Up to this point it may be considered that the practice followed was a normal one. Now the Dominion government's stabilization plan comes into the picture. Two or three years ago it was discovered that due to the collapse of world commodity prices and stock market operations generally, the buying of grain for future delivery had virtually ceased upon the Winnipeg grain exchange. In other words, the public was not in the market. This condition presented at once a very serious problem because the pools were bound to buy and take physical possession of the wheat of their members. This entailed very heavy responsibility and the financing was carried on by the banks advancing large amounts of credit to the pools. As the market was obviously a falling market, there were no contract buyers available and it became clear that unless some agency would carry the contract risks, the market would utterly collapse and the price of wheat would fall much below the level which it did reach. Recognizing this fact and appreciating the serious loss which would be entailed, particularly to the producer, the government authorized Mr. John I. McFarland, the head of the pools sales agency, to purchase grain for future delivery when it was necessary to do so in order to hold the market steady. This was done and the whole transaction was successful in preventing a further serious reduction in the world price of wheat, as Winnipeg has been the pivotal point of wheat marketing, influencing the price of wheat in the world markets. The result of this movement has been to hold the market steady and prevent the dumping of unusual quantities of cash wheat upon the market. It also distributed the marketing of wheat over a longer period of time. There are strong evidences that by holding the market reasonably steady for the past two years, this movement will prove to have been successful in itself, because it has given time together with natural processes, for the absorption of the tremendous overhang of 350,000,000 to 400,000,000 bushels in the hands of the United States.
During the past two months, the wheat market has been very steady, showing an inclination for slow but sure advancement.
The Dominion government, through this action, is not faced with any immediate loss, as we are able to carry forward these contracts and liquidate them only as market conditions warrant.
Up to the present it has not cost a cent to do so, and the possibility of liquidating the whole situation without a dollar of loss is not an unreasonable expectation.
The Budget-Mr. Stevens
Let me again assure my hon. friend (Mr. Casgrain) I had this written out merely for the purpose of accuracy owing to the importance of the subject and my desire to get before the house as clear a statement as I could give it on this very important matter. But I pause now to emphasize this, and I ask my hon. friends, particularly those from western Canada, to accord to a government at least some measure of cooperation and support when we make an effort of this kind, obviously taking some risks in judgment, for the purpose of holding steady the great wheat market of Canada which is one of the most important things affecting our economic life.
My hon. friend opposed the budget proposals. He opposed the reduction of the pound for duty purposes from $4.40 to $4.25. He opposed the exchange stablization scheme. He opposed reductions in tariff on some thirty items.
Subtopic: CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE