1914-05-13

THE FARMERS BANK.

Mr. LEMIEUX:: In connection with the papers brought down with reference to the 
Farmers Bank, would the Minister of Finance lay on the table of the House the names of the depositors in La Banque du Peuple, the Ville Marie Bank, and La Banque St. Jean? I think these reports were submitted to Parliament some years ago.


Mr. W. T. WHITE:: Usually that information is not available in the department, but if it is, I shall consider the advisability of complying with the request of my hon. friend.



BILL WITHDRAWN.

[Stage Direction]
Bill No. 106, to incorporate the NorthWestern Railway Company of Canada.

[Stage Direction]
Hon. J. D. HAZEN (Minister of Marine and Fisheries) moved for leave to introduce Bill No. 191, to provide for further advances to the Harbour Commissioners of Montreal.
Motion agreed to, and Bill read the first time.

[Stage Direction]
Hon. J. D. HAZEN (Minister of Marine and Fisheries) moved for leave to introduce Bill No. 192, to provide for further advances to the Quebec Harbour Commissioners.
Rodolphe Lemieux: When we come to discuss this Bill in committee, will my hon. friend have with him a detailed statement of the 'dredging work performed by the Quebec Harbour Commission at Quebec?


Mr. HAZEN:: I will have the details of all the work that has been done.


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

[Stage Direction]
Hon. W. T. WHITE (Minister of Finance) moved for leave to introduce Bill No. 193, to amend the Act respecting the National Battlefields at Quebec. He said:
By this measure, the number of commissioners is increased from five to seven, and power is given to the commission to adopt by-laws for the administration of its affairs. The commission is further empowered to purchase, without the approval of the Governor in Council, any lands which it may have been authorized previously by Parliament to acquire, provided that funds have been appropriated for the purpose and are at the disposal of the commission.

Those are the three changes provided for in the amending Bill.
Mr. SPEAKER:: This appears to be a Bill which requires to be introduced byresolution. Section 11 says:
No expenditure shall be made and no liabilities shall be incurred by the commission until funds sufficient to cover such expenditure or liabilities shall be at its disposal for the purposes of this Act.


William Thomas White: I was advisedthatitwas not necessary to precede this Bill by a resolution, but I shall bow to your judgment in the matter. No expenditure is contemplated by the Bill unless it has been provided for by Parliament. Under the existing legislation the commission may, with the approval of the Governor in Council, purchase lands provided it has been previously authorized by Parliament to acquire such lands. The purpose of this amending Bill is to prevent the delay which arises in the purchase of land, and which in the past has resulted disadvantageous^ to the commission in purchasing lands. The object of the provision which Your Honour has under consideration is to enable the commission, without obtaining the approval of the Governor in Council, to purchase properties, provided that the acquisition of such properties has been authorized by Parliament, and provided also that moneys for the purpose have been appropriated and are at the disposal of the commission. If Your Honour has any doubt as to the matter upon further consideration, I shall of course be glad to defer to your judgment and proceed by way of resolution; but I had been advised that it was not necessary in this case.


Thomas Simpson Sproule: On looking over the
section more carefully, I think perhaps the hon. gentleman is right. It says:
No expenditure shall be made and no liabilities shall be incurred by Jiie commission until funds sufficient to cover such expenditure or liabilities shall be at its disposal for the purposes of this Act.
If it were necessary to move by way of resolution, it would be only on this one section of the amending Bill. I will look into the mattter and find out what is the correct procedure.


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

[Stage Direction]
Hon. ARTHUR MEIGHEN (Solicitor General) moved for leave to introduce Bill No. 194, respecting Co-operative Credit Societies. He said:
No lengthy explanation will be necessary as the same Bill, with the exception of a few amendments, was introduced by myself last session. Furthermore, last session I had the honour of addressing the House upon the question at large. My remarks upon that occasion will apply to the present Bill, and I will explain it more fully on the second reading. This Bill provides for uniform machinery throughout the Dominion enabling the formation of cooperative credit societies. I do not need to describe the character of the societies for which co-operative credit is provided. They are societies, the principle of which ia mutual loanings among its members of funds for the purpose of their commercial advantage. Certain restrictions are placed upon each society, and the general precautions provided under the previous Bill are embodied here. I may add that the Bill does not differ in any essential particular from that passed by this House, after a very thorough review in Committee, in 1907.
Sir WILFRID LAURIER:: Is it the intention of my hon. friend to press this Bill during the present session?


Mr. MEIGHEN:: That is my intention
and my hope. I do not think it will entail the sacrifice of a great deal of the time of the ,House, because the attention of the House has already been given to the principle, and, in large .measure, to the details. Consequently, I do not think I am asking a great deal of the House in asking that this Bill should pass.


Mr. NESBITT:: Is it the intention to restrict the districts in which these companies work, or is permission to be given them to circulate all over the country?


Arthur Meighen: It is Dominion-wide.


Rodolphe Lemieux: The previous Bill was
passed by the House but rejected by the Senate. Is it the same Bill exactly or does it differ in some respects?


Arthur Meighen: That is the Bill to which I referred in my opening remarks. The hon. member for Rouville (Mr. Lemieux) was chairman of the committee on that Bill, and that committee reviewed the measure in great detail. This Bill differs from that in some respects, but in principle it is the same. Any changes that have been made are dictated by the experience of banks that have been organized since that Bill was before the House.


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. NEELY:: 1.	What disposition has been made of the south half of section 11, township 28, range 29A, school land?
2.	If sold, to whom, by whom, for what price, and whether or not by public auction after due and proper advertisement?


Mr. RGOHE:: The south half of section II, township 28, range 29A, presumably west of the first meridian, has not been disposed of.


RIGAUD POST OFFICE CLOCK.
*Mr. BOYER:: 1.	What price was paid by the Government for the clock which it has placed on the post office building at Rigaud?
2.	(a) When was it bought and (b) from what firm?
3.	(a) What price was paid for the bell annexed, from what firm does it come and (b) what is its weight?
4.	Was that clock and accessories placed by contract or by day work?
5 If by contract, who was awarded such contract?
6. Were there any other tenders? If so, what are the names of the tenderers and the amount of each tender?


Mr. ROGERS:: 
EMPLOYMENT OF DARIUS CADRIN.
Mr. ERNEST LAPOINTE:: 1.	Is Mr. Darius Cadrin, of St. Anselme, county of Dorchester, employed in any of the departments of the Government?
2.	If so, in what capacity, what does he get, either as salary or travelling expenses, and what is the date of his appointment?


Mr. CODERRE:: Mr. Darius Cadrin is
employed as acting preventive officer of customs since 14th November, 1913, at a salary of $700 per annum. He is the acting sub-collector at St. Anselme.


EMPLOYMENT OF THOMAS KINSELLA.
Mr. ERNEST LAPOINTE:: 1.	Is Mr. Thomas Kinsella, of St. Malachie, county of Dorchester, connected with any of the departments under the present Government?
2.	If so, what is his position, how much does he get either as salary or travelling expenses and at what date was he appointed?


Mr. CODERRE:: 1.	Yes.
2.	Inspector in River St. Charles' works, Quebec; salary, $3 per day; appointed 13th August, 1913.


EMPLOYMENT OF ISIDORE LACASSE.
Mr. ERNEST LAPOINTE:: 1.	Is Mr. Isidore Lacasse, of St. Henedine, county of Dorchester, connected with any of the departments under the present Government?
2.	If so, what is his position, how much does he get either as salary or travelling expenses, and what was the date of his appointment?


Mr. CODERRE:: 1.	Yes.
2.	Clerk of works, Quebec; salary, $100 per month; appointed 5th December, 1913.


MR ALBERT MORIN.
Mr. ERNEST LAPOINTE:: 1.	Is Mr. Albert Morin, of St. Henedine, county of Dorchester, connected with any of the departments under the present Government?
2.	If so, what is his position, how much does he get, either as salary or travelling expenses, and what was the date of his appointment?


Mr. CODERRE:: 1.	No.
2.	Answered by No. 1.


MELVILLE POST OFFICE.
Mr. MacNUTT:: With further reference to question No. 9 of Thursday, April 30, what indirect requests or petitions, aside from those of the Melville Conservative Association, have been received by the Department of Public Works in connection with the erection of a post office building at Melville, Sask. ?


Mr. ROGERS:: Alex. Hardy offers to obtain a site.



SUPPLY.

[Stage Direction]
The House in Committee of Supply, Mr. Blondin in the Chair.
Post Office-Outside service-Salaries and allowances, $6,429,920.75.
[u'The Solicitor General has bailed out $58,000,000, and he has brought it down to $100,000,000. What does that mean? That -is Mackenzie and Mann\'s price as promoters for carrying on this work, acting as financial agents, acting as constructive agents. That is their price for their services for all these years\' work.\nNow, Mr. Speaker, I do not want you to get the idea that I think Mackenzie and Mann should not be allowed something. I certainly think they should. They are farsighted, energetic, earnest men and they should get reasonable recognition, but I say that $60,000,000 of stock which the Solicitor General says some day will foe worth dollar for dollar is too much money for Canada to pay to two men for promoting a transcontinental railway in this country. Not only is it too much for these men to get, but it is too much for Canada to pay freight rates on. Who is going to pay these freight rates ? Again it has to come out of the West, not only on that $60,000,000, but on that $40,000,000 that Canada has taken as her share, if I might use the term, of "the booty. Freight rates have to be paid on that. It is not like a royalty in a mine. When you take a royalty on a mineral, you take a product which is easily worked. The intrinsic value is there. It is not in the working that the value exists; the . value exists because somebody is fortunate in finding the mineral and there is a huge profit; but in this case, this road on that $100,000,000 has to earn $6,000,000 annually which has to be taken out of the pockets of the people in rates, and it means that the cost of living in the West will be that much higher. What will be the argument of my good friend Mr. Phippen before the Eailway Commission the next time that freight rates are being discussed ? He is going to say this: In the determination of these rates, you have to take into consideration this $100,000,000. Canada through her Parliament recognizes that that is a fair amount to pay these men for their services. Canada has taken $40,000,000 of it in return for her guarantee; and we represent the Canadian Northern, and Mackenzie and Mann demand that you fix the freight rates at such an amount that there will be a fair return on the money which you must\nconsider as capital invested. That is the policy which the Government has asked me to commit myself to, but I am not prepared to do so. The great broad principle is the principle of a partnership. You, Mr. Speaker, may say: The hon. member has no experience; he is young in Parliament so far; he was prejudiced against these men; they have struck at him and he has struck back; he is hurt. But let me establish my case in the light of history, and it is only in the experience of the past that you can reach the conclusions as to what should be done in the present and as to what will happen in the future. This is not the first time that Canada has experimented in railroad partnerships. In 1852, Upper Canada began to pay the price when she entered into a partnership with the Grand Trunk Eailway Company. By the terms of that arrangement Canada was to have nine directors and the Grand Trunk were to have nine, and what was said at the time? . The inspector general, Mr. Hincks, spoke in severe terms of the misrepresentations made by the enemies of this undertaking respecting the effect which it was said to have on the credit of the province. He denied altogether that the Government was interested in the slightest degree in the cost of the undertaking, whatever it might be. The province paid nothing; it would only promise to guarantee the amount of \xa33,000 per mile, for which it was to have the first mortgage on the road with interest at .six per cent. He did not care how much the stockholders laid out on the road; the more they expended the better . it was for the province. One thing he was pretty certain of, the Grand Trunk Eailway Company would not ask for a single penny from the province, for they could get money in England at a much less rate than six per cent without being subject to the restrictions which were to be imposed upon them if they accepted the Government guarantee, in having directors on the part of the province.\nIn 1854, the Grand Trunk Eailway Company came back again to the Government of the day in Upper Canada. In 1855, they came back again. In 1856, they came\' back again and they asked to be allowed to issue preferential bonds to the extent of \xa32,000,000. In 1857 the Government were so disgusted with the whole thing that what did they do? They brought in a measure to sever the connection between the executive and the commercial enterprise. Listen to what Mr. Cayley said in 1857. He was then inspector', "general which is practicaly Minister of Finance:\nThe first object of this Bill is to dispense with the Government directors in the company. The position of Government directors has been the occasion of casting upon the Government a good deal of reflection. All the management on the part of the Grand Trunk Railway Company has been cast upon or attempted to be cast upon the Government. The position has been an unenviable one. Now we propose to do away with the responsibility of the Government, and to give the entire management into the hands of the company. It has been suggested one member of the Government in tre board with a view of exercising a supervision over its affairs, but this arrangement in the board with a view of exercising only leave to that member the same responsibility while depriving him of the advice and support of his colleagues.\nIn the light of the experience of Upper Canada, in the light of the economic conditions 'that I have laid before this House to-night, the Government ask me to support this measure. All I have to say is that I' cannot see eye to eye with them. I have tried to place fairly before the House my reasons ior my stand. If they are incorrect, it is open to other gentlemen to refute them; 'but as I have spoken, so I believe.\nOn motion of Mr. Boivin, the debate was adjourned.\nOn motion of Mr. Borden, the House adjourned at, 11.30 p.m.\nThursday, May 14, 1914."]
Mr. PELLETIER:: On account of some
misunderstanding, my officers inform me, in the Supply Bill which we have passed, which has gone through and been sanctioned, two items in the Supplementary Estimates for the year ending 31st March,

1914, were omitted. Those items are as follows:
Mail service:	Ordinary land service,
including rural mail delivery-Further amount required	$215,000
For mail bags	 25,000
For railways on account of new rates. 135,000 Mail service by steamboats-Further
amount required	 1,400
Total	3376,400
Miscellaneous: Printing and advertising-Further amount required	$125,000
I am informed by the officers of the
House that we shall have to present a special Supplementary Estimate for these items. The Clerk of the House informs me that if the items were passed here, they must have been left out somewhere in the printing or in the course of the work. I am going to ask the assistant Clerk of the House to make some inquiry about them. Meanwhile, we may go on. The omission can be remedied in some way, but we shall have to verify the facts more completely. When we wanted to have the use of the money covered by these items, we were told by the Auditor General that the amounts were not included in the Estimates 'as passed. At all events, we will look into the matter.


Rodolphe Lemieux: I received a letter this morning which informs me that Mr. Briegel, superintendent of the railway mail service in Montreal, an old gentleman who has rendered faithful service to His Majesty for over forty years, is about to retire upon pension and that the department contemplates appointing as his successor Mr. W. L. Cark-ner, of Quebec city. Mr. Carkner has been in the service for two years only and has never passed the examinations which are required of the other officers. I do not know him personally and he may be a good public servant, but I would call the attention of the Postmaster General to the fact that there are in the post office department at Montreal other gentlemen, friends of his, who have been in the service a very long time and Who should be entitled to promotion. I might name, for instance, Messrs. Methot, Villeneuve and Forest. If the staff in the Montreal post office is not to be demoralized-my hon friend appreciates the sense in which I use the word-the principle of filling vacancies >by promotion should be recognized. The railway mail service is a complicated service, and the man who is at its head should be fully equipped for his duties and fully cognizant of the conditions that exist all over the immense district of Montreal. I do not think it would be fair
to the staff or in the interests of the service that a new man should be brought from another district and given this position in Montreal. Personally I know nothing about the facts, but I am informed that the hon. minister was approached on the subject, that he gave his decision in . favour of Mr. Carkner and that the appointment is about to be made. I would like the hon minister to state whether or not this is the case, and whether or not he will follow the good old golden rule of filling vacancies by promotion, especially in a branch of the service which is certainly one of the most important.


Louis-Philippe Pelletier: Mr. Briegel, who has been connected with the department for a very long time, has given most devoted and efficient service. If he is not quite as capable of working now as he was some years ago, on account of old age, his services are still very valuable to the department, and I shall certainly not ask him to resign or to be pensioned. If the time comes-and I hope it will not be in the near future- when he cannot accomplish his work in an efficient way, he will understand without anybody telling him what he should do.
I am happy to say that that time has not yet come, and so far as I am concerned, I have had no requests from Mr. Briegel to be pensioned; my officers inform me that they also have received no such request. I certainly shall not touch upon the question of his successor until such request is received, for I would not do anything which would hurt Mr. Briegel's feelings.


Rodolphe Lemieux: So far as Mr. Briegel is concerned, that is quite satisfactory. I agree with my hon. friend that Mr. Briegel is an old and faithful servant and that he is quite capable of fulfilling his duties for many months, and, I hope, for many years to come. The hon. member for St.Lawrence is aware that Mr. Briegel is universally known in Montreal, and that he is very popular with the public on account of his courtesy and devotion to duty. It would be a thousand pities if he were removed and pensioned when he is still able to render valuable service to the department. I may say frankly to the hon. minister that the gentleman who informed me in the matter says that the minister was lately approached with regard to Mr. Briegel's successor, and that the hon. gentleman said that Mr. Carkner would be appointed immediately after the close of the session. I am glad, however, to take the word of the hon. Postmaster General that nothing of

the kind will happen. I have the highest regard for my Quebec friends, but surely there are enough public servants in the post office at Montreal able to succeed Mr. Briegel without importing one from another district. It that were done it would cause a great deal of feeling.


Louis-Philippe Pelletier: It would be absolutely improper on my part to discuss the successor of Mr. Briegel when he is in charge of the office, and I intend that he shall stay in charge so long as he desires and so long as his services are efficient.


Rodolphe Lemieux: Hear, hear.


Louis-Philippe Pelletier: I have not said to
anybody that this matter was settled. I think it would have been indelicate on my part to do any such thing without having first heard from Mr. Briegel. So there is nothing decided, nothing settled. As to the question of bringing an officer from Quebec to Montreal or from Montreal to Quebec, I would not hesitate for a moment to do that if I thought it would be in the interest of the service. We have sent people from the East to the West and vice versa, and I believe that my hon. friend did the same thing. We are having some complaint about that in the West, but we [DOT]consider the Post Office Department to be, to a certain extent, in the position of a bank which has branches all over the country. A bank will move its employees or clerks from office to office for the proper carrying out of its business and the efficiency of its service. While we are always prepared to give promotions to the employees of a branch in their own town, when any circumstances require that we move one employee from one district to another we shall certainly do so without being estopped by .the question o'f the place where he formerly lived. The gentleman to whom my hon. friend from Rouville referred is a very good employee in the railway mail branch in Montreal. I understand that he is a very efficient help to Mr. Briegel, but there are others too. In other words I have not looked into the question, and I shall not look into it or decide it so long as our good employee Mr. Briegel is in charge.
I have made inquiries about the other matter of which I spoke and I find that the two items in the supplementaries for the year ending March 31, 1914, had been left in the portfolio of the clerk. We might dispose of them now. There are accounts due which should be paid out of these items, but of course payment cannot now be made.


Rodolphe Lemieux: As these votes are in the Supplementary Estimates of the last fiscal year, I think the minister should inquire whether it will not be necessary for him to introduce a special Supply Bill.


Louis-Philippe Pelletier: I have taken the
opinion of the assistant Clerk o'f the House, who says that he has not the least doubt that we can pass the items now.


Mr. GRAHAM:: But after the items have passed, as the Supply Bill for 1914 has gone through, if will be necessary to put these in a separate schedule of the next Supply Bill and have that passed.


Louis-Philippe Pelletier: My hon. friend is quite right; that is what I am told.


Mr. TOBIN :: A few days ago I placed a question on the Order Paper, which was answered by the Postmaster General. The question and answer are as follows:
Mr. Tobin:
1.	Has Mr. J. R. Denison, postmaster of Richmond, Quebec, been dismissed? If so, on what grounds?
2.	Was an investigation held? If so, by whom and did Mr. Denison have an opportunity of defending himself? If not, why not?
3.	Has a new postmaster been appointed? If so, what is his name and who recommended his appointment?
Mr. Pelletier:
1.	Tes. The management of the office was very unsatisfactory.
2.	Serious complaints were made in regard to the management of the office and an official investigation was held. The inspector's report showed that a change in the postmastership was necessary.
3.	A new postmaster has been appointed by the direction of the Postmaster General. His name is Wm. E. Mclver.
It seems that the Postmaster General has a kind of brutal way-


Some hon. MEMBERS:: Order.


Edmund William Tobin: -of dismissing old employees. Mr. Denison, who has been postmaster bf Richmond for the past sixteen years, has, as far as I know, given satisfaction to the public; and up to April 22 last, I believe, he was not aware that any mistakes had [DOT]been made in his office. But on the 22nd of April last he received this letter from the inspector of the district:
To the Postmaster,
Richmond, Quebec.
Dear Sir,
I beg to notify you that I have received notice from the department at Ottawa that you have been dismissed from the postmastership of Richmond for unsatisfactory management. The transfer will take place as soon as arrangements can be made.

In answer to tliat letter, Mr. Denison *wrote to the inspector on the 23rd of April as follows:
L. E. Dastous, Esq.,
Post Office Inspector,
Sherbrooke, P.Q.
Dear Sir,-I beg to acknowledge receipt of yours of the 22nd inst., advising me that I have been dismissed from the postmastership of Richmond for unsatisfactory management.
I must say that this seems to me to he a very peculiar letter to have received, and I would ask you to register my protest against this, and to advise me wherein the unsatisfactory management has occurred. It seems to me that I should have been advised of any investigation which has been made into the working of this office, and to have had a chance to have put in my defence.
Will you please procure for me copies of any complaints which have been made against me, bv whom they were made, and also what steps were taken to investigate this matter.
J. R. Denison.
I am surprised, yet in another way I am not, at the stand taken by the Post Office Department. It seems they have no regard for justice at all when .they wish to distribute patronage. I quite understand that some weeks ago there was a tour through the Eastern Townships of certain members of this Government, and I have no dou'bt that one of the promises they *made at Richmond was that Mr. Denison's head should be cut off to make room for one of their own friends; but why did they not dismiss him in the proper way? Why did they not hold an investigation and give the accused a chance .to defend himself? If that had been done I should have had nothing to say, but, as it was, the man was dismissed without any investigation, and I would ask the Postmaster General why that investigation was not held? Mr. Denison would like to have the satisfaction of- knowing what he was dismissed for.


Louis-Philippe Pelletier: I am somewhat surprised to hear the hon. member for Richmond and Wolfe raising this question in the way he has done. Politics do not enter into this case at all. I want to tell my hon. friend at once that the Hon. Mr. Per-ley has not in any way been the cause of the dismissal of this postmaster. That question, to my knowledge, was never discussed at all during the visit which my two colleagues made in the Eastern Townships. I might say that for a long time previous to this dismissal it had been represented to .me that the postmaster at Richmond was not giving the public satisfaction. I made inquiries, and was told that
if I could leave this postmaster in charge it would be a good thing from some other point of view than the service, seeing that he was an old man; and I have kept him there for the last twelve or fifteen months. He was not accused of taking any part in politics, and that is not the reason for his dismissal. He has been dismissed purely from the point of view of efficiency in
12	noon, the transaction of the business of that post office- nothing more or less. My hon. frien'd says that an investigation should have been held. Let me tell my hon. friend that I did not go into this matter blindly. This man was dismissed as the result of an investigation. I am sure we have a report in the department from our officials notifying me that the business of the post office at Richmond was not transacted in a satisfactory manner to the public, and that a change should consequently be made. I have not the report before me, as I was not informed that this matter was going to be brought up, when I asked my friends opposite to let me know what matters they were going to 'deal with so that I might have the papers. My hon. friend has chosen to use the word ' brutal ' in referring to this man's dismissal. I did not rise to a point of order at that word because I did not think the hon. member for Richmond and Wolfe, whom everybody knows is a very good fellow, really meant what is implied by that word. There was no brutality about it at all. The postmaster in question has been kept on for a long time, in spite of representations made to me that the business of that post office was not carried out as it should be. Gradually the representations became more pressing, but I said that I would not dismiss the man until the regular and proper investigation had been held. That investigation took place, and the report showed that there was nothing else for me to do but to replace this man in order to give efficient and satisfactory service to the public. Under the circumstances, I do not think the remarks of my hon. friend are just and fair to me.


Edmund William Tobin: Does the Postmaster General think it is right to 'dismiss this man after he has served the public for sixteen years? The Postmaster General admits that no complaints have been made as to Mr. Denison's interfering in politics. Mr. Denison is a Liberal, but he has never interfered in politics one way or the other. He is an honourable gentleman, who is

respected throughout the whole district; and I would ask the Postmaster General if he thinks it fair that Mr. Denison should receive such a letter of dismissal from the post office inspector without any other notice having been given? For the information of the Postmaster General and the House, I will read the letter once more:
The Postmaster,
Richmond, Que.
Dear Sir,-I beg to notify you that I have received notice from the department at Ottawa that you have been dismissed from the postmastership of Richmond, for unsatisfactory management.
The transfer will take place as soon as arrangements can be made.
Yours truly,
(Signed) L. E. Dastous,
Post Office Inspector.
The Postmaster General objects to my using the word ' brutal.' But is that word too strong, considering how this old servant has been treated? This man wrote to the post office inspector on the 23rd of April asking for an investigation, and a chance to defend himself. Was it unreasonable of him to expect British fair play at the hands of the Postmaster General? He was accused of mismanagement of the business of his post office, and he should not have been held guilty until the charge had been proved. But the Post Office Department does not want any light thrown on their investigations; they hold their investigations in the Eastern Townships in a dark room. Mr. Denison was not given a chance to defend himself. I am sure he is not looking for the small salary attached to that post office. He is a wealthy man, well able to provide for himself, but he objects to being dismissed in this way. I will ask the Postmaster General a direct question: Does he approve of that letter of dismissal that the post office inspector sent to Mr. Denison on the 22nd April?


Louis-Philippe Pelletier: The post office inspector having received instructions from the Post Office Department to change the postmaster at Richmond had nothing else to do but notify Mr. Denison of his dismissal, and I cannot blame the inspector for doing what was his duty. My hon. friend seems to be under a misapprehension as to the facts. I told him a moment ago that I was not aware of any charge of partisanship having been made against this man. We have our regular officers whose duty it is to look into these cases of improper management of a post office, and who report to the department whether the 
office is being properly managed or not. In this case the regular course has been followed. We have a report which says that the management of the office was such that an investigation was held and that the change in the postmastership was desirable.


Edmund William Tobin: On what grounds?


Louis-Philippe Pelletier: Had my hon. friend
given me notice I would have brought the papers. I cannot remember the exact tenor of the report but I am almost sure I gave instructions to name another postmaster because of the report of the officials which justified that course. If I remember aright the report of the officer was such that I would not have done my duty had I kept that postmaster there. I am sorry to have to go so far in my statement, but it is the fault of the hon. member (Mr. Tobin) and not mine. I do not know the postmaster, I never saw him, but will the hon. gentleman say that when I have a report from the officers of the department telling me a change must take place on account of mismanagement, that I should refuse to act on that report?


Edmund William Tobin: I did not give the Postmaster General' notice in the House, but last evening after the House adjourned I told him that it was my intention to take the matter up. I am pleased to hear the Postmaster General say there are no politics in this, but I know the contrary, and the supporters of the Government in the Eastern Townships know it also. The minister without portfolio and the Secretary of State could not stop off there during their visit but they had Mr. Baker. I do not know what you call him; I call him their sleight-of-hand man, that is the member for Brome; he stopped off there. Perhaps he expects to step into the gap some day and become a minister. The secretary of the minister without portfolio stopped off there also to settle some questions -as to a site for a post office. When the Postmaster General gets the report of these gentlemen he will discover that his friends down there were not throwing bouquets at each other. Did the Postmaster General inform Mr. Denison that this investigation would be held?


Louis-Philippe Pelletier: The investigation was held by the official of the department who was instructed to do so, and I cannot say whether notice was given or not. I feel

sure that the usual and proper course was taken. In what particular does Mr. Denison claim that he had no notice? Does he claim that he was not in the post office when the officers of the department investigated its affairs ? I presume it was not done by the officer in the absence of the postmaster. Unless the report of the post office inspector is a pure fabrication, there was every justification for the dismissal of this postmaster.


Edmund William Tobin: Let me read the following letter from Mr. Denison to the post office inspector:
Richmond, P.Q., April 23, 1914. L. E. Dastous, Esq.,
Post Office Inspector,
Sherbrooke, P.Q.
Dear Sir:-
I beg to acknowledge receipt of yours of the 22nd instant, advising me that I have been dismissed from the postmastership of Richmond, for unsatisfactory management.
I must say that this seems to me to be a very peculiar letter to have received, and I would ask you to register my protest against this, and to advise me wherein the unsatisfactory management has occurred. It seems to me that I should have been advised of any investigation which has been made into the working of this office, and to have had a chance to put in my defence.
Will you please procure for me, copies of any complaint which have been made against me, and by whom they were made, and also what steps were taken to investigate this matter.
Mr. Denison wrote me yesterday that he had not got any answer to that letter. I beg also to read the following letter from Mr. Denison:
I might say that about the 10th day of March, 1914, Mr. Dastous, the post office inspector, came to Richmond, and stated that he had a complaint and charge to lay against me, in connection with the office. I asked him what the complaint was, and he told me it was for allowing people who are not sworn to assist in stamping and assorting the mail, and he named W. J. Ewing, and Mrs. Powers. I told him that he was (mistaken, as Mr. Ewing had been sworn in assistant postmaster about one year and a half ago, and that Mrs. Powers was duly sworn as assistant, the day she came into the office, and Mr. W. J. Ewing, J.P., administered the oath to her. The inspector seemed surprised at this, and asked me to show him the certificates; as the mail was being sorted, I asked him if he could not wait as at the present time I could not lay my hands on them, and he said he would take my word for it, if I told him I had the certificates when he came.
That is the only notice the postmaster had of what the Postmaster General calls an investigation. I do not wish to take up any more time in the matter, but I think I can ask the Postmaster General to investigate this case more fully, because the
people of the Eastern townships, and especially the people of Richmond and Wolfe, have been treated very harshly by his department in the last two or three years. My hon. friends seem to have nothing to do but to make room for their Tory friends, and they do not even do it in a decent way. There is no use in holding a one-sided investigation. If these people have done wrong in taking part m politics, if they have not conducted their office properly, if they have not given the best service possible to the public, I am sure we shall have no complaints to make; but I am surprised when I hear the Postmaster General tell the hon. member for Rouville (Mr. Lemieux) that he is trying to run the Post Office Department on the same business principles as those on which banks are run. Before any little mail contract is given to-day, the Post Office Department calls for tenders, and two or three tenders are put in. If a Liberal is the lowest tenderer-


Rodolphe Lemieux: He is out of the game.
Mr'. TOBIN:-why, the department will wait for a few weeks and finally write to the defeated candidate, who in some instances will not reply for months. Then they will get some of their Tory friends in the city of Sherbrooke, where there are a lot of lawyers looking for a few dollars, to write to the Postmaster General stating that if such a gentleman is offered a few dollars less than the lowest tender he will accept the contract. Yet the Postmaster General calls that running his department on the same business principles as those on which the banks of the country are run. When my hon. friend makes that statement, he knows that no business man in the country will believe him. Take the St. FrangoisrXavier and Windsor mail services.


Rodolphe Lemieux: And Richmond and
Wolfe.


Edmund William Tobin: The lowest tenderers were-


Mr. GAUYREAU:: Do not give the names.


Edmund William Tobin: As I have the papers here, I might as well give the names. Tenders were called for the service on the 28th of February, 1913. The Postmaster General wrote to the defeated candidate, Dr. John Hayes, at Richmond, Que., on the 28th of February, 1913, as follows:
The following tenders have been received for the St. Fransois-Xavier de Brompton and Windsor Mills mail service. Jos. l.abbt, $175.

Mr. Lab be was the old carrier who had been carrying the mails there for the last tem twelve or fifteen years.
George Morin, $175; T. Levasseur, $180; Pierre Salois, $200; E. J. Morissette, $200.
The first three, Mr. Jos. Labbe, Mr. Geo. Morin and Mr. T. Levasseur were Liberals, and Mr. Pierre Salois and Mr. E. J. Morissette were Conservatives. (Reading):
Jos. Labbe and Geo. Morin's tenders are equal, and the department would be glad to be informed which of these two you consider in the public interest more capable of performing a satisfactory service. An early reply would be appreciated.
Tours sincerely,
(Sgd.) H. B. Verret,
Asst. Deputy P.M.G.
On the 15th of March, 1913, the following letter was addressed to the Deputy Postmaster General:
H.	B. Verret,
Deputy Postmaster General,
.	Ottawa.
Dear Sir,-Re tenders St. Frangois-Xavier de Brompton and Windsor Mills mail service.
Mr P. Salois, one of the tenderers, I think, would give good service. I suggest it be offered him at $170 per annum.
Yours truly,
(Sgd.) I. Hayes, M.D.
Five dollars less than Mr. Labbd's tender, and ten dollars less than Mr. Levasseur's tender.


Mr. BUREAU:: Shame.


Edmund William Tobin: What was done? Here is a letter written by Mr. Salois. On the 12th of April, Mr. Salois went to Sherbrooke, called on one of our friend's friends there, and had him write the following letter to the Postmaster General:
(Translation.)
To the Hon.
The Postmaster General,
Ottawa.
Sir,-I have tendered for the mail contract between St. Francis-Xavier of Brompton and Windsor Mills, at the price of $200.
I am ready to carry out this contract for $170. Hoping that you will favourably consider my request.
Believe me, Sir,
Tour most obedient and devoted,
(Sgd ) Pierre Salois.
That is the way in which business is1 run in the Post Office Department. There are hundreds of such cases throughout the eastern townships, and yet the Postmaster General tells us that he is trying to run the Post Office Department on the same business principles as those on which banks are run.


Jacques Bureau: The Farmers bank.


Edmund William Tobin: Just on the same principles as those on which the Farmers- bank was run. They have done the same thing at Bromptonville.	An old gentleman there,
eighty odd years old, was carrying the mail. He had a contract which ended on the 31st of March, 1914, and was receiving $120 a year for carrying that mail. The Post Office Department cancelled the contract a year ago last January, because one of the political friends of my hon. friend the Postmaster General said that this old- gentleman must be disposed of and a younger man, who had probably voted Tory for the last two or three years, put in his place. .
i have some further -questions- to put to my hon. friend.


Mr. BELAND:: Will my hon. friend tell us who got the contract for the St. Frangois-Xavier mail service?


Edmund William Tobin: Mr. Salois got the contract at $170 a year.


Henri Sévérin Béland: He had tendered for $200?


Edmund William Tobin: Yes. When we were in power, if I went down to the Post Office Department and asked the Deputy Postmaster General and the superintendent of mail service to give a mail contract to so and so, they would -say: This is a business department; and if we asked you to do such a thing in your business, you would say, ' no '. Well, we cannot do it here. I am glad to see the Deputy Postmaster General before the House to-day, because he can bear me out in that.


Mr. BICKERDIKE:: That was some years ago.


Edmund William Tobin: That was previous to 1911. The department was run on different principles then.
On April 27 last, Mr. MeCrea, the hon. member for Sherbrooke, put this question to the Postmaster General;
1.	Has a new postal inspection district been created in Sherbrooke 7
2.	If so, how many new employees have been appointed in connection with the new district?
3.	What is the total amount of salaries paid the new employees, including the inspector?
Mr. Pelletier:
1.	Yes.
2.	Five new employees have been appointed in connection with the new district.
3.	$4,752 a year.


Rodolphe Lemieux: That is Sherbrooke?


Edmund William Tobin: Yes; a new district. Now, Mr. MeCrea was informed by some of his friends that the answer could not be right, that if the department gave him that answer they were making a mistake, as more

was paid in salaries and more people were employed than was stated in that answer. So, on the 11th of May, he put a question and received an answer as follow's:
1.	What is the name of each person employed in the post office inspection department at Sherbrooke?
2.	What is the remuneration paid to each individual, including the inspector?
Mr. Pelletier:	The following persons are
employed in the post office inspector's office at Sherbrooke:
Name, rank and salary-Dastous, L. E. M. inspector, $2,500 ; Soles, C. Edw., asst, inspector, $2,000; Doherty, M. M. D. (Miss), clerk 3-A, $1,000; Campbell, S. (Miss), temporary clerk, $500 ; Bousquet, P., messenger, gr. A., $2 a day; Downing, J. P., temporary help, $2 a day; Frechette, R. temporary clerk, $500; Lefebvre,
J.	P., porter, gr. C., $2.50 a day.
That makes a total of about $8,872.50 a year.
An hon. MEMBER; Which of these is the chauffeur?
Mr. TOBIN; I do not know, but he must be included. We see that on the 27th of April last the Postmaster General told the hon. member for Sherbrooke that the total cost of this office was $4,752 a year, and about fourteen days afterwards he gives items showing that the total cost is $8,872.50 -almost double. Yet the Postmaster General tells us that he is running his department on business lines. I w<~u1d like to ask him what explanation he has of this difference arising within fourteen days.


Louis-Philippe Pelletier: The department
thought fit, from the point of view of business, to establish a branch of our inspection office in the city of Sherbrooke for the Eastern Townships. That existed years ago and was abolished. We have found that it should not have been abolished, that the Eastern Townships were entitled to a post office inspector's office though they had been deprived of it. Believing they were entitled to it, I gave it back to them, and I am proud -of having done so.


Mr. A. K. MACLEAN:: And you call it
business to act on that ground?


Louis-Philippe Pelletier: Yes.


Alexander Kenneth Maclean: Then the post office inspection office is a matter of political patronage and favour, and not a matter of business.


Louis-Philippe Pelletier: Not at all.


Alexander Kenneth Maclean: That is what you said.


Louis-Philippe Pelletier: I say the Eastern Townships were entitled to that office.


Jacques Bureau: On what ground?


Louis-Philippe Pelletier: The public interest.


Rodolphe Lemieux: Explain that.


Louis-Philippe Pelletier: I took it for granted that my hon. friends would have guessed that, but, seeing that their minds are so far away from the public interest, I now state it.


Alexander Kenneth Maclean: What about the" reason the hon. gentleman gave a moment ago-that the office had been taken away, and they had the right to have it restored.


Louis-Philippe Pelletier: These statements do not clash at all. The office had been established, and then it was abolished.


Alexander Kenneth Maclean: Why?


Louis-Philippe Pelletier: For some political reason.


Edmund William Tobin: To cut down expenses.


Louis-Philippe Pelletier: It was necessary that it should be re-opened, because the business in the Montreal office was so great that it could not be taken care of properly. So we re-established that office. And we have established another one at Joliette.


Rodolphe Lemieux: One at Joliette?


Louis-Philippe Pelletier: Yes, a branch. And 1 am re-instating the one at Three Rivers.


Jacques Bureau: Hear, hear.


Louis-Philippe Pelletier: I thought that would please my hon. friend.


Jacques Bureau: It does not.


Rodolphe Lemieux: When was this done?


Louis-Philippe Pelletier: We are doing it now. The amount was voted last session. The office at Joliette will be a branch of the Montreal office.


Rodolphe Lemieux: But Sherbrooke is by
itself?


Louis-Philippe Pelletier: 
Alexander Kenneth Maclean: But not inspection branches, there is only one inspection head office.


Louis-Philippe Pelletier: No, they have district inspectors.


Alexander Kenneth Maclean: But the Montreal bank eastern inspection district includes the Maritime provinces and Newfoundland.


Louis-Philippe Pelletier: How is it that we hear so much about this now, when this vote was passed last session? My hon. friend from Richmond and Wolfe and my hon. friend from Sherbrooke were both members of the House then. Why did not'they raise their voices against it?


Henri Sévérin Béland: If we are to criticise all that comes before us the session will last the whole year.


Louis-Philippe Pelletier: But it takes no more time to criticise it in advance than to criticise it afterwards. When it was proposed that money should be voted for this purpose there was unanimous consent, anl now complaint is made about it. The hon. member complains of the number of employees there. There are five, if I am not mistaken. I think that one of these was in the post office at Sherbrooke before. There is another, Mr. Soles, to whom the hon. member refers. This gentleman was taken from the Montreal office on account of his experience and knowledge of the business of the inspector's office and transferred to Sherbrooke.


Rodolphe Lemieux: He belongs to the eastern townships.


Louis-Philippe Pelletier: He originally came
from there. He wag a pretty good officer in Montreal, and when the office in Sherbrooke was re-opened, we had to have a man there with experience, so we asked Mr. Soles to go to the Sherbrooke office. He consented, and he is paid for his Sherbrooke work as he would have been paid for his Montreal work.


Henri Sévérin Béland: Mr. Dastous was appointed in Sherbrooke ?


Louis-Philippe Pelletier: Yes.


Henri Sévérin Béland: Has he had any experience ?


Louis-Philippe Pelletier: For a certain length of time-I would not care to state the exact number of months-Mr. Dastous worked in Quebec under the instructions of the Quebec post office inspector in order to learn what had to be learned about the duties of an inspector. That is a businesslike way, I should think, of administering the depart-
[Mr. A. K. Maclean.!
ment. The other man, Mr. Soles, who was sent from Montreal, has had considerable experience, and we are satisfied that we now have in Sherbrooke an office which is a credit to the Eastern Townships, anid which should not be criticised as it is to-day by hon. gentlemen opposite.


Rodolphe Lemieux: If I remember rightly, the Post Office Act requires that no one shall be appointed superintendent unless he has had a certain number of years' experience.


Louis-Philippe Pelletier: That does not apply to inspectors.


Henri Sévérin Béland: Was Mr. Dastous employed by the department before he was made inspector ? I always thought that he was a dealer in flour and grain in Sherbrooke.


Louis-Philippe Pelletier: No, he was not connected with the department.


Mr. ROBB:: How far west do the Sherbrooke and Three Rivers inspection divisions extend ?


Louis-Philippe Pelletier: I will get the information for my hon. friend and give it to him this afternoon or to-morrow morning.


James Alexander Robb: Does the Sherbrooke inspection division extend to St. Lambert or St. Johns ?


Louis-Philippe Pelletier: I should think that
would be in the Montreal district. I will get the information.


Jacques Bureau: May I ask the minister to give similar information as to the territory covered by the office to be opened at Three Rivers. Has the minister in view the person who is to be appointed as inspector ? If not, I might submit a name.


Louis-Philippe Pelletier: An assistant inspector is to be appointed at Three Rivers. It is to toe a branch of the inspector's office.


Jacques Bureau: Under the control of the Montreal or of the Quebec inspector?


Louis-Philippe Pelletier: Quebec.


Henri Sévérin Béland: Has the hon. Postmaster General received applications for the position?


Louis-Philippe Pelletier: A very great number.


Henri Sévérin Béland: Would the hon. minister explain the difference between the two amounts given in answer to the same question asked on different occasions by the hon. member for Sherbrooke?


Louis-Philippe Pelletier: One explanation would be that the salary of Mr. Soles, which is, I understand, $2,000, is not a new expenditure; it is paid at Sherbrooke instead o'f at Montreal. However, I will look into that and give my hon. friend the information.


Mr. BOIVIN:: Before the hon. Postmaster General leaves the question of the Sherbrooke post office I think it my duty to resent the insinuation which he has just made against the Eastern Townships' members. In the course of a very aible speech he insinuated that the hon. members from the Eastern Townships, including the hon. member for Sherbrooke, who is not in his seat, and myself, are opposed to the opening of an inspection office at Sherbrooke. I never said a word in this House in opposition to the opening of an inspection office in Sherbrooke; I do not think the hon. member for Sherbrooke ever said a word in this House against the opening of that office, and I fail to understand from anything which has been said by the hon. member for Richmond and Wolfe to-day that he is opposed to the opening of that office. The hon. Postmaster General, who continually rises in his place and tells hon. gentlemen on this side that they ought to be fair, should himself treat the members of the Opposition fairly and not put in their mouths words that they never uttered or make any such insinuations as he has made on this occasion.


Louis-Philippe Pelletier: I made no insinuations whatever. What is the tenor of the discussion which has been taking place in this committee?


Georges Henri Boivin: The tenor of the discussion in this committee is whether or not the Post Office Department is run on a businesslike basis. The hon. member for Richmond and Wolfe was proving that it was not run on a businesslike basis, because two answers to the same question, given within fifteen days of each other, showed a difference of $4,000. The hon. member for Richmond and Wolfe said that that is not businesslike; there is no objection whatever to the opening of an inspection office at Sherbrooke.


Louis-Philippe Pelletier: When I said that this should not be criticised because it was passed by the House last session, the hon. membeT for Beauce said: we have no time to criticise everything and it would take twelve months to do that.
230i


Rodolphe Lemieux: That is because you
bring these matters up at the end of the session.


Louis-Philippe Pelletier: Whether at the end of the session or not, if it is wrong, I should be told that it is wrong; if it is passed unanimously, I take it for granted that everybody agrees. This discussion will be understood by the people as meaning that the expenditure which we are making in Sherbrooke for this inspection office is a useless expenditure and should not be made. I want there to be no misapprehension about this matter. Let us take it for granted that the hon. member for Shefford voices the sentiments of hon. members from the Eastern Townships. I give him credit for what he has said and I accept his word, but let it be well understood that all the hon. members from the Eastern Townships approve the opening of the inspection office at Sherbrooke.


Jacques Bureau: Run on a business basis.


Louis-Philippe Pelletier: Very good; what was wrong a moment ago is all right now.


Jacques Bureau: That is not fair, Mr. Chairman. The hon. Postmaster General has the knack of making assertions that are not always exactly correct. He says that the public will be under the impression, from the discussion that has taken place here, that the expenditure which is proposed to be made in the Eastern Townships is useless. We may criticise the expenditure, but we may, nevertheless, approve the establishment of an inspection office in the Eastern Townships. We may criticise part of the expenditure, and we may admit that another part of it is all right, and it is not fair that the Postmaster General should come here and say: as a whole, you are opposed to the principle of this thing, and you must not criticise. My hon. friend asks us why we did not criticise last year. We had nothing to criticise. He was asking for an expenditure of money, and we thought that that money would be expended in the businesslike manner which he boasts of as being characteristic of the administration of his department. The hon. member for Richmond and Wolfe says that the hon. member for Sherbrooke put a question to the minister twice with regard to the amount of money expended in one particular office. The answer to these questions, put within two weeks of each other, showed a discrepancy of $4,000; yet the Postmaster General says that that is business. I submit that the hon. member

for Richmond or any other member could not criticise this item before the information was available, and it is not right that the Postmaster General should endeavour to convey the impression that hon. members of the Opposition oppose the establishment of an inspection office when they do not oppose it. We want the public to understand that we are going to criticise any expenditure that we do not think is made justly and in a businesslike way. We want it understood that the Postmaster General cannot bluff it out by saying, when an item of expenditure comes before the House:	Oh, you must
oppose this expenditure. We do not know how the money is going to be expended and I claim that the criticism made by the hon. member for Richmond is a proper one. It is his duty to make it and the Postmaster General has no right to get wrathy about it or to insinuate that we are trying to impute motives to him or are against the principle of establishing inspection offices. I gave notice to the Postmaster General who seems astounded because letters to his department were not answered, that in the district of Three Rivers there is a mail service between Yamachiche and St. Barn-abe. A contract was awarded


Louis-Philippe Pelletier: If my hon. friend
would excuse me, I think it would be only fair to the hon. member for Richmond if I gave the information for which he asked.


Edmund William Tobin: I want to answer a few
remarks made by the Postmaster General. Was there anything in my remarks that was against the opening of inspection offices in the district of St. Francois ? I asked the Postmaster General to explain the discrepancy in the amount given on the 27th of April last as the cost of the office, that is $4,700, and the amount given on the 11th of May last, that is over $8,000. If my hon. friend wants to be fair he should come before the House and say why he opened the office. He said that we had abolished the office years ago and when they came into power they reopened it. I do not say that the office is good or bad. We have not opposed it in any way. Why was my friend compelled to open the office? He knows and the people in the Eastern Townships and Sherbrooke know that it is because a party in Sherbrooke held a pistol to his ear and said:	You have to do this and give
Mr. Dastous a position. The collector of customs, Mr. Stenson, an ex-member of this House, died. The French-Canadian people 
of Sherbrooke said that this position belonged to them, but the Minister of Customs gave it to an English-speaking gentleman. The French-speaking people then said: You have to place Mr. Dastous and you must create an office. That is why the office was opened. There was not a request from the people to open a post office inspection, but a request to place Mr. Dastous. I have nothing against Mr. Dastous, who was a grain merchant. If my hon. friend wants to employ him that is his business. He is>
a good Conservative and a young man whom I respect. But when my hon. friend the Postmaster General comes before the House and says that he opened the office on business principles he is not accurate, it was not opened in the public interest, but in a political interest. My hon. friend says that we complained. I have never heard a member from the Eastern Townships say anything against the opening of the office. What we complain of is that when we put questions on the Order Paper there is within two weeks a difference in the amount given in the answers of fifty per cent. If we move for a return in the minister's department the return is not complete; somebody takes out from the file just what we want to see. That has been done with every return I have asked for in the minister's department and he knows it. He admitted it last night. Why not be fair. If he wants to play the game, let him play it fair and be honest about it. If you do not want to give us information, we will not move for any returns. If the Postmaster General treats me in the future as he has done in the past, I will stop asking for information and will tell my people the manner in which he refuses it. Everything that is done in his department is done in a dark room. If an investigation is held, they get a few people together in a room and decide to cut off the heads of a few of our Grit friends. That is not fair. Mr. Denison asked for an investigation* He is an old public employee, he has given good service to the people of the district of St. Frangois and Richmond. My hon. friend will probably be in the Eastern Townships this summer. If he comes to Richmond he will find that it will do his party and himself no good to refuse an investigation and to decline to give Mr. Denison and his friends a chance to show just what ground there is for the complaints that were made against the administration of the post office at Richmond.
Mr-. LEMIEUX: Was Mr. Denison a dishonest man?


Edmund William Tobin: He was an honest man but he was dismissed on the ground that he did not run his office properly. No doubt the minister and his friends wanted the position for Mr. Mclvor, the present postmaster, a young man, perhaps 42 years old. He has been practising his profession as a lawyer in Richmond for ten years, and yet he has to accept a small position that will give him probably $1,400 or $1,500 a year after he pays his office help. He was a defeated candidate in the county of Richmond for the local House in 1912 and lost his deposit. But he came around and held up the Postmaster General and the hon. Minister without portfolio, the member for Argenteuil (Mr. Perley) and said:	You
must do something for me. Then they cut off the head of Mr. Denison and placed him there.


Rodolphe Lemieux: No investigation?


Edmund William Tobin: No investigation. Mr. Denison protested against it and asked for an investigation, but we have not got justice and we do not expect justice.


Louis-Philippe Pelletier: If my hon. friend does not expect justice he should no't lose so much time talking about it.


Edmund William Tobin: I want the people to know how you treat us.


Louis-Philippe Pelletier: If the hon. member
wants the people to know how this thing has been dealt with he should wait before he passes judgment. We have been told that Mr. Mclvor has been appointed, that he was a Conservative candidate and had lost his deposit. That may be true, I do not know. Even if he has lost his deposit as a candidate in an election I do not take it for granted that that disqualifies him to toe appointed to any position at the hands of the Government.


Edmund William Tobin: I do not want to be personal.


Louis-Philippe Pelletier: The hon. gentleman
does not want to be personal, after he has been as personal as he can be. The question is not whether Mr. Mclvor has been a candidate or not. I did not know that when I appointed him; but I will say that if he is qualified to be a postmaster, and I think he is, and if he has been a candidate, that is another good reason why he should have been appointed and I am glad to have appointed him.


Jacques Bureau: We all know that.


Louis-Philippe Pelletier: I am told by my hon. friend that Mr. Dastous did not notify Mr. Denison that an investigation would take place. I have the file here now and Mr. Dastous says:
Mr. Denison was fully aware of my investigation at the time I made it because I called at his office the very same day and told him the object of my visit and made him aware of the complaints laid against him.


Edmund William Tobin: What were the complaints?


Louis-Philippe Pelletier: I am coming to that
now. My hon. friend will see that all the fuss he has made about this does not amount to much in the face of the facts.


Mr. KNOWLES:: Does that mean that he notified him simply on the day of the investigation?


Louis-Philippe Pelletier: I have read what he said. I did not give the notice myself.


Edmund William Tobin: What were the complaints?


Louis-Philippe Pelletier: I would advise my
hon. friend not to get excited. I am trying to give the facts. After I have given them, and if he has a reason, my hon. friend can become excited. I have before me a letter signed by a certain number of the citizens of the town of Richmond, amongst them, the ex-mayor, the President of the Agricultural Society, the Manager of the Canadian Bank of Commerce, the President of the Board of Trade.


Edmund William Tobin: All good Tories.


Louis-Philippe Pelletier: So much the better. Just wait and take your medicine. I have some confidence in the Tories, if my hon. friend has not. I do not take their word because they are Tories, but because they are the best men in the district. The letter 13 signed by six prominent citizens of the town of Richmond, and reads as follows:
Richmond, Que., Feb. 11, 1914. The Hon. the Postmaster General,
Ottawa, Ont.
Dear Sir,-As a citizen of the town of Richmond I hereby complain of the management of the post office at Richmond.
The present postmaster, J. R. Denison, never had the education or business training required for the management of such an office-


Henri Sévérin Béland: I know all about it.


Louis-Philippe Pelletier: The letter goes on:
__and as he is now upwards of 80 years of
age and very deaf, is utterly unable to render the public efficient service, nor does he engage employees capable of doing the work for him.
The present postmaster is a man of large means to whom the salary as postmaster is of no material importance.

The postmaster and his assistants do not sort the mail properly. Almost daily, I receive other people's letters in my box, and I find that letters addressed to me have been given to others, always causing serious delay in receiving them ; and I have reason to believe that sometimes I have never received them. I have heard the same complaints from all the other business men and the townspeople generally.
Persons not employees of the post office (even children) are allowed to enter the office, pick out their own mail before it is sorted and also assist in the general distribution. The management of the post office is so careless and inefficient that intolerable and unnecessary delay attaches to every item of the service.
The post office is not kept in a clean condition, nor is order maintained in the public portion.
As a large mail receiver X find these conditions intolerable, and make this complaint hoping that a competent person will be sent to investigate the truth of the facts alleged.
In addition to sending this complaint myself, it is my intention to show it to a few of the business men of the town more particularly interested in the conduct of the postmaster, and to ask them also to sign this if they can bear out my statements and approve of the complaint.
Yours very truly,
Charles Campbell.
The complaint is signed by five other people: John Hayes, M.D.


Jacques Bureau: The man that Tobin
licked.


Edmund William Tobin: The defeated candidate in 1911.


Louis-Philippe Pelletier: Who will come back next time. It is signed also by A. Rain-bach, George J. Alexander, Mr. W. H. Keenan and E. S. Bernard. I received this in February, long before Hon. Mr. Pea-ley went through the Eastern Townships. It was sent to Hon. Mr. Per ley, and he sent it to me. The matter was investigated in the regular way, and I have here the report of the inspector who says:
I come to the conclusion that the employees, as well as the postmaster, are not qualified to give the accurate and satisfactory service which the patrons of an office of the size of Richmond would naturally expect. The general appearance of the office is not a credit to the Post Office Department; the boys have made depredations in the lobby, defacing and mutilating the woodwork with knives, etc.
I come to the conclusion, therefore, to recommend the appointment of a new postmaster, duly qualified and capable of maintaining discipline, who will undertake to furnish an efficient staff.
Those are the facts. As it is now one o'clock, I would move that the committee rise and report progress.


Edmund William Tobin: We will be able to discuss this at three o'clock?


Louis-Philippe Pelletier: I was going to suggest that we take that up again the next time my estimates are under consideration.
Progress reported.
At one o'clock, the House took recess.
The House resumed at three o'clock.



[Stage Direction]
Right Hon. R. L. BORDEN (Prime M:n-istei) moved that the House go into Committee to consider the following resolution :
In the following resolutions unless the context otherwise requires:-
'Canadian Northern System' means the Canadian Northern and the Constituent and Subsidiary Companies.
'Canadian Northern' means the Canadian Northern Railway Company.
'Constituent Companies' means such of those companies mentioned in the first schedule to the following resolutions, and such other companies, hereafter declared by the Governor in Council to be comprised in the Canadian Northern system, as own or operate railways, terminals, bridges or other railway facilities.
'Subsidiary Companies' means such of those companies mentioned in said schedule, and such other companies, hereafter declared by the Governor in Council to be comprised in the Canadian Northern system, as do not own or operate railways, terminals, bridges or other railway facilities.
' Contractors ' means Mackenzie, Mann and Company (Limited).
'Minister' means the Minister of Railways and Canals.
'Guaranteed Securities' means the securities to be authorized to be guaranteed by the Act to be based upon these resolutions.
'Mortgaged premises' means the undertakings, properties and assets, rights, powers and franchises from time to time mortgaged or charged for the purpose of securing the payment of the guaranteed securities.
'Government' means His Majesty the King in the right of the Dominion of Canada represented in such way as the Governor in Council may from time to time approve.
Section 2, of the Railway Act shall, except as aforesaid apply when any of the expressions defined therein are used In these resolutions.
Whereas the Canadian Northern Railway Company hereinafter called the 'Canadian Northern' has represented that the several companies set forth in the first schedule to these resolutions, and their railways and undertakings, rolling stock, equipment, assets and properties are intended to constitute a transcontinental railway system to be denominated the 'Canadian Northern System' and that the Canadian Northern desires to control said system by the ownership or control of the shares or majorities thereof in the capital stock of the said companies, and that it now owns or controls the shares or majorities thereof in the capital stock of certain of the said companies, and that the several companies are desirous that aid should be granted for the purpose of completing the construction and equipment of﻿MAY 13, 1914
the works and undertakings of the Canadian Northern system and for the betterment thereof;
And whereas it is in the interest of Canada that the desired aid should be granted.
It is therefore resolved that it is expedient to provide as follows :-
1.	That His Majesty on behalf of the Dominion of Canada may aid the construction, completion, equipment and betterment of the Canadian Northern system by guaranteeing payment of the principal and interest of the bonds, debentures, debenture stock or other securities, hereinafter called the (guaranteed securities of the Canadian Northern, to an amount not exceeding forty-five million dollars ($45,000,000) which guaranteed securities, to the extent aforesaid, the Canadian Northern is hereby authorized to create and issue; interest on the guaranteed securities to be at the rate of four per cent per annum payable half-yearly, the principal to be payable not later than a day in the year 1934.
2.	That the guaranteed securities shall be secured by a trust deed, hereinafter called the 'New Trust Deed' made to a trustee or trustees approved by the Governor in Council, hereinafter called the 'Trustee' and the same shall in manner and terms satisfactory to the Governor in Council,-
(a)	Grant a first, fixed, and specific mortgage or charge upon the shares mentioned in the first part of the second schedule hereto;
<b) Grant a specific mortgage or charge upon the mortgage securities and shares of stock now or from time to time hereafter deposited with and specifically mortgaged under the Trust Deed of the 30th day of June, 1903, hereinafter called the 'Perpetual Consolidated Debenture Stock Trust Deed' those now so deposited and mortgaged being mentioned in the second part of the said Second Schedule;
(c)	Grant fixed, specific and floating mortgages or charges upon the undertaking of the Canadian Northern and its properties, assets, rents and revenues, and its rights, powers and franchises, present and future;
(d)	Grant a fixed and specific charge upon the equity of redemption of Mackenzie, Mann and Company, Limited, in $10,000,000 of capital stock and $10,000,000 of First Debenture Stock of the Canadian Northern Town Properties Company, Limited (the subsidiary company mentioned in the eighth clause of the trust deed dated the 19th of November, 1913, made between the Canadian Northern Railway Company, Mackenzie, Mann and Company, Limited, The British Empire Trust Company, Limited, and the National Trust Company, Limited, trustees, securing £3,500,000 of five per cent Land Mortgage Debentures), the said capital stock and First Debenture Stock being now held by the said Trustees as part of the mortgaged premises under the said trust deed.
(2) The Mortgages and charges to be granted under (b) and (c) of this section shall be subject to and rank next after the mortgages and charges heretofore created and the securities heretofore or hereafter created or issued under the existing trust deeds or mortgages securing the same, and to the powers of issuing securities having priority therein reserved and contained.
3.	That before a guarantee is given the following conditions shall be complied with:
(a)	The agreement a draft whereof is set forth in the third schedule hereto, (hereinafter called the ' Agreement ' shall be duly executed
by the parties thereto, and the Governor in Council is hereby authorized to execute the same.
(b)	There shall be transferred to and vested in the Trustee as part of the mortgaged premises the shares of stock mentioned in subclause (a) of section 2 of these resolutions free from prior charges thereon, such shares to become and to remain the property of the Canadian Northern, subject to the charge created by and to the terms of the New Trust Deed. Provided that the necessary shares to qualify the directors and preserve the corporate entities of the respective companies may remain in the name of such directors and other necessary parties, but the share certificates ready for transfer shall be delivered to and held by or for the Trustee of the New Trust Deed.
(c)	There shall be conveyed to the Trustee as part of the specifically first mortgaged premises, by the purchaser at court sale thereof, the railway and undertaking mentioned in the third part of the second schedule hereto, the said railway and undertaking to be free from all bonds or other indebtedness thereon, the same to become and to remain the property of the Canadian Northern subject to the mortgage or charge created by the New Trust Deed, and to be operated by the Canadian Northern as part of its system.
(d)	There shall be transferred to the Minister of Finance and Receiver General of Canada in trust for the Government of Canada, three hundred and thirty thousand fully paid shares of the par value of $100 each of the capital stock of the Canadian Northern and such shares shall be the absolute property of His Majesty in right of the Dominion of Canada. The said shares or any part thereof may be disposed of under the authority of Parliament upon such terms and conditions as it may determine, and the proceeds of the sale thereof paid into the Consolidated Revenue Fund of Canada. Pending the disposal of the said shares and of the seventy thousand shares issued to the Minister of Finance and Receiver General of Canada, pursuant to section 8 of chapter 10 of the statutes of 1913, all voting and other rights under the said shares shall be exercisable by the said Minister of Finance and the Receiver General or by whomsoever he may from time to time appoint.
4.	That covenants or undertakings to the satisfaction of the Governor in Council shall be given that all outstanding temporary loans to the Canadian Northern or any of its constituent or subsidiary companies secured by the deposit or pledge of securities, will be paid out of the proceeds of such deposited or pledged securities when the same shall be sold or disposed of, and that no proceedings against the Canadian Northern or any of said other companies will meanwhile be taken for the collection of such temporary loans.
5.	That covenants or undertakings of the contractors and such other covenants or undertakings as may be required by the Governor in Council shall be given that the current indebtedness of the Canadian Northern and of the said constituent and subsidiary companies will within one year from the passing of the Act to be based upon these resolutions be reduced to the normal or usual current amount to be determined by the minister and that meanwhile all such current indebtedness other than such as may be the subject of bona fide dispute, will be either paid or arfanged in such a manner that no proceedings for the enforce-

[Stage Direction]
ment of payment thereof will he taken or pressed.
6.	That the kind of securities to the guaranteed hereunder, and the forms thereof, and the forms and terms of tfie New Trust Deed, and the times and manner of the issue of the guaranteed securities, and the disposition of the moneys to be raised thereon by sale, pledge or otherwise, and the forms and manner of guarantee or guarantees shall be such as the Governor in Council approves, and such termfe, provisions and conditions as the Governor in Council may consider expedient or necessary shall be included in the new trust deed.
7.	That the said guarantee or guarantees shall be deposited with the trustee, signed by the Minister of Finance or such officer as is designated by the Governor in Council, and upon being signed and deposited as aforesaid. His Majesty shall become liable as guarantor for the payment of the principal and interest of the guaranteed securities according to the tenor thereof, and the said payment shall form a charge upon the Consolidated Revenue Fund, and a guarantee so signed and deposited shall be conclusive evidence that the requirements of the Act to be based,upon these resolutions respecting the guaranteed securities and the New Trust Deed and all matters relating thereto have been complied with.
8.	That subject to the provisions of the Act to be based upon these resolutions any moneys paid by His Majesty under any guarantee given hereunder shall be held to be paid in discharge of the liability of His Majesty, and not in discharge of the liability of the Canadian Northern under the guaranteed securities, or under the New Trust Deed and the moneys so paid shall be held to be still secured by the guaranteed securities and New Trust Deed, and His Majesty shall be subrogated in and to all the rights of the holders of the guaranteed securities, the interest or the principal of which has been paid by His Majesty, and His Majesty shall, with respect to the moneys so paid, be in all respects in the position of a security holder with respect to whose securities default shall have been made in payment, to the extent of the moneys paid by His Majesty.
9.	That (1) the books, returns, reports and other records of the Canadian Northern and of each of the Constituent and Subsidiary Companies shall at all times be accessible and open to inspection for and on behalf of the Governor in Council by any person or persons from time to time named in that behalf by the Governor in Council or by the minister.
(2) Commencing with the year 1915, the Canadian Northern shall furnish the minister annually within five months from the close of its fiscal year a consolidated balance sheet showing the financial position of the Canadian Northern System for the fiscal year then last completed.
10.	That in so far as the Canadian Northern and the Constituent and Subsidiary Companies may be subject to the legislative jurisdiction of the Parliament of Canada, every such company shall have full power to do all and every of the things authorized by the Act based upon these resolutions, or provided for in the Agreement, and shall have full power, and be bound to make, do and execute from time to time, all such acts, deeds, matters and things as may be necessary or expedient for carrying into effect the full intent and meaning of the Act based upon these resolutions and of the Agreement, and the Board of Railway Commis-

sioners for Canada is hereby empowered to do what may be necessary on its part in the carrying out of the provisions of said Agreement.
11.	That repayment of any portion of the proceeds of the guaranteed securities expended upon or for the purpose of any company (other than the Canadian Northern) included in the Canadian Northern System with interest at four per cent per annum shall be by. the respective companies upon whose undertaking or for whose purposes the same may be expended, secured by trust deeds in manner and terms satisfactory to the Governor in Council which trust deed shall grant fixed, specific and floating mortgages or charges satisfactory to the Governor in Council upon the undertaking of such company, and its property and assets, real and personal, present and future, and its rights, powers and franchises, tolls, incomes and revenues, said fixed and specific and floating mortgages or charges to be subject to and to rank next after the mortgages and charges heretofore created and the securities heretofore or hereafter created or issued under the existing trust deeds or mortgages securing the same, and under the power of issuing securities having priority therein reserved and contained. Such trust deeds shall be made to the Trustee of the New Trust Deed and shall form part of the mortgaged premises thereunder. Each trust deed shall be executed before any advances secured thereby are made, and shall cover future advances out of the proceeds of the guaranteed securities.
12.	That the capital stock of the Canadian Northern be fixed at the sum of one hundred million dollars subject to increase only by the Parliament of Canada:
Provided that for the purpose of exchange of Income Charge Convertible Debenture Stock, secured by trust deed made to the British Empire Trust Company, Limited, and the National Trust Company, Limited, dated 6th May, 1910, not exceeding twenty-five millions dollars in all, there may, during the period of the option of exchange given by said Trust Deed to the holders of said debenture stock, viz :*-the years from January 1, 1916, to January 1. 1919, inclusive, and during any extension of that period, be issued to such holders who may exercise said option, such amounts of capital stock, over and above one hundred million dollars as may be required for the purposes of such exchange, not exceeding $100 of capital stock for $100 of debenture stock and not exceeding in all twenty-five million dollars.
Provided that the Canadian Northern may extend the period of said option from time to time. The said additional twenty-five million dollars of capital stock is hereby authorized and shall be set apart for the sole purpose of such exchange and any fully paid stock deposited with the Trustees of said Trust Deed for such purpose may be returned to the depositors thereof; Provided, also that no further issue of said Income Charge Convertible Debenture Stock shall be made under said Trust Deed.
13.	That the difference between the present issued paid up capital stock of the Canadian Northern, namely, seventy-seven million dollars, and the said one hundred million dollars, namely, twenty-three million dollars, may in pursuance of the provisions of the Agreement be issued as fully paid in consideration of the transfer of the shares mentioned in the first part of the second schedule hereto, such twenty-three million dollars of stock to be issued to the parties transferring said shares,

or to their nominees as provided in the Agreement.
14.	That no shares of the capital stock of the respective companies mentioned in the First Schedule hereto, other than the Canadian Northern, beyond the amounts heretofore issued, shall be issued without the consent of the Governor in Council.
15.	That the works and undertakings of the following companies shall be declared to be works for the general advantage of Canada, viz,-
Canadian Northern Manitoba Railway Company,
Canadian Northern Western Railway Company,
Canadian Northern Saskatchewan Railway Company,
Irondale, Bancroft and Ottawa Railway Company,
Marmora Railway and Mining Company,
Canadian Northern Baciflc Railway Company,
The Halifax and Southwestern Railway Company,
The Quebec and Lake St. John Railway Company.
16.	That while any of the guaranteed securities are outstanding the Governor in Council may from time to time appoint any person to be a director of any or of all the companies comprised in the Canadian Northern System, and at pleasure remove the director so appointed.
2.	Every director appointed by the Governor in Council shall at the request of the Governor in Council have the right to have a meeting of the directors or shareholders of the company for which he is so appointed, called at any time, and the secretary or other proper officer of such company shall at such company's expense forthwith upon being requested so to-do, call such meeting in accordance with the statutes or by-laws regulating the calling thereof.
17.	That without limiting any power now possessed, it be enacted that any railway company comprised in the Canadian Northern System which is now or may hereafter be subject to the legislative authority of the Parliament of Canada may, with the approval of the Governor in Council, enter into arrangements and agreements with any other railway company comprised in said system which is now, or may hereafter be subject to said legislative authoriity, or which has now, or may hereafter have power to enter into the same, respecting the operation by or the leasing to or the sale or transfer to such other railway company of the undertaking of the first mentioned company including assets, rights, franchises and powers, and said companies are hereby respectively empowered to carry out such arrangements and agreements.
18.	That without limiting, any power now possessed, it be enacted that any Constituent Company which is now or may hereafter be subject to the legislative authority of the Parliament of Canada, may, under the provisions of the Railway Act, amalgamate with any other or others of the Constituent Companies which is now or may hereafter be subject to said legislative authority or, if not so subject, which now has or may hereafter have power to enter into such amalgamation.
19.	That any company now or hereafter comprised in the Canadian Northern System which is now or may hereafter be subject to the legislative authority of the Parliament of Canada, may acquire shares in the capital
stock of, or securities issued by, or make advances to, or receive advances from any other company comprised in said System, and may take or give security for such advances.
20.	That the Canadian Northern may redeem or otherwise discharge the guaranteed securities and the liability of His Majesty as guarantor in accordance with any terms in that behalf contained in the New Trust Deed.
21.	That the following shall be events of default within the meaning of the Act to be based upon these resolutions, viz,
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(a)	If the Canadian Northern shall make default in payment of the principal or interest of the guaranteed securities or any part thereof, or default in observing or performing any of the provisions of the New Trust Deed, and the security constituted by the New Trust Deed shall thereby become enforceable;
(b)	If while any of the guaranteed securities are outstanding the Canadian Northern or any Constituent or Subsidiary Company shall make default in the payment of the principal or interest or any part thereof, of any securities heretofore or hereafter created or issued under the existing trust deed or mortgages securing the same, or under any future trust deed securing securities having priority to the guaranteed securities or default in observing or performing any of the terms of any such existing or future trust deed or mortgage, and the security constituted by any such trust deed or mortgage shall thereby become enforceable;
(c)	If, while any of the guaranteed securities are, outstanding, an order be made by any court against any company in the Canadian Northern System for the appointment of a receiver -or for possession, or if a receiver be otherwise appointed or possession be otherwise lawfully taken of the whole or part of the undertaking.
22.	That upon the happening of any event of default and at any time or times while the same shall continue, it shall be lawful for the Governor in Council after such notice to the Canadian Northern as the Governor in Council may direct, to declare to be vacant the offices of the directors of the Canadian Northern and of any of the Constituent or Subsidiary Companies which may be subject to the legislative authority of the Parliament of Canada, and to appoint a board or boards of directors in lieu thereof respectively (any former director being eligible for appointment).
(2). The power of appointment herein conferred upon the Governor in Council shall be a continuous power and shall be exercisable from time to time and so often as any event of default may exist and be continuing.
23.	That the directors so appointed by the Governor in Council shall hold office during the pleasure of the Governor in Council, and any such director may be removed and another appointed in his place. Vacancies occurring from time to time may be filled by the Governor in Council. The said boards respectively shall have all the powers of a board of directors elected by the shareholders; and acts of the board requiring the authority and approval of the shareholders shall if authorized or approved by the Governor in Council be as valid and effectual as if authorized or approved by the shareholders.
24.	That if authorized by the Parliament of Canada, the Governor in Council may on such terms and conditions (if any) as Parliament may prescribe, at any time while any event of default shall exist and be continuing, by order
[Stage Direction]
declare the equity of redemption of the Canadian Northern and of all other persons whomsoever in the mortgaged premises to be foreclosed, and thereupon the equity of redemption of the Canadian Northern (and of such other persons) in the mortgaged premises and every part thereof shall become absolutely barred and foreclosed, and the same shall thereupon be vested in His Majesty in the right of the Dominion of Canada, any statutory enactment or any rule of law or equity to the contrary notwithstanding.
25.	That without limiting any of the powers of the board, it is declared that every board so appointed by the Governor in Council shall with' the approval of the Governor in Council have power from time to time, in such way and on such terms and conditions as may be thought expedient,-
(a)	To create and issue securities and to secure the same by mortgages or charges under trust deeds or otherwise and to raise money thereon by sale, pledge or otherwise;
(b)	To make arrangements and agreements with any of the companies then comprised in the Canadian Northern System and with the trustees under any mortgage, charge or trust deed securing any securities issued by any such company respecting such security or the money payable thereunder or the terms of any such mortgage, charge or trust deed;
(c)	To make arrangements and agreements respecting their claims with creditors of the Canadian Northern or any company then comprised in the Canadian Northern system;
(d)	Subject to all securities forming a charge upon the Canadian Northern system or any part thereof and to the terms of any trust deeds securing the same, to make from time to time, with or without consideration, with any corporation or corporations incorporated by the Parliament of Canada for the purpose, having the necessary powers in that behalf, any arrangement or agreement for the operation or for the leasing or for the sale or transfer of the Canadian Northern system or any part or parts thereof, and the undertakings, assets, rights, franchises and powers thereof or any part or parts thereof, or for the sale or transfer with or without consideration of any equity of redemption therein, and every such board shall have power to carry every such arrangement and agreement into effect;
(e)	Generally to do all such acts and things as the Governor in Council may deem requisite in connection with or with the operation of the Canadian Northern and of the Canadian Northern System or any part thereof or with any outstanding securities or the trust deeds securing them, or with holders of securities or creditors or in connection with any re-organizations or changes, financial or otherwise, with respect to the Canadian Northern or the Canadian Northern System or any part thereof, or in connection with the sale or foreclosure or other proceedings in court or otherwise or with the carrying out of the provisions of this section according to its true intent or meaning.
26.	That while and so long as the Governor in Council has power to appoint a board of directors or after the exercise of such power, the Parliament of Canada may at any time and from time to time upon such terms as Parliament may prescribe, vest in the Governor in Council or in any corporation or corporations, person or persons, all or any of the powers which would under the Act to be based upon

these resolutions be vested in any board of directors appointed by the Governor in Council.
27.	That every order of the Governor in Council made in exercise of any of the powers contained in the Act to be based upon these resolutions, may on ex parte application on behalf of the Governor in Council, and without any notice to any person, be made a rule, order or judgment of the Exchequer Court or of any Superior Court of any Province of Canada, and shall be enforced in like manner as any rule, order or judgment of such Court, and shall not be subject to appeal.
28.	That the following provisions shall be enacted with respect to every person from time to time appointed by the Governor in Council a director of the Canadian Northern or of any Constituent or Subsidiary Company, viz,-
(1)	Notwithstanding the provisions of the Railway Act or any other law, statute or by-law to the contrary, it shall not be necessary for any such director to possess any stock or other qualification nor shall any such person during the term of his office be subject to disqualification on any account whatever;
(2)	No such director shall be under any responsibility to any shareholder, director, or officer of the company of which he is director, nor to any other person, in respect of any act done, or omitted to be done by him in the execution of his office;
(3)	Each director appointed under the enactment to be based upon section 22 of these resolutions shall be entitled to be paid by the company for which he is appointed such salary as the Governor in Council may from time to time fix.
29. That the Governor in Council may at the request ©f the Canadian Northern out of the Consolidated Revenue Fund pay all or any portion of the first six half yearly payments of interest on the guaranteed securities falling due after the opening for traffic as part of the Canadian Northern System of the through line from Vancouver to the City of Quebec, but in such case the Governor in Council shall not enforce the repayment thereof against the Canadian Northern under the New Trust Deed until the maturity of the principal of the guaranteed securities. The Canadian Northern shall however pending the repayment of interest so paid by the Governor in Council pay to His Majesty half-yearly interest on such interest at the rate of four per cent per annum, and such interest upon interest until so paid, shall form a charge upon the mortgaged premises under the New Trust Deed.
First Schedule.
The Canadian Northern Railway System. Bay of Quinte Railway Company,
Canadian Northern Railway Company, Canadian Northern Pacific Railway Company,
Canadian Northern pany,
Canadian Northern pany,
Canadian Northern Company,
Canadian Northern pany,
Canadian Northern pany,
Canadian Northern pany,
Canadian Northern Limited,
Canadian Northern
Alberta Railway Corn-Western Railway Com-Saskatchewan Railway Manitoba Railway Com-Ontario Railway Com-Quebec Railway Com-Ry. Express Company, Transfer Company,

Canadian Northern Telegraph Company, Canadian Northern Steamships Limited, Canadian Northern System Terminals, Limited,
Central Ontario Railway,
Duluth, Winnipeg & Pacific Railway Company,	„	_
Halifax & Southwestern Railway Company, Irondale, Bancroft & Ottawa Railway Company,
Lake Superior Terminals Company, Limited, Minnesota & Ontario Bridge Company, Minnesota & Manitoba Railway Company, Marmora Railway & Mining Company,
Mount Royal Tunnel & Terminal Company, Limited,
Niagara, St Catharines & Toronto Railway Company,
Northern Consolidated Holding Company, Quebec & Lake St John Railway Company, Qu'Appelle, Long Lake & Saskatchewan Railroad & Steamboat Company.
St Boniface & Western Land Company, Winnipeg Land Company, Limited.
Second Schedule.
Part 1.
Stocks to be transferred free from prior charges. Bay of Quinte Railway Company $ 1,395,000 Canadian Northern Pacific Railway
Company	 [DOT]	25,000,000
Canadian Northern Alberta Railway Company	 3,000,000
Canadian Northern Western Railway Company	 2,000,000
Canadian Northern Saskatchewan
Railway Company	 1,000,000
Canadian Northern Manitoba Railway Company	Total Issue.
Canadian Northern Ontario Railway Company	 10,000,000
Canadian Northern Quebec Railway Company	 2,000,000
Canadian Northern System Terminais Company	 2,000,000
Central Ontario Railway	 3,329,000
Duluth, Winnipeg and Pacific Railway Company	 3,060,000
Halifax and South Western Railway' Company	 1,000,000
Irondale, Bancroft and Ottawa
Railway Company	 53,000
Mt. Royal Tunnel and Terminal
Company, Limited	 [DOT] * Total Issue.
Marmora Railway and Mining
Company	 [DOT] [DOT]	100,000
Northern Consolidated Holding
Company	 [DOT]	4,446,700
Quebec and Lake St. John Railway Company	 4,002,800
Qu'Appelle, L.L. and Saskatchewan
Railway Company	 201,000
Second Schedule.
Part 2.
Mortgage Securities and Stocks to be Transferred Subject to Perpetual Consolidated Debenture Stock Trust Deed.
1.	The Minnesota and Ontario Bridge Company.-Bond No. 1 for 5100,000 face value, and Bond No. 2 for 580,000 face value, being four and a half per cent First Mortgage Debenture Bond3. dated First of July, 1903, and registered in the name of the National Trust Company, Limited, and the British Empire Trust Company, Limited (herein called the 'Trustees') as Trustees under the Trust Deed dated 30th -June, 1903, made to secure the First Mortgage
four per cent Consolidated Debenture Stock and Bonds of the Canadian Northern Railway
Company	 5180,000
Fully paid shares	 100,000
2.	The Minnesota and Manitoba Railway Company.-Three five per cent General Mortgage Bonds numbered one to three inclusive, dated First July, 1903, being two bonds for 5100,000 each and one bond for 550,000 registered in the name of the Trustees ..	5250,000
Fully paid shares	 400,000
3.	Lake Superior Terminals Company,
Limited.-Ten First Mortgage five per cent Gold Bonds numbered 1 to 10 inclusive, of face value of $100,000 each dated first of July 1903, registered	in the name of the
Trustees	 $1,000,000
Fully paid shares	 500,000
Lake Superior Terminals Company, Limited.- Five per cent Gold Bonds numbered 1 to 9 inclusive, secured by Trust Deed dated the 28th December, 1903, for the following respective amounts; numbers 1, 2, 4 and 6 for $100,000 each, numbers 3, 5 and 7 for $50,000 each, number 8 for $300,000 and number 9 for $150,000	 $1,000,000
4.	Canadian Northern Telegraph Co.-Four
five per cent Gold Bonds, numbered 1 to 4 inclusive for $200,000 each due June 30, 1930	 $800,000
Fully paid shares	 500,000
5.	Winnipeg Land Company, Limited.-Three
first Mortgage Five per cent Gold Bonds, numbered 1 to 3 inclusive, face value $100,000 each, dated 1st July, 1903, and registered in the name of the Trustees	 $300,000
Fully paid shares	 100,000
6.	The Canadian Northern Coal and Ore
Dock Co.-Five per cent First Mortgage Gold Bond No. 1, due 1st June, 1332, for £77,054 15 11	 $375,000
7.	The St. Boniface and Western Land Co.-
Three five per cent Gold Bonds, numbered 1 to 3 inclusive, due 1st July, 1357, for $250,000 each registered, in the name of the Trustees	 $750,000
Fully paid shares	 250,000
8.	The Edmonton and Slave Lake Railway
Co.-Four first mortgage five per cent Gold Bonds, numbered 1 to 4 inclusive due June 30, 1937, for $100,000 each and Bond No. 5 for $20,000	 $420,009
9.	Canadian Northern Railway Express Company, Limited.-Three four per cent First Mortgage Gold Bonds, numbered 1 to 3 inclusive,
due 1st December, 1960, face value $1,000,000 each, registered in the name of the
Trustees	 $3,000,000
Fully paid shares	 1,000,000
10.	Canadian Northern Steamships, Limited. -Certificate No. 2 Five per cent First Mortgage Debenture Stock, due 30th April, 1930, registered in the namo of the National Trust
Company, Limited	 £ 600,000
Fully paid shares	 $2,000,000
11.	Canadian Northern System Terminals, Limited.-Certificate No. 1, First Mortgage Ninety-nine year Debenture Stock and Bonds, being equivalent of £1,438,356, secured by Trust Deed to the National Trust Company, Limited, and the British Empire Trust Company, Limited, dated June 5, 1912, $7,000,000.
Second Schedule.
Part 3.
The railway and undertaking to be conveyed which was formerly owned by the Brockville, Westport and North Western Railway Com-
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pany and which was sold under Court sale, extending from Brockville northwesterly about forty-five miles to the village of "Westport, including stations, yards, buildings, equipment, etc., as per deed from Court.
Third Schedule.
This Agreement made this	day
of	1914.
Between:
Canadian Northern Railway Company, hereinafter called the ' Canadian Northern,'
Of the First Part,
The following Railway Companies:-
Bay of Quinte Railway Company,
Canadian	Northern	Pacific	Railway	Company,Canadian	Northern	Alberta	Railway	Company,Canadian	Northern	Western	Railway	Company,
Canadian Northern Saskatchewan Railway Company,
Canadian Northern Manitoba Railway Company,
Canadian	Northern	Ontario	Railway	Company,Canadian	Northern	Quebec	Railway	Company,
Canadian Northern System Terminals, I.imited,
Central Ontario Railway,
Duluth, Winnipeg and Pacific Railway Company,
Halifax and Southwestern Railway Company. Irondale, Bancroft and Ottawa Railway Company,
Lake Superior Terminals Company, Limited, Minnesota and Ontario Bridge Company. Minnesota and Manitoba Railroad Company. Marmora Railway & Mining Company,
Mount Royal Tunnel & Terminal Company, Limited,
Niagara, St. Catharines & Toronto Ry. Company,
The Quebec & Lake St. John Railway Company,
Qu'Appelle, Long Lake & Saskatchewan Railroad & Steamboat Company,
hereinafter called the " Constituent Companies,"
Of the Second Part;
The following Companies:-
Canadian Northern Ry. Express Company, Limited,
Canadian Northern Transfer Company, Canadian Northern Telegraph Company, Canadian Northern Steamships Limited,
St. Boniface & Western Land Company, Winnipeg Land Company, Limited, hereinafter called the " Subsidiary Companies,"
Of the Third Part; Mackenzie, Mann & Company, Limited, Sir William Mackenzie and Sir Donald D. Mann,
hereinafter called the " Contractors,"
Of the Fourth Part;
and
His Majesty the King, hereinafter called the " Government " represented herein in such way as the Governor in Council of Canada may approve,
Of the Fifth Part; Whereas the Canadian Northern, the Constituent Companies, the Subsidiary Companies 
and the Contractors are desirous that aid should be granted by the Government for the purpose of completing the construction and equipment of the works and undertakings of the Canadian Northern System, and for the betterment thereof; and by an Act of Parliament of Canada, being Chapter	of
the Statutes of 1914, the Government has been authorized to grant such aid upon the fulfilment of certain conditions precedent, one of which is the execution of this Agreement;
Witnesseth that in consideration of the premises;
1.	Interpretation.
" Canadian Northern System " means the Canadian Northern and the Constituent and Subsidiary Companies and such other companies hereafter declared by order of the Governor in Council to be comprised in the Canadian Northern System;
" New Trust Deed " means the Trust Deed described in Section 3 of the Statute;
" Trustee " means the Trustee or Trustees of the New Trust Deed and any successor Trustee or Trustees thereof;
" Guaranteed Securities " means the securities authorized by the Statute of the Parliament of Canada, being Chapter	of
the Statutes of 1914, and " Statute " means the said Statute;
" Mortgaged Premises " means the undertakings, properties and assets, rights, powers and franchises from time to time mortgaged or charged for the purpose of securing the payment of the guaranteed securities;
" Minister " means the Minister of Railways and Canals;
" Government Railways " means the railways subject from time to time to the Government Railway Act and amendments thereto.
In all other cases, the provisions of the Interpretation Act and of the interpretation section of The Railway Act, being Section 2, Chapter 37 of the Revised Statutes of Canada, 1906, shall apply hereto.
2.	Covenants by Contractors.
The Contractors jointly and severally covenant with the Government as follows:
(a)	That the Contractors will forthwith, upon the execution hereof, transfer or cause to be transferred to the Trustee all the shares of capital stock of the Constituent and Subsidiary Companies mentioned in the first and second parts of the Schedule hereto, and the said shares shall form part of the mortgaged premises comprised in the New Trust Deed; Provided that the legal title to such of the said shares as may be necessary to qualify the directors and preserve the corporate entities of the respective Companies or any of them, may be allowed by the Trustee to remain in the names of such directors and other necessary parties, but the certificates thereof ready for transfer shall be delivered to and held by or for the Trustee. The absolute ownership of all the shares mentioned in the first part of the said schedule shall be vested in the Canadian Northern, subject only to the charge thereon created by and to the terms of the New Trust Deed; and the beneficial ownership of all the shares mentioned in the second part of the said schedule shall be vested in the Canadian Northern, subject only to the rights now or hereafter possessed by the National Trust Company, Limited, and the British Empire Trust Company, Limited, under the

Trust Deed of the 30th of June, 1903, securing the perpetual consolidated Debenture Stock of the Canadian Northern, and to the charge thereon created by and to the terms of the New Trust Deed.
(b)	That they will forthwith cause to be transferred to the Minister of Finance and Receiver General of Canada in trust for the Government, fully paid and non-assessable shares of the Canadian Northern of the aggregate par value of thirty-three millions, such shares to be the absolute property of His Majesty in right of the Dominion of Canada;
(c)	That they will cause to be conveyed to the Trustee as part of the mortgaged premises free from bonds or other indebtedness thereon, the railway and undertaking of the Brock-ville, Westport and North Western Railway Company described in Part 3 of the Second Schedule of the Statute, the same to become the property of the Canadian Northern subject to the charge thereon created by the New Trust Deed, and to be operated by the Canadian Northern as part of its system;
(d)	That they and each of them will from time to time make, do and execute all such acts, deeds, matters and things as may be reasonably required by the Government for the purpose of more fully and effectually carrying into effect the provisions hereof, and the terms, conditions, and stipulations of the Statute;
(e)	That the Contractors will not at any time make or seek to enforce any claim for contractors' profits, commissions, or otherwise against the Canadian Northern, or against any of the Constituent or Subsidiary Companies, upon or in respect of any express or implied contract, understanding, agreement, or stipulation of any kind, heretofore or hereafter made, whereby or whereunder they, or any one or more of them, may now or hereafter be entitled to receive from the Canadian Northern, or from any of the Constituent or Subsidiary Companies any construction profits, in respect of work heretofore undertaken, or as consideration for transfers of properties, rights or franchises already transferred, or to be transferred under sub-clauses (a) and (b) of this clause, or for commission or remuneration for services in financing, or for any other services heretofore rendered, and all such claims are hereby by them and each of them absolutely renounced and released.
3.	9. Covenants by Canadian Northern.
The Canadian Northern covenants with the Government as follows:
(a)	That the Canadian Northern is at the time of the execution hereof, the absolute owner of the equity of redemption in all the shares of the capital stock of the Constituent and Subsidiary Companies set forth in ttte second part of the Sechedule hereto, and that all such shares are fully paid and non-assessable, and that there are no mortgages, incumbrances, charges, or liens thereon other than those created by the mortgages and charges heretofore created under existing trust deeds or mortgages referred to in paragraph (b) of Section 4 of the Statute (Section 2 of the Resolutions).
(b) That the Canadian Northern will at all times make, do and execute and concur in all such acts, deeds, matters and things as may be reasonably required by the Government for the purpose of more fully and effectually carrying into effect the provisions hereof.
(c)	That it will forthwith transfer or cause
to be transferred to the Trustee as part of the mortgaged premises all the mortgage securities and shares of stock mentioned in the second part of the schedule hereto subject to the charge thereon created by and to the terms of the Trust Deed of 30th June, 1903, hereinbefore mentioned, and to the terms of the New Trust Deed.
4.	Covenants by Constituent and Subsidiary Companies.
Each of the Constituent and Subsidiary Companies covenants with the Government as follows ;
(a)	That it will not create or issue any further share capital without the consent of the Governor in Council.
(b)	That it will at all times make, do and execute and concur in all acts, deeds, matters and things as may be reasonably required by the Governor in Council for the purpose of more fully and effectually carrying into effect the provisions hereof and of the Statute.
(c)	That it will from time to time execute and deliver to the Trustee the trust deeds, mortgages and charges referred to in section 12 of the Statute securing the repayment of the moneys advanced to or for it as therein mentioned, and in default of any such security being given, the Trustee shall for the benefit of the holders of the guaranteed securities have a charge upon the undertaking, property assets, rents and revenues present and future of each( Constituent and Subsidiary Company for all moneys advanced to or expended upon or for the purposes of such Company out of the proceeds of the guaranteed securities with interest thereon at the rate of four per cent per annum, such charge to rank with the same priority and subject to the same powers as mentioned in section 12 of the Statute.
5.	Issue of Stock by Canadian Northern.
The Canadian Northern covenants with the Contractors that in consideration of the transfer of the shares of the Capital Stock mentioned in clause (a) of paragraph 2, hereof, it will by proper corporate action cause to be allotted to the Contractors or their nominees fully paid and non-assessable shares of the Capital Stock of the Canadian Northern of the par value of twenty-three million dollars, being the difference between the present issued share capital of the Canadian Northern and the amount to which its capital is increased by the Statute.
6.	Routing and Interchange of Traffic.
The Canadian Northern and the Constituent and Subsidiary Companies severally agree with the Government as follows:
(a) That at all times hereafter all freight originating on the lines of the Canadian Northern or on the lines of any of the Constituent Companies, or on any line or lines of Railway now or hereafter owned, leased or operated by the Canadian Northern or by any of the Constituent or Subsidiary Companies, their successors or assigns, shall, when destined to points in Canada, be carried over the lines of the Canadian Northern or of the Constituent Companies or over some other Canadian Railway or Railways (which term shall include the line operated by the Canadian Pacific Railway Company between Montreal and St. John) and that the through rate on export traffic from the point of origin to the point of destination shall
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not be greater via Canadian Ports than it would be via United States ports; ctnd that all inward and outward ocean traffic shall be carried to Canadian Ports, and that the Canadian Northern and the several Constituent and Subsidiary Companies shall not in any matter within their power or control, directly or indirectly, advise or encourage the transportation of any such freight by routes other than those above provided, but shall in all respects in good faith use their utmost endeavours to further the development of trade through Canadian channels and Canadian Ports.
(b)	That they and each and every of them will from time to time enter into Agreements with the Government for the mutual interchange of traffic between the Canadian Northern and the Constituent Companies or any of them, with the Government Railways, and the terms and conditions of every such agreement, shall be such as the parties thereto may agree upon or in default of agreement, as may be settled by the Board of Railway Commissioners for Canada (hereinafter called the ' Railway Board '), and the Railway Board shall have power from time to time upon the application of the Governor in Council or of any party to any such agreement to vary, modify or rescind the same, provided always that every agreement respecting the interchange of traffic shall be subject to any agreements now existing with any other company or companies.
(c)	That the Canadian Northern and the Constituent and Subsidiary Companies or any of them will from time to time on the request of the Governor in Council enter into an agreement or agreements with the Government granting to the Government for the purposes of the Government Railways running powers over the lines of railway now or hereafter comprised in the Canadian Northern System or any part or parts thereof, and the terms and conditions of every such Agreement shall be such as the parties thereto may agree upon, or in default of agreement, as may be settled by the Railway Board, and the Railway Board shall have pow; r from time to time upon the application of the Governor in Council or of any party to any such agreement to vary, modify or rescind the same, provided always, that every such agreement shall be subject to any existing agreements with any other Company or Companie.3.
7.	Covenants by the Government.
The Government covenants with the Canadian Northern that it will from time to time enter into agreements with the Canadian Northern or with any Constituent Company, giving running rights over such parts of the Government Railways as may be desired and the terms and conditions of every such agreement shall be such as the parties thereto may agree upon, or in default of agreement, as may be settled by the Railway Board and the Railway Board shall have power from time to time upon the application of the Governor in Council or of any party to any such agreement to vary, modify or rescind the same, provided always, that every such agreement shall be subject to any existing agreements with any other company or companies.
In witness whereof the Honourable
acting on behalf of His Majesty the King hath hereunto set his hand and seal and the parties of the First, Second, Third

and Fourth Parts hereto, being Corporations, have hereunto affixed their corporate seals by the hands of their proper officers, and the other parties hereto have hereunto affixed their hands and seals.
Schedule.
First Part.
Stocks to be transferred free from prior
charges.
Bay of Quinte Railway Company.. $ 1,395,006 Canadian Northern Pacific Railway
Company	 25,000,000
Canadian Northern Alberta Railway
Company	 3,000,000
Canadian Northern Western Railway Company	 2,000,000
Canadian Northern Saskatchewan
Railway Company	 1,000,000
Canadian Northern Manitoba Rail-
Company	Total Issue.
Canadian Northern Ontario Railway Company	$10,000,000
Canadian Northern Quebec Railway Company	 2,000,000
Canadian Northern System Terminals Company	 2,000,000
Central Ontario Railway	 3,329,000
Duluth, Winnipeg and Pacific Railway Company	 3,060,000
Halifax and South Western Railway Company	 1,000,000
Irondale, Brancroft and Ottawa Railway Company	  53,000
Mount Royal Tunnel and Terminal
Company, Ltd	Total Issue.
Marmora Railway and Mining Company	$	100,000
Northern Consolidated Holding Company	 4,446,700
Quebec and lake St. John Railway
Company	 4,002,800
Qu'Appelle, L. L. and Saskachewan
Railway Company	 201,000
Schedule.
Second Part.
Mortgage Securities and Stocks to be Transferred Subject only to Charge Created by Perpetual Consolidated Debenture Stock Trust Deed of 30th June, 1903.
1.	The Minnesota and Ontario Bridge Co.- Bond No. 1 for $100,00 face value, and Bond No. 2 for $80,000 face value, being Four and a half per cent First Mortgage Debenture Bonds, dated First of July, 1903, and registered in the name of the National Trust Company, Limited and the British Empire Trust Company, Limited (herein called the 'Trustees') as Trustees under the Trust Deed dated 30th June, 1903, made to secure the First Mortgage Four per cent Consolidated Debenture Stock and Bonds of the Canadian Northern Railway
Company	$180,000
Fully paid shares	$100,000
2.	The Minnesota and Manitoba Railway Co.-Three five per cent General Mortgage Bonds numbered 1 to 3 inclusive, dated 1st July, 1903, being to bonds for $100,000 each and one bond for $50,000 registered in the
name of the Trustees	$250,000
Fully paid shares	 400,000
3.	Lake Superior Terminals Co., Limited.-Ten First Mortgage five per cent Gold Bonds numbered 1 to 10 inclusive, of face value of $100,000 each dated 1st July, 1903, registered in the
name of the Trustees	$1,000,000
Fully paid shares	 500,000

Lake Superior Terminals Company, Limited. -Five per cent Gold Bonds numbered 1 to 9 inclusive, secured by Trust Deed dated the 28th December, 1903, for the following respective amounts: numbers 1, 2, 4, and 6 for $100,000 each, numbers 3, 5, and 7, for $50,000 each, number 8 for $300,000 and number 9 for $150,000	$1,000,000
4.	Canadian Northern Telegraph Company.-
Four five per cent Gold Bonds, numbered 1 to 4 inclusive for $200,000 each due June 30 1930	$800,000
Fully paid shares	 500,000
5.	Winnipeg Land Company Limited.-Three
first Mortgage five per cent Gold Bonds, numbered 1 to 3 inclusive, face value $100,000 each, dated 1st July, 1903, and registered in the name of the Trustees	 $300,000
Fully paid shares	 100,000
6.	The Canadian Northern Coal & Ore Dock
Company.-Five per cent First Mortgage Gold Bond No. 1, due 1st June, 1932, for £77,054,15.11	$375,000
7.	The St. Boniface & Western Land Company.-Three five per cent Gold Bonds, numbered 1 to 3 inclusive, due 1st July, 1957, for $250,000 each, registered in the name of
the Trustees	 $750,000
Fully paid shares	 250,000
8.	The Edmonton & Slave Lake Railway Company.-Four first mortgage five per cent Gold Bonds, numbered 1 to 4 inclusive, due 30th June, 1937, for $100,000 each and Bond No. 5 for $20,000	$420,000
9.	Canadian Northern Railway Express Company, Limited.-Three four per cent First Mortgage Gold Bonds, numbered 1 to 3 inclusive, due 1st December, 1960, face value $1,000,000 each, registered in the name of the
Trustees	$3,000,000
Fully paid shares	 1,000,000
10.	Canadian Northern Steamships, Limited. Certificate No. 2, Five per cent First Mortgage Debenture Stock, due 30th April, 1930, registered in the name of the National Trust
Company, Limited	£600,000
Fully paid shares	$2,000,000
11.	Canadian Northern System Terminals, Limited.-Certificate No. 1, First Mortgage Ninety-nine year Debenture Stock and Bonds, being equivalent of £1,438,356, secured by Trust Deed to the National Trust Company, Limited, and the British Empire Trust Company, Limited, dated 5th June, 1912..	.. $7,000,000
He said: Mr. Speaker, it is desirable that a brief statement of the situation, which confronts the country in connection with the Canadian Northern railway, and an explanation of the proposals which have been placed before the House, should be given before the House goes into Committee on this resolution.
The Canadian Northern railway had its beginning in 1896 in the construction of 100 miles of railway in the western part of the province of Manitoba, under the charter of a company known as the Lake Manitoba Railway and Canal Company. The enterprise of building this road had been undertaken in 1889, and those who sought to promote that enterprise had signally failed in their undertaking. Sir William Mackenzie and Sir Donald Mann acquired the charter of the road and constructed it, and it was put into operation about 1896. Afterwards other roads from time to time were purchased, other charters were procured and additional mileage was constructed, so that the system at the present time extends into every province of Canada except, I think, New Brunswick and Prince Edward Island.
The system has to-day in operation 7,236-51 miles; it has also under construction with track laid, but the road not in operation, 1,542-26 miles; it has grade completed, but no track yet laid, 850-52 miles; it has grade not completed but under contract, 230-08 miles; which gives a total of nearly 10,000 miles.
The status of the railway as a potential transcontinental railway was realized in Parliament, according to my recollection, as early as 1903 or 1904, and its status as such was definitely recognized in 1911 by chap. 6 of the statutes of that year. The following recital is to be found in that Act which provided for certain aid to the Canadian Northern Railway Company:
Whereas, having regard to the growth of population and the rapid development of the production and trade of that portion of Canada lying west of the Great Lakes, and to the rapidly expanding trade and commerce of Canada generally, it is in the interests of Canada as a whole that another line of railway designed to assist in the direct and economic interchange of traffic between the eastern and western portions of Canada, to open up and develop portions as yet without railway facilities, to promote the internal and foreign trade of Canada, to develop commerce through Canadian ports, and to afford the Government system of railways in Quebec, New Brunswick, Nova Scotia and Prince Edward Island an interchange of through traffic, should be constructed from the Pacific Ocean to the city of Montreal: And whereas the projected line of the Canadian Northern Ontario Railway Company extending from Port Arthur to the city of Montreal will provide the uncompleted portion of the said through line lying north and east of the Great Lakes.
The statute last mentioned provided for a guarantee of bonds of the Canadian Northern railway from Montreal to Port Arthur, about 1,000 miles in length, to the amount of $35,000 per mile. By chapter 7 of the statutes of 1912 a guarantee of -bonds of the same amount in respect of 115 miles in the province of Alberta, to the boundary of British Columbia, was also authorized.
The aid which has been granted to the company, whether in lands or in subsidies, whether by the federal Government or by the provincial governments or by municipalities, is set out at pages 10 and 13 of the printed documents which are upon the table of the House and which have been dis-
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tributed among hon. gentlemen. From these documents it will also be seen that the total outstanding securities which have been issued by the Canadian Northern and its allied companies amount to $311,276,822.32. Of this total the sum of $58,042,248 has been guaranteed by the Dominion of Canada and the sum of $76,850,203 has been guaranteed by various provincial governments. The balance which amounts to $176,383,371 represents securities which have been issued but which have not been guaranteed by governments.
The most profitable portion of the road now in operation consists of the lines extending from Port Arthur to Edmonton, and these lines, as hon. gentlemen are aware, are for the most part situated within the three prairie provinces. These lines however, are to-day less profitable than they otherwise would be until the system is extended, on the one hand to the Pacific coast, and on the other hand to Quebec and Montreal, so as to be in touch with the great traffic which has already developed, and which will develop in still greater measure, in the future, upon the Pacific ocean, and to bring the road into touch with the great railway systems of Ontario and Quebec, and particularly the system of government railways, and the Canadian Pacific railway system, so far as it is situated within Quebec and the Maritime provinces.
The Canadian Northern system, so-called, comprises the Canadian Northern Railway Company which owns the lines in the prairie provinces, and various subsidiary or allied companies -which are enumerated and set forth in the schedules to the resolution. The securities of many of these allied companies have been guaranteed by the Canadian Northern railway proper and thus the lines owned by the Canadian Northern railway proper in the prairie provinces, which undoubtedly are the profitable portion of the system from an operating standpoint, are vitally interested in the completion, extension and success of the whole system.
It became apparent some months ago that the enterprise could not be carried to a successful conclusion without further assistance. That assistance became necessary for various reasons, among which there was the financial stringency that for a year or eighteen months past has prevailed not only in Canada but-what is of more importance in this particular instance-in the great money markets of the world. The difficulty of making a successful flotation of issues already authorized and o£ further proposed

issues was so great that it could not be attempted without the risk of absolute failure. In the meantime, those who were carrying on the operation of the road so far as already constructed and who were endeavouring to bring the completion of the system to a successful issue, were confronted with this condition. The ordinary current indebtedness of the system, more especially in connection with operation, had increased from $3,000,000, its normal amount, to nearly $11,000,000. It was found that nearly $11,000,000 of contractors' accounts remained unpaid and could not be met. In addition to this, Mackenzie and Mann Limited had raised $10,500,000 to meet outstanding contractors' accounts. Under these circumstances, the company have presented to the Government the statement, which is found on page 10 of the printed documents and which indicates the amount necessary to be provided in order that the road may be completed. It seems proper that at this juncture I should read that statement to the House in order that the situation presented to us may be clearly apparent to hon. gentlemen on both sides: Canadian Northern Ry. System. Requirements to Complete.
1.	C.N.O. Ry., British Columbia
section	$23,647,492
2.	C.N. Ry., main line and
branches already under construction	$15,042,896
3.	C.N.O. Ry., Montreal-Port Arthur
and Toronto-Ottawa. $18,251,891
4.	Canadian Northern Tunnel and
Terminal Co., Montreal Terminals	$5,995,734
5.	Rolling stock:	Equipment for
Transcontinental and maturing equipment notes. $27,441,086
6.	Betterments:	Ballasting, permanent improvements, including heavy rails on balance
main line	$10,000,000
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Proceeds of securities which will be issued in respect to above expenditures and cash in trust accounts, for construction.
Canadian Northern Pacific Ry.:
C.N.P. Ry. 4i% Deb. Stock and
subsidy	$ 6,704,097
New Securities	 4,854,500
C.N. Ry.: Proceeds of securities in hand and to be earned against
above	$7,634,497
C.N.O. Ry.: Proceeds of securities in hand and subsidy to be
earned	$16,788,822
Canadian Northern Tunnel and Terminal Co.:	Proceeds of
terminal securities.. $ 5,995,734 Rolling stock, 4J% equipment
bonds	$16,496,332
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 58,473,982
Balance to be provided
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This balance of $41,905,117 must be provided for the completion of the road and for certain betterments which, as I understand, are absolutely required in the immediate future.
It may be asked why the $58,473,982, which is apparently available, cannot be used for the completion of the road. That seems to be a very natural question, and it. is one which I myself asked when the statement was first presented to me. The explanation is very simple, namely, that both subsidies and proceeds of securities are not available until expenditure has been made which justifies payment by the Minister of Finance or by the trustees for the bond-holders in the case of other trust securities. Subsidies as well as the proceeds of securities which are raised by means of guarantees are paid out only in the proportion which the expenditure bears to the total estimated cost of the road; and in respect of this railway and of all railways, the construction of which is provided for in part by subsidies and in part by the proceeds of bonds and securities, there is necessary as well what may be called a working construction capital; that is, money has to be provided for carrying on the work of the road, and capital is necessary for that purpose before either the proceeds of the securities which are lodged with a trustee or the amount of the subsidies earned can be made available.
The procedure, as I understand it, is as follows. In the first place, the Government engineers inspect the road from time to time and satisfy themselves as to the amount of expenditure which has been made upon it. They also make an estimate of the total cost of the road when completed. The subsidies are paid out only in the proportion which the expenditure incurred bears to the total estimated cost, and the same is true of the proceeds of guaranteed securities, that is securities guaranteed by the Government of Canada, the proceeds of which are always deposited with the Minister of Finance and the Receiver General. They are paid out in the same way, so that, when the last of the subsidies are paid, and when the last of the proceeds of guaranteed securities are paid, the road must have Teached [DOT]completion. I have made inquiry of various provincial governments as to the character of the legislation under which they afforded assistance to the road by way of guarantees. They have informed me that the procedure-is the same with them, namely that the proceeds of guaranteed securities are de-231
posited with the provincial treasurer and are paid only in the same proportion as that which I have already indicated with regard to federal subsidies and securities guaranteed by the federal government. Practically the same procedure is followed in respect of unguaranteed securities as well. The proceeds of those securities are deposited with the trustee for the bond-holders and are paid out by him only in the proportion which the amount actually expended, according to the report of the engineers, bears to the total estimated cost of the whole road. Therefore, while there were $58,473,982 of securities and subsidies apparently available, the difficulty with which the company found itself confronted was that, those subsidies not having been earned and the proceeds of those guaranteed securities not having been earned, it was impossible to apply those moneys to the construction of the road until further expenditures should have taken place thereon.
The extraordinary financial conditions above alluded to account in part, as I have said, for the need of further assistance, and the fact that the securities available cannot be sold at a reasonable price must also be taken into account. In addition to this there is undoubtedly an increased cost of the road due, as I am informed, and as I believe, after having made pretty careful inquiries into the matter, to two considerations: in the first place to a very decided advance in the price of labour and material during the past five or six years, and in the second place to the fact that a higher standard of construction has been adopted than that which was at first anticipated.
Now, the situation which was presented to the Government was not without its difficulties. The credit of the Dominion and of the several provinces had been pledged in very large amounts by the guarantee of securities. It had to be taken into account, and we did take it into account, that besides this the sum of nearly $180,000,000 was outstanding in unguaranteed securities, that that money had been invested in this enterprise by people who may have been influenced, and undoubtedly were influenced, by the fact that the road was recognized as a great transcontinental railway in Canada, and further, by the fact that the road had received very substantial assistance, not only from the federal Government, but from the provincial governments, both in subsidies and by the guarantee of securities. My attention was called recently to an article
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in the Journal of Commerce of Montreal, under date of 6th May, which is not only entitled to respect by reason of the fact that a gentleman who has been very eminent in the public life of Canada for many years is supposed to preside over the editorial utterances of that journal- I refer to Hon. W. S. Fielding-but also is notable for the expression of opinion which it gives with regard to the duty of the Government in respect of the completion of this transcontinental railway. I will not read the whole article, but a portion of it might very well be quoted at this juncture:
No doubt many members on both sides of the House share the widespread feeling that both Dominion and provincial Legislatures have distributed aid in cash, land and guarantees to the railway companies with a rather lavish hand, and that there should be a slowing down, if, indeed, not a halt, in this generous policy. That members entertaining these views should be inclined to set their faces against further assistance to the Canadian Northern is quite natural. But there is another side to the question that must be considered by all who have a sense of responsibility.
Whether the railway aid policies of the past have been.too generous; whether governments, in their desire to provide for the railway needs of the opening west, have moved too rapidly; whether it was wise to become involved in the construction of a third transcontinental railway, while the second was still far from completion-these are questions upon which as one looks back at the events of the last few years, there may easily be room for wide difference of opinion. But such differences would not be sufficient ground for a refusal to face the conditions of the present time.
The affairs of a great railway company, which owes its existence to the encouragement given by Government and Parliament, become so interwoven with the general interests of the country, and particularly with the public credit in the money markets of the world, that it becomes impossible to regard them as matters of private concern. There was a time when the Canadian Pacific, with all the aid it had received, found itself in a critical position. The Government had to come to its aid, and although their action in so doing did not escape adverse criticism there will be few if any to say to-day that the help should not have been granted. The Grand Trunk Pacific has already more than once had to seek assistance. At this moment it is representing that, owing to the very large increase in the cost of labour, materials and supplies, the earlier estimates of the cost of the division which the company are building have been greatly exceeded, and that therefore the Government should make the public aid proportionately larger. The Canadian Northern, under one name or another, is operating in almost every province of Canada. Its financial stability is a matter of importance to a very large number of corporations and individuals with whom it has had dealings, and also to the public interests represented by Dominion and provincial Governments.
To allow the concern to fail in its finances and leave the various railway lines in an un-

finished state would be a national calamity that could not be seriously contemplated by any one possessed of a due sense of responsibility. The company, if it is in difficulty, as fs alleged, must be helped, and the only questions to be considered are the form and extent of the assistance and the proper means of protecting, as far as that may be possible, the Dominion in the way of security for the aid to be given.
Now, Mr. Speaker, many suggestions have naturally been made to the Government in connection with the action to be taken under the circumstances which have been brought to our attention. I start with a *premise with which I think every hon. gentleman in this House will agree, and that is that that system cannot he allowed to remain uncompleted. To leave a road upon which so much money has been expended, into which so much of the money of this Dominion and of the provinces has been poured, a road which has been endorsed by the financial guarantees, not only of the federal but of provincial governments-to leave that with two thousand or two thousand five hundred miles of road necessary to link up the whole system, in an unfinished condition, is a proposition to which no hon. gentleman on either side of the House would give his support and sanction. It was suggested to us, however, that the road should be allowed to go into liquidation, that its finances should be reorganized with a view to cutting down the amount of unguaranteed securities. I am free to admit that *that proposal never commended itself to .my judgment; and I say that, inasmuch as Canada is to-day in that condition of progress and development which makes it absolutely necessary that we should resort almost continuously to the money markets of the world, a saving of $30,000,000 or $40,000,000 or $50,000,000, if that were possible by that method, would in the end result in the loss of tenfold that sum to this country in view of its possible progress and development. It was apparent, as I have said, that the road could not remain uncompleted. It constitutes a part of a great projected transcontinental system and its traffic over the lines in operation has developed wonderfully during the last half dozen years and especially in the western provinces. To leave it uncompleted would retard the progress of this country for at least a generation; and as far as I can discern the situation, even if the road went into liquidation it could not he brought to completion within a reasonable delay unless this country should come to its assistance

by some such measure as this. Therefore, it seemed to us that under proper stipulations and under proper safeguards it was not only desirable but necessary for the country at this time to give such assistance as would insure the completion of that road at an early day.
Certain arguments against any assistance to the road were based also upon the connection of Sir William Mackenzie and Sir Donald Mann with this enterprise. The undertaking, on which they embarked in 1896, and which had its inception in the construction of 100 miles of railway in the province of Manitoba, has gradually developed into the proposed construction of a great national transcontinental system. I am free to confess that I think it would have been better, when the idea of that enterprise became fixed in the minds of Sir William Mackenzie and Sir Donald Mann, if they, by means of their large holdings of common stock and by their almost sole proprietorship of the enterprise, had seen fit in years gone by to associate themselves with large financial interests which, I think, could have been brought into the enterprise, so that the condition which confronts the country at this time might not have been before us to-day. I am saying no more here in Parliament than I have said, in terms even franker than those I have used here, to both Sir William Mackenzie and Sir Donald Mann.
But there was more than that. It has been asserted in the press and in the corridors of this House, and noised abroad throughout the country that large sums of money which have been raised for the purposes of this undertaking, through federal or provincial government guarantees, and by means of unsecured bonds, have been appropriated not to the purpose for which they were raised but to the private enterprises of Sir William Mackenzie and Sir Donald Mann. It is needless to say that if any such condition as that could, be found to prevail, it would demand immediate and drastic action by the Government and by Parliament. Further than that, it was alleged that Sir William Mackenzie and Sir Donald Mann, as contractors for construction, had made very large profits out of the enterprise. Finally it was charged that the moneys raised, whether by Dominion guarantees, provincial guarantees, or without guarantees, had been improvidemtly expended or wasted. We thought it our duty, under the circumstances, to have the books 231i
and records of the system and, so far as it was necessary, other books and records investigated for the purpose of ascertaining whether or not there was any truth in the charge that moneys raised for the purpose of constructing this railway had been diverted to other enterprises. I am bound to say that the evidence which we have received, through the examination, inquiry and report of the expert auditors appointed by the Government, leads us to the conclusion that not one single dollar of the moneys raised has been diverted by Sir William Mackenzie or Sir Donald Mann to any other enterprise or appropriated to any other purpose than the construction of this road. We also felt it our duty to investigate, and we did investigate, the question as to whether or not profits had been rereceived by Mackenzie and Mann in respect of construction and whether or not the moneys expended had been prudently and providently used in the prosecution of the work. I think the extent of work which has been done and the amount which has been expended upon it, when contrasted with the results which have obtained in the case of other similar enterprises, whether in this country or in the United States, would reasonably lead one to the conclusion that the money has been prudently and providently and wisely expended. So far as profits are concerned, I have already placed upon the table of the House the report of the auditors, which indicate that no profits have been received by Messrs. Mackenzie and Mann out of the construction of the road; that they have been acting for some years past as construction agents for the Canadian Northern Railway system; that the only remuneration or compensation which they have received for their services up to the present time has been the allocation to them of common stock; but that they would, unless a safeguard had been provided by the resolution now proposed, have been legally entitled to a claim against the Canadian Northern Railway system of $15,000,000, $20,000,000 or perhaps $25,000,000 for the services which they have rendered, upon the ordinary basis of computation which I understand is applied to such cases. In saying that I desire hon. gentlemen in this House to realize that these two gentlemen have devoted 18 years of their lives almost entirely to the prosecution of this enterprise, which already has attained an important status in the transportation system of this country, and I
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think it will be admitted that they have broughtto the prosecution of the work which they have undertaken an amount of ability and energy and skill which, perhaps, ha? not been exceeded in this country or in any other country in connection with the carrying on of such enterprises.
In addition to the report of the auditors, to which I have already alluded, we have a declaration from the comptroller of the company, Mr. Alfred James Mitchell, of the city of Toronto, who has had charge of the accounts and records of the Canadian Northern railway and of the Mackenzie and Mann Company, Limited, and who has peculiar means of knowing of the matters in respect of which he deposes in this declaration. It is as follows:
In the matter of the Canadian Northern Railway Company and of Mackenzie, Mann and Company, Limited. .
I, Alfred James Mitchell, of the city of Toronto, in the county of York, Esquire, do solemnly declare:	.
That I am the comptroller of Mackenzie, Mann and Company, Limited, and as such have a knowledge of the facts hereinafter stated.
MacKenzie, Mann and Company, Limited, have acted as contractors for the Canadian Northern Railway Company in the construction of certain of its lines and of certain allied lines, as per schedule 'A' attached hereto.
It will not be necessary for me to read the schedule. (Reading):
In connection with the construction to date of such lines, I say that to the best of my knowledge and belief and according to the books kept by me as such comptroller, no contractors' profits or percentage had been received directly or indirectly by Mackenzie, Mann and Company, Limited, or by any other person on their behalf or for their profit, save and except certain fully paid common stock ot the said Canadian Northern Railway Company and of its allied lines issued to them from time to time, the question as to payment for services or profits being left open for future adjustment.
The moneys received to December 31, 1913, by Mackenzie, Mann and Company, Limited, for railway construction as aforesaid amount in all to the sum of two hundred and twenty three million, four hundred and seven thousand, six hundred and forty one dollars and ninety eight cents ($223,407,641.98) and the whole of the moneys so received have been paid out by the Mackenzie, Mann and Company, Limited, for construction of the said railway lines leaving no profit to them other than the said common stock.
And I make this solemn declaration conscientiously believing it to be true and knowing that it is of the same force and effect as if made under oath and by virtue of the Canada Evidence Act.
Declared before me at the city of Ottawa, in the county of Carleton, this twenty first day of April, A.D. 1914.
A. J. Mitchell Z. A. Lash,
A Commissioner for taking affidavits, etc.
£Mr. Borden.]
In addition to the suggestion to -which I have already alluded, it has been alleged that although Sir William Mackenzie and Sir Donald Mann did not make any profits either individually or under the corporate status of the Mackenzie and Mann Company, Limited, they did make profits out of the enterprise as proprietors of or as interested in a construction company known as the Northern Construction Company, Limited, and that the secret of the profits alleged to have been received by them lay in their connection with -that company. We have been furnished with an original declaration, which is in the possession of the Government, a copy of which I will lay upon the table of -the House. It is as follows:
Dominion of Canada, province of Ontario, county of York, To Wit:
In the matter of The Northern Construction Company, Limited.
We, Alexander Robert Mann, of the city of Vancouver, in the province of British Columbia, and Archibald Mackenzie, and Charles Cummings, both of the city of Winnipeg, in the province of Manitoba, do and each of us doth hereby declare:
1.	That we are President, Vice-President and Secretary-Treasurer respectively of the Northern Construction Company, Limited.
2.	That we have full knowledge of all the affairs of said company.
3.	That neither Mackenzie, Mann and Company, Limited, nor any shareholder or director in such company, nor Sir William Mackenzie, nor Sir Donald Mann, have any interest of any kind whatsoever, directly or indirectly, in the Northern Construction Company, Limited, or in its capital stock, or in its property or assets of any description, or in any profits or earnings resulting from the company's operations, contracts, or w-orks.
And we make this solemn declaration conscientiously believing it to be true and knowing that it is of the same force and effect as if made under oath and by virtue of the Canada Evidence Act.
A R. Mann,
A. Mackenzie,
C. Cummings.
Declared before me at the city of Toronto, in the county of York, this ninth day of May, A.D. 1914.
Gerald Ruel,
A notary public in and for the Province of Ontario.
I am not concerned here to speak in any sense on behalf of Mackenzie and Mann, Limited, or Sir William Mackenzie, or Sir Donald Mann. The question that we have to -discuss and consider in Parliament at this juncture is one which transcends the interest of any individual in the country. It is a national question and one which must be looked at from a national standpoint only. It is, however, proper to say that it has been represented to us that

Sir William Mackenzie and Sir Donald Mann have put into this enterprise very large assets which they might, under the law of the land, have retained for their own benefit in the earlv stages of the development of this system. The Lake Manitoba Railway and Canal Company was, I think, the name of the company whose charter they first acquired. Then came the Winnipeg and Hudson Bay railway and the Manitoba and Southeastern Railway Company, and perhaps some other companies in Manitoba, It is fair to say that the charters of these companies had gone begging for half a dozen years before Messrs. Mackenzie and Mann took hold of them, and during all those years no man had ever come forward to carry out the particular enterprises in connection with these companies which Messrs. Mackenzie and Mann did carry out. It is perfectly well understood by hon. gentlemen in this House [DOT] familiar with such matters that these charters carried with them large land grants, and that it would have been possible for any man in Canada to have acquired those charters and, by the construction of those roads, to have acquired the lands which were granted as a subsidy in aid of that construction if he had seen fit to do so. Mr. Mackenzie and Mr. Mann came forward and acquired those charters and, by the construction of the roads, acquired also lands of very great extent, amounting, I think, to over four million acres in all, which at the time when they were acquired were probably of very little value and possibly could not have been sold at all, but which eventually, through the development and progress of the country, have acquired a very substantial and indeed a very large value.
I think it ought to be said in justice to these men that all those lands, which under the law of the land they might have retained if they had desired to do so as their cwn property absolutely, were not retained by them, with the exception, I believe, of one hundred thousand acres, but were placed into this enterprise. The amount already realized from these lands is $17,000,000 and upwards, which has been added to the assets of the Canadian Northern Railway system. There is enough of these lands left to provide, at current prices, something like $12,000,000 more. So it ought to be said, in fairness to these men, that, hav ing the right to retain these lands and to retire from railway construction as men with very large fortunes, they had the ambition to construct a great national transcontinental railway system and into that system they placed the $29,000,000 of assets to which I have just alluded, being the proceeds of the lands which they acquired from the construction of those three lines of railway. I have no doubt that the original idea and ambition of these gentlemen was to make large fortunes out of the construction of railways, and that they did not have in their minds any idea of constructing the great transcontinental system which is almost complete to-day. But it would seem to me that the course taken by them indicates that many years ago the mere idea of making a large fortune out of this, enterprise ceased to be their sole purpose; that they did desire as well to build a transcontinental railway line which would be an important factor in the railway development of this country.
In connection with their idea of building a national transcontinental railway system this also may fairly be said. I have heard it charged against them that if they had been contented simply to develop their lines in the three Prairie provinces and not to reach out to the West, they would have had a very profitable railway system in western Canada and one which would have been of very great service to the country. I think it is only fair that I should give it to the House that their idea in making their eastern extension was that, previously to the projection of the Grand Trunk Pacific railway, they had in eastern Canada a road, the Grand Trunk railroad, with no western connections, with which they could make a working arrangement and provide for an interchange of traffic upon reasonable terms. But when the Grand Trunk Pacific Railway project was brought about they found themselves confronted with this situation: They had to meet the competition of two great railway systems reaching into the east as well as into the west of Canada, and so they would have been isolated in their operations, they would have been handicapped and might have been oppressed. For the reason that the second transcontinental railway was launched in that way they had the belief, whether it was right or wrong, that, in the very nature of things, it was essential for them to press on into eastern Canada.
It was necessary also for us to go into the question of. future earnings and future expenditures, for betterments or otherwise, because these betterments would undoubtedly be necessary even if the road should
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be completed. The anticipation of the company as to earnings after the completion of the system is to be found on page 14 of the printed documents, and upon the same page is to be found a statement of the earnings of the company during the last fiscal year. In considering the possibility of the system acquiring earning power sufficient to meet its total fixed charges, we sought the advice of engineering and traffic experts of the'Intercolonial railway. It is obvious that the future earning power of the system will depend on the progress and development of the country and the future expenditures for bettermems on traffic necessities. While it is possible that the expectations of the company, which are very sanguine, may not be realized, it must, nevertheless, be remembered that the system at present has an earning power equal to that of the Canadian Pacific railway in 1901, and if the country develops in the future as in the past, of which we can have no reasonable doubt, the earning power of the system may be expected to increase accordingly. More than that, we are informed that the line from Montreal to Port Arthur and from Edmonton to the Pacific coast is of a high character, and will lend itself to low operating charges.
The main consideration which influenced us in placing these proposals before the House was the necessity for the completion of the road. We were impressed by the fact that liquidation must invollve long and serious delay in the completion of the enterprise, and must materially retard the development of the country. We were impressed by the fact that such liquidation would impose serious charges and burdens not only upon the federal exchequer, but upon the provincial treasuries. We were impressed by the fact that very large sums, amounting to many millions, were owing to contractors, subcontractors, merchants, material men, and labourers throughout Canada. And we were impressed also by this fact: that a reasonable confidence in the future development of the country should lead to the belief that the enterprise could be carried to a successful conclusion. It has been suggested that adequate provision has not been made in the resolutions which we propose for the payment of contractors and labourers. So far as labour is concerned, there is already in chapter 98 of the Revised Statutes of Canada most ample provision. So far as the resolutions are concerned, although I do not intend to go into any argument upon that point at the moment, I may call the attention of hon. 
gentlemen to the fact that under clause 6 of the resolutions it is provided that the dispositions of the moneys to he raised by means of the guaranteed securities shall be such as the Governor in Council approves; and we shall take care that all contractors, material men and others who have made advances or to whom debts are owing shall be fully protected in connection with the completion of this road.
The road when completed will have an indebtedness of about $40,000 a mile, and fixed charges of $1,600 per mile, which I think will compare very favourably with other systems in this country 4 p.m. and the United States. Undoubtedly, if conditions had permitted it, it would have been desirable to organize a new corporation which would take over the assets and undertakings of all the various companies which form part of the system. We are convinced, however, that by reason of the methods of financing adopted in the past, the great variety of securities issued, and for similar reasons which seemed cogent to us, it is impossible to accomplish this at the present moment. Nevertheless, we required, so far as it was practicable, that all the lines constituting the system should be brought under one management, and in effect amalgamated. The method which has been adopted accomplishes this result in effect while at the same time it does not affect the priority of charges or liens which have been created in the past, and which eventually may, under some refunding arrangement, be arranged so as to permit the entire ownership of the lines to be vested in one corporation. In that regard I would like to say that the Government have 'been careful to see that every security which could have been made available through amalgamation, has been acquired.
The total capitalization of the various companies amounts to $138,500,000, and further proposed capitalization of the Montreal Terminals and of the Canadian Northern Manitoba railway would bring that amount up to about $145,000,000. The total capitalization of the system has been reduced to $100,000,000 by the following method: The stock of all the subsidiary and constituent companies-to which I shall allude as the allied companies-has been transferred to the Canadian Northern railway, and the capitalization of that company has been fixed at $100,000,000. The several companies are prohibited from any further issue of stock.

The proposed issue of $45,000,000 is to be made by the Canadian Northern railway- the parent company to which all the stock of the allied companies is to be transferred-and the Government is to be safeguarded against any liability upon this guarantee by the following securities:
1.	A mortgage upon the undertaking, property, assets and revenues of the Canadian Northern railway, which comprises some 5,3o0 miles, extending between Port Arthur and Edmonton, and includes numerous branches in the three prairie provinces.
2.	A mortgage or charge upon the properties and assets of the allied companies to the extent to which any of the moneys raked by the guaranteed securities may be appropriated and paid for construction or betterment of their respective undertakings.
3.	A mortgage or charge upon the shares of the allied companies now transferred to the Canadian Northern.
4.	A charge upon all the securities and stocks enumerated in the second schedule, and a first charge upon the Brockville and Westport railway-a small railway of about 45 miles.
5.	A charge upon the equity of redemption of Mackenzie, Mann and Company, Limited, in $10,000,000 of capital stock, and $10,000,000 of first debenture stock in the Canadian Northern Town Properties, Limited.
Some further explanation may be given at a later date with regard to the value of that security. We regard it as very valuable security indeed.
In addition to twenty-one million dollars now owing in respect of construction, the Canadian Northern and its allied companies have incurred liabilities to the extent of $20,703,865 -as shown on page 112 of the documents brought down-upon temporary loans secured by the deposit or pledge of securities which under present conditions are not saleable at a reasonable price.
The fourth section of the resolution provides that covenants or undertakings to the satisfaction of the Government shall be given by Mackenzie and Mann, Limited; that these loans shall be paid, and that no proceedings against the Canadian Northern ox any of the allied companies shall be taken in respect thereof. Our idea in that regard is this: we are guaranteeing $45,000,000 worth of securities, as asked for by the memorandum which I read to the House in the early portion of my remarks, to ensure the completion of
this road. When we found that these temporary loans were outstanding to the extent mentioned, that they were secured merely by the pledge of certain bonds and debentures, we made it a stipulation that these temporary loans should be taken care of by Mackenzie and Mann-not by the country- and that the proceeds of the $45,000,000 of guaranteed securities should be available for the completion of the road, and not used to pay off these temporary loans.
In addition to this indebtedness it has been found that the current indebtedness of the Canadian Northern and allied companies, the normal amount of which would be in the vicinity of three million dollars, has risen to the sum of $10,408,128.30. The Government have exacted a stipulation- which is to be found in the fifth clause of the resolution-that security to the satisfaction of the Government shall be given by Mackenzie and Mann and by Mackenzie, Mann and Company, Limited-not only their own covenant, but such further security as the Government may demand- that this indebtedness will, within one year, be reduced to the normal or usual current amount, which is to be determined by the minister, and that in the meantime no proceedings shall be taken against the company for payment of the same. The giving of such guarantees or securities in respect of the temporary loans and of the current indebtedness are made conditions precedent to any guarantee by the Government.
We have also provided by clause 9 of the resolution that the books, returns, reports and other records of the Canadian Northern and allied companies shall at all times be accessible and open to inspection by competent experts appointed by the Government.
In that connection and for a similar reason, we have provided that the Government shall have authority to appoint a director of the Canadian Northern and a director of each of the allied companies, and that the Government shall have power to remove any such director and to appoint another director in his stead. Such director shall have the power to cause meetings of directors or shareholders to be held at any time, and in that way we believe that the Government will be kept fully in touch with and fully acquainted with the proposals of the management and the condition of the undertaking from time to time.
For further safeguard we have also pro-
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vided that the company shall, within five months after the close of each fiscal year, furnish to the Government a balance sheet showing the financial condition of the Canadian Northern Railway System for the year then completed.
As the system has long since assumed the status of a transcontinental railway, we considered it important that all companies whose lines are included in the system .should he brought within the legislative jurisdiction of the Parliament of Canada and made subject to the control of the Board of Railway Commissioners for Canada. This has been accomplished by section 15 of the Bill, which will follow the resolution. My hon. friend from South Renfrew (Mr. Graham) urged that point upon us, when certain proposals affecting this company were under consideration by Parliament last year. We have thought it desirable that this provision should be inserted, not only with regard to the company to which he called attention then, and which indeed was the only company under consideration at the time, but that it should also be applied to all those companies which are not at present subject to the legislative jurisdiction of the Parliament of Canada and which form part of the Canadian Northern system.
The Government have thought it desirable in the public interest and for the reasons already stated, that the road should not be permitted to go into liquidation. Nevertheless, as the contingent liability which is imposed upon the people of the country by the proposals which are now before the House is a substantial one, we have held it to be reasonable that the people of this country, lending their credit for the completion of this enterprise, should also directly participate in any profits and advantages of the enterprise if it is carried to a successful completion. Therefore, in fixing the total capitalization of the Canadian Northern Railway system at $100,000,000 we have required that $40,000,000 thereof shall be absolutely vested in the Government as trustees for the people of Canada who will thus participate in any value which may eventually accrue through the progress and development of the country.
I venture to say that there is no man in this House or in this country who will deny that the people of Canada, in coming to the assistance of this enterprise at this juncture, are reasonably entitled to file compensation which we have asked for in these proposals and upon which we intend to insist. The capitalization of the whole sys-

tem, when these negotiations commenced, stood approximately at $145,000,000 of which $138,000,000 were held by Mackenzie and Mann and $7,000,000 were held by the Government. In consideration of the assistance now afforded to the enterprise, this capitalization has been reduced to $100,000,000 of which $60,000,000 are held by the former proprietors and $40,000,000 are held by the Government. The stock of Mackenzie and Mann has thus been reduced by $68,000,000 and the stock of the Government has been increased by $33,000,000. To permit the road to go into liquidation would not only injure seriously the credit of all Canadian enterprises and of Canada itself for many years, but would involve long delay in the completion of the enterprise.
Mr. MACDONALD:: Before the right hon. gentleman leaves that question of stock, I would like to understand what the effect of subsection I of section 12 of the agreement has, in providing for the issue of $25,000,000 additional stock for the purpose of retiring income.


Mr. BORDEN:: I had omitted to mention that, and of course, as far as most of the details are concerned, we can more conveniently discuss them in Committee. My understanding of that is this: that among the securities which have been issued by Mackenzie and Mann, Limited, were Income Convertible Debenture Stock, to the amount of $25,000,000. I understand that in case of liquidation it would be a charge upon the enterprise, but that the interest payable upon it is not a charge except in so far as the directors may declare that the income has been earned. If, for example, it should be declared that the income has not been earned during a certain period, then the income for that particular period would not be recoverable, by the holders of the stock; in other words, it is not cumulative. Twenty-five million dollars of that description of stock has been issued with an option covering a certain period during which it can be exchanged for ordinary stock. There is in the resolutions a provision, which has been alluded to by my hon. friend, that if those, who hold at the present time the income convertible debenture stock, to the amount of $25,000,000, should desire to make that exchange, then ordinary stock may be issued by the company for the requisite amount, in which case a corresponding amount of income convertible debenture stock will be wiped out.


William John Macdonald: In addition to the
$100,000,000 ?


Robert Laird Borden: In addition to the $100,000,000; it is a change of form. If those who hold that stock desire to do so, they may, within a limited period, which I understand it is the intention of the Canadian Northern to extend, exchange that for ordinary stock. It will be merely an exchange, a substitution of one stock for another already in existence.


Mr. CARVELL:: Is that $25,000,000 of income charge convertible debenture stock included in the securities issued, and mentioned at page 32, amounting to $312,000,000?


Robert Laird Borden: I am informed by the Solicitor General that it is. In connection with the importance of the early completion of the road, I may say that I have received certain communications, which have been placed on the table of the House, and it might be proper that I should read them now. They are communications from the Prime Ministers of four of the provinces. The first one in order of date is a communication from the Hon. George H. Murray, Premier of Nova Scotia, and it is as follows:
Halifax, N.S., March 14, 1914. Hon. R. L. Borden,
Prime Minister,
Ottawa.
Nova Scotia Government realizes that Canadian Northern contributed very largely to railway development in this province, operating at present over four hundred miles. We Jeel that this progressive railway situation could on'y have b*en brought about by the enterprise ot such a concern, and the province, by reason of accepting their guaranteed bonds for large sums is vitally interested in the future of this company. Government feels that any reasonable assistance consistent with public interests that can be accorded by the Dominion to the Canadian Northern would be a policy which would be acceptable to our people as it would enhance provincial credit.
(Sgd) G. H. Murray.
Then, th-ere is a telegram from Sir Richard McBride, as follows:
Victoria, B.C., March 16, 1914. Rt. Hon. R. L. Borden,
Prime Minister, .
Ottawa, Ont.
Press reports state that you say no agreement has been arrived at with the Canadian Northern. You will be interested to learn that operations of this company from Alberta to coast and Vancouver island are of highly satisfactory nature. Main line from Yellow Head pass to coast is magnificent piece of construction and am advised provides finest route on continent with lowest grades. Their work has been thoroughly carried out, roadbed and steel of finest order. Expenditure to date here in
excess $36,000,000, and contract with provincial Government well lived up to. Considering whole undertaking of national importance do not hesitate to say, if representations made you for aid to enable them to complete at once arrangements, for first-class transcontinental service are based on fair, reasonable grounds, there should be ample justification in extending support. Canadian Northern cost approximately $70,000 per mile in British Columbia. Province granted this session additional $10,000 per mile to original $35,000 for main line. These with $12,000 from Dominion still leave balance $23,000 added to which, in the light of past experience, must be large initial expenditure for final completion and equipment in order to carry on first-class service.
(Sgd) R. McBride.
The next letter is from the Hon. J. A. Calder, acting premier of the province of Quebec, under date of Ottawa, April 17, 1914:
Dear Mr. Borden:
As I have been advised that you are not expected to return to Ottawa until next Monday or Tuesday, and as I must leave for the West on Friday, I regret that I shall not have another opportunity of discussing with you the question of further federal aid to the Canadian Northern Railway Company. Since our last conference I have given the matter a good deal of consideration and now wish to communicate to you briefly the general conclusions I have reached.
As I understand the situation, the company in question has made application to your Government for further Dominion aid, chiefly, if not solely, on the ground that such aid is required to enable it to complete and put into operation its main line through British Columbia and east of Port Arthur, thereby providing the necessary outlets for the network of branch lines which the company has constructed throughout the prairie regions.
Regarding the necessity which may exist for the assistance applied for I have no opinion to offer as I have no knowledge of the facts. On the other hand, however, it appears to me that there can be no room for a difference of opinion as to the desirability of having the company carry to completion its through lines at the earliest possible date, more especially as these eastern and western outlets for the products of the prairies have already been largely provided for and are approaching completion.
I have already given you my views with respect to the absolute necessity which exists for the immediate construction of additional branch railways in Saskatchewan. If you desire confirmation of the same I would refer you to the recent decision of the Board of Railway Commissioners in the western freight rates case. The whole question was investigated thoroughly by the board and their conclusions, as well as their reasons therefore will be found embodied in their report.
Viewing the matter, therefore, from this standpoint, it seems to me that if there is any likelihood that the Canadian Northern railway, on account of the magnitude of its through line undertakings may without additional federal assistance, be left in such a position as to compel it to curtail or hold back its branch line development, the loss to western Canada would be very great indeed.

be more effectively safeguarded we shall be glad to consider suggestions to that end. The commitments of Canada in aiding transcontinental railways are very great. I will not pause to consider their wisdom, as the hour for that has passed. The collapse of this enterprise would undoubtedly be a national calamity. It may well be added that lack of courage in dealing with it would be a national disgrace. The enterprise must proceed, but the interest of the country coming to its assistance must be considered and it has been considered. Every dollar of the money to be raised by means of the securities which we propose to guarantee will be used for the payment of existing liabilities of the Canadian Northern system and for the completion of the road. If the expectations of those who believe the enterprise can be carried to a successful conclusion are disappointed, then a summary method has been provided by which the road can be taken over, the system reorganized and either be transferred to another corporation constituted for the purpose, or pass intc the ownership of the people. If, on the other hand, the enterprise meets with the anticipated success, the country will have acquired a two-fifths interest therein as compensation for the guarantee of forty-five millions of dollars. The Canadian Northern system to-day has earnings equivalent tc those of the Canadian Pacific railway! in 1901. We all confidently hope, and, more than that, believe that the progress and development of Canada during the next twelve years will not be less than that with which this Dominion .has been favoured since 1901. In that case it may reasonably be anticipated that the compensation now received from the company for the aid proposed by these resolutions will amply recoup and compensate Canada for every subsidy and guarantee that it has brought to the assistance of this railway. It may not be amiss to bear in mind that a like policy applied thirty years ago in affording assistance to the Canadian Pacific railway would have most amply recouped the country for all its aid to that great undertaking. And so to-day our faith in the future progress and development of this Dominion impels us to believe that for the assistance now proposed the country is receiving a consideration which in the years to come will more than amply compensate not only for the pledge of the country's credit which we now propose, but for all other aid which 
ha^ been granted to this enterprise-and in both cases the country has secured also the construction of a great transcontinental railway.


Wilfrid Laurier: Mr. Speaker,
in rising to present the views which I and those with whom I am associated on this side of-the House entertain with regard to the resolution which has' been presented to the House, I hope that I shall not be considered as making a vain boast if I say that it is our firm purpose to approach this question with minds as free as they can be from consideration of party interest considerations which are never absolutely devoid of passion, and to give to this very important question the attention to which it is entitled, and upon its merits alone.
I may confess at once that I have long believed that this country requires thTee transcontinental railways and although this theory has been sometimes controverted, in this House and out of it, I have never seen any reason to change my opinion. The Americans have three transcontinental railways, the Union Pacific, which is the oldest, the Great Northern and the Southern Pacific, and these three are scarcely adequate to meet the needs of the enormous trade which they have to carry. It is no vain boast to say that in prospects our western country is certainly equal, if not superior, to the western part of the American Republic. Not the whole but the greater part of the American territory west of the Mississippi river is a barren desert which is and must for all time remain unproductive, whereas our own country west of lake Superior is, every inch of it, not only arable but fertile, and not only fertile, but fertile as few other countries are. For my part I can say that I have always favoured the efforts of our two fellow citizens whose names have been mentioned several times by my right hon. friend, and who have applied themselves for many years to the task of binding the continent with another band of steel. The late Government were not slow to interest themselves in the enterprise and to favour it as much as they could. The beginnings of the railway system which we are now considering were certainly very modest, and I doubt if even its projectors, Sir William Mackenzie and Sir Donald Mann, thought at that time that their system would attain the proportions which it has since atained. It was, as has been stated by my right hon. friend, in the year 1696 that Messrs. Mackenzie and Mann went into railway construction. It is to their very great credit that the first venture which
MAY i3, 1914
they took up was an enterprise which, had gone a-begging and which nobody dared to tackle at that time. With the assistance of the provincial Government of Manitoba., they started the construction of a small line of railway branching out. north and west from the existing system. In 1899, or thereabouts, after we came into office, we asked Parliament to give them assistance to extend the railway system then in existence in Manitoba eastward to the end of lake Superior. If I remember rightly, we gave them a cash subsidy of $6,400 a mile for that length of railway. Later, in 1903, we induced Parliament to give them a guarantee of $13,000 a mile for a line of railway running through Manitoba to the city of Edmonton. Afterwards, in 1908, we asked Parliament to give them another guarantee of bonds to provide for several branch lines which wTould be feeders of the line in the prairie provinces. In 1911, as has been explained by my right hon. friend, it was considered that the system would not be complete unless it were extended eastward to the St. Lawrence and eventually to the Maritime provinces, that is to say, unless it were made a transcontinental railway, and in that year we asked Parliament to give to the enterprise from Port Arthur to Montreal a guarantee of bonds to the extent of $25,000 a mile. After the new Government came into office they took up the policy which we inaugurated. In 1912 Parliament was asked to assist a line from St. Albert to the limits of the province of British Columbia, a distance of 115 miles, with a subsidy of $35,000 a mile. They also asked and got from this Parliament a cash subsidy of $12,000 per mile in British Columbia, for a distance of 525 miles. I for my part, and those around me, -did not assist in that last vote, for reasons which I shall explain later on. Last year the Government again extended its bounty to the enterprise and Parliament granted it a cash subsidy from Ottawa to Port Arthur, a distance of 910 miles, of $12,000 per mile, or $10,920,000; and from Edmonton to the boundary of British Columbia, a distance of 260 miles, a cash subsidy of $12,000 per mile, amounting to $3,120,000; in all, $14,040,000. Thus, since the present Government came into office, this enterprise has been assisted to the extent of $24,365,000, of which $4,000,000 was only a guarantee, while $20,040,000 was actual cash. Last year, when my right hon. friend asked the bounty of Parliament for the enterprise, he expressed his opinion-I shall not say conviction, but his strong opinion, or rather the opinion of the promoters of the enterprise, Messrs. Mackenzie and Mann-that with the assistance which we were then giving them, they would he in a position to complete the enterprise by the borrowings which they could make elsewhere. Unfortunately, as we know, these sanguine expectations have not been realized, and they are again before us for a further bounty from Parliament, which, as they again assert, will enable them to complete their system.
It has been current in the corridors of this House, in clubs, in the streets, and in the press all over the country, that the Canadian Northern Company was stranded financially, that the owners of it could not advance any more-nay, that there were against them millions upon millions of liabilities due to their contractors, to their furnishers, to the banks, which they were unable to meet. It was stated also that, unless the country came to their assistance, we were threatened with a financial crisis. It was represented to us that the situation was pretty much the same as the situation in 1884 when the promoters of the Canadian Pacific railway came before Parliament and asked for a loan of $30,000,000 in order to face liabilities which they were unable to meet, and thus avoid a financial crisis. If, Sir, these rumours, which we have heard every day almost since the opening of the session four months ago, had been realized, if it was true that the finances of the company were in such a condition that they could not meet their liabilities, that their credit was exhausted, and that possibly, unless assistance were afforded to them, some financial institution might be in serious peril, involving the fall of some other institutions not so strong, the condition- of things would be far different from the condition of things stated by my right hon. friend. If the situation to-day were the same as it was in 1884, as we had expected, if the promoters of-the enterprise had represented to us that they were for the moment financially embarrassed, that in view of the conditions of the financial market they could not realize any more upon the securities which they had in hand, and that unless we came to their rescue we might have to face a financial crisis, I for my part, would have been inclined to favour doing exactly what was done by Parliament in 1884-lend them the money in order to avoid that financial crisis. But, Sir, this is not the condition which is pre-

sented to us to-day. This is not the statement which is made by the promoters of the enterprise, Messrs. Mackenzie and Mann. They do not represent at all that they are unable to meet their liabilities. They say, on the contrary, and it is stipulated in the resolutions-and my right hon. friend has just insisted upon this point- that the money which is to be raised on the guarantee which they ask of us is not to go to the payment of their liabilities, but is for another object. Indeed, when the resolution was laid before the House some days ago, a communication coming from the Government was given to the ministerial press in which you could read this:
As the company, outside of the amounts owed to contractors, which are very large at the present time, owes also about $14,000,000 of temporary loans raised by the pledging of securities which have not been sold and which hitherto have not been saleable at a reasonable figure, and as the company has also floating indebtedness of between $10,000,000 and $11000,000, the Government have stipulated that Mackenzie and Mann, Limited, shall give absolutely satisfactory security that both the temporary loan and the floating indebtedness shall be paid off by them without recourse in any way to the moneys which are to be raised by the guaranteed securities for the completion of the road.
Therefore it is very plain that not a dollar of the money which is to be raised upon our credit is to go to discharge the liabilities of Messrs. Mackenzie and Mann or of the Canadian Northern railway at the present moment. Indeed, the resolution which we have before us is to this effect in so many words. Let me read again the paragraphs which were read by my right hon. friend, and which go to show that the money which is to be raised upon our credit is not at all for the discharge of past liabilities. Sections 4 and 5 read:
4.	That covenants or undertakings to the satisfaction of the Governor in Council shall be given that all outstanding temporary loans to the Canadian Northern or any of its constituent or subsidiary companies secured by the deposit or pledge of securities, will be paid out of the proceeds of such deposited or pledged securities when the same shall be sold or disposed of, and that no proceedings against the Canadian Northern or any of said other companies will meanwhile be taken for the collection of such temporary loans.
5.	That covenants or undertakings of the contractors and such other covenants or undertakings as may be required by the Governor in Council shall be given that the current indebtedness of the Canadian Northern and of the said constituent and subsidiary companies will within one year from the passing of the Act to be based upon these resolutions be reduced to the normal or usual current amount to be determined by the minister and that

meanwhile all such current indebtedness other than such as may be the subject of bona fide dispute, will be either paid or arranged in such a manner that no proceedings for the enforcement of payment thereof will be taken or pressed.
Mark the difference between the language which I have just quoted and that of the statement which was given to the press. According to the press statement, security was to be given to the Government. Now, it is not security, but is simply a covenant which is given to the Government, that Messrs. Mackenzie and Mann, the Canadian Northern railway, the debtors whoever they be, shall r ot be pressed by their creditors. That is to say, they undertake to pay their creditors, or to have from them satisfactory arrangements that they will not be pressed; in other words, they will have an extension of time. I fail to understand the meaning of this resolution. If the debtors, those who owe this money, whoever they may be, whether the firm of Mackenzie and Mann or the Canadian Northern or any of the subsidiary companies, can make a covenant with the Government that their creditors shall not press them, they can make that agreement just as well with their creditors as with the Government. I do not understand how they can make it with the Government unless they make it also with their creditors; and, if they make it with their creditors, I do not see that there is any necessity of their making such an agreement with the Government. But be this as it may, this clearly is shown that the money to be raised by the sale of the securities is not to be used in paying off past liabilities.
This brings us, to the consideration of the reason why Parliament is asked to appropriate this sum of $45,000,000. At this juncture, I do not propose to go very deeply into the subject, but I intend to lay before Parliament in plain language the reasons why we on this side of the House think that these resolutions are absolutely unacceptable. If the object of the Government in asking for this credit of $45,000,000 is not that the company may discharge its present liabilities, if it is to continue to carry the load it has at the present time, and which it is unable to discharge, what is the reason why we are asked for this guarantee? The object is recited in the preamble to the resolution which is before the House:
Whereas the Canadian Northern Railway Company hereinafter called the ' Canadian Northern ' has represented that the several companies set forth in the first schedule to these resolutions, and their railways and un-

dertakings, rolling stock, equipment, assets and properties are intended to constitute a transcontinental railway system to be denominated the ' Canadian Northern system ' and that the Canadian Northern desires to control said system by the ownership or control of the shares of majorities thereof in the capital stock of the said companies, and that it now owns or controls the shares or majorities thereof in the capital stock of certain of the said companies, and that the several companies are desirous that aid should be granted for the purpose of completing the construction and equipment of the works and undertakings of the Canadian Northern system and for the betterment thereof.
So that, according to the language which I have just quoted, the main object of the Government in asking for this credit is to unite the different companies which at present are already under the ownership of Messrs. Mackenzie and Mann. If that be the object, it is not sufficient
5 p.m. for asking us to appropriate $45,000,000; and, if that be not the object, then we must know that reason, I say that we should know the truth, the whole truth, and nothing but the truth. Moreover, that is not all. We are told that these companies are to be united in a transcontinental system, and with that object I agree; but I say that object is not carried out in these resolutions. In the system as it exists at the present time there are twenty-eight different companies. When this resolution has passed, and when the Act founded on it has received the sanction of the Governor General'-if it receive it

there will still be twenty-eight different companies as there are at present. Why is this? My hon. friend told us a moment ago that the capital stock of twenty-seven of these companies is to go into company under Mackenzie and Mann. That may be the intention. I heard from my right hon. friend a moment ago that the capital stock was to be reduced to $100,000,000. I say that if that be the intention, it is not at all expressed in the resolution before the House. On the contrary, 'by the resolutions now before us the twenty-eight companies preserve their identity. The stock of twenty-seven companies goes into the hands of one company, it may be; but the twenty-eight different companies remain fully alive. Why is this? If you are going to give the stock of twenty-seven of the companies into the hands of one company, why not wipe them out altogether? I repeat that, if it is the intention to reduce the stock of these 28 different companies to $100,000,000, that intention is not expressed in this resolution, and the resolution will have to be
amended accordingly. Let me call the attention of my right hon. friend to that point. I do not know who prepared the resolutions, but whoever did it did not carry out the intention of the Government as it has been announced to us by my right hon. friend this afternoon. Take the language of the resolution, which seems to have been prepared with care. It reads:
In the following resolutions, unless the context otherwise requires:
'Canadian Northern' means the Canadian Northern Railway Company.
* Constituent companies ' means such of those companies mentioned in the first schedule to the following resolutions, and such other companies, hereafter declared by the Governor in Council to he comprised in the Canadian Northern system, as own or operate railways, terminals, bridges or other railway facilities.
' Subsidiary companies ' means such of those companies mentioned in said schedule, and such other companies, hereafter declared by the Governor in Council to be comprised in the Canadian Northern system, as do not own or operate railways, terminals, bridges or other railway facilities.
The distinction between constituent companies and subsidiary companies is very minute, and a definition perhaps, was not necessary to an understanding of what was meant. I call these companies subsidiary companies, whether constituent or subsidiary; they are practically the same. I would call the attention of my right hon. friend to section 12, which says:
That the capital stock of the Canadian Northern be fixed at the sum of one hundred million dollars subject to increase only by the - Parliament of Canada.
What is the Canadian Northern? The Canadian Northern is not the Canadian Northern system; the, Canadian Northern is one company to which the other companies are accessories, and its capital stock is fixed at $100,000,000. I say this $100,000,000 cannot include the capital stock of the subsidiary companies, because the terms are against it.
But that is not all. I take the contract, of which clause 12 says:
That the contractors Mackenzie and Mann will forthwith, upon the execution hereof, transfer or cause to be transferred to the trustee all the shares of capital stock of constituent and subsidiary companies mentioned in the first and second parts of the schedule hereto, and the said shares shall form part of the mortgaged premises comprised in the new trust deed. .	.
The absolute ownership of all the shares mentioned in the first part of the said schedule shall be vested in the Canadian Northern, subject only to the charge thereon created by and to the terms of the new trust deed ;
And, therefore, if the capital stock of the subsidiary companies is to be transferred to

the Canadian Northern, they transfer something more than $100,000,000.
There is something else. By section 2, paragraph b, as security for the $45,000,000 we are advancing to Mackenzie and Mann, we receive a specific mortgage or charge upon the shares mentioned in the first part of the second schedule, that is to say, upon the stock of the subsidiary companies. If, therefore, we receive a mortgage upon the stock of the subsidiary companies, surely it cannot be contended that the stock of these subsidiary companies is wiped out. That is as plain as plain can be.
But there is something else. We receive also a mortgage upon this stock, but part of the stock of ten of these subsidiary companies is mortgaged to different creditors to the extent of $18,000,000. Are we to understand that you are wiping out the shares of these companies which are already secured for the protection of creditors who - advanced money upon them? That is the situation in which we are; and therefore it is very important to know exactly where we are at.
If it was the intention of the Government to have a transcontinental system, why have they preserved the identity of these companies? Why not wipe out their stock altogether? And if you do, there is nothing left of them except the board of management. Therefore, I say to my right hon. friend that if that be the idea he had really in mind, this resolution will have to be amended very carefully. But that is a point for consideration later on.
There is another point, and it is that if it was the intention of the Government to wipe out the stock of all these companies and to assimilate them and make them one, I shall insist that that intention shall be carried out in deed, and that we shall have one company and not twenty-eight companies. And since it is stated that the stock is of these twenty-eight companies is wiped out. I will ask whoever follows me to explain why we keep the identity of these twenty-eight companies which are not to disappear, the mortgage powers of which still remain and which are still empowered to exercise all their powers, and this will lead to very ludicrous consequences'. It is stipulated in section 18:
That without limiting any power now possessed, it be enacted that any constituent company which is now or may hereafter be subjc t to the legislative authority of the Parliament of Canada, may, under the provision of the Railway Act, amalgamate with any other it others of the constituent companies which is
[Sir Wilfrid L<aurier.3
now or may hereafter be subject to said legislative authority or, if not so subject, which now has or may hereafter have power to enter into such amalgamation.
Let us analyse what this means. It is stipulated that the stock, say, of the Canadian Northern Pacific Railway Company, is to be owned by the Canadian Northern Railway Company, which is practically Mackenzie and Mann. It is stipulated also that the stock of the Canadian Alberta Company is to be owned by the same parties, and therefore you provide that Messrs. Mackenzie and Mann, representing the Canadian Northern Pacific Company, can negotiate for amalgamation with Messrs. Mackenzie and Mann, representing the Canadian Northern Alberta Company. If you have the power to amalgamate, why not amalgamate now, and make it clear once and for all? I confess I do not understand what is meant by so much confusion thrown into this agreement. If you want to have a transcontinental railway, as you say, why not enact so when you have the power?
But there is something more serious. For this charge of $45,000,000 which we are asked to vote to the Canadian Northern Railway Company, what security do we get? I submit with all confidence that the mortgage which we get as security is altogether illusory. Is my language too strong? Let me analyse what it means. Here is what we get as security for the $45,000,000 which we are asked to vote to that company:	First, as the resolution
reads, a grant of the first fixed specific mortgage or charge upon the shares, mentioned in the first part, of the subsidiary companies. We are now told that we are going to get a grant of a mortgage upon the stock and shares of the subsidiary companies; and yet we were told a moment ago that all the stock is wiped out. There is $81,000,000 of stock in these companies, and we are told it is altogether wiped out; therefore what becomes of our mortgage upon that stock? I shall be glad to be told what this means; but for my part I say it is absolutely illusory. Even if there were something left, even if the stock were not wiped out, what value would it have in the market to-day? It is of course impossible to speculate as to that. But I do know that while the stock pledged in this part of the agreement is to-day nominally worth $81,000,000, there is, what is not nominal, an indebtedness of $18,000,000 upon it. That is the true situation.
What do we get next? We get a specific

and floating mortgage or charge on the undertaking of the Canadian Northern and its properties, assets, rents and revenues, and its rights, powers, and franchises, present antd future. That would seem to be a mortgage upon the undertaking, upon the roadbed and upon the revenue, and that is worth a good deal, I admit. But we must not forget that against that same property there is a mortgage to-day of 3312,000,000. Does any one on the other side of the House believe that a mortgage upon the top of that mortgage for $312,000,000 is worth a great deal to Canada? Why, if we undertook to execute our rights under that mortgage we ourselves would simply have to provide for the payment of this $312,000,000. That is the consequence of the mortgage we are taking now, and it is the clearest part of it.
I have been tolfd: Oh, but you yourselves advanced money to this enterprise. So we did, but in every case we took a first mortgage. When we advanced in 1903 a certain amount per mile for the railway from Manitoba to Edmonton, we took a first mortgage upon that part of the road, and that mortgage is secure; it is as good as gold. When in 1908 we gave a further advance for another part of the road, we took also a first mortgage upon that part of the road which was to be created by our bounty, and we took a second mortgage upon this enterprise also. When in 1911 we gave a guarantee of bonds to the extent of $35,000 a mile to the enterprise from Port Arthur to Montreal, we took a first mortgage on that part of the road, and we also took a second mortgage on the whole of the enterprise. I venture to assert that even that second mortgage is perfectly satisfactory, though not so sure as the other one. According to this resolution, we have a general mortgage upon this enterprise, but we have not a similar mortgage upon the properties of the subsidiary companies. Somebody perhaps may say that I am wrong in this-that we have a mortgage for this $45,000,000 upon the properties of the subsidiary companies. I say no. We have a mortgage on the properties of the Canadian Northern Railway Company; we have not a mortgage upon the properties of the twenty-eight subsidiary companies. I assert this without any hesitation.
There is also in clause 11 a very extraordinary provision, namely, that, of this $45,000,000 which we are to raise upon our credit, that portion which goes into any one of these subsidiary enterprises for instance, 232
the Canadian Northern Alberta Railway Company, the Canadian Northern Manitoba Railway Company, the Canadian Northern Saskatchewan Railway Company, or the Canadian Northern Ontario Railway Company-is to be secured, not upon the whole of the enterprise, but upon that particular part of the enterprise. I do not understand the reason of this provision, but it is in the resolution.
We have been told in the preamble to this resolution that the object is to create a transcontinental railway, and that we are making an advance of $45,000,000 for this enterprise. If we are to do so, it seems to me to stand to reason that we should obtain a mortgage on the whole of the enterprise, and not simply on a part of it. We should obtain a guarantee upon the properties, not only of the Canadian Northern, but of the Canadian Northern Pacific, the Canadian Northern Alberta, the Canadian Northern Saskatchewan-of all the twenty-eight subsidiary companies that we are to amalgamate. Instead of having this guarantee upon the properties of these twenty-eight companies, we have a mortgage upon the properties of one of them, and the other twenty-seven will give separate mortgages for the part of the $45,000,000 which goes into their own territory. If this is an amalgamation, if this is the way in which you can have a transcontinental railway, I think it is a novel method. It is a method which is not conducive to the object you have in view. Therefore one of the reasons why I object to this resolution is that although it purports to constitute a transcontinental railway, it does nothing of the kind.
My right hon. friend said, and I altogether agree with him, that we cannot allow this enterprise to fail. We have too much money in it-not only the money of the country, but of the provinces and of the bond-holders themselves. It is therefore necessary that we should assist this enterprise; but the provisions made to carry it tc completion are altogether deficient. If you want to have this enterprise as a transcontinental railway from ocean to ocean, in course of time, at least from the Pacific ocean to the St. Lawrence, why is the method of carying out that project covered with these blemishes? Why did you not bring forward a project which would at once have made all these companies into one, and then deal with the project?
There are other serious considerations in this matter. We have been told that we are to have $40,000,000 of the stock of the



company. What is 'be the total stock of the.company? My right hon. friend has presented a view which is new to me, and which I cannot understand in the face of the resolution. To-day there is against these twenty-eight companies a stock issue of $158,000,000. Of this, $77,000,000 is the stock issue of the Canadian Northern, leaving $81,000,000 as the stock issue of the subsidiary companies. We are told that this stock issue of the subsidiary companies is to be wiped out. I cannot read that in the resolution; but if this stock issue is to be wiped out, which is something to which I would not object, what are you going to do as regards the $18,000,000 for which that stock is pledged? I desire an explanation of that. So far as I understand the matter, however, the stock of the subsidiary companies is to be wiped out, and	the	stock	of	the	CanadianNorthern railway is to be fixed at $100,000,000.	The	stock	of	the	Canadian
Northern to-day is $77,000,000, and it is proposed that it shall be increased by $23,000,000. The reason this is done, as has been explained by my right hon. friend, is to compensate Messrs. Mackenzie and Mann for the relinquishment which they make of the stock of the subsidiary companies. Let us read this section once more, because here is another mystery which I cannot fathom:
The Canadian Northern covenants with the contractors that in consideration of the transfer of the shares of the capital stock mentioned in clause (a) of paragraph 2, hereof, it will by proper corporate action cause to be alloted to the contractors or their nominees fully paid and non-assessable shares of the capital stock of the Canadian Northern of the par valve of twenty-three million dollars being the difference between the present issued share capital of the Canadian Northern and the amount to which its capital is increased by the statute.
This is to compensate Messrs. Mackenzie and Mann for their generosity in relinquishing to the trustee the stock of the subsidiary companies. But, according to the first part of the contract, section 2, Messrs. Mackenzie and Mann have stipulated that the stock of the subsidiary companies shall be transferred to the trustee, for what? Simply for the purpose of giving u mortgage upon it. Then the section goes on to stipulate the absolute ownership of the Canadian Northern shares, as follows:
That the shares mentioned in the first part of the schedule shall be vested in the Canadian Northern, subject only to the charge tliereon created by and to the terms of the new trust deed.

Therefore Messrs. Mackenzie and Mann have given nothing at all, except that they have transferred this stock to the trustee for the purpose of giving a mortgage upon it; but they give nothing more to the trustee than the power to give a mortgage, and they keep the stock in their own hands. That requires more explanation than we have received in the speech of my right hon. friend. Suppose that the stock is to be reduced to $100,000,000-and we shell have more to say as to that later on- Messrs. Mackenzie and Mann receive $23,000,000 of stock, the Canadian Northern receives $77,000,000, and the Canadian Government receives $40,000,000, so that out of the $100,000,000 of stock we receive 40 per cent. Is this a sufficient consideration for the bounty which Mackenzie and Mann are now asking the Government to give them?
I would not care very much to bargain and haggle upon this point, but there is a consideration which is paramount, since the Canadian Northern have asked the assistance of the Government at the present time, after telling the Prime Minister and the Minister of Finance last year that, after the assistance they then received, they would not come to Parliament again. Then, I think we have the right to ask that we should obtain at least a controlling interest in the stock of the Canadian Northern railway. My right hon. friend says that he has covenanted and agreed for the possible contingency that this company may make default. I say that not only should we provide four the contingency of possible default by covenant and agreement, but we should have the majority of the stock so that we could control the company. My right hon. friend says that we are to go into partnership with Messrs. Mackenzie and Mann and the Canadian Northern railway. These are the very words of the Prime Minister. That being so, is it unreasonable to ask that in that partnership we should be the leading and not the junior partner?
Now, what is to-day the financial position of the company we are asked to assist? It is a matter for very serious consideration and one that should make us hesitate before we agree to the resolution before the House. I do not pretend to be a master of figures, but there are matters of ordinary business which even one who is not a master of figures may hope to understand. We have had these figures before ns for two

days, and I have looked carefully into them, and I will state the financial position of the company as I understand it to be. I speak subject to correction, and if my figures are wrong my right hon. friend will tell me.
The statement brought before us shows that to finish the road the sum of $100,379,000 is required. I think that as to that there is no dispute. It is also shown, in the documents before us that the liability of the company to banks is not $14,000,000 as stated in the press but $20,703,865. It is also stated in another official document that the floating liabilities of the company are $10,408,000. These items make a total liability of $131,490,865.
As against this there are securities of the Canadian Northern railway of $58,470,000 including, as stated by my right hon. friend, bonds of the Canadian Northern Pacific, the Canadian Northern and the Canadian Northern Ontario railway. I assume that as these are all guaranteed by the different provinces they are worth par. But what of the bonds of the Canadian Northern Terminal Company? There is no statement as to these that they are guaranteed by anybody. It may be that they are cash in the hands of trustees. If so, they must be counted ait par. The proceeds of these are given at $5,959,000. Then there are the rolling stock 41 per cent equipment bonds of $16,000,000. These, so far as I know, are not guaranteed by anybody, and so I do not know that they are worth what is stated here. As to these items there may be some difference of opinion as to their value, but I assume for the present that they are worth one hundred cents on the dollar, and so I assume the correctness of the total I have just stated-$58,470,000. Deducting this amount from the liability of $131,490,000, we have a balance of $73,000,000 in round figures. There are other securities pledged to the banks for temporary loans amounting to $24,703,865. These are set down at different figures-the Canadian Northern Ontario at 754, another at 84, another at 80, another at 95, another at 93. We do not know the exact value of these but the figures show them to represent $20,703,865 to be set against the total liability. This leaves $49,000,000 in round numbers of the liability unprovided for so far as the company is concerned.


Arthur Meighen: Will the right hon.
gentleman please let me know where he finds his $20,000,000 owing to the banks?
2321	'	f


Wilfrid Laurier: Here it is-in schedule B. Now, against this unprovided balance of $49,000,000, we have this proposed loan of $45,000,000. How much will it realize? If it realizes $42,000,000 it will be a very satisfactory return. Thus we have a liability of $49,000,000 for which it is proposed to provide $42,000,000, leaving $7,000,000 absolutely unprovided for and for which this same company must come back next session for further aid. I do not think these figures can be disputed; they are the figures of the documents before us. As to the loans from the banks, I know that it was stated in the press at $14,000,000 but the official statement shows it to be upwards of $20,000,000. Now, this is the security we have, and as I said a moment ago, in my humble judgment, this security is absolutely illusory. We take a mortgage on property that is already fully covered, and consequently the security we have is of no value, but binds us, if we wish to collect, to the payment of all the other securities. With regard to the disposition of the moneys which are to be realized upon this $45,000,000, clause 6 of the agreement says:
That the kind of securities to he guaranteed hereunder, and the forms thereof, and the forms and terms of the new trust deed, and the times and manner of the issue of the guaranteed securities, and the disposition of the moneys to be raised thereon by sale, pledge or otherwise, and the forms and manner of guarantee or guarantees shall be such as the Governor in Council approves, and such terms, provisions and conditions as the Governor in Council may consider expedient or necessary shall be included in the new trust deed.
While I have believed and still believe that this provision is absolutely insufficient, in view of the statement of the Prime Minister that the moneys will be left in the hands of trustees, only to be applied as the work progresses, I shall not insist upon my objection. But another objection I have to make to this agreement, one that is, perhaps, of a more serious nature, is with regard to the provisions respecting tolls and interchange of traffic. My hon. friend, seeing the weakness of his position in that respect, stated that he had made provision to place all these companies under the jurisdiction of the Parliament of Canada. So far, so good; all the companies which are coming under this agreement shall remain separate entities, as they are at the present time, and shall, under this resolution, come under the jurisdiction of the Parliament of Canada and of the Railway Commission so far as tolls are concerned. But I am sure that there is an objection with regard to

British Columbia. What does the agreement say in that respect? I call the attention of the House to section 6, clause (b), of the third schedule of the agreement, which is as follows:
That they and each and every of them-
That is, the subsidiary companies.
-will from time to time enter into agreements with the Government for the mutual interchange of traffic between the Canadian Northern and the Constituent Companies or any of them, with the Government railways, and the terms and conditions of every such agreement shall be such as the parties thereto may agree upon or in default of agreement, as may be settled by the Board of Railway Commissioners for Canada (hereinafter called the 'Railway Board'), and the Railway Board shall have power from time to time upon the application of the Governor in Council or of any party to any such agreement to vary, modify or rescind the same, provided always that every agreement respecting the interchange of traffic shall be subject to any agreements now existing with any other company or companies.
This matter was discussed in the House before, and it was pointed out that one of the companies here mentioned, the Canadian Northern Pacific, had an agreement with the Government of British Columbia whereby the control of the tolls was expressly taken away from the Government of Canada and placed under the jurisdiction of the Government of British Columbia. When two years ago the Government succeeded in putting through the House a measure giving a subsidy to that branch of the road, we on this side contended that this road should not be subsidized or assisted because the company was under the control of the province of British Columbia, not only in respect of traffic originating in British Columbia, but in respect of traffic going into that province. The part of the contract with the province of British Columbia to which I allude is as follows:
In consideration of the guarantee of the securities hereunder, the Northern Company covenants that the Pacific Company will agree that the Lieutenant Governor in Council, may from time to time, having due regard in so doing to the position and interests of the Pacific Company, and In the case of traffic destined to or originating in the other provinces of Canada, bearing also in mind the desirability of obtaining reasonable rates from points in the province of British Columbia to points in the other provinces or vice versa, modify any rates established by the Pacific Company for the carriage of freight and passengers to and from all points on the said aided lines within the province of British Columbia, provided always, that before any rates are so modified, the Pacific Company shall be heard and its interests taken into consideration as aforesaid; provided further, that if the Pacific Company shall at nnv time

be dissatisfied with any rates so modified by the Lieutenant Governor in Council, it shall have the right to appeal from the order modifying any such rates, to the Supreme Court ot British Columbia. Any such appeal shall be heard before the chief justice and one of the justices, or before two of the justices of such court (thereafter referred to as the Appellate Tribunal) who, upon any notice of appeal being given, shall be nominated by the Lieutenant Governor in Council to hear and determine such appeal. The Appellate Tribunal, in the event of any such appeal, shall have authority, and it shall be its duty, to inquire into the whole matter, with power to call and examine on oath or otherwise such witness as either party may desire, to examine into, or cause to be examined into, all books, vouchers or accounts of the company, to call in the assistance of such experts, and generally to make such investigations as it may be deemed desirable to enable it to determine the matters involved in such appeal, and thereupon it may either confirm, modify, disallow, or revise such rates so appealed against. Any rates so modified or determined by the order of the Lieutenant Governor in Council, in conformity with the provisions of this section, shall, except as modified on such appeal, be rates which the Pacific Company will he entitled to enforce in respect of the services covered by such rates. The Canadian Northern railway undertakes that it will not and that the Pacific Company will agree that it will not bring or promote any appeal to the Railway Commission of Canada from any order made under and pursuant to the provisions of this section, and in the event of any such appeal being brought by others, that the Northern Company and the Pacific Company, will represent to the commission on such appeal, that it is satisfied with the rates the subject of such appeal, in so far as they are or have been established within the provisions of this section.
This agreement is standing to-day. It is very true that if this resolution passes into law the Railway Commission shall have jurisdiction over the rates in British Columbia, but subject to the provisions of the agreements. Why is this ?


Arthur Meighen: Under what clause ?


Wilfrid Laurier: Under this clause:
That they and each and every of them will from time to time enter into agreements with the Government for the mutual interchange of traffic between the Canadian Northern and the constituent companies or any of them, with the Government railways, and the terms and conditions of every such agreement shall he such as the parties thereto may agree upon or in default of agreement, as may be settled by the Board of Railway Commissioners for Canada (hereinafter called the ' Railway Board '), and the Railway Board shall have power from time to time upon the application of the Governor in Council or of any party to any such agreement to vary, modify or rescind the same provided always that every agreement respecting the interchange of traffic shall be subject to any agreements now existing with any other company or companies.


Arthur Meighen: Will the right hon. gentleman tell me what that clause has to do with the control of rates ?


Wilfrid Laurier: It has this to do with it: Each one of these companies is preserving its identity; therefore under this resolution they can arrange their rates as independent companies for the interchange of traffic. Each of these companies has its own rights, and these rights cannot be interfered with except by agreement; therefore every arrangement regarding interchange of traffic made between them must be subject to the existing agreement between the province of British Columbia and the Canadian Northern Pacific. Does my hon. friend pretend to say that if the legislation based upon this resolution becomes law I cannot send a car of freight from Montreal to British Columbia without its being liable to be detained at the British Columbia boundary line and being made subject to additional tolls by the' Canadian Northern Pacific Railway Company? If we had only one company, then the question of interchange of traffic would not arise, but, as it stated specifically here, we have all these companies, each preserving its own identity, and the Canadian Northern Pacific Company has the right to make its own tariff under its agreement, and that agreement is preserved and not subject to the supervision of the Railway Board. If that is not the effect of this contract, there is time yet to change it. Does my right hon. friend intend to alter this disposition ?


Robert Laird Borden: Would my hon. friend
answer me a question in order that I may understand his contention. Does he contend that a provincial railroad can enter into such a contract as to oust the jurisdiction of the Parliament of Canada and of the Board of Railway Commissioners in case the road afterwards is declared to be for the general advantage of Canada?


Wilfrid Laurier: No, sir, I do
not contend anything of the kind.


Robert Laird Borden: That is the whole question.


Wilfrid Laurier: But 1 contend that when the Parliament of Canada, at the instigation of my right hon. friend, says that the Railway Commission shall have jurisdiction, but subject only to an existing agreement, my right hon. friend has ousted the jurisdiction of the Railway Commission. I contend, on the contrary, that the Railway Commission has full jurisdiction, because my right hon. friend very wisely
provided that the Canadian Northern Pacific railway shall come under the jurisdiction of Canada, by being declared a work for the general advantage of Canada. But whilst my right hon. friend has claimed that we have jurisdiction over that railway through the Railway Commission, at the same time the agreement says: 'Subject, however, to the .agreement which has been made by the Canadian Northern Pacific Railway Company.5 Sir, this company never should have received a dollar of subsidy from this Gov-[DOT]ernment. We took that position two years ago; but the Prime Minister had the weakness to agree to a stipulation that would not permit even an appeal to be taken to the Railway Commission of Canada. To-day, whilst we give this bounty to this enterprise, and claim jurisdiction for the Railway Commission over the railway, we are very careful to say to the commission that we will exercise that jurisdiction only subject to the agreement which exists in reference to the Canadian Northern Pacific Company.
These are some of the objections which I have to urge. I said at the beginning that I had not the intention of going deeply into the subject; but I said that I would not fail to show the salient objections that we had to this agreement. Let me recapitulate. The first objection we have to this agreement is that although it purports to be a unification of the Canadian Northern system, it is no such unification-that the twenty-eight companies are still in existence, and will continue as they are to-day. The next point is that the guarantees that w7e have are absolutely illusory, that the mortgage which we receive is absolutely insufficient.
I said a moment ago, and I repeat, that this enterprise must go on. It has been conceived for the benefit of the Canadian people. We require this railway. My right hon. friend said he would not let it go into liquidation. It must not go into liquidation, but we should have the control of it. Since we must go into partnership with the Canadian Northern railway, let us see that we are the master, not the servant. Let the agreement be modified; let the resolutions be modified. But, sir, as they stand at the present time, they are not conceived for the benefit of the Canadian people; they are conceived altogether for the benefit of the firm of Mackenzie and Mann and of the Canadian Northern Railway Company. Sir, we have no objection to helping them. We have helped them in the past. 1 for my part have been an admirer of their energy and enterprise. I have not much in common with them; I cannot claim them as friends;

but I admire energy, enterprise and pluck wherever it is found. At the same time, there is this consideration to be borne in mind by the Prime Minister, that there are interests which are transcendent, and the primary of those transcendent interests is that of the country. I have to repeat that the interest of the country is not served by the present resolutions, and as they stand it will become the duty of the Opposition to oppose them from first to last.
At six o'clock, the House took recess.
The House resumed at eight o'clock.


Arthur Meighen: Mr. Speaker, it is one of many interesting features of the character of the right hon. the leader of the Opposition that one is never able to predicate with any certainty the position he will assume, and assume for his party, on any public question. Very little assistance can be gained by a review of his past attitude on similar questions, and usually very little assistance can be gained by a study of the afdvance notices offered by his followers in particular instances. In the case at present under review, we find that even the Toronto Globe is a very unsafe guide in prophesying the position of the Liberal leader. We had been led to expect by the thunder and fire we have heard and seen from the city of Toronto in the last two weeks-yes, in the last two months and a half-that the Liberal party was ready to set its face unalterably against any assistance to Mackenzie and Mann; that it was going to stand between the people of Canada and the dissipating of their resources. We have heard it said that the Government of the day had sold out the people of this country, and that there was to be no sham fight. Even before the proposals of the Government were known, the position of the Liberal party in this country, in antagonism to those proposals, was flourished throughout the world by a section of the Liberal press. However, when the day of battle comes, we find the Liberal leader not setting his face against assistance to the Canadian Northern, but taking exception to certain details of the Government's proposals, and admitting, after he takes all his exceptions, that he does not understand the proposals at all. I am disposed to agree with the Liberal leader in that latter statement. I am also disposed to congratulate him on having shown himself on this occasion the leader of his party, and that he has not allowed the

petulant malice of a Toronto editor to stampede and dragoon him into a wild and unreasoning opposition.
I said that the Liberal leader had admitted that he did not understand the resolutions now before the House. At the same time-as he finished his speech, and indeed at various times throughout his remarks-he emphasized that he was unalterably opposed to these resolutions, and that he was going to oppose them from beginning to end. If I might offer a word ' of advice it would be this: that the attitude of a party, as of an individual, toward any proposal had better be reserved until that party or individual thoroughly understands what the proposal is. I am free to admit that the resolutions before the House are not of the simplest imaginable character. The situation that presented itself for solution was not a simple situation; it was an exceedingly complicated and difficult situation, and it was found that the interests of the country coulid only be preserved by an arrangement that necessarily involved very many and very difficult intricacies. However, I believe-and I am more firmly convinced after listening to the right hon. leader of the Opposition-that the Government's proposals have in the end been reduced to as simple, compact, and thoroughgoing a form as it was possible to reduce them to.
The right hon. gentleman opened his speech with the statement that the alternative that presented itself to the Government of allowing the road to go into liquidation was an unthinkable alternative. Consequently, I need not address myself to a consideration of that alternative at all. The alternative, if it presented itself at all, of permitting the road to go into liquidation was unthinkable. The time for contemplation of that point has gone by. Likewise the hour for considering whether or not we shall go ahead with a third transcontinental system in this country has also gone by. That question is now properly eliminated from discussion. The seal of this country was put upon the third transcontinental system, indelibly and irrevocably, in 1911 by the late Liberal Government. The sanction of Canada was given by the Government headed by the present leader of the Opposition when he guaranteed the bonds of the great connecting link between Montreal and Port Arthur to the extent of $35,000,000. Whatever may be the merits of the question as to whether a third transcontinental system was necessary in Canada, those merits cannot now logically be taken under

36a3
review at all. The hour for discussion has gone by, and once the seal and endorsement of this country was affixed to those thirty-five millions of bonds for the connecting link, we were committed, and committed irrevocably, to the third transcontinental system. It may, however, be worth while to reflect at the present time that when that responsibility was assumed by the Government of the day in May, 1911, the question was brought before that Government in words of warning and in words of weight by the present Prime Minister as to whether or not the Government had assured themselves on sufficient information and data that it was advisable to encourage by the sanction of this country the completion of a third transcontinental system; I would respectfully refer hon. gentlemen on both sides of the House to the words of the leader of the Opposition of that day, the present Prime Minister, when he warned the Government that a very serious responsibility was being lightly undertaken-that even then the traffic over the one transcontinental was not sufficient to occupy more than about one-fifth of its capacity, and when he declared that it might well be that we were taking a false step in affixing the seal and endorsement of this country to that great issue of bonds. However, the time for meditation and reflection on that phase of the question has gone by. The country is committed to it whether it be a success or a failure, and we are bound in justice to its bond-holders, but far more so in justice to the people of this country, to see that transcontinental railway to completion. It is only just to say that in the conflict that may take place between the three rivals for the transcontinental traffic of this country, there are very important advantages that will accrue to the Canadian Northern in the contest; and there is every reason now to say that in the struggle that will ensue the Canadian Northern railway will not be the unfittest to survive. Many and great are its advantages over the Canadian Pacific railway itself, in some respects,, and more and greater still are its advantages over the Transcontinental railway as constructed by the late Government.
What, then, is the position of the Liberal party at the present time? The leader of the Opposition says:	We are committed to
it; failure or collapse is an unspeakable alternative. But, he says: I do not favour the present proposal, because the company does not come to us admitting that it is unable to pay its debts and that failure or collapse is the alternative if we do not
come to its assistance. Why, he says: there are some ten and a half million dollars of floating liabilities and the men who own the stock of the Canadian Northern come forward and agree in the terms of this Bill to themselves provide for the excess of these floating liabilities over the normal figure without recourse to the current securities, and that, he interprets as an admission that the company are not in extremis at all, but are quite able to take care of their own liabilities at the present time.
A word in the first place as to the general principle there laid down by the leader of the Opposition, and then I will have a word to say as to the premises on which he bases it. ' If ' he says, ' it appears to me that this company cannot get along without assistance I would do again as I did in 1911 and I would loan them the money to see them through.' In other words, if it appears to the leader of the Opposition that the Canadian Northern Railway Company were not at the present time able to carry on their enterprises without assistance, he would lend them the money out of the treasury of the country and he would take no compensation in return. On what security would he lend them the money? He says, our present security is illusory. Can he name anything possessed by the Canadian Northern or by the other companies that we do not take security on? Then, if it appeared to the leader of the Opposition that this company were in extremis and bound to ask for aid or default, he would lend the money, give them $45,000,000 on the same security we have taken or on less security, and he would undertake that liability and perform that service and take back not one dollar's worth of compensation from the company. There stands the Liberal party.
If I can convince the leader of the Opposition that the company does require this money and cannot succeed without it, then doubtless we will have the support of the Liberal party in this House and we will have the emphatic support of the leader of the Opposition, especially when he reflects that we are not guaranteeing the bonds for nothing but that we are getting two-fifths stock in the enterprise as a compensation therefor. The floating liability it is true, in so far as it exceeds at the present time the normal figure, must be taken care of aside from the guaranteed securities and their proceeds, within one year. It must be reduced to the normal figure within that time and in the meantime they must be pro-
36cl

tected against action. But what does that mean? It means that Mackenzie, Mann and Company, Limited, the contractors, under subsection (b) of section 4 of the Bill, are bound themselves to see to it that the floating or current liability of the Canadian Northern is reduced within one year to three million dollars, or to such normal amount as the Government may decide to be correct, and that that must be done without recourse to the proceeds of the guaranteed security.
It will be asked, if they are able to do that, then what other liability is it they are not able to take care of? As the hon. gentleman knows, at the present time there stands on the construction account of the Canadian Northern a further liability, owing at the date of the audit, amounting to $21,262,000, entirely aside from the current indebtedness. This $21,262,000 has already been spent on construction, and is planted in the road to-day, and the Canadian Northern Railway Company owes that indebtedness to the men who did their work and supplied the material, and that indebtedness they are not in a position to meet. Why, says the leader of the Opposition, the temporary loans are taken care of. Very true. Twenty million dollars of temporary loans are protected at the present time by isome twenty-four million dollars of securities, and it is provided by the Bill that satisfactory covenants must be given that these securities, and these alone, will be resorted to - in order to satisfy the loans they have advanced. That takes care of temporary loans and floating liabilities, which must be taken care of, but what about the $21,262,000 that is owing on 'construction account? Would the right hon. gentleman tell me now how he would have that provided for by the Canadian Northern Railway Cbmpany? We have thrown everything on the table; he has access to every one of their assets, and to all their available securities, and he cannot point where the Canadian Northern Railway Company can go and discharge that liability of $21,262,000. The financial stringency that has overrun the world, as well as the increased cost of construction, has brought about such conditions that the Canadian Northern Railway Company at the present time faces a situation that it is not able to surmount without the assistance of this Government.
While I am at that point, it may be asked: How are Mackenzie, Mann and 
Company, Limited, going to reduce this sum of floating indebtedness to-the normal figure? My information, and the result of the investigation is this: that the Canadian Northern Railway Company has been under the necessity of providing out of its current revenues large sums in payment of instalments due on what is called 'equipment trust', and as	a consequence
the regular current indebtedness of the Canadian	Northern has
swollen away beyond the normal figure. The payments on equipment trust are payments made on the purchase of equipment. These payments are logically and correctly chargeable to capital, but the company was under the necessity of meeting them when they fell due and they met them out of current revenue. When that necessity is removed, as it will be removed by the present financial arrangement, then the company will be in a position to declare that they are quite capable of taking care of this excess of floating indebtedness over the normal figure, and to reduce it within a reasonable time to the normal figure.
As to temporary loans, very little need be said. It will be clear to all that with the rehabilitation of their credit that naturally results from the present arrangement, the securities that are pledged against these current loans will be amply sufficient and much more in all probability to take care of all liability thereon.
But the fact remains that the system at present stands in a position where it cannot, in the nature of things, be made a paying investment, be made to turn the way of success and away from the road to failure, unless funds are provided to take care of the completion of that road. What does it consist of: The Canadian Northern Pacific, the western lines between Port Arthur and the coast; a portion of the Canadian Northern Ontario uncompleted between Montreal and Port Arthur; other portions uncompleted in the province of Quebec; other large portions uncompleted in British Columbia which ought to, when completed, bring the road into contact with our western harbours. So long as it remains in the present condition it will not appeal to any business man that the road could possibly be a success as a road, but must proceed on the down grade and not on the highway to success. Consequently the road is in danger of failure at the present time. The situation is such that, through no fault of its own, so far as we are aware, the Canadian Northern

Railway Company is brought face to face with a situation where an arm stronger than its own must be extended, and where the assistance of the Government must come to it, or the Canadian Northern railway cannot be anything but a failure. That being the case, the right hon. the leader of the Opposition is bound to reverse his party position and come to the assistance of the Government and help to put through these resolutions which provide for the guarantee, that he -would give for nothing, being given in return for a two-fifths proprietorship of the road.
A further objection taken by the leader of the Opposition is that we have not reduced the capitalization. After all, he says, we have only pretended to reduce the capitalization. That is what I understand to be the point he makes. Under the plan that the leader of the Opposition would follow, he would not make even a pretence. If he" believed that the road needed the money and had to have it, he would lend it just as he did in 1911, and he would not even go through the formality of reducing the capitalization at all. But we have reduced the capitalization; and I think I shall be able to convince him on this point, that he was quite correct when he made the statement that he did not understand the resolutions. What do the resolutions say? They say that, before any guarantee is given, all these allied companies must have their various stocks passed to the trustee as security, the beneficial interest subject to that mortgage being in the Canadian Northern road; that is to say, the Canadian Northern road must be'come the absolute owners, subject to this mortgage which protects the Government, of all the stock of the eighteen companies at present owned by Mackenzie and Mann. There are eleven other companies at present owned by the Canadian Northern itself, their stocks and bonds being already pledged to secure the perpetual debentures issue of 1903; but 18 companies have almost their total stock issue clear in the name of Mackenzie and Mann, Limited. These companies have to put their stock in the Canadian Northern, impressing it first with a charge for the protection of this guarantee. My right hon. friend says: You put those stocks in, you put $25,000,000 of the stock of the Canadian Northern Ontario; you put in twenty-five millions dollars of the stock of the Canadian Northern Padific; you put the stock of the Central Ontario; you put the stock of the Canadian Northern Quebec; you put the stock, six millions dollars or
almost that, of the Quebec and lake St. John and after you have put them all into the Canadian Northern, those stocks still exist. It is quite true that they do exist. No one says that these stocks are burned or wiped out. They exist, but none the less the capitalization is reduced to the capital of the company that owns these stocks and all the assets of these companies.


Wilfrid Laurier: Oh, oh.


Arthur Meighen: The right hon. gentleman laughs. What is the purpose of a reduction of capitalization? How is the public interested in that reduction? Because, if a public utility is over capitalized and the stock gets into the hands of the public, that is a lever in the hands of the public giving them a right to a revenue on that stock and consequently a lever for the upkeep of freight rates; but if you take that stock and keep it out of the hands of the public, put it where it never can possibly get into the hands of the public, and make it owned by the Canadian Northern railway, whose capitalization is reduced to $100,000,000, how possibly can you have any further evil result from overcapitalization? You have idone everything that possibly can be done to prevent every ill that ever comes from over-capitalization. The companies still exist in any case; but the stock belongs to the Canadian Northern railway; all the profits of those companies go to the Canadian Northern railway, and the Canadian Northern railway is capitalized at $100,000,000 and no more. Consequently $100,000,000 and no more is the stock which has any right to earn dividends. That must be clear to my right hon. friend, and I feel quite certain that he understands it just as well as I do. The capitalization, in so far as it is a lever or can be used as an argument to affect freight rates or to affect the public in any way whatever, is reduced to $100,000,000. And we are the guardians of the public and of no one else.
Then my right hon. friend says: Why, that only applies anyway to the eighteen companies that Mackenzie and Mann own clear. They own the stock of those companies clear, each company of course being subject to its bonded indebtedness. But, he says, there are some other properties of which they do not own the stock, and the stock of which is already pledged. That is true. We get a first mortgage on the stocks that come into the Canadian Northern, in so far as they come in clear. In so far as the eighteen companies are con-

possibly be a success as a road, but must Mann, Limited, our mortgage comes upon the stock of these companies direct, a mortgage physically fixed on the stock of these eighteen companies. That is one constituent of the mortgage premises. That constitutes a real mortgage and forms the first constituent of the mortgage premises.
What comes next? The equity of the Canadian Northern railway in the eleven companies, the bonds and stock both, are already brought under the trust deed of 1903. In 1903, the bonds of the Canadian Northern Express Company, $3,000,000, the bonds of the Winnipeg Land Company and the stock of both companies, the bonds and stock of the Lake Superior Terminals, the bonds and stock of the Canadian Northern System Terminals, owning their terminals from shore to shore, all became at the time the bonds of the Canadian Northern, and were put in along with the Canadian Northern assets as security for the 4 per cent perpetual bond issue of 1903. Consequently the Canadian Northern own all these companies, both the bonded indebtedness and the stock issues, sulbject only to the charge created by that trust deed or mortgage of 1903. They hold the equity of redemption therein, and a laTge equity it is. We have taken care, in these resolutions and in the Bill which will follow it, to take that equity and place it as constituent No. 2 under the mortgage which we take to secure this guarantee. Was it not worth while taking it? In that way we take everything these companies have and, we place it under our mortgage as our security against our guarantee. Who is there who can suggest anything more that we can do? Would the hon. gentleman have us legislate the bonds out of existence in order that we could get a first charge? Would he legislate the priority out of existence for the benefit of the people of this country? Would he have confiscatory legislation? We have done everything we can to get the mortgage right down on all the assets left of all the companies that are there. Those assets are tremendous assets.
Furthermore, we take a physical mortgage on the Canadian Northern properties themselves. The Canadian Northern railway, operating the main line and all the 'branches between Port Arthur and Edmonton, about 5,350 miles, is able to give a mortgage on those assets alone. It cannot give a .mortgage on the assets of other companies; it

can give a mortgage on them only to the extent and in the form in which those assets come to it. But on its own physical road between Port Arthur, and Edmonton, the Canadian Northern gives a mortgage direct to the trustee for the protection of the guarantee of this country. Now, the hon. gentleman says:	Oh, this mortgage
is entirely illusory mortgage, because he says, there is indebtedness ahead of it. And in that he has the wonderful consolation of having the imprimatur of the hon. member for Carleton, N.B. (Mr. Carvell), who says ' hear, hear ' to the statement that ' the mortgage is entirely illusory.' Let me draw his attention to a number of these securities-and I know he is listening, though he affects not to be. The Canadian Northern railway itself has a road between Port Arthur and Edmonton which, with branches represents about 5,350 miles of railway. It owns its terminals and various other assets there; it owns its lands. Now, that road is already mortgaged, it is true; it has several bond issues against it. But it is the most valuable portion of the whole Canadian Northern system that is to be; it is the portion that has been paying and paying well, it is the portion that serves, if not the best, almost the best parts of the whole northwest country.
That is the portion which above all things must be preserved; it is the valuable asset of the Canadian Northern railway. Now, as I have said, that road is bonded already. But I ask the right hon. gentleman if he would not, dollar for dollar and mile for mile, rather have a mortgage on that road than on the Canadian Northern Ontario running through a wilderness which has no local traffic, or very little? I ask the right hon. gentleman again, which is the better security-the Canadian Northern Ontario running through a wilderness, a connecting link, or the western line of the Canadian Northern Railway system? I know that he would chouse the western road. Now, I tell him if he took all the securities which this 5,350 miles of railway are liable for and added to them this $45,000,000 he would still have the road charged at about the same figure per mile that he charged, to secure this country, on the Canadian Northern Ontario. He took a mortgage, to secure the guarantee of the people of Canada on the Canadian Northern Ontario, at the rate of $35,000 per mile-he took a first mortgage, it is true, on most of it, or in effect a first mortgage. And if he adds the whole $45,000,000 to the present indebtedness of the

Canadian Northern Railway western line, he would only reach the charge of practically $35,000 a mile. So, if one security is ' illusory '-even assuming that we have nothing else than the physical road of the Canadian Northern railway on the western plains-what is to be said of the security he took in 1911?-and got no compensation. But further, does the right hon. gentleman realize what security he did get in 1911? He just took a mortgage on the rails, the right of way, and, I suppose, the stations. He did not provide for a mortgage on the floating assets and current revenues of the company. But we have provided for it in this case, for if the company goes into liquidation our mortgage takes effect on everything it is fastened to now, and immediately fastens itself on the floating assets of the company and all its cash, revenues, etc. What does the hon. member for South Renfrew (Mr. Graham) think of his Government that brought down a Bill to this Parliament to guarantee the bonds of the Canadian Northern Ontario for $35,000,000 and did not take a dollar of compensation for this country or a dollar's worth of stock, and only took security on the rails, the right of way and the stations-on the mere road itself-did not even have the terminals? So, if we took over the road all we should have would be a bare railway, without a terminal, without a connection, without a traffic arrangement, without anything else.
But we do not stop there. We have already three constituent elements in our security. We have the stocks of eighteen companies- the stocks clear of incumbrance-we have the stocks and bonds of eleven more companies subject to the mortgage of 1903, and we have a mortgage on the Canadian Northern Railway western lines subject to the mortgages on the physical lines and properties themselves. But we have more than that, we have a mortgage on the whole town-site properties of Mackenzie, Mann, Limited. That is a portion of the resolution which the right hon. gentleman may have understood, but I notice that he said nothing about it. What does it mean? The Canadian Northern Railway Company are not the owners of these townsites, they made no investment in these townsites; the moneys were all laid out by Mackenzie, Mann and Company, Limited. Lands were sold them by this Government, paid for by Mackenzie, Mann and Company, Limited, and they purchased lands at various points as well. The expenditures have been made by them and by them alone, and'these lands belong to them, they are legally their
possession, just as the land of any owner is his possession. There is a charge against these townsites in this way:	The lands
which the right hon. Prime Minister referred to, some 4,100,000 acres, belonged to Mackenzie, Mann and Company, Limited as their property. These lands, with the exception of 100,000 acres, were turned over to the Canadian Northern railway. But before they were turned over, or about that time, bond issues were made against these lands, I think to the extent of $7,000,000. These lands are worth to-day somewhere in the neighbourhood of $30,000,-000-the lands and the moneys that have been received from the sales of lands and the agreements outstanding. And the company desired to make a loan, a bond issue, on the lands of $17,000,000 more, were asked to and did put in their townsites as additional security. Consequently, the position was this: Their lands worth about $30,000,000 and their townsites, whatever they were worth, were in as security for bonds issues aggregating about $24,000,000. Now, the lands belong outright to the Canadian Northern railway, and there is an appreciable, yes, a very material surplus, over the whole bond issue in these lands alone. So, if the lands alone were used to discharge the whole $24,000,000 of bond issues it would leave the townsites entirely clear and a few millions of dollars of surplus besides. We have these lands as part of the assets mortgaged direct, and we have the town properties mortgaged as a fourth constituent of our security. It is impossible to say what these townsites are worth. They belong to a company known as Town Properties Limited, which has made an issue of $10,000,000 of bonds, and $10,000,000 of stock. At all events, at a very conservative estimate, these townsites are worth in the neighbourhood of $11,000,000 or $12,000,000. iSo, there is a fourth constituent of the mortgage premises taken as security for the people of Canada against the guarantee.
But we do not stop even there. We conceived that perhaps our security might be improved, and we set about to improve it in this way: In connection with any of the subsidiary or constituent companies or allied companies the stocks and bonds of which were held and are pledged as our security, it was possible that these companies might make further issues, and that consequently the value of our securities would contract, and in that way the security of the people of Canada wouild be diminished. As a result of that, and for a further reason

as well, we took the precaution of compelling each of these allied companies, before it gets one dollar of the proceeds of this $45,000,000 issue, to give a mortgage to the trustees as our security to the extent of all the money that it would receive. Each of the allied companies is bound to give, before it gets a dollar of this money, a mortgage on the physical assets of its own railway and its own property for the whole amount of whatever money it shall receive out of that $45,000,000. In that way it will be impossible for any one of these companies, by a further issue of bonds, or by any other method, to impair the security which this country holds for the money which that company shall get. Oh, the right hon. gentleman says, you should have every road mortgaged. Does he mean that we should mortgage a road or a company that does not get any of the money? If a company does not get any of the money, upon what ground should wTe ask it to give a mortgage? If any of these companies gets the money-and among them they will get all of it, except about $15,000,000, according to the present proposal-then we get a mortgage on its assets-we have already a mortgage on its stock-before it gets a dollar's worth of money, covering every possible dollar they may get of this $45,000,000. What further security would the right hon. gentleman have? Is there any other security in the whole system which the Government could get? We get the stocks and bonds, of the allied companies and every time one of them gets a dollar of the money we get down on the rails and assets of that company for another part of our security. We have everything we could have for the protection of the country.
But we do not stop even there. The Brock-ville and Westport railway, was 'bought for the Canadian Northern at a court sale and we have insisted that that road be conveyed to the trustees and become a part of our security. In so far as the Brock-ville and Westport railway is concerned, our mortgage becomes a first charge on the road. There are, I think, six separate constituent classes of securities covered by one mortgage to protect the people of this country. If we eliminate five of them, and thereby eliminate a value aggregating the whole amount of our liability, we will still have left the Canadian Northern itself and if the whole of our liability were piled upon the present liabilities of that road our security would be better than that the right hon. gentleman took in 1911, mile for mile,
[Mr. Meighen.1
for the $35,000,000 guarantee given to the Canadian Northern Ontario railway.
The right hon. gentleman says:	Why
preserve the identities of these companies? I have addresed myself so far to showing that aside from any special reason for preserving the identities of the companies, this country is not concerned in their amalgamation, because we have succeeded in securing all we can secure as part of the mortgaged premises, even if these companies were amalgamated. We have left nothing out that we could get or to which we would rightfully be entitled, even were the companies amalgamated; so that, in so far as security is concerned, no object can be served by amalgamation. Even though that be the case, I think there are sound reasons why amalgamation should not toe insisted upon. Amalgamation would mean that each of the companies, instead of turning its stock into the Canadian Northern, subject to the charge for our security, would pass its physical assets into the Canadian Northern subject to such indebtedness as might be against it. That would be the effect of amalgamation as distinguished from the present arrangement. What are the objections to amalgamation? The right hon. gentleman seems to think there are none at all. He says:	You provide for
amalgamation in this resolution. It is true that there is in the resolutiou a clause which says that amalgamation may take place under the provisions of the Railway Act, and it is the purpose of the Canadian Northern railway, under the new organization, to facilitate amalgamation as much as possible and as rapidly as the objections and obstacles to amalgamation are swept out of the way. What are the objections and obstacles that at the present time exist? In the first place, under the present system, if any individual outlying line proves an incumbrance rather than a benefit to the system, we are in a position to let it go; we are in a position to s>ay: We will not have this barnacle on the Canadian Northern system, a liability rather than an asset.


Mr. MICHAEL CLARK:: Would that not be rather hard on the districts in the West which you want to serve?


Arthur Meighen: There is no danger of that in the West.


Michael Clark: What about the East?


Arthur Meighen: I do not know; I hope there is no danger there. But if, in the

progress of events, any such a thing should happen, we have the power to let the mouldering branch drop off. If we permitted amalgamation and such an event took place, the liabilities of the line in question would be loaded upon the Canadian Northern itself. What would the right hon. gentleman do in such a case? Suppose that he found that a certain line, a part of the system, is not a paying line; that it is a liability and a drag on the system, pulling it back rather than helping it forward; what would he do to get rid of it? He could not sell it; it is loaded down with $350,000,000, the debt of the whole system. He could not sell it unless he were to take a jaunt through Europe and circularize several thousand bond * holders to get a partial discharge. There would be no. way of getting rid of it; he would be tied to it, no matter whether it [DOT] were valuable or detrimental. So there is one objection to amalgamation. But there are others. It has been found, not only by the Canadian Northern system, but by practically every system, that very many of the accessories which are essential to the success of a railway system are handled to much better advantage in individual companies. I venture to say that not a railway system in the world has amalgamated within it as part of one company all the assets of as many individual companies .as come into this system under the present arrangement. Would the right hon. gentleman advise that the land companies amalgamate and convey their lands to the Canadian Northern? Here the Railway Act itself would come in, because only for certain purposes can a railway own land. There would be objection to any such amalgamation. Would he advise that the telegraph company, express company and the Montreal Tunnel and Terminal Company convey their assets to the Canadian Northern Railway Company? What was the idea oif the forming of the Mount Royal Tunnel and Terminal Company? It was because the markets of England demanded that the money to be raised for the purpose of these terminals should be raised by this method? It is a notorious fact that if you can simplify into one unit certain of the accessories of a railway and base your securities on .specific, well-defined and easily-understood contracts which that company possesses, you can sell the bonds of the company to better advantage. For reasons such as these tne Mount Royal Tunnel and Terminal Company
was formed, and those advantages you sweep away and rid yourself of if you insist on amalgamation. The same is true right through the system. Indeed, there are objections and legal objections to amalgamation which at the present time could not in honour be gotten over. The right hon. gentleman knows, because he himself, .a few days ago, asked that there be laid on the table a list of companies in which Mackenzie and Mann, Limited, did not own all of the stock. That list was laid on the table, some four companies in all, the Quebec and Lake St. John, the Duluth and Winnipeg Company, the Canadian Northern Quebec and another railway whose name at the present time I do not recall. We know that the majority of the stock of these four companies is owned by Mackenzie and Mann or the Canadian Northern railway, but there are portions of the stock, in the main of very small portions but very considerable in the case of the Duluth and Lake Superior and rather considerable in the case of the Canadian Northern Railway Quebec, which are outlying in the hands 'of the public. Will the right hon. gentleman tell me how he would effect an amalgamation in the case of these companies, portions of whose stock are outlying in the hands of the public? He knows that the Railway Act provides for the protection of minority stockholders and he knows that we could not, without doing injustice and depriving the minority stockholders of their rights, insist on having their stock in this case.


Wilfrid Laurier: Hear, hear.


Arthur Meighen: That is quite correct,
so that his whole scheme of amalgamation-


Wilfrid Laurier: All the stock of this company is conveyed to Mackenzie and Mann in this agreement.


Arthur Meighen: Oh, no, how could we
make an agreement with Mackenzie and Mann to compel the public to convey stock to them? All the stock of Mackenzie and Mann is conveyed to the trustees for the protection of the Government.


Wilfrid Laurier: The stock of
other parties, too, according to' your agreement.


Arthur Meighen: If the right hon. gentleman can show me that I will agree to an amendment. Will he just read it, where we provide that all the stock, even if it is owned outside, must be conveyed to the trustees? That would be confiscation pure and simple,

and it does not exist in the resolution. The stock that is to he conveyed is set out in each case in the schedule with the amount opposite the name of the company. That is the stock that is being conveyed, that is the stock that is owned by Mackenzie, Mann and Company, Limited, where they own stock at all. In the case of the Duluth and Winnipeg, the majority is owned by the Canadian Northern railway itself. Where the other is to be conveyed it is the stock owned by Mackenzie, Mann and Company, Limited, because we have no power, without the most arrogant act of confiscation, to demand that others convey their stock to the Canadian Northern railway. As a matter of fact, in the case of the Quebec and Lake St. John, the others cannot be found. That is the reason why Mackenzie and Mann Company have not got the stock. They have_ been trying to chase them up all over the world but cannot find them. I would ask how, under sections 361 and 362 of the Bailway Act, you are ever going to amalgamate with these outlying stocks. The provisions of the Eailway Act relating to amalgamation are for the protection of the minority stockholders, and we would have no right, in justice, to repeal them, even if we chose to do so. We have power to repeal them, of course, but it would be unjust to do so. They provide for an application of two-thirds of the stockholders to the Eailway Board. The Eailway Board must then publish in the Gazette notice that they will, at the expiration of a month, apply to the Governor in Council for leave to amalgamate, and within that time the stockholders have a right to appear and be heard, and there is no telling what length of time may elapse before it would be possible for the Governor in Council to hear the application. After they are heard they have to be protected. I would ask how you are going to protect them so long as there are outstanding stockholders at all? As the stock outlying in the hands of the public comes in and becomes the property of these men and gets into the system, then amalgamation is quite possible, and it is the purpose and aim of all the allied concerns and of the Canadian Northern railway to effect an amalgamation as soon as it can be effected. So much for the question of amalgamation and so much for the advantage of retaining the identities of the original company. I would ask, as a last word, that I be allowed to impioss on the 
right hon. gentleman that while we have, under this arrangement, retained all the advantages of the individual identities of the company, we have not incurred one single obstacle, we have not injected into the agreement one single weakness or impaired our security one jot, by failing to amalgamate the road. The right hon. gentleman complains that the security is illusory because he says it is subject to $312,000,000. He says: You could not take over the road even if there should be failure, because you would have to pay $312,000,000. Of course we would, or assume it. What would the right hon. gentleman say if he found the Canadian Northern railway on their knees and really believed that they were in extremis and had to have the money? What would he himself take for security because he had promised to lend the money? He could not get the Toad except subject to the indebted-9 p.m. ness, he would have to take the very security which to-day he tells us is an illusory security and no good at all. After he took it he would have the hon. member for Carleton or some of his supporters get up behind him and say: You have got all kinds of security; nothing better than default could happen for the country. For this was something like the language used by the hon. member for South Eenfrew in 1911, when he said that it would be a great advantage to this country if the Canadian Northern Eailway Ontario defaulted and we were obliged to take over this connecting link, without terminals and without any of the accessories of a railway. The right hon. gentleman has a further objection, and this time he is more than usually vigorous in pressing the objection. Why, he said, we are giving $45,000,000 now of our credit. We are loading this country with an indirect liability of $45,000,000 for the Canadian Northern railway, and for the life of me I cannot have the heart to vote for it unless we get a majority of the stock. That is his second last objection. I know that the political necessities in this case were very great. This is a concession which the right hon. gentleman has made to the editor of the Toronto Globe. In the main he was much more moderate, much more sensible, has a more far-seeing eye to the advantage of his party, but he made this little concession that he would follow the dictates of that gentleman to the extent of insisting on a majority of the stock. Here is one of the features of his policy which was impossible for us to predict. I would.

be the last to believe that the right hon. gentleman would say that he would be satisfied with this agreement if it called for sixty instead of forty million dollars of this stock. The right hon. gentleman has made railway bargains himself in days gone by. He made a railway bargain in 1903 and he did not take very much stock at that time. Why, he said, we (this Government) have paid out twenty million dollars in subsidies to this company since this Government came into power. I do not think we have. I figure the subsidies that this Government has undertaken total some $15,000,000, but anyway the difference is not very great. The total subsidies which the Canadian Northern railway and allied companies have received come to about $25,000,000. That is the aggregate of they subsidies. Their bonds have been guaranteed to a very considerable extent besides, I think to the extent of About $131,000,000; and in addition they have raised about $176,000,000 without any credit or assistance at all. That, in a nutshell, is the financial history of the Canadian Northern railway, $25,000,000 odd of subsidies. Does the right hon. gentlemen remember the subsidy that has been paid by this country, under the compulsion of his legislation, to the Grand Trunk Pacific? We will use the word subsidy for that is the word the hon. member for South Renfrew (Mr. Graham) insisted on in the Transcontinental debate. He said the seven years' interest is subsidy, and nothing but subsidy; so we will call it subsidy to-night. What is that" seven years' interest which he pays as subsidy to the Grand Trunk Pacific? One hundred and eighty-one million dollars is the cost of the Transcontinental from Moncton to Winnipeg. On $181,000,000, the company have to pay interest after the seven years elapse; we have to pay it in the meantime and it costs this country four per cent. Now, I ask my hon. friend what is seven years' interest on $181,000,000 at four per cent? About $50,000,000 on that item alone. That is the subsidy the* the leader of the Opposition bound this country to pay to the Grand Trunk Pacific; but he bound the people of this country to pay a lot more than that. He bound them to pay interest for seven years on the mountain section, without recourse-no getting it back at any time-and that liability is between $11,000,000 and $12,000,000, and I think I have stated it too small. Add that to the $50,000,000 and you have $61,000,000 or $62,000,000 of subsidy to the Grand Trunk Pacific to get them to build
a line between Winnipeg and the coast. But more than that, he put an implementing clause in his Bill; he did not get any stock or proprietorship as compensation, but he succeeded in getting an implement ing clause, and as a result of that consideration the country is stuck for $13,000,000 more, $4,900,000 of which we have paid already, and to save paying the rest directly we are buying the bonds ourselves, which cost us, of course, far more than we can sell them for. If we followed the course of letting the bonds be sold and paying the difference-as we are bound to do under the implementing clause-we are out $13,000,000 more. Add that to the $61,000,000 or $62,000,000, and you have $74,000,000 or $75,000,000 of subsidy to the Grand Trunk Pacific. But, unfortunately, we cannot stop there. We have undertaken to give the Grand Trunk Pacific the use of the National Transcontinental railway for 50 years for three per cent, and we have to pay, now, four per cent on our money. We are out. one per cent on that. It may be that, in that time, the rate will come down. Suppose that we assume that three and one-half per cent would be a fair amount. Capitalize that, and it runs the subsidy to the Grand Trunk Pacific up to about $100,000,000. That is the subsidy that hon. gentlemen opposite saw fit to pay in additional to their guarantees to the Grand Trunk Pacific. Why? To secure the building of a line between Winnipeg and the Pacific coast, about 1,750 miles long, the right hon. gentleman has compelled this country to pay $100,000,000 in subsidy to the Grand Trunk Pacific, or, on that basis, about $60,000 a mile. Then, in addition to that, we ibuild the eastern end of the Transcontinental outright, ourselves. We are out m the meantime in capital expenditure, for which, of course, we have the road, about $181,000,000 besides, as the cost of the Transcontinental from Moncton to Winnipeg. Spreading the subsidy over the whole road we have paid in subsidy to the Grand Trunk Pacific about $30,000 a mile for every mile of the road between the Atlantic and the Pacific. In addition to that we are building ourselves over half of the road, and we guarantee to the extent of three-quarters of the amount for all the rest of it. That is the bargain that the right hon. gentleman made for the Transcontinental. One would have thought that he would have insisted then upon some compensation to the country. One would have thought that he would not have been satisfied with being the

very juniorest of junior partners of the Grand Trunk Pacific. He is a partner in that transaction, all right; the country is a partner-a very silent partner, it is true. It is a silent partner except on pay day, but the country is never a partner on receipt day. He took care that all the money went the way of the company, and that all the risk went the way of the country. That was his bargain with them, and not one dollar of stock did the country get. No possible chance-no matter how profitable the road may be-of ever bringing back to the treasury any part of the moneys we pa-id in subsidy, or of ever getting compensation for the immense indirect liability under which the country lies. And the same right hon. gentleman says that for the |.fe of him he cannot see his way to consent to let the Opposition vote for a Bill which only takes $40,000,000 worth of the proprietorship of the Canadian Northern as compensation for a $45,000,000 guarantee. I am glad he recognized that there should be compensation for guarantee: this is his first conversion to that doctrine-that is as far as the country is concerned. He recognized the validity of the doctrine in 1903, so far as individual companies are concerned. The Grand Trunk Railway Company guaranteed the Grand Trunk Pacific, and for its guarantee it got the whole stock of the Grand Trunk Pacific. The country guaranteed three-quarters of the cost of building the whole road, and for its guarantee and for its hundred million dollars of subsidy it never got one dollar. And now the right hon. gentleman says that we are not justified at all in letting Mackenzie, Mann and Company away with a paltry $40,000,000 of stock as compensation for our guarantee. We have a two-fifths proprietorship in the Canadian Northern absolutely, -come what may. If it succeeds, as there is every anticipation it will, then the value of that stock enters the treasury of this country as compensation; and there is every reason to believe that before any great length of time there will be a par value for that stock, and that the Government of the present Prime Minister will have restored to the treasury of this country the $40,000,000 which his (Sir Wilfrid Laurier's) Government squandered on the National Transcontinental railway.


Michael Clark: Will my hon. friend allow me a question ? Which railroad has the most wooden trestles in it ?


Arthur Meighen: I am obliged to the hon. member for Red Deer for mentioning that

point. The Canadian Northern railway is building its railway along sensible lines, and according to business methods. It has used both wooden trestles in the construction and later on steel trestles when they could be put in more cheaply. As a result we are going to have a transcontinental railway that will cost on the outside about $40,000 a mile from coast to coast, instead of $100,000 a mile; and as a result we are going to have a real competing factor in the railway world, instead of a factor the only influence of which in the way of competition is to shove up the rates. But did I say $40,000 a mile for the Canadian Northern as against $100,000 for the Transcontinental ? That does not do half justice to the Canadian Northern. In the Canadian Northern as an aggregate system what do we include ? We include the railway from coast to coast and all its branches; we include the terminals in every city to which it comes; we include the lands, 4,002,000 acres and the proceeds thereof; we include the telegraph and telephones; we include the express companies and the transfer companies; we include the steamship companies operating two steamships across on the Atlantic, and we include a quarter of a million dollars' insurance for another steamship that was burned. We have all these collateral accessories which go to make a railway, and even then the total aggregate capitalization bond issue is only about forty thousand dolllars a mile.
On the other hand, what is the situation as regards the National Transcontinental railway? It has cost this country in outlay $180,000,000 for about 1,800 miles of road, and when you have got your $100,000 a mile capitalization you have not a steamship company in it, you have not a terminal in it-yes, you have a terminal in it-


Wilfrid Laurier: No, you have not.


Arthur Meighen: Then I was doing overjustice to the right hon. gentleman. But I do know that you have not any express company in it; I do know you have not any transfer company in it; I do know you have not any steamship company in it; I do know you have not any telegraph company in it; you have not any 400,000,000 acres of land; you have no townsites; you have nothing in it except your bare road between Winnipeg and Moncton. Such is a comparison between the railway arrangement of the present Government and that of the late Government led by the Right Hon. Sir Wilfrid Laurier.

Then the right hon. gentleman has another distinctive feature in his railway policy. Under the present Bill we have a summary method of taking over the road, a summary method which in effect gives us as security the other sixty per cent of stock. We know we have the ordinary right which any mortgagee has, and the right which any guarantor of a mortgage has, the right by subrogation of getting into the shoes of the lender and in the event of default exercising the rights of a mortgagee and taking possession of the road as a receiver; we know we have that right, but we have the additional summary remedy of proceeding by mere Act of Parliament to take over the road as the property of the people of this country and eliminate once and for all, all other parties interested in that railway. And we have not only so arranged it that the interests of the Canadian Northern and all other persons whatsoever in the Canadian Northern system shall be eliminated, and that in the event of default all shall be the property of the Canadian people, but furthermore, the ten million dollars of stock in the townsite and the ten million dollars 'bonds are put into hotchpotch, although they are the property of Mackenzie and Mann, and although Mackenzie and Mann alone made investment in them, and in the event of our foreclosing and taking over the enterprise we ourselves get the whole benefit of the town-site. That summary method is given us. It is true Parliament has to act. The Government did rot think it wise to in any way tie the hands of Parliament in days to come. We provide though that Parliament in days to come, should there be default, shall have in its own hands the power to put in directors of the road, and we clothe the directors so appointed with full power to sell that road to any corporation established by the Parliament of this country for the purpose of taking over the road. Or, if we choose, we can ourselves, by Act of Parliament, legislate that that road is the property of the people of this country and that the interests of all persons whatsoever outside of the people of Canada are eliminated. The idea of that is that we are at this time making the interested parties and all stockholders parties to this contract, and we say to them: We now and here bind you that should the day of default come you shall not appeal to the Parliament of Canada on the ground of your road being confiscated in any way whatever, but you here and now leave the Parliament of this country free from any such question and untrammelled 233
in every way to deal with the property of the Canadian Northern as it may be advised in the interests of the people of this country. That is the summary procedure outlined here for taking over the road.
How does that differ from the procedure followed by the late Government? Had they any such method? No. They had the ordinary method of subrogation it is true; those ordinary methods come in the common law and they were embodied in their Bill. They have the right to go into possession of the Grand Trunk Pacific as receivers, and when they do so they act as receivers, and if the road pays the Grand Trunk Pacific can come back again and take the road and make the money. But if the road fails it fails, and the people of this country stand the loss and all the results therefrom. That was the method employed by the late Government for taking over roads in respect of which it issued its guarantee bonds. And in 1911 when the present hon. member for South Renfrew (Mr. Graham) introduced his resolution to guarantee the $35,000,000 issue of the Canadian Northern Ontario railway, no summary provisions whatever were embodied in that resolution, and the only rights which this country had were the rights of subrogation. Their only way of getting into the shoes of the bond-holders and exercising these rights was by the appointment of a receiver. As a consequence if that road paid, then the stockholders could come in and demand their money back, the bond-holders being satisfied, but if it failed, on the head of this country was the failure, and all the consequent loss.
During the last few weeks we have been told several times that we were very stingy with our information and very slow in producing it. I do not believe that any legislation has ever been proposed in this House which has been accompanied by data so ample as this Government has supplied in the present instance. There has been no concealment. The right hon. gentleman asked for the names of all contractors, and for the names of all parties that the Canadian Northern owed. If there was throughout the length .and breadth of Canada a man to whom they owed one dollar and fifty cents he wanted to know who that man was; he wanted to know the name of each individual who was a creditor fin this $21,262,000. It was not believed that such information would result in any good whatever, but that on the contrary there would be insuperable objection to dis-

365)4

closing such particulars as that. But what was the procedure in 1911 when the hon. gentleman from South Renfrew (Mr. Graham) was Minister of Railways, and when he asked for a guarantee for the Canadian Northern railway? He came to this House without any data at all; he had made no exploration of the road; he did not know what it would cost; he had the guarantee of the Canadian Northern but he did not know how the 'Canadian, Northern stood. He was asked in' this House what the cost of the Canadian Northern was and his answer was he did not know; he was asked what the 'bond isue of the Canadian Northern was and his answer was he did not know. He had no data on the subject; he had never sent his engineers over the line; he did not know what the road would cost; he had very little idea of it at all; and he had no data or papers to lay on the table of the House. And as a matter of fact he was unable to tell the House where the road was going. He pointed out a few far-distant parts through which it was going to go, but the route of the road as ordinarily laid down he was unable to give to the House.


George Perry Graham: Under these conditions did my horn, friend or any of his friends vote against this guarantee?


Arthur Meighen: On this side of the
House the particulars were called for an'd the data should have been supplied by the then Minister of Railways. Protests were made against the guarantee. Inquiries were made of the Government as to the grounds for it. One protest after another was entered. As far as I can recall, the House was not divided; but there was no excuse whatever for the hon. member for South Renfrew (Mr. Graham), then Minister of Railways, not arming himself and informing the country to the extent it should have been informed before it incurred that liability. We have on the table a whole book of idata which I venture to say not one hon. gentleman opposite has read in full yet; and when $35,000,000 were guaranteed here three years ago, the table of this House was as bare as the board of Lazarus. Then my right hon. friend comes to the traffic clause, and he conceives that he has found the much heralded joker which the Liberal press of this country has been declaring would yet be discovered in the Government proposals in regard to the Canadian Nv'bern. He
fMr. Meighen ",
says the traffic clause is so perilous a thing that it utterly removes the Canadian Northern Pacific from the jurisdiction of the Board of Railway Commissioners as to rates. The Canadian Northern Pacific is at the present time a provincial company; it had its bonds guaranteed by the province of British Columbia, and it entered into an arrangement with the Government of British Columbia by which that Government should control its rates, and it would not apply for or agree to a control of rates by the Government of Canada through the Board of Railway Commissioners. That is all correct; tout the law is the law and the law of this country, as contained in section 6 of the Railway Act-I think I have the section right-is that the moment the assets of the railway company are declared to be for the advantage of Canada, the jurisdiction of the province ceases and the jurisdiction of the Dominion commences. Consequently the effect of this clause is undoubtedly, clearly and emphatically, to establish the jurisdiction of the Railway Commission over the Canadian Northern Pacific as over every other railway line embraced in this system. Oh, well, says my right hon. friend, you have nullified the effect of your absolute clause by this traffic clause contained in the agreement. Now, what is the traffic clause contained in the agreement? Here it is:
The Canadian Northern and the Constituent and subsidiary companies severally agree with the Government as follows:-
(b) That they and each and every of them will from time to time enter into agreements with the Government for the mutual interchange of traffic between the Canadian Northern and the constituent companies or any of them, with the Government railways, and the terms and conditions of every such agreement shall be such as the parties thereto may agree upon or in default of agreement, as may be settled by the Board of Railway Commissioners for Canada (hereinafter called the " Railway Board"), and the Railway Board shall have power from time to time upon the application of the Governor in Council or of any party to any such agreement to vary, modify or rescind the same provided always that every agreement respecting the interchange of traffic shall be subject to any agreements now existing with any other company or companies.
That is to say, that the Canadian Northern itself, owning the stock of all the other companies, or any one of the others, as the Canadian Northern Pacific, will, if called upon at any time, enter into an agreement for the mutual interchange of traffic with a Government railway. The terms they are to agree upon mutually. If they cannot agree, the Board of Railway

Commissioners is empowered to fix the terms, but no terms can be fixed affecting this traffic arrangement between the individual company and the Government railway that nullifies any agreement already entered into. In the first place, if this clause is never acted upon, there is no repeal of the general clause establishing jurisdiction, is there? If we never call upon the Canadian Northern Pacific to make a traffic arrangement with a Government railway, then the clause is never acted upon, and consequently there is no repeal, even if there were a repeal, if it were acted upon. I pause for any objection, if there is any objection to the reasoning so far. There is no objection, and consequently that is quite clear. Then, who in the world can conceive of the Government, owning the Intercolonial railway, calling upon the Canadian Northern Pacific 2,000 miles away, to enter into a traffic arrangement? The -Canadian Northern Pacific is confined to the province of British Columbia, and how in the world can it make a traffic arrangement with the Intercolonial railway that never gets west of the province of Quebec? Consequently the point raised by my right hon. friend, to say the most of it, is a purely academic one. There is no conceivable possibility of a traffic arrangement between any constituent company in British Company and any Government railway, is there?
I go farther. Not only wiill the clause never be acted upon, so far as anyone can see, with regard to the Canadian Northern Pacific; but if it were acted upon, it would not have the effect for one minute of impairing in the slightest degree the control of the Railway Commission as to rates. Let us say that the Government owns a railway that runs to British Columbia, and it says to the Canadian Northern Pacific in British Columbia: We want to make a traffic arrangement with you for the interchange of traffic? What is a traffic arrangement? It is an arrangement for the interchange of traffic and for the apportionment of rates. Well, suppose we have a line running to British Columbia, and the Canadian Northern Pacific railway is asked to make an arrangement with us for the interchange of traffic and the apportionment of rates between us. If we cannot agree, the Railway Commission decides how the traffic is to be interchanged and how the rates are to be apportioned. Now, how in the world can that ever interfere in any way whatever with any agreement 2334
between the Canadian Northern Pacific and the British Columbia Government as to control of rates? It does not matter what the rates are. All the traffic [DOT] arrangement does is to apportion the rates, whatever they may be, and to agree upon an arrangement by which traffic shall -be interchanged. The rates are fixed by the Railway Commission. The apportionment of them is fixed by the traffic arrangement.
Furthermore, the agreement that the right hon. gentleman has referred to between the Canadian Northern Pacific and the British Columbia Government is not a traffic arrangement at all. Therefore, for a third reason it can not possibly interfere with the jurisdiction of the Railway Commission, because the meaning of that clause would be, and it was intended to be and is, that, while if there is any traffic arrangement such as that we have, as a Government, "with another road, that traffic arrangement Shall not he violated by any terms the Railway Commission shall make. As a matter of fact we have a traffic arrangement. I am informed that the Canadian Northern has no traffic arrangement with any company, but the Government of this country has a traffic arrangement with the Grand Trunk, made by the right hon. gentleman himself, for the interchange -of traffic at the city of Montreal. As a consequence, we were bound to protect the country by saying that we could not be called upon to make a traffic arrangement with the Canadian Northern that would be a violation of our obligations under our traffic arrangement with the Grand Trunk. That is the effect of clause (b), of which the right hon. gentleman is so much afraid.
I recapitulate as follows the reasons why there is nothing in the objection of my right hon. friend. First, there is no conceivable possibility of the clause being acted upon with regard to the Canadian Northern Pacific at all, because we have no line that connects that can make a traffic arrangement with it. Second, if there were a traffic arrangement between any two companies, it could be made apportioning the rates between them without in any way violating any arrangement with any Government as to the rates themselves. Third, the agreement made by the Canadian Northern Pacific with the Government of British Columbia is not a traffic arrangement at all.
I think I have passed in review, perhaps not fully, but as fully as the time at my

disposal will permit, all tlie objections raised by the right hon. leader of the Opposition to the resolutions of the Government.
I do not feel that I should be justified in delaying the House longer with a more detailed examination of the various provisions of the Bill. That can be better attended to in committee. While we believe this Bill to be complete, while we 'believe that it safeguards the public interest in every way, yet it is laid before the House not as an invulnerable document, not as an infallible document beyond all possibility of improvement, but as the proposal of the Government to which we invite criticism from hon. gentlemen opposite as well as from hon. gentlemen on this side of the House. And if the Bill can be improved in the public interest, it is open for improvement, and we will welcome any suggestions along that line. But, Sir, we lay the Bill on the table of the House and before this Parliament as the solution proposed by us of a very vast and very difficult problem, a problem freighted with difficulties on every side; and we say, in laying it before this Parliament, that we believe it at once preserves the public interest and does justice to all the fair claims of private capital; for only by concurrent regard for the rights ol private enterprise and the promotion of the public welfare can the ultimate ends of government be properly subserved.


Mr. W. F. NICKLE (Kingston):: If my
intention in rising had been to reply to the hon. the Solicitor General (Mr. Meighen), his eloquent, able and comprehensive speech might, at the last moment, have deterred me. But, Sir, I have not risen with that intention. I have a conscious sense of embarrassment in rising to-night to express to this House and to the country the reason for my differing with iny party on this measure. It is not a pleasant thing to differ from men who have been one's confreres for a length of time, and it is an accentuated unpleasantness where the position one takes is seized upon by the representatives of the opposite party and his conclusions and his motives distorted.
When I accepted the nomination for the city of Kingston I reserved to myself the right to exercise my judgment and express my views on such subjects as were not fundamental to the Conservative party, and it is in the exercise of that right that I rise to my feet this evening. Sir, I do not be-

lieve that there is a man in this House tonight who is more loyal to the principles of the Conservative party as he understands them than am I. But I am not willing to admit that it is necessary to the solidarity of party government that the crack of the party whip should be so loud and its sting so sharp that individual responsibility shouild be absolutely abrogated.
I have, as I say, some difficulty in approaching this subject. My good friend the Solicitor General has frankly admitted that the Government places this Bill on the table not wedded to its terms, that they are prepared to have it discussed and to accept amendments if in their opinion they are such as should be adopted.
It is a strange thing what >an important part railway legislation has played in the history of this country. In the fifties we had the Grand Trunk Railway Company; in the sixties we had the Intercolonial railway; in the seventies and early eighties we had the Canadian Pacific railway; at the end of the century we had the minor Ontario railways and the proposed railway in the Yukon; and from 1900 we have had the National Transcontinental and the Canadian Northern railway. In my judgment there is much of truth in what the Solicitor General has said in his criticism of the construction of the National Transcontinental railway and as to the effect of that road a.$ a competing road for the lessening of rates. If I understand the principle which underlay the construction of that road it is that Mr. Hays thought that the increased cost of railway operation through the increase of wages and prices of material, necessitated the construction of a road which would permit of long trains being economically drawn. But when the cost of the Transcontinental was so augmented, through irregularities and extravagance that the interest charges became excessive, then, I say, the National Transcontinental ceased to be a factor in competitive railway rates in this country. If I understand correctly the attitude of Messrs. Mackenzie and Mann, or the Canadian Northern Railway Company, they approached the problem from an altogether different point of view. Their road was constructed more .after the manner of a colonization road. The original cost of construction was reduced to a minimum with the idea of improving the road iut of earnings or improving it indirectly as money might be available. And it follows necessarily,

where grades are high and curves are sharp, that the cost of operation must be high although the expenditure for construction is small and the interest charges comparatively low. I do not know that any opinion of mine as to what would have been the wise thing for the Liberal party to have done in 1903 will carry the slightest weight or be deemed worthy of attention. But I submit for the consideration of this House 'and the country at large, that from the point of view of economy-and I want to emphasize that word, ' economy '-it would have been better for the Government of that day to have made some arrangement with the then existing transcontinental road the Canadian Pacific railway, around the head of lake Superior, than have put Canada to the expense of building another road there. But there is another consideration besides that of economy. I do not know the motives that actuated the present leader of the Opposition (Sir Wilfrid Laurier). It may be that he was inspired with the idea that Canada through the West should be something more than a line, that it should have breadth as well as length, and that he felt that from a national and political point of view it was well that Canada should be broadened around the head of lake Superior, and therefore favoured the construction of the second transcontinental railway. However, Sir, when We come to the question of 1911, it has always puzzled me why the then Minister of Railways and Canals promoted the construction of a third transcontinental road by guarantee of $35,000 per mile of some 1,000 miles of road. Surely it would have been the wiser plan to have incorporated the National Transcontinental and the Canadian Northern Railway system into one road. It would have been more ^economical land certainly it would have served equally well the national and political outlook. But that plan was not adopted, and I suppose that but little is to be gained by looking into the past rather than into the future. But before I leave the past, I would like to direct the attention of this House and of the country at large, and more particularly of my constituents, to the fact that when last year application was made to the Government for further'assistance to the Canadian Northern Railway Company, I was outspoken within my own party in stating my objections to any aid being granted without a full and ample inquiry.
I told those then in authority that in my judgment the amount required would never
complete the Canadian Northern Railway system. I was, however, confronted with the statement then made by an official of the Canadian Northern railway that if that money were granted that railway system would be enabled to carry its work to completion. I was told that to stop that work would be a national calamity; that the Canadian Northern railway was so closely allied with the financial interests of this country that if the work were stopped, financial chaos would result and Canada would suffer a setback from which she could not recover for half a century. Possibly I was wrong in yielding to that argument without full examination, but, as you will remember, Sir, the Bill was brought down to the House in the dying hours of the session and there was little opportunity for inquiry and investigation. This year, however, when the matter came first to the attention of the House, through an insidious and persistent lobby that was carried on by the Canadian Northern interests, it seemed to me that the time had come for a thorough examination and inquiry into the development and organization and relation to the Government of the Canadian Northern Railway system. After giving that matter the most careful consideration that I have been able to give it, permit me, Sir, to-say that I am of the opinion to-night that I held a year ago; that it was a mistake in 1913 to have assisted the Canadian Northern railway, and that the bargain that the Government suggests to-day is a bad bargain for the Dominion of Canada.
I want to look back a little into the history of the Canadian Northern railway. I should like this country to understand just how this undertaking has been organized and managed. I do not know whether members of this House know the history of this company, but I do know that it took me many weary hours to worm out from the statutes of this country the financial wanderings of this road, and the intricacies of its amalgamation and absorbing corporations. I want this House to come back with me to the year 1880, when certain gentlemen presented a petition to this House asking for an incorporation for the Nelson Valley Railway and Transportation Company. The prayer of the petition had the favourable ear of the House and by 43 Victoria, chapter 57, authority was granted to that railway to undertake certain operations, and by 43 Victoria, chapter 59, similar powers were granted to the Winnipeg and Hudson's Bay Railway and Steamship Company. The Nelson Valley Company had power to build a rail-

land, and by an arrangement entered into with the Manitoba Government-and my right hon. friend the leader of the Government this afternoon when directing attention to the fact that these charters of the Winnipeg company and the Manitoba company were for years peddled around without a purchaser failed to direct the attention of the House to the radical change that took place when Messrs. Mackenzie and Mann bought this charter. Up to the time they got their grant of $8,000 per mile from the Manitoba Government, all these companies had was the land grant and the transport subsidy, with an assurance that certainly merited recognition from the point of view of railway financing, they had the courage to make application to the Manitoba Government for a guarantee of $8,000 per mile to build a road that they had admitted could be built for $11,700 per mile. Just figure this out for a moment. These wizards of finance, so-called, had bonds guaranteed at the rate of $8,000 per mile. They had lands that were worth $9,600 per mile, if the land is valued at $1.50 an acre, and I leave it to you and members of the House who are older in parliamentary affairs than I am, to say whether in the '90V lands in the Swan river and Danphin district were not worth at least $1.50 per acre. They had more than that, they had a transport subsidy, which, capitalized, was worth $4,000 per mile. In other words, they had $21,600 of Government subvention to build a road that their own contract showed could be built for $11,700 per mile. That is the beginning of the road.
I want to state to the House where the Canadian Northern Railway Company came into existence. The Act permitting the amalgamation of the Manitoba Railway and Canal Company and the Winnipeg Northern Company, the two companies to which I have been referring, was passed in 1899, 6263 Victoria, chapter 57. You will remember that the authorized capital, not the subscribed capital of the Winnipeg and Northern Company, and that was the final name of the Winnipeg company, was $15,000,000. The authorized capital of the Lake Manitoba Railway and Canal Company was $800,000. And what did the wizards of finance do when they bought up these two charters? They amalgamated the two companies under the name of the Canadian Northern Company and by section 3 of their agreement they fixed the stock at $16,000,000, all paid up and fully subscribed.
And that $16,000,000 of watered stock is
[Mr. Nickle.3
the initial foundation on which the Government builds their claim that they are dealing fairly with the country when they take forty millions of watered stock as security for a bond guarantee of $45,000,-
000.	How did they provide for the distribution? Section 6 says:
Each shareholder in the Winnipeg Company shall be entitled to receive, and there shall he issued to him by the amalgamated company, one share in the capital stock of the amalgamated company, issued as fully paid up and free from calls and other liability, for every, one hundred dollars, paid up upon the shares held by him in the capital of the Winnipeg Company.
The agreement further provides:
Each shareholder in the Lake Manitoba Company shall be entitled to receive, and there shall be issued to him by the amalgamated company two shares in the capital stock of the amalgamated company, issued as fully paid up and free from calls and other liability, for every one hundred dollars of fully paid-up stock held by him in the capital of the Lake Manitoba Company.
The original capital of $15,800,000 was increased by $200,000, a paltry sum perhaps, to roll the whole amount into round numbers. They went on further with their amalgamation. By chapter 52 of 1 Edward VII, 1901, certain agreements of amalgamation between the Canadian Northern Railway Company and the Manitoba and Southeastern Railway Company, and the Canadian Northern railway and the Ontario and Rainy River railway were ratified. The agreement is dated 28th of April, 1900. Schedule ' A ' says:
3.	The name of the amalgamated company shall be 'The Canadian Northern Railway Company.'
4.	The amount of the capital stock of the amalgamated company shall be sixteen million, seven hundred and fifty thousand dollars.
$750,000 of water was poured into the amalgamated company. How was it divided? In the same way: $100 worth of fully paid-up capital stock for every $100 of stock subscribed for, whether paid or not. Let us go further. By schedule B of the same Act a further agreement was ratified. That agreement provided that the amount of the capital stock of the then amalgamated companies should be $24,750,000 being the capital of the two companies. One share of the new stock was issued for each share of the old stock held by the respective shareholders in each company.
And now, Sir, a change comes over the scene; the hand of the hon. Minister of Public Works appears. He was then Min-

ister of Public Works in Manitoba. The Northern Pacific and Manitoba Railway Company ran a line of railway from the United States up into Winnipeg. The railway was not doing well and was dn the hands of a receiver. With that shrewdness that has characterized the Minister of Public Works from that day to this, he grasped an opportunity that few men at that time appreciated. He went to the United States and, made an arrangement, the full story of which I am not at liberty to tell, but it would be interesting if he would take the House into his confidence.


Some hon. MEMBERS:: Hear, hear.


William Folger Nickle: It is not often that gentlemen opposite applaud the Minister of Public Works, but I am sure they will be generous when I tell them that the bargain he entered into with the Northern Pacific and Manitoba Railway Company was highly advantageous to the province of Manitoba and a credit to the Minister of Public Works.


Mr. J. E. ARMSTRONG:: Cheer now.


William Folger Nickle: The province of Manitoba secured the road, and almost at once turned it over to the then Canadian Northern Railway Company stipulating that the Canadian Northern Railway Company must guarantee not to take the traffic through American territory and thence to the seaboard by other American lines but that they must connect up with the Canadian Northern railway to Port Arthur. I want to say that if there is one thing that has characterized our railway policy more than another it is this: we have done things in Canada because our conditions compelled us to do so, but while we did things we also dreamt things, and one of the things we dreamt was that Canada must be united from the Atlantic to the Pacific, and when the Minister of Public Works made that bargain that diverted the grain trade of Manitoba from the United States to Port Arthur and the Great Lakes, he did a great work for Canada. Later on the Canadian Northern railway branched out. Certain subsidiary companies were incorporated to conduct railway operations in British Columbia, Alberta, Saskatchewan, Ontario and Quebec under the name of the Canadian Northern Pacific, Alberta, Saskatchewan, and so on. I have mentioned the fact that they made application to this House in 1911 for a grant of
$35,000,000 and that they got it. We know what was done in 1912, and also last year. So much for the early history of the company.
I now wish to draw the attention of the country to the aid this railway company has had, and while one does not want to say unpleasant things it is hardly fair to the people of Canada to issue such a misleading statement as the Canadian Northern railway people have issued to the people of this country through the recent blue book laid on the table of the House. Any one who reads it with care, and that understands the financial situation, will see how craftily words have been used; the distinction that is made between aid received and aid granted, to these companies since their incorporation, and amalgamation under the name of the Canadian Northern Railway Company, and the careful method by which the subsidies- and aids are eliminated when the aid was given prior to amalgamations. * I say that the statement issued by the Canadian Northern railway most inadequately portrays to this country what assistance has been given to the company, and I am going to read to this House a statement showing the assistance Canada has given the Canadian Northern Railway Company system. Take land grants for instance. Let us see what the Dominion Government has done. As I explained earlier in the evening, they made a grant to the Winnipeg Great Northern of 2,624,128 acres. I have asked the Government how about that extra 256,000 acres they asked for a few week ago. Does the Government intend to grant that in respect of 40 miles of railroad constructed out of Winnipeg-a railroad that was never completed, the wires of which were used to fence the fields of settlers, the ties of which rotted, and whose rails lay a streak of rust along the way? The member for Selkirk (Mr. Bradbury) tells us that when the road was built thirty years ago the land could not be sold. To-day it is worth from $15 to $20 an acre. Is the Government going to yield to Mackenzie and Mann, and grant 256,000 acres of this domain in the year 1914 which was not asked for in 1900, when the land was worth only $1.50 an acre? Why was the request made lately? Why has it hung fire so long? We will take another case. The Canadian Northern Railway Company received, as the Lake Manitoba Railway and Canal Company, 798,400 acres of land. The Manitoba and Southeastern Railway Company, now a part of the Canadian Northern railway, received 680,320 acres. In other

words, the Canadian Northern through these three subsidiary incorporated companies has received 4,102,848 acres of land.
Now, let us see what that land is worth. I desire to be fair, and perhaps it is hard to be fair sometimes; but I would like to direct the attention of the House to the value of the lands .as shown by the company. I would first direct attention to the eighth annual report of the Canadian Northern Railway Company, at page 8 where, over the signature of Sir William Mackenzie, he admits that up to that date there had been sold $12,964,627.76 of that land, and that in addition the railway company had to dispose of 1,161,017 acres.


Frank Broadstreet Carvell: What is the date of that report?


William Folger Nickle: Total

The following table shows the bond guarantees given by the province of Alberta:
1909, chapter 14, Canadian Northern railway: 1913, chapter 8,
Canadian Northern railway, 900 miles at $15,000 per mile . . . . $13,500,000 1911, chapter 19, Canadian Northern Western railway:
315 miles at $13 000 per mile . .	4,725,000
250	"	20,1)00	[DOT]	. .	5,000,000480	"	13.000	"	..	6,240,000100	"	15,000	"	. .	1,500,000118	"	13,000	"	..	1,534,000
1913, chapter 9, 2nd session, 114
miles at $25,000 per mile .. ..	2,850,000
Total	$35,349,000
The following table shows the bond guarantees given by the province of Saskatchewan :
1908-12, Canadian Northern Branch
lines:
1,115 miles at $13,000 per mile . . $14,495,000 1912, Canadian Northern Saskatchewan railway:
315 miles at $13,000 per mile ..	4,095,000
Total	$18,590,000
Then, the province of Ontario, prior to the amalgamation of the Ontario and Rainy River railway with the Canadian Northern Railway system, guaranteed, under authority of 8 Edward VII, chapter 47, the principal and interest at 31% per annum, debenture stock, payable in thirty years from June 30, 1908, $7,860,000.
The following table shows the guarantees given by the province of British Columbia: A guarantee of principal and interest at 4 per cent per annum on approximately 600 miles
at the rate of
$35,000 per mile for 30 years . . $21,000,000
1912,	Vancouver terminals ..	..	10,000,000
1913,	chapter 57, section 2, s.s. a,
b, c and d, 339 miles at $35,000	11,865,000
1914,	legislation, about	 5,100,000
Total	$47,965,000
Let us crystallize the subsidies, and see what they come to. The following table shows them:
Dominion :
Canadian Northern railway, including: Winnipeg Great Northern .. $	374,606 00
Port Arthur, Duluth and West- .
	 271,20000
Ontario and Rainy River . .	.	.	1,534,526	00Canadian Northern Ontario	..	2,255,872	00Canadian Northern Quebec	..	2,020,616	89
Canadian Northern Pacific 1912,
Yellowhead to Vancouver	..	6,300,000	00Canadian Northern Alberta	..	2,589,600	00Edmonton Yukon Pacific ..	.	.	160,000	001913 subsidy	
15,640,000	00Municipalities-	
172,000	00Total	$31,318,420 89
Provincial:
Ontario	 ; 2,001,413 00
Manitoba	 641,575 00
Quebec	- [DOT] -	3,413,541 03
Total	$ 6,056,529 03
Sum total	 $37,374,949 92
I defy you, Sir, to find that amount in the statement issued by Mackenzie and

Mann. I want to be fair to them. They say that what I am dealing with is the amount granted, not issued by the Dominion of Canada, not the amount by the Dominion actually paid over to them. That can be determined by deducting from the sum total the amount in the hands of the Government. What I want to say, however, is that the Dominion is behind this undertaking. Here is the recapitulation of the whole statement:
Land Grants:
Dominion	$ 29,392,404
Ontario	 10,000,000
Quebec	 3,000,000
Bond guarantees:
Dominion	 60,940,539
Manitoba	 24,059,446
Alberta	  35,349,000
Saskatchewan	 18,590,000
Ontario	 7,860,000
British Columbia	 47,965,000
Subsidies granted:
Dominion	and municipalities.. 31,318,420
Ontario	   2,001,413
Manitoba	 641,575
Quebec	 3,413,541
Total	$274,531,338
Loan given by the Nova Scotia legislature to the Halifax and Southwestern of $13,500 per
mile,	for 372	miles	 5,022,000
Subsidies granted to Bay
of Quinte	$159,228
Central Ontario	 219,018
Iredale, Bancroft and
Ottawa	 250,569
James Bay	 27,612

	656,427
Sum total	$280,209,765
That shows that the Dominion of Canada is behind this undertaking to the extent of $280,209,765. What has this company done for Canada ? I have heard considerable to-night from the Solicitor General, who, with that eloquence that always characterizes his utterances and with that effectiveness of speaking that at times stamps a fallacious argument as being effective, made the statement that the Canadian Northern Railway Company was a competitive railroad and that it would lower or regulate rates. If I have not quoted him correctly or given the spirit of his language, I would like him to correct me. I understood him to say that while the National Transcontinental railroad would never be a regulating factor owing to the cost of construction, the Canadian Northern Railway Company would be. I want to take him on his own statement, and I want to quote, in reply to him, not what the Canadian Northern Company say when they want further assistance from the Government, but what they said when they wanted to keep up freight rates. I want to

quote what the Hon. Mr. Phippen argued before the Railway Commission on the Consolidated Western Freight Rates Case. Mr. Phippen said no doubt what he did say with the approbation of the management, and control of the Canadian Northern railway system. Their officials were there. Here is what Mr. Phippen said:
All of the evidence and ninety-nine per cent of the argument has been directed against the Canadian Pacific Railway Company. We have hardly heard the name of the Grand Trunk Pacific Railway Company mentioned, we have hardly heard the name of the Canadian Northern Railway Company mentioned by the Complainants. It has been avoided by them as a thing accursed. Their whole case is built up,, with the exception of some statements which Mr. Pitblado made, and which I will deal with later, upon conditions which exist on the Canadian Pacific railway. The expert brought by the Government, Mr. Muller, says that the Canadian Pacific railway should be the road upon which these rates should be based, and the rates upon which the Canadian Northern should be compelled to carry its traffic.
He says further, that in determining what are-reasonable rates for the Canadian Pacific railway this board should not take into consideration any benefits which were given to the Canadian! Pacific Railway Company under its agreement with the Government, except perhaps the land grant of twenty five million acres. He says that the Canadian Northern railway, constructed at a time when, putting it moderately, it took $3 to get the same result as $1 would bring when the Canadian Pacific was constructed, should be compelled to compete with, the Canadian Pacific Railway Company, not only upon the basis of the Canadian Pacific turning over to the public the benefit of all the advantages which were given to it under the terms of its contract, but turning over also to the public the benefit of the increased value of the dollar which went into the road, in other words, the unearned increment of the Canadian Pacific Railway Company between the time when that road was constructed in 1881, and the heyday of prosperity when the Canadian Northern and the Grand Trunk Pacific Railways were built.
Now, let us see a little more minutely just what that would mean. Let us take the Canadian Northern beginning at Port Arthur and follow it west, and as we go let us apply Mr. Muller's theory to the conditions with which, he would have us compete. We start at Port Arthur and we build to the Red river through probably as expensive a bit of country to construct a road in as there is in Canada. We build that line at the request both of the Government of the province of Manitoba and the Government of the province of Ontario, and we build the line necessarily alongside the line of the Canadian Pacific railway at the request of these provinces as a competitive line to meet Canadian Pacific railway conditions. What would Mr. Muller make conditions under which he would have us compete? The Government of the Dominion of Canada built the line of the Canadian Pacific Railway Company and presented it to the company unden the terms of the agreement of 1881 ; The Canadian Northern railway built the line w'hich it operates out of its own

money, raised on its own bonds, guaranteed, if you will, by the province of Manitoba, but bonds for which it primarily and the people of the province of Manitoba secondarily are responsible. Mr. Muller would say that we must compete with the Canadian Pacific railway line which was presented to it on the basis of there "being no capital charge for the construction of our line.
Now, let us come to the city of Winnipeg, where the Canadian Northern has acquired central and expensive terminals, one part of which is not in use at the present time, but which will "be brought into use almost immediately and which part also has been valued by some of the best experts in the United States within the past few days at $7,000,000, and what do we find? The Canadian Pacific Railway Company Teceived not only a perpetual exemption from taxation from the city of Winnipeg, but it received its terminals in that important city without any charge or cost to the company.
The Canadian Pacific built from Winnipeg when there was scarcely a settler in the country, it obtained its right of way for nothing or practically nothing until it came to range 14, some 80 or 90 miles west of the city of Winnipeg. Then it ran into the Northwest Territories of Canada, and under the terms of the agreement between the Government and the company from there to the eastern boundary of the province of British Columbia it received a right of way 150 feet wide for nothing; not only that, it received its terminals and its station yards through all these important cities through which it now passes, for nothing. But it did more than that, it got half interest in all the town sites along the line. However, leave that out of the question. It got its right of way for nothing, it got its terminals and station grounds for nothing. Yet Mr. Muller would have the Canadian Northern, built by its own bonds, compete with the Canadian Pacific. He would have it build its line and but its right of way when three dollars represent only the value of one dollar, and would say that wnat it paid for its right of way shall not be taken into consideration as a capital charge when competing with the Canadian Pacific railway
More than that, the Canadian Pacific from Tange 14 built its lines under the terms of the contract, by virtue of which the company, its capital stock, its stations, its ouildings, its right of way, its lines, its improvements of all kinds, every asset that man can think of, were exempted for all time from all taxation, municipal, provincial, Dominion or otherwise, and so firmly was that exemption fixed that when the boundaries of the province of Manitoba were extended from range 14 to range 29 the extension was made subject to the tax exemption of the Canadian Pacific Railway Company. So that to-day and for all time by part of what is now the constitution of Canada the province of Manitoba is deprived of its right to tax the Canadian Pacific railway assets between range 14 and range 29 in that territory. Mr. Muller would say that the Canadian Northern and the Grand Trunk Pacific must not only do the other things I have mentioned, but must pay taxes, municipal, provincial and Dominion and compete without this being taken into account.
You gentlemen have all travelled over the line of the Canadian Pacific railway through the Fraser Canyon. You all can form an estimate of what it cost to build the Canadian Pacific railway through that territory. Across the canyon you see the Canadian Northern working along what is probably the most difficult place where God permitted man to build a railway; you see the Canadian Northern building a line between Kamloops and Vancouver which must cost-I am speaking now as an estimate, not by the book-at least $100,000 to $125,000 a mile to build. Mr. Muller would say that the Government-built Canadian Pacific from Kamloops to Vancouver-the Government presented that line to the Canadian Pacific Railway Company-and the Canadian Northern railway should both have their rates fixed by the same standard; that the capital which the Canadian Northern has expended in building this most difficult piece of line should not be taken into consideration but should be provided Heaven knows how; that the company should compete with the Canadian Pacific Company on the basis of that section of the line costing nothing.
I go further to Vancouver. When the Canadian Pacific reached what is now the thriving city of Vancouver it reached a wilderness. Under the terms of its contract it had a right to all the water front it required and to all the land it required for its terminals. It took advantage of that provision to the full. Where we must buy into a city where real estate is, to say the least, not given away, where we have to buy the Canadian Pacific received its terminals for nothing, received its water frontage for nothing, and received hundreds of acres in the city of Vancouver, which it is now disposing of for millions of dollars, for the betterment of its line. Yet Mr. Muller and Mr. Bick-nell would have the Canadian Northern compete on the basis of there being no capital allowance for those advantages.
Going further still, the Canadian Pacific in addition received 25,000,000 acres of land as a land grant, and while Mr. Muller by his theory would not compel the Canadian Pacific to apply the proceeds of the .land in reduction of its capital-I do not know why, unless he had reached the point by this time where it was a reductio ad absurdum, and he saw if applied there would be nothing left but rather that there would be something on the other side of the ledger and the company would have to pay the public dividends-I say if that was not so I do not see why he did not compel them to apply the proceeds of the land grant in the construction of the line, but although he did not compel them he did not prevent them from so doing.
And what do we find today? We all saw the amount of the issue made by the Canadian Pacific a few days ago. By that issue, as I understand it, the Canadian Pacific disposed of approximately $50,000,000 (I have not the figures in my mind) of relatively short day notes secured on the proceeds of sale of their land, to bear interest at 6 per cent, and to be redeemed over a period of ten years; to be redeemed at par meanwhile during the ten years by drawings and at the end of the ten years outstanding notes to be redeemed at par out of these proceeds; the notes being given to the present shareholders of the company at 80. What does that mean? It means that $40,000,000 are taken from the land grant assets of the Canadian Pacific railway and put into the capital account of the road. It means that that $40,000,000 won't draw one dollar

370t'
from the operating revenue of the road, because its interest and principal are to be repaid out of the proceeds of the land sales, and when the transaction is cleaned up, when those notes have been redeemed, the effect of the transaction will be this, that the Canadian Pacific railway will have received $40,000,000 which it has applied in the betterment of its road, and its outstanding obligations will not be increased one cent, because the investment will have been repaid out of the proceeds of Its land sales.
It is quite possible for the Canadian Pacific to do this. According to the statements put in by Mr. Muller it has done it in the past to the extent of many millions of dollars. Doubtless it will continue to do it in the future.
I am not blaming the Canadian Pacific for adopting this policy. So far as the public is concerned, it is a good policy. But it simply means that when the Government gave 25,000,000 acres of land to the Canadian Pacific railway it put a club in the hands of that company which it can wield over the head of any unfortunate company which comes in competition, by using, if it chose, the proceeds of these land sales to reduce its capital charges, to reduce its operating expenses, to make the apparent return on its stock so great as to invite public attack against its rates, and to bring down in the wreck which might follow rate reduction any unfortunate minor competitor who might happen to be in the field-notwithstanding all this, Mr. Muller would apply his theory. The Government made that possible. You may say that the same Government made it possible indirectly in a much smaller way for the Canadian Northern to do the same thing. We bought a charter, that of the old Hudson Bay railway, which carried with it a land grant, and we do show in our assets some 800,000 acres of land and the proceeds of sale of other land, our total grant amounting to two million acres, which we have used in promoting the welfare of our road, and to that extent there is a comparison. But the comparison of the two million against the twenty-five million, the comparison of nothing against the millions we have had to spend in Vancouver, and the other comparisons which I have made show that if the theory which Mr. Muller advocated is to be adopted it would be impossible for any other railway company ever to construct a line in Canada in competition with the Canadian Pacific Railway Company. It would be absurd to suggest that any railway company on its own merits could attempt to construct a line such as the Canadian Northern has built against conditions I have pointed out, conditions which would exist as competitive conditions if Mr. Muller's theory be accepted, and the assets be considered as gifts by the public to the public and not as inducements to the construction of the Canadian Pacific railway.
That was not the intention of Parliament. That it was not the intention is shown by the fact that the Parliament of Canada and the legislatures of the various provinces have assisted in the construction of the Canadian Northern railway in a competitive field where the company must die if this condition existed. Therefore I say that when you are considering what will be done with these assets, when you leach the point that you must consider them either in this investigation or hereafter, you must consider the fact that Parliament did not intend that these assets should be given by the whole of the public to a part of the public, but that they were given to *ve Canadian
[Mr. Nicklr '
Pacific railway as a company, otherwise competition is dead and the Canadian Pacific railway would be the only railway in Canada for all time, unless a road were constructed by public money and operated by the public for the public as a public road.
Now, Sir, what does that mean? It means simply this, if I understand it, that while we have taken freight rates out of the competitive field by entrusting the determination of those rates to the Railway Commission, the officials of the Canadian Northern railway and the officials of the National Transcontinental take the position that the freight rates should not be determined by the road that can most cheaply carry the traffic but should be determined by the road which finds it most expensive to operate; that the credit of Canada is so interlocked and bound up with these railroads that the Railway Commission can do nothing that would indirectly affect the rates because if they do they would impugn and possibly overthrow the national credit. I wish to direct the attention of the House, while we are on the question of transportation to the statement of Mr. Smithers, made the other day at the annual meeting of the Grand Trunk Railway Company. He said:
Mr. Smithers said he felt the Railway Commission must have had the Canadian Pacific more particularly in their minds, because the Canadian Pacific was defending itself against a reduction in that which it had enjoyed ever since its birth.
Let me draw attention to the fact that the Railway Commission had ordered the railway freight rates to be reduced. Here is what Mr. Smithers said:
The effect may be less than is now estimated and there may be compensation in increased traffic, but if we can show these reductions, although they can be borne by a neighbouring rich company, have imperilled the earnings on which we ourselves relied when we entered into agreements with the Government, I am sure the Government will have the support of the Canadian Parliament in either restoring rates, or compensate us in some way for the loss involved.
I submit that these extracts prove conclusively that the question of freight rates must be dealt with not from the standpoint of competition; the matter must be adjusted, if the national credit is to be maintained, by determination of such a rate as will enable the transcontinental companies to continue.
That brings me to another point, and it is here that again I find my divergence with the Government. I was not a member of this House in 1904 or in 1908, but I was taking some little part in politics in King-

ston and the surrounding districts at that time, and there rings in my ears yet the statement of the right hon. leader of the Government and his confreres, that, if Canada were to support the cost of building a railroad, we should own and operate it. The Conservative party, as I understand it, were pledged to Government ownership and Government control. In the debate that took place in this House in 1903, the right hon. leader of the Government of to-day made the remark: I do not shrink from Government ownership and Government operation. He went further and moved a resolution, in the support of which he said that he regretted that the Transcontinental Bill then going through the House would put back Government ownership 50 years. I am not going to discuss the advisability of expediency of Government ownership; that is a matter that may be discussed at another time, but what I do say is that, if my leader turns sharp corners and sees new light, and I do not see that light, I see no reason why I should be held up to the contempt and ridicule of the Conservative party because I go on my way unperturbed, holding my allegiance to the principle that he upheld in 1903. I believe that the Government of this country has to face a great problem.
I do not believe that the National Transcontinental railway from Winnipeg eastward will ever be taken over by the Grand Trunk Pacific Company; I believe that the interest charges on the cost of construction will be prohibitive.


Mr. MORPHY:: Upon what does the hon. gentleman base that belief?


William Folger Nickle: Upon the arguments
advanced by the Conservative party in this House during the course of the National Transcontinental railway debate a few weeks ago and upon a statement which I propose to read in a few' moments. I am not sure whether the hon. member for North Perth spoke on that occasion, but I have a hazy recollection that he did. If I understood at all the import of that debate, the whole anathemas of the Conservative party-and certainly the anathemas of the Solicitor General to-night-were directed against the Liberal party because the cost of the construction of the National Transcontinental railway had rendered nugatory the competition factor in the question of the determination of railway rates in this country.
In 1911 a singular thing took place in this country. Politically I am not very
much interested one way or another with this railroad question; I am not particularly concerned whether the Liberal party or the Conservative party are to blame for the difficulties in which we are. To me it is simply a business proposition. I am trying to look forward, and looking to the future this is what confronts me. In 1911, as I say, a startling thing took place in Canada. The West, outside of British Columbia and Manitoba, went practically solid for the Liberal party, and Ontario, a great industrial centre, went practically solid for the Conservative party. What do we find? Since that time I have sat in this House and if I have listened to one thing more than another it has been the complaint of the western members about the condition of the western country. Canada lies like a huge Idumb-bell, if I may use the expression, one end on the Atlantic, the other end on the Pacific, and between these extremities a narrow district, not thickly populated. The West, as I understand its position, offers three solutions to the difficulty: free wheat, free agricultural implements and, to a certain extent, an increase in the British preference. If I understand the position of the West, it is this: they have little sympathy with protection because they have very few industries. In my judgment, if this country is ever going to become a great country, East and West must co-operate. The East must sacrifice for the West and the West must sacrifice for the East. I am not going to discuss free wheat; I am not going to discuss free agricultural implements, but one thing that struck me when these subjects were under discussion in the House was that the question of freight rates became an important factor. I find that the question of freight rates in Canada is necessarily of more importance than it is in the United States, for several reasons. Our population north of lake Superior is practically nothing, so far as contributing to the upkeep off a railway is concerned. In the states to the south there is quite a dense population. They have a well-regulated railway system, and it is economically managed; more so than our railway system, because the rigours of their winter are not so acute as ours. Those who know anything about railway operation know that in a country with a climate such as Canada has it is more expensive to operate a railway than it is in a country like the United States, where similar clima-


An hon. MEMBER:: The Canadian Pacific railway too?


William Folger Nickle: You ask me why not the Canadian Pacific railway. The reason I say not the Canadian Pacific railway is that if I have proved anything to you to-

night I have proved this, that the Canadian Pacific railway can give a cheaper rate than either of the other two railroads; they can stand the competition and the cut, and in my judgment there is only one way that the Canadian Pacific railway will ever have to stand a cut and that is by the competition of a railroad operated and controlled by the Government. Government competition, a railroad run by the Domim-ion of Canada, where the capital charge will not have to be considered, where raw materials can be given a differential rate, where there will be a certain subvention that will enable the western manufacturer to get his raw material cheaper,
11 p.m. so that the farmer in the West can have a local market and the purely distributing population that exists in the centres of the West to-day may become an industrial population. I believe when the time comes that the West has its industries, the cleavage between the West and the East will be done away with and there will be a tendency from segregation towards cohesion throughout Canada from end to end.
There is another factor in this question which I wish to discuss, that is the general railway situation in Canada. Mr. Hanna's figures were quoted here to-day. I would quote some more of the Canadian Northern railway figures as to the railway situation in Canada, the figures of the Canadian Northern railway not when they want a Government subvention but when they wanted to maintain rates. Let us see what Mr. Phippen said to the Railway Commission;
Now, Mr. Chairman and gentlemen, this brings me to my last consideration, the general situation in Canada as it is to-day, and I hope that my statement will not be unduly emphasized by the press, but I must give this Board facts which I think will give cause for thought to every member of the Board.
And, Mr. Speaker, if I mistake not these facts will give every member of this House cause for thought:
I produce a statement showing the capital invested and to be invested to complete the transcontinental lines at present constructed and under construction.
The figures for the Canadian Pacific railway are taken from the statement Mr. Chrysler filed yesterday, 5635,000,000 odd.
Grand Trunk Pacific railway $175,000,000.
These figures are furnished by Mr. Biggar. They are conservative. I regret to say there will probably be an addition of a further $25,000,000.
National transcontinental, $200,000,000.
This I obtained from a high official in the
Finance Department. The cost of the transcontinental without equipment will be $200,000,000. This is a cold fact, and food for much thought. It is a little over $100,000 a mile. This money has been found or must be found. Some one must pay interest.
The Canadian Northern Pacific, 600 miles, I have estimated. It is my own estimate. It is not based on actual cost or on information given me by any officer of the road. I think I am low, but I wish it taken as simply my own estimate. I have tried to make it reasonable. $80,000 a mile. That is for the British Columbia * work and is not excessive when the Grand Trunk Pacific cost $87,000 on the prairie. At the estimated mileage this amounts to $48,000,000.
Canadian Northern Ontario north of lake Superior. Again this is my own estimate. The mileage is right. $50,000 a mile through this country is not, I think, excessive. That would be $45,000,000.
Additional equipment for Grand Trunk Pacific railway and National Transcontinental. I have that from authority. $40,000,000.
Additional equipment for Canadian Northern.
I have that from our own officers. $35,000,000.
Or a total cost of $1,178,229,094.
Leaving out the Canadian Northern railway, which I deal with a little lower down. I take the net earnings of the Canadian Pacific Railway Company, according to the last report, which were then stated as $42,403,340.
Net earnings of the Grand Trunk Pacific railway, as shown under its operating statement, $2,691,402.
Or a total from these two companies of $45,094,742.
From which I deduct Canadian Pacific taxes shown as $1,362,420.
Leaving a net operating revenue of these two roads of $43,712,322.
To which I add the surplus earnings of the Canadian Northern shown in the last annual report as $400,000.
Giving the total of all net earnings, over and above what is necessary to provide for the outstanding obligations of the Canadian Northern road of $44,112,973.
This added to the above gives a net earning of 44 million dollars to pay interest on $1,178,229,000, and also to provide for such margin of safety as may be necessary to enable those companies to maintain their credit.
Let us see what all this means. Mr. Muller says six per cent is fair. Six per cent on the billion odd amounts to $70,693,745.
For which there is available as above, 44 million dollars.
Leaving a deficit of $26,580,000 a year.
This is not prophecy, it is cold fact.
And the Government rush us into partnership with the Canadian Northern railway! If Mr. Hanna's figures are correct, Mr. Phippen's argument is false; if Mr. Phippen's figures are correct, Mr. Hanna's estimates are wrong.	And did you
read the note to	his	estimates?
Could anything be more vague, more uncertain? What does he say; it is a guess in the dark; I hope it will turn out aP right, but I am not going to pledge mv



word. If it does not turn out ail right, what is going to happen to Canada? She has entered a partnership and is bound to see the thing through, no matter what it may cost. Last year they told us that a $15,000,000 subsidy would complete the road, and this year they tell us that $45,000,000 will complete it. 'Once bitten twice shy' is a proverb worthy of remembrance by governments as well as by men.
There is another side to this question to which I wish to direct attention, and this is perhaps just a bit personal. I do not know exactly whether it is fair that I should bring it up, and yet the conduct was so outrageous that I think it is only fair that the House and country should know how some men fight. There is such a thing as a fair fight. A fair fight is the kind of fight a man should fight who has felt	the approving	touch of	His
Majesty's sword. There is the fight of a knight who should always remember the order to which he belongs ; he should have a fair tilt in an open field. He should realize what fair play is, and should not strike below the belt. , When this despatch appeared in the Kingston Whig I stood aghast. I want the House to listen, because within the last year men have been hiurled from the legislatures of the provinces of Quebec and Ontario because they accepted bribes, because they yielded to the influence of money, and I want to know what is the opinion of this House of men who do not use money, but threats to win their purpose. As I said, when the first move was made by the Mackenzie and Mann interests in the lobbies of this House to secure Government assistance, I was somewhat outspoken in how I felt in regard to the matter. Here is the telegraphic despatch that appeared in the (British Whig, Kingston, dated March 9, 1914:
Not Inclined to be Favorably disposed towards Kingston-W. F. Nickle's Stand is not Relished by the Canadian Northern Railway President whose Company it was Thought Could be Interested in Establishing a Terminal Here for Transhipping Coal From Oswego.
It is reported from Ottawa that Sir William Mackenzie, of the Canadian Northern Railway Company, is not inclined to be favourably disposed towards Kingston with regard to railway facilities here in view of the announcement that its member in the commons, W. F. Nickle, is out so strongly against any further government assistance towards the completion of the Canadian Northern railway line. When some one approached him with regard to the establishment here of a terminal so that coal could be shipped via Kingston from Oswego,

New York, he is reported to have said that the Canadian Northern railway could hardly be expected to consider projects that would benefit this city when its representative was inclined to be antagonistic to the interests of that road.
I try to fighit fair, and to be perfectly sure that I did the gentleman no injustice. I got a second copy of that paper, and, under date of March 12, I sent the following registered by mail to Sir William Mackenzie:
March 12, 1914.
Sir William Mackenzie,
Chateau Laurier,
Ottawa.
Memorandum for Sir William Mackenzie's information.
. Enclosure:	Clipping from 4 The British
Whig,' Kingston, March 9, 1914,
W. F. Nickle.
And the report of the Post Office is that Sir William Mackenzie signed for this on the 15th of March. To this day he has never answered that letter, has never repudiated that interview, and therefore I think I am justified in saying that Sir William Mackenzie justifies that method of fighting. I want to give this House an illustration of how he fights. In Kingston there is a great railroad industry called the Canadian Locomotive Works Company. The man that gets a preponderate share of its vote is as sure to be elected as day follows night. Sir William Mackenzie's emissaries reported in Kingston that their companies would give no contracts to the Canadian Locomotive Works Company, as Kingston's member was unsympathetic to their request for assistance. In a period of industrial stagnation when that became known in Kingston, women held their children to their breasts, dreading the pangs of hunger and of frost, but a thousand times better that I should be removed from the public life of Canada than that women should go cold and children suffer. But I want to say this for those men: no man raised his voice in protest but one. What is democracy coming to when the plutocrats can so tyrannize over the representatives of the people? Does free speech amount to anything? First they tried coercion here, then they tried other influences What do they do? Take my own seat, which L hold so dear because if there is one thing that I have been proud of .more than anything else in my public life it is that I had the satisfaction of redeeming that riding w'hen Sir Wilfrid Laurier was in power. I won that seat after seventeen years of Liberal rule-for the ffcsrt time in a general election since Sir John A. Mac-

donald wend to his grave. Are the representatives of the people to be throttled? Better a thousand times that I should go out of public life than that Mackenzie and Mann should put their hands on my throat, and make the public think a man dare not stand up and express his conviction in this House. Why, Sir, the day the Government brought down this measure, on my way to the Chateau Laurier I met Sir William Mackenzie. What did he say? 'Why don't you go over to the Opposition?' That is his idea of freedom within a party. He thinks there is no room for independence in Canadian politics either on one side or the other; do not express your honest convictions if [DOT] you cannot express them in favour of your party, is his motto. Might I not say in the words of Shakespeare;
Why, man, he doth bestride the narrow world
like a colossus;
And we petty men walk under his huge legs, And peep about to find ourselves dishonourable graves.
I would sooner have honourable defeat than mean victory. I would sooner go down to defeat in Kingston, if I am a candidate in the next election, than I would be in Mackenzie's shoes and so far forget the order to which I belonged as to adopt the tactics of the South African savage and blow a poisoned dart into the back of an unsuspecting enemy. So much for that, and that is personal. Gentlemen may laugh. Some man behind me laughs, but he does not know what it is to suffer. Let him stand where I have stood for the last three weeks and see whether he will laugh. I do not profess any virtues, but as I said when I accepted the nomination, I reserve the right to think and speak for myself. If party government in this country has got to such a stage that within a party there is no room for independence, that a man must agree with his party on the fundamentals and also on the incidentals, then I say to this House that so far as the member for Kingston is concerned, give me the freedom of an elector rather than the fetters of the elected. As I said before, I do not, differ from the Government on fundamentals. I have been as careful to-night as any man could be not to go outside the pale of my party. I am just as good a Conservative tonight, in so far as my inclinations and tendencies go, as I was thirty years ago when I learned my politics at the knee of Sir John A. Macdonald.
But here is where I differ. I am opposed to going into partnership with Mackenzie 2344
and Mann, just the same as I am opposed to going into partnership commercially with people I do not trust. I think they will do the Government in the long run, but if they do not do the Government let us see where the Government has placed us. It is admitted that this one hundred million dollars is practically all watered stock. You may say that is not so, but I submit that it is, and I think one can easily prove it. For instance, I will refer to their statements with regard to two of the companies. It is a very difficult thing to get at the bottom of the position of these companies for the reason that many are incorporated either by private Act or by Dominion letters patent, and under the Dominion Companies' Act they do not have to make annual returns, and so when you ask any question of the department, with the object of getting information, you are confronted with the fact that there is no information to be had because no returns are published. But in Ontario that is different, and there are two companies, the Canadian Northern Coal and Ore and Dock Company, Limited, and the Lake Superior Terminals Company, Limited, that are incorporated unlder Ontario statutes. Here is the return for the Canadian Coal and Ore Dock Company, Limited:
The amount of capital of the company and the number of shares into which it is divided-$500,000 divided into 5,000 shares of $100 each.
The number of shares subscribed for and allotted: 5,000.
The number of shares, if any, issued as fully paid shares as consideration for the transfer of assets, good will or otherwise; if none are so issueld the fact to be stated; 5,000.
The amount of calls made on each share: none.
What does that mean? All water. And that statement is signed by Z. A. Lash.
Now, let us look at the return of the Lake Superior Terminals Company, Limited:
The amount of the capital stock of the company and the number of shares into which it is divided: $1,000,000, divided into 10,000 shares of $100 each.
The number of shares subscribed for and allotted: 5,000.
The number of shares, if any, if it has fully paid shares as consideration for any transfer of assets, goold will or otherwise; if none are so issued, this fact to he stated: 5,000.

The amount of calls made on each share: None.
More water.
And, 'Sir, if one wants a startling statement one need only take up the report into the inquiry of the tariffs of express companies. The inquiry was made in 1911 and reading it one gasps at the financing of this company.
The stock of the Canadian Northern Railway Express Company is now owned by the Canadian Northern Company and is included among its assets. I read from the report of that inquiry before the Board of Railway Commissioners:
This company was incorporated in 1902, with a nominal capital of $1,000,000; $300,000 was issued, $5,000 paid in cash and $295,000 paid up stock issued to the following shareholders:
William Mackenzie, Esq., 1 share of $100.
D. D. Mann, Esq., 1 share of $100.
Z. A. Lash, Esq., 1 share of $100.
R. J. Mackenzie, Esq., 1 share of $100.
Estate 'of A. W. Mackenzie, Esq., 1 share of $100.
Mackenzie, Mann and Company, Limited, $299,500.	!	1
There was $5,000 in cash paid in, and the rest was water.
The property of the company, consisting of general equipment, amounts at its estimate to $38,392
The iinvestigation shows that for 6 years, 1902-3 to 1907-8, their total receipts have been $919,183, increasing from $60,889 for 1902-3 to $336,708 in 1907-8.
The company's operations were principally west of Port Arthur up to about three years ago, when they opened up in Ontario and Quebec.
The amount of transportation paid for the 6 years is $353,126 or 38.4 on gross revenue averaging $58,854 per annum.
The total general expenditure was $331,740 or 36 per cent, averaging $55,290 per annum.
The loss and damage sustained is $3,893 and averages $649 per annum.
The total net earnings are $234,316 or 25.5 on gross revenue, averaging $39,053, increasing from $18,995 in 1902-3 to $57,432 in 1907-8.
Then, we turn back a page and we find out from whom the Canadian Northern Railway Express Company was bought, and here is what the report says:
The capital stock of the company authorized is $1,000,000 ; issued, $300,000. Of this $5,000 was paid in cash and $295,000 was issued as paid up stock to the vendors of the express business, and the rights, franchises, good will, properties, etc., connected therewith, carried on in connection with the Northern Pacific and Manitoba and allied railway companies, and for the good will, properties, etc., used in connection with the express business then done for the Canadian Northern Railwav Company and allied roads.
[Mr. Nickle.J
What one would like to find is how much was given for that stock, and here is what bothers one. As I just explained, reading from the report, the Canadian Northern Express Company issued $5,000 worth of paid-up stock, and $295,000 worth of stock that was issued subject to call was given to .them as a gratuity. The right hon. leader of the Government said to-day that he had a statement regarding Mackenzie and Mann, Ltd.-he read it frankly and honestly as he always does everything-he read thie statement showing that Mackenzie and Mann, Limited, and the Northern Construction Company, Limited, had not made anything out of this railway. But he did not read a statement showing whether Mackenzie and Mann in their individual capacity, and not as members of the company, made anything or not, and I put my finger here on $295,000 and I say that if I manage to find that out in face of the secret system they have in their financing, how much more is there behind?
But it is not just the $295,000. I find in the Canadian Northern Report for 1913 at page 16 that the Canadian Northern Express Company, Limited, had a capital stock of $1,000,000 and they have issued first mortgage gold bonds to the extent of $3,000,000. To whom did Mackenzie and Mann sell these bonds and stock and what did they get for it? These are the sort of things it seems to me that this countrj would like to know and these are the questions that I would like to have answered, because if ever there was a case where apparently men made a large sum of money by the juggling of stock, it is this particular case.
Somebody might say to me, and I suppose it would be in reason: You do not know anything about this; you are inexperienced; and the danger in this partnership which you see does not amount to anything. Before I touch on this point here is a thing which strikes me as a citizen of the country, and it is: Who is going to pay the money to make stock that Canada takes worth $40,000,000? The Government admit that $100,000,000 stock represents the services of Mackenzie and Mann since they undertook this railway business in 1897. Nobody pretends that they paid in anything. That has not been suggested by the leader of the Government as I understood' him, nor by the Solicitor General. The Solicitor General said they had in their subsidiary allied strategic companies com-

mon stock or stocks to the amount of $158,000,000. We have not squeezed water out of that; you cannot squeeze water out of water where there is nothing but watei; the Solicitor General has dipped it out.


Mr. E. B. BENNETT:: Bailed it out.


William Folger Nickle: general which is practicaly Minister of Finance:
The first object of this Bill is to dispense with the Government directors in the company. The position of Government directors has been the occasion of casting upon the Government a good deal of reflection. All the management on the part of the Grand Trunk Railway Company has been cast upon or attempted to be cast upon the Government. The position has been an unenviable one. Now we propose to do away with the responsibility of the Government, and to give the entire management into the hands of the company. It has been suggested one member of the Government in tre board with a view of exercising a supervision over its affairs, but this arrangement in the board with a view of exercising only leave to that member the same responsibility while depriving him of the advice and support of his colleagues.
In the light of the experience of Upper Canada, in the light of the economic conditions 'that I have laid before this House to-night, the Government ask me to support this measure. All I have to say is that I' cannot see eye to eye with them. I have tried to place fairly before the House my reasons ior my stand. If they are incorrect, it is open to other gentlemen to refute them; 'but as I have spoken, so I believe.
On motion of Mr. Boivin, the debate was adjourned.
On motion of Mr. Borden, the House adjourned at, 11.30 p.m.
Thursday, May 14, 1914.