Mr. JACOBS:

What will happen if tomorrow another province raises the same question? Will another punitive bill be introduced? Either the law is good or it is not good. My hon. friend says we cannot imperil the operation of this act in the other provinces. For the life of me I cannot see how the hon. gentleman can prevent similar action with regard to every other province in Canada under the jurisdiction of this act if the same situation should arise.

Mr. RHODES:

I think the obvious answer to the point raised by my hon. friend from Cartier (Mr. Jacobs) is this: The other eight provinces have accepted the act; they have cooperated cordially and have made no objection to the jurisdiction of the act. They have accepted settlements of boards of review which have had the effect of reducing payments coming to provincial governments and provincial boards, so that question cannot arise.

Mr. JACOBS:

My hon. friend must know that it is given to any private individual in a province to attack the legality of any act.

Mr. RHODES:

I assumed that my hon. friend was speaking of the action of a provincial government. I might say also that no private individual has attacked the act in any province, so far as I am aware.

Mr. EULER:

Would the government not

find itself in a most awkward position far as the farmers of British Columbia are concerned if that province should fail in its action against the government in the case to be decided to-morrow? If it fails the province is placed outside the pale; the benefits of the act can no longer be applied to British Columbia.

Mr. RHODES:

I think the hon. member

will not accuse me of discourtesy when I say to him that this government cannot assume the responsibility. The action of the province of British Columbia, through its government, is the cause of this legislation.

Mr. EULER:

This government owes a

duty to British Columbia outside of the government of that province.

Mr. RHODES:

We should: be derelict in

our duty if because of the act of the province of British Columbia this federal act should be declared ultra vires and its benefits denied to Canada.

Mr. MACKENZIE (Vancouver):

It probably will be declared ultra vires, because it

Credit and Finance*-Mr. Speakman

is not being defended1 and we are therefore expressing no confidence in the legislation which we passed last year.

Section agreed to on division.

Bill reported.

Mr. A. W. NEILL (Comox-Alberni):

Mr. Speaker, I rise to a point of order. I wouldpoint out that the bill was brought beforeus only three-quarters of an hour ago, and that it affects the province of British Columbia. For the last hour we have been engaged in the discussion of a bill vitally

affecting that province. Four hon. members from British Columbia have spoken to it, and necessarily our attention was concentrated on the bill then under discussion. This is a complicated bill of seventeen sections, and I submit it is not fair to ask for second reading until we have had an opportunity to consider it. I suggest that it be allowed to stand until to-morrow.

Mr. WILLIAM DUFF:

Mr. Speaker, I

join the hon. member for Comox-Albemi (Mr. Neill) in asking the minister to be good enough to allow the bill to stand over until to-morrow. To-day I endeavoured to obtain a copy of the bill. I sent to the distribution office at ten o'clock this morning; I went down myself at eleven o'clock, and I sent down again at twelve o'clock, one o'clock, two o'clock and at a quarter to three. Still I could not get a copy of it. Only half an hour ago were the bills made available and placed on the table. I respectfully submit that the bill should stand until to-morrow.

Mr. STIRLING:

Under the circumstances I believe it would be preferable to allow the bill to stand over.

Motion stands.

Mr. ALFRED SPEAKMAN (Red Deer):

Mr. Speaker, may I take advantage of this opportunity, perhaps the last during the lifetime of this parliament, to present to the house for its consideration and I hope action, what I conceive to be a problem of first magnitude. While it is not of recent origin, it is a fundamental problem and of increasing urgency. To-day in Canada and throughout the world there is a growing realization of the fact that the whole is greater than the part, or, in other words, using it in its present application, that the state or society as a whole is greater and of more importance than any individual or group of individuals within the state and forming part of that society. This conviction has been expressing itself in past years in Canada, as elsewhere, in legislation designed to bring about an increasing degree of control and regulation by the state of individuals and groups of individuals, whenever the activity of such individuals is apparently detrimental to the public weal.

Mr. YOUNG:

You mean the regulation of the whole by the part?

Mr. SPEAKMAN:

At the present time I am not referring to any special legislation, but rather to the tendency which has manifested itself in Canada and throughout the world. As to the adequacy of the expression I shall not speak at this time. To my mind this process is inevitable in view of modern conditions. There are certain principles, the first of which being accepted the second or third must inevitably follow in logical sequence. In this country, I believe with the common consent of all classes of society and supported by all bodies of opinion in this chamber, the state has undertaken the obligation of providing relief for its unemployed; in other words, the state-and I speak of it in all its branches, federal, provincial and municipal-has undertaken to provide purchasing power for those unable to earn it for themselves through the ordinary processes of industry and business. After all, is not unemployment the human wastage or human loss in industry and business, using those terms in their widest and most general sense? And is not that loss influenced at least in a measure by the general policies followed by industry and business? I think there is no hon. member of the house who, if called upon to underwrite the losses of any business, would not insist upon at least a degree of effective voice in the policies of that business which policies might materially increase or decrease, or indeed wholly obviate, the possible loss. I believe this principle applies to the state in exactly the same way as it applies to the individual man or woman going into business or underwriting a loss. The state has agreed to

Credit and Finance-Mr. Speakman

underwrite this human loss, and I believe it follows in inevitable sequence that the state in growing measure, so long at least as the condition continues must have a controlling or regulating voice in the policies of business and industry. As I have said, the first of these principles has been accepted with practical unanimity and is supported by what I shall describe as the three bodies of public opinion represented in this chamber. The second step has long been advocated by the group in this corner, is now accepted in principle at least by the government in power, and in some degree, though perhaps reluctantly, by the official opposition, as is quite obvious from the support given various measures. But there is in my opinion a third step which, the first two being taken, must follow as inevitably and logically as the second. It is extremely doubtful whether those two obligations can be undertaken and these policies discharged within the confines of what we term to-day our financial system. In other words, the increased obligations on the part of the state consequent upon relief policies, the limitations placed upon business and industry in connection with the setting up of minimum rates of pay, the shortening of hours, the reduction of profits, the putting into force of more humane conditions, must inevitably lead to an increased cost of doing business. It is doubtful whether the state can continue to make these expenditures, whether business and industry can continue to function under these limitations within the narrow confines of what is somewhat ironically termed sound finance and sound money.

Another question naturally arises. What I think is accepted as one of the greatest difficulties encountered by the federal state in dealing with this matter is the question of jurisdiction and constitutional authority in bringing about that control and in passing the necessary regulations. This house has laboured earnestly with this problem. The committee which was appointed went into the matter very deeply but it was confronted with the obstacle of constitutional limitation of power. What was apparently overlooked was what is under modern conditions the most effective form of control and what is under our constitution the unchallenged right of this parliament-the power to deal with such a situation by means of the control which the state may exercise over finance. I shall not deal further with this question, as it is my purpose to be brief; but I think that is something which is recognized by all hon, members as being effective, both constitutionally and practically.

We come now to another point, the dead weight of interest bearing debt, both private and public, which rests upon the country and upon the people. I shall not dwell too long upon this somewhat unpleasant subject, as it has been discussed in detail on former occasions and probably will be discussed on subsequent occasions. Suffice it to say that there is no man in public life within my knowledge wdio has ventured to suggest any manner by which this debt might be discharged or its steady increase checked within the narrow limits of what is called sound finance. No individual, no corporation, no state, can continue indefinitely on a policy of increased borrowings without repayment or prospect of repayment without facing inevitable bankruptcy. This government has recognized that difficulty and endeavoured to meet or alleviate the situation. An effort, successful in a measure, has been made to reduce the carrying costs of debt, particularly of public debt, through refunding at lower rates, through legislative enactments to provide for lower carrying charges, and other means. The government has endeavoured to meet the problem by making legislative provision for the partial repudiation of various forms of obligations, as is evidenced by our Bankruptcy Act and the other acts which provide for the voluntary or compulsory composition of debts. I am not criticizing that form of legislation; I have supported it in the past and shall continue to support it in the future. I consider it a necessary palliative measure under present circumstances, but I do not think any hon. member will suggest that a policy of repudiation or partial repudiation is sound in principle or will realize its full intent in the end. That is not a sound way to deal with the situation. Many in this country now believe that the time has come when we should stop giving our whole attention to the treatment of symptoms and attempt the eradication of underlying causes. I shall not make further reference to the question of debt, as it has been discussed in this house on many occasions. So long as the system itself is founded upon and is inseparable from the use of interest 'bearing credit and the constant increase in interest bearing debt there is no method of repudiation or partial repudiation, no method of decreasing the carrying costs which will strike at the root of the trouble and remove the cause. So long as that policy continues I give it as my opinion that that will be the effect. This is not merely an opinion of yesterday; it is an opinion which I have reluctantly formed over the course of years. I think it* is unnecessary for me to say to this house that I am not inherently a radical.

Credit and Finance*-Mr. Speakman

I have not the type of mind that jumps to something new simply because it is new. I follow ia thing, rightly or wrongly, if in my opinion and according to my concept of logic I am driven to that conclusion by the consideration which I give the matter. I am not saying that my -logic will be inviolable or that my conclusions will be right, but I urge them only after some process of thought Every reform is inseparable from an emotion almost religious in its fervour, and while it is true that ia few great reforms have been accomplished without that stimulus, it is also true that in dealing with business and economic matters no permanent success has been achieved unless in addition to that emotional stimulus there has been a background and foundation of practical common sense.

I do not believe that this condition can be permanently cured so long as the financial credit of the country and the provision of purchasing power is looked upon as a profit making industry, to be held or withheld by groups of individuals for their own private gain, particularly when this essential of modern life is falling more and more under monopolistic control.

There is a third phase which is known to every hon. member and which must appeal alike to his reason and his humanity I refer to the condition which has been referred to so often in the terms of the hackneyed phrase, poverty iD the midst of plenty. A tremendous disparity exists to-day between our capacity to produce real wealth and the extent to which we have -been able to make effective use of that capacity. I doubt if there is an hon. member in this house, a thinking man in Canada, who has not been bending his mind and thoughts in the direction of how this -can be accomplished; how we may bring about a condition that would make available for actual human use within this country, to the average man and woman, that real wealth which we can produce in such abundance. That is the problem. I suggest that there is no country in the world in which a higher standard of living could or should be secured to the individual than in Canada. Canada has often been referred to as one of the last great undeveloped areas, and I am certain of this, that there is no country in the world which in proportion to the scanty population which this country is called upon to support has a greater fund of natural wealth and resource for that population to draw upon. Not only that, but, again a truism, we have within the country in our mines and rivers an actual and potential power which will assist us in making available this natural wealth. I suppose there are countries richer than our own; the United States

possibly is richer in the extent and variety of its resources. But it is called upon to support over ten times our population, and when we make a comparison with Great Britain or the countries of Europe it becomes absolutely ludicrous. Let me say again that there is no country in the world better fitted by nature, by natural resources within its boundaries, by its available power, to provide a high standard of living for all its citizens than is Canada. And it is a reason why we should bend our energies towards making that wealth available. I am reminded of a cartoon I once saw, of a man crouching on a storehouse of treasure, starving and shivering and calling on providence to satisfy his needs by some miraculous process.

May I go a little further. We have here then all these resources, and a population which is scanty, it is true, but I may safely say second to none in the world in its intelligence, industry and desire to work and produce that which it requires. There is no population in the world that is less desirous or less willing to live upon doles and relief and charity than the Canadian population, take it as a whole from one end of Canada to the other. Frenchspeaking and English-speaking people, and people from other countries who came here impelled by a desire, by the labour of their own hands and the application of their own intelligence and industry, not only to make a home but to secure a decent standard of living by their own energy and exertion-these are the people of Canada, and they are still anxious to carry out that intention.

Having all these qualities and factors in this country, there -must be, I say, some fundamental -cause, there must be some fundamental weakness in a system which permits conditions such as -we find them in Canada at the present time. There is another point in connection with that very question. We speak of the power available; we speak of the mechanical appliances at our disposal; and we are beginning to realize more and more that those very mechanical appliances which will make possible so high a standard of living are today, and under present conditions, not increasing but reducing that standard and making it increasingly difficult for men and women not only to find employment but actually to maintain themselves in decency and comfort.

The world we are entering upon, the world we are living in, is a world in which inevitably, more and more, the human element, human energy, will become a constantly diminishing factor in the production of real wealth. And that means that the opportunity for human earnings in the now accepted sense will become a smaller and smaller ratio to the mass

4010 COMMONS

Credit and Finance-Mr. Speakman

and value of the wealth produced; and we cannot blind our eyes, we cannot close our understanding to that problem -which is known to-day as technological unemployment. I am not one of those who believe that, all things being well, work could not be found even under modem conditions. I have only to take a glance at the homes throughout Canada, I have only to look at conditions as I find them, to be assured that if the people of Canada had the money with which to pay for modern improvements and comforts and decency in the remodelling and rebuilding of houses, not by tens of thousands but by hundreds of thousands, and to provide themselves with all those things which they now desire, which we could supply and which they wish to enjoy, so far as production is concerned, we could find work for men even in this mechanized age. We could find work for every ablebodied man in the country and find it for years to come. But whenever it is suggested, whenever a plan is put forward by individuals, groups or governments that this wealth should be made available to the people, we are confronted with the one question- Where will you find the money? And we find ourselves balked and frustrated by a financial system which, however inadequate in its inception, is no longer adequate to meet modem conditions or requirements.

May I in conclusion offer one more thought. There are two ways, as far as I can see, by which goods may be distributed and consumed. There may be others but there are only two that I see as the two obvious methods. One is what is known as the strictly communistic method, that is, where the state itself owns all property, where the state itself owns all production and where every citizen in the state may draw on that store, without money or price, according to his needs or desires. That is one method. Now notice, I am not advocating either method; I am laying down alternatives. The other method is by the provision of sufficient purchasing power in the hands of those who desire to use the goods that are produced, to enable them to buy and pay for and enjoy those goods. I might suggest this-and I am suggesting it for the consideration of those to whom the terms socialism, communism and so on, are a bugbear in the night and a nightmare to frighten them in their dreams. Let me suggest to such people that if they want to avoid that alternative there is only one thing for them to do, and that is to make it possible for the people to secure the necessary purchasing power which will enable them to supply their needs; because I doubt whether we

can long continue in this country or in the world with conditions as we find them, and as they will be in increasing measure, where the majority of the people are debarred throughout their lives from security, potential security in the obtaining of those things which are accumulating before their very eyes and which they require and demand.

We cannot sit down and watch that drift, and so I suggest that the very best way of avoiding an overturn of all those things we hold dear on both sides, all those democratic principles which have been so strongly and eloquently advocated, all those constitutional prerogatives which are dwelt on so frequently -the only way to avoid the submergence of all these things is to deal with the question from another angle and make it possible for the people to live on a high standard of comfort without going to the other extreme.

There is one other thought, and with that I will conclude. This factor at least should be considered in dealing with this subject. Philosophically speaking, apart from natural resources, this is the factor in production which counts-human energy, human intelligence, human foresight, human industry applied to the use of natural resources. All of these others, the machinery developed, power and all the various factors we use are in effect a combination of these two agencies -natural resources and human energy in one form or another. I think it is taken for granted that those now engaged in industry should share in production. And wdien I speak of industry I mean industry in all its manifold forms. I have found that the agriculturist is at least industrious and competent enough to be termed an industrialist in that sense. Those engaged in industry and production in all forms, those who give their energy, their industry and intelligence to development and production, are entitled to a share of the division of its proceeds, and I am including, of course, those who supply capital for development. For after all capital is the crystallization, to some degree at any rate, of human energy and natural resources combined.

But there is another factor which is not always given consideration. I think it will be conceded that the contribution made by the present generation is not the only human factor which is introduced into this question. None of these various improvements would be possible to-day, none of that wonderful machinery, that marvellous utilization of power which we witness would now be available had it depended solely upon the inventive genius, intelligence and industry of those now living

Credit and Finance-Mr. Speakman

and enjoying their benefits. There is what is termed the cumulative heritage. The term has been misused many times, but it simply means that for the last hundred years back, and far beyond that, men have been working and striving and inventing and solving one problem after another; and upon the foundation of that intelligence, that skill and that inventive genius, gradually step by step, not at one fell stroke, there has been erected the structure which we now see. And behind that, beneath it and making it possible, rests the labour of all those who have gone before us, generation after generation. There is not a man living to-day, there is not a group or aggregation of individuals living to-day who can claim a monopolistic right to that heritage as being its sole beneficiaries. The beneficiaries of that heritage, as of our heritage of constitutional freedom and our democratic institutions, is and must be society as a whole, because society as a whole, generation after generation, has made that contribution and laid that foundation. And that means, if rightly interpreted, that not only are those now engaged in industry entitled to some share of the social heritage but that all society is entitled in virtue of the fact that they are beneficiaries and legatees.

I am merely suggesting that in dealing with this financial question, in dealing with the manner in which currency should1 be issued and credit used, we might well ask whether that should not be a factor to be considered, whether what is termed monetization, that is making in actual concrete monetary form the basis of our wealth, should not be considered and whether the people who are the legatees of that heritage should not be given some share of that monetized value. I shall not go into that argument; I shall bring that forward presently in an amendment which I propose to move.

Because this is neither the time nor the place, nor am I competent to go into the technique of how these things should be done, I am merely going to offer a suggestion to the house for its consideration. Whenever anyone in this house or outside suggests that some new principle of finance should be adopted, the cry at once comes: How are you going to effect that in a practical, technical way; give us the details1; give us the method. That is impossible. I might return the challenge by asking this: Is there any man in this house or in this country today-and if there is, I have never met and never heard of him-who can tell us how our system is functioning to-day or how we are going to come out under our present system? Is there anyone who can tell us

how we are going to pay our debts, distribute our goods, under this system? Surely we have a right to challenge them as regards the practical application of a system they adhere to just as they have a right to challenge us as to the details of a principle we suggest. I have advocated this principle in different parts of Canada and I believe it is sound. I believe the greatest obstacle to financial reform is the multitude of schools of finance which have arisen, the quarrelling, the warfare which exists between one and another, the fact that this school and the other school, the Gerry McGeers, the Douglas-ites, the Aberhartites, and other "ites" too numerous to mention are quarrelling one with another as the best means to bring financial reform into effect. They are always quarrelling with each other and hating each other worse than they hate their common enemy, each one more anxious to effect the downfall of the other than to bring about a remedy. I am going to make this suggestion. When the average man buys a piece of machinery, let us say a motor car because we are all familiar with that, I venture to say that there is not one man in a hundred thousand who thoroughly understands all the technical science which lies behind the manufacture and functioning of that car. It is not necessary that he should. He asks two questions. I am not speaking now of the ladies because they will also take into account the beauty, grace and so forth. But two questions are asked: Will it perform

the functions for which it is required and will it stand up under those operations? I have suggested elsewhere and I suggest to the house that all of those who believe that in finance lies at least the crux of our situation should forget all this quarrelling over details which they are not competent either to understand or to solve, and simply ask the same questions, make the same demands as are made upon manufacturers of machinery, upon this parliament wdiich under our constitution is given the obligation and responsibility of providing purchasing power and medium of exchange. We may delegate those functions to the banks; we may pass them over to individuals or corporations, but in doing so we cannot divest ourselves either of the function or of the responsibility. I am merely suggesting then that they should make that effective demand upon parliament: Give us a system which will enable us to pay our debts, to buy goods, to carry on the operations which a financial system is supposed to facilitate as regards all the interchange and consumption of the wealth which we can produce.

Credit and Finance-Mr. Speakman

I will admit at once that parliament is not competent to say just how that will be done, but parliament can do as every manufacturer must do, summon the few technicians in that particular science in the world to-day and set before them that problem with a plainly defined objective. The people then could judge this parliament as they judge any manufacturer, by the way in which the system which is provided for them functions. That is the only way in which they can judge, and, may I say, the only sane manner of judging any system. Does it function? Does it deliver the goods? I am suggesting that this line of thought should be followed. As I say, I have no intention of going into the details of how this should be done; I am not competent to set them before the house, and I am not insulting parliament when I say that it is not competent to understand them as I am not competent to explain them. Members of parliament have listened to technicians and have gone away holding their heads because they were unable to understand the multitude of complexities; so I am not going to discuss the details even were I competent to do so.

In order to crystallize the thought which I have in mind, I propose to move an amendment upon going into supply. I regret that under the rules of the house I am obliged to move it in this way knowing under the usual procedure it must be considered as a vote of want of confidence. But the conditions, the circumstances, the time made it impossible for me to find another opportunity. So I should like to move it as a substantive motion. When I could have moved it as a private member I waited until I saw whether parliament itself through the program before us was taking any step towards meeting this objective, towards solving this problem. It has not done it. Therefore, Mr. Speaker, I move, seconded by Mr. Irvine:

That all the words after "that" in the motion be stricken out, and the following be added as a substitute therefor:

Whereas: The rapid growth of public and private debt, which must inevitably continue under our present financial system if public services are to be maintained and extended and production carried on, together with the increasing disparity between the real wealth of this country and the purchasing power which would make this wealth available for common use, render it imperative that a reorganization of our financial system should be undertaken as the logical first step in any reconstruction program; and

Whereas: No measure or policy has been as yet enacted or proposed by either major party in this house by way of dealing in an effective manner with the foregoing situation; and

Whereas: The issue and control of finance in all its phases is the constitutional prerogative of federal authority, and the provision of a satisfactory system of finance is the undoubted responsibility of the dominion parliament;

Therefore be it resolved: That this parliament resume its direct control over the public credit of Canada with a view to:

Reorganizing the financial system of this country on the basis of our ability to produce and deliver goods and services: financing all public works and construction at cost, repayment to be made at the rate of the annual deterioration of the asset so created; and

Instituting such system of management and control as will best maintain an equitable level of purchasing power and prices, thus avoiding the alternate evils of inflation and deflation.

And further be it resolved: That this parliament recognize the right of every citizen to a share in that accumulated social heritage by means of which modern production has become so efficient, and is of the opinion that the social credit 'based upon this heritage should be drawn upon to the extent necessary and advisable in the increase and maintenance of the standards of living in this country, and that this may be done through the payment of annual dividends to:

All Canadians who are sixty years of age or over; those who are physically or mentally incapacitated: and those who would be entitled thereto under the terms of an effective system of national insurance against unemployment or crop failure, or a national system of mothers' and orphans' allowance, or of widows' pension.

Amendment negatived.