1913-05-05

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Hon. L. P. PELLETIER (Postmaster General} moved for leave to introduce Bill No. 188, to provide for more advantageous conditions for telegraphic communications between Canada, the United Kingdom and other parts of the British Empire.
He said: This is a Bill of a somewhat important mature. It is, In part, the result of some work done whilst I was in England last summer. Its object and purport is to bring about better conditions for Canada in respect of ocean telegraphic communication. It tends to bring more closely together Canada and the Mother Country, and thereby cement the bonds of Empire. Incidentally the Bill also tends, as its title shows, to provide better, conditions for telegraphic communication' between Canada, the United Kingdom and other parts of the British Empire, more especially Australia and New Zealand. ,
We in this country have been for years practically in the hands of the cable companies which have had everything pretty much their own way. Some efforts have been made now and then to improve this condition of affairs. In 1902, or 1903, Parliament voted an amount in order to help the lowering of the rates charged by the cable companies. Later on Parliament also passed another law which had the same object, but which had as one of its provisions that a similar law would have to be adopted by the Mother Country, and as no such enactment was made by the Parliament of Great Britain, that Bill had no effect. In the first place, the cable companies are foreign companies and they have had practically a monopoly which has not been very popular in this country. Whatever reductions were obtained from'
them have been brought about by persuasion and solicitation, and to most of our requests the cable companies have turned a deaf ear.
Since this Government came into power there have been two reductions in the rates which the cable companies had adopted and maintained in respect to Canada. The first reduction was obtained in-December, 1911, and came into force on the 1st of January, 1912. When this matter was discussed during the course of the session of 1911-12, everybody agreed, that the measure of relief which had been, obtained was quite welcome as it stood,, but that it was inadequate and insufficient. Several members of the House suggested' that the time had come for this country to go into the great proposition of a state-owned cable for the Atlantic ocean. Speaking for the Government at the time I said that I could not pledge the Government to that, that it would be a costly undertaking and that the matter would have to be thought over very carefully.
Last summer I took up the question with the British post office. I may say that I have had the help of the Empire Press Unions, and also the benefit of the good advice of the president of the Canadian Associated Press, Mr. John Ross Robertson, and I may say here also that Sir J. Henneker Heaton, well known as the father of penny postage, gave me all the help he could, and that we owe him a debt of gratitude. I thought I should first obtain the views of the British post office. I presented to Mr. Samuels, the very able and distinguished gentleman who is Postmaster General of Great Britain, the views of Canada, Australia and New Zealand. The views of our two sister colonies are well known. They are absolutely, and in the case of one of them, Australia, almost exclusively, in favour of a state-owned cable for the Atlantic. I will come in a moment to the views of the Right Hon. Mr. Samuel; but before going into that, let me briefly explain what the position is, as between Canada, the Mother Country, Australia, and New Zealand. The original intention in 1900, if I understand the matter rightly, was to have what, would be called an all-red telegraph line between Great Britain, Canada, Australia and New Zealand. The greater part of that enterprise was started in 1900, and, as you know, Mr. Speaker, and as the House knows, the four countries now in partnership laid a cable from British Columbia under the Pacific ocean to Australia and New Zealand. As the House knows, the four countries own that cable and share in the profits and expenditure, Great Britain being responsible for five shares, Canada for five shares, Australia for six, and New Zealand for two, making eighteen shares. That cable gives us communication be-
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tween British Columbia and New Zealand and Australia. The management of that cable, or of the business connected with it, was entrusted to what is known as the Pacific Cable Board. That board leased from the Canadian Pacific railway a wire from British Columbia to Montreal at a cost of $55,000, so that now we have communication established between the two sister colonies, New Zealand and Australia, and Vancouver, and from Vancouver over this leased wire to Montreal. Between Montreal and the Atlantic coast, and be-ween the Atlantic coast of Canada and the Mother Country, there is a gap whieh has not been filled so far, but which has several times occupied the attention of this country and of the other countries mentioned. To fill that gap we have to use the cables of the cable companies to which 1 have just referred. It costs, in proportion, much more than the. part which we own, and Canada has the lean part of the business going over the cable. The reduction brought about by the Pacific cable benefits mainly Australia and New Zealand. I am not here to blame or to criticise what has been done in this matter, because it may have been properly considered as part of an Imperial duty, but we certainly did not get as much return from the cable as the three other partners.
This was the state of things when I had the pleasure and advantage of meeting the Eight Hon. Mr. Samuel, the British Postmaster General, last summer. I put before him the proposition of filling that gap toy laying an Atlantic cable, and I had reason to believe that to some extent I was speaking also for New Zealand and Australia. This Government had adopted no policy in regard to that. I simply put the proposition before him for the .purposes of discussion. I found that Mr. Samuel was, for the present at ,least, opposed to an Atlantic state-owned cable proposition. He was quite prepared to listen with an open mind to all the suggestions and arguments put before him; but, with all the facts and figures before him, and these he had pretty well at his fingers' ends, he thought the time had not come for a state-owned Atlantic cable. After several conferences, at which we went thoroughly into the whole matter, he came to the conclusion that for the moment our best course was to try to obtain more favourable conditions from the cable companies, reserving the state-owned cable as a means of last resort. The reasons which he gave then certainly appealed to me. His chief reason was the rapid strides and. extraordinary progress of wireless telegraphy. To put it in a nutshell, the proposition was this: why make extraordinary and costly outlays at the present moment for a cable when the cable is about to have a competitor whose possibilities are
Mr. PELLETIER
immense and which may turn out to be as good if not a better means of communication? Speaking for myself, I would not be surprised if, in a few years, wireless should become the equal if not the superior of the cable. Cable companies have fought one another in the past, and have lowered their rates, but now they have merged into what I think may properly be called a combination. While there are a great many cables, there are practically only two companies now, they having absorbed all the others. One is the Commercial Cable Company, and the other the Western Union. Their rates are practically the same, and are pretty high at that. Cables are much more expensive than wireless organizations, and consequently the wireless organizations can charge lesser rates and these rates may be more remunerative to them than the charges made toy the cable companies. Another reason which was fully discussed at that time, and about which all the experts seemed to agree, was that whilst one cable in the Pacific ocean has sufficed, and may suffice for a long term of years, a different condition of affairs existed, so far as the Atlantic ocean is concerned. If ever a state-owned cable is laid in the Atlantic ocean, the conditions will necessitate duplication in order to give a good and efficient service. The expense of laying two cables would be in the vicinity of $5,000,000, whilst the laying of a proper system of wireless telegraphy would not probably amount to more than $300,000 or $400,000. Therefore, the British Postmaster General was not ready to consider a state-owned proposition, and, as I said a moment ago, I agreed pretty much with him.
Consequently, we entered into negotiations with the cable companies with the view of obtaining some reduction in the rates charged by them. The companies expressed surprise to find us renewing our demands for a reduction of the rates so soon, they said, after the reduction granted in December, 1911. They told us they were going to be ruined, and that there were no hopes of sajvation for them if steps were taken by the Mother Country and the overseas dominions to bring about a better state of affairs. At all events, one of the companies consented to negotiate; with the other one the negotiations were not protracted. We had some difficulty in finding anybody responsible for that company or anyone' willing to enter into any pourparlers. We had one meeting in the office of the British Postmaster General, and the representative expressed very great surprise and seemed to think we were trespassing on sacred ground. He told us that we need not expect much from him. At ah events he promised consideration and said he would give an answer later. His answer

has yet to come, but the other company, the Western Union Company consented to negotiate with us. Those negotiations were veTy long and wearisome. At each conference the gentlemen with whom we were dealing had to send a cablegram to New York, because, as you know, Mr. Speaker, the rates between Canada and England are decided at New York. New York apparently was not very well disposed towards us. One day we would think we were pretty near the object in view, and then another cable would come from New York putting us far apart again. Finally, it became perfectly clear that, whilst we were sure to get something, we could not. expect anything like what we considered fair and reasonable.
These negotiations were so prolonged and so unsuccessful that they were brought to a close. Meanwhile I had given a good deal of attention to what was going on in England as far as wireless telegraphy was concerned. Having informed the representative of the Western Union Company that I was directing my efforts in another channel, I continued my negotiations with the British Postmaster General. Mr. Samuel kept me advised of what was going on and the result of the whole thing was that, the cable companies having refused terms that we thought fair and reasonable, submitted a certain scale of reduction to the British Postmaster General who communicated the same to me and my suggestion was that if they desired to themselves adopt that policy, and experiment with these reduced rates, Canada would not refuse the benefit of this reduction but that we wanted to be understood as not accepting those rates and as not being bound by them. The reductions which then obtained have already been given to this House and I shall not refer to them at length. I said a moment ago that the first reduction, granted in December, 1911, gave a slight measure of relief. The reduction given last summer, and which went into force on the 1st of January, 1913, is a little more satisfactory but it is far from giving Canada the rates to which, I think, she is entitled. There is one rate which it has been absolutely impossible to have reduced and that is the regular business rate. A first reduction was obtained on deferred cablegrams, cable-letters and week-end letters and that reduction went into effect on January 1, 1911. The reduction which went into force on the 1st of January last was on the same lines. They all applied to deferred cablegrams, cable letters and week-end letters, but no reduction of any kind has so far been obtained on the regular cablegrams, the business man's cablegram, whether in code or in plain language. It remains as it has been for years at twenty-five cents a word.
The Bill which I have the honour of presenting to this House provides, to a certain
extent at least, a remedy for that condition of affairs. We have entered into a contract which the Bill proposes to confirm and ratify, if it is agreeable to Parliament. I shall briefly explain it. A number of very wealthy persons in the Mother Country have formed themselves into a syndicate, incorporated as the Universal Radiotelegraph Syndicate, Limited. They will bring to this country the most effective and promising system of wireless telegraphy known as Poulsen's Arc System. It was tried and gave good results. The syndicate undertake and guarantee, first, to establish wireless stations and to establish wireless communication between Canada and the Mother Country. The central point to which they shall come in Canada is Montreal. This will fill the gap of Which I spoke a moment ago. Then, in the second place, the syndicate guarantee that they will give an excellent service at a speed of four hundred letters per minute. This is very important. Four hundred letters per minute means one hundred per cent better on the average than the cable companies can do at the present time.
Mr. MACLEAN (South York):: How
much better?


Mr. PELLETIER:: Four hundred letters per minute or one hundred per cent better. The cables are supposed to give us two hundred letters per minute. If we adopt the well known rule of counting five letters to a word, that will mean forty words, or two hundred letters per minute or four hundred letters. The rates which these people undertake to give to Canada are the following: For code messages, eight pence a word instead of twelve pence, which is the charge made by the cable companies. In the second place, and this is probably the most important part of the arrangement in so far as the general public are concerned, plain language cablegrams will be transmitted at the rate of four pence a word, without any deferment, which is better by two-thirds than the cable companies are doing now. Government messages, or cablegrams, will be transmitted for two and a half pence per word and press messages will be transmitted for two pence a word. The cable companies have in the past concentrated their efforts on making a bigger reduction in the press rates than in the rates charged to the general public. Had they in their minds the idea that if the press were satisfied they would probably have less trouble with the rest of the public? I do not know, but we certainly have succeeded in getting a larger reduction for the press than for the general public. The press rates, as reduced last summer, were as follows:	The ordinary rate for press
messages was brought down from ten cents to seven cents a word with a special reduction to five cents a word between midnight and six in the morning, or between

one in the day to four in the morning, according to the country of origin. Now the rate is reduced under this arrangement to two pence a word. These are the rates under this contract for wireless messages from any part of Great Britain or Ireland to Montreal.


William Findlay Maclean: Is this system covered by a patent?


Louis-Philippe Pelletier: Yes.


William Findlay Maclean: Who are the inventors or the owners of the patent?


Louis-Philippe Pelletier: The inventors are
Mr. Poulsen and Mr. Pedersen. This patent has been acquired by the syndicate which is entering into a contract with us now.


William Findlay Maclean: When could they put the system into operation?


Louis-Philippe Pelletier: I am coming to that. This information is not official; it was given to me by the manager. The largest shareholders are the Imperial Tobacco Company, Werner, Beit & Co., Kleinwort, Sir Robert Jardine, Lord Harris, Basil Montgomerie and FitzGeralds.
They are all .millionaires. This system will give us cheap rates from Great Britain to Montreal. As we all know, the Canadian Press Association get their news over the cables to Montreal, and from Montreal the news is distributed to all parts of Canada by virtue of an arrangement between the cable companies, the land line companies and the press. This syndicate undertakes to pay, for transmission to other parts of Canada, a certain proportion of what is paid by what I might call the ' consumers.' The word may not be good English but it conveys my idea.


Mr. LEMIEUX:: What proportion?


Louis-Philippe Pelletier: 
Rodolphe Lemieux: No discrimination between the West and the East?


Louis-Philippe Pelletier: No. There is a clause in the contract by virtue of which the land line company cannot charge more than the rates which I have just mentioned without first getting the consent of the Board of Railway Commissioners.


Rodolphe Lemieux: You give the company a subsidy?


Louis-Philippe Pelletier: No.


Rodolphe Lemieux: Have they any exclusive right?


Louis-Philippe Pelletier: No.


William Findlay Maclean: Is the
British post office a party to the contract?


Louis-Philippe Pelletier: 
William Findlay Maclean: Have they a line anywhere now?


Louis-Philippe Pelletier: They have in America and in Germany, and as a matter of fact they have a system which is in operation now between San Francisco and Honolulu. These gentlemen have the patents for Canada and Great Britain. By their contracts they guarantee these patents and assume all risk in that respect. The Government has consented that these patents shall not be forfeited even though the syndicate may have to import into Canada for the erection of their stations or the operating of the equipment things which are not now manufactured in Canada. Then, we undertake to do all in our power to prevent other companies from discriminating against them and refusing to handle their messages. The contract is for five years, but at the end of the contract period, the syndicate undertake that there shall be no increase in the rates provided for in the contract except with the consent of the railway board, which, as we shall see in a moment, may be replaced at a given time by another board.
There is another important feature in that contract. Our state-owned Pacific cable is now loaded up to its full capacity. It may become necessary before long for us to duplicate that cable or provide some other means to carry some of the business which cannot be taken care of by the cable.


William Findlay Maclean: Is not
the present Pacific cable a profitable proposition?


Louis-Philippe Pelletier: 
Rodolphe Lemieux: What subsidy is paid?


Louis-Philippe Pelletier: None at all. This is
a very good arrangement for Canada, I think. We simply allow them to come in. There is a clause in the contract under which we reserve the right to buy the whole outfit by means of expropriation, This is done in order that these people may not raise the point that they have been taken by surprise in case Canada should decide that it is desirable to adopt a policy of state-owned wireless telegraphy. My hon. friend has just asked as to the subsidy. Probably it would be better to read the section of the contract relating to that in order to give information:
13. The present agreement does not bind the Government, the press, nor the public to give all or any of their business to the syndicate, it being understood that the syndicate enters the field of general competition at its own risk and expense, and that any other company or companies may be licensed to do business as if this contract had not been passed.
In brief, this is a new competitor which enters the field in accordance with the proverbial belief that competition is the life of trade, and that the more competition there is the better the chance of having the rates of existing companies lowered.
There is a somewhat important clause in the contract, clause 8, which I shall not read, but to which I call the attention of the House. I have already referred to it, but it is a pretty comprehensive clause and may require further explanation.
It is provided that if this syndicate does not give us the satisfaction which it guarantees, Canada shall have the right totake over the system and operate it.
The agreement has been signed subject to the ratification of Parliament.
The other part of the Bill provides for the creation of a board to be called the Ocean Telegraph Board, which shall be composed of the Postmaster General, the Minister of Marine and Fisheries, the Minister of Railways and Canals and the Minister of Public Works. And this board, when the law is passed and when it has the power to make the regulations, will to all intents and purposes so far as ocean telegraphy is concerned, have all the powers which this contract confers upon the Board of

Railway Commissioners. Until such a board is established and has made regulations, the Board of Railway Commissioners will take care of the whole business. We provide in this Bill, as has been done in England, that the wireless and the cable companies shall be obliged to obtain from the Government of Canada a landing license. It is doubtless well known by hon. gentlemen of this House that in England no cable or wireless company has the right to erect any cable or wireless station on the shores of the United Kingdom without receiving a landing license from the British Government.


William Findlay Maclean: Does the new company possess that right to land in England?


Louis-Philippe Pelletier: Yes.


William Findlay Maclean: Then why is the Postmaster General of England not a party to this contract?


Louis-Philippe Pelletier: The Postmaster General of England informed us that he would grant a landing. license to this company if they undertook to inaugurate a system of wireless telegraphy between England and Canada. There is no need of the British Post Office Department co-operating in this contract to any greater extent than we take part in it ourselves. We give the company a landing license, and the British Government does likewise. All the expense is borne by the company.


Rodolphe Lemieux: As between different
points in England, will they give the same rates as they give Canada?


Louis-Philippe Pelletier: I understand that
they give them a very good rate; I shall know more about that in a few days. At all events, the syndicate is satisfied with the rates that have been given by the British Post Office Department.
I think there is not much further to be said in regard to the matter. In brief, we shall now have four competitors. In the past we have had the Marconi stations and two cables companies; this is a new competitor entering the field of free competition at its own risk and expense. I fully expect that it will be a great success, and if so it will not be necessary for Canada to lay a state-owned cable in the Atlantic ocean. If by this experiment we can show to the British Postmaster General that in his present expectations so far as wireless telegraphy is concerned cannot be realized, it is likely that Great Britain, Canada, Australia and New Zealand will agree to take up the matter of a state-owned Altantic cable.


Rodolphe Lemieux: How do the Marconi rates compare with these?
* Mr. PELLETIER


Louis-Philippe Pelletier: I think they are a little higher than the rates we have here, but there has recently been a reduction. In this regard I speak with a great deal of hesitancy, because I am not fully informed in regard to the matter. I do not want to be understood as saying anything at all against the Marconi system; I consider Mr. Marconi to be a great public benefactor. My hon. friend knows that Canada built a Marconi station in 1902 at a cost of $70,000. In our negotiations with the cable companies, when we suggested that they should make their rates as low as those of the Marconi system, they told us that the Marconi people were not serious competitors. I would not like to go so far as that; I think there is a great deal of good in the Marconi system, but the object in this case is to have these four companies competing, resulting in Canada's obtaining the cheap trans-Atlantic rates of which we have been so desirous for many years.


Mr. ARMSTRONG (East Lambton):: For what length of time in addition to the five years mentioned in the contract is the company allowed to continue in business?


Louis-Philippe Pelletier: The company will be on the same footing as the other cable or wireless companies. They will have to obtain landing licenses from this Government, and these licenses will set out the length of time during which the company will be allowed to do business.


Joseph Elijah Armstrong: The Government are entering into a special arrangement with this company for the transmission of messages; what about the length of time?


Louis-Philippe Pelletier: This arrangement is
for five years only, and at the end of that time the company undertakes not to raise the rates.


Joseph Elijah Armstrong: They will continue
to do business for the Government ?


Louis-Philippe Pelletier: They are not doing
business for the Government; they are doing business for the public. The Government is simply giving them permission to do the work.


William Findlay Maclean: Does the Government, by this new ocean cable board, have jurisdiction over the existing cable companies' rates ?


Louis-Philippe Pelletier: Yes. I am informed by the law clerk that there may be a necessity for a resolution in connection with this Bill because of clause 8, to which I have already drawn attention. This clause provides for the taking over of these stations by the Canadian Government, if this is deemed to be in the public interest. This is only a possibility, but it might come to pass, and before proceeding with

the second reading of the Bill I shall bring before the House a resolution approved by His Excellency the Administrator.


Mr. PUGSLEY:: Is this not necessary
before the first reading ?


Mr. SPEAKER:: In recent years we have repeatedly had Bills introduced, and had the resolution passed and referred to the committee after the second reading. Chip rule says that the proposal shall be initiated by a resolution; the English rule says that, where the expenditure of money is a subsidiary consideration, the Bill may be introduced on motion, and then the resolution passed and referred to the Committee of the Whole to which this Bill is referred, after the Bill has received its second reading. The contingency in this case seemed to be so very remote that I thought it was quite proper to allow the Bill to be introduced in this way, as has been done on several occasions in the last few years.


William Pugsley: Why is it proposed to
give to the Committee of the Privy Council, instead of the Board of Railway Commissioners, the control of this wireless system ? The Privy Council have no experts and no machinery such as are possessed by the Board of Railway Commissioners.


Louis-Philippe Pelletier: We have followed the policy adopted in England in that respect. The committee known as the Landing Rights Committee is presided over by the president of the board of trade and the Postmaster General, and other members of the Government are connected with it.


Rodolphe Lemieux: I have
listened with a great deal of attention to the very lucid statement which has just been made by my hon. friend the Postmaster General (Mr. Pelletier). I congratulate the minister on the very clear manner in which he has introduced the subject to the House. The question of cable rates had always a special interest for me when I was Postmaster General because I considered myself to be the minister of communications as is the case in every other country in the world. Besides, I pride myself on being a member of the journalistic fraternity and I have always thought that we should pay more attention to the distribution of news coming from the Mother Country throughout the British Empire. The question is one of imperial importance and should therefore receive the attention of all well-wishers of the Empire. The question is not new.	It has come before
various Imperial conferences since 1887, the date of the first Imperial conference. We all know that the conference which sat in Ottawa in 1893 or 1894 was almost
wholly consecrated to the establishment of the Pacific cable. In that respect the country and the Empire owe a debt of gratitude to Sir Sanford Fleming, a distinguished Canadian, a grand old man of whom we are all very proud. We all know that Sir Sanford Fleming devoted his whole life to the laying of the Pacific cable, and I am quite sure that if Providence spares him for some years to come he will live to see the last gap filled, that is to say, the laying of a state-owned Atlantic cable. I must not forget also that the Board of Trade of the city of Ottawa has always been foremost in its views for the advancement of cheap telegraphic communication within the Empire. At various conferences which followed 1887 and 1894 resolutions were adopted whereby the Home Government and the Dominions were pledged to endeavour to obtain from the cable companies a sensible reduction in rates or, as agreed at the conference of 1911, failing in this, the establishment of a state-owned cable between Great Britain and Canada.
I have followed with great interest the remarks which have been made by my hon. friend. True, in the past we did not succeed in obtaining from the cable monopoly the reductions to which we were entitled; true we cannot persuade that monopoly to bring down its rates to a reasonable level; yet I believe that there is a much better arrangement to be made for cheap telegraphic communication between Great Britain and Canada than can be made under any wireless system. Not that I wish to minimize in any way whatever the arrangement which has been made by my hon. friend with the Poulsen Company, but we know to-day, from our experience with the wireless system, that it cannot be worked with advantage as against the cable because at certain hours of the day there is some atmospheric phenomenon which prevents the working of the wireless. I have that horn Mr. Marconi himself whom I had the honour to meet in England when I was there on similar errands.


Louis-Philippe Pelletier: This syndicate undertakes to give continuous service, day and night.


Mr. BORDEN:: Is it at the same hours in each day that the difficulty occurs?


Rodolphe Lemieux: No, it is rather too technical a point for me to explain fully or to say at what particular hour, but it corresponds with the course of the sun. Before the second reading of the Bill takes place I hope to be able to find in my correspondence the real cause of the non-operation of the wireless system at certain hours of the day.
Whilst I do not wish to criticise or minimize the arrangement made by my hon.

friend, yet I persist in stating that the question of reasonably cheap telegraphic communications 'will only be solved in Canada and Great Britain when you have a state-owned cable. There are older members than I am in the House, you for one, Mrt Speaker, who remember that when the Pacific cable was established a few years ago there were people who thought that it would be a huge failure, and the Pacific cable, because, it was a state-owned cable was made the target of all the criticisms of the various cable companies which have pooled together during the last quarter of a century. As my hon. friend truly stated a moment ago, the Pacific cable has been a distinct success and to-day its revenues, if they were not used partly as a sinking fund, would far exceed the expenditure. Then we know that the Pacific cable has been the means of developing trade relations and colonial friendship with our sister Dominions, New Zealand and Australia. My hon. friend has met I know, a; I met, some indifference on the part of the British authorities on this question and it is very easy to understand that indifference.- John Bull is John Bull. There is hardly one family in twenty in Great Britain, especially in Scotland and in England, which is not directly or indirectly interested in the great cable system of the world. The shares of these companies are most valuable and wrhen a Canadian minister or an Australian minister knocks at the dour of the Postmaster General of Great Britain to plead in favour of reduction of rates, the British Postmaster General knorvs that his constituents are around him in Great Britain and that if he acts in such a way as to decrease the dividends of his immediate constituents, he will hear from the British electorate. Let us not mince mafters. Here is the trouble; here is the crux of the whole question. In England, in nearly every family of means there are holders of shares in the cable companies, and it has been my experience, after three attempts at least to obtain reductions, that we cannot expect, I will not say the good offices, for we always have the good offices of British ministers, but the warm sympathy of the British Postmaster General, as regards a reduction of cable rates. We must rely on ourselves, and how can we better rely upon ourselves than by starting with stage-ownership in cables? The pool exists in New York, yes, we are controlled by New York. The news which is published in the press of this country, in the West and in the East, is tainted; it is not genuine British news; why? because the cable monopoly is in New York. But let the Government of Canada state that the time hag come for the 8,000,000 British subjects Mr. LEMTEUX.
in Canada, to have a cable of their own and a reduction will soon come from New York. But even if a reduction did come, it would be infinitesimal compared with the larger results to be obtained from a state-owned cable. My hon. friend will admit that the cable is superior to the wireless system. A cable laid between Great Britain and Canada, with reasonable rates, will do more for the Imperial connection than all the reductions likely to be obtained from the American monopoly. I will read with a great deal of interest the contract which has been entered into by my hon. friend with the Poulsen system. Once more, I do not wish to criticise, but I have heard
o much of the quarrels between the Marconi Company on the one side, and the Poulsen Syndicate on the other, that I am afraid my hon. friend is adding to the difficulties and burdens of government of my right hon. friend the Prime Minister. The Poulsens and the Marconis are like the Yorks and the Lancasters in England, or the Guelphs and the Ghibellines, they are at each other's throats all the time. They follow each other from one country to the other. To one who is Postmaster General it is a spectacle to see the representatives of those two firms competing and to listen to their advocacy of the excellence of their respective systems. However, if the system for which my hon. friend has provided is a success, he will be entitled to the congratulations of the people of Canada, but I have my doubts, because I cannot put on an equal basis the wireless and the cable. We subsidized the Marconi system in Canada, and they were competitors with the cable companies, and yet the cable companies simply ignored that competition. With reference to the rates, the arrangement seems to be rather entangled. There is a slight reduction; I had expected it would be more substantial; and it is not very clear to me if, when a message has reached Canada, the consumer -the expression used by my hon. friend is quite right-in the extreme west will pay the same toll as the consumer in Montreal or Toronto. At all events these are questions which will be made clearer when we read the Bill and the contract. For myself, I stand for the penny-a-word cable

nothing more, nothing less.


William Findlay Maclean: Mr. Speaker, I must take this opportunity of complimenting my hon. friend the Postmaster General (Mr. Pelletier) on making some headway in dealing with this very important question. I also wish to express my regret that he has not gone in for a state-owned cable. If there is anything we should fear it is these cable companies whether they happen to be wireless or ordinary cable companies. Up to the present time they have been public enemies

rather than public friends and as regards wireless, we do know that twelve years ago we entered into am arrangement with the Marconi Company which was to bring relief. It has not brought that relief up to the pxesent time and there is no assurance that this new company will not follow in the footsteps of the Marconi Company in this respect. While it may be an independent company at the present time, can anybody say for one minute that its fate will not be the fate of the other competitive companies in regard to cable business some day, or that it will not be taken over and made a part of the great cable monopoly- the greatest. monopoly in tire world to-day P Its control is world-wide. It controls the American Beil Telephone Company, it controls the Bell Telephone system of Canada and it will not be long before it will control this system which is to be its competitor. I have not the slightest confidence that Government regulation, unless it is of the most stringent kind, will be able to regulate these companies.
We_ have had a most peculiar instance of this in our own country. We incorporated railway companies that were to give us com. .petition, we gave them large subsidies, generous land grants and legislation. Now the contention is that they are not able to deliver the goods that they promised to deliver in the way of competition. It is contended that the Canadian Pacific Railway Company must not be allowed to reduce its rates because the other companies that are supposed to be its competitors could not stand the competition. Yet they promised competition.
There is another feature of this proposition and it is this:	We committed ourselves to a great Imperial pact for a state-owned cable in the Pacific and it has proved a success. Why not continue that pact, have state-owned cables in the Atlantic and complete the circle around the world in due_ time? There should have been some kind of conference between the various parties to the Pacific cable before this Government turned aside and determined to take what appears to be an independent action. We should have kept our arrangement with the Mother Country, with Australia and New Zealand, especially in view of the faot that the Pacific cable has proved a great success, and will prove a greater success in a short time, and in view of	the fact	that	it isbeyond question that a state-owned cable in the Atlantic would be enormously successful. We were bound to have consulted the Imperial authorities and I tried to ascertain from the hon. Postmaster General if he had consulted them but I did not get any very direct information in that respect.	I	know	the	power
of the cable monopoly but I believe that all we have to do is to intimate to the Home Government, that inasmuch as the Pacific cable has been a great success, we as a portion of the Empire, we as Canadians interested in a state-owned cable and a state-owned telegraph system, whether it be cable, wireless, or some other system, propose the inauguration of a state-owned system in the Atlantic. In other words, inasmuch as the Mother Country controls the local telegraph lines, in cooperation with all the other states of Europe controlling their lines, and in view of the fact that a state-owned line now exists in the Pacific, we believe that we ought to have continued that system and that we ought to have state-owned cables in the Atlantic which would give us competition right away. There is no certainty that we are going to have this competition. It may be that it will come, but if it is a good thing then it ought to be immediately taken over by the state and incorporated into a state-owned system.
I do not at all like the idea that citizens of the United States should control the cable system of the Empire, the cable system of the world and the cable system in which Canada is interested. We are able, we are wealthy enough, to undertake a cable system of our own and I think we have had sufficient experience of the ability of state-owned cables and telegraphs to successfully serve the public to warrant us in making the venture.
There is another characteristic of this cable system which has been in evidence in the past. Wherever the business was unprofitable, the state or the Empire was allowed to take it over, but wherever it was profitable a private company got control of it and a private company have control of it to-day. They have repeatedly refused to reduce the rates in this country and they will continue to refuse to reduce rates. They will try to take over this company and incorporate it into their system. They will try to break up the harmony that has existed up to the present time between the Mother Country and the Imperial states, and what I Tegret most of all is that the British Post Office Department is not a party to this proposition, and that in connection with it there is no direct understanding with the Empire or any of the states with regard to taking it over. The basis of Imperial unity which pervaded our action in the past in connection with the Pacific cable is now departed from and a new arrangement is made which may not be successful, which is not to come into operation immediately and which may be delayed a long while. But we do know that we can start a cable of our own to-morrow, that will do good service in a

few months and that will immediately cut the rates five hundred per cent by the use of the multiplex instrument which will double, quadruple and octuple the transmitting powers of the ordinary cable under sea. Immediately this reduction goes into effect these cable companies will also reduce their rates and perhaps, if we wee to negotiate with these companies, we would get better rates from them. But, so far, our experience has not been successful in dealing with these companies. This cable monopoly that exists in England is much more powerful than even the late Postmaster General (Mr. Lemieux) has described it. It has been able to chloroform every Cabinet that ever ruled in England in order to maintain its privileges. To-day the Maconi company has been turned into a monopoly and it is now one of the biggest corporations in England. It is the subject of investigation before a committee of the British House of Commons, and	it is tainted with
the old taint of all these corporations-it is loaded with watered stock. It is up to all the devices of corporations of that character. It has now control in the United States. It succeeded the British monopoly. It has taken over the Bell Telephone Company:	It has got some of our
local telegraph lines, and it will do its best to get hold of this company with which we are making a contract. Why should we not go in immediately for a state-owned cable in Canada in conjunction with the British Government and the other colonies? Great Britain has long ago nationalized her cable lines, and Australia has done the same. Canada should have not only her own cables, but her own land lines as well.
To-day there is a monopoly in telegraph tolls in Canada. Are we dealing with that question? The rates charged to the people of western Canada are monopolistic, unfair, exorbitant, and ought to be reduced forthwith. I would give the telegraph companies in this country twenty-four hours to cut their rates in two, and I would make them give the public a good service at reduced rates. If they would not do it, I would immediately take over the lines, or would start to build lines of our own in connection with the Canadian Post Office. That is what we should do in this country. We can do it and we ought to do it in the interest of the public. We are building up a Bell Telephone monopoly in this country; we are building up a telegraph monopoly; and we are now going to build up a cable monopoly. Why not put an end to all these monopolies? If we take anything from them, we can give them a fair price for it. Let us start with the idea that the Empire must own the cables, and that the main object of cable and telegraph lines Mr. MACLEAN (South York).
is the public service, the public welfare, and not the profits of companies and shareholders.
We are working at this matter of state ownership in the province of Ontario, and are making some headway. The basis of the headway that we are making is state competition. State competition inaugurated in the province of Ontario in the way of supplying electrical energy has proved a great success. It has cut the rates in two. The work is only beginning, and even now the companies are surrendering and are offering to sell out. In connection with that, we may in a very short time develop a system of province-owned local railways.
What the world calls for, whether in the United States, in Canada, in Australia, or in Europe is state ownership of land lines, cables and all other systems of communication. England is going back on her record. The Postmaster General of England to-day is going back on the record of his Government and the reputation of his country when he allows a monopoly of this kind, and does not take control of these lines and complete the system which was inaugurated some years ago on the Pacific. I do not know what his relations are with the Marconi company, but those contracts that have been made in England are being investigated to-day. After watching the proceedings that have taken place, and knowing what England has done and what all other countries in the world except America have done in the matter of state ownership, I sincerely regret that, after the awful experience which we have had of these cable companies, another company should be allowed to come in and uphold rates, because competition does not reduce rates. The new political doctrine is that you cannot reduce rates by competition. You can do better perhaps by combination; but the best thing of all is state ownership and the idea of giving service to the public rather than of making money for shareholders.
What is the value of low-priced cable messages? We have heard a good deal about war and the dangers of war. Europe to-day is threatened with war. All the world is more or less threatened with war, and enormous sums of money are being paid out on account of the danger of war.


Thomas Simpson Sproule: The hon gentleman is
wandering rather far afield.


William Findlay Maclean: I have almost concluded my remarks. I still contend that the Government in the public interest, should have had a state-owned telegraph line, for this reason, that public opinion to-day regulates the world in the matter of peace and war. If telegraphic communication is very cheap, it enables public opinion to be interchanged, and public

opinion will be the new policeman of the world which will keep the nations from war. The press of this country are given reduced rates, and deferred messages are sent at reduced rates, but the mark of a private corporation that controls a public service is that it does not give the ordinary every-day user the benefit of the reduced prices. The only way to give relief to the ordinary every-day user is by state ownership, under which profits disappear and service is the chief principle. Surely in this twentieth century and in Canada we ought to be sufficiently up to the march of the times to be prepared to assume our responsibility of joining with the Mother Country in having state owned cables all round the world and state owned telegraph lines wherever the British flag flies.


William Pugsley: I entirely agree with
my hon. friend from South York (Mr. Mac-lean.)^ It is a great pity that a new company is allowed to establish a wireless system of telegraphy, which imposes another obstacle to a state owned cable. I think the Government should rather have taken some steps towards the establishment of a state owned cable; or, if the Government is of the opinion that a wireless system will better meet the public necessities, then the Government ought to establish a wireless system across the Atlantic. Some twelve years ago we gave rights to the Marconi Company. Now it is proposed to give rights to another company. The very fact of giving these rights to a new company necessarily postpones Government action in the direction of a state owned cable or wireless system.
My hon. friend the Postmaster General (Mr. Pelletier), mentions the names of a number of men who are associated with this company. He says that they are all practically multi-millionaires. He has not told us what stock they have taken in this company. He knows perfectly well that these companies are ordinarily limited liability companies, and that the financial responsibility of the company does not depend upon the wealth of the individual shareholders but upon the amount of money which each of these shareholders is putting into the company. As to what money these millionaires have put into - the company my hon. friend the Postmaster General has not given any information whatever, but he has told the House that a wireless system across the Atlantic can be established for about $400,000 as against $5,000,000, the cost of the two cables.


Louis-Philippe Pelletier: Two and a half
millions.


William Pugsley: If it were a double cable, which, I suppose, would be necessary in practical operation, the cost, I assume, would be $5,000,000. I take it that the companies have double cables.


William Findlay Maclean: They have twenty or thirty lines.


William Pugsley: My hon. friend says that this wireless system will be capable of transmitting one hundred per cent more words per minute than the cable company.


An hon. MEMBER:: Letters.


William Pugsley: That would amount to practically the same thing. And yet, what is the reduction which the hon. the Postmaster General has stipulated? It is a very small reduction. A reduction upon the whole of not. more than twenty-five per cent.


Louis-Philippe Pelletier: Oh, oh.


William Pugsley: The hon. gentleman
speaks of it costing eight pence per word against one shilling per word, speaking of the ordinary code messages.


Louis-Philippe Pelletier: That is not the only reduction.


William Pugsley: But it is a very important part of the service, and I think that it can fairly be taken as meaning the general reduction which this wireless system is to bring about. Of course, I have not had the opportunity of reading and considering the Bill, and the remarks which I make are subject to reconsideration after I have read the Bill. But I do. maintain that, having established a state-owned cable upon the Pacific, and having practically established a state-owned telegraphic service across the continent from the Atlantic to the Pacific- for that is practically what we do when we pay the Canadian Pacific railway a rental on a special wire-we should go further and establish an Atlantic system either of cable or wireless communication, whichever may be thought best. This we should do jointly, if possible, with the sister dominions and the Mother Country, but if these do not see fit to join us, then Canada should move ahead and establish a state-owned telegraph service herself. Instead of that, what have we? We are encouraging the expenditure of a considerable amount of money by another company. We are giving that company a license and a special standing. It may be said that there is nothing to hinder the' Government from entering upon this business itself. But we know that in practice, the effect of giving this license will be that it would be regarded as a breach of faith if the Government saw fit to step in. Indeed, the contract that the Postmaster General has made provides for the acquisition of the company's system by the Government, but upon what basis, we do not know until we see the Bill. Would the Government have the right to take	over
this system by paying simply what the system cost, or the amount for which it

could be duplicated? Or shall we have to pay on the basis of prospective profits?- which would add, of course, to the value of tlie company and would have to be taken into account by arbitrators who would be called upon to decide the amount to be paid.
For these reasons, I say that, instead of licensing a new company the Government ought now to take up in earnest, the question of a state-owned cable, or if it is thought a wireless system will answer as well, they ought to take up the question of a state-owned wireless system, and let the system across the Atlantic be controlled by the country in the interests of the public and let a service be given that will afford the people of Canada the cheapest possible communication between the overseas dominions on the one hand and the Mother Country on the other without profit for shareholders, but simply with such earnings as will pay the low Tate of interest with which the country will be satisfied upon the cost of installation.


Joseph Elijah Armstrong: The announcement of the Postmaster General is a very important one, and I ask opportunity to lay my views upon it before the House. I listened with a great deal of attention to hon. gentlemen opposite and wondered why they should take a course so different from that which they took a few years ago. I have for many years past ad vocated a government-owned cable on the Atlantic and a government-owned system across our country to connect with the Pacific cable. Even a couple of years ago we knew the Pacific cable to be a paying proposition, and so hon. gentlemen then had the oppo-tunity to establish the state-owned cable across the Atlantic and the state-owned system in our own country, if they had so desired. But they did nothing of that kind. On the other hand, they licensed the Marconi Company to come into Canada, and not only that, but granted it enormous sums of money to build stations, and itself spent further sums to establish stations in the different parts of Canada, and then gave the company the right to operate the profitable stations, the Government taking over the operation of those that yield small returns. I still strongly advocate the establishment of an Atlantic cable owned, controlled and operated by the Government, and also a line across our own country. The cost of two Atlantic cables would be only 5,000,000, which is a small sum in comparison with the amount of benefits which the people would derive from them. I am now, as I have always been, strongly in favour of the Government owning the wireless telegraph system in this country. I still believe we should have appointed the commission I asked for last year to investigate this matter; if they Mr. PUGSLEY.
had been appointed, I cannot help but believe, we should have had a state-owned wireless telegraph system in this country.
I quite understand that the Postmaster General has gone into this matter fully and has investigated it most completely.
I know we all appreciate his efforts on behalf of the people of Canada to obtain reduced cable rates and also to extend telegraphic communication both by wire and wireless systems. I do hope the _ time is not far distant when Canada will own, control and operate its own cable^ system across the Atlantic, and in connection with the Pacific cable, and also the wireless telegraph system, which will do more to connect our eastern and western provinces than anything else that could be established. I do not wish to oppose the proposal brought forward by the Government. It is a step in the direction of cheaper rates for the people of Canada, and I do hope that when the five years go by, then at least, and if possible before that,-


William Pugsley: That is too long to
wait.


Joseph Elijah Armstrong: It may be too long
to wait, but hon. gentlemen opposite did not even take into consideration^ the owning and operation of the Marconi wireless; they started to hand out this monopoly to the Marconi people.


Rodolphe Lemieux: It was only a pioneer
then.


Joseph Elijah Armstrong: The hon. gentleman knows that there were dozens of wireless telegraph companies in different parts of the world in operation at that time outside of the Marconi wireless telegraph system.


William Pugsley: There was only one
Marconi.


Joseph Elijah Armstrong: Yes, but, as the hon. ex-Postmaster General has already stated, it was a system upon which we could not depend. The system now being introduced by the hon. Postmaster General to assist in the development of wireless telegraphy in this country is one that has been operating between San Francisco and Honolulu for some months past with a great deal of satisfaction and with a great deal of benefit to the people of the United States. That system has also been operated between Washington and Honolulu, a distance of some 6,000 miles. Not only has the Poulsen system been successfully operated in these particular instances, but it has been operated day and night with great success, and the service is away in advance of anything that has been given by the Marconi wireless telegraph people. The Postmaster General is to be congratulated, I am sure, for taking this progressive step, although personally I regret that he hat

not gone further and made it a government-owned, controlled and operated system, in order to facilitate the transmission of intelligence across this country.


Mr. MACDONALD:: Has the minister
taken any steps towards providing for state-owned telegraph lines in Canada?


Louis-Philippe Pelletier: The matter to which my hon. friend refers is not connected with this Bill.


William John Macdonald: The hon. member for South York (Mr. Maclean) mentioned it; it seems to me that these matters are interwoven together-the delivery of cable messages in any part of Canada where land lines are used is akin to this proposal. Surely the minister will tell us whether1' he has considered the matter, and if so, what has been done?


Thomas Simpson Sproule: If this matter is dealt
with, it will have to be with the indulgence of the House.


Hon. FRANK OLIVER:: Is it not a
fact that the service given by the present Marconi system is not of far-reaching importance because of the combination formed against it by the land lines in Canada? I understand that land telegraph lines in Canada are working in conjunction with the cable companies, and thereby the people of Canada are to a gTeat extent excluded from the benefits of the Marconi service. If this is a fact it would -seem to me that when another wireless company is introduced the same conditions are likely to prevail, and we are liable to lose the presumed advantage of the reduced rates for the same reason as we have lost the benefit of the light Tates of the Marconi Company. I understand the minister to say that the Marconi rates are very much the same as the rates proposed under the new contract.


Louis-Philippe Pelletier: I believe the Marconi rates are a little higher.


Frank Oliver: In any case, the wireless rates are substantially lower than the cable rates. We have not been getting the advantage of these wireless rates during several years past, not because we did not have a wireless system in operation, and not because we did not have a contract with an effective wireless system, -but because of some condition, not generally known, whereby the public as a fact did not receive the benefit of that system. Their business did not go by Marconi; it went by cable, and paid cable rates. We are introducing another wireless system under similar conditions, with the difference that the Poulsen system will go to Montreal, thus reaching the centre of business, which the Marconi did not. But, apart from that, I understand that there is no control of the land lines in Canada that would ensure to the general publie the advantage of these rates under the new contract, which are similar to those charged under -the Marconi contract. I would think that if no such provision has been made there is some ground for the view taken by the hon. member for St. John (Mr. Pugsley) and to some extent by the hon. member for South York (Mr. Maclean) that we may be strengthening a combination by the introduction of this new company rather than introducing effective competition. I would suggest that this is a very proper time to discuss fully and heely the conditions to which I have alluded that under the existing wireless system the people of Canada have not been getting the benefit of the reduced rates afforded bj chat system-and to consider the possibility of measures being taken to ensure to the people of Canada the benefit of the reduced rates now being given by the two wireless systems instead of by only one as before. I feel, with my hon. friend the member for South York, that this is a matter of very serious importance, and I hope that the minister will give full attention to that phase of the question.


Louis-Philippe Pelletier: Although I spoke at
some length, I did not go into all the details of this Bill. I may say that there is in it a provision to prevent discrimination by the land lines companies as against the wireless and the cable companies. The very provision to which my hon. friend refers is to be found in the Bill as one of the powers which the board may enact by regulation, that is the Government Ocean Telegraph Board which we are creating. They will have power by regulation to prevent discrimination by the land line companies. My hon. friend from Edmonton wishes to know why there has not been more good results from the $70,000 which we paid to the Marconi company in 1903. I might put the question to him for the years prior to 1911. There aTe of course three Marconi companies, the Canadian, the English and the American. The Marconi Company of Canada, when they heard rumors ' that we were going to make some arrangement with this company, acted as the hon. member for Rouville (Mr. Lemieux) has suggested and said that they should have all the wireless business in this country. I put the question to them as the hon. member from Edmonton has put it to me. I said: Can you tell me what the result of your long experience has been and what returns there have been to Canada for spending $70,000 to erect your station at Glace Bay. Their answer was not at all that they were handicapped on account of the land line companies combining against them or discriminating against them, but that atmospheric conditions were against them. I really believe and I can state without fear of contradiction that the Marconi have not



had before last year a sufficiently powerful station to produce the waves which would give a good wireless service over the ocean.
I do not say that to hurt their prospects or business, I think they have realized it themselves. I put it to them; why do you not do more business in this country? I said to them that the cable companies practically laughed at us when we asked them to reduce the rates to the same rates as the Marconi company and said they were not concerned with Marconi rates as the Marconi company was not a competitor for the ocean traffic. I asked a reason for that to the Marconi people and they said they were going to improve, and they may have improved lately but they had not done so up to the time these negotiations took place. The result is that last year the number of press messages transmitted by the Marconi company from their station at Clifton in Ireland to Glace Bay, has not amounted to more than two hundred. They do business with the New York Times, which is practically the only paper on this continent doing business with the Marconi company.
I hope and trust that the Marconi company will be able to give more satisfaction in the future. I cannot see the point of the hon. member for South York (Mr. Maclean) when he says that we should have no competition. I have always understood that competition was a good thing and might produce beneficial results.
Mr. MACLEAN; Government competition, yes.


Louis-Philippe Pelletier: I would ask the hon. member for St. John (Mr. Pugsley), who is very sorry that we have not established a state-owned cable, why has it become more necessary in 1912 than it was in 1911 and the years previous? It is all very well for my hon. friend to blame us for not having done in twelve months what the Government to which he belonged failed to do in fifteeen years. The future will prove the truth of what I am saying, this system will be one of two things, it will be a greater success than the cable or it will be the road that will lead us to a state-owned cable. I am sure my expectations in this respect will be realized. If it be true that this company can give us a service of four hundred letters per minute, if they can give us a night and day continuous operation with the promptness and efficiency which are provided for in this Bill, and if we are perfectly satisfied with the service, to secure which we pay nothing, I ask, why should we sp :nd $5,000,000 to less satisfaction. It seems to me that the whole question is solved.


William Pugsley: My hon. friend says we get it for nothing. Do not the people of Canada pay for it?
Mr. PELLETIER.


Louis-Philippe Pelletier: No, the people of
Canada do not pay one cent for it, they simply say to this company: you can come in and compete with the other companies and we do not pay you one cent. The hon. member for Edmonton was loyal enough to admit that there was a great reduction in the cable rates. The hon. member for St. John (Mr. Pugsley) suggested that he should not speak of the great difference between the cable rates and these rates. My hon. friend spoke of twenty-five per cent decrease on the code messages. There is, on the code messages, a reduction of thirty-three and one-third per cent, and on the plain-language messages there is a reduction of sixty-six and two-third per cent. In plain-language messages, the cablegram or lettergram the man on the street will use, the public will hereafter get for fourpence what to-day costs twelve-pence. Is that not a great reduction? I think it is a fair reduction to begin with and if we succeed in that we will have made great progress in the right direction. My hon. friend from South York (Mr. Maclean) and my hon. friend from Lamb-ton (Mr. Armstrong) say that this has been their policy for years. As my hon. friend from Lambton rightly put it, he has been urging this state-owned cable for years, but my hon. friends on the other side were not of the opinion that we should have a state-owned cable until now. Let me put it in -this way, not from a party standpoint, but from a broad standpoint, my hon. friend from South York (Mr. W. F. Maclean) says, let us act in conjunction with the British Government, and let us have a state-owned cable. That is very easily said, but when you realize that the British Government is not now willing to have a state-owned cable, the proposition is somewhat different.


Rodolphe Lemieux: The British Post Office may not be willing to contribute to the laying out and maintaining of a state-owned cable, but surely a rich and prosperous country like Canada could herself lay, equip and maintain a cable. The cost would have been a very important matter some twenty-five years ago, but to-day, Canada, with its abounding revenues, could afford it. It would cost $2,000,000 to have a cable and a cable-steamer.


Louis-Philippe Pelletier: Two millions and a half for one cable; but my point is that at present we have four countries acting as partners in the Pacific cable, and that is an important point, it seems to me. Would it not be desirable, if we were to continue this all-red line from the Antipodes to Great Britain through Canada, that the same four partners should join? It seems to me there is importance in that. We have the big partner, as I shall call the United Kingdom, unwilling at the present

moment to join. They state as one of their main reasons that with the rapid progress of wireless telegraphy we might have an outlay of $5,000,000 without any practical result. What can I answer? They say: let us try these wireless companies which are making such headway now; if we do not succeed, we will have the state-owned cable. I may tell my hon friend from St. John (Mr. Pugsley) that we are in no way bound morally, or in any other way, not to build a state-owned cable at any time. I have read clause 13 of this contract which provides that this company comes in as a free competitor, and that our hands are not tied. We have a clause in the contract in virtue of which we can establish state-ownership of wireless telegraphy if it is good. We have the right to benefit by it, if it is good, and if it goes to the wall it will cost us nothing.


William Pugsley: Is not the proposition for a state-owned cable contingent on buying out the present company?


Louis-Philippe Pelletier: Of course, and their patents.


William Pugsley: And their actual and prospective profits.


Louis-Philippe Pelletier: Surely if we were to buy out this company and to establish state-ownership we would not have to go into all this, because it goes without saying that this matter will take care of it3elf.


Frank Oliver: Is there anything in this agreement to prevent the Government from making a contract with another wireless company?


Louis-Philippe Pelletier: There is a clause in the contract which says we shall have the right to make any other contract we like. Perhaps I had better read the clause again:
The present agreement does not bind thq Government, the press, nor the public to give all or any of their business to the syndicate, it being understood that the syndicate enters the field of general com^ petition at its own risk and expense, and that any other company or companies may be licensed to do business as if this contract had not been passed.
That is pretty wide, my hon. friend will see. I want to draw the attention of the House to a fact which perhaps is not so well understood as it should be. When I say we have a Pacific cable all the way from New Zealand and Australia to Montreal, I want to be well understood. We have the Pacific cable from New Zealand and Australia to Bamfield near Vancouver, but the systems stops there in a way. We have a leased wire from the Canadian Pacific railway from Vancouver to Montreal for the use of the business of the Pacific cable, 286i
but the Pacific Cable Board have not the control of the line between Vancouver and Montreal. That line is only for the transmission of cable business, tlere arises one of the objections put to us by the British Postmaster General. He said to us, before speaking of a state-owned cable, Canada should provide a land line communication from Halifax to Vancouver.


Rodolphe Lemieux: Just as we have leased a wire for the cable from the Pacific to Montreal, so we would be in a position to lease another wire, if need be, from Montreal west.


Louis-Philippe Pelletier: There is no question about that, but as Mr. -Samuel rightly put it, a line should be added to carry the business through Canada with the right of stopping at any point. We should have a ^system of land line telegraphy, owned and controlled by the Government. There is something i-n that.


Rodolphe Lemieux: There is some difficulty, but it is not insuperable.


William Findlay Maclean: The wireless company will do by itself.


Louis-Philippe Pelletier: If this wireless company is a success, would it not be foolish on our part to expropriate one or two land lines, or to stretch one, two, or twenty wires from Halifax to Vancouver to do the business which will be done under this agreement by the wireless ?


William Findlay Maclean: Not if the State can
do it for half the cost.
.?.?EA?ER: 14 seems to me that we are drifting into a very wide discussion on the introduction of a Bill. It is permissible on the introduction of a Bill to set forth succinctly and clearly what the Bill contains; but it seems to me that great latitude has been taken. I might point out this other fact, that on the introduction of a Bill, which is not like a substantive motion, it is not usual for the mover to have the right to reply and to go over the whole ground again.
-Mr. PELLETIER:	My hon. friends by
putting questions have probably carried me further than I should have gone; consequently I shall reserve any further remarks I have to make until the second reading or the committee stage.


Mr. EMMERSON:: Does the Bill provide for the creation of an ocean cable board to have jurisdiction over matters renting to communication by means of the cable ?


Louis-Philippe Pelletier: Yes.


Henry Robert Emmerson: Why this departure
from the governing principle which we

have adopted in Canada ? All telegraphs and telephones are to-day under the jurisdiction of the Board of Railway Commissioners. Would it not be more desirable to have the wireless system also under the jurisdiction of that board ? It is true that in England they have not a board of railway commissioners.


Louis-Philippe Pelletier: Oh, yes.


Henry Robert Emmerson: As I understand it,
it does not control and regulate in the same way.


Louis-Philippe Pelletier: They have a railway and naval board, which has the same powers as our Railway Board, ^but wider powers so far as the navy is concerned. The question put by my hon. friend from Westmorland (Mr. Emmerson) is the same as that put by my friend from St. John (Mr. Pugsley). In England it is a part of ministerial duty to attend to anything concerning the high seas. In a Bill which my hon. friend from Rouville (Mr. Lemieux) introduced into this Parliament, the Board of Railway Commissioners was given power to deal with the cable question. The suggestion was made to him by interested parties to put a clause into the Bill declaring that the Railway Board should have no jurisdiction unless concurrent legislation embodying the same principle were enacted in Great Britain. That is the reason why this was not enacted. Matters in England relating to the high seas are under the control of the board of trade, while here they are under responsible ministers.


[Stage Direction]
Motion agreed to, and Bill read the first time.

[Stage Direction]
Mr. ARTHUR MEIGHEN (Portage la Prairie) moved for leave to introduce Bill No. 189, respecting Co-operative Credit Societies.
William Pugsley: Explain.


Mr. MEIGHEN:: I need give no lengthy explanation of the Bill. It is in all chief respects Bill No. 11 of the session of 1910; that is to say, it follows in the main the proposals of the hon. member for Jacques Cartier (Mr. Monk) as embodied in that Bill. There are many variations but there is no variation in principle, and there is no variation in any important detail. The variations are only such as I have been led to make after consultation with those who have had charge of co-operative societies in this country and who are able to give me the benefit of their advice in regard to the subject. I might perhaps mention one or two. Greater restriction is placed in the way of incorporation by an increase in the Mr. EMMERSON.
minimum borrowing powers; greater restriction is placed upon the dealing with minors and greater restriction is placed in the way of circumscription of the area in that all co-operative societies are forbidden to open branch offices. Perhaps I need not go farther at the present time. Greater power is also given the minister in the matter of permitting investment in guarantee funds but, as I said before, the Bill, in the main, follows that proposed by the hon. member for Jacques Cartier in 1910.


[Stage Direction]
Motion agreed to, and Bill read the first time.
POLLUTION OF NAVIGABLE WATERS. Mr. BORDEN moved:
That the names of Messrs. Carroll, Edwards and Steele, be added to the Select Special Committee appointed to consider Bills Nos. 2 and 116 respecting the Pollution of Navigable Waters and that the name of Mr. Chisholm (Inverness) be substituted for that of Mr. Molloy on the said committee.
Motion agreed to.

[Stage Direction]
Mr. ARTHUR MEIGHEN (Portage la Prairie) asked for leave to move the adjournment of the House, for the purpose of discussing a definite matter of urgent public importance, namely, the rapid and alarming increase in rates on the North Atlantic and the duty of the Government in relation thereto.
Thomas Simpson Sproule: Personally it does not
appear to me that the matter is one of definite and urgent importance; but while saying that I am ready to defer to the judgment of the House. It seems to me that a more appropriate time might be chosen for taking this matter up. Is it the pleasure of the House that the hon. member have leave to move the adjournment for this purpose?
And leave having been granted:


Arthur Meighen: I have no desire whatever to infringe the rules for the purpose of bringing up this subject at the present time. Doubtless the matter might be brought up on a motion to go into Supply. If that would bring about' the same result, I am sure it is quite agreeable to me.


Thomas Simpson Sproule: In my judgment, that
would be a more appropriate time.


William Pugsley: There are a great many questions to be brought up on -motions to go into Supply. If the resolution-I will not say die rule-is to prevail, I think the opportunities that members on this side of the House will have to speak on motions to

go into Supply will be very limited. As the hon. gentleman has now had the permission of the House to proceed with his motion, he should do so and not take up the time of hon. members.


Thomas Simpson Sproule: As the freedom of discussion on a motion to go into Supply is very great, because several questions may be discussed on one motion to go into Supply, it would appear- to me that it would be a more appropriate time than the present to bring up this subject.


William Pugsley: I think the hon. member should go on.


Arthur Meighen: I can finish by six
o'clock what 1 have to say. Whether or not the subject that I wish to lay before the House is one that, within the meaning of rule 39, can be called a definite matter of urgent public importance may be open to discussion. Whatever may be said upon that score, there can be no question that the subject is one of grave and increasing importance. In my opinion the time lias come when not only this House but the country should have that importance impressed upon it.
My first duty, and it will be accomplished without much waste of time, is to show that there has been in the freight rates charged both coming and going a very considerable and indeed an alarming increase, especially during the past two years. With the exception of the United States of America, no country is so vitally interested in ocean rates on the north Atlantic as is the Dominion of Canada. We import very largely from the United Kingdom; we sell a great part of our surplus products to the
United Kingdom. On the reasonable level of ocean rates depends to an enormous extent the profits from that trade, and consequently depends to an enormous extent the prosperity of this country.
In endeavouring to put upon ' Hansard ' the change that has taken place, I wish first of all to refer to the increase in rates on imported goods. These changes have taken place largely within the past eighteen months, but the increases commenced before that; they commenced under the late Government; they proceeded under this one. I do not think-I say so plainly -that either the former Government or this Government is in any degree responsible for these increases. The responsibility will rest upon this Government; they will be loaded with it only if they should not avail themselves of any remedy within their reach to relieve the present situation or at all events to prevent it from becoming worse. Hon. gentlemen opposite will agree with me that there is perhaps no subject more difficult of approach. There is perhaps no control more difficult of exercise than control over companies that ply between continents, inasmuch as these companies are not in the sense of domestic corporations within the jurisdiction of any individual country. Whatever may be the difficulties of the solution, its magnitude will demand that it be attempted? What is the magnitude? I have here a table from which I shall ask the permission of the House to have placed on ' Hansard ' in full. The freight rates on ocean traffic are on a ton basis, sometimes of forty cubic feet ait other times of 2,240 pounds. This table shows the increases from 1910 to 1913 on various classes of goods:


William Findlay Maclean: Would
the hon. member say whether there has been a corresponding increase from South America?


Arthur Meighen: I cannot say there is. What I say is the machinery by which the present increase has been made and is maintained does not apply, is not a part of, the traffic between North and South America. My argument deals simply with the North Atlantic rates plying between Europe and this country, chiefly the rates from the United Kingdom to this country and to the United States, and also, with greater emphasis, from this country to the United Kingdom. Now, I would like to put on ' Hansard,' if I might be allowed-it would take a great while to read it-a table showing the increase in the rates on grain passing from Montreal and from American ports to the Old Country.


William Pugsley: I hope the hon. member will not think that I am acting uncivilly if I say that I would not like to consent to these figures being placed on ' Hansard ' without being read. The hon. gentleman has raised a most interesting and important question for discussion. I think it will be the opinion of hon. members generally that if the hon. member for Portage la Prairie is followed by other speakers, it will be advantageous to the House that they should hear the figures read, otherwise it would be impossible to discuss what the hon. gentleman says.


Thomas Simpson Sproule: I thought it would be
more interesting and convenient to the. House to have the figures read than to have them handed in and find afterwards that they had not been published. The rule is, that except the Finance Minister or some other Minister of the Crown, hon. members are not allowed to have documents printed in ' Hansard ' that are not read in the House.


Arthur Meighen: It will take a long time, and I ask the House to bear with me. As. to my authority for these figure, I can only say that the data are not easy of access. There is always opportunity for grave dispute as between various interested parties, and it is somewhat difficult except by production of the actual bills of lading, to prove which is right. All I can say is that I believe the figures I am about to givqi are reasonably accurate. In the main they are so accurate and for the purposes of the argument they can be depended upon. I give first the rates from New York and Portland to Liverpool and London and Glasgow, commencing in 1907 and up to the present time. These I have in greater detail in the Canadian rates, but the table I give embraces the Canadian rates as well as the latter, and it can be said without fear of contradiction that the Canadian rates are for all practical purposes the same as the rates from the United States ports. There has been no discrimination on lines plying from our ports to the Old Country, there have been no reductions of rates from other countries of which we have not got the benefit. The same line of steamers do not ply, so the word 'discrimination ' is scarcely applicable. But, though the same line of steamers do not ply between various ports, there is reason to believe, and I think there can be no doubt, that the same control exists over all. I stated a moment ago that the rates are practically uniform between American and European ports on the one hand and between Canadian and European ports on the other hand. I purpose to give the rates to Liverpool on flour and grain for the year 1907:

Ocean freight rates for February and
February 21-
Portland to Glasgow St. John to Glasgow Portland to London. St. John to London. March 1913-
Boston to Liverpool. St. John to Glasgow
At Six o'clock the House took recess. *
After Keeess.
House resumed at eight o'clock.


Arthur Meighen: When the House rose at six o'clock I had placed before you, Mr. Speaker, a somewhat elaborate table showing the great increase that has taken place in ocean rates on grain and flour. That increase cannot be accounted for by normal conditions of any kind and in my judgment an explanation can be found only in a condition of affairs such as we have been compelled to address ourselves to in other lines of industry, namely the presence of monopoly. What is the monopoly that appears to be in control in this instance? There is no attempt to keep secret the fact that there exists an understanding between -the various steamship lines operating between North America and European and particularly United Kingdom ports. It is known as the Canadian North Atlantic west bound freight conference. That conference, however, took its birth not at the time that the rates were increased in this way. That conference has been an institution of very considerable strength for the last eight years. It has been doing its work in a thorough method. For the first three or four or five years of its existence apparently it devoted its energy to sweeping from the high seas traversed by its lines all of what are known as tramp steamers, those steamships that have operated through many years as the element that introduced real competition in freight rates over the Atlantic. As soon as they had completed their work in that regard by means that are so freely at the command of large interests of this kind, they set themselves to reaping the reward, and commencing about eighteen months ago they have been proceeding since. We are interested in this country from two standpoints, might I say from Mr. MEIGHEN.
March 1913, were as follows:
Pek 100 Lbs.
Grain.	Flour.
11 16	22
1116	22
12 25	20
13 12	20
962	18
10	20
three? We are certainly interested in keeping down as far as we are able the incoming freight rates from European centres. We are interested, in that we are compelled and shall be compelled to purchase from those centres a great proportion of the commodities in use in this country, and the increase in freight rates must to some extent be felt by the purchasers in Canada. As I showed at the commencement, this conference has so successfully done its work that roughly speaking they have raised incoming freight rates from twenty to fifty per cent, and in some cases by even a larger percentage, in that way largely nullifying any advantage we might hope to secure from the British preference. In that freight we are interested, but if I may speak for the portion of the country from which I come, we are interested even more in the general rates on flour and wheat. The first point has a double aspect. We are interested in it for two reasons, or rather from two standpoints. The general raise in the wheat rate and flour rate affects us, and we are affected also by the relative rates on wheat and flour. I will discuss it first from the viewpoint of the general increase. It will be seen that while the raise is in the freights in general, the grain and flour rates are the rates in which we are interested to a vital degree. The general rate on wheat has gone up from four and five cents until it has reached as high as nearly twenty cents. Of course it would be unfair to say that these figures represent the average rate to-day as compared with years ago, but it is not too much to say that 100 per cent is the increase that has taken place. Of course the wheat rate varies from month to month. It is one of the objects of the steamship lines to see to it as well as they can that the wheat traffic is distributed over the year, and consequently they are compelled to reduce their rates in the slack season in order that vessels that come here should go back empty or partially empty. They are compelled to

see to it that a spread exists between the rate in the slack season and the rate in the busy season. Consequently it either goes up in the busy season and goes down in the slack season; one or the other happens, or both happen. But the effect is this, that although it has gone down in the slack season by two, three and four cents, still the slack season rate in the last year and to some extent the year before, was very materially and seriously higher than in previous seasons. It is not too much to say that it is 100 per cent higher than it was a few years ago, and the rate in the busy season has increased by even a greater amount. All this of necessity reacts on the Canadian purchaser. It must necessarily react on him, and the amount involved is a collossal figure. It is for the reason that the rates in general have increased that the difficulty is so great, because in proportion to the large amount involved, and in proportion as those companies are interested, as they are to an enormous extent, the difficulty of bringing them to what we would regard as a more equable condition of af-tairs is increased. In that proportion the penalties which, in ordinary circumstances we might be able to impose on them, become utterly ineffectual, and perhaps would really result in being a greater penalty upon the country than upon the steamship lines. So that western Canada is acutely interested in jhe matter of this increase on the rate in wheat.
But I come now, and finally, to what in my mind is of even more general consequence, and in our country especially of even greater consequence than the increase in the wheat rate, and that is the increase in flour. It has been greater than the increase in wheat. I am not arguing that the rate on flour should be equalized with the rate on wheat, though that would undoubtedly mean a great deal to this country if it could be effected. It may well be said that there are reasons which would justify the steamship companies in putting an additional charge on flour compared with the wheat charge, but it does seem strange if they can justify the enormous increase in the spread of flour over wheat, an increase of nearly seven cents per hundredweight, compared with the spread that obtained generally up to a comparatively short time ago. The spread is greater by almost three hundred per cent. That is a very serious matter for Canada. Even although it be abnormal at the present time, even although it be stated that the condition is only temt porary, still on the general trend of advance, of the one as compared with the other, it seems to be the intention of those companies to maintain the spread on wheat and flour dangerously higher than it was a short time ago. We are interested not
only in seeing to it that the wheat rate is kept at the lowest possible figure, but we are also interested from another point of view in seeing to it that the flour rate is kept down as closely as possible to the general run of the wheat, because I think by that means only, and by that result, can we hope to develop a successful milling industry in this country. At the present time this country is exporting flour; at all events last year we exported flour in large quantities. Even in the face of adverse circumstances the export of flour from this country to the United Kingdom has been very rapidly increasing. Last year we exported to the United Kingdom some 4,003,000 cwt. of flour. That is very gratifying indeed, but so far ,as one can get details at the present time, I am advised that owing to the rapidly increasing spread between the flour and wheat rates, the export of flour has been rapidly going down since. It must be manifest to any reasonable man that the milling interests, particularly the small milling interests, must of necessity in respect of their flour exports, have a very small margin of profit in the British market. That will appear manifest I say, to any reasonable man, because they have to sell their flour in competition with the British' miller. The British miller has advantages manifold over the Canadian miller, and by reason of those advantages he is enabled to keep down the price of flour in the United Kingdom at a level which compels the exporter of this country, if he is to find a market there at all, to accept a small margin of profit. The advantages of the British miller are well known. He has, of course, an immediate market for his by-products in almost unlimited quantities, with the result that he is able to obtain prices in advance and in constant excess of the prices that prevail here at the present time, to the extent of nearly seven dollars a ton. That is one advantage. Then he has the additional ad-ventage of being able to choose his grades of wheat in almost an unlimited variety. He has the English wheat. He has the wheat coming there from all parts of the world. He has all qualities from this country and all qualities from another country; he has a constant and never-failing supply, and he is able to make hig contracts in full assurance that he can call upon that supply in the proportion which he desires and at the time he desires. He is able to fulfil his contracts exactly to the letter, and that is a very important advantage. Then he has cheaper money and cheaper labour. As against those advantages we are not without some advantages in this country such as our water-powers, but they are not sufficient to offset the advantages of thei British miller, the chief of which, if I am

right, is that he is able to find a ready market for his by-product at a very favour-price. That being the case, it will be manifest to any unprejudiced mind that if the Canadian miller exports, he must sell his export in that market at a narrow margin of profit. I am advised, and my' advice comes, not from the large millers, with whom I have not been able to confer' at all, but from the smaller millers who' are vitally interested, that the average margin of profit in that market cannot be said to exceed five cents a barrel. Anyway, it is very small indeed. The amount of flour exported is about 4,000,000 ewt., and the amount consumed in this country is about 11,000,000 or 11,500,000 bushels, so that the total produced in this country would run to about 16,500,000 bushels of flour. At the present time we have facilities for the production of flour, a milling capacity to the extent of about 33,000,000 bushels, so that at the present time the milling capacity of this country is taxed only to the extent of fifty per cent of its full capacity. In proportion as we are able to preserve for the Canadian miller the export market can we hope to keep down to the lowest level the price of flour to our own consumers because, it is clear that as the quantity of production rises, as the total product increases, so the cost of the product must diminish. My information is that as between a mill running day and night, as against a mill running half time, the cost is about ten per cent to the advantage of the mill running day and night. What could have been sold at $4 a barrel from a mill in constant operation must be sold at $4.40 for a mill that is only running in the day time. As a consequence a decided advantage accrues to the miller if he is able to find a sufficient market for the export of his flour to permit him to operate his mill day and night. Therefore, it is important, not only from the viewpoint of the miller, but from the viewpoint of the consumer as well, that the market of the Canadian miller in the Old Country be preserved in the most advantageous condition possible.
But there is still another viewpoint. There is nothing in which the general interests of the country, and the general farming interests in particular, have so immediate and deep a concern as in the preservation of the milling industry, and in particular in the preservation of that portion of the milling industry which distributes its operations over a wide field of activity and in very small units of operation. In that portion of our milling industry the farmer in particular has a decided interest because, unless the dairy and stock interests are enabled to secure at a reasonable figure the byproducts of the milling industry, these dairy-Mr. MEIGHEN
ing and stock interests stand in serious peril of losing the prosperity that they have until now enjoyed. Unless we are able to preserve the export of flour for the milling industry to an extent at least comparable with that which it has until lately enjoyed, there is not going to be produced in this country that quantity of bran, shorts and the by-products of the milling industry, that will enable^ the farmers to supply their stock and dairy herds to the extent they now supply them and to the extent necessary to produce the products of the dairy and stock industries under the conditions under which they have been produced. It is of vital concern to the cheese industry, in which we have obtained a paramountcy greater perhaps than we have obtained in any other single industry, that we should do all in our power to see that the export flour market is preserved under the most favourable possible conditions.
It will be said that the transportation companies are concerned in preserving the prosperity of the producer, that they usually look very jealously after preserving the prosperity of the people who supply them with the traffic, of those who supply them with the goods out of which they make the money. [DOT] That is the case to a certain extent, but unfortunately, in a very large degree, that check on the rapacity of the transportation interests does not exist in this instance, for the reason that the transportation interests, as far as I can see, have everything to gain and nothing to lose by the substitution of wheat for flour as a commodity of transportation. By the substitution of wheat for flour they are enabled, first, to get the advantages of cheap loading and unloading, the advantages of cheap loading in particular which accrue to them by virtue, to a large extent, of the money expended by the people of the country in erecting transfer elevators at Halifax, St. John and Montreal. They have that advantage and it is a great advantage, because by that means they are enabled to secure the despatch of their vessels with the shortest possible detention on each trip.
But there is another reason, and one that, I think, is in the minds of the companies themselves, and it is that, to the extent to which they are able to discourage the export of flour from this country, they are able to grasp for themselves the transportation not only of the flour but of the bran and the shorts as well; they have the whole thing to ship in the form of wheat. In proportion as the flour export is discouraged and the shipping of wheat is encouraged they get in the form of wheat a bulkier commodity and therefore they stand to gain more than they lose. So, when you are looking to the self-interest of these com-i panies to see that their rates are kept at a

figure to enable the producer to carry on his industry you are leaning on a broken reed.
Now, I come to another thing. What is the solution? I am free to confess that this problem is fraught with difficulties perhaps greater than are those which confront this country in relation to the operations of any other monopoly. We have confronted monopoly before in this country with some measure of success. Not always have we acted as promptly as we should have, not always have we succeeded as fully as we would have liked, but monopoly has been foiled and has been brought to bay. Here we are face to face with conditions that did not obtain in our contests with other mon-oplies of a similar kind. What are those conditions? The various transportation companies that carry freight from Canada to the British market and that carry the commodities consumed here from the British market are not, and perhaps cannot be brought, within the jurisdiction of this Parliament and this Government in the same way as other transportation companies, or other corporations when we would fain stop monopoly within our own domain. To these companies that ply between this country and Europe, that ply on the high seas, under the strict letter of the law, our jurisdiction stops not exactly at the shores of this country, but three miles beyond those shores. Beyond that, only indirectly if at all can we bring them within our jurisdiction. Furthermore, it is well known, and, I think, uncontradicted that tho.se lines which operate from our ports to ports across the Atlantic have a distinct understanding, if not more than that, with all lines operating from Portland and the port of New York to similar ports across the ocean. All have been brought under what is known as the North Atlantic Shipping Conference. They are all reaping the rewards that come from that monopolistic corporation and they all at present feel themselves bound to obey the dictates of that conference, whatever they may be. The problem that faces us is this. Is is possible, and along what lines is it possible, to succeed so as to bring to a sense of duty, to a sense of equity, this corporation? I do not think I am stating the ease too strongly when I say that there is a monopoly. We have every evidence of a monopoly in the arrogant exercise of power that we have had to submit to- up to the present time. I am aware that the Government have been dealing with this matter; that they have addressed themselves to it with vigour. I am also well aware that it is not possible to follow the 'old methods of attack and hope to meet with success in an attack on this corporation.. It is not possible to adopt the old weapons and' hope to win. Along what lines is it possible that we may succeed?	.


William Pugsley: My hon. friend states
that the Government have addressed themselves with vigour to this question. What has the Government done in the matter?


Mr MEIGHEN:: I would prefer, and I think the hon. member would prefer, that the Government themselves would make a statement on that point. I can state this, that the matter has been in the proper department under very close consideration, followed by action, so far as one could expect the Government to act, for at least the past six months. While I am on my feet, perhaps 1 would he able to gain something if I were to ask the hon. member for St. John if he would tall us what he thinks the Government ought to do.


William Pugsley: It appears that during
the last eighteen months, from the statement of my hon. friend, there has been a steady and rapid increase in ocean freight rates.


Arthur Meighen: Before that.


William Pugsley: My friend seems to
date the matter about eighteen months ago. I have no doubt whatever that the Government have two recourses open. All these ships, whether they are subsidized or not, have to use Canadian ports. In Montreal they have to- get accommodation from the Harbour Commission which is created and controlled by the Government. The same is true of Quebec. In the winter time, the same would happen in the case of St. John and Halifax. The Government can legislate over these companies which necessarily come into Canadian territory. The other remedy is that at least three of these companies, indeed I think four,- have been subsidized by the Government of Canada, and in the contracts the Government have control of the rates of freight. While these subsidies are given ostensibly for the carrying of mails, they are given quite as much in order to develop the freight traffic. Seeing that month after month and season after season these rates have advanced during the last eighteen months, I think the Government are quite within their powers to fix the rates which these companies ought to charge and to make them reasonable and fair as they were a few years ago.


Arthur Meighen: The hon. gentleman
says that these increases have taken place in the last eighteen months. They commenced before that time. I want to call the hon. member's attention to this, that the perfection of the North Atlantic Shipping Conference is not a matter of eighteen months' duration. That perfection was attained while the hon. gentleman was Minister of Public Works of this country. It was while the late Government was in

power that they collected their arsenal and sharpened their weapons. It was during all those years that they holdly set about to equip themselves for reaping the re^rc* that they are now attempting to garner. They did it in the full light of day. They acted in such a way that they swept from the seas the tramp steamers, everything that might enter into competition with them.
I do not intend to castigate or to censure the late Government. I now leave that phase to the subject.
The hon. gentleman says that these lines enter Canadian ports, and consequently that we have jurisdiction. The inference is that we should deny them access to Canadian ports; that we should penalize them for coming here unless they bring themselves within certain rates to be fixed .by the minister in charge or by the Governor in Council. What would be the result of that? It would simply be to turn the traffic into American ports and the hon. gentleman knows that quite well. It would .simply be to do this country infinitely "neater injury than it is even now suffering from in the increased rates. In so far as we legislate by virtue of the fact that they come into our ports and not into American ports to that extent we may put a premium on their entering American ports, and they may be more ready to do it than the hon. member imagines. He says:	We have
been giving them subsidies, ostensibly for the carrying of mails. What would be the result of attempting by any means at all to use the handle of these subsidies under the provision put in the contract by the Government? The total subsidies to the four of these lines referred to by the hon. member is $1,000,000. The amount m the coffers of the companies from the increase on wheat alone would be three or four million dollars. Does the hon. gentleman think that the companies plying between Canadian ports and the Old Country could be influenced in the slightest degree to submit themselves to the jurisdiction of this Government under the threat of the withdrawal of the subsidies? Not for a moment. This might result: We would be left without the means of carrying our mails from Canadian ports. My information is that there is no other way in which we could expect to have them carried at a better figure. Therefore, although there appears to be some weapon m these contracts, there does not appear an effective one. If there is, however, I have not the slightest doubt that it will be exercised so far as it can be exercised without seriously imperilling other and greater interests of this country.
What is another recourse that we might have? As I stated, the United States of America are vitally interested. The United States of America, in the face of what has Mr. MEIGHEN.
been going on, have been compelled to increase their wheat shipment and to decrease their flour shipments. The flour of the United States millers has not been able to find a market in Great Britain, to the extent that it formerly did, by fifty per cent. The result is that last year the flour exports of the United States were brought down to a figure practically the same as our own.


An hon. MEMBER:: Hear, hear.


Arthur Meighen: If the hon. gentleman
who says ' hear, hear ' hopes to find in that the prospects of our selling them wheat, if he looks at the figures, he will find that their wheat exports are increasing. Their wheat exports last year were very great indeed. Their wheat crop was the greatest in the history of the country. Well, they are interested, and it may be a matter of congratulation to this country that they are. The United States has the matter under investigation at this time also. The United States, doubtless, have the same recourse that the hon. member for St. John thinks it would be so easy for this Government to take. They gave subsidies also. But they did not imperil the prosperity of their own ports in the hope that they might gain an advantage in this regard. They set to work to investigate, and that investigation is now in progress and nothing has yet come of it. I refer to it in order to suggest that perhaps by the joint operation of both Governments, with the co-operation, if necessary, of the British Government, a tribunal might be formed that would be able to control freight rates on the North Atlantic in something the same way in which the Railway Commission controls railway rates in Canada. But we know that we have interests in ocean rates that would be adverse to the interests of the people of the United Kingdom. It would be doubtless in the interest of the consumers there to see that the wheat rate was kept as low as possible in relation to the flour rate, whereas the very opposite would be the better policy here-to reduce the flour rate and not continue the spread between the two. I should be glad indeed if the Government of the day could find a solution for the problem in the direction I indicate. At all events the purpose of my bringing this discussion up is to draw the attention of the people of this country through this Parliament to the great increase that has taken place, to call attention .to the serious aspect of this matter in relation to our prosperity and to enlist behind the Government the active co-operation and sympathy of the Canadian people in whatever steps they may see tit to take in order to bring about a betterment of conditions.


William Pugsley: Where would be the
objection, to a board like the Board of Railway Commissioners having the same control over ocean freight rates as they now exercise over railway rates?


Arthur Meighen: I really thought better of the hon. member for St. John. The transportation interests of this country are definitely and clearly within our jurisdiction. They operate within our domain, and to that extent they are within our jurisdiction. But a company operating beyond the juris. diction of the Canadian Parliament is one upon which we have no similar power to impose restrictions. And should we empower, or purport to empower, a commission to deal with these matters, that is if we were to put into law that authority that is in the Railway Act, and these companies refused to obey the order of the commission, how should we enforce that order in such a way that it would not have the result of driving these companies over another route? Because, in going over another route they do not abandon vested interests of their own as a railway company would have to do in abandoning its route. It will be clear at once that a very different condition of affairs obtains, and it is clearly by reason of that that the difficulty that is now facing us in the matter of the control of these rates appears so very great indeed.


Frank Oliver: I think everybody who has listened to my hon. friend from Portage la Prairie (Mr. Meighen) will agree as to the importance of the question that he has brought before the House. I do not think that any apology is necessary for bringing it before the House and giving it attention even at this stage of the session. It is a question that has borne most heavily upon the people of the western country particularly, and the facts, I think, are generally within the knowledge of those who are best informed in that country. There has been a serious depression in the price of wheat in the western country which has been reflected in the depression of every line of business in the West and throughout Canada, and there is no question that the increase of the Atlantic freight rates has been a serious factor in producing that condition. Therefore as a matter of major importance affecting Canada as a whole and a large part of producing Canada particularly, it may fairly claim the attention of the House. My hon. friend mentioned that the freights coming westward had also seriously increased. This lays a serious burden upon the people of Canada. But while I do not wish to criticise my hon. friend's argument, and I know that he is generally very accurate in his statements, let me suggest that there appears to be an error in the statement he laid
before the House. He instanced the increase in the rate of freight coming westerly, and intimated that the rates on freight were sufficient to wipe out the British preference. Now, first of all, is my hon. friend satisfied that the westerly freight have been increased to Canada out of proportion to what they have been to the United States? He says the easterly rates are the same from United States ports and Canadian ports. If the westerly rates are the same, then there is no discrimination.


Arthur Meighen: I do not see where the point comes in.


Frank Oliver: It does not make any
difference whether the hon. gentleman sees the point I am making or not; I am asking him a question of fact. The hon. gentleman knows and I do not know: Is the rate from Canadian ports higher than the rate from American ports? '


Arthur Meighen: I did not give the
figures from Europe to American ports; I
did not see that they affected the case.


Frank Oliver: I think they affect the
case very considerably. The other point in that connection I wanted to get at is this: My hon. friend was figuring that the increase in the freight was equal to the difference in the duty on the goods; and I think he will agree that he is in error if he applies the gross amount of difference on the freight as being reasonably comparable to the amount of difference on the goods under the preference. Let that be as it may, I only draw attention to it to mark the exception that proves the rule, because my hon. friend is usually as accurate in his statements as he is logical in his reasoning.
I was rather surprised, however, as my hon. friend pursued his argument, that he laid so much stress on the disadvantage that resulted to our milling industries because of these higher rates-not discriminatory rates, but these higher rates that the milling industry of Canada has to pay in common with the farming and every other industry. For a time it almost appeared to me as if the logic of his argument was that this North Atlantic Conference should raise the rates on wheat in order that they might protect the milling industry of Canada. We are all anxious to see the milling industry develop and expand, but when we are talking of monopolies, and objecting very strongly, as v/e surely do, to the monopoly of the freight traffic across the Atlantic, there is something to be said about the milling monopoly in Canada. I am not so sure that the Canadian consumer does not to-day suffer as much from the milling monopoly of Canada as he does from the

freight monopoly across the Atlantic. I am credibly informed that a sank of Ogilvie's best flour can be bought in the city of London, after this freight has been paid, as cheaply as it can be purchased under the shadow of the Ogilvie mills in Winnipeg. If that is a fact-and I have reason to believe that it is I think my hon. friend would have been better advised if he had made his argument rather on behalf of the producer of the wheat, than on behalf of the miller, who certainly takes whatever advantage there is in the position that he occupies in regard to the trade of the world. The man who is injured by this high rate of freight is, as always, the initial producer and the ultimate consumer. The farmer is the initial producer of this product which is the substantial foundation of the wealth of Canada to-day, and it is directly upon him that these monopolistic charges bear most heavily. The miller has to stand his load, it is true, but the miller passes on a share of it to the farmer. It is the farmer, the initial producer, who has to stand the practical part of the burden, and the initial producer, the farmer, who is also to a great extent the ultimate consumer, is the man who suffers most severely from this recent rapid increase in the freight rates.
My hon. friend was particular to
point out that although these increases in the freight rates have only occurred since the present Government came into power, the organization by which these increases have been made into being while the late Government was in power. He holds out the suggestion that the late Government is in some way responsible for the fact that these shipping interests, which he himself says are absolutely outside the jurisdiction of Canada, will require the united efforts of Great Britain, the United States and Canada to bring them under control-and he is not so sure that they can be brought under control. He is willing to stand up in this House and try to create the impression that the late Government was in some way culpable because this organization was formed.


Mr. PERLEY:: He did not say that.


Frank Oliver: I know my hoi), friend did not say that, but he made an argument of which that was the logical conclusion. My hon. friend was too clever to say it; he does not generally say foolish things, but he makes very lever arguments which sometimes lead to very wrong conclusions. I take the liberty of repeating that that was the conclusion to which my hon. friend was attempting to lead the House and the country, and I say with all due respect that it was an absurd suggestion. That, however, does not relieve the situation as it is at the Mr. OLIVER.
present time. At that time there was no complaint as to the improper exercise of the monopoly; freight rates on the Atlantic were reasonable, and it was not pressing upon the late Government to deal with a situation that was grinding the_ people of Canada as a mill-stone-such a situation as exists to-day, and which is so serious that my hon. friend brings it to the attention of the House. He says the Government have taken it into consideration; I am glad to hear it. I did hope that my hon. friend would have a practical suggestion to make before he concluded his remarks, and I was certainly astonished when he waved aside absolutely the idea that, although Canada has control of her own ports, she cannot by any possibility control the shipping which touches at those ports, and that, even though Canada subsidizes steamship lines, she can have no control over the conduct of the lines so subsidized. I am not prepared to say how far	Canada could
exercise control in the matter of rates over the vessels that touch at her ports; I am not	prepared to	say	what	measure of control	she	could	exercise	because of	the	subsidies that
she pays. It would strike the ordinary citizen, however, that if she is going to spend millions in affording shipping facilities at her ports and in subsidizing transportation on the ocean, she ought, in reason, to have something to say .towards ameliorating a condition that on the face of it is not only unjust but exceedingly burdensome to her people. I do not think my hon. friend was well advised when he brushed aside so lightly these facts that were brought to his consideration.
His suggestion, if suggestion it may be called, is that there shall be a
conference between the authorities of Canada, the United States and Great Britain. I have no objection to such a suggestion, I think it is probably a very wise one. But I ask my hon. friend how he could make such a suggestion or expect the Government winch he supports to act upon it. Does he not know that his Government was elected, that he himself was elected on the cry: No truck or trade with the Yankees, beware of entanglements with those villains south of the line, they are dangerous, you must not even sell them goods, or your loyalty will be impaired.


Mr. SCHAFFNER:: No one ever said anything of the kind. That is a pure mis-statement.


Frank Oliver: Why, it was argued that the railroads should not run across the line, that we must not allow our freight to go across the line or Canada would be injured; and yet my hon. friend deliberately suggests that the Government which he supports and the party with whom he acts shall enteT into negotiations, Mr. Speaker, and arrangements to form a combination,

a combine which shall be greater than the shipping combine, between these three Governments. I am horrified and I am sure the country will be horrified when they hear of such a reversal of its loyalty policy on the part of my hon. friend and the Government which he supports. Of course I do believe that the country generally will say that they are coming around on good common sense and thereby they will be the stronger because of it, but I must say that I really have not very much hope even as yet of such a sensible action being taken. In any case it will take a long time to arrive at a conclusion by that means. I think that everybody will admit that we need not expect such a conference to be held and to take action, even if action can ever be taken, within a very short time.
I have a suggestion to make to my hon. friend and to the Government of which he is a supporter, and I hope it will be taken in good part, it is something that deals with the question of transportation of the western farmer's wheat or the western miller's flour if you like, something that is entirely within Canadian control, that is within the reach of this Government and of this Parliament. To enforce it we do not need to have any truck or trade with the Yankees, nor do we have to go across the ocean to ask for assistance there. My hon. friend is aware that the links of communication of transportation between the wheat fields of Portage la Prairie and the mills of Liverpool are several in number and all of them are important. One of them is the link between Port William and Port McNicol. It is within my hon. friend's knowledge that just as a monopoly of transportation has come into being on the Atlantic ocean so a monopoly of transportation has come into existence on the great lakes, a monopoly which did not come into existence under the late Government but which is being brought into existence to-day under the present Government and which was materially assisted by legislation passed by this Parliament at this session, in the face of the strongest protest from this side of the House and some from the other side of the House.


Arthur Meighen: Is it not a matter of
fact that the company to which the hon. member referred had its capital stock largely increased by the late Government?


Frank Oliver: Sure.


Arthur Meighen: And is it not with that increased capital that it has done what the hon. gentleman says it has done?


Frank Oliver: No.


Arthur Meighen: Is the hon. gentleman
not aware that the increase was foT that purpose?


Frank Oliver: No.


Arthur Meighen: When the Richelieu
and Ontario Navigation Company came before the late Government and applied for an increase of capital, the hon. gentleman was a member of the Government. The hon. member for St. Lawrence division of Montreal introduced the Bill for the enlargement of the capital of that company. The hon. gentleman has just told us that they did not know it was for the purpose of acquiring other interests.


Frank Oliver: I did not say so at all.


Arthur Meighen: He said it was not for the purpose of creating a merger.


Frank Oliver: No, I said it was not for the purpose of monopolizing traffic on the upper lakes.


Arthur Meighen: The hon. gentleman sat in the House when that Bill was moved to one of its readings and the hon. member for St. Lawrence division of Montreal was asked by the hon. member for Lambton what the purpose of the increase in capital was and he told the House that it was to create, a merger.


William Pugsley: That was in passenger
. and tourist traffic, a different thing altogether.


Arthur Meighen: 
Frank Oliver: Certainly.


Arthur Meighen: And, in the face of his statement that the capital was required to form a merger, the hon. member enlarged the capital and gave them the privilege.


Frank Oliver: The Richelieu and Ontario Company were operating on the lower lakes and the St. Lawrence, theirs Was strictly a tourist proposition.


Arthur Meighen: It was a merger though.


Frank Oliver: Certainly, but not in respect to the transportation of western grain. My hon. friend brought before the House to-night the question of the transportation of western grain and over that he has wept bitter tears.


Arthur Meighen: They were in the wheat traffic, then.	-


Frank Oliver: Oh,no. The Richelieu and
Ontario Company has been a passenger company for many years, it made no difference to the western farmer whether they had a merger or not as long as they were



operating only on the lower lakes. After they extended their operations to the upper lakes, they were still competitors, not destroyers of competition. The money that they were authorized by Parliament at this session to raise was for the express purpose of establishing a monopoly of traffic on the upper lakes and every man in Parliament knew it when he voted for it. There is the place where my hon. friend and the Government can use the authority that is vested in them and the responsibility that has been placed upon them and can come to the rescue of the western farmer or miller to a considerable extent and effect a considerable saving in transportation charges. The link of transportation between Fort William and Port McNicol. is as the neck' of a man and the company that has control of that link has a strangle hold on the business of the Dominion of Canada, on the farmers of Portage la Prairie and of Souris as well as of every other part of the northwest and my hon. friend knows it. When he brings to the attention of Parliament and of the country the fact that the western farmer is to-day being bled by a transportation monopoly he does well, but if he thinks he can draw attention away from the merger on the upper lakes by talking about the merger on the Atlantic I tell him he is mistaken. My hon. friend from South York (Mr. Maclean) laid before the House proposals as to how control can be exercised in regard to that lake merger.


William Pugsley: He moved a resolution.


Frank Oliver: Moved a resolution which was voted down by my hon. friend and the Government which he supports. And still my hon. friend gets up here to-day and weeps about the merger on the Atlantic. It is a merger nearer home that is the main trouble to us at the present time. The merger on the lakes is of that nature. It is the cheap transportation of the summer and the low rates that have hitherto prevailed on the lakes by reason of unlimited competition that have saved the situation for the western farmer. The merger has taken hold of that transportation now with the intention of keeping the lake rates just sufficiently below all-rail rates to secure that the wheat will come that way, but so that they will get the last cent that is in it before it passes out of their hands. We have built three railroads parallel to that stretch of water, and when those railroads are completed, we hope to have an all-rail connection and the best possible all-rail rates. But we never expect to get the rail rates down as low as grain can be carried by water with unlimited competition on the lakes. With a merger on the lakes the business interests of Canada are throttled. The western farmer will have to pay the last cent, Mr. OLIVER.
and the western miller will have to pay it too, for, notwithstanding what my hon. friend has suggested, I do not believe that those transportation mergers play favourites. I think they take it out of the miller just as well as out of the farmer, and out of the farmer as well as the miller.
That is the suggestion which I wish to leave with my hon. friend and with the Government. The question is just as important as he said it was. I will say it is even more important and more far-reaching than he suggested, but I hope that instead of sitting down and waiting to deal with the Atlantic merger when we can get action by three governments upon it, the Government of Canada will take action through this Parliament, if that is necessary, in order to secure unlimited competition in lake transportation for the benefit of our people, and not allow a merger and a monopoly to get control of our transportation at its most critical point, shut our eyes to it, refuse to see it, decline to talk about it, try to draw attention away to a merger somewhere else, and make the people believe we are doing our duty by them in that way.


Mr. W. H. BENNETT (East Simcoe):: The hon. member for Portage la Prairie has introduced a subject of great interest not only to the, farmer of the Northwest, but to the transportation interests of the whole country, and even if it has caused my hon. friend from Edmonton (Mr. Oliver), to resurrect, that phantom of reciprocity which haunts him by day and keeps him awake at nights, I think the importance of the subject warrants it. It is quite true that there can be troubles that have no remedy, and from the discussion, so far as it has gone, this apparently is a trouble that has no remedy. I do not propose to say that I shall give a remedy for it, but it is to be regretted that when the late Government some fifteen years ago, appointed a very able and efficient committee to deal with the whole question of transportation that committee did not continue its labours to the end, and the Government at that time did not act upon its recommendations. This question comes not only into the scheme of transportation which must exist on the Atlantic and on the upper lakes, but into the system as a whole, and I say it is as much in the interests of the country as a whole that the system of transportation should be perfected and advanced through Canadian channels as it is in the interests of the farmer of the West or the flour miller. The Canadian Pacific railway have an employment roll of about 80,000 men, and assuming on an average that each is head of .a family of three, you find that one line of railway alone has a population of nearly a quarter of a million. It

goes without saying, I care not in what business it is, that if you can increase a business you can carry it on more cheaply. The departmental stores and the factories prove it. In every line of industry and commerce, which increases its output the proportion of cost is less. In the same way, if at some point in Canada we can increase our export trade to an extent that will be abnormal compared with what it is to-day, we will direct to some Canadian harbour what is at present being directed to New York, the bulk of the tramp steamers of the Atlantic ocean. For years we have been trying, with a fair amount of success, to add to the export trade of Montreal, but the trouble with the trade from Montreal is that at the very season of the year when our western exports are coming forward, that port is closed. The farmer cannot thresh his grain in the West and forward it by rail or by vessels down the great lakes and have it in Montreal by the middle of November or by the latter part of November, and yet by that time the port of Montreal is closed. What recourse is to be had by the people of Canada? My hon. friend from Edmonton referred to the new line of the Canadian Pacific railway from Port McNiehol to Montreal. There is no doubt that the Canadian Pacific railway have spent upwards of ten million dollars in establishing a terminal at Port McNiehol and in the construction of the line from Bethany on their main line to Port McNiehol. I take it that every -man will concede that men of the calibre of the board who control the Canadian Pacific railway are men with a fair amount of business intelligence and acumen, and they have only gone into that huge investment because they have something in view. The reason they went into that was that they might go to Chicago and take away part of the trade from there that goes to Buffalo and take away part of the trade from there to Port McNiehol. And why should that trade not be carried to Port McNiehol-I am referring only to the Canadian Pacific railway-instead of going to Buffalo so that we might get that portion which is for export by way of the Atlantic to Great Britain or Germany or any other European country? In the first place the vessels plying from any of those upper lake ports to Port McNiehol can make nearly three trips as against one to Buffalo. To my mind the solution of this whole matter is that the Government should do exactly what my hon. friend from Portage la Prairie recommended, start an investigation, making it not subject to political exigencies, or to the building of a harbour here or there to please some political interest or some railway interest, but relegating the whole matter of transportation to a commission of big men who would be beyond political influence 2871	.
or the influence of any railway corporation. Let them decide once and forever what the country is going to do. The Lord knows there are enough propositions before the country to-day-the Welland canal enlargement, the Georgian Bay canal, the Hudson Bay railway and each one of them cannot be the proper and successful one. One would imagine that all these propositions are being put forth on the assumption that all the grain of the Northwest is to be exported to Europe. As a matter of fact how much grain is exported each year to Europe? I have the last report of the Board of Trade of the port of Montreal and it shows that the total export of assorted grain, which includes wheat, oats, barley, rye, and flax seed, was 39,000,000 bushels and that the amount of wheat included in the total was 30,000,000 bushels. The bulk of the grain that is produced in the Canadian Northwest every year is carried to Midland, Port McNicol and such points, is scattered among the hundreds and thousands of small mills in our own province and converted into flour.
What is going to be done? I am going to make a suggestion. I say that we must pin our faith upon centering our export trade for the biggest part of the year at some all the year round Canadian port. It is idle to say that you can bring the grain from the Northwest for export and ship it out of the port of Montreal or Quebec in one season. The port of Montreal is closed before the grain can arrive there. Therefore, on the face of it, in so far as the connection of the Canadian Pacific railway extends, there is only one port and that is the port of St. John.


An hon. MEMBER:: And Halifax.


William Humphrey Bennett: And also Halifax.


Rodolphe Lemieux: Is the grain not taken to St. John at the present time by the Canadian Pacific railway?


William Humphrey Bennett: Yes, that is now being done by the Canadian Pacific railway. I went into the Library to get the report of the Board and Trade of St. John to ascertain how much grain passed through there during last year. Unfortunately, they do not seem to have the report of the board of trade and so I am at a loss to know, but perhaps the minister might know how much grain was shipped out of St. John last year. Once again I say that if you drive the grain to one Canadian port and build up an enormous export trade there you are going to bring the vessels. I do not think that this story of tramp ships competing in the trade can stand close examination. If you were to take to the port of Montreal a vessel carrying 200,000 bushels and place her alongside of an ! ocean steamship carrying 100,000 bushels

do you believe that the grain freighter could carry the freight as cheaply as the ocean steamer? It cannot be done. In th first place, the ocean steamer has her passenger list, her subsidy for mails, her high class packet freight and the grain practically takes the place of ballast and nothing more or less. I mean and 1 believe that if the Government tried they certainly could work up such a trade by having these large steamers come into an all the year round Canadian port. Let these steamers also carry other commodities, freight of an assorted kind at a higher rate, in addition to which they have the advantage of their passenger lists and postal subsidies. The great bulk of the passenger trade of this country, that is people going from Canada to Europe, is done through the port of New York. Why could not that trade all be done through the port of St. John and Halifax in the winter months? The distance is shorter and the route is as exempt from the dangers of ice as that from the American ports. Why should not that trade be kept here ? How can you bring that about ? It is not a question of erecting grain elevators and the Government assisting by grants of money to build those grain elevators on the Georgian bay. You can bring it about in another way altogether. The situation might be met just as it was met at Port Arthur last winter. When the grain elevators were filled, large vessels were allowed to lie alongside of these elevators and during the winter months the grain was transferred from the elevators to the vessels. Then, the grain elevators were filled up again. They handled some 13,000,000 bushels, and there is no reason why 50,000,000 bushels should not be handled in the same way. This might also be done at the lower end of the lakes, at Port McNicol and other ports where you could take care of 40,000,000 or 50,000,000 bushels while the vessels were frozen in. Then this grain could be transferred to the elevators at St. John or Halifax, and either of these places could be made one of the greatest grain distributing ports on the American continent. That ought to be done, and I believe the Government could bring it about. One way it might be done is by granting a subsidy, allowing every railway company, or other shipping company, to participate in a part of the bonus in proportion to the amount of grain carried through Canadian channels whether by way of Halifax or St. John. That is one way in which the result might be brought about, and once the trade had gathered together and been solidified at that point the question might be considered of reducing the bounties or subsidies. Then, what is to be done with the Grand Trunk railway ? Unfortunately the Mr BENNETT (East Simcoe).
Grand Trunk railway has no outlet in Canada in the winter months. Portland is their port. But after the port of Montreal is closed they might be given a subsidy or a bonus sufficient to induce them to cooperate with the Canadian Pacific railway to carry their grain down to Halifax or St. John.


William Pugsley: They will have their
own line as soon as the Grand Trunk Pacific is finished.


William Humphrey Bennett: As my hon. friend suggests, when the Grand Trunk Pacific is completed to St. John, that line will be available, but in the meantime there might be an arrangement between the Grand Trunk railway and Canadian Pacific railway to carry that grain down to the seaboard. I am not going to say much about what my hon. friend from Edmonton (Mr. Oliver) said as to supposed mergers on the upper lakes. While it is quite true that this so-called Richelieu and Ontario Navigation Company have taken over some of the freight lines, they have not possessed themselves of all the vessels on the upper lakes, and this Government has power, if at any time anything is done in restraint of trade, or to unduly enhance the cost of carriage, to bring American vessels in and allow these American vessels to ply between Fort William and any Canadian point on the upper lakes in contravention of the coasting laws. If the rates are fixed too high by any Canadian steamship line the remedy is open at once, the cure is there, for the owner of the grain in transit to the old country. All he has to do is simply to hire American vessels to carry his grain to Buffalo and ship it by way of New York, Newport Roads, Philadelphia or any other American port.
To my mind, the Government should at once, no matter what it costs-I mean within reason-do something along the line which I have suggested. We talk about spending $50,000,000 on this public work and $50,000,000 on that public work all to be brought into competition on this great transportation question. It would pay this country to perhaps spend the interest on $50,000,000, which would be $2,000,000 a year, for two or three years- or less than that amount-in order to give a substantial subsidy, because in this way I believe they could induce vessels to come to St. John or Halifax during the winter months for the grain and flour, and thus establish a trade in those commodities. The result of bringing vessels to these ports would be to produce competition which would have the effect of reducing rates. I think that my hon. friend from Portage la Prairie deserves the thanks not only of this side of the House, but of the country at large, for stirring up the Government, if they require stir-

ring up, to take this matter into their very serious consideration and endeavour to bring about the results which have been advocated during the discussion to-night.


Mr. LEVI THOMSON (Qu'Appelle):: I
was not here during the whole of the speech of my hon. friend from Portage la Prairie (Mr. Meighen) and I therefore want to ask him a question. If it was answered by his speech I hope he will overlook the fact and answer my question all the same. I do not think the hon. gentleman told the House what the proportionate rates were on flour a-nd wheat. Does my hon. friend know whether the rates on flour are higher per hundred than on wheat and, if so, how much ?


Arthur Meighen: I gave the necessary figures to the House at almost tiresome length. They are higher on flour than on wheat. There was a time when they were lower on flour, but never for any length of time. The prevailing spread was about two cents, but it has increased until it has reached, as I am informed and believe, ten cents. At the present time it is not very far from ten cents.


Levi Thomson: Does my hon. friend mean that the rate across the Atlantic on flour is ten cents higher than on wheat?


Arthur Meighen: It is approximately
that, perhaps a little less.


Levi Thomson: I have been*reading an article by an American writer on the same question, and he makes very much the same complaint as is made by my hon. friend. He goes very carefully into the figures; and, while my hon. friend is trying to put the blame for the whole increase on ocean freight rates, this writer's figures show, that that is not where the whole blame should be laid. This writer gives the rates for taking the 1910 crop across the Atlantic as three cents per hundred for wheat, from New York to Liverpool.


Arthur Meighen: He gave them wrong.


Levi Thomson: He may have given them wrong or he may not have done so. H? may have meant ' per bushel,' but he said per hundred/ The rate for taking the 1912 crop across the Atlantic was seven cents, according to this writer.


Arthur Meighen: About twice that.


Levi Thomson: From what the hon. member says, the rates have been raised this spring to ten cents a hundred! Among other things, this writer said that the rate on wheat from the Mississippi to Liverpool, including all costs amounted to twenty cents per hundred in 1910. and on an average forty cents per hundred in 1912.


Arthur Meighen: The. hon. gentleman
had better not argue on those data because
they could not be farther out than they are. The hon. gentleman must have misunderstood that data, because I am safe in saying that those figures are absurd.


Levi Thomson: They may be absurd, or they may not. Perhaps the writer would say that my hon. friend's figures were absurd.	,


Mr. BURRELL:: What is the name of the writer?


Levi Thomson: Mr. Laut. I do not
know much about him. Those certainly were the figures which he gave. I presume his figures are not very far out. He blamed that increase entirely on the Atlantic carriers just as my hon. friend did. I notice that there was only four cents of an increase from 1910 to 1912, caused by the Atlantic carriers, and sixteen cents caused in some other way, either by the inland carriers, by commissions or otherwise. I merely bring these figures to my hon. friend's attention, because he has given the matter very serious consideration and he has made some suggestions. - He suggests an investigation. In this case I think we should have an investigation, not only of ocean freight rates but of every other charge, because I am satisfied that the loss that has been caused to the western farmer on the removal of last year's crop has not been wholly caused by the increased Atlantic freight rates. A proper investigation would bring out the fact that a very large proportion was caused otherwise; it would show that the inland increase has been greater than the Atlantic increase.
My hon. friend from St. John (Mr. Pugsley) has suggested remedies which might be applied, notwithstanding what my friend from Portage la Prairie says joint action was suggested. I do not see why joint action with Great Britain is necessary. Possibly it may be. From the reasons which my hon. friend from Portage la Prairie gave in opposition to what my hon. friend from St. John said, I can see that it is very necessary to have joint action with the United States. The only serious .objection to taking the action suggested by the hon. member for St. John is that we might drive trade to the United States. The people of the United States feel the seriousness of the situation just as much as we do and are just as anxious to apply a remedy as w'e are. They have the same danger facing them in applying the remedy suggested by my hon. friend, that they might drive the trade to Canada. They are no more anxious to drive away trade than we are; therefore, it is a matter that should be dealt with jointly. I have no doubt that we can completely control these freight rates by that action? The article which I

was reading was in a responsible paper, and I have no doubt that it was based on correct estimates. In that article great complaint was made of the excessive profit to the carrying companies for carrying products from this continent. I have no doubt that the profits have been excessive. Now, if that is so, if they are anything like so excessive as is claimed, the traffic must be a very profitable one. You might drive these transcontinental-Atlantic carriers from Canada to the United States or from the United States to Canada, but you could not drive them from both. Therefore, by joint action we would have them completely at our mercy.
Another suggestion occurred to me while my hon. friend was speaking. It may not be worth much, but I give it for what it is worth. At the present time the United [DOT] States Government and Congress are dealing with the question of reducing the tariff on certain products. Among other things, I think it has been proposed that flour shall fee free coming from countries that do not charge a duty on American flour. We, I believe, collect a duty on American flour coming into this country. I do not think we get any great benefit from it. How would it do for us to do away with the duty on American flour, which would


Some hon. MEMBERS:: Oh, oh.


Levi Thomson: I am sorry that shocks my hon. friend from Edmonton. It does not shock me in the least. I am not worried about American flour coming in or about my wheat going out.


Frederick Laurence Schaffner: Why is wheat worth more in Canada than in the United States?


Levi Thomson: My hon. friend may say that, but I do not think he seriously pretends to believe-
Mr. SCHAFFISlER: The markets for the last year have been higher on this side.


Levi Thomson: I am not going to enter into an argument on a side issue with my hon. friend. I have grown wheat extensively and have watched the markets closely, and either I am very blind or my hon. friend is entirely wrong. We must remember that last year was an exceptional one in the United States; the north western states produced the greatest crop they ever produced. That would account for the fact -if it were a fact-that their wheat was the same price as ours. But only in exceptional cases could this 'be so. We must remember that if the measure now before the Congress of the United States goes through, I understand it will mdan a duty of ten cents a bushel on wheat going from Canada to the United States, and notwithstanding what my hon. friend from Souris says he knows, and I know very well, that on the average the price of wheat in Minneapolis is very considerably higher than Mr. THOMSON (Qu'Appelle).
it is at Fort William. It is well enough to joke-and I suppose it was as a joke that my hon. friend intended it


Frederick Laurence Schaffner: I was not joking; I state it as a fact that during the last year the price has been higher in Winnipeg than in Minneapolis.


Levi Thomson: I think the hon. member will agree that on an average of five yeans the prices in the United States in corresponding markets have been from five to ten cents a bushel higher there than in Canada. I do not think we need quarrel about that. It seems to me that if we adopt the plan I am suggesting it would place our millers in a very good position. I do not object to that. We will give the benefit to them in the hope that they will pass on some of the benefit to the farmers; but if we do not get it, we will try some other way to force them to give it to us. If American flour were allowed free into Canada and Canadian flour free into the United States, as the price of wheat here is cpn-sideraibly lower than the corresponding markets in the United States, the Canadian miller would have an advantage. He would get his wheat cheaper. I think that the change would have the effect of raising the price of wheat somewhat, because I do not know that the Canadian miller is moTe anxious to obtain excessive profits than other manufacturers are. I think that this would do more good than anything that could be done in the direction of controlling the English market. As the hon. member for Portage la Prairie has pointed out, there are many advantages in favour of the English miller. It is impassible to carry flour and the by-products of wheat as cheaply across the Atlantic as to carry wheat, which point the hon. member for Portage la Prairie explained. Wheat is the easiest thing to handle, much easier than flour in bags, barrels or in any other way you can ship it. If we compel the carriers to carry flour at the same price as wheat, I think we will merely give the benefit to the miller and take it from the farmer. One thing is sure, and that is that the carrier is not going to lose it.
I have no desire to deal with this matter in a party way. The hon. member for Portage la Prairie has injected some party-ism into it, but I do not want to do that. These are questions which we should consider in a non-partisan spirit, and I presume that the Government is anxious to hear any fair suggestion from this or the other side of the House. I have told what I think, and I hope the suggestion will be received in good part.


William Findlay Maclean: .The hon. member for Portage la Prairie (Mr. Meighen) has brought to the attention of the House in a very reasonable way pro-

bably the moat important question in this country to-day. the question of transportation. And he has brought out the fact that a surprising thing has happened in connection with transportation of late in this country and on the whole continent, and that is a sudden and enormous increase in ocean freights both eastern bound and western bound. He has shown that that great increase affects farming industry and every other industry in this country. As a matter of fact, when you regard it from the standpoint of the farmer of western Canada, it means that if present freights are to obtain and if the present price of wheat are to rule, farming is not a very profitable thing in our Canadian West. It means probably that the farmer will, be tilling fifteen-dollar-an-acre land. At sixty or seventy cents a bushel, rather than $1, the farmer is getting for his wheat not much more than the cost of production. Therefore that profitable industry we thought we had of the production of the wheat in the West is not so encouraging, hut that the future of the farmer in the Canadian West is a good deal in jeopardy. It is a fact that there is a great combine in connection with transportation; that that combine prevails in our own country and upon the high seas; that it affects the United States; that it affects the farmer and the consumer of wheat, and it is, therefore, a matter worthy of the fullest and amplest consideration of this Parliament. Can we do anything as we are to improve the situation and regulate these freight rates? I say we can do a great deal, but we must first find out who the great sinner is, make inquiries as to his record, and see whether we have attempted to discipline him. To my mind, the greatest sinner in connection with transportation in this country is the Canadian Pacific Bailway Company. It is needless to deny the fact that, by reason of its extensive associations^ its enormous fleet and the control it exercises over the freight traffic in this country, the head of this North Atlantic combine is the Canadian Pacific Eailway Company. What have we allowed that company to do in Canada? The Minister of Public Works represents the	people of_ the West,
and I	would call	his attention
to the fact that idle Canadian Pacific Eailway Company is bound by its charter to have long ago reduced the freight rates in this country. While the Canadian Pacific Eailway Company is piling up enormous reserves; while it is paying huge dividends to its shareholders; while it holds in its possession enormous accumulations of lands, it is not to-day reducing its freight rates in Canada, and it is forming a great combine on the Atlantic. We have the; Canadian Pacific Eailway Company in our hands in this House if we but assert the supremacy of Parliament. We do not need
to go to the Old Country or to the United States; we have the power right here in this House, and it is our duty to assert the authority of Parliament as against the conduct of the Canadian Pacific Eailway Company and those associated with it. We ou.ght first and foremost to have a reduction of the rates charged by the Canadian Pacific Eailway Company over its own lines. It should not matter if this interfered with the Grand Trunk Pacific or the Canadian Northern; if we could make the Canadian Pacific Eailway Company reduce its rates in the West we should be willing to subsidize the other two lines if they suffered by reason of the competition. These railways came into existence upon the express declaration that if they were allowed to go into business they would create competition and bring down the freight rates. They cannot claim that there should not be a reduction. It is the duty of this Parliament to find a way, notwithstanding what the conditions are, to effect a reduction of the freight rates of the Canadian Pacific railway to which we are entitled in this country. What is this Parliament doing in this respect? It is all very well to say: Let us go to Great Britain, and let us go to the United States; I say let us deal with this question here at home. What do we propose to do with the Canadian Pacific Eailway Company, which is making enormous profits in Canada to-day in regard to its exorbitant freight charges, and which is to-day forming a hugh combine on the Atlantic?


Mr. HEPBUEN:: What percentage of the ships operating at Canadian ports does the Canadian Pacific Eailway Company own?


William Findlay Maclean: I do not know the
number, but the Canadian Pacific Eailway Company is unquestionably at the head of the Atlantic combine. It has not been denied that they control the Allan Line of Montreal, and they have any number of other steamers associated with them. The Canadian Pacific Eailway Company is coming to be the greatest ship-owner, as well as the largest railroad corporation, in the world. Not content with that, however, they are taking part in other enterprises; they threaten to become the greatest bankers in Canada, and they are almost at that point now. Because of the lack of courage on the part of this Parliament, they are not giving the reduction that by their charter they should give. They have so much money in lands that they are busy day and night trying to find a way whereby they can create another company and transfer to it all these assets, dividing them among the shareholders, and not giving anything to the people of Canada who pay the freight, rates. That company is within the jurisdiction of this Parliament. Are we doing anything to reduce these rates? Have we

asked the Canadian Pacific Railway Company to reduce its rates, not only on its railways, but on its lake lines and ocean lines? It is all very -well to say we will consult other nations, but we have got to do something ourselves; we have got to do something with this great combination which dominates the railway situation in Canada, the lake situation and the ocean situation.


Bernard Rickart Hepburn: I think my hon. friend is in error when he says that the Canadian Pacific Railway Company dominates the lake situation in this country.


William Findlay Maclean: The hon. gentleman will find that directors of the Canadian Pacific Railway Company are very prominent on the lake lines; he will find the names Osier and Matthews very frequently mentioned in that connection. The Canadian Pacific railway did not build elevators on the lake ports if it was not to dominate the trade. As I say, therefore, the Canadian Pacific Railway Company is dominating the trade on the railway, lake and ocean lines, and we are doing nothing to compel that company to reduce their rates. Are the public not entitled to their rights? Are we not entitled to have the contract embodied in the company's charter carried out, and to have a reduction of freight rates in this country? What are we doing in that regard? All we are doing is allowing them to continue their present system of raiding this country. Not long ago we allowed the Canadian Pacific Railway Company to do a most lawless thing; I have repeatedly called the attention of the House to their action in connection with their capitalization. Every dollar _ they unfairly took away and gave to their shareholders in the shape of bonus stock was a tax on the farmers of the Canadian West. I ask the farmers who come from the Canadian West whether or not they believe that? Are they not willing to stand up in this House and try to compel the Canadian Pacific Railway Company to do justice to the people of this country? Shall we allow a geographical discrimination in railway freight rates to exist in this country? Shall we allow the people of the West to continue to be subject to this discrimination, although the lines cost much less in the West than in the East? What is the good of talking about the matter of ocean rates if we do not secure justice at home? Why should we discuss the Grain Act, the building of government-owned and local elevators and the construction of storehouses at the different ports, of building the Hudson Bay railroad and of doing this and doing that, if we allow such lawlessness to continue, and if we decline to secure the reduction of rates to which the people of this country have long been entitled? We must make these companies understand that Parliament is supreme; we must assert the supremacy of Parlia-Mr. MACLEAN (South York)
ment over every corporation in this country. If the Canadian Pacifif railway is charging unfairly on the Atlantic ocean can we do anything here in Parliament to bring them to time? I say yes. Hon. members have said we will send this question of equality of rates to the Railway Commission. The jurisdiction is in Parliament and the cure is in Parliament. What is Parliament doing to get equality of rates for the people of the West? I shall not go into the politics of the question, I shall not discuss the records of either party in connection with it. I am presenting the case in its bald and straight aspect. What are we doing in this Parliament, not so much to regulate ocean rates as to compel the discharge of the duties and obligations that these railways have undertaken towards Canada here in our country? What are we doing with the Canadian Pacific railway in regard to its capitalization? Is this Parliament to sit quiet and allow that crime that was committed against the people in connection with the capitalization of the Canadian Pacific railway to be repeated? If we do they will do another thing, they will switch away all the resources they have to-day in their treasury and give them to their shareholders instead of to the Canadian people in the way of reduced freight rates. Are we going to Great Britain to ask for relief? Would they not say there and in the United States: Why have you not compelled them to reduce rates at home? Such a reduction was due long ago, and why should we not in this country have a two-cent passenger rate? If you want to discipline the offenders start to discipline them at home and assert the supremacy of the state, and the idea that they must live up to their bargain. The Canadian Pacific railway to-day, I believe, .are ready, the moment Parliament says so, to reduce their rates and they can afford to reduce them, but they will not do it of their own motion, in fact they might be hauled up by the Railway Commission for the awful crime of reducing rates without the permission of that board. That is the position as it looks now and until we do something ourselves to get these reduced rates in Canada what is the good of talking about dealing with ocean rates? Canada is entitled to get from the Canadian Pacific railway equality of railway rates, to get a cheaper passenger rate. There is no railway in the world that has such a passenger business and that could so well afford to give a two-cent passenger rate as the Canadian Pacific railway and I believe they are willing to do it but this Parliament has not the courage to demand it nor has the country so far had the courage to demand it and we have got to deal with these things here in this Chamber and not by sending missions

abroad. The idea of sending missions to other countries is a good one, but the main thing is to do something in this House. It is the duty of this Parliament to assert the doctrine that there must be one railway rate from one ocean to the other throughout Canada, and there must be one classification and a simpler classification, then if we find that the Canadian Pacific railway is the outlaw and the arrogant outlaw-and I speak advisedly, when we find that railroad to be an outlaw, surely we have other ways to discipline it and if we discipline it in one way it will respect this Parliament, but so long as we allow it disregard its obligations and do as it likes it will come back and take all the cream we like to set milk for it to get; we are now setting out milk for them to get the cream and they will take it. This afternoon we discussed in this House a matter of paramount importance to the Empire and to the country in connection with cable tolls, Instead of disciplining the Canadian Pacific railway which is an outlaw in regard to its charter obligations, its freight rates and the way it handles its capital, we should go after it in the matter of telegraph rates-and by telegraph rates I mean on land lines and cable, by wireless or any system you like. There is another way to discipline this great offender, the head of this combine referred to this afternoon. I call the attention of the hon. member (Mr. Meighen) to the fact that the head of that combine has the greatest express monopoly in the country. It has been suggested in Parliament that we should have a parcel post, a state-owned express system. Where is it? Why is it not coming along? Why is not Parliament providing for it? If we gave the Canadian Pacific railway to understand that notwithstanding its wealth and notwithstanding its enormous enterprise and its great extensions in every direction, this Parliament was supreme and it had to respect the views of this Parliament and the rights of the people of Canada, and if we went after them nearer home and let them see that Canada would give them competition in express rates and telegraph rates and things of that kind they would not be so quick to make these combinations on the Atlantic. To-day they have a free hand and the outlaw finds himself justified and worshipped in this country and pointed out as the great embodiment of commercial success in Canada. Of course it will be said to me: You are making an attack and always are making attacks on the best thing we have in this country. I give the Canadian Pacific railway credit for what they have done, for their enterprise, for their largeness of view; I give them credit for having political
views at times that may be in the interests of the country. But when the railways of this country take the position that trade should run east and west, as they did in the case of the recent reciprocity discussion, and maintain that it is in the interest of the country that trade should run east and west, then the railway that takes that position must have a clean record and must see that our people can trade east and west with the reasonable freight charges to which they are entitled. Are they giving to the people of Canada reasonable charges on freight east and west? The people in the West have a burden on account of this great Canadian Pacific railway, rich and powerful as it is, Canadian as it is, Imperial as it is, and they wish some relief from that burden. . Let usi go and 'build as we shall a Halifax terminal to cost $20,000,000. What will we get for all these expenditures for terminals in Canada for elevators and other transportation facilities if we allow this company to charge what it likes in our own country and do what it likes in creating a combination on the north Atlantic ocean? The Canadian Pacific railway has got all the other lines in its power. The Canadian Pacific railway is the dictator of the American railways, it is getting to be the dictator of the port , of New York and also the dictator on the Pacific ocean, owing to its ever increasing power. It will continue to do these things as long as this Parliament has not the courage to. deal with it in relation to questions that are at home and within our jurisdiction. What is this Parliament going to do with the Canadian Pacific railway, not so much with Tegard to Atlantic freights as with regard to the reduction of freight rates in our own country? What are we going to do in regard to the regulation of its capitalization? The world is told to-day, Canada is told that the Canadian Pacific railway is a far-seeing, provident railway and has lots of money in its treasury to expend on its lines. So it has, but it did not come by that capital in a right way, it did not issue that capital in a way that was fair to the people of this country. It has placed the burden of that high finance on the people in the way of freight rates. Therefore it is up to this Parliament, it is up to all of us here and to the people of Canada to see that something is done by Parliament here in this House. We cannot pass the duty over to the Railway Commisssion, we cannot pass it over to an ocean conference, we have got to deal with it here and when I speak of the Canadian Pacific railway I included the other lines, they are just as much outlaws, only they have not been as successful. The Grand Trunk Pacific when it comes into operation is going to give us what? Competition and lower rates? All we have in

sight is higher rates, and we are told that they must be allowed to impose higher rates. Was it for this that we incurred that enormous expenditure for the creation of the Grand Trunk Pacific railway? Is this Parliament to do nothing? Are they to do nothing? I think the proposition comes right home to us here in this House and that the railways will do nothing as long as we allow them to act as they are acting to-day, to form combinations, to put up rates. How dare any railroad come into this Parliament House and ask for relief-I do not care how small the Bill may be, how dare the Canadian Pacific railway face the Canadian Parliament and ask for legislation when it is on record as being an outlaw in connection with Atlantic freight? Yet they come here, and we welcome them. We give them what they ask for; we do not demand of them a performance of what they formerly agreed to do. And so it goes on. People come along with a new proposition, and there is another expenditure of Canadian money. What we want is the enforcement of the rights we have to-day, and if we cannot get any relief in that way let us go into the business of competition with them. There is nothing like state competition to regulate these corporations. I have preached that doctrine now for a good many years in this House, perhaps I have not made much success of it, and yet I see a time coming when it will dominate the whole situation. That time is coming rapidly in our own province when we are going to control the local traction situation. We have it now, and the most progressive legislation in America to-day is going on in the province of Ontario. It might not be going on here, hut in Ontario it is goinsr on along the lines, which I have mentioned, of compelling the railway companies to do justice, to carry out their contracts, and if they refuse, of instituting some kind of state competition with them. Perhaps the day has come by reason of the conditions which exist in this country when we should get a state-competing line from ocean to ocean in Canada made up of the Intercolonial railway and perhaps one of the other lines. Such competition would regulate the railways of this country, or we could find a way of taking over the whole of them. If those railway companies are to continue to treat the farmers of the West as they are being treated in regard to freight rates, we have to deal with them, even if we have to take over the Canadian Pacific railway. Perhaps that is the way out of it. If I had the responsibility on my shoulders I would go to the Canadian Pacific railway and ask them for their explanation of the sudden advance they have made on the ocean freight rates of Canada. I would ask them for a' straight explanation, Mr. MACLEAN (South York).
and I would also ask them if they were in a combine. I would say to them, it is the duty of Parliament to deal with that combine. I would say to them, it will be our duty to take over your road and administer it. There are lots of other ways of reaching them. Some suggestions have been made here to-night. The Canadian Pacific railway is doing business with our ports. It is using our harbour improvements and our river improvements. We are doing everything, and apparently the more we do, the more they take from the people by way of freight rates. They will continue to take it, just so long as we allow them. I am in favour of something being done. The proposition of joint- action has been suggested. Let me remind this House of something in tfhe way of joint action on this transportation question. Not long ago there was a correspondence between the chairman of the American Railway Commission, and the late chairman of the Canadian Railway Commission, in regard to an interstate railway commission, and good progress was made in that direction. I think the correspondence took place under the recent Government, and I am not passing any political criticism. The proposition was under way, when some one chloroformed and killed it, although it was right along the line of the proposition we have had this evening,_ that is, a proposition of some kind of joint action. We could reach those people by joint action. If we got the three governments together, we could regulate their rates, because Governments are bigger than -any local combination or corporation that may be created. It is a matter of courage on the part of the governments in asserting their supremacy. A way could be found of dealing with the ocean freight rates, but that is not the substantial grievance in Canada to-day, although it is one of the grievances. The substantial grievance is the unnecessarily high freight rates in this country, the discrimination against the West in favour of the East, the high telegraph tolls and express rates. If we cannot reach those companies as outlaws on the Atlantic, can we reach them as outlaws in our own country ? Parliament can do it. Now is the time to do it. Who is prepared to join in an effort to do it ? How far will we go in asserting that the day has come when there must be regulation of those great corporations who are trying to be masters and to do as they like. I think the day has arrived when Parliament must be supreme, and must control and regulate those railway companies, and compel them to do justice. When we begin to regulate them at home, we will soon reach them abroad, but we have to begin, and we should begin right here by passing a law. The first essential must be no discrimination against the West. Are we ready for that ? As I have

said, if regulation would be unfair to the Grand Trunk railway and to the Canadian Northern railway, we must find some other way, or we will take them over, or put up a combination of government lines against the Canadian Pacific railway. Some way must be found to do away with that inr equality of rates in the West, and with the inequality of telegraph charges and express charges, and we can find it here.
I believe we could regulate the Canadian Pacific railway especially and not hurt it a bit. In fact, I believe the Canadian Pacific railway wants to be regulated in that direction. We have got into such a muddle, that if someone says a reduction will hurt someone, we do not get a reduction. That is the doctrine I have heard preached in this House year after year by men on both sides of politics, and yet there are transportation grievances in this country. We have jurisdiction in some respects and we can take it in other respects, but we are always just a little too late in doing things. We have always a father to bury or a daughter to marry, and we are not doing the things we should do. We should first deal with the things we can deal with. I make these remarks without any reflection on anybody. I simply say there is a great transportation problem in this country and it is for this House to deal with it. We cannot hand it over to commissions. We must deal with it here, and we ought to deal with it now. If this session is to be exhausted by dealing with other things we ought to come back and deal with two or three problems such as the transportation problem, including the Railway Act, and our canal enlargement. As the hon. member for East Simcoe (Mr. Bennett) said, we must have a high-class policy in transportation, and we must pursue it, we must assert the rights that the country has under existing agreements, and compel those who have been outlaws in the past to do justice to the people of this country.
Hon. GEO. H. PERLEY (Acting Minister of Trade and Commerce): I think the thanks of this House are due to the hon. member for Portage la Prairie (Mr. Meighen) for bringing up this question in such a fair and non-partisan way. I believe this is one of the most important problems that we have to face in Canada to-day, the question of ocean rates on our produce going to the Old Country. Western members have chiefly spoken on the question of ocean rates, and I am rather sorry the discussion was not confined to that particular . phase of the transportation problem, for, although Western members have been the chief speakers, this is a matter in which all Canada is interested. It affects every man, woman and child in this country, and touches the farmers of Ontario and Quebec as much
as the farmers of western Canada. The transportation problem is one of the greatest! problems, petrhaps the greatest, that we have to face in Canada. We have spent vast sums of money in many ways to try and cheapen the cost of taking our products to market. We have built great canals, we have spent money on our railways and we have taken the step of providing a railway commission to regulate rates, a commission of which I think we are all justly proud. We believe that it has performed, and is performing, its duty in a most efficient manner. But after spending all this money and taking all these precautions, if the steamship companies on the ocean are able to so increase their rates as to destroy all the good that we have done in other ways, it seems to me that we will be in as bad a position as we were in long ago. It is a very difficult question, but at the 3ame time I believe we shall be able to find a remedy for it as we have done for other troubles. In the old days there were all kinds of abuses connected with the railway companies. I remember well it was said that there was no way in which they could be regulated, but we have found a way of regulating them.
My hon. friend from Edmonton (Mr. Oliver) referred to the carrying trade on the great lakes, but I do not think he need be afraid about that. This Parliament is perfectly well able to deal with the question if it becomes apparent that abuses exist.
I was rather surprised that my hon. friend spoke about that point and forgot, or did not want to remember, that his Government granted the increased capital which enabled them to start this combine which he claims to exist. I would like to be fair to the steamship companies about ocean rates. The rates certainly seem to be very high and higher than they should be. Perhaps some years ago they were lower than they ought to have been to give a fair return on the capital invested-I do not know, but they certainly have increased very fast and no good reason has been shown for it. I believe that this is a world-wide movement. Freights all over the world have gone up. It is difficult to get ships and charters for ships are very much higher than they were a few years ago. Of course, supply and demand would naturally regulate these rates if there were no *combinations. It has been stated that this North Atlantic conference is really a combination, or that they have an arrangement about freight rates. I do not know whether that is so or not. But the chief thing that we should consider in this matter is whether the increase in our rates is greater than it has been in the rates for other parts of the world. I do not

know whether our rates have been increased more than the rates from South America to Great Britain, for instance. We have no data regarding that at the present time. But we must not forget that the United States are as much interested in this question as we are. We are in no worse position in Canada than they are across the line. Rates have been increased to them exactly as they have been to us and while it does not help our farmers, or the people of this country who are paying these heavy rates, still we know that there is no discrimination against Canadian ports or Canadian products.
During the short time that I have had temporary charge of the Department of Trade and Commerce this question has come up on a good many occasions. Tt has arisen, as has been referred to by my hon. friend from Portage la Prairie and other speakers, with reference to the comparative rates on flour and wheat. About six weeks ago there was a meeting here sentatives of the steamship companies between some of the flour millers and reprein regard to this matter. The spread, as it is called, in the rates between wheat and flour varies very much at different times in the year. The rates on wheat are determined from time to time almost entirely by the amount of wheat that is offered for export. Therefore, when there is very little wheat offered, say, in -the months of February, March and April, the steamships carry wheat for a good deal less in proportion'than at other times of the year. The gentlemen who attended this meeting in Ottawa did not agree as t-o how much difference there ought to be between the rate on wheat and the rates on flour. The millers claimed that the difference should not be more than two or three cents per hundred pounds while the steamship men claimed that the actual expense is as much as seven cents per hundred pounds. I listened to the arguments on both sides and I found it very difficult to decide in my own mind which I thought the better. However, it was suggested to the steamship men that this was an abuse and that they should not make rates which would hurt our milling industry and prevent the export of flour to Great Britain. A letter has come to the department from the Allans in which they say that the rate on grain from Montreal to Liverpool, London and Glasgow averages fifteen cents per hundred pounds while on flour it averages eighteen cents per hundred pounds. In other words they claim that the difference is about three cents per hundred pounds which was the maximum that the millers would agree ought at any time to be charged. I consider that this question -of ocean rates is as difficult a question as any that has come up during the time that I have been a Mr. PERLEY.
member of this House and is one which requires greater study in order to find a proper solution for it. It was suggested some time ago that the Railway Commission might be given authority over these rates, but I do not see how we' could give them authority over a matter of this kind. As has been so well said here, our jurisdiction only extends three miles out to sea. We do not want to take any action that will hurt our ports or put an obstacle in the way of the ever-increasing amount of traffic that is going from our ports. At the same time, the Government are quite alive to the fact that we must insist upon getting fair and reasonable rates for our products going to the Motherland.
I have given a good deal of consideration to the question, and I am rather inclined to think that perhaps the better way for us would be to have a commission of investigation, or some official inquiry, in order that we may get the actual facts in connection with the ocean rates, and when we have got these facts we shall be in a better position to suggest some remedy if the rates are found to be exorbitant.
Hon. WM. PUGSLEY (St. John City): Mr. Speaker, I desire to say a few words in reply to the hon. acting Minister* of Trade and Commerce (Mr. Perley). In the first place, in view of the fact that the hon. member for Portage la Prairie (Mr. Meighen) who very often seems to speak with authority for this Government, and who perhaps sometimes may be regarded almost as an understudy of this Government, stated that this Government had been dealing in a vigorous manner with this question far the past six months, the official statement which we have from the acting Minister of Trade and Commerce (Mr. Perley) is extremely disappointing. All that he tells us is that, instead of dealing vigorously with the subject, he really is at a loss to know what to do. He thinks that perhaps the best thing that can be done is to appoint a commission to look into the matter. This is a Government which seeks to carry on the business of the country by commission. A great many commissions have been appointed by this Government since they have come into power. It is an easy way to shelve a question which the Government do not desire to deal with.


Arthur Meighen: Is that not just exactly what my hon. friend suggested while I was speaking?


William Pugsley: No.


Arthur Meighen: That a commission
should be appointed and be given power to control these freight rates?


William Pugsley: No, my suggestion was that authority should be given to the Board of Railway Commissioners to control the

rates and to see that they were made reasonable and fair. My hon. friend the acting Minister of Trade and Cbmmerce says that he does not see how we can have any jurisdiction over vessels which come to Canadian ports and which, after they sail out and get three miles from the coast, pass entirely outside the jurisdiction of Parliament. What is the good of referring the matter to a commission? Does the Minister of Justice give that advice? Does any lawyer advise that a company, whose vessel comes into our harbour, which vessel becomes subject to port dues, which is under the control of a harbour master, whose position at any berth in the harbour must be assigned to the vessel by the harbour master, which takes aboard its grain and its produce from our wharves and in our country, cannot be controlled by this Government and this Parliament as to the rates which shall be charged by that company on produce which is taken on board in our country and which is taken out of our country for transportation to other parts of the world? Surely no lawyer will so advise. My hon. friend says: We do not want to hurt Canadian ports. Apparently he does not care how much he hurts the hard working farmer of the West. It perhaps does not appeal to him that during these eighteen months, during which these enormous increases in rates have been going on, the price of wheat to the western farmer has fallen about ten cents per bushel. The farmers of western Canada to-day are twenty or thirty million dollars poorer than they would be if the rates of two years ago prevailed. Just as these rates of freight upon our great lakes, upon the St. Lawrence and upon the ocean have increased, so has the price to the farmer of the West gone down, until he is in a position that he is scarcely able to make both ends meet. Notwithstanding that last year some four or five hundred thousand new settlers came into our western country, we see by our newspapers that the acreage under crop this year is not as great as it was last year. Why is it? It is because of the decline in the price of wheat and the increase in the freight rates which has caused that decline. Yet my hon. friend the acting Minister of Trade and Commerce is afraid to deal with the -subject for fear that he may hurt Canadian ports.


William Humphrey Bennett: Does the
hon. member assert that the lake rates were higher last year than in previous years? I think he is in error as to that.


William Pugsley: I think it was stated by the hon. member for Assiniboia (Mr. Turriff) that the lake rates were three cents a bushel higher last year.


William Humphrey Bennett: The rate was not increased.
Mr. PbGSI.EY: Perhaps it was three cents a hundred pounds, but it was stated that the rate was higher last year than in previous years. The important point is that the rate -between the West and the European market was very considerably higher during the past sea-son than it was two years ago. That operates to the detriment of the farmers. If this continues and if the farmer is to bo starved out and his business destroyed, then the Canadian ports will -suffer much more than they would if there were a disposition shown by the Government to take action in order to secure fair and reasonable rates. Wh-at har-m could there be in leaving the matter to the Board of Railway Commissioners? That -board can be given by this Parliament an -authority over the rates which shall be charged. I do not see why companies like the Canadian Pacific Railway Company, the Allan Line, the White Star Line and the Canadian Northern Line should not be compelled to give ocean rates upon freight which might be fixed hv the Railway Commissioners as fair and reasonable. If there is no harm in allowing the Board of Railway Commissioners to fix the rates on the great railways of the country, how would the country suffer if we gave them the power to fix the rates upon the ocean, because -we know' that what affects the business of production is the rate from the point of production to the markets of -the world. Take the subsidized companies. While these rates have been jumping from month to month, the Government has had a contract with the Allan Line, in which the Canadian Pacific Railway company has a share, for about $600,000 per year for carrying the mails. As I said earlier in the evening, these steamship subsidies, w'hile ostensibly given for the carrying of mails, are n-otgivenentiralyforthatpurpose. It does not cost these companies anything like that amount for merely carrying the mails. These subsidies have always been recognized as a bonus to enable them to carry on better the freight business of the country, to take the products of Canada to the markets of the world at a cheaper price than they would otherwise be able to do. The Government has now entered into an arrangement with these four companies, the Allan Line, the Canadian Pacific Railway Company, the Canadian Northern Line and the White Star Line to give them a subsidy amounting to a million dollars; yet my hon. friend the acting Minister of Trade and Commerce tells us that he does not know whether these companies are all in what he calls the North Atlantic Combine to raise the freight rates to the detriment of the people of Canada. Ought he not to have ascertained that before he entered into this bargain? Does he not think he ought to have made these companies agree to subject themselves t-o the

Minister of Trade and Commerce or to the Governor in Council or to the Board of Railway Commissioners so far as the rates which they should charge on freight are concerned? Let these subsidized steamship lines undertake to carry the produce of the West from Montreal to Liverpool for a fixed sum which will be deemed to be reasonable either by the Governor in Council or by the Board of Railway Commissioners, and you will have every other steamship line following suit and you will have the steamship lines sailing out of New York following suit. The produce which ' now goes through the port of New York would go through the ports of Canada, if it is found that the freight charges from the port of New York are unreasonable and excessive, and this Government compels the Canadian steamers to carry freight on a fair and reasonable basis. The ' traffic would necessarily come to the port where charges are fair and reasonable. As representing the constituency in which is the great port of St. John, where the winter port business has gone forward by leaps and bounds, let me say that we have no fear of any regulation or law which will compel the Canadian steamship companies to charge fair and reasonable prices. And we have no desire that the interests of our port shall be advanced and promoted at the expense of the great producing population of Canada. I see no reason why the Government should not take action. It is clearly a question of expediency, a question whether or not it is desirable to bring these ocean steamers under the control of the Government and of Parliament. If it is thought well to do it, we have the power to do it, and that it would be well to do it I think there can be no question. There is the same argument in favour of doing it that was presented some years ago in favour of giving to the Board of Railway Commissioners control over railway rates. There is no use in having railway rates reasonable unless the ocean rates are fair and reasonable also. The same arguments that have effect in one case apply also in the other.


Henry Robert Emmerson: I assume that my hon. friend from Portage la Prairie was speaking by inspiration when he brought this subject before the House this afternoon, and he put it in a very clear and dignified way. Apparently, he has stirred up a hornet's nest, and matters have come to light that were not anticipated by those who inspired him. I think that if the suggestion of my hon. friend from 'St. John were JcaTried out and the matter referred to the Board of Railway Commissioners, we might expect to hear from it about two years hence, judging by the action taken in respect to Mr. PUGSLEY.
discrimination against western Canada in the matter of railway freights. After all,
I think the real, genuine way to deal with this question is the one suggested by my hon. friend from South York. He seems to have delved to the very core of the matter, and I think the suggestions he has made are worthy of very careful consideration on the part of the Government. Apparently, the Government have nothing in their minds with respect to this subject. They have not been dealing with it, as was suggested by my hon. friend from Portage la Prairie. My hon. friend the acting Minister of Trade and Commerce is my authority for that inference. This matter has been going on for the past year and a half, the rates increasing gradually and reaching higher levels every six months. Now the increases have become a very serious matter. And yet the Government has not taken any action, apparently has not considered it. Judging from what the acting Minister of Trade and Commerce said, he, has realized, as a result of what was brought to their notice by my hon. friend from Portage la Prairie that something should be done. This is a matter, apparently, that requires heroic treatment. The disease seems to be deep-seated, almost chronic, and I am sure that no reference to a commission to inquire into the facts is necessary. The facts are there, the results are apparent, and it simply requires that the knife should be applied, for the remedy must necessarily be somewhat drastic. My hon. friend from South York has spoken particularly with respect to the beginning of this great monopoly; and he has called the attention of the House to the number of occasions, even during this session, when matters were brought to the notice of Parliament which were not dealt with as they ought to have been dealt with in my judgment, and he has pointed out very clearly the methods that might have been adopted and followed in applying remedies. What he says points to one great conclusion, and that is that we are in the hands of a great monopoly in Canada with respect to transportation. We are in the hands of a monopoly in transportation over the great lakes. We are in the hands of a monopoly certainly in connection with the railways so far as western Canada is concerned. And this monopoly is but the outcome and result of many of the monopolies that we as a Parliament have permitted. Now this Parliament can deal with ocean freight rates so far as Canadian shipments are concerned. We might talk from now until doomsday and gloss over the whole subject, but that would not reach a conclusion. The responsibility is upon the Government to take action in the matter and I hope they will do so.


Robert Laird Borden: My hon. friend from Westmorland (Mr. Emmerson) finds no difficulty at all about dealing with the situation, whether from the practical standpoint or from the standpoint of the jurisdiction of this Parliament. I am not disposed to agree with him or with the hon. member for St. John as to the ease with which this Parliament could assert its jurisdiction with respect to matters that have been discussed this evening. I am not disposed to say that some remedy may not be found within the control of this Parliament. But when these hon. members assert that we can apply the same theory and jurisdiction to steamships on the highways of the world that we can apply to railways operating lines within the jurisdiction of the Parliament of Canada, they are surely asking us to entertain a theory which they cannot have very deeply rooted in their own minds. My hon. friend from St. John developed a rather extraordinary theory with regard to bringing traffic to Canadian ports. According to the view I understood him to express, the best way to get steamships to Canadian ports is to reduce the rates that they can charge for freight. I assume that if we could carry his suggestion to its logical conclusion and enact a law that these steamships should carry freight across the Atlantic for nothing, then all the steamships that ply	on
the Atlantic would seek the ports of Canada. That does not seem a very reasonable or businesslike view. It is perfectly true that the hon. member for Portage la Prairie has brought to the attention of the House a very important subject, and one which is thoroughly deserving of the attention of this Parliament in so far as this Parliament is in a position to apply a remedy. If there be a monopoly, and if that monopoly is charging higher rates for transport than are just and reasonable, and in excess of those charged elsewhere throughout the world, it is a matter which ought to be carefully considered and dealt with in so far as this Parliament has jurisdiction over it. When hon. gentlemen suggest that the matter be dealt with from a practical standpoint as well as from the standpoint of simplicity of jurisdiction, it [DOT] might be worth while to inquire why they did not make use of the splendid remedy of which they now talk so glibly, in bygone days, when freight rates on the Atlantic were claimed to be higher than they should be. We did not then.find the hon. member for St. John (Mr. Pugsley) so ready to assert the simple and easy jurisdiction of Parliament to which he has referred to-night.


Frank Oliver: Was there then such a
condition as exists at the present time?


Robert Laird Borden: I heard complaints regarding ocean freight rates for many years in this House; the hon. member knows that.


Frank Oliver: I am simply asking if in the past the rates have been so excessive as they are to-day?


Robert Laird Borden: I am familiar with them only in so far as they have been disclosed in the House this afternoon, and through communications which have come to my attention only within the last two weeks. So far as .that information goes, it would indicate that the rates have certainly increased rapidly during the past three or four years. I do not know whether corresponding increases have taken place in the rates of ocean transportation in other parts of the world; it seems to me that there is some room for inquiry in connection with -that subject. This matter has already been taken up by the Department of Trade and Commerce, and nearly everything that could be done, outside of actual legislation, has been done by the department with the sincere desire to afford any remedy that might be available. I venture to assure the House that the whole subject, which is undoubtedly an important one from all the standpoints from which it has been presented by the hon. member for Portage la Prairie, is not only receiving the attention of the Government, but will receive in future every possible consideration that can be given to it, especially in the direction of an inquiry whether increases of a similar character have taken place elsewhere in the world, and whether the jurisdiction of this Parliament can be asserted by any of the methods that have been suggested this evening. The hon. gentleman who brought this matter to the attention of -the House stated very frankly that he saw a great many difficulties'in the way of the exercise of that jurisdiction. Whether or not any or all of these remedies can be made available, we shall have to consider, and, having come to a conclusion, I can assure hon. members that the Government will spare no effort to take any steps that may be within the power of Parliament to alleviate the conditions in so far as they do tend to create an injustice or a hardship. A country such as this, which has a great export trade in agricultural products, particularly in cereals, notably in wheat and in flour, is undoubtedly deeply interested in the establishing of reasonable freight rates, and no matter could more worthily engage the attention of Parliament than the bringing about of any legislation which might tend to remove any injustice or hardship in this regard that may have been created in the past or that may exist at present.
Motion (Mr. Meighen) negatived.



PRIVATE BILLS.


[Stage Direction]
House in Committee on Bill No. 150, respecting the Real Estate Loan 'Company of Canada, Limited.-Sir Edmund Osier. (Mr. Lancaster in the Chair.)
On section 2-number of shares:
Frank Oliver: Is the gentleman in charge of this Bill present? I think we should have a brief statement in regard to the Bill, if it is of the same purport as other Bills having the same or a similar object in view.


Mr. AMES:: This Bill has been passed
by the Senate and by the Banking Committee of the House of Commons. The Banking Committee made no changes in it. The Bill simply provides that the forty dollar shares of the company may be increased to one hundred dollar shares. The company when originally formed went into business in the West and met with severe losses and at one time it had to reduce the value of its shares. Since then it has recuperated and is now doing very well. They wish now to put the shares on a one hundred dollar basis.


William Pugsley: Is the effect of increasing the share value from forty dollars to one hundred dollars/that the share becomes paid up to the extent of one hundred dollars or does each shareholder become liable for the extra sixty dollars?


Herbert Brown Ames: The paid up amount in cash remains the same so the percentage paid up on the one hundred dollars will not be so great as on the smaller value share. I understand that this has been passed by the shareholders and by the directors and is satisfactory to all concerned.
Bill reported, read the third time, and
passed.



MIDDLESEX TRUST COMPANY.

[Stage Direction]
House in Committee on Bill No. 152, to incorporate the Middlesex Trust Com-pahy. (Mr. Lancaster in the Chair.)
On section 11-investment of moneys of company:
William Pugsley: Does the hon. member
who is chairman of the committee think that directors of a trust company ought to be permitted to invest its funds in any company, no matter what may be the nature of the business carried on by that company? We all know that people put their money in trust companies and take stock in trust companies with a view to safety. It is in the majority of cases different from putting money into industrial companies where there is more or less risk.
Mr. BORDEN.


Herbert Brown Ames: This clause as amended by the committee is one which is usually put into Bills incorporating trust compaiftes. It has been intimated to us in the committee that it is the intention of the minister to endeavour, before Parliament meets again, to have a form of model trust company Act which shall be the one to which all future incorporations must conform and at that time it is quite probable that the question Taised by the hon. member for St. John and many others will be discussed on their merits, without any reference to the particular companies involved. As the House has already passed this very session a number of Bills containing this particular clause, it would seem almost invidious to exclude this company from the rights that have been given _ to others. There is one feature which I think will appeal to the hon. member for St. John (Mr. Pugsley) the provision that bank stock is not a loanable security.


William Pugsley: I do not object to loans on bank stock; it says to any other company.


Herbert Brown Ames: This trust company may
lend to the extent of twenty per cent on the 'stock of a bank, and that clause applies to other companies as well.


[Stage Direction]
Section agreed to.
Bill reported, read the third time, and passed.

[Stage Direction]
House in Committee on Bill No. 178 to incorporate the Pacific and Eastern Mortgage Company.-Mr. Stevens. (Mr. Lancaster in the Chair.)
Herbert Brown Ames: This also is a model Biy.
I think one clause has been struck out.
'Tthe CHAIRMAN:	Clause 34 is struck
out.


Herbert Brown Ames: It was struck out inasmuch as it conformed exactly with the J oink Stock Companies Act, and we thought it unnecessary to repeat it here. Otherwise the Bill is exactly as it passed the Senate, and the same as our model Bill for mortgage companies. I understand this is a company which it is proposed to form in Vancouver.
On section 40-sections of Companies Act not to apply:


William Pugsley: What sections are
those ?


Herbert Brown Ames: In a general way, there are certain sections which have already been replaced by legislation in this Bill rendering them unnecessary. Otherwise there
<3097

would be a conflict between legislation in the Companies' Act and certain clauses in this Bill.


Mr. CARVELL:: It goes farther than that. It would almost seem that the section as drawn gave the directors power practically to make their board perpetual. That was the view of some members of the committee, and they therefore thought it better to eliminate that entirely.


William Pugsley: It was carefully considered in the committee ?


Frank Broadstreet Carvell: It was carefully considered in the committee.
Bill reported, read the third time, and passed.



CANADIAN PROVIDENT INSURANCE COMPANY.

[Stage Direction]
House in Committee on Bill No. 148, to incorporate the Canadian Premier Fire Insurance Company.-Mr. Aikins. (Mr. Deputy Speaker in the Chair.)
On section 1-incorporation.
William Pugsley: The name of this company is changed to the Canadian Provident Insurance Company.


George Halsey Perley: The Canadian Provident.


Frank Oliver: Who is in charge of this Bill ?


Herbert Brown Ames: _ My hon. friend from
Brandon (Mr. Aikins) was in charge of the Bill, but he had to go to Winnipeg. The only change he desired to have made in the Bill was in the eigtheenth line. He desired to change the name from the Canadian Premier Fire Insurance Company to the Canadian Provident Insurance Company. Otherwise, the Bill conforms absolutely to the standard for a company that is authorized to carry on fire, plate glass, steam boiler insurance, and other classes.


William Pugsley: Does that conflict with the Act ?


Herbert Brown Ames: Not in so far as we could'
learn from the Insurance Department. They raised no objection.


Frank Oliver: I do not wish to oppose
the Bill, seeing that it has gone through the committee, but I would think that it would be rather objectionable that a company should be a hail insurance as well as a fire insurance company. The two classes of risks are so entirely unlike that I would think it not advisable that they should be grouped together.


Mr. NESBITT:: The Insurance Act
allows it if they put up so much more money.


Frank Broadstreet Carvell: There is another objection. It arose in connection with Bill No. 174 as well, but the Banking and Commerce Committee thought it ought to be put through. I wish to register my protest against a company of this kind under any circumstances. Here we have a company with an authorized capital of half a million dollars and they are allowed to do business when they have subscribed $250,000 _ and paid up $100,000. The result of allowing this insurance company to commence business with a capital of $100,000 is that a little fire, like one of several that occurred this week, would wipe them out of existence. Then they are allowed to go into the business of plate glass, steam boiler, and inland transportation insurance, in addition to fire insurance. There is a provision that they cannot go into all of these others until they have paid up $50,000 more, but they can go into any two of these additional subjects by paying up only $100,000. Of course, we had the promise of the superintendent of insurance that he would not grant them their certificates to go into any of these additional classes of insurance until they had actually put up $50,000 more. I suppose that as long as the present commissioner of insurance is there he will carry out that promise, but we do not know what changes may take place in the future. This seems to me to be very slip-shod legislation. I do not know whether other solicitors have had any of the difficulties over these small insurance companies that I have had or not but I know of a number of cases in which these small companies have refused to pay legitimate claims on the merest technicalities. I have an action going on now in which a small company, originating in British Columbia or Manitoba, which came down east and did business, took advantage of some technicality in their conditions and refused to pay. This was a case in which a man insured his stock. He was asked whether there was any incumbrance on the building, thinking the question referred to the building only. The company claims that the insured was not warranted in saying that there was no incumbrance when there was an incumbrance on the stock and they refused to pay on that ground. I have another case-or rather I advised that there was no legal claim-where a property was vacant for more than one month or two months required by the conditions of the company. It was vacant with the knowledge and consent in writing of the local agent and the insured thought it was all right, but it turned out, according to the conditions of the company, that it was all wrong. The result was that the man lost his property through a fire which was general in the village and lost his insurance. I am meeting cases of this kind



all the time and they all come from these small companies. That brings up a^ larger question. I have felt that this Parliament should take up the question of a general fire insurance policy. Of course we might raise the legal question as to whether or not the Parliament of Canada has any jurisdiction, but in the Parson's case it was held by the Privy Council that Parliament had the right to legislate^ so long as it did not conflict with provincial rights.


Mr. McKENZIE:: What about the Ottawa Fire Insurance Company?


Frank Broadstreet Carvell: That was practically the same.


Edward Walter Nesbitt: I thought it was decided that the power was in the province.


Frank Broadstreet Carvell: In the Parson's and
Ottawa cases the decision was that the province had the power in the absence of Dominion legislation.


William Pugsley: We might at all events make a form applicable to all companies incorporated by the Parliament of Canada.


Frank Broadstreet Carvell: Yes. If I had my way I would have this Parliament make an insurance policy and there would be only one condition and that would be that the company would pay in the absence of fraud. That might appear to some to be rather drastic legislation. But I protest against incorporating a company like this with an actual capital of $100,000. I do not believe that any company should be allowed to go all over Canada and do an insurance business with the beggarly capital of $100,000. I think that they ought to have half a million of capital actually paid up before they should be allowed to do business. Many people may say that this would be driving the business into the hands of the big companies. Possibly that may be so, but I have noticed that the big companies do not raise the little technicalities that the small ones do and as a rule the big companies grant fair play to their policy-holders.


Edward Walter Nesbitt: Do not people go to the little company because they get their insurance cheaper?


Frank Broadstreet Carvell: That may be so in some portions of the country but not in the eastern provinces. As a rule the small companies are tariff companies, just the same as the big companies aTe. I think the idea is that the small companies want to do business and they push it; they employ agents all over the country, these agents are doing business in a small way, they are looking after it, they are getting it and then, when a fire occurs, the companies refuse to pay.


George Halsey Perley: I would suggest that, if there is any objection to this Bill, it stands.	t
Mr. CAEVELL.


Herbert Brown Ames: This is a model Bill, and nothing would be gained by allowing it to stand. The points that are raised are points that are always raised in connection with every fire insurance Bill. You remember that four or five years ago, when the Government introduced their regular Bill with reference to insurance, it was determined that a fire insurance company might be permitted to do five kinds of insurance. To do what one might call their major business they were required to have a considerable paid-up capital, and for each additional class of insurance that they added they would be expected to increase their paid-up capital stock by a considerable amount. Until this present session of Parliament $75,000 has been regarded as the amount at which a fire insurance company could commence business. The Banking and Commerce Committee at the very outset of this session discusssed this matter on the instance of the hon. member who has just taken his seat, and we then determined to make the initial sum $100,000. That has been held as a precedent in all the insurance Bills which we have passed this session. In this case, as a fire insurance company, it has to have a paid-up capital of $100,000. When the company makes contracts of plate glass insurance, steam boiler insurance, and inland transportation insurance, it has to add $50,000, making the total paid-up capital $150,000. When it takes up marine insurance, it has to add $25,000 more, making a total paid-up capital of $175,000. Before it has been in business for five years, it has to add $75,000 more, making a total paid-up capital of $250,000. I admit that this is ja comparatively small amount. If we are spared to meet again at another session of Parliament, on the first Bill of this character that comes up before the Banking and Commerce Committee we shall carefully consider whether that sum ought not to be greater. The parties asking for incorporation of this company have been following the lines laid down by their predecessors. I would suggest that, as this is the last fire insurance Bill that we are likely to have this session, it would be invidious to impose upon them conditions different from those imposed upon their predecessors.


Frank Broadstreet Carvell: The hon. member for
St. Antoine (Mr. Ames) has correctly stated the purport of the Bill. I am not finding fault so much with the fact that they are entitled to take up three or four different kinds of insurance as with the smallness of the paid-up stock. I would not hesitate to refuse one of these Bills even at this late date and even at the risk of being charged with invidious distinction. That we have erred in the past is no reason why we should do so now.


Edward Walter Nesbitt: The question resolves
itself into one of capability of management more than of capital stock. I know several fire insurance companies in Ontario that commenced with $10,000 capital stock that are just as strong as any company doing business in Canada to-day. That is brought about by capable management. In 1910 we spent nearly two months on this insurance Bill. We did the very best we could for the public generally in allowing the capital to be a reasonable amount, because otherwise we would shut off competition. There was complaint about the so-called monopoly of insurance companies at that time.


Frank Oliver: I did not hear the member for St. Antoine say anything about hail insurance.


Herbert Brown Ames: In my first remarks I mentioned hail insurance. In my subsequent remarks I read from section 7 exactly the classes of insurance which this company were to carry on. There is no hail insurance in this Bill.


[Stage Direction]
Section agreed to.
On section 8-power to acquire rights, &c., of another company:
Frank Broadstreet Carvell: I wish to call, the attention of the committee to this section which provides that:
The company may acquire the rights, shares and property and it is intended that they shall acquire the rights, shares and property of the Canadian-Phtenix Insurance Company incorporated by chapter 102 of the statutes of Manitoba of the year 1906 as amended by chapter 77 of the statutes of Manitoba of the year 1911, and in such case the company shall perform and discharge all duties, obligations and liabilities of the last mentioned company.
To my mind this is not a proper method of legislating. We should have some detailed statement as to the assets and liabilities of the Canadian-Phoenix Insurance Company. We have no evidence on that point. It may be a bankrupt company, although I suppose these men would not put fresh capital into the company unless it was a fairly solvent concern. It only bears out my further statement that the whole Bill looks to me like slip-shod legislation and that a company of this kind ought not to be placed in a position to fool the people of this country.


[Stage Direction]
Section agreed to.
Bill reported, read the third time, and passed.
On motion of Mr. Borden, House adjourned at 11.50 p.m.
[Stage Direction]
Tuesday, May 6, 1913.