September 26, 1945

PC
LIB

Ian Alistair Mackenzie (Minister of Veterans Affairs; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. MACKENZIE:

You have to sit down; the Speaker is on his feet.

Topic:   INQUIRY AS TO CONTINUATION OF RESEARCH
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PC
LIB

Ian Alistair Mackenzie (Minister of Veterans Affairs; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. MACKENZIE:

Not for anything.

Topic:   INQUIRY AS TO CONTINUATION OF RESEARCH
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PC

Joseph Henry Harris

Progressive Conservative

Mr. J. H. HARRIS (Danforth):

Mr. Speaker, may I be permitted to ask the Minister of Reconstruction if the several thousand employees of Research Enterprises may be given some immediate consideration, as this is a matter of urgency, with regard to the reconversion of Research Enterprises into a plant of a kind that will ensure the employees of some work in the not too far distant future.

Topic:   INQUIRY AS TO CONTINUATION OF RESEARCH
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LIB

James Horace King (Speaker of the Senate)

Liberal

Mr. SPEAKER:

If I understand the question aright, it is a repetition of the one just asked by the hon. member for Eglinton (Mr. Fleming), which I have ruled out of order.

Topic:   INQUIRY AS TO CONTINUATION OF RESEARCH
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LABOUR CONDITIONS

STRIKE AT FORD MOTOR PLANT, WINDSOR


On the orders of the day:


PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. JOHN BRACKEN (Leader of the Opposition):

Mr. Speaker, I should like to ask the Minister of Labour if he has any further report to make to the house on the progress being made in the settlement of the labour dispute at the Ford Motor plant at Windsor.

Topic:   LABOUR CONDITIONS
Subtopic:   STRIKE AT FORD MOTOR PLANT, WINDSOR
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LIB

Humphrey Mitchell (Minister of Labour)

Liberal

Hon. HUMPHREY MITCHELL (Minister of Labour):

Through the good offices of the Secretary of State, the member for Essex East (Mr. Martin), and the mayor of Windsor, it has been indicated to me that the unions involved desire that efforts be made for the conciliation of the dispute. After consultation with the Minister of Labour for the province of Ontario-for I would point out to the house that this is a provincial dispute at the moment, not a federal dispute-a wire has been dispatched to both the company and the union stating that both ministers have agreed to meet with them on any date convenient to them in order to bring the parties together and get the wheels moving again in the Ford plant at Windsor.

Topic:   LABOUR CONDITIONS
Subtopic:   STRIKE AT FORD MOTOR PLANT, WINDSOR
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VETERANS AFFAIRS

INQUIRY AS TO APPOINTMENT OF SPECIAL COMMITTEE


On the orders of the day:


PC

Alfred Johnson Brooks

Progressive Conservative

Mr. A. J. BROOKS (Royal):

May I ask the Minister of Veterans Affairs if it is the intention of the government to set up a special committee on veterans affairs at this session of parliament, and if so, at what time we may expect the committee to be set up?

Hon. IAN A. MACKENZIE (Minister of Veterans Affairs): The reply is in the affirmative. The intention is at once to set up such a committee, and I shall be asking the various parties and groups in this house for their selections of names for that committee, probably in a day or two.

Topic:   VETERANS AFFAIRS
Subtopic:   INQUIRY AS TO APPOINTMENT OF SPECIAL COMMITTEE
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GOVERNOR GENERAL'S SPEECH

CONTINUATION OF DEBATE IN REPLY


The house resumed from Tuesday, September 25, consideration of the motion of Mr. W. M. Benidickson for an address to His Excellency the Governor General in reply to his speech at the opening of the session, and the amendment thereto of Mr. Ross (Souris).


SC

Victor Quelch

Social Credit

Mr. VICTOR QUELCH (Acadia):

Mr. Speaker, I had not intended to take any further part in this debate, but now that the hon. member for Souris (Mr. Ross) has moved an amendment dealing with a subject which is of very great interest to western Canada I feel obliged to make a few comments upon it. His amendment reads as follows:

We respectfully submit to Your Excellency that, pending the establishment of a more stable and equitable price structure for Canadian farm products based on parity of income for farmers, immediate consideration should be given to establishing for a period of years floor prices for all basic agricultural products at levels not less than ninety per cent of parity.

This amendment is perhaps not worded just as clearly as it might have been, but my interpretation is that it definitely endorses the principle of a parity income for farmers, and with that objective we are absolutely in accord. It also submits that in the maintaining of floor prices not less than ninety per cent of to-day's parity should be established. I take that as the meaning which the hon. member for Souris had in mind in moving his amendment. If that is the meaning, the amendment will receive the full support of this group. I should like to point out that we have on various occasions in this house taken a stand in support of that very objective, as I shall shortly show.

In this house and throughout the country there has in the1 past been a good deal of misunderstanding as to just exactly what is meant by parity prices. It has been quite a common thing to base parity on the prices over a given period, 1926 to 1929, and some have based it upon the 1913 to 1914 period. But the important thing to note is that in neither of these periods did the income of the farmers represent a parity income. Therefore if we are using the period 1926 to 1929, we can use it only as a temporary expedient to keep

The Address-Mr. Quelch

us going until such time as we have definitely established the principle of parity income. Of course, by parity income I mean that the income of the farmers should bear the same relation to the national income as the farm population bears to the national population.

We in this party have had on the order paper of this house for a number of years a resolution to that effect. I should like to read it to show that the amendment now before the house is in line with what we have long been advocating regarding parity income. The motion standing in the name of the hon. member for Bow River (Mr. Johnston), and dated September 6, reads as follows:

Whereas agriculture has seldom received its fair share of the national income of Canada;

And whereas the cost of producing all agricultural products varies considerably from year to year;

Therefore be it resolved, that, in the opinion of this house and in the interest of the nation as a whole, the government be requested to set the prices of agricultural products at such a level that it will guarantee to the farmers of Canada at such yearly percentage of the national income as will have the same relation to the national income as the agricultural population bears to the national population of Canada.

We have had such a resolution on the order paper for several years. The only years within the past century during which prices for agricultural products did maintain a parity of income for the farmer were 1915 to 1919. That basis is seldom mentioned in relation to parity prices. In support of that I should like to quote from a pamphlet which I have in my hand, issued by the Canadian Federation of Agriculture and called "What Share of the National Income does the Farmer Get?" On the back page we find a table setting out agriculture's share of the national income. It shows that in 1926 the farmers' income represented 17.8 per cent of the national income; in 1929, 14.6 per cent; in 1930, 9.6 per cent; in 1931, 6.3 per cent; in 1932, 5 per cent. By 1940 it had gradually crept back to 11 per cent. The average between 1926 and 1929 was 16.6 per cent, and from 1930 to 1940, 9.4 per cent. If we turn to page 13 we find a graph which shows the relationship of the farmers' income to the national income. It appears that from 1915 to 1919 the farmers' income represented approximately one-third of the national income, and at that time the farmers constituted one-third of the population; therefore I think it is quite correct to say that during the period from 1915 to 1919 the farmers, representing one-third of the population and1 obtaining one-third) of the national income, received in reality a parity price.

The amendment is aimed' at establishing that parity. We all realize that a parity of that kind cannot be brought about overnight.

Therefore in the meantime we would establish a floor of at least 90 per cent of existing parity.

I have heard it argued by some hon. members and by some people outside this house that the farmers are not entitled to that type of parity for the reason that a farmer does not need to spend the same amount of time and money in training himself for his job as is required in some other vocations, and that, therefore, it would not be fair to compare the income of the farmer with the income of, we will say, the lawyer or the doctor. If that were true I would say that the farmer more than compensates for the difference by the extra long hours of labour which he puts in, and which are just about twice as many as those of men in any other profession. While labourers generally work from six to eight hours a day, the length of the farmer's work is from ten to sixteen hours a day. Therefore I maintain that he certainly makes up for any lack of training or any less time he has spent in training, by the extra hours of labour he puts in, not for one, two or three years, but during his life until such time as he is too old to work. I said, "if that statement were true," but I am not prepared to admit that it is true. I believe it takes longer to train an efficient farmer than to train a man in any other occupation. The farmer to-day must be skilled in many trades, skilled in combustion engines and power machinery; he must understand their maintenance and how to repair them. He must be a good blacksmith. He *must also be skilled in knowledge of plant life and animal life and all that they entail. He must be a general animal doctor, and as the hon. member for Edmonton East (Mr. Ashby) said the other day, must act at times as a maternity nurse. He must also be a competent salesman. Many men who prove themselves to be good farmers as far as the work they do is concerned, fall down on the job of selling their products. In that case they are doing their work, very frequently, for almost nothing.

I think all of us who are married will agree that a farmer needs to become a skilled diplomat in handling or humouring an overworked wife. Finally, I would say that he must find ways and means of carrying on in the face of adversity. Anyone who farmed during the thirties knows how at times it seemed an almost impossible task to carry on from one year to another. We persisted, however, in the hope that the next year would be different and that we would be able to "make a go of it."

Coming for a while to a discussion of the question of wheat, I wish to speak of the policy which was brought down in this house by the

The Address-Mr. Quelch

Minister of Trade and Commerce (Mr. MacKinnon). In placing the new policy before the house the minister explained that, owing to crop failures in various parts of the world, the only two countries which would have a large surplus for disposal w'ere Canada and the United States, and that, therefore, they would be in a position to demand a higher price. He also drew the attention of the house to the fact that the wheat will be sold largely to our allies, -who are in no position to pay a high price for that wheat; they will have great difficulty in finding the means of payment. Therefore he urged that it was our moral obligation to make that wheat available to these nations at a price not higher than the present one.

We in this group are absolutely in accord with that. Consistently during the war we have advocated Canada's participation in such measures as mutual aid, the billion dollar gift, and UN.RRA. We have always emphasized that all the united nations should be willing to pool their production for common use against the enemy, and that so long as the united nations were reducing their standard of living to barely sufficient to maintain the people in a state of decency, there Should be no question of inter-allied debts being considered; the contribution should be made as a moral obligation, and no debts should be formed. Unfortunately, as we know, that policy has not been carried out, and the difficulty of inter-allied debts is already coming to the front, as it did after the last war. I am convinced that eventually those debts will be, if not repudiated, put off indefinitely and not paid, because after the last war no nation, with the exception of Finland, was able to pay the debts it incurred, and I do not doubt for a minute that no nation will be able to pay the debts of this war in view of the fact that they are far heavier than they were following the last war.

But the point I wish to make is this. While we agree that the policy enunciated in this regard is a fair one, we insist that when Canada makes that sacrifice and that contribution it should be a sacrifice of the Canadian people and not of any one class of society alone. Why should agriculture be asked to stand the full cost of that sacrifice? Surely the logical thing to do is to pay the farmers the price that can be obtained, sell the commodity to the people who need it, at the current price, and make up the difference between the two figures out of the general revenue fund or any other source which the government sees fit to use. We may differ as to the way that should be done, but that is not the point in question now.

The minister has tried to excuse his proposals on the ground that the government policy will compensate the farmers by guaranteeing a floor price of $1 a bushel for the next five years. But the mere fact that the minister says that it will be compensating them implies that the price may fall below that figure. On the other hand, the government does not know for certain whether the price will fall below or whether it will be above that amount. It may not call for any sacrifice at all. But certainly the government are not in a position to make a guarantee for the next five years, because they do not know whether they will be in power for the next five years; they might go out of power next year, in which event the farmers might be called upon to make the sacrifice for nothing.

But there is another reason why we are opposed to the farmers having to make that sacrifice. It is that we say that the farmers are being called upon to make a double sacrifice. For ten long years the farmers of the country produced at very low prices, and day by day, year by year, they were making considerable sacrifices. Therefore to-day the farmers should be guaranteed a fair price, a maximum price in order to compensate them for the losses they suffered in those ten years, without being asked at the same time to make similar sacrifices in the future as well.

I have already said that high prices are required to-day to compensate the farmers for the losses they suffered during the 1930's. I have no intention of going into what happened in those years, because most of us are quite familiar with the history of those times. It will be recalled that pre-war prices were dominated by export prices. I never could see the justification for that, because before the war, with the exception of wheat, the largest percentage of production was consumed in Canada. I could never see why that small percentage, from five to ten per cent, which was exported should dominate the price of the other ninety-five percent consumed in Canada; yet that was the case, with the exception of wheat, apples and one or two other commodities.

I recall that wheat in 1932 fell to 194 cents a bushel, and from. 1932 to 1934 it averaged around thirty to forty cents. Unfortunately however, the government were not merely content with wrecking agriculture by allowing prices to fall to those very low levels. Thev were not content with wrecking agriculture by making farmers accept world market prices. They further penalized agriculture by their fiscal policy. It will be remembered that in those years we were competing with world markets, with Australia and the Argentine. It-

The Address-Mr. Quelch

will be recalled by many hon. members that Australia depreciated her currency twenty-five per cent below sterling, while at the same time in Canada we appreciated the dollar twenty per cent above the pound sterling, with the result that Australia had an advantage of some forty-six per cent over Canada. In other words, when Australia shipped wheat to Liverpool and obtained $100 in return, when that money was converted into Australian funds the farmer there received $125; but when we shipped wheat to Liverpool and the money obtained for it was translated into Canadian funds we found that our farmer received only $80 instead of $100. Thereby our farmers were penalized to the extent of fortj six per cent owing to the government's fiscal policy.

I recall that Professor Upgren estimates that when the cost of that policy to western farmers from 1931 to 1936 was worked out it averaged $47 million a year. If you add to that the penalties imposed as a result of tariff policies you have another $32 million, making a total loss of $79 million a year to the farmers as a result of government fiscal policies, and that in addition to the general policy of trying to force export prices upon agricultural products consumed in Canada.

It will be remembered that these low prices continued for several years even after the declaration of war. They continued to the end of 1941. I listened to one hon. member recalling how a delegation came from Saskatchewan protesting against low prices, and shortly after that the price was raised from seventy cents a bushel to ninety cents. Unfortunately, however, just about the time the government increased the price of agricultural products, they made a drastic increase in the income tax.

What happened as a result of these low prices? Since no industry can continue to produce at a price below cost of production, the farmers were forced heavily into debt; up to the time prices were raised, the farmers were still going into * debt, and when prices were raised the income tax was drastically increased so that the farmers who were trying to pay off their debts found that their debt payments w'ere increased by approximately thirty-five per cent or more owing to the income tax. By bringing about an increase in the tax at that time the government increased the farmers' debt payments by about thirty-five per cent, and that is not helping the farmers to remedy the situation that came about in those pre-war years.

I am of the opinion that farmers should be entitled to exactly the same type of consideration in regard to losses as some of the

other businesses in Canada. Take, for instance, the chartered banks. What is the situation in regard to the chartered banks? They are allowed to set aside annually a certain amount of undisclosed money placed in what one might call a hidden or secret or inner reserve, and the excuse for that action is that the money is set aside to meet possible losses in the future. As a consequence, they pay no income tax on that amount. The reason given is that banking is a very risky business; bankers do not know what may happen in the future and therefore they must build up a reserve to take care of possible losses. I doubt very much whether banking is anything like as risky as farming and, if bankers are allowed to create an inner reserve without paying a tax on it, why should farmers not be allowed to set aside a certain amount of money in a reserve to take care of possible losses in the future.

Again, what do farmers' debts consist of largely? They consist of unpaid expenditures. If a bank is allowed to accumulate money to pay a possible loss in the future, expenditures it cannot meet, there is every justification for the farmer being allowed to pay debts represented by unpaid expenditures without having to pay taxes upon that money. I think there is a real and legitimate claim on the part of farmers for better treatment in that regard, and I am not quite satisfied that the bankers are justified in the claim they make, that the inner reserves are used for the purpose of meeting possible losses. I maintain that those reserves have been used in the past to guarantee profits. Why do I say that? Because during the depression years in the 1930's, as we know, the banks suffered heavy losses. That was emphasized during the hearings of the banking committee last year. If the banks suffered heavy losses during the thirties, evidently they would not be able to pay profits, and yet they paid an average dividend of around eleven per cent right through the depression years. If they were suffering losses during all those years, how could they pay a profit? Evidently the hidden reserves were used not merely to pay their losses but to guarantee a profit to shareholders. I suggest, therefore, that the farm-mers have undoubtedly a far better claim to exemption from income tax on the payment of debts, at least those incurred prior to 1942, than the banks have for exemption in respect of money set aside in reserve.

To-day one might well ask what the future of western agriculture is to be if the pre-war policies of this government come back into operation. I would say, if that is to be the case, then agriculture faces a very dark future,

The Address-Mr. Tucker

and not only agriculture but those men who come back from overseas and take up land. They will be entering into a very hazardous occupation, and no matter how good the new Veterans' Land Act may be, if these veterans in the future are to have to produce at less than cost of production they will go into bankruptcy. That will happen no matter how hard they work or how good a deal they receive under the Veterans' Land Act.

If in the future as in the past the cost of production on large farms is in any way to govern prices for the whole of agriculture, then it must be quite evident that many are bound to go bankrupt. Every small farmer will become bankrupt, because the figures are already on record to prove that it is possible to produce grain considerably cheaper on a large farm of two sections or more than on a half-section, and if we are to base price? on cost of production on the large farm then, the small farmers are bound to go into bankruptcy. What will happen then is that the small farmer will become the hired help of the larger farmer or will drift into the city to swell the relief rolls, as has happened to a great extent during pre-war years. Does anybody consider it desirable that western Canada should become merely an area of large mechanized farms? If that happens it means that community life, the small villages, will go. If the idea is merely to show how efficiently we can produce wheat, and if we are to sacrifice everything else to that, then perhaps it might be excusable, but I think most of us will recognize that human rights are more important than material rights, and that it is desirable from every point of view to maintain the small community.

I believe that the principle of parity of income for farmers should be adopted. As I said at the beginning, I realize that such a policy cannot be put into operation overnight. Until such time as that policy can be put into operation the very least that we can do is to guarantee a price of at least ninety per cent of existing parity. I believe it is fair to say ninety per cent and not one hundred per cent, because we realize that there must be a certain error in computation and it cannot be estimated immediately what the parity will be. That may take several months, so that initially a fair price of ninety per cent could be established and the remainder paid later on when the full facts are available.

When we consider agriculture it is well to remember that when agriculture has prospered in Canada the whole of Canada has prospered, and when agriculture has gone bankrupt it has dragged down with it various other industries throughout the dominion.

I look upon the policy that the minister brought down-and I say this in all kindliness -as the first step to a deflationary policy; and the farmers throughout the west are afraid of that very thing. I remember Hitler said in his book "Mein Kampf", and he used to repeat it time and time again, that if you wanted to bring in a policy to which you knew the people were opposed, never try to bring in the whole policy at once, just bring it in little by little and then the opposition will never think that any one individual step is of sufficient importance to fight. I think that is exactly what the government is trying to do here; they are bringing about reduction step by step and hoping the farmers will consider no one step of sufficient importance to fight.

Topic:   GOVERNOR GENERAL'S SPEECH
Subtopic:   CONTINUATION OF DEBATE IN REPLY
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LIB

Walter Adam Tucker

Liberal

Mr. W. A. TUCKER (Rosthern):

Mr. Speaker, I should first of all like to congratulate you on your appointment to your present high office, and also the mover and the seconder of the address in reply to the speech from the throne; and with that I would particularly associate those hon. members who have made such splendid contributions to this debate. This is the third parliament in which I have had the honour of sitting, and I cannot recall any opening session in which such splendid speeches were made by new members of the house.

If the house will permit me, I should also like to express a word of congratulation to the Assistant Clerk of the house as a former colleague from Saskatchewan, and commend him for the outstanding manner in which he has carried out his duties thus far.

The amendment moved last evening on behalf of the Progressive Conservative party, as found in Hansard at page 464, reads as follows:

We respectfully submit to Your Excellency that, pending the establishment of a more stable and equitable price structure for Canadian farm products based on parity of income for farmers, immediate consideration should be given to establishing for a period of years floor prices for all basic agricultural products at levels not less than ninety per cent of parity.

I could not possibly support this amendment. Ever since I have been a member of this house we of the Liberal party, particularly those of us from western Canada, have been contending at all times and in all places that the principle of parity prices for farm products should be accepted. We considered that we had obtained the acceptance of that principle when we finally had the gov-

The Address-Mr. Tucker

eminent pass the Agricultural Prices Support Act, subsection 2 of section 9 of which reads as follows:

In prescribing prices under paragraphs (a) and (c) of subsection one of this section, the board shall endeavour to ensure adequate and stable returns for agriculture by promoting orderly adjustment from war to peace conditions and shall endeavour to secure a fair relationship between the returns from agriculture and those from other occupations.

We consider that a definite acceptance on the part of this government and of the Liberal party of the principle of parity prices; there could not be a more striking acceptance of it than having it written into the law of the country. I am not alone in believing that that is what the statute meant. I find I am confirmed in that opinion by a speech made on January 18 last- by the president of the Canadian Federation of Agriculture. This is what he said about the floor prices bill. I quote from page 10 of his speech:

In our opinion the floor prices bill is a more radical reform measure, and likely to be more far-reaching in its effect and ramifications, than any other piece of legislation passed in the interests of agriculture in a long time. The bill sets forth its aim as follows-

He then quotes the section, of the act which I have just read to the house, and goes on to say-and. it is a most significant sentence, because it is the president of the Canadian Federation of Agriculture speaking to his own organization; it is not by any stretch of the imagination a political utterance;

This, we believe, is the first official declaration by a Canadian government that farm people are entitled to a parity of economic returns with non-farm groups; and likewise, the first time it has been incorporated as a definite objective of fiscal policy.

I thought to myself last night: is this the new leadership that we are going to get from the present leader of the opposition? We fight to get the principle of parity prices accepted and written into the statutes of the country, and then we get an amendment moved on behalf of the official opposition that we shall have only ninety per cent of parity. Well, all that I can say about it, Mr. Speaker, is that those improvements were too hardly won to think of paring them down now by ten per cent or at all.

It might be said by my hon. friends that this does not apply to wheat; but when the government adopts that policy in regard to all other agricultural products and states its policy in regard to continuing the wheat board, as it has done, naturally the same principle will be applied to wheat. No other possible action could be followed in that regard. And surely in the fight to establish that definitely-if it still has to be a fight, which I do not think is

[Mr. Tucker. 1

necessary-it is not going to strengthen our position to suggest that we should be satisfied with ninety per cent of parity. Therefore I think that this amendment was certainly ill-timed and ill-judged.

With regard to the point as to whether or not the recognized farm leaders of this country are satisfied that this government is committed to a principle of parity prices in regard to wheat, and to a fair attitude toward the wheat board, I should like to -read from the statements of the leaders of agriculture in western Canada. The first one that I should like to read from is a statement of Mr. Wesson, the head of the wheat pool in Saskatchewan. This is taken from the Leader-Post of September 20, in which he is reported as having said:

I believe that the decision of the government to continue to sell wheat to Great Britain and other importing countries at a price around $1.55 for 1 Northern basis lake head and Vancouver is a fair one. There is not the least doubt in my mind that under present conditions, with a feverish demand for wheat in Europe and dwindling supplies, the price could be much higher at the present time. I hope, however, that in years to come when there may be temporary unwanted surpluses that Great Britain and other countries will recognize this concession and play fair with Canada and other wheat exporting countries by continuing to pay a reasonable price for the amount of wheat they require.

I heartily concur in that expression of opinion by Mr. Wesson, who goes on to say:

The announcement that the initial payment for the next five years will not be less than $1 per bushel will be generally accepted as satisfactory so long as it is understood that the Canadian wheat board will continue to act as the sole marketing agents for Canadian wheat. However, until such time as there is a reduction in the cost of those things which enter into the cost of production, there should be no reduction in the wheat board's present initial payment of $1.25.

Again I heartily endorse these sentiments expressed by Mr. Wesson; and I think the Liberal party of western Canada will not be found wanting in the future, as in the past, in supporting the wishes of the farmers and in fighting for these things.

Topic:   GOVERNOR GENERAL'S SPEECH
Subtopic:   CONTINUATION OF DEBATE IN REPLY
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September 26, 1945