March 31, 1936

LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

I shall have pleasure in directing the minister's attention to the request of my hon. friend, and hope to be able to give him an answer to-morrow.

Topic:   PROFESSIONAL DOG RACING
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TRADE WITH SOVIET UNION


On the orders of the day:


CCF

Angus MacInnis

Co-operative Commonwealth Federation (C.C.F.)

Mr. ANGUS MacINNIS (Vancouver East):

I should like to be informed by either the Prime Minister (Mr. Mackenzie King) or the Minister of Trade and Commerce (Mr. Euler), in view of the government's policy for extension of trade, whether any steps have been taken by this government to negotiate a trade

agreement with the Soviet Union, and whether any proposals have been received from the Soviet Union to negotiate a trade agreement, with this government.

Topic:   TRADE WITH SOVIET UNION
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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Right Hon. W. L. MACKENZIE KING (Prime Minister):

I may say that the matter has been and still is under consideration.

Topic:   TRADE WITH SOVIET UNION
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CANADIAN WHEAT BOARD

EQUALIZATION OF PAYMENTS WITH RESPECT TO 1930 WHEAT CROP


The house resumed from Monday, March 30, consideration of the motion of Hon. Mr. Gardiner for the second reading of Bill No. 22, to provide for the payments of certain sums of money to primary producers of wheat with respect to wheat of the 1930 crop delivered to provincial pool organizations.


CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Right Hon. R. B. BENNETT (Leader of the Opposition):

Mr. Speaker, I have just had handed to me a copy of the telegram sent by the Minister of Trade and Commerce (Mr. Euler) to Mr. Brouillette on December 4, 1935, to which last night I made reference inasmuch as the file which I received just before beginning to speak apparently indicated that such a telegram was in existence, although an explanation was made which indicated that possibly one was not sent. It reads as follows:

Louis C. Brouillette,

President, Canadian Cooperative Wheat Producers, Limited,

Regina, Sask.

The government herewith makes formal request that the Canadian Cooperative Wheat Producers. Limited, transfer forthwith to the Canadian Wheat Board "all wheat or contracts to purchase or take delivery of wheat in respect of which the government of Canada has given a guarantee"-

These words are between quotation marks.

-on the terms of my letter November twelve, nineteen thirty-five to you. Stop. A similar request has been sent to Mr. McFarland.

That was signed, as I said, by Mr. Euler, Minister of Trade and Commerce.

Yesterday when I was dealing with a correction of the minister from unrevised Hansard I dealt with only one phase of the quotation from the unrevised Hansard. I think that for the purpose of the record it is desirable that the said quotation from unrevised Hansard should also be read as it appears in revised Hansard, page 3571, on June, 12, 1935. It is not the practice to read from unrevised Hansard when the revised Hansard has been issued, particularly w'hen dealing with figures:

I come now to a point which I think is perhaps somewhat interesting as it indicates the average increase of acreage in other

Wheat Board-Mr. Bennett

'countries.... The average acreage in Canada *for the five years 1909-13 was 9,940,000 acres; in 1927-31 it had risen to 24,590,000 acres and in 1933 it had risen to 25,990,000 acres. The acreage for 1933 showed an increase of 161-5 per cent over the average acreage for the five years 1909-13. In Australia the average acreage for 1909-13 was 7,600,000 acres; for 1927-31 it was 15,000,000 acres, while for 1933 it had fallen to 14,970.000 acres. The 1933 figure was an increase of 96-9 over the 1909-13 figure. In the Argentine the average sown acreage for 1909-13 was 16,050,000 acres; in 1927-31 it was 20,500,000 acres; then followed a decrease in 1933 to 19,660,000 acres. In the United States for the period 1909-13 the acreage was 47,100,000 acres; in 1927-31 it had risen to 60.400.000 acres while in 1933 it had fallen to 47,520,000 acres. This latter figure showed an increase of only nine-tenths of one per cent over the 1909-13 figure. If you take these figures you will see that on the basis of the Argentine increase, which was only 22 per cent, we should have increased our acreage to less than 13 million acres instead of to almost 26 million acres. For reasons which are

obvious these are the increases which should have obtained. Argentina, which has been forcing its wheat upon the markets of the world, has increased its acreage relatively less than our own country and other wheat producing countries. Further than that, the Argentine had actually decreased its wheat acreage at one time before it started in to increase the area sown. We are sometimes prone to blame the Argentine for the action it has taken in forcing its wheat upon the markets of the world at a low figure.

I read that statement in order that there may be no misapprehension as to what was the real statement made on that occasion.

When the house rose last evening at eleven o'clock I was dealing with the legislation passed by the legislature of Saskatchewan in connection with the control and marketing of wheat. It is chapter 61 of the provincial sta-stutes for the year 1934. Similar legislation was enacted by the province of Manitoba under the premiership of Mr. Bracken and by the province of Alberta under the premiership of Mr. Brownlee. The legislation varies slightly, but in general principle it is the same. It recites the agreement arrived at in London in 1933 and then provides for the control of production and of marketing of wheat. I am sorry that, in order to make the story complete in>

view of what was said last evening by the minister, I shall have to read the first paragraph of the preamble:

Whereas the governments of Germany, Austria, Belgium, Bulgaria, France, the United Kingdom of Great Britain and Northern Ireland, Greece, Hungary, Irish _ Free State, Italy, Poland, Roumania, Spain, Sweden, Switzerland, Czechoslovakia, the Union of Socialist Soviet Republics and Yugoslavia, having been invited by the Secretary-General of the Monetary and Economic Conference on behalf of the governments of Argentine, Australia, Canada and the United States of

IMr. Bennett.]

America, to take part in a conference to consider the measures which might be taken in concert to adjust the export of wheat to effective world demand with the object of eliminating the abnormal surpluses and to increase and stabilize the price of wheat at a reasonable level which would be remunerative to the farmers and fair to the consumers of breadstuffs, did actually meet in conference for the aforesaid purposes in the months of July and August, 1933, at the city of London, England; and

Whereas an agreement was entered into by and on behalf of the said governments pursuant to the said conference on or about the twenty-sixth day of August, 1933, containing seven articles, a true copy whereof is appended hereto as schedule A....

The rest of it is not important beyond the fact that provision is made to set up a board. Section 2 of the act provides:

(1) As and when it is considered necessary to do so for the purposes mentioned in the preamble the lieutenant governor in council may establish a board to be styled "the emergency w-heat control board" (in this act referred to as the board) to be composed of three or more members to be appointed by the lieutenant governor in council one of whom shall be appointed as chairman and shall be entitled to hold the position of chairman as long as he continues a member of the board.

(2) The lieutenant governor in council may determine what remuneration shall be paid to the members of the board, how vacancies thereon are to be filled, and any other matters necessary for the effective constitution and operation of the board.

(3) The powers hereinafter conferred on the board shall automatically determine on the thirty-first day of July, 1935, except for the purpose of winding up the affairs and business of the board.

The powers of the board, according to section 3, are:

(a) to control, by licence or otherwise, the total quantity or volume of wheat which each owner or occupant of land or any person claiming through or under such owner or occupant, may sell or dispose of in Saskatchewan during the crop season of 19341935, namely betw-een the first day of August, 1934, and the thirty-first day of July, 1935;

(b) to require that any wheat sold in Saskatchewan shall be sold or delivered in accordance with such regulations or conditions as the board may from time to time make;

(c) generally to do such other acts or things as may be necessary to effectuate the intention of the agreement in schedule A hereto.

The rest of it need not be read, but I should point out that it was a statute to provide for the licensing of sales and the control of the production of wheat until July 31, 1935, in accordance with the terms of the agreement entered into in London in 1933.

The other afternoon the Minister of Agriculture (Mr. Gardiner) said that these proposals contemplated a reduction in the acreage sown to wheat. Undoubtedly that is true, but

Wheat Board-Mr. Bennett

owing to crop conditions it was not necessary to put into operation the provisions of the act, so that the act never became effective in any one of the three provinces. The conditions which would have called for its being made operative did not arise, owing, as I have said, to crop failure; I think that word would be adequate for the purpose. Nevertheless the three western provinces were sufficiently seized of the importance of the situation to regard it as desirable that they should place that legislation upon the statute books, as they did, though for the reason I have stated it was not necessary to call it into being to effectuate the purpose intended.

Topic:   CANADIAN WHEAT BOARD
Subtopic:   EQUALIZATION OF PAYMENTS WITH RESPECT TO 1930 WHEAT CROP
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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

May I ask a question?

Topic:   CANADIAN WHEAT BOARD
Subtopic:   EQUALIZATION OF PAYMENTS WITH RESPECT TO 1930 WHEAT CROP
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Certainly.

Topic:   CANADIAN WHEAT BOARD
Subtopic:   EQUALIZATION OF PAYMENTS WITH RESPECT TO 1930 WHEAT CROP
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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

In what year was the

act passed by this parliament implementing that agreement?

Topic:   CANADIAN WHEAT BOARD
Subtopic:   EQUALIZATION OF PAYMENTS WITH RESPECT TO 1930 WHEAT CROP
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

So far as I know there

was no act passed at all, because it was not necessary to do so. The house was in session when these acts to which I have referred were passed by the provinces, and my memory is that parliament did not pass any act. We laid the agreement on the table and there was some discussion with respect to it, but inasmuch as control rested with the provinces rather than with the dominion in connection with production nothing further was done, because the occasion for it did not arise.

Topic:   CANADIAN WHEAT BOARD
Subtopic:   EQUALIZATION OF PAYMENTS WITH RESPECT TO 1930 WHEAT CROP
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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

In what year was the

agreement laid on the table?

Topic:   CANADIAN WHEAT BOARD
Subtopic:   EQUALIZATION OF PAYMENTS WITH RESPECT TO 1930 WHEAT CROP
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

The agreement was signed in 1933 and laid on the table when parliament was in session in 1931. In the meantime all the western provinces were communicated with and passed legislation in practically the same terms, I having brought this matter to the attention of each of the several governments. As a matter of fact an agent went from here to each of the several governments to discuss the legislation, which as I say was in practically the same terms, though there were some slight variations in one province as compared with the legislation enacted in Saskatchewan.

There is only one other point to which I should like to direct the attention of this house. For some reason which at the moment I cannot understand this legislation contemplates the money being taken out of the consolidated revenue of Canada in order to pay these charges. Under the order in council the money was not to be taken out of the consolidated revenue; it was to be obtained from the banks under our guarantee, so that, since the guarantee was for ultimate loss, we would have our liability determined in the

light of the final action that might be taken in connection with the series of transactions. That, however, has been departed from here; this measure directly takes from the treasury a sum of money for the purposes indicated. I do not know just why that action has been taken or why it is being done in that way, or if it were to be done in that way why it was not done as we are doing in connection with harbour boards and as we did last year with respect to garnet wheat, it being agreed by all parties, so far as I know-at least there was no evidence of any objection-that this was a sound way in which to do it, namely to appropriate a given sum of money for the purpose of making good any loss which might be sustained by reason of the action that was taken by the board of grain commissioners in standardizing garnet wheat as a separate grade. That would be the method that would have suggested itself to one, because it sets out in the estimates the reasons why it was done and the purposes for which the money was to be paid. Here the same course might have been pursued. It has not been pursued; neither does this appear as an item in either the supplementary or the main estimates. Rather it is a separate bill, for reasons that, after perusing all the documents that have been laid before us, I think one cannot but regard as being more or less political.

I do not intend to take up further time, Mr. Speaker. I regret that I had to read for nearly an hour and a half from the documents that have been tabled; it is not easy work. All that I had to say personally with respect to the matter could have been compressed, as it was, into perhaps half an hour or a few minutes longer. I did, however, have to read from revised Hansard in order to establish what was said by me in 1935, and the circumstances under which sales were made on the Winnipeg market in 1933. In that instance I read from the evidence given by Mr. Mclvor, now a member of the wheat board, to indicate just what conditions were, and I did it for the purpose of trying to bring home to the house that, at least in the mind of one who in the opinion of the government was qualified to be made a member of the wheat board, if action had not been taken a catastrophe would have followed such as to make it well nigh impossible to indicate what it would have meant in terms of losses to the farmers of this country.

That is all I have to say, sir, except that this action has not been taken under the order in council passed in October, 1935, which is clearly demonstrated by the documents that have been produced. This action is taken in consequence of the government, by reason of the guarantees given, compelling the pool to

Wheat Board-Mr. Bennett

hand over the wheat to the new board. That I think is abundantly clear from the letters and documents which I read last evening. It therefore is also abundantly clear that possession of the wheat passed to the wheat board by reason of action taken wholly independent of and entirely beyond the scope of the order in council of October 10, 1935. Of that I think there can be not the slightest doubt in view of the last telegram from the Minister of Trade and Commerce to Mr. Brouillette, the president of the organization that owned the wheat. It follows from that, Mr. Speaker, that the determination of the amount to be paid was a matter of settlement between the government and the wheat producers. That is evidenced by the statement made publicly by the responsible Minister of Agriculture and by the documents that have been produced. It therefore follows that the preamble as set forth has no relation to the payments being made, none whatever. I was hopeful that, having regard to the effect upon the future as well as to the precedents of the past, the government would at least provide that there should not appear in this measure anything beyond a statement, if a preamble is desirable, that the wheat had been delivered to the board and taken over on terms implying or involving a settlement as to the amount to be paid by the government to the wheat producers organization, and that it had been agreed that this sum was to be accepted and paid, as the bill says, in settlement of any claims that they might have in the matter. I make that suggestion because I do not think it is fair to parliament itself, much less to those who are members of it, that after powers have been exercised in the way I have indicated to take over the wheat from the producers and hand it over to the wheat board, it should be made to appear that it was done by some other method and for some other purpose and under certain other authorities. For it is clear that the provision of section 7 of the Canadian Wheat Board Act has no relation to this matter now at all, that it was not under the provisions of that section that this wheat has been taken possession of by the board. It is clear beyond peradventure that the government, exercising its power under the guarantee given to the banks and its additional power to discontinue the guarantee if it saw fit, did take from the board this wheat, on the terms that they would settle the account on the basis of the information received from the auditors, and on that basis they have made a settlement on the terms and conditions contained in the bill. All this long discussion therefore would have been unnecessary had the matter been either included in the supplementary estimates or infMr. Bennett.]

troduced in a measure that contained only such preamble or recitals as were necessary to make it appear that the Canadian Cooperative Wheat Producers, Limited, had been compelled by the government to deliver the wheat to the board, and having delivered it to the board the terms and conditions under which it had been delivered were to be settled as they have been. With respect to the return of moneys, that could have been dealt with in a very few minutes without legislation at all. involving profits that arose from sales that have been made. With respect to other matters, with respect to recouping the losses, that of course could have been covered by an estimate if it was so desired. But if it is desirable to introduce a bill, then only such recitals as may become necessary for that purpose should be included in the legislation in question.

I am, sir, very regretful indeed that I have been compelled to read so many documents and thus take up so long the time of the house, but it was perfectly clear that I could not read one document unless I read the answer, and as there was a series of documents they had to be read as a whole. The result has been that while my own contribution to the debate could have been made in a very short space of time, I have been compelled to trespass upon the patience of the house to a very considerable extent in order to present this matter, free as possible from party animus or considerations, for the purpose of having the record clear from the time the matter first became a subject of consideration and discussion up to the present moment.

Mr. M. ,1. COLDWELL (Rosetown-Biggar): We have had a very long discussion concerning the second reading of this bill, and I do not intend to speak at any great length. But there are some things which, as I participated in the debates earlier in the session, I should like to say at the present time.

During the past few days I have heard the question asked: What is the justification for this particular bill and these payments at the present time? It is of course the business of the minister and of the government to produce that justification, and to a large degree I think they have done so. However, I should like to point out that this measure is amply justified if we look back into the history of wheat marketing in Canada for the last twenty years or so. The cumulative experience of the western growers during that period, particularly during the war and postwar years, led them to believe that some form of marketing, other than the speculative sys-stem which had been in operation for a number of years, must come into existence or they could not get a fair return for the product

Wheat Board-Mr. Coldwell

of their toil. Hence to secure a form of orderly marketing they sought the establishment of a wheat board. We remember, as I mentioned before, how the legislation passed this chamber in 1922 but never became operative. As a result we find the producers organizing their cooperative associations or pools. I do not propose to traverse that

ground; I did so on another occasion, but may I say that this problem which is present with us to-day and will, I have no doubt, be with us for a very considerable time in the future, arose in a particularly acute form in 1928. In that year the world had a record yield of wheat. Excluding Russia and China, the world produced 3,945,000,000 bushels of wheat, or 464,000,000 bushels more than the average production for the immediate preceding five years. Of course this vastly increased production of grain by the farmers was only symptomatic of the general condition throughout the world. The world was passing through a tremendous boom; it was fairly generally believed that the problem of distribution had been solved and that the more we produced the wealthier society would be. So the wheat producers were simply in line with the feverish production of that time.

Then came 1929 and the debacle. Hansard for 1929 and 1930 makes very interesting reading; for it is quite obvious that the government of the day failed to realize the implications of what had occurred. They told us that in a little while wheat would begin to move and all would be well again. I was looking at the budget speech of the Minister of Finance (Mr. Dunning), made on May 1, 1930. In that speech, after pointing out that there had been a very serious diminution in exports of wheat from Canada to Europe and Great Britain, he went on to say, "in consequence there are still large quantities of grain available for marketing; it is reasonable to anticipate a gradual readjustment of our trade balances with the United Kingdom and Europe." I do not blame the Minister of Finance for not having accurately gauged the condition that was upon us, because our banks, our financial corporations, and big business at that time were all anticipating that the condition would right itself. But it did not right itself; consequently we have the very serious situation among the western producers which this bill is designed in some degree to relieve. Blame has been placed upon the producers' organizations, but may I say that these organizations were in close contact all the time with people who should have been able to advise them regarding economic and financial conditions with wdiich we were surrounded, and if we are to attach blame to the men who at that time were charged with responsibility for marketing our wheat and other grains, then that responsibility must be shared by those who were advising them When the crash came in 1929 it seems to me two courses were open to the western producers. They were seriously indebted to the banks and could have adopted one of two policies. First, they could have permitted the agreement with the lending banks to become operative, throw all their stocks of wheat and grain upon the markets, and endeavoured to satisfy the banks. Or, secondly, in some manner they could have mortgaged their subsidiary elevator companies, assets and so on, and thus assumed payment of all liabilities in order to prevent the panic which would have developed on stupendous proportions. As a matter of fact they chose the second course, and incurred losses at that particular time amounting to about $22,000,000. These were guaranteed by the provincial governments, who took what was in effect a mortgage upon the producers' elevator systems. Since that time they have made steady progress in meeting that particular obligation. The point I should like to emphasize, because I believe it has a very direct bearing upon the justification for this measure and any further generosity in connection with this proposal, is that the step taken at that time prevented a crash which would have involved every financial and grain marketing institution in Canada. It would have shaken the economic structure of Canada to its very foundation. It is ironic that the producers should have built up an organization designed to combat the financial system and the grain interests, and that in effect the farmers' organizations should have been used, perhaps unconsciously, to stabilize the economic structure at that time. My plea to the government and the minister is that because of this they deserve generous recognition for what they did. Private business could not, or would not, have done .it; and had the situation been faced by a business concern of the size of the producers' organizations I venture to say that the economic structure of the nation would have been shaken more severely than it was.

To-day organized western producers are before the House of Commons asking not a compassionate allowance but what they regard as a measure of justice. It has been admitted in the debate, and in the report of the auditors, that the wheat of the 1930 crop was used successfully-or unsuccessfully; that may be a debatable point-from 1930 to 1935 for stabilization purposes. The point I make is that this wheat was actually used in the interests of the economic fabric of Canada as a whole.

Wheat Board-Mr. Coldwell

Topic:   CANADIAN WHEAT BOARD
Subtopic:   EQUALIZATION OF PAYMENTS WITH RESPECT TO 1930 WHEAT CROP
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LIB-PRO

Joseph Thorarinn Thorson

Liberal Progressive

Mr. THORSON:

Was that done at the

request of the pools, or was it forced upon them?

Topic:   CANADIAN WHEAT BOARD
Subtopic:   EQUALIZATION OF PAYMENTS WITH RESPECT TO 1930 WHEAT CROP
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CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. COLDWELL:

I believe in reality it

was forced upon them. It is true of course that the producers' organizations realized something of this sort had to be done, but the conditions with which they were surrounded actually forced the situation upon their attention and the attention of the governments.

The position may be somewhat different in regard to coarse grains. The report states, and was so quoted by the minister, that there is no direct evidence that coarse grains were used for stabilization. I submit however that there is a great deal of indirect evidence which would seem to bear out the contention that coarse grains were used for stabilization and other contingencies. Moreover there is plenty of evidence that these coarse grains were held and used to relieve conditions which arose in the drought areas of western Canada.

The minister quoted Mr. McFarland to the effect that when he took office in 1930 there was sales resistance abroad. May I point out that in the budget speech to which I have referred the Minister of Finance did not attribute to sales resistance the slowness of the movement of wheat in the early part of that year. It might be inferred from something he said that there was some factor operating which he did not name, but in fairness to Mr. McFarland and to the western producers it should also be said that after five years of experience in handling the situation Mr. McFarland in his various public utterances during the last year made it abundantly clear that the policy of feeding the grain to the market under an orderly plan was the policy which he advocated at the close of that period of experience. Moreover he persuaded the government of the day, or the producers through him and with him persuaded the government, to form a wheat board, and to adopt a policy that had been urged by the farmers many years before. It was by and with the consent of the House of Commons that both the wheat board and a minimum set price were established. Had that policy been adopted five years earlier and had the government stepped in in 1930, as I believe it should have done, and stabilized the wheat and grain position in Canada, the amount of money involved in the aggregate would have been much greater. Had that action been taken then, instead of discussing a settlement on he basis of an initial price of 60 cents, as we

are doing to-day, it is probable that throughout that period the set price might have been considerably higher. Why? If we examine the average prices prior to 1930 we find that the average open market price for No. 1 northern at Fort William in 1928-29 was $1.24 per bushel; in 1929-30 it was exactly the same, and in 1930-31, the year we are discussing, the average price basis Fort William was 64 cents per bushel. May I remark that that is higher than the amount now accepted by the producers and included in this bill. In all probability in that year a wheat board would have set the price of wheat in the month of July, and the average market price for wheat in the month of July, 1930, was 95-1 cents per bushel. I think therefore that when the pools originally decided on an initial price of 70 cents, which was soon after reduced to 60 cents, they were not too optimistic, in the light of what was actually going on. Had the price been set a month later, the average price for August was 92-5 cents, and for September 72-5 cents, basis No. 1 Fort William, the open market quotations.

As to coarse grains, in which some of us in this chamber are particularly interested now, there is a strong presumption, and I use that term advisedly, that these grains were used for the common good of the people of Canada for a considerable portion of the period under discussion. The interpretation placed on order in council P.C. 3199 I know does not recognize that fact. I do not believe that the interpretation is an altogether generous one. As I said the other afternoon it seems to me that even the letter of the bond is not being adhered to in this particular settlement. The sum of $8,262,415.37 was included in this order in council. Where did that figure come from, and why was it included? That is something of which we have not yet up to the moment received, in my opinion, an adequate explanation. Moreover, as I said the other evening, I would draw attention to the significant words, placed more or less in parenthesis in the order in council, "being the sum total of balances due to the primary producers."-not to the wheat producers only, but to the primary producers. I believe that the minister himself is of the opinion that this interpretation might be placed on these words, because on page 1675 of Hansard he is reported as saying in part in the house last Friday evening that it was understood by the man he was mentioning at the moment that coarse grains were to be paid for. Moreover, that was substantiated very largely by the quotation* he gave us from the statement

Wheat Board-Mr. Coldwell

of a responsible official, namely the publicity agent of the western pools, Mr. W. A. McLeod, and published extensively throughout Canada, and particularly in the pool's own paper, the Western Producer, published at Saskatoon.

I am urging the government, Mr. Speaker, still to consider this matter in a more generous light. The minister said the other day that it was probable the flax growers would get considerably less than $1.25 per bushel, the first initial price. It is believed or was believed throughout western Canada that the intention of the order in council was to settle these payments on the basis of the first initial price, and the first initial price for flax was $1.25 per bushel. But the actual settlement, we are told, will be considerably lower, and that is a very serious matter for many producers who have been waiting ever since 1930 to get a settlement which they thought would ultimately be just, if not generous. I am definitely asking the government to accept the minister's opinion of what was intended as expressed in those words of the order in council that I have just quoted, and to settle not only on a basis of justice but with some measure of generosity. It seems to me that when the western producers take up this order in council in future years there will be some justification for their believing that as far as this house is concerned at this time it did not place upon that document the interpretation that it was originally intended to bear. Some might even go so far as to believe that it was a contract, the sanctity of which this house is breaking at the present time, and that the services, the tremendous services to Canada on the part of the western producers in 1929, when undoubtedly another policy than that adopted might have wrecked the whole fabric of this nation had it been adopted, as it could have been adopted, has not been recognized in the particular measure before us.

May I say in conclusion, Mr. Speaker, that the problem of wheat, of grains, and of the farmer has not been settled when we pass this bill. All that we shall have done is simply to deal with something that occurred six years ago. To my mind we should get this measure through, and when we have got it through we should immediately as a parliament begin to consider the implications of what might happen in the future. I have before me on my desk the report of the Secretary of Agriculture of the United States, Mr. Wallace, published in December of last year, and at page 69 I find this significant statement:

The United States stands ready to cooperate with other nations in bringing about an adjustment of world production to demand.

I would rather put it the other way, and say bring about an adjustment of world consumption to production, but he puts it the other way, and goes on:

It is believed that an effective international wheat agreement will be hastened if this country continues to produce a sufficient amount of wheat so as to remain an active participant in world trade. In furtherance of this policy, plans for 1936 have been modified so as to permit the production of an exportable surplus of wheat in addition to increasing domestic reserves.

Wherever we look throughout the world to-day we find barriers erected, tariff barriers, quotas, and so forth, interfering with the normal flow of trade. We see the nations of the world becoming more self-contained. We see the United States reversing its policy. We see Russia producing more grain in the last few years than she has ever before produced in her history, with a production two years ago of 1,200,000,000 bushels, and last year a quantity in excess of that amount. She is building up these huge reserves against famine or war in the future. She is satisfying an [DOT]ultimate need for those reserves and at the same time building up an exportable surplus for the markets of the world, and consequently I believe that one of the main businesses of the parliament of Canada at this particular time is to devise not only a settlement of the 1930 claim but a policy for the future.

Let us not forget this, that 55,000.000 acres of the 73,000,000 acres of cultivated land in Canada lie between the great lakes and the Rocky mountains, and the farmers there are entirely dependent upon the production of a few basic commodities such as wheat and coarse grains. The problem that faces Canada in relation to this particular matter is a problem that is stupendous in its proportions, and unless we lay the foundations well so that we may build upon them a policy, Canada faces a very difficult time in the years to come.

Topic:   CANADIAN WHEAT BOARD
Subtopic:   EQUALIZATION OF PAYMENTS WITH RESPECT TO 1930 WHEAT CROP
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SC

Robert Fair

Social Credit

Mr. ROBERT FAIR (Battle River):

Mr. Speaker, realizing as I do that for the past five years 77,000 farmers have been waiting for a settlement of these payments on the 1930 pool, I do not intend to take up very much time and will be content to endorse the remarks of the speaker who has just taken his seat (Mr. Coldwell), adding a few facts from the point of view of those who produced and turned their wheat into the 1930 pool.

Let us go back for a moment to the year 1919, when the first wheat board was organized. We find that it was organized for the purpose of holding the price of wheat down. This was at the end of the war years, and the farmers have been working constantly since that time to have another wheat board

Wheat Board-Mr. Fair

formed. They were unsuccessful in that effort, and in 1923 decided to do the next best thing; the farmers of Alberta organized their own wheat pool. In 1924 the farmers of Saskatchewan and Manitoba followed suit and worked along very successfully until 1928 and 1929, when difficulties that could not have been averted by those who organized and supported these pools forced them to do things which they had no intention whatever of doing. When we look at the wheat prices of 1929, which reached a high of $1.73 and a low of 86 cents, I do not think it is any wonder that conditions turned out as they did at that time. If we had gone about remedying the conditions that brought about the crash at that time, instead of wasting time since then in trying to deal with high and low tariffs, fixing prices of wheat and so forth, we should have been much further ahead to-day.

Looking over wheat prices at Fort William from 1924-25 to 1928-29 we find the following. In 1924-25 the price was SI .69; in 1925-26, $1.51; in 1926-27, S1.46, in 1927-28, $1.46, and. in 1928-29, $1.24. That gave an average of $1.47$ per bushel, basis No. 1 northern Fort William. Starting again with 1930-31 we find a price of 64 cents; 1931-32, a price of 59 cents; 1932-33, 54 cents; 1933-34, 68 cents; 1934-35, 81 cents, or an average of 65$ cents. If we look for a moment at the cost of producing wheat as given in bulletin No. 159, which has been put out by the dominion Department of Agriculture, we find that the cost of wheat grown on summer fallow is 78 cents, and wheat grown on land of the second crop, the second after summer fallowing, is $1.12. So that we can take the average cost of growing wheat as 95 cents a bushel.

In 1930 we had a large crop of wheat, and that year in some parts of the western provinces there was a good deal of rain in the fall. This prevailed during the harvesting season and again during the threshing season. While straw and grain are wet there is no profit in threshing, and that year there was also a snowstorm, so that we did not get our threshing started until late in October and in November, with the result that instead of getting a straight grade for our wheat most of us got a tough grade. I happen to be located just west of the fourth meridian in Alberta, and for the information of this house I will give the street prices, basis No. 1 northern, on the 50 cents initial payment. Most of us came in on that 50 cent payment that year. These are the figures for the tough grades: No. 1 northern, 44 cents; No. 2 northern, 41

cents; No. 3 northern, 36 cents: No. 4 northern, 32 cents; No. 5, 28 cents, and No. 6, 21 cents; feed, 15 cents. The straight grade prices were: No. 1, 50 cents; No. 2, 47 cents; No. 3, 42 cents; No. 4, 38 cents; No. 5, 34 cents; No. 6, 27 cents, and feed, 20 cents. Deduct from this 10 cents a bushel for threshing and you will find that you have on the tough grades: No. 1,

34 cents; No. 2, 31 cents; No. 3, 26 cents; No. 4, 22 cents; No. 5, 18 cents; No. 6, 11 cents, and the fancy sum of 5 cents for feed-this in the face of a cost of production of 95 cents a bushel. And this price includes an extra 20 cents for freight and handling charges, that is deducted by the elevator agent.

You may think that we are getting a handout in what we are asking to-day. According to the order in council the settlement is based on sixty cents a bushel, although the average price for that year was sixty-four cents a bushel at Fort William. I may say that that wheat was delivered in the fall and winter of 1930, and you must realize that we have paid interest at the rate of seven and eight per cent and sometimes more than that on debts that should have been paid with the proceeds of the wheat. We have paid over $2,000,000 in interest, but there is nothing whatever said about that here, and apparently the farmers are content to do without that interest, although I do not believe that that is right, when we find that the banks, the elevator companies and the commission men received somewhere around $50,000,000 in interest, handling and commissions on that wheat being carried over.

The farmers have pressed right along for settlement on the 1930 wheat crop but have been unsuccessful. We do not know the reason, but we do know that we had a considerable quantity of wdieat taken over, not with our consent but with the consent of the government, and stacked away in a pile. In the front of this pile was placed the wheat that was purchased by the government for stabilization purposes, and the farmer's wheat was left at all times at the back of the pile. If the stabilization management had got rid of the farmer's wheat first of all it could have been sold time after time at profit, and those of us who contributed wheat could have been paid off and we could have paid our debts and avoided the embarrassment which some of the farmers of the west have experienced since in being put off their places for taxes and so on.

We find that this deal was made on October 8 and the order in council was passed on the

Wheat Board-Mr. Gardiner

10th, From extracts from that order in council the farmers of the west were given to understand that they would have their cheques right away, and on the strength of this many of them went to their storekeepers, promised to pay their bills and got an extension of credit. After a short time of course that extension was cut off; the cheques were not forthcoming. The result is that many of us in the west are having a hard time to get groceries and supplies. But the farmers are not the only ones who are affected, because when they cannot pay their bills the storekeepers cannot pay theirs, so that the embarrassment extends all along the line, from farmer to retailer and wholesaler and eventually to manufacturer.

Some mention was made a few days ago about the provincial governments having to stand good for the pools. I think some people have the idea that they lost a lot of money on this account. I want here and now to contradict that idea. The pools are making their payments and paying a large amount of interest to boot, and still continue in good standing.

According to the figures in my possession, the quantity of wheat supplied by the pool farmers of the west was never less than one-third of stabilization quantities, and it sometimes formed one-half. Late in 1935 we still find 76,000,000 bushels left. I do not know why this should be. It certainly is not for the farmers' benefit. Those who wish to make use of figures have included storage and interest charges on this grain to build up a case which will not stand, I think, any close scrutiny,

Looking at some of the handicaps that we are up against, I wish to quote the cost of a few pieces of machinery and the number of bushels of grain that it takes to buy them on the basis of grain prices in various years. In 1919 the price of a gang plough was S151; wheat at that time was $2.17, so that you could buy that gang plough with seventy bushels of wheat. In 1925 the price of that same implement was $158, and it cost us 104 bushels of wheat, because the price was then $1.51. In 1930 the gang plough which we bought with seventy bushels of wheat in 1925 cost us 208 bushels. In 1919 a seed drill cost us the price of 107 bushels of wheat; in 1925 it cost 168 and in 1930, 394 bushels, or almost four times as much grain as was required in 1919. So you can figure out why we are here, looking for a little justice. An eight-foot binder, which in 1919 represented 120 bushels of wheat and in 1925 took 190

bushels, in 1930-the year for which we are given the handout-it cost us 442 bushels. For a five-foot mower, which in 1919 we could buy for forty-two bushels of wheat and in 1925 for sixty-seven bushels, in 1931 we had to put up 157 bushels. I remember that in the fall of 1931 I went into one of the lumber yards in Paradise Valley, my home town; the weather was beginning to get cold and I wanted to purchase thirteen storm windows. Perhaps you will think I am lying, but I had to sell 142 bushels of No. 1 wheat to buy those thirteen storm windows. If any hon. member wishes to check up on these facts I can give them to him without any trouble.

I do not wish to take up any more time, as much time has already been occupied in the discussion, and the farmers, business men, teachers, preachers, doctors, lawyers and all our western people are looking east for this settlement. But I ask in conclusion that, in view of the amount that has been cut off by the government, there be substituted interest to those of us who have contributed that wheat, and that the amount be brought back to that of the original order in council.

Topic:   CANADIAN WHEAT BOARD
Subtopic:   EQUALIZATION OF PAYMENTS WITH RESPECT TO 1930 WHEAT CROP
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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Hon. J. G. GARDINER:

(Minister of

Agriculture): There is not much to be said

in concluding the debate. One question raised by the leader of the opposition (Mr. Bennett) with regard to the preamble should, I think, be dealt with, as well as one or two other matters of not so great importance as that having to do with the preamble.

I wish to refer to some remarks made last evening by the leader of the opposition, and renewed to-day, with regard to the discussions which took place in the legislature of Saskatchewan in 1934. I have with me the speeches which were delivered on that occasion by myself and by the attorney general of Saskatchewan. The debates in connection with this matter covered the period from March 7 down to April 6, almost one complete month. The beginning of the debate was an address delivered on a motion to adjourn the house to discuss a matter of special importance to the people of Saskatchewan. That permission was given, and the attorney general, who with the then prime minister of Canada and others had been in the old land, dealt with this question, outlined what had been done at the conference, and gave us the assurance which I read to the house last night, that any bill which he had it in mind to introduce after the discussion was completed did not contemplate a

Wheat Board-Mr. Gardiner

reduction in acreage. The heading in the pres3 report is:

Acreage not to be cut by legislation, says Attorney General. Government rather to strive to meet the situation on the basis of limited production. Hon. M. A. MacPherson tells members of the legislature.

Those headings are a fair interpretation of what is contained in the speech that was delievered on that occasion. As leader of the opposition at the time I had the privilege of replying to the attorney general, and the reference to the remarks made by the attorney general which are mentioned in the heading is in these words:

Quota system should not apply to southwest Saskatchewan as it might be applied elsewhere in Canada, declares Liberal leader, stressing lack of crops in past four or five years. Asserting that the farmers in what was termed the drought areas of Saskatchewan who had not harvested and marketed a crop in four or five years should be allowed to market whatever crop they grew this season; J. G. Gardiner, speaking on his resolution on wider and freer markets as the only permanent solution of the wheat marketing problem, attacked the London wheat agreement.

It will be noted from that heading that I was making a speech, reported in the press in about four or five columns, which was an attack upon the London wheat agreement, just as I was making an attack the other evening upon the same agreement. This discussion took place from a month to two weeks before the third reading of the bill. The legislation having to do with the control of wheat was in the house the greater part of that time. There was very little discussion on the bill itself because of the fact that the discussion took place on the resolution and the view's of members of the house were fairly well known as a result of that discussion. On the third reading some members of the house spoke in opposition to the bill and, as is sometimes the case in legislatures and in houses of commons, there was some one there who thought that perhaps some political capital could be made out of putting the members of both sides of the house more or less "on the spot," and a vote was called for on the third reading. When that vote was called I stated my owm position in relation to the bill. It was

reported in the Western Producer in these words:

J. G. Gardiner, leader of the opposition, stated his position before the vote was taken. He would support the bill because the wheat agreement upon which it was based had already been signed . ..

Not because I agreed with the agreement, but because it had been signed already in Europe.

... signed without consulting the people. Under the circumstances, the implementing bill would have to go through.

It was a bill to implement legislation that at that time we were led1 to believe was going to be passed by the House of Commons at Ottawa, and we were only asked to pass it as implementing the legislation passed here, which in turn was to implement the agreement previously reached in London. As we have been told, in the answers to the questions I asked the right hon. leader of the opposition, the bill implementing that agreement was never passed by the House of Commons; nothing was ever done to implement the agreement.

There is one other important fact in connection with these proceedings, and it is this: Even the bill passed by the legislature of the province of Saskatchewan was not to come into effect until the first day of July, 1934; on April 6, 1934, everyone in the province of Saskatchewan knew there was going to be an election before July 1, 1934, and that we who were sitting in opposition on the sixth day of April of that year were more than likely to be the government of the province after July 1, 1934. The vote was taken; the matter was made an issue in the campaign. My view was, and in the light of what happened to-day in this house that view has been strengthened, that it was very well known at the time that this legislation was not likely ever to be implemented.

Topic:   CANADIAN WHEAT BOARD
Subtopic:   EQUALIZATION OF PAYMENTS WITH RESPECT TO 1930 WHEAT CROP
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

The hon. gentleman should not make a statement of that kind. There was nothing the federal parliament could do at the time; as the Supreme Court of the United States has since said the provinces had supreme control over the matter.

Topic:   CANADIAN WHEAT BOARD
Subtopic:   EQUALIZATION OF PAYMENTS WITH RESPECT TO 1930 WHEAT CROP
Permalink

March 31, 1936