Hon. GROTE STIRLING (Yale):

I wonder if I might ask the minister to go a little further on the question of recruiting. Is it his intention to open recruiting stations in parts of the country where units are not being definitely recruited? I will give as an instance the interior of British Columbia, in which province recruiting previously has taken place at the coast. It is a long journey from the interior to the coast.

Mr. ROGERS:

It is the intention to establish recruiting centres in the interior of British Columbia at certain selected points in relation to certain units that will be included among those now being mobilized. Obviously I cannot give the house a statement of the various permanent recruiting stations which will be established. Normally they would be located Where there were either headquarters or subunits of the non-permanent active militia units. But if a certain part of the country, even under those conditions, finds itself discriminated against, I shall be very glad to consider the advisability of opening recruiting stations there.

Hon. R. B. HANSON (Leader of the Opposition) :

Will that be true also with respect to the northern and northeastern portions of New Brunswick, where there has been very little opportunity of recruiting?

Mr. ROGERS:

I can also give my hon. friend an assurance in that regard.

Mr. N. J. M. LOCKHART (Lincoln):

I Should like to ask the Minister of National Defence (Mr. Rogers) for some information, which might be given to me privately as to what is being done with regard to certain matters which I brought to the attention of the house generally and to his personal notice more particularly, having to do with certain protection in the areas I described. Definite questions are being asked me and the press have reported things which I hesitate to believe with regard to the protection being afforded. Could I have, even privately, some information which might serve to allay the fears of those who have spoken to me?

Hon. NORMAN McL. ROGERS (Minister of National Defence): I should like to thank my hon. friend for the suggestion he has made, and I shall be very glad indeed to discuss the matter with him this afternoon at his convenience.

Mr. HANSON (York-Sunbury):

I should like an assurance from the minister that there will be an accounting to parliament of the moneys expended under this act. I realize that this is a bill designed to bring money into the consolidated revenue fund and that with respect to the ordinary services of the country expenditures must be made under votes of this parliament, which are subject to the audit act and to the scrutiny of the auditor general. As to the portion of the moneys which will be devoted to loans, what provision is there in the law now with respect to an accounting to parliament? Is it covered by the audit act? I know that details will appear in the auditor general's report, but it is so late when the report reaches one that it it not of much use.

Government Loan Bill

Mr. RALSTON:

I am sorry I cannot tell my hon. friend immediately what does appear in the audit act with respect to this matter. He will understand that in the case of refunding the issues themselves are a charge on the consolidated revenue fund, and that the bonds on maturity really amount to a cheque against that fund. That is the way the payment out of the fund would be effected. The payment is indicated in the accounts when the loan disappears from the liabilities side of the balance sheet.

Mr. QUELCH:

I believe the minister mentioned the other day that the government had sold to the chartered banks and to the Bank of Canada $65,000,000 worth of bonds bearing interest at two per cent. Will he now give the percentage sold to each respectively?

Mr. RALSTON:

I am sorry I have not the amounts before me, but if my hon. friend wishes I can get that information for him.

Mr. QUELCH:

Can the minister explain why a greater percentage of the bonds could not have been sold to the Bank of Canada, rather than to the chartered banks?

Mr. RALSTON:

As I remember it, the

bonds were held partly by the chartered banks and partly by the Bank of Canada, and the bonds held by the chartered banks were refunded by the issue of new bonds. The difference between $65,000,000 and $80,000,000 was paid off, and the balance was issued to the Bank of Canada.

Mr. HANSON (York-Sunbury):

I realize

that this section, which is the enabling section of the bill, is based largely on the principle used by corporations. Full power and authority is given the governor in council to regulate the sale, pledge the security, state the rate of interest and set all the terms and conditions, as provided in this section. What is the policy of the government with respect to loans made under the authority of this measure in respect of (a) the lifetime of the security, and (b) the rate or rates of interest? And (c), will the government under section 4 make regulations with respect to callability?-a very important feature which should not be and no doubt is not being forgotten by the financial advisers of the government. If there is one reflection which might be made on financing which has been done in the past it would be that provision was not made for the calling of long-term, high-interest-bearing debentures. I urge upon the government that, in respect of every issue, some provision be made for calling obligations which will mature after

the cessation of hostilities. I know that such a provision may interfere with the price received for the security, because as a rule financial institutions, if they are receiving a good rate of interest, purchase non-callable in preference to callable securities. One reason for this preference is that in the case of institutional investments, holdings of callable securities may interfere with the establishment of a satisfactory portfolio. But in the interests of the country we should be certain that this provision is made. If the minister has a policy in respect of these different matters I should like him to state it to the house and country.