1914-06-02

REPORT PRESENTED.

[Stage Direction]
Abstract of statements of insurance companies in Canada for the year ended December 31, 1913.-Hon. W. T. White (Minister of Finance).

[Stage Direction]
On the Orders of the Day being called:
Sir WILFRID LAURIER:: I would like
some information from my right hon. friend regarding the commission appointed to report on the claims of the province of British Columbia for better financial terms. Can my right hon. friend tell me in what condition that commission if?
iMr. BORDEN: A question arose a's to whether the case filed on behalf of the province of British Columbia was within the scope of the Order in Council appointing the commission. Negotiations and discussions have taken place, and the province of British Columbia has agreed to amend its case by omitting certain items. As I understand, the amended case has not yet been filed, and we are awaiting receipt of that case for the purpose of filing our counter plea.


Wilfrid Laurier: Has the third commissioner been appointed yet?
.Mr. BORDEN: No, the third commissioner has not been appointed. In order to appoint him it is necessary to know the probable date on which he will be required and the length of time he will probably be engaged in the investigation. It is im-

possible to get any exact date or any definite information on that point until both cases have been filed.



THE LOSS OF THE KARLUK.

[Stage Direction]
On the Orders of the Day being called:
Hon. J. D. HA2EN (Minister of Marine and Fisheries):	My hon. friend from
Edmonton (Mr. Oliver) yesterday asked me what steps were being taken to rescue the men who had been on the Karluk, and who remained at Wrangle island. I told him I would give the information this morning. On the 30th May we communicated with Captain Bartlett, who had made his way from Wrangel island to the coast of Siberia, and from there to Saint Michael's, Alaska, and asked for his advice as to possible arrangements for the relief of the party on Wrangel island, and for information as to the time when ice conditions would allow of their being taken off. We received a despatch from Captain Bartlett the day before yesterday, stating that the only available vessels navigating these waters are the Russian Government ice-breakers Taiymr and Waigatsch, which make an annual exploring trip along the north coast of Siberia, and he suggested that the Russian Government be asked to allow these vessels to take off the members of the expedition. Captain Bartlett also suggested that the United States revenue cutter Bear, which patrols the northern Alaskan seas, might be able to undertake this relief trip. The United States and Russian Governments are being approached to ascertain if they could give assistance in this direction. Captain- Bartlett further states that navigation in those waters is not possible before the end of July or the beginning of August.

[Stage Direction]
On the Orders of the Day being called:
Mr. G. H. BRADBURY:: 
Hon. J. D. REID (acting Minister of Railways):: I will take this matter up with the Railway Commission immediately and with tile Canadian Pacific railway, and will certainly do everything possible to help tile people in that district. I am sorry to hear they are taking off the train. The Railway Commission have power, of course, to see that a proper service is given, and I will direct the attention of the Railway Commission as well as of the Canadian Pacific railway to the telegram and information the hon. member has given to the House.



THE OCEAN LIMITED.

[Stage Direction]
On the Orders of the Day being called:
Hon.   W@: I would like to invite the attention of the Minister of Railways to a somewhat similar matter to that which the hon. member for Selkirk (Mr. Bradbury) has directed his attention. In this matter the minister will be more powerful to correct the injustice which is being done to the people in a very large portion of New Brunswick including the people of the city of St. John. The Ocean Limited, which gives splendid accommodation between Montreal and certain points in the Maritime provinces, has lately been put on, and in advertisements and in the train arrangements all that part of New Brunswick west of Moncton is utterly ignored. No connection is made for that part with the city of Montreal, and the service is so arranged as to make it exceedingly inconvenient for the people residing west of Moncton to take the Ocean Limited either going to Montreal or coming from Montreal. I cannot but think that the arrangement has been made in the interest of the Canadian Pacific railway so as to encourage all persons travelling between St. John and Montreal to take the Canadian Pacific instead of the Ocean Limited. I may say that in the public advertisements of the Ocean Limited it is expressly declared that it is not intended to be a train for St. John. In the advertisement appearing on the Government Railway Folder, the Ocean Limited is advertised as follows:
Montreal, Quebec, Moncton, Halifax; only one night on the road between Ontario and Halifax, saving hours of time; through sleeping cars between Montreal and Halifax; dining cars are noted for excellence of service; through the beautiful Matapedia and Wentworth valleys; connection for the Sydneys and Newfoundland.


John Dowsley Reid: The time-table shows the St. John connections.


Mr. PUGSLEY:: By the time-table we
find that the Ocean Limited arrives at Moncton at 3.55 in the afternoon, about fifty-five minutes after the train has left for St. John, or fifty-five minutes too late to make connection with St. John; and, in order to utilize the road by way of Moncton, the passenger arriving at Moncton has to remain there about three hours before he can get another train to take him to St. John. The same remark applies to the service north; a passenger must remain two or three hours at Moncton if he desires to take the Ocean Limited. There is no sleeping 
car connection, and the whole service is designed to cut out St. John as a point to be served by the Ocean Limited. I believe that the service which has been advertised for this season is worse, eo far as St. John and other points west of Moncton are concerned, than it has ever been before, and I cannot but believe-


Mr. SPEAKER:: I would like to remind the hon. gentleman that although the present is not an inopportune time to present to the House a matter of urgent importance upon which he desires to base a question, it is not the proper time to take up some matter which may start a discussion on both sides of the House.


William Pugsley: I was simply, on the
Orders of the Day being called, drawing attention to a matter of great public importance, and perhaps I was led to go further than I would have gone by the fact that the hon. member for Selkirk was very properly [DOT] allowed to bring a similar matter to the attention of the House.


Thomas Simpson Sproule: The hon. gentleman
read a very long telegram and made some remarks upon it. It was my intention, provided he desired to go further than ask a question, to direct his attention to the fact that it would not be proper to proceed. Although a sufficient amount of explanation is necessary in order to lay an intelligent foundation for the question to be asked, any discussion of the matter is out of order.


William Pugsley: 1 would suggest to my
hon. friend the Minister of Railways and Canals that he take this matter up at once with the officials of the department and see whether it can be remedied. An important commercial city like St. John should be placed upon the main line of the Intercolonial so far as passenger service is concerned, and direct communication should be had between St. John and Montreal by means of the Ocean Limited.


John Dowsley Reid: This is the first complaint I have heard with regard to the Ocean Limited since it was again placed on tlie time-table. However, I shall be glad to take the matter up with the department with a view to seeing if anything can be done.


William Pugsley: The hon. gentleman may be thankful to me for bringing the matter up, because Iby-and-by he will hear very loud complaints.



HON .G. H. PERLEY'S TRIP TO LONDON.

[Stage Direction]
On the Orders of the Day being called:
Mr. LEMIEUX:: I see by this morning's Citizen that the hon. member for Argenteuil (Mr. Perleyj is leaving shortly for Europe, and that the object of his trip is two-fold; first, to discuss with the Imperial Government the question of Senate representation of the western provinces, and, second, to take up the matter of the purchase of a site for the Canadian offices in London. Would my right hon. friend inform the House if that report is correct?


Mr. BORDEN:: It is proposed that the
hon. member for Argenteuil, as a member of the Government, shall proceed to London during the coming summer and remain there for some months for the purposes indicated and for other purposes.


Wilfrid Laurier: Anything
about naval affairs?


Robert Laird Borden: My right hon. friend is
so intensely interested in naval affairs that I have very great pleasure in assuring him that in case the necessity arises the hon. member for Argenteuil will discuss naval affairs.


Rodolphe Lemieux: Emergency?


Robert Laird Borden: Necessity.


Mr. GERMAN:: Does this mean that the Bills respecting senatorial increases will be dropped for this session?


Robert Laird Borden: It is intended to introduce a resolution with regard to the matter; in case that resolution should pass, it would not be necessary to proceed with the Bill.



INVESTIGATIONS INTO SHIPPING CASUALTIES.

[Stage Direction]
The House again in Committee on Bill No. 223, to amend Part X of the Canada Shipping Act-Mr. Hazen; Mr. Blondin in the Chair.
On section 1-chapter 113, Revised Statutes, 1906, amended:
Mr. HAZEN:: I have considered the suggestions of the Deputy Minister of Justice as to changes in the phraseology of this Bill, and I think it would be well to accept them. I beg to move:
That the words ' a commission ' in the fourth line of subsection 2 be struck out and that the words ' commissioners ' be substituted therefor, 292}
and that in the following line the word 'commission ' be changed to ' commissioners.'


[Stage Direction]
Amendment agreed to.
Wilfrid Laurier: I see a statement in the press to the effect that it is intended that the commission shall sit on the 9th of this month. Is that the case?


John Douglas Hazen: No decision has been
arrived at as to the date upon which the commission shall sit. A representative of the British Board of Trade is on his way here now; he sailed by the George Washington on Saturday last, and the place of the sitting will depend on what may take place in his consultation with officials here. The newspapers have also published a statement that the commission will sit in Montreal; I may say that no decision has been arrived at in that regard.


Wilfrid Laurier: Quebec ought to be ihe place.


John Douglas Hazen: The matter has not been discussed.


Robert Laird Borden: We have an intimation
to the effect that *the imperial Government will be prepared to co-operate with us in the constitution of the court.
Section, as amended, agreed to.
Bill reported, read the third time, and passed.



CANADIAN NORTHERN RAILWAY AGREEMENT.

[Stage Direction]
Mr. BORDEN moved the third reading of Bill No. 214, respecting the Canadian Northern Railway system.
Wilfrid Laurier: Mr. Speaker, before we dispose of this Bill, the House, I hope, will bear with me for a few moments while I summarize the views which we on this side of the House entertain with regard to this legislation.
The position which has been taken by the Government and their supporters all through the discussion that we have had has been that, in the introduction of the legislation which is now before Parliament, they were not free agents, that they were compelled by the circumstances in which they found themselves to ask Parliament once more to give this further assistance to the Canadian Northern Railway system, alleging that the Government's policy with regard to the construction of a third transcontinental railway was one which they found and which they had to carry out; at the same time, they have disclaimed all

responsibility and laid it altogether on the shoulders of their predecessors. For my part I have no objection, and my friends have no objection, to accept the fullest responsibility for the policy which we followed during our term of office, that this country required no less than three lines of railway in the western provinces and the provinces in the East in order to accommodate and to do full justice to the enormous trade which is already looming up, and which from year to year must develop between the different portions of our country, and in order to fill the gap, which up to the present has been the greatest danger to Confederation and which still exists, on the north shore of lake Superior, and at last to open to the fullest to the Canadian people all the latent wealth which has been dormant for ages between the Laurentian mountains and the shores of Hudson bay.
With regard to the second transcontinental railway, the Government of to-day can well disclaim any responsibility. While they were in opposition they combatted with all their might and power and influence the very idea of that legislation. If they could have prevented it passing they would have done so; and since they have been in office not only have they not made any effort to carry out to the fullest the idea which we had in view and which was embodied in that legislation, but they have more than once done their very best to take away from that road its transcontinental character and make it simply a local railway.
But towards the third transcontinental railway, the Canadian Northern railway, they have always shown great tenderness. They never offered any obstacle whatever to its construction nor opposed any grant of money for assistance of any character that was asked from Parliament for this road. Any appropriation that was demanded they cheerfully voted up to 1911. In 1911, when we proposed to subsidize that railway to connect the lines which lu*l already been built by the Canadian Northern railway in the western provinces with the St. Lawrence at Montreal, they did not exactly assent, neither did they dissent. They raised some doubts and expressed them, but their doubts and protests, if protests they were, were rather of the kind of a young dam,sel, who, receiving an offer of marriage, by her answer does not discourage but rather encourages the suit to be pressed on. So it was with [Sir Wilfrid Laurler.l
the Canadian Northern railway, and the company was not slow to act upon that impression as soon as the present Government assumed office. In the very first session that the present Government were in office, in the year 1912, the Mackenzie and Mann system, the Canadian Northern railway, were rapping at the door of the treasury to have it opened, and to have it opened in a way and for a purpose which we had refused, that is to say, for the extension of their system through British Columbia and to the waters of the Pacific at Vancouver. In the session of 1912 the Canadian Northern, railway asked for a subsidy from Edmonton to the summit of the Rocky mountains at the Yellowhead Pass and thence to Vancouver. The subsidy for the first part of the line from Edmonton to The Summit a guarantee of bonds at the rate of $35,000 ia mile, over a distance of some 116 miles; upon the line from The Summit to Vancouver, a distance of some five hundred miles, a cash subsidy of $12,000 per mile; in all a total of some $10,000,000. This was readily granted by the present Government. This request had already been refused by us, as ' we would not entertain any idea of giving a subsidy to the Canadian Northern railway in the province of British Columbia, in view of the extravagant and abnormal terms of the agreement under which the Government of British Columbia had granted assistance to the company. By that agreement, the Government of British Columbia stipulated that they .should have full control over the traffic of the road. In addition to that, wa have heard in the East much criticism of the Transcontinental railway on the ground that it is duplicating the Intercolonial. As a matter of fact, the Intercolonial is in the valley of the St. Lawrence and the Transcontinental railway is in the valley of the St. John, so that there can be no duplication. But, by the subsidy which was given by this Government to assist the Canadian Northern railway from Edmonton to the summit of the Rocky mountains and thence to Vancouver, there is not only parallelling, but I think that for three hundred miles the rails of the two lines are never more than three miles apart. Not satisfied with that, in the following year, in the session of 1913, the same parties again came to this Government for assistance, to do what? To subsidize the line from Port Arthur to Mont-

real, the very thing we had started out to do ourselves, and to this line they gave a new subsidy. On the whole, that year they received a, subsidy of $14,000,000. Now they are coming -again for further assistance to the amount of $45,000,000. So that during the four years commencing with 1911-that is, 1911, 1912, 1913 and 1914,-the same men have been coming to the Government of Canada and to Parliament for assistance, and have obtained it; and if they get the assistance which they now ask, they will have obtained in four years, by these repeated contributions, no lees a sum than $100,000,000.
Where is this to end? That is the (question we have to ask ourselves. I stated on a previous occasion, and I have to repeat again, that to this railway, for my part, I offer no objection, except to the portion in British Columbia, which I think should not have been, subsidized at all under the existing circumstances. For the rest of the road I am most enthusiastic. I think it is a road that should be built, as it will serve a good purpose and is needed; but at the same time it must- be apparent to everybody that the policy which wo have been following up to this time in order to facilitate the construction of this road cannot be persisted in any longer, and we must call a halt at some time. We have been pouring and again pouring into the coffers of the Canadian Northern railway millions upon millions, until, within the last few years, it has reached the large amount of $100,000,000. What is to be done? We cannot allow the enterprise to lapse; certainly I do not want to see it lapse. (Assistance ought to he given, but given upon terms altogether different from those applicable to the assistance which is being given here. If the Canadian Northern railway had shown any inclination to take us into their confidence, put before us a true statement of their business, and show us exactly where they were, and if we could have had some assurance that this is the last call, and that they will not come knocking at our doors again, there might be some reason to treat them as they request; but we cannot have any such assurance. On the contrary, I think it is a matter of absolute certainty that, in view of the figures placed before us, in view of the undertaking which they have to carry out and of the conditions, they cannot complete that enterprise with the assistance of the $45,000,000 that is to be voted by this Parliament.
Therefore, some new position had to be taken. What is the policy which ought to have been followed? I believe that I have given this matter the best consideration that is in me. Whilst I claim to be a partisan, I hope that I have approached the subject in no partisan spirit, but simply with a view to the best interests of the country at large; and it seems to me that the solution which was offered to the House a few days ago by my hon. friend from St. John (Mr. Pugsley) is the best that can be adopted. My hon. friend from St. John suggested that the best solution would be, first, to reduce the capital stock of the company from $100,000,000 to $30,000,000, and, second, -that the Government should take power to itself to acquire the whole system. That policy was rejected by the Government. 'In regard to the two points involved, the first, the reduction of the capital stock, is not a point of paramount importance, and, therefore, for the present, I put it aside. But as to the other, the acquisition of the railway and of +he whole enterprise, a reason has been given by the Government why it should not be adopted. What was the answer made by my right hon. friend the Prime Minister (Mr. Borden) when he took the floor after my hon. friend from St. John had sat down? What was the only point that my right hon. friend made? The only answer lie gave why provision for the acquisition of this road should not be embodied in this statute was that we suggested the same thing in 1904 in regard to the Transcontinental railway, and me Government of that day, the Opposition of this day, would not accept it. My right hon. friend spoke in this way on that occasion:	[DOT]
In 1904, the question of public ownership was considerably discussed in this House, and tve moved a resolution declaring that as the oeople of Canada were providing about nine-tenths of the cash and credit required for the construction of the National Transcontinental railway, it would be better to provide the other tenth and own the whole line from Moncton to Prince Rupert. The right hon. gentleman scoffed at the idea of extending the principle of government ownership and operation of a line. He told us that he had gone with Mr. J. R. Booth, I think it was, to Parry Sound, had looked out upon the waters of the Georgian bay and had seen the Canada Atlantic steamers there and had made himself acquainted with all the complexities and developments connected with the operation of a modern railway system and had come to the c6nelusion that such considerations forebade the Government from embarking upon any policy of state ownership of railways.

I have nothing to disclaim of what has been stated by my right hon. friend as to my views at that time, except, that what I stated at that time in regard to having accompanied Mr. Booth to the Georgian bay had reference, not to the question of Government ownership, but to the suggested acquisition of the Canada Atlantic railway. My right hon. friend, who has a habit of looking into the past and trying to find some inconsistency in hiis opponents, may perhaps remember what I said upon that occasion. It had reference not, as he said, to the absolute ownership of railways, but to the acquisition of the Canada Atlantic which had been proposed by my right hon. friend when he was occupying the place that I now occupy. Among the many policies which my right hon. friend suggested against the construction of the Transcontinental railway, one was the .acquisition of the Canada Atlantic, and I point out to him the difficulty there would be in the Government owning the Canada Atlantic, because I had been told by Mr. Booth that the trade of the Canada Atlantic had to come from Chicago to go to Boston, and the difficulties in the way of the bonding system were such that Mr. Booth had to operoate the Canada Atlantic, as f.ar as Chicago was concerned, by way of a subsidiary American company. But I have nothing to disclaim of what I said on that occasion, or upon- any other occasion-that I never was favourable to the operation of railways by the Government. I do not say that there are not some countries mere settled than we aire dn which this might not be a good policy. I did not say that. this was a policy which might not be a good one in a country that is much more settled than ours; but in a new country such as this I thought that operation by company was preferable to operation by Government. Such was my view. I expressed it with perfect frankness and honesty to Parliament and the country at that time. With reference to the Transcontinental railway, in a country such as this, .as between Government operation and company operation,
I favoured operation by a company.
Such, however, was not the view of my right hon. friend. He believed that the Transcontinental' railway should be owned -and operated by the Government. He said if we furnish nine-tenths of the *money to construct the National Trans-

continental why not own it as well? If it was good policy, im>
the view of my right hon. friend, because we supplied nine-tenths of the money to build the National Transcontinental railway, what reason can there be why we should now not own the Canadian Northern, when we .supply not only nine-tenths, .but every cent of the money that goes into it? My right hon. friend will tell you that I have changed my views. If he does, I will tell him that lie (has changed his views; .and, if he has changed' his views and if I have changed my views, I want the House to determine Who has progressed and who has retrograded. It is for the House to determine. I have not changed my views. I am not enamoured any more of Government ownership than before, but if we have to make a choice to-day, and if the choice we have to make is between pouring more money into the coffers of the Canadian Northern Railway Company and the Government getting control of the road, I would rather get control of the road for the benefit and profit of the people of Canada. That is the view that I have to present to the House on the present occasion.
I said a moment ago that my intention was simply to summarize the views and the policy which we have laid before the people on this question, and I summarize them in a few words. We must carry on this enterprise; we cannot laillow it to go by default; we cannot allow anybody or anything to come in which wouild imply anything detrimental to our credit in England; this enterprise Iras to be carried out; but, instead of carrying it out in the way proposed, we propose that we should carry it out by other means-that we should take .absolute control of the enterprise; and for that purpose, I beg to move, seconded by my hon. friend from St. John (M,r. Pugsley) :
That the said Bill be not now read a third time, but that it be resolved that under existing circumstances no assistance should be given to the Canadian Northern Railway Company unless at the same time it is provided that the Government have power, within a reasonable time to acquire the ownership of the entire stock of the oompany at a price to be fixed by arbitration, but not to exceed thirty million dollars.


Hon. L. P. PELLETIER (Postmaster General):: The right hon. gentleman has told us that he has summarized-I think I might say he has tried to summarize-the

position of himself and his party on this question. The summary to my mind is not very clear, but the reason may be, and I think is, that the position of the Liberal party in this House on this matter is not clear enough to permit of being summarized. We have had a prolonged discussion on this question, but nobody will complain of that because it is one of the most important things *which has been brought under the notice of this House during the present session. It has been said in this House and it has been repeated in certain newspapers, that we brought this Bill down in the dying days of the session, that we have not given enough time for its consideration, and that the House has not had full opportunity to do so. My right hon. friend the leader of the Opposition has not raised that point to-day, and I think very properly so. It might be well to point out that these resolutions were put on the Order Paper on the 28th of April last, and this is the 2nd of June. The discussion on the Bill began on the 13th of May and it is not finished yet. Consequently, I think hon. gentlemen opposite will agree that we have given full and ample time for proper discussion and consideration of this matter. Let us compare the history of this Bill with what happened in reference to the National Transcontinental Railway Bill. In 1903 Parliament met on the 12th of March, and the National Transcontinental Railway Bill was not introduced in the House until the 30th of July, four months and eighteen days after the opening of the session. And so, if you compare the action of the two parties in respect to these Bills, it will be conceded in all fairness that sufficient time has been given to consider this Canadian Northern Bill.
Now that we have arrived at the last stage of this measure in the House, we are told by the right hon. gentleman this morning that the position of the Liberal party with respect to the measure is summarized in the amendment now proposed by him. That amendment says:
That under existing circumstances no assistance should be given to the Canadian Northern Railway Company unless at the same time it is provided that the Government have power, within a reasonable time, to acquire the ownership of the entire stock of the company at a price to be fixed by arbitration, but not to exceed thirty million dollars.
It will be apparent to all that the amendment is couched in vague terms indeed; it will be noticed that the right hon. gentleman has not told us what he has in mind as being a reasonable period of time within which all this should be accomplished. Let me refer first to the last part of the amendment, which says that no assistance should be given to the company unless we have the entire stock of the company, and that the cost of that stock should not exceed thirty million dollars. The right hon. gentleman has told us that this was not an essential part of the suggestion he has put before the House, and consequently the essential part of it must be the acquisition of the ownership of the entire stock of the company. I take it that the people of this country can, at any time they so desire, acquire the entire ownership of the stock of this company by having recourse to expropriation proceedings. Whenever the Government and the people of Canada think it wise that this should be done, it is open to them to do so without any such amendment as that now before us.
We have been told several times during this debate, and the right hon. gentleman has taken good care to repeat it this morning, that this enterprise must be carried out and that the railway must be completed. We are, therefore, all agreed on this point, and there is no difficulty over it. The only remaining difficulty, then, between our friends opposite and us, is as to the manner in which the enterprise should be carried out and the railway completed. On that point I would remind hon. gentleman that it has been suggested by one of the most important members of the Liberal party from his seat in the House, that assistance to the Canadian Northern railway should take the form, not of a guarantee but of an advance of money made by the country to the company. This suggestion has been made by a gentleman who has occupied the important position of Minister of Railways in the late Liberal Government, and a gentleman who is certainly one of the most prominent members of the House. In his opinion, therefore, the help which this Bill should give should be a straight loan of $45,000,000. Whether the rank and file of the Liberal party do or do not agree with that we do not know, because no formal proposition to that effect has been put in your hands, Mr. Speaker, nor has there been any embodiment of that view of the ex-Minister of Railways presented to the Committee of the Whole. But have we not the right at this moment, in view of the importance of the statement and the prominence of the hon.

wherein these statements are incorrect. That has not been shown so far. What have we done? A sub-committee of Council has been working at this for months. We have had these people before us; we have put to them every possible question as best we could; and, after having had all their answers, we have said, this is not sufficient. We have taken some of the best men in the Department of Railways and Canals, and in the Finance Department, to make a complete, searching and thorough investigation; and these men have reported to us. We have been told that this is not sufficient. But in what respect is it not sufficient? Is there anything which has been hidden from Parliament? That is the point. This is not suggested, but we are simply told, from political motives, that we might have made a more searching and complete investigation.
Mr. Speaker, the Prime Minister and his colleagues, particularly those acting on that sub-committee, are satisfied in their souls and consciences that we have a complete and true statement of the facts as they exist. Under the circumstances we have come before Parliament with carefully prepared legislation. I do not think any Bill has ever been put before any Parliament which has been given the study, thought and consideration which this matter has received at the hands mainly of the Prime Minister and of the Solicitor General; and we ourselves have gone into the whole matter. The details, of course, have been more in the hands of the Solicitor General; but we are all satisfied that the statement of facts put before us and verified by our own officers, is an absolutely correct and true statement, and I do not think these facts can be contradicted by the assertion that another inquiry should have taken place. If we had made another kind of inquiry, we would have been asked: Why did you not use the officers of your own departments? I am satisfied that there is no course we could have taken that would have satisfied our hon. friends opposite, because they have to fight this matter anyway.
We are told 'that this country has given -all the money that has gone into the construction of this road. As a matter of fact, this country has not provided all the money used in building the Canadian Northern railway; $174,000,000 has been provided by the Canadian Northern Railway Company, the proceeds, if I mistake not, of their bonds, and $131,000,000 is the exact amount which this country has provided. This $131,000,-

000, as I understand it, includes all money and guarantees given by the provinces and by the Dominion.


William Pugsley: Including the land
grants.


Mr. MEIGHEN:: Not the Qu'Appelle,
Long Lake and Saskatchewan.


William Pugsley: What about the Winnipeg and Hudson bay?


Louis-Philippe Pelletier: I think that ,at this
late hour we should not enter into the details of this matter, but that we should, following the suggestion of the right hon. the * leader of the Opposition, take a general and broad view of the proposed legislation. The right hon. gentleman says that the country has provided nine-tenths of the money used in the construction of this road, and I am showing him that $174,000,000 was provided by the Canadian Northern Railway Company and $131,000,000 by the people of this country in the way of guarantees and subsidies.
The compliment which hon. gentlemen of the Opposition have paid us because we are doing our duty in coming to the aid of this company is one which we deeply appreciate. We return to them our sincere thanks in that they have realized that we are doing our duty in a general way. They say: Oh, you should do it in this way or in that way; you should adopt this suggestion or that suggestion. Looking, however, at the whole matter from a general point of view, it is agreed on all sides that in coming to the assistance of this company at the present time we are doing something which is absolutely right-something which is concurred in by the leader of the Opposition and toy other hon. gentlemen sitting on the same side of the House. No great harm, therefore, can possibly be done, when we all agree on the general policy that ought to be followed.
Having regard to these facts, I think we may well proceed now to give the Bill its third reading. We have under these resolutions a method of foreclosure, a mode of bringing this matter to a successful issue, in respect of which compliments have been paid to the Solicitor General.
I wish to add mine to those which have already been presented to him, and to tell him that he has indeed rendered a great service to this country in working out this legislation as we find it before us to-day. We shall not apologize to the country for this measure; we shall go before the people

and say that this is one of the best measures which has been introduced into Parliament and we are confident that the future will show that what we are doing now is absolutely right.


William Pugsley: 
Louis-Philippe Pelletier: Does the hon. gentleman expect an answer to this question tion on the third reading of the Bill?


William Pugsley: Yes.


Louis-Philippe Pelletier: Let us take this matter seriously.


William Pugsley: The hon. gentleman declares to-day that he is in favour of the Government taking over this railway. My hon. friend the Solicitor General stated a few days .ago that if the suggestion had been made to Mackenzie and Mann that as a condition of obtaining Government aid to the extent of $45,000,000 they should give .a>n option on the stock of the company, on the equity of redemption for $30,000,000, they would have spurned the suggestion, and the road would have proceeded rapidly towards a receivership. My hon. friend the Postmaster General is apparently in favour of the Government's acquiring ownership of this road; may I ask him if Mackenzie .aind Mann were .asked to state whether or not they would give an option upon the stock of the company, and at what price? The Postmaster General thinks that is itoo much of a poser for him just at the present moment.


Louis-Philippe Pelletier: I never made the
statement which the hon. gentleman says I made.


William Pugsley: Which statement?


Louis-Philippe Pelletier: The statement that I
am in favour of having the Canadian Northern railway owned and controlled entirely by the Government at the present time; I never said that.


William Pugsley: Perhaps I was wrong
in drawing too direct a conclusion from the hon. gentleman's remarks; at any rate, he
stated that he was strongly in favour of state ownership of railways, and he proceeded to give reasons why. If I am to draw any conclusion at all from my hon. friend's position, it is this: that instead of asking this company to day, when they are, according to. their own statement, in a helpless condition; when they cannot finish this enterprise without getting the Government to guarantee their bonds to the enormous extent of $45,000,000; instead of asking them to give an option on .the stock of the company, we should, according to the view of my hon. friend, help them out of their difficulty; we should help them make this road profitable and valuable; we should help them to increase the value of the capital stock and then endeavour to acquire title by expropriation and give to them whatever the arbitrators may choose to allow them. That, apparently, is the view my hon. friend takes of the easiest route towards state ownership of this railway. The Government has not disclosed to this House that information which it ought to have given with regard to the assets of the men who own this railway, Messrs. Mackenzie and Mann; of the profits which have been derived from the construction of this road -and from the financing of the securities of this great undertaking. The other day when my hon. friend the Solicitor General boasted that the Government had obtained all the securities which they could properly ask for and that Mackenzie and Mann had even handed over the interest which they had in the various town-sites, I pointed out that the greatest town-site of all, the one of surpassing value, the townsite of Mount Royal, at Montreal, they had entirely neglected to secure to this country.
My hon. friend said that there was no evidence that the Canadian Northern railway or the -Mackenzie Mann Company owned that. I pointed out the fact that there was every presumption that they owned it, that when the Canadian Northern railway came to Montreal that land which now forms this townsite was simply farm land, that the fact of the Canadian Northern railway building the tunnel under Mount Royal has given an enormous value to the townsite which they have laid out. I stated that the land was purchased ostensibly for the Canadian Northern railway, or Mackenzie, Mann and Company, Limited. I stated that Canadian Northern engineers had laid it out. I stated
4G40


Arthur Meighen: That is not the Canadian Northern railway.


William Pugsley: It is the Canadian
Northern Montreal Land Company, Limited. In the West it is the Canadian Northern Prairie Land Company, in other places it is the Canadian Northern Terminal Company, in some places it is the Canadian Northern Hotel Company, or it is the Canadian Northern Alberta Railway Company, in others it is the Canadian Northern Western Railway Company; but in all of the enterprises which belong to Mackenzie and Mann you will find that the name Canadian Northern is used. I refer the
(Mr. Pugsley. 1
Solicitor General to the people of Montreal if he requires any further evidence in favour of the contention that it is the townsite of the Canadian Northern Railway Company. There is the fact that Mackenzie and Mann interests acquired the land, and" the further fact that it is the Canadian Northern Railway enterprise that makes it valuable; the fact that the Canadian Northern engineers laid out the townsite, and the fact that it is owned by the Canadian Northern Railway Montreal Land Company, and that Davidson and MacRae, who, as I have said, are the agents for all Canadian Northern land interests, both town and country, are the general agents for this townsite, and its office is in the building in Montreal which is owned by the Canadian Northern Railway Company. Let me say to my hon. friend that I differ entirely from him and from the Prime Minister, who has stated that Messrs. Mackenzie and Mann are entitled to their lands, and that they are not bound to hand them over to the Canadian Northern Railway Company or to the Government. I think my hon. friend said that they are as much entitled to their lands as the member for St. John is entitled to land in which he may be interested in the Northwest. The case is altogether different frofn that of a private individual. Mackenzie and Mann are the Canadian Northern Railway Company.	Who own
that company? Is it not the men who own the stock? It is not the men who own the securities, it is not the men who hold mortgage bonds upon the road, because the latter have no voting powers. The men who ow'n the company, who are the company, are the men who own the stock; and up to last year, when the Government took over 87,000,000 stock of this company in consideration of a grant of $16,000,000. Mackenzie and Mann owned all the capital stock of the Canadian Northern Railway Company. Now, Sir, I maintain that it was the duty of these men, coming to the provinces, coming to the federal Government year after year and getting land grants, bonuses and bond guarantees for the construction of the road, to take the town-sites in the name of and for the benefit of the Canadian Northern Railway Company, and as security for the Dominion and the provinces who are aiding so liberally this undertaking. They did not do that, they took the land for these townsites in their own name, in the name of Mackenzie, Mann and Company, Limited. But our

argument is that while they took the town-sites in their own name, they belonged to the Canadian Northern Railway undertaking, and it was a simple matter of duty for them, coming as they have come for the fourth time during the last four years to this Government and asking aid to the extent of $45,000,000, to put in all these townsites, not only the townsites in the prairie provinces and British Columbia, but this townsite at Montreal and all the other townsites in which they are interested and which have been given any value by reason of the building of the Canadian Northern railway, to turn them in and give the country security upon them. That they have not done. It appears that the Government have not asked them to do it. It appears that the Government have simply taken those securities which they chose to offer to the Government and have not asked for these valuable securities, which they have kept entirely outside of the company and entirely outside of the Government security.
My hon. friend the Postmaster General (Mr. Pelletier) says that my right hon. friend the leader of the Opposition (Sir Wilfrid Laurier) is wrong in stating that the Government has put in the bulk of the money, or practically all the money, for this undertaking. He says that Messrs. Mackenzie, Mann and Company, Limited, have raised some $174,000,000 on securities which have not been guaranteed by the Governments of the Dominion or the provinces. But is it not true that when the Government to-day are asking the people of Canada to guarantee these $45,000,000 of bonds which stand below and after all the securities now existing against the Canadian Northern and its subsidiary companies, practically the Government is assuming responsibility for all the securities which are already issued against the undertaking. If the Government should unfortunately be called upon to make good its guarantees it will have to make good all the securities already standing against the enterprise or eke pay over this $45,000,000, lose the amount entirely, and let the road go to the people who are holding the securities which stand ahead of these guaranteed by the Government. That is the position that the country is in to-day.


Arthur Meighen: If that is the case, then we have also put up every dollar for the Grand Trunk Pacific.


William Pugsley: I am not speaking of the Grand Trunk Pacific. I am speaking
of this road which these gentlemen say is bankrupt, which they say cannot be saved from a receivership unless the country comes to the rescue; and my argument is that in guaranteeing these bonds, which in some cases stand fifth, the Government stand behind the entire indebtedness of this undertaking. The Government by this Act practically guarantee the $360,000,000 of securities which are standing out to-day against the Canadian Northern Railway Company and the various constituent and subsidiary companies which compose the system. Under these circumstances I put it to thi6 House as to whether or not the proposition of my right hon. friend the leader of the Opposition (Sir Wilfrid Laurier) as representative of the Liberal party in this House is not a reasonable and a fair proposition. I ask you again and I ask this House now when this company comes to us in this helpless condition and asks to be saved from bankruptcy, if that is not the time to make a bargain with the Canadian Northern railway as to the acquisition of this stock on behalf of the people of this country.
My right hon. friend (Sir Wilfrid Laurier) moves as an amendment that as a condition of granting this aid the Government shall be allowed to take control of this stock and control of the enterprise until it is completed, and that the country shall have leave to take over the entire stock of the Canadian Northern railway within a reasonable time at a price to be fixed by arbitration but not to exceed the sum of $30,000,000. Is not that a reasonable proposition? Is not that a proposition which is fair to the people of this country who are called upon to assume this enormous liability? Is it not fair to Mackenzie, Mann and Company who are asking this country, for the fourth time, to help to complete this enterprise? It is fair to Mackenzie, Mann and Company, and it is a fair and reasonable proposition on behalf of the people of this country.
But the Postmaster General says that we are moving along towards state ownership in connection with the Canadian Northern railway because, while we do not own a majority of the stock, while we take no power to acquire the whole of it, yet we own forty per cent. To my mind, instead of that being an argument in favour of the policy of the Government, it is one of the strongest arguments which could be urged against this proposition. My hon. friend is oblivious of the state of public opinion if he

thinks that the people approve of the Government asking them to go into partnership with Mackenzie, Mann and Company in the ownership and control of this undertaking. They are absolutely opposed to it. They are opposed to becoming the minority partner if they are to be in the partnership at all, but if there is to be any partnership they want to have the controlling voice. The result of what the hon. gentlemen have done is to put the people in a position of partnership with Mackenzie and Mann but without control; they have only the minority voice, being responsible . for all this railway company does, being responsible from the date this becomes law for what Mackenzie and Mann, as holding the majority interests in this undertaking, may do, being responsible in honour for the debts and engagements of this company and being bound to stand behind this company whatever may happen in order to save the credit of the people of Canada. Instead of doing something which they ought to be proud of they are irrevocably committing the honour, faith and credit of this country into the hands of Mackenzie, Mann and Company.
My hon. friend says that they have made every inquiry and that in their heart of every inquiry and that in their heart of connected with this enterprise is just as it ought to be. I presume that in the secret recesses of the caucus, when they got together in the family circle, they told their friends all that they had ascertained and they may have satisfied their friends as to the exact position of affairs; yet, we find that the hon. member for Peterborough (Mr. Burnham), one of the most honourable and conscientious gentlemen on that side of the House, a very thoughtful man, and one who is not disposed to condemn anything which he be-lieyes to be right or to forgive what he believes to be wrong, unless extreme party necessity compels him to do so, feels constrained, with all this secret information and all this knowledge imparted to him, to tell the House and the country that he is satisfied that Mackenzie and Mann are a pair of buccaneers. Notwithstanding that, the hon. gentleman, impelled by party exigencies, asks this Parliament to declare by statute that His Majesty the King, as representing the people of this country, shall enter into a partnership with the gentlemen whom he so described. We do not believe in that. We believe that the position of creditor and debtor as between the coun-
try and Mackenzie and Mann should not be disturbed. We do not believe that the whole of the people of Canada, by taking forty per cent of the stock and going into a partnership in this enterprise, should have an interest in receiving dividends jointly with Mackenzie and Mann against the interests of the people who are to be served by this road and whose interests will be affected by keeping the rates and tolls down to as low a point as possible.
We believe, and it is so expressed by the resolution, that as a condition of granting this aid the Government shall take control of the stock of this undertaking, hold that control for a reasonable time and that during that time it shall have the right to take over the road at a value to he fixed by arbitration. We say that the valuation shall not exceed $30,000,000 which, we submit, any reasonable man will say is an amount beyond the value of the equity of redemption under the existing circumstances.
The Postmaster General says that those who come after him will be able to look back to this Parliament as a Parliament which has declared that one of the transcontinental railway systems of the country shall not be allowed to take one pound of freight consigned for export anywhere except through a Canadian port. I do not like to say with regard to my hon. friend that he is attempting to humbug this Parliament and the people of Canada. Other gentlemen may attempt that, perhaps other gentlemen on the other side of the House, but my hon. friend would never attempt to humbug the House and the people. Yet does my hon. friend pretend that he believes this Act to mean that the Canadian Northern Railway Company shall refuse to ship from the West any produce destined for the limited Kingdom or any European market unless it is shipped through a Canadian port? Does my hon. friend believe the statute will accomplish that? Does he believe it will take out of the hands of the shipper the right to route his shipment by any port that he pleases?


Mr. FOWLER:: Would the hon. gentleman say that the Parliament of Canada has not the right to impose upon a railway to which it is giving large assistance a condition such as that referred to by my hon. friend and, if it imposes such a condition, could it not enforce it by law?


William Pugsley: I say it could be done, but I want to know if it is intended to dc

it in this case? Further, I want to know if it is not simply put forward with the view of humbugging the people of eastern Canada by the phraseology.


George William Fowler: Will my hon. friend say that as a representative of one of the winter ports of Canada he considers that bad legislation, is opposed to it and wants it stricken from tihe statute?


William Pugsley: If the hon. gentleman
will he kind enough to sit down I will give him an answer. I do not hesitate to say to my hon friend that it is bad legislation. I do not hesitate to say to my hon. friend that to the producers of Canada, and especially to the western producers who have to reach European markets and ports, it would be most injurious.	.


George William Fowler: Why?


William Pugsley: Why?-to say to the
western farmer that you cannot ship by a railway which serves your district, or by any port you please, or in the cheapest way in which you can, to the markets in the old country, but that you must use one port and one port only, would be most unjust. I say that would be most unjust to the western producers.


George William Fowler: Will my hon. friend permit me another question?


William Pugsley: Yes.


George William Fowler: This is a matter of some importance.


William Pugsley: My hon. friend's questions are quite important.


George William Fowler: It is a most important
matter to me personally, because I tried to get that same clause inserted in the Transcontinental agreement with the Grand Trunk Pacific and was unable to do so, but a different government is in power now and this clause is in, and not at my initiative either.


William Pugsley: Will the hon. gentleman now ask me the question?


George William Fowler: Yes, the question I have to ask is this: would my hon. friend move, or is it his intention to move, that this clause be omitted from the Bill, and, if not, why not?


Some hon. MEMBERS:: Answer.


William Pugsley: My hon. friend is always so pleasant in his questions that it would be quite out of harmony with my views to refuse to answer him. I may say to my
hon. friend that if the leader of the Government will say that he will allow that motion to be submitted to the judgment of the House, and will give me an opportunity I shall be glad to move it, and I shall be specially glad if the right hon. the leader of the Government would accept the amendment.


George William Fowler: Then why do you not
move it?


William Pugsley: I have moved a number of amendments, and not one has been received with favour by the other side of the House. I am not able to entertain the hope yet that even if the Angel Gabriel sat upon this side of the House and were to make a suggestion to the gentlemen on the other side, they would receive it with favour.
At one o'clock the House took Tecess.
The House resumed at three o'clock.


William Pugsley: Mr. Speaker, just before recess my hon. friend the member for Kings and Albert (Mr. Fowler) thought it necessary to jump quickly to the rescue of the Postmaster General-I suppose he thought the Postmaster General was not able to take care of himself-and he sought to convey to the House the idea, by questions which he asked me, that this legislation providing for the routing of traffic through Canadian ports, irrespective of what might be the directions of the shipper, was a great improvement upon the legislation enacted some years ago in regard to the routing of traffic by the Grand Trunk Pacific. It will be remembered that the agreement made in 1903 provided that the Grand Trunk Pacific should carry all traffic, not otherwise routed by the shipper, through Canadian ports, and it bound itself by every possible means to encourage the routing of Canadian traffic through Canadian channels. I hope my hon. friend the member for Kings and Albert will do me the honour to follow me and show to this House how this agreement is to be enforced, and what are the penalties, if any. We all know there are no penalties; but I hope he will show what provisions have been made which will secure its enforcement. My hon. friend must know, as other hon. members know very well, that this agreement is utterly and absolutely futile; and that it has been inserted in this Bill only in order to enable gentlemen like my hon. friend, who love to talk when he gets the opportunity, and who can make the worse appear the better reason and black appear white and white

appear black when it suits him to do so, to make the people of Canada believe that something has been accomplished for them in this agreement. To show how utterly futile this agreement is; to show that it is, if I may use the word without offence, a mere pretense to induce the people to believe that something has been accomplished which has not been and which will not be accomplished, let me call attention to the fact that one of the constituent companies, which is now being taken over by the Government, in which the Government is to have a two-fifth's interest, is a road which has its terminus in American territory. It is well known that on lake Superior the great port which is the competitor of Fort William and Port Arthur is the port of Duluth. That city has shown wonderful enterprise; it is the terminus of the Northern Pacific railway, and it has developed with marvellous rapidity since its establishment as a port. From that port the great American lake steamers pass on down to Buffalo, Cleveland, and other eastern lake ports, where the grain is transferred from the vessels to the elevators; and from those elevators, as opportunity offers, is forwarded to New York, Portland, or Boston, and thence to the markets of Europe. This Government by this resolution is not divorcing the Duluth, Winnipeg and Pacific Railway Company, but it is to continue part of the system. The people of Canada, if this Bill passes, will find themselves in the strange position of owning a two-fifth's interest in a railroad which has its principal lake terminus at Duluth in Minnesota, one of the United States of America, a port which, as I have said, is the great competitor of Fort William and Port Arthur. Yet the Government have pretended that this company, whose terminus is at Duluth, whose road was acquired by the Canadian Northern Railway Company in order to give them a lake terminus at Duluth in American territory, is to enter into a covenant that any traffic carried over it shall be shipped through Canadian ports. What control have the Government over the grain when it reaches Duluth? Yet the Government put in this Bill an agreement on the part of the Duluth, Winnipeg and Pacific Railway Company that they shall control their traffic after it leaves Duluth and have it shipped through Canadian ports. Did any one ever hear of a greater pretense than is put forward in this Bill in this respect?

Further, what do the Government do? They make all these companies, including the Duluth, Winnipeg and Pacific railway, covenant that all (incoming ocean traffic shall be shipped through Canadian ports. In other wotrds, if the (agreement means anything, it means that, when the products of the old world, coming by way of Duluth, and destined for points on the Canadian Northern, reach Duluth, the Duluth, Winnipeg and Pacific Railway Company is to say to the owner of the goods:	We
cannot carry your traffic to Manitoba, Saskatchewan, Alberta or British Columbia, because we have entered into a covenant with the Government of. Canada that we shall not do so, even though there may be no other route and no other means of getting it to its destination. I think that shows how absurd is the pretense the Government are putting forward that in some way this is to carry Canadian traffic through Canadian channels.
I said to my hon. friend the member for Kings and Albert that, in my opinion, this is bad legislation. The horn, the Post-majster General speaks of that splendid diay coming when all traffic between western Canada and eastern Canada shall be carried through Canadian channels, when all traffic destined for the markets of the old world land all traffic from the old world destined for points in Canada shall be carried through Canadian, ports. We all would like to see the dawn of that day, but how is it to be brought about? It is by the railway companies being forced to give cheap nates for freight, by our cutting down instead of (increasing the watered stock of these companies. It is to be brought .about by reducing the capital instead of increasing it, by compelling these companies to give reasonable rates and lower tariffs in order that trade may be cheaply and advantageously carried on Canadian railroads in preference to American ones.


George William Fowler: Is (it not a fact that the Canadian railways are obliged to give as cheap transportation to goods intended to be exported as any otheT road? Is not that part of the covenant made between this Parliament and the Grand Trunk Pacific Railway Company?


William Pugsley: Yes.


George William Fowler: Then what becomes of
the hon. gentleman's present argument?


William Pugsley: Does not my hon. frietnd see that, in order to get to the markets of Europe, you have to use not only the railways but the steamships; 'and tire rate upon the steamships is as important a factor in getting to the markets of the old world as the rates upon the railways? Yet the Government do not make the Canadian Northern covenant that they will carry wheat over their system through Canadian ports to the markets of Europe as cheaply as limes running to Boston or New York. They did not make them covenant to do that. But this means nothing at all. It means that they are pretending by legislation to compel the western producer to send his traffic over the Canadian Northern to Canadian ports, and thence by sea to the markets of the world, no matter what may be the difficulties in his way or the cost to him of crossing the ocean. This is restrictive and prohibitory legislation which should not be tolerated by the people of this country. It is taking away the liberty of the people of the West, who have a right to send their produce by what route they please, by railway or by steamship, to the market to which their produce is destined. You cannot develop this country in that way; you cannot establish harmonious relations between the East and the West by restrictive and prohibitory legislation of that character. The only way in which you can develop traffic is by preventing these railway companies from exacting high tolls from the producers and consumers of the country, by improving our ports, by improving the accommodation upon the ocean, by lowering the steamship rates upon the ocean and the lakes in order to enable the western producer to get his produce to the markets of the world more cheaply through Canadian channels than through American channels. That is the only way in which you can accomplish this result; you cannot do it by restrictive legislation. My hon. friend the Postmaster General thinks that the millers and the steamship owners of the East are entitled to make the farmers and the other producers of the West hewers of wood and di'awers of water for the purpose of encouraging and advancing their interests. They cannot make a united East and West in that way; they can only do it by encouraging traffic, by reducing the tolls and increasing the accommodation and making it easier and cheaper for the people of the West to send through Canadian rather than through American channels.
You may see the absurdity of this thing in another particular. Suppose the western 293
miller and farmer wants to send his flour, wheat, oats, or cattle to some part of Europe or some part of the West Indies to which there is no suitable line of Canadian steamers running, and the only way these ports can be reached may be through the ports of the United States. Is the miller and farmer of the West to be, therefore, prohibited from sending his flour, grain and cattle over the Canadian Northern in order to reach these markets ? If the legislation means anything at all, it means that. But it does not mean anything at all, and it does not mean that; and there is no intention to enforce it; and my right hon. friend the Prime Minister practically admitted that when I asked him regarding it. As the responsible head of this Government, he would not tell the people of this country that it was intended to enforce this provision; but it is left to the hon. member for Kings and Albert (Mr. Fowler) to point out how the provision may be applied, and I trust that he will endeavour to show it to the House and the country.
There is another point I want to make in reference to the statement of the Postmaster General. He does not show in respect of this Bill that courage which 1 would like to see him show. He tells this House that he thinks, after all, that Canada ought not to have three transcontinental lines of railway, the Canadian Pacific, tiro Grand Trunk Pacific and the Canadian Northern-that they have been commenced too soon; but he says the responsibility is not on the i>resent Government; that it is on the late Government; that they are only dealing with the legacy which has been left them by the late Government; that they have been driven to this position by what the late Government has done, and they are endeavouring to rescue the country from the consequences of that action. That conduct is not courageous; it is not only timid, but should be characterized by a stronger word, if it were parliamentary to use it, under the circumstances of this case; and I will tell you why. The policy of the late Government was to encourage what may be called the prairie system of the Canadian Northern railway. First, there was the line to Winnipegosis; thence it went on to Prince Albert. Then, there was another line from Winnipegosis extending westward, crossing the Prince Albert branch at Warman, and extending westward to Edmonton, with branches north and south, opening up and developing the prairie country and giving opportunity to settlers to go in. There were 5,000 miles of road



that the Canadian Northern built before they ever became ambitious to construct the transcontinental system, and the road was of enormous benefit. It was paying its way; not one dollar of interest was ever defaulted by the company, and it was a prosperous and growing company doing great benefit to the country. What was more natural than that the Government should assist in linking up that prairie system west of the Great Lakes with the St. Lawrence and the city of Montreal? The late Government, in 1911 I think it was, decided to yield to the request for aid to construct a road between Port Arthur and Montreal. If the company had stopped at that for a reasonable time, what we would have had would have been thousands of miles of road through the prairie country connecting with the East, with its main line passing through the clay belt of Ontario, which is, as all reports show, capable of very considerable development, containing a great deal of rich agricultural land; and these prairie lines, traversing all sections of our prairie West, would have brought the traffic of the West to the East, and taken traffic for western points westward from the cities of the East. It is true that the late Government aided the road as far as the foothills of the Rocky mountains. That was for the purpose of reaching the rich coal fields at Brazeau. When the late Government was requested to grant aid for extending the road through the Rocky mountains to the Pacific, we did not yield to that request, and no aid was granted. But, Sir, what did this Government do when they came into office in 1911? Notwithstanding the fact that the Grand Trunk Pacific runs through the Rocky mountains at the Yellowhead Pass, notwithstanding that, by 'the contract with the Grand Trunk Pacific, it is provided that they shall be obliged to grant to any other railway company running rights, subject to the approval and direction of the Governor in Council, notwithstanding that the Governor in Council could have secured these running rights through to the Pacific, the Government, led by the present Prime Minister, in 1911 granted aid to the extent of $35,000 per mile for a road from the then terminus up into the Rocky mountains, and on, I believe, to the boundary line between Alberta and British Columbia. As my right hon. friend the leader of the Opposition has pointed out, through practically the whole of that distance the line runs within three or four miles of the 
Transcontinental railway. Sir, that was absolutely unjustifiable. Then began the mad career of this Government in aiding that road and encouraging it to extend its rails across the Rocky mountains and on to the Pacific coast. W7as there any need of doing this? Two transcontinental lines cross the mountains over which any traffic originating on the Canadian Northern destined for points upon the Pacific coast, for China, Japan or any part of the Orient, might be carried upon advantageous terms. The Grand Trunk Pacific, from the point where it could easily be joined by the Canadian Northern, runs to Prince Rupert through the mountains, a distance of 500 miles. As I have said, there is upon the statute book a covenant on the part of the Grand Trunk Pacific Railway Company to grant any other railway company running rights over that line. If these running rights had been exercised, millions upon millions of dollars could have been saved to this country and to the province of British Columbia. But this Government did not choose to adopt that course. As I said, they started upon making the Canadian Northern a transcontinental system, carrying it through the mountains and on to the Pacific coast.	[DOT]


Thomas Simpson Sproule: It seems to me that the hon. gentleman is wandering far away from the question that is before the House. The rule is that a member should address himself to the last question submitted to the House, and that question is that under the existing circumstances no assistance should be given to the Canadian Northern railway unless at the same time it is provided that the Government shall have the power within a reasonable time to acquire the ownership of the stock of the road. The assistance proposed to be given to the road is embodied in the Bill; the amendment is intended to take the place of the Bill. It seems to me that it is competent to direct attention to a comparison between these proposals and to argue which is the better, what is embodied in the amendment or what is embodied in the Bill; but I do think that it is wandering away from the question before the House to go back into the history of this road and of other roads connected with it.
Mr. PUGSLEiY:	I -respectfully submit
that Your Honour might be right if I had already spoken on the third reading of the Bill and was seeking to address the House again on the amendment; but I

have not yet spoken to the third reading, and if I do not speak now to the third reading I shall not afterwards have an opportunity of doing so.


Thomas Simpson Sproule: That makes absolutely no difference; the speaker must address himself to the last question before the House.


William Pugsley: With all due deference, to Your Honour, I submit that on the motion for the third reading of the Bill and on an amendment thereto, if a member of the House has not already spoken to the third reading, he has a perfect right then to speak both to the third reading and to the amendment; otherwise the tongue of a member would be tied. After having spoken now, I cannot speak again upon the third reading of the Bill and I must devote my whole speech to the two questions before the Houee.


Thomas Simpson Sproule: My ruling is that a
member should only address himself to the last question submitted to the House. In my judgment, it would be absolutely proper to draw a comparison between the provisions embodied in the Bill and the provisions embodied in the proposed amendment, but the fact that a member has not spoken to the third reading of the Bill is no justification for his travelling over the same ground, on this question that he would have covered if he had spoken to the third reading of the Bill.


William Pugsley: Your Honour will agree with me that one would have to keep a very close command of himself and have a very great knowledge of the different arguments to be advanced in favour of or against the two propositions in order always to be sure that he was strictly within the ruling which you have just given. I will endeavour, however, not to digress any further. The Government is asking us to approve this Bill by giving it its third reading. We say no to that; we eay that the House should not be asked to do that unless there is coupled with the provisions of the Bill the right to take over the entire stock of this undertaking for a sum not exceeding $30,000,000.
My hon. friend the Postmaster General, in arguing against the amendment moved by my right hon. friend, appealed to the House and indirectly to the country to support the Government in what they were doing because they had been forced to this position by the legislation enacted by the 2931
late Government. I do think that it would be narrowing too much the limits of this discussion if I were to be prevented from pointing out to my hon. friend that in that argument he is doing an injustice to himself, an injustice to the Government of which he is an important member and an injustice to the people of this country, some of whom are disposed to take his word. The people of this country have been placed in the lamentable position in which they are today because the present Government have committed this country through Parliament to the immediate construction of this road through the mountains of British Columbia. They and they alone are responsible for the present condition of affairs; they have brought us to this unfortunate position. My right hon. friend, as the leader of the Liberal party in this country, has no other course open to him but to move the amendment approving of Parliament granting this aid only on the condition that this mismanagement and reckless expenditure of money must cease so far as the Government of the country can make it cease and that the Government in granting this aid shall control all the stock of the company; that the stock shall be reduced to the reasonable sum of $30,000,000 and that the country shall have the opportunity of taking the road over. But, Sir, it does not follow that my right hon. friend if he were free to take such a course as ought to have been taken before the country was committed to this vast expenditure, would have taken the course which he is constrained to take to-day by reason of the deplorable condition which confronts the people of this country, which condition, as I say, has been brought about by this Government. Instead of granting aid to the extent of $35,000 a mile which encouraged Mackenzie and Mann to begin the needless and entirely premature construction of this road through the mountains, which will give us four railroads through the mountains of British Columbia; instead of doing that they ought to have said to Mackenzie and Mann:	You must
take running rights over the Grand Trunk Pacific. Mackenzie and Mann might say: We want to run to Vancouver; we do not want to go to Prince Rupert. Well, by running their trains from Edmonton to Calgary they could connect with the Canadian Pacific railway and run through to Vancouver under arrangements which could be made with the approval of the Board of Railway Commissioners. If they wanted to reach Vancouver by another route, they

could go over the Grand Trunk Pacific to Prince George, which is at the great bend of the Fraser river, and they could follow the road which is now under construction, the Pacific and Great Eastern, from Prince George to the city of Vancouver. I say that it is an utterly reckless, an indefensible and wasteful expenditure of public money to engage in the construction of this line going through the mountains of British Columbia when there will be three other lines traversing various portions of the Rockv mountains through that province.
The Postmaster General feels confident that the people of this country will approve of the course of the Government. Let the Government take the full responsibility for the construction of this road through British Columbia-and it is a fearful responsibility for them to take. Why, Sir, $24,000,000 of the aid for which they are now asking is to finish the road in British Columbia. More than one-half of this grant of $45,000,000 has been caused by the Government recklessly encouraging the Canadian Northern railway to go ahead and build this road right down to the Pacific. More than one-half of the total amount granted is to be expended in completing the line through British Columbia, and if it had not been for the Government encouraging the Canadian Northern railway to build instead of utilizing running rights over the other transcontinental roads through British Columbia, the Canadian Northern railway would not have been here asking for aid.
The hon. Postmaster General criticised the suggestion of the hon. member for South Renfrew that the Government should make a loan, borrowing the money and lending it to the Canadian Northern railway. I am inclined to think that is a very much better proposition than the one before the House to-day. In either case the bonds to be issued have to be placed in the London market. If they had been straight Government bonds, say four per cent bonds, they could have been floated at par, because we know that Government bonds bring a higher price than guaranteed bonds. But Messrs. Mackenzie and Mann say-we have their authority in the statement of Mr. Lash-there will be a loss of $5,000,000 in floating these guaranteed bonds upon the market. Therefore by granting a guarantee instead of a straight loan the country loses $5,000,000. If I had to choose between the two ways of granting aid, I would say that the hon. Postmaster General was not justified in criticising the suggestion of the

ex-Minister of Railways. In either case a mortgage would have to be taken, and the bonds would have to be floated in the financial markets of the world; but in one case the money could have been got at par, it would have been secured by the same mortgage, the securities to the country would have been identical and the country would have saved $5,000,000. It is an easy thing to endorse a note, we all know that as individuals, but it is very much better, safer, more prudent, if you are going to aid a man, to make a straight loan to him and take such securities as he can afford to give. So here it would have been far better to make a straight loan to the Canadian Northern railway, to borrow the money at the cheaper rate at which it could be borrowed in that way, and take all the security which could be got for it. The risk which the country runs would have been the same in the one case as in the other, and the country would have been saved this large amount. With regard to the proposition itself and to the opinion of the country, 1 repeat what perhaps I have already said too often in this House, that this country will not approve of the Government committing the people of Canada to a partnership with Mackenzie and Mann in this system of railways. The country is willing to aid any important railway undertaking, but it does not want to be paid for what it does in common stock of the company, more particularly as the interests	of the	whole people	of
Canada would be pcomoted by reducing the rate on a railway and making the capitalization as small as possible. I say again that what ought to have been done, in my humble judgment, was to have reduced the capital stock down to a reasonable amount, to have squeezed out all this vast amount of water which is in the stock and which has nothing behind it, to let the country take security for what it is giving, hold that security for a few years until it has seen the result of the work which is done under the aid which the Government propose to give, and reserve to the Government, on behalf of the people of Canada, the right to take over this underbaking within a reasonable time if the country, through its representatives, should be of opinion that it ought to be taken over and operated as a part of the Government system of railways. My right hon. friend Sir Wilfrid Laurier- says ' a reasonable time.' Reasonable is not an indefinite term. It wiill be for the Govern-

meat, if this resolution is adopted, to fix what would be a reasonable time. In the amendment which w.*s before the House a few days ago, five years was placed as the time. My own idea would be that ample time should be given for the people of this country to fully understand the question, and to express their view with reference to it .at the polls. I do not know when the next general election will come. 1 know that it will not come until the gentlemen on the Treasury benches are forced by law to go to the country. I know that the voice of the people is the last thing they want to have heard. They do not think we can hurt them so much here in this House except as we may influence public opinion; it is those ballots which are silently cast in the ballot boxes which will hurt them, that is what they are afraid of. But if we allow a few years, five if you like, or three years, four years, a reasonable time, as stated in the amendment moved by my right hon. friend, to enable the country to determine whether it will take over the road or not, if you give to the people of the country the option to take it over .at a price to be fixed in the usual w.ay by .arbitration, not to exceed a reasonable sum, before that time passes the people will have had an opportunity to express their view on this important question at the polls, the wishes of the people of Canada, who .after all are the paymasters, whose money is to be taken and put into this undertaking, ought, to be law and ought to be carried out by the Government of this country.


Arthur Meighen: Mr. Speaker, however long the right hon. leader of the Opposition (Sir Wilfrid Laurier) may ' be in public life, and however far advanced in years he may become, he never forgets the fact that we live in a world of change. But the changes even of modern life, the acts of a play or the shifting scenes of a picture show, appear very mild in comparison to the myriad fronts that present themselves in the policy of the Opposition. It is only a few days ago that the hon. member for Middlesex (Mr. Ross) moved in this House that we had not sufficient information, that we were not sufficiently advised of the assets of the Canadian Northern railway, that we did not know what those assets were worth, that we had not sufficient information as to the strength of our security, which is
on all those assets, to enable us to act at all; and consequently he recommended to the House that we wait and .lie idle on ouir oars until the next session and then set a committee of Parliament rambling around to find out exactly what the assets of the Canadian Northern railway are. The right hon. gentleman voted for that resolution. We arrive at to-day and find that the right hon. leader of the Opposition has had a change of heart. He thinks now that we have information enough already, and that the best thing we can do is to lay the foundation right here and now to buy out the Canadian Northern railway and to pay about $30,000,000 for it.
The note with which the right hon. leader of the Opposition introduced his speech and the note with which he closed it this forenoon was that he intended to present a summary of the views of the Opposition on this Canadian Northern Railway question. I have 1a very keen admiration for the intellectual sublety and agility of the right hon. leader of the Opposition, but I despair of his capacity to present a summary of the views of the Opposition on the Canadian Northern question. There is no man living, however adept in political mathematics, who can add together the Opposition's views on the Canadian Northern question and come at a total. The leader of the Opposition must have arrived at a result by a process like this: He must have considered that negatives cancel positives, that a man venturing one position must be nullified by another venturing the direct opposite and that therefore the grand total must be very nearly nothing at all. It may be the accident of politics that the leader of a party finds it hard to keep the views of his followers along a consistent line. But surely the ex-ministers might keep together or in harmony. There are three hon. gentlemen sitting right beside him now who will illustrate what I mean. There is the hon. member for St. John (Mr. Pugsley) and there is the hon. member for Rouville (Mr. Lemieux). Immediately to his left there was also a former member of his Government, the hon. member for South Renfrew (Mr. Graham). One of these hon. gentlemen was his Minister of Railways and Canals, a man who wrould be expected to know, of all men associated with the right hon. gentleman, most about railway subjects, and who, if I may be permitted to say so, exhibited, if I am any judge at all, in his speech in this House, something of a desire to keep in mind the ultimate object

of the discussion and the ultimate good of Canada and not to permit his judgment to be entirely submerged by party considerations.
The hon. gentleman to the right of the Tight hon. the leader (Mr. Pugsley) has just got through denouncing this transcontinental railway scheme in toto. He says that this Government has started the country on a mad career of folly in endorsing the carrying of this transcontinental railway system to the Pacific coast. That is what he said in the speech that he closed about two minutes ago. The hon. ex-Minister of Railways and Canals was out of the House when the hon. member for St. John was speaking, but, in the speech of the hon. ex-Minister of Railways and Canals, this is the opinion which he gave utterance to with regard to what the hon. member for St. John described as mad folly. At page 3945 of ' Hansard,' he said:
Now I want to say in passing that I agree with the Prime Minister, and X agree with the leader of the Opposition-which may he considered a somewhat difficult thing to do. I believe that the completion of this road must not only not be stopped, but it must not be delayed.
There must be no hesitation in completing the transcontinental railway!


William Pugsley: They were then in the
mountains and they must go through.


Arthur Meighen: They were in the mountains in 1911 when the hon. gentleman was in power. The legislation of British Columbia went through in 1910 and the hon. gentleman was then in power.


William Pugsley: We are speaking not of what took place in British Columbia but what is taking place in this Parliament.


Arthur Meighen: The ex-Minister of
Railways and Canals and the ex-Minister of Finance declared at the time, that the assistance was given to put through a transcontinental system from one coast to another, and that system was the Canadian Northern system. The ex-Minister of Railways and Canals declared on the page before that which I have quoted, that he believed there was room in Canada for another transcontinental railway. How are you to have a transcontinental railway if it does not run from coast to coast?


William Pugsley: Get running rights
through the mountains.


Arthur Meighen: Why not have running rights through Ontario, why not have

running rights everywhere? The hon. gentleman is strong on running rights.


William Pugsley: Through the Yellowhead Pass, where there is no local trade developed and for 200 miles there is no earthly reason why running rights should not be given to accommodate everybody.


Arthur Meighen: Did the hon. gentleman ever hear of one railway using running rights over another farther than between two divisional points? It is a railway impracticability. The British Columbia section under the British Columbia legislation had been endorsed and then the Government of my hon friend came along, endorsed the whole system and sanctioned it as a transcontinental system from coast to coast. Now the hon. gentleman says: Endorse it as a running rights system. They would not endorse it then on a running rights basis, but they insisted in their legislation that they should have a line of their own and they insisted that it should be up to a certain standard, they fixed the standard and compelled the road to follow it. The hon. gentleman g'ave us his view of running rights a few weeks ago and we have heard a little more about it since. He contended that we had sold the country because we had given the Canadian Northern railway running rights over the Intercolonial railway and the Hudson Bay railway subject to terms to be fixed by the Railway Commission. Although we have the jurisdiction of the Railway Commission superimposed over our permission, he declared that we had been taken into camp by Mr. Lash and had sacrificed the country to the Canadian Northern by giving running rights over the Hudson Bay railway which he considered a sacrifice and a wasting of public resources and of public property.


William Pugsley: What I said was that I had no objection whatever to giving running rights, but that they ought to be on such terms and conditions as the Governor in Council should agree to.


Arthur Meighen: That is what the hon.
gentleman said the second last time. The first time he had no faith in the Governor in Council and he wanted to deny running rights out and out.


William Pugsley: Not at all.


Arthur Meighen: And I will tell you why he changed. He had been looking up the National Transcontinental Railway legisla-

tion of 1903, and he had found there that the awful sacrilege which he would charge against this Government had been perpetrated by his Government in 1903 in dealing with the Transcontinental railway. In 1903 they made an agreement between the Government and the Grand Trunk Pacific whereby it was provided that they should secure to the Grand Trunk Pacific running rights and haulage powers over the Intercolonial railway or any portion thereof not over any parts that the Governor in Council should decide-but over ' any portion ' thereof-upon such terms as might be agreed upon between the Government and the company.


William Pugsley: Hear, hear.


Arthur Meighen: Exactly the terms of
this legislation. This legislation says that the terms shall be agreed upon between the Government and the railway. We use the very words that I read in the Grand Trunk Pacific Act-exactly the same-and if the Government, and the company cannot agree we provide now that the Board of Railway Commissioners shall settle the terms. Does the hon. gentleman object to that? Then what does he object to?


William Pugsley: If my hon. friend wants an answer I will give it to him.


Arthur Meighen: I would like to know
what the answer is.


William Pugsley: What I said was that it was wrong to give the Canadian Northern the first claim to running rights over the Hudson Bay railway and over the St. John Valley line which would be part of the Government railway system and I said further that it ought to be left to the Governor in Council to determine as to what parts of the system the Canadian Northern should have running rights over.


Arthur Meighen: I am very certain that is what the hon. gentleman said in his second last speech. He objects to first rights being given to the Canadian Northern railway but he limits his objection now to the Hudson Bay railway because he knows that his Government gave first rights to the Grand Trunk Pacific over the Intercolonial. Consequently his objection to first rights to the Canadian Northern only applies to the Hudson Bay railway, he thinks we have sold the country because we have given first rights over the Hudson Bay railway to the Canadian Northern.


William Pugsley: And the St. John Valley line as well.


Arthur Meighen: And the St. John Valley line, a rented line. It is only a few days since the hon. member for St. John told us that, as he had not very much to do with railways under the late Government, he did not profess to be very familiar with railway legislation, and that he had not made the study of these railway questions that the hon. member for South Renfrew (Mr. Graham) could have made under the late Government. That remark applies with striking force to his precent position. He thinks, coming new into the discussion of railway matters, that a fearful wrong has been done the people of Canada in giving rights to the Canadian Northern railway over the Hudson Bay line, but it is only about two weeks since the member for South Renfrew stood in his- place in the House and declared that he had no objection whatever to that policy. I hope the hon. member for St. John will now-pay that deference to the expert opinion in railway matters of the member for South Renfrew that he professed to pay a few days ago. Here is what the hon. member for South Renfrew said (page 3,946, 'Hansard'):
Hon. gentlemen must not forget that the Government is building a railway to Hudson bay and this agreement gives the Canadian Northern and its subsidiary companies the right to operate the Hudson Bay railway. That I am not objecting to at all.
'But,' says the hon. gentleman from St. John, 'if it were only within the control of the Governor in Council :I would be satisfied; I have faith,' he says, 'in the Governor in Council in this regard, but I have no faith in the Board of Railway Commissioners for Canada.' Well, the Railway Commission of Canada is likely in my judgment, to protect the interests of this country in any running rights agreement, but it is only very recently that the hon. member for :St. John has developed such confidence in the Governor in Council. It is not so long ago, when he was speaking on the question of the increase of capital of the subsidiary companies in the Canadian Northern Railway system, that he thought it was worth while to hold this House of Commons for half a day in order, that he might endeavour to convince us that it was not proper to confide to the Governor in Council the mere power to approve of an increase of capitalization of a subsidiary company.	He
thought he should delay the House for half

a day to show that the Governor in Council was not fit to decide a matter of such responsibility as to approve of an increase in capitalization of a subsidiary company, allowing it was but a part of a great company whose capitalization could not be increased. A few days passed, and then the hon. member came down with an amendment of his own, and he was going to lock up all the stock of this company into a thirty million dollar pocket, then he was going to put it in trust in the name of the Receiver General for Canada, and then he was going to let Mackenzie and Mann take the responsibility of running the road, and if they did not make a success of it lose it, but if they did make a success, they had to give it over to the country on an arbitrated value not greater than thirty million dollars. And he added a clause to his resolution saying that in the meantime Mackenzie and Mann should be left in charge of the Canadian Northern system. One day went by, and the hon. member told the House that he had decided to eliminate that last clause after due consideration; he had decided that it would be better not to insist on Mackenzie and Mann running the road instead of the Government. The hon. member had looked up the speech of the hon. ex-Minister of Railways, and he saw that that hon. gentleman held the directly opposite stage on the question, and consequently he struck a compromise, and he said he was ready to leave it to the Governor in Council to decide, whether the Government would run the Canadian Northern in the meantime or whether Mackenzie and Mann would run it.
The attitude of the hon. member for St. John is this:	That though the Governor
in Council is not a body to be trusted with the increase of capitalization of a subsidiary company, it is to be trusted to decide of its own motion without the authority of the Parliament of Canada, whether this country shall assume a debt of $360,000,000 and operate a railway of 10,000 miles. What a great body this Governor in Council must be in the eyes of the hon. member for St. John- it is quite competent to decide on the largest commercial question that has ever faced this country without the authority of Parliament at all, but it is utterly incompetent to be trusted to approve of the increase of capitalization of a small subsidiary company.
I think the leader of the Opposition in his speech to-day has meted out justice to the hon. gentleman from the city of St.
[Mr. Meighen.l
John (Mr. Pugsley) in that he has taken one clause out of about three which were left in the resolution moved by
4 p.m. him the other day. The hon.
member for St. John himself struck out the last clause and brought in the other three, and now the leader of the Opposition has stripped his resolution of two clauses and brought in one of them. But I submit that the leader of the Opposition has not done very much justice to the hon. member for Rouville (Mr. Lemieux).
The hon. member for Rouville had a policy also, and 1 cannot see any of it summarized in this grand total moved to-day by the leader of the Opposition. The hon. member for Pictou (Mr. Macdonald) wanted to delay the issue six months notwithstanding that the Minister of Railways in the Government he supported declared that we could not afford to delay at all, six months was about the time he thought we should lie 'back and do nothing. The hon. member for Middlesex (Mr. Ross) thought we had better wait until next session and then start a commission of expert accountants from amongst the members of this House of Commons to find out all about the finances and business of the Canadian Northern railway. But the hon. member for Rouville (Mr. Leinieux) was not satisfied with any of the propositions made by his friends, and he declared in the House that we should not make a move at any time, but should leave everything go to rack and ruin until we had a general election. He said we had no authority to move at all in this House in the way of a third transcontinental system. Now, I would like to ask the leader of the Opposition how he is going to 'summarize' this sentence of his lieutenant from Rouville, taken with the sentence I have quoted from the hon. member for South Renfrew, as to going ahead at once with the road. Here is what the hon. member for Rouville said:
Sir, this policy means the completion of a third transcontinental railway, and I say that the Government has no mandate to commit the country to the immediate completion of that third transcontinental railway.
He says we have no mandate whatever to complete this road. It would be interesting indeed to hear the right hon. gentleman 'summarize' that statement with the statement I have just quoted from the hon. member for South Renfrew. The hon. member (Mr. Lemieux) went on:

I say that pending the Redistribution Bill, the Government cannot consistently commit the new electorate to that huge guarantee. The new constituencies have the right to be heard from in reference to the new venture. We cannot and we must not saddle the new electorate with this guarantee of $45,000,000 without the consent of that new electorate.
He was asked by the hon. member for Frontenac (Mr. Edwards) whether he would defer everything until after the next election, to w'hieh he answered, yes.


Rodolphe Lemieux: Read the whole answer.


Arthur Meighen: Here is the question and the answer:
Mr. Edwards: Would the gentleman argue that action should be deferred until after the next election?
Mr. Lemieux: Yes, and the people will then condemn the action of the Government.


Rodolphe Lemieux: I wanted to have that little rider added to the 'yes.'


Arthur Meighen: Very well, but it only emphasizes the affirmative 'yes.' Will the hon. gentleman tell me this: How is an hon. member of this House, who declares that we should not 'commit the country to a guarantee at all, that we should not move a step until after the next general election, going to vote now for an amendment which means that we commit the country to me whole $45,000,000 and take an option in lieu thereof^ I have no doubt the hon. member (Mr. Lemieux) is going to vote for this amendment; he belongs now to the 'vote for everything' party, and he can change as quickly as a moving-picture show or as any other of the changing scenes of life.
The hon. member for St. John is in the most remarkable position of all. He declared that we could not take this step without putting all the stock of the company into a trust fund in the hands of the Receiver-General for Canada. The leader of the Opposition thinks it is just as well outstanding; but the hon. member for St. John thinks we had better gather it in now and leave it in trust in the hands of the Receiver General of Canada, take from Mackenzie and Mann their lands, stocks, townsites and services, and then give them a chance to keep the road going, to make the system pay, to dispose of all this $45,000,000; and if they succeed, we shall take the road from them at a fraction of its value, and if they do not succeed, we shall take the road from them without giving them anything at all, and he is surprised and astonished a the very
suggestion that Mackenzie and Mann would not grasp at such a great opportunity as that.
In the discussion of this subject I venture to suggest to hon. gentlemen opposite that, in their hurry to get hold of something that will appeal with a dulcet sound to the electorate of Canada, knowing as they do that it is not an easy matter for an elector, with the time at his disposal, to grasp even the salient facts of an intricate problem of this kind, they have forgotten their responsibilities as members of this House; they have forgotten that we are engaged in the solution of a very vast, intricate and difficult problem, on the proper solution of which depends in large degree the prosperity of this country. It is true that Parliament is master of the situation to this extent, that, if it is not able to make an arrangement with the owners of this stock and of this road, then it can refuse the grant and let liquidation follow. Liquidation will follow, just as it would have followed the Grand Trunk Pacific in 1909, if the loan that the hon. gentlemen supported had not been made, because the Grand Trunk Pacific in their letter stated that that would be the result, if the loan were not made. We have arrived at this stage m the case of the Canadian Northern that, unless assistance is given, the road will pursue the course inevitable. It will find itself unable to link up and get into a paying position; it will find itself unable to maintain outlying lines, which so isolated cannot {pay, consequently. If we cannot come to terms witli these gentlemen we have only one alternative: We have to do nothing and let a receivership follow as quickly as it will. We cannot disguise [DOT]that fact as serious members of Parliament. We have two choices and only two, namely:	To make an arrangement
with Mackenzie, Mann and Company, Limited, the holders of this stock; or il we cannot make such an arrangement, then the other alternative is: Let the road go into liquidation. Therefore, we have to deal with them, to come to the best terms we can and then say: Are these, the best terms we can procure, better than the other alternative ? If the best terms we are able to secure are better than the other alternative, the duty of this House, in justice to the people we represent, is to accept these terms. The hon. member for St. John (Mr. Pugsley) says that we are legislators. He forgets that not only are we legislators, but we are negotiators. We

are parties to a bargain; we necessarily must be parties to a bargain unless we are prepared to see liquidation come. We are legislators; but we are first of all negotiators; and it is beyond the power of this Parliament, except by negotiation, to put shape to what the hon. member for St. John and the leader of the Opposition say is their policy, namely: To reduce the capital stock to $30,000,000. This Parliament has no power under the authority granted by the British North America Act to interfere with property and civil rights in this country. Only by the consent of the stockholders can that be done; and only by the consent of the stockholders can any of these things be effected which have been effected and which have been enacted under the arrangement we now propose. The Parliament of this country is bound to set itself face to face with the facts and say: Is there any reasonable likelihood that Mackenzie, Mann and Company, Limited, would for one moment think of consenting to such an alternative as that represented by the right hon. leader of the Opposition ? * Oh,' says the hon. member for St. John, ' why would they not ?-they have not put a dollar into this road; they have done nothing for this road at all.' I submit this, and I ask hon. gentlemen to ponder over it, that there are three main elements in the consideration that Mackenzie, Mann and Company have given to the Canadian Northern. There are the grants of land which they turned over; there are next the townsites which are now turned in for our security, and there is thirdly the release on the behalf of the Canadian Northern absolutely of their entire claim for their services to this road, for their financing of this road during a period of about eighteen years.


William Pugsley: The hon. gentleman says there are grants of land which they turned over. Were not those grants made specifically for the construction of the railway to the railway company?


Arthur Meighen: I address myself to
answering that question, and without boasting, I venture to think that, when I am through the hon. member for St. John will deem that he has been answered.
The grants of land were made and went to those who should construct three railways, namely, the Manitoba and Southeastern, the Winnipeg and Hudson Bay, and the Lake Manitoba Railway and Canal Company's road. The grants of land went with the charters, titles to be made upon construction of the roads; and whoever

acquired the charters and the right to construct the roads, and did construct them, would have earned those land grants. The hon. member for St. John will have no difficulty in following me, because he has passed through the same experience that I am now endeavouring to recite.


William Pugsley: Will my hon. friend
allow me to ask another question?


Arthur Meighen: Yes, but I will not forget what I am at.


William Pugsley: I will refresh my hon.
friend's memory. Were not the several contracts by the Government to give the land grants made directly between the Crown and the railway companies?


Arthur Meighen: They were made between the Crown and the railway companies. The Crown gave the charters; the land grants followed the charters; and whoever fulfilled the terms of the charters got the land grants. The Lake Manitoba Railway and Canal Company entered into an agreement with the contractors, Mackenzie, Mann and Company, that Mackenzie, Mann and Company would build the railway, and they, having built the railway, would get the land grants. Whoever built the railway would get the land grants. The same thing is true in the case of the Winnipeg and Hudson Bay and in the case of the Manitoba and Southeastern. Mackenzie and Mann earned the land grant, just as fairly as the hon. member for St. John ever earned anything in his life. They got it by a contract with the company by which they built the road. They built the road; the land grant was theirs and they were in a position to sell it, keep it, or do just what they liked with it. They kept 100,000 acres of a land grant of 4,102,000 acres, and the rest of the land grant they turned over to the Canadian Northern Railway Company of Canada. Was the land grant theirs before they turned it over or not? Does the hon. member for St. John say it was not theirs?


William Pugsley: What I will say to my hon. friend is this, that my information is that all these roads, for which land grants were given, were constructed with the proceeds of bonds which were issued against the roads which represent the value of the roads; and that those bonds are outstanding to-day. and it was equity and justice that the proceeds of the lands should all go into the railway company.


Arthur Meighen: I am quite as well
aware as the hon. member for St. John that moneys were raised on the road and the roads were encumbered, and the land grants became the property of the men who built the road, having the charter to do it. But my hon. friend's statement was not an answer. My question was, whether or not before these lands were turned over they were the property of Mackenzie and Mann in order to do what they liked with it. I know one hon. member who will not answer that question in the negative in this House.


William Pugsley: My belief is that the
proceeds of these lands belong to the Canadian Northern Railway Company, and had there been other shareholders than Mackenzie and Mann the proceeds would have been divided, but Mackenzie and Mann owned the railway company.


Arthur Meighen: The Canadian Northern was formed in 1899. Now, were or were not Mackenzie, Mann and Company in a position to hold or dispose of these land grants they had previously earned just as they might desire?


William Pugsley: My hon. friend knows
perfectly well that the very commencement of the Canadian Northern system was that line from Winnipeg to Winnipegosis, and he knows that from the very outset that railway company was all acquired by Mackenzie, Mann and Company, and they offered to take a part of the Canadian Northern system; and the land grant, if there had been no other stockholders except Mackenzie and Mann, would necessarily have gone into the name of the Canadian Northern, but Mackenzie and Mann being the Canadian Northern there was nobody to question who should receive the proceeds.


Arthur Meighen: Hon. gentlemen will see that my prophecy was right, that if there was any hon. member in this House who would refuse to say ' no ' to the question as to whether Mackenzie, Mann and Company, Limited, were in a position to sell that land before the Canadian Northern Company was formed in 1899 it was the hon. member for St. John. I can give the hon. member another example just to show that the action Mackenzie, Mann and Company took was one justified by precedent and justified in law and was an action that any citizen of this country in the same position had a perfect right to take, and that the land was theirs before they transferred it, and that in transferring it to the Canadian Northern they contributed their own property to the road. What is my precedent? A charter was granted to the Qu'Appelle, Long Lake and Saskatchewan Railway Company, which built a line between Regina and the city of Prince Albert. That railway entered into an agreement with contractors to build that line. The contractors built that line. They got as remuneration for building it the land grant that followed the charter, and the contractors refused to turn the land grant over to the railway company and turned it over to their own company. But, the hon. member for St. John said a moment ago: These contractors raised money on the land grant to build the road.


William Pugsley: Will my hon. friend pardon me? He referred, I think, to the Qu'Appelle, Long Lake and Saskatchewan railway, because my hon. friend knows that I was interested in that road, and, being interested, I am able to answer my hon. friend. And I will say to him that that land grant was not turned over to the contractors, but the greater part of it was sold in England to London bankers who put up the cash and that road was built out of the cash proceeds.


Arthur Meighen: The land grant went to the contractors, and the contractors sold the land grant in England-*


William Pugsley: Not at all.


Arthur Meighen: And when the railway passed out of the hands of the stockholders of the contracting firm they refused to turn over the land grant.


William Pugsley: My hon. friend is entirely in error. If he wishes to be informed as to the facts, let him ask the hon. member for West Torohto (Sir Edmund Osier).


Arthur Meighen: And the hon. member for West Toronto will say just what I am saying. When they built it they were entitled to the land grant on the road, and it does not make any difference to anybody whether they raised the money on the land grant or on the road. Both were their property, and both were encumbered. If they raised so much on the land then it was to their interest and added that much to the road; and when they sold the road they got that much more out of it. Their equity in the road would be that much larger. But the hon. member for St. John knows that I know he was interested in the bonding and building of the road, and sold the road and kept the land grant.


William Pugsley: Mr. Speaker, I repeat that the hon. member for West Toronto, whose firm did the financing for the road, will corroborate what I say, that the greater portion of the land grant was sold in England to London bankers, and the proceeds used in connection with the road.


Arthur Meighen: What is the difference? If they mortgaged the land grant and sold part they would not need to mortgage the road to get the money to build it.


William Pugsley: Nor you cannot reasonably say the land grant passed over to the contractors. I say it did not.


Arthur Meighen: I say the contractors
got the results of the land grant, and I say that the land grant did not follow the road. If the hon. gentleman raised the money on the land grant he did not need to raise it all on the road. Is it not as broad as it is long? Two properties belong to the men who built the road, of whom the hon. member for St. John was one. The two properties, land grant and road, belong to them. They took the land grant as their own when the railway was built, and when they turned the stock of that road over to the Canadian Northern about twelve years ago, they refused to turn over the balance of the land grant, but kept it as their own property. Now, if the proceeds of the land grant must go into the road, too, and if the hon. member is true to the principles he is preaching now he will gather up the proceeds of the road sold to the Canadian Northern, and he will gather up the proceeds of the land grants and turn the whole thing over to the Canadian Northern railway.


William Pugsley: I am sorry for the misinformation of the hon. member.


Arthur Meighen: I have in my mind a picture of the hon. member for St. John chasing after the proceeds of the land grants that he earned. I have in my mind his bringing back into the treasury of the Canadian Northern railway the equity he got out of the road when he sold it, and I think I hear him stand on the floor of Parliament and assure hon. members that when he turns in all those proceeds he has kept himself, he is not giving a dollar to the road, because it all came from the country. I think I have shown-not to the satisfaction of my hon. friend from St. John, because he knew well long ago that the land grant was Mackenzie, Mann and Company's and that they could have kept

it. And they did keep 100,000 acres that they did not turn over, but made titles to it, and sold it. They did not do the same with it all. They turned it in to help finance the Canadian Northern; they raised $24,000,000, and that $24,000,000 is a contribution of Mackenzie, Mann and Company to the Canadian Northern system.
But about 857,000 acres remain, and the equity in the unsold land, with the proceeds of those sold, makes a contribution in lands alone of $29,975,000. If these men had put in nothing towards the success of the system but the land grants, what would justify the Parliament of Canada in saying to them: We separate you from the position that other citizens of this country are in, and say you are not entitled to enjoy the rights to which the ordinary citizen in Canada is entitled. We declare that we will expropriate that property, and we bind ourselves to expropriate it, not at what its value may be, but we will take it at anything at all as long as it is not up to $30,000,000.
But the land grant is not all. Does the hon. member for St. John think that there is no contribution in the release of their claim for 18 years' services? In 1902 the Government was sued by Mackenzie, Mann and Company, Limited, for profits on their expenditures in the Yukon, and the Exchequer Court of this country decided that, they were entitled to 12! per cent as profits on their contract on the moneys expended in the Yukon under the authority of the Government of this country. In the determination of what contractors undertaking a work of such magnitude are entitled to, the judge of the Exchequer Court of Canada found that 12J per cent was not an excessive percentage, and he awarded Mackenzie Mann and Company, Limited, a judgment of about $44,000 in respect of services alone, or 12! per cent on the net expenditure. 124 per cent of what they have done and expended in relation to the Canadian Northern would amount to a good many millions. 124 per cent on services of the same type, involving the same risk, if not more, in respect of about $244,000,000, would run the obligations of this company to Mackenzie and Mann up to about $30,000,000 of money. Would the hon. member for St. John like to see a judgment in the Exchequer Court of Canada or in any court against the Canadian Northern Railway system for an amount which the courts of this country -would deem fair for such services, $30,000,000 of money, perhaps? Sup-

pose for some reason or other the amount of the award was reduced to 8 per cent, you would have a judgment of about $20,000,000 against the Canadian Northern Railway system for services rendered by Mackenzie, Mann and Company to that system in the way of financing construction pending the receipt of the money and in the way of services as expert railway men.


William Pugsley: Do you not think that
$30,000,000 would pay them for all their services?


Arthur Meighen: I cannot figure out in
my mind how $29,975,000 in land and $20,000,000 of a judgment is going to make $30,000,000; that is a method of 'summarizing,' to use the word of the leader of the Opposition which I cannot follow. Furthermore, does the hon. member for St. John say that there is no value whatever in the town-sites? I admire his prudence in not answering the question. Is there no value in town-sites in respect of which $10,000,000 of stock and $10,000,000 of bonds were pledged by finaneers in England, who themselves used that security and raised millions for the Canadian Northern? Is there no value in these townsites, notwithstanding the fact that from here to the Pacific coast the valuation is submitted upon a basis of $150 an acre in towns and $15 an acre if the lands are outside of towns and that even on that basis the equity is fixed at some $11,500,000 in these townsites alone? You add $11,500,000 to $29,975,000; you add to that eight per cent on the moneys Mackenzie and Mann have expended for their services in construction and you have a total responsibility of what? About $63,000,000 in hard cash. It is not perhaps suggesting too much to the hon. member for St. John to say that if they are to receive their payment in stock instead of money and are to depend for realization upon the success of the enterprise behind which they stand, then the compensation in stock should not be made on the same basis as the compensation in cash. But the hon. member for St. John is amazed that any one should suggest that a Bill would not be quite acceptable to Mackenzie Mann and Company, Limited, that compelled them to leave that land, to leave their services, to leave the townsites all in as security and to take the chance of having the whole thing go down, or, If they made it succeed, be obliged to accept something less than $30,000,000 for their services. It is au right to make these resolutions in the House of Commons; it is all right to flutter
them before the country, but the hon. member for St. John and, I believe, the right hon. leader of the Opposition himself underestimates the intelligence of the electors of this country. They have underestimated it in days gone by, and they are making the same mistake to-day on a more colossal scale. The electors of this country believe that only by holding out large inducements will large enterprises be undertaken and brought to a successful issue. The proposal of the Government has been before the House for three weeks. We are asked to vote it down and to accept an amendment which the hon. member for St. John and every man in this House knows has no chance whatever of being acceptable to Mackenzie, Mann and Company, Limited; they would simply pursue the course of taking their judgment against the road.


William Pugsley: Have you made any
effort to see whether or not they would accept it?


Arthur Meighen: We have, as I have already told the hon. gentleman, asked more of Mackenzie and Mann even than the Opposition have suggested, but I want to say that many of the freak propositions of hon. gentlemen opposite did not appeal to us as worth suggesting. .The member for Pictou (Mr. Macdonald) wanted to wait six months; the hon. member for Wesr Middlesex (Mr. Ross) wanted to wait until the next session of Parliament and then appoint a commission, and the hon. member for the city of St. John wants to put through provisions without the consent of the stockholders to reduce the stock to $30,000,000. But the three resolutions lead to one and the same end. They mean in the result one thing and one only. They mean to allow the road to go into liquidation by the ordinary process, and it is only a matter of phraseology whether you support the amendment of the hon. member for Pictou, the hon. member for West Middlesex, or the hon. member for St. John. There is one interpretation and one only of these proposed amendments, and that interpretation is liquidation. We must vote them down or accept liquidation of the company and all its consequences.
We heard something more from the hon. member for the city of St. John this afternoon. This is- the first day that he really got around to the discussion of the land grants; this is the first day that he ventured to suggest that he would endorse what had been said by hon. gentlemen opposite as

to Mackenzie and Mann doing nothing for the road when they turned the land grants over to the company. I venture to say that this will be the last day that the hon. gentleman will discuss that phase of the subject in the House of Commons. I have found no fault with the hon. gentleman's procedure in connection with the Qu'Ap-pelle, Long Lake and Saskatchewan Company; I have not criticised his right to act as he did in that regard, but I have criticised his right to stand in the House of Commons and challenge the integrity of these gentlemen and challenge a course pursued by others who did exactly the same as he did himself.


William Pugsley: I did not challenge the integrity of Messrs. Mackenzie and Mann. I said that the land grants having been made for the purpose of assisting in the building of the road, the proceeds., bona fide, should have gone into the road and into the subsidiary and constituent companies forming part of the proposed Canadian Northern system. I said that these gentlemen hold all the stock in these various companies; they have a right to do what they did, but when it comes to a question of giving to the country security for this additional aid, that land grant and all the proceeds now owned by Mackenzie and Mann ought to go into the security to the Government. That is what 1 say.


Arthur Meighen: If the hon. gentleman thinks that his position is in any way clarified by his last remarks, I am sorry that I cannot agree with him. He says that, bona fide, the land should have followed the road, that it did not follow the road to the extent of 100,000 acres; consequently there was male tides, but he does not criticise it at all. If bona fide, the land should have followed the road, then the Qu'Appelle, Long Lake and Saskatchewan land grant should have followed the road. I ask the hon. member for St. John to take one position or the other; the two cases are exactly analogous., oni all fours; and in my judgment both parties acted bona fide and in so far as Mackenzie, Mann, and Company turned the land into the road, that land was a contribution on their part to the Canadian Northern railway.
The hon. member for St. John has very strongly urged that we have missed a great chance in not including some real estate speculations near Montreal in our securities, that whatever the interest of Mackenzie, Mann and Company may be in the Can-

adian Northern Railway Montreal Land Company, which owns this model city, we should take that interest in and make it the property of the Canadian Northern Railway system. I have already stated the position of this land company, in so far as it concerns the Canadian Northern Railway system and the country, and I do not know that any very great good is to be gained by repeating the explanation. I have never been able to see the value of adding interest to fallacies by repeatedly exposing them. But perhaps an exception may be here allowed. The model city was a real estate speculation near Montreal. Mackenzie, Mann and Company had some interest in it, as I have often stated to the House. A company of brokers financed the enterprise of tunnelling the mountain at Montreal, financed the bonds of the Mount Royal Tunnel and Terminal Company. The risk that thereby fell upon that company of brokers was a great risk indeed, as any one would surmise and as engineers would certify. They might have encountered any class of earth or any crack or fissure, and there is no telling what dangers and perils might have resulted. Consequently it was thought not advisable that the Canadian Northern railway itself should engage in that risk. A company of brokers was found who, for a large interest in the land company whose property was on the other side of the mountain, undertook to finance the temporary bonds of the Mount Royal Company. They did finance the bonds for that financial interest and I venture to lay this before the minds of business men in this House that nothing more equitable, nothing more reasonable could be suggested than that those who undertook the risk and peril of financing the bonds of a tunnel company to build that tunnel should take as their compensation some of the results accruing to the property that would benefit through the construction of that tunnel. Nothing could be more logical, no business contract could be more equitable or fair. That was the plan taken and the brokerage company became interested to that extent. The interest left to Mackenzie, Mann and Company and their associates was only a fractional interest in that company, and whatever interest was left was entirely pledged to secure the bonds of the company itself, and it is urged this country should take that value and that liability. That suggestion seems to my hon. friend from St. John to be all right; that is something that appeals to his imagination. Here is something that he thinks the country should en-

gage in! He is horrified at the idea of the Government of Canada owning shares in a great railway enterprise, 10,000 miles in length; horrified at the idea that we should associate ourselves as owners of forty per cent of a great railway enterprise, a public utility in this country. But he wants us, no matter what the liability may be, no matter what the risk may be, no matter what the debt against it may be, to associate ourselves as junior partners in a real estate speculation somewhere near Montreal.


William Pugsley: Not at all; only to take a security.


Arthur Meighen: Only to take a security? As soon as we realize on the security we would become owners of an encumbered share in a land deal. We thus would become owners of that security and junior partners in the real estate speculation near Montreal. The hon. member for Rouville said in the very interesting speech that he delivered that this Government have no right whatever to take any interest in any private concern and he described the Canadian Northern Railway system as a /private concern. If the Canadian Northern Railway system is a private concern, how much more private is a land speculation across the mountain from Montreal. So that, according to the hon. member for Rouville, we have no business whatever to become partners in a private speculation in any sense at all. But the hon. member for Rouville was the most insistent and loudest in. his applause for the hon. member for St. John when he (Mr. Pugsley) pronounced from his place right beside him that we ought to get in at once and become partners in the model city beyond the hill at Montreal. I think I have disposed of all that was said by the hon. member for St. John, but there is no portion of the subject that I am not willing, if it is considered of sufficient interest to the House, to rehearse even again.
The hon. member for St. John has said that we are not doing right in compelling .the Canadian Northern Railway system to divert its traffic entirely to Canadian ports. We have provided in doing .so for the protection of the shipper. We have provided that he shall not be taxed one dollar because the Canadian Northern railway is under the necessity of transporting its traffic through Canadian ports. The shipper in the West or in the East is not suffering,
he is bound to get as cheap rates through Canadian ports as through American ports. Consequently where is the imposition? But he says we have no right to compel the diversion of traffic in that way, that our law is a farce and cannot be enforced. But the horn, gentleman admits that such legislation is within our power and stronger than the language of the Bill which compels the company to carry their traffic entirely through Canadian ports. The hon. member says it is no more effective than the old legislation.


William Pugsley: Hear, hear.


Arthur Meighen: The old legislation
simply enabled the company to divert traffic wherever they liked.


William Pugsley: Not at all.


Arthur Meighen: As long as the shipper said it was to go by certain ports so it went and, as every one who has ever shipped anything knows, the shipping companies simply put their form before the shipper and say: There is our form, sign it. The shipper signs it and thereby diverts the traffic whatever way the shipping company says. As a matter of practice the legislation of the late Government in connection with the Grand Trunk Pacific and the Canadian Northern railway was without value because it left the shipping company in full practical control, they could divert the shipping as they liked, and the clause proved of no value to the people of this country. We have provided otherwise. We have provided that the rates must be equalized and the shipments must go through Canada so that the Parliament of Canada is supreme and can see to it that no injustice is done to Canadian ports in respect to the routing of traffic. That could not be done under the old legislation, and I venture to say that the hon. member for Kings and Albert (Mr. Fowler) was taking no great risk when he suggested to the hon. member for St. John that, if he was sincere, he would get up and move that this so called farcical clause be struck out of the Bill now before the House. Sir, the policies of hon. gentlemen opposite can shift and change, they may pass from one attitude to another with lightening velocity, but however great the variety or swift the change, I venture to say they will never get around to the amendment proposed by the hon. member for St. John and strike out the routing clause of the present Bill.
46G0

We are shortly to go to a vote on the question of the third reading of the Bill. The House has had before it for three weeks the proposals of the Government. The House has had before it the report of the investigating committee appointed by this Government from the Civil Service of Canada to investigate the Canadian Northern railway. The figures of the report have been spread abroad before the eye of every hon. member and every citizen of this country. Three weeks of investigation, three weeks of questioning, have gone by, and not one figure, not one sentence of the report of that investigating committee has ever been successfully challenged in this House. Not one atom of the report has ever been seriously challenged as to its truth or corrected, 'the report of the investigation is complete in every sense. It stands to-day unimpaired, unattacked, unchallenged. The report shows that aid must be given or liquidation must follow. This House knows that liquidation must not follow or the people of Canada will suffer. Consequently we are doing nothing but our duty in asking hon. members to vote for the present Bill and not to be deluded into any of the glittering schemes of hon. gentlemen opposite-not to follow this party course, which is no policy at all, but is simply a series of shifting shams and variegated vagaries that are mocked by the name of policy.


Mr. MACDONALD:: Mr. Speaker-


Some hon. MEMBERS:: Question, question.


William John Macdonald: Mr. Speaker, the importance of this subject is the only apology which I have to make to the House for detaining it for a few moments before the third reacting takes place. After my hon. friend the "Solicitor General (Mr. Meighen) has talked fox an hour, and has satisfied the over-burdened wisdom of the hon. member for Souris (Mr. Schaffner), that hon. gentleman, with characteristic tolerance, seeks to prevent any other hon. gentleman from venturing to say anything further on this question. But, notwnn-standing the hon. member for Souris-


Mr. SCHAFFNER:: Say something new.


William John Macdonald: -believing that this measure, if it passes into law, will be most dangerous and most inimical to the interests of Canada, I intend to express my opinion with reference to it and without regard to my hon. friend. We have listened to a curious address this afternoon,

indeed to two curious addresses, from the Government benches. In that casuistical way in which the Solicitor General approaches every subject, he approached this subject to-day with a series of mental gyrations in order to try and convey the impression that hon. gentlemen on this side of the House had different views as to why this proposition should be defeated. There is no question that some hon. gentlemen are able to follow the Solicitor General and his party with that docile quietness which hon. gentlemen on the other side have assumed on this question, but, in the opinion of the Solicitor General, hon. gentlemen on this side of the House have no right to express any varying views in regard to it.
The hon. gentleman gave utterance to a statement which indicates the matter exactly from the viewpoint of his leader and himself. He said: It is difficult for the electors to grasp the intricacies of this question. There my hon. friend gave to the House and the country the keynote of the peculiar utterances which he has been presenting to the House. I venture to say that, outside of the right hon. gentleman who leads the Government (Mr. Borden) and himself, on the confession of the hon. Postmaster General (Mr. Pelletier) to-day, half of the men who sit on the Treasury benches do not know anything about the intricacies of this proposition themselves. Then, because he and the Prime Minister know, and their colleagues and followers know nothing of the intricacies of this question, instead of discussing the facts in such a manner as to enlighten the House and the country, my hon. friend the Solicitor General adopts the peculiar method, in dealing with this most serious financial problem of arguing that three-quarters of the hon. gentlemen on this side of the House are opposed each to the other, but that all our views lead to one end, and that is that we are opposed to this proposition.
The hon. gentleman, notwithstanding all his parliamentary experience, sought to obtain the applause of hon. gentlemen sitting behind him by actually urging that the motion made by myself for the six months' hoist of this measure did not have the technical parliamentary meaning which he knew very well it did have, an absolute negative to the proposition before the House. The hon. gentleman attempted to lead the House and the country to believe that it meant a delay of six months in

dealing with the question. When a i o-called minister of the Crown thinks it necessary to adopt such a specious deception to mislead the people of the country in regard to the merits of a motion for the six months' hoist, it shows that he and the Government,are in a very peculiar position in regard to the question. Yet my hon.friend with that earnestness which he assumes but which he does not feel upon every question, announced that it meant the absolute postponement of this question for six months. Did my hon. friend not know, when he made that statement, that I was moving a parliamentary negative to the proposition which meant that hon. gentlemen on this side of the House said that the measure should not pass at all?


Arthur Meighen: What would a parliamentary negative without any amendment mean except delay?


William John Macdonald: My hon. friend is
dropping into his casuistical method again. He would rather that somefbody out in the country should think that the member for Pictou had moved that nothing should be done for six months. The hon. gentleman sat behind the right hon. the leader of the Government, when he was on this side of the House, and heard him moving six months' hoist amendments and he must have known what they meant.
The hon. gentleman made a reference to the views of my hon. friend from South Renfrew (Mr. Graham) upon this question. Let me give to my hon. friend and the House just what my hon. friend from South Renfrew did say as to what should be done before this measure should be passed:
Therefore the first thing I would ask is that Messrs. Mackenzie, Mann and Lash, be their property great or be it small, take their share in this undertaking by pledging every dollar of personal they have for the completion of this line.	.
Let us see what my hon. friend the member for South Renfrew said further:
In putting up the guarantee now proposed, they get no first mortgage and no property. On the other hand, they are guaranteeing every underlying charge against the Canadian Northern Railway system, they are guaranteeing the payment practically of all the indebtedness of the Canadian Northern railway and making sure all the bonds heretofore issued on that line and by subsidiary companies. Under these circumstances, I think it is not unfair that Messrs. Mackenzie and Mann should hand over, at least for the time being, the control of this enterprise to the Government of Canada.
Is that not a policy sufficiently antagonistic to the resolutions of my hon. friend
the Solicitor General? Does my hon. friend say that my hon. friend from South Renfrew is not, upon this question, taking a position that absolutely and fundamentally states what should be done and to which my hon. friend the Solicitor General is opposed? Any policy for Mackenzie and Mann; we never took the trouble to find out from Mackenzie and Mann what their assets and liabilities were; the hon. member for South Renfrew does not know what he is talking about, when he deals with this question, practically says the hon. Solicitor General. Look at the finessing that the Solicitor General attempted with my hon. friend from St. John (Mr. Pugsley). Here are Mackenzie and Mann controlling a railway company. The Government gave a land grant to secure the construction of the railway. Mackenzie and Mann turn up as a contracting company and proceed to let a contract to themselves to construct the railway. They hand over to themselves, being the construction company, the land grant that was given by the Government to ensure the completion of the road. My hon. friend the Solicitor General said that Mackenzie and Mann, when they took that land and the proceeds of it, should put it in their own pockets and not be asked to contribute a single dollar to the enterprise and that when the enterprise comes to the Parliament of Canada later on to ask for assistance Parliament has no business to say to these contractors: Put some of this land, or its profits, into this enterprise before you come to us for aid. That is where my hon. friend stands in regard to the matter.
We have been discussing this question for about three weeks during which time we have been endeavouring to get from the Solicitor General, who seems to have the whole project under his hat and to be the sole repository of all the knowledge there is on the Government benches, some information in regard to it. We are now told at the conclusion of the debate that this concern is in liquidation and that unless the House passes the proposal submitted by the Government nothing else will be considered. And yet the Solicitor General has never yet attempted to justify this policy before even his own followers. True, he has said it, is the best they could do, but he has never asked the Canadian people to recognize in the policy anything that Canada had reason to	be proud of.
The Postmaster General was delightfully



*unctuous this morning but he apparently did not know much about the question. He told us that both sides of the House were agreed on the general principle of this question but that there was a difference as to details. That was a nice easy way to dispose of it, but what are the details? One detail is as to whether this House and the country are going to support a proposition which means that Canada will be committed, not merely to the payment of the interest -on ,$45,1000)000, but ultimately the payment of the principal sum itself. Another detail is, that we are asked to commit ourselves to the proposition, that Mackenzie, Mann and Company, Limited, -can go out and purchase where they please anything they like in connection with this railway, make any contracts they wish without our control or supervision, and that we will have to pay the whole bill in the end. Another detail, so lightly referred to by the Postmaster General, is that this country is doubling its debt, because irrespective of these obligations to which I have referred, Canada signs her name to an obligation to pay to these bondholders $312,000,000 over and above anything else that is said to have been paid. These are the details, and certainly the members of the Liberal party in this House and in this country have not consented to them, and never shall.
If the Government succeeds in passing this measure, then since they came into power in September, 1911, they will have voted and given 5 p.m. to the Canadian Northern Railway and those who arebehind it, half a million dollars for every week they have been in power. And yet the Postmaster General says the difference between the two parties is purely a matter of detail. I wonder what his conception must be as to general principles, if $400,000,000 is a matter of detail to him. We on this side of the House have opposed every stage of this Bill. In the first instance we declared that it should not pass at all, and we have followed that up by various amendments, making suggestions in the interest of the people of the country. We come now to the third reading, and we absolutely say that the Bill should not be read the third time in the form in which it is, and we declare that under existing circumstances no assistance should be given to the Canadian Northern Railway Company until at the same time provisions are made under which

Canada can absolutely control the whole enterprise, by taking the stock over at a valuation and under conditions which will not be onerous to the people. We suggest that there should be a direct method of getting control of this road in case of necessity, rather than the circuitous process prescribed in this Bill by* the Solicitor General and Mr. Lash, and under which the country will be involved in an expense of millions of dollars.
We have pointed out in this debate wherein this measure is pregnant with evil to Canada; we have pointed out wherein this Government in 1911-12 sowed the seeds of the difficulty which confronts them today. They gave to this company and to these men who are interested in this enterprise that assistance in 1911-12 which enabled them to embark on the most costly part of their project, namely, the construction of the Pacific end of this enterprise through the Rocky mountains. Then it was that this Government started on its career of financial dissipation which is working to its confusion to-day. Last year $15,000,000 were thrown to the winds without inquiry, and without any attempt to safeguard the interests of the Canadian people. After two and a half years of their rule, as the inevitable result of their reckless disregard for the interests of the Canadian people, the Government now comes to Parliament, and, as the Solicitor General says, knowing that the masses of people will have great difficulty in following the intricacies of this measure, ask the Canadian people to embark in a wholesale proposition by which they will assume every dollar of debt in this enterprise and liability for every dollar that Mackenzie and Mann choose to spend from now on until the railway is completed. The Solicitor General need have no worry about where the opposition is on a proposition such as that. The attitude on this question of the hon. membeT for Calgary (Mr. Bennett) and the hon. member for Kingston (Mr. Nickle) ought to be sufficient to convince him and those behind him that inside of this House and outside of this House, there are friends and supporters of the Conservative party who view with alarm the position to which Canada is reduced by the mismanagement and misgovernment of the men now in power, in dealing with railway matters. What will the end be? Had the Government come to this House and said: let us look after the creditors who are entitled to receive their money, let us provide for their

payment and take a lien for the money we pay out to those who have righteous; demands against the road; let us investigate the proposition fully; let us say to the men who are connected with this enterprise: you should take in other Canadians and other men throughout the empire who have status in the financial world to help you on with this; enterprise, if the Government had placed before the House and the country all the facts in connection with the enterprise, then they might have confidence in asking Parliament and the Canadian people to ratify their policy. But they have not done that. To-day, the Solicitor General actually had the temerity to say that not one item of the report they made with reference to the status of this enterprise, had been challenged or questioned. How could their report in regard to Mackenzie and Mann Company, Limited, be questioned or challenged, how could any member of this House, seeing that proper inquiry was excluded by the Government, have access to the documents in the possession of Mackenzie, Mann and Company, to ascertain whether the statements made by the Solicitor General and his colleagues be challenged.
But with evidence verified by an affidavit which would not be received by any court in this country as proof of the fact where it was questioned-and these facts are all questioned-my hon. friend closed his last speech on this measure with the bombastic assurance that not a single item of this report had been questioned, nor a single suggestion made that it was untrue. Under these circumstances, Canada is asked to pass it by; and lest these people go into liquidation, Canada must assume the present load of debt and must go into the vast unknown future of liabilities which will necessarily follow the passage of this measure. Without any care or thought, without any investigation worthy of the name, the Government are committing this country to this position. I am glad to say I believe that hon. gentlemen on this side of the House will, as we have done before during this discussion, proceed to declare that the interests of Canada demand that this measure should not be passed and that it should never become law in this country.


Mr. BELAND:: I am paired with the
junior member for Ottawa. I would have voted for the amendment.


Mr. CLEMENTS:: I am paired with the
hon. member for Moosejaw. I would have voted against the amendment.


Mr. GUTHRIE:: I am paired with the
hon. member for Lincoln. I would have voted for the amendment.


Mr. BURRELL:: I am paired with the
lion, member for Strathcona. I would have voted against the amendment.


Mr. McCREA:: I am paired with the hon. member for Lanark. I would have voted for the amendment.


Mr. BRISTOL:: I am paired with the
hon. member for St. Lawrence. I would have voted against the amendment.


Mr. CARROLL:: I am paired with the
hon. member for Kings, N.S. I would have voted for the amendment.


Mr. KYTE:: I am paired with the hon.
member for St. Antoine. I would have voted for the amendment.
[Sir Wilfrid Laurier.)
Mr. WM. CHISHOLM: I am paired with the hon. member for Annapolis. I would have voted for the amendment.


Mr. KEMP:: I am paired with the hon.
member for Huntingdon. I would have voted against the amendment.


George William Fowler: I am paired with the
bon. member for Queens and Sunbury. I would have voted against the amendment.


Mr. BARNARD:: I am paired with the
hon. member for Saskatoon. I would have voted against the amendment.


Mr. ALGUIRE:: I am paired with the
hon. member for Glengarry. I would have voted against the amendment.


Mr. KAY:: I am paired with the hon.
member for Brome. I would have voted for the amendment.


Mr. MICHAUD:: I am paired with the
hon. member for Kent, N.B. I would have voted for the amendment.


Mr. W. T. WHITE:: I am paired with
the hon. member for Westmorland. I would have voted against the amendment.


Mr. CODERRE:: I am paired with the
hon. member for Three Rivers. I would have voted against the amendmnt.


Mr. BEATTIE:: I am paired with the
hon. member for Montcalm: I would have voted against the amendment.
Amendment (Sir Wilfrid Laurier) negatived.
Mr. VERVILLE moved in amendment, seconded by Mr. Carroll:
That the said Bill he not now read a third time but that it be referred to a Committee of the Whole with instruction that they have power to amend the same by providing that the Act shall come into force by proclamation of His Royal Highness the Governor General, which may be issued when Mackenzie and Mann Company, Limited, who are the owners of coal mines in the Island of Vancouver, shall have agreed to a board of conciliation, as requested by the operatives of the said mines.
He said: In support of my amendment 1 shall be very brief. In the discussion we had in the House some time ago, and in the return presented to the House, it was admitted that it was almost impossible for the Government to compel Mackenzie, Mann and Company to accept a board of conciliation. It was proved by the return, and in the agreement -at that time, and admitted by the Minister of Labour, that it was impossible to get the opposing parties

together. It was proved, by the return that the men were largely favourable to having a board of conciliation, and it seems to me at the present time that we have the power in our hands, and it is the right time, to force Mackenzie, Mann and Company, who are anxious to receive the guarantee of this amount of money, to accept a board of conciliation. My amendment does not say that the strike should be settled, because I do not believe it is within the jurisdiction of the Government or of this House to say that a strike should be settled. At the same time we should force, whenever we have occasion to do it, those who may be interested to agree to conciliation. I say that, because any one who wants a guarantee of public money should abide by the laws of the country. In the past, we have seen the Grand Trunk and the Grand Trunk Pacific having to accept the awards of boards of conciliation; and I should have the support of the Minister of Labour because I have heard him make such statements in this House time and again, and I know he has forced the Grand Trunk to abide by the decision rendered by a board of conciliation. At this stage, Mr. Speaker, the strike which is still on in Vancouver island, is too costly for. the country. I could not get the amount it has cost the Government, because I had a question on the Order Paper, which has been made an order of the House, and the information has not yet come down; but we can imagine that it has cost probably one quarter or half a million dollars so far to have the militia guarding the mines. It seems to me at the present time it would be a great saving to the country to force the owners to have a conciliation board, so as to enable not only the members of this House but also the public to understand the real situation existing on Vancouver island.
The House will agree with me that my amendment is strictly on conciliation grounds, and I do not see why I should not, and I hope I will, receive the approval of both sides of the House on this question. There is no harm whatever in forcing Mackenzie and Mann to accept a board of conciliation, so as to give an opportunity during the recess of Parliament to find out the exact condition of affairs, because in the return we have had we have seen only one side of the question, and it has been explained in another way by the other side. By this resolution it is particularly stated that this principle not only applies	to the	Canadian
Northern railway, but should apply to every railway company when it makes a demand for assistance. It is outside the jurisdiction of the Government to state plainly that strikes must be settled, because the trouble may come from one side or the other; but we have a law on the statute-books which has worked fairly well in a good many cases, and at the present time I do not see why we should not force Mackenzie and Mann to have a board of conciliation. That is the reason I move this amendment.


Herbert Sylvester Clements: Is the hon. member
for Maisonneuve in a position to state that Mackenzie and Mann are the owners of these mines on Vancouver island?


Mr. VERVILLE:: My amendment states
plainly some mines; it does not say all the mines. I am told that Mackenzie and Mann are the owners of some of the mines on Vancouver island.


Herbert Sylvester Clements: Do they control any
single mine on Vancouver Island?


Alphonse Verville: I cannot say for certain, but I am told that the Canadian Collieries are controlled by Mackenzie and Mann, and until such time as it is proved to the contrary, I will stick to that statement.


Mr. CURRIE:: If the hon. member is not in a position to state that Mackenzie and Mann have any interest in any mine in Vancouver, I ask if this amendment is in. order?


Herbert Sylvester Clements: I think I can state to-the hon. member that Mackenzie and Mann do not control any single mine on Vancouver island.


Alphonse Verville: We had it made plain in the previous discussion that Mackenzie and Mann were the parties to settle that question. The Minister of Labour knows it, and every one who has seen the return knows it.


Mr. CROTHERS:: I think I should say a word or two on this amendment. As I understand the wording of the amendment, two statements in substance are made, or are implied. One is that Mackenzie and Mann own one or more coal mines on Vancouver island, a number of miners connected with which are on strike, and the other is that Mackenzie and Mann's workingmen have requested a board of conciliation. The only mining company on Vancouver island in which Mackenzie and Mann are at all

interested, so far as I am aware, is the Canadian Collieries, Limited. That company operates seven mines at Cumberland, a place about 120 miles north of Victoria, and one mine eight or ten miles south of Nanaimo. I understand that Mackenzie and Mann hold only very limited shares in that company, that they have not the control of any of the mines which I have mentioned and that they are not interested in any other mines on Vancouver island-I am not aware that the workmen ever requested a board of conciliation; on the contrary, they refused a board of conciliation when offered one by the Labour Department. The men went on strike at Cumberland on September 16, 1912, and some two or three days afterwards at their other mines south of Nanaimo, at a place called Extension. The first intimation I had of any labour trouble on Vancouver island was an article which appeared in the Ottawa Citizen of September 19, 1912. Without having any direct notification from the men or from any one else, or without any information whatever except what I saw in the papers, I sent a message to the secretary of the organization at Cumberland, in these words:
Peter McNiven,
Secretary United Mine Workers Lodge, Cumberland, B.C.
My attention has been drawn to newspaper despatches announcing the occurrence of coal miners' strike at Cumberland mines. The Industrial Disputes Investigation Act provides means for possible settlement of all matters in dispute by reference to an impartial board ot three members, on which company and workmen concerned may each have a representative of their own selection. Law does not compel acceptance of board findings but forbids strikes or lockouts pending inquiry under severe penalties. In present case requirements of the Act do not appear to have been satisfied, and I am desirous of learning particulars of dispute by telegram without delay. Department will furnish any fuller explanation of Industrial disputes law which may be required, and is to-day mailing you copies of this law and forms of application thereunder. In the event of proper application being made, everything possible will be done to expedite procedure under Act.
It happened that Peter McNiven, whose name we had on our list of officers of the different unions, had been superseded by a man called McAllister, and the next day I received a message from McAllister as follows:
Hon. T. W. Crothers,
Minister of Labour,
Ottawa.
There is no strike declared at Cumberland mines. The company have openly discriminated against men who were taking an active part in union organization. They have also refused

to meet a committee of men. The men decided to take a holiday, after which the company gave orders for men to take their tools out of the mines.
That was the reply to the message that I sent them suggesting that they should apply for a board of conciliation and enclosing copy of the Industrial Disputes Act and blank forms upon which they might make application for the board. The reply which I have read to the House states that there was no strike, but that there was a lockout. The commissioner afterwards appointed by the Government to investigate conditions on Vancouver island found that as a matter of fact these men had gone on strike. They were urged over and over again to ask for a board of conciliation, but they constantly refused to act. I spent several weeks upon the island. I went first to the city of Vancouver, and there met a number of the labour leaders and heard what they had to say in regard to the matter. I then went over to the city of Victoria and saw the Minister of Mines and the officers of his department and the managers of all the coal mines on Vancouver island. I then went to Cumberland and met twenty-seven of the men who were on strike and heard what they had to say about the situation- I had before me forty of the men who were actually working, and of these only one man had any complaint to make; all the others were perfectly satisfied with the conditions in the mines. This one man rose and said: I am not satisfied. I said: What is your grievance? He said:	I am not getting enough
money for the work which I am doing.
I said: How much do you get per diem throughout the year, after paying for your explosives? What is your net income? He said: About $5 a day. At Nanaimo I saw a large number, seventeen, I think, of the men who were on strike, as well as a large number of those who were opposed to the strike. I consulted the mayor of the city of Nanaimo, the police magistrate, members of Parliament and two or three ministers of the gospel. I addressed a meeting there on this question, and I attended a meeting at Ladysmith, which is the water port for the mines at Extension, and addressed some 200 miners. At South Wellington I addressed 120 men. I think that I became acquainted with the views of the men who were in favour of the strike, of the men who were opposed to the strike, of the managers of the different companies and of the owners of the different mines. This amendment, proposed by my

hon. friend the member for Maisonneuve, does not set forth accurately the facts. It says impliedly, if not in so many words, that the miners requested a board of conciliation. This they did not do; on the contrary, they refused a board of conciliation. The mines in which Mackenzie and Mann are interested are but a few of the many coal mines on Vancouver island where strikes occurred simultaneously. How would it do for my hon. friend the member for Maisonneuve to provide in his amendment that the Act shall not be proclaimed until all those interested in the different mines in Vancouver island ask for a board of conciliation and submit to any award that may be made by such board?


Mr. STEVENS:: This amendment, in my estimation is perfectly useless under the circumstances; and the hon. members who have moved and seconded it know perfectly well that it will be fruitless in every respect. I venture to say that neither one of the hon. gentlemen who have imposed this amendment on the House at this particular time ever approached the Minister of Labour, as Minister of Labour, or asked his assistance in any way to the solution of this difficult problem. Other members from British Columbia and myself have been constantly in touch with the Minister of Labour; we have discussed this question privately in his office, in his official capacity, from every conceivable angle and sacrificed much time and energy, especially the two representatives from that district, in trying to secure a solution of this question. Now hon. gentlemen come forward and introduce an amendment with no other earthly reason than to make a little bit of petty, political capital out of the occasion. There is not a vestige of interest in the heart of either one of these gentlemen to attain a solution of the problem or they would have been spending their time, as men claiming to represent the labour interests of this country in a peculiar manner, in assisting us during the last two or three years to arriye at some solution of the problem. I am prepared now and so are my colleagues to do anything that human power can do to bring about a happy solution of this trouble. We know and hon. gentlemen know that the amendment is simply put before you in order to confuse the whole question and, if possible, make a little political capital. The right hon. gentleman who intends to vote for this amendment knows that perfectly well and he knows he will vote for it with no hope of solving the solution, but simply to make political capital.


William F. Carroll: When the Bill was under consideration in committee, I said a few w'ords in connection with the unfortunate strike of the coal miners on the island of Vancouver, and I appealed to the Prime Minister, who was in his seat, that something should be done to get Messrs. Mackenzie and Mann to procure a peaceful settlement of the strike which was then and is now in progress in the mines controlled by them in British Columbia. At that time the reason given by the right hon. gentleman who leads the House was that the Bill did not anticipate taking control of the coal mines, nor did it anticipate taking over the coal mines as *security for the $45,000,000 of bond [DOT]guarantee that the Government are giving to Mackenzie and Mann or to the Canadian Northern Railway Company. The *Prime Minister said, however, that he *would take the matter into consideration. I suggested then that if steps were not taken I or some other hon. member would move an amendment to that effect before the Bill received a third reading, and that is in effect the amendment which my hon. friend from Maisonneuve (Mr. Ver-ville) has brought before the House. An hon. gentleman from British Columbia asked if Messrs. Mackenzie and Mann actually controlled the coal mines in British Columbia. I say they do. I say they control the Canadian Collieries, Limited, in British Columbia. I say they operate coal mines in Cumberland; they operate at least six mines in British Columbia and I do not think there is any gentleman who knows it better than the hon. gentleman who asked the question.


Herbert Sylvester Clements: I think I am in a position to know the actual facts as well as any hon. gentleman and the facts which 1 stated are facts.


William F. Carroll: The hon. gentleman
thinks they are facts. I know that the statements I am making are facts, and all the hon. gentlemen know that too. If the hon. member would read the correspondence brought down by the Minister of Labour and read to the House during the discussion of this unfortunate trouble some months ago, he would see that Messrs. Mackenzie and Mann do control and that it was their officials in Toronto who sought

a settlement of this strike through the mediation of the minister.


Herbert Sylvester Clements: At one time Mackenzie and Mann controlled some mines; but I say that recently they have not controlled them and they do not control them today.


Edmund James Bristol: I happen to be a director of a coal mine on Vancouver island which has suffered immediately through this - strike-


William F. Carroll: If the hon. gentleman
has anything to say, he can make his speech afterwards.


Thomas Simpson Sproule: Order.


William F. Carroll: If Mackenzie and Mann
do not operate mines in British Columbia a change has taken place within the last month and a half or two months; and if my hon. friend from British Columbia has a statement of fact to make to the House and can substantiate it at any time I am quite willing to admit the truth of his statement; but they did operate within two months past, they were the controlling factors of these mines then.


Herbert Sylvester Clements: The hon. gentleman is making a statement which is not a fact and which I defy any hon. member to prove.


William F. Carroll: I ask the hon. member to withdraw the statement that the statements I make are not facts. I wish the hon. gentleman to withdraw that.


Some hon. MEMBERS:: Take it back.


Thomas Simpson Sproule: I think the hon. member should accept the hon. member's ward when he makes a statement. I think he is bound, under parliamentary usage, to accept the statement he makes as a fact.


Arthur Meighen: I submit that only applies to a question within the personal experience of a member. It could not apply to a question at large, because in that way one hon. member would always have to take as gospel anything said 'by another hon. member.


Thomas Simpson Sproule: I understood the hon.
member to say that not over two months ago they did own mines and if any change had taken place it must have been since then. That is the statement he made. He did not say that they owned any now, but that they had owned mines in the past.


Herbert Sylvester Clements: The statement I made and that I know for a fact is that they did not control these mines two months ago.


William F. Carroll: I gave to the House some of my reasons for saying that Mackenzie and Mann controlled and owned these mines in Cumberland and that they owned the Canadian Collieries, Limited, two months ago. If the hon. gentleman has any facts in his possession to show that they have cased to be owners and controllers of these mines, it is due to the House that he should submit them.


Herbert Sylvester Clements: The hon. gentleman is making the statement. I ask him to give the proof.


William F. Carroll: One place where he will get the information is in the return brought down to this House.


Henry Herbert Stevens: I asked Sir William
Mackenzie myself when I approached him in connection with this matter if Mackenzie and Mann controlled these mines, and he told me distinctly they did not control; they were interested, but did not control.


William Pugsley: Who is president of the company?


Henry Herbert Stevens: I do not know.


Rodolphe Lemieux: Why did you approach him?


Henry Herbert Stevens: To endeavour to secure
a solution, knowing he was interested as one of the shareholders in the mines. He stated to me that he did not control the mines.


Thomas Wilson Crothers: I think the hon. member has probably based his statement on returns brought down from my department a few weeks ago. He referred to these returns. I do not have them under my hand, but I venture to say that he will find nothing in these returns, nothing in any letter or anything else, showing what interest Mackenzie and Mann had in the Canadian Collieries Limited.


William F. Carroll: I do not wish to say that the hon. gentleman does not desire to give the truth to the House, but I agree with him that there is no correspondence brought down which will show what particular interest they had in the mines. Certainly, they were the controlling factor and their agency at Toronto was active in attempting to secure a solution of the difficulties in these particular colleries.


Louis Coderre: That is a different matter altogether.


William F. Carroll: That is not a different matter. The correspondence does not show whether Mackenzie and Mann own ten per cent, twenty per cent, or fifty per cent of this stock, but they apparently own sufficient of the stock to take such a keen interest in it that most of the correspondence on behalf of the Canadian Collieries was handled through the Toronto office. That is evidence, I think, that they have a controlling interest in these mines. I have no evidence to offer the House that Mackenzie and Mann do not now operate these mines except the word of my hon. friend from Vancouver (Mr. Stevens).


Edmund James Bristol: Will the hon. gentleman allow me to give him some information P


William F. Carroll: When I am finished-


Edmund James Bristol: The hon. gentleman is making a statement that is not correct, and I am in a position to give him the correct information. If he does not want it, of course he does not want it.


William F. Carroll: Mr. Speaker, I will call to your attention the fact that an hon. gentleman (Mr. Bristol), whom we seldom see in this House except when Mackenzie, Mann and Company are under consideration, has said that I have made a statement that is not correct. I think that is not parliamentary.


Thomas Simpson Sproule: Order. The statement that what an hon. member has said is not correct is certainly parliamentary.


Edmund James Bristol: The hon. gentleman made a certain statement in this House. Knowing that the statement that he had made was incorrect, I said that I would give him information that was accurate.


William F. Carroll: If the hon. gentleman has any facts to give the House he will have sufficient time to give them. Only a few days ago I met a gentleman in this city who has been attempting to bring about a solution of this difficulty, and he said that he had been approached by Sir William Mackenzie more than a month ago in reference to this question. If he has no stock in the Canadian Collieries, Limited, why should he be interested in securing a settlement of this strike ?


Edmund James Bristol: Was that question directed at me ?


William F. Carroll: I did not ask any question at all; I asked the question generally. My hon. friend is always anxious to uphold Mackenzie and Mann. I do not blame him for it. I suppose that it is to his interests either politically or personally, I do not know which. I am trying to be fair in this matter. The Prime Minister, the other day, was kind enough to say that he would take this question into consideration, and if the Prime Minister will say to the House that, on the information he has, Mackenzie and Mann are not interested in the collieries in British Columbia in which there is a strike at this time, I will be most happy to take his word. But I cannot take the word of every hon. gentleman behind him who pops up in his place and says that he knows that they have no interest in those mines-


Edmund James Bristol: Nobody has said that.


William F. Carroll: -unless he is able to substantiate that statement. Objection was taken to this motion because there has been no request made by the operatives of British Columbia for ,a>
settlement of this strike. I understand that there has been. I am only speaking from what I have been told. A gentleman who has been president of the Trades and Labour Council of Canada assured me that there had been laid before the Department of Labour a basis of settlement on behalf of the striking miners. That statement was made to me only three days -ago by Mr. Watters who is, I think, now president of the Trades and Labour Council. But even if thfere was not an actual .application made for a board of conciliation that should not put this amendment ini any other light than the true one which is that we are trying to get the people together and to .arrive at an equitable land fair basis of settlement of the coal shrike in British Columbia. My hon. friend from Vancouver has said that he would venture the assertion that neither the mover of this resolution nor myself, the seconder, had ever approached the Minister of Labour towards getting .a settlement of this trouble. The hon. gentleman is right in that. I have never approached hiim but when the question was up in the House during the present session we expressed our views and sentiments and said that something should be done, and could be done, by the Minister of Labour to bring about a settlement of this strike. The Minister of Labour was

kind enough to acknowledge the tact that under an Act of Parliament, the Conciliation Act, he couild appoint a boaird to inquire into the facts and ascertain who was right and who was wrong.
I am aorry to have heard the hon. member for Vancouver say that he had sacrificed his time in attempting to get a settlement of this strike. This is the first time I have ever heard a public man in this country say that he was sacrificing his time in endeavouring to get a settlement of a strike that has been a horror in the coal mining districts of British Columbia for a couple of years. He is sent here by the people of British Columbia to do just 'such things, he is sent here by the electors of the city of Vancouver in the public interest and when he tells this House and the country that he is sacrificing his time in doling that he is certainly saying what no other public man in Canada has ever dared to say.
At six o'clock, the House took recess.
The House resumed at eight o'clock.



PRIVATE BILES.


[Stage Direction]
Bill No. 212, to incorporate the Title Insurance Company of Canada.-Mr. Baker.
Bill No. 202, respecting the Grand Council of the Catholic Mutual Benefit Association of Canada.-Mr. Macdonell.
Bill No. 210, for the relief of Frederick Dwight Chesiey.-Mr. Baker.
Bill No. 211, respecting a patent of Frederick Sinclair Corrigan.-Mr. Macdonell.
Bill No. 209, respecting certain patents of the F. N. Burt Company, Limited.- Mr. Macdonell.

[Stage Direction]
Further consideration in Committee of the Whole of the two following Bills:
Bill No. 41, respect the Canadian Northern Railway Company.-(Mr. W. H. Sharpe. t Bill No. 63, respecting the Canadian Northern Ontario Railway Company.-Mr. Currie; Mr. Blondin in the Chair.
Mr. GRAHAM:: These are the Bills that have been standing on the order paper so long?


Mr. ROGERS:: 
[Stage Direction]
Motion agreed to.
Bills reported, read the third time and passed.

[Stage Direction]
Mr. PORTER moved the second reading of Bill No. 220, for the relief of Helen Vine-berg.
William John Macdonald: Before this Bill is read the second time, I desire to say that my attention has been called to the circumstances of this case. The well-understood practice of this House, in dealing with Divorce Bills from the Senate, is to treat the conclusions arrived at by the Senate Committee as being proper findings of facts, unless they appear to not to be justified Iby or to be contrary to the evidence. My opinion is that any lawyer who reads the testimony-and it is not very interesting testimony to read-will agree that there is absolutely no warrant or foundation for their finding that adultery was committed in this particular case. It is true, there is evidence of other circumstances as to the relations between the parties, on whicli some comments might be made; but I do not understand that, as a matter of law, these facts or circumstances furnish any contributory reasons why a divorce should be granted. On the main question, which is the usual ground upon which a divorce should be granted, I submit that the evidence is not only not in favour of the petitioner, but distinctly to the contrary.
The circumstances are that a servant-maid in the house of the respondent and the petitioner gave certain evidence alleging the paternity of a child that was born, and stated that the respondent was the parent. This is absolutely denied by the respondent, who also denies categorically the circumstances alleged by this witness. He is supported in his denial by the fact that the woman referred to had sworn, of her own free will and accord in Toronto, that the paternity of the child belonged to another party. Any man in this country

could be attacked and placed in a very unfortunate position if evidence of this character were held to be sufficient to warrant the granting of a divorce. I have been at a loss to understand the motives which led the gentlemen who compose the Divorce Committee in the Senate to come to this conclusion. Were it a case in which the	reliability of the
parties would form an issue and in which the judges, whose duty it was to determine the facts), might have the advantage of seeing the parties in arriving at a conclusion, I would not question the decision at which they arrived; but the evidence is of such a character that the truth or falsity of the allegation cannot be determined by any such means. We have here, therefore, a case in which the other branch of this Parliament, where these Bills are initiated, has undertaken to make a finding which I am sure any lawyer in this House who reads the testimony will agree with me is contrary to the evidence. Personally I do not desire to accept the responsibility of giving the second reading to a Bill which is in that position. While I do not think as a rule this House should interfere in pure questions of fact, where the elements of forming judgment Test peculiarly with the committee of the other House, that is not the case here. No court of appeal in my judgment, after reading this testimony would come to any other conclusion than that the findings of fact were contrary to the evidence. I would therefore respectfully protest against this Bill being read the second time on that evidence.
i Mr. THOBURN:	I do not know what
decision lawyers might come to upon reading the evidence; but I feel satisfied, as one who heard the evidence, that not only lawyers but every one else who heard it would be perfectly satisfied that the applicant in this case was justified in getting her divorce. As one of the sub-committee appointed to hear these cases, I heard the evidence and I confess I do not expect ever to hear such evidence again. I do not think such evidence was ever before submitted to a court. The act of adultery is proven beyond a doubt; time and places on several occasion, day and date, were given, which I do not think could be contradicted.


William John Macdonald: It was contradicted, as a matter of fact.


Mr. THOBURN:: By the defendant?


William John Macdonald: And by the previous sworn testimony of the girl.


William Thoburn: You could hardly expect anything else. There are not many defendants who will, as a rule, acknowledge the charge made against them. I have every reason to believe, Mr. Speaker, that this Bill should get its second reading. It was heard before the Senate Committee on two occasions, and I might say that on neither of these occasions was there a dissenting voice. It passed the Senate by a two-thirds majority, and I hope and trust if it comes to this House it will pass likewise.
*Motion agreed to, and Bill read the second time.



CANADIAN NORTHERN RAILWAY AGREEMENT.

[Stage Direction]
The House resumed consideration of the proposed motion of Mr. Borden for the third reading of Bill No. 214, respecting the Canadian Northern Railway system, and the proposed amendment thereto of Mr. Verville.
Thomas Simpson Sproule: I would like to say with regard to this amendment, as a question of order was raised before 6 o'clock, that I have looked info it carefully. At first it seemed to me to be not in order. The amendment is based on several allegations. One is that Mackenzie and Mann own coal mines in British Columbia, an allegation of fact; another is an implied allegation, that they are the owners of coal mines at which there is a strike; and the third is an allegation of fact that the operatives in these mines had requested that a conciliation board be appointed. As these are allegations of fact, with which, of course, the Speaker could not be familiar, nor could he be expected to decide, I think that it must be left to the House to decide the question. Therefore, I rule that the amendment is in order.


William F. Carroll: Mr. Speaker, when I arose before dinner to speak on the amendment proposed by the hon. member for Maisonneuve (Mr. Verville), I intended to say but a very few words, and to give my reasons for supporting the amendment and for giving my name as its seconder. There were some statements challenged by hon. gentlemen on the other side of the House, and there seems to be some doubt as to whether or not Messrs'. Mackenzie, Mann and Company, or the Canadian Northern Railway Company, are interested in these mines in British Columbia. I propose, therefore, to read certain correspondence

which, took place between the Canadian Northern Railway Company and the Department of Labour.


Herbert Sylvester Clements: If the hon. gentleman refers to me, there was no assertion made that the Canadian Northern Railway Company or Mackenzie, Mann and Company were not interested in any of the mines in Vancouver island. The statement I made was that the Canadian Northern, or Mackenzie, Mann and Company, do not control one single mine on Vancouver island at the present time.


William F. Carroll: I am going to give to
this House very strong testimony from the Canadian Northern Railway Company and the officials of Mackenzie and Mann, as well as from the private secretary of Sir William Mackenzie, which will remove any doubt that the Canadian Northern or Messrs. Mackenzie and Mann did control 'and operate the mines in British Columbia when this strike became prevalent on the 4th of September, 1912.
On September 4, 1912, the following letter was addressed by Mr. D. B. Hanna, third vice-president of the Canadian Northern railway, to F. A. AoLamd, the Deputy Minister of Labour. It seems' there was some correspondence before this, but I am starting wiith this particular communication :
Toronto, Ont., Sept. 4,. 1912.
F. A. Acland, Esq.,
Deputy Minister of Labour,
Ottawa, Ont.
Your message 21st only received yesterday, but not on being on board I waited to consult Sir William and have since wired Victoria for information, we thank minister for his offer and will state situation more fully when 1 receive reply from Victoria. Meanwhile understand men at one mine have quit work but trouble not spreading.
(Sgd) D. B. Hanna.
On the 27th of September, 1912, Mr. Acland writes to Mr. Hanna as follows:
Ottawa, Sept. 27, 1912.
Re disturbances in coal mines at Ladysmith and Cumberland, B.C.
Dear Sir,-With further reference to the industrial troubles in the coal mines controlled by your company on Vancouver island concerning which the department has exchanged telegrams with you, the minister, I am to state, is particularly desirous of having without delay your company's statement on the subject, and would he obliged if the same could he forwarded immediately. Statements received by the minister go to show that work has ceased at Ladysmith as well as Cumberland, the alleged ground being discrimination against membership in the local union, hut the department is not fully informed as to this. The situation is one in
[Mr. Carroll. |
which it w'ould appear probable that an application would shortly be received for a board of conciliation and investigation, and the minister has thought that your company might desire to take action which will render unnecessary the establishment of such a board. Can you kindly arrange to have a statement expressing the company's view forwarded to the department so that it may be placed before the minister on Monday, the 30th.
Yours very truly,
9 p.m.	(Sgd) F. A. Acland,
Deputy Minister of Labour. D. B. Hanna, Esq.,
Third Vice-Pres., Canadian Northern Ry., Toronto, Ont.
I wish to point out to you, Mr. Speaker, and to the House, that Mr. Acland says that ' industrial troubles ' have arisen ' in the coal mines controlled by your company ' and that this epistle is addressed to the third vice-president of the Canadian Northern Railway Company. Mr. Acland [DOT]again writes Mr. Hanna on the 19th of November:
Dear Mr. Hanna:
When I called on you on the 9th instant regarding the coal mining troubles of your company's mines on Vancouver island you were good enough to promise to secure a statement of circumstances to date and asked your Mr. Thompson to see to it. I had intended calling on you on the following Saturday, the ICth inst., but did not reach Toronto until your offices were closed. Perhaps you will he kind enough to forward for the minister's information the statement you were expecting, if it has in the meantime, arrived. Parliament, as you are aware, meets immediately and the minister feels it would be well to have the latest information from the company's point of view as to this somewhat difficult dispute.
Yours truly,
(Sgd) F. A. Acland, Deputy Minister of Labour.
D. B. Hanna, Esq.,
Third Vice-Pres., Canadian Northern Railway, Toronto, Ont.
Surely nobody can dispute that between September 27, when the first letter was directed to Mr. Hamma saying that industrial troubles had occurred in the coal mines ' controlled ' by his company in Vancouver, and the letter of the 19th of November which refers to ' the coal mining troubles of your company's mines on Vancouver island,' Mackenzie, Mann and Company were interested. If they were not interested they certainly should have denied it.
On the 21st of November the answer of Mr. Hanna, follows:
F. A. Acland, Esq.,
Deputy Minister of Labour,
Ottawa, Ont.
Dear Mr. Acland,-I have your letter of the 19th instant. I understand from Mr. F. C. Annesley, secretary to our president, that he

sent to Sir William at Ottawa on the 18th instant some papers concerning the difficulty at the mines on Vancouver island, and no doubt Sir William has since taken the matter up with you.
Will you please advise me if such is not the
case?
Yours very truly,
(Sgd) D. B. Hanna.
It- is not difficult, of course, to identify the Sir William referred to in this letter; he is none other than Sir William Mackenzie, president of the Canadian Northern Railway Company. Mr. Acland answers this letter on November 23, 1912, as follows:
Dear Mr. Hanna,-Yours of the 21st. Sir William, as you say, has been in Ottawa for some days, but has not, I think, been in the department and has not left with the minister or elsewhere any papers or information concerning the difficulties at your mines. If you are able to apprise the minister of the latest developments and present situation it would be an advantage. It frequently happens that questions on matters of this kind are asked in Parliament and the minister particularly desires to have information at hand.
Yours truly,
P. A. Acland,
Deputy Minister of Labour.
D. B. Hanna, Esq.,
Third Vice-President,
Canadian Northern Railway Company, Toronto, Ont.
Then comes a letter from a gentleman who, I understand, is Sir William Mackenzie's private secretary. It is as follows:
Hon. P. A. Acland,
Deputy Minister of Labour,
*	Ottawa Ont.
Dear Sir,-With regard to your letter to Mr. D. B. Hanna, respecting trouble at the local mines, Sir William Mackenzie is going to Ottawa to-night. Will you therefore kindly communicate with him while there. I may say that we understood that Colonel Davidson had seen either you or the minister with regard to this matter.
Yours very truly,
(Sgd) H. Annesley.
I am not in a position to say who Colonel Davidson is, but I understand from an lion, gentleman in front of me that he is the land agent of the Canadian Northern Railway Company. But the most wonderful telegram of all is one which was sent from Cumberland by one of the mine managers, a man by the name of Coulson. It is a private telegram, but it was brought down in the files produced by the Labour Department at the request of the hon. member for Maisonneuve. It is between officials of the Canadian Northern Railway Company and not between the Canadian Northern Railway Company and the Department of Labour, and I am at
a loss to understand how it came to be brought down. It was sent by one of the coal mine managers at Cumberland to Sir William Mackenzie and was forwarded to him by Mr. Annesley, Mr. Mackenzie's private secretary. It is as follows:
Canadian Northern Railway Company, Offices of the Third Vice-President,
Toronto, Ont., October 7, 1912. Translation of message to Sir William Mackenzie :
Coulson Wires:
Replying to my telegram of the 10th, I did not state that two weeks ago our miners were prevented from voting on resumption work by local union president, who destroyed ballot boxes and also threatened men. Local union officials realize error in not giving thirty days' notice before striking and also in not having consulted international union and are trying to avert responsibility. International union repudiate action and will not support strike morally or financially. Conditions very quiet but we expect men very soon to hold indignation meeting and return to work repudiating union entirely.
Here comes a very important part of the telegram:
Union appeals to Ottawa their last resort. If unsuccessful union dead and labour trouble ended.
If there were any doubt as to what conclusion should be arrived at from the letters which I have read concerning the control of those mines by the Canadian Northern Railway Company, there can be no doubt about it after reading this message from the manager of those mines, directed to Sir William Mackenzie, in which he denies that the company's miners were prevented from voting at a certain election held among the miners. I am sorry that I had to read all those letters, but I place them on record to show that in my humble judgment when this strike was in progress in 1912 and 1913, Mackenzie and Mann, or the Candian Northern Railway Company, controlled and were developing certain mines in the province of British Columbia. If since that time the control has been handed over to other parties, and I do not say that it has not, there may be some reason for hon. gentlemen opposite saying that this amendment is out of order and should not be voted upon. Nothing, has been done, however; and the strike is still on. I hold in my hand a paper called the Industrial Banner, dated May 22, 1914, in which there is a .telegram from British Columbia to the eeffot that the strike is still on though it is not so serious. There has been so much discussion as to who is in the wrong in this matter that I think now is the time and place to have it

shown exactly why matters came to the crisis that they reached in the coal mining areas of British Columbia. If Messrs. Mackenzie and Mann or the Canadian Northern Bailway Company have nothing to do with those mines, this amendment is not going to hurt them; they can easily prove to the gentlemen who have special control of this legislation that they are not interested in the mines. I hope, however, that if they are called upon they will give their own evidence, and not ask the clerks in their office to produce the necessary proof. The question was threshed out in the House as to whether or not the Labour Department, presided over by the hon. the Minister of Labour, whom I am glad to see in the House again after his illness, was to blame in this matter. We criticised the department in the House some time ago and we tried to cast upon them the onus of showing wffiat they had done in connection with the matter; we believed that they had done nothing. I am not going to reiterate those statements, but as a matter of fact nothing has been done, whether it is the fault of the Labour Department, the Canadian Collieries, Limited or the Canadian Northern Bailway Company I am not going to say. But it is certainly due to labour and capitalistic interests in this country that this matter should be settled peaceably and amicably. The hon. member for Vancouver said that last year he sacrificed his time and energy towards the settlement of this strike; sacrificed, mark you, Mr. Speaker, his time and energy.


Mr.   SPEAKEB@: I think that the hon.
member is getting outside of the amendment. The matter for discussion now' is not the strike, 'but the question of the amendment to the third reading of this Bill.


William F. Carroll: I was -attempting to show why the Government should accept this amendment, and I was giving the reasons wffiich prompted me to accept it. Of course, if I am not allowed to give my reasons for supporting the amendment I presume that I am out of order. The hon. member for Vancouver said that he sacrificed much time and energy in promoting the interests of the miners of British Columbia. I am sorry that any hon. gentleman in this House should think that the devotion of time and energy to such a purpose is a sacrifice. If he has given time and energy to the solution of this difficult problem, it has met with very little success; it has borne very little fruit, 
because the trouble still exists, though it is not so acute as it was three or four months ago. I can do nothing else than give this amendment my cordial support; I think it deserves the support of every well-thinking and reasonable man in this House. The Government had due notice when this Bill was in committee that such an amendment would be offered. If they have any very good reason for not giving it consideration and not adopting the amendment, we on this side will be well satisfied; but we wTould like to hear some other reasons udiy the Government at this particular stage should not accept this amendment when they have played the same role heretofore, or told the country that they have played that role heretofore in settling a difficult problem in connection with the Grand Trunk Bailway system. So they cannot say that they have no precedent, that they have not set a precedent for settling labour troubles along the line here suggested.


Henri Sévérin Béland: I am paired -with the hon. member for Ottawa (Mr. Chabot); had I voted I would have voted for the amendment.


Mr. DEVLIN:: I am paired with the hon. Minister of Trade and Commerce; had I voted I would have voted for the amendment.


Mr. SEGUIN:: I am paired with the hon. member for Chambly-Vercheres; had I voted I would have voted for the amendment.


Mr. W. CHISHOLM:: I am paired with the hon. member for Annapolis; had I voted I would have voted for the amendment.


Mr. MUNSON:: I am paired with the hon. member for Vaudreuil; had I voted I would have voted against the amendment.


George Perry Graham: I am paired with the hon. Minister of Railways and Canals; had I voted I would have voted for the amendment.


Hugh Guthrie: I am paired with the
hon. member for Lincoln; had I voted I would have voted for the amendment.


George William Kyte: I am paired with the hon.
member for Montreal, St. Antoine; had I voted I would have voted for the amendment.


Pius Michaud: I am paired with the
hon.. member for Kent, New Brunswick; had I voted I would have voted for the amendment.


Albert Edward Kemp: I am paired with the hon. member for Huntingdon; had I voted I would have voted against the amendment.


Thomas Beattie: I am paired with the hon. member for Montcalm; had I voted, I would have had great pleasure in voting against the amendment.


William Thomas White: I am paired with the hon. member for Westmorland; had I voted I would have voted against the amendment.
Amendment (Mr. Verville) negatived.
Motion (Mr. Borden) agreed to, and Bill read the third time and passed, on division.



THE FARMERS BANK.

[Stage Direction]
Hon. W. T. WHITE (Minister of Finance) moved the second reading of Bill No. 185, for the relief of the depositors of The Farmers Bank of Canada. He said:
Mr. Speaker, before entering upon my
[Stage Direction]
argument in support of this measure, I propose to give a brief history of the bank to which it relates and the various steps and proceedings which have led up to this resolution. The Farmers Bunk of Canada was incorporated in the year 1904, the incorporators being: James Gallagher, Teeswater; John Watson, Listowel; John Ferguson and Alexander Fraser, Toronto; and Alexander S. Lowe, Drayton. These gentlemen were named in the Act as provisional directors. During the sessions of 1905 and 1906 extensions of time were granted within which the bank might obtain the certificate of the Treasury Board which was necessary under the provisions of the Bank Act, for the commencement of its business. Finally, on November 30, 1906, the Treasury Board issued its certificate and the bank entered upon its career. The head office of the bank was established at the city of Toronto and its branches were principally in the rural districts of Ontario. The name of the bank was evidently designed by the promoters to attract farmers as depositors and customers, and they succeeded in their purpose, because the principal part of their deposits and business was drawn from that source. After carrying on the business of banking for four years the bank suspended payment on December 19, 1910, and has, since that date, been in process of liquidation.
The failure of the bank caused a sensation at the time on account of its unprecedentedly disastrous character and on account of the reports that speedily obtained currency as to the nature of the transactions in which the money of the bank had been lost. Allegations were made at the time that the issue of the certificate of the Treasury Board in the year 1906 had been procured by fraud and deceit on the part of Travers, the general manager of the bank, whose dishonesty had been the cause of the wreck. It was further alleged that the Government of the day had had express notice of such fraud and deceit and should not have issued the certificate. On this ground it was then urged that the Government was responsible for the loss which had ensued both to depositors and shareholders. During the session of 1910-11 a petition was presented to my right hon. friend (Sir Wilfrid Laurier) then the leader of the Government, and his Finance Minister, the Hon. Mr. Fielding, for parliamentary relief to both depositors and shareholders upon the following grounds:
(1)	That a certificate to open the hank should not have been granted;

(2)	That the certificate which was issued should have been subsequently cancelled;
(3)	That the shareholders should be released from the claim for double liability; and
(4)	That the depositors should be compensated for the loss of their deposits.
The subject of this petition was discussed in the House during the session of 1910-11 upon a motion made by my hon. friend from Halton (Mr. Henderson), which motion was as follows:
That this House is of opinion that a Royal Commission should forthwith issue to inquire into and investigate the incorporation and organization of the Farmers' Bank of Canada and the granting of a certificate by the Treasury Board permitting such bank to issue notes and transact business and al the circumstances connected therewith, and generally to inquire into and investigate the operation and efficiency of the Bank Act in relation to the affairs and transactions of the said bank.
In the debate upon that motion, particulars were given of the alleged negligence on the part of the Treasury Board in granting the certificate. At this point it will be informing to the House to call attention to certain provisions: existing in the then Bank Act, and I desire to place them upon ' Hansard ' because they have a bearing upon the question of the alleged negligence of the Treasury Board, and upon the arguments which I shall adduce in respect thereto.
Clause 12: For the purpose of organizing the bank the provisional directors may after giving public notice thereof cause stock books to be opened in which shall be recorded the subscriptions of such prsons as desire to become shareholders in the bank.
Clause 13: So soon as a sum not less than $500,000 of the capital stock of the bank has been bona fide subscribed and a sum not less tlfan $250,000 thereof has been paid to the minister, the provisional directors may by public notice, published for at least four weeks, call a meeting of the subscribers to the said stock, to be held, etc., and the subscribers at such meeting shall (a) determine the day upon which the annual general meeting of the bank is to be held; and (b) elect such number of directors duly qualified under this Act, not less than five, as they may think necessary.
Clause 14 : The bank shall not issue notes or commence the business of banking until it has obtained from the Treasury Board a certflcate permitting it to do so.
Clause 15 : No certificate shall be given by the Treasury Board until it has been shown to the satisfaction of the board by affidavit or otherwise that all the requirements of this Act, and of the said Aot of incorporation of the bank as to the payment required to be made to the minister, the election of directors, the deposit for security for note issue, or other preliminaries, have been complied with, and that the sum so paid is then held by the minister.
These were the provisions of the Bank Act with which it was necessary that the

provisional directors of the bank should comply before they were entitled to the issue of the certificate by the Treasury Board. I would call particular attention, although I hardly think it is necessary, to this provision of clause 13:
So soon as a sum of not less than $500,000 of the capital stock of the bank has been bona fide subscribed, and a sum not less than $250,000 thereof has been paid to the minister.
Because the argument will turn to a certain extent upon the provision of the Bank Act contained in that clause.
It was charged in the House in the course of the debate that bona fide certificates to the amount of $500,000 never were received, that bona fide payments on account thereof never were made, and that no authority ever was given by the subscribers to apply for a certificate to open the bank. It was charged further: that the certificate of the Treasury Board was obtained by fraud, deceit, and perjury of W. B. Travers the General Manager of the bank; and it was alleged that the Treasury Board, through the Minister of Finance, had express notice by a letter from Leighton McCarthy, K.C., M.P., addressed to the minister, and secondly by verbal notice from David Henderson, M.P., and Sir Edmund Osier, that fraud was being practised in the application for the certificate of the Treasury Board. I desire to place upon ' Hansard ' the letters which will be found in the Sessional Papers for the year 1911, forming the correspondence which passed between Mr. Leighton McCarthy and others, and the department. I read first a letter of October 8, 1906, addressed from Leighton McCarthy, K.C., M.P., to the Hon. Mr. Fielding, Minister of Finance at Ottawa:
Toronto, Oct. 8, 1906.
Hon. W. S. Fielding,
Minister of Finance,
Ottawa.	[DOT]
My dear Mr. Fielding,-I have been consulted on behalf of a number of subscribers to the shares of the Farmers' Bank, and from the instructions I have received a number of the subscribers will dispute the bona fide character of the subscriptions. I have not time to-night to give a full statement of the grounds of this request to you, but I beg to assure you that grave conditions have arisen which will require careful consideration before the Treasury Board would grant any certificate for the organization of this bank.
I therefore ask you to be good enough to stay any action 'which might be taken until I have had an opportunity of discussing this with you. If it is not asking you to hold it too long, I would prefer not having to go to Ottawa this week, but will go any day next week which would suit your convenience. Of course if 295
there is no immediate prospect of your granting such a certificate my seeing you at an early date will not be necessary.
Leighton McCarthy.
On October 11 another communication was addressed to the Minister of Finance by Mr. Leighton McCarthy, as follows:
Toronto, Oct. 11, 1906.
Hon. W. S. Fielding,
Minister of Finance,
Ottawa.
Please wire me assurance in reference to stay of certificate of Treasury Board mentioned in my letter of Monday night.
Leighton McCarthy.
Again, on October 11, 1906, Mr. Fielding addressed a telegram to Mr. McCarthy, evidently in answer to the one I have just read:
Ottawa, October 11, 1906. Leighton McCarthy, M.P.,
Toronto.
No application yet received for the certificate referred to. Please forward your representations immediately and they will be considered when application comes.
W. S. Fielding,
Minister of Finance.
On October 11, Mr. Fielding wrote this letter to Mr. Leighton McCarthy:
Minister of Finance, Canada.
Ottawa, October 11, 1906. Leighton G. McCarthy, Esq., M.P.,
Toronto.
My dear Mr. McCarthy,-I have your letter of the 8th instant, and your telegram to-day on the subject of the Farmers' Bank.
I wired you to-day that no application had been made by the promoters for the Treasury Board certificate, and suggested that you send forward at once any representations which you may wish to make, to which we shall give all due consideration.
W. S. Fielding,
Minister of Finance.
On October 12, we have the reply from Mr. Leighton MaCarthy to the telegram of the 11th of October:
Toronto, October 12, 1906. Hon. W. S. Fielding,
Minister of Finance,
Ottawa.
My dear Mr. Fielding,-Many thanks tor your telegram received last night, advising me that no application had yet been received for certificate of the Farmers Bank and asking me to forward representations immediately when they will be considered. This will receive my attention.
I am obliged to you for the telegram.
Leighton McCarthy.
On October 19, and this is a very important communication, Mr. McCarthy addressed the following letter to the Minister of Finance:
[Stage Direction]


Toronto, Oct. 19, 1906.
Hon. W. S. Fielding,
Minister of Finance,
Ottawa.
Re the Farmers Bank of Canada.
My dear Mr. Fielding.-I beg to inclose the special endorsement upon a writ of summons in the High Court of Justice for Ontario, which will be issued by William A. Saxon, John Sproat, George Castle, William McLean, Finlay Mc-Callum, Robert Hume, James Murray, George Denoon, John McLeod, Jane Shuert, William Harris, on behalf of themselves and all other persons alleged to be subscribers for shares of the capital stock of the Farmers Bank of Canada who may desire to come in and be parties to this action, against the Farmers Bank of Canada, James Gallagher, John Watson, John Ferguson, Alexander Fraser, Alexander Shepherd, Lown, W. R. Travers, C. H. Smith, A. G. H. Luxton, and the Traders' Bank of Canada, and W. J. Lindsay and I respectfully request that the Treasury Board will stay any action upon the application of persons professing to act in the name of the Farmers Bank of Canada, or in the name of the provisional directors of the Farmers Bank of Canada, for a certificate under section 15 of the Bank Act on the grounds alleged in the inclosed special endorsement, and other grounds which may be disclosed upon the examination of the alleged subscribers for shares.
I have received information that the alleged subscribers for shares paid a large sum of money in cash and have signed notes for other large sums of money, and that the persons professing to act in the name of the bank have transferred notes and received the proceeds, and that a deposit either has been made or will be made of the cash received and the proceeds of these notes, or sufficient amount to .make up $250,000.
I wish you to have the kindness to acknowledge the receipt of this protest against the granting of a certificate so that I may advise the shareholders who are disputing their liability, and I would be pleased to go to Ottawa upon any appointment you may make for the further consideration of this matter.
Leighton McCarthy.
On October 23,	1906, that letter is
acknowledged by Mr. Boville, acting Deputy Minister of Finance, in the following communication:
Dear Sir,-I beg to acknowledge the receipt of your letter of the 19th inst. to Mr. Fielding's address respecting the Farmers Bank of Canada. When application is made by the Farmers Bank to the Treasury Board for a certificate to enable them to commence business, the representations contained in your letter with its enclosure will be laid before the board.
(Sgd) T. C. Boville.
For Deputy Minister of Finance.
On October 23, 1906, we have a communication from Travers addressed to the Minister of Finance and Receiver General, as follows:
Dear Sir,-I hereby beg to enclose you certificate No. 1150 from the Bank of Montreal,

Toronto, for $250,000, to be deposited to the credit of the Farmers Bank of Canada in compliance with section 13 of the Bank Act.
Please acknowledge receipt and oblige.
(Sdg) W. R. Travers,
General manager.
On October 24, 1906, we have the acknowledgement of Mr. Boville in the following terms:
The General Manager,
The Farmers Bank of Canada,
Toronto.
Dear Sir,-I beg to acknowledge the receipt of your letter of the 23rd instant, enclosing receipt and draft of the Bank of Montreal, Toronto, for the sum of $250,000 deposited by your bank in compliance with section 13 of the Bank Act.
I may say in this connection that opposition has been filed in this department to the granting of a certificate to your bank under section 14 of the Bank Act.
T. ,C. Boville,
For Deputy Minister of Finance.
Then Mr. Travers replies on the 29th: [DOT]
Toronto, October 29, 1906. The Hon. Deputy Minister of Finance,
Ottawa, Ontario.
Dear Sir,-Yours __of the 24th, post-marked October 26, was received here on the 27th.
I was surprised to know that any one had filed an opposition against this bank being granted a certificate.
Would you kindly do me the favour of supplying me with a copy of the said objections, as I do not know up to the present moment wherein we have deviated in the slightest effect from the Bank Act.
W. R. Travers, General Manager.
Then there is a letter from Mr. Boville to Mr. Leighton McCarthy under date of October 31, 1906, as follows:
Dear Sir,-Referring to your letter of the 19 th instant, addressed to Mr. Fielding, on the subject of the Farmers Bank of Canada and the issue of a certificate to that bank to commence business under section 15 of the Bank Act, I noticed recently a reference in the newspapers for a judgment given by Judge Anglin in a suit relating to this matter. In view of the decision rendered, I shall be obliged if you will let me know if you still desire the protest contained in your letter to be brought before the Treasury Board upon an application of the Farmers Bank for a certificate to be considered.
T. C. Boville,
For Deputy Minister of Finance.
Mr. McCarthy replies, under date of November 1, 1906, as follows:
T. C. Boville, Esq.,
Acting Deputy Minister of Finance, Ottawa.
Dear Sir,-With reference to yours of the 31st ultimo, I will be in Ottawa on Monday or Tuesday of next w^eek when I will do myself the pleasure of calling upon you with reference to the subject matter of your letter.
Leighton McCarthy.

Then Mr. Boville addresses a letter to Mr. Travers under date of November 2, 1906, as follows:
Dear Sir,-I beg to acknowledge receipt ot your letter ot the 29th instant, and in reply I beg to enclose herewith a copy of a letter addressed to Mr. Fielding by Mr. Leighton McCarthy by way of protest to the granting of a certificate to your bank to commence business. Of the enclosure with Mr. McCarthy's letter I have not sent you a copy as it is lengthy, and I have no doubt you already have a copy of it in your possession.
(Sgd) T. C. Boville,
For Deputy Minister of Finance.
Then there is a letter from Mr. Leighton McCarthy under date of November 2, 1906, addressed to Mr. Fielding, Minister of Finance, as follows:
Dear Sir,-Referring to my letters of the Sth and 9th instant, with reference to the application for a certificate made on behalf of the Farmers Bank; I am advised by those who are instructing me that the claims made by them in the action brought have been settled by their subscriptions being taken up by some parties interested in the bank and refunding the money paid by the individuals or returning the notes which had been given. The objections which I made on their behalf to the issue of the certificate are therefore withdrawn. Would you mind therefore returning to me the papers which I forwarded to you.
(Sgd) Leighton McCarthy.
Mr. Boville replies on November 7 to Mr. McCarthy:
Dear Sir,-Referring to your letter of the 2nd instant, in the matter of an application of the Farmers Bank of Canada for a certificate to commence business, I beg to enclose herewith the papers forwarded with your letter of the 19th October.
(Sgd) T. C. Boville, Deputy Minister of Finance.
The next is a letter from Mr. Boville to Mr. Travers under date of November 7, 1906:
Dear Sir,-Referring to my letter to you of the 2nd inst., inclosing copy of a letter addressed to Mr. Fielding by Mr. Leighton McCarthy by -way of a protest to the granting of a certificate to your bank to commence business, I beg to state that I am advised by Mr. McCarthy that the objections which he made to the issue of a certificate have been withdrawn.
Then there is a further letter on November 21,	1906, from Mr. Boville to Mr. Travers:
Dear Sir,-Referring to your letter of the 23rd October, making a deposit under section 13 of the Bank Act of the sum of $250,000. I have no doubt that you will be applying very shortly for a certificate under section 14 to commence business. In the papers to be submitted to the board in support of the application there is a list of bona fide subscribers of capital stock of the bank showing subscriptions to the extent of $500,000. Would you 295 i
be so good as to have added to this list for submission to the board, a statement showing the actual amount of cash paid up by each subscriber.
(Sgd) T. C. Boville, Deputy Minister of Finance.
Then there is a letter in reply to that addressed to the Deputy Minister of Finance by Travers:
Dear Sir,-I have the honour herewith to forward declaration of the general manager of the Farmers Bank of Canada setting forth facts relating to the incorporation and organization of the said bank, and also giving the names of the directors elected at the meeting of subscribers and such other particulars as are required by the Bank Act. The provisions of the Act as to subscriptions and deposit with the Receiver General having been fully complied with on behalf of the said bank, I apply for the certificate of the Treasury Board permitting the said bank to commence the business of banking.
(Sgd) W. R. Travers,
General Manager.
I will ask the House to bear in mind that the certificate of the Treasury Board was issued on the 30th day of November, 1906.
Hugh Guthrie: What was the date oi the last letter?


William Thomas White: November 27, 1906. On
November 30, 1906, the following letter was addressed by Mr. Fielding, Minister of Finance, to Mr. W. R. Travers, General Manager of the Farmers5 Bank of Canada:
Dear Sir,-I regret that owing to pressing engagements yesterday, arising out of the Budget, I was unable to meet you to consider your application for the issue of a certificate to authorize the Farmers Bank of Canada to commence business. I shall be glad to see you to-day, at my office, at any time before one o'clock if you can call. Or I might be able to see you later, between four and five, at the House of Commons, if that will be more convenient.
There is a phase of the matter which I should like to bring to your notice so that you may consider it at once. It has been represented to us that in some previous instances where an application was in all respects apparently regular, there was actually an evasion of the intention of the Bank Act in relation to the paid-up capital. We have been told that in some cases the subscribers did not actually pay in cash but gave notes to the provisional directors which were used to raise the money. On account of information of this kind, which has reached us in relation to a previous case, we deem it proper to scan very closely every application for a certificate which comes to us. I shall be glad to have an assurance, that nothing of the kind has taken place in relation to the subscriptions for the Farmers Bank, but that the amounts set forth in the application as having been paid up have in every case been bona fide cash payments.
W. S. Fielding.
Minister of Finance^

On the same date is a letter from Travers in reply addressed to the hon. Minister of Finance:
Dear Sir,-In reply to your letter of the 30th of November, I have to say that in the ease of the Farmers Bank of Canada, the provisional directors did not raise the money in the way mentioned by you. You will find the statement put in by me absolutely correct as to the amount of stock subscribed and the amount paid up.
W. R. Travers,
General Manager, Farmers Bank of Canada
Both of these letters are dated November 30, 1906, and on the same date at a meeting of the Treasury Board the following minute was made:
The board had under consideration an application made by the Farmers Bank of Canada under the provisions of the Bank Act for the issue by the Treasury Board of a certificate permitting the said bank to issue notes and commence the business of banking.
It having been shown to the satisfaction of the board that all the requirements of section 15 of the said Act have been complied with the board authorize the issue of the certificate applied for.
T. C. Boville,
Secretary.
Then the certificate is in the following form; issued the same date, November 30, 1906:
This is to certify that the Treasury Board, at a meeting held on the thirtieth day of November, A.D., 1906, authorize the issue of a certificate under the provisions of the Bank Act permitting the Farmers Bank of Canada to issue notes and commence the business of banking and this certificate is hereby issued in accordance with such authority and for the purposes above mentioned.
Dated at Ottawa this thirtieth day of November, A.D., 1906.
Now, I should call attention here-I had inadvertently overlooked it-to a letter addressed by the Deputy Minister of Justice to the Deputy Minister of Finance, dated the 28th of November, 1906:
I have the honour to acknowledge receipt of your letter of the 28th instant, and of the inclosed papers, being the application from the Farmers Bank of Canada for a certificate to commence business, under section 13-17 of the Bank Act, and papers in support thereof.
You ask me to advise you if on the papers submitted such certificate may legally issue.
In reply, I beg to state that the statements in the statutory declaration of Mr. Walter R. Travers are sufficient, if they are accepted, to show compliance with the statutory provisions and that the evidence thus afforded is such as the Treasury Board may lawfully accept under the Act, and thereupon issue to the bank a certificate under section 14 of the Act.
Papers returned herewith.
E. L. Newcombe,
Deputy Minister of Justice.

Now, under date of November 30, 1906, there is another letter which I desire to place upon ' Hansard although it would not in the ordinary course come to hand until the day after the issue of the certificate by the Treasury Board. That letter which is referred to in the'debates on the motion to which I have alluded, and afterwards in the report of the commissioner with which I shall deal later, is addressed by Mr. E. S. Clouston, then president of the Canadian Bankers Association, to the Deputy Minister of Finance. It is as follows:
T. C. Boville, Esq.,
Deputy Minister of Finance,
Ottawa.
Farmers Bank of Canada.
Dear Sir,
In . connection with the application of the Farmers Bank of Canada for the usual certificate from the Treasury Board, I have reason to believe that the money lodged, or to be lodged, at Ottawa as stock subscriptions, cannot be regarded as paid-up capital, and that a large proportion of the amount necessary to the obtaining of a certificate is a loan made upon the promise of its payment when returned by your department.
Permit me to request that, if only for the protection of the public, the Treasury Board will exercise its right to refuse to issue a certificate if it thinks best so to do, until a thorough investigation has been made into the circumstances stated herein.
E. S. Clouston,
President.
To which the following reply was 'sent- and this reply, I think, ends my reading of the correspondence:
Finance Department, Ottawa, Canada, December 3, 1906
E. S. Clouston, Esq.,
President Canadian Bankers Association, Montreal, P.Q.
Dear Mr. Clouston,-I beg. to acknowledge the receipt of your letter of the 30th ultimo, respecting the Farmers Bank of Canada. I note what you state with regard to the money paid in under section 13 of the Bank Act.
In view of the published reports in the newspapers, of some litigation in connection with the subscriptions to the capital of this bank, the matter has had the careful attention of the department, and some time ago the general manager of the bank was communicated with to the effect that when applying for the certificate to commence business, in addition to the list of subscriptions to the extent of a half million required by the Bank Act, the statement should contain also the actual amount of cash paid up by each subscriber on his subscription. On the 29th ultimo application, in due form, was made by the bank for the certificate permitting it to commence the business of banking. The application was accompanied by the usual documents and also by a list of the subscriptions of cash paid in by each subscriber. The list itself covers over 500 names and nothing therein appeared calling

for any particular comment. From the statutory declaration of the general manager I quote the following paragraphs:-
4.	On the twenty-third day of October, 1906, there had been actually bona fide subscribed five thousand seven hundred and fifty-seven shares of the capital stock of the Farmers Bank of Canada, and I have had personal knowledge of the applications and subscriptions, and each and all of the said subscriptions is and are on the printed form of application-a copy of which is now produced and marked exhibit 'C,' to this my declaration, and that the said subscription appeared on the stock books of the said bank, and that a sum beyond $250,000 thereof in cash has been actually paid in by the subscribers of the same.
5.	Now shown to me and marked exhibit *D' to this my declaration is a list of the subscribers of the capital stock of the said bank correctly setting forth as to each subscription the name of the subscriber, his address, the number of shares subscribed for by him, the amount of such shares and the amount paid in thereon. Each of the said subscriptions is a bona fide subscription to the capital stock of the said bank.
I previously had some conversation with Mr. Fielding, who was very busy in connection with the preparation of the Budget speech, with regard to which application. But on Friday last the day after the delivery of the Budget speech Mr. Travers, the general manager, had an interview with him. In the course of this interview that gentleman gave a most positive assurance that 'not a dollar' of the amount deposited had been borrowed. For the purpose of record Mr. Fielding wrote to Mr. Travers a letter, of which I enclose a copy, asking for the assurance that the amounts set forth in the application as having been paid in were in every case bona fide cash payments. I enclose a copy of Mr. Travers' reply.
Under these circumstances there did not seem to be any warrant for the withholding of a certificate under section 14 of the Act, and, accordingly, a certificate was issued on the 30tli ultimo.
T. C. Boville,
Deputy Minister of Finance.
So much for the alleged notice to the Minister of Finance by the communications from Mr. Leighton McCarthy, prior to the issue of the certificate,'and from the president of the Canadian Bankers Association, by a communication which apparently reached the department the day after the certificate had been issued. In addition, as I said before, it was alleged that verbal notice had been given to the minister of grave irregularities in connection with the application for the Treasury Board certificate, and I desire in this connection to read from ' Hansard ' of March, 1911, the statements made by the hon. member for Halton (Mr.' Henderson) and by Sir Edmund Osier, and the replies thereto of the Hon. Mr. Fielding, the Finance Minister. I shall not, of course, read their speeches in full, but only such
portions as appear relevant and necessary in connection with my argument.


Mr. McKENZIE:: Did not these gentlemen give evidence before Sir William Meredith? Possibly this House .would rather have the evidence they gave under oath.


William Thomas White: I think I am within the
rules in reading from ' Hansard ' of a previous debate relating to the matter, and there is this further consideration-because I have no desire whatever to exclude the evidence, which, as my hon. friend says, would be the best testimony-that the reading of the evidence would be a rather lengthy and tedious performance, and I think that the matter can be put very much more succinctly and 'clearly by reading extracts from ' Hansard '.


Mr. A. K. MACLEAN:: It would not be as accurate.


William Thomas White: It would not be as accurate. I think I may say that the evidence given under oath is substantially the same as the .statements made in the (House during the course of that debate.


Alexander Kenneth Maclean: The evidence of the hon. member for Halton was very wobbly when given before the commissioner.


William Thomas White: It will be open to my hon. friend, if he desires, to give at length the evidence of the hon. member for Halton before the commissioner. I am satisfied, having read the evidence and having read ' Hansard,' that there is no substantial difference between the statements made in the House and those made on oath by all parties concerned. I shall read Mr. Fielding's reply to the allegations made by the hon. member for Halton and by Sir Edmund Osier. The following is an extract from the speech of the hon. member for Halt-on:
I told him-
That is, the Minister of Finance.

I was deeply interested in the matter of the Farmers Bank for the reason that a very large amount of money, practically half the stock of the hank, was subscribed in my county. I realized at this time that it might create a panic In the county if the worst came to the worst, and the bank should fail and the double liability be exacted. I told him that I myself had seen promissory notes made by farmers in my county, indorsed by the provisional directors, that had been used, as I was informed and verily believed, for the purpose of raising money presumably to make up the $250,000 required in order to get a certificate.


Alexander Kenneth Maclean: I have always
wondered, what notes the hon. member for Halton saw; I have assumed that they were the notes which were sued upon by Mr. McCarthy and which were returned. Is that the impression of the minister?


William Thomas White: I am not in a position to say whether the hon. member for Halton referred to the particular notes in respect of which Mr. McCarthy addressed his communication to the minister, or to other notes. My hon. friend As aw.are that promissory notes, were given by subscribers ;and afterwards hypothecated and that the money was raised in that way. Whether these particular notes were those or some of those referred to by Mr. McCarthy or whether they were some not referred to by him, I am unable to say. The hon. member for Halton goes on:
No other money was wanted by the provisional directors. They did not require to borrow money for any other purpose; they had no authority to borrow money at all, and this borrowing was altogether improper. Now, I made that statement, and X thought that was a warning to the Minister of Finance to beware of the men with whom he was dealing, and that he should he on his guard. The Minister of Finance accepted my statement in that light, and, as I said, with all the courtesy that was required, he told me that he would hold the certificate back as long as he could. X confess that I left the Minister of Finance feeling quite safe. I thought the matter was in the strong hands of a strong man, who stood between the subscribers to this stock and the Government, a man who was in a position to defend my constituents and prevent them being defrauded. Shortly afterward, the minister met me in the corridor-there was no secrecy about this conversation, never so intended by me, or I believe, by the minister

and informed me that Mr. Travers had been down, and that he had brought his money. And the minister said-(I will use his own words)- ' I put it up to him and he denied it.' What was it the minister 'put up to him?' What did the minister wish me to understand he had ' put up to him,' but the very statement I had made to him a short time before? And Mr. Travers denied it. He then asked Mr. Travers to give him a letter to that effect, declaring that my statement was untrue. And he accepted that letter and gave Mr. Travers this certificate. He believed Mr. Travers whom he had never met, perhaps, until a few days before-because I believe he was introduced to him by Mr. Calvert,-he accepted Travers' words, and repudiated mine, although I had sat in the House with him for fifteen years and we had always been on the best of terms, t confess that, when I heard the minister say, in answer to a question in this House that 4 certain gossip ' had come to him, X felt somewhat hurt; and I am delighted today to hear the minister say that in using these words he had no reference to myself, and I candidly believe he had not. . . . As I say, I called on the minister and told him that, owing to the correspondence that appeared

in the paper, I thought there was danger to the Farmers Bank. The minister was familiar with what had taken place, and, seeing that I was somewhat worried over the matter, he very kindly said to me, * Henderson, I don't see why you should worry over this; you are not responsible ; besides, you did warn the Government.' Those were the explicit words of the Minister of Finance.
Mr. Fielding: I am bound to say to my it.,', friend (Mr. Henderson) that X shall have 10 take exception to that statement later on.
Mr. Henderson: I make that statement of ray own knowledge, from distinct recollection;- and you can understand, Sir, and I think the House will understand, how vividly it was impressed upon my mind from what I have said of the anxiety I had concerning the standing of this bank. The minister says he will have to take exception to my statement, but I must ask him, as one member of this House, as one has a right to ask another, to accept this statement. I will not put it in the extreme form, but I adhere to it; the statement I made is absolutely correct.-' Hansard ', vol. Ill, 1910-11, March 15 pages 5302-5304.
Mr. Fielding replied to the statement of the hon. member for Halton as follows.


Alexander Kenneth Maclean: I am not going
to ask my hon. friend not to proceed, but I do not want to stay that I do not think it is fair to make that statement a part of the Government's case under this Bill when the evidence of the hon. member for Halton was taken under Oiath before the commission and is available to the minister.


William Thomas White: May I explain to my hon. friend that Mr. Fielding's reply is, I think, quite as strong as his evidence in the matter. I am putting the matter this way for the sake of convenience, and because the statements both of the hon. member for Halton and of the then Minister of Finance are in much more succinct farm heie than they are in the evidence. Mr. Fielding's reply, in so far as it related to the allegations in question, was as follows:
Now, we come to the second question, the granting of the certificate. I want to say in that connection that my chief regret is that I have to have a difference of opinion with my respected friend from Halton. I know him too well to hesitate for a moment in accepting any statement that he might make. I credit him with all good faith and sincerity, and if he and I do not agree as to what has occurred that does not imply that I for one moment question the good faith or veracity of my hon. friend, but it simply means that I am obliged to sav that my hon. friend is mistaken. I am obliged to say when my hon. friend tells me that he warned me against the issue of that certificate that he is mistaken. My hon. friend and I have had frequent conversations over the question of this bank. I do not recall, however, that we met in any formal way, but we met at different times as members of the House do,

46S3
and we had conversations concerning the bank. That arose from the fact that my hon. friend knew I was opposed to the granting of the charter and that I viewed it with anxiety. The conversations between my hon. friend and myself were always along the line that we regretted the necessity for the creation of this Farmers . Bank, we were sorry to have the farmers of the country engaging in banking when, in the case of many of them, they were not familiar with the responsibilities which would be involved in the acceptance of shares of a bank. All our conversations were along that line. We were feeling sorry that the farmers were going into this matter, hut I can assure my hon. friend that when he soys that he warned me against the issue of the certificate, although I know he makes the statement in all good faith, I am bound to say that to the best of my recollection he is entirely mistaken. Nothing of the kind occurred.


Emmanuel Berchmans Devlin: Would the minister mind reading, from the bottom of th-e page, Mr. Fielding's answer to Mr. Foster?


William Thomas White: Mr. Foster: Does my hon. friend (Mr. Fielding) wish that denial to apply to the three interviews at which there were conversations or only to the last one?
Mr. Fielding: I do not remember how many conversations I had with my hon. friend.
Mr. Foster: There were three that were mentioned.
Mr. Fielding: No matter how many there were, in so far as they took place before the issue of the certificate, I mean my denial to apply to all.


Alexander Kenneth Maclean: Did the hon. member for Halton, in the statement from which the minister has just read, protest against the issue of the certificate?


William Thomas White: He says:
Now, I made that statement, and I thought that was a warning to the Minister of Finance to beware of the men with whom he was dealing, and that he should be on his guard. The Minister of Finance accepted my statement in that light, and, as I said, with all the courtesy that was required, he told me that he would hold the certificate back as long as he could. I confess that I left the Minister of Finance feeling quite safe.
That is the discussion that took place in the House between the hon. member for Halton and the Finance Minister relating to the alleged verbal notice.
On July 28, 1911, Sir Edmund Osier spoke as follows in the House:
My attention was called, since I returned, to a debate in Parliament on the 15th of March. Before I left this country on January I was present -when we were discussing the question of the Farmers' Bank.
I then made the statement that I had spoken to the Minister of Finance in reference to the issue of a certificate to this bank. The Minister of Finance said that if I was in the House
he w-as sure I would not make that statement. After the deposit had been made with the Receiver General and before the certificate had been issued, I met the Minister of Finance and had a talk with him about the Farmers' Bank.
X told him that it was a fraud, that the people connected with it were not worthy, and that the method taken for obtaining the necessary deposit was absolutely illegal. I knew that of my own personal knowledge, because I knew where application had been made to borrow the money on these endorsed notes; I did not know at the time from whom. I saw that the Finance Minister was under a good deal of anxiety about the condition of affairs. The matter ended there so far as I was concerned until some time afterwards, when I learned that a certificate had been issued, and I again spoke to the Minister, and said I was exceedingly sorry that the Government had issued the certificate. The Finance Minister said that so far as he saw, the law had been complied with, and that if the Government had not issued the certificate they would have been open to the charge of protecting the larger banks. Of course there is a good deal of reason in that, but I think it was a case where the closest scrutiny ought to have been observed. It was notorious that the men at the head of the bank were not worthy. The information I think was given fairly, and without any prejudice against the establishment of new banks. Further than that, I may say that X had a conversation with my hon. friend from Halton (Mr. Henderson), and he told me that he had made the same representation to the Finance Minister-I only make this statement because I do not want to put in the mouth of the leader of the Opposition statements which I cannot confirm.
Mr. Fielding replied to that statement of Sir Edmund Osier as follows:
If I had been aware that the hon. gentleman intended to bring this matter up to-day I should have read over the debate to see how far there was any conflict between the hon. gentleman's statement and my own. I am quite sure any statement the hon. gentleman makes, either at this time or any other time, has been made in good faith. Busy men hesitate to speak with confidence concerning conversations that took place several years ago, and I feel that I should hesitate to speak definitely about a conversation on that matter of several years ago. But this I do know, that the attitude of my mind with relation to the Farmers' Bank was such that if my hon. friend or anybody else had given me any substantial reason against the issue of that certificate, I would have welcomed it, because it is notorious that I did not wish to issue the certificate to the Farmer's Bank. My hon. friend is right, X viewed it from the beginning with anxiety. I do remember I had a conversation with him about the matter, but I do not remember that he gave me any information bearing on the subject which would justify me in refusing to issue the certificate. I am sure, in a matter of such importance, my hon. friend if he had felt that he had material evidence to submit, would not have been content to trust the matter to memory, but he would have sent me a communication giving me definite information. It is, however, beyond question that anything that came to me on the subject from any quarter represented the anxiety which business- men had concerning the flotation of

this bankj, an anxiety which I felt. But against that, I had the sworn testimony of the man who came into my office and swore that he had complied with all the provisions of the law. That sworn testimony should have outweighed probably any casual conversation I may have had from any quarter at all. I do not for a moment imagine that the hon. member for West Toronto (Mr. Osier) did anything in this matter except with the best intentions, and I am quite sure that neither he nor I have any desire to misrepresent one another.
That covers the statement made by the hon. member for Halton and the hon. member for West Toronto with respect to the alleged verbal notice given to the Minister of Finance. In order that the House may have before it the view that prevailed at the time in the House of Commons on the part of some of those now connected with the Government, I desire to refer briefly to the speech of the Eight Hon. Mr. Borden, now Prime Minister. I think it is important that the view which he took of the matter at that time should be now placed before the House.
Mr. A. K. MiACLEAN: In 1911 the Prime Minister said that if he was returned to power he would appoint a commission to look into the matter. I presume he meant that if the commission reported that there *was a just claim on behalf of depositors he would pay it; if not, he would not. It was just prior to an election, it will be remembered, that the statements which the minister is about to read were made.


William Thomas White: Mr. Borden, speaking on the motion of the hon. member for Halton, and referring to a letter which he had received, made the following statement:
That gives an idea of the way this matter Is regarded throughout the country, of the suffering which has been brought upon the people, and the question is: How has all this result been brought about? The bank obviously should not have been permitted to commence business. My hon. friend the Minister of Finance himself has admitted that. There can be no doubt at all, as my hon. friend from North Toronto (Mr. Foster) has pointed out, that if he had taken the ordinary business precaution of calling for the minute books of this bank, as one would suppose that any man in his senses would have done, he would have seen that the Bank Act was being violated, he would not have permitted the bank to commence business.
Then he goes on to refer to the communication I have read in regard to it. He make3 the following observations:
There was the letter of Mr. Leighton McCarthy, there was the writ, and the endorsement upon the writ itself which, in the plainest and most unmistakable terms, conveyed a warning to the Minister of Finance in this

regard. Perhaps sufficient emphasis has not been laid upon one particular paragraph of Mr. McCarthy's letter of the 19th of October, 1906, three days before the writ was issued. He stated the writ would shortly be issued, and three days afterwards on the 22nd of October, it was issued, and in his letter he says:	.
I have received information that the alleged subscribers for shares paid a large sum of money in cash and have signed notes for other large sums of money, and that the persons professing to act in the name of the hank have transferred notes and received the proceeds, and that a deposit either has been made or will he made of the cash received and the proceeds of these notes, or sufficient amount to make up $250,000.	.
The intimation conveyed by that to any one who is familiar with the provisions of the Bank Act is simply that these men were conspiring together to contravene and to evade the provisions of the Act which the Minister of Finance was bound to see observed. From first to last Mr. Leighton McCarthy, in the correspondence at least, has never withdrawn the statement made by him in that letter of the 19th October, 1906. True, he did in a subsequent letter state that his clients had been settled with, hut he never in any letter withdrew these statements of fact which he made to the Minister of Finance. The statements in the writ itself are so startling and convey so plain a notice to the Minister of Finance that one would think there could not be the slightest doubt in his mind as to what his plain duty would be. The first charge of fraud is this:
1. That the provisional directors who professed to act for and in the name of the bank had no lawful power or authority to receive subscriptions for shares or to accept them; and (2) that the subscriptions for shares which were procured from the plaintiffs and others were procured through fraud and misrepresentation, and the plaintiffs allege, amongst others, the following particulars of fraud, namely:
1. That the agent in procuring the subscriptions for shares falsely represented that persons had subscribed for a larger number of shares than they had in fact subscribed for, and the following are examples of such false representations.


Alexander Kenneth Maclean: Did the commissioner make any finding for or against anything of that kind?


William Thomas White: I will deal with that later on. I said that before entering into a discussion of the report of the commission, which is the foundation of the legislation we are introducing, I proposed to review the steps leading up to this legislation. If I am out of order I shall how to the ruling of the Chair.
Mr. SPlEAKEK: The hon. minister is quite in order; it is not a discussion of the present session.


William Thomas White: It is not my desire to deal unfairly with this matter. When an allegation is made, and a reply to it is made by the minister or any one else, I

shall be glad to give it with sufficient fulness to show the attitude of the party against whom the accusation is made, and I think I have done that fairly.
The hon. unember for Halton made the statement in this House that he had given notice of irregularities to the Minister of Finance. The Minister of Finance denied that he had. Sir Edmund Osier made a similar statement and the Minister of Finance entered a denial to that also. The commissioner dealt with the evidence given by the hon. mfembei lor Halton and by Sir Edmund Osier, and I shall refer to that later on. I am sorry if I am taking too much of the time of the House, but it is impossible to lay the foundation of a case of this kind in order that the House may have an intelligent comprehension of all these circumstances without going fully into these matters.


Alexander Kenneth Maclean: I concede that
you require a great deal of time to lay the foundation for this legislation.


William Thomas White: That may be, but the
foundation will be well and truly laid when I finish. My right hon. friend the Prime Minister (Mr. Borden) proceeds:
Then he gives eight or ten cases where men had applied for small sums and had been put down for sums ten times as great, and where men who had subscribed nothing at all are put down on the stock list as actual subscribers. In all the instances so set forth in this writ, as I understand it, the names of these men are on the stock list which the Minister of Finance accepted on the sworn declaration of Travers, although comparison of the writ with the list would have given the plainest possible indication to the Minister of Finance not only of fraud in the first instance, but fraud persisted in up to and at the very time when this certificate was being asked for from the Government.
Then he goes on:
That Major Thomas Beattie, represented by the prospectus to have consented to act as a director, had not subscribed for any shares, and refused to be a director, and refused to allow his name to be used in any way in connection with bank, and the plaintiffs allege that the names of other persons were represented by the propectus to have consented to act as directors who had not subscribed for any shares or given any authority for any such publication.
Was it not open to the Minister of Finance to write a letter to Major Beattie and ask him whether that statement was true or false? Was it not competent also for the Minister of Finance to have taken the precaution which Major Beattie took to have looked up the record of Mr. Travers a little and to ascertain whether this matter was not worthy of further investigation by him. There is a further direct charge of fraud which ought to have
attracted the attention of the Minister of Finance in an especial manner.
Next he refers to the special endorsement upon the writs referred to in the communication from Mr. Leighton McCarthy. He states in reference to that:
The defendants in that suit under the terms of the settlement in court admitted in effect every one of the charges of fraud I have just now read.
Then he refers to Sir Edward Clouston's warning which only reached the Minister of Finance on November 30. Then he said:
I am not going into particulars of Sir Edward (Houston's warning just at this moment, but to be brief let me sum the whole situation in this way. The minister had the following warnings-in the first place he had the warning of the hon. member for Halton (Mr. Henderson). Again I repeat that, attributing equal sincerity to each, the testimony ot one who has a distinct recollection of a particular incident which impressed itself upon his memory, is always to be accepted against that of the other party who merely affirms that according to his recollection the incident did not occur. In the second place he had the warnings of other similar witnesses who can be produced if inquiry is granted. In the third place he had the warnings of Mr. Leighton McCarthy in the three letters referred to. In the fourth place he had the warnings contained in the writ of summons, and the endorsement. I want to point out to the minister and to the House that the charges in that writ were ot a two-fold nature, namely, those which concerned the plaintiff alone and those which concerned the public interest, and the duties of the Finance Minister. Among the latter were the charges that moneys had been illegally paid out by the provisional directors in contravention of the Bank Act, thus impairing the bank's capital.
Then, further on:
The written warning of the Canadian Bankers Association confirmed all previous warnings, and the Treasury Board should have instantly ordered the return of the certificate and failing compliance the Government should have peremptorily ordered the issue of a Royal Commission to investigate the alleged frauds. .	.
Then:
The Treasury Board had a plain and clear duty before it. We have been asked what could the Minister of Finance do? In the first place he could have ordered the production of the minute books, he should have ordered an investigation, he should have ordered further corroborative evidence, lie should not have granted that certificate after warnings which had been conveyed to him unless he was absolutely and positively assured by the evidence as to which there could be no doubt whatever that everything in connection with the Farmers Bank had been properly done in accordance with the law, and that no fraud was intended upon the Government of this country or upon the public. That is what he should have done. But, he says he was helpless when the direct and positive warning of Sir Edward Clouston came to him. I say he was far from help less.

He continued:
What should he have done? He should have sent a telegram after Travers. It is said that he sent a messenger after him, and that Travers refused to give up the certificate. That may be mere rumour; there may be nothing in it; and I do not vouch for it. But the minister should have sent a telegram after Travers ordering him to return that certificate immediately and telling him that if he failed to comply, the Government would the next day issue a Royal Commission to inquire into all the circumstances attending the organization of that bank and its application to the Treasury Board for a certificate. That is what the minister could have done, but that is what he did not do; and as the direct result of his inaction and neglect, the farmers of Canada, the workingmen of this country, have suffered losses to which they should not have been subjected.


Alexander Kenneth Maclean: There was no evidence to that effect given before the commission.


William Thomas White: This is the argument on the part of the present Prime Minister as to what should have been done in view of the warning contained in the letter from the president of the Canadian Bankers' Association.	f


Alexander Kenneth Maclean: It is worse than that; there is an insinuation representing simply that there are rumours abroad to that effect.


William Thomas White: My hon. friend does not challenge the fact that this argument was made by. my right hon. friend the Prime Minister in 1911?


Alexander Kenneth Maclean: No.


William Thomas White: I am placing it before the House for what it purports to be; a statement of his view at that time.


Alexander Kenneth Maclean: In that statement of the present Prime Minister, which my hon. friend has just read, there is the suggestion of a rumour-


William Thomas White: He calls it a rumour.


Alexander Kenneth Maclean: -that Mr. Fielding had dispatched a messenger to Mr. Travers asking him to return the certificate.


William Thomas White: He said he did not vouch for it.


Alexander Kenneth Maclean: But this case was afterwards the subject of inquiry before a Royal Commission and the minister has no right to read a statement like that to th;s House.
I say it is an unfair discussion of the issue.


William Thomas White: I confess I do not follow my hon. friend; I am either in order or I

am out of order. I am giving the views which were expressed by the present Prime Minister in 1911 when this matter was under discussion. It is true that it was mere rumour; he says there may be nothing in it.


Alexander Kenneth Maclean: What does the hon. gentleman want to read that for? It is not in the evidence.


Thomas Simpson Sproule: Order.


William Thomas White: I am trying to put the case as fairly as I can consistently 10 p.m. with the views which the Prime Minister enunciated in 1911.


Alexander Kenneth Maclean: You might have left out that part of it.


William Thomas White: That is my hon. friend's criticism of my method of presenting it. It may be a crude method, but it is my method. I cannot leave out sentences.


Thomas Simpson Sproule: Hon. members who are interrupting the speaker are doing it in open violation of Rule 23, which says:
When a member is speaking no member shall interrupt him except to order.


William Thomas White: The reason I am putting this on record is to show the views that were held at that time by the Prime Minister which afterwards caused him and the Government to issue a Royal Commission. He-states at this time that a Royal Commission should issue. I desire to read an extract from a speech of the present hon. Minister of Militia and Defence (Mr. Hughes), as follows:
I support the motion of my hon. friend calling for a Royal Commission in order that there may be a full investigation into the affairs of the bank with the view of ascertaining, as has been said, where .these funds have been disposed of and how they have been disposed of and of ascertaining still further whether some of them may not be honestly and fairly reclaimed in order to lighten the burdens of the poor people who are the victims in this transaction. I support it also in order that evidence may be obtained which will be of great assistance to us in moulding the new Bank Act, and still further I support it on the ground that I am satisfied that if a Royal Commission is granted the matter will be brought home so closely to the Government and the negligence of the Government in issuing this certificate will be so clearly shown that the people concerned will have a just claim against the Government for the loss that they have sustained.
I desire to read-and this is the last quotation-an extract from the speech of the Hon-Mr. Crothers, now Minister of Labour, in the same debate. He said:

Now, I have no hesitation in making the charge, I believe the people of this country will make the charge, that the losses that the depositors and shareholders of the Farmers Bank have sustained are morally owing to the culpable negligence, the criminal negligence, of the Treasury Board. They made a mistake, to say the least of it; certainly they failed to exercise that common sense and that intelligence that any man would who had in his heart the best interests of the people of this country. And having got further evidence, he would have refused to authorize these people to open their doors and be in a position to bleed the public to the extent of millions-of dollars. I believe, therefore, it is the duty of Parliament to do something for these people. I do not know, I am not prepared to say, that they would have a legal claim against the Crown, because the Crown is supposed to do no wrong, by a monstrous fiction. But these people, having suffered this immense loss by reason of the negligence of the Treasury Board of this Government, this Government is morally responsible for the losses they have sustained, having taken the course they did.	[DOT]
I am reading that, not as evidence against the Treasury Board, but as indicating the view of a member of the present Government in 1911 on the assumption that there had been negligence. His view at that time was, and I have no doubt it is now, that if negligence could be shown on the part of the Treasury Board, and he alleged it at that time, that the Government would be morally responsible for the loss sustained by the depositors.


Daniel Duncan McKenzie: The commissioner
found against it.


William Thomas White: I will come to that, and
we will see whether he found against it or not.
Nothing was done by the late Government in answer to the petition for relief from the depositors and shareholders in the bank. My hon. friend from Halifax (Mr. Maclean) has referred to the promise which he said was made by the present Prime Minister to the committee of shareholders and depositors as to his action in this matter, if returned to power. I have a copy of the communication which passed between Hon. Mr. Borden and the committee representing the depositors and the shareholders, during the summer of 1911 after the dissolution of the House and before the election, and I quote Mr. Borden's statement:
If returned to power we will make full inquiry by Royal Commission into circumstances connected with organization of Farmers Bank and granting certificate by Government. Our action with respect to depositors will be governed by result of inquiry.
I have tried to set forth fairly before the House the allegations and counter-allegations made by the parties in respect to thi3 matter. I have here the evidence containing the examination and cross-examination of Mr. Henderson and of Sir Edmund Osier, and of Mr. Fielding, but I would submit to the House that as it is substantially along the lines of the statements made bj these gentlemen in Parliament, it would be tedious and I think unnecessary that I should place it on ' Hansard.' I think I have placed the matter fairly before the House, showing the allegations made by the hon. member for Halton (Mr. Henderson) in the House and in his evidence, and also by Sir Edmund Osier, and the denials entered by the Minister of Finance in the House.
After the present Government took office, further petitions were received on behalf of the shareholders and depositors for parliamentary relief, and the Government, in pursuance of the promise of the Prime Minister, appointed Sir William Meredith, now Chief Justice of Ontario, as a commissioner, with the following powers:
To make an investigation into all material and relevant facts in relation to:
(a)	The incorporation by Act of Parliament of the Farmers Bank of Canada and the organization thereof;
(b)	The application for and the giving by the Treasury Board of the certificate permitting the bank to issue notes and commence the business of banking;
(c)	The conduct and operation of the business of the bank, the amount of the capital subscribed and paid up, the causes of the suspension and failure, the extent of the liabilities and the value of the assets thereof.
Counsel were appointed by the Government and evidence was duly taken and the commissioner made his report in February, 1913. This report by Sir William Meredith and his findings are the basis for this legislation. It becomes necessary that I should examine Sir William Meredith's findings with some care, and particularly as to the circumstances surrounding the issue of the Treasury Board certificate. The commissioner says:
The application to the Treasury Board for the certificate was accompanied by what purported to be a list of the shareholders, and among other documents a statutory declaration of W. R. Travers, the general manager of the bank, in which he declares it is ' a list of the subscribers to the capital stock of the said bank correctly setting forth as to each subscription, the name of the subscriber, his address, the number of such shares subscribed by him, the amount of such shares and the amount paid in thereon ' and that each of the subscriptions ' is a bona fide subscription to the capital stock of the bank."

It will be necessary at this point to say a word as to Travers. The commissioner says he first appeared upon the scene in March, 1906. Travers, ias the House is aware, was the wrecker of the bank, and he is now serving a term in Kingston penitentiary. The commissioner says:
He appeared upon the scene first on March, 1906, when the provisional directors were endeavouring without success to obtain the necessary subscriptions to comply with the terms of the Bank Act as to obtaining a certificate for the commencement of business.
By an agreement entered into with him by the provisional directors by which he was authorized to sell the capital stock of the bank on the basis of a commission of 10 per cent. He was to be engaged as general manager, for five years at $4,000 for the first year, increasing by $1,000 in each of the four subsequent years, and after five years to receive a pension of $1,500 a year during his life.
So fhat we have an 'agreement entered into between the provisional directors and Travers, whereby he was to be general manager for ;a period of five years at ia salary stipulated and agreed upon. A subsequent agreement contains terms which it is not necessary to further mention. With respect to these agreements the Commissioner finds as follows:
It appears clear from these agreements and resolutions that what was intended was to sell the charter of the hank to Travers and to put him in control of its organization and business, and that the provisional directors should abdicate their functions and act in accordance with his directions, and that is what followed.


Louis-Philippe Pelletier: What is that from?


William Thomas White: I am reading from the report of the commissioner; and I shall, from this on, be dealing largely with the findings of that report and quoting from the report itself.
As I pointed out to the House, the provisions of the existing Bank Act require that $500,000 of the capital stock should he subscribed and that $250,000 should be paid thereon by the subscribers before the Treasury Board's certificate, necessary under the provisions of the Bank Act for the commencement of business could be issued. The finding of the commission upon that aspect of the case is as follows:
It is not open to question that $500,000 of the capital stock had not been then subscribed, and that $250,000 had not been paid by the subscribers.
There we have a positive and definite statement by the commissioner that the requirements of the Bank Act with respect

to the capital stock had not been complied with by the provisional directors of the board at the time the certificate Was issued. The commissioner finds further:
The statement in the declaration that the list of subscribers correctly set forth as each subscription ' the amount paid thereon ' and the statement that the $250,000 deposited to the credit of the Minister of Finance and the Receiver General was paid out of the moneys paid in and which actually had been received in respect of the shares, was literally true, but was calculated to deceive the Minister of Finance as to the real facts and was intended to do so.
Then he goes on to find:
The fact was that two sums amounting together to $100,000 had been borrowed by Travers from the Trust and Guarantee Company on the security of promissory notes made by applicants for shares which had been endorsed to him by the provisional directors for the express purpose of raising money to he used in making the deposit.
The commissioner then goes on to show the actions of Travers in respect of the application to the Treasury Board for the certificate.	He finds, with respect to
the raising of money upon these notes pledged to the Trust and Guarantee Company, as follows:
That in thus dealing with these notes the provisional directors and Travers were guilty of a breach of trust does not, I think, admit of doubt, and for the manner in which the money was borrowed and applied there was neither justification nor excuse.
He goes on then to find as follows with regard to the application to the Treasury Board for the issue of the required certificate :
My conclusion on this branch of the inquiry is that the Treasury Board was induced to give its certificate by false and fraudulent representations on the part of Travers, and that if the facts I have mentioned as to the way in which the $250,000 was made up had been disclosed, the certificate of the Treasury Board would not have been given.
The commissioner then refers to the verbal notice with which I dealt a little time ago, alleged to have been given by the hon. member for Halton (Mr. Henderson) and Sir Edmund Osier, and this is his finding with regard to this alleged notice:
It is plain from the letter of the Finance Minister to Travers, of 30th November, 1906, that the Minister understood that section. 13 of the Bank Act would not have been complied with if the $250,000 was made up wholly or in part of money raised on promissory notes given by subscribers for shares to the provisional directors and that he would have felt it his duty to recommend that the certificate should not be granted if he had known that part of the money had been raised in that way.

That that information had been given to the minister before the certificate was issued appears from the testimony of Sir Edmond Osier and Mr. David Henderson and is shown by the letter of the 19th October, 1906, of Mr. Leighton McCarthy to the minister, which appears in exhibit 5, pp. 2, 3. In that letter Mr. McCarthy states as follows:
X have received information that the alleged subscribers for shares paid a large sum of money in cash and have signed notes for other large sums of money and that the persons professing to act in the name of the bank have transferred notes and received the proceeds and that a deposit either has been or will be made of the cash received and the proceeds of these notes or sufficient amount to make up $250,000.
That the verbal information I have mentioned was conveyed to Mr. Fielding was not denied though he stated that, as I have no doubt was the fact, no formal objection to the granting of the certificate was made either by Sir Edmund Osier or by Mr. Henderson. That, however, in my opinion is immaterial.
I call the attention of the House particularly to this finding of the commission that I now read:
I do not suggest that the minister would have been justified because of the information conveyed to him in recommending that the certificate should not be granted, or that the Treasury Board because of it would not have been justified in refusing to grant it, but, having received the information, it was in my opinion incumbent on the Treasury Board to have investigated the charges that had been made before coming to a conclusion as to whether or not the certificate should be given.


Emmanuel Berchmans Devlin: In connection with that,
would the minister read on page 6 of the commission's report towards the end of the page, the words beginning with ' The statement in the declaration that the list of subscribers? '


William Thomas White: I read that, but I will
read it again:
The statement in the declaration that the list of subscribers correctly set forth as each subscription ' the amount paid in thereon ' and the statement that the $250,000 deposited to the credit of the Minister of Finance and the Keceiver General was paid out of the moneys paid in and which actually had been received ir. respect of the shares, was literally true, but was calculated to deceive the Minister of Finance as to the real facts and was intended to do so.


Emmanuel Berchmans Devlin: Was literally true.


William Thomas White: I want the House to pay
particular attention to this finding of the commissioner:
I do not suggest that the minister would have been justified because of the information conveyed to him in recommending that the certificate should not be granted, or that the Treasury Board because of it would not have been justified in refusing to grant it, but, having received the information, it was in my opinion incumbent on the Treasury Board to
have investigated the charges that had been made before coming to a conclusion as to whether or not the certificate should be given.
He goes on to say:
The officials of the Department of Finance appear to have treated Mr. McCarthy's letter as if it had never existed, and, in my opinion, in that they erred, for although Mr. McCarthj on the 2nd November, 1906, wrote to the minister informing him that the claims made by his clients had been ' settled by their subscriptions being taken up by some parties interested in the bank and refunding the money paid by the individuals or returning the notes which had been given ' and had withdrawn the objections which he had made on behalf of his clients to the issue of the certificates, Mr. McCarthy did not in any way intimate that the information he conveyed to the minister as to the way in which the $250,000 had been made up had been found to be incorrect.


Mr. SINCLAIR:: Will the minister permit a question? Is there any provision of law authorizing an investigation under oath before the Treasury Board?


William Thomas White: I cannot speak from memory as to the provisions of the Bank Act at that date, but I think the members of the Treasury Board might satisfy themselves in such manner as they deemed proper, by affidavits or otherwise. I am speaking from recollection.


John Howard Sinclair: When the commissioner speaks of an investigation, if he simply means making inquiries from subscribers in different parts of the country, it could hardly be expected that the Finance Department would do that.


William Thomas White: My hon. friend, who is a
lawyer, will observe that the commissioner finds that it was incumbent on the Treasury Board to have made an inquiry in view of the information which had been received by the minister.


John Howard Sinclair: The commissioner says
so?


William Thomas White: That is his finding.


John Howard Sinclair: 
William Thomas White: Such inquiry as would
satisfy them. If they had sent for the list of subscribers, or called for the minute book, if they had made an investigation, they would have discovered that the provisions of the Bank Act had not been complied with, that the provisional directors had abdicated their functions, as the commissioner says, in favour of Travers, that Travers was guilty of a breach of trust and was at that time a perjurer in making the statutory declaration,

and that he had been engaged for a period of five years to control the destinies of the bank as general manager.


John Howard Sinclair: If there is no legal
authority to make investigation, the department would be regarded as impertinent in making one.


William Thomas White: I do not agree with my
hon. friend that it would be regarded as impertinent, if positive information has come to the Treasury Board that there are grave irregularities. They should not fail to investigate the matter, call for the books of the bank, and for affidavits from others in connection with the application. 1 think they would discover any irregularity and would be able to justify themselves in withholding the certificate of the board necessary to the commencement of business.
The commissioner goes on:
It is true that, as Mr. Fielding stated in evidence, Travers, so far as he knew, was a reputable banker; but that was not, in my opinion, a sufficient reason for not having instituted an inquiry as to the matters which had been called to his attention. Such an inquiry could easily have been made, and the delay occasioned by it would have been inconsiderable, and such an inquiry would, undoubtedly, have resulted in the discovery of the manner in which the $100,000 had been raised and in the refusal of the Treasury Board to give the certificate.
This is a very important finding on the part of the commissioner. He says that, in his opinion, the fact that Travers was known to Mr. Fielding as a reputable banker was not a sufficient reason for not having instituted an inquiry as to matters which had been called to his attention. He says such an inquiry could easily have been made, and the delay occasioned by it would have been inconsiderable, and would have resulted in the discovery of the irregular manner in which the $100,000 had been raised, and in the refusal of' the Treasury Board to give a certificate. He says it was incumbent upon the Treasury Board to have prosecuted an inquiry in order to ascertain the facts, in view of the information which had been given. The commissioner then, after dealing with the facts connected with the issue of the certificate by the Treasury Board and making his findings thereon, goes on to deal with the conduct of the affairs of the hank subsequently, and I desire to put his findings in that connection upon 'Hansard.' He says:
Notwithstanding the irregularities on the part of Travers and his misconduct in connection with the application for the certificate, which

I have mentioned, the evidence satisfies me that if the bank had been prudently and honestly managed there is no reason why it should not have succeeded. The promissory notes that had been given by subscribers were for the most part good and were subsequently paid, and while it is true that if the certificate of the Treasury Board had not been granted the money of the shareholders and depositors would not have been lost, the efficient cause of that loss was the recklessness and fraud of those entrusted with the management of the bank, and not the granting of the certificate.
The efficient cause.


Emmanuel Berchmans Devlin: Has the minister been able to find out the meaning of the word 'efficient'?


William Thomas White: In early days I examined many theories and authorities on the question of proximate and efficient causes -the causa causans of the old books. I would say that the efficient cause is the primary cause, without which loss, if loss is involved, would not have happened, notwithstanding that there may be some other contributory cause more immediately connected with the loss that subsequently occurred. I think I could find authority in support of that definition of efficient cause.


Pius Michaud: On what page is that statement made in the report?


William Thomas White: On page 9 of the report of the commissioner, sessional paper 15.3a.
It will probably not be necessary for me to place upon 'Hansard' the finding of the commissioner with respect to the condition of the bank, as given in testimony before him by the liquidator. But, before coming to my argument, which will connect the finding of the commissioner more closely with the action of the Government, I desire to place upon 'Hansard' the finding of the commissioner with respect to the management of the affaire of the bank and the result of the administration of Travers. He says, on page 9 of the sessional paper in question:
The subsequent management of the affairs of the bank was characterized by gross extravagance, recklessness, incompetency, dishonesty and fraud, and has resulted in the entire loss of the paid-up capital and the whole of the deposits, and that after allowing for all that can be extracted from the shareholders on their double liability a loss amounting to no less than $1,806,437, making a record unparalleled in the history of any bank in Canada, or, as far as I am aware, In any other country.
Just in passing, I should like to call attention to the statement made by *the Prime Minister in the House on the last day of last session with regard to this

4G91
matter. He was asked a question by a member of the House, as follows:
Is it the intention of the Government to reimburse the depositors of the Farmers Bank? If so, does the Government propose to act in like manner with the depositors of the Bank of St. Jean and of the Bank Vile Marie?
The answer was as follows:
It appears from the report of the commissioner appointed to investigate the matter of the failure of the Farmers Bank (a) That the issue of the certificate of the Treasury Board authorizing the bank to commence business, was procured by false and fraudulent representations on the part of the promotor and subsequent general manager of the bank, W. B. Travers. (b) That in the commissioner's opinion it was incumbent upon the Treasury Board before issuing its certificate, to have investigated certain charges made to the Department of Finance that the amount required by the Bank Act to be paid in respect of subscriptions, had not in fact been so paid, and (c) That if the true facts had been disclosed, the certificate of the Treasury Board would not have been given, and thus the bank under the management of Travers would not have been authorized to commence business.
The case is of exceptional and indeed unique character, both with regard to the fraudulent means by which the certificate was procured and in respect of the results which followed, involving the ultimate loss of all moneys placed in the bank by the unfortunate depositors. The man who fraudulently procured the certificate in the name of the bank, was enabled to attract those deposits by the unwarranted assumption of powers in violation of plain statutory conditions. While the direct subsequent cause of the loss was the fraud and dishonestly of the banks' manager in the administration of its affairs, there is nevertheless a certain connection between that loss and the power and status with which he became invested upon the granting of the certificate. Having regard to these considerations, the Government consider that the depositors are entitled to a reasonable measure of relief, which will be provided by legislation to be introduced at the next session of Parliament.
The case of the other banks mentioned, is m no wise similar, and the action which the Government propose to take in the case of the Farmers Bank will afford no warrant or precedent for reimbursing their depositors.
What is the justification for the measure of legislative relief which we are bringing down in the matter of the Farmers'* Bank and its depositors? I have called the attention of the House to the finding of the commissioner as to the duty of the Treasury Board in view of the information which had been received from Mr. McCarthy, from the hon. member for Halton and from the hon. member for West Toronto. Let me repeat it. The commissioner finds that:
It was incumbent on the Treasury Board to have investigated . the charges that had been
made before coming to a conclusion as to whether or not a certificate should be given.
The House is aware that such investigation was not made. A certificate was issued, the Treasury Board not having made the inquiry which the commissioner finds it was their duty to have made. Failure on the part of' an individual or a public body to discharge a duty which is incumbent upon him or it is negligence at common law. The finding of the commissioner, therefore, is that the Treasury Board was negligent in not having investigated the .charges which 'had been made before coming to a conclusion as to whether or not the certificate should be given. I submit that that cannot be controverted; that if it was incumbent upon them to do something which they did not do, they were negligent. If the charges had been investigated by the Treasury Board in pursuance of its duty as found by the commissioner, the following would have been disclosed:
1.	The agreement which Travers had with the provisional directors under which, in the words of the commissioner, Travers was put in control of the organization and business of the bank, the provisional directors abdicating their functions and agreeing to act in accordance with his directions.
2.	That Travers was to be general manager of the bank for five years.
3.	That the meeting of subscribers had teen irregularly called.
4.	That the amount required by the Bank Act to be paid by the subscribers had not been paid.
5.	That Travers had been guilty of a breach of trust, as found by the commissioner.
6.	That Travers had made a false declaration and had attempted to deceive the minister -and the board.
I say that if the Treasury Board had made the investigation which it was incumbent upon them to have made in pursuance of their duty, these facts would have been disclosed. I ask the House whether, if the facts had been disclosed, the Treasury Board certificate would have been granted, or, if subsequently granted, the bank would have been enabled to commence business with Travers as its general manager? I submit that the Treasury Board certificate would not have been issued; at all events it would not have been issued at that time and if it had


Emmanuel Berchmans Devlin: Does the minister not
think, then,' that subscribers for stock after the certificate had been issued should be placed in exactly the same position as the depositors?


William Thomas White: I explained the other
day when wTe were discussing the resolution which preceded this Bill that it is entirely out of the question for the Government, following any logical method of

dealing with this matter, to relieve the shareholders.


Emmanuel Berchmans Devlin: To relieve the shareholders who subscribed prior to the issue of the certificate, but if the Government feels that the depositors must be paid on account of the negligence of the Treasury Board, why not pay the subscribers for stock after the certificate of the Treasury Board was issued?


William Thomas White: Because the subscribers
to stock, as soon as the stock is allotted to them, become shareholders; the shareholders elect directors to manage the bank and the directors select and continue m office a general manager. There is no question that the directors are the agents of the shareholders, and the general manager is the official of the directors. The shareholders are the proprietors of the bank. I do not know upon what basis the Government could come to the relief of the shareholders, the actual proprietors of the bank whose agents, the directors, had continued Travers in office and to some extent participated in the reckless management of the bank. The commissioner makes the point that if the bank had been honestly managed there would have been no loss.
I say that if Travers had not been the general manager the bank would probably have succeeded; on the law of probabilities it would have succeeded. The failure, therefore, of the Farmers Bank followed upon the negligence of the Treasury Board in failing to investigate that which the commissioner says dt was incumbent on them to investigate. The general argument would go something like this:	No certificate, no bank, no bank, no loss; or if the bank had been permitted subsequently to open for business then; if no Travers in charge, no loss. So that in both cases we get back to the negligent action on the part of the Treasury Board in granting a certificate without making investigations which it was their plain duty to have made. The certificate of the Treasury Board empowered the bank, with Travers at its head, to invite deposits and to enter upon the career of misconduct which brought ruin to thousands of the depositors.
I may say in concluding my remarks that the Government feels that it is morally bound to make reparation, and we have been unable to see on any logical ground that anything short of the full amount- of the loss -can be fairly offered to

these depositors who have suffered, aa I have shown, through the negligence of the Treasury Board in granting the certificate. I have placed upon ' Hansard ' previously the position of the liquidation as given to me in a statement by the liquidators, so it will be unnecessary to refer to that further. The Bill authorizes payment to depositors of the full amount of their losses, and the Government in respect of any moneys paid to them will be subrogated to their rights. So far as I can see from the statement given by the liquidators, all the assets of the bank will be required to meet the charges of liquidation and the preferred claims, so that I do not think the subrogation to the rights of the depositors will result in the Government receiving any of the proceeds of the liquidation.
I beg, therefore, to move the second reading of the Bill.


Alexander Kenneth Maclean: Mr. Speaker, I desire to conclude my remarks upon the second reading of the Bill this evening, and therefore I shall abandon some aspects of the discussion which I proposed taking up had the remarks of the Minister of Finance been delivered to the House earlier in the day.	.
I cannot but feel, and I trust I say so truthfully, that every hon. gentleman in the House must be impressed with the fact that the Minister of Finance himself felt he was presenting to the House very doubtful legislation indeed for our enactment. The Minister of Finance says that the Government feel themselves under a moral obligation to repay losses sustained toy the depositors in the Farmers Bank. He asserted that they realised the existence of this moral obligation three years ago. I have only to say, this moral obligation did not press heavily upon the Prime Minister or the Minister of Finance or the members of the Government or they would not have allowed three years to elapse without moving in the matter. Under the provisions of the Bank Act, the Farmers Bank was chartered in 1904, I think. The bank was not organized under the charter originally granted in 1904; it was renewed in 1905, and again in 1906. It eventually received a certificate from the Treasury Board enabling it to commence business. In 1910 the Farmers Bank failed with liabilities to depositors aggregating $1,000,-
000.	In 1911 or 1912 the present Government appointed a Royal Commission to inquire into the circumstances attending the issuance of this certificate and the facts attending the 296
failure of this bank. That commissioner found that the failure of that bank was due to fraudulent and incompetent management, and I say that was the obvious, logical and truthful finding.
The Bill before us is a measure to enable the Government to repay the depositors of the Farmers Bank the losses sustained by them, and the question before hon. members is whether or not they will support the measure. I submit that, in all the reasons submitted by the Minister of Finance, there is not sufficient to justify him in asking us to support this legislation. The Minister of Finance was particularly weak when he appealed to ' Hansard ' and read statements made by members of Parliament in 1911, when the matter of the issuance of the certificate to the Farmers Bank was a subject of debate, in a session preceding a general election, when party feeling was running high. I say I was surprised at the Minister of Finance presenting extracts from these debates on this occasion. I believe that there are members in this House to-day who spoke in 1911 upon the motion to which the minister referred and who to-day do not believe in the views they then expressed. It is said further that in the Senate there are one or two members who were then members of this House of Commons and who spoke upon the very motion to which the Minister of Finance referred, who to-day are canvassing their fellow members in the Senate against supporting this measure, notwithstanding the fact that in 1911 they spoke favourably to the motion which was referred to by the Minister of Finance.


Some hon. MEMBERS:: Name, name.


Alexander Kenneth Maclean: I am not going to give the names. If hon. gentlemen want to know the names I will give them privately.


Some hon. MEMBERS:: Names, names.


Alexander Kenneth Maclean: Unless there exist
stronger reasons in justification of this proposed legislation than the contradictory statements of the hon. member for Halton, the hon. member for West Toronto, and Mr. Fielding, the late Minister of Finance, the legislation should be withdrawn. Let me repeat what I said on a former occasion during the present session that I regard this legislation as extremely unfortunate. It is extremely difficult to understand why the Government should present it. Do they really believe in it. I doubt if hon. members sitting behind the Government will be



enthusiastic in casting their votes in support of this measure. I doubt if the Government, among their own political friends in or out of this House, will find any substantial encouragement for pressing this legislation upon Parliament. If the Government believed that a moral obligation rested upon them to recoup depositors of the Farmers Bank, the legislation would have been submitted to us long before the dying days of the third session of this Parliament. It is pretty generally and publicly admitted that this legislation is unjustified, and I would have been glad if the minister had said to his supporters: The Bill simply represents the views of the executive, it is not presented as a Government measure, and Government supporters are at liberty to exercise freely their best judgment and vote as they see fit.
While opposing this Bill, I cannot resist expressing my regret for the loss sustained by the depositors in the Farmers Bank. I suppose that every hon. member on this side of the House will join with me in this expression of regret. It was a disastrous failure. It brought some men to premature graves. Some were placed in the prisons of this country. To others came unexpectedly want and sorrow, and to all those who have suffered in these and other ways I am sure that we all join in expressing our regret for this unfortunate disaster. But we must deal with a measure of this kind in a business-like way, lest we establish a precedent which the country would in the future very much regret. The Farmers Bank was started in November, 1904, by an Act of this Parliament. The bank did not organize under its original Act of incorporation, but by the further Acts of Parliament the charter was extended in 1905 and 1906. The provisions of the Bank Act require that any bank started by Act of Parliament must organize within a year; otherwise its charter lapses. A serious obligation rests upon Parliament when it undertakes to grant a
11 p.m. charter to any number of gentle-ment to organize a bank. The responsibility for the organization, and for all the events in connection with the Farmers Bank subsequent to the incorporation down to its failure is more directly attributable to the act of Parliament than it is to any ministerial act of the Department of Finance. It is an undoubted fact that the then Minister of Finance (Mr. Fielding) was opposed openly to the granting of a charter to the applicants for a bank to be known as the Farmers Bank.

He divined apparently the trouble which ensued. He was rather prejudiced against the name that the incorporators were seeking for this bank. He thought the promoters were likely to secure as shareholders for this bank a class of people who were little accustomed to banking or commercial transactions, and he so expressed this opinion in the Banking and Commerce Committee. I want to point out to the hon. member for Halton (Mr. Henderson), who became a very brave and outspoken man after disaster had overtaken this bank, that if he had shown the same amount of courage and interest in his constituents who were probable subscribers to the stock of the Farmers Bank on the occasion when the promoters were seeking a charter, and had opposed the granting of this charter, he would have done his duty to a greater degree than he did.


Mr. HENDERSON:: On what ground
could I have opposed the granting of the ohartejr?


Alexander Kenneth Maclean: The hon. gentleman
might at least have opposed the granting of the name ' Farmers Bank.' He knew that the Minister of Finance was opposed to granting them that name. He told the Minister of Finance privately that they should not have obtained the name, and his only excuse was that he was afraid of his constituents and consequently would not undertake to oppose it in the committee.


David Henderson: Where is your
authority for that?


Alexander Kenneth Maclean: The evidence of the
late Minister of Finance, I trust I may say to the hon. member for Halton that in the discussion of this matter, he will not seek refuge under any of the rules of the House of Commons, when we on this side of the House do not see our way clear to accept his statement of some of the facts in issue in this matter.


David Henderson: I have not done so.


Alexander Kenneth Maclean: I want to say to the hon. member for Halton that I trust he will not; and I do not think he should. With all due deference to the hon. gentleman, I do not think his conduct in connection with the Farmers' .Bank, as a friend of its depositors is one of which he may feel particularly proud. _
I was remarking that the late Minister of Finance was opposed to the granting to the incorporators of the name ' Farmers'

Bank ' and I think he was justified. He anticipated that the granting of this name to the proposed bank would deceive a certain class of the public and might possibly, as it did, cause a great deal of trouble. When Parliament undertakes to grant a charter to certain named persons to engage in the banking business, Parliament is responsible for the creation of the institution. The conditions which an incorporated and organized bank, is required to comply with before the certificate ' is issued are purely formal, and I do not think that failure to comply absolutely with these requirements is a very serious matter, the important matter being the granting of the charter by Parliament. The charter enables the incorporators to solicit subscriptions, to receive payment upon stock subscriptions, to pay into the hands of the Receiver General the $250,000 required by the Act, to select their directors, and in fact it practically enables them to organize the bank and do everything except issue notes. The purpose of requiring the incorporators to obtain from the Treasury Board a certificate before commencing business was to protect the public against the premature issuance of notes. When the Farmers Bank was chartered by Parliament, that charter enabled the stockholders to organize their bank, to elect their directors, and to do everything necessary in respect to the carrying on of a general banking business, except the right of note-issue, and when they obtained the certificate from the Treasury Board they were entitled to make a note issue up to the amount of their unimpaired paid-up capital.
It is argued that the requirements of the Bank Act were not strictly complied with before the certificate was issued, and that this certificate was obtained from the Trea-[DOT] sury Board fraudulently and through deception. I do not intend to argue against the finding of the commissioner in this respect. He finds that this certificate was obtained by fraud and by deception. It is not necessary to argue against it nor does it follow that if the finding of the commissioner in that respect is correct that this legislation is justified. I see little relevancy between the findings of the commissioner and the measure now before us. The Minister of Finance does not look to the vital and essential particulars of the findings of the commissioner to justify his legislation. Under the Bank Act stock subscription to the amount of $500,000 is required before the certificate of the Treasury Board can be issued.
296J
It is very questionable, indeed, whether or not the bank fulfilled this particular condition. I would like to call to the attention of the House the finding of the commissioner on that point, and then I think hon. gentlemen will see that there was no very substantial neglect or failure to comply with the requirements of the Bank Act, so far as the amount of stock subscription was concerned. The report says:
It was contended that the statement in the statutory declaration of Travers, made on the 27th November, 190G, to which I have referred, and a copy of which appears on pages 7 and 8 of the return (exhibit 5), that the list of subscribers marked exhibit D to the declaration correctly set forth as to each subscription the name of the subscriber, his address, the number of shares subscribed by him and the amount of his shares, and that each subscription was a bona fide subscription to the capital stock of the bank, was untrue. The number of shares subscribed for, as shown by the list, was '5,792, though by an error in the addition it was stated to be 5,789, and the amount subscribed was $579,200, a corresponding error as to this having been made in adding up the figures; of these shares it was, however, stated that 35 were subscribed after the 22nd October, 1906, which as I have mentioned was the date of the first publication in the Globe newspaper of the notice calling the meeting of the subscribers, and Travers appears to have thought that subscriptions received down to and including that day, but not those received after it, were to be taken into account in making up the $50,000 which section 13 of the Bank Act requires to be bona fide subscribed before the meeting of the subscribers is called.
In substance, the commissioner finds that prior to the day upon which appeared for the first time, the notice published by the directors calling the first meeting of shareholders, there was not $500,000 of stock actually subscribed. But if you take into consideration' subscriptions' which were received up to the date of the first appearance in the Globe newspaper of the notice calling together the meeting of the shareholders to elect directors, then $500,000 worth of stock was subscribed, and the commissioner finds that Mr. Travers thought he was justified in including the amount of stock subscribed down to that date. The commissioner proceeds:
If the 22nd October, 1906, be the determining date, and as I think allotment was necessary to constitute an applicant for shares a subscriber within the meaning of the Act, the statement as to the number of shares that had been bona fide subscribed for was untrue, and on the hypothesis I have just mentioned less than 5,000 shares had been subscribed for.
Even if you take this view as given by the commissioner in the paragraph I have just read, there was a very slight deficit in the amount of capital required

to be subscribed before calling the general meeting of shareholders for the election of directors. The commissioner proceeds:
If, however, all the shares for which bona
fide application had been then made were properly included, or the determining date was the date of the meeting of the subscribers, the statement was true.
At any rate we have the finding by the commissioner that there was $500,000 of the Farmers' Bank stock subscribed up to the day on which appeared in a newspaper published in the city of Toronto the first notice calling the shareholders together for organization purposes and for the purpose of electing directors. It is true that the Bank Act requires that, before this meeting shall be called, that amount of stock must be subscribed. There is no definite finding of the commissioner therefore that there was not $500,000 of stock properly subscribed within the terms and provisions of the Bank Act. But admitting that there was a shortage in the amount of stock subscribed at this time, I say that the deficiency was very slight indeed and not important in its consequences. Mr. Travers, I think, honestly believed that the statement he made to the Treasury Board in this respect was perfectly correct, and that he was justified in making it; and the error, if any, was so small and inconsequential that I think it affords a very poor and weak foundation upon which to rear the legislation we are now discussing.
The charge is also made that the $250,000 in cash, which the Bank Act requires shall be bona fide paid by stock subscribers before the calling of the first meeting of shareholders, was not bona fide paid. I think the finding of the commissioner is at least to that effect, and I am not going to argue that the evidence presented to the commissioner would justify any other finding. But there is this to be said, that a very considerable proportion of the $250,000 had been actually paid in by stock subscribers; that Mr. Travers had secured from the provisional directors, whether properly or not, a power of attorney empowering him to endorce notes received by the provisional directors in payment of stock subscriptions. The preliminary expenses in connection with the organization of the bank were excessive, the amount exceeding $40,000. When Mr. Travers required the $250,000 to deposit with his application for the certificate, he was considerably short. He resorted to the method of endorsing stock-subscribers' notes to the amount of over $100,000 to the Trust and Guarantee Company of the city of Toronto, upon which
[Mr. A. K. Manias* o.I
security he borrowed from this company $80,000. With this $80,000 and $20,000 additional borrowed from the same company upon other collateral he secured his $250,000. It is only fair to point out to the House that Mr. Travers at the moment did not adopt this method of procuring this $250,000 in any secret manner. He thought in so doing he was within his legal rights. This further should be said, that Mr. Travers, having been for a long number of years engaged in the banking business, had a considerable knowledge of what had been the practice in this respect by banks in similar circumstances. It is generally accepted as a fact that frequently subscribers' notes have been discounted to secure the amount for deposit with the Receiver General. I suppose Mr. Travers was well acquainted with this practice, and thought he might safely imitate a practice well known in the country. It is perhaps well that we inquire at this stage what is the purport of requiring a deposit of $250,000 with the Receiver General prior to application for the Treasury Board certificate. This was not always the law in Canada. Prior to 1890 a payment of only $100,000 upon the subscribed capital of a bank was required. There was a further provision that a second $100,000 would have to be paid within a certain time, I think two years, after commencing to do business, and the purpose in increasing that amount from $200,000 to $250,000 was not intended for the protection particularly of depositors or creditors, but for the purpose of encouraging the organization of banks with large capital in this country. That was the reason assigned by the present Minister of Trade and Commerce in 1890 in presenting to Parliament for revision the Bank Act.
It seems clear to me, and to anybody approaching this question in an unbiased fashion, that the failure of the Farmers' Bank in a small degree to comply with the actual requirements of the Bank Act, in respect of the amount of capital required to be subscribed, and the actual amount of bona fide payments to be made upon stock subscriptions prior to the application for the treasury certificate, was, after all, not a very substantial one; and that failure was by no means the cause of the subsequent failure of the bank.
Mr. SAM. SHARPE: Providing the bank had not sufficient capital, as required by the Bank Act, would that not encourage

recklessness and speculation on the part of the manager?


Alexander Kenneth Maclean: I do not think so; I wouid not think that that would be a fair deduction. In some cases the result might be as suggested by the hon. member, but I do not think it would he necessarily due to the fact that the bank was starting with an amount of capital less than that required by the Bank Act.


Mr. HANNA:: Did it not have that effect ' directly in this case?


Alexander Kenneth Maclean: I doubt it very much indeed. It has been urged, Mr. Speaker, that the department did not exercise the necessary caution and supervision of the representations or allegations made on behalf of the bank by Mr. Travers when making his application for the certificate, and that, it is owing to this failure to make a very careful supervision of the statements made to the Treasury Board that the failure of the bank ensued. I take this ground in respect to this contention, that it was not the proximate or effective cause of the bank failure. That is the finding of the commissioner. The depositors, I say, did not extend credit to the bank upon the ground that it had or had not the Government certificate. The people of Canada know that there is no Government guarantee against loss by a bank's operations except as to note issue. I say that the Government can produce no depositor of the late Farmers' Bank who will say that he or she was induced to make a deposit owing to the fact that the bank received the certificate from the Treasury Board. Their mind was not influenced one way or the other by this fact.
Let us see what was the scope of the reference to the commissioner in respect of the Farmers Bank. It was read by the Minister of Finance and consequently I need not read it at length. But one of the matters which the commissioner was directed to investigate was the conduct and operation of the business of the bank, the amount of capital subscribed and paid up, the causes of the suspension and failure, and the extent of the liabilities, and the value of the assets thereon. On page 10 of the commissioner's report we find the reasons which he gives for the failure of the bank. Let me read them:
Notwithstanding the irregularities on the part of Travers and his misconduct in connection with the application for the certificate, which 1 have mentioned, the evidence satisfies me that if the bank had been prudently and honestly managed there is no reason why it should not
have succeeded. The promissory notes that had been given by subscribers were for the most part good and were subsequently paid, and while it is true that if the certificate of the Treasury Board had not been granted the money of the shareholders and depositors would not have been lost, the efficient cause of that loss was the recklessness and fraud of those entrusted with the management of the bank, and not the granting of the certificate.
Now, the Government of this country asked the commissioner to make a finding as to the cause of the failure of the Farmers Bank, and he makes the direct and specific finding that it was due to the recklessness and fraud of those entrusted with the management of the bank, and not to the granting of the certificate. And still the Government asks us to support legislation upon the assumption that the Department of Finance was responsible for the [DOT] failure of the bank, and that consequently the Government should repay the losses sustained by the depositors of the bank. I submit that in that finding which I have just given to the House there is no justification for the position taken by the Minister of Finance this evening, and no justification whatever for the legislation we are now considering.
Mr. SAM. SHARPE:	Might I ask another question? Does the hon. gentleman agree with the finding of the commisH sinner on page 8, that it was ' incumbent ' on the Treasury Board to prosecute the inquiry because of the information which they had received?


Alexander Kenneth Maclean: That portion of the
commissioner's report was read by the Finance Minister, but the commissioner himself says that, notwithstanding that finding, the efficient cause of that loss was the ' recklessness and fraud of those entrusted with the management of the bank and not the granting of the certificate. Surely the hon. gentleman can appreciate the force of that portion of the finding of the commissioner which I have just read. I am finding no fault whatever with that portion of the finding of the commission to which the hon. member refers, but I want to point out again that the commissioner, notwithstanding his finding upon that point says that the failure of the bank was due not to the issuance of the certificate but to the reckless and fraudulent management of the hank.
The hon. Minister of Finance has urged that the capital required under the Bank Act, $500,000, had not been subscribed prior to the request for the issuance of the Treasury Board certificate. I say that

that statement is open to grave doubt. I think that substantially Mr. Travers complied with this portion of the Act; if he did not, the degree of failure was not very serious. I am sure that hon. gentlemen on both sides of the House will agree with me that the degree of failure was not sufficiently large to justify this legislation. At any rate, there came a time in the history of the Farmers' Bank when this defect was cured; when the whole 5500,000 was fully subscribed and paid. Hon. gentlemen opposite also seek to justify this legislation upon the ground that promissory notes were taken from subscribers, some of which were discounted and the proceeds constituted a part of the 1250,000 deposited with the Receiver General. It may or may not have been proper for the provisional directors to accept promissory notes from subscribers; I doubt, however, whether there is any legal objection to doing so. Mr. Travers was advised by a reputable legal firm in the city of Toronto that he might accept notes from subscribers; that has been the practice in this country, I understand.
Mr. McKENZIE; The commissioner never questioned the legality of that procedure.


Alexander Kenneth Maclean: No, it was never questioned; there was no legal objection to accepting the written obligations of stock subscribers. But admitting that the provisional directors of the bank were in error in accepting from subscribers promissory notes in payment of subscriptions, still then there came & time when every note which was received was liquidated by the promisors. The commissioner finds that in May, 1907, promissory notes amounting in the aggregate to $59,110 for stock subscriptions were still unpaid and he finds that these were subsequently paid. I say therefore that the failure of the provisional directors of the Farmers Bank to comply with the requirements of the Bank Act in these two respects was subsequently cured. If, owing to the reckless and fraudulent mismanagement of the bank subsequent to that, losses occurred to the shareholders and depositors, it is unfair and untenable to attribute it to other causes.


Mr. BLAIN:: What ie my hon. friend's opinion of having notes discounted in that way for that purpose?


Alexander Kenneth Maclean: I do not think it is a desirable practice in connection with the IMr- A. K. Maclean.]
organization of a new bank, but it is a practice which everybody in this country knows has long prevailed.


Richard Blain: Is it not contrary to the
Bank Act?


Alexander Kenneth Maclean: I do not think it is
contrary to the Bank Act to accept notes from subscribers; it may be contrary to the Bank Act to discount these notes and to use the proceeds towards constituting the $250,000 to be deposited with the Receiver General to secure the issuance of the certificate. I have pointed out that in May, 1907, the full amount of notes given by shareholders for stock and outstanding was $59,110. At that time, December 31, 1907, the Farmers Bank had deposits payable after notice to the amount of $445,465. So, therefore, I say that there did come a time when every defect or irregularity which was in existence at the time the bank applied for the certificate was cured.


Mr. THORNTON:: Does the hon. member mean to say that the defect complained of by Leighton McCarthy was remedied? If he will read page 8 of the report he will find that the commissioner says that it was not cured, and that the Department of Finance erred.


Alexander Kenneth Maclean: I am attempting to
show that there came a time in the history of the Farmers' Bank when every irregularity alleged to have existed at the time of the application for certificate was cured.


Charles Jonas Thornton: How do you know?


Alexander Kenneth Maclean: I know it from the finding of the commissioner. Will my hon. friend tell me what he knows to the contrary?	[DOT]


John Allister Currie: Where does the commissioner say that?


Alexander Kenneth Maclean: The commissioner finds as follows:
The promissory notes that have been given by the subscribers were for the most part good and were subsequently paid.
As a matter of fact they were all paid. If the depositors of date December 31, 1907, have any moral claim against the Government for the loss sustained by them by reason of these inrregularities, surely the persons who became depositors after that date when the irregularities were cured have no claim against the Government.


John Allister Currie: Does the hon. gentleman say that all these notes were paid? Is it not a fact that a number of these notes have not been paid and never will be?


Alexander Kenneth Maclean: I think it is a fact that all were paid long ago; at least, that is the finding of the commissioner and I am disposed to take his finding in preference to the statement of hon. gentlemen because I feel that they are not likely to have sufficient knowledge to justify them in making assertions to the contrary. I assume that the commissioner, having heard all the evidence that could be given in connection with this fact, was justified in making the findings he did.


Mr. MORPHY:: The hon. gentleman
seems to base his argument largely on the report of the commissioner. Will he admit or deny that long before the commission was entered upon or completed he, in this House, without having the evidence before him, placed himself on record as against the relief of these depositors?


Alexander Kenneth Maclean: When?


Hugh Boulton Morphy: At the end of March two years ago. Is the hon. member's memory defective? The hon. member said that the Government would be foolish, I think he said silly, to give any relief to these depositors.


Alexander Kenneth Maclean: That shows that my
opinion was justified and has been sustained by a gentleman in whom the Government had sufficient confidence to appoint a commissioner to investigate this very important matter. I do not think that is, after all, very important. The Minister of Finance argued this evening that if at the time of the application for their certificate an inquiry had been instituted respecting the statements made in the petition for the certificate, errors and misstatements would have been discovered which would have led to the knowledge that Mr. Travers was an undesirable person to become the manager of the Farmers Bank, and while the bank might have eventually come into existence and gone into business, still, with anybody else but Travers at its head, it would probably have been successful. I fail to see that the Minister of Finance can from such a series of hypothetical facts draw the conclusion that the Government is morally responsible for the failure to institute such an inquiry. If the irregularities which are made the basis of the legislation had been discovered
prior to the issuance of the certificate and the facts of these irregularities called to the attention of Travers at the time, I have no doubt that he was a sufficiently able man to have ' cured and remedied these irregularities, and that is public opinion upon the point. It has been stated in many newspapers in this country during the last two or three weeks that if these defects had been detected prior to the issuance of the certificate they would have been cured by Travers, and that doubtless he would have been permitted to do so by the Treasury Board.
Now, it i3 only natural that we should ask ourselves what is the relation between a bank and a depositor. That is very important indeed. I submit that it is the relation of borrower and lender. It has long been established that the man who deposits money in a bank is, in his relation to that bank, a lender of money, and the bank is a borrower. In the event of failure the depositor will always be considered a voluntary creditor. It was never the purpose of the Canadian banking laws to guarantee depositors in our banks against loss. That idea was suggested in the Committee on Banking and Commerce last year when it had under consideration the revision of the Bank Act and the suggestion received very little if any support from members of that committee. The suggestion was opposed by the Minister of Finance himself. Now the relation between the depositor and the bank being that of lender and borrower-and I do not think any one can dispute that-I ask, upon iwhat principle can you justify the proposal of the Government to indemnify the losers, the lenders in this case, who were the depositors of the Farmers Bank? You cannot justify this legislation upon any sound principle. You have as much right to indemnify against losses made by any lender of money. The relationship is exactly the same, that of borrower and lender.
I wish to deal with another aspect of this case presented by the Minister of Finance this evening. He urged very earnestly that the information which was conveyed to the Department of Finance by the member for Halton, by the member for West Toronto, and by Mr. Leighton McCarthy, the solicitor for certain subscribers to the stock of the bank who had initiated an action against the provisional directors, was of such a character that the Department of Finance should have pursued a further inquiry into all the facts relating to the application

of the -bank for the certificate, and having failed to take notice of this information were guilty of such negligence as to make the Government responsible for the loss. I wish to refer to information claimed to have been given to the Minister of Finance by the hon. member for Halton (Mr. Henderson), and the hon. member for West Toronto (Sir Edmund Osier). Any information given by the hon. member for Halton to Mr. Fielding, was not of such a character as to justify any particular attention being given to the same by the Minister of Finance. They were not in the nature of a protest against the issuance of the certificate. They were but expression of fears. He was clearly very timid of opposition at the time the incorporators were asking for their charter.


An hon. MEMBER:: We have heard that before; you are repeating.


Alexander Kenneth Maclean: That is quite true but I am perfectly within my rights in doing so if I so desire. In the evidence which the hon. member for Halton gave to the commissioner he stated that prior to the issuance of the certificate he had advised the Minister of Finance that notes had been given by subscribers and were being discounted for the purpose of securing the amount necessay to deposit with the Receiver General. In his evidence the hon. member for Halton said that he just met Mr. Fielding casually and made a remark to that effect to him. One would think that if the hon. member for Halton was particularly impressed with any alleged improper conduct on the part of Mr. Travers, or anybody connected with the Farmers Bank, he would have made it a matter of business and duty to have gone to the Minister of Finance and impressed upon him the irregularities which he believed were going on in connection with the organization of the bank. Still the hon. gentleman admits that he met Mr. Fielding only casually. Sir Edmund Osier's evidence is to the effect that he casually met Mr. Fielding in the House of Commons and told him that he had reason to believe that the money was being raised improperly. Mr. Fielding's evidence is to the effect that at no time did the hon. member for Halton or the hon. member for West Toronto give him such evidence as would justify him in believing tnat any irregularities were being practised by the provisional directors of the bank: Mr. Fielding says that he was from the beginning prejudiced against the bank
[Mr. A. K. Maclean. 1
and he would have been pleased to have had put in his hands any evidence which would have justified him in refusing the certificate. The Farmers Bank did not commence business for one month after the issuance of the certificate. This gave ample time for the hon. member for Halton and the hon. member for West Toronto to bring the matter up in the House of Commons and have it then and there fully -discussed"! The commissioner makes a finding upon the point. He says:
It was unfortunate, I think, that the information conveyed to the Minister of Finance by Sir Edmund Osier and Mr. David Henderson as to the way in which the money deposited by the bank had been raised, if it was intended to prevent the issue of the certificate, it was not conveyed to the minister in writing.
So that it might have been brought clearly and emphatically to the attention of the Minister of Finance.


David Henderson: Does the hon. gentleman believe that under the circumstances there were five members of this House who would have put it in writing? I do not believe it. It is not usually done.


Alexander Kenneth Maclean: Why not?


David Henderson: It is not usually
done.


Alexander Kenneth Maclean: [DOT] That is the reason the hon. gentleman gave before the commission. He says that it is not usually very safe for a member of Parliament to put in writing everything he has to say; it might be used against him.


Charles Jonas Thornton: The commissioner
says most emphatically that it was not material that it should be put in writing.


Alexander Kenneth Maclean: There is nothing in the evidence given to the commission by the hon. member for Halton or the hon. member for West Toronto respectively in the way of a definite protest against the issuance of the certificate. Again it is urged that the information which was furnished to the Department of Finance by Mr. Leighton McCarthy is of extreme import-
12 m. ance and that the department should have pursued a further inquiry into the statements set forth in Mr. McCarthy's letter. There is this, however to be said in respect to this matter: A writ was issued on behalf of some of the subscribers of stock, allegations of improprieties of various kinds were made against the provisional directors of the bank and Mr. Travers. I do not think anybody would

be justified in considering as facts all statements set forth in a writ of summons or in any pleading in an action of law, because everybody knows that such documents do contain statements which are not capable of proof and Which frequently it is not intended should be proven. At any rate all these statements were withdrawn. The shareholders who were disputing their liability upon notes for stock subscriptions were settled with, and the protest registered in the Department of Finance was withdrawn by their solicitor. While the stock subscribed for by these particular shareholders may have been mentioned in the list of shareholders filed in the department at the time of the application for the certificate, still it must be remembered that at that time there was I think $500,000 of other stock subscriptions upon the record. That is, if you exclude in your computation the stock subscriptions which were mentioned in the action commenced by Mr. Leighton McCarthy, there still would be sufficient to comply with the Act. At any rate, I do not understand upon what ground lion, gentlemen urge that the Finance Department was bound to pursue further the allegations made in this action after they were withdrawn. If the action was dismissed in a court of law nobody would object to my presenting to this House the judgment of the court in justification of the course pursued by the Department of Finance.


Daniel Duncan McKenzie: The action was dismissed.


Alexander Kenneth Maclean: As a matter of fact the
action was dismissed by order of the court.


Daniel Duncan McKenzie: By Judge Anglin's decision .


Alexander Kenneth Maclean: There being nothing in the finding of the commissioner to justify this legislation, we are interested in finding out what is the reason for the Government presenting it to the House. The commissioner finds it was not due to the issuance of the certificate but to the fraudulent and incompetent management of that banking institution. The particulars of the losses which brought about the downfall of the bank are to be found in the exhibits accompanying the report of the commissioner. For instance, the liquidator found, after the bank's failure, that in 1907 their operating losses were $46,000, in 1908, $50,000, 1909, $63,000, in 1910, $82,000, or altogether a loss of
$243,000 in these four years. Surely hon gentlemen will hardly urge that this was due to the issuance of the certificate. Further, there were bad debts incurred to the amount of $598,000, organization expenses amounted to $87,000, defalcations $134,000, losses on the Keely mine $509,000.
I ask hon. gentlemen if any of these losses were caused or induced in any degree whatever by the fact that the certificate of the Treasury Board was issued before there had been an absolute compliance with the requirements of the Bank Act. There being no justification for this legislation in the report of the commissioner to what are we to attribute it? I say this legislation is not before us because the Government is under any moral obligation to pay the depositors of the defunct Farmers Bank. This legislation is here for political reasons and for political reasons alone. I am told that in fifteen or sixteen constituencies in Ontario it was a very acute issue in the elections of 1911. I find that petitions were sent to the Government from associations of depositors and shareholders, asking for the payment of their losses and I notice that these petitions set forth the fact that this bank failure was quite an issue in 1911 in some sections of Ontario. I shall read on of sections of Ontario. I shall read one of many:	,
Copy.
At this meeting of depositors of the Farmers Bank of Canada at Pontypool, assembled, upon a motion of Mr. Thos. Hill and seconded by Mr. Geo. Douglas, it is hereby unanimously resolved after hearing read the speeches made in Parliament in March, 1911, on the Farmers Bank question by the Right Hon. R. L. Borden, Hon. Messrs. Foster, Crothers and Hughes, and by Messrs. Armstrong, Blain, Beattie, Boyce, Donnelly, Henderson, Edwards, Porter, North-rup, Sharpe, Thornton and Taylor and others, and as in the election which was held in September last the Conservative party continued to take the attitude assumed by them in Parliament in the previous March.
And whereas promises were made that justice would be done the depositors in the event of the Conservative party being elected.
And whereas literature was circulated during the election on behalf of the Conservative party;
And whereas the Conservative party was returned to power, the public being fully cognizant of its attitude upon the Farmers Bank question, and as nothing appears to have been done up to the present time by the Conservative party.
Now, therefore, this meeting assembled hereby respectfully requests the Government of this country to carry out the policy on this question, upon which they were returned to power.
It is hereby requested that a copy of this resolution be forwarded to the Right Hon. R.

L. Borden, and to the hon. Minister of Finance, and to C. J. Thornton, Esq., M.P.
(Sgd) M. H. Minore,
Chairman.
I have no doubt that a great many gentlemen who were elected in 1911 in Ontario made promises that if they were elected they would support any application made on behalf of. the depositors to have their losses made good by the Government.
Mr. THOltNTON: Will the hon. gentleman say that in constituencies where that resolution was passed, any promise was made by the Conservative candidate to have the electors vote for them because of any promises made to depositors of the Farmers ' Bank?


Alexander Kenneth Maclean: Personally, I
have no doubt whatever of that being the case.


Charles Jonas Thornton: I want to say now, because I may not have the privilege of addressing the House again on this matter, that the resolution referred to was passed in my constituency and there was no promise direct or indirect made that the losses in the Farmers Bank would be recouped.


Alexander Kenneth Maclean: The hon. gentleman
wil] have to settle that with the-


Mr. S. SHARPE:: My hon. friend from
Halifax must accept the hon. member's word, and take back his statement.


Alexander Kenneth Maclean: I do not feel obliged to accept the hon. member's word upon a question of that kind. He is not in a position to speak for all the electors in his county, and he is not supposed to be cognizant of everything that may transpire in it.


Charles Jonas Thornton: I most emphatically
say that it was not used in my constituency to influence the electors to vote for the Conservative candidate.


Alexander Kenneth Maclean: I do not know what
county this place is in and I do not care. This resolution was passed at this place by an organization of depositors and shareholders of the Farmers Bank; and they allege that the Conservative party, during that election, said that justice would be done to the depositors and that literature was circulated during that election to that effect on behalf of the Conservative party. They even go so far as to say that the Conservative party was returned to power upon this issue. Possibly in that respect they

exaggerate the importance of the issue somewhat. It is a well-known fact that the present Minister of Labour on many occasions during that campaign in the province of Ontario promised that, not only the losses made by the depositors, but the losses made by the shareholders, would be repaid by the Conservative party if returned to power.


An hon. MEMBER:: He never did.


Alexander Kenneth Maclean: That statement was
made in this House on more than one occasion and was never denied. It is a very probable thing that the Minister of Labour would make that statement during the election of 1911, because he had made practically the same statement in this House in 1911.


Charles Jonas Thornton: I make the contradiction most emphatically.


Alexander Kenneth Maclean: What contradiction is that?


Charles Jonas Thornton: Of the statement that the Conservative party made promises in my constituency to reimburse the losses in the Farmers Bank.


Alexander Kenneth Maclean: I am sorry I cannot accept the statement of the hon. gentleman, but I trust he will not think that I am disrespectful to him when I decline to accept his statement upon this point.
I say that the Conservative party, for the purpose of electing candidates in certain constituencies in the province of Ontario, promised repayment of losses to the depositors in the Farmers Bank; that these statements were made for that purpose and to accomplish that end. If the Conservative party really were sincere in making these promises during the election of 1911, they should have long since implemented their promises*, instead of postponing this measure until this very late date. In expressing my opposition to this Bill, which I have done, in a very discursive way and incompletely, I think I am voicing public opinion. I believe it is the opinion of all members that legislation of this kind should Inever have been introduced. The country will agree with me when I say that this legislation is before us merely because it is pressed upon the Government by a few hon. gentlemen in this House who found their way here by reason of the support which they obtained in the last general election on account of their promise to secure repayment from the Government to de-

positors of any losses which they might have incurred.


Samuel Simpson Sharpe: Is that the reason why the hon. member for West Middlesex (Mr. Ross) is supporting this Bill?


Alexander Kenneth Maclean: I really do not know.
That is the view of the people; that opinion is expressed in a great number of newspapers ordinarily favourable and sympathetic to the Conservative party and the present ministry. There is nothing in law or in equity to justify this legislation. There is nothing in any of the facts disclosed in the proceedings of the Royal Commission to justify the conclusions made by the Minister of Finance upon which he bases this measure. It is unfortunate legislation in every respect; it presents to Parliament a very pernicious and unfortunate precedent which this country will in the future regret if we pass this legislation, and I think this House should not express its adherence to the principle of the Bill. Therefore I beg to move:
That the word 'now' be struck out and the words 'this day six months' be added at the end of the motion.
Mr. H; |B. (MORPHY (North Perth): Although the hour is very late, being half an hour after midnight, I desire to expedite to some extent the discussion before the House by saying a few words in reply to my hon. friend (Mr. Maclean). In the first place I desire to make an observation in regard to the peculiar attitude taken by the hon. gentleman in assuming before the House to-night, to speak as though he justified his position from something that he found in the report of the commissioner, Sir William Meredith. When I turn to 'Hansard' of the 30th of March, 1012, at page 6710, I find that the hon. gentleman uttered these words:
Only recently a prominent justice of the Superior Court of Ontario, Sir William Meredith, was appointed a commissioner to conduct an inquiry into the Farmers Bank, an inquiry which I said speaking a few days ago, was both useless and mischievous.


Hugh Boulton Morphy: What authority has the hon. gentleman for stating that the Royal Commission of inquiry entrusted to Chief Justice Meredith regarding the Farmers Bank is both mischevious and useless?


Alexander Kenneth Maclean: I do not propose lo engage in a prolonged discussion of that point.


Hugh Boulton Morphy: I do not wish to discuss it. but I would like an answer to the question.


Alexander Kenneth Maclean: I merely repeat what I said before, that it is both useless and mischievous.
And this gentleman, representing an enlightened constituency, speaking to Parliament, under the pretense of basing his remarks upon the evidence and findings of
the commissioners, stands convicted before the House and. the people with having, long before there was a commission appointed, to take evidence and witnesses called, without a tittle of evidence, without hearing a witness, puts himself on record, as opposed to it, absolutely, in the terms I have just read. It seems to me that absurdity could go no further than that a man, representing the people of an intelligent county, should come into this Parliament to-night, showing -a bias, a prejudice, a mind made up in advance of the hearing, and confessing it in language of that kind, and no individual, intelligent or unintelligent, can place any reliance at all on. any argument he utters.
With regard to his aspersions against the hon. member for Hal ton, I would like to tell the hon. gentleman that members on this side, and I believe members on that side, except himself, have the highest regard for the hon, member for Halton for his word, his probity of conduct and his worthy actions from the beginning of his career up to the present moment. It little works then to the advantage of the hon member for Halifax, to argue in this fashion for partisan purposes, and to weaken the evidence that the hon. member for Halton gave, knowing that it tells against his own party affiliations and that it was a damaging bit of evidence that he had to overcome. I was surprised, Mr. Speaker, to see the hon. gentleman, who is usually fair, and who keeps to high standards, descend to make what was a personal and threatening attack -against the hon. member for H-altom for the unmagnaaimous purpose of attempting to -make political capital at the expense of as honourable a gentleman as there ever was in this House. Is the level of debate to be dragged down by mem holding high places like the hon. member, who for some party purpose, cannot discuss -a question on its merits without attacking hon. gentlemen on this side? I hope that the hon. gentlem-an has not been inspired to attack the hon. member for Halton; I fear it was lack of preparation, because he -admits himself he laboured, and to be as charitable -as I can I will say, that not having much to say he fell down eggregiously, -and made a mistake in attacking -a gentleman of the standing enjoyed by the hon. member for Halton.
The junior member for Halifax said that the Government seemed to be hard pressed, that they had waited for three years to carry

out the measures of relief after they obtained power; and in the same breath he complains that they are doing it even now. There is an old saying that it is better late than never; but you cannot satisfy the hon. gentleman. He complains:	They did not
do it soon enough, he now complains that they are doing it too late, a futile argument, purely partisan, absolutely without anything to base it on, and an argument that is not worthy of the mental attainments of the hon. gentleman. He says that the situation is one that is not only vicious but mischievous. What is the position? Has the hon. gentleman no constituents for whom he speaks? Was there a Farmers Bank in his constituency; had he one of the twenty-seven or twenty-eight banks that failed? The hon. gentleman has some colleagues who have spoken on this subject and who have supported the proposition that the Government should relieve the depositors. I can understand the argument of the hon. gentleman when he attempts to convince the House that this ought to be a question upon which there should be no party vote, one that should not have been introduced by the Government, a question which his two colleagues who have hundreds of sufferers could vote for, and he could vote against. But the Government in this case have taken a courageous stand, and, being a money measure, I presume they must introduce it. The Bill is based upon what the Prime Minister said before he brought this legislation down, and after a fair discussion of the Bill, if it receives a majority in this House, no matter whether the majority is on that side or on this side, it will become law if it receives a majority.
The hon. member remarked that the Senate has been lobbied by gentlemen in this House who spoke in favour of this Bill. I know nothing about that. But, Mr. Speaker, the hon. gentleman's friends are in control of the Senate, and I have yet to learn that Conservatives in the Senate have influence sufficient to make the majority bow to the will of the minority. I do not like the argument. I fear my hon. friend the junior member for Halifax has something up his sleeve; he knows something about his own friends in the Senate.


Alexander Kenneth Maclean: No, you would like to see the Senate defeat it.


Hugh Boulton Morphy: I said that the hon. gentleman's friends-


Alexander Kenneth Maclean: Your friends.
[Mr. Morphy.}


Hugh Boulton Morphy: My friends in this House would like to see the Senate defeat it. Is that what the hon. gentleman means?


Alexander Kenneth Maclean: A great many of them.


Hugh Boulton Morphy: I will attend to that
argument a little later on, and show where we stand from the point of view of the representatives of the people. I represent a county that has been severely struck in two ways. I will give the details later. But I first want to refer to the statement of the Prime Minister in this House which has been put on record to-night by the Minister of Finance wherein he promised on the 6th of June, 1913, that he would introduce legislation to relieve these unfortunate depositors. It is late, and I am going to endeavour to cut my remarks short. I will not give again what the Minister of Finance quoted to-night. But the statement of the Prime Minister was clean-cut, unequivocal, and absolute last year that he would introduce this Bill this year; and it is before us. He made use of the language a part of which I quote:
The case is of exceptional and indeed of unique character both with regard to the fraudulent means by which this certificate was produced and in respect of the results which followed, involving the ultimate loss of all moneys placed in the bank by the unfortunate depositors.
The man who fraudulently procured the certificate in the name of the Dank was enabled to attract those deposits by the unwarranted assumption of powers in violation of plain statutory conditions. While the direct subsequent cause of the loss was the fraud and dishonesty of the bank's manager in the administration of its affairs, there is nevertheless a certain connection between that loss and the power and status with which he became invested upon the granting of the certificate. Having regard to these considerations, the Government consider that the depositors are entitled to a reasonable measure of relief, which will be provided by legislation to be introduced at the next session of Parliament.
Implementing these remarks, the Finance Minister introduced the following resolution :	>
That it is expedient to provide that there may be paid and applied from and out of the consolidated revenue fund of Canada, a sum not exceeding in the whole one million two hundred thousand dollars to pay to persons who were creditors for money on deposit in the Farmers Bank of Canada, the respective amounts standing at their credit in the books of the bank when the bank suspended payment.
Upon that resolution a Bill has been introduced. Let us see how the failure of this bank has affected the people. According to the returns brought down, the taxes collected on the 14th of December, 1906, the

year of failure, in certain municipalities were deposited in the Farmers Bank. In the municipality of West Zorra, the taxes collected from the people and deposited in the Farmers Bank amounted to J18.741.07; Camden East, $15,115.19; Mornington, m the county which I represent, $10,674.96; Scott, $64,485,91; Esquesing, $4,448.59; township of Kerwood, $3,747.24; Brucefield, $6,347.13; Embro, $5,566.73. This means that the losses in this respect struck every man, woman and child in these municipalities. These taxes were collected on December 14, five days before the bank failed, and were deposited not for speculation but for safe keeping in a Canadian bank to which a charter had been granted by this Parliament. In the township of Mornington, 2,746 people are direct losers in connection with these taxes. The losses in the other townships would average about the same; I have not taken the trouble to figure them up. In the township of Mornington in my county 304 persons were depositors in this bank, Liberals and Conservatives, without distinction of political affiliation. Does my hon. friend object to the Liberals of that county receiving money that has been stolen from them through this failure merely for the sake of the principle in respect of which he takes such a lofty stand ?


Alexander Kenneth Maclean: I do not believe that any money was stolen.


Hugh Boulton Morphy: The hon. gentleman makes no distinction between Liberals and Conservatives in this matter ?


Alexander Kenneth Maclean: Certainly not.


Hugh Boulton Morphy: He is opposed to any one being remunerated in this regard. I hope that as the representative of North Perth 1 will never seek to make any capital out of a matter of this kind. I hope that the time will never come when the unfortunate people of whom the hon. member for Halifax spoke so feelingly to-night and with whom there was connected death, suicide, broken hearts, asylums and disaster, will be made by me the subject of political capital. I hope the day will never come when I shall attempt to make political capital out of the misfortunes of any class of people, whether I represent them or not. I think it is descending pretty low in the scale when a tremendous loss of this kind is debated with a heat that is devoid of all sympathy for the unfortunate ones.


Alexander Kenneth Maclean: Do not think that there are any politics in my views; there may be in your own, but there are not in mine. I am not in a position to be prejudiced.


Hugh Boulton Morphy: On February 12, 1912, a Royal Commission was issued to Sir William Meredith to make investigation. Very wide powers were given to him under this commission; they have been related by the Minister of Finance, and I need not repeat them. The commissioner made his return, sessional paper 153a. It is concise and easily understood. I desire to specify for the better understanding of my argument certain dates connected with this matter. On November 30,	1906, at a
meeting of the Treasury Board, the issue of the certificate to commence business was authorized, and the certificate was issued on that day. Two months later, on January 2, 1907, the bank began business. Three years and eleven months later, on December 19, 1910, the bank suspended payment. The failure of the bank, which had twenty-six or twenty-eight branches in Ontario, affected thousands of depositors who were conducting savings or current accounts and who were distributed over widely separated sections of the province. These depositors petitioned the Government of Canada for relief, and the main ground of their application was that the Treasury Board of this country, a board established for the careful consideration, amongst other things, of the issue to banks of certificates to do business after being incorporated, was guilty of negligence in connection with the issue of the certificate under which the Farmers' Bank was launched as a public institution. The general manager, Mr. Travers, who has been spoken of in terms which I shall not repeat, was handed a certificate impressed with the seal and approval of the Dominion Government and sent into the public market to get public business, particularly from the farmers, under circumstances which led only to one end, disaster. Nothing else could be hoped for; it was a case of disaster, loss and ruin to those who had dealings with the concern at the head of which was Mr. Travers. It is argued that the Treasury Board was culpable and guilty of negligence in the issue of that certificate, and that through that negligence the people have suffered. It has been truly said by the Minister of Finance, that if there had been no certificate issued there would have been no bank; if no bank, no deposit; if no deposits no loss. From that point of view it is unnecessary to consider with any hair-splitting, narrow arguments from the lawyer's point of view or otherwise, what the proximate cause of the loss was or what was the efficient cause

of the loss. If I may be permitted to use another word, I should like to say that we should consider what was the deficient cause of the loss, the defective action on the part of the Treasury Board that caused the loss. That is coming closer to the point. There was no efficiency about it. The whole situation and the action of the Treasury Board is reeking with deficiency, with defective operation, with no operation; with neglect, with failure to act. That is the most startling thing about the whole situation from the Treasury Board's point of view.
What is the good of talking about the law in a case of this kind? Parliament can make the law. What is the good of talking about politics? The people will make the politics. They will attend to those who do wrong and those who do right; and I advise the hon. gentlemen to get in and come with us if they feel that way and make this thing unanimous in favour of those who have suffered. No one here desires to take any glory out of this. Let us see if there is not something in the case that can be treated from an equitable and conscientious point of view, mot from a legal hair-splitting point of view, as to whether there has been efficient or proximate cause and what the causes were. The point is that the depositors make their application and they make it upon a basis that is sufficient to arouse in the minds of any reasonable man in this House feelings which would compel him to approach the subject from a point of view of equity and good conscience nather than of the fine hair-splitting points of law. This country, as was said by the leader of the Opposition, ought to be big enough and fair enough to do what is right in this or any other ease. That is the ground on which I would like to see it put, and on which it should be put. The Parliament of this country have been decent in lots of cases where they had less right or reason to go out of their way to do the decent thing than in this case. If an equitable claim exists to such an extent that it ought to move this Parliament, then Parliament can make the laws to suit its case. That is the intention of the resolution before this House. The Minister of Finance introduced the resolution into this House in the most courteous, careful, studied manner so as not to create offence. He laid himself open to arguments which were seized upon by the press 
of this country who proclaimed far and wide that the minister had made the admission that the Finance Minister ox the Treasury Board in the preceding Government had not been guilty of negligence but only of an error of judgment and that therefore the whole thing fell down on the admission, of the Minister of Finance. That was making politics with a vengeance.


Daniel Duncan McKenzie: Is that not what it
was?


Hugh Boulton Morphy: I do not intend to reply to that from any hon. gentleman who has ever sat upon the Bench. That question is unworthy of the hon. gentleman who asked it.


Thomas Simpson Sproule: Order.


Daniel Duncan McKenzie: I suppose the hon.
member would not mind my interrupting him.


Hugh Boulton Morphy: Not at all, so long as the hon. member rises in his place and asks permission he is always at liberty to interrupt me.


Thomas Simpson Sproule: The remark that it is unworthy of the hon. gentleman is unparliamentary.


Daniel Duncan McKenzie: If the Minister of Finance did say that if a mistake was made in the Department of Finance at all it was an error of judgment he was quite right because section 15, with which my hon. friend is quite familiar, says:
No security shall be given by the Treasury Board until it has been shown to the satisfaction of the board.
No certificate shall he given by the Treasury Board until it has been shown to the satisfaction of the Board, by affidavit or otherwise, that all the requirements of this Act and of the special Act of incorporation of the bank, as to the payment required to he made to the minister, the election of directors, deposit for security for note issue, or other preliminaries, have been complied with, and that the sum so paid is then held by the minister.
If the minister was satisfied that was all . he had to do.


Hugh Boulton Morphy: I have a note with regard to error of judgment and will come to it later on. I desire at present to compliment the Prime Minister and the Minister of Finance upon the manner in which they have introduced this subject. They have brought it before the House in a way with which the most captious member on the opposite side of the House could find no fault, there (being in it no (bitterness, no intention to wound, to sting, to make poli-

tical profit, but simply to do their plain duty as the members of the Government. So I hope that anything I may say by way of criticism a little later will be taken in the same spirit. Hon. gentlemen opposite need not go around with a chip on their shoulders ready to get angry if we use Mr. Fielding's name. Mr. Fielding would not feel annoyed at strong, trenchant criticism and I do not see why hon. gentlemen should be ready to fly out. The late Minister of Finance was human. We on this side admit his many great qualities; that only shows that he was human, and to err is human. With regard to the error of judgment, what I complain of is that the Finance Minister of the late Government and the Treasury-Board erred in not pursuing the question, so that they would get facts on which to base their judgment, as I will show by quoting the evidence of those who testified. On page 3 of the report of the Commission of Inquiry we find the evidence of Mr. David Henderson, the hon. member who sits in front of me, then a member, who described exactly what took place. About eight days before the issue of the certificate he had a conversation with Mr. Fielding, part of which is given in his evidence [DOT] Mr. Hodgins who had charge of the investigation asked:
David Henderson, sworn, examined by:-
Q. You are a member of Parliament?-A. Yes, sir.
Q. And you were a member of Parliament in 1906?-A. Yes.
Q. Representing the county of Halton?- A. Yes, sir.
Q. You became somewhat interested, I understand, in some matters connected with the organization of the Farmers Bank; I mean, interested to the extent of hearing and knowing about them?-A. Yes, I was present; do you mean the granting of the charter?
Q. About that time?-A. Yes, I was familiar with it from its inception.
Q. You never were financially interested one way or the other?-A. No, in no way; not personnally.
Q. Your interest was in what sense?-A. Simply that I represented a county in which a very large amount of money had been subscribed in stock, and in that way I felt interested for the people I represented.
Q. This being called the Farmers Bank?-A. Well, it was so called, though practically it was not organized farmers.
Q. Were you a member of the Banking Committee of the House of Commons?-A. Yes, sir.
Q. Do you remember the fact that an application for extension was made on two occasions, in 1905 and 1906?-A. There were two occasions at any rate, if not three; two occasions; perhaps the first one would allow a year to apply for a certificate, and there would be two applications after that.
Q. The last application that I know of is contained in the Statute, 1906, which gave six months?-A. Yes.
Q. Do you remember that coming up in the Banking Committee?-A. Yes, it was limited to six mouths.
Q. Do you remember why?-A. Why it was limited?
Q. Yes?-A. We had in the Banking Committee hesitated a good deal about extending the time; the Finance Minister objected very much, and I confess I concurred with him, usually supported him in that; and on the second occasion when they came back, we simply gave them six months, thinking as they had had two years it was not well to keep the matter dangling before the people longer, and the time was limited because we thought they should have been more active.
Q. Was anything known as to who was interested in the bank at that time?-A. Well, I knew nothing about it, I think, beyond the names of the provisional directors as published.
Q. Did any one appear beiore the committee in order to urge this extension?-A. Now, I am not sure, I do not recall.
Q. Do you know who suggested limiting the time to six months?-A. I could not speak at this date; it may have been Mr. Fielding, or perhaps myself. I had adopted a policy of that kind-we had

the Committee had-adopted a policy of that kincl J think, with some previous charter.
Q. Was any inquiry made into the particular circumstances of the difficulty these people had in organizing?-A. I am not aware that there was any particular inquiry, the simple fact they had not succeeded in getting all the money; they asked for more time.
Q' They had six months, from the 18th July, 1906 ; probably about six months from the date it came up?-A. It was six months from the expiry of the previous year.
Q. After that, did you take any steps in connection with the organization of the Farmers Bank or with reference to It?-A. No, I think I could say none whatever.
Q. That is, you had nothing to do with the matter from that time.-A. No.
Q. Did you make any communication at all at any time to the Finance Department with reference to it or to any one connected with the Finance Department?-A. I had a conversation with the Hon. Mr. Fielding with reference to their mode of raising money.
Q. Had you known about that yourself'___A
I incidentally learned it a few days before I went to him that they were discounting the notes which had been taken from shareholders.
Q. They were discounting the notes; did you know anything more than that?-A. I was shown several notes made by shareholders, farmers in my county, and I saw on the back of these notes the endorsement of the provisional directors.
Q. That would be several names, would it?_
A. Yes, there were several names.
Q. How did you see those?-A. A few days before the House met; the House met that year, I think, on the 22nd of November-a day or two days before I had occasion to go to Milton, from where I lived in the village of Acton, and on my way I met the solicitor of a number of farmers who had contested their liability to pay their stock, feeling that something was wrong.
Q. Who was the solicitor you met?-A. Mr. Laidlaw.
Q. Where were you going from when you met him?-A. I was going from home, from the

village of Acton, by way of Georgetown to Milton.
Q. By rail?-A. Yes.
Q. Did you meet him?-A. Just met him casually in the car.
Q. Had he the notes?-A. Yes, he showed them to me.
Q. That would fix the time at which you acquired your first knowledge?
Mr. Commissioner: He has not mentioned the year yet.
Mr. Hodgins: Can you fix the date at all to that?-A. I can fix it by reference to other matters, I said the House met that year on the 22nd November.
Q. What year was it?-A. 1906 ; the House met that year on the 22nd November, and it would be a short time before that, perhaps not more than a few days.
Q. What communication did you make then, and to whom, in consequence of what you saw and heard from Mr. Laldlaw?-A. I casually met Mr. Fielding and informed him that I had seen notes of shareholders in the possession of Mr. Laidlaw, endorsed by provisional directors, and presumably it was for the purpose of raising money to make the deposits, as the time had nearly expired. Our conversation lasted only for a few minutes and was along that line.
Q. Can you give us in any more detail what was said by you and by him, or is that what you have told us the general tenor of it? A. By Mr. Fielding?
Q. Yes? A. I mentioned the circumstance which I have detailed to you, and Mr. Fielding, I think, seemed somewhat surprised; at any rate, he answered me by saying that he would hold back the certificate as long as he could.
Q. You had no further conversation with Mr. Fielding at that time? A. No. I have given you just the conversation we had; I don't think it lasted more than two or three minutes at the outside.
Q. How soon after your coming down to Ottawa was that? A. I would asspme, I have no absolute data, but I would assume it would be within three or four days at the furthest, within a few days; I may mention this as fixed in my memory, I knew it was before the granting of the certificate, because Mr. Fielding told me he would hold it back as long as he could, and it was after the House met; the House met on the 22nd, the certificate was granted about the 30th, so it was between the 22nd and the 30th; I would suppose I went to Mr. Fielding possibly within a day or two at the outside after I came down.
Q. What occurred then, and what further was said? A. He stated that Mr. Travers had been down and he had brought his money; that he had asked him, that he had put it up to him- he did not say definitely what he had put up to him; he left me to assume on account of our conversation within a few days before that it was what I had told him-and that Mr. Travers had denied it, and he asked him to give him a letter to that effect and he said he did so; and he says, 'I then gave him the certificate.'
Q. You have known Mr. Fielding for a long time? A. I have known him for over 15 years.
Q. Were you and he friendly? A. Very friendly.
Q. In 1910? A. Yes. On that occasion I went to Mr. Fielding's room in the House of

Commons, to his office, to see him personally. I had information that there was something of a very peculiar character which seemed to me would materially affect the bank's interests, and its standing, and I felt, as I said before, very naturally worried and anxious about it and I called on Mr. Fielding and told him what I had learned. He was familiar with the facts himself, as much so as I was, and after chatting a few moments about it he turned to me and said, ' Well Henderson I don't know why you should worry over this; you are not responsible for it and besides you did warn the Government.'
That is very strong language. I desire to go a little farther along the
1 a.m. same line so as to be fair to those who then constituted the Treasury Board:
Mr. Commissioner:	Why did not you put in
writing your warning? A. Well, we do not always put everything in writing that we say to a minister. Sometimes it is safer not to put it in writing; that is my experience. It did not occur to me at the moment to put it in writing, besides I think I simply met him casually; sometimes these things are given out to the public, but into other hands sometimes to the detriment of the member of Parliament. They saw it was undue interference on my part. However, my own impression is I met Mr. Fielding casually, this matter was in my mind, and I just simply mentioned the matter to him, told him what I knew about it. Of course being Finance Minister I did not require to put it in the shape of a warning, because he knew the effect of a thing of that kind. It did not occur to me at the moment the necessity of putting it in writing; I thought that he was the man that if he had the knowledge that that would possibly be as far as it would necessary for me to go, he having control practically of the issue of this certificate, and being the chief member of the Treasury Board.
It will be seen that the Minister of Finance and the Treasury Board had full notice of the events leading up to the issue of the certificate which would have caused prudent men to have acted differently from the way in which these gentlemen acted. On page 51 we find the evidence of Sir Edmund Osier:
Mr. Hodgins:	You were a member of the
House of Commons in 1906? A. Yes.
Q. You remember the time at which the certificate was granted to the Farmers Bank? A. Yes.
Q. Had you an interview on the subject ot the Farmers Bank at all with Mr. Fielding, the Finance Minister? A. Yes.
Q. Was that before or after the certificate was granted? A Before the certificate was granted.
Q. Was It at Ottawa? A. Yes.
Q. We are told that the House set about 22nd of November in that year? A. I do not recollect.
Q. We will have to prove that in some other way; was it after the session began in 1906? A. Yes.
Q. What was your interwiew with him, what occurred during that interview? A. I told Mr. Fielding that I had knowledge that the money that was deposited there was practically ob-

tained by false pretenses, that it was not bona fide money obtained by stock subscriptions.
Q. What money did you refer to? A. The money that was deposited with the Government pending the issue of the certificate.
Q. Did you go any more into detail? A. No, I told him that I knew, as a matter of personal knowledge that it was not a straight

Q. You were speaking of the way in which the money was raised by the discount of notes? A. Yes, to my knowledge.
Q. Of what notes? A. From discounting the notes of the subscribers.
Q. Did you intimate that to Mr. Fielding? A. Yes.
Q. Or was it in a general way that you made the statement? A. Oh, it was in a general way, but in a sense particular, because I made that statement.
My hon. friend the junior member for Halifax Will have to remember that, while the hon. member for West Toronto said it in a general way, he also says that he said it in a sense particular, because he made the statement that the money was obtained by false pretenses, and that it was not just a passing and casual conversation. It will not do for my hon. friend to waive it to one side and say that he casually met Mr. Fielding and made this remark to him. What was said is a matter of evidence. You cannot actually say that a man is guilty of false pretenses. It is too serious a charge to make in a casual way about a man. Fraud, crookedness, false pretenses cannot be charged casually. I do not think any sane man would believe the hon. gentleman's statement about these matters only having been casually mentioned.


Alexander Kenneth Maclean: By whom?


Hugh Boulton Morphy: Both by Mr. Osier and Mr. Henderson.


Alexander Kenneth Maclean: I say that they say that their remarks were made casually.


Hugh Boulton Morphy: I have read how this remark was made, and Sir Edmund Osier denies that it was made in a casual way. He says that it was 'in a sense particular, because I made that statement,' the statement being that the method of obtaining money by stock subscription was not straight, and that it was being obtained by false pretenses. Mr. Fielding admits both of these conversations, but he does not remember what took place at them. He admits the conversations with the hon. member for Halton and the hon. member for West Toronto, but his mind is vague, hazy, and in no way too clear as to what took place. He admits that the conversations were about the bank. Whom are you to believe, leaving aside any bias, any 297
self-interest-the men who say that they do know what was said, or the man who says that he does not remember? The question of weighing evidence will appeal to the hon. member for North Cape Breton (Mr. McKenzie), being a judge of distinction and long experience, and I would like him to answer that after reading the evidence. Turning to the exhibits that have been filed with the evidence, I might mention that there are several letters which have been put in by my hon. friend the Minister of Finance (Mr. White). I am not going to encumber my remarks with these letters; they are already in, and can be found in the exhibits. But there is one letter from Mr. Leighton McCarthy that .1 desire to read and to comment briefly upon. It is as follows:
Home Life Building, Victoria, Street,
Toronto, October 8, 1906. Honourable W. S. Fielding,
Minister of Finance,
Ottawa.
My Dear Mr. Fielding,-I have been consulted on behalf of a number of subscribers to the shares of the Farmers Bank, and from the instructions I have received a number of the subscribers will dispute the bona fide character of the subscriptions. I have no time to-night to give a full statement of the grouhds of this request to you, but I beg to assure you that grave conditions have arisen which will require careful consideration before the Treasury Board would grant any certificate for the organization of this bank.
I therefore ask you to be good enough to stay any action which might be taken until I have had an opportunity of discussing this with you. If it is not asking you to hold it too long, I would prefer not having to go to Ottawa this week, but will go any day next week which would suit your convenience. Of course if there is no immediate prospect of your granting such a certificate my seeing you at an early date will not be necessary.
Leighton McCarthy.
Subsequently this wire was sent on the 11th October:
Toronto, Ont., Oct. 11, 1906. Hon. W. S. Fielding,
Minister of Finance,
Ottawa.
Please wire me assurance in reference to stay of certificate of Treasury Board mentioned in my letter of Monday night.
Leighton McCarthy.
Mr. Fielding wired back:
Ottawa, October 11, 1906. Leighton McCarthy, M.P.,
Toronto.
No application yet received for the certificate referred to. Please forward your representations immediately and they will be considered when application comes.
W. S. Fielding, Minister of Finance.

Hon. gentlemen will notice that is a promise on the part of the man whose duty it was to do so to consider the charges that Mr. McCarthy had made in his letter. On October XI, Mr. Fielding sent the following telegram to Mr. Leighton McCarthy :
Ottawa, Oct., 11, 1906. Leighton McCarthy, M.P.
Toronto, Ont.
No application yet received for the certificate referred to. Please forward your represent -tations immediately and they will be considered when application comes.
W. S. Fielding.
Ottawa, Oct., 11, 1906.
And on the same date, October 11, Mr. Fielding wrote to Mr. McCarthy:
My Dear Mr. McCarthy-
I have your letter of the 8th inst. and your telegram to-day on the subject of the Farmers Bank.
I wired you today that no application had been made by the promoters for the Treasury Board certificate, and suggested that you send at once any representations that you may wish to make, to which we shall give all due consideration.
W. S. Fielding,
Minister of Finance.
On the 12th of October, Mr. McCarthy wrote to Mr. Fielding as follows:
Toronto, Oct., 12, 1906. My Dear Mr. Fielding-
Many thanks for your telegram received last night advising me that no application had yet been received for certificate of the Farmers Bank and asking me to forward representations immediately when they will be considered. This will receive my attention.
I am obliged to you for the telegram.
Leighton McCarthy.
Then on October 19, 1906, there is a long letter from Mr. McCarthy to Mr. Fielding, which is as follows:
Toronto, Oct. 19, 1906.
Re the Farmers Bank of Canada.
My Dear Mr. Fielding-
I beg to enclose the special endorsement upon a writ of summons in the High Court of Justice for Ontario, which will he issued by: William A. Saxon, John Sproat, George Castle, Wm. McLean, Finlay McCallum, Robert Hume, Jas. Murray, Geo. Denoon, John McLeod, Jane Shuert, Wm. Harris, on behalf of themselves and all other persons alleged to be subscribers for shares of the capital stock of the Farmers Bank of Canada who may desire to come in and be parties to this action, against the Farmers Bank of Canada, Jas Gallagher, John Watson, John Ferguson, Alexander Fraser, Alexander Shepherd, Lown, W. R. Travers, C. H. Smith, A. G. H. Luxton and the Traders Bank of Canada, and W. J. Lindsay, and I respectfully request that the Treasury Board will stay any action upon the application of persons professing to act in the name of the Farmers Bank of Canada or in the name of the provisional direc-

tors of the Farmers Bank of Canada, for a certificate under section 15 of the Bank Act on the grounds alleged in the enclosed special endorsement and other grounds which may he disclosed upon the examination of the alleged subscribers for shares.
X have received information that the alleged subscribers for shares paid a large sum of money in cash and have signed notes for other large sums of money, and that the persons professing to act in the name of the bank have transferred notes and received the proceeds and that a deposit either has been made or will he made of the cash received and the proceeds of those notes or sufficient amount to make up $250,000.
I wish you to have the kindness to acknowledge the receipt of this protest against the granting of a certificate, so that I may advise the shareholders who are disputing their liability and I would he pleased to go to Ottawa upon any appointment you may make for the further consideration of this matter.
Leighton McCarthy.
The letter enclosed a writ against a number of individuals as well as against' the Traders Bank, issued by a gentleman in one of the most reputable law firms in the Dominion of Canada, a former member of this House, a gentleman well known to members opposite and with whom he had political affiliations, a man who would not make a statement lightly without just reason to believe it could be proven to the hilt.	This gentleman sent forward the
writ as a warning to the Minister of Finance, and that writ contained an endorsement which is to be found at page 1006 of the Exhibits, and which is as follows :
This action is brought by the plaintiffs on their own behalf and on behalf of all other alleged shareholders of the Farmers Bank of Canada, who dispute the validity of alleged contracts to take shares of the capital stock of the Bank, and who allege that they were induced to subscribe for shares through fraud and misrepresentation, and who may request to be joined as plaintiffs.
And the plaintiffs' claim is, (1) For a declaration that the alleged contracts are void; (2) For the rescission of alleged contracts to take shares of the capital stock of the Farmers Bank of Canada; (3) For an accounting for the money and promissory notes received or alleged to have been received in the name and on behalf of the provisional directors of the bank;	(4) for an injunction;	(5) for a
receiver: and (6) for administration.
And the following are particulars of the Plaintiffs' Claim:
1.	The Farmers Bank of Canada was incorporated by a Special Act of Parliament of Canada on the 18th day of July, 1904.
2.	The defendants Jas. Gallagher, John Watson, John Ferguson, Alexander Fraser and Alexander Shepherd Lown, were appointed by the said Act to he provisional directors of the bank.
3.	Amendments of the Act of Incorporation

were passed on the 20th day of July, 1905, and on the 26th day of June, 1906.
4.	The amendment passed on the 20th day of July, 1905, is alleged to have been passed on the petition of the Farmers Bank of Canada; and the amendment passed on the 26th day of June, 1906, is alleged to have been passed on the petition of three of the provisional directors of the bank.
6.	Stock books were opened in pursuance of the prospectus for the purpose of entering subscriptions of persons who might be induced to subscribe for shares of the capital stock of the bank.
7.	The applications for subscriptions for shares and proxies appointing the secretary of the provisional board, and forms for receiving subscriptions for shares were printed and put in circulation.
8.	Forms of bank notes in the name of the Farmers Bank of Canada were also either printed, lithographed or engraved for the purpose of inducing persons to subscribe for shares.
9.	The printed prospectus, the application for stock, the forms for subscriptions, and the said forms of bank notes in the name of the Farmers Bank of Canada, were delivered to agents and solicitors to procure subscriptions for shares.
10.	The agents and solicitors produced and used the prospectus, the applications and the forms, in their canvass for subscriptions for shares.
11.	The plaintiffs and others subscribed for shares, and the plaintiffs allege:-
(1)	That the provisional directors who professed to act- for and in the name of the bank, had no lawful power or authority to receive subscriptions for shares or to accept them; and
(2)	That the subscriptions for shares which were procured from the plaintiffs and others were procured through fraud and misrepresentation, and the plaintiffs allege amongst others, the following particulars of fraud, namely :-
(1) That the agents in procuring the subscriptions for shares falsely represented that persons had subscribed for a larger number of shares than they had in fact subscribed for, and the following are examples of such false representations, namely-
(a)	That Robert Noble whose name i.s. entered in the prospectus as one of those who had consented to be a director, had subscribed for shares to the amount of $10,000, whereas he had in fact only subscribed for shares to the amount of $3,000;
(b)	That John Sproat had subscribed for shares to the amount of $10,000, whereas he had in fact only intended to subscribe for shares to the amount of $1,000, and that he was induced to sign an application in the belief that it was tilled up for $1,000, and that the general manager afterwards claimed that it was a subscription for $10,000, and the said John Sproat then repudiated the entire subscription ;
(d)	That James Murray had subscribed for shares to the amount of $10,000, whereas he had in fact only subscribed for shares to the amount of $1,000:
(e)	That Dr. Stewart was subscribing for shares to the amount of $10,000, whereas he was not in fact subscribing for any shares; and other false representations of a similar character were made by the solicitors and agents in reference to alleged subscriptions of other persons.
297i
Mr. Fielding and the Treasury Board had that document in their hands when Travers came down to get this certificate; they had read it and all these charges were before them, and yet there is not a line in Mr. Fielding's evidence, from one end of it to the other, in which he swears that he ever asked whether these charges were true or not. There is a statement in Mr. Fielding's evidence to the effect that he asked Travers to give him a letter that these things that were said about him were not true, but there is no evidence that Mr. Fielding ever held this document up before Travers and said:	Travers, you have
to wipe these charges out before you can get a certificate from me.
On the motion of Mr. Morphy, the debate was adjourned.



NATIONAL TRANSCONTINENTAL RAILWAY.

[Stage Direction]
Mr. HAZEN moved for leave to introduce Bill No. 224, to amend the National Transcontinental Railway Act.
Thomas Simpson Sproule: Of course this can only be done with the consent of the House.


[Stage Direction]
Motion agreed to, and Bill read the first time.
On motion of Mr. Hazen, the House adjourned at 1-20 a.m. Wednesday.
Wednesday, June 3, 1914.