the insurance companies and the banks by shutting them off and giving them just cash when we require to renew our obligations as we do year after year; I want to protect them. When you have done what I suggest, and if I am right in saying that we have maintained control over prices, that we have maintained rationing of goods, then every proper reason that has ever been advanced before in Canada in support of this debt-increasing burden falls to the ground.

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