1914-05-28

SUPPLEMENTARY ESTIMATES FOR 1914-15.

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A message from His Royal Highness the Governor General, transmitting Supplementary Estimates, for the year ending March 31, 1915, was presented by Mr. White (Minister of Finance), read by Mr. Speaker to the House, and referred to the Committee of Supply.

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Mr. DOHERTY moved for leave to introduce Bill No. 213, to amend the Dominion Lands Act. He said:
The purpose of this Bill is to meet a condition that may be created by the passage of the Naturalization Bill, which is now before the House. By reason of the change in the new Bill as to the period of time required for naturalization, those who have taken up homesteads may find themselves at the end of the three years not in a position to get their patents because of their not yet being British subjects. This Bill contains but one section, which provides that a homesteader who has made entry before the coming into force of the new Naturalization Act, and who would be entitled to his patent under the law as it now stands, upon declaring his intention to become naturalized as soon as he is in a position to comply with the requirements of the new Act, shall be entitled upon that declaration of intention to receive his patent just as if he were a British subject.
Motion agreed to, and Bill read the first time.


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Bill No. 211, respecting a patent ot Frederick Sinclair Corrigan.-Mr. Mac-donell.
Bill No. 212, to incorporate the Title Insurance Company of Canada.-^Mr. Baker.

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(Questions answered orally are indicated by an asterisk.)

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Mr. MaoNUTT:
1.	On what grounds was the sentence of one Allan Wishart, who was convicted of a criminal
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offence in Saskatchewan about a year ago and sentenced to two years' imprisonment, commuted to nine months?
2.	Is the Government aware that he is said to have been previously convicted of a criminal offence and has judgments against him for damage resulting from setting fire to the prairie grass on a windy day and burning farmers' crops and a country church?
Mr. DOHERTY:: 1.	It is against the parliamentary practice to communicate the advice tendered the Governor General upon the applications for clemency.
2.	No.


NEWMARKET CANAL.
Mr. PARDEE:: 1.	What arrangement, if any, has the Government with Mr. Osborne, of York county, respecting the right to use property adjoining the Newmarket canal?
2.	What rent, if any, does Mr. Osborne pay for the use of Government property?
3.	Are privileges similar to those accorded Mr. Osborne allowed other farmers whose property adjoins the canal?
4.	Will the Government permit farmers whose property adjoins the Newmarket canal to drive their cattle to water in the canal in case they so desire?


Mr. J. D. REID:: 1.	Privilege to use and occupy all the reserve lands along the Holland River division for pasturage purposes.
2.	$151 per annum, for 3 years.
3.	No. Tenders were called for the lease of these lands, and, Mr. Osborne's being the highest, the privilege was granted him.
4.	Parties wishing to use any portion of the land leased or any privilege connected therewith, can, no doubt, arrange with the lessee.


MAILS IN CHARLEVOIX AND MONTMORENCY.
Mr. LEMIEUX:: 1.	Who has the contract for the conveyance of the mail between Baie St. Paul, county of Charlevoix and Tite des Caps, county of Montmorency ?
2.	How many trips is the contractor supposed to make weekly between these two places?
3.	What price does the contractor get for each trip between Baie St. Paul and St. Tite des Caps and vice versa?
4.	Was such contract awarded after tenders had been asked for by the Postmaster General?
5.	If so, how many people tendered for that contract, what is the full name and address of each of them and the amount of each tender ?


Mr. PELLETIER:: 1.	Hercule Girard.
2.	Six trips.
3.	The contractor is paid at the rate of $3,100 per annum, subject to a deduction

for late arrival at the terminal points, of 50 cents for the first hour, 75 cents for the second hour, and $1 for the third and subsequent hours by which the courier exceeds the schedule time.
4.	Yes.
5.	Joseph Duford, Baie St. Paul, $2,475 per annum; Thos. Tremblay, Dufour, $2,919; Hercule Girard, Baie St. Paul, $3,150 (reduced to $3,100); Gedeon Dufour, Dufour, $3,120 per annum; H. Dufour, Dufour, $3,425; Pierre Bouchard, Les Chenaux, $3,677.75; C. Simard, St. Tite des Caps, $3,693.40; A. Baily, Dufour, $3,700; L Lelland, St. Tite des Caps, $7,000. All the tenders were subject to the deductions referred to in No. 3. The two lowest tenderers withdrew their offer because the parties they had offered as securities refused to be responsible.


HOMESTEAD ENTRY.
Mr. MacNUTT:: 1.	When and by whom was the northeast 1 of section 12, township 27, range 31, W. 1 C.M., entered as a homestead?
2.	Has the entry therefor been cancelled? If so, when, upon whose recommendation, and upon what grounds?
3.	What is the name of the homestead inspector who investigated and reported thereon?


Mr. ROCHE:: 1.	There appear to have been several
entrants for this land, as follows:	F.
Posnikoff, date of entry, 4th May, 1905. Land cancelled, as inspection of the same showed he was absent and could not be located; George Bukuros entered 19th September, 1906. Cancelled on his declaration of abandonment 27th of April, 1908; lastly, Ewan Oksenty entered 15th October, 1908.
2.	Entry was cancelled on Mr. Oksenty's declaration of abandonment 10th May, 1913. No recommendation to cancel.
3.	Land was not reported on by homestead inspector with a view to cancellation.


SHERBROOKE MAIL CARRIER.
Mr. McCREA:: 1.	Has David Armstrong, mail carrier of Sherbrooke, Quebec, been dismissed?
2.	If so, for what cause and what are the names of the persons who made the complaints, if any?
3.	Has an investigation been made 'where Mr. Armstrong had an opportunity to meet his accusers and defend himself?
4.	What remuneration was he receiving for his services?
5.	Has he received his pay in full? If not, why not?
6.	Has a successor been appointed? If so,

what is his name and on whose recommendation was the appointment made?
7.	What remuneration does he receive?


Mr. PELLETIER:: This is a repetition of questions which on the 11th May, 1914, were allowed to stand as a motion for return. The papers have just been laid on the table of the House. Question dropped.


ST. DAVID DE LEVIS POSTMASTER.
Mr. BOURASSA:: 1.	Was the postmaster of St. David de L6vis dismissed from office? If so, when and why?
2.	Was his case investigated? If so, what was the report of the investigator?
3.	What was the dismissed postmaster's salary?
4.	By whom was he replaced, and what is his successor's salary?


Mr. RELLETIER:: 1.	Yes. On the 6th May, 1914, for political partisanship.
2.	No, an investigation was not necessary. The postmistress refused to sign a solemn declaration denying that she had taken part in politics, and that the post office had been used as a political centre.
3.	$152 per annum.
4.	Mr. Frangois Bittner, $162 per annum.


UNOPPOSED AND UNDISCUSSED MOTION.
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Mr. Emmerson.-For a return showing how many private cars are owned or leased by the Government, and what they are named or numbered; the total cost of said cars; the cost of operating same during the calendar year 1913; whether anything was paid for haulage or shunting of said cars during the said year, and if so, how much; where the said cars are located, how many at Montreal, how many at Ottawa and how many elsewhere; whether any of the departments of the Government, or the ministers of same, have cars for their particular use, which are sometimes placed at the disposal of other ministers; whether any of the railways in Canada or in the United States make any charge for transportation or hauling of said cars; and at what rate, or whether the companies in Canada, by courtesy dead head said cars?

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On the Orders of the Day being called:
Mr. OLIVER:: I would like to repeat the inquiry of yesterday in regard to what has taken place in connection with the recent arrival of Hindu immigrants at Vancouver.


Mr. ROCHE:: We have not had any word since yesterday; in fact, I do not think we had any word at all yesterday or to-day. The vessel is about one-half mile from the Port of Vancouver and the immigrants are being examined as to their physical and
mental condition under the provisions of the Immigration Act. We have not had any word to the effect that that examination has as yet been concluded.


Frank Oliver: May I also repeat the inquiry which I made yesterday of the right hon. the Prime Minister (Mr. Borden) as to whether it is the intention of the Government to take action under the section of the Immigration Act that excludes action by the courts until the immigrants have been finally landed or passed by the Immigration Department? Does the Government intend to maintain that jurisdiction to the exclusion of the courts?


Mr. BORDEN:: The only action the Government could take would be to instruct counsel to go before any court in which proceedings had been initiated and raise, and argue, the point that the jurisdiction of the court is excluded by that particular provision. In any case where that provision, in the opinion of the larw officers of the Crown, should apply, the point will, of course, be raised and argued.


CAPE BRETON RAILWAY.
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On the Orders of the Day being called:
Mr. KYTE:: I desire to ask the acting
Minister of Railways and Canals (Mr. Reid) if, to his knowledge, any negotiations are under way by his department with the view of taking over the Cape Breton Railway line from Point Tupper to St. Peters and if engineers have been sent out by his department to survey a line of railway between Sydney and 'St. Peters.


Mr. REID:: There have been no negotiations to take over the Cape Breton railway as far as I know and if any engineers have been sent to the district mentioned by the hon. gentleman they would have been sent by the management of the Intercolonial railway. I do not know anything further about the matter.


George William Kyte: Would engineers be sent out by the management of 'the Intercolonial railway without the knowledge of the acting Minister of Railways and Canals?


John Dowsley Reid: Only to do any surveying
work that might be necessary for the Intercolonial railway.


George William Kyte: This is not along the Intercolonial railway at all.


John Dowsley Reid: I will make inquiries and let the hon. gentleman know.


THE PRINTING BUREAU.
Mr. EDWARDS:: Mr. Speaker, from information I have received I deem it my duty to call the attention of the hon. minister of Public Works (Mr. Rogers) to the condition of the Printing Bureau. I am informed that in that building there are over a thousand hands employed and that the building is iim dangerous condition. There are 600 tons of paper on the top floor and part of the building is cracked from the foundation to the top. It seems to me that, this information having come into my possession, it is my duty to place it before the minister, so that it possible some of this weight may be removed from the top floor before there is a fatal accident.


Mr. ROGERS:: The question of overloading the upper portion of the building to which my hon. friend refers was brought to my attention some time ago, and I understand that the danger has been removed by the removal of the heavy quantities of paper that have been stored there.


PERSONAE EXPLANATION.
Mr. MARCIL:: Mr. Speaker, I desire to make a personal explanation. During the consideration of the Volunteer Bounty Act in committee last night I seem to have been misunderstood in what I said. What I intended to say was that if the Government were not careful a great many more applications would be received for this bounty than from people who were entitled to it. I never intended to convey the impression that any applications had been made, or that any persons had received the bounty money fraudulently, but I wanted just to call the attention of the Minister of Militia (Mr. Hughes) to the very great danger that would confront the Government if care was not exercised in the administration of this Act.
Mr. HUGHES. I am very glad that the hon. member (Mr. Marcil) has seen fit to correct a very wrong impression that he created regarding his own province.


ORDER IN THE CHAMBER.
Mr. SPEAKER:: In reference to the noise in the House, and the large number of members constantly moving around, a complaint has been made to me more than once by the reporters that they find it very difficult to hear what is being said. They suggest as a remedy for one of these difficulties that members, especially ministers, should speak a little louder, and as a remedy

for the other, that those who are compelled to indulge in conversation should do so in a lower tone of voice.


CANADIAN NORTHERN RAILWAY AGREEMENT.
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On the motion of Mr. Borden for the second reading of the proposed resolutions respecting the Canadian Northern Railway Company:
Mr. D. C. ROSS (West Middlesex):: Mr. Speaker, before the motion is carried I would like to make a few observations on this very important public matter. It was my intention to say something about this question on the second reading of the Bill, but having just been in my county I have some idea of the public sentiment in regard to this matter which I think I should communicate to this House. This is one of the most important questions that has come before this Parliament since I have had the honour of a seat in it. The Dominion Government, at the present time, is taking upon itself in these resolutions a liability of $45,000,000. The Government of the day is well aware that a time of falling revenues, when owing to extravagance the public expenditure is being increased and the public debt also, is the time when a matter of this kind should be dealt with in all seriousness and when the public interest of Canada should at least be protected. Prior to the opening of Parliament this session, various rumours appeared in the press- in regard to assistance that was to be given to the Canadian Northern by this Government. Those rumours were very persistent, and they varied in some degree from time to time as- the press apparently got hints from members of the Government as to what form that assistance would take. I found, in talking over this matter with not only Liberals but Conservatives, that there was- only one view throughout that part of western Ontario from which I come, and that was that Messrs. Mackenzie and Mann, although they may be men of daring and of financial ability, and although they may be great railway contractors-, have received from the people of Canada all that any men should receive in the form of public assistance. There has been great doubt in the minds, not only of Liberals, but of Conservatives, in western Ontario as to the advisability at this time of assisting these men in the manner in which the Government is proposing. More than that, there is amongst the ordinary electors of western Ontario the most resolute resistance to this resolution (with

the exception of the resistance to the naval measure of last year) that I have met with since I have been in public life. These men have bled the municipalities, the provinces-, and the Dominion of Canada; and I must say that, amongst Conservatives and Liberals alike, there is only praise given to the hon. member for Kingston (Mr. Nickle) and the hon. member for Calgary (Mr. Bennett) for the independent and patriotic stand they have taken with regard to these resolutions.
It is only my intention to discuss these resolutions in a general sense, not to go through them seriatim. When I came to the House this session I was confirmed in my view that the voice of the people as pronounced in western Ontario was correct. I am not one of those who believe that the voice of the people is always the voice of Providence; but I think the voice of the people in a case like this is a pretty safe guide as to the proper course for the Government to take. When I came to the session, I thought that the good common sense of this House would prevail to some extent, and I was rather delighted to find the public opinion existing in western Ontario confirmed by so many members of this House on both sides. In the first place, we have the public opinion of western Ontario resolute against this measure. In the second place, let us take the hon. member for Kingston-and there is no better Conservative than he in this country-a man who has shown an independent spirit in provincial politics and who has to-day shown it in Dominion politics, a man with whom I was acquainted in college days, and whom I know intimately, a man who is moved only by patriotism-I find him with his face set against this measure. He has had large business and political experience, and it must have been a struggle for him to depart from his party on this measure; and yet I find him confirming the views of the people of western Ontario as I understand them. The hon. member for Calgary is one of the most eminent railway barristers in Canada, a man of wide railway experience, a man known throughout the West as a man of sound judgment and business acumen, and one who is not the least of the Conservatives in this House; I find him also with his face set against these resolutions. He has described these men as political mendicants, and I think his description is absolutely correct. Messrs. Mackenzie and Mann, in my opinion, have been the most persistent pair of political parasites with which any country has ever been afflicted.


Mr. BLAIN:: Perhaps the hon. gentleman will deal with the hon. member for Norfolk (Mr. Charlton)?


Duncan Campbell Ross: I may deal with him later on.


Mr. W. H. BENNETT:: Deal lightly with the erring one.


Duncan Campbell Ross: Let us take the other side first. I have not heard my hon. friend from Peel (Mr. Blain) say anything in regard to these resolutions, but he was not so silent during the last Parliament. What has happened him?
We go down the line and we come to the hon. member for St. Antoine (Mr. Ames), whose fidelity to Conservative principles no-one will doubt because he is the high prieBt of protection and of all the doctrines that go to make up Conservatism. What does he say in regard to these resolutions and these people to whom we are proposing to grant this aid? He says, just as, the hon. member for Kingston said, that they are not to be trusted. He says ' A burnt child dreads the fire '; he says * When you are supping with the devil, you must use a long spoon'; and therefore it is apparent that the hon, member for St. Antoine has not too much faith in the men with whom this Government is dealing.
Then we come to the hon. member for West Peterborough (Mr. Burnham). He describes the operations of these men, if I remember aright, as, rather buccaneering operations, and so it is apparent that he has not much confidence in these men to whom the country is going to grant assistance to the extent of $45,000,000.
Then we come to the hon. member for Thunder Bay and Rainy River (Mr. Garrick), who is a personal friend of mine. He delivered an excellent speech on this matter. Of course, he admitted that these were his friends and that he was interested. I am not surprised at that for I thinlc that probably he is; but he seems to think that some more members on the Conservative side of the House are against these resolutions, than those who have voted against them. He seemed to express doubt in regard to-the hon. member for Prince Edward (Mr. Hepburn) who, he said, was unanimously elected chief whip of the new Bull Moose party, which comprises the Conservatives who are opposing these resolutions. He expressed doubt even as to the hon. member for Brandon (Mr. Aikins), wno is also a high priest of Conservatism.
'Then we come to the right hon. the Prime Minister. He evidently has some

doubt himself as to the fidelity and honesty of Messrs. Mackenzie and Mann, who are seeking relief, because he telle us that he had a statement last session from a high official of this company that $15,000,000 would complete the road, showing that he, the Premier of this country, having once been deceived by these men, he should, as the hon. member for St. Antoine says, use a long spoon when supping with the devil.


Mr. BORDHN:: I am not at the moment aware of having said that, but perhaps I may be in error.


Duncan Campbell Ross: I certainly apologize if 1 have misrepresented what the Premier said; but I understood that, in answer to a question on the Order Paper, the Premier said he had been told by a high official that $15,000,000 would be sufficient to complete this road.


Robert Laird Borden: I think my statement related to the ability to complete the road without assistance under ordinary financial conditions.


Duncan Campbell Ross: Well, it is practically the same thing. The right hon. gentleman understood, and I think it was the general impression left upon the House by his statement of last session, or by the general discussion of last session, that $15,000,000 would be sufficient to complete the road.
The greatest offender of all in this respect is the hon. Minister of Finance. He is the guardian of the public purse of this country. He has been in this Parliament for three sessions, and in his modest way he has claimed on various occasions to be a splendid accountant, to be able to diagnose a balance sheet as well as any man in the House or in the country. He has told certain members on this side that they were not mathematicians, leading us to believe, inferentially, that he was a mathematician. He has even said to the hon. member for Pictou (Mr. Macdonald) that that hon. gentleman should not doubt his legal knowledge because he had some legal knowledge. So, in this case we may not have ' a ministry of all the talents ' but we have a minister of all the talents. He is mathematician, Finance Minister and lawyer. Yet, if there is anything that has happened this session that should lead the Government to go slow in this guarantee, it was the discovery of the Finance Minister's action in relation to these contractors. Last session we advanced to this

concern the sum of $15,030,000 which was supposed to go into the construction of the Canadian Northern railway. The Minister of Finance told us, as the hon. member for St. Antoine (Mr. Ames) pointed out, that the Canadian people were getting ten per cent of the capital stock of the Canadian Northern railway for the $15,000,000 that we were giving them in cash. He stated that in four different places. You will find it recorded, for instance, at page 11725 of ' Hansard ' of last year. This statement was made in answer to a question by the hon. member for Shelburne and Queens (Mr. McCurdy):
Yes. Therefore, taking the whole capital stock-
You will observe, Mr. Speaker, not the stock issued, but the whole capital stock.
-of the Canadian Northern Railway Company, which controls 4,500 miles in the West, and owning, I believe, the Canadian Northern Quebec system, and affiliated with the other systems with the ultimate idea of amalgamating them all into a system extending over the continent, the Dominion owns one-tenth of that stock.
What docs that mean? The entire capital stock of the Canadian Northern railway was $92,000,000. But as a result of this arrangement of last session we got only $7,000,000 of stock. The minister led us to believe that we were getting ten per cent of the whole capital stock of the Canadian Northern railway as I have read you from ' Hansard'. Now, either as guardian of the public purse of Canada, this minister of all the talents was derelict in his duty and guilty, as he would say s in common law,' of negligence, and so lost to usi $2,200,000 worth of stock, or else he was deceived by these men whom we now find before Panldament for further assistance. Either his arithmetic was bad, or his .law was bad, or his faithfulness so far as public duty was concerned was worse. Such being the case, after listening to the debate in this House and listening attentively, after discussing the matter with the people in my part of the country and hearing the expressions of opinion both on the other side of this House and on this, I have come to the conclusion; that these applicants are men with whom the Government should enter into an arrangement only after the closest investigation and scrutiny of the facts. I have listened in this House to questions asked of the ministers generally as to the meaning of these resolutions and to the replies given to those questions. Listening to the
MAY 23, 19i4
reply given by the Solicitor General as to the meaning of section 14, I confess that- amd I do not wish to say anything offensive -not only did I not learn what that section meant, but I doubt very much if the hon. gentleman himself knows what the reason is for that clause being incorporated in these resolutions. It seems to me that in this matter the Solicitor Generali has taken up a new role. It seems to me he is not here to protect the public .interest in this guarantee transaction, but that he is here as counsel for Mackenzie and Mann. Everything he says tends towards that. His answers may be summarized: It .is not going to hurt the public interest and Mackenzie and iMann want it. It looks a.s if section 14 and others had not 'been drafted by the Solicitor General but had been put there by other hands than his, hands more crafty, and directed with greater knowledge of the intricacies of acts of this kind, and with the set purpose of placing upon, the people of Canada a burden from which they will [DOT]not be free for many years to come.
What was actually done in this matter so far as investigating the facts is concerned? On what evidence are we asked to grant this aid?
We have the officers of the Railway Department making an investigation at the instance of the Government. I say nothing of the competence or incompetence of these officers, for I know nothing about it. But it seems to me that a full investigation made by officers of the Department of Railways of all the intricate dealings of Mackenzie and Mann in the course of twenty years could not be made in the length of time that these officers have taken for that work. I assume, of course, that these men were sent there with instructions from the Government to get at the bottom of things. But, knowing what the Government was going to do or was likely to do, their investigation would be superficial and would only go to confirm the statement of the officers of the company themselves. In the second place, it would seem to me that the affidavits we have received in regard to what has been done by these men with the money they have received and with regard to their general financial situation, are very unsatisfactory. I do not know what relations exist between the hon. member from Norfolk (Mr. Charlton) and Mr. A. J. Mitchell, and I have no reason to doubt the honesty of Mr. Mitchell, but my hon. friend from Norfolk spoke of this gentleman in a rather fatherly way as if he believed every-276
thing he said, and appeared to me in his action in this matter to be' influenced rather by personal than by public grounds, but in Mr. Mitchell's declaration all he said was ' to the best of my knowledge ' and ' judging from the books of the company.' But when Mackenzie and Mann come and ask a guarantee from this country of 545,000,000 of their bonds, the least they can do is to come to this House and submit their own affidavits with regard to the facts. I know of no reason why Sir William Mackenzie is not a proper person to make an affidavit. And I say the same concerning Sir Donald Mann. Why cannot these men submit their own affidavits that they have received no personal gain from the grants made to the Canadian Northern railway by this country ? If I were to go to the bank for a loan, the bank would not expect a statement from a student in my office, but would ask me to make a personal declaration as to the value of my assets. And in the next place, you will notice that the declaration of Mr. Mitchell was taken before Mr. Z. A. Lash. That seems to me almost improper,-it is in bad taste at the least. If the Government wish to accept a declaration of this kind, it should be made before some impartial party, and certainly not before a man so closely connected, as solicitor and partner with Mackenzie and Mann as Mr. Z. A. Lash.
Now, what security are we getting in regard to this guarantee and what investigation has been held as to that security ? In the first place we are getting all the physical assets of the Canadian Northern railway and also certain stocks on which grave doubts have been cast by members in this House, particularly by the hon. member for Calgary (Mr. Bennett). He has told us that several of these companies have not paid interest on their bonds. That seems to be another reason for making an investigation before this grant is made. If these companies are in a practically bankrupt state their stock is no good. Attention has been called to the fact that we get no personal security from Mackenzie and Mann. And now, I am going to speak in a plain business way, as I have found business transacted in my part of the country. Mackenzie and Mann are no better tjian ordinary business persons in this land, any man in this House, or any other, and particularly the lawyers in this House, will know as a matter of business practice what happens if he goes to the bank to get a loan. I think Sir William Mackenzie and Sir Donald Mann should be made subject to the



ordinary business principles that guide the bankers of this country. They have been here before; they have been treated generously; they have made a failure of the enterprises they have undertaken. They have been heralded throughout this country as two of the multi-millionaires of this land. I saw not long ago a report in a newspaper in which ten millionaires of Canada were mentioned, and high up in the list I saw .the names of Sir Donald Mann and Sir William Mackenzie. I do not begrudge them their wealth; I hope that they will have a great deal of it, but when they come to the people of Canada and ask for a guarantee of $45,000,000 on their bonds they should be made to follow the ordinary business principles of the average business man. No personal covenant is given by these men; no pledge is given of their personal assets except that they undertake to transfer to the Government a certain amount of stock and that they forego the commission which they say they have earned in the carrying on of their business. For my part, I do not believe what is said by Conservatives here and elsewhere that these men have not made money out of the undertakings which they have carried on. They went into the business as poor men, and if, as it is said, they .are wealthy, I cannot see where they have made their money unless it has been out of the assistance given them by the people of Canada. An eminent lawyer, one very familiar with railroad enterprises, said recently that Mackenzie and Mann have made as much money out of these contracts as they could draw out with their two hands, and that the only reason why they did not make more is because they had not more than two hands. I believe it and I say that it is only fair that we should judge them accordingly to ordinary business principles.
We have a covenant here on the part of Mackenzie, Mann and Company, Limited, that they will reduce the floating debt of the Canadian Northern and that they will pay off temporary loans. As the hon. member for Pictou (Mr. Macdonald) pointed out, the covenant of a limited liability company may be worthless or it may be of some value. The Solicitor General was asked not long ago in this House if he had made any inquiries into the financial standing of Mackenzie, Mann and Company, Limited. As I remember his reply, he said that he had not, and it seems to me that in that respect he has been derelict in his duty. If this company is to give covenants to the Govern-

ment, we should know something about their financial standing. That is a first business principle; if you are taking a covenant from a person or from a company you should know what is their financial standing in order that you can ascertain whether the covenant they give is valueless or valuable. The present Government in less than thirty months have given these men $21,640,000 in cash. That is a large sum of money. They have been helped by every province in the land; they have made a failure of their enterprise, and they come back asking for an increase of their credit. What would happen if any limited liability company in Canada went to the Bank of Commerce or to any other bank in this country and asked that their line of credit be increased? Every lawyer and every business" man in this House knows what would happen. The manager would say: we gave you a line of credit of $30,000; you ask us to increase that line of credit to $50,000. What are your assets? That is the first thing he would find out; but this the Government has not inquired into in the case of Mackenzie, Mann and Company, Limited. The next question the manager would ask would be: Who are the directors of your company? If these directors will give a personal bond to the bank and guarantee the line of credit which I give your company, I will increase your line of credit from $30,000 to $50,000. There is no reason why the Government in dealing with large financial matters should adopt principles different from those adopted by a bank or a financial institution in dealing with financial problems of less magnitude. That is the practice adopted by every bank in Canada, at least in nine cases out of ten, unless the limited liability company is beyond reproach of any financial unsteadiness. I would like to ask the Solicitor General here and now: Has this Government ever asked these men if they will give their personal guarantee that this agreement will be carried out?


Mr. MEIGHEN:: If the hon. gentleman has read the agreement he must have observed that a great deal was asked of these gentlemen and that a great deal more was received than ever was received before.


Duncan Campbell Ross: The Solicitor General is at his old tricks; he will not answer the question. I would like to have a fair, straight and frank answer from him. These men have given their personal guarantee only in regard to one thing: that they will transfer certain stock to the Government

and that they will forego their commissions, which it is doubtful they have
12 noon, ever earned. What I am asking the Solicitor General-and I will try to make it as .plain as the English language can make it-is: has this Government or the negotiator of this agreement ever asked that additional security be given in the shape of the personal guarantee of Sir William Mackenzie and Sir Donald Mann that the agreement entered into with this Government shall be carried out?


Arthur Meighen: I may say again-and if the hon. gentleman does not understand me I cannot heln it-that a great deal more was taken than has been suggested by the hon. gentleman, and the Government believe that they have obtained as much as can be obtained and at the same time keep Mackenzie and Mann responsible for the success of the enterprise.


Duncan Campbell Ross: The same answer. The Solicitor General will not say that the Government has asked for this personal guarantee and I say that the Government has been most derelict in its duty.


Arthur Meighen: I say that the Government have asked for a great deal more than the hon. gentleman has even suggested and have obtained as much as could be obtained and at the same time keep Mackenzie and Mann responsible for the carrying out of the enterprise in the public interest.


Duncan Campbell Ross: I do not consider that to be a direct answer to my question. These people, mendicants, the hon. member for Calgary calls them, surely have no right to say what the bargain will be with the people of Canada. If this Government had not been dealing with men who were their friends before the last election and who are their friends to-day, they would have asked for and obtained the personal guarantee of Sir William Mackenzie and Sir Donald Mann before one dollar of this guarantee should be given to them. I say that this Government is derelict in its duty in not compelling these men to give their personal guarantee.


Arthur Meighen: Why did not the hon.
gentleman: insist on that when aid was given to the Canadian Northern under the late Government?


Duncan Campbell Ross: The hon. gentleman knows
why; he is endeavouring to draw a herring across the trail. He knows that we got a first mortgage for whatever we gave and 2761
that we got ample security, which he is not getting to-day.


Arthur Meighen: If a first mortgage is
all that is required, why did the hon. gentleman in 1909, when the Government took a fourth mortgage a.- their security, not insist on obtaining the personal covenant of the Grand Trunk directors?


Duncan Campbell Ross: The hon. gentleman does not answer my question. His duty is towards the people of Canada to-day. He has set himself up far and wide to be the great servant of the people in more ways than one; to be the great servant of the people of the West in more ways than one. At one time it was thought that he was in favour of free agricultural implements, free wheat and a lot of other things in the interests of the great West, but since he has entered this Government he has become the Tory of Tories, the protectionist of protectionists. I am very much afraid that if the people lean upon him, as a member of this Government, for assistance in the future, they will be leaning upon a broken reed. Personal security should be asked for from these people. 1 do not care what previous governments did, I do not care what this Government did; but I say that they owe it as a duty to the people of Canada to see that these men, who are getting a guarantee of $45,000,000, give us the best security that this Government can get from them. This Government is the superior power; these men come here as suppliants, and if they will not give security, this Government should refuse to give thjs guarantee.
There are other grounds upon which I am not in favour of these resolutions. I do not think that sufficient protection is given the people of Canada. Mackenzie, Mann and Company are to have the $45,000,000. They are to have control of this road, apparently without any restraint, for three years. II do not think, in the Lfe, of past experience, with their lack of success, that this country is doing right in giving them a free band, nor do I think one director on the board will help us a particle. The Government are not doing right in giving them the money without provision in the resolution that they can be pulled up short in case they do not carry out the work of the railroad in a proper business-like manner for the next three years.
Another reason why I am opposed to these resolutions is that a very short time ago a very large deputation from all over

Ontario appeared in this House to ask assistance in regard to electrical radial roads. We all know that the great problem before the people of this country-to-day is to decrease the cost of food products, to see that the producer gets his goods to the consumer with the least possible expense. We in western Ontario believe that the building up of an electrical radial road system will be very helpful. The suspicion is very general in western Ontario that these people, Messrs. Mackenzie and Mann, who are not esteemed to be men of a very unselfish nature, are not any too friendly to the development of the radial railroads in western Ontario. I do not think that men who have in their hearts no sentiment but selfishness, who have nothing altruistic in their natures, and who, as we suspect, are trying to impede the building of radial railroads in western Ontario for their own selfish purposes, should be assisted as they are being by the people of Canada to-day. These being my views on this matter, feeling that these men have not given security as they should, feeling that they have not backed up this grant by their personal prominence, I .have much pleasure in moving, seconded by Mr. McCbig:
That all the words after 'that' be struck out and the following substituted:
That the consideration of the said resolutions be not further proceeded with until a committee of Parliament has fully examined into and reported upon the necessity for the aid applied for by the Canadian Northern Railway Company, the extent to which such aid should be given to complete this system, and the nature and value of the secyrity to be taken.


Robert Laird Borden: My hon. friend for West Middlesex (Mr. Ross) has repeated a great many of the arguments and has made a great many of the allegations that have been heard, with a good deal of reiteration, in the House during the past week or ten days. So far as his speech consists of reiteration of what we have heard many times, he will pardon me if I do not follow him; and I trust he will not regard me as lacking in courtesy towards him inasmuch as three-quarters of what he has said has been answered and answered very satisfactorily at least half a dozen times. He will agree with me that it would serve no good purpose that I should repeat the answers so often and so effectively given.
He has enunciated in his resolution a new policy, and 1 believe that we shall have others later on from hon. gentleman on his side of the House.

We had the announcement in the first instance from the right hon. gentleman who leads the Opposition that such steps must be taken by Parliament as would prevent this enterprise from collapsing and would insure the completion of the road. I am not quoting textually from what my right hon. friend said, hut I am giving as accurately as I remember the exact purport of his words. A similar statement was made toy the hon. merhber for South Renfrew, who went even further than the right hon. leader of the Opposition, and who said that not only must the completion of this road be assured in the interests of the country, but that its completion must not for one moment be delayed. And then these hon. gentlemen proceeded to give evidence of the sincerity of their statements, and of the consistency of their views with their votes, by supporting a resolution which would postpone for at least one year or eighteen months any aid which could be effective in securing the completion of the road. In other words, by their voice they declare absolutely, as distinctly as could be declared by men in this Parliament, that Canada must come to the aid of this enterprise; that its coming to the aid of this enterprise is in the interest of the people of all Canada, and that they were prepared to support a measure to that effect, although they disagreed with some feature.-, it is true, of the particular measure which we have presented to Parliament. Then, by their vote, they ask that consideration of the proposed resolutions shall be postponed for six months, which means that they could not be taken up until the next session of Parliament, and that no effective aid could be given for at least eighteen months while, in the meantime, the labourers and sub-contractors and material men and merchants throughout Canada, who represent an indebtedness of about $21,000,000, would suffer for want of their money, and the whole industrial life of this country be thrown into confusion.
My hon. friend for West Middlesex (Mr. Ross) proposes something of the same kind, for if his resolution means anything it means that the work upon the Canadian Northern Railway system shall stop, that the organization shall be disbanded, that men shall be thrown out of employment by the thousand, and that the thousands of men, workmen and others, throughout this country to whom

legitimate debts are owing shall go without their money for eighteen months or more. It is the same proposal made by my hon. friend from Pictou, though in a somewhat different form. My hon. friend from West Middlesex is entitled to his opinion, but I desire to tell him here and now that I do not believe any considerable portion of the people of Canada are in favour of his policy. I believe that a vast majority of the people of this country consider that the completion of this road should not be put off indefinitely. I believe they are in hearty concurrence with the opinion of his own colleague, the hon. member for South Renfrew, that the completion of this road should not even be delayed, and that they regard it as absolutely essential that the work should go on and not be interrupted in the way my hon. friend proposes. That is my conception, and by and by we may have an opportunity of testing the opinion of the electorate upon that particular question.
My hon. friend has made some rather curious statements designed, I suppose, more or less for political effect, and in particular he has asserted, upon what authority I do not know, that Mackenzie and Mann, besides being guilty of the various high crimes and misdemeanours to which he has alluded in a general way, have declared themselves to be in opposition to the radial system of railways which has been proposed by the Hydro-electric Commission of Ontario. On what authority does my hon. friend make that statement?


Duncan Campbell Ross: I said that in western Ontario there was a very deep suspicion that such was the case. I have heard it repeated time and again by very influential men in western Ontario.


Robert Laird Borden: I can tell my hon. friend that I have some information on that subject. I have been informed by one who knows infinitely more about that subject than he knows, or is likely to know about it in the near future, that the statement which he has just made is absolutely without foundation. So far as the Mackenzie and Mann or the Canadian Northern interests are concerned, they are not only not in opposition to that proposal, but it has their very hearty support, and will have their enthusiastic co-operation; and I absolutely believe that the information which has been given to me in that regard is thoroughly reliable.
My hon. friend is very anxious for an investigation. Let me point out the position of hon. gentlemen on the other side of the
House in this connection. In 1911, those who were at the back of the Canadian Northern came to my right hon. friend and asked him and his Minister of Railways to declare by Act of Parlament that the Canadian Northern railway had the status of a great national transcontinental road. Will my right hon. friend deny that? He will not. They asked something further at that time; they a.-ked that the Parliament of Canada, recognizing the Canadian Northern Railway system as having the status of a great national transcontinental Tail way, should guarantee the bonds of that road to the extent of $35,000,000 for the purpose of establishing its status as a transcontinental road, and to complete a very considerable portion of the line -about 1,000 miles between Montreal and Port Arthur. According to the statement of my hon. friend from South Renfrew, the very fact that those bonds were brought here and a guarantee of th=* Government asked for was sufficient evidence that those securities were not marketable and that the assistance of the country must be given. Did the Administration of my right hon. friend the leader of the Opposition make one single inquiry into the financial condition, of the Canadian Northern Railway system at that time? Is my hon. friend from West Middlesex able to say that it did?


Duncan Campbell Ross: They got a first mortgage.


Robert Laird Borden: They got a first mortgage which, according to the statement of his own leader, must be regarded as absolutely valueless, because the securities mortgaged were not marketable without the guarantee of the people of this country. I venture to say now, as I have said before, that it can be demonstrated to the satisfaction of any reasonable man that the security which the Government is receiving to-day for its proposed guarantee is infinitely more valuable than the security which the late Government took in 1911, although we have not a first mortgage. Was any inquiry made into the financial situation of the road in 1911? Was the company or Mackenzie and Mann asked at that time: Why do you come to the Government for a guarantee; you say your securities are unmarketable without the guarantee of the people of this country, and you come to the Government for aid; what is your financial position; are you able to carry out this great project of building a national transcontinental Tailway; what assets have you, Mackenzie, Mann and Company, Limited; what moneys have you

put iuto the construction of this road; what profits have you made; what claims have you against the Canadian Northern? Was a single one of these questions asked of these men? Will my hon. friend from West Middlesex assert that any such questions were put to Mackenzie and Mann or that any information on that subject was vouchsafed to Parliament at' that time? He knows that he cannot answer that question in the affirmative. And to-day, after the present Administration has made the most careful and searching inquiry into all these matters, he asks, for the purpose of keeping thousands of men An Canada out of their money for the next eighteen months or two years, that a further inquiry .be made by Parliament. We have had an inquiry by auditors appointed by the Government of this country, the best men we could select. We have had inquiries made of Mackenzie, Mann and Company, Limited, and of its officials; we have had inquiries made of the Canadian Northern1 Railway Company and its officials. We have had this matter looked into in the most effective and thorough way that seemed to us possible undeT the circumstances, unless we ware prepared to postpone the completion of this road for eighteen months or two years. We have done in that regard infinitely more than ever was thought of by hon. gentlemen on the other side of the House when they bad a similar question before them. Under these circumstances my hon. friend asks that this question shall be considered further by a committee of Parliament. In addition to what I have already said, the question has already been considered by this House sitting in committee for about a week, and questions relevant and irrelevant have been asked without end and information on every possible point, so far as it could be reasonably and properly vouchsafed in the public interest, has been given, to hon. gentlemen onj the other side of the House. What then must be the opinion of this country and of this House under he circumstances? Simply that the motion of my hon. friend is put forward as a political move and nothing more. He is willing to sacrifice the interests of this country, as they would be sacrificed by his proposal, according to the statement of the hon. member for South Renfrew. He is willing to delay the completion of this road and to keep thousands of people throughout this country, to whom debts are owing, [Mr Borden. 1
out of their money for perhaps eighteen months or two years in order that the political interests of the party opposite might 'be advantaged. Under the circumstances, I do not think it is necessary for me longer to delay this House, and I ask it to mete to the resolution of my hon. friend the treatment which he himself in his own heart knows it deserves, and that is to vote it down by ami overwhelming majority.


Sir WILFRID LAURIER:: When the
company with which we aTe now dealing comes for the fourth time in four years asking for the assistance of this country, when it has already been given in the last three years more than $60,000,000 and now asks for $45,000,000 more. I think everybody will agree that the motion which has been made by my hon. friend from West Middlesex is a very reasonable one, and that we should know exactly what is the status of the company. If, as stated by my hon. friend, the company came here as a suppliant pleading that they were stranded, that they had not another dollar to pay their creditors and labourers, I admit that there would be some reason for the warmth displayed by the right hon. gentleman, but I must remind my right hon. friend that such is not the position taken by the company. They do not appear before Parliament representing that they are unable to pay a cent to their creditors and the labourers who built the road, as asserted by my right hon. friend, who declares that unless this money is voted the men who have built the road will not be paid. That is not at all the position taken by the company. It is one of the covenants of this agreement that no portion of this $45,000,000 shall be used to pay the men who excite the sympathy and consideration of my right hon. friend. When my right hon. friend is so solicitous about the creditors and the labourers, has he seen to it that the money which he is asking Parliament to vote shall go to the payment of these creditors and labourers? Nothing of the kind. It is stated in so many words that it shall not go to these creditors and labourers and therefore the tears which were shed by the Prime Minister a moment ago were shed in vain. It has been stated that not a dollar of this money is to go for the payment of the creditors and the labourers. Then what is to be done with the money that we are asked to vote? It is to enable the com-

panies to go on with their operations and to complete the building of the road. We can therefore, thrust aside the sympathy which the Prime Minister endeavoured to arouse when brought to close quarters in the consideration of this resolution.
But my right hon. friend has stated there is another reason. He asks: did the late Government ask for an inquiry when they gave the Canadian Northern Railway Company a guarantee to the extent of $35,000 a mile for the road from Port Arthur to Montreal? We have heard that argument before. That is the sort of argument that my right hon. friend undertakes to present whenever he is brought to close quarters- you did the same; you are another! We did not ask for an inquiry in 1911, but should ask for an inquiry in 1913 when an addition to the guarantee of $35,000 a mile, which had already been given for the completion of the road from Port Arthur to Montreal was granted? Did -my right hon. friend ask for an inquiry when he gave that additional subsidy of $10,000,000 cash, or $12,000 a mile? No, he did not. He relied upon the ability of the company to complete the road, as we had relied upon the ability of the company to complete the road. The company came back in 1911, in 1912, and in 1913, and on the last occasion my right hon. friend thought that we should have an inquiry and he tells us that it was a most complete inquiry. My right hon. friend admits that conditions have changed; that they are not the same as they were last year. Last year he gave $10,000,000 to the company, without going into their business at all. This year, when they come back for further aid he said: this has gone far enough and we must have an inquiry.
He tells us that the inquiry that has been made is the best that could be made, that it is complete, and that everything that could be done has been done. It may be that it has been sufficient for my right hon. friend. My right hon. friend told my hon. friend from Middlesex that his argument had been answered five or six times during the debate. Of course, it may have been answered to the satisfaction of my right hon. friend, and those who follow him, but if my right hon. friend and his followers are satisfied, those who sit on this side of the House ought also to be satisfied with the inquiry that has been made. My hon. friend thought that there should be an inquiry. What kind of an inquiry did he have ? He appointed three officers of the Government to inspect the books of
the Canadian Northern Railway Company. I have nothing to say against the officers of the Government who were employed for this purpose; they may be very competent -I believe they are-but under such circumstances as these, when Parliament is asked to vote money that will bring the total aid granted to this company during the last four years up to $100,000,000 or more, does my right hon. friend mean to say that this kind of an inquiry should be conducted by the accountants of the Government and not by independent accountants ? Such an inquiry should be held, as would not only satisfy the right hon. gentleman and his followers, but would satisfy the public at large, the men who have to pay the money. Does he mean to say that the best inquiry has been made when it has been conducted by accountants of the Government and not by the best firms of accountants to be found in this country or any other country ?
The position taken by my hon. friend from Middlesex is perfectly reasonable. Why should there not be a parliamentary inquiry ? The only reason stated by my right hon. friend why there should not be such an inquiry is that it would delay the payment of the poor men who are the creditors of the company. That concession has been removed by the fact that the resolution does not provide for anything of the kind. We have been assured from the Treasury benches in the last five or six days, over and over again, that the inquiry which has been made by these accountants has been most complete, but we now believe it has not been as complete as we had reason to expect. We have reason to believe that it has been far from complete. What information have we as to the value oi the securities placed before us ? We have simply the report of the accountants based upon the books of the company, and nothing more. What information have we in the report of the accountants, that has been laid on the table, that we have all the securities to which we are entitled? I asked a few days ago about the Niagara COmpany. I was told that there was no necessity for placing information on the table ot the House regarding the Niagara Company, because the Niagara Company belongs to the Canadian Northern, and therefore it is sufficient to have it so. That was the statement of the hon. the Solicitor General (Mr. Meighen), and we have no information from the accountants who were employed as to that. I submit that we should have had a far more complete inquiry, and that we should have had placed before us more detailed

information as to the securities which the Government are taking in consideration of this guarantee.
My hon. friend from St. John (Mr. Pugsley), some days ago, asked why we should not have the facts with relation to the Montreal Townsite Company placed before us, and why that company should not be included in these securities. The Solicitor General told us that he did not know anything about the Montreal Town-site Company. I looked at the book which has been placed before us, and I found that $5,000,000 of the $100,000,000 required to complete the enterprise is to be expended upon the Montreal terminals. We have to provide for the Montreal terminals, and yet we have no information as to the Montreal Townsite Company, which is connected with the terminals. We have to provide for the expenditure, and yet we have no information in regard to it. This illustrates the want of information that confronts us in dealing with an important question of this kind. What is the answer that the Solicitor General gave when he was asked for that information? This is the language which he used on that occasion :
Mr. Meighen : It would take a long time. They represent a great many assets, all the town-, sites acquired in connection with the lines in western Canada by Messrs. Mackenzie and Mann Company, Limited, and all the agreements of sale and sums realized thereon.
Mr. Pugsley: Can the Solicitor General tell me in the name of what company these are held.
Mr. Meighen: The Canadian Northern Town Properties, Limited.
Mr. Pugsley: That includes the most valuable of all, the townsite at Montreal?
Mr. Meighen:	I do not understand that
Messrs. Mackenzie, Mann and Company, Limited, own the site at Montreal.
Mr. Pugsley: Who does own it?
Mr. Meighen: I have no information to give the House on that point.
These so-called investigations were held, but we are told to-day by the Prime Minister in answer to the suggestion of my hon. friend the member for West Middlesex (Mr. Ross), that we should have a full investigation on this point, that such an investigation will not be held because we already have a report upon this point. We have had an inquiry, the result of which shows on one side of the balance sheet $5,000,000 put down for expenditure on the townsite of Montreal; and on the other side, as regards any value that may come to us and the security of which will go to assist us, we are told by the Solicitor General that he does not care whether we have it or not; 
that he has made no inquiry whatever. My hon. friend shakes his head. Shall I repeat his words? Here they are:
Mr. Meighen:	I do not understand that
Messrs. Mackenzie, Mann and Company, Limited, own the site at Montreal.
Mr. Pugsley: Who does own it?
Mr. Meighen: I have no information to give the House on that point.
Mr. Pugsley : I may say that I do not think the Solicitor General ought to shut his eyes to knowledge which everybody else has.
Mr. Meighen: I do hot shut my eyes.
Later on he says this:
Mr. Meighen: If the hon. gentleman will show to the House that they own the townsite, I will undertake, on behalf of the Government, that it will be put in.
That is all the satisfaction which my hon. friend the member for St. John (Mr. Pugsley) got from my hon. friend the Solicitor General. It was my hon. friend the member for St. John who was to get this information for the Solicitor General, and not the Solicitor General who was to get the information for the hon. member for St. John. In the face of that nothing can be more logical and to the point than that we should have a parliamentary inquiry.
My hon. friend tells me-and he relies upon me also-that I said in the opening of the debate that I did not want this enterprise to collapse. I repeat that I do not want this enterprise to collapse, but I certainly do not want it carried on in the manner provided by" my right hon. friend. My right hon. friend has stated that we object to some features of these resolutions. We object to the whole of the resolutions, because they are such as cannot be carried out to the satisfaction of the public and in the interest of the public. My right hon. friend says, with what intent I know not: I may appeal to the country upon this? I am dubious of the appeals of my right hon. friend to the country. He has told us many times that he is going to the country; but when the time comes, he puts it off to another day.


Robert Laird Borden: I did not say that I would appeal to the country upon this.


Wilfrid Laurier: I think my right hon. friend said that a moment ago.


Robert Laird Borden: I did not. I said that by and by there would be an opportunity of discussing this matter before the electorate, and that we would be willing then to discuss it.


Wilfrid Laurier: In an election campaign we discuss things before the elect-

orate and get their verdict, but if this is simply to be an academic discussion before the public, that is a different matter. I have misjudged my right hon. friend, and I apologize; I have presumed too much upon his courage.


Robert Laird Borden: The same kind of courage which my hon. friend showed in connection with the Grand Trunk Pacific.


Arthur Meighen: Mr. Speaker, I do not
desire to engage the .attention of the House with a general discussion on the resolutions that are now before us for concurrence, and I shall attempt to confine myself to such features as have been called in question already in the debate. When the resolutions were first moved by the right hon. the Prime Minister., it was frankly stated that they were not placed here as immaculate and infallible but that we were open for suggestions as to improvements and for amendments in any way that might be devised in the public interest. That invitation has been very lightly accepted by many hon. members and suggestions have rained upon us almost without number. It must be admitted that if none of them appear to have any great force or to have any real amending value, they do not fail for lack of variety. There are some hon. members who, like the hon. member for South Renfrew (Mr. Graham), are anxious to do something and to do it now, and who suggest that it be done. There are others, like the hon. member for West Middlesex (Mr. Ross) and the hon. member for West Kent (Mr. McCoig), who want to do nothing. Then there are others who, like the right hon. the leader of the Opposition, are anxious both to do something a^d to do nothing. There are some who feel that we have not exacted sufficient from Mackenzie and Mann; that 40 per cent of an enterprise is not enough to exact in return for a bond guarantee of $45,000,000, the proceeds of which go into the enterprise. Those who take that view say that we should go further and increase that 40 per cent to 60 per cent or more, and thus gain control of the enterprise. Then there are some who,- like the hon. member for North Oxford (Mr. Nesbitt), say that we have gone far too far already, and that we should not take a dollar's worth of stock at all. Then there is the further suggestion of the hon. member for South Renfrew (Mr. Graham) that we should'take a majority of the stock now; that we should get into the saddle and construct the road ourselves
a la the transcontinental construction;- that we should, while we are constructing it, switch Mackenzie and Mann off the track and operate the road, too, but that, as soon as we have it all done, we ought to reinstate Mackenzie and Mann in the control and operation of the road. Then there is the reverse position advanced by the hon. member for St. John (Mr. Pugsley), who says that we ought to leave Mackenzie and Mann for the present in control of operation and construction to spend the $45,000,000, for which purpose they are quite suitable, until, say, within five years, they have it all done, and that then we ought to take it from them at a fraction of its value and operate the road ourselves. On the other hand, there are those who say that Mackenzie and Mann do not know anything about operation; that they are construction experts; but that when it comes to operation, they are mere children and no more competent to operate a railway than the waifs of the street. Then there are those who say that government operation is the last thing in the world, and who, like the hon. member for South Cape Breton (Mr. Carroll), frankly tell us that Mackenzie and Mann are good enough for them.
It will naturally be impossible for the Government to accept all these suggestions. One might go even further. There are some who take the view that we ought to proceed at once, and see the road through; that these are enterprising men, men of pluck and daring, deserving of assistance. That view is represented by the right hon. the leader of the Opposition. There are some who have confidence in Mackenzie and Mann, who have expressed it throughout their careers and who are willing to abide by it, who believe that they are great Canadians, perhaps like all great men, not without faults, but who believe that they are great men and have made a better success of the Canadian Northern Railway sys-ten than we ourselves have made of the construction of the National Transcontinental. There are others still, who describe them as mere buccaneers, as mere parasites on the 'body politic-having become so just of late-and who would pursue them through twenty years of alleged crime from the time they stood on the banks of the Red river until they reached the waters of the Pacific.
Well, after all, the resolutions remain exactly as they were brought down. Three amendments have been moved, none of them embodying any of these virulent

and violent propositions enunciated by hon. gentlemen opposite-all very moderate resolutions, but unfortunately not in the public interest.
We come now to the position of the hon. member for West Middlesex (Mr. Ross). That hon. gentleman takes the ground, that we ought to appoint a committee of the House to investigate the financial condition of the Canadian Northern railway and the value of the stocks and bonds of the (railway, its terminals, etc., before we proceed; which, being interpreted, means that we do nothing at all this session but that instead we wait till next and then start a committee going to investigate the accounting system and the value of the assets and securities of the concern. The leader of the Opposition has stated that the investigation we have made is not of much value.	True, be says, we appointed
accountants, the best in the Government service. One is the financial [DOT]comptroller of the Railway Department, a gentleman accustomed to this work for many years, and, if I am not mistaken, appointed by hon. gentlemen opposite. Another is a gentleman of similar position in the Finance Department, and another similarly situated in the Railway Department. These gentlemen have made an investigation. But, says the leader of the Opposition, it is true these men are competent, but they are not independent, and, being in the service of the Government they are likely to favour those with whom the Government is dealing. I should have thought that, if they had any bias, (being in the employ of the Government they would favour the Government, and that, being competent and honest men, their lack of independence would tell in our favour. He says that nothing but an investigation by outside accountants will suit him, and therefore he will support the amendment of the hon. member for West Middlesex whose proposition is to appoint a staff of competent accountants out of the House of Commons-doubtless he will call upon himself and the hon. member for Prescott (Mr. Proulx) and the hon. member for St. John (Mr. Pugsley) and thus satisfy the leader of the Opposition that really competent accountants have investigated the Canadian Northern railway.
But the leader of the Opposition saye also: The argument you advance would be sound and I could not resist it if this money was really going to pay the debts of the concern; I could not

stand between the men who have built this road, whose labour and material have gone into the road after we had sanctioned it as a transcontinental system, but the trouble is they are not going to get their money out of this $45,000,000. The right hon. gentleman must have been absent from the House when this matter was under discussion, for it has been stated on the floor of this House and it is stated in the resolution itself, that the purpose of this guarantee is to complete the road. And how can the road be completed unless the money spent in building it is paid? We cannot take the road over from the contractor, noT can the Can-idian Northern railway, unless the debts against the road on construction account are discharged. Not only is that clear on the very face of the resolutions, but on the floor of Parliament and on behalf of the Government of Canada, with due authority for the words I used, I made the statement that the Government of Canada would see to it that the debts on account of construction as stated in the auditor's report would be discharged before the $45,000,000 was paid out. The right hon. gentleman has the undertaking of the Government of Canada on that point. Then, is not he bound, in justice to his own opinion as stated by himself, if he can remain consistent for half an horn;, to stand up and support the resolutions? These debts to- the amount of $21,262,527 are to be paid by reason of these resolutions going through, and will be paid before the money guaranteed is paid out. And we maintain control in the meantime. That removes the main obstacle to the support of the leader of the Opposition. But, he says, there is trouble yet over this Mount Royal tunnel situation. He says that $5,995,000 of this money is going to supply tunnel and terminal facilities at Montreal. He is mistaken; not one dollar of the $45,000,000 is going to supply tunnel and terminal facilities at Montreal. It has been stated on the floor of Parliament, times almost without number that that money is in sight and ready as soon as it is wanted. The financing was done temporarily by a firm of brokers in England, and, as they took all the risks of that project, the financing was done necessarily at a high rate of interest, relatively speaking. Eut, now that the venture is an assured success, arrangements have been made for the financing of the project at current rates, discharging these temporary bonds. All that appears cn the face of the returns laid on the

table. And, while hon. gentlemen complain so bitterly that we have not given them sufficient 'nforn. it.on, in the very words of their complaint they continually show that they have not taken in even a fraction of the information we have laid before them. The right hon. gentleman says we should have taken an interest in the Model City, a real estate speculation somewhere near Montreal, and because the Solicitor General refuses to tell the House who owns the Model City, and to state all the assets and liabilitiss of that real estate venture, the leader of the Opposition declares that he cannot see his way to support these resolutions. I did go to the extent of submitting to the House my opinion, as the result of inquiry made, that Mackenzie and Mann do not own that real estate speculation. But what is to be said of the attitude of hon. gentlemen opposite, who declare in thunder tones throughout Canada that the Government must not link up with Mackenzie and Mann even to the extent of taking stock in a railway system in which Mackenzie and Matnm have stock; yet at the same time demand that we .shall enter into a partnership with them and several others in a real estate speculation somewhere near the city of Montreal? And the townsites are no good, either, according to these hon. gentlemen. I wonder what values the townsites would have had if we had not included them in our security. We should have had the hon. member for Edmonton (Mr. Oliver) picturing the almost fabulous value of the townsites near Edmonton. We heard the hon. member for Humboldt (Mr. Neely) telling us the tremendous value there was in the townsite of Port Mann, if the Solicitor General had not been so mesmerized as to leave it out. But, as soon as he learned that it was in, he rose and said that it was of no more value than the village of Bossendale or any other little town on the line.
Now, the amendment before the House is not merely that we read these resolutions again this day six months-that would have satisfied the hon. member for Pictou (Mr. Macdonald), but it does not satisfy the hon. member for West Middlesex (Mr. Boss)-but that everything shall be delayed until next session, and that then we shall appoint a committee of Parliament to investigate the financial condition of the road and try to find out whether we have enough security, or whether we had not
better adld some stocks in some Brazilian traction company or other assets, which, the hon. gentleman states, belong to these men, Mackenzie and Mann.
I have listened to many taunts from hon. gentlemen opposite, but. I do not think that I have anything to complain of. Certainly all the credit that is coming to me has been given me, if not a great deal more. I had something to do with these arrangements, but the Bill that is before the House derived its merit not from the humble individual who addresses you but from the fact that there are at the head of the Government of Canada to-day men who are able to deal with great affairs and solve the difficulties connected with them in the interests of the people. I do not pretend for one moment to measure up in legal experience or capacity to the distinguished man who represents Mackenzie and Mann in legal matters. I join with the hon. member for Pictou in paying tribute to the great ability of Mr. Lash. But the hon. member for Pictou should remember that in the negotiations I enjoyed this protection: that Mr. Lash well knew that whatever arrangements we might arrive at would be subjected to the scrutiny of really competent lawyers; that they would have to pass through this House; that they would have to pass under the eye of the hon. member for Pictou himself, and that there was no chance on earth that these resolutions would ever survive that furnace of fire unless they were ironclad against legitimate attack. Having enjoyed that protection, which, I know, must have had a restraining influence upon Mr. Lash, asking hon. gentlemen to keep in mind the fact that I was not wholly at his mercy, I leave the terms of the resolutions themselves to be the answer to hon. gentlemen opposite, or to hon. gentlemen not opposite, that I have been befooled, mesmerized, seduced, and all the rest of it in arriving at this arrangement with the Canadian Northern.
I have been charged by the hon. member for West Middlesex (Mr. Boss) with not knowing what the resolutions mean, and in order that he might make his charge in such a manner that no one could possibly dispute him, he really cited an instance. He tells the House: Here is a clause; I cannot tell for the life of me what this clause means, and the Solicitor General cannot either. I will read to the House clause 14 of the resolution, which he says is so inscrutable:
That no shares of the capital stock of the respective companies mentioned in the first sche-

dule hereto, other than the Canadian Northern, beyond the amounts heretofore issued, shall be issued without the consent of the Governor in Council,


Duncan Campbell Ross: I quoted the wrong section; it was section 19.


Arthur Meighen: I asked the hon. member if it was section 14; he looked down at his paper and said it was. However, I do not know that 19 is any further from the A-B-C's than 14. It reads:
That any company now or hereafter comprised in the Canadian Northern system which is now or may hereafter be subject to the legis-receive advances from many other company corn-may acquire shares in the capital stock of, or securities issued by, or make advances to, or receive advances from any other company comprised in said system, and may take or give security for such advances.
Here is a system of companies, twenty-nine in number, the parent company being one; any one of them may make advances to any other and take security for them; any one of them may issue shares to another and pay for them or give value for them. They are enabled to take shares from each other if any object may be served thereby. I do not know what is so very mysterious about that; I do not know what is so very difficult to explain. The meaning of it is as clear as any sentence in the English language can be. I think what the hon. gentleman has in mind is this: that I did not pretend to be familiar enough with the actual operation and working of railway systems to be able to say just when and under what conditions this clause may be availed of. I did give some possible instances; that is all; does he expect me to be more? I tell him what the clause means; I tell him the extent to which it goes; I tell him its limitations; I show him that no public interest can suffer, and, with my meagre intelligence, I assume that my duty is then discharged. I trust that the hon. member for West Middlesex at last appreciates the meaning of clause 19.
At one o'clock the House took recess.
The House resumed at three o'clock.


Mr. E. M. MACDONALD (Pictou):: Mr. Speaker, I had understood that the Solicitor General had not concluded his remarks when the House rose for luncheon, and I am free to say that so far as my hon. friend had proceeded he had furnished to the House no reason why the amendment of my hon. friend from West Middlesex (Mr. Ross) should not be accepted and ap-
proved. I was somewhat surprised at the attitude taken by the right hon. Prime Minister (Mr. Borden.) in regard to this matter. One would have thought that the sole and only purpose of the Government in introducing this measure to Parliament was to enable certain people in this country who were owed money by the contractors for the Canadian Northern railway to be paid out of the treasury of the Dominion of Canada, and that the Opposition should be condemned and despised because they ventured to suggest that before assuming what will be ultimately a liability of $450,000,000, more than double the debt of the country, the House should pay this great measure, introduced at this late period of the session, the compliment of at least investigating the circumstances surrounding it and so enabling the country and Parliament to realize just where they stand in reference to it as a business proposition. The Premier knows very well that when the proposition to aid the Canadian Northern was first suggested during this session of Parliament my right hon. friend's position and that of the Government was that nothing should be done by way of loan to these gentlemen. I refer to the statement of the Minister of Finance in which he declared that the announcement made by Sir William Mackenzie in Toronto as to what was to be done by the Government had no foundation in fact; that he was not prepared to say what Sir William Mackenzie had said, but, so far as he was concerned, the statement that aid was to be given by way of loan was not a fact. Everybody knows that, were it not for the fact that these two astute gentlemen who are behind this project proceeded, as my hon. friend from Calgary pointed out, to lead this House and the Government to believe by representations to them through the men who were their creditors throughout the country, that a difficult situation existed, the Government would have not taken up this question at all and would not have asked Parliament to saddle this country with this huge and enormous liability. That being so, when the Government came to Parliament they did not come here asserting that they were asking this aid for this enterprise for the purpose of seeing that the creditors of this company were paid. Oini the contrary, the right hon. gentleman, in his opening address, asked Parliament to support this proposition because

it was the desire of the people who owned the various constituent companies to unite them together into a third transcontinental system, which the Government wished to see completed. That was the high ground upon which they came to Parliament. My right hon. friend asked Parliament to ratify this measure. Nothing was said about the payment of creditors and it was not said at that time that there were in this country a lot of people who were in financial difficulties on account of the	fact	that	they	had worked
for this company and had not been paid. No plea was put forward such as is being put forward to-day that you should not investigate this proposition at all because some people were out of money through their dealings with this company. My right hon. friend has descended from the high pedestal which he assumed in inaugurating this measure. Now the sole and only purpose of this measure is to see that certain gentlemen get their money and we are told that Parliament should assume, by virtue of the fact that we have become partners in this enterprise, a load of indebtedness which will more than double the public debt of this country. Therefore, I say let us take steps to see that the men who are entitled to get their money are protected; but before we assume this great liability, let us stop and investigate this thing. The question as to whether the men who have put their money into the work and material into the construction of this road should be paid is not an issue in this House. I can assure hon. gentlemen we would support any reasonable proposition which would ensure these men getting their money. That is one thing and the proposition that we should assume this huge liability without stopping to investigate is quite another thing. We say that before doing that, we should stop and investigate and that is the resolution of my hon. friend from West Middlesex. The Premier will not becloud the issue in the slightest degree by asserting vociferously, as he did this morning, that we should not take time to look into this thing in the smallest degree because there are some people to be paid. Let them be paid, but let us stop for a moment and consider where Canada will be ^fter they are paid. It is stated that there has been a full investigation. Was ever a more absurd proposition suggested to Parliament? What was investigated? What have we in these documents? We have here certain 'statements that were 'submitted by Messrs. Mackenzie, Mann and Company, prepared in their office and submitted to the Government. After they were submitted to the Government, the Government sent*certain auditors employed in the Civil Service to check over the statements and ascertain if they were added up correctly. That was the investigation that was made, nothing more and nothing less. These gentlemen who were authorized by this Government, went to Toronto and they asked Mr. Mitchell to produce the books of the company. He showed them the books and they checked off the items. Is that all that the country wants to know in regard to this enterprise before this liability is assumed? Is that a full and complete and adequate investigation such as any business concern in this or any other country would have made before assuming this enormous liability which is to be forever imposed on this country? Sir, it is a farce to come forward with such a suggestion as that. No investigation worthy of the name has ever been made into this matter nor does Canada know where she will stand when she assumes this liability upon which only time will throw light. My right hon. friend says that careful and searching inquiry has been made into the fact that men have been kept out of their money and he advances this as a reason why this amendment should not be adopted. Let me give two or three things that should have been investigated by the auditors that were not. In this bluejbook we find, o,n page 43, a statement of what is known as floating liabilities amounting to over $10,000,000. The largest item contained in it is one of over $6,000,000 from the Canadian Northern Railway Company. I asked my hon. friend the Solicitor General the day before yesterday to tell me what was included in that $6,000,000. My hon. friend has said that to the best of his information a certain portion of it had relation to moneys that had been paid out on equipment, but he could not say definitely in regard to the matter. He was also unable to give to the House the items which make up that $10,000,000.


Arthur Meighen: Does not the hon.
gentleman know that floating liability simply means the current liability shown in the books of the company, and that it varies from day to day not only in its amount but as regards its apportionment between the creditors. I have already informed the hon. gentleman that this amount is largely due to the hanks for payments made in dis-

charge of the ordinary everyday liabilities of the company.


Edward Mortimer Macdonald: My hon. friend would dispose of it by saying that yiey are the everyday liabilities of the company, but the company has not floating liabilities to the extent of $10,000,000. They already owe to the 'bank $20,000,000.


Arthur Meighen: No.


Edward Mortimer Macdonald: Yes, they do, for temporary loans.


Arthur Meighen: That is right, I was not thinking of the temporary loans.


Edward Mortimer Macdonald: The Solicitor General has had no statement prepared by his auditors in regard to this amount, and he can give ns no information beyond what he furnished yesterday. No inquiry has been held as to whether these liabilities were properly or improperly contracted, as to how they originated, and whether that prudence has been displayed in the management of the railway which would warrant the country in taking notice of these liabilities. Take the item as to equipment trust. My hon. friend has succeeded admirably in beclouding the House and the committee as to where this concern stands in regard to equipment trust. The discussion that he and the hon. member for Calgary had in regard to this question was the inception of this beclouding of the issue. The hon. member for Calgary read from the report of the Canadian Northern Railway Company showing that it had a surplus of so much money, and the Solicitor General said that the surplus went into equipment trust, and he has been talking about equipment trust here and there all through this debate. Whenever my hon. friend could not explain an item he would say: Oh, that money has gone into equipment. In regard to this very item of $6,000,000, he said that a large part of it had gone ink* equipment. Do you not think it would be wise and prudent, Mr. Speaker, to have an investigation into this question of equipment trust? We have this condition: the Canadian Northern Railway Company gets its equipment through the Imperial Rolling Stock Company; the Imperial Rolling Stock Company gets it from Mackenzie, Mann and Company, Limited; and Mackenzie, Mann and Company, Limited, purchase it from the car makers. It is the usual thing for railways to have a rolling stock company, but in other railways the equipment is purchased from the car makers in the first in-

stance and not through the medium of sub-contractors like Mackenzie, Mann and Company, Limited. It would be most interesting if an investigation were held to ascertain whether Mackenzie, Mann and Company, Limited, got any percentage on this equipment as it passed through their hands to the Imperial Rolling Stock Company.


Arthur Meighen: The auditors have investigated that and found that Mackenzie, Mann and Company, Limited, made no profit on the transaction. In passing, may I say that the Intercolonial railway of Canada operated by this and the late Government buy some of the parts of their equipment direct from the makers instead of through the car trust, just as the Canadian Northern do because they can get it more cheaply that way. The makers of this equipment have adopted a system whereby they will sell portions of their equipment more cheaply directly to the railway companies than to the car makers, and that is the only reason why Mackenzie, Mann and Company, Limited, bought the equipment themselves.


Edward Mortimer Macdonald: pay wthat they owe to the bank when we ask that they will pay the $10,000,000 of liabilities, the items of which we know absolutely nothing? I repeat, how much more imperative does it become, from the standpoint of the good faith of the country, apart from any technical question of law, as to our partnership relations, after all that has been done, and after we agree to give this company a guarantee of $45,000,000 more on their bonds, that we should have the fullest information with regard to the affairs of the company? Why should we not investigate and find out the value . of the Inverness and Richmond railway, why should we not find out the value of these railways in the Niagara district, and of the radial railways running west from Toronto? Why should we not find out the value of the iron deposits and the iron works of these gentlemen up at Port Arthur, and why should we not find out the value of all the other various and widely-distributed interests of these gentlemen all over Canada? We say that we .should stop for a moment and ascertain these things, and if we find that the country can get more security before it doubles its debt, we should take it. l>o you mean to say that we should vote down a resolution which would bring about that good result? Yet that is the proposition of the Government and nothing more on this question.
Then my hon. friend the Solicitor General yesterday took a1 most singular position. He said that he did not regard it as being of any importance to the Canadian people what the assets and liabilities of this joint stock company, known as Mackenzie, Mann and Company, Limited, were. In fairness, let us consider what is involved in that proposition. Mackenzie, Mann and Company, Limited, are one of the important constituent factors in this whole proposition. They are called 'the contractors,' they sign the agreement, they become parties to the trust deed. In dealing with this railway proposition the Government say: we will not ask Mackenzie, Mann and Company, Limited, to give us any statement of their affairs; we do not care whether they are bankrupt; we do not care what their last statement was, or whether their liabilities exceed their assets; to us it is a matter of perfect indifference. That is the position which my hon. friend the Solicitor General takes. He indicated that he had not even asked the joint stock company, Mackenzie, Mann and

Company, Limited, for a statement of their affairs. The logic of my hon. friend, from a business standpoint, cannot stand inspection for a moment. There are plenty of business men on both sides of this House. There is not one of them who is engaged in any active business in this country who would form a contractual relationship with any joint stock company in which the amount of the liability involved in that relationship amounted to $30,000,000, who would not ask the joint stock company to give him the last statement of their affairs, showing how they stood, which statement they would require to be certified by auditor s of probity about whom there was no question. Yet, the Government simply say: we will not ask; we do not think it is of any importance and we do not care.
Is there not ample room for an investigation in the interests of the country in reference to this important feature of the matter? Apparently that whole phase of the question has been disregarded by hon. gentlemen who undertake to tell us that there are some people in this country who are owed some money; therefore, disregard every other consideration, vote this whole proposition, impose this tremendous liability on the country, simply accept it and pay this $21,000,000. A singular feature in regard to this $21,000,000 is that the Government did not know whether it is to form part of the $100,000,000 until after this debate had gone on for three or four days. When I had the honour to speak upon the motion I made at the inception of this discussion, I asked the Solicitor General to let us know categorically and positively whether this $21,000,000 was to come out of the $42,000,000. The position my hon. friend took in regard to the matter is interesting. The forty-two million dollars ought to be the yield of the $45,000,000, leaving $58,000,000 besides that, and my hon. friend's position was this: it will come out of either one of them but I do not know which. After we had discussed this question my hon. friend went out and made it his business to find out where we were on the matter and he came to me a day or two afterwards and told me that he was able to give the assurance for the first time that the money would come out of the $42,000,000 or the $58,000.000. He does not even now take the position that the $21,000,000 is coming out of the $42,000,000. He simply takes the position as between the $42,000,000 and the $58,000,000 that as the Government are going to have something to do in regard to controlling the expenditure of this money, there will be

some place out of which that $21,000,000 will come.
Let me suggest to the House a possibility in connection with this matter. After this measure goes through and the parties who are disposing of these bonds go- to England, the first $45,000,000 of bonds which have been secured -by this guarantee, and which issue will he made in pursuance of this measure, will naturally be the securities which first will he sought after by any underwriters who want to deal with the matter. They will have to be sold first. The credit of Canada is good for $45,000,000 at this juncture, though what it will be in a year or two, if Providence permits this Government to remain in office, Heaven only knows. Forty-five million dollars may be sold, but where are they going to sell the $58,000,000? The London bankers will say: We will make you an offer for the $45,000,000, but we want to know about the $58,000,000. Part of it may be guaranteed by the provincial governments, but the rights of these provincial governments are being wiped out under this measure. Henceforth all legislation in regard to these railways that are now being declared to be for the general advantage of Canada must emanate from Ottawa. At this moment the particular section of the resolution relating to this matter stands suspended, like Mohammed's coffin, between heaven and earth. The local governments and the federal Government are unable to say just what the relation of the provincial legislatures is to be to these securities that are at present in existence. With that condition of affairs, are the gentlemen of the commercial markets of the world going to snap up the $58,000,000 worth of second-class securities? The consequence will be that the proceeds from this $58,000,000 will be delayed. Mackenzie and Mann, who will not say at this moment that they will pay their debts out of the $42,000,000, the supposed net proceeds of the $45,000,000, tell the men who are wanting this $21,000,000: When we are able to sell the $58,000,000 worth of bonds, you will get your proportion of it.


Robert Laird Borden: As has been explained
several times already, part of the $58,000,000 is subsidies and a considerable part of the balance consists of the proceeds of securities already sold and now in the hands of the Minister of Finance and Receiver General, but not yet available, because not yet earned. I understand that about $29,000,000 of the $58,000,000 is in that position.


Edward Mortimer Macdonald: My hon. friend has not disposed of all the securities that are outstanding. I am aware that there are certain Dominion guarantees upon a portion of the securities forming part of the $58,000,000, but that guarantee does not apply to the whole of it. There are securities that have provincial guarantees, and there are unguaranteed securities as well. You have in that $58,000,000 those three classes of securities and therefore the whole of the $58,000,000 and the whole of the $45,000,000 must be realized before these creditors can look for payment of the money owing to them. Who is going to buy securities that rank after securities of this Dominion and of the provinces ? Therefore, unless this measure is amended, in order to protect the men who have put $21,000,000, either in work or in material into this enterprise, who are now creditors of this entire concern, these men have no guarantee that they will get their money until the $58,000,000 worth of securities is sold. My hon. friend the Solicitor General is entirely beside the mark when he speaks about the investigation into the cause of the delay of these men being paid their debts. If my right hon. friend follows the suggestion of the Solicitor General, it will be two or three years before they are paid the money now owing to them, unless the financial situation in London improves in such a way in the interest of Canada that our securities will be received with greater favour than now, when public confidence in Canada and things Canadian has been lost since this Government came into power. It will be impossible under existing circumstances to sell off in a short time a hundred million dollars' worth of securities from guaranteed down to unguaranteed, unless you have a combination of underwriters of the strongest possible character, either English or European, who will undertake to take care of the bonds. I say further that, so far as this House stands at the present moment on the documents before us, without any special declaration in the resolutions guaranteeing the payment of the $21,000,000, we shall have to wait until all these securities are sold before the creditors of this company can get all the money that is owing to them. Yet, forsooth, we are told that we must not have any investigation into a measure which postpones for two or three years the payment of this money to the people who need it. We are told that hon. gentlemen should not have t'he temerity to ask that Parliament should stop and hesitate 'and


Mr. NESBITT:: I hon. member for Hamilton, voted for the amendment.


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


Mr.   MARGIE@: I was paired with the hon. Minister of Justice. I would have voted for the amendment.


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


Mr. LEMIEUX:: I was paired with the Postmaster General. I would have voted for the amendment.


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


Mr. BUREAU:: I was paired with ihe Secretary of State. I would have voted for the amendment.
(with the exception of sufficient shares to qualify the directors) to the Receiver General to be held by him in trust for His Majesty.
(c)	For the holding of the said stock by His Majesty for the period of five years.
(d)	To provide that in case no default is made by the company in the payment of interest on the bonds of the company to be guaranteed by His Majesty as provided by said resolution, and in case the conditions of the said resolution and the agreement therein provided for shall be in all other respects carried out during such period of five years, the said stock shall be transferred to Mackenzie, Mann and Company, Limited, or their nominees, unless His Majesty through the Governor in Council should exercise the option hereinafter mentioned.
(e)	To provide that the Governor in Council shall have the option at any time within such period of five years to acquire the absolute ownership of the said stock and of the said Canadian Northern Railway system, and of all the constituent and subsidiary companies mentioned in the said resolution or proposed agreement, subject to existing encumbrances and to said arrangements regarding the conversion of said income charge convertible debenture stock, for a price to be fixed by arbitration, but not to exceed the sum of $30,000,000, being the par value of such stock so to be reduced as above provided.
He said: There is a clearly defined difference between the proposition put forward by the Government and the amendment to which I respectfully invite the consideration of the House.


Mr. DOUGLAS:: I was paired with the Minister of Agriculture. I would, have voted for the amendment.


Mr. KAY:: I was paired with the Minister of Militia. I would have voted for the amendment.


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


Mr. NORTHRUP:: I was paired with the hon. member for Stanstead. I would have voted against the amendment.
Amendment (Mr. Ross) negatived.


Hon.   W@: I move:
That all the words after ' that ' be struck out and the following words be inserted in lieu thereof: 1 That said resolution be not now concurred in but that it be referred back to the Committee of the Whole House with instructions to amend the same in the following particulars:
(a)	To provide for the reduction of the issued capital stock of the Canadian Northern Railway Company to $30,000,000 par value, subject to the right to make provision for an addition thereto of an amount not exceeding $25,000,000 if it should at any time become necessary for the purpose of exchange of the income charge convertible debenture stock mentioned in paragraph 12 of the said resolution.
(b)	To provide for the transfer of such stock
277i


Arthur Meighen: Would the hon. gentle-"man say what has become of the last clause of the amendment of which he gave notice?


Mr. PUGSLEY:: I will explain that in a few minutes; or, perhaps, I had better refer to it now. After I gave notice to my right hon. friend the leader of the Government that I would move an 4 p.m. amendment in those terms, on further consideration I came to the conclusion that it would be desirable to strike out the last clause. By that clause, if the House had approved it, the Government would have been bound to leave the management of the road in the hands of the Mackenzie and Mann Company, Limited. Upon fuller consideration I thought it would be better that the Government's hands should not be tied in that respect. By other provisions of the amendment, the full control of the company is vested in the Government, if the Government chooses to exercise the control. The amendment provides that the whole capital stock shall be vested in His Majesty for a period of five years. There would, of course, have to be enough stock in the hands of the directors to qualify them for their position, but the complete control would be in the hands of

the Government. If the Government thought right, they might leave that control in the hands of Mackenzie and Mann or their nominees.
As I have said, this amendment is in principle entirely opposed to the proposition put forward by the Government. I think we might well discuss it, apart altogether from any personal considerations, so far as Mackenzie and Mann are concerned. I would venture to hope that we might discuss it entirely aside from any partisan bias. For this is a question of enormous importance to the people of the country, not only to those who are living in Canada to-day, but to	those	who are	to comeafter those	who	are now uponthe stage	of	Canadian	affairs.The Government is proposing, most unwisely, I think, to go into partnership with Mackenzie and Mann. W-e know that iso far as the Canadian Northern railway is concerned these gentlemen started out with different ideas from those entertained by other great railway corporations both on this side of	the	Atlantic	and theother side. Ordinarily, when it is proposed	to	build a	railway,
there are two ways by which it is expected that means may be obtained for construction. One is by the issuing of securities and the proceeds of land grants, in case such grants should be made, and the other by issuing the shares of the company to form its capital stock. Hon. gentlemen know that there is to-day a very large amount of the capital stock of the Cam adian Pacific railway outstanding which represents money to a large amount that has actually gone into the construction of the railway. Messrs. Mackenzie and Mann evidently started out with the idea that they would not allow the stock of the Canadian Northern railway to be circulated, would not place it upon the market, would not try to get people to invest their money in it and become shareholders with them in the enterpris-e, but wouild endeavour to construct the railway entirely out of Government subsidies, out of the proceeds of guaranteed bonds and out of the sale of lands which might be granted to them from time to time. Up to the present time they have held control of the entire capital stock of the company. That I am right in this appears from the return that has been laid on the table in which it is stated that the total issue of capital stock of the Canadian Northern railway is

$77,000,000 of which $7,000,000 is held by the Government under the .legislation of last session and $70,000,000 by Mackenzie, Mann and Company, Limited, and their associates. Now it is proposed by the Government that His Majesty, represented by the Government and on behalf of the people of Canada, shall go into partnership with Mackenzie and Mann in this enterprise. It is very important to bear that clearly in mind. The condition of affairs to-day is in no way different from what it would be if they were just beginning this undertaking and the proposition were made to the Government to go into the undertaking and to engage in the construction and operation of a railway extending across the continent in which His Majesty would be represented by a two-fifths interest aind Mackenzie, Mann and Company by a three-fifths interest. That is what is proposed to-day. But the condition is even worse than it would be if we were at the commencement of the enterprise. The Canadian Northern Railway system has enormous obligations amounting to upwards of $300,000,000, the interest on which must be provided for. Under the management of Mackenzie, Mann and Company, Limited-whether or not that management is to blame for it-this enterprise to-day is practically in a condition of bankruptcy. The Government say to Mackenzie, Mann and Company, Limited: we are prepared now on behalf of the people of Canada to join with you and to become partners with you in this, undertaking; to bear with you its responsibilities and to share with you its profits. It makes no difference that the company in which they are to become a partner is an incorporated company. In former times companies were incorporated without a limited liability; in many cases they were organized without any incorporation at all. The only object of incorporation is that shares may 'be issued and distributed and the interest divided, and that there may be a liability limited to the amount of the shares held by each individual shareholder. The shareholders are exactly in the position of partners. They are obliged to share the losses, although they are not responsible to the public for losses beyond the amount of the stock which they hold, and they are entitled to a share in the ptofits in proportion to the amount of shares which are held by them. Although in this case His Majesty may say, through the Government of Canada: if this enterprise

goes down we do not hold ourselves responsible-just as Mackenzie and Mann might say 'because of the limited liability which is imposed by the statute incorporating the company-yet in all other respects the Government and Mackenzie and Mann are partners. So far as the management of the company is concerned, they are partners; so far as the right to share in the profits is concerned, they are partners. We are asked to authorize the entering into a partnership of the Government with Mackenzie, Mann and Company for the ownership and operation of this railway. It has been said that as the Government is in a minority, there will be no responsibility so far as the management is concerned. Sir, I deny that, the government of a country are in the position of trustees for the people whom they represent; the Government of this country are the trustees of the people of Canada and the moment they take property in this company, represented by stock of the par value of $40,000,000, having the right to vote for directors, having the right to have their nominees elected to the board of directors, the duty is cast upon them of watching carefully the interests of this company on behalf of the people for whom they are acting as trustees and of taking a part in its management. If that company goes to the wall, the people of Canada cannot escape the moral responsibility of standing behind the undertaking and seeing that people do not suffer through the operations of this railroad .in the future.
From what I have heard, I believe that among the business and financial men of this country and among the people generally, there is a determined and unalterable opposition to the Government's going into partnership with Mackenzie, Mann and Company in this enterprise. As I said the other day, if it is desirable to aid the Canadian Northern system, and I do not dispute that it is desirable, let that aid be granted upon its merits. The only sound reason for granting aid is that it is desirable that the undertaking shall be carried to completion so that we shall have another transcontinental railway extending from the Atlantic to the Pacific. Forty million, dollars of watered stock is to be laid away in the treasury in the expectation that at some time or other, through the tolls which will be paid to this railway company by the people o! Canada, there may be derived a revenue to the treasury of the Dominion. Surely that ought not to be a consideration influencing this Parliament and the people
of this country in approving the proposed action of the Government. Hon. gentlemen have argued that that is a great advantage; at the last session of Parliament the Minister of Finance put forward the same argument. He said: we are giving to the Canadian Northern Railway Company a bonus of $16,000,000 in cash, but we are getting $7,000,000 of paid-up stock which is liable to be worth a considerable amount by and by; that is the advantage which we are getting for the people of Canada. I say with reference to the action of Parliament last session, as I have said with reference to the proposed action this session, that aid to the Canadian Northern ought to be given entirely independent of and entirely irrespective of any transfer of common stock to the Government. The amendment which I propose, if adopted, will do away altogether with any idea of a .partnership. It will give the Government for a few years the control of this railway by means of the stock, which control may be exercised by active participation or otherwise as imav be deemed expedient from time to time. The position of creditor and debtor is retained. We say to the Canadian Northern Railway Company: We are willing to aid this enterprise, because we believe that it is to the advantage of the people of Canada that it should be carried to completion. iBut for a few years, until there lias been fully demonstrated your ability and the ability of the company to pay the charges which are against the property and to pay the interest upon the debentures amounting to $45,000,000 which the Government proposes to endorse for the Canadian Northern; until it is shown that you can meet promptly all the obligations which you engage to meet under this agreement, the whole stock of the company, the whole control of the company, shall remain in the hands of the Government. I think that is desirable, because in' ca^e there should be default the Government would be enabled at once, as the holder of the stock, to take steps for the purpose of exercising its right to control and of taking charge of the affairs of the company. The amendment which I propose provides for the holding of the stock for a period of five years. It provides also that the stock shall be reduced to $30,000,000. Today it is $77,000,000 and contains a great deal of water. It has not been shown to this House, and I do not for a

moment suppose that anybody believes it to foe true, that Mackenzie, Mann and Company have put any substantial amount of money into the undertaking. This vast sum of $77,000,000 is practically all watered stock. It may be said that it has been issued by authority of Parliament. It has not been in the sense in which Parliament declares stock to be paid up. That amount of stock, I grant you, has been authorized; but it has been paid up very largely by the manipulation of having Mackenzie, Mann and Company, Limited, as contractors, and issuing, through their board of directors, the stock to them as fully paid up stock in consideration of their engaging to construct the various portions of the system. That is the way in which the stock very largely has been secured to be issued as fully paid up. But as to the actual payment of money into the enterprise in consideration of the issue of stock, so far as we know, so far as this Government have been able to tell us, so far as we believe, there was no substantial amount of cash* put into this undertaking to represent this capital stock. As I have already said, the whole idea-and I am not stopping now either to approve of it or to criticise it-of those gentlemen who have been promoting this railway has been that they would construct it without calling upon the capital stock; that they would lay that capital stock away in their own treasury and build the road out of the aid which would be given by the public in the way of money and land grants, and out of the proceeds of securities which the company might issue. It may be asked why do you name $30,000,000? There are two reasons why that should be done. The first reason is that the issued capital is $77,000,000. When the Government took the $7,000,000 at the last session, Parliament was assured that under ordinary circumstances the company would be able, with the amount of $16,000,000 which was then voted to the company, to complete the system without coming to the country for additional aid. But now it is proposed to add to the securities, and thereby add to the fixed charges, the enormous sum of $45,000,000. Capital is raised in two ways, by the issue of securities and by the issue of capital stock and now that it is proposed not to use the capital stock at all for the purpose of raising money to complete the system but to issue these securities to the amount of $45,000,000 to be en-
dorsed and guaranteed by the Government of the country, I say that tlhe, capital stock ought to be reduced to an amount equal at all events to the amount which is to be added to the charges upon the road which are secured by guarantee. If yon take $45,000,000, the amount of the charge which is now being created, from the issued stock of $77,000,000, it would reduce it down to $32,000,000. I have put it at $30,000,000. There is not a very great deal of difference because, after all, the question of the amount of capital stock is not very important, so far as Mackenzie, Mann and 'Company, Limited are concerned, or so far as the Government is concerned, except that in case the Government decided to take the road over, the amount Which the arbitrators would allow would be limited to the capital stock, and except in so far as it might influence the Board of Railway 'Commissioners in case an application were made to fix tolls, when undoubtedly they would have reference to the capital stock. But the difference, ae I have said, between $30,000,000 and $32,000,000 is not very great. I suggest that it should be made $30,000,000 for another reason, that there is nothing in the way of physical property of a value to represent anything more than $30,000,000. Nobody will contend that. This whole system, to a large extent, is being reorganized; the different companies are being consolidated as far as they can be consolidated and capital stock in the parent company is being issued. It ought to be for such an amount as will fairly represent the value of these properties over and above the securities or charges which are now standing against them. There is no man in this House who is familiar with the circumstances but will say that $30,000,000 is an ample amount at which to fix the capital stock, because it represents and more than represents the value of the equity of redemption of the company in this property.
You may ask what is the object of making a reduction. It is this, that in future, if the capital stock is at $100,000,000 which is almost entirely watered if not all watered, it would necessarily have its effect upon the Board of Railway Commissioners when they would come to determine what tolls should be allowed. That is an important consideration for the people of this country. More than that, if the capital stock is authorized by this Parliament at the enormous sum of $100,000,000, the investors to whom Messrs. Mackenzie, Mann and Company, Limited, may offer that stock would natur-

ally siippos-d that, in the opinion of this Parliament, it had a value behind it and that it ought to have a value in the markets of the world at least at all events approaching an equality to the value which Parliament put on it when it declared that it might be issued as fully paid up stock. Those are two reasons, I think, that ought to be regarded as sufficient and that is why I think it desirable to fix $30,000,000.
I am entirely opposed to the plan of the Government of increasing the capital stock. I have heard in the past quite a number of gentlemen on the other side of the House complain of the practice of companies issuing great quantities of common stock without any consideration, simply as watered stock. We know that Public Utilities Commissions have been appointed in the various provinces to make examination into the issue of stock by companies to prevent that practice. We know that stock is disposed of among innocent people for value, and they naturally expect a reasonable return upon the par value of the stock. I do not think I need argue this any further because it will appeal to every one as being reasonable that instead of increasing the stock it ought to be reduced down to a figure which is approximately representative of the actual value of the equity of redemption in these undertakings. The amendment provides that in case no default is made by the company in the payment of interest on the bonds to be guaranteed by His Majesty as provided in the resolution, and in case the conditions in the agreement in all other respects shall be carried out, then, at the end of the five years, this stock shall be returned to Mackenzie, Mann and Company, Limited. It will be borne in mind that included in the $30,000,000 which will go back to Mackenzie, Mann and Company under those circumstances is the $7,000,000 issued to the Government in pursuance of the legislation of last session. I think that it ought to go back. I think it was entirely indefensible for the Government to take it; it ought not to have influenced the Government or Parliament in their action in making the grant of $16,000,000 to the Canadian Northern Railway Company.
I think it ought to form part of the $30,000,000, and if Mackenzie, Mann and Company, Limited, or the Canadian Northern railway, which is the same thing, pay the interest upon these debentures and the charges upon the property, and if they carry out the agreement in all other respects for a period of five years I think that would test their ability to carry out the undertaking, and the $30,000,000 of stock might then be handed over to them subject, as the amendment provides, to the Government having the right at any time within the five years to take over the entire stock of the Canadian Northern and to become the entire owners of the Canadian Northern and its constituent and subsidiary companies subject to the encumbrances then existing against them. Does not my amendment propose to deal fairly with Mackenzie and Mann in the event of the road being taken over ? It provides that the value of the stock shall be fixed by arbitration, but that it shall not exceed the $30,000,000 which is to 'be the par value of the stock. It surprised me to hear the Solicitor General make the statement that my amendment if adopted' would lead at once to a receivership and to this company's going into bankruptcy. I was astonished at that remark. What does it mean, Sir? It means that Mackenzie, Mann and Company, Limited, who have been aided already by the people of this country to an amount exceeding $300,000,000-


Arthur Meighen: That is only two and a half times too much.


William Pugsley: How much is it then ?


Arthur Meighen: About $131,000,000.


William Pugsley: Including land and subsidies.


Arthur Meighen: Including everything the country has given to the Canadian Northern railway.


William Pugsley: Including what the provinces have given ?


Arthur Meighen: Yes.


William Pugsley: My hon. friend may be right, but I was told differently. I will take my hon. friend's figures. The statement of my hon. friend is this: Mackenzie, Mann and Company, Limited, have gone into this enterprise as their own personal undertaking although under the name of the Canadian Northern Railway Company. They come now to Parliament and ask for a $45,000,000 guarantee and they ask for that without putting up a dollar of their own 'security, and without telling Parliament what is the wealth of either of them to-day, or what is the wealth of Mackenzie, Mann and Company, Limited; and that if Parliament were to say, we will grant your request but in granting it we make the condition that you shall be willing to have your stock reduced to $30,000,000 and the Government
43a6

shall have the right at any time within five years to take over that stock subject to all the liabilities which are now upwards of $300,000,000-my hon. friend will not contradict that-and we will pay you what arbitrators, mutually chosen, shall decide your stock is worth, but the amount shall not exceed $30,000,000, we will hand back the $7,000,000 of stock which you gave us last year, we will let that go into the pot-my hon. friend the Solicitor General tells this House that if that proposition were made to Mackenzie and Mann they would reject it with indignation and would allow this entire system to go into the hands of a receiver. Mackenzie, Mann and Company, Limited, may be masters of this Administration, but they are not the masters of the people of Canada, and if they were to say that to the Government I would say to Mackenzie and Mann: If you take that attitude, make default if you like upon your bonds and the Government of Canada will immediately take steps to enter into possession under the securities which we have guaranteed, and the different provinces can be trusted to do the same thing. I am inclined to think it might not be a very bad thing for this country if that position were taken towards Messrs. Mackenzie and Mann. According to the argument of my hon. friend, the more deeply Mackenzie and Mann get the country involved the stronger argument they can make to Parliament because they can terrify Parliament and the Government, according to my hon. friend, by the threat that they will lie down and let the country do the best it can with the property which they have created through public aid. I do not believe that Mackenzie and Mann would take that attitude. I believe that if any one were to offer them $15,000,000 apiece in cash for their equity of redemption in this property they would gladly take it. At all events, if they would not take it they would be bigger fools than I imagine them to be.


Arthur Meighen: Would the hon. gentleman recommend that the Government make that offer now?


William Pugsley: Not to-d'ay, no, because the people of Canada have not authorized.* this Parliament to commit them to government ownership of the Canadian Northern system. I do not ask Parliament to give power to the Government to take over the road, but what I say is that the idea of government ownership and operation of a transcontinental railway system is growing, and, I believe, growing rapidly in this

country. If my amendment were to carry, no doubt the matter would be discussed in the public press and from the public platforms of this country, and after the next election we should know very well the views of the people of Canada on government ownership. Strong argument could be made from the fact that we have in eastern Canada a government-owned and operated system, and that we have in the West, extending from the Saskatchewan river up to Hudson bay, a government road which will be some 500 miles in length. The people might very w*ell say that it is desirable in the public interest that this system should be extended from the Atlantic to the Pacific. ,1 do not propose to bind the Government or Parliament upon the question of government ownership, but, as Messrs. Mackenzie and Mann admit to-day that they are in a helpless condition, and that, although this is the fourth time within the last four years they have come to this Parliament for aid, yet they must come, and that, unless the Government guarantees their bonds to the extent of $45,000,000, they will not be able to finish the undertaking, I say that under those circumstances it would be doing no injustice to Mackenzie and Mann to say: We are willing to guarantee your bonds, but you must give us an option on your equity of redemption in the road, in order that if, at any time within five years, the people of this country should consider it desirable to take over the road, they may-do so at a price to be fixed by arbitration, but not to exceed the amount of $30,000,000. Tf this enterprise is a failure the Government will be called upon to take over the entire system. We hope it will not be a failure. I have the greatest possible confidence in this country, and more particularly in the West. You are aware, Mr. Speaker, that it was practically only in 1900, some four years after the Liberal party came into power, that the West began to develop, and that tihe people of the world began to realize the resources of our western country. .It is a remarkable fact that that knowledge was first brought home by immigrants who came in from the country to the south of us. It was then that they first discovered the richness of the great province of Saskatchewan and they began to come into Canada by hundreds and thousands and tens of thousands. That province, or at all events a great portion of it, that for a century or more had been looked upon as

being the northern extension of the great American desert, was discovered to be land of the greatest possible fertility and that land which was thought to be a desert is regarded to-day as being the very garden of the Northwest. So it is with the other Western provinces; business began to increase in 1900, and they developed rapidly from that time on. What has been the history of the Canadian Pacific railway? In 1900, although that road had been in operation for fifteen years right across the continent, its total gross earnings were only $36,000,000; in the short period of thirteen years its earnings have grown from $36,000,000 to $130,000,000 or nearly 400 per cent. 'That shows you what the country is capable of.
I have the greatest possible hope that, the present period of depression will speedily pass away, that immigrants will again begin to come into this country in as great number as before, that business upon the Canadian Northern railway will revive, and that before very many years it will be a success. But what is to make it a success? It is because this Government is pledging the credit of the people of Canada to an amount of $45,000,000. Is it not reasonable that in asking the Government to do this, in asking them to put upon a sound basis an undertaking which to-day is bankrupt, the company should be willing to say to the Government: in consideration of your doing this, we will grant to you an option, which you may exercise at any time within five years from this date, to take over the property at a fair and reasonable valuation to be fixed by arbitration. I do not think that if that proposition were made to Mackenzie, Mann and Company they would reject it. I do not think they would dare to reject it. I cannot imagine that they made that threat to my hon. friend or to the Government and I rather think it is just simply a voluntary statement on my hon. friend's part intended to influence the House against the amendment that I am proposing.
I perhaps ought to explain in regard to the provision I am making in the amendment, with reference to the $25,000,000 of income charge convertible debenture stock. The House will remember that it has been stated that there is an issue of $25,000,000 of income charge debenture stock, the holders of which have the right, on notice to the company, to convert that stock into $25,000,000 of common stock at par value. I do not think there will be any likelihood
in the near future of that right being exercised, but still, suppose Parliament were to have the good judgment to act upon the suggestion which I humbly venture to submit to the House and accept my amendment, provision would have to be made for the issuing of this $25,000,000 of stock in order to keep faith with the holders of the income charge convertible debenture stock in case they should decide to exercise the option. That is the only reason why I have made reference to it in the amendment.
I am not going to detain the House because I realize that the matter has been thoroughly threshed out and that the House would like to come to the decision of the various questions which may be raised by amendment, as speedily as possible. I thought it desirable to explain what is intended by the amendment. I just wish to say one word in answer to my hon. friend the Solicitor General, who took occasion to mention my name when he was addressing the House before recess. He said that we complained because the Canadian Northern townsite of Mount Royal, at Montreal, had not been included in the securities which the Government propose to take. Then he said:	How
inconsistent the Opposition are; at one time they say that the Government should not speculate in the stock of the Canadian Northern, and then they want us to' speculate in Canadian Northern townsites. My hon. friend did not do himself justice when he made that remark,	particularly in	view	of	thefact that he	made a strong	point	to	theHouse that we were getting security upon the equity of redemption in the common stock of the Canadian Northern Town Properties Company, whose whole property consists of interests in townsites, who have no other assets, no other property, the security upon which my hon. friend thought it of such importance for the Government to take that	he devoted a special	clauseto it, which	clause will be	found	in	the
resolution. There is the difference between the hon. gentleman and those of us who have been discussing this matter from our standpoint. The hon. gentleman seems to have taken for the Government just those townsites which Mackenzie, Mann and Company, Limited, chose to give him, and those are the townsites which to-day are of the least value, but when it comes to the great, and the most valuable, townsite in what will be the heart of the city of Montreal,

in the favourite residential part of Montreal, the hon. gentleman says: oh, do not find fault with us for leaving that out, because that would be speculating in town-sites.


Arthur Meighen: Because they do not
own it.


William Pugsley: That is not the argument that the hon. gentleman made yesterday. The argument that the horn. gentleman made yesterday was that we should not speculate in townsites. The hon. gentleman thinks it all right to speculate in town-sites that are of little value-townsites in Manitoba, Saskatchewan and Alberta-


Robert Laird Borden: Port Mann, for instance.


William Pugsley: I am told that they
have milked Port Mann pretty well. The Government ought to have taken security upon all the new (town-sites in British Columbia. We do know that quite recently the Grand Trunk Pacific put Prince George on the market and they are said to have realized $3,000,000 from that one townsite alone. But as my hon. friend from Humboldt (Mr. Neely) says, Port Mann was milked pretty well by Mackenzie, Mann and Company before they venture to offer it to the Government. Let us take for a moment the townsite at Montreal. The hon. the Solicitor General says that the Canadian Northern does not own it. I know, iand everybody else in Montreal knows, that when it was proposed to run the tunnel through Mount Royal, it WU3 recognized that it would bring all of that district upon the northern side of the mountain within five minutes of the business portion of the city. The land is beautifully situated. It was announced in the newspapers that a gentleman from Winnipeg, under the direction of Messrs. Davidson, MoCrea. and Company, who handle all the townsites and all the land of the Canadian Northern Railway Company, would come to Montreal to take charge of it. Messrs. Davidson, MoCrae and Company opened their offices in Montreal and sold the land as being the land of the Canadian Northern. It is splendidly situated just in the vicinity of where the railway will enter the tunnel under Mount Royal. I venture to say that that townsite is worth $20,000,000.
I repeat that it is worth $20,000,000. I venture to say that they have taken or will take that much money out of it. Let me

ask you, Mr. -Speaker, whether, if Mackenzie, Mann and 'Company, Limited, -have put the proceeds of that townsite into the pockets of themselves and their associates instead of into the Canadian Northern Railway Company, that is playing fair with the people of this country? These townsites are made valuable by the railway. What would Fort George townsite be worth but for the Grand Trunk Pacific railway? What would this townsite north of Mount Royal at Montreal be worth but for the Canadian Northern railway? It would be valuable for very little more than simply farm lands. Yet by reason of the Canadian Northern building this tunnel through the mountain, thus bringing all this district within five minutes of the /business centre of the city of Montreal, this townsite has been made of this enormous value. The only inference, however, to be drawn from the remarks of my hon. friend, taken in connection with the fact well known to the people of Montreal that this townsite is handled as a Canadian Northern townsite, is that Mackenzie, Mann and Company, Limited, have not put it into the hands of the Can-dian Northern but have kept in their own hands what should have /been the interest of the railway. That matter ought to be investigated. My hon. friend says the member for St. John ought to give us the information about it. I am not in touch with Messrs. Mackenzie, Mann and Company, Limited. The hon. gentleman is.; he has been for weeks, perhaps for months, in consultation with Mr. Lash, solicitor for the Canadian Northern Railway Company.


Arthur Meighen: My hon. friend misinterprets me. I have given the information. The result of my investigation is that they do not own the townsite. My hon. friend contradicts that statement. If he wishes, he can endeavour to establish his contention. If he establishes his contention in goes the townsite.


William Pugsley: Does my hon. friend
say that Mackenzie, Mann and Company, Limited, do not own the townsite?


Arthur Meighen: They do not own it. I have said so four or five times.


William Pugsley: And does he say that
they have not the larger part of the stock of the company in whose name the townsite is?


Arthur Meighen: I will make a further statement along that line. I have already said that they do not own it, and I can say

to the hon. gentleman now that their interest, in whatever shape it may be, is a fractional one and is purely speculative, and one into which, I think, having regard to the professed principles of hon. gentlemen opposite, it would be heresy itself to lead this country.


William Pugsley: The hon. gentleman is apparently able to get some information.


Arthur Meighen: I have given the hon. gentleman that information several times.


William Pugsley: No; the hon. gentleman has only told us now that that is the interest they have. What would be thought of Sir Thomas Shaughnessy and Mr. David Mc-Nicoll if, as they built railways in various sections of Canada, they looked out ahead and got the titles to the townsites in their own names or in the names of companies which they controlled, and did not let the townsites stand in the name of the Canadian Pacific Railway Company? As a matter of fact, in the West, the townsites which are created by the Canadian Pacific railway are sold and disposed of by the Canadian Pacific Railway Company. Mackenzie, Mann and Company, Limited, have adopted a different course, because I find that in the trust deed to the British Empire Trust Company all these townsites in Manitoba, Saskatchewan, Alberta and the town-site of Port Mann in British Columbia, have been declared to be the property of Mackenzie, Mann and Company, Limited. My own judgment is that my hon. friend, knowing how very valuable is this Mount Royal townsite, being able to learn, as he should be, from the slightest inquiry that it was put on the market as a Canadian Northern townsite, ought to have made the further inquiry and to have found out what was the interest of Mackenzie, Mann and Company, Limited, in that townsite.
I will not detain the House further. I submit this amendment to the judgment of the House. I hope that it will meet with the approval of the majority of the members of this House; but whether it meets with their approval or not, I am satisfied that it will meet with the approval of the majority of the people of this country.


Robert Laird Borden: My hon. friend (Mr. Pu,gsley) has gone in some detail into the whole question, which has been debated at very great length already in this House. I do not think I need follow him in like detail, and therefore I will confine myself to the main points put forward by him in favour of his amendment.
In the first place, my hon. friend, who has a policy of his own on this question, like a great many of the hon. members opposite, seems to have framed this amendment in such a way that it has the quality of fluidity in a remarkable degTee.


William Pugsley: What is that word?


Robert Laird Borden: Fluidity; it has the quality of fluidity: it changes its form very rapidly. Two days ago my hon. friend gave notice of a motion which contained this clause:
To provide that until default is made in the payment of interest or in the carrying out ofl other provisions of said resolution and agreement, or until the Governor in Council exercises such option, the nominees of Mackenzie, Mann and Company, Limited, shall he the directors of the company, and be in control of its affairs.
That portion of the proposed amendment has been dropped. Thus the motion of which my hon. friend gave notice two days ago differs from that which he moved to-day in an exceedingly important respect. In the one case, Mackenzie and Mann, through their nominees, were to have control of this road until default should occur, or until the Governor in Council should exercise the option provided for in the resolution. In the amendment he now proposes, he has entirely omitted that provision. He undertakes to explain that omission, and the substance of bis explanation, so far as I could follow him, is, that he thinks the resolution should be in its present form because it is different from that which he at first proposed.


William Pugsley: I think the hon. gentleman was not following me very closely.


Robert Laird Borden: I think that however,
closely one may follow the hon. gentleman he will receive no other impression from his speech. It is a fortunate thing that this debate was not postponed until tomorrow for by that time the resolution would probably have assumed another form, and we do not know what amendment he might have been then inclined to put forward.
This amendment in its present form means if it means anything, that the Government of Canada should undertake the completion and operation of a road which they do not own and may never own. I do not know whether my right hon. friend the leader of the Opposition is sufficiently rapid to keep up with the political gyrations of the hon. member for St. John, but he will have to take many and long steps

if he is fo keep the pace with him in this matter. In 1904, the question of public ownership was considerably discussed in this House, and we moved a resolution declaring that as the people 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 railways. 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 conclusion that such considerations forbade the Government from embarking upon any policy of state ownership of railways. He is reported in ' Hansard ' of 1904, at 5 p.m. page 1646 as speaking in defence of the National Transcontinental Railway proposals and in opposition to the proposal we advocated. After giving considerable attention to the subject, he said:
That is the reason we thought it preferable to adopt the plan we have adopted rather than go into government ownership which seems to be a fad that is rather developing on the other side of the House.
And in the campaign literature which the right hon. gentleman circulated in the general election of 1904 in defence of the National Transcontinental proposal appeared the following:
Some persons in this country are frequently told that because the State aids the railways it should own them, and to the public mind this includes the operation of them by the Government. If any one of the various railway policies contrived by Mr. R. L. Borden means the extension of the Intercolonial railway across the continent, operated as a public work, then the Government of Canada takes issue with Mr. Borden, and says that it does not believe it would be in the public interest to operate the Grand Trunk Pacific as a government work.
That was the position of my right hon. friend in 1904, and that is the position, so far as I understand it, that he has taken ever since. It has remained for the hon. member for St. John to pull forward- rather reluctantly I should judge-the right hon. leader of the Opposition into a policy

which goes much further than anything we proposed in 1904. For, while the policy proposed by the hon. member for St. John might conceivably result in the ownership of this railway system, it does contemplate and distinctly provide for the operation by the Government of a great transcontinental line of railway before the Government has any ownership in that line. That is pushing the theory of state operation a little further than it has ever been pushed in this country or in any other. Whatever may be the merits or demerits of state ownership and operation of railways I should think it would be a fairly reasonable proposition that it will be quite time enough for the Government to undertake the operation of a great transcontinental line when it has acquired the ownership of that line.
Then, what does the hon. gentleman propose further? He proposes that the proprietary interest of the capital stock of this railway shall be cut down to $30,000,000. I do not know whether he means that the stock is to be taken compulsorily or by agreement. Does he suggest that we shall confiscate the stock, or does he suggest that we shall negotiate?


William Pugsley: I suggest that it be
made a part of the agreement under which we give this guarantee, that that shall be a condition and that they shall consent.


Robert Laird Borden: And if they will not consent, he thinks we should permit the road to go into a receivership?
Mi- PUGSLEY: That is another matter.


Robert Laird Borden: Let me show how far that squares with what has been done in other cases. In 1904, the Government of which the right hon. gentleman (Sir Wilfrid Laurier) was the leader authorized the capitalization of $45,000,000 for a little over 1,700 miles of railway from Winnipeg to the Pacific coast. The capitalization of the Canadian Northern railway, under the present arrangement, cannot be increased beyond $100,000,000 without the consent of Parliament, and when it is completed it will comprise nearly 10,000 miles of railway. The authorized capitalization of the Grand Trunk Pacific on the same basis would be nearly $250,000,000. Or, if you take the issued stock of the Grand Trunk Pacific, $25,000,000, the capitalization of the Canadian Northern railway on that basis would be $130,000,000 or $135,000,000. My hon. friend speaks of this stock as ' watered stock.' He says that Mackenzie and Mann have never put a dol-

lar into this road. We have shown in this House over and over again that they have put in nearly $30,000,000 of lands to which they had as good a title as has the hon. gentleman to any of his holdings in the West. We have shown that they put in the security of townsites, and the assets of other companies that they have organized. More than that, they have put into this enterprise lands at Port Arthur which they acquired at a very low price in its early stages, and they have put these lands in at those low prices for which they were bought many years ago. There are computations which they have submitted to us, but with which I have not thought it worth while to weary the House, and which show, that at least >$40,000,003 or $50,000,000 of assets made up in this way have gone into this road. And he calls this ' watered stock.' Let us see about the stock authorized by his leader under an agreement which, I presume, he supported in 1904. The Grand Trunk Pacific was authorized to issue $25,000,000 of common stock, and it was provided that the Grand Trunk railway should hold that stock. It was authorized to issue also $20,000,000 of preferred stock. I believe that the preferred stock has not been issued up to the present time. And what we said would happen in the case of the common stock is what actually happened,-the Grand Trunk Pacific, being authorized by this Government under an arrangement made between that company and this Government, handed that stock over to the Grand Trunk Railway Company without the payment of one single dollar. In consideration of what? In consideration of the Grand Trunk Railway Company guaranteeing a certain portion, about one-quarter of the securities upon, the mountain section and all the securities beyond $13,000 a nude on the prairie section. This country, which guaranteed three-fourths of the securities upon the mountain section and undertook to implement those secur- . ities, to pay interest upon them for seven years without recourse and to lease the eastern division to the Grand Trunk Pacific Railway Company for seven years without any rental, received not one single dollar of consideration for the guaranteeing of those securities. I would like to ask my hon. friend whether or not he considers that the $25,000,000 of .stock handed over to the Grand Trunk Pacific Railway Company under the agreement made by his leader and supported by himself in 1903-04 was watered stock?


William Pugsley: I am informed by a
gentleman who should know, because he is an officer of the company, that the Grand Trunk railway, in consideration of that agreed to guarantee the bonds, and that they actually guaranteed upwards of $40,000,000.


Robert Laird Borden: The country, which has
already guaranteed $70,000,000 in oin.e mortgage and which has also loaned money to this company, did not receive any compensation of that kind. If. my hon. friend thinks that the guarantee of $40,000,000 was ample compensation, sufficient to make the stock fuLly paid up, what does he think of this stock, inasmuch as the present proprietors have put in lands of the vailue of nearly $30,000,000 and, besides that, have financed the construction of this road for eighteen years, from the time it was first commenced, placing their personal and individual credit at the command of this company for that purpose during all these years? In the construction, of a railway which costs over $350,000,000, it must be obvious to every man in this House that a very large amount of working .construction capital must be provided. Some one must either provide that money or make himself liable for it. I would ask the hon. member for the city of St. John if he believes for one moment that during that period of eighteen years these gentlemen, have not made themselves liable first and last for at least the amount which he has mentioned? They have, and, in addition to that, they have put in lands worth thirty million dollars, which they- held as their own property by a title that vas absolutely good under the law. Taking all these things into consideration, I leave it to the judgment of every hon. gentleman in this House as to whether or not the term watered stock can be best applied to the stock of the Canadian Northern railway or to the stock of the company to which I have just now alluded. I do not think there can be any difference of opinion on the subject. We all know that in this country railway stock has been issued on a great many occasions without actual payment in cash, but so far [DOT] as this stock is concerned assets of very large and substantial amounts were put into the concern as consideration for that stock.
Then in addition to what I have said, we called upon this company, upon Mackenzie, Mann and Company, Limited, and upon Sir

William Mackenzie and Sir Donald Mann, to release every possible claim they had for all agency services and commission extending over a period of eighteen years in respect of the construction of the road during all these years; and, further, to release profits, if there were any, that they could have charged in respect of the construction of the road.
My hon. friend has said that we are greatly to iblame because certain townsites are not given to the Government as security. I have not recently refreshed my recollection, but I have a distinct impression that in 1909, when the loan of $10,000,000 was made, we, the Conservative Opposition, made a motion that the townsites in connection with the Grand Trunk Pacific Company should be brought in as security to the country in respect of the guarantee then proposed to be made. In this instance we put in town-sites to the number of nearly 300. My hon. friend says that others should have been put in, but we put in every townsite that, so far as we could understand, bad any connection with the road. The one to which attention was called by hon. gentlemen on the other side of the House, Port Mann, was put in and forms part of the security, for whatever value there is in it. My hon. friend says that we are not playing fair with the people of the country because other townsites have not been brought in as part of the security. He knows how many have been included; if he can satisfy us upon any reasonable evidence that there are any others which should be brought in, we shall be glad to insist that they be included, but I do not propose to take into consideration in connection with that, mere street rumour, or such expressions as ' it is said ' or ' I am told.' Action by Parliament requires to be based upon something more than that, and up to the present time my hon. friend has given us nothing more.
My hon. friend says that he does not make his proposal with a view to government ownership or government operation at the present time; that that subject may be discussed at the next general election. I think my hon. friend has really given the key to his motion. He does not intend that this amendment shall be taken seriously, but he does desire to have something to talk about at the next general election.


William Pugsley: I should like to see it passed.


Robert Laird Borden: My hon. friend and his friends are very wonderful in one respect.

When they are in opposition they are ready to destroy any supposed evil; their zeal knows no bounds; they profess to be ready to tear it to pieces. Whether it be protection, trusts or combines, or anything else, just let them get at it; let them have the reins of power and these injustices will be destroyed at the earliest possible moment. But when they attain power, they roar as gently as any sucking dove. In 1896 they came into power; how long was it before they destroyed protection? Just before they went out of power, they were arm in arm with protection, as they were, indeed, all through their term of office. So in regard to these corporations. My hon. friends sitting in opposition on the other side of the House, are ready to spring upon any corporation, take it by the throat, shake it, make it yield up its stock, destroy it, if necessary; have no mercy upon it. But, when they come into power we find them closeted with corporations, linked up with them in every possible way, and treating them as gently as it would be possible to treat their dearest friends. So it has been in this case, because, if I am not mistaken, there was no such particular antipathy to the Canadian Northern railway, or to any person associated with that railway, in 1911, when it came here and got a guarantee of $35,000,000. If I am not mistaken, my hon. friends opposite were very good friends with these supposed buccaneers, very good friends, indeed. I do not think any hon. gentleman opposite will deny that statement; I do not think any of them would have the hardihood to do it. Mackenzie and Mann at that time were enterprising, patriotic, pure-minded Canadians, to whom the country owed a great debt of gratitude; to-day they are buccaneers. And yet, if these hon. gentlemen came into power to-morrow, they would undergo a rapid change of heart. Indeed, I think distinguished honours conferred on these gentlemen were conferred at the instance of my right hon. friend. I really am astonished that he should have it in mind to advise the conferring of honours of that kind by the Crown upon gentlemen who have been described by some of his friends as of such doubtful character. When did these hon. gentlemen opposite discover that these men were buccaneers? It is greatly to be regretted that they did not make some investigation in 1911 and make the discovery at that time. We know that all this commotion does not accurately express the state of mind of

hon. gentlemen opposite. We realize that perfeetly well, and we realize that any one of them, my hon. friend from St. John in particular, may think it desirable to play what he imagines is a profitable political game; hut I hope he will not expect that anyone, either in this House or in the country, will take the playing of that game very seriously. The people understand their motive.
The whole situation, so far as we are concerned, is this: The late Administration, in 1903 and 1904, conceived the idea of building another transcontinental railway, and they said that time would not wait, that they were impelled to undertake it at once. Later on, indeed I think in that very session of 1904, they acknowledged that the Canadian Northern railway had the status of a transcontinental railway, and in 1911 they formally stated that fact in the recital to an Act of Parliament, and gave that company aid by guarantee to the extent of $35,000,000. They thus undertook the project of building two additional transcontinental railroad S' in this country when it had a population of little more than 7,000,000. That was a very great task for a population of that number to assume. My right hon. friend gave up the reins of office, and we had to assume them. We were confronted with the prospect that the construction of this transcontinental railway would be stopped and indefinitely delayed. The situation was by no means .an easy situation, and we solved it in this way: We said, in the first place, that, so far as the Canadian Northern railway and its allied -companies were concerned, their capital must be reduced. My hon. friend the member for St. John (Mr. Pugsley) thinks that by repeating the statement, successfully controverted, over and over again, that the capital stock has been increased, he may impress some person with the idea that there is something in his assertion. Let me tell him that to-day, before this agreement is consummated, Mackenzie and Mann own $i0,-000,000 stock in the Canadian Northern railway, and $68,000,000 of stock in the allied companies. When this Bill is passed and this agreement is consummated, Mackenzie and Mann will not own either $70,000,000 or $138,000,000, they will own $60,000,000 of stock, or $78,000,000 less stock than they owned originally. They Had $138,000,000, that is the $70,000,000, in the Canadian Northern railway and the $68,000,000 in the subsidiary companies; we had
$7,000,000 of stock in the Canadian Northern railway and no more. After the agreement is consummated Mackenzie and Mann will have but $60,000,000 in the Canadian Northern railway and the Government of Canada will have $40,000,000 in the Canadian Northern railway.
It has been demonstrated over and over again to the satisfaction of every member in this House that by the method which we have taken the capital stock of that system is effectually and absolutely reduced to $100,000,000 and no more. Further than that, we have provided that it cannot be increased without the consent of Parliament. Under these circumstances it seems to me that there is no good reason whatever for the proposal of my hon. friend. We guarantee $45,000,000 for the completion of this road. The Government of Canada will make that guarantee under such conditions as will ensure that every dollar raised out of the proceeds of those securities will go into that road and after it has gone into that road we will have a two-fifths interest in all the advantages that may come out of the future success of the enterprise. In marked contrast in that respect is our proposal to any proposal- ever brought forward by hon. gentlemen opposite.
My hon. friend from St. John speaks of partnership and that cry has been repeated by almost every member on the other side who has spoken. The hon. gentleman from St. John knows as well as I do that there i& no partnership, otherwise he would have to contend that every man of the 30,000 shareholders of the Canadian Pacific railway is in partnership with every other one of those shareholders. Does he mean to contend that? I would not think he would be guilty of that absurdity, and I am glad to see he is not. But if that be not true, then it is not true that the Government of Canada is in partnership with Mackenzie and Mann, Limited, or any one else. The truth is that the Government of Canada has, by means of its assumption of this portion of the stock issue, acquired an interest in the road and in all successes and advantages which may come to it in the future; and in that regard I am sure that the people of Canada will approve of the action of this Government.
I was speaking of the situation we had to face. We had to assure the completion of this transcontinental railway and not to allow any collapse; not to allow the credit of this country to be endangered in financial markets abroad; not to allow thousands of people in this country to suffer from the

certain results of any collapse of this enterprise. What did we insist upon? We insisted that the stock should be reduced to $100,000,000 and that the companies, I think some thirty in number, comprising this system should be amalgamated so far as it was possible to amalgamate them and that the road should be brought under one management. We felt that, if the people of Canada lent their credit to the completion of this enterprise, then the people of Canada'were reasonably entitled to participate to a large etxent in its future success. I have no fear at all of the judgment which the people of Canada will pass upon the action of the Government. We have made, in respect of the aid which we now bring to insure the completion of this road, an infinitely better bargain than any of the same character ever made by my hon. friends on the other side of the House. We are absolutely prepared to meet hon. gentlemen opposite, on this question before the electorate of Canada, when the proper time comes.


Mr. W. F. MACLEAN (South York):: Inasmuch as the question of public ownership has come up in this discussion, I propose to refer to it for just a few moments, and also to the amendment of the hon. member for St. John. I agree with what the Prime Minister has just said, that it was the duty of Parliament and the Government to come to the aid of the Canadian Northern railway because of the action of the previous Government and of the previous Parliament, and also because if they had refused to accept responsibility in this matter the credit of Canada would have been greatly injured and there might have been a panic in this country. In coming to the aid of this concern, the Government has done something that the public will approve of, and which they were more or less compelled to do to save some of the provinces who had been too free with their credit in encouraging unnecessary duplicate transcontinental lines when they could better have employed their money in building local railways. Be that as it may, the credit of the country had to be maintained and the responsibility was on the Government, and to my mind the proposition before the House is pretty nearly the only possible proposition under the circumstances. Further, the Canadian Northern railway is a great transcontinental system. It will have the best grades of any of the three transcontinental systems in this country. Its feeder lines are, I believe, the equal of the Canadian Pacific railway, and

better than those of the Grand Trunk Pacific. It has every prospect of being a first-class transcontinental line, and it has also the facility of developing traffic. It is surprising the way the Canadian Northern railway, in its short career, has developed traffic from one end of the country to the other. I regard that road as a very valuable transcontinental proposition, and above all it is the one transcontinental road that ought to fit in and join up with our present public owned railway, the Intercolonial railway. I absolutely believe in public ownership in regard to these great propositions. Every time I have been returned to this House I have been pledged to my supporters to uphold the principle of public ownership. If the people of South York and of the city of Toronto believe in anything it is in public ownership, and when I speak in favour of public ownership I speak not only for myself but for my constituency, for my neighbours, for my city, and I believe I speak for the great province of Ontario. We to-day in the province of Ontario believe in public ownership absolutely. We have a Government in Ontario to-day that has the confidence of the people of Ontario more than any previous Government, for the reason that it believes in public ownership and is applying that principle to-day to local radial lines to be linked up with the greater systems. The other day a deputation from Ontario came to this Government-and it was the finest deputation I ever saw here, of men from all counties and cities in Ontario and of both political parties-to say that the people of Ontario absolutely believe in the principle of public ownership as applied to the railways of Ontario, and, inferentially, a wider application of the principle. We have a press in Ontario that is largely in favour of public ownership, and we have in this House men who believe in public ownership and who are here to uphold that doctrine. The people in the Maritime provinces already have public ownership and the people of the West are believing in it more and more, and the whole tendency of this country is in the direction of public ownership of at least one transcontinental railway linked up with the Intercolonial. As one who believes in public ownership, I would like to see something in this agreement that would provide for the acquisition of the Canadian Northern by the people of this country. I think that could be done in absolute harmony with the agreement, but it could not be done on the lines suggested

by the hon. member for St. John as it would involve the breaking of the agreement, as the Prime Minister has just pointed out. The agreement has to be carried out practically as it is, but is it not possible to so modify it as to ultimately secure public ownership of this system?


William Pugsley: The agreement is not
executed yet; it is still open.


William Findlay Maclean: Yes, it is still open.
Now we come to Mackenzie -and Mann. I know both these gentlemen very well and have known them for a long while. I have listened to a great deal of criticism passed upon them in this House, perhaps some of it justly, and I have often criticised them myself both in this House -and outside, but I have this to say: Sir William Mackenzie and Sir Donald Mann are the first men I have met connected with the railroads or public utilities of this country who are ready to sell out to the public under fair terms. The Mayor of Toronto has been negotiating with Sir William Mackenzie for the purchase by the city of the Toronto Street railway and the Toronto Electric Light Company, and Sir William Mackenzie is willing to sell out on what I consider fair terms. I believe he once offered to sell out his franchise in the city of Winnipeg.


William Pugsley: What is the price for the Toronto Street railway?


William Findlay Maclean: It has not been definitely fixed, but is about $20,000,000, and if the matter comes up -again I am going to argue that it would be a good proposition for the city of Toronto to buy the Street railway and the Electric Light Company for $20,000,000, or something in that neighbourhood. I think it is well , known, as the Prime Minister said just now, that the Mackenzie interests are not only willing to sell out their Street railway franchises, but also their radial lines in the province of Ontario, and their transmission lines and the generating plant in connection with the development of power at Niagara Falls.


William Pugsley: Why do they not sell
the Toronto Street railway?


William Findlay Maclean: One reason given was
that Sir William was fully occupied with tue proposition now before the House.


Thomas Simpson Sproule: The hon. gentleman is
rather wandering away from the question beiore the House.


William Findlay Maclean: I am discussing public ownership and I wish to confine myself to the amendment of the hon. member for St. Jonn which has that principle in view. All I have to say is that these men are willing to sell out their interests to the public, perhaps at a reasonable price. If that is the case my suggestion to the hon. member for St. John is this: Leave the resolutions as they are -and drop everything in his amendment but the last -clause which I will! read to the House.


William Cameron Edwards: The bon. gentleman referred to the Toronto Street railway as being worth $20,000,000. Does that represent its total value? Is it not a fact that Sir William Mackenzie owns only a small portion of it?


William Findlay Maclean: H-e has the management only.


William Cameron Edwards: The Mackenzie interest has only a small portion of it?


William Findlay Maclean: Yes, but he acted as the authority for the company to sell it completely, and also for the company controlling the electric light system. The whole franchise would be cancelled and turned over to the public.


William Cameron Edwards: I ask this question because the impression might go out that Sir William Mackenzie had $20,000,000 in it.


William Findlay Maclean: No, the stock is much less than that. They got the whole property. The hon. member for Charlevoix (Sir R. Forget) may know more about the details than I do.


An hon. MEMBER:: He has the control?
Mr. MAC-LEAN: Yes, he has a sufficient interest to enable him to make the proposition. Inasmuch as the people of Canada are coming to the relief of the Canadian Northern railway, and therefore should acquire it, I believe there ought to be a clause in the agreement on the lines of the .last paragraph in the proposed amendment of the hon. member for St. John (Mr. Pugsley). Therefore, I would like to see it read in this way, and if we make this change perhaps there are a good many members who will vote for it:
(a) To provide that the Governor in Council shall have the option at any time, within a period of five years, to acquire the absolute ownership of the $60,000,000 of stock remaining outside of the $40,000,000 stock held for His Majesty, making up the $100,000,000 as described in section 12 of the resolution, and of the said Canadian Northern Railway System,



and of all the constituent and subsidiary companies mentioned in the said resolution or proposed agreement, subject to existing ijn-cumbrances, and to arrangements regarding-the conversion of the income charge convertible debenture stock, for a price to be fixed by arbitration, but not to exceed the sum of $30,000,000.


William Pugsley: T.hat is better than nothing.
'Mr. MA'CLEiAtN:	That is better tihan
nothing. When we are making a bargain with this company, putting the credit of Canada behind it and burdening ourselves with this debt, we ought to have an option on that $'60,000,000 of stock remaining. I would not consider $30,000,000 as an excessive value for that stock. I do not know what the views of Mackenzie, Mann and Company, who own that stock, may be in regard to the matter, but I believe that they would be willing to negotiate with the Government now, in view of their being prepared to sell their other interests, and that they would be prepared to give an option on that remaining $00,000,000. We ought to get 5* now and not leave it to the future. At the present time it would be a cheap investment. There has been money put into this great transcontinental railway by that firm. It is a most valuable line, and it is worth the money. It will help to build up this country, and this railway links up with the Intercolonial better than any system we have. If we secured that option the people of Canada would endorse it, and I believe that the people expect us to obtain it. If the amendment is changed in the way I suggest it will not interfere with the resolution in any respect. It makes provision for the completion of the road, but in return for the guarantees that we are giving, and for what we are doing for the company, we ought to have an option on the railway.
We never can get control of the Canadian Pacific railway unless we buy its stock, but its capital to-day is $300,000,000 and the . stock is valued at double that amount. The greatest crime against the people of Canada with reference to the Canadian Pacific railway was the unstatesmanlike policy of allowing it to increase its capital stock. When I came into this House the Canadian Pacific railway had only a capital stock of $60,000,000 or less than that. It has been greatly increased. When we allowed it to be increased up to the enormous sum at which it stands to-day, we lost the opportunity of getting possession of the road except at an enormous cost. We should have
[Mr. W. P. Maclean.!
got control of the stock at the point at which it then stood, we should have forced them to finance through the issue of bonds, and then, for a comparatively few millions, we could have got control of the road at any time.
Here is a company with a smaller capitalization. The capital stock is being reduced to $100,000,000.. We have $40,000,000 of it; they have $60,000,000, and I believe that we ought to be able to get an option on this $60,000,000. If we do that we will make provision for public ownership. There has been a great deal of talk about public ownership, and all of us have taken more or less refuge in it in order to meet the conditions that have arisen. The people of Canada believe in public ownership and the people of the United States are coming to believe in it. I believe in it. The hon. gentleman said that after the next election there might be a party which would be in favour of public ownership. I hope to see a party in the next election in favour of public ownership, and I am going to associate myself in the next election with the men who believe in the principle of public ownership.


Mr. BURNHAM:: Would it not be a good thing to allow somebody to try this out, and then if it is all right we can take it over ?


William Findlay Maclean: It has been tried out all over and it has succeeded. Public ownership has succeeded everywhere that it has been tried.


Mr. LALOR:: What about the Intercolonial ?


William Findlay Maclean: Public ownership must be administered by men who believe in it, and must be supported by .a parliament tnat believes in it. The people of Canada do believe in it and they are going to return a parliament that believes in it. When we have such a parliament as that 1 will not be afraid of public ownership. We are not afraid of it in Ontario to-day. It has proved a great success in connection with the Hydro-electric, and in connection with the portion of the street railway in Toronto which the people own. We are not afraid of it in Ontario, we believe in the principle, and wherever the men administering it believe in it success results. 1 am not going to be judged on the question of public ownership under the administration of men who do not believe in it, and I .am not going to take any great stock in men who say they are public ownership

men and who do not live up to their principles.
I want to give an incident to prove how this principle is spreading in this country. The people are demanding it. We had the Liberal party in office, we have the present Conservative party in office, and a number of the members of these parties have professed to be public ownership men. I will tell you how you can test out the question as to the attitude of the two parties. Has there been a single public ownership man appointed to the Senate? What man can profess public ownership, or profess to be friendly to it, and be in a position to recommend or suggest the name of a man for appointment to the Senate? We hear professions in this House, we hear talk in all directions in favour of public ownership and we either believe in it or we do not. I believe in it, my constituents believe in it, and the great majority of the people of Ontario believe in it, We are going into a campaign in Ontario to acquire from Mackenzie, Mann and Company, Limited-and I hope it will come out in the forthcoming elections that ihe people of Ontario are prepared to carry out this project-their transmission lines, their radial lines and the generating plant in connection with the development of power in the province of Ontario, we are to begin a new policy of local radial railways for the development of this province. Here is a great opportunity in connection with the proposal now before the House to have the principle of public ownership injected into this proposition without in any way counteracting the resolutions. While I cannot vote for the hon. gentleman's amendment, I make the suggestion that, if the Government' can see its way to amend this proposition- I do not say that $30,000,000 is a fair price; perhaps the owners will say it is not, but let the maximum price be put into this agreement-the Government should make this amendment and then, at any time when it appears to the Government and to the Parliament of this country desirable to try the principle of public ownership, they will be free to do so. There is no cure for the railway grievances of this country except the competition of a public-owned line as against the private-owned corporations. We have not been able to bring the public-owned corporations to time by means of the Railway Commission, but we shall be able to regulate this line. That being the case, and if the proposition now before the House is not damaged 'by this suggestion of mine, why not carry it out and put this country 278$
in a position of being able to acquire a transcontinental line any day after this agreement is concluded? If we leave the proposition until the question of default arises or to the long time provided for it in the agreement, it may be too late. My belief is that the road will in course of time become too valuable for us to act, -I think so highly of this transcontinental line owned by the Canadian Northern railway in connection with the new great policy for the settlement of the West-and I may deal with that question a little later on-that I have every confidence in the Canadian Northern as being a fine line of railway, because it has splendid connections and it would be the best possible asset that the people of Canada could acquire. Therefore I want to see some provision injected into this proposition which, while it would not in any way interfere with the agreement, would provide for the Parliament and the people of Canada acquiring this railroad.
At six o'clock, the House took recess. ,
The House resumed at eight o'clock.


Mr. LEVI THOMSON (Qu'Appelle):: Hon. gentlemen who support these resolutions are fond of making comparisons between the present situation and that which existed when the Canadian Northern railway came to the late Government at different times for assistance. The late Government obtained first mortgages in every case, 1 think. But apart from that, it seems to me the comparisons are very unfair. The late Government appear to have followed the usual course in the assistance which they gave to this company. So far as I can find out they only gave such assistance as was usually given. As to whether or not such assistance should be given to railway companies, I do not propose to discuss that question	at this	time. I do not
think it necessary to discuss it.	The
situation at present, however, is entirely different. This company has received as much assistance as any company under similar circumstances has received heretofore. It seems to me that all things considered there is no great railway company in Canada that has received proportionately the amount of assistance for the amount of work done, or supposed to be done, that this company has received. It was supposed that the assistance they had already received was sufficient to enable them to complete these lines. But now they come to us asking for additional assistance,

asking for something altogether out of the ordinary. It seems to me that when they come for unusual assistance we are justified in asking that they shall give us extraordinary security or something out of the ordinary as equivalent for that security, and it seems to me that that is admitted by the Government, as they themselves ask not only for security but also for a large block of the common stock in consideration of the assistance given. So, we seem to be agreed on that point, that we are entitled to an extraordinary return, if you like to call it so, for the guarantees we are giving. I think we agree also in this, that the security the company is giving the Government is not sufficient. That may be denied on the part of the supporters of this resolution-that is it may be denied in words but it is admitted in deeds. They are prepared to give the guarantee, but the^-demand not only the security that has been given but also $40,000,000 of the common stock. But if the security is ample, there is certainly no justification for asking for the common stock. No man can justify the action of the Government in demanding that stock if the security is ample. So, I think that so far as that goes we are on the same ground and believe that the security is not sufficient. The question of what we should get in place of the security, or whether we should accept any return in the place of the security, is up for discussion. I admit, I do not like the sort of return we are getting. Of course, we ail have our prejudices, and I with the rest I confess, I do not like the business of note-shaving: to me a disgusting business. But that, it seems to me, is exactly the business the Government is engaged in. They say, in effect: Yes, we will endorse your note, but we must have a rake-off. Many of us, of course, have been offered that by people who wished us to shave their notes. But for my part, I do not like the business and would not go into it. And, as I would not go into it as an individual, so I will never consent that I and others, the people of Canada, should go into that business. It is a business we have no right to go into, there is no justification to go into it. And it is a rather undignified position to be in, I think, to say the best of it.
We are told that the stock of this company is to be fixed at $100,000,000, and the people of Canada are to receive $40,000,000, while Mackenzie and Mann receive the *other $60,000,000. That has been discussed
IMr. L. Thomson.]	.
at length and I do not wish to go over the whole matter, but there are one or two points that have not been dwelt upon and which I should like to mention. It seems to me that the position is very serious, I notice that the Solicitor General (Mr. Meighen) to whom we must look as the spokesman of the people of Canada on this occasion, is reported at page 3831 of ' Hansard ' as saying, in speaking of this $40,000,000 of stock which the Government is to receive:
There is every reason to believe that before any great length of time there will be a par value for that stock.
That is, in a very short time, that stock will be worth one hundred cents on the dollar. The Solicitor General proclaims this not only to the members of the House and to the people of Canada but to the investors of the world. Mackenzie and Mann are going to hold $60,000,000 of that stock. What are they going to do with it? The most natural thing is to sell it, especially when they have the recommendation of the Solicitor General speaking for the people of Canada as to its value. Have not the holders of this stock the right to go to investors and say:	This stock is worth one
hundred cents on the dollar; if you doubt it, here is what the Solicitor General has said about it. That should settle the question fairly well. The hon. gentleman is responsible to the people, and the people are responsible for the representations he makes, and investors are entitled to rely on such representations. The investor who buys these shares at one hundred cents on the dollar has the right to ask the people to see that he gets proper return for his money. What will the result be? The result will be, as we all know, that the people of the West must pay rates sufficiently high to recoup these investors and to give them reasonable interest on their money. I do not think that any company has ever had the advantage in going to the investor and the buyer of stock that this company has had; I do not know that any company that has ever existed in Canada has been so favourably situated. I am sure that no member of a Government has heretofore stood up in his place in the House and represented that the stock which is to be sold by any company in Canada is worth 100 cents on the dollar, as the Solicitor General has done. I am sure that the case is without parallel, and that the purchaser of stock in this case is in a better position to obtain reasonable returns on his invest-

ment than any other person who has ever before bought stock in Canada.
Although I followed his remarks very closely, I was not able to come to a reasonable conclusion as to what objections the hon. member for South York (Mr. W. F. Maclean) was urging to the amendment, further than that in his opinion it would be hardly fair to bring the common stock down to $30,000,000. That appears to be the only objection the hon. gentleman has, so far as I could gather, to the amendment, because the amendment which he suggested was practically the same, except with regard to that particular phase of the matter. I think that he wanted to inject something into this resolution that the Government would accept. Of course, the Government are responsible for what they accept, but if the Government object to the amendment of the hon. member for St. John, they will oppose any other effective provision that it may be desired to inject into these resolutions; if they are not effective, of course, they are of no use. The hon. member for South York seems to be under the impression that Mackenzie and Mann would not be sufficiently paid for their labours if the amount of the stock were cut down to $30,000,000; the Government seem to be of the opinion that Mackenzie and Mann should receive $60,000,000 for their services. The Prime Minister refers to the lands which he appears to think Mackenzie and Mann are throwing in. I do not see that Mackenzie and Mann personally have anything to do with these lands, aside from the fact that they are the property of the Canadian Northern railway. The Canadian Northern Railway Company, not Mackenzie and Mann individually, have the right to those lands. It was because the railway was being built that these lands were granted, and if there is any benefit to be obtained the railway company should receive that benefit. Mackenzie and Mann as individuals, therefore, are not giving anything, so far as these lands are concerned.
I think I am expressing the feeling of the people when I say most respectfully that I do not believe for a moment that Mackenzie and Mann have never received anything for their services during the last eighteen years. I doubt very much whether members of the Government believe that. All these interlocking corporations were not produced for nothing. There was a purpose in view in the purchasing and acquiring of these companies, and that purpose was to rake in as much money as possible.
However, admitting for the moment, for the sake of argument, that Mackenzie and Mann have heretofore received nothing but common stock, it is urged that if the common stock be cut down to $30,000,000 Mackenzie and Mann will not be getting enough for their services; that instead of $30,000,000 worth of common stock they should have $60,000,000 worth for the.eighteen years of service which they have rendered in connection with the enterprise. If Mackenzie and Mann have received nothing for their services; if they have looked after the letting of contracts and have attended to the work connected with the undertaking and have received nothing for it, I admit that they are entitled to something. The question is, how much are they entitled to receive ? We are told that they have given eighteen years of their lives to this service. The present Prime Minister of Canada has given eighteen years of the best portion of his life to the public service. The Government propose to pay Mackenzie and Mann $30,000,000 each for their eighteen years of service; has the Prime Minister received that much for his services? Is not the Prime Minister entitled to just	as	much	as these gentlemen
are? He occupies a more important position than they do; he has been selected by at least half the people of Canada as the most satisfactory man amongst them to take one of the most important positions that Canada can offer to any man. He has occupied that position for the greater part of the eighteen years during which he has been in public life. What has he received for his services? I have not ascertained exactly what he has received, but I do not think that there is any secret about it. I think I am safe in saying that he has not received one per cent of the amount which it is proposed to give Mackenzie and Mann for their services in connection with the Canadian Northern enterprise. Let us take our hon. friend the Solicitor General, who has been termed by his admirers as a second Daniel come to judgment. I admit that he is a great worker and a capable man; we all admire him, although we do not think very much of the job he has made of this agreement. Let us compare his remuneration with the amount which it is proposed to give to these gentlemen. My hon. friend, I understand, gets a salary of $5,000 a year as Solicitor General of Canada and it is proposed to pay Mackenzie and Mann for eighteen years of service, $30,000,000 each.


Arthur Meighen: The hon. gentleman is entirely wrong. When Mackenzie, Mann and Gompany own entirely the $10,000,000 stock and $10,000,000 bonds of Town Properties, Limited, that is what they put in. There is no fractional interest in anything they put in. They own the equity of redemption and that is put in. They own that entirely.


Levi Thomson: Then I am still right, because if they have bonds in certain properties they have only a fractional interest.


Arthur Meighen: They own stock and
bonds.


Levi Thomson: That is a fractional interest.


Arthur Meighen: What else can there be besides stock and bonds?


Levi Thomson: If they own the whole
property, without any other persons being entitled to stock or bonds or in any way to derive benefit from it, they are the sole owners. I shall not quarrel with my hon. friend on that because he will admit that there are very few of those properties in which they have an entire interest.


Arthur Meighen: I say they are absolute owners of everything put in, and no one shares with them.


Levi Thomson: They are-absolute owners of the stock and shares, but the stock and shares do not represent the whofle property.


Arthur Meighen: Yes, they do.


Levi Thomson: If they own the shares of these railway companies, which are called subsidiary companies, these shares only represent a little part of those railways. We only receive security on the portion owned by Mackenzie and Mann, not on the subsidiary companies. [DOT]


Arthur Meighen: We do not take security on that, we take the security on the interest of Mackenzie and Mann in the $10,000,000 stock and $10,000,000 'bonds in Town Properties, Limited.


Levi Thomson: I do not think there is any need of taking up time on that because my hon. friend and I agree in reality, although we put it in different ways. Because they own unhampered shares in certain property, while they have a total interest in those shares they have not a total interest in the property; they only own a fractional interest in it. Therefore, I say, there is no good reason why other properties should not be included. We only want their interest, it may be good, 'bad or indifferent, they may own the whole of something that is very little use or a portion of something that is of great use. I think I am right in saying that the feeling of the country is that these companies are putting in the stock which is of very little use because of encumbrances and such things against the property and the things that are of use they are keeping carefully out, and are finding all kinds of excuses, which are accepted by my hon. friend for keeping tnem out.
I wish to discuss briefly the question of public ownership which is raised by this amendment. I listened with great interest to the hon. member for South York, as I always do to his progressive theories. I

am a little sorry that while he is so progressive in his ideas he is conservative in his vote, hut I am pleased to note that my hon. friend is improving because this session he has given some progressive votes as well as progressive ideas. We may hope the time will come when his votes will be generally progressive as well as his ideas, and we shall welcome that day. The right hon. the Prime Minister seems to be very much annoyed at any suggestion that it might be well for us to own and operate railways. There was a time when my hon. friend was not so frightened of the idea. The Prime Minister seems to be very much annoyed also that any gentleman on this side of the House should have changed his ideas in the least with regard to the matter. He thinks it a terrible thing that any hon. member on this side of the House when in office were not in favour of government ownership, but when out of office are inclined to be in favour of it. My right hon. friend is very fond of the tu quoque argument. It struck me that he was liable to have thrown at him the retort of our boyhood days, you're another. It seems quite appropriate that the Prime Minister should speak of the position of those who, when in office, are opposed to Government ownership, and when out of office are in favour of it, because I am sure there is no one who can speak of it more feelingly than the Prime Minister; he has been there and should know all about it. One of his supporters has said that on this question he has turned a sharp curve. The Prime Minister seems to think he should have a monopoly on sharp curves, and he considers it a serious offence when anyone on this side of the House tries to take a curve of any kind. The unfortunate part is that the Prime Minister takes his curves in the wrong direction; they are backward short curves. If any one should make sharp curves into line in favour of Government ownership they would be taking the proper direction. That is the only difference between them and the Prime Minister, he goes backwards and they go forward. It is better to go forward than to go backward.
The most serious objection I see toward the Government owning such institutions as railroads is that the public do not take their politics seriously enough. I think when you say that you have said all that there is to be said against Government ownership. The hon. member for South York (Mr. Maclean) will agree with me that that is about all you can say against
government ownership, that the people do not take their politics with sufficient seriousness, they do not look seriously enough on public affairs, they are not disposed to give to them the same careful and businesslike attention that they give to their own private affairs. One of the greatest arguments in favour of government ownership, and one that appeals most strongly to me, is that it will induce the public to take their politics more seriously, and if it has that effect it will be a great help, it will be one of the greatest blessings we ever had in Canada. If development along the line of government ownership, control and management of public utilities will have the effect of inducing the people generally to take their politics more seriously, to give the same careful attention to the public business that they do to their private business, it will be a great blessing. If my hon. friend's amendment is accepted and if it has that effect he will have very great reason to be proud of having done this much for the benefit of the public.


Edward Walter Nesbitt: When my right hon. friend the Prime Minister rose to speak on the amendment he was rather caustic in his remarks with reference to the last clause of the notice of this amendment having been struck out. I thought at the time my right hon. friend must have a very short memory if he forgot how often the resolution was changed before it came to the House in its present form. We had to wait for some time, for several days, and there were several changes in the resolution before-


Thomas Simpson Sproule: There are too many
hon. members carrying on conversations which are quite audible to me and which are inconsistent with the quietness and decorum which should prevail while a debate is in progress.


Edward Walter Nesbitt: My right hon. friend also tried to construe the amendment into a proposition that the Government should operate the road. I am very strongly in favour of the amendment proposed by my hon. friend from St. John, because it is a businesslike amendment. It is treating the guarantee as a loan, and if Messrs. Mackenzie and Mann are capable of carrying this enterprise to final success, I do not think they should object in any way to the proposal contained in the amendment. I am quite sure that it is a business proposition: we propose that the Government shall have control of the whole stock,

excepting a sufficient amount to qualify the directors of the Canadian Northern, until such time as the agreement has been successfully carried out. The builders of the Canadian Northern cannot reasonably make any objection to putting their stock in the hands of the Government, as trustee, to be reassigned to them when they have carried out the agreement. That strikes me as being a reasonable business proposition that no borrower should object to, and we can only treat the Canadian Northern or Messrs. Mackenzie and Mann as borrowers. I am quite sure that no business man would construe the amendment proposed by my hon. friend from St. John as asking the Government to take over and operate the road. It is true it gives the present and any future Government the option of taking over and operating the road within five years. It gives the present Government absolute control of the road and of the expenditure of the $45,000,000. I, for one, do not see why the Government should object to the amendment. They should be the first to want absolute control of the expenditure of that money, for the country is furnishing the means by which Messrs. Mackenzie and Mann can complete the Canadian Northern enterprise. As to the reduction of the stock to $30,000,000, I am not going to say that the stock is watered. My right hon. friend says that Messrs. Mackenzie and Mann have put a certain amount of land into the completion of certain roads in the West, but I do not agree with my right hon. friend that the lands from a moral business standpoint, belonged to Messrs. Mackenzie and Mann privately. The lands were given to assist the completion of certain roads, and afterwards these roads received provincial guarantees sufficient in themselves to carry the roads to completion without the lands. Though Messrs. Mackenzie and Mann may legally have owned the whole of these lands, let me repeat that from a moral business standpoint the lands did not belong to them privately, but to the Canadian Northern railway. Therefore, so far as I am concerned I shall have to strike out these lands from what Messrs. Mackenzie and Mann have personally put into the road. No doubt they have expended a great deal of energy and had a great deal of worry and vexation of spirit in connection with the construction of this road. But if, as the Prime Minister says, they are entitled to a claim against the road for the hard work and energy they have put into it I am quite 
sure that the $30,000,000 would be ample payment. My right hon. friend may not think so, but I am quite sure the people of Canada will think these two gentlemen are being fairly well paid if they get $30,000,000 for all their work and trials and tribulations in connection with the building of this road. The amendment of the hon. member for St. John proposes to reduce the capital stock to $30,000,000 and to give the present or any future Government the right to take over this road by paying Messrs. Mackenzie and Mann, and paying them well, for all the trouble they have had. Personally, I would be' the last to say that they are not entitled to be well paid, but, as I said, they will be well paid if they get for their stock $30,000,000 or anything in that neighbourhood.


Francis Ramsey Lalor: If I understand the hon.
gentleman, he does not consider the stock as absolutely worthless; as being all water.


Edward Walter Nesbitt: I said that my right hon. friend had stated that the stock was not all water, and I also said that I disagreed with him as to the lands that were given for the building of certain roads in the West. I did not say the stock was all water. I said that these two men had put a certain amount of energy and hard work into the Toad and I am not saying that they are not entitled to a certain amount of stock for that, but I say they would be well paid if they got $30,000,000 for the work they have put in, and I am quite sure my hon. friend will agree with me in that. I think if he was one of these gentlemen he would be quite satisfied with his portion of that $30,000,000.


Francis Ramsey Lalor: During the time the stock might be in the Receiver General's hands, as is provided for in the resolutions in case of default, are you in favour of Mackenzie and Mann or the Government operating the road?


Edward Walter Nesbitt: I am in favour, and I
understand the amendment is in favour of Mackenzie and Mann finishing the work, but under the control of the Government. The instant the stock is assigned to the Government, we get control.


Arthur Meighen: That is all struck out now.


Edward Walter Nesbitt: No, it is not struck out; it is simply not definitely stated.


Arthur Meighen: It was definitely stated and then struck out.


Edward Walter Nesbitt: 
Mr. BELAND:: I was paired with the
hon. junior member far Ottawa (Mr. Cha-bot); had I voted I would have voted for the amendment.


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


Mr. LOGGIE:: I was paired with the
hon. member for Dundas; had I voted I would have voted for the amendment.


Mr. BICKERDIKE:: I was paired with
the hon. member for Centre Toronto; had I voted I would have voted for the amendment.


Mr. STANFIELD:: I was paired with
the hon. member for Calgary (Mr. Bennett) ; had I voted I would have voted against the amendment.


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


Edward Walter Nesbitt: I was paired with the
hon. member for Prince Edward; had I voted I would have voted for the amendment.


James McCrie Douglas: I was paired with the
Minister of Agriculture; had I voted I would have voted for the amendment.


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


Mr. PERLEY:: I was paired with the
hon. member for Russell; had I voted I would have voted against the amendment.


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


William Thomas White: I was paired with the hon. member for Westmorland; had I

voted I would have voted against the amendment.
Amendment (Mr. Pugsley) negatived.


Frank Oliver: Mr. Speaker, in pursuance of the notice given last night, I desire to move an amendment. I do not wish to repeat what I said last night in all particulars; hut I may repeat this much that, as the resolutions assume to control freight rates over this railroad system so far as to give a preference in rates to Canadian ocean ports, it would not be right that the resolutions should go through without an amendment being moved which, by assuming a measure of control over freight rates, would remove the inequality that now exists between freight rates in western and in eastern Canada. This railroad system will operate in the West and in the East. At the present time there is serious discrimination in railway freight rates in the West as compared with the East. I cannot consider that it would be right to allow this measure-


Thomas Simpson Sproule: Order. There are too
many hon. members moving around in the Chamber and too much talking for the speaker to be heard. It seems to me that, having regard to the decorum of the House of Commons, hon. gentlemen when addressing the House are entitled to better attention.


Frank Oliver: I desire to say that on this occasion, when this railway company is being dealt with generously by Parliament, it is right and proper to impose freight rate restrictions and to exercise freight rate control over those parts of the line by which traffic reaches Atlantic ocean ports, it is just as right and far more necessary that, as a consideration for the assistance given, a like control should be exercised and the discrimination that now exists in regard to freight rates as applied to western Canada should toe removed, so far as this railroad system is concerned. It is desirable that we should have railroads; but the purpose of a railroad is, first to give accommodation, and next to give accommodation at rates that will make business profitable. Conditions at the present time are such, in view of the falling price of the main product of western Canada in the world's markets, that it becomes necessary to lighten by every possible means the burden upon production of that part of the
nation's wealth. The costs of transportation are a part of the cost of production, and a decrease in the costs of transportation is a decrease in the cost of production, and a corresponding widening of the basis of production. It is true that the through freight rates are not discriminatory. It is the local freight rates in which there is discrimination at the present time, and it is in regard to these local freight rates that we desire to have the discrimination removed.
It is particularly important, it seems to me, that .there should be a declaration toy Parliament upon this subject at this time. As has already been said during the course of this debate, this Government is taking a large financial interest in this Canadian Northern enterprise, a forty per cent interest in whatever profits may accrue. When the Government is taking a forty per cent interest in the profits and consequently in the earnings of the enterprise, the Government has a special interest in freight rates; and it is desirable before these resolutions are passed, before the agreement becomes effective, that the purposes of the Government should be defined and the mind of Parliament should be declared in what direction the Government will exercise the authority vested in it as a Government having control of transportation, and how far it will exercise the authority vested in it as a partner in the Canadian Northern Railway enterprise, to maintain its earning powers fox the purpose of securing dividends.
The conditions to-day are different from what they were three months ago. When this matter was under consideration in the House last year, we were told that the question of discrimination in railway freight rates was under the consideration of the Railway Commission. We were given to understand that it was a matter that was entirely under the control of the Railway Commission; that it was not a matter that should be dealt with or interfered with by Parliament. Since that time the Railway Commission, having taken the matter into consideration at great length, have delivered a decision which confirms that condition of discrimination in freight rates between eastern and western Canada, of which western Canada has complained during the past year. Clearly then, while the country reasonably might have looked to the Railway Commission for such an adjustment of rates as would have been fair

to western Canada, the condition to-day is, that we are past the point of looking to the Railway Commission. The Railway Commission has rendered its decision, which is against western Canada and in favour of discrimination in railway rates. The only authority in the Dominion of Canada that can put the question of freight rates between East and West on a position of equality is this Parliament. And it seems to me that now is the time and this is the occasion for Parliament to make a declaration that shall be effective so . far as this transportation system is concerned.
If equality of rates is established on the Canadian Northern railway system, it will, in effect and in practice, be established on the other and competitive systems doing business in the western country. It is because of this effect of the existence of the Canadian Northern Railway system as a competitive transportation enterprise, that it has claims, or may be considered to have claims, upon Parliament for favourable consideration. As a competitive transportation enterprise it has merit, and may claim assistance towards its maintenance. But, if it is not to give the benefits of a competitive transportation enterprise, then there is no good reason why it should be dealt with so liberally by the Parliament of Canada as is proposed in this resolution. Therefore, I beg to move, seconded by Mr. Buchanan:
That the said resolution be not now concurred in but that it be referred back lo Committee of the Whole for amendment, to provide that:
The Canadian Northern Railway Company shall within two months from the date of the passing of this Act, submit to the Board of Railway Commissioners for Canada a schedule of traffic rates upon the lines of the said company now or hereafter to be constructed west of Fort William, which shall be the same as now applies on the lines of the said company in the provinces of Ontario and Quebec, except in so far and to such extent as the said Canadian Northern Railway Company may be able to establish higher cost of operation on such lines west of Fort William, and the said schedule shall be subject to the authority and control of the said Board of Railway Commissioners, to be revised and adjusted by them in accordance with the foregoing provision.


Robert Rogers: I do not know that under ordinary circumstances, so far as the amendment of my hon. friend is concerned, it would be necessary to make any reply, especially for western Canada, where the circumstances and conditions are well understood. It is undoubtedly true that the

transportation question is a very live question, that it is the all-important question with the people of western Canada. But let me say-and in saying it I do not wish to be misunderstood, I do not wish to be thought in any way discourteous to any hon. gentleman opposite-that in view of the many and varied statements made in the discussion on these resolutions, as well as of the many and varied amendments which we have had, it is desirable to realize and understand that the amendments of these hon. gentlemen are not regarded seriously either by this House or by the people of this Dominion. Especially is this true when they attempt to make it appear that they have some knowledge of the question of railway freight rates and some policy of railway legislation designed, as this legislation is designed, to contribute benefit and advantage to the common people. It is necessary to keep this fact in mind. It is necessary also to keep in mind the fact that though these hon. gentlemen had the opportunity for many long years of presenting railway legislation to this Parliament for the benefit of the common people, yet search their legislation from end to end, and I defy any man to find any legislation placed on the statute-books by these hon. gentlemen that carried advantages to the people of the Dominion in respect of freight rates. This is true of their record with respect to western Canada and it applies to the conditions suggested by my hon. friend from Edmonton (Mr. Oliver). That hon. gentleman undertakes to say that there is discrimination in western freight rates. Now, that statement being true, the responsibility and the blame rests more upon the shoulders of hon. gentlemen opposite than upon the shoulders of hon. gentlemen on this side of the House. My hon. friend refers to the fact that it has been acknowledged by the Railway Commission that discrimination exists in the freight rates applied to western Canada. That may be true, and my hon. friend quoted here last night a statement emanating from the Board of Trade of the city of Winnipeg in which that body makes the special request of the Government that when the Railway Act is being considered by this Parliament consideration may be given to the suggestions which they make in regard to this subject of discrimination. When that time comes it will be the duty of this Parliament to lend consideration and to give ear to the views of that important body.
In respect of the motion which is now proposed by my hon. friend for Edmonton,

I would like to ask how it would be possible for this Parliament to undertake to legislate in respect to one company only ? That is really the proposal of my hon. friend. We have as every one knows, several railway companies in western Canada. When I came to Ottawa in the fall of 1911, one of the first things that engaged my attention was the question of the discrimination in railway freight rates in western Canada. At the request of the board of trade of the city of Winnipeg, I submitted this matter to the then chairman of the Railway Commission, which was the proper thing to do if I felt that an injustice existed as against western Canada. Let me read to the House the reply of Judge Mabee, then chairman of the Railway Commission, dated November 25, 1911:	[DOT]
My dear Mr. Rogers:
X beg to acknowledge receipt of your letter of the 23rd, enclosing me a statement covering comparison of freight rates as between points in eastern and western Canada, and in reply I beg to say that I had a similar statement forwarded to me, together with a resolution of the Winnipeg Board of Trade, a copy of which I enclose. The Honourable the Minister of Railways had a copy of the resolution forwarded to him and he, also, sent his copy to me. I take the liberty, also, of enclosing you a copy of my letter to the secretary of the Winnipeg Board of Trade. I do not know that you bothered about looking through this comparative statement, but it is full of most capable and easy explanation. They take Montreal, Quebec, and Windsor, all lake ports, as the basis of comparison. Take, for instance, the rate from Montreal to Windsor, $2.10, as compared with the rate from Winnipeg to Side-wood, $4.25; the rate from Quebec to Windsor of $2.56, as compared with the rate from Port Arthur to McLean of $5.74; the rate from Quebec to Rossport, $4.29, as compared with the rate from Port Arthur to Walsh, $7.36; the rate from Windsor to Jack Pish, $3.53, as compared with the rate from Port Arthur to Crane Lake of $7.06. Between Montreal and Windsor, Quebec and Windsor, Quebec and Rossport, Windsor and Jack Fish, there is a water communication, and between these places steamers are continually plying carrying large packet, and other freight, in competition with the railway company, and if the. latter expect to get traffic, they must, to some extent at least, meet the rates of the water carriers..! However, I know that the western rates are high-possibly, in many instances, too high- and if the Winnipeg Board of Trade will formulate their plans, I will set on foot a diligent and active inquiry with reference to the whole rate situation in the three prairie provinces.
Yours very truly,
(Sgd) J. P. Mabee.
That was the position which I found when I came here in November, 1911. I followed the matter up and finally succeeded in having an inquiry made into the question of freight rates. A decision in the matter was
given a few months ago; a decision which, to my mind, is very gratifying indeed to the people of western Canada. We had also the statement of Judge Mabee that although he had been in office for a number of years he had never had a request from hon. gentlemen opposite to deal with this question of railway freight rates. The question naturally arises: Why did not Mr. Justice Mabee receive a request from hon. gentlemen opposite to that end, if they were at all interested in the welfare of the people of western Canada in the matter of freight rates ? It is a matter of fact that hon. gentlemen opposite wake up to the truth of the condition of affairs in this country only when they are relegated to the place which they now occupy in the seats of the Opposition in this Parliament, and I believe that the people of Canada will see that they are kept there for many years to come.
We have had in western Canada a very serious condition in respect to the question of transportation. As far back as the year 1900 the Government of the province of Manitoba, realizing that it was impossible to secure anything in that regard at the hands of the federal Government of that day, undertook to protect the citizens of shat province by providing for a reduction in railway freight rates. If any one part of this discussion was more amusing to me than another, it was that part in which the right hon. gentleman who leads the Opposition rose in this House and undertook to take credit to himeelf and to his Government for having done much for the Canadian Northern, and for having assisted it materially in the province of Manitoba and in the other provinces of western Canada. Let me correct my right hon. friend. The Government of which he was the leader never guaranteed a bond for a dollar in respect of the Canadian Northern railway in the province of Manitoba. But, notwithstanding the fact that my right hon. friend and his Government did not do that, the Government of that province protected the people by providing legislation that has not cost the people of that province one single dollar. The net result is that, if you analyse the figures in respect of the amount that is to-day being paid in transportation, and add thereto the reductions which were exacted iby that 'legislation, you will find that that legislation is saving the people of the province of Manitoba, and has been saving them for the past ten yeaTS over $5,000,000 a year. That is legislation of which the Conservative


Hugh Guthrie: I just rise to say a
word or two in regard to the amendment moved by my hon. friend from Edmonton to which the hon. Minister of Public Works has addressed himself in his own somewhat peculiar style. So far as the amendment itself is concerned, the minister has quite obviously evaded the crux of the question, and purposely I think. He has gone considerably into railway history in an endeavour to show that the Liberal party during its term of office did nothing for the people of this country in regard to transportation. No one knows better than the minister that that is not the case. He knows that his main difficulty in the province of Manitoba was with the monopoly which had been created by the Conservative Government of Canada when,they granted a charter to the Canadian Pacific Railway Company. That was the trouble.


Robert Rogers: We had no trouble at
all.


Hugh Guthrie: And that trouble was caused by the Conservative party and opposed by the Liberal party as strenuously as anything could be opposed. I do not want to take away from the Minister of Public Works one jot or tittle of credit to which he is entitled for what he has done towards relieving the situation. I believe he is entitled to some credit and to more credit than his confreres in the Government for the reduction in freight rates which took place in Manitoba, but it is idle nonsense for a man of his intelligence to say that the Liberal party have done nothing for the people of this country in the way of reduction of freight rates. The very tribunal to which the Minister of Public Works appealed was created by the Liberal party in 1903 under the Railway Act which is still in force. Why was it created? It was to overcome the difficulties which were cropping up here, there, and everywhere in Canada.


Robert Rogers: You never asked the
commission to deal with this matter.


Hugh Guthrie: That commission was
established in 1903 by the Liberal party to deal with the difficulties which were cropping up everywhere in the Dominion. The Railway Commision did deal with freight rates in every portion of Canada. I do not say that they dealt with the equalization


Robert Rogers: Will my hon. friend allow me? I stated that Mr. Lafleur, K.C., had pointed out to the Railway Commission, as +he hon. gentleman may see in the report, that the prairie and mountain section of the Grand Trunk Pacific would cost over $96,000 per mile, and he claimed that as the fixed charges would consequently be over $4,000 a mile, it would be impossible for the company to meet any reduction in freight rates.


Hugh Guthrie: I quite understand my hon. friend's explanation. I am trying to deal with the three prairie provinces of Manitoba, Saskatchewan and Alberta. I think Mr. Lafleur pointed out in the same argument that the cost in these provinces would run between $40,000 and $45,OQO a mile, but that if the higher cost of construction in British Columbia were taken into account the average per mile would be about what the minister has stated. Why not give the shippers of Manitoba, Saskatchewan and Alberta the benefit of the low rates and equalize it if you will with the low rate which prevails in the East? It matters not one whit to the man who has goods to ship whether they go over the Grand Trunk railway or the Canadian Pacific railway. What he wants is to get his goods to the head of the lakes and then he can route them as he likes.
The Railway Commission has dealt with the question recently, it is true. Is there any reason why we should not revise its findings at this moment? I am not a western man; I have no particular or special interest in western men more than any citizen. of Canada would have, but I see the force and the point of the amendment which my hon. friend from Edmonton has seen fit to move. Now you have your chance. The Government is in a position to-day, in making this advance or loan to the Canadian Northern, to say: we insist that a term of this agreement shall he that you shall equalize your western traffic rates with your eastern traffic rates, unless you can demonstrate to the Board of Railway Commissioners that the cost of operation is so great that it is impossible to be done. That is all the amendment asks; it is a reasonable request, and it is a request which will satisfy the people of the West. They know now the reduction- that the Railway Commissioners have made in freight rates, and unless the Canadian Northern can demonstrate to them that the cost of operation in the West is

greater than in the East there will be another cut in freight rates, and the rates between the East and the West will be to a greater extent equalized1.
That is an important point to the people in the West. It is idle for the Minister of Public Works to say that the Liberal party never tried during its term of office, to relieve the western shippers. Surely we offered them a solution of the whole question in 1911, a solution of the whole transportation problem, and nothing has been holding this country back so much as the refusal of the people of the country to accept that solution. There was another solution offered just last autumn when the United States Government proposed to give free wheat and wheat products, as soon as Canada would do the same. Now, let the Minister of Public Works, get his thinking-cap on for one minute. He knew that was a good thing; he knew that would solve the railway rate question, and he went to Winnipeg and proclaimed it as such. The Government and Legislature of Manitoba, by a standing vote, unanimously declared that it was a solution of their difficulty in the West, and I have no doubt that the Minister of Public Works was in close conference with the leaders of the local party in Manitoba when that resolution was
10 p.m. passed in the Manitoba House.
Then he came down here. What does he say now ?-that the Liberal party has done nothing. I have pointed out that we erected the machinery, we made it possible to bring these matters before the board, we made it possible for the humblest citizen of the West to be heard, we made it possible to secure the reduction that has taken place. Then we made it possible in 1911 to make further reductions, which opportunity was rejected by the people. Even during the present session we have tried, by means of free wheat and flour, to make it'still more possible for the people of the West to move the greatest of their products at cheaper railway rates than they can now do. For these reasons I intend to vote for the resolution. I am not a western man, I am not affected by it, nor will the people of my county be greatly affected by the result of it. It seems fair and reasonable, it need not hinder the bargain, it cannot injure the bargain, and it is so businesslike that I think it should commend itself to the Government.


William Findlay Maclean: Mr. Speaker, there , is an issue between the Conservative and the Liberal parties, as was pointed out by the two previous speakers. I do not pro-279
pose to enter into the merits of the dispute, but I have always, when the Conservative party were in opposition and since they came into office, put forward in my motions the proposition that there ought to be an equality of railway rates in this country, and inasmuch as I have taken that stand in the past I intend to urge it here to-night and to urge it with all the force at my command. No one yet has ever given me a reason why there should be a discrimination against the people of the West and in favour of the East. These roads are national roads. They have been largely built by national contributions and they were so built in order to serve all the people of the country equitably. Instead of that there has been discrimination against the people of the West in passenger rates, in grain rates, and in ordinary transportation rates. There is no complaint made now as regards the transportation of grain, but the inequality still continues in regard to general freight matters. My contention is that this inequality should not continue. We do not discriminate against the West in connection with any law in this country. There is equality of treatment under the criminal law and in regard to the postal rates. But for some reason this Parliament stands for higher freight rates, higher express rates, higher telephone rates, and higher telegraph rates for the people of the West. Why should that be? It is not fair to the people of the West; it is not just treatment, and as long as we continue it the people of the West will have a grievance.
What has been the history of this question? I give every credit to the hon. the Minister of Public Works (Mr. Rogers) for his efforts in regard to the reduction which he secured for the people of Manitoba, and which he secured at a time when concessions were given to this same railway company that is under discussion to-night. Assistance was given to the railway; the Government helped them to acquire the Manitoba lines and in return for that 'assistance then given, a reduction in rates was acquired by the people of Manitoba. The result has been that the Railway Commission has seen fit to extend to the provinces of Saskatchewan and iAlberta the same rights that Manitoba had and which were secured by the Act of the Manitoba Government. If that happened in that case why should we not adopt the same methods here to-night and secure equality of treatment as between the East and the West? As was pointed out by the previous speaker (Mr. Guthrie), if the construction



of the Grand Trunk Pacific and this railway has cost a great deal of money, that high cost has occurred in the provinces of Ontario and British Columbia and, if so why should these people and the farmers of the Wesit be treated as they are now being treated by the Railway Commission, and why should the commission which was created by this Parliament take the stand, without any instructions from this House, that there should be this discrimination.
There is such a thing as the strategy of statesmanship, and the strategy of statesmanship is in taking advantage of every occasion as it arises to remedy public grievances. This is a public grievance in the West. A railway is here seeking aid. That same road sought aid once in the province of Ontario, and a concession was got then that we ought to get here to-night. The right hon. the leader of the Opposition (Sir Wilfrid Laurier) subsidized the Grows-nest Pass branch of the Canadian Pacific railway, and got some concessions in regard to freight rates, and there was a reduction. On other occasions there have been reductions obtained. I simply maintain the position I have always maintained, that when concessions are given to railways is the time to get concessions from them. They have been got in the past, and they ought to be got now. 'Especially is it our duty to bring some relief to the people of the Canadian West. They have high interest rates to pay out theie. Why should they be so stigmatized? Largely because Parliament has stigmatized the people of the West in regard to railway rates, the bankers demand higher interest rates in the West. That should not be. We should make it our duty to declare for equality of treatment for everybody. As a consideration of the assistance that we are giving here to-night, we can insist that this company shall give the same treatment to the people of the West that they are giving to the people of the East. It has been mentioned that we are dealing only with one case, and that it would not be fair to deal with one and not with the others. It follows, as has been stated, that if that applies to one, the othens will have to follow.
It is reported in the press that the Grand Trunk Pacific are to come here this session for some further assistance. Why not set the example and impose the same condition upon them also, if they come here for assistance. Probably both the Canadian Northern and the Grand Trunk Pacific will
get assistance this session in order to enable them to complete their road, and we should say, in giving that assistance, that they must give equality of treatment to the people of the West. There is nothing unfair in that. The Canadian Pacific Railway Company can stand the reduction, as we all know because its treasury is overflowing. If I was induced at any time to assist legislation through this House in order to secure the construction of the Canadian Northern and the Grand Trunk Pacific, it was based on the statements made in this House time after time that, not only would they provide additional railway service but they would provide competition for reduction of rates.


John Hampden Burnham: What about public
ownership?


William Findlay Maclean: I will deal with that when the Grand Trunk Pacific matter comes up. At the present time I am dealing with the freight rates, and the opportunity presented to the hon. member for West Peterborough and the rest of us to afford some relief to the people of the West. What do the people of the West want? They are in competition with the farmers of the United States. Freight rates in the UnitedStates are lower than in the Canadian West; and that being the case, there ought to be equality of treatment as between the United States and us. We have nothing to do with that matter; but we have the opportunity here and we should take advantage of what I call strategy of statesmanship, and every time these people come here for assistance, we should insist on a concession being given to the people of the West. If we did that we would get that concession, and that is the only way in which to get it. The Railway Oommisiom, for some reason or other, have seen fit, without the authority of Parliament, to set up the principle of discrimination. That principle is a fundamental one; and it should not be in the hands of the Railway Commission, a creature of this House, to establish that artificial discrimination. There must be equality for the people. The people of the West have paid their share; they are paying their share to-day, and they will have to pay their share in the future of the completion of this railway. They will have to assume their share of the default, should there be any default; they will not be let off with less than the people of the. East, but they will have to pay their full share, and assume the same responsibility. That

being the case, why not give them equality of treatment? The people of the West want relief of some kind. It is coming more and more to be a recognized fact that graingrowing in the West is only possible if the farmers of the West get every encouragement, and especially if they get equality of treatment. Now that we have three great transcontinental railways on our hands, we must find traffic for them; we must find a policy that will encourage settlement in the West. We want settlers in the West; we want people to come from the United States and from all parts of the world; but we want them to understand that, when we invite them to come to Canada, they are going to get the same treatment in regard to railway freight rates as the people get in other portions of Canada. Is that unfair or unjust to any one? In my opinion, it is not. I have never met any one in this Government or in this House who will say that it is unfair. The only men who say that this discrimination should exist are the railway men. This discrimination should not exist, and this Government should put it on record for the guidance of the Railway Commission that this discrimination should not be allowed to continue.


Mr. CURRIE:: What is the discrimination?


William Findlay Maclean: There are higher rates imposed on certain classes of freight in the western provinces than are charged in the East.


John Allister Currie: Specify them.


William Findlay Maclean: A resolution from the Winnipeg Board of Trade was read here, within the last two or three days. I am not going into the details.


John Allister Currie: Just wild general talk.


William Findlay Maclean: The hon. gentleman says that the Winnipeg Board of Trade is guilty of wild talk. The hon. gentleman says that all these hon. members who represent the provinces of Manitoba, Saskatchewan and Alberta, and especially the province of Manitoba, were indulging in wild talk when they said that the rates in the West were higher than in the East. I believe the facts which have been presented, and have been admitted by the Railway Commission. The Railway Commission says: You must pay more in the western provinces, but they do not give a reason for their decision. It is the duty of Parliament to insist upon equality of treatment. I am prepared to 279J
say that, in order to get equality of treatment and to get the Railway Commission to do justice to the people of the West, even if it should involve a slight genera] increase in rates, Parliament would be justified in allowing the Railway Commission to impose that increase; but I believe there will be such an increase of business to the railways, and such a rush of settlement in the West, that an increase in eastern rates will be negligible. The cure of the grievances in this country to-day, and of the so-called slump in business, lies in the immediate settlement of the West, and in bringing a class of farmers there who will develop that country, especially farmers from the western states. You cannot expect to get settlers to come into the West from the United States when you tell them that, if they go there, they are going into a country in which Parliament allows the railways, which are national undertakings, to discriminate as regards freight rates. In order to get American settlers into the West, you have to give them equality of rates.
You ought not to interfere with the settlers in the West getting the market of the United States for their wheat. If you give them equality of rates and the opportunity of selling their wheat in the best market that is to be found, you will see a new boom and a new era of settlement come to our Canadian West that will restore and revive business and put the nanne of Canada in the forefront of the world.


Robert Rogers: The best market is in
Winnipeg to-day.


William Findlay Maclean: If the farmer thinks he will have a better market if he ha.s two markets, I am not going to interfere with him; but I am going to be guided by the Conservative legislation of the province of Manitoba, and I am going to leave it to the farmers of the West to say what they [DOT] want. This is a free country; free opinion is allowed in 'all portions of it, and no man is a judge of his own conditions and his own wants as much as he is himself. I cannot be charged with saying what I am saying here to-night for political effect. I have given some little attention to this question in the past. I have taken, the position against hon. gentlemen opposite time after time that it was their duty to secure this equality of treatment. They did not secure it, but the opportunity is here to-

night to get it. No injury will be done to the Canadian Northern oir to the Grand Trunk Pacific, and the Canadian Pacific railway can well afford to give equality of treatment. Therefore, we should take advantage of each opportunity as it arises when these railways come here for assistance. We should take advantage of the Grand Trunk Pacific coming here, as I believe it is going to do-and it is the special pet of hon. gentlemen opposite-and Parliament will be justified in compelling them to give what the people of the West aire entitled to, namely, equality of rates. Why should there he discrimination? Where is the member from the West, on either side of the House, who is in favour of discrimination? I have talked with the members of this House, on both sides, and I have read the papers of the West, and I know that everybody says that what they want is equal treatment. Why should not they get it? I have not been able to find out. The only people who set up a different claim are the representatives of the railways before the Railway Commission. But, as I have said, if they cannot themselves do business on a basis of equality, then this Parliament will be justified in authorizing the Railway Commission to make a readjustment that will secure equality. For it is not law, it is not justice, to place this stigma upon the Canadian West. Why that stigma was ever put upon the West, I cannot understand. But, if we are friends of the West, if we believe in a united Canada, we must demand equality before the law. Therefore, not out of regard tor any political party, but as a matter of justice, I ask this equality of treatment. To grant it means not only to do justice but to secure greater prosperity for the whole country. It means putting more heart into the man in the West who is raising wheat and selling it at a price which leaves him but little profit. If we can give him relief on freight rates, if we can put him on an equality in this matter with every other citizen in this country, it will mean much for the West of Canada. I give Manitoba credit for the action it took, and I give credit to the hon. gentleman who had a hand in it. But if this has been an advantage, not only to Manitoba, but has spread its influence also to the other prairie provinces, why should not we seek to secure for all three of these provinces equality with Ontario? The hon. gentleman's contention proves the case absolutely-outside of the statements he has made as to lack
of consistency on the part of certain politicians. But the issue is not the issue of consistency but the issue of justice and equality. In keeping with the stand I have taken in the past, and on the ground of justice and of the welfare of Canada, I say we should make this concession now in connection with the Canadian Northern railway. And if the Grand Trunk railway comes here with a similar request, we should make the concession in connection with that system also.


Mr. W. A. BUCHANAN (Medicine Hat):: I do not rise to answer the remarks made by the hon. member for South York (Mr. Maclean), for I feel that those remarks are unanswerable; they represent the opinions of the western people, and I believe they represent also the opinions of Canadians generally who are interested in the welfare of western Canada, and therefore of the whole Dominion. The Minister of Public Works (Mr. Rogers) boasted of the position taken by the Manitoba Government when it had occasion to deal with this railway. This particular railway came to the Manitoba Government for assistance, and that Government in giving assistance stipulated certain things, one of them being a reduction in freight rates. The Minister of Public Works uses this as an argument in opposing this resolution of the Opposition demanding exactly the same thing as a condition of granting the application of this Canadian Northern railway for assistance from the Dominion Government in this year 1914. His argument was an argument in favour of this amendment of the Liberal party in regard to freight rates. If it was good for the province of Manitoba to make a deal for lower freight rates in Manitoba, then it is good for the Dominion of Canada when giving assistance to the Canadian Northern railway to arrange for the equalization of freight rates in the West. That is all we are asking for, and I think the Minister of Public Works has shown that this is an opportune time to deal with that question.
Reference has been made to what this Government has done in the matter of freight rates before the Railway Commission. I would point out that the recent decision of the Railway Commission was a victory for the counsel engaged by the Liberal Governments of Alberta and Saskatchewan. They were able to get equalization of freight rates in the prairie provinces, but the experts and counsel engaged by the Dominion Government were not able to secure the equalization of freight rates between the East and the West. The decision


of the Railway Commission was practically a repudiation of the arguments presented by the Dominion expert, Mr. Mueller. In fact, it was stated that Mr. Mueller contradicted himself throughout his evidence and that his evidence was of no real value as an argument for the equalization of freight rates.
The Dominion Government is now coming to the assistance of the Canadian Northern railway. We are told that we are being supplied with certain securities; we are told that we are entering into a partnership by getting a certain amount of stock in this road. I do not think the people of this country look upon this as tangible or of any real value. But I believe the people of both the East and West would consider an arrangement with regard to freight rates as of some value in this arrangement with the Canadian Northern railway. If we are going to hand over assistance to the railways every year, why do not we get something from the railways which will be helpful to the people who are putting up the money to construct these roads ? I say this is an opportune time to deal with this road and to bring about a revision of freight rates that will assist the people in the West and bring about better trade relations between eastern and western Canada.
Baker,	Marshall,
Ball, Beliemare,	Meighen,
	Merner,
Bennett (Simcoe),	Mondou,
Best,	Morris,
Blain,	Morrison,
Blondin,	Nantel,
Borden,	Nicholson,
Boulay,	Paquet,
Bowman,	Paul,
Boyce,	Pelletier,
Boys,	Porter,
Brabazon,	Reid (Grenville),
Burnham,	Rhodes,
Carrick,	Robidoux,
Clark (Bruce),	Roche,
Clarke (Wellington),	Rogers,
Cockshutt,	Schaffner,
Cromwell,	Sevigny,
Currie,	Sexsmith,
Doherty,	Sharpe (Lisgar),
Edwards,	Sharpe (Ontario),
Elliot,	Shepherd,
Fisher,	Smith,
Foster (Kings, N.S.),	Stanfield,
Foster (Toronto, N.),	Steele,
Fowler,	Stevens,
Fripp,	Stewart (Hamilton),
Garland,	Stewart (Lunenburg),
Girard, ,	Sutherland,
Glass,	Thompson (Yukon),
Hanna,	Thornton,
Henderson,	Tremain,
Hughes (Victoria, O.),	Walker,
Jameson,	Weichel,
Lalor,	White (Renfrew) and
Lamarche, Lewis,	Wright-82.
PAIRS :


Mr. NEELY:: I was paired with the hon. -member lor North Grey; had I voted I would have voted for the amendment.


Levi Thomson: I was paired
with the hon. member for Shelburne and Queens; if I had voted I would have voted for the amendment.


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


Mr. CRUISE:: I was paired with the hon. member for Centre York; if I had voted I would have voted for the amendment.
Mr. MeCOIG: I was paired with the hon. member for North Essex; if I had voted I would have voted for the am'endment.


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


Henri Sévérin Béland: I was paired with the
hon. member for Ottawa; if I had voted I would have voted for the amendment.


James McCrie Douglas: I was paired witji the hon. Minister of Agriculture; otherwise I would have voted for the amendment.


William Stewart Loggie: I was paired with the
hon. member for Dundas; if I had voted I would have voted for the amendment.


Mr. BRADBURY:: I was paired with the hon. member for Calgary; otherwise I would have voted against the amendment.


Mr. WEBSTER:: I was paired with the
non. member for Restigouche; if I had voted I would have voted against the amendment.


William Thomas White: I was paired with the hon. member for Westmorland; otherwise I would have voted against the amendment.


George Halsey Perley: I was paired with the hon. member for Russell; otherwise I would have voted against the amendment.
Amendment (Mr. Oliver) negatived, main motion agreed to, and resolutions read the second time and concurred in on division.
Right Hon. R. L. BORDEN (Prime Minister) thereupon moved for leave to introduce Bill No. 214, respecting the Canadian Northern Railway system.


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

[Stage Direction]
Hon. W. T. WHITE (Minister of Finance) moved third reading of Bill No. 169, to amend the Customs Tariff, 1907.
Mr. A. K. MACLEAN:: I beg to move:
That the said Bill be not now read a third time, but that it be referred back to the Committee of Ways and Means with instructions that they have power to amend it by striking off section 2 from the said Bill.
Section 2 of this Bill, which will be section 7 of the Customs Tariff Act, provides for the imposition in certain cases of a surtax and the maximum rate is fixed at twenty per centum ad valorem.
It is left, however, with the Governor in Cbuncil to fix the amount of
11 p.m. the surtax. Under the customs tariff as it at present stands there is a similar provision, but a flat rate is fixed and this statutory rate cannot be changed by the Governor in Council. The purpose of the amending clause is to give, as I have said, to the Governor in Council the power of fixing from time to time, as they may see fit, the rate of the surtax. I submit that this is not a proper matter to leave to the discretion of the Governor in Council. A surtax is in the nature of a penalty against nations which do not accord to Canada what is considered to be fair tariff treatment. It is in an open and standing notice in our customs tariff to all countries of the world that unfair or discriminatory tariff treatment against Canada is liable to bring upon them. the imposition of a surtax under the Canadian customs tariff. It being intended for that purpose, therefore, 1 submit that it is not a fit and proper matter to be left to the executive, but should rather be fixed by statute and 'be amendable by Parliament. That has been the position of affairs, and I do not think that there is any Teason for our departing from it now.


William Thomas White: This legislation is of the character known as retaliatory; it is for the purpose not of aggression but of defence, and is to be exercised only in the case of discrimination of an unfair and unjust character against the products of Canada which become imports to a foreign country. The principle of the legislation -has been already recognized in the Customs

tariff of 1907, section 7 of which is as follows r
Articles which are the produce or manufacture of any foreign country which treats imports from Canada less favourably than those from other countries may be subject to a surtax over and above the duties specified in schedule A, such surtax in every case to be one-third of the duty specified in the general tariff in the said schedule A.
Any question arising as to any foreign country or goods coming under the operation of the provisions in regard to the surtax shall be decided by the Minister of Customs, whose decision shall be final.
The Governor in Council may make provision for carrying out the purposes of this section, and may, by Order in Council, from time to time suspend the surtax from application to the goods of any country.
In connection with this section. I desire to call the attention of the hon. member for Carleton, N.B. (Mr. Carvell) to a statement which he made in this House last evening. He said in substance that under the provisions of the Customs tariff of 1907 this surtax could be imposed only by Parliament and that the only power that was given to the Governor in Council was to make regulations for carrying out the purposes of the section. Further, he took exception to the legislation which is now under consideration on the ground that the Governor in Council could fix a surtax which, he said, should be fixed only by Parliament. My hon. friend the member for Carleton is a good lawyer, I must say in fairness to him that he usually looks up legislation to which he refers and I generally regard his opinion as valuable. But I would point out to my hon. friend that under the legislation of the late Government as found in the Customs tariff of 1907, the question as to whether a surtax is to be imposed against the products of a foreign country discriminating against Canada rests not with Parliament nor with the Governor in Council, 'but with the Minister of Customs. He will see that that is the case if he refers to subsection 2 of section 7 of the Customs tariff of 1907.


Mr. CARVELL:: I have not my statement before me, but I am satisfied that my horn, friend will not find that I said anything like what he has just stated. I said that the minister or the Governor in Council has the power now to say whether or not there shall be a surtax on a certain produce, but the rate is fixed at one-third.


William Thomas White: I understood my hon. friend to say last night-if he says that l am in error, of course I shall accept
his statement-that the surtax could only be imposed by Parliament.
Mr. CARViELL: Oh, no. What I stated was that there was no discretion allowed as to the amount of the surtax, it being fixed by Parliament. Under the new Act, however, discretionary powers will be vested in the Governor in Council.


William Thomas White: vious occasions, it may be 2, 5 or 10 per cent, but must not exceed 20 per cent. It is not 20 per cent of the rates in the general tariff schedule but 20 per cent ad valorem, so that if the tariff rates were, let us say, 30 per cent upon certain commodities, it would be open to the Governor in Council to increase such rate to 35 per cent or 40 per cent, but no more than 50 per cent. This provision of a more flexible surtax is not unknown in the legislation of other countries. Germany, Italy, and Japan,have similar legislation. In Germany, on dutiable goods proceeding from states that treat German ships or products less favourably than those of other nations there may be imposed by way of surtax twice the amount of the tariff rate on dutiable goods.


Alexander Kenneth Maclean: That is fixed?


William Thomas White: Yes. And free goods may be taxed with a duty not exceeding 50 per cent ad valorem, so there is a mixed provision in German legislation.
Italy provides that goods proceeding from countries in which Italian vessels and products are subject to a differential regime, may be burdened with an increase of frontier duties up to 50 per centum of the duty inscribed in the general tariff. In the case of goods duty free under the tariff, the same may be burdened with an import duty up to 25 per cent of their official marked value.
Japan provides that with respect to articles the produce or manufacture of a country in which vessels or produce or manufactures of Japan are subjected to less favourable treatment than those of other countries the articles of such country may be designated by imperial ordinance, which shall be liable to customs duties not exceeding in amount the value of such articles in addition to the duties prescribed in the tariff.
As I stated last night, it is open to the Governor in Council to impose such rates as to him appear advisable under the circumstances. It might be extremely undesirable to impose a surtax of 33J per cent, which my hon. friend from Halifax has described as a flat rate. That might be a prohibitive tariff. It might be that the situation could be reasonably met by im. posing a surtax of a much less amount, say 5 per cent or 10 per cent ad valorem, or even less. The 20 per cent ad valorem clause puts it in the power of the Government to impose a higher surtax than 33$ per cent should they deem it advisable. My hon. friend from Halifax referred last evening to the Underwood tariff of the United States. This is not particularly germane to the discussion, because, as I have already pointed out, this legislation is general and not aimed at any nation. In
[Mr. W. T. White. 1
regard to the provisions to which my hon. friend referred, I find that the United States tariff item section 4, paragraph J, subsection 7 reads:
That a discount of five per centum on all duties imposed by this Act shall be allowed on such goods, wares, and merchandise as shall be imported in vessels admitted to registration under the laws of the United States.
Provided that nothing in this subsection shall be so construed as to abrogate or in any manner impair or affect the provisions of any treaty concluded between the United States and any foreign nation.
That is the section of the Underwood tariff. The Attorney General of the United States advises in respect to that legislation as follows:
The five per cent discount to American vessels only, which was the primary object of the subsection, cannot be given without impairing the stipulations of existing treaties between the United States and various other powers, and that consequently the subsection, by the' express terms of the proviso, is inoperative.
So that, in respect to that particular section to which my hon. friend from Halifax (Mr. A. K. Maclean) drew my attention last evening, it is the opinion of the Attorney General that it is inoperative. I should say, for the information of the House, that on March 6 of this year the Board of General Appraisers of the United States rendered a decision overriding this opinion of the Attorney General which I 'have just quoted. Extracts from the decision are as follows:
Hence we hold that even though this law is made operative to its fullest extent, and the reduction given of five per cent upon goods imported in American bottoms, it will not have the effect of abrogating or impairing any treaty. We, therefore, find that the law must be so administered as to allow 5 per cent discount from the duty on goods imported in American vessels. . . . We conclude that subsection 7 of paragraph (j) of section 4, Tariff Act of 1913, should be enforced according to its letter.
The concluding paragraph of their decision is to this effect:
We, therefore, as above stated, sustain the protests where the goods are imported in vessels subject to American registry, and overrule the protests where the goods are imported in vessels not subject to American registry.
An appeal has been directed by the Attorney General of the United States from the decision of the Board of Appraisers to which I have referred. That is the position of the matter to-day.
Mr. BOltDEN: Where does the appeal lie?


William Thomas White: The letter under which the appeal is directed is as follows:
Treasury Department, March 14, 1914.
Sir,-The department is in receipt of your letter of the 7th inst., recommending that an appeal be taken from the decision of the Board of United States General Appraisers, dated March 6, 1914, G.A. 7540 (T.D. 34246) that under subsection 7, paragraph J, section 4, Tariff Act of October 3, 1913, a discount of 5 per cent should be allowed on the duties imposed by that Act on goods imported in American vessels.
In view of the importance of the issue, you are hereby requested to file, in the name of the Secretary of the Treasury, an application with the United States Court of Customs Appeals for a review of the said decision, in accordance with the provisions of subsection 29 of section 28 of the Tariff Act of August 5, 1909.
Respectfully,
(100201) Charles S. Hamlin,
Assistant Secretary. Assistant Attorney General, New York.


Wilfrid Laurier: Is that 1909?


William Thomas White: I presume that is the Act which provides the method under which appeals may he taken. This provision of the Underwood Tariff Act is, therefore, in the opinion of the Attorney General of the United States inoperative, but the Board of General Appraisers of the United States have ruled differently and an appeal has been directed against the decision of the Board of General Appraisers to the United States Court of Customs Appeal. I have made some inquiries about the matter and I understand that at present no discrimination is being exercised against Canadian imports to the United States carried in Canadian vessels. As I stated last night, this legislation is general in character; it- is not aimed at any particular nation. I have stated that this Government, and I am sure any government, would reluctantly exercise the power conferred upon it by the Customs Tariff Act of 1907 and the amending legislation that we propose, to make use of the surtax as against the products of a nation discriminating against its goods or against its shipping. But as my hon. friend evidently had in mind the section of the Underwood tariff to which I have referred, and as he mentioned it last night, I thought it might be of interest to the House that I should place before it the position of the legislation at the present time. We feel that Canada should have legislation providing for a surtax to be imposed in proper cases. We feel that the present provision in the Customs Act of 1907 does not go far enough. We feel that it is not sufficiently flexible. My right hon.
friend says that it is rigid and my hon. friend from Halifax says that it is a penalty. We provide that the Governor in Council may, up to but not exceeding twenty per cent ad valorem, impose an additional tariff rate by way of surtax upon the products and manufactures of any foreign country which treats unjustly the imports of Canada or discriminates unfairly against its shipping.


Alexander Kenneth Maclean: Is that a power which a government would desire to have? Would it not be better for it to be able to justify the imposition of the surtax by statute? Would it not be more peremptory in its application and operation because when once done under this Act it is done and that is the answer to the foreign country. Would not leaving that power in the hands of the Governor in Council lead to interminable negotiations with other powers before and after?


William Thomas White: Whatever is done by the
Governor in Council is done under the authority of this legislation and this is the legislation of Parliament.


William Findlay Maclean: I have no doubt about that.


William Thomas White: Parliament may say to the Governor in Council-in fact Parliament has said to the Minister of Customs: you may impose a surtax of thirty-three and a third per cent in addition to the present tariff rates, that surtax to be fixed, rigid, and inflexible, or Parliament may say to the Governor in Council, as we propose: you tnay impose a surtax but it must not exceed twenty per cent ad valorem. In both cases the solirce of the authority of the Governor in Council is Parliament.


William Findlay Maclean: Of course, there is no doubt about that.


William Thomas White: 
William Findlay Maclean: In any event it will
be prohibitory. A surtax is practically always prohibitory, it is intended to be.


William Thomas White: I would not say that, I
would not agree that it is prohibitory, or intended to be prohibitory. I would not lay that down as a general proposition.


William Findlay Maclean: I do not lay it down as a wise proposition, but I say that is generally the effect of it.


William Thomas White: The existing provision for a thirty-three and one-third per cent increase on the general tariff rate iby way of surtax would not necessarily constitute a prohibitory rate. Take a fifteen per cent or twenty per cent general tariff and one-third of that would be only five or six per cent, which would make a duty of twenty or twenty-six per cent which is about our average rate on dutiable goods. So I would not say that the surtax under the Customs Tariff of 1907 which we are amending was prohibitory or was intended to be prohibitory, nor will I say that a surtax should be prohibitory. I think the Governor in Council, under the sanction of parliamentary authority fixing a maximum rate, might well be left in the exercise of this discretion which presumably would be exercised wisely and with great circumspection as against any nation with whom the Dominion of Canada was carrying on business. The presumption is that the Government would exercise that power wisely and having regard to the situation that had developed. I have expressed myself on more than one occasion strongly to the effect that this Government or any Government would be extremely reluctant to invoke the surtax but if a case arose in which the surtax would be invoked, personally I can see no gbod reason why it should be placed at a rigid inflexible rate, at one-third of the general tariff rate. I can see no good reason why it should not be made more flexible and why there should not be a discretion which the Governor in Council should wisely exercise upon a proper occasion and impose a surtax which would be less than thirty-three and one-third per cent upon the general tariff rate.


Frank Broadstreet Carvell: I wish to correct the
minister. I find in yesterday's ' Hansard ' the following:
Mr. Carvell: Why has the minister changed the provisions of the present section 7? Under the present Tariff Act, the surtax is absolutely fixed by Parliament at one-third of the general tariff. By the new Tariff Act, it is provided that the minister has the right to fix this sur-

tax, excepting subsection 2 which provides for the surtax imposed upon goods going into the United States in any but United States vessels. What is the reason for changing it from the positive Act of Parliament to*the discretion of the minister? Does it not leave the matter open for the minister to make one trade with one importer and another trade with another? Does it not leave the matter open to lobbying between the importers and the minister? I think the minister should give some reason for changing an Act of Parliament into an Order in Council.
Mr. White: I direct my hon. friend's attention to section 7 of the present customs tariff by which power is given to the Governor in Council. Subsection 1 of section 2 of the Bill now under consideration provides that the Governor in Council may impose a surtax over and above the regular duties to an amount not exceeding twenty per cent ad valorem. The difference between the two sections is this. Under the present tariff the amount of the surtax is fixed at 33J per cent which is a very heavy surtax. Take the case of goods dutiable at 35 per cent one-third of 35 per cent would be nearly 12 per cent. There is no power to change that. It may appear desirable to the Government to impose a surtax of 2 per cent or 5 per cent, but not one of 12 per cent. The tariff rate might he too high it might be prohibitive, with the surtax of 33J per cent imposed on the goods sought to be imported ; it might be so high that it would be prohibitive if such a rate of duty by way of surtax were imposed. The amount of the surtax will be left to the discretion of the Governor in Council.
Mr. Carvell: That is just the objection. If there be a surtax it is imposed for a purpose; it is a penalty. I object to the degree of the penalty being left in the discretion of the min ister. I think that if there is to be a penalty Parliament should impose it and not the minister.
Mr. White: The Governor in Council.
Mr. Carvell: Under the present law the only power the Governor in Council has is to withdraw it entirely.
So I think the minister was in error in construing the existing statute as meaning that the minister has the right to- say that the surtax shall be applied or shall not be. If it were applied it would have to be for 33i per cent of the general tariff. I do not feel that the comparison between the tariffs of Italy, Germany and Japan would [DOT]be fair as compared with the laws of Canada. We are in Canada a strictly democratic country, so far as the enforcement of our laws are concerned, while in [DOT]the three countries concerned there is quite a lot of autocracy left in their form of Government. Let me give one illustration in recent times which ill my j'udgment shows that if a surtax is in effect at all it should be a fixed surtax. My friend will remember that in the United States in 1909, under the Payne-Aldrich tariff, certain surtax provisions were made which were fixed; and when the President of the United States held that he had no option

but to apply "these, they were felt to be so serious that it meant absolute prohibition of a large portion of our goods going into the United States. The result was that the parties came together, and, by a mere fiction, by this Parliament making a slight change in its Tariff Act which amounted to nothing, the President held that he was justified in saying that the provision did not apply to Canada.
'Mr. W-HITE: Supposing the surtax provision in the United States tariff had been flexible and not inflexible, would the President have been confronted with that difficulty?


Frank Broadstreet Carvell: No, but the probability is that he would have imposed a small surtax and we would have had to pay it. It was a rigid penalty, and the President did not feel like imposing it; negotiations were entered into, and the surtax was entirely disregarded as far as Canada was concerned. Ilf you are going to have a surtax, make it a surtax, something which is positive and which every country will know to be the law.


William Thomas White: If it had been flexible, what would have hindered the President of the United States, if he deemed it proper, and the Government of Canada, if they deemed it proper, entering into some arrangement of the kind that was entered into.


Frank Broadstreet Carvell: I can only say that, under the laws existing at that time, under the views of the President of the United States, we are all perfectly well aware that Mr. Taft would have imposed a very small surtax, and the people of Canada would have had to pay it whatever it was. As it was, we avoided it entirely. It is, I think, another argument in favour of making the surtax positive, and not leaving it in the hands of the Governor in Council or the Government or the minister, or whoever the authority may be, to dicker backward and forward, and make one trade with one country and another with another.


Thomas Simpson Sproule: The motion is scarcely in proper form, because, instead of being to refer back to the Committee of the Whole it is to refer back to Committee of Ways and Means. Some other slight informality, can, I presume, be made right by the clerk.


William Thomas White: I accept the statement of my hon. friend from Carleton as to what he meant by his remarks of last evening.
What misled me as to what he had in his mind was this remark of his:
Mr. Carvell: Under the present law the only power the Governor In Council has is to withdraw it entirely.
I understood my hon. friend to have it in his mind that Parliament must impose a surtax and that the only power the Governor in Council had was, as he has stated it here, to withdraw it entirely.


Frank Broadstreet Carvell: Or impose it.


William Thomas White: Evidently what he had in his mind was that Parliament fixed the amount at thirty-three and one-third per cent and that the Governor in Council had power to make regulations with regard to that. I understand him now to agree with me that the Minister of Customs can decide in what cases the surtax shall be applied.


Wilfrid Laurier: The law which it is now sought to amend has been in existence for something like seven years. On the whole, I think it has worked satisfactorily. While Germany was the country of which we had to complain at that time, it has had the effect and the result *of bettering the conditions of which we had to complain against the German Government. Our relations, as a consequence of this, were placed upon a more satisfactory basis.
Before I go any further I may say that I have not heard my hon. friend state to this House what inconvenience he has found in the working of the Act which has made necessary this legislation? So far as I know, he has not cited a case in which the surtax of one-third of the duty has been found to be unsatisfactory, and wherein it would have been more conducive to the general welfare of the country if he had had the flexibility which he now seeks to have. Unless inconveniences are found in the working of the statute, it is always a better policy to leave it as it is.
There is one thing in the amendment of my hon. friend to which I have no objection at all to offer. He is now seeking to enlarge the scope of this statute and to extend it, not only to a case of the imposition of the duty to which it is now limited, but to meet the possibility of discrimination in the shipping of goods. So far, I am altogether in sympathy with my hon. friend, and I think it is a wise provision he is making to reach, not only the injustice from which we have to suffer in the case of an abnormal duty under the present law,

but to meet such a case as he has in mind of injustice done to us in the shipping of goods. If he had confined his amendment to that alone, and extended it simply to the shipping, for my part I would have no objection; but, on the contrary, I would rather commend his action.
To one point to which we on this side of the House take exception is the power which he takes from Parliament and gives to the Governor in Council of establishing the rate of duty. The surtax is a tax; and a tax ought to be fixed by Parliament and ought not to be arbitrary nor in the power of the Governor in Council to alleviate or to make more onerous. Every subject ought to know what are the taxes he has to pay. In a matter of this kind there is nothing to be gained but much to be feared if the power of fixing the taxation, at present vested in Parliament, is made over to the Governor in Council. I am afraid that under the present Administration there is too great a tendency to take away powers from Parliament and to give them to the Governor in Council. I believe in the view held on this side of the House, that this tendency should not be encouraged and that every instance of it ought to be met by our determined opposition. I admit that there are cases in which the Governor in Council may be properly vested with such powers. For instance, the present law gives to the Governor in Council the power to determine when the Act shall apply:
The question arising as to any foreign country or goods coming under the operation of this section shall he decided by the Minister of Customs, whose decision shall be final.
This is a power which is properly vested in the Governor in Council, which Parliament gave at the time and which ought to rest in the Governor in Council. The fact that a new Act shall be passed in Germany, or Japan or Italy or the United. States, discriminating against Canada, or imposing an abnormal duty or a surtax, such as we had to complain of in 1907, is a circumstance in which the Governor in Council very properly and wisely is given at once the power to determine whether or not the Act shall apply and whether or not there is any injustice done to Canada. So far so good; but when it comes to the fixing of what shall be the tax, what is there to be gained in giving the power of determining the rate of duty to the Governor in Council ? My hon. friend says there may be cases where the tax will be five or ten or twenty per cent. The statute says the law shall be the same for all, whether Italy,

or Germany or Japan or the United States. The law says, as to any country which deals unfairly with Canada, that Canada will retaliate in this way and will impose such a duty. I submit, with all due deference to what my hon. friend has said that this case should rest altogether upon what inconveniences may have arisen in the application of the statute; and that, as the statute has proved to be satisfactory up to the present time, there is no occasion to alter the law, especially if you desire to alter the law in such a way as to give the Governor in Council the power to determine the rate of duty that shall be imposed.


Frederick William Borden: I do not desire to go over the arguments made by my hon. friend the Minister of Finance, and I will merely say that I cannot appreciate the force of my right hon. friend's contention. He argues that Parliament, not the Governor in Council, should impose a tax, and thus that every man in this country should know exactly the amount of tax to which he shall be subject. The very statute which as my right hon. friend claims was properly passed by Parliament, gave to the Minister of Customs the power to impose a surtax.


Wilfrid Laurier: No, to determine the case in which the tax should be imposed, not to determine the tax.


Robert Laird Borden: What is the difference in principle between the two? There is absolutely none. It is true, as I understand the provisions of the Bill, that the surtax may be somewhat larger or perhaps may be somewhat smaller under this legislation than under that which it supersedes, but the principle is in no wise changed. In the one case as in the other the decision as to whether the additional tax, whether large or small, shall be imposed, rests entirely with the minister under the former legislation, and with the Governor in Council under this legislation. Therefore, there is absolutely no distinction.
When my right hon. friend makes the suggestion that there has been an increasing tendency on the part of this Government to assume to itself powers which ought to be exercised by Parliament, I would like to point out to him that in the Naval Aid Act of 1910, there are no less than twenty-two sections which confer powers upon the Governor in Council, and some of them	of a	very important character. I do not	think that any
Bill passed during the past three years

'affords so striking an illustration of the conferring of powers upon the Governor in Council as that which my right hon. friend himself then passed. If one cared to examine the statutes passed during the fifteen years in which my right hon. friend held power, he would find numerous statutes in which that same principle was carried out to its fullest extent. I am not criticising that. The tendency of modern legislation is to confer upon the executive powers which can he more conveniently exercised by the executive than by Parliament. It is not a tendency of this Parliament alone; it has been a marked tendency of legislation in the Imperial Parliament foT the last forty or fifty years. The complexity of modern affairs renders it necessary.


Alexander Kenneth Maclean: That remark may be true about many subjects, but not of taxation.


Robert Laird Borden: I do not want to go over that argument, but I thought I had made it abundantly clear to every hon. member that the principle was not changed here at all. The scope within which the power can be exercised is changed, but the principle is not changed.


William Findlay Maclean: Nobody said it was.


Robert Laird Borden: Then what is the point of my hon. friend's remark? I think in Great Britain you can find illustrations of the exercise of power by His Majesty in Council under legislation fully as striking as the legislation which we are amending or as that which is proposed to-night. However, I need not labour that point. The only purpose for which I rose was to emphasize the fact that there is absolutely no change of principle in this legislation as compared with that passed under the Administration of my hon. friend. I do not see how it would be possible for Parliament to define these conditions. It was left to the minister in 1907, and under the legislation now proposed it is left to the Governor in Council.
Amendment (Mr. A. K. Maclean) negatived.
Bill read the third time and passed.
On motion of Mr. Borden, the House adjourned at 11.42 p.m.
Friday, May 29, 1914.