Mr. C. G. MacNEIL (Vancouver North):
Mr. Speaker, I share the impatience expressed by some of the previous speakers at certain features of the debate, and the meagre promise given of remedial legislation designed to eope with the situation before us. The Prime Minister (Mr. Mackenzie King), the leader of the opposition (Mr. Bennett) and members on both sides of the chamber, have made brief but impressive reference to the seriousness of the situation, and it is gratifying that there is agreement on this score. As some of our national problems overshadow all other considerations, I had hoped that at the opening of this parliament we might dispense with the customary exchange of partisan pleasantries or. recriminations and address ourselves soberly to the pressing problems of the moment.
The situation as I view it not only places a grave responsibility upon the administration but constitutes a most acute crisis for the majority of our Canadian people. In my humble opinion it is not quite so important that we should carefully observe the ritual of a bygone day, as that we should observe the democratic traditions of a British parliament, by which this house may become an instrument for imperative social change and the necessary adaptation of our political approach to rapidly changing social and economic problems.
During this debate uncomfortable revelations have been made indicating that party considerations are frequently placed before national considerations. Quite properly reference has been made by many speakers to the
necessity of preserving in this house the principles of democracy-" government of the people, by the people, for the people." But may I point out that nothing so imperils the security of our democracy as those appeals to the electorate designed to arouse prejudice rather than to establish a sound political consciousness. or a sane comprehensive outlook on our national problems. I feel that it is a sad day for our democracy when any party, simply by commanding extensive financial resources, may control the facilities of propaganda and thus obscure the real issues. It is to be deplored that attempts should have been made to exploit, in a coercive manner, the relationships between employer and employee. In my opinion such methods ultimately create grave distrust in our political institutions and cause many of our people to seek political expression through means usually regarded as unconstitutional.
In this respect I regret that hon. members on the other side of the house have chosen to speak slightingly of groups sitting in this corner. Whatever differences of opinion may exist, I submit that we represent a large body of opinion, an important cross-section of the electorate, composed of decent, law-abiding people, with decent aspirations, who sought with the ballot, in a constitutional manner, to register their protest against conditions which may be rightly regarded as intolerable, and to express their firm resolution to establish in this country for our people a more satisfactory way of living. Any intolerant or con-temptous treatment of these views is not consistent with the best parliamentary tradition in Canada. Of all matters arising during the recent campaign the one which I think might be discussed to the greatest advantage is the fact that an increasing number of people in Canada are restless, not only because of the chilling fear of insecurity but also because of a growing distrust of our political institutions. Far too many people regard this house as merely an instrument to preserve the status quo rather than as a medium through which they may obtain redress for social and economic wrongs. I hope we may have some assurance from the Prime Minister that due recognition will be given to the views advocated by this and other minority groups, for arbitrarily and contemptuously to refuse consideration of these views so strongly desired by so many people would accentuate rather than minimize the gravity of the situation.
I make these remarks in the light of recent experience. Before my departure to attend this session I took the opportunity to cross the constituency which I represent here in
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order to secure as far as possible some discussion of the problems which, in the opinion of the electors, should be brought to the attention of the house. In my opinion it was a wholesome sign that there participated in these meetings and discussions many who had not found it possible to support the platform on which I was elected. They were'willing to lay aside partisan considerations and bitterness and to enter into these discussions. I found that they were not concerned in any great degree with' party considerations or party aggrandizement but that they were mainly concerned with the solution of those problems that weigh most heavily at the present time on all sections of our community. I can safely say, Mr. Speaker, that in the constituency of Vancouver North but a very small percentage of the population enjoys any reasonable degree of economic security, and we have had to face some of the more ghastly phases of destitution and want.
Should I be suspected of exaggeration you need not accept my unsupported statement. Ask the doctors, the nurses, the social welfare workers in the more thickly populated areas. Ask such men as the Reverend John Antle of the Columbia coast mission and his assistants, who now must minister not only to the spiritual but also to the physical needs of the people facing great hardships along the coasts of British Columbia. If you could step on that mission ship to-night you would find it laden with clothing required for women and children who otherwise would be without. They are making a valiant attempt to cope with a situation for which as yet adequate provision has not been made by the state. All these people will tell you that they are facing conditions that may be described as nothing short of appalling and that constitute an ugly blot on our Canadian life.
In my effort to gain some insight into the desires of the electors of my constituency I found that it was these matters about which they were mainly concerned. They asked me what might be done to relieve the distress and degradation imposed upon their fellows in their communities. They asked me how they might regain some reasonable degree of security and escape the precarious modes of living which they must now undertake. They asked me what might be done more properly to equate consumption needs with their ability to produce the things needed for a satisfactory standard of living. Not once but several times I was reminded, "Mr. MacNeil, I hope when you reach Ottawa you will not forget us poor folk"- a very touching plea. I mention this now not for reasons of sentiment, but because it reveals a very ,
general belief that too often in the deliberations of the house the interests of the common folk are relegated to the background.
I believe, sir, in the expression of its views the house should more clearly and definitely reflect this anxiety, this concern of the great majority of the electors of this country. It is of very little advantage to promote the temporary prosperity of the few while the many are permanently depressed, and I submit that unless we place these considerations above all others during this and succeeding sessions, not only the present administration but parliament itself will forfeit, and rightly forfeit, the confidence of the people.
I am especially interested in the reference made in the speech from the throne to unemployment. I find there scant comfort for those who must now endure the tragic consequences of a prolonged period of unemployment. Of these problems I may claim, sir, to have intimate knowledge, gained through painful personal experience. On numerous occasions I have been delegated to present the views of the unemployed before the local authorities, so I think I may claim to hold, to some extent, a special brief for the unemployed. I know something of the barriers that, under present conditions, confront men who by industry and thrift are attempting to rehabilitate themselves in our national life. My plea on behalf of the unemployed is not for more compassionate consideration of their needs, though heaven knows they need more compassionate consideration. My plea is that conditions at present existing among our unemployed in Canada should be dealt with more definitely from the standpoint of the public interest, for it is not in the public interest that we should any longer permit the perpetuation of conditions that have shattered so many of our Canadian homes and wrecked the lives of thousands of our young people.
The true nature of the problem is not revealed in the official statistics available; nevertheless these statistics give some inkling of the magnitude of the problem. We know that in Canada to-day there are over a million people so destitute of this world's goods that they must appeal for aid from the public treasury. We know that an equally large number are in almost as serious a plight, sometimes on relief and sometimes off, always on the fringe of destitution and subject to almost unendurable insecurity. We also know that prior to the end of December, 1935, a sum in excess of $500,000,000 has been expended from the federal, provincial and municipal treasuries under relief measures, and this vast sum does not include
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enormous amounts collected and disbursed by semi-public charitable institutions. We know that there has been serious exploitation of the unemployed by unscrupulous employers of labour, and this situation has tended to lower wage levels and in that respect has dealt serious injury to the working class in this country. The cumulative results of this prolonged period of unemployment, coupled with inadequate relief measures, are not generally understood. It is easy to say glibly that over a million people in Canada are destitute to the degree that they must accept public relief, but to understand the situation properly it must be thought of in terms of the lack in those homes of butter and sugar and meat and proper clothing, of living under leaky roofs and without proper sanitary facilities. We must recognize that due to the long continuance of unemployment people have been unable to replace articles of household equipment necessary for healthy living. In many sections of the constituency which I represent people are herded in slum housing conditions that will soon be as bad as those we read of with horror in the cities of Europe. This not only results in the impairment of physical health and a consequent national loss, but constitutes a grave threat to the national welfare, for if an epidemic should break out among people living under such conditions it would menace not only them but the entire community. In this and other respects unemployment is a threat to the welfare of the entire nation.
Another consideration that is generally overlooked is that prolonged unemployment has resulted in serious deterioration of manual skill. You see this as you observe men struggling to regain a foothold in industry after three or four years of enforced idleness; they find it extremely difficult to regain the skill demanded in modern industry. Many are falling by the wayside. This is particularly noticeable in the relief camps. Recently I spent some time visiting several of the larger relief camps in British Columbia. I was extended every courtesy. I admit that these camps are conducted as well as possible under the circumstances. They are often referred to as slave compounds; 1 am not inclined to use that description tonight, but my impression of them is one of human scrap heaps. There you find young men with no outlet for their talents, no hope of regaining their rightful place in the life of the community. It was suggested by one speaker that the average stay in these camps is only ninety-five days, but I found
men there who have fallen into such a state of hopelessness, who have lost ambition to the extent that they have been in those camps two or three years without making any attempt even to reach the nearest city. I heartily concur in the remarks of the Minister of Labour (Mr. Rogers) that this atmosphere of hopelessness is something that should cause us grave concern. Men are scrapped, given no opportunity. It is suggested that educational facilities have been provided, but I ask any hon. member to explain to me how under such conditions the inmates of these camps can profitably pursue studies or even read. Let any one examine the supply of literature, the magazines, and he will realize that it is absurd to say that the men are being given educational or even proper recreational facilities. All these conditions tend to produce an attitude of apathy and hopelessness that in my opinion is terrible. I suggest that in considering further public expenditures beyond the staggering sums already disbursed we should insist that such expenditures should represent not so much a grudging dole, not so much a cheap form of insurance against social disorder but a genuine investment in the rehabilitation of human lives.
In this connection I deplore very much official statements sometimes appearing in the public press to the effect that relief has become a racket. This creates the impression that in the official mind the unemployed are regarded merely as a tiresome responsibility, as a group of people who have not jobs and so must be fed. I am in a position to give the lie direct to the statement often made that the unemployed consist largely of those who have no work because they will not work. Anyone who has made a careful study of the situation knows that the army of the unemployed is recruited from all walks of life, represents all trades, all professions, all occupations. Above all, they are human beings, and unemployment does terrible things to human beings. And they are not just an appendage to the nation, they are our own people; they are in and of the nation, and what touches one touches all. I have met many men who have lost members of their family in recent years; one man in particular lost his wife because she was unable to obtain adequate medical attention when required. He shook his fist in my face and said, "MacNeil, they murdered my wife," and when I considered the circumstances related by him I could not quarrel with that statement. We should consider the situation revealed in a recent statement by a mother in
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Vancouver, who found to her horror that her son, after having spent years moping around the home while the family was on relief, had become involved in the underworld. These conditions have engendered bitterness which I feel has some justification.
In the speech from the throne the government proposes stimulation of industry by various methods. May I point out that even if by trade agreements or other legislation industry could be restored to, let us say, the production level of 1929, yet by reason of the technological advance of industry there would still be no work for fifty per cent of our unemployed. It is proposed that a commission be established. I have a vision of how that message will be received by the unemployed. They will ask, as did the leader of the opposition (Mr. Bennett): What for? Is it for further inquiry, or is it for the development of a policy to deal with this serious situation? May I direct the attention of the government to the fact that the conditions of the unemployed have already been investigated to the last humiliating item and in the most intimate manner. The magnitude of the problem is already fairly known, in general terms, and no good purpose could be served by any further inquiry into the matter. The facts are now before the government. I submit further that the problem is of such proportions that no commission appointed by the government could possibly evolve a policy which would adequately meet the situation or assume the responsibility which in my opinion should properly be borne by the administration and by members of this House of Commons. Under the system which has prevailed in the past these, our people, have been scrapped; they have been left to rot, and rot spreads. For these reasons the unemployment which is permitted to exist in Canada to-day is undermining the very stability of our national life. I would urge that because of these conditions we should now engage in a unified and national effort to wipe out the social injustices which find expression in the tragedies of unemployment.
One of the greatest problems related to that of unemployment is found in connection with a large number of ex-service men. About 50,000 Canadian and imperial ex-service men will be extremely disappointed because in the speech from the throne no reference has been made to steps which might be taken by the government to implement the recommendations of the Hyndman commission. I submit that procrastination in the solution of this problem is the more costly procedure.
Able-bodied ex-service men must, of course, cast in their lot with their fellow workers. As I understand the situation, they do not desire any preferential treatment, but I submit that every consideration is due ex-service men who are physically handicapped but who are not eligible for benefits under the Pension Act or the War Veterans Allowance Act. Their problem has not yet been solved, and it would ease the general situation if certain well defined categories of ex-service men who are physically handicapped and have a special claim on the nation should be now taken off the labour market. I would urge upon the government that during this session an opportunity be provided for further discussion of this matter, and an examination of the evidence that has been so painstakingly prepared by large and important organizations of ex-service men.
The chief problem we must consider has to do with the security of our Canadian people, and using to some extent the words of a prominent United States business man I suggest that we will enjoy the wealth that is ours in Canada only as we endeavour to distribute that wealth equitably among all. We will enjoy security, that which so many of our people passionately desire, only as we establish security for all. We will enjoy economic liberty as well as the political liberty of which we boast, only as we liberate the masses of our people from the sordid and age-old struggle for food, shelter and clothing and make it possible for them to release their energies in the ways that are indicated by human aspirations.
Mr. VICTOR QUELCH '(Acadia): Mr. Speaker, in the speech from the throne we find the statement that unemployment continues to be Canada's most urgeht problem, and that the government intends to endeavour to put every man back to work. But to-day it is evident that unemployment is inherent in any system that does not deliberately make work, and it is therefore useless to hope that by increasing industrial activity it will ever be possible to reabsorb the total army of the unemployed. Under the heading of Sources of Unemployment, in the December issue of the Labour Gazette, page 1126, we find the following statement:
The recent depression might never have reached such alarming proportions if the economic equilibrium of the world had not first of all been upset by the growth of unemployment right in the middle of a period of economic recovery and prosperity.
Stuart Chase, in dealing with this subject, points out that onward, from 1920 to 1929, in spite of the fact that the output of industry
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was steadily increasing and that we had an be a major catastrophe, because we would era of prosperity, unemployment was steadily produce tremendous quantities of goods which increasing at the same time. The time has the people would not have the purchasing evidently come when industrial efficiency power to buy. The final result would be apparently has little use for more man power wholesale bankruptcies, followed eventually in the great primary industries, no matter by wholesale unemployment, and the last how much the output of industry increases, stage of the people would be worse than the However, surely that is not any reason for first.
sorrow. For generations past we have been striving to increase the productive capacity of man by the use of scientific inventions, and to-day we find that we have been so successful that we are actually in possession of surplus productive capacity, both machine and man power. We have emerged from an era of scarcity into an era of abundance, and we have reached that ,-tage where it is both possible and logical that we should engage in an era of greater leisure. As Major Douglas has put the matter, the best brains are endeavouring to put this world out of work, to create what is miscalled an unemployment problem, but which in reality is a condition of greater leisure. A viewpoint similar to that is expressed by the League of Nations World Economic Survey of 1932-33, which report, in dealing with wages and social policy, states as follows:
Considering the mechanization of industry from the standpoint of history, it becomes evident that the age of abundance is the goal towards which mankind has heen striving since earliest days. That we are prone to look upon facilitation of production as a curse resulting in poverty and idleness, and' not a blessed relief from toil, is merely an indication of the defective nature of our present economic system.
I should like to repeat that last sentence:
That we are prone to look upon facilitation of production as a curse resulting in poverty and idleness, and not a blessed relief from toil, is merely an indication of the defective nature of our present economic system.
In this regard we should remember the words of Irving Fisher, as they appear in his book, Booms and Depressions. He points out the fact that "the depression was not caused by unemployment," and it also follows suit that even if it were possible to do away with unemployment we would not necessarily do away with the depression. For example: If we were to borrow a sufficient sum of money to put every man to work on a program of public works, what would be the result? There would be a tremendous increase in fixed debt charges; there would be higher prices, and eventually we would be actually decreasing the purchasing power of the people. Then again, if we were to put every man to work in industry, would we have found a solution of our difficulties? No. The result would
It is also true to state that the depression is not the cause of unemployment, because unemployment has been steadily increasing in times of prosperity. We must realize that to-day unemployment is a sign of progress, and the only reason we are not in a position to take advantage of this progress is because, as the League of Nations has stated, we are operating under a defective economic system. Upon an investigation of the economic system, as our leader has already stated, we find that owing to certain practices industry fails to distribute sufficient purchasing power to buy back its own production. If that statement is correct, what would we expect to find as a result? We would find that there would be a large surplus of goods produced that the people would not be able to buy, and as industry could not continue to produce a surplus of goods that it could not sell it would be obliged to dismiss some of its employees. That in turn would decrease their purchasing power and decrease the effective demand as against the supply of goods, thereby resulting in more goods remaining unsold, and industry dismissing more men, and so the vicious circle would steadily narrow.
Is that not exactly the condition that we find throughout the world to-day? In the days before the machine era the profits of individual workers were small and as such were available as purchasing power; but today, owing to the great mechanization and centralization of industry, we find that the profits of the corporations are sufficiently large that their beneficiaries, even though they explore every form of luxury, do not need to spend their entire income, with the result that a portion of it is saved, and so long as it is saved it is not available as purchasing power. If it is eventually spent on goods it becomes available as purchasing power, but if on the other hand these savings become reinvested in new production and used as working capital, then there will be caused a permanent deficiency of purchasing power equal to the amount of the reinvestment. If this were a matter of only a few hundreds of thousands of dollars I would not take time to deal with it, but as there are many millions of dollars involved I shall deal with it at some length.
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Mr. P. W. Martin, in his book Unemployment and Purchasing Power, has this to say on the question of reinvestment of savings:
So long as the circulating medium of exchange is put to its two uses of (1) inducing production (i.e. paying wages and dividends) and (2) buying the production thus induced, alternately, industry can sell all it makes. But it must be alternately. When part of the community's purchasing power is used not to buy goods but to add to the working capital, this necessary alternation is not being observed; purchasing power is being used twice running for the same purpose. The circulating medium has short circuited as it were. Money which should have been used to purchase goods is being used, for the second time in succession, to induce further production, and, as an inevitable consequence more production will be induced than there is purchasing power available to buy it.
To show the great extent to which this practice takes place I should like to quote from the Pollack Foundation, from a book entitled Profits:
Profits from industry in the U.S.A. in one year were $6,/00,000,000. Of this amount $3,900,000,000 was paid out in dividends, and $2,800,000,000 was reinvested in new production.
Now this $2,800,000,000 had already entered into the cost of one set of goods, and instead of being made available to buy these goods it was immediately thrown into the cost of producing more goods. One purchasing power cannot pay for two costs, and yet we wonder at the absence of purchasing power.
Without taking time to deal with very many of the causes of the deficiency of purchasing power I might refer to the fact that depreciation charges also constitute a large part of the deficiency. Interest charges and profit charges, becoming afterwards reinvested, would also cause a deficiency. Then there is deflation, the results of which we know only too well, so I shall not take time to deal with them.
In view of these facts it becomes evident that the income of the people cannot buy the country's total production. Orthodox economists attack this statement on the ground that it does not need to, as people are not interested in buying capital goods such as plant and equipment. So let us follow the argument along these lines: that the income of the people as represented by payment of salaries, wages and dividends from the production of capital goods, plus salaries, wages and dividends from the production of consumption goods, is inadequate to pay the total price of consumption goods, unless you can have a volume of capital production sufficiently great that the payment of salaries.
wages and dividends from the production of capital goods is equal to the amount of the deficiency that exists as between the total prices of ultimate goods and the amount of purchasing power distributed in their production. Now, if in order to bring about this equation we carry out a program of production of capital goods, what are we going to do with it? If we ship these goods to other countries we would have to demand gold in payment, and immediately we would find that every other country was attempting to do the same thing, and we would very soon be faced with a vanishing market. If we attempt to bring about this equation through a program of public works, how is it going to be financed? In the past it has been financed by borrowing money which has had to be repaid by taxation and there would be interest charges that would also have to be repaid by taxation, so that in the final analysis we would be actually decreasing purchasing power instead of increasing it. In support of this statement I would like to quote from an orthodox authority, Mr. Jackson Dodds, who appeared as a -witness before the standing committee on banking and commerce in 1934, and gave evidence. He was being questioned by Mr. Irvine:
Mr. Irvine: I am trying to get at this as basically as possible. I want to know if we have a depression now. The witness says we have. He has told us how the bankers discovered that there was a depression. I am now getting at what brought it here, and I am trying to arrive at that by a process of elimination. He says there is plenty of wealth, plenty of goods, and with plenty of resources we can make more. Well then, the question is, is it because of the incapacity of the Canadian peoples' stomachs and backs to use these goods within the last few years that we have this depression?
Mr. Jackson Dodds: No, I would say it is because we cannot sell these goods.
Mr. Irvine: Why cannot we sell them?
Mr. Dodds: Because people outside the
country won't buy them.
Mr. Irvine: What about the people inside the country?
Mr. Dodds: Well, the people inside the
country are also doing business on the basis of what is sold outside the country, and if there is no business going on outside the country, that is, if we are not doing an international trade, business must fall off within the country.
That statement very ably backs up the contention of Major Douglas that it does not matter how great a wealth of goods you have within a country; you may be able to produce a surplus of every kind of commodity imaginable, but unless you can sell a certain proportion of those goods outside the country so that the salaries, wages and dividends paid
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out in their production are equal to the amount of the deficiency of purchasing power that exists within the country it will be impossible for the people to buy the goods they require and that are available for distribution.
Borrowing money to finance a program of public works can be considered sound business only if the money can 'be borrowed without paying interest charges, and, second, if it never has to be repaid. In support of that I would like to go back to the year 1913 and follow the debt growth from that time on. We find that the total bonded indebtedness of Canada in 1913 stood1 at the figure of $2,132,000,000. By 1933 it had increased to $8,972,000,000, or an increase of 8 per cent compounded annually; in other words, an increase of 323 per cent in two decades. In 1913, it took 13 per cent of the net production of the country to pay the fixed debt charges. By 1933, it took 42-8 per cent of the net production of the country to pay the fixed debt charges. If we are going to continue in the future at the same rate that we have progressed in the past, it can be only a question of time before the fixed debt charges of the country will be greater than its total production. And then what will be the result? I suppose some members will tell us that, in order that the sacredness of the written contract may be maintained, the people of Canada must be prepared to starve, just as in the past some hon. members have told us that, in order that the sacredness of the written contract may be maintained, the people of Canada must be willing to tighten their belts. It would be interesting to know exactly what happens to the vast annual payment of debt. No doubt some of it will find its way into the pockets of the small investor and be used as purchasing power. But unfortunately by far the greater proportion of it will be lost as purchasing power by repayments of loans to the banks, cancellation of book entries, and also by being used for reinvestment purposes by the large investor.
The foregoing summary is sufficient to prove Major Douglas's contention that industry fails to distribute sufficient purchasing power to buy back its own production, with the result that there is a steady increase of unemployment, and also that there is a continual fight for foreign markets.
In view of these "facts, what is the real problem before us to-day? Unemployment? No, because for generations past we have been striving to bring about an era of greater leisure, and the problem becomes merely one of bringing about a more equitable distribution of the work that there is to be done. Foreign markets? No, because we have in Canada a great market crying out for these goods, and the goods we do not require can be exchanged for those we cannot produce in Canada. No; the problem is: first, to stimulate the purchasing power of the people of Canada until it is equal to the capacity of industry to produce and deliver goods; second, as the capacity of industry to produce and deliver goods increases, to guarantee that the ability of the people to procure these goods shall be increased to a like degree. We claim that this can be accomplished only by financing consumption, and in order to do this it will be necessary to regain for the nation the control and issue of currency and credit. We should keep in mind that anything that is physically possible can be made financially possible; that the only real justification for production is consumption; that is, that the only real reason for producing goods is in order that they may be consumed. Therefore, before seeking foreign markets, let us be certain first of all that we have satisfied the requirements of our own people.
In closing I would like to remind the house of the words of Einstein regarding this subject, that:
The purchasing power of the masses must never be allowed to fall below the collective prices of commodities.
In other words we must equate consumption with production.
Topic: GOVERNOR GENERAL'S SPEECH
Subtopic: CONTINUATION OF DEBATE ON ADDRESS IN REPLY