Mr. GUTHRIE:

May we have some explanation?

Mr. ROBB:

I gave the explanation before six o'clock.

Mr. BENNETT:

There is a very great

deal to be said with respect to this matter, because it is involved in the application of a principle which has been applied on several occasions in Great Britain, but I shall not endeavour to' discuss the matter to-night. I will reserve my criticism and suggestions for the second reading of the bill, without in any sense concurring in the resolution now before the house.

Mr. IRVINE:

Just as a matter of information I wish the Minister of Finance would inform the committee how he proposes to borrow money, say next year, at a rate of interest which may range from one per cent to four per cent, to retire bonds paying five and one-half per cent in 1932 or 1933, as the case may be, without losing money? I do not see how it can be done.

Mr. ROBB:

That is quite a reasonable

question, Mr. Chairman, and if we find that at the rates of interest Which are suggested we cannot convert these outstanding bonds, we will not do it. I think the record of the government goes to show that any re-financing has always been done at a low rate of interest, and that will be the policy followed in this case. We are simply asking parliament to give us the authority so that if we find it possible' to convert these outstanding loans at a rate of interest sufficiently low to save the country something on the interest, we will do so. V e are told by financial men from time to time that there are frequent transactions going through their books involving these outstanding bonds, and we are advised that by a refunding arrangement, enabling

people who hold these outstanding bonds now at a high rate of interest to refund them, we will save money. Let me say now that we will try to provide in future that in loans of this magnitude it will be possible for the Minister of Finance to call in these bonds, if he finds the market so working that it will be to the advantage of the country to do so, and refund them again at a low rate of interest.

Mr. GARDINER:

Before six o'clock the

minister gave us various items which were to be refunded in the next few yearn. I believe the first large item was about $446,000,000, due in 1933, and in 1934 we have another large sum of about $511,000,000. The other figures given by the minister ranged from $53,000,000 to $73,000,000, in different issues, and he also made the statement that he expected to pay the smaller bond issues in cash up to 1932. In view of the fact that the real refunding will be in connection with the larger loans, is it within the power of the minister to call in those issues before they mature, and pay them off or refund them? I suppose that would be a question of bargaining, but I would like the minister to explain the situation.

Mr. ROBB:

We have no authority to say to my hon. friend or to any other person holding these bonds, " Bring in your bonds and we will give you cash for them." We believe, however, that we can put a price on them which will be attractive and which will permit us to refund them at a rate of interest which will result in a saving to the country.

Mr. IRVINE:

Could the minister give us any idea as to where these bonds are held?

Mr. ROBB:

No, I have no idea where these particular bonds are held, but I can give the house information as to the bonds payable outside of Canada. Between 1929 and 1952 there are payable in New York bonds to the value of about $225,874,000, while there are bonds maturing in London between 1934 and 1960, inclusive, amounting to $311,668,138.39. The debt of the country is largely held in Canada.

Mr. IRVINE:

May I ask if any portion of the bonds which the minister contemplates retiring by this loan are tax free bonds?

Mr. ROBB:

That information is not on

record; I have just sent out for it, but there is a considerable proportion of these bonds which are tax free.

Mr. MATTHEWS:

The 1933 bonds are

tax free, while the 1934 bonds are taxable.

Dominion Notes Act

Mr. GARDINER:

Has the .minister any

information as to where these different issues were floated, whether in Canada or abroad?

Mr. ROBB:

Most of them are payable in

Canada; some are payable in New York while some are payable in both Canada and New York. In New York we have $60,000,000 due in 1929; in 1931 we have $25,000,000 due; in 1935 we have $874,000 due in Canada and New Y'ork; in 1936 we have $40,000,000 due, and in 1952 we have an issue amounting to $100,000,000. The rest are all payable in Canada, with the exception of a loan of $45,000,000 maturing in 1930, which is payable in New York and Canada. Let me repeat that we hope to be able to retire out of revenue, without going into the market, the maturities of 1928, amounting to $53,000,000; the maturities of 1930 amounting to $65,000,000. the maturities of 1931 amounting to $52,000,000 and those of 1932 amounting to $73,000,000, but it is too much to expect the Canadian people to take care of the larger maturities of 1933, although they may take care of them in part.

Mr. MATTHEWS:

I believe I can answer the question which was asked by my hon. friend. The 1933 issue is payable in Canada only; it is non-taxable and is apparently the issue which this $500,000,000 is intended to retire. That issue is not payable anywhere except in Canada.

Mr. IRVINE:

Mr. Chairman, at the risk

of making myself appear ridiculous to hon. members of this house who may claim to be high financiers, I desire to offer just one suggestion which I have made to the minister on previous occasions, but which I regret to say he has not as yet seen fit to accept. I do not believe we will have a better opportunity than the present to take over our own bonds. When all is said and done, the bonds which will be issued for this loan of $500 000,000 will be issued against the credit of Canada. I care not if the minister has to go to New York to get the loan, he will have to take Canada in his pocket; he will have to deposit Canada in Wall street and go to the front door to borrow back a portion of Canada at 4 per cent or 5 per cent as the case may be. I am still at a loss to know why that credit, which is good enough for Wall street, is not good enough for Canada, and I still wait for the minister to answer the question.

Mr. ROBB:

I do not want to be

discourteous to my friend, but I repeat that

the debt of Canada is largely held by Canadians, and in this refunding operation we propose to give Canadians the preference. But I say to the bond men and to the bankers of Canada that they will have to meet the rates of the world to get the business, or we will go elsewhere.

Resolution reported, read the second time and concurred in. Mr. Robb thereupon moved for leave to introduce Bill No. 35, to authorize the raising, by ivay of loan, of certain sums of money for the public service.

Motion agreed to and bill read the first time.