Mr. Abbott:

Would my hon. friend allow a question? Just as a matter of interest, does he think the Canadian farmer should get less for his bacon-

Mr. Coldwell:

No.

Mr. Abbott:

-because he ships to the United Kingdom?

Mr. Coldwell:

No. But just a moment; that is one of those catchy questions.

Oh, oh.

Mr. Coldwell:

Oh, you can laugh; but what the minister asked me was another question, and I will tell him why. It is because the farmers' cost of production has risen beyond the value of his returns, since this government allowed controls to be removed. That is the answer to his question. As a matter of fact the answer is to be found in the government's own report, put out by the bureau of statistics. What does it show? It shows that the average cost of living in Canada rose in August by about one point; but it also shows that the return received by the farmers for their produce in the same month decreased by seven points. So, you see, I am talking about the justice that would be achieved by subsidies and controls. So far as the primary producer is concerned, his returns are falling now.

Mr. Argue:

Bacon is down $7 a hundredweight in one month.

Mr. Abbott:

Which price does my hon. friend want to continue to go up?

Mr. Coldwell:

I will answer that. If the government is going to allow the basic prices of other commodities to rise, and monopolies to continue to set those prices, then the farmers' prices must go up. We have to face it. But it is because the government, ever since it began to remove controls, has let inflation run wild in this country-and in the neighbouring country the same applies-that in European countries as well as in Canada

prices have continued to rise. That increase I say is due to a large extent to inflation in North America.

The Prime Minister this afternoon compared certain prices in Washington and New York with prices in Ottawa. Well, had he taken, for example, a comparison of prices of the same commodities in Minneapolis and Winnipeg he would have found a somewhat different condition. Be that as it may, a statement about two weeks ago by Mr. Michael DiSalle, director of the office of price stabilization in the United States, which office is in charge of the stabilization policy of the federal government in that country, had this to say:

Up to February 15, 1951, from Korea, the cost of living in the United States increased eight per cent. These rises cost our people $16 billion.

The increase from February 15, 1951, to June 15, 1951, was eight-tenths of one per cent, or less than $2 billion.

I should add that from February 15 to June 15 the office of price stabilization in the United States exercised some control over American prices. He went on to say this:

While we held this price line, the index in Canada -which has no direct price controls-increased five and three-tenths per cent in that period.

Had our prices been going up at the same rate as Canada's1 it would have" cost the American consumers $7 billion-$150 per family of three.

That is not my statement; it is the statement of Mr. DiSalle of the office of price stabilization in the United States. So I say that our criticism of the government in respect to this matter is fully justified; and I hope that hon. members, wherever they may sit, will support both the amendment and the subamendment, in order that we may give to the people of Canada an assurance that we at least are determined to bring the matter forcibly before our government. The cost of living index today is 189-8, the highest in our history and, as I said, during the same month, August, farm prices dropped another points.

Mr. Gibson:

Farm income or farm prices?

Mr. Coldwell:

Farm prices dropped to that extent, and let us bear in mind that the failure of the government to bring about any stabilization in the price level has reduced the purchasing power of the Canadian dollar to 52 cents in terms of its value in the base period of 1935-39.

The Prime Minister (Mr. St. Laurent) and the Minister of Finance (Mr. Abbott) have said that there must be more saving because more dollars chasing fewer goods will cause further inflation. I thought the Prime Minister rather discounted that statement at the end of his address when he said that inventories were unusually high and that

manufacturers could not move goods. It seemed to me then that goods should be chasing dollars unless something else intervened, and I think that something else is monopolistic price fixing by some of the powerful organizations in this country. I want to see our young people save and put a little money by. I have encouraged it whenever I have had the opportunity. One afternoon about a month ago I happened to be in the Royal Bank. I was standing talking to one of the officials at the counter when a young lady walked across with a couple of hundred dollars in bonds that she had bought about 1943 or 1944, I think she said. She handed over the $200 in bonds and what did she receive? As far as I could hear, it was $198 or thereabouts.

She did well.

Mr. Coldwell:

Someone says that she did well. I heard that young girl's remark. She said, "Oh, I am not going to lend the government any more money. I lent them $200, when I could have bought something else with it, and now I get $198", or $196, as the case might have been. Let me say at this time that I am proud of the fact that when the victory bond campaigns were first instituted the hon. member for Melfort (Mr. Wright) on behalf of this group urged upon the then minister of finance, Right Hon. J. L. Ilsley, that we should guarantee 100 cents on the dollar when these bonds became payable, and I am glad that has been done with the new savings bonds.

Mr. Abbott:

I know my hon. friend wants to be fair.

Mr. Coldwell:

Quite fair.

Mr. Abbott:

The point that was made by the hon. member for Melfort, if I understood him correctly, was that the bonds should be paid at 100 cents on, the dollar when they became due. No Canadian bond has ever been paid in any other way.

Mr. Coldwell:

No, not always. Look at the savings bonds today.

Mr. Abbott:

What he was suggesting was that all government obligations should be demand obligations.

Mr. Coldwell:

Quite fair, victory bonds which were being sold to the ordinary man in the street and the ordinary small person who was saving his money. We were told at that time that it could not be done. I am glad to see that it is now being done with the savings bonds. May I say to hon. members that in 1946 the Canadian consumer was able to obtain basic food and other supplies at more properly related prices. The consumer was protected

The Address-Mr. Coldwell against high prices. The producer was protected against low returns. We have seen the result of government policy already, of course, in the falling consumption of milk, for example. The bureau of statistics tells us that the consumption of milk dropped by 20 quarts per capita in our country between 1946 and 1950. That is a serious thing when we realize how basic milk is to good health.

Of course we were told that if controls and subsidies were removed, if business was permitted to return to normal competition, to make normal profits and all the rest of it, production would increase and prices would go down. That was the theory. I think the Minister of Finance will confirm my statement that that was the theory presented here. What have we seen? We have seen prices go up, corporation profits reach the highest level in our history, and prices continue to soar.

In a recent broadcast, which I subsequently criticized, the Prime Minister contended that if prices were controlled there might not be a fair distribution of some scarce commodities without rationing. Let me say once again that the Canadian people are rationed now, not by tickets but by a much more cruel, harsh and unjust system of rationing, rationing by the purse.

Mr. Gibson:

Has that not always been true of every nation at all times?