Mr. RALSTON:

I thought I made myself absolutely clear; I do not know why the right hon. gentleman should interject that remark. The very fact that I said that this bill is to be in force until another parliament repeals it is evidence that I dio not think for a single instant that one parliament binds another and that a subsequent parliament cannot repeal this act. But I am saying that it seems to me that we should not in the dying days of this particular parliament decide on a permanent policy for Canada when the policy we are adopting is being dictated to a large extent by the emergent situation in which we find ourselves having regard to that accumulation. Other emergency bills, as I am reminded, have been limited to a year. For instance, -the relief acts were passed year after year, made to expire, and unless renewed, expiring entirely. Those are emergent measures. I submit that this is an emergent measure due to the situation in which we find ourselves, and to some extent perhaps an experiment, one which will have to be tried out in order that we may find out whether it is the best for all' concerned.

There are three classes of people who are concerned in connection w-ith this legislation: first, the customers, who fear a monopoly.

If we indicate to the world now that we are labeling this bill as a permanent policy for Canada as far as wheat is concerned, we do not improve our situation- with our customers in the world market. They wil at least be reassured if we put some limitation on this bill to indicate that it will expire at a certain time unless it is further extended. Second, the taxpayers will accept in the name of an- emergency many things that they -will hesitate about if they are regarded and imposed as a matter of permanent policy. Third, last and .most important, it seems to me that the producers themselves might well wish to reconsider this matter at the end of one or two years. It may be that a fixed price will prove a deterrent to -the commercial -trade and at the same time may not give the producer a fair return. In other words, with the government seeking to back this legislation and with the board making a fixed price, the trade may feel they are out of the situation; and if the minimum price should not be regarded as sufficient, the result will- be that the producer loses entirely the benefit of the trade competition, the advantage o-f the marketing connections which the trade has in- the markets of the world and the benefit which an active, vibrant, self-reliant trade could bring about in the way of increasing prices.

Before this bill comes out of the committee, I think the Prime Minister (Mr, Bennett) who is in charge of the measure, should reconsider the proposal made to him in the committee and insert some clause in the bill to indicate its nature, namely, that it is an emergency measure; that it is for the purpose of dealing with the situation in which we find ourselves; that it is to bridge the gap; to provide, as suggested in the committee, that the bill should be in force for one year, giving the governor in council power to extend it for a second year and providing at the end of that second year that it should automatically lapse unless it is further extended by parliament. That is the feeling which I have with regard to this matter.

There are one or two other points to which I should like to refer when we come to the particular clauses of the bill. I believe if the government could insert an amendment of that kind, it would be possible for us to present an absolutely united front in connection with this measure to deal with the situation in which we find ourselves and after all to attempt to help to make western Canadg, what we all want it to be, the habitation of a prosperous and contented people, the place where -men and women who have endured a good deal during the past

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three or four years may be given hope and an opportunity to play the part which they are destined and qualified to play in the development of this dominion, because we all realize-and this cannot be repeated too often-the importance of the great west, and of t

Mr. LUCAS:

As a .member of the special committee dealing with Bill No. 98, I think I am within the judgment of all the members of that committee when I say that we all received a great deal of very useful information from the various witnesses who appeared before us. But in my opinion the greatest justification for the setting up of that special committee was the fact that it enabled the representatives of the pools to place on the official record an. absolute refutation of the false propaganda that has been circulating throughout not only this country but the world in regard to the selling policy of the pools, suggesting that the situation facing Canada now in not 'being able to dispose of her grain has been entirely due to that policy. I will deal with that a little later by means of some of the evidence, and I think it is very important because a strong opinion prevails among a large number of people that the setting up of a government board to take over the handling of Canadian wheat is more or less a continuation of the pool policy, and therefore if that policy were false, then of course a number of people believe the board would be carrying out something that would not be in the best interests of this country.

One point- we should bear in mind is that the marketing of Canada's wheat is no longer a local or farmers' problem, but haa now become a national one. When one considers not only the importance of our crop but also the fact that the government of every important wheat producing .country in the world is giving some form of support to its wheat producers. Canadian farmers can not be allowed to shift for themselves. Another factor in this regard is the value of the crop as it is set forth at page 3563 of Hansard. This gives the figures from 1920 up to the present time, running into not hundreds of millions but billions of dollars, and it shows that Canada is now the largest single wheat exporting country in the world. Wheat is the most important commodity in the export business of Canada, amounting I believe to almost one-third of our export, business. When the final chapters of Canadian history are -written, I believe none will foe more interesting than that dealing with the opening up and development of the great western plains.

fMr. Ralston.]

I think I am safe in saying that there is no man in the house who is more familiar with the struggles, disappointments, hopes and ambitions of the farmers in trying to get a fair price for their product than is the hon. member for Melville (Mr. Motherwell) who has been out in that part of the country from its pioneer days- and who took a prominent, part in leading and encouraging the farmers to organize, in order to get a .more fair return for their products. Those efforts were not for the purpose of taking from somebody else what was his but to try to get for the farmers themselves tha-t which rightly belonged to them and to give them a fair return for their toil. I am sure nobody can object to that.

I am not going into early history, because the hon. member for Acadia (Mr. Gardiner) when the bill was before the house on second reading gave a very interesting account of the early development of the farmers' movement. We are all familiar with the Canada Grain Act. That act first came into being because of petitions from the farmers and as a result of commissions set up to investigate the problem. Finally' the Canada Grain Act was put upon the statute books. Its main purpose was to prevent abuses and protect the farmer. Then came the war, and then in 1919 what was known as the Canadian wheat board was set up. I think it is fair to say that when the 1919 wheat board was established there was a good deal of antagonism among the farmers because there was a belief largely prevalent among them, whether or not it was erroneous, that this wheat board was not established for the purpose of getting the farmer more for his wheat but of stopping the price of wheat from going up. However, when the year was finally closed the results were so satisfactory, as well as the handling of the wheat during that period, that there was a complete change of attitude, and a great effort was carried on in the succeeding years to have the 1919 wheat board reestablished. In 1922, a measure was passed in this house providing for the establishment of a wheat board. We are all familiar with what happened. While agitation for a new wheat board was being carried on, the Saskatchewan government appointed a commission under James Stewart and F. W. Riddell to look into the matter and report. The first question that this commission was asked to decide -was as follows:

Is it possible for any kind of pool comprising less than the whole of the western wheat crop to market the crop to the same advantage from the producers' point of view as a system of national marketing of the whole crop by a Canadian wheat board?

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In answering that question they had this to say:

During the early months of the season, when a large volume of wheat is offered for sale, there is a natural decline in prices. This system of competitive selling permits of no intelligent regulation of supplies of either the farmers' wheat or that owned by the elevator companies. To the extent, therefore, that the marketing of wheat outside the limits of the pool is continued, on this basis, the marketing of the wheat within the pool would be affected detrimentally. Therefore the object of the pool, which would be the stabilization of prices by a more even distribution of supplies, would be adversely influenced.

There is hardly a favourable basis of comparison between the advantages accruing to the producer of wheat through a pool under national control, and any other form of pool attempting to control an- unknown portion of the crop in competition with the balance of the crop in an open market. It is perfectly obvious that under a system of national control, where only one seller exists, and buyers are numerous, the advantage in trading is with the seller.

Now, when the farmers could not get the government ryheat board reinstated, they determined to handle their own wheat, and organized the pools. The operation of those pools in western Canada brought satisfaction not only to many farmers, but to the general business of the country. It relieved the farmer of the worry of deciding when he should sell, and I think any hon. member from western Canada will agree with me that it is veiy difficult to know when to sell, with the market fluctuating each day and no stability, for it must be remembered that the farmer gets only one crop and when it is sold that is his only chance of getting a return for that year. By the wheat pool he was given an initial payment, and following that he received interim payments which enabled him to carry on his business, and at the end of the year when the crop was all sold he knew he was going to receive a fair average price. For my own part I sold wheat to the pool from the very beginning of its organization, and I am still selling wheat to the pools. I understand that the banks and the business men were w-ell satisfied, because the farmer had money distributed to him through different periods of the year, and so was able to finance much more satisfactorily.

However, when those pools were organized they came into conflict with the organized grain trade. It is just as natural as can be that that trade, seeing some of its business likely to be taken away, set out to oppose the pools. This was done by circulating all kinds of propaganda against the pooling method.

At one o'clock the committee took recess.

The committee resumed at three o'clock.

,Mr. LUCAS: When the committee rose

at one o'clock I was dealing with the fact that when in 1921 and 1922 the producers could not induce the government t'o reestablish a wheat board similar to that of 1919 they decided) to organize themselves as voluntary pools, and endeavour to sell their own wheat. In doing this they had to face the opposition of the organized grain trade. At page 209, of the evidence, we find that Mr. Brouillette stated:

There is another point that I think you as a committee should satisfy yourselves about before you go out of your way to make changes on the supposition that there is something of such importance in this open market that would warrant keeping it operating. There have been a lot of charges. You take the first year we started to operate the pool when the market price was $1.49-$1.51 on .August 2, 1929. We continue on operating. We make a dollar initial payment. We decide some time in March or April to make our first interim payment. The 2nd or 3rd of March the open market is $2.05 and a fraction. Unfortunately, we decide on making an interim payment of 35 cents. That brings your total payment up to $1.35. Inside of a month the price on the Winnipeg market goes from $2.05 and a fraction down to $1.38! on the 2nd or 3rd of April. Then within a month following that it rebounds up to around $1.70.

Hon. members will observe that there was in this instance a drop of 67 cents a bushel in the market price of wheat in one month and I think all hon. members will agree that that drop was not due to world causes, because within a month the price rebounded back again. While it may be difficult to prove I a.m satisfied that there was an actual attempt made by the grain trade not only to embarrass the pools but to pratic-ally put them out of business. Our pools began operating first in Alberta in 1923, and in Saskatchewan and1 Manitoba in 1924. They had only got nicely into their swing when in August of 1925 the market price of wheat had reached $1.51. At that time the pool set its initial price at what was considered to be a safe figure of SI per bushel. On March 4, the market price was $2.05|, and1 the pool deciding to make an interim payment to their customers had their cheques written out when the price dropped 67 cents, or from S2.05J .to S1.38f. The fact that the pools had made an initial payment of $1 and announced an interim payment of 35 cents put them in an embarrassing position: When

the market .price came down to SI .38 the pools found themselves in difficulties with the bank due to the fact that their credit was gone, because they were supposed to keep a margin of 15 cents a bushel. How-

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ever within a month's time the market price rebounded: to S1.72J. The only thing that saved the pools was that before they had their cheques sent out the tremendous drop had taken place and in order to protect themselves they withheld) the cheques which had already been made out from the producers. That is one place where the exchange made a mistake. They brought about the drop in price too soon. Had they waited until the cheques 'had gone out to the producers they certainly would have placed the pools in an awkward position.

The statement 'has been made that the policy of the pools antagonized foreign buyers and for that reason they are responsible for the carry-over. In this connection I shall quote from the evidence of Mr. Milner, president of the Winnipeg grain exchange. At page 66 of the evidence he is reported as follows:

Q. Well now, is there any other cause you want to mention as an example of past experience in centralized control; or, have you any in mind-A. I have the Canadian pools.

Q. Well, what do you mean by that, just explain that-A. Well, the result of their operations was a large carry-over.

That is the propaganda that has been broadcast throughout the .country until it is firmly believed that the pools were entirely responsible for this large carry-over. I believe it is fair to say that if the pool policy had created antagonism and they were unable to sell, it would have shown in the amount of wheat he'd by the pools and the trade. What are the facts? I turn to page 208 of the evidence and find that in answer to questions by Mr. Ralston Mr. Brouillette gave the following evidence about carry-overs.

Q. We ought to know?-A. Yes, we should know. I think this is the best proof we can get of it. Our Mr. Bredt, who will be appearing before this committee, will go into more detail; but for the four years when we were operating on the largest scale, 1926, 1927, 1928 and 1929, the total deliveries of grain in the three western provinces were 1,455,252,835 bushels. The percentage of that total delivered to the three pools was 755,719,373 bushels, or 5T9 per cent of the total. The total carryovers at the end of each year for that period of four years was a total of 402,000,000 bushels. Now, if we sold more or less of our share in that period' it would show up in our share of the carry-over, would it not?

Then, following further questions the witness stated:

The Witness: Yes, the pool's share of all that -that is what we carried at the end of each year, totalled for those four years on the same basis as the figure above referred to was 170,000,060 bushels, which was 42-3 per cent, and we were entitled during that period to 51-9 per cent, to have carried our fair and equal share on that basis.

Dealing with the same question of carryovers Mr. Bredt is reported at page 236 of the evidence as follows:

The Witness: In 1929-30, the Canadian

carry-over again was 127,000,000 bushels. The pool share of that carry-over was 50 per cent, and the pool handlings in that year of the total were 5T3 per cent. It is rather a coincidence that the carry-over of the pool handling and the total are identical; that is, 127,000,000 carry-over and the pool handles 51-3 per cent. Does this indicate that the pools were responsible for the large carryover? They had 41 per cent in the one year, 50 in another; they handled 51-3 per cent. Now, surely they cannot be accused of not selling, withholding, refusing to sell or holding up the price, because if they had, they would not have sold so much. They sold more, comparatively, than the trade did. They only held 41 per cent of the carry-over in the one year when they might have held off 50; and in the second year they held 50 per cent and they handled 51-3 per cent.

I believe those figures should set at rest for all time the allegation that the pools were responsible for the carry-over.

Then, again, there was a story circulated that when the Hon. J. H. Thomas, a minister of the British government came to Canada he communicated with the pools and tried to make negotiations for a large quantity of wheat, but that- the pools had refused to sell.

I want to deal with that for a moment. It will be found on page 221 of the evidence, where I asked this question of the witness, Mr. Brouillette:

Q. Some time ago there was a statement circulated widely in the press that the Hon. J. H. Thomas, minister in Great Britain, had come before the pools and made an effort to buy a large quantity of wheat, and the pools refused to sell to him. Is there any truth in that statement?

The answer was:

There is no truth in that statement whatsoever. If there is any wide circulation of such misunderstandings in this country it might be worth while to read from our records covering exactly that situation.

Further on this same witness said:

Aside from speaking from this record, I was present at the conference at the time the Hon. Mr. Thomas met our central board, if not the executive. This was in September, 1929.

Now I wish to put this statement by the Hon. Mr. Thomas on the record. The evidence continued as follows:

Q. Hon. J. H. Thomas?-A. Yes.

At the request of the British government, conferences were arranged with the right honourable J. H. Thomas, Lord Privy Seal in the British Cabinet, and representatives of the wheat pools on September 2nd and 3rd, 1929, at Winnipeg. ....

Discussions took place on the possibilities of facilitating the interchange of commodities

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between Canada and the United Kingdom, having regard in particular to the desirability of ensuring an even flow of outward and return cargoes between Canada and the United Kingdom.

At the first conference with wheat pool officials, it was evident that Mr. Thomas was under the impression that the Canadian wheat pools had been refusing to sell wheat at prevailing prices. The situation was fully explained to him and Mr. Thomas expressed himself as quite satisfied th at the Canadian wheat pools were anxious to dispose of their wheat, and were freely offering it to consumers at prevailing prices. When quoted some months later as criticizing the policy of the pools, Mr. Thomas, in an official interview, sent to the Canadian Press by the British High Commissioner, made the following statement:- _

My attention has been drawn to comment in Canada upon a statement made by me in the House of Commons on the 1st of April. The suggestion that the statement was based upon any feeling that the pool had been attempting to hold up wheat is wholly baseless. My statement was made in reply to an opposition supplementary question and was based on assurances given me, by you, at Winnipeg in September, that the pool had been anxious to sell at prices substantially lower than those prevailing. I fully accepted these assurances, and welcomed them as evidence of a friendly attitude towards my plans for encouraging more regular interchange of goods between Canada and Great Britain. I trust you will give full publicity to this explanation. As you know, I fully appreciate the difficulties with which the pool has been confronted', and

1 earnestly hope the situation may soon rectify itself to the advantage of both countries.

I quote that because only last week I was talking to a business man in Ottawa who referred to this very question, that the pools had refused to sell to Great Britain when Mr. Thomas was trying to negotiate with them. The statement also was made that placards were displayed on delivery wagons in London advising against using Canadian flour. This has also been refuted. It has also been claimed that the pools held the price above the market and of course therefore could not sell, but what are the facts? I want to call the attention of hon. members to a table that appears on page 282 of the evidence, exhibit "C" which absolutely refutes that charge. It was filed by the witness, Paul T. Bredt, Canadian Cooperative Wheat Producers Limited, and gives the export offers and comparison with market prices for July, August and September, 1929. Here is the summary of that table. Out of 76 market days the pool offered wheat below the market on 52 days and sometimes over 6J cents a bushel below the market; on 14 days out of the 76 it offered wheat over the market; on

2 days at the market, and on 8 days there were no offers. A study of this table is most

illuminating and absolutely refutes the statements, that the pools held their wheat above market prices.

It was also claimed that because of this supposed antagonism against the pools they were unable to sell their fair share of wheat in Great Britain and in other markets. What are the facts? At page 261 evidence will be found to this effect. The total Canadian exports to Great Britain are given, and the pools' share of those exports. In 1926-27 the total of Canadian exports was 62,979,000 bushels; the pool's share was 50,152,000 bushels, a percentage for the pool of 79-8. In 1927-28 the total Canadian exports were 67,430,000; the pool's share was 36,181,000 or a pool percentage of 53-7 per cent. The 1928-29 total was 69,895,000 bushels; the pool's share was 34.665.000, a pool percentage of 49-8. The 1929-30 total was 43.214,000, the pool's share was 22,980,000, a percentage of 53-2.

I hope, Mr. Chairman, that with those facts before us the charge that the pool has been holding up prices and has refused to sell and has antagonized foreign buyers will be disposed of for all time.

I am in favour of Bill No. 98, to establish a Canadian grain board, but I would have much preferred to have seen sections 9, 10 and 11 as part of the bill rather than to become operative only by order in council. Those clauses 9, 10 and 11 are of course the ones which it was claimed would put the grain exchange out of business, and that there were compulsory features in connection with them. It was claimed that the farmer would lose a great deal of his freedom. I think, Mr. Chairman, that the farmer fully understands this question, and that so far as his freedom is concerned it is very limited. So far as prices are concerned, the farmers all know that prices are sent out twice each day, formerly by telegram but now by radio, and it is upon these prices that the farmer is paid and the same price is sent to all elevators. So far as taking away liberty is concerned there was nothing in those clauses had they become operative to prevent a farmer selling wheat any day he liked, to any elevator he liked. The competition in services would have been the same. Talk about the farmer's freedom! About the only freedom he has left is to draw his grain to the elevator and there his freedom ceases, and when his grain has been dumped down the chute he kisses it good-bye so far as he is concerned.

The producers feel that speculation on the market is not in his best interests. I would like to read a quotation from E. A. O'Neal

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which is found at page 185 of the evidence, but time does not permit. Mr. O'Neal appeared before the agricultural committee in the United States and dealt with this question very effectively. He points out that it appears that the Exchange can only carry on when special licence is given to what he calls the big boys, and while speculation may boost prices it also depresses prices.

It has been admitted that the futures market cannot carry on without the speculator, but to-day the ^peculator is gone; that is the small speculator that is necessary to carry on this market. It has been admitted on all sides, and evidence before the Stamp commission also brought out the fact that the majority of these speculators lost money. I want to ask this question: Is it fair to encourage these people to speculate when they are sure to lose their money? From what I know of the farmer I would say that he does not want to get a price by this means if in so doing he is robbing those who can ill afford to lose. It is an unsound foundation upon which to base prices. It is common knowledge to everyone that in this futures market bear raids are sprung periodically, and the small speculators of limited means are closed out and mans- of them ruined. In addition a lot of farmers' grain is sold on these severe drops in the market. That is not only a serious thing to the farmer, it is a serious thing to the country. As I stated earlier in my remarks, a farmer has only one crop of wheat in a year and he depends upon the return he receives from that crop to carry him through. When he is forced to sell on a low spot it means a reduced standard of living for the rest of the year.

A lot of people think that the wheat market is similar to the stock market. I have no objection to a man speculating in mining stocks or in shares of other concerns. When the price of automobile shares, for instance, goes up on the market there is no change in the price of automobiles or the rate of wages paid. A speculator on the wheat market is permitted to sell future wheat without owning or controlling one bushel while a speculator on the stock market can sell only shares which he has borrowed from the owner and which he can deliver when called upon to do so. The price of foodstuffs of the world should not have to depend upon speculation in futures. I cannot imagine a manufacturer standing for a situation whereby hundreds of automobiles could be dumped on the market by speculators who did not have one automobile and the price depressed. Yet that is the situation with which the farmer is confronted.

It has been said that there is no public opinion for a national wheat board, a compulsory wheat board or anything of that nature. I have not time to quote all the resolutions which have been passed in this connection but the attitude of the organized farmers of Alberta is well known and was placed on Hansard a few days ago by the hon. member for Acadia (Mr. Gardiner). I would refer hon. members to the Western Producer of June 20, 1935, which contains a whole page giving particulars of resolutions which were passed by various organizations in favour of a wheat board during the period from 1930 to 1935. The first I will quote refers to a resolution passed on April 14, 1931, by the Manitoba legislature, not a farmers' organization, and reads:

The Manitoba legislature unanimously approved formation of a wheat board similar to that of 1919 last Tuesday. Without a division the legislature went on record as favouring such a board, which would set minimum prices and carry the western farmer through the present period of depression.

J. R. Griffiths, government member for Russell, moved that the legislature favour the forming of a wheat board along the lines of the 1949 board. There was no debate on the motion and immediately after Mr. Griffiths' motion was introduced it was unanimously approved.

The next article refers to Saskatchewan and reads:

Falling in line with recent action of North Battleford, the Saskatoon city council on January 30 approved a resolution suggesting to the federal government that it give consideration to a request from argieultural interests to establish a national wheat marketing board.

The next article is dated March 9, 1933, and reads:

Delegates to the annual convention of the Saskatchewan Association of Rural Municipalities passed a resolution, unanimous but for two votes, asking the dominion government to set up a national marketing board on which producers would be adequately represented, to control sale of Canada's entire 1933 crop.

The next is dated March 30, 1933, and

reads:

The report of the special committee on agricultural relief was received by the Saskatchewan legislature and referred to the government. Among the committee's recommendations was one supported by all the members favouring establishment of a national marketing board.

The next is dated March 7, 1935, and reads:

The Alberta legislature last week unanimously adopted a resolution welcoming Premier R. B. Bennett's announcement that a national wheat board is to be formed.

By an overwhelming vote of 53 to 1 the Alberta legislature endorsed government's support of the federal marketing legislation.

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We must recognize that this action is necessary because of changed conditions. Every important wheat producing country in the world has had to adopt measures of a similar nature. It has been said that the refusal of the pools to sell wheat has lost us our markets, but I should like to refer to the evidence of Mr. Melvor, which appears on page 376 of the proceedings, as follows:

Let us examine the situation in France, Germany and Italy. From 1924-25 to 1928-29 these countries imported an average of 215 million bushels annually. From 1920-30 to 1933-34 these countries imported an average of 95 million bushels- an annual reduction of 120 million bushels in the latter period as compared with the former.

Let us look at the situation last year. France, Germany and Italy imported a total of 20 million bushels. Germany, in fact, became a net exporter of approximately 5 million bushels. What has this situation meant to Canada Assuming that we received 40 per cent of the imports of these three countries prior to 1929-30 (a moderate percentage) a market was afforded for about 85 million bushels of Canadian wheat. Last year if we had secured the entire market of these three countries (and we did receive a very large share) we had an outlet for only 26 million bushels. This is one phase of the export problem which must be realized.

The former demand for our wheat does not exist. We might as well be frank about this matter. Mr. James Richardson stated in his evidence that last year he visited all the important countries of Euiope and after visiting Germany he decided that there was very little business to be done. He said that he secured his money but that others who had sold later had not yet been paid, and that there was practically no market for our wheat in either France or Italy. I want to take this opportunity of saying that I believe that the stabilization efforts earned on by Mr. McFarland have been of tremendous benefit to the farmers of western Canada. I think the government should receive some measure of congratulation for supportiflg Mr. McFarland. All the witnesses who appeared before the committee admitted that if there had not been some form of stabilization, prices would have been very much lower. Last October 18 million bushels of wheat were dumped on the market inside of three days. The president of the grain exchange was not as frank as we would have expected in. giving evidence in this connection as upon cross examination he could not remember anything about this incident although it was a very serious event in the life of Canada. I think it is safe to say that most of the papers carried headlines on this matter, and nearly everyone was familiar with it, yet .after referring to it in a written statement the

president of the grain exchange could not remember anything about it when he was being cross examined.

There is one other point to which I should like to refer. It is sometimes thought that low prices mean increased consumption, but I should like to refer to the evidence of Mr. Melvor, as appears on page 363 of the proceedings. Mr. Melvor, quoting from a speech made by Mr. McFarland before the Canadian Club of Winnipeg on April 11, 1935, said:

The lowest price in over 499 years occurred in the season 1932-33, and Stanford university shows the world consumption of wheat in that year of record low prices was less than in either of the two preceding years, and was only a few million bushels greater than the disappearance of last year, which is clear evidence that record low prices did not increase world consumption. It is also a proof that there is a saturation point, even for the most essential product.

There is one important fact which many people appear to overlook and that is, "Exports increased by reason of price sacrifice," do not all go into immediate consumption, but also go to create increased reserve stocks, visible and invisible, in some other country.

Mr. ROBERGE (Translation):

Mr. Chairman, when Bill No. 98, now under discussion, has been amended in the manner that I shall suggest, it will certainly be the best measure the government has ever presented to the house. At the close of my remarks, I shall submit an amendment the effect of which will be to give to the farmers of all provinces bonuses similar to those that the government grants to the western farmers.

That does not mean that I am opposed to the government spending money to help the western farmers. On the contrary, I think governments never do enough for the farmer, and in order that the country might emerge from the present depression we must begin by helping the farming class instead of spending millions on the militia.

Last winter, at the beginning of the session, the right hon. the Prime Minister (Mr. Bennett) received a large number of petitions from farmers of the province of Quebec asking him to bonus certain of their products or to have the government take control of their marketing, as it did for western wheat. I myself have received many petitions from farmers of my county and of the new county known as Megantic-Frontenac. I shall read to the house the petition I transmitted to the right hon. the Prime Minister on January 22, 1935:

Mr. Prime Minister,

Whereas one of the chief causes of the present unfortunate position of the farmers of the province of Quebe'" is the low price of their products; and

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Whereas the remedy to the situation would consist in the government:

1. Fixing a minimum price for farm products on the following basis: Butter, 30 cents per pound; cheese, 15 cents per pound; eggs, 20 cents per dozen; pork, 10 cents per pound; potatoes, 50 cents per bag;

2. Granting to dairy farmers an export bonus of 5 cents per pound on cheese and 10 cents per pound on butter;

The undersigned believe that with these minimum prices and this export bonus the agricultural situation, which is the foundation of our economic system, would appreciably improve, with resultant advantage to the general business situation of the country.

We therefore respectfully ask you to bring down the necessary legislation to give effect to our request.

To this petition I joined the following letter:

Allow me to transmit to you a petition from the farmers of the parish of Thetford Mines, county of Megantic, requesting either a bonus or fixed prices on products such as butter, cheese, eggs, pork and potatoes. These farmers claim that you have granted to the western farmers a special bonus of 5 cents a bushel on wheat and I believe that the province of Quebec should enjoy similar treatment.

Hoping that I may be able to transmit a favourable answer to the petitioners and assuring you of my highest regard, I am,

Yours very truly,

Eusebe Roberge,

Member for Megantic.

This letter was addressed1 to the right honourable the Prime Minister, from whose secretary, Miss Berube, I received the following answer;

The Prime Minister has instructed me to acknowledge receipt of your letter to which was attached a petition from citizens of Saint-Alphonse-de-Thetford'-Mines, asking the government to establish a minimum price for farm products and to grant an export bonus on butter and Cheese.

You may rest assured that the matter will be seriously considered by the proper authorities.

Believe me, dear sir,

Yours very truly,

M. T. Berube,

Secretary.

My colleague, the hon. member for Drum-mond-Arthabaska (Mr. Girouard) has also received many similar petitions. On April 9, 1935, he spoke in this house as follows, according to Hansard, page 2568:

The farmers of my constituency-and those of Quebec generally-have signed a petition addressed to the Prime Minister of this dominion, asking the government to fix a minimum price for a number of products and to establish an export bonus on butter and cheese. As this petition is very important, perhaps the house will allow me to quote it. After describing their unfortunate plight, these farmers requested the government, in January last, to fix-

... a minimum price as follows on the following products: butter, thirty cents per pound; cheese, fifteen cents per pound; eggs, twenty-five cents per dozen; pork, ten cents per pound; potatoes, fifty cents per bag.

You will observe, Mr. Chairman, that the farmers who signed this petition are very moderate in their claims.

What was their surprise then at seeing the resolution moved by the Prime Minister in this house on the 4th of March last. They had expected it to include some of the farm products of the other provinces. The resolution, which I find in the orders of the day, read as follows:

March 4-The house in committee on the following resolution:

That it is expedient to bring in a measure to establish a board to be known as the Canadian Grain Board with power to purchase, receive and take delivery of wheat, oats, barley, rye and flax-seed, or any one or more of such grains for marketing and to sell, store, transport and market such grains, and to provide for the appointment of such clerks, employees and assistants as may be necessary, and to provide for their remuneration and for the expenses of, and arising out of, the operations of the board.

Mr. Chairman, ever since 1930 the government has been 'helping the western wheat producers. Here we are to-day with this resolution and a bill before the house respecting all grains, that is to say the production of 50 per cent of the farmers of western Canada. It is well known that not more than 50 per pent of the western farmers practise mixed farming. Therefore, when the government takes over the products of half the farmers of western Canada, would it not be fair and reasonable to include in this bill some of the products of the farmers of eastern Canada, in accordance with the terms of the petitions to which I have just referred? The province of Quebec supplies nearly one-third of the federal revenue and it should therefore be entitled to its share of the bonuses granted to farmers by the federal government. When the government paid a bonus of 5 cents a bushel on wheat, at a cost to the Dominion treasury of $12,720,121, the province of Quebec furnished nearly four million dollars of this amount.

I will be told, Mr. Chairman, that the supplementary estimates just voted contain an item of one million dollars for the cheese industry. I congratulate the government for this, its first grant to the eastern farmer; but why not place the cheese producer on the same basis as the wheat producer? When the government granted a bonus of 5 cents a bushel on western wheat, they did not say: When the expenditure has reached one

Grain Board

million dollars, there will be no more. They paid 5 cents a bushel on all the wheat produced in the western provinces. Why does the government not dlo likewise in respect of all the cheese that will be produced, and why does it not pay a bonus on all the butter produced? That would be only fair and just and it would make up to a certain extent for what the province of Quebec has done to help the farmers of western Canada.

That is not all, Mr. Chairman. What has been the cost of the government's venture in wheat? Some say 50 or 60 million, others say 100 million, and1 of this sum the province of Quebec has to pay approximately one-third, that is to say, about twenty million dollars.

Allow me, Mr. Chairman, to quote the opinion of the hon. member for North Waterloo (Mr. Euler) given at page 3088 of Hansard:

We have speculated in wheat to the extent almost of hundreds of millions of dollars and we do not know how much we shall lose- possibly twenty, thirty, forty or fifty millions.

I consider that the hon. member has been very indulgent for those who have speculated in wheat, for in view of the large number of bushels of wheat overhanging the market today, the lose will be much heavier. On the same page of Hansard is to be found the following statement of the hon. member for East Hamilton (Mr. Mitchell):

I have listened to the inquest of the hon. member for North Waterloo (Mr. Euler), but I would ask him this question. What condition would this country have been in had we not gone to the rescue of the farmers in the west when we could hear in the lobby talk about twenty-five cent wheat? What would have happened if we had left all these things go to the wall?

The hon. member for East Hamilton was probably unduly pessimistic, as wheat at 25 cents is too cheap. The price would have been higher.

I shall quote the prices given by the Prime Minister when he spoke on the subject, as reported at page 3565 of Hansard:

Fiscal year:

1925- 26..

1926- 27..

1927- 28..

1928- 29..

1929- 30. .

1930- 31..

1931- 32..

1932- 33..

1933- 34. .

Average price per bushel . $1 51.2. 1 46.3. 1 46.3. 1 24. 1 24. 64.2. 59.8. 54.3. 68.1

Had the government not taken over the marketing of wheat, the price would have

remained at the average figure, probably 54 cents, the inquiry having revealed that the cost to the government was a fraction over 85 cents. I do not blame the government for the price paid to the farmer; what I do blame it for is the high price of wheat sold for domestic consumption, when it should have been sold at market price and no more.

Here are the prices paid in the province of Quebec for flour and other products, from 1931 to 1935, as compared with those prevailing 'both before and after the government assumed control of wheat marketing. Baking flour, delivered at stations in the province of Quebec, sold at $2,021 in 1931 and $2.12i in 1932. In 1933, when wheat was at 54 cents, flour was selling at SI .60, in 1934 at $1.80 and in 1935 at $2.25.

The reason of the high price of flour in 1935 is that the government took charge of the marketing of wheat.

Bran, in 1931, sold at S1.03J; in 1932, at $1.18; in 1933, at 75J cents; in 1934, at $1, and in 1935, at $1.35. Meal, in 1931, sold at S1.031; in 1932, at $123$; in 1933, at 80i cents; in 1934, at $1.05, and in 1935, at $1.40, a difference of 594 cents. Middlings sold in 1931 at $1.18$; in 1932, at $1.33$; in 1933, at $1,054; in 1934, at $1.20, and in 1935, at $1.60, which figures out at 54i cents per bag.

The 32 parishes of the county of Megantic bought at least two carloads a day of these products, and with the average extra price of about 60 cents per bag which we have had to pay, we have, since the government took over the marketing of wheat, paid an extra price of $612 per day, which makes $18,360 a month or $220,320 a year. Therefore, the 65 counties of the province of Quebec have contributed $14,320,800 more than they should have done.

Farmers are not the only ones who buy flour and other wheat products; the workingmen and other residents of cities have had to pay an extra price of 2J cents a loaf for bread since the government took charge of the marketing of wheat.

There you have, Mr. Chairman, the cost to the province of Quebec of the bonuses paid to the farmers of western Canada. The 5 cent bonus on wheat has cost the country at least 12 million dollars, and the two years of government control of wheat marketing have added another 28 millions for flour and other wheat products only, making a total cost of 52 million dollars.

In order to convince some of my hon. friends who may think I am mistaken, I have obtained five invoices from the Ogilvy

Grain Board

Flour Mills, of Montreal, which is perhaps the leading flour manufacturing company in Canada, and I now lay them on the table of the house.

Mr. Chairman, the government has maintained the price of flour at such a high level that we find ourselves to-day importing flour from various countries, as is shown by the answer of the Minister of Trade and Commerce (Mr. Hanson) to a question of the hon. member for New Westminster (Mr. Reid) given on page 560 of Hansard of February 7, 1935:

Mr. Reid:

1. What quantities of flour were imported into Canada during the calendar year 1934?

2. What were the various quantities from each country?

Mr. Hanson (York-Sunbury):

1. Canada's total quantity of wheat flour imported during the calendar year 1934 amounted to 178,175 barrels.

2. Canada's total quantities of wheat flour imported from various countries, during the calendar year 1034, were:-

Imports from: Barrels

United Kingdom 105,431

United States 3,338

Alaska 1

Australia 69,380

Hong Kong 25

The government has thus maintained the price of flour at such a high level that Canadian merchants have imported some when all the while the country had on its hands an enonm-ous surplus of wheat it did not know what to do with.

In view of the help given to the west by the province of Quebec on this occasion, I hope our western friends will support the following amendment I am going to move in order that the eastern farmers may receive their just share;

Mr. Roberge moved, seconded by Mr. Girouard:

That Bill No. 98 be amended in the following manner:

(1) That the title of the bill be the following: "An act providing for the establishment and definition of duties of the Canadian Grain and Other Farm Products Board."

(2) By substituting the following section

for section 1. "1. The present act may be

cited under the title: An act respecting the Canadian Grain and Other Farm Products Board, 1935."

(3) By adding at the end of subsection (1) of section 2 the following paragraph:

"(f) other products of the farm" means in the present act: butter, cheese and maple

sugar.

(4) By substituting the following subsection for subsection (1) of section 3:

"3 (1) a board to be known as the Canadian Grain and- Other Farm Products Board is constituted; it is composed of three members appointed by the governor in council."

[Mr. Roberge.1

(5) By adding the following subsection at the end of section 7:

"(3) the board may grant a bonus of 5 cents a pound on the sale of each pound of butter, cheese and maple sugar, sold by farmers who have no grain to sell or who do not benefit by the present act in any other way."

(6) By adding the following subsection at the end of section 13:

"(2) the board may also adopt regulations respecting the application of subsection (3) of section 7."

The CHAIRMAN (Mr. Gobeil):

Shall I translate the amendment?

Mr. DENNETT:

There is no duty cast

upon you, Mr. Chairman, to do so. If the amendment is as I understand' it, it is wholly out of order, but we can deal with that perhaps later.

The CHAIRMAN (Mr. Gobeil):

The

amendment will stand for a few minutes until it is translated.

Mr. CHEVRIER:

There is an amendment before the committee. It is in French and it ought to be translated- at once to enable the committee to continue the discussion.

Mr. KENNEDY (Peace River):

If I cor-reetly understood the hon. member for Shel-burne-Yarmouth (Mr. Ralston) this morning when he was speaking on this bill, he gave us again that old story about the antagonism to the pools and the antagonism to orderly marketing or anything that looked like an attempt on the part of the farmers of western Canada through the pools or by the assistance of the government to get a reasonable price for their produce. It has been argued again and again-

Mr. RALSTON:

Is the hon. gentleman referring to what I said?

Mr. KENNEDY (Peace River):

Yes, the

words I caught were "starvation and holding up to ransom."

Mr. RALSTON:

Those were the words used by the Prime Minister.

Mr. KENNEDY (Peace River):

That does not make any difference.

Mr. RALSTON:

If my hon. friend will

permit me to correct him-he said I had said something about the pools. I do not think he will find, from the start to the finish of what I have said, anything about the pools.

Mr. KENNEDY (Peace River):

Well, the same argument has been applied to the pools by the grain trade ever since there was a

Grain Board

pool in 1923. Whether that was said by the Prime Minister or anyone else, it was quoted by the hon. member here to-day, and I presume he accepted it.

Mr. RALSTON:

I am not accepting anything. I quoted it for just what it is, a statement by the Prime Minister in regard to the situation which he found existing.

Mr. BENNETT:

That is not the whole

of it.

Mr. KENNEDY (Peace River):

At any

rate we are told directly or indirectly, as we have been told ever since 1923 by the private grain trade, that if we were not very careful we would get in bad with our customers in Europe. The suggestion is that the farmers of western Canada did hold up the people of Europe, and that is the reason why there is not the demand for Canadian wheat that there ought to be. Now, if I understand the matter correctly, and I shall quote authorities for my view, just the reverse of that is true. The position of Europe to-day, with its tariffs and so forth, is a result of other conditions entirely. The situation as it has developed since 1925 arose from fear of a deluge of cheap wheat, not because of any attempt of western Canada or other exporting countries to hold up the people who wanted their food products. I have a statement by Sir Arthur Salter, I shall not take time to read it in detail, but in a speech made in England appearing in The World's Economic Crisis and the Way of Escape, he pointed out that if there had been no general depression there would in all probability have been an agricultural depression, because of the mechanization of grain production. Then he went on to point out that while there may be an unlimited demand for general products-a man who has a buggy can use a car and a radio- there can be no such increase in the demand for food products, because no matter how prosperous people may become their stomachs do not become any larger, they do not eat any more. The only possibility of increasing the demand for foodstuffs is by an increase in population. In fact he shows that as people become increasingly prosperous they tend to eat less breadstuffs and more of more expensive foods. That argument appears on pages 26-27 of the book I have mentioned.

Another writer, Mr. G. D. H. Cole, writing on the European agricultural situation, a book published in 1933, has the following to say at page 437:

Naturally, apart from the complicating factor of external debts, which has been of outstanding importance especially in the case of Germany, the countries which have suffered most acutely as a result of the world slump have been those which rely for the means of paying for their imports on the sale of the agricultural goods and raw materials which have declined most sharply in value. Of all commodities that which affects the largest number of countries is wheat; and it is on wheat above all other classes of goods that attention has been concentrated in the attempt to restore the position of certain of the struggling countries of eastern Europe.

Then at page 440.

In these circumstances there has been strong pressure from the countries chiefly concerned in the export of wheat to secure a preferential outlet for their surplus in the European markets. These countries want of course not merely a market for their exportable supplies of wheat, but a market with a price substantially above that ruling the world as a whole. For this price, determined partly by the more favourable conditions of production in the new world, and still more of late by the existence of large stocks of unsold wheat which have hung continuously over the market with a permanently depressing effect upon prices, is far too low- to enable the peasant cultivators of the European producing countries to exist at a tolerable standard of living above all in face of the heavy burdens of debt by which they are weighed down.

The first statement dealt with the international position; this statement deals with the peasant position. At page 422 he continues:

Nor is this situation at all surprising in face of the fact that in July, 1931, when the price of wheat was about 12 gold francs a quintal at most, the import duty in Germany had already reached nearly 31 gold francs a quintal. In fact, in those states where domestic w-heat growing is important but not on a sufficient scale to meet the entire demand, the home consumers are being compelled in the interests of farmers threatened with ruin to pay exceedingly high prices for the absolute necessaries of life.

If we want perhaps better authority than either of these let us turn to the publication of the League of Nations, issued from Geneva in 1935 on agricultural protectionism. Briefly the story is that after the war when millions of men went back to their homes, migration was no longer possible on the old scale. The need of reestablishing these men was just as great in European countries as in this country. We had to adopt the soldier settlement scheme. There was no opening for all these men in industry so an attempt was made to reestablish them on farms and keep them employed in that way. It is remarkable that it seems so difficult to grasp the fact that it is possible to overproduce foodstuffs. During the war it required the British blockade to bring Germany into submission through a scarcity of food. If it had not been for that, notwithstanding the number of men engaged

Grain Board

in the war there seemed to be ample foodstuffs to keep the whole world going. Then when twenty million men came back and the progress of mechanical invention turned to the uses of peace, there is no doubt that the world should have expected a tremendous increase in production in all lines. This happened in agriculture as well as in other lines, or even more so. Here is what this League of Nations publication has ito say on that point, at page 6:

The attached description of the evolution which has occurred since oversea production began to make its appearance on the European market shows what were the origins of agricultural protectionism as practised before the war.

It is unnecessary to recall here how the war, by taking millions of workers from the fields in the belligerent countries just when the armies were demanding more and more foodstuffs, gave an impetus to oversea agricultural production-particularly cereals-the effect of which is still apparent to-day.

For several years indeed after the close of hostilities, Europe continued to import considerable quantities of agricultural products

particularly cereals and meat-her return to her former productive capacity having been retarded by a series of concomitant causes, such as the Russian revolution and numerous agrarian reforms. But directly her producing capacity was again restored about 1925, the balance between supply and demand was broken; prices were already on the down grade, and the full force of the collapse was felt from 1930 onwards.

Exporting countries with a surplus of goods had to bear the full shock of this catastrophe, against which they possessed only one means of defence-a useful means at first, but one which was later to constitute an additional danger-namely, to slow down the marketing of their crops by accumulating stocks ...

True, the moment is in sight when, thanks to the increasing extension of technical progress, half the agricultural population of any given country will be amply sufficient to supply a demand which, unlike the demand for industrial products, can after all only increase at the same rate as the population itself.

Here is an additional reason, a very important one, why Europe was anxious to rehabilitate her men on the land and keep them there.

But it is clear that no country in which the peasant class plays a fundamental part- and that is the case in almost all countries-can agree to allow this evolution to proceed so rapidly as to produce highly dangerous upheavals. One has, moreover, to reckon with the idea, somewhat obscure but not devoid of foundation, that the farmer for a series of reasons independent of his will, such as atmospheric disturbances or diseases of animals and plants, is exposed to more sudden and dangerous risks than other classes of producers. It will seem natural, then, in the main, that in countries in which the historical development and dominant conceptions in the life of the people demand such an effort, the population as a whole should be prepared to afford special

| Mr. D. M. Kennedy.]

assistance to the agricultural classes-generally in the form of protective duties-and that such help should be considered more and more imperative in proportion as agricultural prices collapse and the depression continues to exercise its effects.

For social, historical and psychological reasons, the preservation of agriculture appears to the majority of countries as an absolutely vital question, and one which cannot be considered as a purely economic problem. The peasant class, which is an element of order and stability and an admirable reserve of energy, forms, at any rate in the countries of the old world, the basis of the social edifice and plays an essential part in reconstituting and rejuvenating the physical strength of generations worn out by life in industrial and large urban centres.

It seems to me that we have here entirely different reasons from those advanced by the grain exchange or arguments advanced either in or out of this chamber, about holding of wheat by the pool and which we have heard in western Canada for the last twelve years. Europe proceeded in a new way to protect its peasant class, its farmers, to protect agricultural prices so that peasants could live, carry on and pay their debts. In addition to that they were protecting themselves against a large influx of imports as against exports because of the recent cutting off of exports of capital from the United States. I have before me a statement concerning the cutting down of capital exports to Germany and other countries about the year 1929. At page 422 of Cole's book I find this;

The effects of this withdrawal of American capital can be seen in the figures showing the import of capital into the leading European countries. In this connection by far the greatest significance attaches to the situation in Germany. In the five years from 1924 to 1928 the total import of capital into Germany is estimated to have amounted to over 3,500 million dollars, of which over 1,000 million dollars was imported in each of the years 1927 and 1928. In 1929 the import of capital into Germany fell sharply to 550 million dollars, and in 1930 to less than 150 million dollars, thus bringing the movement of German rationalization abruptly to an end.

That deals with the general situation. The argument has been advanced however that we ought to have sold more of our wheat in competition with the Argentine, for instance, on the British market. In face of the fact that five western Canadian crops have been sold at less than the cost of production I do not see how we can be accused of holding up anybody anywhere. If we cannot get away from the charge of holding people up when we are selling at less than the cost of production it seems to me that we will have to turn around and find some other way of making a living. We cannot develop the country and we cannot create conditions

Grain Board

which make it worth while for our people to endeavour to carry on until the prices equal the cost of production. After what Great Britain did through the Ottawa agreements in connection with the stabilization of prices and the cutting down of the influx of meat products into that country I cannot believe that the people of Great Britain or its parliament would want to drive a bargain which would mean ruin to the farmer of western Canada. The only people who have said so are those who have associated themselves with the grain exchange; it is an argument of the private grain trade.

Now then, should we have sold against the Argentine? As I understand the situation the Argentine has no granaries, elevators or a storage system. A country which has not a storage system has to sell immediately the crop .is off the ground; it must sell as rapidly as possible so that the crop will not rot on its hands. If we were determined to sell our wheat against the Argentine and had adopted no policy of stabilization where would the price have gone? Would there not have been cut-throat competition? Would it not have driven the price lower?-indeed the evidence discloses that when that policy was attempted the price did go lower. Surely on the whole the policy of stabilization was better, and saved us from ruin.

Various estimates have been made as to the advantage of the stabilization policy to the farmers of western Canada, and the figure of 10 cents or 15 cents per bushel has been indicated. I understand the estimate was given to the committee by the assistant manager of Canadian Cooperative Wheat Producers Limited, Mr. Mclvor. Various questions were asked regarding the present price of Canadian wheat as compared with the Argentine wheat, having in mind the intrinsic value of both wheats. I believe the statements submitted tc the committee on behalf of Mr. McFarland indicated that there was a difference of 7 or 8 cents. I believe the spread to-day is about 26 or 27 cents. According to the statement of Mr. James Richardson about 16 cents is accounted for,-10 cents per bushel intrinsic value in favour of Canada and a preference of 6 cents. In his evidence Mr. Richardson stated there would have been a good market for Canadian wheat, and that probably another 100,000,000 bushels would have been marketed at from 70 cents to 85 cents. His statement however was rather vague. In another place he stated that a British miller had said he would increase his milling of Canadian wheat at a price 18 cents below the present price. In the light 92582-269

of these statements the 10 cents down would at least be necessary in order to sell the wheat Mr. Richardson mentioned. He does not say it would go into consumption. It is safe to say however according to the information of Mr. Richardson and George Mclvor that because of stabilization the difference in price level to-day would be around 10 cents. I submit that if we were selling and forcing this wheat on the world market regardless of the consumer demand we would drive the price down another few cents. I submit that the statement that stabilization has resulted in a benefit of fifteen cents a bushel was not so very far wrong. During the last few years the farmers have been selling wheat, No. 1 at about 30 to 60 cents, an average of about 45 cents at the elevators. About 20 per cent of the wheat delivered and inspected during the last three years, 1932, 1933 and 1934, for which we have records in the report of the board of grain commissioners was below No. 4, and I submit that if there had been no stabilization we would have taken care of the surplus in this way: An amount equivalent

to the surplus would not have been worth hauling to the elevators and would have been left to rot on the farm. So I submit it was a far better policy to enter into stabilization, even though it was an arduous task to raise the price and put some value into that wheat. We have exported some six hundred million bushels of wheat during the last few years, and with the ten or fifteen cents a bushel increase, which was still a reasonable price to consumers, stabilization gave us more for that six hundred million bushels than we would have got for the whole of the wheat if delivered at ten cents a bushel less. So I submit that whatever may be said against this policy it has that much to the good so far as the farmers of Canada are concerned, and if it ultimately costs the country something I do not believe it will cost as much as a policy of cut-throat competition would have done, throwing our wheat on the markets of the world.

Mr. GOLDING:

Then why not continue that policy?

Mr. KENNEDY (Peace River):

I want to continue it. The wheat surplus became dangerous according to reports about 1929-30. The wheat surplus was gradually accumulating from 1924. It did not become really noticeable until we saw those tremendous efforts at deflation, and intense protectionism spreading throughout the world, and the cutting off of credits to Germany and other European countries in 1929 and 1930. The wheat surplus rose from 471 million bushels in 1921, which

Grain Board

was the approximate wheat stocks in important areas in that year, to 904 million bushels in 1931. That was the world surplus, and it went later to over one billion bushels. I understand, Mr. Chairman, that that surplus has been coming down at about the same rate as it went up, and' that we are holding in Canada a little less this year than we did last year up to the first of August and a little less last year and the year before, if I remember correctly. So it seems to me that the world wheat situation is not such a hopeless proposition as has been stated. The increases in the surplus went up at the rate of about 40 million bushels a year from 1921 to 1931. They are coming down at about the same rate by decreases in acreage and from various other causes.

I hold in my hand the monthly bulletin of agricultural statistics for May, 1935, and at page 152 is shown the world's visible supply of wheat and) flour, and the source of these figures is BroomhalFs. The table gives the figures of the visible supply on April 1 for each year from 1932 to 1935, as follows:

World's Visible Supply of Wheat and Flour

April 1, 1932

595,830,000April 1, 1933

577,640,000April 1, 1934

532,980.000April 1, 1935

445,599,000

From 1921 to 1931 the world surplus piled up, and I have these statistics from the report of the imperial economic committee on the wheat situation, 1931: In 1921 the surplus increased 31 million bushels; in 1922 it '*'"creased. 46 million bushels, in 1923 it increased 117 million bushels, in 1924 it . decreased 159 million bushels, in 1925 it increased 63 million bushels; in 1926 it increased 69 million bushels; in 1927 it increased 69 million bushels; in 1928 it increased 68 million bushels; in 1929 it decreased 49 million bushels, and in 1930 it increased 95 million bushels. The decreases are as follows: 1932-33, 18 million bushels; 1933-34. 44 million bushels; 1934-35. 87 million bushels. Those figures are set out at page 105 of the twentieth report of the imperial economic committee on the wheat situation, 1931, and later figures issued by the dominion bureau of statistics in its monthly bulletin of agricultural statistics for May, 1935, at page 152.

So I submit that stabilization has been of tremendous advantage and there is no indication that our present trouble is in any way permanent at all so far as I can see, not if we have common sense. I submit therefore that the arduous job has been done and done well, and that we are better off than we would have been if we had followed any other policy that has been suggested as an alternative-better

off in dollars. If this country loses some money as a result of this carry-over it at least indicates that the farmers of western Canada have benefited to some extent.

Mr. SPOTTON:

To a great extent.