No, they are not; the hon. member is entirely wrong. State banks are not open at all; many of the national banks are not open and many of the federal banks are not open. But the point of the matter is this: not only was it calamitous for the interests of that country, but it has precipitated there a financial crisis which has' already drawn into the maelstrom of ruin several of the great insurance companies. That brings me to the point referred to last night by the hon. member for Winnipeg North Centre (Mr. Woodsworth) who said: Why is this government interested in insurance companies? Why does the goverment, he asks, safeguard insurance companies when the people of this country are out of work? I wish the hon. member were in his seat because I should
like to talk perhaps more plainly than I care to in his absence. But I would say this, that that is the utterance of a demagogue. It is a suggestion, and I put this to my hon. friends in the corner angularly opposite, that the actions taken by the government in the last year or two years, have been for the purpose of saving rich companies, and that on the other hand we are disregarding the welfare of the people.
Now what are the facts? In these insurance companies there are seven billions of dollars of insurance in force in Canada, including life insurance, health insurance, accident insurance, and all other classes of insurance, and included in the ambit of that enormous sum are hundreds of thousands, if not over a million, people insured. It represents the savings of hundreds of thousands of our people. It is their hope for the future should the head of the family be disabled or die, as the case may be. It is the economic lifeblood, shall I say, of hundreds of thousands of people in this country, and yet some of my hon. friends, the hon. member for Winnipeg North Centre and the hon. member for Southeast Grey (Miss Macphail) and some others advocate the disregard of our obligations in regard to bond interest and in regard to the payment of bonds, provincial and municipal, and yet, Mr. Speaker, those are the assets behind this seven billions of dollars of insurance in force in this country. This is the class of securities into which is poured the millions of dollars of premiums of the people of this country. They have twitted the Prime Minister over constantly talking about the credit of Canada, but if the Prime Minister was to listen to some of the arguments put to him in the past year in this house and disregard the credit of Canada it would mean the ruination, not simply of half a dozen or a dozen insurance companies, but of countless hundreds of thousands of poor people in this country whose savings are in the form of insurance premiums. These are things that it is well to keep in mind. If the credit of this country should collapse it would largely destroy the savings of these people to whom I have referred.
My hon. friend the member for Macleod (Mr. Coote) had a few words to say the other night, and I wish to say to him that with much that he has to say I do not find particular fault, but his chief demand was for a central bank. He . wants a central bank, and he described that as a national bank owned one hundred per cent by the state. That is what he wants-a central bank owned by the state. What is to be the policy of such a bank? He says that its policy must be laid down in black and white. What is it? The
The Budget-Mr. Stevens
policy of such a bank would be that it should maintain price levels, he says. Let us look at that for a moment.
It sounds very simple and very attractive. My hon. friend says he wants a central bank owned by the state to maintain price levels. If one does not analyze the proposal very closely, there is an attraction about it because one of the things we want to achieve above everything else is the restoration of price levels for commodities in this country and throughout the world; there is no question about that. We want the staple commodities of the world to rise in price. I pause here to interject that there are really only two main schools of thought on the economic situation. One holds that the process of deflation must be continued until interest, wages, service charges, and rents are brought down to the low level of any and all the staple commodities. On the other hand, there are those, and I think in this school the government and those on this side of the house largely stand, who hope that there will be found, and that we can find, a method for restoring price levels and obviating the necessity of dragging down all these other things to the lowest possible level. On the one hand you have complete liquidation; on the other hand you have a restoration of credit, and when I say credit I do not mean some nebulous thing that is handed out without anything behind it. Credit is a tangible thing. It exists in tw'o or three things-commodities, land, real estate and character, because character is very often used as credit. But there must be something tangible before any bank or institution will extend what is commonly called credit. Credit is not something that is available without anything behind it. So I say there are those two schools of thought.
My hon. friend from Macleod says, knowing that the proposal is attractive and appeals to the people, that the price levels should be raised. He says let us have a central bank. But it does not follow that a central bank would raise price levels. I have given the matter a tremendous amount of thought, so far as I am capable of doing it, and I confess that I do not see that a central bank would or could affect price levels to any extent. I do not. I say this-I said it in 1923 when the Bank Act was up for revision, I have said it many times since, and I say it again now- that we now have machinery under the Finance Act almost if not quite as flexible and effective as that of a central bank. But I do wish to point out that a central bank cannot fix prices; there is no doubt about
that. Nor can it maintain price levels, because price levels are the result of world conditions.
Idealistic theories are pleasant things to trifle and play with, but some of us are more anxious to find out how to apply those theories. What we are anxious about is to find the mechanics-shall I say?-of many of these proposals.
I have spoken longer, Mr. Speaker, than I intended but I should like, if I might be permitted, to turn away for a moment from the realm of controversy. The opposition in a debate of this kind have certain duties to perform. They criticize the government, and I have no quarrel with them. I have duties to perform as well, and my duty as far as I am able is to present views representing a defence of the government's course and a justification for the action it has taken. Obviously our views will clash from time to time, but may I crave the indulgence of the house for a few moments while I say a few words of a non-controversial character?
I have attempted as far as I was able to defend the government this afternoon. I feel that in doing so I have been doing but justice to my colleagues, many of whom are carrying loads which I think few in this house realize. For a moment I refer to the Prime Minister, who is perhaps the pivotal point of a great deal of abuse from various parts of the country because he is not able to come forward with complete solutions not only for public problems but for problems almost of a private character. There seems to be a tendency these days to lean upon governments, and to expect from them a solution of even local or private problems. The Prime Minister is condemned for trying to maintain the country's credit. He is attacked for this and for that, and yet from day to day, without any sparing of his time or his energy, what he is seeking to do is to guide this country through perhaps one of the most perplexing times in our history, and doing it I believe from one motive only, and that is a high sense of public duty.
My colleague the Minister of Finance (Mr. Rhodes), and I know this from my contacts with him, is daily confronted with demands from provinces and from every part of the country for financial assistance to overcome difficulties which are entirely foreign to the duty and the constituted power of this government or of this parliament.
My hon. friend the Minister of Railways (Mr. Manion), to whom I want to pay a tribute in his absence, attacked the railway problem in this country two and a half or
The Budget-Mr. Motherwell
three years ago in a most intelligent and vigorous way, and it is very largely as a result of his efforts that the improvements which have taken place in regard to expenditures have been achieved.
Then we have the Minister of Labour (Mr. Gordon). Who would envy him his task in meeting the problem of unemployment, a task which it is impossible for one properly to describe. I say the government have endeavoured, as far as we can from day to day, to meet the problems of the day as they present themselves to us.
May I say this: Canada is a democracy, is still a democracy and I hope will remain a democracy. But the success of a democracy depends upon the extent to which each individual unit which goes to make up that democracy discharges his or her obligation as a citizen of the country. I fear that in these days there is a tendency on the part of many citizens to lean too much on governments, whether they be municipal, provincial or federal, and to look for help and assistance where very often they could fend for themselves. Unless we can imbue the mass of the people with a sense of responsibility, then there is not much hope for this Canadian democracy.
But, sir, I have hope for it. I have confidence in it. I believe our Canadian democracy will overcome the difficulties with which we are confronted. Not perhaps to-day or to-morrow but as the days go by and as the people once more become fully seized of their duty and their sense of responsibility, these difficulties will be overcome. All we can do as a government is to confront our task each day, and to endeavour to the best of our ability to discharge our duties. All we can ask of hon. members opposite, all we can ask of provincial governments and others holding public positions in Canada is that they shall attempt to do the same. We do say to hon. members opposite -not that we are asking any consideration for our actions-that we do feel that there are tasks in which all of us can join in an effort to solve the problems with which Canada is confronted.
Subtopic: CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE