Mr. POWER:

They are in the deal and

they were up to their necks when the price was thirty-eight. The order in council reads: "application of the amounts realized," that is the swag from the gamble, the kitty. It continues:

Application of the amounts realized, less expenses, shall be made against such advances and interest, and thereupon the governor in council, on the recommendation of the Minister of Finance, shall determine the date at which payments are to be made in pursuance of this guarantee.

If we are lucky we may get a little money for unemployment relief, and that will not be such a .bad idea. We would have as much chance to relieve unemployment through gambling as we would have through some of the other policies of the government.

Mr. SPEAKMAN:

It is just as good as

a sweepstake bill for hospitals.

Mr. POWER:

At any rate I stated its

purpose quite frankly. There was no hypocrisy about it, I admitted it was gambling. The final paragraph of .the order in council of April 12, 1933, reads:

The minister finally recommends that should the Relief Act, 1933, expire and no renewal or further extension of the powers therein contained be then exacted, and any portion of such advances or interest to wheat producers be unpaid to the said banks, wheat producers shall pi'oceed to sell and dispose of all wheat and other grains, if any, in its possession or control acquired under the guarantee of the governor in council and shall proceed to sell and dispose of all contracts entered into and falling within the guarantee of the governor in council for the future delivery to it of wheat and other grains. Application of the amounts realized, less expenses, shall be made against such advances and interest, and thereupon the governor in council, on the recommendation of the Minister of Finance, shall determine the date at which payments are to be made in pursuance of this guarantee.

I am not quite sure just what that means, but it looks as though when the Relief Act, 1933, is about to expire the government will be able to come to us and say: Unless you pass this act at once we are going to dump so many million bushels of wheat upon the market, and think what the results will be in western Canada! I cannot see any other reason for it. They are going to order the sale of this wheat before the Relief Act expires, and if it does not, apparently the wheat will have to be disposed of.

There is one other point: I have not the order in council before me, but perhaps the minister cau give some explanation of it. It is an order in council passed a month or so ago. dealing with advances made to farmers. It is all mixed up and rather confused in the minds of those who are not familiar with the wheat situation. It relates that an advance of thirty-five cents has been made under the pool plan as an initial payment to the farmers. It goes further and relates that it is not likely that any additional payment would be justified. Then it says further that even

Supply-Trade-Grain Act

though such additional payment may not be justified, the government authorizes an interim payment of five cents a bushel to persons who have delivered their wheat under the pool plan and that such wheat amounts to about 13,000.000 bushels. As I interpret this order in council, it means this: that people in western Canada who were hard pressed for money last fall and sold their wheat outright will receive only the amount which they got at that time; that those who were able to hold their wheat and carry it according to the pool plan, received an initial payment of thirty-five cents and will now be given five cents more than the men who were so hard up that they had to sell. If that is the wrong interpretation, I shall be glad to get an explanation from the minister.

Mr. STEVENS:

The hon. member is not quite correct in his interpretation of that last order in council. It will be understood very readily by all western members and, I think, by most members, that in the operation of the wheat pool system, the pool at the commencement of the season makes an estimate, which is usually supposed to be verj' conservative, of what wheat will bring throughout the season. Then for its initial payment, it fixes a price with a safe margin below that estimate. During all the years of the operation of the pool, with the exception of one or two in these very recent years of distress, the market upheld the expectation. The consequence was that the intial payment was invariably followed by one, two and, I think in some cases, three subsequent distributions. The final distribution would not occur until the pool had disposed of that particular crop year's purchases. In the instance my hon. friend has mentioned, the pool fixed a price of thirty-five cents.

Mr. STEWART (Edmonton):

What year?

Mr. STEVENS:

That would be for the current crop year.

Mr. VALLANCE:

At the head of the lakes.

Mr. STEVENS:

Well, at the point where it is always fixed, thirty-five cents at the head of the lakes, but that is standardized. Then later in the season, had they been free of any obligation to the government, they would of their own volition have made a second payment, a dividend as they call it, if they had earned that dividend in the sale of their grain. In this case they had earned that dividend, but they could not pay it without authority of the governor in council because of the various guarantees against them. *

Mr. STEWART (Edmonton):

The guarantee of 1931 is still the guarantee?

Mr. STEVENS:

The original guarantee.

The point I would like the committee to grasp is this: If the government had wished, let us say, to be exceedingly exacting, they might have refused and said: Until you liquidate the original guarantee, that is the one which protected their elevators, their other property and all the rest of it, we will not authorize a further dividend. But that would have been obviously unfair, because that guarantee is being liquidated by a long process and over a long period of time. So the governor in council permitted the pool to pay a dividend in this case, and I think it was a fair and proper thing to do, wholly in the interests of the farmers.

Let ms turn to my hon. friend's rather lengthy, humorous

Mr. POWER:

I was quite serious at that time.

Mr. STEVENS:

-and fairly reckless dissertation of a few moments ago. This matter is not just a cheap gamble.

Mr. POWER:

It is a very extensive one.

Mr. STEVENS:

It has nothing to do with ordinary gambling in the markets. This is a very serious matter and it amounts to this: There are two ways in which this wheat can be marketed; one way is the elimination of the grain exchange in Winnipeg and the physical wheat to be offered for sale and purchased as the purchasing market will absorb it. If that method were resorted to in Canada you would have a pressure of Canadian wheat, in the world market in the autumn months-As long as the market is such that it can absorb that pressure, Canada's returns will be the fair world market value. But at the' present time and for the last four years in particular-and the same may be said of previous periods of time

nothing but chaos and disaster would have resulted to the Canadian seller of wheat had that course been followed. There is no escape from that.

What is the other method? It is that which has grown up over a long period of years. I remember, and my hon. friends in the far corner opposite will remember, that many a time in the committee on agriculture this point has been raised and debated. We have urged the farmers to hold their wheat back and to feed it more slowly into the market. That is fine in theory, but the farmer must pay his taxes; he must put in his stock of food and so on for the winter. So he presses his wheat on the market in the fall. This is his practice and there is no

4U08

Supply-Trade-Grain Act

need of our questioning whether he is wise or the reverse; he does this. If he presses his wheat on the market and there is no one to buy the futures, to hold them and to carry them forward for a period of three or six months as the case may be, I believe the market will break. What the grain exchange does is this: it permits buying for later delivery by those who desire to use the wheat later on, for instance, milling companies which want delivery in May, or people who are bona fide exporters, who want to anticipate foreign requirements over a period of months, or speculators. It must be borne in mind that it is not only irresponsible speculators who buy futures. Let us not for a moment get that idea.

Mr. POWER:

We know that.

Mr. STEVENS:

We know there is the

element of the irresponsible speculator, but there is the exporter who is providing for his normal requirements over the whole period and there are the milling companies and other agencies which are bona fide dealers in wheat. They come forward and carry this wheat during a period of time that permits the farmer to dispose of his wheat for cash and by that system and the negotiation of those contracts in the banks bona fide concerns and speculators are enabled to carry those futures over a long period of time. It was to perform that function in part that the government authorized this purchasing of futures to which my hon. friend has referred.

I want to emphasize again, as I did before, that it is a matter of opinion whether the government should or should not have done it, but it is not open to question that in doing it they rendered a service to the market. I wonder if my hon. friends, particularly my hon. friend from Willow Bunch and hon. members from Saskatchewan, Alberta and Manitoba, would take the opinion of those responsible for the operation of the big wheat pools of western Canada.

Mr. DONNELLY:

No.

Mr. STEVENS:

I suppose not.

Mr. MOTHERWELL:

They were in a

position where they had no say in the matter.

Mr. STEVENS:

I have just been given

to understand that it is desired that the committee rise and report progress, and I now move accordingly. We shall have to continue the consideration of these estimates at some future time, but I do ask hon. members of the committee to give thought to the welfare of the pools in whose interest and support this operation was carried on.

Progress reported.

On motion of Mr. Bennett the house adjourned at 5.45 p.m., until Tuesday, April 18

Tuesday, April 18, 1933