Mr. Vicior Guelch (Acadia):
Mr. Speaker, I was surprised that this question should have been brought up in this way, because after all there are before the house amendments to the address in reply to the speech from the throne which deal with this matter. In saying this I do not mean to indicate that the question is not of vital importance. The peculiar thing about the so-called dollar shortage and the loss of markets is that this is not something that just developed all of a sudden; it has been developing for many months, in fact for a number of years. The thing that people in this country are not able to understand is why we have allowed the situation to reach a climax before taking the necessary steps to stop it.
I was amused at an article which appeared in Toronto Saturday Night of February 7 under the heading, "In praise of fear," by P. M. Richards, and I should like to quote briefly from it as follows:
The silly feature of all this is that the inevitableness of the world dollar crisis should have been obvious from the start. Our politicians and economists and' bankers must surely have known it, yet they consented to follow the line of least immediate resistance.
I think we all feel that way. Then the writer indicated what he thought would be
a solution for the problem. Perhaps this article was written in a somewhat frivolous vein; nevertheless there is a germ of truth in it. Here is the way in which he says such a depression could be avoided:
I have a plan for the avoidance of economic depressions. It's simple, but, I think, should be effective. Each nation would appoint an economic czar, pay him handsomely and treat him with honour so long as he did well, but hang him-no excuses accepted-immediately the economy dipped below a certain level. He would get nice cash bonuses, and extras like beautiful Egyptian dancing girls, if results were extra good. If, unfortunately, they were extra bad, the economic czar's staff would be executed too.
I think men who accept positions of great responsibility for which they are well paid should have some obligation to produce results. What happens is that when they fail they are appointed to the Senate or made judges of the supreme court, or are paid higher salaries in order to encourage them to do better in the future. They suffer no penalty because of their inability to accomplish the task given to them.
I have been interested in recent months reading the speeches of the Minister of Agriculture (Mr. Gardiner), and I want to congratulate him upon the way in which he places responsibility upon those whom he terms financial crackpots, the economists. I notice that the other day he said that some people are making it difficult to get our surpluses to the areas where they can be consumed. Who are those individuals? I think the Minister of Agriculture, having gone that far, should go a step farther and inform the house just who the people are who are making it impossible to distribute goods that are surplus so that they may be made available to people who need them.
We were told by the conference of the FAO that it would not be wise to adopt the ICCH proposal because it might delay convertibility. I do not believe the people in India, China or other parts of the world who are suffering from starvation consider it a good excuse when they are told that they must continue to suffer, in spite of the fact that there are large surpluses, just because it might delay convertibility of currency. I think they are far more interested in getting goods that might be made available to them than in seeing the convertibility of currency established.
As I say, the matter was crystal clear many months ago-in fact many years ago, back as far as 1944 and 1945. During those years this house debated at great length the question of the financing of international trade, and the matter was referred to the committee on reconstruction. We had Dr. Clark, the deputy
minister of finance, before us, and the question was discussed at some length. I criticized the proposals that were placed before the committee, which were the forerunners of the Bretton Woods agreement, on the ground that they did not provide the means, in the first place, by which the devastated areas of Europe could be rehabilitated. It did not provide a method whereby these nations could get back rapidly into production. Furthermore, there was no provision under these financial arrangements whereby the creditor nations would be obliged to accept payment for their exports by taking imports from the areas that had rebuilt their industries.
The same argument was advanced on the discussion of the Bretton Woods agreement. I want to remind the Conservatives that at that time apparently they did not realize exactly what the Bretton Woods agreement stood for. Therefore we are suffering today from the consequences of that agreement because nobody in the house could possibly suggest that the funds provided under it could meet the great unbalance of trade today. Yet we were told then that that proposal would meet the financial needs of the world in the postwar transitional period and for a long time afterward.
The other day I put on the record a statement by Mr. Snyder to that effect. We have been told time and again that we do not want to have a recurrence of the kind of trade restrictions and controls that we had in the depression years. Indeed, anybody who studies that period will find that the reason these controls had to be put into operation was to bring about an adjustment in trade relations. The depression came first and then the controls were adopted to rectify the situation. I think that is made quite clear in a publication issued by the United States department of commerce entitled "The United States in the World Economy". At page 13, under the heading "Future Problems and Policies", I find the following:
Unless the supply of dollars is more adequate to meet the requirements of other countries, they assuredly will insist on their rights to exercise a close selective control over the use of the amounts available and to promote more intensive relations with third countries under preferential trading arrangements. And unless dollars are made available with greater regularity than in the past it would be both unjust and unwise to demand the removal of restraints and controls largely designed to protect the internal economies of other countries against external shock and pressure.
During the discussion of the Bretton Woods agreement we pointed out time and time again that it had a definite pro-creditor bias, that it placed absolutely no responsibility whatsoever upon creditor nations to accept payment from debtor nations in the only
way that the debtor nation could pay, by the exports of goods. At that time we were told it was a question of trade agreements, and that later on international trade agreements would be brought down which would place the responsibility where it should be. Later on we had the Geneva trade agreement. Did that take care of the situation? The Geneva trade agreement made the matter ten times worse. Not only did it leave on the debtor nation the obligation to balance trade, but it also placed upon the debtor nations restrictions that made it absolutely impossible for them to protect themselves against excess exports from creditor nations.
I am referring of course to the nondiscrimination clause. The pamphlet to which I have referred, "The United States in the World Economy", emphasizes the fact that debtor nations must be allowed to exercise controls and restraints on trade in order to protect their balance of payments. The Geneva trade agreement was referred to the standing committee on banking and commerce, but was not endorsed by it. It was returned to the house without being endorsed, and it has never been brought back to parliament. Why? It. is a very strange thing. This government is operating under the Geneva trade agreement. The government made agreements with other nations endorsing it. It was sent to the banking committee, failed to get endorsation, and has never been brought back before parliament. Nevertheless we are continuing either to operate under it or to pay lip service to it.
Subtopic: PROPOSED COMMONWEALTH