Mr. JAQUES:

I am not accusing the minister of saying that, but it has been said twice in this house, and I am asking if that is a promise or a threat. It is curious that such a statement is accepted as being quite patriotic, but a statement that we should enlist men as soon as possible because their rates of pay are likely to increase would receive a different reception. Quite a different interpretation would be put on that statement. The minister explained the methods of financing. He calls any creation of credit by the state, inflation. We are led to believe that this war can be financed mainly from the savings of the people, and we have been led to believe that this was the case during the last war. If the last war was financed from the people's savings, I should like, to know why bank deposits increased by something like a billion and a half dollars. Where did that come from? Did it come out of the people's savings? I do not think so.

I remember that as a child I was astonished at seeing a conjurer produce rabbits out of a hat. At the end of the last war, when I was fully grown, I was greatly surprised by having a bank offer me not only bonds but the money with which to buy them. So we can easily see through this little trick of financing by the people's savings. It is just a smoke-screen, because the greater part of a war is financed by the creation of credit. I am not going to take up much of the time of the house, but I should like to know why it is not considered

inflation when money is created by private corporations and then issued as a loan to the country. But if the state itself creates the credit and uses it for the purpose of prosecuting the war, that is called inflation, and that is where we in this corner part company from the rest of the house.

There is one other point. If the production of munitions of all kinds is to be increased to the maximum, surely that will require the savings of the people for investment. If their money is put into bonds, where will the necessary money come from to expand the war industries? But if the state will supply the money which they need, combined of course with a proper system of taxation, since, as the minister has said, we shall be bound to cut down our standard of living because so many men will be taken out of the production of the things we ordinarily consume and be diverted into the production of munitions, and taxation is necessary for that reason, then by these two methods by using the Bank of Canada to issue credit for the state itself, and by a proper system of taxation to prevent inflation, it will be possible to finance and win this war without adding to the debt burden of the country.

I ask hon. members to consider the burden of debt of Canada at the present time. We are told that this war is a life and death struggle and that it will continue until Germany is beaten. Some experts say that the war will last ten years. I canot say anything about that, and I am simply giving the figures I have read as having been given by British experts. I think four years was mentioned here this afternoon, and the minister said this war was likely to be more costly than the last. If that be so, consider the state of debt which we shall have to face at the end of the war if it is financed as the last war was. I am quite aware that no action is likely to follow upon any remarks which we in this corner of the house may make. Nevertheless I am making them because I wish to make my stand clear now at the beginning of the war. The results I am content to leave to the verdict of time.

Hon. R. J. MANION (Leader of the Opposition):

Mr. Speaker, I have just a few words to say because the hon. member for Kootenay East (Mr. Stevens) has, on very short notice, made a very able speech on behalf of our party. There are one or two points I should like to mention, and I know of no better time than the present because it is always understood that in a budget debate any subject at all may be discussed. I have no intention of delaying the house, because my hon. friend the member for Yukon (Mrs.

The Budget-Mr. Manion

Black) wishes to say a few words before six o'clock and I wish to leave her plenty of time. The government certainly cannot accuse us of not doing everything we can to help them and I have no intention of changing our record at this late hour. I believe it is the duty of the whole house to assist the government to get through their business in parliament as expeditiously as possible so that they may get down to the real business of *carrying on our part in this terrible conflict.

Perhaps a word or two about the budget will not be out of place now I am on my feet. While we have gone through a series of crises and now have this terrible catastrophe of war brought upon us by Hitler, it is some satisfaction at least to know that the ill wind that brought us the war brings us a couple of favours. First, there will be a better price for wheat, which will probably save Canada as much as she may spend on war between now and Christmas; and second, it will probably cure the unemployment problem, which we were apparently unable to cure in peace-time.

It strikes me that it is not unwise to utter at this moment a thought which all of us who are in public life should bear in mind, that all over the world to-day thoughtful people are asking why at a time like this we can raise the money for war but in peace-time we find it so difficult to get the money to cure national ills such as unemployment. I say that without any thought of criticizing anybody. I say it merely because I believe that during this war in which we are engaged it is the duty of all of us in all sections of the house to endeavour to work out a method of curing that local condition, or the very fact that we are unable to do so and yet are able to carry on the war will wreck the system under which we now live.

I wholly agree with the minister (Mr. Ilsley) when he said that we must have courage at home as well as abroad, and in imposing these new taxes he should expect very little complaint from those who are taxed, because if the man at home is taxed he is at least very much better off than the poor fellow who is at the front offering his life. We all realize that taxes are necessary at a time like this, and I was glad to hear the minister express the desire that Canada, so far as it can, should pay as it goes during this war. During the last war I think England led the world in doing that, and it did noble work; we did not do so badly, but perhaps we could have done much better. Having learned from the mistakes of the past, I hope now we shall do everything in our power to pay as we go.

I entirely agree with the minister that equality of sacrifice should be the principle of this whole taxation, based on the ability to pay.

I shall not discuss any of the items of the budget, but I should like to express my approval of one feature-I am not criticizing the others-and that is the necessity, as the minister said, of encouraging our industrial companies to expand, companies which will have to make heavy initial capital expenditures which might prove a total loss if the war proved to be of short duration. This encouragement must be given if we are to get industrial production in this country such as we got during the last war, when we had a magnificent record. We must, as the minister pointed out, to a certain extent, perhaps to a great extent, take care of the preliminary expenditures which must be made by the industrial companies which we expect to produce the needs of this war. I think that should be plainly understood. At the same time we should provide by some form of amortization that if the war goes on for a great length of time, the company will not get the full advantage of its production all at once and then be free of any taxation upon it over a long period of time. Suppose we were so fortunate as to go through a short war; our industrial companies would not be encouraged to greater production and greater efficiency if there was before them the fear of bankruptcy through making heavy initial expenditures in plant which would be useless if the war should last only a few months.

But the real reason I rose to my feet was to draw to the attention of the Prime Minister (Mr. Mackenzie King) with all due respect but with great solemnity one particular point I wish to make, and I know of no better time to do it than now. While we of the official opposition and our friends to the left are promising, and so far as we are concerned and I am sure so far as they are concerned, intending to carry out that promise, to give every cooperation to the government by avoiding the playing of polities, I hope the Prime Minister and his government will return the compliment. This method of cooperating, this principle of no politics, cannot be a one-way street; it must run in both directions. In saying that, I do not want to utter any jarring note in this session. I am not trying to offer any unfair criticisms; indeed I do not wish to offer any criticisms at all; for I fully realize that the war is only in its tenth day, that we declared war as recently as last Sunday, and having served in governments I realize the time it takes to get everything going in a proper manner. But, unfortunately, already there are

The Budget-Mr. Munion

various complaints-many of them. I overlook that at the moment, but I urge upon the Prime Minister-and I am sure he will accept the suggestion in the spirit in which it is offered-that he and his government see that politics are set aside by the government as well as by ourselves.

I say that for this reason. I shall give one illustration, and only one, although I could mention a number. I have in my hand a paper in which reference is made to a certain appointment. I shall not name the appointment or the man, but the appointee is one who is known to be outstandingly, openly and strongly a supporter of this government. I have not a word to say against that circumstance; for I have the utmost respect for a man who has strong political views, to whichever of the parties represented in this house he may happen to belong. But I pick up another paper and I find that another appointment is to be made, or so it is positively stated; it is an appointment in association with the first-and I understand they are the only two-and it is to come, according to the statement, which I hope will be corrected, from the organization office of the Liberal party. The Prime Minister shakes his head, and I hope he is right. Probably, and I say this with respect, he knows nothing about it; naturally he cannot know the details of all appointments to be made. But I draw to his attention and to the attention of the government that this would not be carrying out the spirit of the contract which we offered them. In attempting to cooperate in every way, my party and I are sincere. I want the government to give us every chance to cooperate, and I suggest this with no thought of reflecting on the government and no desire to offer any criticism. I repeat that I understand full well it takes time for the government to get down to handling affairs; and if a few errors are made, far be it from me to offer any criticism. I am not doing something which I did not do in my few remarks the other day. At that time I pointed out that patronage and favouritism must cease. I will read the sentence if I may, although in doing so I am breaking the rules of the house:

Another suggestion, and it is this: Let not the abuses of political patronage and favouritism interfere with our national efforts. Canada as a whole is fighting-not one party-and Canada demands that we do our duty fearlessly and fairly. Let service and quality and honesty rule in all our vast expenditures. We must not let any scandal destroy our efforts.

I have no reason for doubting that the Prime Minister is just as sincere as I am in desiring that anything of that sort be avoided.

I am putting it before him only because I

want to bring about national understanding and a united country at this very serious time, and [DOT]we cannot have national understanding and unity if any one of the three or four parties in this house starts out to play politics. We of the opposition have a duty to perform which is second only to the duty which the government itself has to perform. According to our constitutional system a good opposition is just about as necessary as a good government; and we intend honestly and fairly to cooperate; but we do not intend to abdicate our right to criticize if we think the government is not playing fairly with the people of this country, as it would not be doing if it permitted politics to get into the administration and the affairs of a war. I say this merely for the purpose of urging the government to give us every opportunity to cooperate with them to the fullest extent, because we intend to do our duty, and while we have avoided anything in the way of criticism during this session, and shall so continue until the end of this session, naturally we cannot promise that in the future if criticism is deserved.

One other matter, which perhaps is not so important, and perhaps I should have notified the Prime Minister of my intention to mention this. I ask him if he will make a statement on it this evening. That is the question of an election. I was going to mention it to the Prime Minister; but it occurred to me only a few moments ago, and I thought that since I was rising in my place it might be an appropriate moment to mention the subject. If it is assured-and I believe that it is the intention of the Prime Minister-not to have an election until after another session of parliament, if the opposition and the country can be assured that such is the intention of the government, the opposition will be in a better position to cooperate with the government than if hon. members on all sides are to go home with the thought in their heads that possibly an election will be sprung upon them. I have no reason to think the Prime Minister will do any such thing; in justice to my right hon. friend I should say that from conversations with him I have reason to think there is no thought of an election. But I believe that for the good of the country and the empire it would be an appropriate statement for the Prime Minister to make, if he deems it advisable, that there will be no election until at least after another session of parliament.

My whole object in these observations is not in any way even to imply criticism, but to ensure that we can continue to cooperate in every way as we have done this session and to maintain a united front throughout Canada in these very serious times.

The Budget-Mr. Mackenzie King

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

Before I reply specifically to my hon. friend with regard to the two points which he has raised, may I at once extend to him and also to the leaders of the other parties in the house my own warmest thanks and the thanks of the government for the manner in which thus far they have cooperated with us. No one appreciates more than I do the spirit that has actuated hon. members on all sides of the house. It is my hope that that spirit will be maintained, as fully as may be possible, all circumstances considered, not only through the remainder of the present session but, I trust, in any future sessions parliament may have in the course of this terrible war.

Now, as to party politics in relation to government at this time, let me say quite honestly and frankly that there is nothing my soul would loathe so much as an effort on the part of any members of my own party or any members anywhere to seek to make party capital out of a condition such as the world and this country are faced with at the present time. So far as I am concerned I look upon myself to-day, with all due humility, much more as the leader of all parties in this country united in an effort to do what we can to preserve and defend the liberties of mankind. Personally I believe that we can be most successful in that effort as a government taking full responsibility but shouldering it fearlessly and courageously, and faced by an opposition which, as my hon. friend has just said, is as necessary to the full discharge of parliamentary obligations under .the British system as is any other feature of our constitution.

My hon. friend, as the leader of the opposition, holds a position involving a special duty imposed upon him by parliament. His position is recognized by statute and he is in many particulars in a capacity similar to that of any member of the government. It is his duty to watch over every act of the administration to see that it is performed as it should be, more especially is this true ait a time such as this. I do feel that what my hon. friend has pointed out as his conception of his duty is what, more than anything else, will help me in my position as leader of the government to discharge my own obligations in the way in which I should like to see them discharged; the way in which I shall use my utmost endeavours to have them discharged. I wish my hon. friend to be free to criticize, and indeed he will help me if from time to time, as matters come to his notice which

in his opinion show evidences of party bias, he will be good enough to bring such matters to my attention and accord me an opportunity to discuss them with him.

My hon. friend has mentioned that he has seen certain names suggested in connection with possible appointments. On the other side I have had the criticism that some or most of the appointments made thus far have been going, not to Liberals but to others. That is a part of human nature. There are certain appointments which properly are made by the administration in office, and which must continue to be so made in the customary manner, for example, vacancies, such as appointments to the senate, must be filled by the administration. I do not think my hon. friend would expect-

Mr. MANION:

We do not want them; indeed, we would not take them.

Mr. MACKENZIE KING:

I am, however, entirely of one mind with my hon. friend as to the attitude the government should assume with respect to agencies specially associated with war effort, as respects all phases of war effort. I will do my utmost to cooperate with him and with the leaders of other parties in maintaining an attitude which is above party in this time of great struggle.

As to the question of a general election before another session, my hon. friend has been kind enough to say that I told him some time ago that I would not think of anything of the kind or countenance it. Nor have I had a suggestion from any member of parliament that a general election should be thought of between now and another session. The term of parliament is five years; and as time runs on there may be in the minds of some a temptation to follow the course which was adopted during the last war and have parliament perpetuate its term, provided the war is not over at that time. Personally, I never liked the extension which was made during the tame of the last war. In my opinion, the people of the country have the right to say whom they wish to have administering the affairs of Canada, and they should exercise that right periodically at the time provided for in the constitution. I do not think any parliament should take it upon itself to deprive the people of that right. That is my feeling, very strongly, at the moment. There may be conditions between now and the end of this parliament which may necessitate a reconsideration of this question, but I should hope that everyone would expect that the people of Canada should have a chance to express

The Budget-Mrs. Black

their minds freely with regard to the administration, the opposition, third parties and generally with their representation in parliament within the period of time which the constitution provides. It is my intention to have parliament called again in January. It may possibly be necessary to have parliament called before that, but I should expect that we would follow the usual procedure and bring hon. members together some time in the month of January. At that time, we will be in a position to consider what steps may be most necessary with regard to developments that may ensue meanwhile. I hope I have made perfectly clear the position of my colleagues and myself. .

Mr. MANION:

May I be allowed, Mr. Speaker, to break the rules and speak again merely to express my thanks to the Prime Minister for his straightforward answer to my question.

Mrs. MARTHA LOUISE BLACK (Yukon):

Mr. Speaker, it is nearly six o'clock, and I am sure you will allow me to take just two or three minutes to express a few thoughts that occur to me at this time. I only wish to say to the government of the day that, when I left the Yukon, the message given me by Liberals and Conservatives alike, was this: "Go down to Ottawa and tell the government that to the utmost of our ability we will support them, as we did during the last war, irrespective of any political feelings." There are men and women in that section of the country who are willing to give their all, I do not care whether it be their worldly goods or their lives if needs be, and they are at the disposal of the government to use as the government will.

The government must take the blame in all that it does as well as the credit. We must have faith that this government as well as every other government will honestly and conscientiously try to do the best it possibly can. The government will make mistakes, because it is only human, as we all are; but if the government makes mistakes we will strive with our lives, with our help, and with the little treasure we have, to see that those mistakes are rectified and that eventually we shall once again have a peaceful and happy country. .

At the present time there are no boundary lines either in the air or on land or at sea, and we must stand together to protect this land of ours from the raid that may possibly come.

At six o'clock the house took recess.

After Recess

The house resumed at eight o'clock.

Mr. J. C. LANDERYOU (Calgary East):

Mr. Speaker, at the time of the civil war President Lincoln declared that he had two enemies, one the Confederate army and the other finance, and that of the two he feared finance more. He did not fear the Confederate army which faced him nearly as much as he feared finance in the rear, and I say we are in the same position to-day. I do not fear Hitler nearly as much as I fear finance. In Hitler we have political dictatorship, but in finance we have a worse dictatorship, more cruel and more destructive of our social and economic well-being than any political dictatorship can ever hope to be. So I must remind the government and the acting Minister of Finance (Mr. Ilsley) that every precaution must be taken to prevent finance from wrecking the social and economic structure of this country as it has done in the past.

We have very clearly stated our position on this matter. I was interested to note the headlines in the newspapers being put out across Canada to-day. Here is one:

New higher taxes to pay Canada's war debt.

Voluntary service registration in dominion.

Here is another:

Pay as you go policy.

Equality of sacrifice will be insisted upon.

After listening to the budget address, I believe the statements thus made to the people of Canada are absolutely false, because there is no equality of sacrifice in the financial policies advocated by the present administration. We are going to watch carefully the policies pursued by this government; so if they want our cooperation and support, it must be upon the basis we have set forth, the broad basis of national service. The pay-as-you-go policy! I find nothing whatever in the budget address that would indicate equality of sacrifice. I find no fundamental difference between the policies advocated by this government and those policies of borrowing and taxation pursued by the government that was in charge of the affairs of this country from 1914 to 1920. I find that taxation is not being applied in an equitable manner; at least I do not see anything of the kind indicated in the address that was presented this afternoon.

We have urged upon the government the conscription of finance, man power and industry, because we believe that justice, equality of sacrifice and efficiency demand universal conscription. By the conscription of finance we do not mean to conscript the savings of

The Budget-Mr. Landeryou

the people of Canada as represented by savings deposits. The minister states that he does not intend to borrow from the savings of the people. Surely he did not have to tell the house that. Hon. members understand the position of the savings of our people in our Canadian banks to-day. There is approximately $2,500,000,000 in savings deposits; there are over four million depositors; but 8 per cent of that number control 76 per cent of the total deposits, and only 24 per cent of these deposits are owned or controlled by 92 per cent of the depositors. In fact, this is the position with respect to savings in this country: There are 3,797,000 deposits of $1,000 or less, and according to the governor of the Bank of Canada the dollar value of the deposits coming within that category is about $452,000,000. These deposits average $117. We know the great bulk of the savings deposits in this country is in the hands of a few. We will never suggest that these savings, accumulated over the years by the great majority of the depositors, should be confiscated or seized under any pretext whatever. These people have not had enough in the past; why should ' we attempt to take away what little they have to-day? Furthermore, it could not be done because business would come to a standstill. So to suggest that there is in the hands of the people to-day sufficient money in the form of savings deposits to finance a major war is foolish.

The last- war was financed through the creation of money out of nothing by the banking corporations of this country, which money ultimately became the savings of the people. Bonds were given the private banking corporations and credit was issued by these private companies, who have usurped the power that should belong to parliament to control the issue of money and credit. We say that power must be taken away from private individuals; that the issue of money and credit must be taken over by the state, to be regulated in terms of private, public and industrial need; that finance must go hand in hand with the conscription of industry and man power, if [DOT] necessary. But we will never tolerate the position that was taken in the last war, that the lives of men should come before demands upon finance. We say that all must make this sacrifice.

So we wish to make our position clear, that the government can issue money upon the *credit of the nation just as well as it can borrow money upon the same credit. The minister can rise in his place until doomsday and say that is inflation; but the money must come from somewhere and we are determined that usury and debt, the twin destroyers of

civilizations in the past, shall not come out victorious in this war. We are determined that usury and debt shall receive their deathblow before the culmination of the crisis that now exists in the world.

I listened to the remarks of the leader of the opposition (Mr. Manion), who said that many people in Canada were now wondering why we should have had to go through ten years of a great depression during which individually, municipally, provincially and federally we faced bankruptcy. We were unable to secure the money necessary to keep the wheels of industry turning; the great production of our country had to be sold on the instalment plan, because of the deficiency of purchasing power in this country. Many of our municipalities went into bankruptcy, and to-day many others face it. Many municipalities found themselves unable to carry out civic improvements they knew to be necessary, and unable to maintain a decent standard of living for those on relief. We had a million Canadian citizens living on $6.43 a month for food, clothing and shelter, less than was spent by this government to keep a man in the penitentiary. The youth of this country were riding the freight trains, unable to find employment, driven from pillar to post, sleeping in box cars and knocking at back doors for food, and last session they were called yaps and street-corner bums by a member of the Liberal party. These so-called yaps and street-corner bums are now to be the heroes of the country. They are now asked to give their lives for their country. We demand equality of sacrifice. We say these young men are being hounded into the army through force of economic circumstances. We are saying that if they have to make the supreme sacrifice; if they have to lay down their lives for their country- as the youth of Canada are prepared to do-* the men who stand in the rear and operate the financial system should not be permitted to plunder the nation, while the fighting men are doing their best to protect national integrity.

We say that provincial governments, too, were in a very bad financial position, and were passing the buck in respect of relief costs. The federal government was unable to maintain the widows of men who served in the last war. As a matter of fact, I have had widows of that kind in my own constituency who have come to me with tears in their eyes, begging that I bring their plea before parliament, and asking that something be done for them. They have told me they have been unable to live in Canada or to enjoy the standard of living which they thought was proper, in view of the fact that their husbands had served Canada in the last war.

The Budget-Mr. Landeryou

But, always we hear the cry, "There is no money." Parliament is now assembled, and . the two hundred and forty-five men who some months ago were asking, "Where is all the money coming from?" now say to the youth of Canada, "We have battleships costing millions of dollars; we have aeroplanes with machine guns mounted on them, costing hundreds of thousands or probably millions of dollars. We have tanks for you; we have submarines for you. We will give you small guns; we will give you big guns. We will give you all the ammunition you want. We will give you shoes, food, clothing, shelter. We will give you all the equipment you want." To all those young men who were knocking on the back door for food we now say, "We will give you chits which will permit you to go to a restaurant for food-we will give you all these things if you are willing to go out to lose your life or to destroy the lives of others. But in times of peace we would not give you money. We would not see that you had a decent job.We would not make it possible for you toget married and raise a family in this great country of ours." No, but we say to them now, "Here are these instruments of destruction; we give them to you for nothing, because we are making a profit on them." As in the last war, we will make a profiton the bodies that lie in Flanders' fields.

It is estimated that in the last war $25,000 was the cost of destroying a soldier. Somebody has been making a profit out of those dead bodies ever since.

These conditions must cease in Canada, if we do not want to break down the whole social and economic structure of our nation. The youth of Canada are prepared to serve. We realize that we in the British empire are faced with a great task. We know, too, that this month of September is one of the gravest we have known. But we are watching very carefully, because we have had the bitter experience of ten years of depression. We know something about the financial policies pursued between 1914 and 1918, and we are determined that in this instance a change must come. So do not fool yourselves.

The youth of Canada are prepared to make their contributions on the basis of universal conscription. We do not want the newspapers of Canada to stress particularly the conscription of man power, because, so far as I personally am concerned, I am for universal conscription, but I would not vote to have one man join the army or leave the

shores of Canada unless at the same time there were conscription of finance and industry.

By conscription of industry we do not mean nationalization. We do not mean that we are going to go into a scheme of government ownership, as has been proposed by hon. members of the Cooperative Commonwealth Federation. We do not want any change of ownership, but we do want industry financed with a sufficient amount of credit, so that there will be no difficulty in establishing factories which in years to come may have to be established, in building storage plants which may be required to store our food, or in any way developing Canadian industry.

We are in favour of industry functioning at its maximum capacity to serve the needs of Canada and the empire. However, in reading the press, I have noticed emphasis on the suggestion that we advocate the conscription of man power. We do advocate that; we are prepared to conscript man power. But we must conscript industry and finance as well. We do not want the newspapers in Canada, or members of the old-line parties to go out on the hustings and say that we are advocating the conscription of man power without stating that we also demand the conscription of industry and finance. All three must go together.

We know that this war may become an issue closely related to supplies of men, food and implements of war, and we believe that industry should be mobilized so that all waste may be eliminated. We do not want to see the fruit growing in the orchards of Nova Scotia, Ontario or British Columbia falling to the ground and being wasted, as it has been in times past. On the contrary we want a strict conservation of our food supply, because we learned in the last war that the allied forces faced food shortages. We know that the results of this war may depend to a considerable extent upon food supplies-a factor which may be of greater importance than supplies of guns or men. If we do everything that can be done to build up our food supplies and to [DOT] indicate to the people of Canada that we are sincere in our desire to see that everyone makes the same sacrifice, we shall have no difficulty.

Once more I urge the acting Minister of Finance to consider the issue of debt-free money by the government, so that all necessary financing can be done, so that the farmers of Canada may get the machinery necessary for increased production. Let there be no delay in supplying the nation with equipment necessary to increase our supplies of

The Budget-Mr. Pelletier

food. I would urge that the government take steps to see that debt and usury are not permitted to be victorious in the next war, and that it earnestly endeavour to bring about a condition whereby all, through equality of sacrifice, may have that peace and sweet content which the Prime Minister has stated is the rightful heritage of all.

Mr. POUL.IOT: Would the hon. member tell us how his monetary system would be of any benefit to the returned man or to the common citizen, and what the benefit would be? I have not gathered that.

Mr. LANDERYOU:

Does the hon. member want to know how money would help the returned man?

Mr. POULIOT:

I want to know how that money will find its way into the pockets of the private individual and how, being there, it will help him to get anything.

Mr. SPEAKER:

Order. I would remind hon. members the house is not in committee.

Mr. LANDERYOU:

I had not intended to go into any detailed discussion in that connection, but I would point out briefly to the hon. member that at the present time you can borrow money on the credit of the nation.

Mr. R. A. PELLETIER (Peace River):

Mr. Speaker, I shall at the outset of my remarks offer congratulations to the Minister of National Revenue (Mr. Usley) upon the clear manner in which he presented his budget speech this afternoon. We might say also that we feel extremely sorry to hear of the illness which led to the resignation of the former Minister of Finance (Mr. Dunning). We in this corner of the house feel particularly sorry that the government should have to suffer the loss of his services at this time. We always felt that the hon. gentleman was a most able and sincere individual. So far as we were concerned, he always extended to us the greatest courtesy and we again offer our sympathy to the government for having lost his services.

I am sure all of us realize that it was not an easy task for any government or any individual to have to face this country at this time and present a budget. We feel sorry that such a situation has been brought about, but we do admire the minister for the courage he displayed and we sincerely hope to be able to offer our cooperation. During the last few days of this session we have been asked to give our cooperation to the government, which we have done gladly, in order that the business of the house might be rushed through because of the emergencies of the present situation. We gave our cooperation because

we felt it was in the best interests of the country to do so. But the question of a declaration of war has been decided; the necessary funds have been voted to carry on, and we feel it proper to call a halt at this time in order to review the important decisions we are about to make.

The hon. leader of the opposition (Mr. Manion) has so thoroughly offered his cooperation to the government that he appears to have abdicated his position as leader of the opposition in this house. As a matter of fact,, at the present time we have what might be-called a union or national government. Apparently there is no need to include-opposition members within the ranks of the-government when the government is receiving such whole-hearted cooperation from the leader of the opposition. We understand, of course, the motives which have led the leader of the opposition to offer his cooperation; he has done so in a spirit of assistance to the government at a critical time. Nevertheless we maintain that, once the government has been given power and authority to act, there is no need for undue haste in discussing matters that will affect, not only the present situation but the aftermath of the war.

We are grateful to the Prime Minister (Mr. Mackenzie King) for having been kind enough to clarify the situation with regard to a general election this year. He has made it quite clear that parliament will be assembled once again. I think that is the only fair thing that could be done and I thank the Prime Minister for that demonstration of a really democratic spirit. This will mean that, no matter what policies may be pursued in the future, we shall have an opportunity of discussing them and leading public thought by their being presented once again to parliament before the people are called upon to decide.

We have not had time to go into the budget in detail. We are more -or less in the same position as was the hon. member for Kootenay East (Mr. Stevens) this afternoon. Apart from touching generally on the broadest points of the budget, it is impossible for us at this time to visualize fully the different provisions and what they will mean to the people of Canada. We do know that we are facing a serious situation and that these measures have been brought down in order that we may meet that situation as adequately as possible. I believe it is proper for a private member to attempt to analyse the situation as it exists to-day and as it may exist in the near future. We know the present alignment between the conflicting armies, but the great question in Europe

The Budget-Mr. Pelletier

to-day is Russia. Everyone is wondering what Russia will do finally, and as yet no one has been able to answer that question. There are those who believe that in the event of Russia becoming involved in the war on the side of the foe of Canada, the agony of the present crisis would be greatly prolonged. For this reason we should take the proper steps to protect the people of this country in a financial way.

No one can know what will happen, but I think we should pay heed to the warnings which have been given from time to time by the Prime Minister as well as to the declarations by Mr. Eden of Great Britain as recently as yesterday. It has been stated that we are involved in a war which has for its purpose the complete destruction of Hitlerism from the face of the earth. That is quite a job, and I believe we are going to be a long time doing it unless we bring about universal conscription of all our resources. In my opinion that is the only way to strike a quick and decisive blow at the enemy.

In bringing down the budget this afternoon, the Minister of National Revenue stated that there were only three methods by which money could be raised, namely, by taxation, by borrowing and by inflation. He gave a good deal of time to the question of inflation and pointed out the dangers of an inflationary policy at this time. He should have gone further and stated that inflation is dangerous only when it is inflation, but that reflation is entirely different. As a matter of fact, the minister admitted that there would be a certain amount of inflation at the beginning. He felt that this would be absolutely necessary. I believe he used the wrong term. Instead of calling it inflation, he should have called it reflation. Reflation is getting back to the former level, and that is the term which he should have used.

There is also the question of borrowing. The minister did not go into this in detail, but I should like to submit to him that there is danger in borrowing. The minister stated that it would be necessary to borrow money to a certain extent to finance the war. The result of such a course will be that the bonds of this country will be placed upon the market and be made available for purchase by various institutions. There might be a tendency on the part of banking and lending institutions and others to call in their present loans and thus restrict the amount of credit and currency available to industry, the proceeds being invested in government bonds. This is what has happened to a great extent during the

I Mr. Pelletier.]

past few years because of the economic pressure and distress which have been prevalent in the country.

This afternoon the hon. member for Kootenay East referred to gold. He pointed out that without using any harebrained .financial scheme, without using any wild form of inflation, it would be quite possible and proper to use our own gold resources. The amount of the gold backing of our dollar could be increased, and thus our gold would be used to greater advantage than it has been in the past. This would not be taxation; this would not be borrowing; this would be using currency in terms of public need. There has never been a greater need for public credit than at this very moment.

There are in the budget many matters which need to be discussed, but I am particularly glad to note that every effort is to be made to control any undue rise in prices. I know the minister will agree with me that inflation can be brought about if there is no control over the rise of prices. I have a clipping here which I should like to place on the record, showing the amount of products in cold storage in Canada at the present time, and it might be interesting later on to see how they have increased in price without any new sources of production being drawn upon.

The quantity of creamery butter held in cold storage in Canada on September 1, 1939, was 54,975,936 pounds, as compared with 61,113,630 pounds on the same date last year. The stocks of other commodities held in cold storage are as follows:

Commodities Held in Cold Storage on September 1, 1939

Dressed poultry pounds 2,894,628Cheese pounds 52,507,421Dairy butter pounds 291,177Cold storage eggs dozen 7,861,333Fresh eggs dozen 591,488Frozen eggs dozen 6,009,041Pork pounds 25,919,044Beef pounds 9,932,231Veal pounds 3,733,649Mutton and lamb pounds 844,495Frozen fresh fish pounds 34,661,250Frozen smoked fish pounds 1,964,588Dried, pickled and salted fish., pounds 3,421,578

And so on. A complete list is given of the amount of stocks now held in cold storage in this country. Some people have already taken advantage of present prices to make a profit out of those commodities. I must say that we in this comer of the house are convinced that any increased profit has certainly not gone to the primary producer. Only yesterday I received a long distance telephone call

The Budget-Mr. Maclnnis

from a manufacturer in Montreal complaining that they were unable to carry on their manufacturing activities in that city because they were unable to get any sugar. When they went to the wholesaler, he told them he had no sugar and to go to the manufacturer; and when they went to the manufacturer, he sent them back to the wholesaler. The result was that they could get no sugar at all. Undoubtedly, when the sugar now withheld is put on the market, it will be sold at a higher price than ever before.

As the hon. member for Calgary East (Mr. Landeryou), who spoke before me, said, there can be no doubt in the country as to the stand taken by this group concerning universal conscription. We have felt that this is the only way by which we can get efficiency of action and equality of sacrifice. We feel that only by this means can we attain these results which are desired by every Canadian in this country. We believe that, no matter how great the financial contribution may be, it can never be as great as the contribution of human life. We feel that a repetition of the methods of financing the last war can only bring about a repetition of the results-debt, poverty and unemployment. Furthermore, the people would be given greater confidence in this parliament if it demanded in this hour of crisis an equality of sacrifice so far as that is possible. It is by these considerations we areT motivated, and we should like to see these policies brought into effect at this time. We feel that only in this way can parliament have the full confidence of the Canadian people. Therefore, Mr. Speaker, we have decided that the only fair thing to do is to bring in an amendment to the resolution that was moved by the Minister of National Revenue this afternoon, and I shall place it before the house in a moment.

Our amendment calls for the setting of a committee to study ways and means of conscripting finance. We feel that this would not necessarily mean a long time to get results. A committee of this kind could work just as quickly as any other board or committee which has been set up or proposed by the government at this time. If industry can be conscripted, we feel that it is just as easy, if not easier, to conscript finance, and that it can be done just as rapidly. We feel that in moving this amendment we are placing before parliament what the people of this country would like to see done. They have no hesitation in offering their lives, and I feel that no one should have any hesitation in contributing to the extent of his financial ability to the cost

87134-lli

of the war in which we are engaged at the present time. Therefore, Mr. Speaker, I move, seconded by the hon. member for Camrose (Mr. Marshall):

That the Speaker do not now leave the chair, but that this house set up a committee to study ways and means of conscripting finance, and thus bring about a greater equality of sacrifice.

Mr. ANGUS MacINNIS (Vancouver East):

Mr. Speaker, I had not intended to speak in this debate at all. The attitude of our group with regard to Canada's participation in this war has already been put before the house by one of our members. I agree with the statement he made, and so far as possible I hope within the ambit of that statement to facilitate the work of the session to the greatest possible extent.

But there is one word I wish to say to the government and to the Prime Minister (Mr. Mackenzie King) in particular. We are facing a time of stress. Many of our people remember the last war, and a great many more remember the promises that were made during the course of the last war. Everyone realizes that those promises have not been fulfilled. Nevertheless I am sure that a great many people have agreed, like myself and others of us in the Cooperative Commonwealth Federation group, to participation in this war because we believe vital issues are at stake, and because we believe that if the powers opposed to Germany in this war prevail, we shall have a better opportunity to maintain our democratic institutions and to build up on that foundation a better society than we now have.

I would urge upon the government that it is of the utmost importance that during the course of this struggle we retain as much as possible of our civil liberties. We must be careful with our censorship. Already it has been drawn to my attention that two radio broadcasts arranged by the organization to which I belong have been prohibited in the city of Vancouver.

When I was arguing for Canadian participation in war, the thing I had to combat most was this: the moment you agree to participate in a war, that moment your civil liberties are taken away and there is no assurance that they will ever be restored. I have a certain amount of faith in my fellow man. I believe that others are just as anxious as I am tb maintain civil liberties and democratic institutions, and I hope that if it is found necessary to take away certain liberties and privileges we now have, the amount taken will be the minimum and will be restored as soon as this war is over. I draw that point

The Budget-Miss Macphail

to the attention of the Prime Minister, and I think a statement on the subject should be made before parliament prorogues.

As to this amendment, I do not wish to say anything. I could vote on it more intelligently if I knew exactly what it meant. I have said time and time again in this chamber-of course without any effect-that if my friends to the left knew the distinction or the association between finance and property, they would not be talking continually in this way. Finance to-day represents property; you cannot conscript finance without conscripting property. They say they are opposed to the nationalization of industry and yet they are going to nationalize finance. You cannot nationalize finance without nationalizing industry; and even if the thing could be done, nationalizing finance without nationalizing the material things which are manipulated with finance would be quite useless. If someone of the Social Credit group could explain to this house what is meant by the conscription of finance, he would be conferring a favour on the house, and it would enable me, at least, to vote intelligently on this amendment. Until I have that information I must vote against it.

Miss AGNES C. MACPHAIL (Grey-Bruce): In the budget speech this afternoon I noticed particularly one sentence, and it was this:

We must be able to hold out to business men the opportunity of making a reasonable profit and also the chance of securing some compensation for exceptional efficiency and willingness to take the risks inherent in industrial enterprise in war-time.

I have no particular objection to that sentence, but I look in vain for some protective sentence in the interest of the greatest industry that Canada has, the industry of agriculture. I hear a disquieting rumour today-how true it is, time will tell-that the price of cheese at something like the present price is being fixed by Great Britain. I feel that I must say to the government-I had hoped others would have done so, and then I should not have needed to-that agriculture in this country must not be sacrificed on the altar of mistakes of foreign policy outside this country.

Since the last war Canadian agriculture has taken a fearful beating. In 1926 although the agriculturists formed one-third of the total population, they received only one-fifth of the national income, and from 1931 to '1937 they received something less than one-tenth of the the national income. The farmers of this country have been paying for the last war ever since it ended. All our production was speeded up to war-time necessity. Suddenly the markets which they had were taken away;

no attempt was made to fix prices, except of wheat, and that very recently, and the farmers have been working for nothing. One does not need to make an argument about it; the shabby countryside which one sees ever}-where-more so in some provinces other than our own, but everywhere-shows all too clearly that the farmer went on producing at a loss.

If the Canadian government is to give every economic assistance it can to Great Britain in the war which is now in progress, it must be on the basis of adequate prices for Canadian agriculture. The thing I fear-and it is almost certain to happen-is that there will be another great campaign to increase the production of foodstuffs to meet the needs of a peculiar situation, one which will not last; and then, when it is over, the farmer will fall into a depression even greater than the one which has existed constantly since the close of the last war.

I urge upon the government, and I regret to say it seems to be the only way it can be done, that they take it upon themselves to safeguard the interests of agriculture in this country. If agriculture was doing its duty by itself, it would have an organization so powerful, with an office in this city so strong, that there would be no doubt that the interests of agriculturists would be remembered. Since that is not so, and I regret very much to say it is not so, I feel that the government of Canada must feel themselves responsible for the safeguarding of agricultural interests in this country; and we must not allow the fixing of farm prices in England, if they are going to be our prices, at anything like their present level, because the present level is starvation wages for the farmer, wages which make it impossible for him to care for the needs of his family. He cannot pay doctor bills; he cannot provide for any dentistry; he cannot dress as he should; he cannot look after his buildings; he cannot paint them. We cannot allow our own government or any other to fix for agricultural products prices which would mean a continuation of the semi-starvation which the farmers of this dominion have endured.

None of us is happy about the present situation. I do not think I was ever more desperately unhappy than I was at the conclusion of the speech of the Minister of Justice (Mr. Lapointe) the other day, a brilliant and excellent speech, but one which made me feel that the hope for Canada in the future is very slight; that we are not a nation; that we have no control over the amending of our own constitution; that we only use words when we say we declare war. At least we can

16a

The Budget-Mr. Woodsworth

surely do this; we can say that no other government is going to say what our farmers shall get for their products, when the lives of these other governments depend upon the amount of farm stuffs which will be sent to them from this country. I entreat the government to listen to me on this occasion.

Mr. J. S. WOODSWORTH (Winnipeg North Centre):

Mr. Speaker, before the main motion is put. there are a few remarks I should like to make. In this debate we have heard the phrase "equality of sacrifice" used very freely, indeed. While the budget might have been worse than it is, at the same time I should not like the impression to go abroad that there is the slightest ground for talking about its providing for equality of sacrifice.

Men are asked to go and give their all. Women are asked to stay behind and care for their children, and to face the prospect of lifelong widowhood with orphaned children. I say it is absurd in such a situation to talk about equality of sacrifice. Wealthy people are asked to make a sacrifice of giving up expensive wines-no, as a matter of fact, their sacrifice is that of paying more for expensive

The Budget-Mr. Woodsworth

wines. That kind of thing is all they are asked to do. It is the mere giving up of a few luxuries, if it amounts to even that much. Simply because we are doubling the taxation on articles used by certain classes of people, it does not follow that there will be equality of sacrifice, and it is absurd for us to try to spread abroad any such idea.

Again I would point out that even though we conscripted all wealth, there would not be anything like equality of sacrifice, unless the men of wealth themselves faced life-and death in the trenches, with all that this involves. I have to speak against war, but I have profound respect for the men who are willing to make the great sacrifice because of their high ideals. On the other hand, I have little respect for the man who stays behind and does even the slightest bit of profiteering -or, I would gc farther than that and say, "profit-making."

Hon. members to my left against whose amendment I voted talk about conscription, but it is not the kind of conscription I want. I believe they mentioned that it involved no change of ownership. The kind of conscription I would advocate is something that does involve change of ownership. I would talk about the conscription of bank accounts and the conscription of property of every kind- if we are going to go into conscription at all. Talk about that; let us have that kind of conscription.

A few days ago the leader of the Social Credit group (Mr. Blackmore) said that they stood for a wide program of conscription of man power, finance and industry. Well, I would be inclined to say that if the conscription of men were advocated, I would certainlv advocate, not the kind of conscription they lane about-a namby-pamby thing that does not mean anything and that has no sense in it- but that before a single man is conscripted, there ought to be complete conscription of wealth. And even then you would not begin to get equality of sacrifice.

These are things that should be clearly recognized. I have not the right to discuss the amendment which has just been voted upon, but I do insist that the kind of thing we have been talking about-and, in my judgment, this has been done in all sections of the house- is unreal. I cannot but think that if we are going into this war and are going to stand shoulder to shoulder in the defence of the country, to use the words of the Prime Minister (Mr. Mackenzie King), it must mean that if we are sincere, those who hold that belief ought to be prepared to go to the very limit of sacrificing every last dollar in the country.

[Mr. Woodsworth.)

Mr. STEWART:

They may have to.

Mr. WOODSWORTH:

That is not the popular doctrine, but I say that is what is involved in the fine phrases we have been using.

I voted against the amendment because I want to get away from a lot of the camouflage we hear so much about. Let us get down to business. If we adopt the idea of conscription, then let us be prepared to carry it through to the very limit. What is the use of our talking about setting up a committee to study this kind of thing? Of course we would all vote to set up a hundred committees, if they meant anything-but they do not, at the present time.

The government has said it is not going to adopt conscription. I say that before there is any effort made to conscript the people of this country, we should conscript all the wealth. And one other word: For the moment we may not be entering upon a procedure of legal conscription; but when I read that certain municipalities are turning men off relief unless they sign up, then I say that is moral conscription, that it is not justifiable, and that it is just as effective as legal conscription would be.

Let us face these facts-and I believe these are the last words I shall have to say with regard to the whole situation. One of the hon. members who has spoken has remarked on the fact that money can be easily obtained when we are at war. I cannot but think of the thousands of men I have met personally during the last few years-the boys who have been riding the rods and the men in the soup kitchens. I know we are all sympathetic with our less fortunate brothers, and more or less in a general way we all would support any move towards an improvement in their condition. But the government apparently could not find money to give relief to those poor boys-although, as soon as what is described as a national crisis arises, we find there is plenty of money for all kinds of undertakings. And those self-same poor boys who yesterday were hobos are now well dressed and provided with the necessities of life.

I point these facts out in making what may be my last plea. According to the orders in council which were read to-day, it may not be possible for us to speak. If these orders are strictly construed, it would not be possible for us to talk-even about the terms of the peace. I lived through the last war, and I found that I could not speak. I commend the Prime Minister from the bottom of my heart for those noble words of Liberalism he uttered just before the dinner recess.

Ways and Means

I do-and I think he has it in him really to struggle to maintain some of those principles of liberty. Personally I am not so much afraid of the power of Hitler in this country as I am of the possibility that by entering upon this war we shall be conquered by some of the things which to-day we condemn in Hitler.

I would hope that through all the restrictions and privations which necessarily must come in a war, the principles of liberty, the principles of free speech and the principles of a free parliament which, as I said the other night, had been upheld to this stage, may be upheld to the very end of the war-however long it may last.

Motion (Mr. Mackenzie King) agreed to. WAYS AND MEANS

Mr. MARSH:

We have not the bill before us and I do not think we should proceed without it.