Mr. TUCKER:

I have the greatest respect for the Minister of Finance, but I have read this report with what intelligence has been given me, and I have given the house what I have found in this report. If the Minister of Finance or anybody else can prove that it is not so, I shall be right there listening with both my ears wide open to hear the explanation. The fact is that, according to this report, the banks borrowed from the Minister of Finance $48,000,000, and they can lend out nine times the increase in their cash reserves. Is there anything wrong with that? If they lend out nine times any increase in their cash reserves-and remember when they got that $48,000,000 from the Minister of Finance they put it in their cash reserves-then I fail to see how it can be otherwise than as I have stated; for the banks can lend several times the amount of their cash reserves, or they can buy bonds with the money. If I am wrong I hope the Minister of Finance, who is a good friend of mine, will enlighten me, but in the meantime I adhere to my view that that is exactly what happens.

Mr. W. A. TUCKER (Rosthern):

Mr. Speaker, first let me extend to you my humble congratulations on your elevation to your present position. The first time I haul the opportunity of observing the deliberations of the House of Commons it was under the speakership of the Hon. Mr. Lemieux, and at that time I was filled with admiration at the wonderful way in which he presided over the house. Since the opening of this parliament I have watched the manner in which you, sir, have presided over our deliberations, and in my opinion you have attained fully

to the ideal and worthily followed the traditions honoured in this house by the Hon. Mr. Lemieux.

I do not need to tell hon. members, especially those who have sat in this house before and have gone through the experience of rising in this chamber for the first time, how nervous I feel and with what diffidence, Mr. Speaker, I address the house through you. As I look back over Canadian history and consider the great men who have sat in this House of Commons since 1867; as I have read from time to time the speeches of those who led both the great historic parties from confederation to recent times, and as I consider those who to-day are leading all parties in this house, their patriotism, their devotion to public affairs, I am satisfied that never before have we had men more capable and more devoted to the best interests of the people. So it is with diffidence and humility and deference that I rise to advance any ideas before this house. Each of us, however, has an obligation to express his opinions and to voice the wishes of the constituents by whom he was sent here.

As I consider this motion I am satisfied I should not be doing my duty to my constituents did I not express in this house my unqualified support of the resolution-with this exception, that it calls for immediate legislative action. I quite realize, sir, that the question where the money is to come from cannot be left out of consideration. The government must have time to adopt policies which will enable them to provide the money before we can expect them to bring in such legislation. That is only responsible government. I will deal with that in a moment, but here I should like to say that as far as old age pensions are concerned, if there is anything that the Prime Minister (Mr. Mackenzie King) has done that above all else has earned the grateful thanks of large numbers of people it is the legislation that he introduced providing for old age .pensions. Furthermore, the country has not overlooked those who supported that legislation, no matter in what part of the house they sat. Many old people have had the evening of their lives made happier by their action, and above all by the leadership in that regard of the Prime Minister. When the time comes that the Prime Minister finishes his work, one of the outstanding things for which he will be remembered in history will be the fact that he took one of the first steps to make things a little more economically secure for people who were unable to look after themselves.

Retiring Allowances-Mr. Tucker

Something was said in the course of this debate of which I desire to express my disapproval. It was suggested that one reason the party of the leader of the opposition (Mr. Bennett) was not successful in the last election was that he expressed the idea that something of this sort should be done in Canada, that the people of Canada expressed their dissent from that view by not returning him to power. I suggest that the Conservative party was defeated not because he expressed that idea, but for other reasons, and in spite of his having taken that stand. I believe that the majority of the people of Canada expect this parliament to take steps to restore economic security to people who are unable to look after themselves owing to economic conditions over which they have no control.

As I see it, this resolution has to do with three types of people. First there are the old people between sixty and seventy who by reason of being physically unfit cannot get a job to enable them to look after themselves. I submit it is our duty to look after those who are unable to take care of themselves. If there is one thing that Christian society has recognized as its paramount duty ever since there has been Christian society it is that of looking after those who cannot look after themselves. I submit that the time is coming nearer and nearer when we shall refuse to leave those people to be looked after by charity, and shall recognize that we must use the resources of the state to care for them. That applies to returned soldiers who are now unable to eam a living. It certainly applies to those who are afflicted with blindness and cannot provide for themselves. As far as I am concerned I shall not be satisfied if before its life is over this parliament shall not have taken some real steps that will cause it to go down in history as having done more to this end than any parliament that has preceded it.

There is another category of people to whom the resolution would apply, namely those doing casual work, people who are eking out some kind of existence by competing in a precarious sort of way in the labour market, people who are preventing younger men and women from obtaining work. Although we do not know just what proportion of the total they constitute, we do know that many of them would gladly accept $20 a month rather than have to go on living partly through the charity of friends and partly through smashing down wages to a level at which a young man cannot possibly work and earn a living for himself and family. When we extend to those people the benefits of a measure such as the one before us, we are achieving two objects: first, we are looking

after people who have served the state faithfully and well for a period of possibly forty years; and second, we are furnishing a large measure of employment.

As in a humble sort of way I have studied public affairs for many years and have read about people who have been fortunate enough to obtain government positions, people who, having served the government for a certain number of years, eventually have arrived at the age of superannuation, and as I read about ordinary government employees being superannuated at $3,000 a year, my mind goes back to the pioneers who settled the country. I think of the people, for example, who went out to western Canada, men who, taking their wives with them, settled miles and miles away from medical assistance. They took the very lives of their children in their hands when they went to those areas. They worked and slaved for years and years. They did the work of the nation, because they were growing the food of the nation. When I consider that we say to those people that we cannot give them even $20 a month but that we can give $200 or $300 a month to people who have been more fortunate because they have secured government jobs, and did not have to face those vicissitudes, I am convinced that it is not fair. In doing that I submit we are giving less than justice to the people who settled the country, and endured great dangers and privations in doing so. We must do something more than simply dismiss their claim; we cannot be content with saying that we have not the money.

There is another category of people who would be affected, namely those between the years of sixty and seventy who are well able to make a living for themselves, who have no desire for this legislation, and whom, I understand, the legislation as explained by the proposer would not affect. With considerable hesitation I suggest that there is growing up in Canada among our young people a feeling that the older people are prepared to hang on to their jobs, even when they have reached eighty years, thereby keeping their grandchildren on the bread line, and in a position where they cannot get married and establish homes for themselves. In other words they are beginning to feel that their fathers and grandfathers are not treating them as if they were of their own flesh and blood. As the average longevity is increasing, due to the advance of medical science, we must give consideration to this problem. If a man who has reached the age of seventy-five years and has made a real contribution to the society of his day and age continues to hold his position for another ten years, he is thereby

Retiring Allowances-Mr. Tucker

depriving some other man of the dearest thing in the world, namely the chance to make his contribution to his day and age. As the resolution does not suggest any solution for this condition I say we should do something about it. One could not reach any conclusion in the matter without first giving it a great deal of serious thought and consideration. It is a fact however that the circumstance I have indicated is in the minds of our young people.

One now comes to a consideration of the cost of a pension scheme. According to the Canada Year Book there are 525,731 males and females in Canada between the ages of sixty and seventy. Assuming half those people were paid $20 a month, the cost in round figures would amount to $63,000,000. Suppose half the applicants for pension were able to compete on the labour market-and that is putting it at a very high figure-and that that half were given a pension, thereby leaving only a half of the total number to deprive others of work, we would provide jobs for 131,000 young people.

As the relief camp at Dundum is in the constituency of Rosthern, which I have the honour to represent in this house, I am keenly interested in the young men in the relief camps. I realize that I represent those boys at Dundum camp; I have visited them, and believe I know something of the attitude of the young people in Canada. I know what they expect; I believe they expect some real, wholesale measure of relief, and they will not be satisfied with any nibbling. They want jobs-lots of jobs. As I have indicated, the measure before us could be made to provide jobs for 131,000 young people. That would be worth while, and the people of Canada would be in a position to say, " Well, at least this parliament is doing something to justify its existence; they are not talking, and doing nothing else."

I do not intend to discuss the cost at great length, but I shall lay only a few facts before hon. members for their careful consideration. Although the facts I am about to detail are not new, I feel it my duty to state them. I do so without a chip on my shoulder; I do it in all humility and for the sake of the future of Canada.

First, I hear the statement on every hand that our public debt is due to the war. That is a popular suggestion. My figures, which I suggest are reliable and worthy of consideration, are taken from the report of the royal commission on banking and currency which sat in 1933 and reported to this chamber. According to the report I find that in 1914 the total debt in Canada, dominion,

provincial, municipal and public corporate debt-that is, the debt of us as a people, not including our private debts-was $2,232,000,000. In 1919 it had risen to $3,749,000,000, an increase of approximately $1,500,000,000. I was surprised, however, when I read that in 1929 the debt had risen to $7,445,000,000. In other words during a period of real prosperity in the ten years between 1919 and 1929 it had increased to twice as much as it had been immediately following the war.' What have those people to say who urge that our debt is due to the war. I find that by 1932 the debt had risen to $8,652,000,000. What does that mean? It simply means that from 1919 to 1932 the public debt of this country increased by more than one million dollars a day. And that was happening all over the world. We are told that that debt increased because people were saving up money and lending it out. I would like to know where the wealthy people are in Canada who have been saving a million dollars a day to lend to the government outside of what they lend to private corporations. I shall show, Mr. Speaker, that when the banks lend money they do not lend solely the savings of the people. It is true they lend the savings of the people, but they lend also credit which they themselves create.

Mr. TUCKER:

Mr. TUCKER:

I have, and I find that the banks in the past made ridiculous loans to people who never could repay them. In that way the banks have thrown away millions of dollars; they have put up buildings such as no other industry has been able to build; they have made twenty per cent on the amount of their original invested capital every year of this depression, when everyone else has gone in the hole, and after concealing every profit they possibly could. That is my answer to the Minister of Finance.

Mr. TUCKER:

My answer is this. I am not sure, but I believe it takes $500,000 to start a chartered bank, and there are not many people who can get together $500,000. I know it could not be done in western Canada, if they got together all the farmers in the west. I hope the day will come when the great cooperative enterprises of western Canada will have their own bank and share to some extent in these profits. I trust, Mr. Speaker, that you and the house will pardon me if I speak with rather more heat than I should. I am a new member, and I must ask you to overlook my over-anxiety, if I may put it that way, to place my views before the house. I do so in all humility, in spite of appearances to the contrary, and I am ready to hear any correction which I think is due.

Now if it is all right for the Bank of Montreal to take government bonds, if it is all right for the banks to take $48,000,000 worth of government bonds and obtain new money against those bonds, then it should be all right for the Bank of Canada to advance whatever money this country needs against dominion, municipal and provincial government bonds. To-day, as I understand the Bank of Canada Act, the Bank of Canada will give credit in its books, dollar for dollar, against dominion government bonds. What should be done when the time comes that this country needs more credit and there has not been enough credit saved up to finance the government, as happened during the war? The credit of the country was extended and extended. Suppose we need to borrow some money; what happens? Suppose there is not enough saved up-and there will not be enough saved up to finance us if we continue the way we are going. We shall have to go through this process. The banks will want to buy some dominion government bonds. They

will take some of their present bonds to the Bank of Canada and get credit against those bonds, dollar for dollar; and on the strength of that credit they will be able to turn round and buy nine times as many bonds as they deposited in the first place. What has happened? We have used our credit and in effect we are paying interest on it at the rate of probably 30 per cent.

Is it any wonder that we have no money to take care of old people? Is it any wonder we have no money to look after the unemployed? Hon. members of this house will have to consider this question: Are they going to sacrifice the future development of this country, are they going to sacrifice the unemployed, the old and the sick, are they going to neglect to do the things which a civilized country ought to do, in order to be able to pay interest on a basis such as that? That is the question that must be settled. If the present financial system is cramping us, if it has this country in a strait jacket, which is more important-the financial system or the people? I submit to you, Mr. Speaker, that it is up to this parliament to remove that financial strait jacket; it is the duty of this parliament to explore new avenues. I know that there are some people-the Minister of Finance is in that class-who takes the attitude that the suggestion I make is not feasible. Well, I say to him, let us have a trial of it. The present system is not working so satisfactorily that everyone should be ready to die fighting for it, and if some other method is advanced by great thinkers, why can we not at least have a trial of it? And if it works, let us extend it; if it does not work we can abandon it.

In that connection I would remind the house of what was done by the government led by the leader of the opposition; we have not forgotten it. The leader of the opposition will probably find fault with the way in which I am putting it, but in essence this is what was done. They took to the banks $35,000,000 worth of treasury bills of this country, $35,000,000 of obligations of this country, bearing interest at, I believe, 4 per cent. They said to the banks, "We want you to advance us $35,000,000 worth of credit against these obligations of ours, and you shall take these obligations to the Minister of Finance and he will issue against them $35,000,000 worth of new money on which he will charge you 3 per cent." In other words, we borrowed in that way $35,000,000 worth of credit which cost us only one per cent, and I submit that it should not have cost us a cent if we had set up our own central bank and financed that business for ourselves.

Retiring Allowances-Miss Macphail

Let me say this to my confreres, the members of the Liberal party-because I am a Liberal-I believe that liberalism has the future of this country in its hands, and if liberalism does not meet this problem, if it does not solve it, the people in their desperation may do we know not what. I venture to stand in my place to-day and make these suggestions as a Liberal, because our great leader has taken the attitude that people of all shades of opinion will be welcome within the ranks of the Liberal party; and if we can persuade the majority of the people in that party that our views are right, then they will adopt those views. I suggest-and I think I am right in this-that I have a better chance of persuading my friends of the Liberal party that these views are right than my friends down there to the left have. They may be better speakers than I am, they may be more able in their presentation of a case, but I know that in the hearts of my fellow members of the Liberal party, from the Minister of Finance down, there is after all a wish that we should be able to get together on this question and in some way meet the views of those for whom I, one of the humblest members of the Liberal party, venture to speak. I am sure there is more of a wish to do this than if I were fighting outside that party. That is why I stand here to-day, without apology, advancing these views as a member of the great Liberal party of this country.

As regards the expansion of credit, some people seem to think that if you work through the banks it is not inflation, but that if the country did it through its own banking institution it would be. I could read excerpts from both these reports which indicate this, that when the banks create credit and lend it against government bonds or deposits available to be checked out, they are creating the equivalent of currency just as much as if they had printed it, because more than ninety per cent of the business of this country to-day is done by cheques on deposit accounts. In other words we turn over to the banks ninety per cent of the control over the purchasing power of this country. They have the right to say how much money the people shall have to purchase with. If the banks do it, it is just as much inflation as though the government turned on the printing presses-just as much and no more. In that connection I would like to read from the Financial World of New York one or two paragraphs, which I found in the Magazine Digest, and which illustrate better than any words of mine what I would like to say:

In a democratic capitalistic country like the United States some 90 per cent of the total

business is done through the medium of net demand deposits in banks. Actual currency is used to but a moderate degree. Therefore, if there is to be a great recovery movement, there is required as a base (1) a large volume of net demand deposits and (2) the will to use them.

In times past great changes in the volume of net demand deposits have been due to expansion and contraction of bank credit. In other words, during periods of rising optimum banks have been prone to expand loans and with each loan expansion create a deposit. In this instance, however, we are witnessing the greatest and fastest expansion in net demand deposits in the history of this country with practically no contribution from the banks.

I would like hon. members to note this:

The 1919 boom was financed with a peak of less than 14 billion dollars of net demand deposits. These dropped to around 10 billion dollars in the sprinsr of 1933. On October 30, 1935, they totalled $16,657,000,000.

That is a rise from the peak of over two billion dollars.