April 13, 1933

CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

And of course to pass it

on.

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LIB
CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

Certainly. When I spoke before, I spoke entirely from memory. I have now before me from the bureau of statistics the exact situation on March 24, 1933. While the arrangement is a little different from what I gave, it will be accurate and I shall read it as I have it before me:

Stocks. of Grain at Different Elevators during the Week ending March 24, 1933

Bushels

Western country elevators.. .. 109,564,466

Interior private and mill elevators 5,608,863

Interior, public and semi-public

terminals 3.170,610

Vancouver and New Westminster. 9,990,449

Victoria 390,134

Prince Rupert elevator 301,695

Churchill 2.430,283

Port William and Port Arthur.. 67.274,934

Eastern elevators-lake ports.. .. 14,298,249

Eastern elevators-seaboard ports. 5,840,579

United States lake ports 5,758,644

United States Atlantic seaboard

ports 951,552

225,580,458

That makes a total of 225,580,458 bushels.

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LIB

Olof Hanson

Liberal

Mr. HANSON (Skeena):

Is there any statement with regard to the Prince Rupert government owned elevator?

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CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

Yes, a very small amount, hardly worth mentioning, 300,000 bushels.

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LIB
CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

It passes through. They are not shipping very much. It is rather an unfortunate thing that the elevator is there. The situation generally, in my estimation, as the hon. member for North Bruce said a moment ago, is improving because world conditions are improving. There is no question about that. It may be, and I am a bit hopeful of this, that Canada will actually profit by the conditions that seem to be developing throughout the wheat world to-day. The only thing that could intervene to prevent it would be one of those phenomenal crops all over the world simultaneously, such as actually did occur in 1928-29, but that is a most extraordinary and unusual thing to happen. We do not expect it, and so I believe that Canada will actually benefit from this improvement in conditions. I do not know that there is anything that I can add. I do not wish to prolong the discussion, but these facts I think are useful and illuminating and encouraging.

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LIB

Olof Hanson

Liberal

Mr. HANSON (Skeena):

The minister said that it was unfortunate that there was an elevator at Prince Rupert. That is a remark that I cannot let pass unchallenged. That

elevator was built in Prince Rupert and taken over by the government. It was built under the pretence by the government of the day that the port of Prince Rupert would be one of the outlets for grain from British North America. For the benefit of the house I wish to state that wheat can be shipped to the Pacific coast more cheaply to Prince Rupert than to any other port on the Pacific coast. I have taken this matter up with the minister and he has given due consideration to seeing that at the next renewal of the lease with the wheat pool a certain amount of wheat shall go through that elevator at Prince Rupert each year. I must, however, challenge his statement that it is unfortunate the elevator is there. I repeat, that it is cheaper to send wheat to Prince Rupert owing to the grade on the Grand Trunk Pacific railway than it is to any other port on the Pacific coast. We have a harbour in Prince Rupert second to none on the Pacific coast from South America right up to Alaska. The minister knows that, and I hope he realizes that as a representative of British Columbia in the federal cabinet he does not represent only one portion of British Columbia but the whole province.

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LIB

Edward James Young

Liberal

Mr. VOUNG:

I really admire the skill of the minister in answering questions, but to my mind he has not cleared up the situation yet. Everybody knows that when the miller is not buying wheat, then in order to have a market at all, wheat is sold to the speculator. Nowr the impression throughout the country is that there will be this year a carry-over of 158,000,000 bushels to be disposed of. That will be sold by Mr. McFarland or by the grain trade. In addition, it is believed that Mr. McFarland carries large numbers of options which he has bought against wheat he held previously and which must still be sold. When the speculator comes into the market to buy, these options will be offered to him in competition with the actual wheat we have to sell. Is that impression which is abroad correct? Are we carrying large quantities of options in addition to the carryover of 158.000,000 bushels of actual wheat?

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CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

I do not agree with the form in which the bon. gentleman puts the situation. I will answer as frankly as I can. It is true that Mr. McFarland is carrying a certain number of options, and it is true that there is in Canada a certain quantity of wheat. Obviously w'hen the purchase of Canadian wheat gradually increases, as we hope and feel confident it will, then the trading in wheat will develop and these options can be absorbed by the market.

Supply-Trade-Grain Act

The point I was making to my hon. friend a moment ago was this. He suggested, perhaps not definitely but I gathered that that was his suggestion, that we should get rid of these options as quickly as possible. If we did that, we would break the cash wheat market, which is of course the very thing we ought not to do. You can only sell as the market is able to absorb, and if the pressure on the market exceeds the ability to absorb, the market falls inevitably as night follows day. If we were to do what has been suggested and get rid of these options, the market would fall and it would destroy the world market because Winnipeg after all is perhaps the most influential centre in the world where wheat is marketed, and wheat prices are fixed. Further, the opposite of that is true. When Canadian wheat was pressing on the market during the past couple of years faster than the market could absorb the actual wheat, there was no speculative buying on the market because it was a falling market, and because of disturbed conditions throughout the world. It was then that Mr. McFarland was authorized to step into the market and take up these options. Otherwise the pool would have had to stop buying the farmers' crop and there would have been a disorganization of the whole wheat-selling system of western Canada. The service that has been rendered has been invaluable in steadying the cash wheat market, and those after all are the figures to examine for the real condition-the wheat actually being shipped and the cash sale price in Winnipeg. Those are the most important factors; the rest is adjustment.

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LIB

Charles A. Stewart

Liberal

Mr. STEWART (Edmonton):

I want to take issue with the minister in that statement which he has made several times in this house. I happen to be on the producing end, and am therefore a seller of wheat. I have to sell my wheat, in the fall. The large stocks of wheat which the government were carrying in the fall when the new wheat came on the market did not help the situation very materially. That was not their fault. But I do point out to the minister that in October and November of last year large quantities of wheat were thrown on the market by Mr. McFarland, and that action broke the price for me and every other producer in Canada. When the minister tells us in the House of Commons that the action of this government through Mr. McFarland in 1932 saved money for the farmers of western Canada, he is telling us something that cannot be borne out by the facts. No matter what Mr. McFarland may have done in 1931, in 1932 he certainly

did not help the situation. He may be helping it now by keeping wheat off the market, but I can name three occasions upon which he threw very substantial quantities of wheat on the market and broke the market by five cents a bushel. That is what happened to me. I am one of those who happened to pay the piper. I began selling wheat locally for 37 cents per bushel. Before I got through the market was at 28 cents, and it went away below that. If wheat will not leave Canada when the farmers of Alberta are getting less than 30 cents per bushel for No. 1 northern, then I do not know when wheat will leave this country. I say, Mr. Chairman, that the work of John I. McFarland and the support of this government of the wheat market was not worth anything this year. It may be that they were in for a very heavy carry-over, and had to get out from under, but when they took action this year they certainly did not help the farmers of western Canada.

I hold in my hand an order in council passed on the twelfth of this month about which I was going to ask the minister. In it the government seek authority to sell grain. I do not know why they ask for that authority because they can sell grain at any time. The order in council renews the guarantees to the banks and to those whom they have been backing. Now they are going to get out of the market. Apparently that is so, if this order in council is correct, because it states:

The minister recommends that the governor in council may at any time fix and determine a date at which wheat producers shall proceed to sell and dispose of all wheat and other grains 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 this guarantee, for the future delivery to it of wheat and other grains.

I cannot see the necessity for such a provision in an order in council, because ordinarily they may sell wheat if they see fit. I do take issue wTith the minister when he states that in the marketing season for 1932 Mr. McFarland and the stabilization fund were worth anything to the farmers.

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CON

James J. Donnelly

Conservative (1867-1942)

Mr. DONNELLY:

As I understand it, in 1930 when the pools were in financial difficulties Mr. John I. McFarland was appointed by them to act as the head of their selling agency and to sell the carry-over of wheat from 1929 and 1930. I tried to get from the minister on April 15 of ladt year some idea of Mr. McFarland's activities, and we are still endeavouring to get that information. We have not got it yet. I ask the minister: How much

wheat was given to John I. McFarland by the

Supply-Trade-Grain Act

pools to sell? That is my first question. That was the office to which he was appointed; that was the job given him to do, namely to sell the carry-over of the pool. First of all we want to know how much wheat was given to him. Next we want to know how much of that wheat he sold; how much has he still left on his hands? As we find that later on, at the instance of the government, he has taken on other activities, we want to know how much future wheat he has bought. How much he has bought for future delivery?

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LIB
CON

James J. Donnelly

Conservative (1867-1942)

Mr. DONNELLY:

Yes. How much has

he sold, and how much is he still carrying? When we asked the Prime Minister this question last fall we were told that we would be given the information when we reached the committee stage. We are asking for it to-day. The minister comes along now and tells us that had it not been for the activity of Mr. McFarland in the wheat market last year, dear knows what would have happened to the pool. I say the pools were not in any worse condition than the grain trade; they were in the very same position. They were buying and selling wheat from day to day. The minister knows as well as anybody else that because the government was in the grain market, because the government was in on the wheat market, all the small speculators left the market and would not go near it. They were afraid to touch it. The small speculators were driven out, and that is why the government was in. Further, I want the minister to tell me how much Chicago wheat was sold on the Winnipeg market and was bought by the government through John I. McFarland. How much wheat was sold there by Chicago speculators? We are told that the Americans were buying large quantities of wheat in the Minneapolis and Chicago market, which they sold in Winnipeg. How much did they buy and sell? We want to know.

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CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

Obviously it is impossible for me to answer the questions the hon. member has asked. In the first place he is mixing two entirely different activities.

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CON

James J. Donnelly

Conservative (1867-1942)

Mr. DONNELLY:

I am not mixing them

at all. I have set them out separately and distinctly.

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CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

As I recall the facts, the

pools of western Canada-and in this statement I speak subject to correction-the three western pools were associated and operating together in the marketing of their wheat abroad. This was prior to the fall of 1930.

For a great many years they had been successful, as the market had been largely a rising market. Everything worked profitably and I believe satisfactorily. In 1930, difficulties arose in the world market. We will not go into details, but I will make the simple statement that difficulties were experienced iu the marketing of wheat. The three pools, operating through a western pool selling agency-

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LIB
CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

-secured the services of

Mr. McFarland to act for them. That is an arrangement between the pools and Mr. McFarland, and has nothing to do with the matter.

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LIB

John Vallance

Liberal

Mr. VALLANCE:

No, that is not correct

-excuse me for saying so. I think the minister will agree that when John I. McFarland 'took over the central selling agency of the pools it was done on the say so of this government. Only on that understanding, namely that John I. McFarland took it over, would they guarantee the bank.

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April 13, 1933