Mr. VIEN:

How does that compare

with the expenditure?

Sir GEORGE FOSTER:

The expendi-

* ture that is asked to be voted for the coming year is $1,175,000. The expenditure up to January 31, 1921, was $982,431, but of course the accounts are not all in for the year ending to-day, nor even for the period up to January 31. The expenditure so far as the accounts have come in, is quite a bit less than the revenue up to January 31. There is no doubt that the

revenue for the year ending to-day will be over and above the expenditure.

Mr. McKENZIE:

Does the minister follow the financial year or the calendar year in adjusting these accounts?

Sir GEORGE FOSTER:

The financial

year.

Mr. SINCLAIR (Antigonish and Guys-borough) :

I should like some information from the minister in connection with an answer which was given yesterday by the Minister of Finance to a question I asked. My question was, what were the approved securities forming part of the basis on which a large number of Dominion notes were issued. Dominion notes are authorized up to a certain number of millions of dollars, according to the gold kept in the vault. A change has been made in the statute by which not only gold but securities forming part of the basis on issue of Dominion notes. The question was, what are the particular securities on which this $127,000,000 of Dominion notes are issued? The Minister of Finance tells us that, among other things, Dominion of Canada bonds were one of the securities, others being bonds of the Canadian National Railways and assignments of grain and produce. How can grain and produce be used as a basis of currency in Canada?

Sir GEORGE FOSTER:

What is the last phrase my hon. friend is reading?

Mr. SINCLAIR (Antigonish and Guys-borough):

A number of securities are specified, among others, assignments of grain and produce and demand notes of commercial houses endorsed by banks to the order of the Minister of Finance. Now, it was a new idea to me that grain and produce could be used as a basis of issue of notes for circulation in Canada. We were accustomed to the idea that Dominion notes must be based on gold, and I confess it was a rather startling idea to me that bonds of the Canadian Government,-a debt owed by the Government itself-could be used as a basis for the issue of further notes. That, however, is not the question I am asking now. The question is: By what means are grain and produce used as a basis for issuing Dominion notes?

Sir GEORGE FOSTER:

I am not entirely conversant with the matter. The Minister of Finance will give more precise information to my hon. friend. But I suppose

that these are bankers' securities that they hold. It does not mean that grain in its passage through Canada can be, or is, in any way used as a basis lor the issue of Dominion notes. It must mean that notes are issued on the strength of securities which the bankers have. However, I would prefer my hon. friend to take the matter up with the Minister of Finance.

Mr. VIEN:

Will the minister please explain these items contained on page Z 12 of the Auditor General's report?

* Advances to George Searls, chief inspector, Winnipeg, $115,711. Advances to George Searls, chief inspector, Winnipeg, $129,445.57.

It seems that the Auditor General's report does not afford much information with regard to the expenditure of this money.

Sir GEORGE FOSTER:

My hon. friend will quite understand the purpose of these advances. Mr. Searls is chief inspector of the whole of the grain business and has a large staff at Winnipeg working under him. All the samplers, graders, inspectors and clerks who have to carry on this manifold work must be paid, and an advance is put into the bank to the credit of Mr. Searls. When these salary cheques become due he checks out against that advance.

Mr. BELAND:

His own personal

cheques?

Sir GEORGE FOSTER:

No, the

cheques are all official. It may be that his is the last signature, but the cheques are thoroughly conserved as to security.

Mr. VIEN:

Are all these employees under Civil Service Commission appointment?

Sir GEORGE FOSTER:

They are all under Civil Service Commission appointment except those that are not.

Oh, oh!

Sir GEORGE FOSTER:

That statement sounds superfluous, no doubt, but I will explain the situation to my hon. friend. Those that are not under the Civil Service Commission are nevertheless under a certain regulation; according to the income of the grain at different seasons, or at different periods within active seasons, it is necessary to put on a certain number of temporary employees. Similarly, if a man goes out through sickness or any other cause someone must be put in his place. Now, it is obviously impossible to carry on these operations uninterruptedly if a written request for employees to fill these tem-

porary positions must be sent to the Civil Service Commission. If such written applications were sent to the commission, the positions would have to be advertised, and that, of course, would consume so much time that in the interval the service would be disorganized. Under an arrangement with the Civil Service Commission, the staff officer out there, Mr. Searls, can put on these temporary employees as the necessity for them arises. They cannot be termed permanent because, after a little time, the rush is over and their services are immediately dispensed with. Trouble having become imminent in regard to temporary positions, I requested the Civil Service Commission to send one of their number to Winnipeg. He went into the whole matter with the authorities there, and this arrangement was agreed upon between them and is being carried out under the supervision of the Commission.

Mr. VIEN:

What is the system that

prevails in the appointment of these temporary employees?

Sir GEORGE FOSTER:

I cannot give complete information regarding the whole modus operandi.

Mr. BELAND:

Is it similar to the

system in connection with the census?

Sir GEORGE FOSTER:

No.