1908-06-19

REPORT PRESENTED.

[Stage Direction]
Report of the Commissioners on the Quebec Bridge.-Mr. Graham.

[Stage Direction]
Bill (No. 190) an Act respecting Juvenile Delinquents.-Mr. Aylesworth.

[Stage Direction]
Mr. PARMELEE moved that the fifth report of the Joint Committee of both Houses of parliament, be concurred in.
Mr. FOSTER.: What is it ?


Mr. PARMELEE.: It is the customary report dealing with the printing and nonprinting of parliamentary documents, nothing special.


[Stage Direction]
Motion agreed to.

George Eulas Foster: Before the orders of the day are called, I would like to ask if any report of the commission under Judge Cas-sels has yet been laid on the table of the House.


Mr. FIELDING.: The clerk of the House informs me that he has communicated with the clerk of the court and requested that we be furnished with a copy. But it has not yet arrived.


Mr. BLAIN.: Is it the case that Judge Cassels lias adjourned his investigation until some time in September, and if so, has he the authority and consent of the government to do that?


Mr. TAYLOR.: 


William Stevens Fielding: I have no information on the subject except what I read in the newspapers. Judge Cassels is the master of his own court, and it is for him to determine how he shall proceed.


Mr. BENNETT.: Is the evidence taken in the investigation being held by Judge Cassels to be published ?


William Stevens Fielding: I am not aware whether that point has been considered.



NATIONAL TRANSCONTINENTAL RAILWAY-COST OF CONSTRUCTION.

Mr. R. L. BORDEN.: I desire to ask the Minister of Railways whether he hopes to furnish the information at an early date which I asked for a week ago yesterday ?


Mr. GRAHAM.: I am endeavouring to get it, the order is a large one. I hoped to give it to the House when I was making some statement about the Grand Trunk Pacific and the Transcontinental. I thought that was the object of my hon. friend, to have it when the estimates came up. However, I can furnish it to him in advance as soon as I get it.


Robert Laird Borden: The hon. gentleman will appreciate the fact that if we had it in advance we would be in a better position to discuss his statement when it is made, and in that way perhaps obviate the necessity of a future discussion.


George Perry Graham: I will give my hon. friend a copy of it as soon as I get it. They are working at it now.



CROOKED LAKE INDIAN RESERVE.

Mr. LAKE.: I would like to ask the Minister of the Interior (Mr. Oliver) whether he has yet decided when he will place on the market the surrendered portions of the Crooked Lake Indian reserve ?


Mr. OLIVER.: My memory is that it is to be placed on the market this fall, some time probably in November, after the returns of the cron have been received to a sufficient extent to put the surrounding people in a position to buy.



THE TORRENS LAND TITLE FUND.

George Eulas Foster: The Minister of the Interior promised to give the House information with reference to the Torrens Land Title Fund. I wish he would lay a statement on th'e table, or give it to the House as soon as possible. I may say to the Minister of Railways that when he has that report ready which he promised to the leader of the opposition, he had better lay it on the table of the House so that we can all have access to it.


Frank Oliver: The total of the fund on March 31, 1908, including the 3 per cent

interest which is added to the fund, was $211,957.30. On the 31st March, 1907, an approximate adjustment of accounts between the provinces gave Alberta $81,101.47, and Saskatchewan $119,253.91.


Mr. SPROULE.: Is there any claim made on the fund in the meantime ?


Frank Oliver: I think there is not.


George Eulas Foster: If the House will allow me-I take it that this fund is in the nature of a trust fund, and that the government paid interest upon the moneys in its hands, and that when it is divided to the provincial governments they also will pay that interest into the fund.


Frank Oliver: The Act under which we administer the fund calls for the payment of 3 per cent interest from the holder to be added to the fund, and the sum I have given is not only the amount paid in but the interest added. What the provinces will do with it after the money has been handed over to them, I am not able to say. We take from them a security that will guarantee us against any claims that may be made against us. As long as^ that guarantee is good we have no serious interest in their disposition of the funds. The I.and Titles Act will be administered under their law, which they may amend from time to time.


George Eulas Foster: I think there is an important point there. This fund as it proceeds upon legislation is in the nature of a contract between this government and the various contributories to the fund, and under that, the Dominion government paid three per cent interest, which made a material accumulation to the fund. I do not see how the government is going to hand it over to the provinces in the way of a free loan. I think they must hand it over with the compact and with these conditions, and that the provinces must add the interest to the loan. I would like the minister to look into that and see if it is not so.


Thomas Simpson Sproule: There is a point that appears to be overlooked. The original contract would apply to the whole of the Northwest Territories. Now Saskatchewan and Alberta are only a portion of what was then the Northwest Territories. What is going to become of that part of the country which is still the Northwest Territories, and to which this fund applies, as well as to the portion that now' constitutes the two provinces ?


Frank Oliver: The first clause of the Bill provides that the first adjustment shall be between the government with respect _ of payments made on account of lands which still remain under the jurisdiction of the Dominion and the two provinces together as having jurisdiction over the balance of the lands.	j i *|;


Thomas Simpson Sproule: It will only apply to that portion which arises out of deeds made for land now within the two provinces.


Frank Oliver: Precisely. That is put clearly iu the Act.



DEPARTMENT OF MARINE AND FISHERIES-JUDGE OASSELS' INVESTIGATION.

Richard Blain: I would like to ask the hon. leader of the government whether Mr. Watson, who was appointed by the government as counsel to assist Judge Cassels, has the consent of the government to go to the old country as reported in the newspapers.


William Stevens Fielding: My hou. friend the Minister of Justice (Mr. Aylesworth) informs me there has been no arrangement whatever with Mr. Watson in the matter. It appears that the judge announced that he would not be able to proceed with the inquiry for some time, and Mr. Watson, having professional engagements, is going to Europe to attend to them. But there has been no arrangement between Mr. Watson and the Department of Justice with regard to the matter.



SALE OF TIMBER ON DOKIS RESERVE.

William Humphrey Bennett: I w'ouid like to ask the Minister of the Interior if, since the appearance of the advertisement of the sale of the timber on the Dokis reserve on the French river, any jn'Otest has been received from members of the band against the sale being made ?


Frank Oliver: No, not that I am aware of. Shortly after the surrender was signed, we received a protest from some members of the band, but as the protest was of no legal effect we continued with the sale in accordance with the terms of the surrender made by the majority.


William Humphrey Bennett: I would like to ask the minister if a valuation or estimate has been made of the timber on the reserve and, if so, by how many persons ?


Frank Oliver: We have two men estimating. One is Mr. Fraser, who is our agent with respect to timber on the north shore. Gore bay, or some place in Mani-toulin island, is his place of residence. We have also employed Mr. Campbell, who is said to be an expert in timber valuation.


William Humphrey Bennett: Where does he reside 1


Frank Oliver: I cannot for the moment, remember. He is a gentleman who is well known in this part of the country. At the time of my last inquiry we had Mr. Fraser's estimate. Mr. Campbell's estimate had not been put in. We had two estimates made-separately so that one would check th$

other. Probably Mr. Campbell's estimate is made by this time. At any rate, estimates will be made before the sale.


William Humphrey Bennett: Have the services of an auctioneer been arranged for, what remuneration is to be paid, so much per day or a percentage on the sale and who is the gentleman employed, if a gentleman has been selected?


Frank Oliver: Mr. Peter Ryan, of Toronto, has been offered the work of auctioneering at a commission of one-quarter of one per cent.


William Humphrey Bennett: Were the band consulted as to the selection of an auctioneer ?


Frank Oliver: No.



DOMINION POWER COMPANY.

Mr. COCKSHUTT.: May I ask the leader of the House when we may expect that Bill letter (H) of the Senate, relative to the Dominion Power Company, will come before the House ? I have had several anxious inquiries from up my way with regard to the Bill. They want to send a deputation down.


George Perry Graham: By some misapprehension the municipalities of Canada have been labouring under the idea that the Bill would come before the Railway Committee. I am in receipt of telegrams from a great many of them. I communicated with the chairman of the Private Bills Committee, before which committee this Bill is to come, and as a result of a conference with him I have wired to the municipalities from which I have had communications, that the Bill will come before the Private Bills Committee on Wednesday next when all parties will have an opportunity to be heard.



BANK ACT AMENDMENT.

Hon.  W. S.@: FIELDING (Minister of Finance) moved the second reading of Bill (No. 160) to amend the Bank Act.


George Eulas Foster: Would the Minister of Finance give an explanation of the Bill before we go into committee on it ?


William Stevens Fielding: I gave, I thought, a very full explanation of the matter in the budget speech, but it is some time ago and perhaps it would not do any harm to repeat it in substance. The aim of the Bill is to permit the banks to issue additional circulation during the period of the moving of the crops, beginning in October and ending with the turn of the year. The experience of last year certainly indicated that there was need of a larger amount of circulation to carry on the business of the country and with the prospect of an increasing crop every year it appears not only de-


Frank Oliver: sirable but absolutely important that some measure should be devised whereby an additional circulating medium shall be found. As I explained in the budget speech, if we could rely upon that additional circulation being produced from the increase of capital 

note circulation being based on the amount of capital-if we could rely upon a large increase of the banking capital of the country and a corresponding increase of the bank circulation there would perhaps be no need for a measure of this kind, but, it would hardly be safe for us to assume that such an increase of bank capital would be brought about. I am rather inclined to think that it is not desirable that it should be brought about unless the capital comes in from abroad. Our bank capital is owned in Canada very largely and as I mentioned in a previous discussion on the subject, if it should be determined by the banks generally to increase the amount of their capital to call upon their shareholders to provide additional capital, it might merely mean the displacement of investments, transferring them from one form to another, and instead of being an advantage to the country it might be a serious disturbance to our business affairs. Of course, if we could rely upon additional capital being subscribed outside of the country and brought in that would be a very happy solution, but it would not be well to rely upon that being brought about. That being the condition, we approached the question with the view of seeing how far we might meet the requirements of the banks with safety, and so we determined, not for the whole year and not under ordinary conditions, but for a limited period and under exceptional conditions, that we might safely allow the banks to issue additional circulation.


George Taylor: May I ask the Minister of Finance what the dates are between which this privilege will be granted ? I understood him to say from the 1st September to the end of the year.


William Stevens Fielding: I said beginning in October until the turn of the year. The Bill provides that it shall extend from the 1st October to the 31st January.


George Taylor: My experience in the grain business is that that is not sufficient time because the great bulk of the grain is carried after the opening of navigation in the spring and if the privilege were limited to the 31st January I do not think it would be of much benefit. I know that a great many grain men purchase grain in the fall and store it until the opening of navigation.


William Stevens Fielding: In fixing these dates we were guided by the experience with regard to the volume of circulation. It is found by actual experience that after the date mentioned the circulation falls off and if money cannot be obtained then it is not

for lack of circulation, because by the end of January the banks have a very considerable circulation and they then do not have the need for this additional circulation. I think my hon. friend will find that the dates we have fixed will reasonably meet the conditions. As to the basis of the additional circulation there was hardly any difference of opinion between the business gentlemen and bankers with whom I discussed this matter and myself. I think I may say there was almost a unanimous opinion among the bankers that the conditions that are here laid down might be accepted. I will not say they were entirely satisfactory to the bankers ; they would be pleased I am sure if we would not exact interest on this circulation but treat it as part of their ordinary circulation. However we took the view they ought to pay interest on this special circulation and we have provided for that, and the banks have I think made up their minds that it is fair and reasonable. The basis of circulation would be the combined paid up capital and the reserve, which are the two elements which indicate the strength and stability of a bank. Our banks as a rule are conservatively managed and they have accumulated considerable sums of what they call a reserve. Several of them have a reserve in excess of their capital, and if we take the capital actually paid up and the reserve we may fairly say that these indicate the character and strength of a bank. So, we propose to allow them to issue an additional circulation to the amount of 15 per cent of the combined paid up capital and the reserve.


George Eulas Foster: How much would that allow them?


William Stevens Fielding: The present paid up capital which measures the amount of circulation which may be issued is $92,937,272 and the effect of this will be that they can issue an additional circulation of $24,668,604.


George Eulas Foster: How do you get at that result?


William Stevens Fielding: We take one of the latest returns as showing the amount of the paid up capital of the bank and that measures the existing power of circulation.


Mr. BERGERON.: What is the existing circulation?


William Stevens Fielding: The limit of the existing circulation is nearly $93,000,000.


Joseph Gédéon Horace Bergeron: It is just as much as the capital.


William Stevens Fielding: The law provides they may1 circulate up to the amount of their paid up capital.


Robert Laird Borden: What my hon. friend (Mr. Bergeron) desires to know is, what is the usual amount of the circulation.


William Stevens Fielding: It varies, in October and November with some of the banks, it runs quite close up to their limjt. Once in a while it runs over the limit, and we have a little trouble but that is owing to error and not to intent. The more energetic and progressive banks issue circulation pretty well up to the limit in the autumn and then on the turn of the year the circulation falls again.


Joseph Gédéon Horace Bergeron: The intention of this Bill is to allow them to issue more than the present limit?


William Stevens Fielding: More than the present limit, to the extent of 15 per cent of their combined paid up capital and reserve.


Joseph Gédéon Horace Bergeron: Would the government he responsible to the people in case anything should happen?


William Stevens Fielding: No. Except this: That there is a provision in the Bank Act whereby the circulation of all the banks is secured by a common fund and this circulation will stand In the same position as the other. The government is not responsible, but the insurance fund (if I may so call it) which is in the hands of the government would be amply sufficient to protect the public in that respect.


Joseph Gédéon Horace Bergeron: That is provided for in the present Bill?


Mr. SPEAKER.: I notice a growing tendency for hon. members to sit in their seats and ask questions or make remarks instead of rising to address the chair. It is as I say, a growing tendency that should be discontinued. It certainly cannot make for proper decorum in debate.


Joseph Gédéon Horace Bergeron: I beg your pardon; I was under the impression we were in committee.


Robert Franklin Sutherland: Even in committee the rule is, and should be followed for an hon. member to rise when he is addressing the chair.


George Eulas Foster: In these hot days.


William Stevens Fielding: At the date at which these figures were taken the paid up capital was a little under $93,000,000 and the reserve was $71,500,000. The reserve approaches the paid up capital and in one or two of the very strong banks it actually exceeds the paid up capital. In answer to my hon. friend (Mr. Bergeron) I may say that the existing law provides that all the banks must contribute to what is called for convenience an insurance fund for securing the

circulation of all the banks. The consequence is that if any one bank should fail that fund becomes available to protect the notes of that bank-not only its own part of the fund but the whole fund. That provision of the law will be continued and it will apply to the additional circulation which it is proposed to authorize by this measure.
Mr. FIELDING-. They have to provide a proportionate sum of the insurance or redemption fund. The same principle which runs through the Bank Act, that all the banks must contribute to the insurance fund, will apply to this.


Thomas Simpson Sproule: That is 5 per cent?


Mr. FOWLER.: Why is this proportionate increase of circulation not confined to the reserve. A bank may have a capitalization of $5,000,000 and practically no reserve, and you would allow that bank to issue 15 per cent additional which would be beyond the amount of its total reserve. Such a bank would therefore have notes out amounting to more than its reserve and capital. Why not make that percentage entirely against the reserve so that the note issue would not be in excess of the capital.


William Stevens Fielding: I admit that would be an additional strength but if we did that we would practically confine the note issue to the larger and stronger banks, and shut out the younger banks altogether, because the younger banks have not yet had time to ac cumulate a reserve. We did not think it desirable to discriminate against them in that way.


George William Fowler: Would not this provision allow a bank to issue notes beyond the amount of its capital?


William Stevens Fielding: Surely.


George William Fowler: That does not seem to me to be a very good idea.


William Stevens Fielding: 
George Eulas Foster: What was the note circulation m the months of October, November and December of last year?


William Stevens Fielding: The circulation in November was $84,000,000.


Thomas Simpson Sproule: Is there provision made for the banks giving additional security on account of this right to issue $24,500,000 more?


William Stevens Fielding: 


William Stevens Fielding: That is 5 per cent on the total circulation, so that it does not mean that the security is only the 5 per cent as affects a particular bank, but that 5 per cent goes into a common fund and becomes responsible for the default of anyone bank. The fund is now very large. I think there is abundant security.


George Eulas Foster: What was the circulation in October and December last year?


William Stevens Fielding: In October the circulation was $84,289,000, or nearly the same as in November. In December it had fallen to $77,500,000.


George Eulas Foster: Mr. Speaker, I look upon the attempt to enact legislation of this kind and at this time as a pretty important and serious matter, and I want to give a few reasons why I think so. In the first place, we have always had the custom of making a decennial revision of the Bank Act at the time the charters were to be renewed; and it has always been the privilege of the House-because in legislation of this kind it is equally important that the House shall have information at its command as that the Finance Minister shall have it-to have the bankers here and to have the matter threshed out in the Banking and Commerce Committee, where representations could be heard from the bankers and financial men of all degrees of thought and of all grades of opinion. In that way we have been able to get a thorough information. We are not all able to study financial questions; in fact, most of us have very little time in the session to do it, and it is of very great importance to us to be able to get the opinions of financial men and bankers on these questions. That is why I deprecate any important legislation of this kind outside of the decennial period, and I do not think the Finance Minister has made a case of sufficient importance to warrant parliament in making drastic changes, as he is proposing to do in the principle and in the adoption of the Bank Act, at this session. That is more particularly the case, because we are only a little way removed from the decennial period. We are then deprived of the opportunity of getting the ideas of financial men and bankers with reference to these proposed changes. The minister has said that he has the advantage of conference with the bankers. He has not put upon the table of the House a single document either pro or con, or a single point that has been made by the financial men and the

bankers. He has information himself perhaps, but he does not give it to us and it is impossible for us to get it. He introduces this measure, and the House has heard just how much of this information he has given to us. He simply states that he has conferred with some bankers and that some of them think so and so, or thought so and so at one time and thought so and so at another time; but the opinion of the bankers, either in whole or in part, he has not given to us at all. That is my first criticism with reference to this legislation.
My next criticism is that this legislation is an absolute change from the foundations of our banking system which have hitherto prevailed in this country. We have gone upon the basis of having capital as the substratum for the issue of circulation, and we have followed the good, sound rule that a banking institution must not have a circulation over and above its unimpaired capital paid up. We have, in addition, the double liability security, which is considered to be and has proved itself to be in this country a very substantial security. Now, without any advertisement of the fact, without I think any strong reasons therefor, the minister proposes to make this drastic change- to authorize circulation by the banks without the substratum of capital, without any added security whatsoever In the shape either of capital or of securities. He is proposing to authorize an additional issue of from $20,000,000 to $25,000,000 by the banks without their being called upon to give to the people one single dollar of added security. Heretofore the security has been thought good because the circulation could not pass beyond the unimpaired paid-up capital of the banks. To-day the Finance Minister wishes to authorize tpe banks of the country to expand their note circulation by about $25,000,000 in the maximum, under the present condition, without having any extra capital on which to base that at all, and without giving a single bond or single security of any kind to the country. What is the principle that under lies the circulation by the banks? It is a privilege which they get from parliament a franchise which is offered to them and of which they take advantage; but every power of issuing their own credit means that they undertake an additional obligation to the people of this country, and the rule is I think an absolutely good rule, that if their obligations to the people of this country are to be increased, then the security which they offer for that increase of credit ought to be pari passu increased. I do not think any sound financial man will find any fault with that doctrine. It is a doctrine which I think is universally practised, a doctrine which we have adhered to and I think very justly guarded in this country.
Now, I want for a moment to come back to last fall's operation, which seems to be
taken as a ground work for this extraordinary legislation. Last year the trouble was that the banks did not issue enough of their credit to enable the business operations of the country to be carried on as they might have been carried on if that credit had existed. Everybody knows the reasons for that; they were many and complicated, and there is no need of detailing them. They were exigencies and circumstances which will occur in all countries at recurring periods; but as the Bank Act was instituted and the bank circulation authorized last year, there was no period during that time that the banks had not sufficient basis on the unimpaired capital plan to have issued much more of their credit than they did issue. Then, the point I wish to make is that the credit was not issued because the banks were stopped by the limitations of the Act on their issue power. I asked the minister what was the total circulation in October? $84,000,000. What was the total circulation in November ? $84,000,000. What was the total circulation in December ? $77,000,000. And yet in any one of these months they had the right to issue up.to $93,000,000 or $94,000,000 under the Bank Act as it to-day exists. I think that is a proposition that ought to claim the attention of this House; I think that ought to receive.its due measure of very serious consideration, proving indisputably that under the system which we have had, which we have adhered to, the banks did not go up to the limit of their circulation in the month of December by very near to $20,000,000.
If it had so happened that these banks were anxious to disburse their credit, and found that the Bank Act precluded them that they were up to their limit and could go no further, there would be a good cause for their coming to this parliament and asking for a method by which they might increase their circulation and if they had done so, the obvious answer to them would have been : Get more capital subscribed for your banks and you will have, per se and along with that, the right to issue more currency. But the Minister of Finance says it might be difficult. Look at the profits of the banks, read their dividend reports for the last year. Is there or is there not an incentive for the investment in the bank stocks of the Dominion not only of Canadian but by foreign capital ? No one doubts it. By common consent the banking system of Canada is allowed to be about the best there is in the world. I have just been reading the report of the last committee of the United States, precedent to the adoption of their Currency Bill in March of this year, and in that the statement is made by one of the foremost financial men of the world that the Dominion of Canada had about the best banking system and the United States had about the worst, that was the difference between the two. Under

these circumstances was there any probability that if the banks wished to increase their capital they would not have found subscribers for that capital at any fair price of issue ? The banks may have held up the issue to a very high price and prevented people from investing in their stocks, but that is their own business ; they could equally as well have put it at a reasonable price of issue and increased their capital by 10, 20 or 50 per cent. The Finance Minister all at once is fearful that to tie up money in bank stock will take it away from the legitimate lines of investment in this country. But foreign countries are investing in this country and within the banks of this country only within the last two or three years we have had ocular demonstration of the disposition of money from outside Canada to come into this country, and invest in our banking stocks, to take a share in the profits of banking operations in Canada. So I do not think there is any argument on that branch of the subject. That would seem to me to be the proper method in which to have the limit of issue heightened, but along side of that we have the fact that in December of last year the banks might have issued $20,000,000 more than they really did under the existing legislation.
I wish to place before the Hotise the legislation of the United States which I think is very illustrative on this point as to the lines pursued by the Finance Minister and by the American congress. Everybody in this House knows that the banking and currency system of the United States was diametrically opposed to ours as far as the basis of circulation is concerned. The basis of circulation in the United States wTas forced upon the people of that country on account of their great war. In 1863 the Secretary of the Treasury of that time, in order to sell United States bonds, made it obligatory by law that the circulation of the national banks should be based upon United States bonds and that national bank circulation should be taxed. So it came to pass that the whole banking circulation of the United States became a bit of engineering to sell the bonds of the United States and from that time to this it has been based upon the bond issue. The bankers get that circulation out in order to buy United States bonds. They base their circulation on the bonds they hold. When it was profitable for them to sell bonds they sold them and the circulation dropped ; when it was profitable for them to buy bonds they bought them and the circulation went up. That is, they had an absolutely artificial method of circulation based upon the price of bonds and the profits that the banks could make on them. What were the banks for ? As they thought, to make profits for their shareholders. When they could sell their bonds and make a profit for their shareholders Mr. FOSTER.
they did it and the circulation went down ; when they could- buy bonds at a price which would pay them they did so and held them for sale and the circulation went up. That is the exact opposite of a correct circulation which our circulation is. With us the circulation goes up when there is a call in the country for it, and when it can be profitably employed and the circulation goes down when there is not a call for it in the country and it cannot be profitably employed. It so happened that in the United States the periods during which banks could make a profit out of their bonds happened from July to the end of December, so that had sold bonds and reduced the circulation during the very months the crops were being handled and consequently there has been great trouble with their currency problem. Within the last few days the United States, after having grappled with that measure for a long while, after having many Bills introduced and canvassed, at last passed a measure which is entitled and is to a certain extent what we may call an emergency circulation measure. But as a matter of fact in Germany and in the United States the circulation was altogether inelastic and these measures of emergency currency were necessary in order to overcome the inelasticity of their systems*. In Canada ours is an elastic system and there seems to be no need for an emergency currency in order to add to the elasticity of our banking system. What has happened in the United States of America ? Granted that with an inelastic system they had to do something to provide for elasticity in the period of call for credit and for money in the country, how did they treat the banks ? It is worth while to pay attention to their method as embodied in the last Act which they passed. That Act provided, in the first place, that any national bank which had a circulation based upon United States bonds up to 50 per cent of their unimpaired capital stock and a surplus of not less than 20 per cent of their capital stock might apply to the treasury for leave to coin an extra circulation. That application went to the treasury. It was taken up and considered by the treasury. If the treasury considered that greater circulation was necessary in the region in which that bank operated, then the Secretary of the Treasury/ of the United States under this Act could grant additional circulation.
On what basis? On the basis that the bank shall deposit with the Secretary of the Treasury of the United States bonds or other interest-bearing obligations of the United States, or bonds or other interest-bearing obligations of any State in the Union, or bonds of any city, county or township municipality that has been legally organized for ten years and has not defaulted in its payments for ten years, such bonds to be approved by the Secretary of the Treasury.



JUIvTE 19, 1908

[Stage Direction]
You see that they wish to give elasticity to this inelastic system, but they base the increased currency absolutely upon the deposit of undoubted security. On these securities the Secretary of the Treasury can issue bills to the extent of 90 per cent-not 100 per cent-of their actual market value as determined by himself by such means as he may deem necessary. Here the Minister of Finance authorizes an issue of $25,000,000 by the banks, and does not put a dollar of security in the treasury of this country as a basis for that circulation and as a guarantee to the public to whom the banks, on the basis of this extra circulation, incur very important obligations.
But that is not all. In the United States they provide that, for the whole of the United States, not more than $500,000,000 of emergency circulation shall be issued, and that, with reference to any bank, it shall not issue, even under these conditions, any more than the amount of its unimpaired capital and surplus. When the bonds to which I have referred are deposited, the legal title is transferred to the Secretary of the Treasury of the United States, who holds them in trust for the redemption of the circulation and for the payment of obligations which may be incurred. Now, besides putting up these securities, the bank has to pay to the United States treasury one-half of one per cent interest on the note circulation based od the United States bond circulation, 6 per cent for the first four months and 9 per cent for any time after the first four months, for any extra circulation which is based upon the deposit of bonds of what we would call the No. 2 class, that is bonds which are accepted by the Secretary of the Treasury for the emergency circulation. That is to say, the banks have to provide security undoubted and, in addition, they have to pay the interest upon their circulation on the basis I have stated. There are other regulations which do not particularly apply to the legislation we are considering this morning, with reference to the reserves. The obligation to hold a large proportion of the reserves in lawful money of the United States and in securities of the first class has been apportioned, tightening up the reserve principle on the whole and making it more effectual for the purposes of a practical reserve. More than that, the United States, under this legislation, charge on any special deposits that are made by the United States treasury in the bank an interest of not less than one per cent.
Now, consider the contrast between the two. Here we have an emergency circulation which the Minister of Finance tacks on to an elastic system of currency, the issue under which is still $20,000,000 within its limit under present legislation. Not a dollar of security is taken for this added circulation by the Minister of Finance. The government places its funds in the banks as they come in from customs and other resources, and the banks get what benefit they can from this without paying a single cent of interest to the country. In the United States, bonds are required to be approved by the Secretary of the Treasury up to 90 per cent of the circulation, and the banks pay interest to the government, as I have stated, on the deposits that the United States treasury places with them, the minimum rate of interest being one per cent. There is a great difference between the two plans. The one in the United States was supposed to be sufficient and fair to all parties, the public as well as the banking interests. on an inelastic system. But the Minister of Finance considers it necessary to make this addition to an elastic system under which the banks have not yet come up to the maximum of their circulation.
Now, I think these are pretty serious matters to be taken into consideration. I would have no objection at all, as a matter of general legislation, when the Banking Act is taken up for revision, that you should make tlie basis of circulation the unimpaired paid-up capital plus the surplus reserve of the banks to a certain extent. I would also limit the power of circulation issue by a new bank pending the time when it had established itself in business and acquired a basis other than its mere credit. To-day you allow a bank to start. It has perhaps $250,000, or perhaps $1,000,000, of paid-up capital. You allow that bank, when it has nothing in the wide world but its credit, to issue $1,000,000 and do a business upon it. An old bank, with the same capital, you do not allow it to issue a single dollar more than the new bank. But the old bank has not only its credit, but it has its reputation, built up in twenty, thirty, forty or fifty years of business, and it has also an immense surplus to back up its liabilities, including its circulation. In these two things I think there might be an amendment in our present Banking Act-first, to make the basis of circulation the unimpaired capital and a certain percentage of the surplus ; and, second, to restrict the circulation of a bank until a surplus has been earned. But these are matters which, I contend, ought to be introduced into the general legislation and made a part of our system. To make the changes that are here proposed I consider dangerous, because you omit the security which we in Canada have always considered we should hold. That is what I criticise to-day ; that is what I had hoped tlie Minister of Finance would not ask this parliament to consider.
Now, there are peculiar points, as I find on looking into the figures, which developed in last year's operations. The Minister of Finance came to the conclusion that the banks had not credit enough. to distribute in order, we will say, to move the grain crops of the country, and decided that he must rush to their relief. He said : It is true we are bankrupt ; we have not a dollar
[Stage Direction]
of money that we can spare, and I dare not pledge our credit; so I will break into the strong box and deplete the reserves on which this country depends for its security. So he broke into the strong box and took $5,000,000 out. Now, what happened when he did that? In the first place, this is what appears from figures as I get them : The outstanding Dominion notes increased from October 31 to December 31 only $1,300,000. But I uuderstood that $5,000,-OOO of Dominion notes was placed at the disposal of the Bank of Montreal. 'Am I correct in that?
William Stevens Fielding: The amount I would say was about $5,000,000.


George Eulas Foster: It went up to $5,000,000. What is the explanation of this? The Finance Minister comes to the rescue, as he says, in order to get more circulation out, authorizes $5,000,000 of circulation, and ends up with this peculiar state of things, that on December 31, as compared with October 31, there was only $1,300,000 more outstanding Dominion notes. What else happened? The specie held against those notes decreased, in round figures, $5,000,000, and the specie held by the bank decreased by over half a million dollars and the Dominion notes held by the banks increased by only $1,800,000. Where did the $5,000,000 of gold which the government's reserve was depleted, where did it go to? And if this $5,000,000 of notes, increasing the issue by that amount, were put at the disposal of the hanks, how is it that only $1,800,000 was shown in the increase between October 31 and December 31? Was this gold which was taken from the reserve exported from this country, or was it distributed?


William Stevens Fielding: There was no gold taken. The additional amount of notes was issued and the proper proportion of gold was not deposited to cover it.


George Eulas Foster: The statements of the Minister of Finance show there was a decrease in specie held against the issue of the Dominion by $4,921,915.


William Stevens Fielding: That is the ordinary variation that passes to and from all the time.


George Eulas Foster: You may take the accounts for the year past and go through them month by month and you find no variation of that kind. The fact was that coincident with this operation nearly $5,000,000 of gold disappeared from the reserve of the Dominion government.


William Stevens Fielding: The note circulation diminished too.


George Eulas Foster: The note circulation of the whole country diminished. It shows that the Finance Minister did not uphold Mr. FOSTER
it. The outstanding Dominion notes increased $1,300,000 in that time. That is rather a peculiar state of things ; I do not understand it and I would like a full explanation of that from the Finance Minister. On the face of it, it looks as if his operation was not very sticcessful in the purpose for which he proclaimed it to be used, namely, to assist the producer to sell at a better price the produce which he found it difficult to sell under the financial stress. I do think this is one of the most important steps that has been taken in Dominion legislation. I believe it to be a retrograde step. I am surprised that the minister does not take the least security from the banks. But the minister will say: Oh, I charge them 5 per cent. No he does not, he does not even charge them 5 per cent. The minister will not even put it beyond the ground of dickering, and he says, I do not charge more than 5 per cent- leaving it to dicker with the banks so that he can give it to them at 3-1 per cent, or give it to them at 3 per cent, or give it to them at 4 per cent. The United States legislation takes the opposite course, and lays down an irreducible minimum beyond which the Treasury cannot go, then it gives the Treasury power to charge a higher rate of interest if it considers best to do so. I think we should take the circulation interests of our country out of the region of dickering. I would have the minister, if he could, lay down the irreducible minimum, and then give him power, if he thought he could get more interest, to charge more, according to the circumstances of the case. But he puts a possible 5 per cent and he says that is something going into the coffers of this country. But the banking circulation of this country is not to be juggled with on the mere line of getting a sight tax into the Dominion treasury. The emergency circulation must be a tax. Then to float this enormous accumulation of credit $25,000,000 may go out, and the people have to support that and pay for it, and the profit goes to the bank and all the Finance Minister has to say is this :	Well, I taxed them 3 or 4 or 5 per
cent. But that is no answer at all to the call of the country for a substratum of guarantee for their circulation, which is given as a gratis credit to the banks of this country.
Now, will the minister tell us how much profit the banks of this country probably made out of the very important franchises that we give them ? Take the circulation, they made out of that a good tidy sum ; I venture to say from 1 per cent to 2 per cent on their yearly dividends is made out of that free franchise that the government gives in the way of circulation. Was there then any reason why giving them a free franchise in which the public gets some interest, and from it derives some benefit -is there any reason why a fair sub-

stratum of guarantee should not he the basis upon which that extra franchise is given? I do not see any reason at all. More than that, whilst in the United States the banks have to pay for every dollar of government deposits, the banks here, for the deposits which pass through their hands and which remain in their coffers, have whatever profit they may get. In checking them in and checking them out there is some trouble and bother, but in the main they make a substantial profit out of the transaction. In the United States it is so thought, and, therefore, they have to pay a substantial interest upon their deposits. Now, take the two cases. The United States, with financial interests which far overtower anything we have in this country, men of the highest financial standing, bankers who are amongst the best in the world, all come together and have agreed that an emergency circulation shall be based upon adequate security; in addition to that it shall pay a tax and that on the deposits of the government over and above shall be paid an interest to the central gov-ednment. Here we take exactly the reverse course. My contention is that there has been no proof at all that an emergency circulation is necessary in this country. If it is necessary, the best and safest way to make it is to base it upon the accretion of capital, or undoubted security, and in the next place for the mere machinery of an emergency circulation base it on a tax of 3, 4 or 5 per cent by the goveimment. For every dollar of circulation given as a credit to the banks there ought to be for the country a corresponding substratum of obligation in reserve to meet it.


[Stage Direction]
Motion agreed to, House went into committee on the Bill.
Thomas Simpson Sproule: While this is a new venture in the financial world there does not seem to be a very adequate consideration for the privilege we give the .banks, because in reality, it means that, for the use of that money for four months, they pay $408,000. It is an insurance fund of about $408,000 for the privilege of issuing $24,600,000.


George Eulas Foster: That does not come to the people; it comes to the treasury.


Thomas Simpson Sproule: It comes to the treasury, to the Consolidated Revenue Fund of Canada. It seems to me that there is no provision in the Bill to prevent a bank, In the event of this privilege being granted from investing the money in call loans in Wall street instead of using it to aid in handling the crop. It was stated that last year during the financial stringency, they had more money in call loans than would have been required to handle a large portion of the crop of the west, and it was said that that condition was due to the fact that they
could get a higher rate of interest there than if they had invested this money in the Northwest. It was said in the press that they were realizing as high as 25 per cent. What provision is there to prevent them doing the very same thing instead of making the money available for the movement of the crop of the west. There is none at all. I think the security is most inadequate. It seems to be a very flimsy venture at the best. The security is simply an insurance of 5 per cent, not 5 per cent for the whole year, but 5 per cent per annum for probably four months which would only amount to $408,000 as the whole security held by the government for the right given to the banks to put in circulation $24,675,000.


William Stevens Fielding: I will first say a few words with reference to the remarks of my hon. friend from East Grey (Mr. Sproule). We have the whole assets of the bank as a security.


George Eulas Foster: But we have that already.


William Stevens Fielding: Well, then we cannot have anything more.
, Mr. FOSTER. But we give them more circulation.


William Stevens Fielding: We give them more circulation, but we have the whole of the credit and assets of the bank.


George Eulas Foster: But we have that already.


William Stevens Fielding: The credit and assets are such as to justify, under the conditions described, the giving of this additional circulation. I want to deal for one moment with the remarks of my hon. friend from East Grey with regard to call money in New York. This is a question which has been frequently talked of. I think there has been a very great misunderstanding with respect to it. I think it can be shown that the sending of this money to New York is not always a disadvantage to Canada. It has been explained by bankers of high standing that the money is to a very large extent a part of their cash reserves for which there is no market in Canada. You cannot lend money on call in Canada to any extent.


Robert Laird Borden: You can lend it on call, but you cannot get it back when you want it.


William Stevens Fielding: Yes. If they kept the whole of this money in Canada they would simply lock it up in their safes and not distribute it in the general commerce of the country. Consequently, they say that if instead of locking that money up in their safes as a reserve they send it to the New York market, lend it on call and make a good profit, always being able to get it back with reasonable promptness, it is no dam-

age to the bank and no loss to Canadian interests. It gives the bank a profit which is made out of the American investor and it does not do any harm to anybody in Canada.


Thomas Simpson Sproule: Admitting that, still you have the undeniable fact that when the public required this money in Canada the government had to come to their rescue and advance money. Is that not a fact that is indisputable, while at the same time, a great deal more of their money than was needed here was invested in Wall street?


William Stevens Fielding: But my hon. friend has missed the point of my statement-I should not say of my statement, but the statement of a great many bankers-and that is that if they had kept that money in Canada they would not have loaned it to the trade of the country, because it would be deemed part of their cash reserve and it would have been locked up in their strong boxes. Therefore it would not have done any good to have brought it back from the United States. At the same time the figures will show that a considerable sum of money was withdrawn from the United States and to that extent I have no doubt the trade of Canada got the benefit of it But the bankers state that the money, that is in what is used in the call loan market in New York, is money which, if it were in Canada, would be locked up in their vaults as a part of their necessary cash reserve.


Thomas Simpson Sproule: Why could they use it in the United States?


William Stevens Fielding: Because there is a market for what is called call money. There are people in New York who. in cases of emergency, are willing to put up securities and to pay from 20 to 50 per cent for money for a few days. We have no such foolish people in Canada


Mr. W. F. MACLEAN.: The Canadians do that business in New York.


William Stevens Fielding: That may be another explanation of it. The statement of the bankers is that this is part of their cash reserve, that they would not lend it in Canada, but that they put it out in New York because they can get it back quickly, and that if they should lend that money in Canada and seek to get it back quickly it would very seriously disturb the trade of the country.


Thomas Simpson Sproule: When the attempt was made in New York to get these call loans back they would not pay them back in cash but they would only issue paper in payment of them.


William Stevens Fielding: There were difficulties in the way, but there was a round-about way, as the bankers explained, by which Mr. FIELDING.
the money could be got back. That was by selling bills on England.
Mr. FOSTER, They would have to go through London.


William Stevens Fielding: Yes, they could have got it back by a round-about way, but it could have been done. However, the banks always have money available and this would have been available according to the statements they make and with regard to which I do not think there is any doubt.


George Eulas Foster: That, to be brought down to definiteness, should be put in this way : How much reserve did the banks carry ? Was there more than their necessary reserve in New York?


William Stevens Fielding: There is no fixed rate.


George Eulas Foster: Had they more than their reasonable or usual reserve in New York? It is all very well to say that they just had their reserve there, but if the figures were accurately checked up we would see whether they had their reserve there or more than their reserve.


William Stevens Fielding: I do not think it would be shown that they had more than a reasonable reserve. I have no doubt that they were trimming their sails and that their reserve was a little stronger than usual.


George Eulas Foster: As far as their usual reserve goes, I do not say that it is reprehensible.


William Stevens Fielding: Now, my hon. friend from North Toronto has given us some very interesting information with regard to the American system. But, considering that the hon gentleman said the American banking system is recognized to be the worst in the world, I do not see why he should ask us to take our examples from our friends across the border, and yet he has pictured the recent legislation in the United States' with reference to banking and currency as something that he could commend to our admiration. I think he is not correct in that. I think he is quite incorrect when he says that the recent legislation at Washington is something upon which everybody is agreed. On the contrary, I find that there have been wide differences of opinion and that the conclusion that has been reached is looked upon as a mere makeshift and not a satisfactory solution. The Bill creates a commission to inquire into the subject and in this the Bill recognizes that it is merely a makeshift arrangement. Under the Aldridge Bill it was proposed to allow the issue of circulation as against a certain class of securities, under the Vreeland Bill it was pvoposed to allow the issue of currency as against another class of securities, and when they had fought over the matter for months they

took pieces of the Aldridge Bill and the Vreeland Bill, tacked them together and they have made the confession that the whole thing is unsatisfactory, because in the Bill itself they have appointed a commission to find out what should be done.


George Eulas Foster: The Bill did not refer to a commission.


William Stevens Fielding: It was either in the Act or coincident with the Act.


George Eulas Foster: Of course, they may have a commission.


William Stevens Fielding: It is not a question of * may have ' but they actually have. I understand-if not in the Act itself for I have not had the pleasure of reading the Act, but I have read the discussion-I understand they have appointed a committee of members and senators to look into the whole matter, practically confessing that they do not feel at all on safe ground. I do not think we can learn very much in that way from the recent legislation of the United States. My hon. friend says that the United States Act provides for the issue of circulation only against bonds of undoubted responsibility, but if my recollection is correct the Bill not only allows the issue of currency as against bonds but it allows the issue of currency against ordinary commercial paper.


George Eulas Foster: It does not.


William Stevens Fielding: Yes, my hon. friend will find he is mistaken.


George Eulas Foster: I will send the Bill over.


William Stevens Fielding: I have not the time to read it now but if I am wrong I will be happy to make the correction. The Bill as passed allows a combination of banks to issue currency as against the deposit of commercial paper up to a certain value.


George Eulas Foster: The hon. gentleman is led astray by this-there was the Fowler Bill which probably met with general favour but Congress felt it was not in a position to legislate upon it at present-the Fowler Bill contemplated the division of the United States into districts and it also contemplated certain large bases of circulation but the Fowler Bill has not passed.


William Stevens Fielding: The Bill my hon. friend has sent me over is not an Act of Congress. It is a Bill introduced in March last and all sorts of changes have taken place since that date.


George Eulas Foster: That is the Act of Congress.


William Stevens Fielding: I think my hon. friend is mistaken.


George Eulas Foster: I tell the minister that is the legal enactment.


William Stevens Fielding: On the face of it, it says it is a Bill introduced in the House of Representatives, March 30, 1908, and is referred to the Committee on Banking and Commerce. There is nothing to indicate it to be the Bill which has passed. I think the hon. gentleman will find that my statement of the legislation of the United States is more nearly correct than his. My hon. friend said we were allowing a larger proportion of emergency currency-I do not like to use that phase because it is hardly correct as applied to us ; we are going to have this at certain periods and I do not think emergency currency is a correct description-however, using that phrase for convenience, my hon. friend pointed out that the United States legislation gave authority to issue $500,000,000 currency. Therefore, we in proportion of our population to the population of the United States might well issue $33,000,000 currency, instead of which we are only proposing to issue $24,500,000 at the outside, so that on the law of proportion we are well within the limit. The hon. gentleman indulged in a criticism with which I have a measure of sympathy. I quite agree that the Banking Act is a serious part of our legislation and should not be lightly tampered or tinkered with. I agree that for most purposes it is well we should only deal with the revision of the Bank Act at stated periods, when we have gathered the results of ten years of experience to guide us. But occasionally circumstances will arise which seem to make amendment urgent. I think this is one of the cases. My hon. friend invites us to wait until the ordinary period comes to revise the Bank Act. In the ordinary course the Bank Act would not be revised until the session of 1910, which means two or three years before we could deal with this matter. We submit that with the prospects of the need of currency in the west, with the magnificent prospects for the coming crop, with the difficulties which arose last year, which in part were exceptional and due to a financial condition that is not likely to arise again ; with the prospects of the increased crop and the necessary increase that would be required in our banking facilities to handle that crop, I think it would be a fatal mistake for any Finance Minister to face that condition of affairs without making any provision in some form for meeting the conditions. That is the position we take. We admit this is a difficult question. We admit that all these questions affecting our banking and currency are grave and serious and nothing is further away from my thoughts than that we should approach them with lightness. I can assure my hon. friend that the matter has been thoroughly thought out. He and I agree that our banking system is perhaps the best in the world and certainly there is none that it does not compare favourably with. In view of the strength of our banks

generally we can safely entrust them wltli the broader power which we contemplate. My hon. friend (Mr. Foster) said that as a rule the House had a knowledge which comes from banking men and that the House had a right to meet the bankers just as the Minister of Finance has. Well, this Bill has been on the Order Paper for several months and if auy intimation had been given by my hon. friend that it was deemed desirable before we proceeded with it to have a conference with the bankers I would have offered no objection. Even to-day, if my hon. friend thinks any good purpose can be served ; if there is any information which the House should have and which it has not, and if he prefers to have the Bill referred to the Banking and Commerce Committee to hear the bankers, I would have no objection whatever. But I do not think it is necessary. I can say to my hon. friend that there is not much difference of opinion upon the subject. X will not say there was none, because there was some little difference of opinion. I told my hon. friend there was no correspondence on the subject, but it came to my mind since that there was a letter from one gentleman who made a suggestion differing a little from this report. However, I do not think he was seriously objecting to the Bill. I had the pleasure of discussing the measure with our leading banking men and of course they are looking after the banking interest, and they would be much better pleased that we should give them the right to issue these notes and charge them nothing. But having given them the large and liberal privilege of issuing up to the amount of their capital, when we give them an extension of circulation for special reasons, we think it right they ought to pay for it. Whether the rate of interest we have named is reasonable or not reasonable is not a vital question. What I had in mind in fixing the interest was that we ought to be willing to adapt ourselves to the conditions of the money market at the time. If the bankers want this money when they are charging 7 per cent for it, I think we may reasonably charge them 5 per cent. We do not expect the banks to be benevolent institutions and if they have to handle the business they must have some profit. I think a margin of 2 per cent is reasonable for their services in handling this money and for the risk they take, because they take the risk and not the government. The ordinary discount rate in Canada in commercial affairs is about 6 per cent, and if the bankers should desire to avail themselves of this Bill at a time when current discounts are 6 per cent, I think there would be no wrong in letting the banks have the money at 4 per cent. On the other hand, if it were a time when the banks were charging a higher rate we might reasonably exact 5 per cent, but the question of the rate of interest is of small detail. My hon. friend Mf. FIELDING.
(Mr. Foster) has referred to the fact that in the United States the money of the government is held in the treasury, while in Canada we put our money in the banks, and, he says, we get no interest. Well, if there is any valuable difference in our system as compared with the American system it lies in the fact that we do not hoard our money but leave it from day to day in the hands of the banks, so that to a certain extent it is always available for the commerce of the country.


George Eulas Foster: There is no use in quarrelling with that.


William Findlay Maclean: The United States are now depositing in the banks.


William Stevens Fielding: They are beginning to do so and I think they are beginning to realize that the system which existed in Canada long before my day, and long before my hon. friend's day, is a reasonable one. But, he says, we are depositing without interest. That is nothing new. We have been doing that for years and I believe there is something to be said in favour of it. When we deposit this money in the banks we do not leave it there for any stated period. We put it in to-day and may draw it out to-morrow. The money is there at our order and if we did not adopt this system of utilizing the banks of the country, then we would have to establish an expensive system of sub-treasuries all over Canada. I know that some of the banks complain that what advantage they get out of the government deposits does not compensate them for the trouble of handling the mass of small transactions the government have. If they were to apply the ordinary rate of commission in commercial transactions, it would amount probably to more than they now receive from the government in the money which remains from time to time in their possession.


George William Fowler: Do you deposit in the various banks, or only in one or two ?


William Stevens Fielding: In-24-about three
fourths of the banks all over the country. We have not of late added to the list, but we are depositing in the same banks in which we were depositing when I came into office.


George William Fowler: And the other banks are obliged to accept your cheques at par, although you have not a deposit with them ?


William Stevens Fielding: They do as a matter of fact.


William Foster Cockshutt: May I ask the minister if there have been any requests from the Bankers' Association or from any other quarter for permission to issue this emergency currency ?


William Stevens Fielding: I would not say that there has been any formal resolution or



TUNE 19- 1908

[Stage Direction]
request from the Bankers' Association or that there has been any formal correspondence on the subject; but I have had consultation with the principal members of the Bankers' Association, and I think I am justified in saying that while they would be pleased if the Bill were made more favourable to them, they regard this legislation as necessary to enable them to meet the trade requirements of the country this season.
William Findlay Maclean: It seems to me that there ought to be an increase in the available bank capital of the country. The country is growing rapidly, and therefore needs more money. There are two or three ways in which that may be obtained. As the Minister of Finance has pointed out, it might be got by increasing the bank capital. which would of course admit of a corresponding increase of the issue of bank notes ; but he says that the banks are slow to increase their capital. That is a fact. It is also a fact, as he states, that if they do increase their capital, the money for this purpose comes out of the deposits in the banks, and does not increase the available capital of the country. I have made some investigation into this matter, and I say that the banks are too conservative in regard to increasing their capital. I think I could name one bank in which one man or a small group of men have control of the shares, and put a bar upon any proposal to increase the capital unless they can control it. I think something should be done in the direction that the minister suggests, of getting foreign capital brought into this country as bank capital. That has been done in some cases. The Royal bank is one.


George William Fowler: The Sovereign bank is another.


William Findlay Maclean: The Sovereign bank is another. It brought capital from Germany, and I think that was the cleverest thing ever done in banking in this country-going to Germany and getting money and putting it into circulation in this country.


George William Fowler: And losing it in Alaska.


William Findlay Maclean: That is not the point. The point is that foreign capital was brought into this country.


George William Fowler: I may tell the hon. member that that foreign capital was Invested afterwards in Alaska.


William Findlay Maclean: I did not raise that point. The question I raised was the getting of foreign capital into this country, and the inference from the hon. gentleman's statement would be that we should not get foreign capital into this country.


George William Fowler: Not at all.


William Findlay Maclean: I am not discussing the maladministration of that eapi-347
tal after it comes to this country ; but I say that our banks ought to be more liberal in regard to bringing in foreign capital. The reason our banks do not go to outside sources to increase their capital is their large bank reserves, which are practically made up from the profits of the_ existing shareholders, and they do not wish to allow outsiders to come in and participate in those reserves. Some way ought to be found to induce or make our bankers increase their capital when the requirements of the country need it, and to try to get outside capital. I do not say that the banks should not have reserves ; they should have; but it is always to be remembered that these reserves are made up out of the public. The stronger they become, the more it means that the public are paying for their banking facilities. Our banks ought to be liberal enough to try to get more of their capital taken up iu Europe. A large number of them have taken powers to increase their capital. There is no reason why the banks of this country should not every one of them double their capital, and if they are progressive they will do so, and at the same time offer inducements to foreign capital to come in and take up this additional capital. That is one way in which financial relief could be obtained for this country. Another method has been suggested in the country, and I would like to hear the Finance Minister's opinion of it; that is, that as the country is progressing and. its financial requirements are steadily increasing, why should we not increase proportionately the issue of Dominion notes, and thus help to increase the currency of the country ? I am not prepared to express an opinion on that, but I would like to hear from the Minister of Finance whether there is any objection to it. A third method of relieving the pressure is the method proposed here to-day. On the whole, I am not inclined to disapprove of an increased note issue by the banks, because there must be some relief provided for the financial pressure that existed last year, and that will exist more than ever this coming fall. I believe there will be a great improvement in business this coming fall and some increased capital must be provided ; and to the extent to wheh the measure before the House makes that provision, to that extent it will meet with the approval of the country. But there are the two other available resources which I have pointed out, and by means of a conference with the banks or among the bankers themselves, steps should be taken in the direction of inviting outside capital to come to this country more than has been done in the past. The bank that has done most in that direction is the Bank of British North America, which was organized iu Great Britain to do business in this country. I believe the Bank of British Columbia is of the same character. While we



want to see our banks controlled and handled by Canadians, I think the people of this country would want our bankers to take a more liberal attitude towards getting a larger amount of foreign capital put at the disposal of Canadians for Canadian business. If the minister would care to give it, I would like to hear what his opinion is as to providing relief by a larger issue of Dominion notes, and as to whether the banks themselves would have any objection to that.


George William Fowler: The hon. member for South York (Mr. W. F. Maclean) seems to misunderstand the position I took with regard to the matter he was discussing. I am not averse to the introduction of foreign capital into this country. I think Canadians are a unit in favour of the introduction of foreign capital into this country, whether it be invested in manufactories or in bank stock ; but I think that the hon. member for South York was a little unfortunate in the illustration he gave when he spoke in com-mentatory terms of the dealing of the Sovereign bank.


William Findlay Maclean: I must call the hon. gentleman to order ; I did not. I simply commended that one thing, the getting in of foreign capital. I did not commend the action of the bank in any other direction.


George William Fowler: I am familiar with the history of the Sovereign Bank from what has appeared in the newspapers, and I do not believe that the introduction'of foreign capital by the Sovereign Bank had any very good effect upon Canada. The money was used, as I understand, in Alaska, where it was totally lost, and the shareholders of the bank, not only abroad, but at home, have lost a very large proportion of the money they put into that bank.
With reference to the first part of section 1, providing that the bank may issue and reissue its notes payable to bearer on demand and intended for circulation, I understood the minister at one time to have very strong opinions with regard to the reissue of notes, from a sanitary standpoint. Does this mean that the old notes come back to the bank and they reissue them again and again?


William Stevens Fielding: It means to issue and reissue a given amount, but not necessarily the same notes.


George William Fowler: I wish to emphasize what I said with regard to the issuing of notes on combined capital and reserve. I still think that although it might prevent some of the new banks, who had not yet any considerable reserve, adding to their circulation, the important thing is that the circulation shall be well secured, that the people shall have confidence in it and that there shall be behind the circulation an Mr. W. F. MACLEAN.
amount of capital sufficient to cover it. That seems to me to be the important thing in connection with the solidity of our banking system.


William Stevens Fielding: I entirely agree that it is desirable to obtain capital from abroad, but, of course, the banks would have to take their own steps in that direction ; it is not a matter with which the government can deal, and I am afraid the mishap that has occurred would to some extent operate against us in seeking capital abroad. However, that would be a matter for explanation, and if the banks would take the proper steps to issue capital abroad and forego their right to issue in Canada, capital might be obtained in that way. I am aware that this idea is in the minds of some bankers now. One general manager told me that he contemplated foregoing his right to issue in Canada and allowing a new issue to be made abroad. If that can be done generally, it is very desirable.
As to Dominion notes, there is a certain amount which we can issue on a very moderate reserve, which recently we have departed from, but beyond that we have to put up dollar for dollar, and the issue of further Dominion notes would be of no benefit to any one, as we would have to get gold and place it in the treasury against the notes.


William Findlay Maclean: But you could change the proportion, and the minister could obtain power to issue more notes against the same quantity of gold. The minister will not say that the time may not have come when the proportion between the Dominion notes and the reserve might be changed.


William Stevens Fielding: I think the proportion might be revised from time to time. It has been revised once since I came to office, but it is not desirable to revise it too often. It amounts to this, that a certain amount of circulation is never called at all, it passes from hand to hand, and is never presented for payment, and it is all right to issue that amount on a moderate reserve ; but the moment you issue a quantity beyond that, you have to have the gold for it. ' We have changed the amount once since I became minister, and the day may come when a further step will be taken.
Mr. BLA1N. What effect will this legislation have on the future credit of Canada? There are many enterprises in Canada now that call for the pledging of the credit of the country to a great extent in the years that are approaching, and the effect of this legislation on our banking system and the future credit of Canada is very important.


William Stevens Fielding: I entirely agree as to the importance of this point. We have entered into large operations, and with the splendid development which is going on

we must naturally expect to require much money in the future; if this Bill were going to affect our credit adversely, I would not be justified in presenting it to the House.
I have given it consideration, I have talked with financial men about it, and I have every reason to believe that the propriety of this Bill will be recognized in financial circles. The nature of the BUI was disclosed in the budget speech some months ago, it was given publicity in financial papers, and I am glad to know that no adverse opinion was expressed. It seems to have been taken for granted that some action of the kind was necessary, but at any rate no adverse opinion has been expressed.


William Foster Cockshutt: Are the operations of the Royal Mint having any effect on the amount of currency? Does the business of our country take up all the money made by the mint, or is there a tendency for it to come back to the banks and be stored there?


William Stevens Fielding: The operations of the Mint do not in any way affect the financial operations of the country, because we only send out as much silver as is demanded at the time. It so happens that as there has been a period of what I might call check, what we hope js merely a temporary slackness, the demand has been less than usual and consequently the amount required is less than the average. That means that the mint is not working to its full capacity and is not producing as much as it could. At all events we turn out no more silver than there is a demand for.


Robert Laird Borden: His security for circulation is determined on the basis of an average, as I understand. Would it not be possible that you would have floating about the country, during a certain period of the year, fifteen or twenty millions more than you have under ordinary conditions ? Bui. as I understand it, you would not have a corresponding increase in security, becausp the security is based altogether upon the average. I do not know whether I make my idea clear.


William Stevens Fielding: Yes. We require the banks, of course, to make returns from from day to day showing how far they avail themselves of this, and I thought the machinery of the existing law applied to the new conditions was ample. I shall be glad to look more closely into that. But I do not think there will be any difficulty.


Robert Laird Borden: There may be nothing in it


William Stevens Fielding: I see the point the hon. gentleman has made.


Robert Laird Borden: You have, say, during three or four months of the year per-3474
haps ten or fifteen millions more of circulation than the average, but, as the increase is only on the basis of the average, there would not seem to be during these months adequate security if the present is no more than adequate.	.


William Stevens Fielding: We shall have to look more carefully into that point before the Bill is finally disposed of.
At one o'clock, committee took recess.
Committee resumed at three o'clock.
On section 1-additional issue during moving of crops.


George Eulas Foster: I would ask the minister if it is necessary in this enactment to put in the words :
Provided that during the usual season of moving the crops.
We do not fix any period by those words, it is an indefinite period, and then we proceed to fix an exact time.


William Stevens Fielding: We want to show that this is designed to meet the moving of the crops. It would be as effective without it,
I admit, but the purpose is indicated in that sentence, and I think it should be so.
On subsection 4-notice of additional issue.


George Eulas Foster: Will the minister think of my suggestion, that instead of putting a maximum rate a minimum rate should be placed ?


William Stevens Fielding: I think there is something to be said in favour of leaving a certain scope, owing to changing conditions in the money market. I would have no objection to make the maximum not exceeding 6 per cent. That would only be under exceptional circumstances. Probably there is no need of a minimum rate, because we never have a very low rate in Canada. If my hon. friend prefers to make a maximum of 6 per cent I would not object to it.
On subsection 9-Bank of British North America.


George Eulas Foster: Why is security taken in the case of this bank ?


William Stevens Fielding: The Bank of British North America had an Imperial charter and is in a somewhat different position from other banks, and an exception has always been made concerning it in legislation. The double liability clause does not apply to them. This is the existing law. We thought that, as a matter of good drafting, instead of putting in an amendment here and there, it would be better to re-enact the whole clause.


Thomas Simpson Sproule: Does this law mean that you have no power to extend the time beyond the 31st day of January for a bank to make a return showing the amount of its notes in circulation for each day during any month in the usual season of moving the crops ?


William Stevens Fielding: As I have pointed out earlier in the day, we have taken these dates after a careful study of the circulation reports from time to time, and the experience is that after the 1st January there is an abundance of circulation available.


Robert Laird Borden: Has the minister considered the question I spoke of before recess ?


William Stevens Fielding: Yes. The suggestion of the hon. gentleman certainly would apply to the Bill but it applies also to the existing Act. The point of his suggestion was that the deposit of 5 per cent, which is sometimes called the insurance or guarantee fund, will, while it is supposed to represent the circulation, amount at times, not to five per cent upon the whole circulation but only upon the average. That is correct. It applies, however, to the clause as it stands to-day as well as to the amendment we are making, and it is therefore capable of being abused at the present time. I would rather deal with it by way of a general amendment when we come to the revision of the Act than make it in this particular case. You must recognize that at certain stages your circulation runs up high and at other stages the circulation is low. The deposit is made upon the average of the year. That average is ascertained by taking the highest circulation at any point in a given month and then arriving at the average for the year. Sometimes the deposit is more than is necessary for securing the circulation and sometimes less, the adjustment being made on the average and changing from year to year. The suggestion is one therefore that would apply to the existing law as well as to the amendment and we must note it for careful consideration in the general revision which will come at no distant day.


Robert Laird Borden: This is in line with what may occur under the Act as it is at the present time. The conditions may be very much exaggerated, that is assuming that the banks take advantage of it. If they do take advantage of it you will have conditions much more abnormal than are possible under the present system.


William Stevens Fielding: The circulation would increase or decrease.


Robert Laird Borden: During three or four months the circulation might be very much larger than during the other months of tiie year. Might I ask also whether or not the government did take into eonsider-


William Stevens Fielding: 
William Stevens Fielding: The suggestion of circulation based upon such deposits has sometimes been made, but it has not generally found favour with the banks. The amount which any of these banks could issue is not very great. I do not think the extra risk is at all considerable. Fifteen per cent upon the paid-up capital and reserve in the case of most of the banks would not be a very large figure ; so that the risk is pretty widely distributed and in the opinion of the best financiers with whom I have discussed the question this system is regarded as being quite safe. The other system has been suggested but it has not found favour with the banks. We found in connection with the advance mfde to assist the grain business that the banks were exceedingly unwilling to put up securities. They do not like to part with them at all. I think this measure should go through and in the revision, which will in all probability take place within two years,

if any of tile possible abuses which have been suggested under the operation of this Bill have been found to have occurred they can be corrected.
Before luncheon my hon. friend from North Toronto and I had a little difference as to the recent American banking legislation and if he will permit me I would like to say a word or two to clear it up. I stated that the American system allowed the issue of currency not only against high class bonds, such as my hon. friend spoke of, but also against commercial paper. I also stated that the Americans had found very great difficulty in settling this problem, that what they had done had been to take portions of the Aldridge Bill and portions of the Vree-land Bill, tack them together and that the result was very unsatisfactory, a fact which was acknowledged because they included in the Bill a proposition to appoint a commission to inquire into the whole matter. My hon. friend said that I was mistaken, that there was no proposition as to a commission and no provision by which they could issue currency against commercial paper. In support of that he sent me over a document which he said was the Bill passed by the United States Congress. I find that this is not the Bill which was passed at all. This was a Bill which was before Congress on the 30th March but it was not finally passed. I hold in my hand the Bill which was actually passed and which was approved by the president on the 30th May. It contains a clause saying that currency is to be based to some extent upon the security of commercial paper and it also contains the following provision :
That a commission is hereby appointed, to he called the ' National Currency Commission/ to be composed as follows: Six members of the Senate, to be appointed by the presiding officer thereof; six members of the House of Representatives, to be appointed by the Speaker, and six other persons, to be appointed by the President of the United States.
That it shall be the duty of this commission to investigate carefully the causes of the recent financial crisis and the relation of the banking any currency system thereto, and to make recommendations to Congress for such changes in the existing banking and currency system as may in their opinion be desirable; and said commission may also recommend such changes as they may find desirable and within the constitutional power of Congress in regard to the banking institutions of the United States and in the laws governing the distribution of public funds.
The difficulty arose from the fact that the Bill which my hon. friend had was not the Bill which had been passed. The Bill I have in my hand is the one that has passed. That explains the misunderstanding.


George Eulas Foster: I have not had very much time to take up this matter. I sent to the library for the Bill as passed and I thought that I got it.


William Findlay Maclean: I would like to refer for a moment to what I brought up before recess and it is this : In so far as the banks have been given a great franchise, permitting them to supply banking facilities to this country, they ought to be equal to the duty of discharging the obligation which they have assumed. Roughly speaking, they have $100,000,000 of paid up capital. On that $100,000,000 they can issue $100,000,000 of their notes and it seems to me that inasmuch as a great expansion of the trade of the country is at hand, inasmuch as the demand for money this coming fall will be greater than ever it was in Canada before, the banks ought to approach the problem themselves and in some way try to double their capital. They have all taken the power to double their capital. If the banks double their capital there will be $100,000,000 of new bank capital, and against that $100,000,000 of their notes could be issued, the result of which would be that the country would be in possession of $200,000,000 which would be available for trade. This measure at the best would only give a relief to a great country in a period of expansion of $25,000,000. That will not suffice, there will be a money famine within twelve months, probably within six months, and a quick way of providing relief is for the banks themselves to take advantage of the law as it stands to-day and if they do that they will increase their capital and the country will have $200,000,000 available. Take the greatest banking institutions we have in this country to-day-the Bank of Montreal; its capitalization is about $14,000,000. There is no reason why that bank should not have a capitalization of $50,000,000 with the business it is doing and with the increased business that is in sight. I simply wish to take this opportunity of suggesting this means of relieving the situation by increasing the amount of capitalization of the banks and thereby increasing the amount of money available for the Canadian people.


Mr. GERVAIS.: Before this Bill is reported I would like to say one word. I have been asked by several Montreal banks and private bankers why it is that at the subtreasury office in Montreal they cannot get the newly coined 25 and 50 cent pieces. As every one knows this country gladly spent $100,000 for the construction and building up

IMr. FOSTER. How much?


Honoré Hippolyte Achille Gervais: A few thousand dollars.


George Eulas Foster: Nearly $600,000.


Joseph Gédéon Horace Bergeron: Nearly three-quarters of a million.


Honoré Hippolyte Achille Gervais: for the building up of
the Royal Mint. The people of Canada are glad to have such an establishment, but,

on the other hand, the merchants, the bankers and the people at large would like to see these newly coined pieces freely circulated throughout Canada.


William Stevens Fielding: We shall be very glad to furnish the new coins as fast as there is a demand for them. I may say to my hon. friend that each assistant Receiver General's office in Canada has now a quantity of the new coins. For the ordinary person one coin is usually considered as good as another ; but if there are those who, for any *special reason, want a quantity of the new coins at once, they can get them. The old coins will be gradually worked off, and then all the coins will be new.


Honoré Hippolyte Achille Gervais: I may say that two banks in Montreal tried to get from the subtreasury offices, in St. James street, $5,000 worth of the new coins, and had to write to Ottawa and ask permission to get them. As a matter of fact, for a good reason or a bad reason, the people at large desire to get the new pieces, and I would request the hon. Minister of Finance to give the proper orders to each sub-treasury office to give the newly coined pieces to all who ask for them, provided they give due and legal consideration ifor the same.


William Stevens Fielding: I will call the attention of the various assistant Receivers General to my hon. friend's suggestion. Of course, if we have a quantity of the old coins on hand, we cannot afford to re-mint them.


Thomas Simpson Sproule: In connection with the Bill which we passed yesterday in regard to the advance to the banks last fall to enable them to handle the grain crop, I understood the Minister of Finance to say that from the operation we earned about -$48,000 in interest paid on the money by the banks, and that the Bank of Montreal, for distributing the money and providing the security, charged about $1,500. Taking the one sum from the other shows what we actually made. It occurred to me whether the Minister of Finance considered the question of the wisdom or otherwise of the government issuing all the bills and selling them to the banks, and thereby earning something for the consolidated revenue of Canada. I have always thought that the government instead of the banks ought to issue the bills. I would like to ask the minister if he has considered that question at all?


William Stevens Fielding: It is a question that might properly be considered in connection with a general revision of the Act. It would mean a tax on the banks, such as we are Imposing by this Bill to some extent, on the ordinary circulation. The opinion of my predecessors was that that was not a wise policy ; but the world moves, and we shall have to consider this and many other ques-


Honoré Hippolyte Achille Gervais: tions when the time comes for a general revision of the 'Act.
Bill reported, read the third time and passed.



LEAD BOUNTIES.

[Stage Direction]
Mr. FIELDING moved that the House go into committee to consider the following proposed resolution :
Resolved,. That it is expedient to enact that the provision of chapter 31 of the Acts of 1903,
' An Act to provide for the payment of bounties on lead contained in lead-bearing ores mined in Canada,' shall, subject to the rnodifi-cations herein set forth, be extended until the 30th day of June, 1913; that the standard price of pig lead in London, England, referred to in the said Act be hereafter fixed at £14 10s.; and that the provisions of the said Act limiting the payment of such bounty to $500,000 in any fiscal year be removed: Provided, however, that the total sum to be paid by way of such bounties under the said Act of 1903 and under any Act to be founded on this resolution shall not exceed the sum of $2,500,000.
He said:	If it be agreeable, I would
suggest that we go into committee and pass the resolution pro forma,, and deal with the question at a later stage in connection with the Bill, which puts it in better shape. If it is desired to discuss the matter to-day, I will not present the item, but if it is agreeable to have the_discussion on the Bill, and adopt the resolution pro forma, I will move the item.
Robert Laird Borden: There is no objection.


[Stage Direction]
Motion agreed to, and House went into committee on the resolution.
William Stevens Fielding: I will only state that the general purpose of the Bill is to extend for a further period the bounties which were granted some years ago. The sum authorized to be advanced to be paid by way of bounties was $2,500,000. Only a comparatively small portion of that was actually paid, and this is to enable producers of lead to claim the advantage of the bounty for a futher term, not exceeding the gross sums mentioned. With that brief statement, 1 will be glad to have the resolution passed, and when we come to consider the Bill in committee the matter can be dealt with more fully.


George Eulas Foster: I would like to intimate to the Finance Minister that in this period of double sessions it would serve a good purpose if he could give a little timely notice of when he is going to take up any particular Bill. A couple of days' notice would help us very much in arranging our work.


William Stevens Fielding: We generally give notice the evening before ; but if the hon. gentle-

man desires any particular Bill to go over, we would be glad to meet his wishes. It Is our duty on both sides to try to meet each other's wishes.


Thomas Simpson Sproule: What was the standard price of pig lead before?


William Stevens Fielding: 
[Stage Direction]
Motion agreed to, and Bill read the first time.

[Stage Direction]
House in Committee of Supply.
Public buildings, chargeable to income- Brandon drill hall, $20,000.
['We will discuss that later.\nSome resolutions reported.']
Hon. WM. PUGSLEY (Minister of Public Works).: When the matter was discussed in committee 'before this item stood In order that some further information might be obtained, and also in order that my colleague, the Minister of Militia and Defence, might be present. I may say that Brandon is the headquarters of the Manitoba Dragoons and also of some infantry regiments. The building is 145 feet by 75 feet; main hall, 119 feet by 75 feet. It was commenced in March, 1907, and is of brick and stone.


Mr. J. D. REID.: Who is the contractor?


Mr. PUGSLEY E. C.@: Lemay and L. B. Lachance. The total contract price was $52,754.


John Dowsley Reid: How much has been paid to date?


William Pugsley: To the 31st December, $12,445.92.


John Dowsley Reid: There must have been progress estimates paid to the 1st of .Tune. What is the total expenditure to the 1st of June?


William Pugsley: I cannot give that at present.


John Dowsley Reid: Then the item had better stand till we get the information.


William Pugsley: I have no object'on to give the fullest explanation, but it is not usual to ask for that.


John Dowsley Reid: It certainly is.


William Pugsley: This is the first time it has been asked this session.


John Dowsley Reid: During the whole time I have been in parliament it has been customary to give this information and the item had better stand till it is obtained.


William Pugsley: Very well.


Richard Blain: What is the total cost of the Brandon drill hall?
Mi-. PUGSLEY. $70,891.92, including heating, electric wiring, fitting and site, which. cost $3,100. The heating system is estimated at $2,500.


John Dowsley Reid: This is another instance of a building costing nearly 50 per cent more than was at first estimated. At page 6743 ' Hansard,' 1906, a vote of $20,000 was taken for the Brandon drill hall when Mr. Hyman was Minister of Public Works and this discussion took place :


William Humphrey Bennett: Is this a new work?


Mr. HYMAN.: Yes. Plans and specifications are now in preparation. I have not the details of the principal requirements, but I think the cost of the building would be in the neighbourhood of $50,000.	.


William Humphrey Bennett: Does that include the site? Mr. HYMAN. I hope we may be able to make it include the site.
Mr. Hyman gave an estimate of $50,000 for this building, and the new Minister of Public Works tells us it will cost $70,000. The hon. gentleman (Mr. Pugsley) occasionally twits the opposition with allowing items to go by and then he takes the ground that the House is committed to the work and the expenditure. He is new to his department and I would suggest to him that he should very carefully consider his estimates and make it plain to the House what the total cost of the building will be.


William Pugsley: The contract price is $52,000 and Mr. Hyman may have had that in mind. The $70,000 includes the heating and boilers, electric wiring, fixtures, fittings, fencing, contingencies, superintendence and also a shooting gallery, which was added to the original plans and which will cost about $3,000. I agree with my hon. friend that it is desirable as far as possible to give the House as accurate an estimate as may be of the total cost of a building.


John Dowsley Reid: When Mr. Hyman stated this building would cost $50,000 I took it for granted it would include site and everything else.


William Pugsley: I do not say whether it is or not.


John Dowsley Reid: I took it for granted he did. To-day we are told it is going to cost $70,000 or about 30 per cent more than we understood when the item went through. In giving an estimate for a public building the minister should state whe-

tber it includes heating, as a man would do in building a house for himself.
Winnipeg public building-hospital for permanent corps, $13,500.


William Pugsley: This is a revote to make provision for a hospital at Winnipeg to be used in connection with the permanent corps there. It was applied for as early as 1906 by the Militia Department. Nothing has yet been done but the work has been strongly urged.


John Dowsley Reid: The $13,500 is just for *be building.


William Pugsley: Yes.


John Dowsley Reid: What is to be the total rest of the building ?


William Pugsley: The requisition comes from the Militia Department and as we have not prepared the plans I am unable to give the estimate.


John Dowsley Reid: It is a strange way to put estimates through. We are asked to vote money for a public building at Winnipeg, yet the minister does not know what the cost is to be. The House should be informed of the total amount to be expended on each building.


Sir FREDERICK BORDEN.: The estimated cost for the building is $14,500. According to my memorandum there is no hospital at Fort Osborne, the permanent corps barracks, for the Canadian Mounted Rifles stationed there. Temporary arrangements have been made and the local hospital has been used. The building is urged by the district officer commanding and by the medical officer there as being absolutely necessary. The D. O. C. District No. 10 when asked to recommend a site reported none available in the barracks or on government property.


John Dowsley Reid: Why did not the min-ter ask for the $14,500 ?
Mr. PTJGSLEY We do not anticipate that the contract will be let until late in the summer or that more than $10,000 will be expended this year, $13,000 at the outside.


George Eulas Foster: Has the Minister of Public Works prepared an estimate and plans?


William Pugsley: Not yet.


George Eulas Foster: It does not matter what has been placed before the Minister of Militia, the responsible minister is the one who erects the building, the Minister of Public Works, and here the minister asks a vote but his officers have not made an estimate. Under these circumstances the minister cannot persist in asking for this vote. He had better let it lie until he gets a proper estimate and plans from his deputy and then Mr. J. D. REID.
if he comes to us with reasonable plans no doubt the House will be prepared to carry them out. This is reversing the proper method of getting supplies.


William Pugsley: I think my hon. friend is in error in regard to the ordinary custom. It is not customary to have the plans and specifications prepared before the vote of parliament is granted. The usual course, particularly with military buildings, is that the officials of the Militia Department, some of whom are competent engineers, make a requisition on the Public Works Department stating what is required and giving an estimate of the cost. They sometimes furnish sketch plans on which the chief engineer of my department will work, but until the vote is passed it is not customary to prepare plans and specifications. When plans are prepared by my officers, if the cost is found to be much beyond the estimate of the Militia Department, of course I would not feel justified in proceeding with the construction of the building without coming to parliament again, because, there is no doubt, having that estimate of $14,500. that would be supposed to represent substantially the cost of this building.


George Eulas Foster: I do not think that meets the case. We must hold the Minister of Public Works responsible for this construction. I see that the minister is going to have barracks erected-the next item is for quarters for the married non-commissioned officers and men, guard-room, &c., for which a vote of $35,000 is to be asked. I understand the minister to say that he has here about 100 men.


Frederick William Borden: Considerably over 100. This other vote is for the married men's quarters.


George Eulas Foster: How many of the 100 or 125 men there are married?


Frederick William Borden: I do not know. But at present the married men are occupying houses rented from the city of Winnipeg. And as rents are high there, the department thought it could save money for the country by providing its own buildings.


George Eulas Foster: Is it not possible to combine the two? It seems to me that, having a building for the married men's quarters an additional wing for the hospital would be all that is necessary. The proportion of disabled even in actual warfare is not so very large; and, in times of peace, under a well regulated Militia Department, the health of the men will surely be well looked after. Besides, that is a healthy country. So there cannot be among these men a very great proportion of hospital patients. It seem to me you could meet the requirements of the case by putting on a wing of reasonable dimensions upon your proposed new

building. We should avoid, as far as possible, these large fixed expenses, for every dollar so spent takes away from the money we have for the drill and support of the militia. I think it would be better for the officers of the two departments to get together and see whether a new hospital could not be made in the form of a wing upon the proposed building.


Frederick William Borden: As a medical man, I do not think it would be desirable to attach a hospital to a dwelling house. The hospital should be at a distance from the dwelling. It is a rather suggestive building, and I think its presence would create discomfort for those who are not in the hospital. As the amount to be spent for the hospital is only $14,500, it does not seem unreasonable for hospital purposes for a military depot such as Winnipeg.


George Eulas Foster: What is the area of the ground the department has there?


Frederick William Borden: It is a considerable piece of ground. I must confess that I was inclined to think that a place could be found there for a hospital and was surprised to find a memo, to the effect that this idea could not be carried out.


William Pugsley: I agree with my hon. friend to this extent: I repeat what I said the other night that when a vote is granted by parliament for the erection of a building, the Minister of Public Works has a right to regard that as warrant to him to proceed with the plans and specifications and to have an estimate made by the chief architect of the cost of the work. If the minister finds that the cost will substantially exceed what may have been represented by a responsible minister then it will be the duty of the Minister of Public Works not to proceed, but to come to parliament and ask for a further vote before proceeding. That is the course to be taken in this case. The chief architect has not prepared speci-cations or working plans. Presumably the estimate of the Militia Department is sufficient to cover the amount. But if, after getting the matter into that definite shape, it is found that the amount will materially exceed this, then I will feel it my duty not to go on with the erection of the building, but I will submit the matter again to parliament for its consideration. For instance, where the estimate is $14,500 if that were exceeded by two or three thousand, I woidd say that was a material increase and would justify me in delaying the work.


George Eulas Foster: I think that is an additional reason why, before we go further, the two departments should consult on the subject.


John Dowsley Reid: I understand that the Minister of Militia has his own engineers to make plans?


Frederick William Borden: Yes, we submitted plans.


John Dowsley Reid: These will be the working plans ?


Frederick William Borden: No. We submitted a plan showing the accommodation we require, but not the w'Ot'king plans.
air. LAKE. The position the aiinister of Public Works seems to take now'is that it is not the custom to have plans prepared iu advance or to do anything more than make a rough estimate of the probable cost of a building of this nature before submitting the vote to parliament. But last night, he took the position on a number of items that all or part of the amount was a revote and that, as parliament had previously decided upon this work, it was useless for the opposition to ask details-that these matters were already settled. I do not see how the minister can take both these positions. If he is going to take the position that the passing of the original vote for a given work commits parliament to that work-and I do not object, to that-then, when he comes down and asks for a vote for a new work, he is bound to explain the nature and cost of that work.


George Eulas Foster: As to the second part of the position of the minister, after the House has voted for the public work with sufficient knowledge as to what it is likely to cost, after that of course revotes should be made wdthout objecting to the principle of the construction. But when the minister comes and asks for a vote of parliament for a specific purpose he must be prepared to give clearly what he supposes it will cost, and he cannot do that unless he has the estimates of his officers. That is why I think in this case the minister is pressing for what he should not press. But I would like to see the officers of these two departments get together and confer, and see w'hether it is necessary to buy other sites and the like of that; then after-w'ards the officials of the Public Works Department can make an estimate of the cost.


Mr. BARR.: Here we are asking for this estimate before a site has been chosen. It seems to me that the first thing to do is to >decide where you are going to put up your building. We are certainly voting in blank without knowing what the site will cost, and without seeing the plans and specifications.


Mr.  J. D.@: - REID. Is this to be built within the city limits of AVinnipeg ? Because if it is, we should know w'hat the site is to cost. We all know that land in Winnipeg is very costly, especially if it is valued at the same rate as this land for the Transcontinental was paid for, $250,000 for seven acres eight miles out of Winni-

peg. On that basis, what rate would it be worth in the city of Winnipeg ? Perhaps it will cost three times as much as the building. Every member Is entitled to a full statement of what is going to be expended on this particular item.


William Pugsley: I thought we had made it clear. The Minister of Militia stated that the estimate of the officials of his department was that this hospital, which is not to be of a pretentious character, can he supplied for the sum of $14,500. Now I said that we might buy a lot, and it might cost three or four times what we are estimating. I think I might fairly ask the committee to trust the Minister of Militia and myself. I will say that if the site and the building cannot be obtained for something in the vicinity of $14,500, then the work will not he proceeded with without coming again to parliament.


William Humphrey Bennett: Where is your money for the site ?


William Pugsley: The information furnished me by the district officer commanding in Winnipeg is that it is possible, 1 will say probable, that a very suitable building can be purchased quite close to the officers' barracks, and can be fitted up for a hospital, at a total cost of $14,500. The hospital seems to be urgently required. It is evident that where you nave, even not more than one hundred men congregated permanently, there is need for a hospital of some kind.


William Humphrey Bennett: Then it is not going to be a new building at all ?


William Pugsley: Not necessarily. It may not be a new building.


William Humphrey Bennett: Who owns this building you have your eye on ?


William Pugsley: I have not my eye on it, it is the district Commanding officer who has his eye on it. I have a memorandum from the district officer commanding stating that they have under consideration the purchase of an existing building in a suitable locality near to the barracks. He reports that the total probable cost would be $14,500.


John Dowsley Reid: The Minister of Militia stated that they were going to buy land and put up a new building, and he has had his officers prepare plans for, that purpose. Now the Minister of Public Works says they are going to buy a second-hand building and fit it up.


William Pugsley: No, I said there is a possibility of doing it.


John Dowsley Reid: Buying an old building and fitting it up for a hospital does not look satisfactory. A hospital should be a


John Dowsley Reid: perfectly isolated building. It should be a detached building. The Minister of Militia has his officers prepare plans for a new building, he is going to buy land and to spend $14,500, while the Minister of Public Works says that he has his eye on an old building or some other place that he is going to fit up.


William Pugsley: You are mistaken. I said that the district officer commanding says it is possible that a suitable building can be got without erecting a new one.


George William Fowler: This is a quarrel between the district officer commanding and the Minister of Public Works.


William Pugsley: There is no quarrel at all.


George William Fowler: It seems to indicate a lack of discipline between the District Officer Commanding and the minister. This is a matter of considerable importance. We have a very expensive militia staff and if they are fighting and quarrelling amongst themselves we want to know it. We are accustomed to having a ministry quarrelling amongst themselves because one of the minister has said himself that they fought like blazes.


William Pugsley: That is a long time ago.


George William Fowler: Not so long ago. I do not know but that the coming into the cabinet of the Minister of Public Works has poured oil on the troubled waters. I know that the hon. gentleman is one who always believed in carrying peace instead of a sword.


John Barr: It seems to me that it is a very unusual thing to build a hospital of this kind. As I am informed there are only 100 men in connection with this regiment. There is no manufacturer in the country employing 100 men who would build a hospital at a cost of $14,000 to say nothing of the cost of the expense of keeping up the staff. This is a very expensive course to pursue and from past experience we know that it is only the commencement.


George Eulas Foster: What has been the history of the sick list in that school for the last three or four years and how have the sick been provided for ? What hospitals are there in Winnipeg ?


Frederick William Borden: I cannot give the list, but of course, I can get it. The requirements have been met in the barrack rooms with a temporary hospital. A certain number of cases have been treated there and I suppose the more severe cases have been sent into the city hospital. In so far as my hon. friend's objection- is concerned about an additional staff I may say that all the staff that will be necessary for this

hospital is now in existence. There is a medical officer and the members of the army medical corps, who, I believe would be quite sufficient to carry on this hospital.


George Eulas Foster: The minister knows that this is a year in which economies ought to be the order of the day If possible. The revenue is falling off. The customs revenue is falling off at the rate of $2,000,000 a month and it will probably accelerate for a few months at the very least. People throughout the country are retrenching. The sick list cannot be very large. You have efficient hospitals in Winnipeg. You have a temporary hospital for cases which are not serious. I imagine that the minister will find that the cost to which he has been put in taking care of his men in the last three or four years would not be very much. This is a year in which the minister might leave this over for the present. There is no better friend of the militia of Canada than I am provided the money is properly expended. One of the greatest criticisms of the Minister of Militia is that he is very expensive, and whilst we all want our soldiers to have reasonable accommodation it woud be wise to practice economy as much as possible. With the temporary military hospital in Winnipeg and the excellent hospitals they have in the city there should be no difficulty at all in taking care of a few sick soldiers.


Frederick William Borden: I have no personal knoweldge at all because I have only seen the Winnipeg barracks once. The medical officer there is a very excellent man and Colonel Evans the District Officer Commanding, is one of the best men in the service. I rely upon them for advice and they have urged uiion me the necessity for this expenditure. The necessity is quite as great now as it was last year when the money was voted. I believe this expenditure would be in the public interest. In our permanent corps we are constantly worried by frequent desertions which is partly due to the fact that the men can get higher pay elsewhere, but It is also partly due to the fact, I am sorry to say, that we do not give the men the accommodation that ought to be given them. We should see that the sick in our depots are taken the very best care of. I am not going to say that the public interest will suffer materially by letting this vote go for one year, but I think it would be a discouragement to the permanent force to strike it out. In view of the strong pledge given by the Minister of Public Works as to the expenditure not being allowed to exceed the amount mentioned, it would be better to let the vote go.
Mr. BENNETT There are over 200 men in Stanley barracks, Toronto, and there is no special hospital building there. You
use one or two rooms in the ordinary buildings at Stanley barracks as a hospital.


Frederick William Borden: We are
short of rooms at Winnipeg and we need the accommodation that is being temporarily used as an hospital.


Mr. W. J. ROCHE (Marquette).: Is that the reason the District Officer Commanding recommended a new hospital ?


Frederick William Borden: That is
one reason.


John Barr: The reason you have so many desertions from the permanent force is that some of the officers you put over the men are tyrannical and do not consider the well-being of the soldiers. It is not because there is no hospital accommodation that they desert. Some of these men who come out from England are perfect machines, and the Canadian soldiers will not stand for the grinding process that soldiers in the older countries are submitted to.


William Humphrey Bennett: In places where we have splendid militia corp,s the government will not give them accommodation for their accoutrements on the plea that they have no money, but here you are spending money on a hospital in Winnipeg where there is no necessity for it because in Toronto you have 200 men without a hospital and here where you have 100 men you want to build one. The permanent corps Is composed of big strong, able fellows ; they are not a lot of invalids. I think it will be found there is a nigger in the fence here. No doubt some friend of the government has a building to unload and he thinks the government is the best customer.


William James Roche: Has the District Officer Commanding reported on the character of this building ? Will this vote be used merely for the purchase of the building or will it cover the entire property, the ground around the house and also'the equipping and furnishing?


William Pugsley: I hardly think that Colonel Evans is a man who would recommend a hospital in order that some friend might sell his property to the government.
Mr. BENNETT I have not the slightest doubt that it will turn out that the owner of this building is a friend of the government.


William Pugsley: I can hardly think an accusation of that kind could be truly made against Colonel Evans.


William Humphrey Bennett: It is forced on him as it is forced on other officials.


William Pugsley: Colonel Evans has reported it is not possible to find a site on government land and he suggests there is

a suitable building close by the Winnipeg barracks which will afford the necessary accommodation and the cost will not exceed $14,000.


William Humphrey Bennett: How did the commandant come to hear of this particular building ?


William Pugsley: I presume he has eyes to see.


Mr BENNETT.: And ears to hear.


William Pugsley: It is not intended to have an elaborate hospital but something in the nature of a cottage hospital where the men will be properly treated and which will not cost a very large amount. In view of the assurances which have been given it seems to me that hon. gentlemen" are hardly justified in objecting to this vote.


John Barr: Could my hon. friend tell us the size of the ground they have in Winnipeg? He might discover that there was abundance of land there.


Frederick William Borden: I am not able to'give the size of the ground. There is a considerable strip of land there. But Colonel Evans is a man of the very highest character, a man in whom I have great confidence, and I do not believe that he would make any report for the purpose of carrying out some scheme to buy a building from anybody.


William Humphrey Bennett: Nobody insinuated that he did. I have no doubt that it has been suggested to Colonel Evans by some party friends that this building was available.


William Pugsley: Has the hon. gentleman the slightest information that would warrant him in making that statement?


William Humphrey Bennett: Experience of the past. We all judge the Minister of Public Works from the experience of the past, and we judge of this department from the experience of the past. Some party friends unloaded on the government an Old jram-shackle building in the county of Mont-magny some yeai's ago, and one might recall half a dozen such eases. Somebody over Colonel Evans might point out this building to him and ask him if it would do. He might say it would be very suitable. The minister must know who owned this building. As a matter of fact, has any contract been made for the purcnase of the site?


William Pugsley: None whatever.


William Humphrey Bennett: I think the minister had better let the item stand over until we learn the name of the vendor. That could be very easily learned by wiring Colonel Evans.


George Eulas Foster: We discussed the item for fully half an hour, and the minister deliberately kept in the background the infor-


William Pugsley: mation that we were going to buy a building.	.


William Pugsley: There is no settled intention to buy a building. There is no settled intention that a building is to be erected.


George Eulas Foster: I do not know that you have any settled opinions, anyway.


William Pugsley: My hon. friend, of course, may form his judgment in regard to me. Perhaps I may be permitted to have my opinion of the hon. gentleman as well. There is no settled decision as to whether a new building shall be erected or whether a dwelling house shall be purchased. All that is intended is to have a small hospital, something, I presume, in the nature of. a cottage hospital, the total cost of which will not exceed $14,500. If, upon the report of the District Officer Commanding, the Minister of Militia shall decide to purchase an existing building and utilize that as a hospital, I presume that will be done. I can assure the committee that nothing will be done without full examination or without getting full value for the money expended.


George Eulas Foster: That statement is as old as the hills, but we come back to the old question, upon what is the vote based? The minister's sentiments and opinions are in such a fluid condition that he does not know what will be done. I think he had better tell the committee what he proposes to do before asking it for the money. He has not the least idea whether he is going to buy or build, or any information as to any valuation by his officers. If the minister stirs himself he can get that information in two or three days, and then, if his item is a reasonable one, it can be put through.


Mr. SCHAFFNER.: What is the custom in regard to having these hospitals in other cities?


Frederick William Borden: At Kingston there are two, one in connection with the Royal Military College and one in connection with the depot.	,


Frederick Laurence Schaffner: Has it been the custom in any of the cities of this country to utilize a portion of the general hospital and give it a grant?


Frederick William Borden: I think not.


Frederick Laurence Schaffner: It seems to me that it is an idea worth considering. I know that the Winnipeg General Hospital is very much in need of funds ; and that would be better than to provide a separate hospital for 100 men, not one of whom perhaps might be ill in a year.


Frederick William Borden: I am told that the condition of the General Hospital is not satisfactory, and that is one of the

reasons why it is desirable to have this hospital.
Mr. SCHAFFNER, There are two hospitals, one at Winnipeg and one at St. Boniface, both of which have large accommodation. I think perhaps there is no better hospital on this continent than the one at Winnipeg. It is so good that it has been found very difficult to maintain, and it seems to me that the government, instead of building a hospital for 100 men who, as a rule, are in good health, might better give a grant to one or both of these hospitals.


Frederick William Borden: I think the plan of sending the men to an outside hospital would be very objectionable on many grounds, one, perhaps the chief, being the question of discipline. It is absolutely necessary that a permanent force, a standing army, the only one we have at any rate, should be always under control and within the precincts of the property owned by the government. The local hospitals are not used by the permanent forces or troops in any country of which I have knowledge.


Frederick Laurence Schaffner: The minister knows that the maintenance of a hospital involves great expense. It will be necessary to keep a permanent hospital staff during the whole year but with 100 healthy men the hospital would necessarily be closed for a part of the year.


Frederick William Borden: The staff is practically all there now and the supplies are all arranged for. The men in the hospital would be served exactly as in the barracks.


John Barr: Have they hospitals outside of the barracks in London and other cities where you have the permanent corps?


Frederick William Borden: I believe they have in London.


John Barr: Is it not in connection with the building?


Frederick William Borden: I think so.


John Barr: I think.they have a room there and they have much the same number of men as in Winnipeg.
'Sir FREDERICK BORDEN. They have a hospital certainly.


John Barr: They' use a room in the barracks. The minister does not keep very well posted in his work.


Frederick William Borden: Most of the hospitals I have ever seen are made up of rooms.


John Barr: Yes, but in some cases they are not made up of cottages. If the minister does not know where the London hospital is, he is not well posted in his line of business. He should get busy and look up
his department and see how these things are done. If he would we might have a better standing army than we have at present and not so many desertions. We know that the minister trusts everything to subordinates, that they run the show and that the minister, to a great extent is a figurehead.


Frederick William Borden: Much obliged.


George William Fowler: The strongest argument put forward by the minister is that with regard to discipline, but I think, in view of the financial stringency and the necessity for retrenchment, he might arrange to continue the present accommodation for men who are not seriously ill and send those who are seriously ill to the local hospitals by arrangement.


Mr. BEATTIE.: In London there is a very large new barracks and a large room at one end is used for a hospital. I was there for three months some years ago and never saw a patient in the hospital. As to the Winnipeg case, everything depends on the buildings and whether there are rooms suitable for hospital use.


William Humphrey Bennett: In Penetanguishene they have a large asylum with from 250 to 300 inmates but there is no such absurdity as a separate building for use as a hospital. They use a large room in the building. But that is in Ontario where they do things in a business fashion and where the people appreciate such administration.


George Eulas Foster: The minister is also asking $35,000 for another building. That is $50,000 asked for a small depot in Winnipeg of the permanent force. There is today a protest in the country against the extremely large cost of the staff and the permanent force. The cost in my opinion is out of proportion to the value of the force and I think that opinion is general throughout the country. This depot has been there for 20 years, sick men have been taken care of within the barracks and those who are seriously ill in the hospitals. Why should we spend $50,000 at the present time if it can be avoided?


Mr. ARMSTRONG.: I wish to call the attention of the minister to the fact that the temperature in this room is about SO. We spent $20,000 or $25,000 on arrangements whereby we were supposed to have good ventilation in this building and there is no excuse in the world for our not having a comfortable temperature here. Seeing that preparations are under way to keep us here for the rest of the summer I think we have a right to call upon the Minister of Public Works at once to see to the ventilation of this building. Instead of building a hospital in Winnipeg it might be well to build one in connection with parliament. As we have spent, within the last few years

$25,000 for the improvement of the ventilation of this building, we ought not to have a temperature such as we have here to-day There is no excuse for it.


Mr. PORTER.: Has the department any fixed principle upon which these hospitals are to be provided for tha different units of the force ? It seems to me that this is important. The permanent corps of Canada is not going to remain exactly as now ; it must increase as the requirements of the country grow. Would it not be well to have now some recognized principle, for instance, as to whether the hospital provided for each unit is to be isolated from the rest of the accommodation for the troops or is to be a part of and attached to the building occupied by the men. All these details should be worked out in such a way that it will not be possible for one corps to feel that it is not being as well treated, is not being given as good accommodation as any other. Any cause of friction or discontent should be removed wherever possible. Will the minister explain whether any fixed principle has been determined upon in these matters, and, if not, would he not agree with me that it would be more sensible to arrange some principle on which these facilities and accommodations are to be provided in future ?


Frederick William Borden: The question of hospital accommodation. I think, is well understood and has been for many years. The amount of accommodation depends upon the strength of the force. I have no doubt that the permanent force of Canada will be increased as time goes on. That is, the number of depots will be increased as the western country settles up. But, so far as the east .is concerned, I doubt that there will be any additional depots required, and I doubt whether any increase in the strength in these depots will be necessary. So. I fancy it is pretty well understood what hospital accommodation is necessary.
Something has been said about Toronto and Stanley barracks. The property owned by the government there has been sold to the city of Toronto. It is the intention, as soon as possible, to undertake new buildings in that city. Under the plans for the buildings which are now under consideration, and which have been practically completed, hospital accommodation will be afforded in a separate building. In Kingston, it will be necessary, in the near future, to construct an entirely new depot ; the buildings there are unsanitary and unfit for occupation-not absolutely unfit, but undesirable. So far as these places are concerned, it is thought best in the public interest not to change the present hospital accommodation. But, so far as Winnipeg is concerned, there is no reason why the necessary hospital accommodation should Mr. ARMSTRONG.
not be provided now. According to the reports which I have received-and in which 1 have every confidence-from Colonel Evans and the doctor in charge, I think it ought to be done. This vote was passed last session, and we are asking for a revote. The Public Works Department have received from my department an estimate of the accommodation required and of the expenditure involved-$14,500. The vote asked for here is $13,000. The Minister of Public Works has stated that no expenditure will be begun until he has ascertained fully what the cost will be, and has given his pledge that, that if a materially larger expenditure is involved than $14,000, he will not go on. In view of all the facts, I think this vote might fairly go through.


William Humphrey Bennett: On what street is this proposed building ?


William Pugsley: Looking through the memorandum of the Militia Department, I see a statement from the District Officer Commanding. It does not show where the building is, except that it says there is a suitable building quite near the barracks.


Richard Blain: Would the minister read the memorandum ?


William Pugsley: I have read it once, but if hon. gentlemen desire it, I will read it again. There is a memorandum sent in by Colonel Fiset, deputy minister.


George Eulas Foster: What is the date on which Colonel Fiset sends that in?


William Pugsley: There is no date given. It is a memo, from the deputy minister giving what purports to be a report of the District Officer Commanding.
The District Officer Commanding, (Militia District No. 10, when asked to recommend a site, reported non-available in barracks,' or convenient property.
He, however, recommended the purchase of an existing building in a suitable locality, near /Fort Osborne barracks. This is now under consideration.


Edward Guss Porter: When it becomes necessary from time to time to establish a hospital,' there does not seem to be any fixed principle in the department upon which that hospital shall be established. If the building is to be a part of the barracks, then the amount of accommodation will depend altogether upon the amount of space that is desirable. Would it not be better to determine, in the case of every such expenditure, first, whether a hospital shall be built separate and distinct from the rest of the barracks, or whether it shall be a part of the barracks itself ? That seems to be undetermined in this vote.


Frederick William Borden: I thought the principle was thoroughly well understood that a hospital should be a separate

building, if possible, and it should be as nearly as possible to the barracks, on the military ground, but not too much in the way. When I first spoke on this subject I thought we had ground enough ; afterwards I discovered that the District Officer Commanding had stated that we had not ground enough. If that be the case, then, if the building is to be purchased outside of our grounds, it must be adjacent to it.


Frederick Laurence Schaffner: I cannot make up my mind that it is advisable under almost any circumstances to buy an old building for a hospital. The making over of any building is usually very unsatisfactory, and particularly so if you want to make it into a hospital. If we are going to spend money in Winnipeg for a hospital we had better drop the idea of purchasing an old building, but go on and put up a new building, if it is necessary to have a hospital at all. Let us settle to-day that we will not buy an old building infested with microbes. .It is hard enought to get rid of microbes. '


William Humphrey Bennett: You have no vote for land there?


William Pugsley: This amount $14,500 will cover everything. If it does not pay for the land and the whole building, then it will not be proceeded with.


Frederick William Borden: I agree to that.


Frederick Laurence Schaffner: I do not think you will do it in the city of Winnipeg. I prophesy now that you will ask for more money. If it takes $6,000 to buy a vacant lot for a post office site in Dauphin this amount will not buy the land and put up a building in Winnipeg.


William Pugsley: How is it in Boissevain?


Frederick Laurence Schaffner: I guarantee that you can get a site for a post office for one-quarter that amount.
Winnipeg military buildings-quarters for married non-commissioned officers and men, guard room, &c.-Fort Osborne barracks, $35,-
000.


William Pugsley: This vote covers two sets of buildings, one for quarters for noncommissioned officers and men, and the other for a guard room, prison room, squadron lecture room, and so forth. Both buildings will be erected on stone foundations. The total probable cost is $88,000. The contract for the first set of bu ldings is $39,975. The second contract is $25,475.


George Eulas Foster: So that it is proposed to expend about $90,000?


William Pugsley: In that vicinity.


George Eulas Foster: Does the minister press that very great expenditure this year?


William Pugsley: All the contracts are entered into in pursuance of the votes of last year.


Frederick William Borden: The rent roll at present paid to the department at this depot is $600 a month, that is $7,200 a year, for ten houses. We think that the department will be very much better served and there will be an actual economy, because the interest on $90,000 at 4 per cent will only be $3,600 a year.


George William Fowler: You must not forget the cost of maintenance.


Frederick William Borden: We find these men a house and make them an allowance for fuel and light. We will heat and light these houses just as the houses under rental have been heated and lighted. The saving will be the difference between what may be the cost of these buildings and the rent that is paid now.


William Humphrey Bennett: What is the rank of these men for whom you rent houses at $60 a month?


Frederick William Borden: They are non-commissioned officers. The rent is $30 a month, and some of the houses are rented for $20.


William Humphrey Bennett: Six hundred dollars a month for ten houses would be $60 a month.


Frederick William Borden: I will look at these figures again.


William Pugsley: I have a memorandum from the district officer commanding, who says that this building will pay for itself in about ten years.


George William Fowler: That is an awful amount of money to accommodate tten families. It is practically $9,000 a family.


William Pugsley: It will accommodate more than ten families. The second building is to contain the guard room, the prisoners' room and the quartermaster's room.


George William Fowler: Have they not these buildings now?


William Pugsley: I presume so.


George William Fowler: What have they been doing in past years without these buildings?


Frederick William Borden: I wish to make a correction in my statement as to the rental. The rental is $3,240. The statement was made up incorrectly for me.


George William Fowler: You do not have many desertions among these officers who have these palatial mansions to live in ?


Frederick William Borden: They do not desert in winter time.


William Pugsley: I have also a memorandum which says that the old guard room at

the present time in use is one of the old huts erected in 1870, 37 years ago, when there was nothing but Fort Garry existing, a building which was constructed of logs. It also says that the cells of the prisoners' room open into the guard room, and that prisoners cannot be isolated. It also says that on account of the dampness it was found necessary to move the quartermaster's stores from B block to 'A block, and that the conditions are unsanitary and un-liealthful.


Mr. PERLEY.: I notice at page V-63 of the Auditor General's Report:
Quarters for non-commissioned officers, including guard rooms, &c.
And it says that a contract was given for ' building complete,' at $2,600.


William Pugsley: When was that?


George Halsey Perley: Last year's report.


William Pugsley: That is a mistake.


George Eulas Foster: Has it reference to this $26,000?


William Pugsley: The contract is actually $25,000 for the guard room, and for the officers' quarters it is $39,000.


George Halsey Perley: The Minister of Militia states that the rents came to $3,240.


Frederick William Borden: I was going to add a further amount of $1,200. The total amount is $4,440.


George Halsey Perley: For how many houses?


Frederick William Borden: Twelve,
two of which are officers' houses.


George Halsey Perley: The minister has it right now ?


Frederick William Borden: That is
right.


George Halsey Perley: If that is the case I would like to ask how, with an expenditure of $90,000, he expects to save any money in the rentals, even basing the calculation at 4 per cent? There will be the necessary incidental expenses, and I am sure that as a householder the hon. gentleman knows that there are always some landlord's repairs that have to be done, and if he puts all these items in, I would like to know how he expects to save money by this expenditure?


Frederick William Borden: The saving is not as large as I supposed it was, but the expenditure to the country will not be increased, and the advantage will be very great indeed to the force. At 4 per cent there would be an annual charge of $3,600 as against the present rental of $4,440.


George Halsey Perley: Does the department pay the insurance on the buildings now?


Mr TUGSLEY.: 


Frederick William Borden: I do not
know.


George Halsey Perley: While the government does not carry any insurance, it is necessary that an allowance should be made for insurance, because the risk is there in case of fire. There is the wear and tear to the buildings, the repairs to keep them in a proper condition, and the minister must acknowledge that by the time all these charges are paid the buildings are going to cost the country more than the present rental.


Frederick William Borden: The comfort and satisfaction will be very great, and the discipline will be improved thereby.


George Halsey Perley: The argument used by the hon. gentleman was that he was going to save money for the country and now he acknowledges that that argument of his falls to the ground.


George Eulas Foster: It looks to me as an outrageous expenditure, and I do not use that term without thinking what it means. At this particular juncture in the affairs of our country it requires a pretty bold man in our Militia Department to ask for an expenditure of over $100,000 for a squad of 100 men in Winnipeg. The Minister of Miiltia now admits that we will not saVe money by the transaction. He is unwarranted in counting interest at 4 per cent because he will find it will not cost him much less than 10 per cent for all incidentals, depreciation, and everything of that kind. He will be paying 10 per cent on $90,000, or including the hospital $104 000, so that you are spending $1,000 on capital account for each man you have in that squad at Winnipeg. Taking as fair a forecast of the conditions as you can and considering all the expenditures to which you are obligated already there is yawning in the face of the government a deficit of between $25,000,000 and $35,000,000 this year, and you have got to go on the market and borrow it. In Heaven's name cannot we avoid spending $90,000 here and $90,000 there at such a' time as this ? It surprises me that these enormous expenditures are persisted in when the country wants economy.


William Pugsley: Parliament voted the money for these buildings last session, tenders were called for and a contract entered into, the work is going on and the contractor must be paid.


Robert Laird Borden: What were the tenders ?


William Pugsley: For the first building the contract price was $39,975. not including heating, &c., and for the second building the contract price was $25,475 which does not include the heating, &e. The lowest tenders were accepted.


George Eulas Foster: What is the space in the guard room ?
Mr. PUGSLEY It is a two story brick building 80 feet by 31 feet, in addition to an L.


Mr. HENDERSON.: How many guards will that hold ?


William Pugsley: I think the District Officer Commanding is wrong in saying the buildings will pay for themselevs in ten years. Eight officers will be accommodated in this building who are now allowed, $800 a year each for living outside, and that gives $0,400. The interest on the .investment would not exceed $3,600, so that you have quite a margin.


Robert Laird Borden: But you still have to pay fuel and light.


George Halsey Perley: The Minister of Militia says he was in error in saying $6,400 ; he now says it is only $4,440. They had better arrage between them as to which is correct.


William Pugsley: While I quite agree that the government and parliament should be prudent in expenditure, I deny that the state of the money market could be any ground for the government delaying its obligations where the construction of public buildings has been entered on. I also deny that it is a time when the government' should refuse to go on with the construction of public works which are in the interest of the people of this country. Except that the interest rafe is higher now than it was formerly, I deny that money cannot be obtained by the issue of ordinary securities. Only a short time ago the Pennsylvania Railway Company asked for a $40,000,000 loan on their debentures and .they received offers for $1,000,000,000. The rate of interest is higher than it was a couple of years ago because there are other classes of securities than government securities which investors are beginning to regard as safe, but outside of the interest I do not think there ever was a better time to obtain money than at present. The interest is reasonably high for permanent loans. The Pennsylvania loan was 4 per cent.


Richard Blain: I draw the attention of the minister to the fact that a vote of $6,000 was taken for these buildings in 1906. The hon. minister has made the price very high. I will read what the Minister of Public Works at that time, Mr. Hyman, stated :
This is not commenced. The Militia and Defence Department desire to build quarters for the married non-commissioned officers of A squadron of the permanent force, which will cost in the neighbourhood of $40,000; a guard room, prisoners' room, lecture room, &c., at a cost of $22,000; and a stores building at a cost of $4,000, making a total of $66,000. These will be built on government property.
Now, my hon. friend states that these will cost upwards of $90,000.


William Pugsley: The minister was within the mark, so far as the cost of the building is concerned. The addition is for furnishings and fittings.


George Eulas Foster: What is a guard room for?	*


Frederick William Borden: The chief purpose of a guard room is to confine men temporarily who have been disobedient or have violated the rules.


George Eulas Foster: You build a guard room 82 feet by 31 feet for a squad of 100 men, more or less. The cost of the building, without anything else is $25,000, to furnish a place where you may keep safely an occasional disorderly soldier.


Frederick William Borden: Besides the guard room, there are to be temporary offices, a prisoners' room, district officer's offices, and orderly room, a clerks' room and a store room. This new building was recommended by the district officer commanding.


George Eulas Foster: There is no reason why all that could not be provided for $10,000.


George Halsey Perley: May I ask the date of that report of Colonel Evans?


Frederick William Borden: This is simply a memorandum prepared for me by the deputy minister, and it has no date. It was prepared during the present session, but I fancy that this communication was over a year ago, before the first estimates were brought down.
Mr. PERLEY- I would like again to refer to the item on page Y-63 of the Auditor General's Report-' Winnipeg military buildings: quarters for non-commissioned officers, including guard rooms, &c., J. & J. McDiarmid Company, contract for building complete, $2,600.' The minister said this must be a mistake, but it cannot be, because the item is carried over to the total on page V-4.


William Pugsley: It is clearly a mistake. That would be simply a payment made on account, because the amount of the contract of McDiarmid & Company is $25,475.
Brandon drill hall, $20,000.


William Pugsley: I promised to give the hon. member for Leeds and Grenville the total amount of the progress estimates to date. They amount to $37,637, less 10 per cent drawback, $3,763, leaving a balance of $33,874, of which $23,010 has been paid to date, leaving a balance due of $10,864.


George William Fowler: How large is the site ?


William Pugsley: 215 feet by 110 feet.


William James Roche: What did it cost?


William Pugsley: 

Barracks for permanent corps-Strathcona Horse, $40,000.


William Pugsley: It is intended to erect a barracks for the Strathcona Horse ? This is a revote.


George William Fowler: Where is it located ?


William Pugsley: It is not located.


Frederick William Borden: It has been in the estimate for 3 or 4 years. The idea was to preserve the name and perpetuate the fame of the Strathcona Horse, a very desirable object in which the whole House agreed on every occasion when I brought the matter up. The difficulty has been to locate the Strathcona Horse, and I must confess I have not been able to do so yet. I believe it has now come down to a choice between Calgary and Medicine Hat. A report was made by a military board some years ago as to the proper place, from a military stanpoint, for the location of this force with a view to its utilization for purposes of traiuing. As the committee knows, the chief business of the permanent force is to educate the officers and non-commissioned officers in the active militia. The desire is to have the corps conveniently situated so that advantage can be taken of it by the active militia throughout the new provinces. I hope that in the next few weeks the question will be determined.


George William Fowler: What does the board say ?


Frederick William Borden: The board says either Calgary or Medicine Hat. From a military point of view hither would accommodate the active militia and strategically either place would be equally good.


George William Fowler: Have you a permanent force called the Strathcona Horse ?


Frederick William Borden: Only the nucleus. WTe have created a new military district and placed it under the command of Colonel Steele, who is quartered at Calgary at present with a small staff. He is doing good work there and is eminently qualified to do the work required there. He was the commanding officer of the Strathcona Horse, as the committee will remember. Lord Strathcona was consulted about this very matter and as to the officers. We thought it right to pay him the compliment, as the corps was named after him and in view of all he had done in connection with it, of asking him for his views with regard to it, and while he did not insist on anything he was very much pleased indeed to think we were going to select as many as possible of the officers who served with the corps in South Africa.


William Pugsley: 


Richard Stuart Lake: Are they to be mounted rifles ?


Frederick William Borden: Yes, they are to be mounted rifles.


Mr. KNOWLES.: In connection with the selection of the site I wish to put it on. record that in my opinion there can be nodebate or hesitation as to the choice between Calgary and Medicine Hat. The first essential is that the site should be central. . The minister has explained that this is for the use of the three great prairie provinces and we all know that Calgary is on the extreme western frontier. As between Medicine Hat and Calgary there can be no doubt that Medicine Hat is the more central. More than that, Medicine Hat has in view a very suitable location across the Saskatchewan river and within a few mouths there will be opened for traffic a bridge across the river at this point. While no suitable grounds are in view at Calgary, I submit there is a much stronger case in favour of Medicine Hat.


Richard Stuart Lake: It might be a question which is the most central point for the corps likely to be raised in that country. Calgary would be most suitable for the corps situated north of Calgary. Perhaps the minister could say where the corps likely to send officers and non-commissioned officers for instruction are chiefly situated. Where are the headquarters of those at present in Alberta ?


Frederick William Borden: In the two provinces there are the Alberta Rangers, regimental headquarters, McLeod ; Saskatchewan Light Horse, A squadron, Saskatchewan, B, Lloydminster ; Independent squadrons; Alberta Mounted Rifles, regimental headquarters Edmonton ; A and D siquadrons, Edmonton, B, Strathcona, C, Fort Saskatchewan ; 16th Mounted Rifles regimental headquarters, Regina, A squadron, Moosomin, B, Moosejaw, C, Regina, D, Grenfell ; 15th Light Horse, regimental headquarters, Calgary, A and D squadrons, Calgary, B, Cochrane, C, High River.


Richard Stuart Lake: At present there is no mounted corps at Medicine Hat. The minister ought certainly to consider the convenience of the corps at present organized in that country and those likely to be organized in the future. The minister, I presume, must also consider the advantage of having the headquarters in a large centre where it is a good thing to' foster the military spirit. I hope the minister will take all these matters into consideration and will weigh the merits of either place before he comes to a decision.


Frederick William Borden: I am glad to have the views otf my hon. friend and of all the hon. members who represent the

western provinces. In justice to Medicine Hat, I should say that I overlooked one corps, Independent Squadron D, headquarters at Medicine Hat.


Mr. TURRIFF.: I would point out that over half of the corps whose names have been read out by the minister are at present more convenient to Medicine Hat than to Calgary. Moreover, the bulk 'of the future population of those provinces will be more convenient to Medicine Hat than to Calgary. It does not make much difference as to distance, because in either case the militia would have to take the train to go there. It is only a matter of a few miles difference. But so far as the centre of the bulk of the population is concerned Medicine Hat is rather more so than Calgary.


George William Fowler: Will this be for the benefit of the three provinces ?


Frederick William Borden: We have a cavalry school at Winnipeg now.


George William Fowler: You have no infantry in Alberta and Saskatchewan ?


Frederick William Borden: I think there is one regiment being organized in Alberta at or near Edmonton, and there is a regiment in Manitoba.


Richard Stuart Lake: I agree with the hon. member for Assiniboia (Mr. Turriff) that it does not make much difference which place you choose, as the matter of distance would be about equal. But you ought to have an attractive place where the officers and noncommissioned officers will be tempted to go.


Richard Blain: When may we expect that a decision will be come to with reference to the location ?


Frederick William Borden: I have been waiting for advice and assistance in this matter, it may be settled at any moment. So far as I am concerned, I have an open mind. I hope it will be settled during the present year. I may say with regard to the active militia to be accommodated, that portions of British Columbia have to be considered as well as these two new provinces, because no doubt the school, where-ever it is established, will be utilized to some extent by the militia of the eastern part of British Columbia.
Mr. IfOWLER. What quantity of land is it proposed to acquire ?


Frederick William Borden: I believe there is no difficulty whatever about the land, whether we locate at Calgary or at Medicine Hat. There is a large quantity of land in both places owned by the Northwest Mounted Police, and which is available.


George William Fowler: When you say a large quantity, how much do you mean ?
348*


Frederick William Borden: We ought
to have fifty acres or a hundred acres, fifty would do pretty well.


George William Fowler: I think two hundred would be even better, because it would be used as a drill ground and for tactical movements. You cannot have too much.


Frederick William Borden: I do not remember the exact amount, but I am told there is plenty of land available at either of these places.


George Halsey Perley: As the hon. member for Calgary (Mr. McCarthy) is not here, I think this item ought to stand. We want to get some information from him as to what is likely to be the total cost of this land.


Frederick William Borden: Let the item be carried now, and we will give him a chance of discussing it later on.
At six o'clock, committee took recess.
After Recess.
Committee resumed at eight o'clock.


George Taylor: Mr. Chairman, before we proceed with the discussion of the items of Supply, there is another matter which I wish to mention, and I will do it in a moment while a quorum is gathering-there is not a quorum here at present. I am glad to see the Minister of Public Works (Mr. Pugsley) in his place. I would ask him if, when he came into this Chamber from the corridor, he did not notice how, in contrast with the air there, the air in the Chamber was foul? I believe a large amount of money was spent a few years ago to try to improve the ventilation of this room. But, in my opinion, the steps then taken were not so effectual as would be the mere opening of these upper windows to admit fresh air and let the foul air escape. The air here is something awful, as you come out of the corridor. I mentioned it to two or three members and they feel about it as I do. I would urge the minister to give instructions to have the windows opened, and let us have fresh air from outside.


William Pugsley: I have spoken to the chief architect with regard to the ventilation, and he says that the opening of the upper windows would interfere with the circulation of air which comes in from below, and make the situation worse than it is.


George Taylor: The same statement was made two or three years ago, but some of us insisted that the windows should be opened and after it was done, all agreed that it was a great improvement.


William Pugsley: The chief architect tells me that he cannot make the change to-

night, but he will try on Monday and see If it does good.


William Findlay Maclean: I would ask the Minister of Public Works to consider the idea of a roof-garden in connection with this House, or a pavilion on the lawn. If we are to have summer sessions, we could be much more comfortable in a pavilion.


William Pugsley: Would the hon. gentleman (Mr. W. F. Maclean) suggest that we should hold our session in the roof garden?


William Findlay Maclean: Certainly. Some kind of canopy or awning could be provided making an ideal chamber in weather of this kind, particularly as compared with this.


Mr.  M. S.@: McCarthy. Mr. Chairman, before six o'clock, the item under discussion was the vote for the barracks for the Strathcona Horse. This item is not a new one. There has been an item in the estimates for this purpose ever since I have been in this House, and I do not know how many years before. I understand that the only thing preventing the building of the barracks, which is greatly needed, is that certain representations have been made to the Minister of Militia as to the point at which the barracks should be built. I have repeatedly made representations both in this House and out of it to the Minister of Militia and the officers of the Militia Department regarding the suitability of the city of Calgary for such purpose. I do not propose to take up the time of the House repeating in detail what those representations were, for the simple reason that some three years ago the Minister of Militia and a number of his officers went through the western country for the purpose of satisfying themselves where this barracks should be established. There can be absolutely no doubt in the mind of any man as to the proper place for the barracks, and that proper place is the city of Calgary.
Mr, GRAHAM. Hear, hear.


Mr.  M. S.@: McCarthy. I am glad to find that I have one of the members of the government, the Minister of Railways and Canals, to agree with me in this matter. The officers of the department are quite able to satisfy their own minds as to this point. Though the matter was investigated some three years ago, for some reason the construction of the building has been delayed-what the reason may be I do not know. There are many reasons which combine to make the city of Calgary a most desirable point. In the first place, it is the best place for recruiting men; it is centrally located to recruit men from Alberta, British Columbia and the western part of Saskatchewan. It is also the best place for recruiting horses. There is more interest taken in military matters In the Mr. PUGSLEY.
city of Calgary than in any other place in the middle west. The city of Calgary is the largest city between Winnipeg and Vancouver. From what I could gather from the representations made here this afternoon, it was suggested by the members for East and West Assiniboia that Calgary might be an inconvenient point for young men from Saskatchewan who wanted to recruit. But, Mr. Chairman, they have a barracks in Winnipeg, and if you look at the map you will see that Winnipeg would be more desirable to the eastern part of Saskatchewan than Medicine Hat would be-against which latter place I have nothing to say-but, naturally, these men would go to the city of Winnipeg rather than to Medicine Hat because, as I understand it, that section is in the Winnipeg military district at the present time. Further consulting the map, the minister will see that young men who desire to attend the barracks from north of Calgary-from Edmonton and all the places south of Edmonton-if required to go to Medicine Hat, would have to pass through the city of Calgary to reach their destination. The reason Edmonton was chosen as the capital of the province of Alberta, I understand, was that it was said to be the centre of the province by the Prime Minister. Now, Calgary is 190 miles south of Edmonton. So, the men from the alleged central part of Alberta would have to pass through Calgary and go 380 miles east to Medicine Hat; the same argument applies in the case of those coming from British Columbia. I have already said that there is no place in the west that has taken a greater interest in matters military than the city of Calgary. For some years a number of the citizens there kept up a drili hall at their own expense. According to the Dominion census of 1896, not only is Calgary the largest city between Winnipeg and Vancouver, but without its suburbs it has a population 9,000 greater than that of Medicine Hat. For all these reasons, I submit there can be no good ground for taking away this barracks, which, it is generally understood, was to be established at Calgary. Colonel Steele is there and camp is now being held at Calgary. It was held there last year because it was the most convenient place and the place where all the men who take an interest in military matters prefer to go to attend camp. I hope the minister will see to it that justice is done. Though Calgary is the largest city between Winnipeg and Vancouver, practically no public money has been spent there since 1896 by the Laurier administration, except for some improvements on the post office. I warn the minister not to continue that policy of discrimination as it cuts both ways, but to deal with the city of Calgary justly and fairly. I have no doubt as to the determination he will come to if re will consult

with the officers of the Militia Department who visited that country three years ago.


William Pugsley: I need only say that the location of this barracks will, of course, rest with my colleague the Minister of Militia (Sir Frederick Borden). He is not present at this moment, but I feel sure that I can say for him that he will weigh most carefully the respective advantages of Calgary and Medicine Hat and will arrive at such a decision as he believes in the public interest.
Public Works, chargeable to income-rents, repairs, furniture, heating, &c.-'Ottawa public buildings including repairs, ventilation, lighting, furniture, &c., $175,000.


William Pugsley: This vote is for the purpose of carrying on the improvements and repairs and the purchase of furniture, fittings and other supplies which are found to be necessary from time to time to maintain the public buildings in the city of Ottawa in a proper state of efficiency to meet the requirements of the public service. These works are mainly performed by the mechanics and labourers of the Department of Public Works and are under the direct supervision of the officers of that department. The amount is exactly the same as that voted last year.


Thomas Simpson Sproule: Was it all expended ?


William Pugsley: X think it was all expended.


Richard Blain: Perhaps the minister would specify how much of this was for ventilation, how much for lighting and how much for furniture.


William Pugsley: It is impossible to give my hon. friend that information. It is estimated that for wages there will be required $96,141.10 ; staff, mechanics and engineers, about $29,910 ; purchase of materials, $48,948.90, making the total required $175,000.
Rents, Dominion public buildings, $133,000.


William Pugsley: This is to pay the rent of buildings occupied by the government in the city of Ottawa and throughout the Dominion. The appropriation last year was the same.


Richard Blain: What amount is paid in Ottawa ?


William Pugsley: 


William Findlay Maclean: How much in Toronto ?


William Pugsley: I should think about. $7,000.


Thomas Simpson Sproule: Have you rented any other buildings in Ottawa since last year ?


William Pugsley: We have rented the other half of the Canadian building, the
Seybold building for customs purposes and a portion of the Trafalgar building for the Department of the Interior. Since I have been minister I have been pressed very much by different departments to give them additional accommodation, among others the Department of the Interior, the penitentiary branch, the Department of Customs and I have endeavoured to meet their requirements. As hon. gentlemen are aware parliament has approved of the erection of an additional departmental building, but the construction has not yet commenced and in the meantime we .are obliged to rent accommodation.


William Findlay Maclean: Is any headway being made with the new building ?


William Pugsley: Nothing beyond acquiring the property. We have put in the estimates $250,000 and it is not impossible that during recess we may take action towards the erection of a building, but as to that,
1 cannot say.


George William Fowler: You will not have time ; the elections will be on.


William Pugsley: Are they coming on ?
I thank my hon. friend for the information.


Richard Blain: How much is being paid for the Seybold building ?


William Pugsley: 


Richard Blain: Who does the repairing ? Mr. PUGSLEY. The department.


Richard Blain: What is the estimated cost of these repairs ?


William Pugsley: The work is being done by the staff of the department and I suppose the cost will run up to perhaps $5,000.
Mr.-FOWLER. What happens to the rents of those properties on Mackenzie avenue which have been acquired by the government ?


William Pugsley: The rents are being collected by the department.


George William Fowler: What income did the department receive from rents last year 1


William Pugsley: About $6,000. Some of the buildings have been pulled down.


George William Fowler: Do you rent the church ?


William Pugsley: We are not getting a rental from the church.


George William Fowler: I should hope not.


Richard Blain: There are some few private owners who asked what we thought was a higher price than the government ought to pay for their properties. The department took the necessary steps to expropriate and then the payments filed in the ordinary way, their petitions of right to be paid compensation to be determined by the Exchequer court.


Thomas Simpson Sproule: How much do you pay for the other half of the Canadian building ?
Mr. PUGSIjEY. The total amount is $12,539.60. For the additional half we pay $15,209.60.


George William Fowler: That is a large rent for one building.


William Pugsley: It is only 41 cents per superficial foot which is regarded as a low rental in Ottawa.


Mr. STAPLES.: What is the extent of the property that the government purchased for the new building which they intend erecting?


William Pugsley: It is a very large area, taking in the church on Sussex street and Mackenzie avenue and extending down to the Mint.


William D. Staples: Does it take the Lindsay building?


William Pugsley: No. The purchase of the Lindsay building is under consideration, but it would cost pretty nearly as much as all the rest of the property, and we did not think it was necessary to have it, or that we would be justified in paying a large sum for it.


David Henderson: Has the staff of the Customs Department been so much increased in the past year that it is necessary to get accommodation in the Seybold block?


William Pugsley: That is for the Ottawa Custom-house, outside service. It formerly was near the Rideau Club, and we have removed it and put the Penitentiary branch in its place.


David Henderson: Is the Penitentiary branch so large that you require a separate building outside of the East Block?


William Pugsley: We have had constant and pressing demands from the Justice Department for further accommodation.


David Henderson: There seems to bfc great extravagance and waste in connection with these things.


William Pugsley: The accommodation in the East Block is very limited as compared with the number of occupants.


Mr. URIAH WILSON.: Some of the offices in the Auditor General's Department are very small ; are you giving him more room?


William Pugsley: We have given the Auditor General's Department some rooms In the Canadian building.


Uriah Wilson: It is very inconvenient to separate these branches of different departments and give them offices Mr. BLAIN.
in different parts of the city. They should be kept together as much as possible.


William Pugsley: I agree with that, and we have endeavoured to arrange it with that end in view.


Uriah Wilson: Would it not be better to remove one entire department to another building rather than to separate branches of the same department?


William Pugsley: The heads of the de partments prefer the arrangement we have made.


William Findlay Maclean: Has the Minister of Public Works ever directed his attention to the erection of modern administrative buildings similar, for example, to' the Traders' Bank building in Toronto, which occupies a comparatively small lot of land, but in which 1,500 people can be accommodated? There is a new kind of architecture that they call the administrative building, which, at comparatively small cost, gives abundance of light and space. There is no striving for architectural effect, but the architects strive to apply modern experience to the office accommodation which the building should afford. It is high time for our Department of Public Works to abandon the old idea of architectural effect and come nearer to the modern idea. In Washington they are coming to adopt this style of building, and it is well worthy the consideration of the government here. I would like to see an experiment made with an administrative building of that kind in the city of Ottawa.


William Pugsley: Twenty-two stories ?


William Findlay Maclean: Yes, if you like ; the new municipal building in New York is to be thirty stories.


William Pugsley: In the construction of the new post office at Montreal we are not paying so much attention to architectural effect as to affording ample light and space and accommodation. I doubt very much if the public would approve of erecting these huge sky scrapers in the capital city of Ottawa, where the laud is somewhat abundant and where the general desire seems to be to have ample ground in connection with all buildings. I think it would be a mistake to erect these very high buildings in Ottawa.


William Findlay Maclean: I am not advocating sky scrapers, but I am advocating buildings of several stories, which would give plenty of space and light. If you had a six-story building here you would marvel at the accommodation you would get.


George William Fowler: I cannot agree with my hon. friend from South York with regard to public buildings. While attention should be paid to utility in erecting these public buildings, attention should also be paid to

architectural beauty as well. There Is no reason why these buildings should not be architecturally beautiful as well as in the highest sense useful. With regard to providing office room for the public service, that is a matter the government seems to have neglected very much, and it should be taken up at once. It does not seem to me to be right that the civil service should be scattered ail over the city in .buildings in most cases entirely unsuitable for the purpose, and the government should enter on a large scheme of providing suitable office buildings. It is not well for the service that too many clerks should be congregated together in one room. They certainly cannot and do not perform their duties as well as they would if they were separated more. They get talking together about the last tennis game when they should be attending to their public duties. I believe you could do with fewer public servants if they were provided with proper offices.


William Pugsley: I am quite in accord with the idea the hon. member has just expressed, and the government, recognizing it, has engaged to construct new departmental *buildings with a view to properly housing the public officials ; but we are obliged to rent these buildings temporarily until the new-buildings are completed. It must be home in mind that in addition to the cost of the land, which is considerable, these buildings, which are to include accommodation for the various departments now needing it and also a palace of justice for the Supreme Court, will cost a very large sum- in the vicinity of $4,000,000. Considering the financial condition which came upon this country as well as upon other countries of the world last fall, we thought it was not desirable then to enter upon the work of building. We thought we might acquire the land and get our title completed, and during this season complete the plans and specifications as well as call for tenders for the work, but not engage vigorously in the work of construction perhaps until next year. A vote of $250,000 for the work has already been passed, and it is not unlikely that we may take the necessary steps to complete the plans and specifications and call for tenders for the work.


Richard Blain: Has the minister a lease of the Seybold block ?


William Pugsley: Yes, a lease for five years.


Richard Blain: Are there taxes upon the property, and if so, what are they ?


William Pugsley: We pay the taxes. They are $2,000.


Richard Blain: That makes a little over $8,000, besides $5,000 for fitting up.


William Pugsley: Yes, but that expenditure would be for the five years, and we have the right of renewal.


Richard Blain: What is the value of the property ?


William Pugsley: It is a five story building. I suppose the building and land would be worth $60,000 or $70,000, perhaps $100,000.


Richard Blain: Is it the intention to occupy all the five stories ?


William Pugsley: We have the five stories available if we need them all, but at present we allow the Customs Department to occupy two floors. With regard to taxes,
I may say that an Act of the Ontario legislature provides for the taxation of buildings which are rented by the government.
I would not be disposed myself to raise any question with regard to that, because it seems to me that it would be a great hardship on the city of Ottawa that a private building that would pay taxes if rented by a private individual would escape taxation when rented to the government. My own view would be that, unless there was something exceptional in the law, the property would be taxable, because the assessment would be against the owner, and I do not see why he should escape taxation simply because the property is occupied by the Crown. The owner will just add the amount of the taxes to the rental.


George Taylor: What amount of public improvements were made on the Seybold building ?


William Pugsley: The improvements will be made by the men regularly employed by the department. I am not able to state exactly what they will cost, but probably in the vicinity of $5,000, for altering the partitions and putting in counters and fittings.


George Taylor: And an elevator ?


William Pugsley: There is an elevator in the building, put in by the owner.


George Taylor: 
William Pugsley: Those who are on the monthly list are allowed two weeks each year, and they may select their own time, provided their services are not urgently required, and if they are off for a day or two, the time is counted against their two weeks.


George Taylor: I put another question as follows :
1.	Is Mr. Arthur Caron in the employ of the Department of Public Works as a subordinate to M. Paul Reinhardt ? If so, what was he employed at on the 8th of June, 1908?
2.	Is Octave Thiberge also in same employ? If so, what was he employed at on the same day?


William Pugsley: Arthur Caron and Hubert Theberge (not Octave Thiberge) are employed under Mr. Reinhardt, on the carpenters' staff of the Public Works Department. Neither of these men reported for duty on June 8.
I want to read to the hon. minister some correspondence which I have received in reference to these gentlemen :
Dear Mr. Taylor,-You may interest a lot of local people, particularly in Hull, by putting a question in the House in order to find out why it is that ever since 1896, one Paul Reinhardt, a French Canadian of Hull, who is superintendent of the Public Works Department's shop on Wellington street, Ottawa. has been allowed to take the government time to meddle actively and offensively in every election, municipal, provincial and federal, in favour of Grit candidates? He was appointed by the Liberals in 1896. Moreover, he brings his squad of subordinates from the shops and places them in the polls to represent his candidates. That is what he is doing again in Hull to-day, and it is and has been a scandal for Hull for twelve years now. You had better have an inquiry made also of how it came about that his brother's house in Hull was partly built by the shop's staff and with the shop's stuff.
This is followed by another letter:
Hull, June 10, 1908.
Dear Mr. Taylor,-Following my first letter,
I must not say that the man Reinhardt was head canvasser for Gendron. His subordinate at the government shop, Mr. Arthur Caron, was deputy returning officer in a poll on Victoria ^ street in Hull. The Hull men on his staff in Ottawa and who partook in the election are Octave Theberge, and a half dozen others. Now this has been going on, I say, for twelve years at every election, mind you every election, municipal, provincial and federal.
Yours truly.
He then wrote :
Hull, June 12, 1908.
Dear Mr. Taylor,-All of that Hull crew of Reinhardt worked in Hull all the week previous to the election, that is from first to eighth of June. Moreover, one Remillard, and one, Thomas Caron, of Hull, two elevator men in the Post Office Department, took the week Mr TAYLOR.
here for the same purpose. You want to look out whether they'll be paid for that.
All Reinhardt's staff, six from Hull, worked here for eight days.
The last letter reads :
Hull, June 15, 1908.
Dear Mr. Taylor,-It appears that this Reinhardt affair is a preconcerted scheme. They have right to holidays and are paid for it. So they all took their holidays at once, they will get paid for it and they came to work here eight days earning the money that other political workers would have been glad to earn.
You might also inquire what became of Mr. Tarte s boat-house, worth $400, which used to be anchored at government $50,000 dock here, whether one Tom Caldwell borrowed it and is nowhere to be found, or who bought it and how much was paid for it. Also who is allowed to store boats, launches, &c., in that dock.
There is a state of affairs that is true and I think it my duty to bring it to the attention of the minister.


William Pugsley: By whom is it signed ? Mr. TAYLOR. It is not signed.


William Pugsley: Mr. Chairman, I would ask my hon. friend whether he thinks it fair that he, as a member of parliament, having no knowledge of the truth of these matters himself, should read in parliament an anonymous letter, a letter to which the writer is ashamed or afraid to put his signature, and have these charges against employees of the department spread upon the record.


George Taylor: I give this as information coming to me, apd I believe from the minister's answers to the questions I asked that these statements are true. Reinhardt was there for a week and the minister said he was on his holidays. The other man was deputy returning officer, an employee paid by the government and he was, allowed to go there and take part in thei election. If this is so, the minister should dismiss the whole staff. I believe the information is correct.


William Pugsley: What knowledge have you that warrants you in believing it is true ?


George Taylor: I have some knowledge outside of that. The gentleman told me he would send the facts, I know the party who sent it.


William Pugsley: What is his name ?


George Taylor: That is a private matter.
I want to give the information and let the minister investigate it because I do not think the country has a right to pay these men for holidays when they are taking part in elections This man is a civil servant drawing $85 a month and he should not be taking part in elections. Reinhardt was the head pusher for Gendron' and one of

the others was deputy returning officer. It is the minister's duty to parliament and to the country to investigate and if these statements are true dismiss the men, one and all.


William Pugsley: I think it is the duty of the man who gave the information to my hon. friend if he knows, as he states, that the house of a brother of Reinhardt has been built by the Public "Works staff out of material belonging to the Public Works Department, to go before a magistrate and lay an information.


George Taylor: I shall give the minister the gentleman's name privately.


William Pugsley: That was the man's duty and it was the duty of my horn friend instead of reading the letter in parliament, to have so advised him. When my hon. friend asked the questions the other day I made inquiry and I was informed that so far from its being true that this man's brother had built a house with the labour of members of the Public Works staff and with material from the Public Works Department-


George Taylor: Partly.


William Pugsley: -his brother had not built a house at all. As far as going on holidays is concerned, Reinhardt is foreman of the department and is entitled to two weeks holidays the same as other foremen and superintendents. The time he was away will be charged against his holidays. With regard to the other man, who did not report for duty, it often happens that men employed by the day do not report for duty. The direction I have given is that they shall be docked their pay on the days they are away and these men who were employed by the day and absent on the occasion of which my hon. friend speaks will not be paid by the department for that time.


Richard Blain: Does the minister think it quite proper, keeping in view the policy of the government, that this gentleman, an employee of the government, should act as deputy returning officer in the recent elections ? '


William Pugsley: I see no objection to a man occupying the position of deputy returning officer, it is a non-partisan position.


Richard Blain: My hon. friend surely has forgotten the resolution that was passed by this House unanimously in respect of employees taking an active part in political elections.


William Pugsley: But a deputy returning officer is not supposed to take any part and must not.


Richard Blain: My hon. friend would not venture to state that before the House and ask us to accept it seriously ?


William Pugsley: I certainly would.


Richard Blain: Every one knows that when a man is appointed deputy returning officer he is a supporter of the government, he is an active politician.


William Pugsley: Am I to understand that my hon. friend is confessing that in the recent elections in Ontario the deputy returning officers were partisans and took part in the elections ? That is a new doctrine.


Mr. CARYELL.: In the last election in New Brunswick Conservative after Conservative was appointed. I am surprised the hon. gentleman will confess what his friends were doing in Ontario.


Richard Blain: I never thought my hon. friend would venture to mention New Brunswick again.


William Pugsley: You amaze me by the statement that the deputy returning officer is a partisan.


Frank Broadstreet Carvell: I am surprised to hear my hon. friend make the confession he made here.


Richard Blain: My friend is not at all so innocent as he would like the House to believe. Neither is the minister himself. He is a politician and knows something about politics in his own province. He has taken an active part. Every member of this House knows that while we have party government here, in the main It is friends of the government who are appointed deputy returning officers in every election. How the minister would venture to support a government whose policy it is that no official shall take an active part in the elections and then defend this man acting in this way during his vacation


William Pugsley: In the province from which I come I do not believe there is a single sheriff who would appoint as deputy a man who had taken an active part in the election. They are always careful to get men in whom both sides will have confidence, men who did not take an active part in the elections.


Richard Blain: The hon. gentleman travels entirely outside the lines of the policy of the government of which he is a member when he says that an employee of the government receiving a pretty large salary has the right to take part in a provincial election, such an active part as to be a deputy returning officer.


William Pugsley: The man was a day labourer, and was not paid for the day he was absent.


Richard Blain: That is not the point. The people of this country will not understand that the government is carrying out its declared policy when a member of the cabinet will justify a government employee taking a part in a provincial election, so active a part-I repeat-as to be a deputy returning officer.


William Pugsley: Will the hon. gentleman (Mr. Blain) tell the committee what active part a deputy returning officer takes in an election?


Richard Blain: The hon. gentleman is not so clever as he may think. The hon. gentleman himself is a politician of the partisan kind, or he would not occupy his present position. I do not find fault with party politics; I believe in it and the people of this country believe in it.' There is no use in the hon. gentleman pretending that a deputy returning officer is not a partisan; everybody knows he is. Yet the minister justifies a civil servant in taking an active part in politics and accepting the position of deputy returning officer. The people of this country will note with interest what the minister has said, in contrast with the declaration of the Prime Minister that, while civil servants have the right to vote, they shall not take an active part in an election.


William Pugsley: As I have stated, the man who acted as deputy returning officer, as the hon. gentleman says, was employed by the day; he could come to-day and stay away to-morrow. On the day he did not report for duty he was not paid by the department. I am not prepared to say that there is any objection in an employee of the government, a day labourer, on the day when he is not under pay of the department, acting as a deputy returning officer. The hon. gentleman puts it that I have countenanced employees of the department taking an active part in politics and acting as deputy returning officers. I said nothing of that kind. I declared with the utmost sincerity that I did not look upon the position of deputy returning officer as that of a partisan. I do not think he ought to show any interest in an election one way or the other. And, if the sheriff does his duty, he will not appoint any man as deputy returning officer except one who, he believes, will be impartial as between the parties. My hon. friend (Mr. Blain) must have had an experience different from that of those of us who come from a different part of the Dominion. I am surprised to hear that in the province of Ontario the position of deputy returning officer is regarded-as, judging from his statements, it appears to be-as a partisan position and one which is properly filled by a partisan. I am surprised to hear him say that the man who takes the position as a deputy returning officer is assumed, from Mr. PUGSLEY.
that very fact, to be taking an active part in politics. The only way he could take an active part would be by seeking in some way by his action on the day of election to secure the return of the candidate of the party who had chosen him for the position. I do not believe that the premier of Ontario would subscribe to the doctrine which the hon. gentleman puts forward. I do not look upon the position of deputy returning officer as a partisan position. He is like a judge; he is supposed to be impartial


Frank Broadstreet Carvell: He takes an oath to be impartial.


William Pugsley: Yes, and he violates his oath of office if he acts in any except the most impartial manner.


Mr. TELFORD.: The returning officers in Ontario are the sheriffs and registrars, most of whom have been appointed by the Liberal party. These men might be accused of partisanship just as much as the deputy returning officer. I have never heard any complaint made against the appointment of sheriffs and registrars to the position of returning officers, and I see no reason why there should be any objection against deputy returning officers being appointed from the ranks of public officers.


Mr. AYERY.: Just to show what partisanship does in the province of Ontario, I may say that this government appointed a returning officer in my county. I asked to get rid of this man Hawkeye and he refused. And this was the man who afterwards handled the bogus ballots and had the trick ballot box. The government has done nothing to stop him. He is running about the country and has been here in this city. I think the government should look after such men.


Richard Blain: I was glad to hear the few remarks of my hon. friend from North Grey (Mr. Telford), because he is a well-known politician in the northern part of Ontario. I think I should read him something that is right up to date for his information and the information of the House, as the discussion has broadened out a little. I have here a copy of a letter that the hon. gentleman wrote to the Toronto ' Globe ' recently:
I would feel obliged if you would send me samples of the ' Weekly Globe and Canada Parmer/ each week for members whom I am trying to do with as I have done. I believe that few of the members see the ' Weekly Globe and Canada Parmer/ and consequently do not know its value. I am convinced that if we Liberals


William Pugsley: I dislike very much to interrupt my hon. friend, but I rise to a point of order.


Some hon. MEMBERS: Order.


Richard Blain: What is it?
Mr. rUGSREY. I am pleased, under ordinary circumstances, to hear the hon. gentleman, hut I think that, upon reflection he will agree with me that what he is now reading has nothing to do with the item under discussion.


Richard Blain: My hon. friend rises to a point of order. I say he has broadened the discussion, and I am following him, in respect to politics in the local elections of the province of Ontario. I continue the letter:
I am convinced if we Liberals are to hold our own in Ontario it is by circulating such papers as the ' Weekly Globe.' A spurt immediately before an election is not going to do it.
There is not another paper in your city that is doing the Liberal party any good.


William Pugsley: Order.


Mr. DEPUTY SPEAKER.: The point of order is insisted on, and I have no option in the matter. The question before the House is the item for rents for Dominion public buildings.


Richard Blain: Does my hon. friend wish to discuss it from his standpoint and then shut off the discussion from the opposition standpoint?


Charles Marcil: I think we should not discuss that further.


Richard Blain: I suppose I had a right to say to the Minister of Public Works that the Liberal party imported from the United States deputy returning officers to take part in the local elections in Ontario. It will be Interesting news to hon. gentlemen who represent Ontario constituencies to suggest that the large number of deputy returning officers that are appointed from time to time are of the non-partisan stripe which my hon. friend would like us to believe. Mr. Chairman, as my hon. friend does not wish me to read the letter, I will take another opportunity of directing the attention of the House to it.


Mr. CARVE  LL@: I hope my hon. friend will rend in the ' Globe ' about postage stamps, at the same time.


Richard Blain: I suppose my hon. friend refers to the franking privilege. If I exceeded my rights in the franking privilege, my hon. friend can take action against me, and I will take care of the case. With the permission of the chairman, I will read exactly what I did frank.


Charles Marcil: If the minister insists on relevancy, I have no option in the matter. The hon. gentleman must keep to the item.


Richard Blain: My hon. friend (Mr. Car-veil) who has interrupted me wishes me to read it.


Charles Marcil: The hon. member (Mr. Carvell) does not make the rules of the House.


David Henderson: I understand that the discussion has turned on the question of what constitutes a partisan.


Charles Marcil: The hon. member cannot discuss the action of employees of this government unless it has some relevancy to this vote.


David Henderson: I wish simply to bring the question back to where we started from. I heard the Prime Minister of this country, within the last month, say in this House that he was a partisan. Does the Minister of Public Works wish to imply that Sir Wilfrid Laurier would not be a fit man to make a deputy returning officer ? He fails to draw the distinction between a partisan and an offensive partisan. Now, coming back to the question before the committee of buildings rented for the Department of Justice, I find, under the head of Civil Government last year, there were twenty-two employees in the Justice Department, and there are the same number this year. Now I am at a loss to- understand, if twenty-two officials of the department found accommodation in the eastern block last year, how it comes that these same offices are not fit to accommodate the same number of men this year ?


William Pugsley: They were cramped for space.


David Henderson: They do not appear to have been cramped last year.


William Pugsley: Yes, they were.


David Henderson: Have they grown a little more corpulent under this grafting government ?


William Pugsley: Order.


David Henderson: Who. is out of order?


William Pugsley: The hon. gentleman.


David Henderson: Has it come to be out of order to call this government a grafting government ?


William Pugsley: It is clearly out of order.


David Henderson: WTell, I am sorry to see that the hon. gentleman has not a very proper conception of the meaning of the English language.


William Pugsley: I think the hon. gentleman should withdraw that expression. I think there is nothing more disorderly than to make a statement of that kind. Sup-

pose an hon. member on this side of the House were to make a charge of that kind against members of the opposition who had been members of a government, he would be clearly out of order. You can not make a charge against members of this House who happen to be members of the government collectively, which you would not be permitted to make against an individual member of the House.


George William Fowler: Yes, you can.


David Henderson: I am sorry the minister has become so extremely sensitive. I think perhaps before this session closes he will have opportunities for curbing his sensitiveness if he is going to get riled or feel offended at such a reference. I did not intend to make it in an offensive way. 1 think it has ceased to be an offensive expression to say that a man is a grafter. It is an expression so well understood in connection with this government nobody thinks there is anything wrong about it.


William Pattison Telford: I rise to a point of order. What does grafter mean ?


David Henderson: Now I do not propose to be schoolmaster for the hon. gentleman.


William Pattison Telford: I would like very well to have a definition of grafter.


David Henderson: Has the hon. gentleman been grafting, too, that he becomes so sensitive ?


William Pattison Telford: I have been charged by my late political opponent with graft to the extent of $31,000, and four questions were placed on the Order Paper for my particular benefit regarding the charge.


David Henderson: That is news to me. I thought the hon. gentleman was too old a member of parliament to get frightened at the idea of grafting. I am not imputing anything to him. When I made use of the term I did not make use of it in any offensive way. That word has become so common that I would not think any member of this House would feel hurt if the term was directed to himself. Now, we will get back to the Department of Justice.


William Pugsley: I hope the hon. gentleman will discuss it in a gentlemanly manner.


David Henderson: Does the minister mean to insinuate that I have been ungentlemanly?


William Pugsley: I do, decidedly. In my judgment, in an assembly of gentlemen, it is not proper to apply to any member of this House, or to any six members of this House, the expression which the hon. gentleman has used. I do not think it is in order, and on reflection the hon. gentleman will see that an expression of that kind will not add to the dignity of discussion in the Mr. PUGSLEY.
House. I think it ought to be the duty and ambition of all of us to improve the tone of parliament and keep it as high as possible.


David Henderson: That is just what I
was going to say. If there is any member of this House who does not want to be called a grafter, then do not let him graft. How does it come that the Department of Justice was able to accommodate the staff last year when the staff consisted of 22 officials? The minister says that they were somewhat cramped. This year there are still only 22 men and yet a great building outside of the department is to be provided at a .large expense besides retaining the old department. I cannot understand it. I think we are going too fast altogether. My Impression is that we ought to do with the departments that we have until we get the new buildings completed. I do not see the propriety of renting these buildings all over the city. I would not like to say that it was for the purpose of accommodating a friend. I do not want to impute that but we should have some explanation why the government are paying $6,500 rent, $2,000 taxes and $1,000 annually for the next five years for fitting up the building, making $9,500 a year to accommodate the customs officials when they were fully accommodated last year in the building that they now occupy for aught I know.


An hon. MEMBER.: And the revenue falling off.


David Henderson: Yes, and the revenue falling off every day. There is something radically wrong and I think it is time we called a halt in these matters. But, I have not received a full explanation as to why the Justice Department require more room than they required last year to accommodate the same number of men. With regard to the statement that I was not a gentleman, I do not mind that at all.


William Pugsley: I hope my hon. friend will not imagine that I suggested that he was not a gentleman.


David Henderson: I did not take it seriously.


William Pugsley: I did not say it.


David Henderson: I have my own opinion and I set it up against that of the hon. gentleman.


William Pugsley: Let me assure the hon. gentleman that I did not say he was not a gentleman.


George William Fowler: You said that his conduct was not the conduct of a gentleman.


William Pugsley: He asked me what I thought of his conduct and I said that I did not think it was consistent with the conduct of a gentleman to make that charge.


George William Fowler: That is not what you said.


William Pugsley: That is what I said. However, if I said anything that in any way suggested that the hon. gentleman was not a gentleman, I not only take it back but I apologize. No one could be in this House for six or eight months with the hon. gentleman as I have been, without recognizing that he is a gentleman in the highest sense of the word.


David Henderson: Perhaps I had better rise in my place now and say that the hon. Minister of Public Works is not a grafter.


William Pugsley: Now, I want to give a little information, which I am sure will alter the opinion the hon. gentleman has formed as to the improvements of the government in giving this accommodation to the penitentiary branch. The customs house has been urging the necessity of larger premises. The Justice Department has been urging that larger accommodation should be provided for the penitentiary branch. We are transferring the customs house officials to the Seybold block so as to give them the requisite accommodation on two floors of the building. On the ground floor of the building which has been vacated we give accommodation to the penitentiary branch of the Justice Department. The total rent which we pay for the building which the penitentiary branch is to occupy is only $1,500. We give them the ground floor and we will have the upper floors still to be occupied by other departments.


George Taylor: I want to draw the attention of the minister to a statement he made a few minutes ago with reference to Mr. Caron. He said that he was only a carpenter working occasionally by the day. If he looks at page V-17 of the Auditor General's Report he will find that in nine months Mr. Caron worked 235 days at $2.50 a day, not a wet day or a day's lost time in the whole nine months.


William Pugsley: I did not say he was working occasionally by the day; I said by the day and, being free to stay away if he pleased, if he did stay away he would be docked his day's pay.


George Taylor: He worked every day for nine months.


William Pugsley: That shows that he is a very industrious man.


George Taylor: I understood the hon. gentleman to say that he was only a carpenter working occasionally by the day.


William Pugsley: I did not say ' occasionally.' If I did I did not intend to.


Thomas Simpson Sproule: What rent is the government paying for the Imperial building ?


William Pugsley: $25,777 per annum.


Thomas Simpson Sproule: While the Canadian
building is rented for $42,000 ?


William Pugsley: 


Thomas Simpson Sproule: And the Seybold building for $6,500 ?


William Pugsley: Yes. I will give the list of rentals paid by the government :
Premises on Sussex street, geological
survey museum	$	600 00
P. G. Johnston & Company, Sussex
street,	geological	museum	 480	00
French translator's office, Sussex
street	 600	00
Agriculture Department, Queen
street	
2,250	00Central	basin,	coal shed	
360	00Department of the Interior, Immigration branch, Imperial building 1,950 00 Methylated spirit warehouse and laboratory, Department of Inland Revenue Department, corner Queenand Lyon streets	
1,200	00Marine store house, Sussex street..	800	00
Ottawa Building Company, Limited,
for Customs	
1,500	00Molsons Bank, Metcalfe street, one and two fiats for Labour Department	
1,200	00
Molsons Bank, basement for Labour
Department	
180	00Agriculture Department, exhibition branch, Ottawa Investment Company	
1,000	00
Labour Department, second floor Great Northwestern Telegraph
Company	
360	00Surveyor General's staff, corner of Metcalfe and Slater streets.. ..	3,000	00
Surveyor General's office, Sparks
street		540 00
Mounted Police, 172 Wellington
street	 1,140	00
Imperial Realty Company, Militia
building	 25,777	00
Imperial Realty Company, Canadian
Building	  42,539	60
Imperial Realty Company, Railway
Commisison	   ..	5,300	00
Department of the Interior, Thistle
Building	 800	00
Trafalgar Building, for staff of chief
astronomer	
2,200	00Seybold Building	
..	6,500	00
Department Inland Revenue, Thistle
Building	 550	00
Penitentiary branch, Eagan estate.. 200 00 Corry Building, fourth, fifth and
sixth floors and part of basement	10,200	00Electric clock system	
330	00Great Northwestern Telegraph Building, for District Officer Commanding Military District No. 4..	500	00Sparks Chambers, Post Office Department	
180	00
Sparks Chambers, Civil Service
Commission	 540	00
Georgian bay canal, three offices,
Sparks street	 360	00
Total rents paid in Ottawa.. ..$113,236 60 Mr. SPROULE. I make it $125,000.


George Halsey Perley: Who arranges as to what particular department shall occupy these various rented buildings? They are scattered all over the town.


William Pugsley: This has been a matter of gradual expansion. The officers of a department urge the necessity for further accommodation, and then we ascertain where suitable premises can be got at the lowest possible rent. We consult the deputy heads of the different departments which desire the accommodation, and the final arrangements rest with the Public Works Department.


George Halsey Perley: If it is absolutely necessary that all these buildings should be rented, which I very much doubt, it would be much better if some system were applied to the arrangement of offices. The present system leads to a great deal of inconvenience to the public, and I have no doubt to a great deal of inconvenience to the officials and to the departments. Even a person who lives in the city has great difficulty in finding where a certain branch of a department may be located so as to get the official you want. A stranger coming to the city must lose a great deal of time trying to discover where he is to go. Why should not the whole of one of these buildings be used for one particular department? Wrhy should the Interior Department, for instance, and the Department of Agriculture as well, he scattered all over the town in different buildings?


William Pugsley: I admit it is extremely inconvenient, but it must be borne in mind that these buildings did not become available at the same time, and we have had to do the best we could. The heads of the different departments have tried to keep tlie branches together, and I think it is recognized that the Department of Public Works has endeavoured to do the best it could under the circumstances.


George Halsey Perley: I understand some of these leases run for a good many years.


William Pugsley: Some for ten years and some for five.


George Halsey Perley: Is it the intention of the government to go on with the new building?


William Pugsley: Yes.


George Halsey Perley: What does the government intend to do writh these long leases when the building is finished?


William Pugsley: It is not supposed that these new buildings, which are very extensive, will be finished very much before the expiry of these various leases. We have endeavoured to fix the term so that we will be able to occupy them until the new buildings are completed.


Thomas Simpson Sproule: 


Thomas Simpson Sproule: Do we pay taxes to the city on these rented buildings, and if so, what taxes do we pay?
Mr. rUGSLEY. With respect to some of them we do not pay taxes, but in the case of the larger buildings we pay the taxes.


Thomas Simpson Sproule: What taxes do we pay?


William Pugsley: We pay taxes as follows :-	[DOT]
Statement of taxes paid on buildings rented in Ottawa city in accordance with the tenure
of leases.
Imperial Realty Company, Canadian Building, Customs, Inland Revenue
and Interior Departments	$ 3,311
Imperial Realty Company, Canadian
Building, Militia	 2,073
Imperial Realty Company, Canadian
Building Railway Commission	 622
Molsons Bank, Metcalfe street, Labour
Department	 330
Ottawa Building Company, 83-100 Wellington street, Customs Department. 382 Ottawa Building Compruy. Sue 'ey or
General, Metcalfe street	 167
Corry Building, Rideau street, Georgian bay survey, Ottawa river wonrs, Marine and Fisheries Departments (soy; 705 Seybold Building, Sparks street, Cus
toms Department	 2,000
Northwest Mounted Police, 172 Wellington street	 120
Agriculture Department, commissioner
of exhibitions, Metcalfe street	 3i0
J. B. & W. A. Lamb, Queen street, Inland Revenue (say)	 i60


Thomas Simpson Sproule: We have twice within the last few years arranged our business with the city of Ottawa, giving the city a liberal consideration in view of the fact that these buildings pay no taxes. In consideration of fire protection and water and the non-payment of taxes, we paid originally $00,000 a year, and I think that finally we raised the amount to $100,000"a year.


William Stevens Fielding: We did not increase the amount; it is still $60,000, but we increased the period.


Thomas Simpson Sproule: Then you paved Wellington street.


William Stevens Fielding: That was under the old agreement.


Thomas Simpson Sproule: You did some other things as well. Under that arrangement you gave the city of Ottawa a pretty liberal consideration. Now, the fact that you rent all these buildings and then turn round and pay taxes on them, means that the government are losing so much money which they would not lose if they had their own buildings, because these would not be taxable. The hon. minister asks why we

should occupy these rented buildings and pay no taxes on them, X might remind him that if he went into any town of Ontario and agreed to employ in any industry as many labouring people as are employed in these buildings, and paid the same amount of wages that are being paid to these people, it would not hesitate a moment to pay a bonus of $10,000 and exemption from taxation for ten years or perhaps twenty years.


William Pugsley: But this industry is located here permanently and cannot be taken away.
Mr. SI'ROUIjE. The very fact that we are continuing here an industry which is growing rapidly is a reason why we should be dealt with more liberally by the city of Ottawa, and not be compelled to pay taxes on every building we occupy. Of course, the city might say : ' Well, get your own buildings.' I frankly think that it would be better for the country if we got our own buildings. I think it would cost us less than it does to-day. X am not very well informed with regard to the rents in Ottawa, but I would consider the rents we are paying for some of these buildings very high for most parts of this country. I do not know how they are struck.


William Pugsley: They are based usually on the number of superficial feet occupied.


Thomas Simpson Sproule: The parties who succeed in getting these buildings rented to the government as a rule get rich very fast, so that I take it that they are renting at a pretty liberal figure. This year we have added three more buildings, aggregating a rental of $32,500. Surely there is not such an addition to the staff of this government as to require that much additional space every year.


William Pugsley: If you will go round, you will find every one of them occupied.


Thomas Simpson Sproule: I am told that the employees are so thick in these buildings that they are almost tumbling over each other, and I presume that accounts for the additional buildings. The large number of employees we have in this city would make a city' anywhere, and it seems to me that the city of Ottawa ought to deal a little more liberally with the government than it is doing at the present time. But the government should make a more energetic move to get the necessary land and erect suitable buildings of our own.


William Pugsley: We have all the land now. Some has been bought by agreement and the rest expropriated. The moment the Crown files its plan in the registry office the title is vested in the Crown, and then it is simply a question of valuation. Anxious as we all are to have these public buildings erected as speedily as possible, if I had
asked the Minister of Finance to put $1,000.000 in the estimates last fall, in the financial condition that existed, would he have done so, or would the House have approved of his doing so? We think we have pursued a prudent course in going slowly this year. With regard to the taxes, it must be borne in mind that these parliament buildings are a fixture in this city and that there are no taxes on them. They get fire and police protection and the benefit of water.


Thomas Simpson Sproule: All of which we are paying for.


William Pugsley: An agreement was made some years ago between the government and the city, by which the government agreed to do certain works and make certain improvements on Wellington street and in connection with two bridges and in connection with Major Hill Park and some other matters, in consideration of which the city agreed not to impose a tax on the salaries of civil servants derived from the government. So far as these other buildings are concerned, they were required for the use of the government. The owners of these buildings were at the time paying taxes to the city. Suppose the Public Works Department had sent one of its officials to say to the city : We are crowded for room and we must rent buildings, but we want you to waive taxes on these buildings in consideration of our renting them. The city council would answer -. We have nothing to do with your renting or not renting the buildings. So long as they are occupied by private owners they pay taxes to the city, and if you rent them we shall still expect to be paid taxes by the owners of the buildings. I could not make any answer to that.


Mr. GANONG.: Is the minister aware that the government had the Seybold building rented before?


William Pugsley: Yes.


Gilbert White Ganong: At what rental?


William Pugsley: The same.


Gilbert White Ganong: You did not pay taxes?


William Pugsley: I do not know about the taxes. We offered Mr. Seybold $6,500 and the matter was under negotiation for some four months. We refused to pay the rental he asked and he was of the opinion that the department treated him rather harshly in refusing to pay a higher rental. We are paying a reasonable rental, not more than private individuals would be obliged to pay for the same accommodation.


Thomas Simpson Sproule: I have been impressed with the fact that, if we are to judge from the increased superficial area of floor space used by the departments in Ottawa, the civil service must have more than doubled

in the last ten years. The population of Canada has not doubled in that time, and I do not see the necessity for such an increase.


William Pugsley: The business of the country has more than doubled.


Thomas Simpson Sproule: The trade has, but it does not follow that because the trade has increased the number of employees must increase in the same ratio. With proper organization, if ten men can do $100,000 worth of trade, 20 men can do three times that amount. There is a strong opinion in the country that a good organizer could so arrange the work and organize the staff so that the work that is done to-day could be done with one-half the present staff.


William Pugsley: Has my hon. friend ever tried to correct that erroneous impression in the country?


Thomas Simpson Sproule: If I was put on my oath I would swear to it. I think it is high time that either the Civil Service Commission or some other intelligent body should reorganize the service and show results by work and not increase the staff as it has been increased. At the present rate we would have before long all the buildings in Ottawa used by the departments and there has been no such growth in the population of Canada.


William Pugsley: A second Canada has grown up in the last ten years.


Thomas Simpson Sproule: Yes, a second Canada has grown up very different from the Canada that preceded it; it is a Canada not creditable to her history in respect of extravagance or administration. I believe we are approaching a stage when there will be a new Canada to take its place.


George Halsey Perley: What steps does the minister take to arrive at a fair rental for buildings in this city?


William Pugsley: The officers of the department make very careful inquiry, look into the assessment value, consider what would be a fair rental on the value of the property, inquire as to the prices at which buildings similarly situated are rented to private individuals, banks, &c., and see at what rate other buildings can be secured, and so endeavour to arrive at a fair valuation. I think my hon. friend, on inquiry, will agree that the rental we pay for the Canadian building of 41 cents per superficial foot is very reasonable.


George Halsey Perley: Would the minister give the total rent paid and the amount of taxes paid by the government for one of these buildings; so that we may form some estimate as to its fairness?


William Pugsley: Let us take the Canadian building. The total rental we pay is $42,539.60, and we pay $3,311 taxes.
Mr. SPROULE


George Halsey Perley: If the taxes are $3,311. that would mean that the assessed value of the property is about $165,000, for the taxes in the city run about two per cent on the assessed value. If the government is paying $42,539 rent, that means that the minister is paying about twenty-five per cent of the assessment every year for the use of the buildings.


William Pugsley: Does the hon. gentleman know anything about the building ? It is a very expensive building. I am satisfied that $165,000 would not begin to represent the value of the land and building. It is a structure of eight stories, very large, exceedingly well constructed and fitted up in modem style.


George Halsey Perley: I have nothing to say against the Canadian building ; it is an exceedingly good building.
Mr, PUGSLEY. Will my hon. friend say. from his knowledge of the value of real estate in the city, that such a building, located as this is in a business centre, is too highly paid for at a rental of forty-one cents per superficial foot ?


George Halsey Perley: I am not in the business, and do not know whether that rental is high or low, but does the minister think it right to pay twenty-five per cent of the assessed value ?


William Pugsley: I do not know that that is the assessed value.


George Halsey Perley: But the hon. minister has said that the taxes are $3,311, which would indicate an assessment of $165,000. I do not know whether the forty-one cents per superficial foot is a fair rent or not. I know that the building is an exceedingly good one


William Pugsley: From the inquiries I have made from people who are qualified to speak, I am led to believe that a rental of forty-one cents per foot is a very reasonable rental.


George Halsey Perley: I do not know about that but surely the minister will not say that it is reasonable to pay twenty-five per cent on the assessed value


William Stevens Fielding: But is it safe to assume that the assessed value is the real value ?


George Halsey Perley: In some cases it would and in some cases it would not. But there are no places in Ottawa, or any other city that I know of that should be rented at twenty-five ner cent of their assessed value.


William Stevens Fielding: The hon. gentleman should not dwell so much on the assessed value. All over the country property is under valued for assessment purposes. I venture to say that the hon. gentleman (Mr. Perley>
would not sell his own house at its assessed value.


George Halsey Perley: The argument of the hon. minister (Mr. Fielding) is fair in a way. But the assessed value in Ottawa is supposed to be the real value, although it may not be so in all cases. But, even allowing a large margin, the minister will hardly claim that it is fair to pay a rental representing such a high rate on the assessment.
Yukon public building-rent, repairs, fuel, light, water services and caretakers' salaries. &c., $100,000.


William Pugsley: That item may be reduced to $85,000. One quarter of this and all votes have already been granted. On that basis, if $60,000 is voted now, that would give the amount needed.


George William Fowler: What is the nature of these expenditures ?


William Pugsley: They are for government huose, post office, and the administration building. Then there is the court house. Then departmental stores at Dawson, post office at Whitehorse.


Thomas Simpson Sproule: What do we want with departmental stores?


William Pugsley: I presume this place is required for stores of the different departments. These would be telegraph stores, we have a telegraph department there.


George William Fowler: This seems to be a very large amount, $85,000 for taking care of public buildings in the Yukon.


William Pugsley: That includes salaries of the agent, the clerk of works and the accountant. The clerk of works gets $3,000. He is a master builder. Mr. Bertram is the superintendent. Wages are very high in the Yukon.
Rideau Hall, including grounds-improvements, furniture and maintenance, $35,000.


William Pugsley: This amount is required for maintenance of the buildings and grounds, the details of which I have here, and will read if desired. The total spent last year was $33,393.63. It was about an average year, and the items of about 'the same character.
Mr.' FOWLER. Under whose superintendence is this money expended?


William Pugsley: There is a clerk of works who looks after all this expenditure, Mr. Hutchison. He reports to, and confers with, the chief architect.


George William Fowler: I understood one of these items was $3,000 for crockery.


William Pugsley: Furniture and crockery.


George William Fowler: There must have been a good deal of waste in crockery. How much a year for carpets?


William Pugsley: Carpets, linen and dry goods, $2,996.


George William Fowler: We have the most disgraceful ramshackle building down there that can be imagined. To pay $35,000 a year on it, exclusively of another charge of $8,000 for fuel on this disgraceful old building-I cannot understand where the money is spent on it. I-think if that building were taken away and a' decent building erected in modem style, it could be maintained for considerably less than the amount it costs us to-day. People who come here from abroad and go down to see the residence of the Governor General are not impressed with the greatness of Canada, and wonder how we allow the figurehead of this great nation to live in such an old barn of a building. The Minister of Public Works should see that a decent public building is erected there that could be maintained at a reasonable expense.


William Pugsley: There is a great deal of course in what my hon. friend says. The building is not at all attractive on the outside, it is not impressive, it is everything else but impressive. As my hon. friend says, it is not calculated to convey to visitors a fair idea of the greatness and wealth of Canada. Last session of parliament there was an appropriation of $100,000 voted for improvements. The idea was to make a facade in front of the building, to take away the present front and make a considerable improvement. Tenders were called for, and they were received shortly after I became minister. The lowest tender, if I remember rightly, was $275,000. I felt that I was not justified in entering into a contract for two reasons. One was that I did not think I would bejustified in expending so large an amount of money upon Rideau Hall. I thought the feeling of the country would be that it would be better to erect a new government house rather than expend that sum on repairs. Another reason was that, parliament having voted only $100,000, the members would feel that they ought to cover the total expenditure. Indeed, when the Acting Minister of Public Works asked for that vote he thought it would cover the cost. Therefore I declined to accept any of the tenders, and returned the cheques. So nothing has been done. I wish myself that it were possible to erect a government house which would be worthy of Canada and worthy of the empire to which we belong. I do not myself approve of the site of government house. I think a little further down the river, in the vicinity of Roekliffe, would be a much preferable site. Overlooking the Ottawa river there is a site which, for grandeur and magnificence, I do not believe could be surpassed or equalled anywhere in the world, and if it were possible to acquire a site there and to erect a suitable government house I believe the people of Canada would approve of the necessary expenditure. However, now is not the



time, for reasons hon. gentlemen can well understand, to engage in that expenditure. It is better to get along for a little while with the building that we have, even although it is not creditable. I would very much prefer myself considering the idea of erecting a new and suitable building upon a proper site-such a site as can be obtained-rather than spend a large amount of money in repairing or Improving the present building.


George William Fowler: I think the minister did wisely in refusing to entertain the idea of spending very much money upon the repair of an old building like that. It is never a good plan to repair an old building anyway. I do not know the site to which the hon. gentleman refers, but, in my opinion, the people of Canada would be perfectly satisfied to spend a reasonable amount of money, and it seems to me that the money spent for repairs on this old building would be sufficient in itself to erect a new building.


Uriah Wilson: Would the minister tell us what was spent on capital account on Rideau Hall last year ?


William Pugsley: If my hon. friend will look at the Debates he will see the answer I gave to that question.


Uriah Wilson: I suppose if I look up the Auditor General's Report, the report of the department and the Debates I might get the information and I would not have to ask this question.


William Pugsley: I am very sorry I Ijfave not the memorandum here with respect to it.


Uriah Wilson: The hon. gentleman should have the documents here.


William Pugsley: I have not the papers with me showing that expenditure, the vote having been passed some time ago, and it would be utterly impossible for me to carry in my head all the items of expenditure throughout the country.


Uriah Wilson: Will the minister bring down the information ?


William Pugsley: I will be very glad to get it for my hon. friend.
Furniture-Dominion public buildings, $12,-
000.
Mr. PUGSLEY'. This is for public buildings all over the Dominion. Last year the total expenditure was $11,258.40. We are asking for $12,000.
Post Office-fittings and supplies, $30,000.


William Pugsley: I would move that the item be changed to ' Dominion public buildings-fittings and supplies ' as it applies to other buildings as well. It is intended to apply part of this vote to the purchasing of Mr. PUGSLEY.
bag racks for use in various post offices. I think it is what they call the Harrison Bag Rack.


George William Fowler: Is that a new patent ?


William Pugsley: No.


[Stage Direction]
Amendment agreed to.
Dominion cattle quarantine stations-renewals, repairs, &c., $20,000.
William Pugsley: This is the same vote as last year. It is for the construction of corrals and dipping vats all along the boundary line between Canada and the United States and the maintenance of cattle quarantine stations throught the Dominion. This is in compliance with the request of the Department of Agriculture. Last year we expended $7,700.42.


George William Fowler: You want $20,000 now.


William Pugsley: The expenditure was low last year. This has been the usual vote for this purpose. There remained on the 1st January an unexpended balance of $13,000 which has lapsed.


Mr. HERRON.: Has the minister a record of the quantity of stock that is coming across the boundary line ?


William Pugsley: I regret I have not. That will be in the Department of Agriculture. All I do is to provide the money.


John Herron: I doubt very much if there is any stock at all coming across or any dipping to be done.


William D. Staples: I think we should let that item stand until we get more information from the Minister of Agriculture.


William Pugsley: I am quite wiling.
Item allowed to stand.
Dominion immigration buildings-repairs, furniture, &c., $4,500.


William Pugsley: This is for making necessary repairs and renewals to all immigration buildings throughout the Dominion. Last year the expenditure was $4,701.55.
Dominion quarantine	stations-maintenance, &c., $4,000.


William Pugsley: This is to make the necessary repairs to the different quarantine stations to keep them in proper state of efficiency.	.


John Herron: What repairs have to be done at quarantine stations in the west, if it applies to the western country ?


William Pugsley: I will give a statement showing how this money was distributed last year. There were repairs at Halifax, Sydney, Pictou, Charlottetown, Chatham. St John, Point Edward and Williams Head, B. C., the total expenditure being $8,565.68.

Ottawa public buildings-heating, including salaries of engineers, firemen and watchmen, $102,000.


George Taylor: Might I suggest to the hon. gentleman that he would add something to this vote to get a cooling apparatus in this chamber. The thermometer is now registering over 80 degrees.


William Pugsley: I am inclined to think we might devise a plan to have the air passed through refrigerating compartments so that it would be fairly cool when it reaches the chamber. It would cost some money, but it is worth considering.


George Taylor: That was to have been done two years ago, when $25,000 was spent.


William Pugsley: Not for that purpose.


Joseph Elijah Armstrong: If the Minister of Public Works would visit some of the better clubs and public buildings in London he would find that the temperature is kept at a proper mean during the year, and at very little expense. It is a shame to ask men to remain in this chamber in such heat as we have had to-day. I cannot believe that the officials who look after the ventilation of this building are doing their duty, and I trust the minister will investigate.


William Pugsley: I think the only workable plan is to have the air pass through chamber cooled by the ammonia system.
I will ask my deputy and chief architect to see If some improvement cannot be made.


Joseph Elijah Armstrong: I am president of a company which uses a system of cold storage, and we produce a great many tons of ice per day at very little expense. I think a somewhat similar plant might be introduced in this House.


William Pugsley: I will look into the matter.


Gilbert White Ganong: I would suggest that the minister should consult Mr. D. B. Gosselin, a gentleman who was born in his own county, but who is now a resident of the United States, and who has been most successful in the cooling of factories and large public buildings. Mr. Gosselin has installed a system of cooling and cleansing the air in my factory which has proven most satisfactory. In some departments of my factory it is absolutely essential to have the air cool and dry, and since Mr. Gosselin introduced this system we can work at four degrees higher temperature than formerly. I think the minister should consult him about the ventilation of this chamber.


William Pugsley: If my hon. friend gives me his address, I shall ask the chief architect to get into communication with him.


Gilbert White Ganong: I shall do so.


William Pugsley: I am afraid the only perfect remedy is to have shorter sessions.
349i


George Halsey Perley: That would not remedy the trouble, because the air in the winter time in this chamber is generally vitiated.
I find it exceedingly difficult to sit in the House for long even in the winter months, because the temperature is kept unnecessarily high, and as a rule the air is foul. I would suggest that the vote be reduced so that we might buy less coal to burn and then there would not be so much heat. A great many of the members have been rendered ill from sitting in this hot and foul atmosphere.


William Pugsley: I will think of that, too.


George William Fowler: Could not something be done in the way of opening the windows ?


William Pugsley: If you open the windows you, would get a temporary current of air and prevent circulation. The chief architect will try it on Monday to show the result.


George William Fowler: Another trouble is that we do not have sufficient sunlight in this chamber. The only place the sun ever did strike was on one of those windows and some clever person put green shades on to keep it out.


George Halsey Perley: This is a most serious question, and there is no reason why a remedv should not be applied. The Minister of Public Works knows that in the theaters in London and in the large auditoriums which are sometimes situated in the centre of a building, where there is no outside ventilation, the air is always kept fresh and the temperature comfortable. There is no reason in the world why the health of the members of this House should be endangered because of lack of fresh air.


Mr. SAM. HUGHES.: In any first-class public school you will find a goad system of ventilation that could be very well adopted here. There are the two processes ; you can either force the fresh air in and then force the foul air out, or you can exhaust the air in connection with the pressure in. The air in this chamber should be cooled, and this can only be done by the use of ice or by the adoption of some of the other cooling processes now used. There would be no trouble whatever in regulating the temperature of the air of this chamber to any point required. All that is necessary is a man with a head. If the architect's department have not heads, there are any number of men in the country who could fix this thing up. In winter time the air is often unbearable because the fans are not kept going. At the present time, the windows are open in the corridor, there is not the slightest motion of the air. The fresh air should be forced in by pressure and the foul air forced out of these doors. Either the men who are supposed to operate the fans

do not understand them or the fans are not properly placed.


William Pugsley: I have a great deal of confidence In the chief architect, and he tells me that the system of ventilation here Is by forcing the cold air in from the top all along these galleries by means of pumps and drawing it off at the bottom of the chamber. I think it is remarkable that in this chamber, with over 20 members, the air is as pure as it is. What we want is in some way to cool the air, and I will have the chief architect look into the systems iu other places and see if we cannot improve the atmosphere in that respect.


Joseph Elijah Armstrong: Does the man who keeps the fans going keep them going at night ?


William Pugsley: Yes, all the time the House is sitting.


Samuel Hughes: When I came in the other morning, I asked one of the men why the fans were not going, and he said he had forgotton to turn them on at eleven o'clock in the morning.


George Taylor: As soon as we go out of the chamber at six o'clock the fans stop.


William Pugsley: If so, that is contrary to orders.	'


Joseph Elijah Armstrong: When the minister is looking into the question of ventilation, I hope he will look into the ventilation of the halls and other rooms of this building. The moment one comes into the main hall from the fresh air, he finds himself in foul air.


William D. Staples: How much of this item is required for the purchase of coal ?


William Pugsley: Last year we purchased 6.000 tons of furnace coal at $0.90 a ton, 50 tons of bituminous slack at $4.75 and 300 tons of cannel coal at $8.60. This vote is also for engineers, assistant engineers, firemen, caretakers, &e.


William D. Staples: What methods does the minister adopt in calling for tenders for coal ?


William Pugsley: Advertisement in the Ottawa papers.
Ottawa public buildings-elevator attendants, $15,000.


George William Fowler: What do you pay them ?


William Pugsley: From $50 to $60 a month.
Ottawa public buildings-gas and electric light, including roads and bridges, $35,000.


Joseph Elijah Armstrong: What is the total amount paid for electric light ?


William Pugsley: 

W ARMSTRONG. Has the minister considered running a plant for lighting purposes?


Samuel Hughes: 


William Pugsley: I am told there formerly was a system, but the present rate of $2 per annum for each light of 16 candle power is regarded as much more economical. There are 11,382 lights.


Joseph Elijah Armstrong: What is meant by roads and bridges in this vote?


William Pugsley: We light the Laurier bridge and the roads to the Experimental Farm and Rideau Hall.
Telephone service, $9,850.
Mr. PUGSLEY". There is an increase of $1,000. The telephone service is increasing; it seems to be regarded as one of the necessaries of life.


George William Fowler: Do you supply telephones in the homes of civil servants?


William Pugsley: No, only in the homes of the chief officers of the departments. For instance in the Customs Department, they are supplied at the residence of the private secretary, the assistant commissioner and the accountant.


George Halsey Perley: What about the Public Works Department?


William Pugsley: In connection with the Public Works Department there are 51 telephones altogether.


George Halsey Perley: What price is paid?


William Pugsley: We pay a flat rate for office and residence of $35. There are additional charges for desk and wall extension sets. The city rate is $45 for a wall set in an office and $25 for a wall set in a private residence. We get the benefit of a fiat rate of $35 on business phones, and of course the great majority of ours are business phones.
Grounds, Ottawa public buildings, $7,500.


William Pugsley: This is a vote to pay for the care of the grounds in connection with the public buildings and also the walk which extends around the grounds.


George William Fowler: Do the government own the ground in front of the building?


William Pugsley: Of course the government does.


George William Fowler: One would not think so.


William Pugsley: Why not ?


George William Fowler: A stranger approaching here in the afternoon would imagine that he was on the shores of New Brunswick, or Nova Scotia, in some such constituency as that represented by the Minister of Finance (Mr. Fielding) where the fishing industry is extensively carried on and that the fishermen were drying their nets. It does not strike me as being proper that the very grounds in front of this building should be given over as a playground for any people,

I care not whether they are members of parliament, civil servants or the general public of the city. I think the grounds immediately in front of this House might be reserved, not as a playground, but as a beauty spot as my hon. friend suggested. I do not think it is at all impressive for strangers to come here to this parliament House and see these grounds devoted to the purpose for which they are now used. The reason why I ask in whom the ownership is was in consequence of a letter X received -and I suppose other members of parliament received the same :
Dear Sir,-You are most heartily invited to use at any time and to any extent the tennis courts, bowling green, quoit beds or cricket lawn of the Civil Service Amateur Athletic Association on Parliament Hill.
I supposed that these belonged to the Civil Service Amateur Athletic Association. It looked like an act of great kindness, of condescension, on the part of the association to extend to me this kindly invitation. I may use their cricket lawn-I suppose that is part of the ground in front of this building. I may use their tennis court, their quoit beds, their bowling green. I suppose I am to supply my own materials for the game, and then X am permitted, graciously permitted-I and other members of parliament to whom this most generous invitation is extended-to use the grounds. That is, I suppose, when they are not occupied. That would go without saying, that it was not in occupation by the people who own it. Now, I do not think, under the circumstances, in view of the fact that I have received this invitation, in view of the fact, as the invitation expressly states that the grounds are the property of the Civil Service Amateur Athletic Association, that my question should cause surprise. I would like to know from the minister how the grounds were transferred to this association, whether by deed of gift in the ordinary way, by His Majesty, the King, or if in the previous reign, by Her Majesty, the Queen, or whether by formal Act of parliament ? In what way did the government of this country divest itself of this property ? It would not be by expropriation-that would be the other way round. It seems to me the minister should not have expressed the view that I was not serious when I asked as to this ownership. He must see that I have very strong reasons for asking the question in the manner in which I did. For, certainly, when the Civil Service Amateur Athletic Association speak of their cricket lawn, tennis ground, bowling green and quoit beds, one would suppose they had in some way acquired an absolute ownership of this property. And this $7,000 vote, it seems, is devoted-a considerable portion of it at least-to keeping up these quoit beds, cricket grounds, tennis courts and bowling greens. It does seem to me this requires some explanation on the part of the minister. Do they actually own this property ? Or have they leased it ? Or have they acquired it by taking possession of it 7 The minister might point out how they have acquired it, and also say whether they are able to keep off the general populace. I have thought over this several times when, in passing, I have seen these people disporting themselves on the green, and have wondered how they came to acquire the title in the first place. Perhaps they took it by forcible possession. If they have no title, by what right do they keep off the general public ? If they say the grounds are public, that might give them a right from one standpoint. But would it give them the right to keep the public off ? Why should not the people of the city-the people who pay the taxes, for the civil servants do not pay taxes-come here and play baseball, or 'cricket, or any other game 1 Or exercise their horses, use the place as a riding ground ? Or teach the equestrian art to their children ? I fail to see why it should not be used by the general public. It appears, however, that the Civil Service have acquired an absolute title to the property. I would like to have an explanation from the hon. minister.


William Pugsley: This is a legacy which has come down to me from my predecessor-


George William Fowler: If the minister will pardon me, in the eight years I have been a member of this House, I have never seen these games carried on to the same extent as this year. I was not here under the old government, and do not know what was done at that time. But before the present minister came, I never saw anything like what goes on now.


William Pugsley: I made inquiry with reference to the use of the grounds and found that, a considerable time ago, permission was given to the members of the civil service to use the green in front of the west block for a bowling green, and to use the grounds in front of the parliament buildings for tennis and other games. I may say very frankly that I had some doubts whether or not it would be better for me to issue notice discontinuing the use of the grounds in front of the parliament buildings. But as I have seen, within the-last few days, the boys and girls enjoying themselves on that beautiful lawn, I hesitated about depriving them of that pleasure. Perhaps I was a little too tenderhearted. However, I decided to let matters go on this year, at all events, as in recent years. But' if there is any general expression of feeling on the part of members of the House that this rule should be countermanded, and this permission rescinded, I shall be disposed to act upon it.


George William Fowler: What does the minister thing of the circular ?


William Pugsley: I think it should not be construed too critically. I presume they merely intended to say that if a fine looking gentleman like my hon. friend from Kings and Albert (Mr. Fowler) would go down and have a game of tennis, there is the tennis net which he can use, there are the pretty girls, and he might have a delightful game of tennis. So with all the members of parliament. It was intended, I am sure, as a kindly invitation to the members to go there and join in tennis, join in baseball, join in bowling upon the green. I do not myself feel that the members of the Civil Service Association intended anything but to extend a courteous invitation to the members to join with them in their games on the parliament grounds. - The permission is only a temporary one. It was given by one of my predecessors, and can be countermanded at any time.


George William Fowler: I think if the minister had acted according to his first thought he would have acted wisely and well. Because if the Civil Service Association have a right to use those grounds they have no greater right than the general public. If the hon. gentleman was influenced in permitting the thing to continue by reason of the fact that the boys and girls were disporting themselves there, that should influence him to extend the privilege so that more boys and girls might have the opportunity of enjoying themselves. Therefore it should not be confined to the civil service. I think as a matter of fact he should allow the civil servants to obtain a ground somewhere else, and reserve these grounds from use.
Major's Hill Park, $6,000.


William Pugsley: That is for the purpose of keeping the park in proper condition. The sum includes salaries of the assistant superintendent, the guardian, and the pay of the men. It is intended to extend the park down towards Nepean Point, and beautify it.


Thomas Simpson Sproule: We have been expending and beautifying that park for the last thirty years, and now that we have succeeded in making it attractive and ornamental, we turn around and allow the railway company to disfigure the whole thing.


William Pugsley: We will discuss that later.
Some resolutions reported.



ADJOURNMENT-BUSINESS OF THE HOUSE.

[Stage Direction]
Mr. FIELDING moved the adjournment of the House.
Thomas Simpson Sproule: What business on Monday?


William Pugsley: 


William Stevens Fielding: We will take up the Bill respecting the lead bounties and Chinese immigration, and the Minister of Public Works will continue Supply. If there are other Bills non-contentious, we will take them up.


Thomas Simpson Sproule: I wish again to call attention to a letter which I think was addressed to Mr. Shearer some time in April last, a copy of which I have asked to be brought down. No attention is paid to my request, and I have to repeat it again and again. Perhaps it is because I made the request to the First Minister. I would like to say so in his presence, because he has repeatedly treated requests of mine in the same way. I want to say that I will take an early opportunity of referring to it, if that is the case.


William Stevens Fielding: There is not the slightest intention on the part of the Prime /Minister to be discourteous to my hon. friend. It has been overlooked in the multiplicity of things, and I will call his attention to it.


[Stage Direction]
Motion agreed to, and House adjourned at 11.15 p.m.
[Stage Direction]
Monday, June 22, 1008.