1916-05-15

VACANCIES.

Mr. SPEAKER:: I have the honour to inform the House that I have received a communication notifying me that a vacancy has occurred in the representation in the House of Commons by the death of Bowman Brown Law, Esq., member for the electoral district of Yarmouth, Nova Scotia; and also that I have received the resignation of Joseph Octave Lavallee, Esq., member for the electoral district of Bellechasse, Quebec; and that I have issued my several warrants to the Clerk of the Crown in Chancery to make out new writs of election for the said electoral districts.



PRIVATE BILL WITHDRAWN.

[Stage Direction]
Bill No. 100 (C-2 of the Senate) to incorporate the Manitoba-Ontario Railway Company.-Mr. Blain.

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

Mr. PARDEE:: 1.	Has the launch Walrondo, formerly used by the superintendent of dredging at Victoria, B.C., been sold? If so, to whom, and at what price ?
2.	What was the original cost?


Mr. ROGERS:: 1.	No.
2.	$12,000.


LUNENBURG COUNTY MAIL SERVICE.
Mr. A. K. MACLEAN:: 1.	Who is the contractor for the mail service on the Church Lake, New Cornwall and Mahone Bay route, Lunenburg county, N.S.?
2.	Were tenders asked for the said service? If so, what were the names of persons who tendered, and the amount of their respective tenders?


Mr. CASGRAIN:: The contract for this service has been awarded to the lowest tenderer. The names of the tenderers and the amounts will be furnished when the contract has been executed.
QUEBEC REFEREE ON BUTTER AND CHEESE.	[DOT]


Mr. BOIVIN:: 1.	Did the Government receive a petition signed by about 300 factorymen of the province of Quebec asking for the appointment of Mr. John O'Dell, formerly of Montreal but now of Abercorn, Quebec, as referee on butter and cheese in that province?
2.	If so, has (this petition been considered by the Government?
3.	Has the said appointment been given to Mr. ODell? If not, who has been appointed?


Mr. HAZEN:: 1.	Such a petition was received signed by 15 produce dealers and 46 factorymen.
2.	Yes. ,
3.	No. It is not proposed to appoint any one to the position of official referee. Before the receipt of the petition J. E. D. GaTeau was appointed inspector of weighing of butter and cheese.


THE RAINBOW.
[Stage Direction]
On the Orders of the Day:	,
Sir WILFRID LAURIER:: By your leave. Mr. Speaker, I wish to direct the attention
i

3M3
of the hon. Minister of Naval Service to a despatch, published last Saturday, stating that the Rainbow had actually taken possession of a ship which, though Mexican in origin, as I understand, was chartered by a German company and was carrying a valuable cargo of sugar, copper and corn. May I ask if there is any truth in the information?


Hon. J. D. HAZEN (Minister of Marine):: On a former occasion I gave answer to the House that the department had been advised that the Rainbow had captured a power schooner called the Oregon, but that in the opinion of the department it was not advisable to publish at this time any details with regard to the matter.


Wilfrid Laurier: I do not want to ask for more information on that point, but are we to understand from this that the Rainbow is patrolling the waters of the Pacific with a view to protecting our commerce?
Mr, HAZEN: Yes.


Wilfrid Laurier: May I ask if the two submarines which were purchased at the opening of the war are also so. engaged?


John Douglas Hazen: Yes, they are both in commission all the time and actively engaged.


SALE OF SMALL ARMS AMMUNITION.
[Stage Direction]
On the Orders of the Day:
Wilfrid Laurier: May I ask the hon. gentleman who is leading .the House to-day to tell me whether or not it is the intention of the Government to allow the Opposition to have counsel appear on its behalf be/ore the commission of Mr. Justice Davidson in respect to the charges made the other day by the hon. member for North Cape Breton (Mr. McKenzie)?


Sir GEORGE FOSTER:: Yes, I think I
may say that counsel will be arranged for.


Wilfrid Laurier: In what manner?


George Eulas Foster: I do not know
in what manner. The Prime Minister himself is away, but I think I may go so far as to say that counsel will be provided.


Wilfrid Laurier: My hon.
friend cannot tell me whether counsel will be arranged to represent each side of the
House, as was done in connection with the Meredith-Duff Commission?


George Eulas Foster: No, I cannot tell my hon. friend anything as to details.


Wilfrid Laurier: That is not a detail; it is important.


George Eulas Foster: It may be important, but I have not the details.


Wilfrid Laurier: I suppose,
then, the matter being under consideration, that the commission will not proceed tomorrow with the investigation?


George Eulas Foster: I believe that the commission is called for to-morrow. I [DOT] think my right hon. friend will have to wait for an answer to his question until the return of the right hon. the Prime Minister, who will be here to-night.


EXTENSION OF TERM OF PARLIAMENT.
[Stage Direction]
On the Orders of the Day:
Wilfrid Laurier: Can my right hon. friend give me to-day any information as to what has been done with reference to the petition of this Parliament for an extension of the term of Parliament? We were informed by the right hon. the Prime Minister a few days ago that the petition of this Parliament had been forwarded to the Imperial authorities; but he has not told us that any information has been received of the action taken upon it.


George Eulas Foster: The last information that I know anything of was that this resolution had been forwarded, that the matter was in the hands of the British Government, and that legislation will be introduced in the Imperial Parliament. It is in their hands.



SUPPLY.

[Stage Direction]
The House in Committee of Supply, Mr. Rhodes in the Chair.
Canadian Northern Railway Company-loan not exceeding $15,000,000, repayable on demand, with interest payable hall yearly at the rate of six per centum (6 %) per annum; to be used for expenditure made or to meet indebtedness incurred in paying interest upon securities of the companies included in the Canadian Northern Railway System having priority over the guaranteed securities authorized by Chapter 20, Statutes 1914, and instalments of principal of equipment securites and upon construction; the whole of said loan to be secured by mortgage upon the undertaking of the Canadian Northern Railway Company, and so much of said loan as may be applied for the benefit of any company included in the Canadian North-
[Stage Direction]
era Railway System, to be secured In addition by mortgage upon the undertaking of such company, such mortgages to contain such terms and conditions as the Governor in Council may approve. The disposition of the loan to be subject to the direction of the Governor in Council, $15,000,000.
['I beg to lay on the table of the House the report of the commission appointed to investigate the Parliament Buildings fire in February, 1916, together with the evidence.\nOn the motion of Mr. Rogers, the House adjourned at 11.31 p.m.\nTuesday, May 16, 1916.']
The CHAIRMAN:: Before the committee proceeds further with the consideration of this item, I wish to -say that on Saturday evening, when this item was under consideration,' the hon. member for St. John (Mr. Pugsley) proposed to this resolution the following amendment:
That after the word " approve " in the third line from the bottom of the particulars of the proposed vote, there should be added the fol-[DOT] lowing words. " Before making such loan the Governor in Council shall require the company to give to His Majesty the King an option to acquire at any time within five years from the date thereof the railways and other property of the company and of all other railways and property included in the Canadian Northern railway system at such price as to the Governor in Council may seem reasonable under existing circumstances."
On the subject of amendments in committee, May, 11th edition, at page 615, says:
Each resolution for a grant forms a distinct motion, which can only be dealt with by being agreed tc, required, negatived, superseded, or, by leave, withdrawn; ... here the power of the committee ceases. The committee may vote or reduce a grant, or may reduce the amount thereof, either by a reduction of the whole grant, or by the omission or reduction of the items of expenditure of which the grant *s composed; but the committee have no other function.
Again, at page 616:
Nor can the committee attach a condition or an expression of opinion to a grant.
The powers of the committee in this connection are so circumscribed that it does not appear that the House itself could give instructions or authority to the Committee of Supply >to propose such an amendment. On this point, I quote May, 11th edition, at page 607:
An instruction to the Committee of Supply cannot be moved, as, following the Speaker's ruling; " nothing can be brought on in that committee of which notice has not been given in detail, by the Estimates laid before the House."
It, therefore, in my judgment, appears to be clear that the amendment of the hon. member for St. John is not in order, and I so rule.


Mr. PUGSLEY:: Mr. Chairman, I, of course, cheerfully bow to your decision. My object has, I think, been attained by bringing the motion before the committee and to the attention of the Government,

because, of course, if the Government decided against the amendment, I recognize that I could not hope it would he carried *by the committee, even if you, Sir, had ruled it to he in order. But I would like to call the attention of the Minister of Finance to the fact that the resolution itself provides that the loan shall be secured by a mortgage on the undertaking of the company, such mortgage to contain such terms and conditions as the Governor in Council may approve. I submit that, under the resolution as it is, it will he quite open to the Government to stipulate that the company shall give to His Majesty an option to purchase the Canadian Northern railway system at a price which -may be agreed upon, and I do hope that the idea which I have endeavoured to put forward in the amendment will commend itself to the Government. I hope so for this reason, that there is to-day a rapidly-growing sentiment among the people of this country in favour of the Government acquiring this transcontinental system of railways. That feeling has, of course, been given a very great impetus by the fact that this company has been coming pretty often, I think quite too often, to the country for assistance. When this loan of $15,000,000 is made there will be in the vicinity of $70,000,000 or $80,000,000 which the company has obtained from the Government under conditions which make it apparent that, but for the Government assistance, the company could not have pulled through. The Minister of Finance, in proposing tnis vote, frankly stated that unless the Government gives this assistance to the company it will, in all probability, be obliged to place its railway system in the hands of a receiver. The same statement was made two years ago, when the Government guaranteed the -bonds of the company to the extent of $45,000,000. Now, does it not seem that, the company having been obliged to come again to the Government for an additional $15,000,000, the Government ought to take an option from the company, on reasonable terms, for a reasonable amount, which option could be exercised or not as Parliament in the future might determine. I would not suggest that any injustice whatever should be done to the company. I should think that it ought to be recognized that these two gentlemen, Sir William Mackenzie and Sir Donald Mann, notwithstanding what may be said by their critics, are deserving of a large measure of praise, a large degree of credit, for the enterprise

and foresight they have shown. They have succeeded in building up a great railway system, consisting of some 8,000 or 9,000 miles, traversing many of the richest sections of Canada, a system which in the future must prove an enormous factor in the development of this Dominion. I think that these gentlemen are entitled to all reasonable consideration, and that the' Government ought to deal with them on some equitable basis. But it does seem to me that it would not be fair to the people of this country that the Government should, by continuing to assist this company, take all the risk of the company pulling through and getting in a good financial position in the future. Then, when the day of prosperity comes again, as we all hope that day will soon come again, and if the country should deem it wise to take over this system, the company would be in a position before arbitrators, or before the Exchequer Court, to demand an enormous sum running into many millions of dollars, claiming prospective profits, and compelling the country to pay a very large sum of money indeed for this property which to-diay is practically in the hands of the Government, and which, if the Government were to exercise its powers, it could now acquire for the amount of the securities which,are outstanding against the road.
In 1914 I moved a resolution, the effect of which would have been that the Government would have the right to take over the equity of Mackenzie and Mann, Limited, which means Sir William Mackenzie and Sir Donald Mann, at a sum not exceeding 330,000,000. I was greatly astonished to hear the Solicitor General, speaking for the Government on that occasion, say that $30,000,000 would be no temptation to Sir William Mackenzie and Sir Donald Mann, and that rather than accept $30,000,000 for their equity, over and above all the securities and obligations, they would let the road go into the hands of receivers. I could not believe that statement. I could not believe that the Solicitor General was warranted in making that statement to the House; though when he made it I presume he must have consulted them. But the time has arrived when with the company coming back again for assistance, for the enormous sum of $15,000,000, the Government should come to an understanding with Sir William Mackenzie and Sir Donald Mann, and have it clearly understood that if, within a reasonable period, say within five years, the Government and Parliament
should, in the interests of the people of Canada, take over this road they will affix to it as a condition a reasonable sum at which the equity of these gentlemeu should he acquired for the country.


Mr. R. B. BENNETT (Calgary):: I desire to make a few observations this afternoon on this item. I ventured two years ago to say that I believed that the largest problem in domestic politics was that related to transportation in this country. I still think so. Unfortunately, no recriminations that we may engage in will take from us the question, and no deception will delude us for a moment as to the conditions that confront us. I cannot conceive of any question of greater importance to the country as a whole, and to the individual, than the question which is now before us.
Before I make a few observations regarding the matter, I should like to place myself on record, not in a spirit of hostile criticism, but rather in the way of suggestion, that there should be, if possible, some rule adopted by this Parliament by which railway legislation shall be brought into this House in the first fifteen days of the session. For many years, since 1900, at least, and for many years before that, legislation involving the appropriation by Parliament of millions of dollars has usually been submitted for consideration in the closing days of the session. The result has been that only a few members are conversant with the question, and these few usually make it their business not to disclose what they know as to the real purpose of the legislation introduced. I think something should be done to prevent legislation of this character from being introduced during the last days of the session. I am perfectly certain that this House, at this critical stage, has not had ample opportunity to consider this matter in all its phases. Might I suggest that legislation of this character, involving an appropriation of public moneys for the support of public utilities of the character of railways, should be introduced in the early days of the session, and be left for the consideration of the members, even if it is not passed until the closing days of the session.
There is no problem perhaps that is engaging the attention of thoughtful men in England more than the making effective of that system of democracy which is embodied in our representative institutions, whether we call them legislatures or parliaments. At the present time, the com-

municating link between the private member in this House, and practically in every House of Parliament in the British Dominions, and the Government, which initiates legislation and under our constitution, which appropriates public moneys for public purposes, is the caucus. How inefficient that is, it is unnecessary for me to state. There is not a man in this House who does not know that the caucus is a wholly inefficient method of communication between the private member and the Government which initiates legislation. The theory of the constitution that a cabinet is a Committee of the House of Commons or of Parliament is an excellent theory, but the tendency of our history has been, for the last 50 years, to increase and strengthen and magnify the powers of the cabinet, while destroying and minimizing and lessening the authority of the private member. Any student of the political history of England during the past 50 years is conscious of that fact. In England they have been endeavouring by various methods to overcome that difficulty. They realize that not only has the power of cabinets become greater, but that .the supreme authority of the Prime Minister in the cabinet has become greater. I think it was Mr. Paul who in his political history of England pointed out that fact with great authority and with great power.
There must be some method, short of that, which is used in the United States, by which the cabinet has no representation on the floor of Congress at all, and where every member has the power to initiate legislation of a far-reaching character-there must be some method by which the power and strength of democracy can be maintained, and, at the same time, the cabinet system of government, which we have as a Committee of Parliament responsible for initiating legislation, is maintained. I make these observations because I think there is no subject which better illustrates the point than that to which I am alluding. It is absolutely impossible for the members of this House to grasp in all its magnitude the issues that are involved in this railway legislation. It is perfectly absurd to expect that in a few days men can appreciate all the bearings which this legislation may have on the future of this country.
Fortunately, to-day, we can at least feel that what we are asked to do does not commit this country ,to any permanent policy as some of us regret we have been committed to permanent policies in the past. What

we are doing to-day we are doing because it is necessary; because there is that necessity which knows no law, and to which we must at all times yield if we are to maintain the credit of the country, which is a matter of paramount importance. I make these observations because conditions and not thories confront us. Might I analyse.in a few passing sentences what these conditions are. Wfe have a vast area, one of the largest countries in the world, as large as the United States of America, and larger; half a continent, stretching from the Atlantic to the Pacific, from the 49th parallel to the Arctic regions, with a population of less than 8,000,000. and to-day, whether we like It or not, we have over 35,000 miles of railway. I suppose this House is aware that only four countries of the, world have a greater railway mileage than Canada, namely, the United States of America, British India, and the Empires of Germany and of Russia. In railway mileage we rank fifth among the nations of the world. The mere statement of that fact, coupled with what I have already said as to our limited population and the immensity of our area, will at once bring home to every member of this House the magnitude of the problem that confronts us. And if we look further into that problem we, find that we have in this country practically four great systems of railway:	the Government-owned system,
which we have had since 1867, and which had its origin in what might be called one of the terms of Confederation-the derivation of the word " Intercolonial " itself indicates the purpose and intent that was in the minds of those who created that system of transportation. To the Intercolonial railway has been added, during the intervening years, many miles of road. The railway has been extended to Montreal; that was certainly a necessity, and was one . of the first acts of hon. gentlemen opposite when they came to power. Its branch lines have in some cases been built, and in others acquired, by taking over small feeders in the Maritime Provinces. There are still in the Maritime Provinces some small lines that have not yet been taken over, which cost but little, and which, in my opinion, should be taken over before any other lines are taken over. I make that observation because of personal knowledge of the conditions.
Next, we have the Grand Trunk system. That system, as has been pointed out by many, was never conceived with the idea

of occupying the place in the transportation business of this country that it does to-day.' This road, originally extending only from Portland to Montreal and Toronto, was pushed through to Chicago, and has gradually absorbed, during all these years, a large number of smaller roads, and its unfortunate financial position has been brought about not through the operation of the eystem itself, but because in taking over other small lines it has frequently paid larger prices for them than should have been paid, and very often has guaranteed obligations that were wholly incommensurate with the value that was being received by the system. Speaking broadly and generally, that is how the Grand Trunk system has been built up. In connection with the Grand Trunk we have the Grand Trunk Pacific system, about which I shall make a few observations later on; dealing with them both under the term Grand Trunk system.
It may not be known to all the members of this House, but the fact is that practically every dollar in thd Grand Trunk system is British money. Except for a small loan made upon the New York market within the last two years there is not a dollar in the Grand Trunk system that is not English money. I do not know whether hon. gentlemen are aware of the fact, but it was certainly a surprise to me to learn that over $100,000,000 in the Grand Trunk system has never seen a cent of dividends. I believe that the security holders of that company number now 90,000 persons, most of whom live either in the British Isles or in British possessions scattered throughout the world.
The next system, in point of time, is the Canadian Pacific railway. Of that system it is only necessary to say that it is one of the richest, most powerful, with the most diversified interests of any ' corporation in the world.
The last system in point of time is the Canadian Northern. It is true that the Grand Trunk Pacific was launched after the Canadian Northern, but I am dealing with it as part of the Grand Trunk eystem. The Canadian Northern system, as I pointed out two years	ago, owed its origin
to the ambition of a couple of gentlemen for whom apparently the hon. member for St. John (Mr. Pugsley) has a very warm feeling to-day, and as to whom I will not say anything other than to point out, and point out in stronger terms as I proceed, that any
proposal to take an option on the Canadian Northern and pay these gentlemen a single dollar for their charters would meet with the just disapproval and condemnation of every Canadian; for to commit this country to paying them a single dollar would do violence to every principle of reason and every dictate of common business sense.
As I pointed out two years ago, the Canadian Northern system has grown up gradually, extending its ramifications from the province of Manitoba westward to the Pacific, and now eastward to Montreal and Quebec. As to the policy that actuated the gentlemen who built that road, I am not concerned to-day. I have had my say as to that, and I am reminded of the words of a very great exponent of principle who said, " Not Heaven itself can change the past. What has been, has been." And he closed with these words; "And I have had my day." That may be true also. These, then, are the systems of railway that we 'have in Canada to-day.
Then there are scattered throughout the country some small lines in the lower provinces, quite a few independent lines in Ontario and Quebec, and a few in the far West, but these latter are closely associated with the Great Northern system in the United States. In the East, the Michigan Central, the Wabash and the Pere Marquette connect with their termini at Chicago, Buffalo, or on the Atlantic seaboard.
That is the situation. I have heard a great deal said as to who is responsible for it. But all the talk in the world as to who is responsible for this situation will not relieve us from the condition that now confronts us. If there is one thing this war has taught us, it is that recriminations do no good; we have learned that at least. On this point I would only say that there is, I think, a certain definite principle that may be laid down that will fix the measure of responsibility as between the Liberal and Conservative parties. A party that initiates legislation must assume responsibility for it, and unless the other party in the House opposes, it must share with the initiating party the responsibility. So I have already pointed out that the government owned system of railways was part of the arrangement by which we reached Confederation. The extending of the Intercolonial to Montreal was part of the policy of the Liberal party, and to them must be given the credit, and they are glad, I doubt not, to accept this responsibility.
v

They should have extended the Intercolonial further to the Great Lakes, by taking advantage of the opportunity they had of acquiring the Canada Atlantic; there is no doubt about that. The price paid for the Canada Atlantic by the Grand Trunk was at least $1,000,000 too great.
The responsibility for the Grand Trunk rests with pre-Confederation men like Hincks, Macdonald, Cartier, and other men who lived, moved and had their being in this country prior to 1867, had much to do with shaping the course and guiding the destinies of that road.
I understood the hon. member for Edmonton the other day to make some observations that would lead me to believe that he thought the attitude of the Conservative party after they	came into power
had something to	do with the illfortune that has overtaken the Grand Trunk Pacific and the National Transcontinental. I should like to say this; In my opinion the Liberal party must assume the whole responsibility for the Grand Trunk Pacific. The hon. member for St. John quite realized that when he rejoiced in this ill-fortune, because he said that it reflected great credit upon the Liberal party; he did not say so in those very words, but that is what he meant in the ultimate analysis. So far as the Grand Trunk enterprise is concerned I happen to remember the late Mr. Hays and his party coming west to look over that country before determining what the policy of the company should be. I remember that the Board of Trade and others of us met them at Calgary, and I went on to Banff with them, and spent Sunday there. I know something of the dreams they had, something of their hopes and expectations, and certainly what they now have on their hands does not in any sense represent the hopes and expectations they then held. It is only fair to say that at that time these gentlemen believed-at least they so expressed themselves-that the great cities and towns of eastern Canada where manufacturing was being carried on vigorously, and where traffic was being produced in large quantities, and which were served by the old Grand Trunk, should be linked up with the prairies of the West, in order that the Grand Trunk could share in the great development that must inevitably take place in that country.
I believe at that time that these gentlemen would have been quite satisfied to project their line to Winnipeg and Edmon-

ton, and make adequate connections in the East 'by using existing facilities or by extending existing facilities, and ultimately carrying their road through to the Pacific. Unfortunately, however, the proposal submitted/ to Parliament bore no resemblance at all to the proposal which these gentlemen had in mind and which they desired Parliament to pass. I suppose it is a matter of public knowledge that the late Mr. Hays placed himself on record as to what he asked the late Government to do, and that, as a matter of fact, the late Government diid not do it. It is sufficient for my purpose to say that, as that legislation was initiated by the Liberal party and as it was opposed by the Conservative party of that day, the Liberal party in this country must take the responsibility for it. That is a fundamental principle of our constitution. Had the Conservative party agreed to and accepted that legislation, it would have been equally blameable, because one party must initiate legislation and the other party may oppose or support.
The National Transcontinental, built at an expenditure by the Canadian people of $152,000,000 up to the present time, was built largely for political purposes. It is my belief that hon. gentlemen opposite, then in power, had hopes or expectations that that road would one day be useful; but in the light of the knowledge we now possess-and I do not altogether blame the Government of that day, and I am going to say something as to that in a moment- it must be apparent that to build that road from Winnipeg to Quebec, to- span the St. Lawrence by a bridge and continue it to Moncton, New Brunswick, under the conditions that existed (commencing, as my hon. friend the Minister of Finance said last year, to build the chimney first and the house afterwards), was little short of a manifestation of absence of all business judgment. I believe hon. gentlemen opposite think that now; they must think it, they cannot get away from it; but I do not go so far as to blame them entirely for that. After carefully studying this railway matter during the past year, the best conclusion that I can arrive at is that all of us-and I mean the people of Canada as a whole-were somehow infected at that time with a disease which came from overspeculation and optimism run riot, or run mad. There was no real warrant for the building of the Grand Trunk Pacific and the National Transcontinental in the way in which it was built, having regard to the

Canadian Northern, than there would be for an endeavour to create, for instance, a House of Lords in this country, and I have never been quite able to understand how strong-headed business men permitted themselves to be led into building that road. I have never yet heard any explanation from anybody that would either justify it or excuse it. I had the' hardihood, on a public platform in my community, to give my opinion in regard to the matter, and I remember that I was very severely criticised by my own friends, and was told that I was lacking in faith in my country and was filled with a spirit of pessimism. So, in the ultimate analysis, under our democratic institutions, the people themselves must aocept the responsibility for the conditions that exists, and neither the Opposition nor the Government is vitally concerned, because no Government would have initiated the legislation in the terms in which it was initiated except upon the demand of the people manifested by resolutions passed by boards of trade, municipal councils, farmers' unions and associations, and merchants throughout the country, who were all asking for the building of railroads, wholly oblivious to the fact that those railroads must be paid for; who gave no reasons, simply demanding the building of railways and the spending of money, reckoning not the evil day when the cost would have to be borne, caring not except for what they called the development of the country and the maintenance of a fine spirit of optimism.
Let us pass to the Canadian Northern, which was partially commenced at that date. I have never yet heard an adequate explanation for the building of it, although I havie heard, from two gentlemen who are now no more, a reasonable explanation. I have never yet been able to understand how the right hon. leader of the Opposition ever permitted those two roads, the Canadian Northern and the Grand Trunk Pacific, to be built. I remember, in 1905, the Canadian Northern system reached the city of Edmonton, and I remember something of the rejoicing that took place because it was built through to that point. Then I remember that, instead of amalgamating those two systems into one, or instead of by some method preventing the Grand Trunk Pacific from parallelling the Canadian Northern, they launched the Grand Trunk Pacific system and permitted the Canadian Northern to push forward its enterprise by branch lines, which were
perfectly justified; but they also, in 1911, placed upon the statute books of this country, in fulfilment of a resolution which passed this House, an Act by which they declared in the preamble, and in the terms of the resolution, that the Canadian Northern was to be a transcontinental system reaching from the Pacific to the Atlantic, just as in similar terms they had made a similar declaration with relation to the Grand Trunk Pacific. Surely that will stagger any one who merely sits down and thinks of it. Less than 8,000,000 people, just when times were beginning to get bad in 1911, permitting the ex-Minister of Railways and Canals to introduce and have passed through this Parliament, legislation giving to the Canadian Northern railway $35,000,000 to bring its system from the head of the lakes east, when we all know that the expenditure of a much less sum than that would have brought efficiency to existing facilities and caused no such embarrassment as that which now confronts us.
I have been asked by a hundred business men-and I am sure every other hon. member has been asked the same thing- what explanation can you give for this? The reasonable explanation-^and it is a very simple one- is that an election was-coming on. We ought to face that proposition very frankly; and, what is more, that is a case in which both parties must accept responsibility, because the Conservative party of that day, sitting in Opposition, did not oppose that $35,000,000 grant to the Canadian Northern railway; they did not challenge it. The records show that, and the Conservative party must accept responsibility with the Liberal party, because if the one party initiated this legislation, it is a case in which the other party did not oppose, and, not opposing, must share the responsibility. Why did the Conservative party not oppose this legislation? I suppose the obvious answer is-because there was an election pending. Therefore you have an election forcing upon the people of this country a grant of $35,000,000 to bring the Canadian Northern railway east from Port Arthur.
The Conservative party on the defeat oi the Liberals -succeeded to these legacies. My hon. friend from Edmonton (Mr. Oliver) does not usually make unfair statements, but the other day he said that the Conservative party's attitude towards the Grand Trunk Pacific and the National Transcontinental had been in a sense respon-



sible for the evil days that had overtaken those enterprises. I wonder whether he has paused to think what the Conservative party did. In January, 1912, I was in the city of London, England, and the broker for the Dominion of Canada, speaking to me in one of the banks, said: " I suppose Canada will not disregard her obligations with relation to the Grand Trunk Pacific." I was happy to say to him, as any Canadian would have said:	" Governments may
change, but the obligations of the State continue." So, instead of the Conservative party doing anything to embarrass the Grand Trunk Pacific or the National Transcontinental, they did quite the opposite; they placed upon the statute books from year to >ear, provisions whereby the time for completion was extended in order that that railroad might not show its continuing deficit upon operation, but might possibly, with changed conditions and improved times, be able to meet its obligations.
So far as the National Transcontinental is concerned, I am sure that there is not a member of this House who does not know, not only that the Grand Trunk Pacific could not have taken over the National Transcontinental, but that to have suggested that they should do so, as we see now in the light of their then financial position, would have been to have added to their deficit three per cent upon the cost of that road, which would have been not less than $5,000,000 a year.
There is the situation: the National Transcontinental was still unfinished; the Canadian Northern nor the Grand Trunk Pacific were not built through to the Pacific coast; the Canadian Northern rights in relation to the $35,000,000 available for construction east had been established; the building of branch lines over the prairie had made much progress; and signs were showing of the financial depression that followed. What was to be done? For my own part, I have no hesitation in saying that had I been dictator I would have stopped the building of the Canadian Northern railway east of the lakes; I would not have assumed the responsibility of guaranteeing the 31 per cent on the $35,000,000; I would have stopped the building of the road;-and more, I was going to say this to the House and will say it now, that, in my opinion, many miles of track on the National Transcontinental must be taken up and put in some other place where they will serve some useful purpose. It was under these conditions that Parliament

granted cash subsidies to the Canadian Northern Railway, they voted them year after year. I had not hesitation in saying what I said two years ago. We should not have done it. As I now see it,
I was derelict in my duty in not then pointing it out. But we voted those subsidies. It is impossible for any member of this House to say truly that this Parliament is primarily responsible for the carrying of the Canadian Northern to the Pacific. With an optimism which is not properly described by that name, the province of British Columbia guaranteed the securities of the Canadian Northern, and the road was built from the Yellowhead Pass to Kamloops and from Kamloops to the coast. It parallels the Canadian Pacific at some points and the Grand Trunk Pacific at others.
As to the prospects, there is no local traffic that can be developed for many years to come that will pay the interest on any mile of its track. It has good grades and curves; it has every quality to make a railway, except one, and that is traffic; and it will take some time, under existing conditions, before traffic is forthcoming. This Parliament voted cash subsidies to assist in its completion. I do believe that possibly there was a situation when, finding the road in the position it was in, with the province of British Columbia only responsible, when it would have been better to leave it as it was until we could take -stock of the situation, until we could see if by some system of re-arrangement we could find a way to piake something out of the road crossing the mountains. But recriminations and retrospective views in the light of present knowledge do not assist us. Two years ago we voted a guarantee of $45,000,000 to the Canadian Northern upon representations of fact which, I, have no doubt, were believed, but which are now shown to have been absolutely erroneous. To-day we are confronted with the appalling situation of the Canadian Northern in default and the Grand Trunk Pacific, practically insolvent. What are we going to do?
It has been pointed out that there are three courses any, of which we may pursue: we may take them over to-day; we may assist them; or we may put them into the hands of a receiver. [DOT] For my own part,
I have never hesitated in my belief as to what should be done. I have listened to all the arguments that have been given and

they have not changed my mind. In my opinion, we ought to let both roads go into the hands of a receiver. That sounds very serious, and in the minds of many it is an absolute impossibility. I can only point out that eighty per cent of the railroads of the United States have been in the hands of receivers; and one-seventh of the railway mileage of the United States Nis now in the hands of receivers. There is only one way by which you will get rid of all the accumulated water and of all the difficulties that belong to taking over these systems, and that is by a receiver or by a reorganization which has the effect of a receivership.
Look at the Grand Trunk Pacific for a moment; I will not deal with it at length. The Grand Trunk Pacific has three kinds of securities; those guaranteed by the Government; those guaranteed by the Grand Trunk; and its own class of securities. Those guaranteed Iby the Government place upon us a responsibility which we must discharge in times of stress and strain, as well as in times of prosperity. And I trust that in any balance sheet of the public accounts which the Minister of Finance may put out hereafter, he will show at the foot of the page " contingent liabilities," because no statement of the finances of the Dominion is a correct and complete statement that does not show the contingent liabilities that belong to us by reason of our guarantees. So, we have to pay the interest upon the Grand Trunk Pacific guaranteed securities for its lines in the mountains and on the plains, for which we hold a mortgage. We must pay this, whether we wish to or not, we must pay this to maintain our place among the nations of the world and our credit in the markets of the world; we must do this, or, ourselves become insolvent. As to the securities guaranteed by the Grand Trunk Kailway Company, my hon. friend from South York (Mr. W. F. Maclean) pointed out that we should take over this railway to-day; but I should like to point out to the House and to the country that we are confronted with the guarantee of the Grand Trunk Railway system its guarantee upon the bonds of the Grand Trunk Pacific. For my part I am not prepared at this moment to say that the tax-payers of the Dominion of Canada should be substituted for the shareholders of the Grand Trunk Railway. It may be that when we have before us all the information to enable us to deal with this matter as adequately as we should, the
common sense and wisdom of the House will conclude that it is better that we should ourselves be put behind the securities of the Grand Trunk Pacific by accepting the obligations of the Grand Trunk system, by relieving them, and taking over the system as a whole. But to-day, for the Grand Trunk Pacific, there is the guarantee alike of the Dominion of Canada and the Grand Trunk Railway system behind it; and until such time as the obligations of the Grand Trunk have in some sense been settled with relation to the Grand Trunk Pacific, I do not think that this House would he discharging its duty to the people by now taking the system over. It is all very well to say: there is $15,000,000 due to the Grand Trunk by the Grand Trunk Pacific, and $15,000,000 due to the Grand Trunk Pacific Development Company, and that we have only to take over the stock. That is very true; it is a simple thing to acquire the Grand Trunk Pacific. But in the acquisition of that road, we substitute for the guarantee of the Grand Trunk Railway system-a guarantee given thoughtfully and after careful consideration by the shareholders duly assembled in London to deal with the matter-the guarantee of the tax-payers of the Dominion of Canada. I want to know that adequate safeguards have been provided, that we have proper agreements with regard to traffic that will secure us against the building up of towns and ports outside the Dominion of Canada, before that is done. It is for that reason that I gladly vote a sum of money to enable a proper investigation to be carried on in order that we may know, in the light of expert information and advice, just what can be done to save a situation which is very acute. So much for the Grand. Trunk Pacific, in so far as taking it over at the present moment is concerned
With regard to the Canadian Northern, I am not going to deal at length with figures to-day, because .they are only painful to read and my voice is bothering me very greatly. What aTe we going to do about the Canadian Northern? My hon. friend the member for St. .Tohn (Mr. Pugsley), says that we should take an option for its purchase. The crux of the Canadian Northern situation may be very simply stated. It has $107,000,000 of provinoially guaranteed securities and $101,000,000 of Dominion guaranteed securities; that is, $208,000,000 of guaranteed securities of the provinces and the Dominion. That means that the people of this Dominion must protect the credit of the Dominion or of the provinces

to the extent of the interest on those sums of money. In addition to that, whether we will or not-it is now too late to look back except to take stock of it-we have promised to pay the interest on $45,000,000 Dominion guaranteed securities for two years and on $35,000,000 of similar securities for three years, and British Columbia has promised to pay the interest on an enormous sum involved in the construction of that road to the Pacific for a period of three years. So these sums must be met anyway.
According to the figures that we have before us, something like $147,000,000 of unguaranteed Canadian Northern securities are outstanding. How are they secured? They are secured primarily by lodging with a trust company the certificates of .title to Canadian Northern properties called subsidiary companies. There are the Lake Superior terminals, there is the telegraph system, there is the express system, and in addition they are secured, of course, by a charge upon the Canadian Northern system. It is true that two years ago we put $45,000,000 behind that again. I think we could afford to lose the $45,000,000 now rather than put ourselves behind that; I think that must be apparent to every thoughtful Canadian. The problem is a simple one with the Canadian Northern. You say you will not have a receivership, because it would hurt our credit. Then I ask this question: how are you going to adjust that $147,000,000 of unguaranteed securities? You have your federally-guaranteed securities, your provincially-guaranteed securities; now you have your unguaranteed securities. I, for one, will protest as long as I have a seat in this House against the substitution of the Canadian taxpayer for the 'Canadian Northern with relation to these unguaranteed securities. I will not become a party to the people of this country being told that they must insure and guarantee unguaranteed securities. If men in England bought $25,000,000 of income certificates of the Canadian Northern and paid par and more for them; if they bought $147,000,000 of unguaranteed 4 per cent perpetual debenture stock and paid par for it, that is their business. But I do protest against the substitution of 8,000,000 Canadian people behind an unguaranteed security of any railroad company. I go further. Not only is it unsound business, unsound in principle and in detail; I say further that it puts a premium upon watering railroad securities and stocks. A point to which I shall presently direct attention is this: If we are to take over this Can-

adian Northern railroad, or if we are to prevent a receivership occurring; if we are to act the part of the receivers; if we are to reorganize the system, then we must proceed to reorganize even as the receivers of the Wabash reorganized that road two years ago; even as the receivers of the Frisco .system, are now endeavouring to reorganize that system; even as the receivers of the Book Island system are now endeavouring to reorganize that system. We must proceed upon business principles, and if these 4 per cent unguaranteed securities are to. be taken care of by this country they can never be taken care of on the basis of making them worth 100 cents on the dollar. I am not adverse to any system of reorganization by which these securities would have some value placed upon them; but I would deprecate greatly any endeavour to substitute for the Canadian Northern Bailway system, which was the security upon which they were sold, the collective credit of the people of this Dominion. That is the reason why it, seems to me that we must go further than we have gone; we must do that very shortly, in order that an opportunity may be afforded by the lodging of these securities with a trust company, or otherwise to bring about some scheme of reorganization, because I think the time is gone by when men of business and intelligence, sitting in this House, should be frightened by the word " receivership." It is a great bogey, this word " receivership." All it means is that you put somebody in who takes charge of the property to conserve it and savie it for the people whose money built it.
I would just like to say this to the hon. member for St. John, who talks about the magnificent undertakings that have been carried forward by Mackenzie and Mann. The Canadian Northern Bailway Company is a corporation owing its origin to this Parliament. It was created by nothing more or less than a statute that gave corporate powers and existence to two or three men. and clothed them with the responsibility on the one hand and the opportunity on the other of building a transportation system. They organized themselves as a corporation, and with one hand they borrowed hundreds of millions under that name, and with the other hand they paid it to themselves as contractors, to build what we now have

a railroad. That is the story, just as tersely put as I think it can be put. And, mark you, the money that was borrowed with the one hand was, with the ex-

ception of the $140,000,000 to which I have referred, borrowed upon the collective security of every man in the Dominion or in the provinces. In the one instance it was the collective credit of the people in the provinces, and in the other of the Dominion as a whole. And with that money they, under another name and with the corporate existence which is given to them in another place, are building this transportation system and handing it over to whom? To the people whose money built it? To the people whose credit built it? To the people who made it possible? Not so. Year after year they have come .back to us and asked us to give them more money to continue the operation of something that they themselves did not create nor build, but which owes its very existence and continuance to the collective credit of the people of this country. We are unable, however, to get a receivership, because the attitude of the Minister of Finance, may, after all, be the correct one. Moreover, in a period of war we must accept the inevitable; the opinion of those who are charged with financial responsibilities and the obtaining of large sums of money with which to carfy on the war should at least be respected to the full. So, conceiving that the hon. Minister of Finance is right and that I am wrong, what are we to do? We are confronted with this situation; we must either assist the road or let it default, and since we are not to let it default, for the reasons which the minister has given, then we must help it.
What are the conditions upon which I, speaking as a western man, am willing to help save the credit of this country? To me the conditions are very simple. First of all, any loans made to these roads must be demand loans. I would not permit myself to become a party to a single dollar more going to either of these systems unless it be upon demand. Because, as my hon. friend who has just taken his seat knows, that if loaned upon demand you may demand it to-day and go to action to-morrow; or you need not demand at all but commence action for payment.
Mr. PUGSLEY *. Which you would not do.
Mr. BiENNETT: I do not know whether or not my hon. friend's remark reflects his own mind; but, speaking for myself, i'f the systems were conducted as they have been, I would not hesitate to commence proceedings to-morrow morning. First of all, then, a demand loan. That insures for me absolute control of the situation; I know when it is a demand loan that I at least have control.	I know when it is a
demand loan	that I can call, and
by calling it I can get my money back, or take possession. If the days of prosperity come to-morrow or the day after, then so much the better for us; we shall get our money back, and in a period of years we shall have made good the $45,000,000 loaned two years ago to the Canadian Northern and the $25,000,000 loaned the Grand Trunk Pacific. First, then, a demand loan. I have no hesitation in saying that, so far as a loan, if it must be a loan at all, is concerned, we must do this.
Then, having made a demand loan, what is the next condition I insist upon, so far as I am concerned? The rate of interest, the terms, Having been settled, I ask that this country shall have absolute control of the distribution of that money; in other words, I want the Minister of Finance to be responsible to this Parliament for every dollar of it. I do not want this money to pass through the exchequer of these people, for them to do with as they please; I ask the Minister of Finance to accept the responsibility for its expenditure, for and on behalf of the people, who make the loan. He will say to me, I suppose: " Why should I accept this responsibility? I am only lending money." It is more than lending money. We are saving bankrupt enterprises from destruction, and because we are endeavouring to save our credit we are not putting a receiver in charge. But the Minister of Finance, sitting here to-day, is to me the receiver of the system, and as such I ask and I expect, and if I am permitted to live will demand, that he shall see to the distribution of every dollar of that money-every cent of it. I want to know that every dollar of it is used for the purpose for which this Parliament is voting it. I want to know that every cent of it is used for the purpose of meeting the demands which have arisen, and which must be paid by reason of fixed charges accruing -for the purpose only of preserving the credit of this country.
Then so far as the Canadian Northern is concerned, there is a large question-this is the third demand that I make upon my friend the Minister of Finance. The operating revenues of the Canadian Northern Railway far exceed its operating expenses. According to its estimate, which has been laid upon the table of this House, the Cana-

dian Northern Railway* for the year ending 30th June, 1917, will have, apparently, a net revenue of nearly ten millions of dollars. I say to you, Sir, that I protest against Mackenzie and Mann being left in charge of that ten millions of dollars.


Mr. TURRIFF:: Hear, hear.


Richard Bedford Bennett: I protest against the men who have been guilty of the misrepresentation they have, between their statement of two years ago and their statement of to-day, being left in charge of the operating revenues of that system. They are not worthy of being left in charge of the operating revenues of that system. I do not trust them. The people of this country do not trust them. The people of this country will not for a single moment submit to taxation being put upon them to save this system from going into the hands of a receiver if, Sir, it is proposed to leave these * men in charge of the operating revenues of that road. I am satisfied that that must not be done. I want to point out to this House that this vote, which we are making here to-day, means a tax for both railways upon the people of 'Canada of $3 for every man, woman and child in it, for the purpose of meeting the interest charges and demands that may be made upon us by reason of the default of these railway systems. There are worse things than default in payment of money, and it seems to me that, when this record is written in the history of this country, the default in corn-man sense on the part of the Canadian people will be in evidence quite as much as the default in payment of interest. Now, having taken stock of the situation, realizing where we are at, I believe that I but voice the opinion of" the community in which I live when I say that we demand that these men'shall not be left in charge of the operating revenues of that Toad.
I am not casting any reflection upon the operation of railways; I am not a railway man. But I wish to give one illustration of the wasteful methods of these men in the operation of this road. The hon. gentleman from Assiniboia (Mr. Turriff) spoke the other day. Doubtless he and I frequently go down to the station to take the train for Toronto. Sometimes we take the Canadian Northern train; sometimes we take the Canadian Pacific railway train. That train on the Canadian Northern between Ottawa and Toronto has no more license to be there, no more license to be running there than there would 'be for run-

ning a train from here to Kamchatka. It has no license whatever. Any man in this House knows that.


William Pugsley: Would the hon. gentleman explain why?


Richard Bedford Bennett: The reason is this: there is a sufficient number of trains without this one, to meet the demands of night traffic between Ottawa and Toronto. The Canadian Northern is operating a day train between these points. I have passed through the night train and counted the passengers, night after night, for the purpose of satisfying myself what the revenue may be. I know how many passengers are necessary for a train to pay operating expenses. The maintenance of that train means nothing more or less than a fixed chaTge upon the revenues of that road; and, as a matter of fact, that money should have been spent in building freight cars to 'supply the Goose Lake system, of which my hon. friend spoke the other evening, to haul out the farmers' grain. That is what I mean.


Mr. MORPHY:: Why would the hon. gentleman not take off the Canadian Pacific Railway train?


Richard Bedford Bennett: The Canadian Pacific
Railway train is operated by a system that shows a surplus of $20,000,000 and was there first.


Hugh Boulton Morphy: Let the other road have a little of the money, then.


Richard Bedford Bennett: I hope my hon. friend is not so lacking in intelligence as to make a remark of that kind seriously.


Hugh Boulton Morphy: I do not ask you to submit me to any impertinence. Of course, we will stand almost anything from you.


Richard Bedford Bennett: I am surprised


Hugh Boulton Morphy: The hon. gentleman is an advocate here for the Canadian Pacific Railway.


Richard Bedford Bennett: At least, my hon. friend, who occupies that proud position for the Canadian Northern Railway, has been able to show that animus which actuates him. I am not an advocate of the Canadian Pacific Railway.


Hugh Boulton Morphy: You have that reputation.


Richard Bedford Bennett: I want to say once more that I am unfortunately in the position of sacrificing a large sum of money per annum because I was, and am not now, an em-

ployee of the Canadian Pacific Railway. I have sacrificed more money per annum than the hon. gentleman ever earned in his profession in a year for the purpose of being here rather than being an advocate of the Canadian Pacific Railway. I simply say that the duplication of unnecessary railway facilities is best indicated by the running of that train between these two points. There are four trains a day on the Canadian Northern railway between Toronto and Ottawa: one leaving each point at noon, arriving at the other point in the evening, and one leaving each point at 11 o'clock at night, arriving at the other terminus the next morning at 7.30 o'clock. The local service is not taken care of by the night trains; that is obvious. How did the Canadian Pacific Railway-and I thank my hon. friend for reminding me of it-reach its present position? Just in the manner indicated by my hon. friend from Edmonton (Mr. Oliver) the other day-by making its service consistent with the demands of the travelling public. That is how it was done. When I first went West the train between Calgary and Edmonton ran three times a week; it went up one day and came back the next. My hon. friend from Edmonton will say it was a poor train. It was a poor train. And yet it was by the maintenance of that service that the Canadian Pacific Railway was able to permit the system between these two points to exist. Had it run night trains, as it now does, there would, of course, have been a deficit as between the operating expenses and the revenue. But it did not run night trains until three years ago. But getting back to my illustration, you have on the Canadian Northern a beautiful Pullman train leaving here at 11 o'clock at night. May I remind my hon. friend from St. John that every one of those cars would put 20 freight cars upon the plains, where the profitable business of that road Comes from. In other words, according to the best computation that I can make, each of these two night trains between Ottawa and Toronto, would involve an initial expenditure at least equal to the cost of one hundred 1,000-bushel freight cars. I leave it to the hon. member for Assiniboia (Mr. Turriff), who is much more familiar with these facts than I, to say whether or not one hundred freight cars would not handle 100,000 bushels of grain; and whether the moving of 100,000 bushels of grain would not help to relieve the congestion in that country. In constant service between the grain-producing centres of
Alberta and Saskatchewan and the head of the lakes, these cars would produce five times the revenue that will be produced in the next five years by the operation of the night trains between Ottawa and Toronto.
net the money tnat my hon. friend from Perth (Mr. Morphy) wants the system to get, I want it to get by carrying the freight that is lying there to be carried by reason of the development of the country which the railway was built to serve. The people of the West realize that the expensive passenger equipment and service is being maintained at a loss. I do not care what the company says, or what their traffic returns show. I have the evidence of men who have gone over the system for the purpose, and the Board of Railway Commissioners will give you the actual statement. It is a losing service, and the 100 freight cars that could be built, with the expenditure necessary to maintain them, would move 100,000 bushels of wheat out of the congested areas, and be productive. What we demand is that this- system be no longer managed by the men who created the existing conditions, but by men who will be responsible for meeting the traffic demands of western Canada, and who will see that the money is not diverted for other purposes. I think it is only fair to ask that.
You ask, how is it to be accomplished ? It is to be accomplished in two. ways: (1) by the appointment of a board of directors, and (2) by the appointment of adequate auditors. These are the two methods by which I propose to meet the difficulties to which I have directed attention. Left in charge of the $15,000,000, these men would do what they have done in the past. We want not local auditors, not men who have merely good reputations in the particular communities in which they live, but men of international reputation, men who will be responsible in the largest sense of the term for the audit of the railway system, men of large business training and experience who., by reason of their great position in the business world, will enjoy the esteem .and confidence of the Canadian people.
So far as directors are concerned-I can only speak for some of us in the West- we ask that those appointed, and I think the Minister of Finance said he would give us three directors, be not dummy directors, not men who will not direct, but men who will be able by reason of their skill, experience and knowledge of railways, to see that the money of the road is used foT

the purpose of supplying facilities to the public. After all, the obligation of this railway system is to do what? It is to supply the people with an efficient transportation service, and the demand for that will not be met unless there be appointed directors who have the requisite knowledge, and who will be responsible for the effec-. tive administration of the system.
The next safeguard which we ask, and it is not too much to ask, in view of the circumstances, is that no new work should be commenced that would commit the system to great expenditures. I agree entirely with the observations that have been made as to what has been going on in various parts of Canada with regard to the launching of new enterprises connected with this system. We ask, and we have a right to ask, that the money lying in the banks upon the guaranteed securities of the Dominion and the provinces should be used for the purpose of completing the roads for which they were loaned, because we are bound as a matter of law to that, and further, that no new undertakings be commenced. A few years ago, they launched a vast steamship enterprise; they launched a system of hotels, and they 'have also on hand great terminal enterprises. We must insist, and I ask the Minister of Finance to see to it, that no new expenditures are made until such time as we have had an opportunity to consider them
I go further. The last demand is that there should be an adequate commission for the purpose of ascertaining all the facts connected with these and other railway enterprises. It is not sufficient to say to this House that you are going to appoint a commission. If a commission is to be appointed, it should be appointed before the end of this month. It should be appointed before the month of June, because there will remain only the months of June, July, August and September in which it could carry on its work. It must be a commission, if possible, of men who do not reside in Canada. I do not believe i that you can get in Canada men who would not be more or less influenced by local conditions and circumstances, or who would take a disinterested view of the matter, and present a report of a disinterested character upon which we could act. My hon. friend from Perth (Mr. Morphy) referred to the attacks that have been made upon me at various times, the suggestion being that I am partial to the Canadian Pacific railway because I once acted as their legal adviser. These attacks reflect a state of mind TMr. R. B. Bennett.]
common in this country and one which might find expression in any report made. We do not want men who are likely to be influenced by the Canadian Pacific railway, by the Grand Trunk railway, or by the Canadian Northern. What we ask is that you get the biggest men that you can get for money on the American continent, for the purpose, not of studying the Canadian Northern and Grand Trunk enterprises, but of looking over the whole railway situation of this Dominion and of determining how the 35,000 miles that are now in Canada can be so co-related and so co-ordinated that they will be of the greatest use to everybody, and that we will get out of them the money to meet the charges against them.
I do not think it is unreasonable or unfair to ask that the commission get to work at the earliest possible moment. I have talked with a gentleman who has travelled over Canada and he informs me that 2,500 miles of railway in this country should be torn up, because they are of no good and never will be of any good to the people. By coordination and by co-relation, by linking up this piece of system or that branch line with a new main line, by using the branch lines of the Grand Trunk or Canadian Northern, by using the lowest grade of this road here and another there, we may be able by a system of co-operation to save many miles of railway from destruction. Should a man ask for more than that; can he ask for less? It is not too much to expect that a commission composed of such men, would be able to do invaluable work for this Dominion, and would be able to bring in a report which would enable us to arrive at a conclusion in relation to the whole matter when Parliament met again. But it is not for any commission to determine the policy of the Canadian people. That must be determined by themselves. I do not believe that the railway question has ever been as seriously considered by the Canadian people as it should be, and I think that when a report, such as I have indicated, is ready, we should have if possible a special session of this Parliament to deal with this whole matter. I have advocated that privately, and I repeat it publicly. I believe that Parliament should be called together, if possible, without the Government assuming the responsibility [DOT]for the carrying out of this or that policy. There should be placed on the table of the House a report such as I have indicated, and we should sit together in special session

and determine once and for all what we shall do with regard to a matter which is of great importance to the Canadian people. It would be a report made by men of outstanding position in the railway world whose knowledge and experience would command the respect and esteem of the Canadian people. There should be a financial report that could be read and understood by every hon. member of this House. I would supplement that report, if I had my way, with the annual reports of the Canadian Pacific Railway, Canadian Northern and Grand Trunk systems of the 30th June, 1916, and let the members of this House study the situation which demands the greatest possible care on the part of every person. Then there is left the question, what shall be done after that? I am not going to say whether or not I believe that government ownership would serve best the interests of this country. I am not here to say whether I believe in the nationalization of all Canadian railways. What I have been struggling for for years -and, so far as I am concerned I will not be content until I get it-is the necessary knowledge to enable me to arrive at an opinion on this question. A former president of the United States, President Taft, in a recent address pronounced himself as strongly opposed to government ownership of railways, as strongly opposed to the nationalization of railways in the United States. The hon. member for Edmonton (Mr. Oliver) the other evening said he was not sure that it would serve as a useful purpose in this country. The hon. member for South York (Mr. W. F. Maclean) was sure that it would be a panacea for all our ills. I am not sure; I have not definitely made up my mind. I have recently looked through the traffic returns of all the great railroads and am satisfied of one thing: the economies that could be effected in operation if the railroads of Canada were nationalized would amount to a stupendous sum. The surplus revenues of the Canadian Pacific railway are very great, for the fixed charges of that road, last year were only $10,000,000; and when you remember that their fixed charges were only $10,000,000; while the fixed charges of the Canadian Northern were $15,000,000 per annum, you can get some idea of the burden that would be placed upon us if we dealt with this question in every phase and took into consideration every road that has been built and will be built in Canada. So I am not here to declare either for or against public ownership. But what I ask in the strongest possible terms is that we should not procrastinate in the creation of this commission. We should deal with these matters in the earliest possible moment, and should receive a report that will command respect, that will be the last word of authority on the subject. There are great men in the United States who have been employed by the great railroads for a similar purpose-by Mr. Hill and the late Mr. Harriman, for instance-men of transcendent ability in railroad work, and who have done much in the reconstruction work of railroads in the United States. In addition to that, there are great financial men who would be able to give their assistance in the preparation of a report that would enable us to understand, first of all, the physical value of the Canadian Northern and Grand Trunk Pacific system-the replacement value-and, secondly, their franchise value, if any. We should also have prepared by proper solicitors a statement of the legal position and of the securities that have been issued by these roads, together with recommendations as to how they can best be dealt with.
In connection with the question of physical value, I should like to turn for a moment to the last condensed balance sheet of the Canadian Northern railroad system. This values the railway and equipment of the Canadian Northern railroad, as on the 30th day of June, 1915, at $430,052,428.55. Let us compare that with the Canadian Pacific railroad. You will find _in Poor's Manual a statement of the Canadian Pacific railway system, and it is one well worthy of consideration, because, with all its vast mileage of railway, aggregating 14,000 miles, with all its steamships and lands, it carries its railway and equipment at only $503,584,725.07 (Poor's Manual, 1916, page 1499). When you reflect that the Canadian Northern railroad system is carried in their balance sheet at over $430,000,000, and the Canadian Pacific railroad, with all its equipment, at $503,000,000, or only $73,000,000 difference, you can form some adequate conception of the real situation in regard _ to the railways of this country. Nothing could more clearly indicate the character of what has been going on during all these years than these two sets of figures. Take that in conjunction with the figures that were put on Hansard the other evening by the hon. member for Lambton (Mr. Armstrong), comparing the Canadian Nor-

them Railway caTS per mile with the Canadian Pacific Railway's, and showing that the Canadian Pacific, with some 14,000 miles for traffic purposes, owns something like 87,000 freight cars, 2,781 passenger oars, and nearly 8,000 service cars, as compared with a system which shows not one-third of that equipment, yet whose railway and equipment is declared on its books to be only worth $73,000,000 less than the Canadian Pacific Railway and with several thousand miles less track. That, it sei ms to me, is something to which the attention of the country cannot be too strongly directed, and I should like the figures placed in possession of every member of this House, together with a copy of the annual statements of the Grand Trunk Pacific, the Canadian Pacific Railway and the Canadian Northern Railway for the year ending June 30, 1916; so that hon. gentlemen might study these figures in the light of the report of the commission and determine how economies may be effected such as will, by co-relation and co-ordination, enable us to save, if possible, the Canadian taxpayer from further demands on his purse.
I should like hon. gentlemen also to bear in mind the obligations of this road which carries its railway and equipment at $430,000,000. On the 30th of June, 1915, the assets of the Canadian Northern were represented in round figures to be worth $562,000,000, while the Canadian Pacific Railway's assets were valued at $931,000,000 only, of which nearly $100,000,000 was in cash and active securities. Does not that suggest to thq House the necessity for the most watchful care in relation to the expenditure of the revenues of the Canadian Northern Railway and of the moneys we are advancing?
But that is not all. Two years ago, you will find in the Sessional Papers for 1914, representations were made by Mr. Hanna, vice-president of the Canadian Northern Railway, over his signature, as to what would be the earnings of the Canadian Northern Railway system for the year 1916. He estimated that the gross earnings for 1916 would be in round figures $54,000,000, and the net earnings $15,000,000; for 1917, gross earnings $61,000,000, and net earnings $17,000,000; and for 1918, gross earnings $67,000,000, and net earnings $20,000,000. Now I find by the documents that were laid upon the Table of the House the other day that the estimated gross earnings for 1916, instead of being $54,000,000, as represented by Mr. Hanna two years ago, are now ee-

timated by him at $34,900,000, and the net earnings at $9,770,000 instead of the $15,000,000 that he estimated two years ago. In view of that the country may well question whether the glorious prophecies of Sir Donald Mann as to the traffic of the future will be realized, and whether, let us eay in 1917, the gross earnings of the company will be $61,000,000, as Mr. Hanna estimated them to be in 1914. This year he says they will be $41,000,000. In 1914, when he was after $45,000,000, he estimated that the gross earnings for 1917 would be $61,000,000, and this year, when he is after only $15,000,000, he estimates that the gross earnings will be only $41,000,000, or $20,000,000 less. Then as to 1918, he estimated in 1914 that the gross earnings would be $67,000,000 and to-day he estimates that they will be $47,000,000, a shrinkage of $20,000,000, and so on for 1919 and 1920, and as regards the net earnings in the same ratio.
There is one other matter I should like the House to consider. There are outstanding, according to the figures placed upon Hansard by my hon. friend the Minister of Finance and the documents we have before us Canadian Northern railway liabilities to the amount of $492,000,000- $107,000,000 and $101,000,000 and $149,000,000, then $92,000,000 .of apparent debt then $17,000,000 for equipment, besides $25,000,000 which we have outstanding for income -bonds, or nearly $500,000,000 of securities outstanding, outside of capital stock which is another $100,000,000. Think of that in the light of the fact that the total value given of the railway and equipment is only $430,000,000. It is no wonder that people are asking: Where are we going to get off if this thing continues? There is a limit to the resources even of the Canadian people; there is a limit to the power of the Canadian taxpayer, and I say, in all seriousness:	This country cannot continue
year after year putting up money to meet deficits that arise in the operation of railroads owing to the promoting tendencies of the contractors who build them. Hence,
I rejoice that the Minister of Finance has seen fit to appoint three directors on the Board of Directors of this road. If they are dummy directors like our present director on the Grand Trunk Pacific, who is a station agent at Levis, they will not be very valuable, but if they are men like Sir Thomas Tait, who gave the best of his life to the Government railroads in Australia, then I know that not one dollar will be diverted from its proper source, and that

every dollar that comes from the system Will go back into the system or in payment' of its just debts.
There are other figures of tremendous interest. My hon. friend from Edmonton (Mr. Oliver) said the other day-and he seemed to think it was true, I think he believed it absolutely-that since we came into power in 1911, there had been a shrinkage in railway earnings, and he attributed that to the fact that the people of this country were not as prosperous as they were before. All I can say is that the railway statistics show quite the opposite. I wish every hon. member would study the volume issued by Mr. Payne every year, and if my hon. friend will turn to page 32, he will find that the railway earnings per year in Canada have increased since 1911; that on the 30th of June, 1911, they reached a higher point than they ever reached before; that they increased since then; that the number of passengers and tons of freight carried per mile until this past year also increased. A summary of the whole railway situation is given on page 39, and it indicates that for the year ending the 30th June, 1911, the gross earnings per mile were $7,430.45; the operating expenses per mile, $5,158.85, and the net earnings per mile, $2,271.64. In 1912 the net earnings increased; in 1913 they increased and in 1914 they increased, but in 1915, they showed a falling off, so that instead of there being a diminution in the traffic returns of the railways as to the number of passengers or as to the tons of freight carried per mile, or as to the revenue per mile, either gross or net, there has been a constant increase since the 30th June, 1911, until last year.


Mr. OLIVER:: Is the hon. gentleman
saying that I made some allusion, in the remarks I made the other night, to railway traffic since 1911?


Richard Bedford Bennett: The remark that I understood my hon. friend made was that unfortunately, shortly after the Conservative party come into power, there was a shrinkage in the prosperity of the country, and that that shrinkage affected the railroads.


Frank Oliver: I did not specify the railways. What I mentioned particularly was that there had been a yearly increase in productive area and in production in the West, and that that increase in production and in productive area did not continue
after 1911. I did not allude to the railway traffic at all.


Richard Bedford Bennett: Well, it was referable to the railway traffic.


Frank Oliver: Certainly


Richard Bedford Bennett: And I only read from
page 39 of the statement to show that in 1911 we had reached a higher point in railway earnings per mile than at any time before or since 1907, and that there was a steady increase every year until 1915. I merely mention that in passing as it seems to bear upon the observations which the hon. gentleman made.
There can be but two ways by which we can effect improvements in our present system. One is by practicing economy. In relation to economy, I will not deal with that at any greater length than to say that I believe the railways in question can be managed much better than they have been in the past, because the Canadian Pacific Railway Company was last year able to show economy amounting to many million dollars that enabled it, with a shrinkage of 25 or 30 per cent in gross revenues, as the hon. Minister of Finance said, to show a very large net return, almost in keeping with the previous year. Everyone who lives in the West will bear me out when I say that the most drastic economy can be effected in relation to the Canadian Northern in the East, and that great benefit will accrue to the West by better facilities for the handling of freight, *because freight facilities are demanded in western Canada, and most railway men are constantly engaged in the study of how to bring the handling of freight to the highest state of perfection.
I have had letters from almost every part of the western provinces during the past few months, complaining of the handling of traffic by the Canadian Northern. My hon. friend from Assiniboia (Mr. Turriff) has had the same sort of letters, and I doubt not that my hon. friend from Edmonton (Mr. Oliver) has had the same. Every one of us have received complaints of the slow movement of freight. While there has been congestion of freight, and no ears, these unnecessary duplications of "services go on in eastern Canada. Where is the traffic to come from? Economy in service can effect some improvement, but the reorganization of the railway system of Canada, the saving of the taxpayer from the demands that are made upon him an-

nually, can be brought about only in one way, and that is by increasing traffic. Increased traffic in the East 'must largely mean passenger traffic, because there can be no great increase for some years to come in freight traffic, but in the West, colonization and settlement are the two things that must bring about increase in traffic. Linked up with the transportation problem is the problem of settlement and colonization. After this war there can be no material progress, no material move towards prosperity until such time as we settle our lands with suitable persons and increase the population of this country, and that increase of population will mean that we shall thereby be adding traffic to the railways, so that the solution of this problem of transportation ultimately must rest with the men of western Canada and with the development of that great country west of the lakes. I care not how much discussion may be indulged in as to what passenger facilities are required here or there. So far as the West is concerned, in the hands of the producers of the plains, and not with the residents of the cities and towns, rests the solution of this problem, for until such time as the great body of mileage that is now unproductive, that is now not being utilized to the extent to which it can be utilized, is supplied with traffic, although there may be congestion at this or that point, in the ultimate analysis you find there is not sufficient traffic for all those roads to take care of. There is a limit to the traffic production of 8,000,000 people, and that limit has been nearly reached. This year, with lessening crops, and with lessening traffic, there will be lessening returns.
Let me point out some figures that have been prepared by a gentleman who is now engaged with the Economic Commission, and that show what we have in the West at the present time. We have a population in the four western provinces of 2,212,576. In Manitoba 56 per cent of the population is urban and 44 per cent rural; in Saskatchewan, 27 per cent is urban and 73 per cent rural; in Alberta, 40 per cent is urban and 60 per cent rural; in British Columbia, 55-4 per cent is urban and 44-6 per cent rural. We have a total of 955,653 people in the towns and 1,256,923 people in the rural parts of the four western provinces. Let us look at the railway mileage:
CMr. R. B. Bennett.]
Railway mileage.
Miles.
Manitoba	 4,576
Saskatchewan	 6,011
Alberta	 4,153
British Columbia	 4,378.9
Total	 19,117.9
That is, in these four provinces we have more than half the railway mileage of Canada-and with a population of less than two and a half millions of people. How does that work out with relation to the population?
Relation of Railway Mileage to Population.
Total. Rural.
1 mile to. 1 mile to
Manitoba	
116	51Saskatchewan	115	84Alberta	
120	72British Columbia	
114	45Four Western provinces.. 116.3	66
This does not take account of certain miles of railway in British Columbia not yet completed. Now, if this House and this country will keep these facts in mind, it will assist in the realization of the vastness of the problem that confronts the Canadian people. It means this-that we must get into the West more people. For there is no chance of 66 people ever being able to produce or consume traffic sufficient to maintain a mile of railway the average cost of which in Canada is between $40,000 and $45,000, ^ and the fixed charges upon which will amount in the aggregate to nearly $2,000;-sixty-six people cannot contribute $2,000 a mile net, which really means after all the production of $6,600 a mile. People cannot produce at the rate of $100 each for the purpose of maintaining the railways, for that is what it comes down to. So, this problem of transportation is indissolubly connected with the colonization and settlement of western Canada; and I say to the Minister of Finance, unless some policy is outlined by which these plains are settled year by year and day by day, you will have a demand made upon 4 p.m. the tax-payers of this country to pay a deficit upon the operation of these railroad systems. There are the facts that stare us in the face; and it requires courage, determination, imagination, and a vision of the future that is to be to deal with them as they should be dealt with. We must settle this country, for until the country is settled the transportation problem will not and cannot be settled. In the eastern part of Canada, I believe, you have only one method by which you can possibly hope to succeed in solving

the problem, and that is by increasing largely your passenger traffic, and you can only do that when you have roads sufficiently strong to take care of these passengers. I have 'long had a dream that the terminal facilities at Halifax might be used by bringing, let us say, the Mauretania to that port to ascertain what time she can make in carrying passengers from Liverpool destined for Chicago and other American cities; and then have well-equipped trains such as we have provided in some cases, to see how many days quicker we can land passengers in Chicago, Minneapolis, St. Paul and other western points, than can possibly be done by way of New York. In that way we may be able to develop passenger traffic for our railways. But we cannot look to that alone for a solution of the railway problems. It is borne in upon my mind-that, when, out of thirty-five thousand miles of railway in the whole Dominion you have nineteen thousand miles west of the Great Lakes, the problem must be dealt with in the West; and, that being the case, it is incumbent upon those who have the power and responsibility, to see to it that our population is increased by a vigorous immigration policy.


William Pugsley: I am very glad to hear the hon. gentleman come to settlement of the West. Will he state briefly what are his views of a progressive policy for settling the West?


Richard Bedford Bennett: I have a well-defined
idea on that subject, but the statement of it in this House might not serve any useful purpose. It would be only a statement of the ideas of one person.


William Pugsley: But the hon. gentleman is very influential with the Government.


Richard Bedford Bennett: No, not very influential. I wish he were. I will go this far-any settlement policy to be effective in this country must have reference both to the East and to the West. I am not one of those who believe that when this war is over you will find people flocking into this country. I believe that the darkest days of this country's economic history in the near future will be, first the period of readjustment to follow the war, and after that the period of reconstruction. When the war is over, and our soldiers are paid off and return; when dislocated industry is being adjusted from the manufacture of munitions; I believe you will find a time of very great depression in this country, a time that will require the greatest courage and determination on the
part of all of us to meet. After that will come the reconstruction period, and that, in my judgment, will be not of rapid development. There are two reasons why it should come slowly. The first is, that the settlers we shall get-into the country will be of limited numbers, and the second is that the economic strain which we shall have undergone will be so great as to prevent us from readily finding large sums of money for the purpose of the undertakings necessary for a large inflow of people. I do not know that I should take up time to talk about this, and perhaps the hon. member for St. John (Mr. Pugsley) will excuse me if I do not enter upon the question at length, because I do not think that the presentation of the views of one individual upon an abstract question will serve any useful purpose. I have said that I have well-defined ideas of how this is to be accomplished, and I have also said that the carrying out of the policy necess'ary to accomplish the end will require great courage, great determination, some imagination, and a vision of the future that is greater than the present. I believe that the abandoned farms of the eastern provinces can be settled. Upon these farms I would settle men who have lived out of doors for the last two or three years, men who will be glad to come here with a little money, to seek educational advantages for their children, and who desire to'escape high taxation and to continue to live under the British flag. These men will settle in the East. But the younger men, more vigorous, with a spirit of adventure, and who want to be in the open, must come to the West. And in coming they should be given the assistance of the state, with money to go upon the land and to find for them agricultural implements. We must provide modern facilities to make this the best country to live in in the world; because, unless it is better than other countries, other countries will get the settlement that we need. For we know that settlement does not always follow the flag. We know that after the Boer war thousands of men went to the United States who should have come to Canada. And they went there because we could not offer them the facilities that were offered them elsewhere. We must have rural tele- [DOT] phones, good means of highway transportation, and some community life -such as can only be brought about by putting the state behind it all. No policy of colonization can be made efficient or useful or worthy of the

name of a policy, that does not put behind it the power of the state. I am sure I shall be excused, if for no other reason than because of the difficulty with which I speak from making further observations on the subject.
I do desire to reiterate and to press upon the attention of this House the fact that the transportation question cannot be settled other than by the West, because, fortunately or unfortunately, 20,000 of that 35,000 miles of railway are there, with a population so sparse that we have one mile of road to every 66 of our rural population. That being so, I am giving my support to this measure at this time because I btelieve that it means the end. Two years ago I was frank in stating that I did not believe that it meant the end. It is no joy to any man to be right if being right means that his country suffers thereby. I have no joy in relation to that, but I am profoundly concerned about one thing, which I press upon this Government and upon my hon. friend the Minister of Finance: that no time be lost; that there be no procrastination and no delay; that this commission of the biggest men that' money can buy at once get to work and report to the Canadian people as to the possibilities of co-ordination and co-relation of the various units that comprise the railway systems of this country, so that, if possible, the traffic that is now being developed and may be developed, may be made productive and so that there may be no further calls upon the Canadian taxpayer. I am certain, however, that the Canadian taxpayer will not continue to pay unless some return be made to him either in the way of lessened freight rates or by his ownership of the facilities by which his trade is being transported. I want to be able to arrive at a conclusion, with my mind at least seized of all the facts, therefore I do urge upon my hon. friend the selection of the best men that he can get-men of experience, of knowledge, of vision; men who, looking to the West, will see not merely a few scattered homesteads and a few miles of track, but a great vision of the mighty influx of the human race that will one day pass over in that direction and occupy this land, for whom facilities have been supplied far in advance of the needs, far in advance of what the requirements are to-day. The constant demand that has been made on Governments being met by constant acquiescence, not refusal, has created a condition in which we find more 
facilities than we have traffic to take care of, although now and then, by reason of the spreading out of those facilities, there are not sufficient cars to take care of the traffic which develops at particular points. That but accentuates the force of the argument that I have been endeavouring to make. If such a commission does that, having a proper audit made by men of international reputation who will ensure to me that the money which we are voting is used for the purpose of protecting the credit of the Canadian people and' not otherwise, and that the revenues which are paid by the people of this country are used for the purpose of carrying their traffic to the seaboard; if and when that is done, I am satisfied that when we come back-if I had my way it would be a special session for the consideration of this subject only-free from the fetters of restraint imposed upon men who vote to support a cut-and-dried policy -what we will do as representatives of all the Canadian people to work out a great policy, having regard to the present and looking also into the future, will redound to the credit of this Parliament and of the people who are represented here.
I apologize for having trespassed so long upon the time and patience of the committee in compelling it to listen to my remarks, made under very difficult physical conditions. There is much that might and should be said with relation to figures, but they are lessons of the past. The future problem is what must be dealt with under the conditions that now exist. Recrimination or self-deception or regrets will not get us away from the fact that the condition that confronts us is one of the most difficult that ever confronted Canadian statesmen, and that it calls for the co-operation and the united effort of every man who sits within this Chamber, whether he sits on the side of the Opposition or supports the Government.
Hon. GEORGE P. GRAHAM (South Renfrew) :	I assure the hon. gentleman who
has just taken his seat that he need not apologize for the length of his remarks. He has devoted a good deal of study to this question, as is evidenced by the manner in which he has presented it to the committee, it is one of the problems, and my hon. friend has dealt with it in a manner to which no person can take objection. I regret that I was called out and did not hear his remarks in their entirety, but I shall read them in Hansard with a great deal of interest, and

I will keep them among the few Government books that I do keep, because the hon. gentleman has given us a great deal of information that is worth while. The gist of it is this: whatever our views may be, Sir, the successful solution of our railway problems depends on the results of our endeavours to fill up the western country and make traffic for our transportation facilities. That', in short, is what confronts us. The problem before the country is to devise a scheme to bring immigration or its management up to date, so that the lands of the West will be occupied and developed and so that proper returns may come to the country from that development.
A few days ago, when these railway Estimates were placed before the House, I pointed out that the manner in which they were submitted to us robbed the members of their right to deal with them in a practical manner. I was laughed at by some hon. gentlemen on the other side. I pointed out that they should have been introduced by resolution, as is the ordinary method, so that any member on either side could move an amendment. No restriction, no qualification can be placed on these grants, and I claim that that is not fair to members of the House. The Government meet and decide what they will do, but the rest of us represent the people just as much as do the members of the Government. I repeat that the manner in which the granting of this aid has been introduced precludes any motion on the part of any one on either side of the House to vary, to qualify or to place restrictions or impose conditions in respect of this proposed aid. That is not fair. The Government say to us: you have to take the responsibility of putting this road into liquidation without any condition, or you have to grant this aid. After the ruling to-day, which, Sir, was absolutely according to the rules of the House, I am firmly convinced that these items were not brought in in this way accidentally; they were brought in to put it beyond the reach of members to impose any condition upon the granting of this money. I wished to move an amendment providing that if we granted this aid the Government should take over a sufficient amount of the common stock of the Canadian Northern to give the people control, so that we could .say what must be done with this road when the time came. I think it is unfair that I am precluded from proposing that amendment. I am not going to argue the matter"; what is the use?
As a member of this House who has given some attention to railway matters, I realize that my hands are tied. I might just as well sit down. I am absolutely helpless unless I am prepared to vote to strike out the item, which I am not prepared to do.


Richard Bedford Bennett: Would it not be sufficient if 25 per cent of the stock were lodged with a trust 'company and we had a voting power? This would give us control of the corporation and would be sufficient for our purposes.'


Mr. GRAHAM:: I would not object to that; what I want is not the stock for its value, but for its voting power, so that when the time for decision arrives the people of Canada, through the Government, will have control. But, as I say, I cannot move the resolution because the manner in which the legislation is brought in precludes my proposing an amendment. The only thing I can add is to urge the Governor in Council to make that a part of the conditions which they have power to impose, when they come to grant this aid. I have not the power. I say that the decision of the chairman, which was absolutely correct as I pointed out to the House the other night, makes it impossible for any member on either side of the House to have anything to say about this grant in a practical way, unless he is prepared to move that the item be reduced or be struck out. Under those conditions I feel that my duty has been performed. Had I the right, I would move one resolution, perhaps two. One that I would move I have just outlined, and that is, that in some way the Government should take control of the stock, so that when the time for a final decision comes, it would be in a position to practically dictate what the terms would be, and the company would be compelled, yes, I think, would be willing to be compelled, to leave it to a reasonable Government to say on what terms this road would be taken over. I protest again at this unusual method, of presenting this matter to Parliament, one which has never before been followed in this Parliament, at least in my time. When in other sessions aid to railways has l?een proposed, the measures have always been brought in in the usual form, by resolution; and then any member in this House could move any amendment he liked as to conditions, and these amendments could be discussed. But under this new method under which both these items

have been presented to the House, we are absolutely precluded from moving any amendment, and no member, no matter what constituency he represents, has the right to do anything practical in reference to these votes of money.	[DOT]
One word more:	The question of the
nationalization of railways has been discussed in this House. Personally I am free to say that I am not afraid of the nationalization of railways; but if I were going to do it, I would nationalize all railways and not a portion of them, for reasons which I shall not. stop to discuss now. One great reason is that the systems ought to be brought in under the same conditions, and should be placed under the same	management,	if we are	to
take	over the control of any of
them. Mark you, the taking over of one or two might be the initial step towards taking them all over. I repeat that I am not the least alarmed at the prospect of the nationalization of railways. I have lived for a good many years in a town where the lighting system and the waterworks have been taken over by the municipality; and while we have disagreed as to details in many things, I must say that the management has been just as good, it not a little better, than under private companies, and the people have always felt that, whatever money was expended, it was their money and it was their business; and the public have taken a greater interest in the management of these public utilities than they did when they belonged to private companies. Then we have the work of the Hydro-Electric Commission in Ontario, which has been Government of a great public utility. That commission has served, and is serving, a useful purpose. I say, without any hesitation, that I believe the establishment of that commission and its working out has brought about the betterment of conditions 20 years sooner than this betterment would have been brought about had there been no Government control of this great public undertaking. I have no fear of the nationalization of railways. It will have to be a complete proposition embracing them all, if it be done at all. Perhaps, as I have said, taking over one or two at a time might be the initial step towards further enlargement of the national system until it would embrace all existing systems. But I do want to make my position clear that I am precluded as a member of this House from moving a resolution that I desire to move, 
imposing conditions on both these companies when we are granting aid to them.


Sir THOMAS WHITE (Minister of Finance) :: It appeared to the Government that it was not necessary to proceed by resolution with this Bill as was done in 1914 when the mortgage of $45,000,000 was given to the Canadian Northern Railway Company. This legislation-because it is legislation notwithstanding that the loans are embodied in the Estimates-provides for the. issue of no securities. It is a simple money loan, a lo,an of $15,000,000 upon conditions set out in the Estimate. No. securities are to be issued, no complicated legislation is necessary; and it seems to me, arguing the matter from the standpoint of the right of the Government to introduce this legislation in this way, it is simply a question as to whether or not those proposals are properly in the Estimates. I do not think that the Chairman or the Speaker of the House would rule that these items in the Estimates are out of order. If they are in order, then the Government is clearly within its rights in bringing down, these loans in the Estimates, as has been done.


George Perry Graham: Does my hon. friend remember the Scripture quoted by the hon. Minister of Trade and Commerce (Sir George Foster) the other evening, "All things are right; but all things are not expedient"?


William Thomas White: If the Minister of Trade and Commerce quoted Scripture, I would pay more attention to him than to my hon. friend in doing so. There is no reason why the suggestion of the hon. member for Assiniboia (Mr. Turriff), the hon. member for St. John (Mr. Pugsley), and the hon. member for South Renfrew (Mr. Graham), should not be discussed, notwithstanding that no power of amendment exists in Committee of Supply. The hon. member for Assiniboia raised the matter the other night. He asked:
Whether, if this vote of $15,000,000 for the Canadian Northern carries, he intends to ask them to hand over to the Government, in addition to the 40 per cent of the common stock of the company that the Government now owns, additional stock to the amount of say $15,000,000 or $20,000,000.
That is the idea the hon. member for South Renfrew (Mr. Graham) has in his mind.


George Perry Graham: Either that or the proposition of the hon. member for Calgary (Mr. Bennett); I am not particular.


William Thomas White: At all events, the idea is to obtain control of the stock of the company. The hon. member for Assiniboia went on to say:
I suggest this not because I consider that this stock would be of any particular value, but in order that the Government might be ready to handle the situation and be in a position to avoid being taken by the throat in connection with the matter in the future.
I desire to draw attention in this connection to the legislation of 1914. Under that legislation, in event of default on the part of the Canadian Northern' railway in the payment of interest upon its securities, or in the event of a receivership, which would be in event of default, then this Government has the power, as that legislation is existing to-day, to appoint a board of directors of the Canadian Northern Railway Company and of its subsidiary and constituent -companies to enforce its security; to
-declare the equity of redemption of the Canadian Northern and of all other persons whomsoever in the mortgaged premises to be foreclosed, and thereupon the equity of redemption of thd Canadian Northern (and of such other persons) in the mortgaged premises and every part thereof shall be and become absolutely barred and foreclosed, and the same shall thereupon be vested in His Majesty in right of the Dominion of Canada, any statutory enactment or any rule of law or equity to the contrary notwithstanding.
The effect of that enactment, which is in existence to-day, is that, in the event o-f default on the part of the Canadian Northern Railway Company, so far from the Canadian Northern Railway Company being able to take this Government by the throat, the Government cam demand that the directors of the Canadian Northern Railway system resign their offices, and the Dominion Government may appoint directors in their places, may take complete control of the Canadian Northern Railway system; and may foreclose the equity of redemption of the Canadian Northern rail-' way and deal with that equity of redemption as Parliament may see fit, in the interests of the people of Canada. That was the legislation brought down in 1914 in connection with the guarantee which we then gave upon the $45,000,000 securities of the Canadian Northern. In so far as my hon. friend from Assiniboia (Mr. Turriff) has declared that the Canadian Northern railway can take this Government by the throat and control the situation, I desire to draw his attention, and the attention of the hon. member for South Renfrew, to the legislation to which-I have referred.
250	.


John Gillanders Turriff: Would that not mean that the Government would have to take foreclosure proceedings? That would take at least a year, if not more. It would mean, if the Canadian Northern people fought the ease, a long, tedious legal struggle, whereas the whole trouble could be avoided and the Government could be put in a position to act quickly and thoroughly if they controlled this stock. When my hon. friend the Minister of Finance gave the grant of $45,000,000 and the guarantee in 1914, he took over $40,000,000 worth of stock. Now that the company comes for another $15,000,000 more, why not take over another portion of the stock?


William Thomas White: My hon. friend still misunderstands the legislation of 1914. So far from any delay being open to the railway company, under that legislation the Dominion Government can at once appoint boards, take possession, and administer the system by these boards. It has as full power ^s if it had all the stock of the Canadian Northern railway and its subsidiary and constituent companies.
I come to the amendment which my hon. friend from St. John (Mr. Pu-gsley) had in view. No point of order was taken by myself, or, so far as I know, by any other member of the Government. The point of order was raised by -the Speaker himself'. Personally, I had no objection to the amendment; in fact, I came to the House to-day prepared to discuss it, because it had not occurred to me that it was out of order. The Chairman is, however, clearly right, and no amendment is possible under the rules of the House, but that does not preclude us from discussing the merits of the amendment which my hon. friend from St. John had in view. In that amendment he suggested:
Before making such loan the Governor in Council shall require the company to give His Majesty the King an option to acquire at any time within five years from the date thereof the railways and other property of the company and of all other railways and property included in the Canadian Northern system at such price as to the Governor in Council may seem reasonable under existing circumstances.
That is to say, my hon. friend from St. John had this in view, that, before extending this aid, by way of loan, the Governor in Council should now fix a price at which it would be open to the Government to take over the Canadian Northern system, and that in reaching a conclusion as to that price they should refer to the existing circumstances. I would point out to my hon.



friend that he is dealing there with the equity of redemption of the Canadian Northern Railway Company. Of course, so far as the terms of his amendment go, it would be possible for the Government to, fix a price, $380,000,000 or $400,000,000, or more, but included in that price, of course, would be the debt which the Government would have to assume in taking over the system. My hon. friend will agree that as there are liabilities amounting to some $380,000,000 upon the Canadian Northern system, what the Government would have to do would be to practically fix the value of the equity of redemption of the Canadian Northern railway system in its undertaking; in other words, to fix a fair price upon the value of the stock. That is what the amendment of my hon. friend comes to, and the question arises as to whether it would be wise for the Government, dealing with this matter as it is now dealing with it, to fix a price at which it would be within the power of the Government within the next five years to take over the Canadian Northern Railway system. It has to be pointed out that at present the Government holds 40 per cent of the stock of the Canadian Northern, that is to say, $40,000,000 out of a total issued capital stock of $100,000,000. My hon. friend from Assiniboia says that there is no value in the stock, but he and my hon. friend from St. John (Mr. Pugsley) are evidently at variance as to that, because it is perfectly clear that my hon. friend from St. John, by reason of the suggestion that the Government should fix an option, has in mind that there is value in the stock of the Canadian Northern to-day. He is at variance with the hon. member for Assiniboia, who says that the stock has absolutely no value, and whose suggestion was that the Government might be better able to control, through a majority interest in the stock, the administration of the Canadian Northern Railway system.


Richard Bedford Bennett: Purely voting.


William Thomas White: Yes, purely voting. I have pointed out that the holding of a majority interest in the stock is not necessary to enable us to control the Canadian Northern Railway system in the event of default, and if we took over to-day the administration of the Canadian Northern Railway Company, no default having taken place, we should not only have to provide this $15,000,000, which we are providing by way of a loan so as to meet the temporary obligations of the Canadian Northern system, but we would also have to take upon

ourselves the burden of financing the Canadian Northern system during the present war and hereafter.
Hon, gentlemen will have observed from the statements laid before the House the position of the Canadian Northern-$92,000,000 of maturities this year and next year, and obligations current. The sum of $15,000,000 is the minimum amount, upon receiving which by way of loan the Canadian Northern will be able to finance the obligations which it has still to meet during the present and the coming year. The Government is not at this moment proposing to control the operation of the Canadian Northern, because if it did propose to control it, it would have to undertake the burden of financing the Canadian Northern system. The proposals of the Government are to assist the Canadian Northern Railway Company and the Grand Trunk Railway Company by way of loans of minimum amount, upon receiving which, the two railway companies will be able to continue their operation during the present war. It is a temporary measure designed to enable these two companies to go on as solvent concerns, until we can make the investigation to which I alluded in my speech upon the occasion of the House going into committee on this subject, until we can make an investigation into the whole of the Canadian railway situation, so that we can substitute for the temporary policies which have been adopted during recent years a permanent policy which will, we hope, solve the whole railway situation.
To come back to the question of taking an option, under the legislation of 1914, in the event of default, the Government may foreclose, and it will then be for Parliament to say whether they will pay anything for equity of redemption or not. It will be open to Parliament to say:	We
shall pay something or we shall pay nothing. There is another feature. Not only do we control the situation through the legislation of 1914, but, as pointed out by the hon. member for Calgary, we absolutely control it by reason of the fact that this $15,000,000 loan is a demand loan, and being a demand loan, we hold a stronger position than if we held a majority of the stock of the Canadian Northern Railway Company because the rights of a creditor are higher than the rights of a shareholder. The company not being able to meet his demand, the creditor absolutely controls the situation. So that from a strictly legal standpoint it is not necessary that we should have a majority of the stock of the

Canadian Northern railway in order to control the administration of that road in case of default.


William Pugsley: Is it intended to exercise the right of calling in this $15,000,000 in case of default?


William Thomas White: I have told my hon. friend that the Government is investigating the whole Canadian railway situation. We are doing what I believe is the sensible thing under present -conditions. The Canadian railway situation is exceedingly complicated and one of the most important that has ever confronted any Government in Canada. We are taking the opinion of experts, and when we have their advice we shall be in a position to act. In the meantime, by reason of this being a demand loan, our position is such that we can control the situation. There is another point. Hon. gentlemen have suggested that we should obtain control of the Canadian Northern railway stock. Now, it must be borne in mind that the possession of that stock is very valuable to them in financing the Canadian Northern railway system. As a matter of fact, I understand that to-day their stock is pledged in order to assist in the financing of the company. The company, of course, has to continue to finance itself, and it seems to me that as we are affording the minimum degree of assistance with which the company can get on, we should not take any step that would prevent the Canadian Northern railway from doing its share of the financing. As the hon. member for Assiniboia thinks the stock has no commercial value-and I am not pronouncing upon that at all-the only point my hon. friend can have in mind is the control of the Canadian Northern system, and I have already pointed out that we have that control by the legislation of 1914 and by reason o!r the fact that this is a demand loan. There is another aspect that I commend to, the attention of the hon. member for St. John. Would it be wise for the Government at this time to place a value upon Canadian Northern stock? If we did that we should have to say that the stock was either worth nothing, at all or worth a small amount, or perhaps a large amount. Now if the stock was not worth anything, as my hon. friend from Asiniboia thinks, whaJt would be the use of taking an option on it?


Mr. NESBITT:: No use except that it
would give you control.
250i


William Thomas White: We have dealt
with control. Again, if the Government put a small value upon the stock, that would unquestionably embarrass the Canadian Northern in the financing which they must do to carry on this road, for I have already stated that the stock is of value to them in carrying on their financing. So if the Government, taking the advice of the hon. member for St. John, placed a small value on the stock and took an option on it for five years, we would be fettering the company, or at least the owners of the majority of the stock, in the financing which they and the company have to do if the company is to continue as a going concern. If the Government took the other alternative and put a large value on the stock, what would be the position if by reason of default the Government found it necessary to take over the Canadian Northern railway system? Under the legislation of 1914 it would then be for Parliament to determine what should be done with the road and how much should be paid to the stockholders, whether anything or nothing. Why should the Government take a step which might embarrass Parliament in dealing with the equity of redemption should the road ever default? Unquestionably the placing of a value on the stock would fetter the Government in deciding what should be done with the equity of redemption, if it had to deal, with it under the legislation of 1914.
So far as control is concerned, I have shown that we are able to exercise all the control we need under the legislation of 1914 and by reason of the fact that this is a demand loan. I have shown further that the taking of this stock by the Government would seriously embarrass the Canadian Northern railway and its shareholders in the very necessary work of carrying on the financing of this road. The Canadian Northern railway financial arrangements are not going to be completed by obtaining this $15,000,000 from the Government. There are the maturing obligations of this and next year and current liabilities to be met to the amount of $92,000,000.


William Pugsley: How will possession of the common stock which stands behind all this security assist the company in their financing?


William Thomas White: My hon. friend knows that in the eyes of financial men the majority of the stock of a company like the Canadian Northern railway might be

regarded as of considerable value as additional collateral. It might make just the difference between the company obtaining a loan and not obtaining a loan. As a matter of fact, I understand that the stock is now pledged for that very purpose.	,


William Pugsley: Has it a market value
to-day?


William Thomas White: I do not know whether it has or not. But my hon. friend evidently has it in mind that it has, or he would not suggest that the Government fix a price at which it could take over the road at any time during the next five years.


William Pugsley: What I am afraid of is that after the Government has pulled the road through, the stock will have a vast prospective value.	[DOT]


William Thomas White: 
William Pugsley: Where would have been the difficulty, after this Government came into power, in arranging to give the Canadian Northern running rights through the mountains over the Grand Trunk Pacific, instead of giving them the subsidy and joining the British Columbia Government, which guaranteed bonds for over $40,000,000 to enable them to build an independent line down through the Rockies?


William Thomas White: The line was under construction. Not only that, as I pointed out the other evening-


William Pugsley: They started construe

tion on the British Columbia grant.


William Thomas White: Yes. ' ' \


William Pugsley: But is it not true they had no assistance from Canada to go through the Rocky mountains?


William Thomas White: The line was under construction when we gave the assistance. In the legislation of the late Government, under which a grant of $35,000,000 [DOT]was given on the Canadian Northern Ontario line between Montreal and Port Arthur, it was recited that it was in the interest of Canada that there should be a third transcontinental line from Montreal to the waters of the Pacific. It was that $35,000,000 grant on the Canadian Northern Ontario line between Montreal and Port Arthur that determined the character of the Canadian Northern as a transcontinental system. There is not a doubt about that, and at the time that grant was given the late Government had in contemplation, and stated in the recital of the resolution, that it was in the public interest that the line should be carried through to British Columbia to reach the waters of the Pacific.
There is one thing about this debate that has pleased me, and that is that there has been very little recrimination. The past is a closed book. I address myself to this railway situation with no favourites. It is one of the most important situations that has ever confronted any Government in this country; it has been for the last four years. The difficulty in this country as we all know is the immense geographical area and the sparseness of our population. In the early days confederation was possible only because the Intercolonial, built at great expense, linked up the then East with the then West. The next great step taken was the construction of the Canadian Pacific railway which made a larger confederation possible, and linked up the West and British Columbia with the East. Then we had the building of the Canadian Northern railway in the Prairie Provinces. And there is one aspect of this that is apt to be overlooked, .and that is the enormous importance to Canada of the railway situation which we have built up. Almost every day in this House we hear, of the necessity of more transportation, of more cars-, of new districts in the West that should be reached

by branch lines. What would be the condition in the West to-day if those lines had not been built.


William Pugsley: Deplorable.


William Thomas White: Last year 40 per cent of the wheat was carried out by the Canadian Northern Railway system. This question is not a matter of individuals ; it is not a matter of the Canadian Pacific or the Canadian Northern or the Grand Trunk Pacific as a corporation. The point is, the importance of the railway system to Canada and its development; and that is the way in which this question ought to be approached. What we have before us to-day is not a theory but a condition. We have these three railway systems completed-except that railway systems.are never completed, because they must always extend, must always increase their mileage as conditions permit. No question in this country since Confederation has been so vital to it as that of the railways. My own opinion is that we have overbuilt for the time being. But it must be borne in mind that public opinion has been in favour of building railways, to connect the East and the West, to develop the West, and to afford access to the remoter parts of the country in order that immigration might flow in and settlement result. The whole country has benefited'by .the extension of the railway systems to tthe West. Therefore,, though, as I say, we Lave overbuilt, it must not be forgotten that the most vital question in this country today is the transportation question. That being the case, I personally do not believe in getting into a pessimistic frame of'mind with regard to Canada. If, when this war broke out, anyone had-told me as Minister of Finance that we should have been in the condition in which we are to-day the war having lasted almost two years, I should not have believed it. Consider the position of Canada oo-d'ay. Notwithstanding this war, Canada enjoys a very high degree of prosperity. Our exports are greatly in excess of our imports, and our trade is the largest this country has ever had. Our bank deposits are two or three hundred millions greater than they were at the outbreak of the war. I do not allow myself to take too long views of things, because I do not believe that the human mind is capable of forecasting what will take place after this war is over. I have great confidence in the people of this country and in this country's resources, and so I do not

allow myself to think things are going to the bad after this war is over.


Edward Walter Nesbitt: They don't give any
reasons.


William Thomas White: No, they do not. I rely with the greatest confidence upon Canada's .ability to carry out her share in this war and to come through the war with a high degree of prosperity.


William Pugsley: In connection with the hon. minister's financial operations, which have been very successful, does he not find himself hampered sometimes by the pessimistic remarks made by his colleagues?


William Thomas White: 
William Pugsley: Has the hon. minister
any view as to a broad immigration policy?


William Thomas White: I have. At the present time the sources of immigration are largely stopped by reason of the war. But not only should the Government use every effort to promote immigration, it should encourage any auxiliary means there may be of bringing in immigration; it should seek to have its own efforts to
bring immigration intp this country supplemented by the efforts of others. In addition to that, once the immigration is here, the Government should assist, by some plan that I think could be devised, in getting the people settled on the land.


William Pugsley: To my mind this is the most important question we have had to deal with. I am glad the minister has touched upon the subject of immigration. The minister has stated that the sources of immigration are stopped during the war. Is that true in regard to the vast multitude of people to the south of us, in the United States, from which in recent years we have obtained hundreds of thousands of our very best settlers? Why should we not, by a vigorous policy, continue to get people from the United States even in larger numbers than in the past?


William Thomas White: My hon. friend is right so far as the United States is concerned. When I spoke of the sources of immigration being stopped, I had reference rather to European sources. -Jit the same time, we must not disguise the fact that the war has an influence upon immigration even from the south. It is not rational that it should be so, but it is a fact, nevertheless.
I have shown the railway situation which confronted this Government when it came into power. I have indicated my views as to the importance of the problem, and to the unwisdom of allowing these railway systems which have continued up to the present time to collapse. I have indicated my faith that the country with its resources and with its people will overcome any difficulties that may be presented in the future. On the whole, as I have stated, my attitude is one of optimism, not of pessimism, in regard to the future of this country, even of the railways of this country-although I say that in my view we have overbuilt. It must be borne in mind, however, having regard to the geographical areas of this country, that it is, in a sense, necessary to overbuild. That is to say, you do not get your settlement until you get your railway; the railway comes first in order of time. I do not desire, as I have said, to enter upon any controversy, but my view is that if the Canadian Northern Kailway system and the Grand Trunk could have been put together in 1903-4, this overbuilding situation would have been avoided. The Canadian Northern was taking grain out of the West, but the Canadian Northern

must find return traffic, and the reason why the Canadian Northern embarked upon its railway policy in the East was in order to obtain feeders for its western system. If the Canadian Northern had had the Grand Trunk as a feeder in the East, then the Canadian Northern would not have needed1 the Canadian Northern' Ontario; but by reason of the Grand Trunk promoting the Grand Trunk Pacific the Canadian Northern found itself in a position in which it would be shipping grain out of the West but not taking freights back. Consequently, it embarked on the policy of building the Canadian Northern Ontario. As I have said, there is no use in recriminating. There is not much use in criticising. There is not much use in making reflections upon the wisdom or unwisdom of past policies. The fact is that the railway situation, so important to the people of Canada, is here before us and we have to deal with it, and that is what the Government proposes to do.
Some points have been raised as to the disposition of this money. We are making a loan of 815,000,000 to the Canadian Northern Railway Company. Under the legislation of 1914 and of 1911 the Dominion Government gave guarantees of $45,000,000 and $35,000,000 to the Canadian Northern Railway Company and the Canadian Northern Ontario Railway Company. The proceeds of those securities went into the Receiver General's account under the legislation in both cases. I have been trustee for hundreds of millions of dollars in my time, and I can say that no more complete check could be devised than was devised by the Railway Department in authorizing the payment out of those moneys. I say here as Minister of Finance that the proceeds of the $45,000,000 guarantee were paid out absolutely for the purposes for which the guarantee was given, and for no other purpose whatsoever.


Hugh Boulton Morphy: Was that money handled by Mackenzie and Mann?


William Thomas White: A guarantee was given for the purpose of paying indebtedness incurred and expenditures made on construction account and for certain other things mentioned in the legislation. The suggestion has been made in the House that in some mysterious way the money is being diverted, but I say there is not a word of truth in that.


William Pugsley: Those suggestions came largely from the other side of the House.


William Thomas White: They did not
come from me. I set out in the statement which I laid on the table of the House every single certificate, and at the end I set out a letter from Major Bell, who is an admirable official, one of the best officials in Ottawa-he is an expert accountant-in which he stated that in all cases before these certificates were issued-I am speaking now of the $45,000,000 guarantee-a careful audit was made either by himself or by members of my staff under my supervision. Every voucher was checked; he had representatives even in Winnipeg.


John Gillanders Turriff: My hon. friend is aware that the great bulk of the Canadian Northern railway was built by Mackenzie and Mann as contractors. The certificate might be perfectly right, but if Mackenzie and Mann charged $50,000 for doing $35,000 wortfi of work, what was the check worth?


William Thomas White: It was shown in 1914 that nothing of the kind occurred; that they were the agency of the Canadian Northern for making these contracts with sub-contractors. I will say this-after all, the truth' is the truth-I do not believe there is a more economically conducted railway in Canada than the Canadian Northern. I have absolute confidence in the accounts that are presented.


Hugh Boulton Morphy: Is there any railroad that has its investments at a cheaper rate?


William Thomas White: I do not know of any. The proceeds of this $15,000,000 loan are paid over on the order of the Governor in Council. It will be audited just as the. proceeds of the $35,000,000 of guaranteed securities were audited, and as the proceeds of the $45,000,000 of securities were audited. I have had some experience in trust, company work in paying out moneys, and I do not know of any system of any trust company in this country under which the disbursement of moneys are paid out with greater care than the proceeds of Dominion guaranteed securities are paid out at Ottawa. I think that would apply to the late Government as well as to this Government;
I believe that the Finance Department has been absolutely honest in its administration of public funds. This loan will be paid over on the order of the Governor in Couneil after an audit is made to show that it is properly paid out. We are charging 6 per cent, and the loan is a demand loan. I believe that every possible safeguard has been thrown around this transaction from

the standpoint of the Dominion Government. A mortgage is being taken upon the undertaking of the Canadian Northern and its subsidiary and constituent companies which may derive benefit from this loan. Therefore, so far as the transaction itself is concerned, I have no hesitation whatever in supporting and recommending it.
One or two other matters were mentioned, among them the assets of the Canadian Northern Railway Company. The Canadian Northern Railway Company has been built in more recent years than the Canadian Pacific. I do not know what system the Canadian Pacific has in vogue, but if it carries on its business the way other companies carry on their business, I suppose the property values were entered up as of the time that they were acquired. That may also be so in connection with the Canadian Northern Railway Company, and, that being so, the Canadian Northern Railway Company's assets would naturally stand at a much higher figure because they had been acquired in later days. The sums that would be paid for the Canadian Northern Ontario right of way through the province of Ontario would be very large as compared with the cost twenty years previously. If the Canadian Pacific assets were entered up at their present value, I think they would be very much larger than that at which they now appear. I am the first to pay tribute to the Canadian Pacific and the efficiency of its management, but it must not be forgotten that years ago the Canadian Pacific Railway Company was not in as prosperous a condition as it is to-day. Its western lands have become immensely valuable. Its own enterprise, of course, had a great deal'to do with making them valuable, but it must not be forgotten that the enterprise of other concerns also tended to make these lands valuable. So that the Canadian Pacific railway is through its land holdings a participant in the prosperity which was brought about, perhaps, in large measure by itself, but also by these other railway companies, that is tb say, the Canadian Northern, and in less degree the Grand Trunk Pacific Railway Company.


William Pugsley: And by the enterprise
of the people.


William Thomas White: And by the enterprise of the people, and by the assistance which the Government of Canada has given to all these enterprises. The hon. member
for South York (Mr. Maclean) the other day spoke, lightly I thought, of taking over all the railway systems of Canada.


Edward Walter Nesbitt: Sure; it would only take a minute.


William Thomas White: at the rate of twenty or twenty-fivie million dollars a month, some two hundred and fifty or three hundred million dollars a . year; that we shall probably be confronted with a debt, at the end of this war, of one thousand million dollars. In time of peace it would not be a light undertaking to bring about the nationalization of all the railways of Canada; it would certainly not be a light undertaking to do so in time of war. But this situation must be faced; there must be an encl of this annual coming to the Government of Canada by these two railway companies for relief. The policy which we have adopted has been stated to be no policy. I say it is the true policy in the situation in which we find ourselves. We are not in a position to say what should be the permanent solution of Canada's railway problem. We are in this position, that we do not want these railway companies to collapse. The policy which has been before this committee, and I know it has met with approval in this House, is the true policy at this time, and it is not the less the true policy because it provides temporarily for the situation. It bridges time; it enables these roads to continue- these roads which are so vital, so essential for the welfare of this country-until such time as, upon the best advice that we can get, we shall be able to suggest some permanent solution, which I believe will probably involve the taking over by this Government of one or more of the existing railway systems of Canada, and which, as I stated, may involve later on the nationalization of all the railway systems of Canada.


Mr. F. F. PABDEE (West Lambton):: With the hon. member for South Renfrew (Mr. Graham), I distinctly voice my objection to the manner in which this legislation has been brought up. Even with the explanation of the Minister of Finance as to the whys and wherefores of bringing it before the House in this way, the fact remains that it should have been introduced by resolution. Further than that, I want to wholly endorse the remarks of the hon. member for Calgary (Mr. Bennett). There are many of us who took a somewhat strong position in 1914 in regard to the legislation granting $45,000,000 to the Canadian North, ern railway. It appears to me to be a most vicious practice that practically the largest amount, outside of our civil government, that we grant in this country are to railways, and that invariably-and perhaps one side is not more to blame than the * 
other-the Government waits and waits until the dying d.ays of the session and then such important legislation, with all that attaches to it, is put before this House. I am not going to cavil to any great extent, but we have been here practically for a month waiting for the Government to bring down this railway legislation and it has only just now come down, when everybody is in a mood to finish the session and go home. I am glad to hear the Minister of Finance speak with the optimism he does. We have at the	present	time rather	toomany pessimists	in this	country


William Pugsley: Hear,	hear.


Frederick Forsyth Pardee: -who	are going	along
with their, mouths drawn down and predicting all sorts of evil things for Canada at the end of the war. It is true they all say we are overbuilt in railways. Unquestionably we are; but I would remind this House and the country that for ten years after the Canadian Pacific railway was completed we were also overbuilt. The building of railways in districts where they are most needed, has invariably produced good results. The railways have brought the people, the people have brought prosperity ; and to a large extent the great prosperity of the West is due to the building of the Canadian Pacific railway and the immigration which that railway brought into the West, to such an extent that it has enriched this country by millions and millions of dollars. Then if we had not had the existing railway transportation, even although we were overbuilt, with the abnormal crop of last year in the West, Canada would have been in a far worse position than she is in to-day. So, I am not finding fault to any great extent with the building of the railroad. The only thing that does strike me in regard to the Canadian Northern is that, year after year, we come to this House and, year after year, grants are made to the Canadian Northern Railway and, year after year, the same question is put from either one side of the House or the other:	Is this the last aid that the
Canadian Northern Railway is going to require? And the invariable answer is: Yes, this is all they want; this will see them through. I have been listening to that now for a good many years, and yet, as the sessions roll around, still there come other requests from the Canadian Northern railway: " We are again in deep water; we come to you and ask you to give us aid."
It has become, so far as my observation goes, a question in the country whether or

not the Canadian Northern Railway is being properly managed. We have been told by the Finance Minister that in his opinion- and without any disrespect to him I am sure he will allow me to take his opinion in this matter, for what it is worth, as mine is to be taken-that it is a most economically managed railway, that all the money that comes from this railway goes back into it and that, as a matter of fact, it is properly managed in all respects. That may or may not be true. Speaking for myself, I would like to be convinced by a most thorough independent audit of the Canadian Northern Railway Company's books that all the money that is earned by the Canadian Northern goes back into the Canadian Northern. The hon. member for Calgary (Mr. Bennett) fold us this afternoon that $10,000,000 is the estimated profits of the Canadian Northern on its operating account. If that is so, I would like to know, merely as a citizen, if that $10,000,000 goes back into the Canadian Northern. We want to know that, and we can only know that by a better and more independent audit of Canadian Northern affairs than there has been up to the present time. Would it not strike the ordinary man that, having regard to the fact that these requests are coming session after session, and are granted, as this request will be granted, I have no doubt, the Government, not from the point of view of the value of the stock of the Canadian Northern-I care nothing about that for the purposes of my argument-but for the purposes of the management of the Canadian Northern, should take unto itself sufficient stock to give it control, irrespective of the control which it acquired in 1914; that it should appoint upon the Canadian Northern Board men, in whom the people would have confidence, to see that the money which comes from the Canadian Northern goes hack into the Canadian Northern, so that the people would know exactly where the money is going, and, therefore, whether these grants are being made properly or not. That is the point I make. So far as the stock goes, I agree with the minister's argument, so far as it goes, but, to my mind, no argument can be successfully put up against the contention that as the people of this country have advanced, in this Parliament and in other Parliaments, enormous amounts of money, they should know that the moneys which come from the Canadian Northern go back into the Canadian Northern and that the
road is properly managed. This, it would appear to me, is a proper enough request, and it is something that really ought to be done.
So far as I am concerned,-I am expressing only my own opinion-I am in favour of a receivership for the Canadian Northern. A receivership would not dislocate matters in connection with that system to the slightest degree. The borrowing powers would not be curtailed in any way, and the financing of the road would not be hampered in any way. A receiver could go on and do exactly the same thing to-day as if the road were left, as no doubt it will be left, in the hands of the present owners. But there would be this advantage, il submit, that if a receiver were appointed for the Canadian Northern railway, and he was a man in whom the country had confidence, the people would know that, dollar for dollar, the money that was coming in and going out was being applied and expended in the interests of the road, and therefore, in the interests of the people of Canada. The matter is becoming serious, so serious that when we consider the enormous amount of money that has been put into the Canadian Northern railroad, and that the money has to a very large extent been advanced by the people of Canada, it seems high time that the people of the Dominion had a voice in the running and operating of that road. I have not heard any argument advanced by the Minister of Finance against a receivership. I would like to hear, for my own information, whether, in any way the road would be prejudiced by such an appointment.


William Thomas White: I dealt with the matter in my speech before we went into committee. I pointed out that a receivership would mean by reason of the number of subsidiary companies involved, dismemberment of the system, a break-up.


Frederick Forsyth Pardee: I would not think that that would be an insuperable difficulty.


William Thomas White: There are thirty or forty of them.	[DOT]


Frederick Forsyth Pardee: I have yet to be convinced that the hon. minister is right.


Hugh Boulton Morphy: Would the hon. gentleman apply the same principle to the Grand Trunk?


Frederick Forsyth Pardee: It might be veTy reasonable to do the same thing.


Hugh Boulton Morphy: In regard to the Grand Trunk and Grand Trunk Pacific ?


Frederick Forsyth Pardee: The Grand Trunk and the Grand Trunk Pacific are locked together. If, as the Grand Trunk railway tell us today, the Grand Trunk railway can no longer carry the Grand Trunk Pacific, and if it is a fact that the Grand Trunk Pacific will have to come for aid in subsequent years, in the same way as the Canadian Northern has come, the sooner we take hold of the Grand Trunk Pacific the better. So far as I am concerned, the horn, member for Perth (Mr. Morphy) can take no comfort from the view that because we had to do with the Grand Trunk Pacific we should argue another way. I say that so far as the Canadian Northern is concerned, the control of the stock ought to be taken, that the people ought to have upon that board representatives able to take care of the receipts and expenditures of the road. If this is not done, and I have no doubt it will not be done, I say a receiver should be appointed in whom the people of the Dominion would have confidence, so that they would know exactly whether or not the money which they had invested in that road would be properly expended.
We are told that a commission is to be appointed, "a commission for inquiry and report upon the railway situation," and for that purpose a sum of $150,000 has been placed in the Supplementary Estimates. Since 1911, when this Government came into power, there has been a superfluity of commissions in this country. Some 85 commissions have been appointed for one reason or another, according to a return recently brought down. Some of these commissions have done something; some of them have done very little, but I do think -and I am not speaking in a partisan way-that, before these sums are voted to the Canadian Northern and the Grand Trunk Pacific, it would be fair for the Government to give this House the names of the commissioners who will inquire into the railway systems of the Dominion. That at least would have the effect that, when these votes go through, the country will know that, even although another vast sum had been granted to the Canadian Northern, men in whom they had absolute confidence were being appointed to inquire into the operations and carryings of these two roads, and that, therefore, they might reasonably hope that before another grant is asked, as

no doubt it will be, they would knoiw all the facts connected with these roads.
In conclusion, I just wish to say that I think, and I believe the people of this country think, that before any further large grants are made to the railways, of this country, and especially the Canadian Northern railway, the people should be fully informed of all the facts, and if any railway is to be assisted the Dominion Government should be fully protected so far as the outgoings and incomings of that road are concerned.


Frank Oliver: I have listened with very great interest to the remarks of my bon. friend from Calgary (Mr. Bennett), and if I appreciated them correctly their logical conclusion was, or might very well be interpreted to be that Canada had reached the limit of its railway development. When he argued that to-day we have far overbuilt in railroads, and are in consequence suffering serious financial difficulties, the logical conclusion of his argument must have been that we should not build in the near future. I maintain that so far as the western country is concerned we are not over-built, and not only are we not overbuilt, but it has been my duty to bring to the attention of the Government from time to time the needs of certain localities for additional railways. I am not alone in that, as other members have been impelled to bring the same aspect of the case to the Government's attention. Admitting, for the sake of argument, that there has been over-building in some directions, there is still a need of further building in other directions. Even if it should be demonstrated to the satisfaction of the country that we have over-built in some districts, that is no reason why we should not have further construction in other places where it is needed. I will not go over the details as to where it is needed, as I have already discussed in the House construction in which my constituency is particularly interested.	[DOT]
First of all, let me say on the general question whether ' we have over-built or not, that in developing a new country we build in advance of requirements ; otherwise there would, be no development through railway construction. It is admitted in the present day and generation that if we have a country to develop it is sound policy to invest the public money and credit in the construction of railways that will secure that develop-

ment; and it is not until after the road has been constructed that development takes place, or can take place. When, therefore, it is said that we have over-built and have not the traffic to make our railways profitable, we are simply stating what must necessarily be the case: the railways must be built before the traffic is created. We build the railway in order to create the traffic, and we must await the natural and ordinary development of the traffic before we can expect a railroad to have the earnings which it will ultimately have. Such a condition does not indicate any fall-down or failure of our policy in railway projects. It is true that war conditions at the moment are preventing, and will prevent, so long as they continue, that expected development upon which we rely for carrying the capital charges and expenses of our roads. But that is an abnormal condition that no foresight could have provided against; that is an abnormal condition that lays serious burdens upon us which we never expected. Those conditions have to be met, and it is now for us to say in what manner we shall deal with them. I do not wish to discuss at the moment how we should deal with this question, but I want to bring to the attention of the House the fact that the railway condition confronting us is not an abnormal or an unnatural one, but the normal and the natural one, except in so far as it has been made abnormal by abnormal war conditions. As my hon. friend from Lamb-ton (Mr. Pardee) has said, we were overbuilt when the Canadian Pacific Railway was completed. It was many years before the traffic that was created by the building of that road was sufficient to make the Canadian Pacific Railway a profitable enterprise. There was less traffic per railway mile in Canada on the day the last rail of the Canadian Pacific railway was laid than there is to-day, counting every mile of railroad we have in the country. Just as the building of the Canadian Pacific railway produced valuable results to the country, which results, however, had to be waited for, so the building of the Transcontinental and the Canadian Northern railways have produced and are producing results, but we must wait a reasonable period for those results to accrue. In fact, it is still in dispute whether the Transcontinental is cpmpleted yet; the Canadian Northern railway is certainly not completed. After the Canadian Pacific railway had been completed across the continent and its branch lines completed to Prince
Albert and Edmonton, it was still ten years, so far as the main line was concerned, and five years so far as the branch lines were concerned, before the road was doing the business that is being done to-day by the Canadian Northern Railway and the Transcontinental.
We are to find the solution of our railway difficulties in increased settlement and development? When we realize that of the crop of last year produced in the prairie West, practically half of that available for export still lies in the elevators and in the granaries of that prairie West- because there were not transportation facilities to move it to the seaboard during the months that have passed, I ask you, Sir, to prove to me that the country is overbuilt with railroads. I do not think the evidence is that the country is overbuilt with railroads. It may be evidence that the railroads are not well managed ;that the business is not well directed; but when such facts are brought before the House as were brought before it the other day by the hon. member for Dauphin (Mr. Cruise) and by the hon. member for St. John (Mr. Pugsley), that men in the prairie West in the month of May, having hauled their grain fifteen or twenty miles to the elevator at the railroad station to sell it, could not sell it because the elevator was full, and that the elevator was full because the railroad had not been able to take away the grain. I say that the evidence has yet. to be produced to show that this country is overbuilt with railroads.
While I do not wish to introduce contentious matters, there must he some question as to responsibility in this ease, and I maintain that the Government of Canada, being responsible for the railway situation, having assumed absolute responsibility for the operation of the Transcontinental, certainly are the people who either should not have allowed that condition to exist or should be able to say to the House why it exists and how they propose to remedy it. Certainly, for the Government to come to the House and ask for loans amounting to $23,000,000 to pay interest and cost on railroads now existing, on the plea that they are not able to earn interest on their bonds owing to lack of traffic, while the prairie West is choked with its own wealth produced last year, is a situation that I maintain demands explanation.
I agree with my hon, friend from Calgary (Mr. Bennett) when he says that every dollar of this loan should be traced by the Government in order to see that it goes

where it is intended to go, and that there should be no question as to the fact of the money being used to meet the purpose for which it is voted. I supplement that with the criticism that the Government, having had to take this responsibility ever since they have held office having two years ago come before the House and the country with their proposal for a guarantee of $45,000,000 for the Canadian Northern, and having since that time made further advances to both the Canadian Northern and the Grand Trunk Pacific, are not square before the House when they come to us in the face of existing financial conditions of the railroad companies on the one hand and as to the traffic conditions of the country on the other, and give us no word of explanation in the matter and tell us they .are going to appoint a commission to inquire into the whole business. I do not. agree with what my 'hon. friend from Calgary (Mr. Bennett) and other hon. members on both sides of the House have said as to the appointment of a commission in this matter. This is not a time nor an occasion for the appointment of a commission; it is a time and an occasion for the Government of Canada to come before the people of Canada with a definite policy as to what they propose on their responsibility to do in handling the railroad situation of this country. What can, by any possibility, be the result of any inquiry that may be made? I have already criticised the Government for its attitude towards the Grand Trunk Pacific. I may be misunderstood if I criticise the Government for its attitude towards the Canadian Northern; but I ask: How can any business enterprise, looking for money in the markets of the world; expect to get that money on fair and good terms in the face of the deluge of adverse criticism that both these railway enterprises have received in this House from the Government as well as from the Opposition? How can it be expected that a company shall be successful in financing, that is to say in borrowing money on its credit, if those who are its principal creditors, who have absolute control of it in every particular, discredit it as a well thought out enterprise and discredit its management as well? Both enterprises may deserve everything that is said in regard to them; but that having been said, it is futile to say that they can carry on their business by ordinary methods from this time forth. Unless the Government can bring . forward some bet-
ter policy than it has yet brought forth, these enterprises are on the hands of the country; we have no choice in the matter, and to ask us to vote $23,000,000 now to put into broken-backed enterprises, as they are labelled on both sides of the House, is only putting $23,000,000 out of the power of the people of Canada when it should not be put out of their power. If we are to take over these railroads, now is the time to do so. That seems to be the only conclusion at present. I do not wish to be understood as agreeing that that is the best policy; but in view of the conditions into which the Government has permitted the matter to drift, and in view of the fact that they have no definite proposition to offer for a solution of the problem, there is no need of any commission of inquiry to find out what must be the result.


John Gillanders Turriff: Will the Minister of Finance state what the policy of the Government will be after this loan is granted, and as I expect it will be granted, as to the Canadian Northern branching out into new fields altogether such as they propose to do in Ontario and which will add greatly to their liabilities?


William Thomas White: I am speaking from memory, but I think, under the legislation of 1914, there is some limitation upon the power of extensions unless with the consent of the Governor in Council. It is the financing of the Canadian Northern that gives immediate concern and that makes this loan necessary. I do not think my hon. friend need be very apprehensive about any extensions of the Canadian Northern-did I understand him to say in Ontario?-because any such extensions would have to be financed, and at present my hon. friend knows how difficult it is to finance.


John Gillanders Turriff: The minister must be
aware of the campaign that went on for two months of this session in the Railway Committee and in this House to get authority to revive charters to build lines in Ontario that would take many, many millions; yet those interested said that they had the money to carry on the work.


William Thomas White: I am not familiar with that situation. I understand the reference is to two electric lines proposed in Ontario. They are part of the Canadian Northern, and if the subsidiary companies concerned are able to finance their enterprises, it will increase the earnings of the

company and will not diminish the security of the Government, hut will rather enhance that security. I speak with incomplete knowledge, for, though it may seem strange to my hon. friend, I am not familiar with the Canadian Northern legislation that is before the House. I accept what the hon. gentleman says-that they have the money for the completion of these lines. But there is nothing in that situation that would immediately connect with the proposal now before the committee, as near as I can see.


Frank Oliver: The Canadian Northern
enterprise seems to be completed except that part from Capreol to Montreal. What is the intention or expectation with regard to that portion of the scheme as the result of the loan proposed? Capreol is north of Sudbury and is the point of junction between the Montreal branch and the Toronto branch. I understand that the section from Ottawa to Capreol is being operated with local trains, but that on the line from Ottawa to Montreal no trains are being run. It is quite plain that the Canadian Northern cannot be a profitable and completed enterprise as a transcontinental line unless and until that connection is finished. Has this aid in view the securing of the completion of that part of the enterprise?


William Thomas White: I have no doubt they will complete it as soon as they have the financial strength to do so. But this money is not for that immediate purpose; it is to assist them in the situation in which they find themselves in regard to existing obligations for construction and for payment of interest upon securities.


Frank Oliver: Is it not usual for a financial institution, when dealing with a concern in difficulties, to take into consideration how soon and under what circumstances that concern is going to get into a profitable and earning position? This Canadian Northern, considered as a transcontinental line, is not a completed enterprise. It cannot be made profitable-no one can expect it to be profitable-unless this section of the line is completed and the road put in full operation. Surely, that is a matter for the consideration of the Government when they are giving aid of $15,000,000.


William Thomas White: If matters of this kind were to be taken into consideration, as I said the other day, instead of $15,000,000 we should have to give them
more. This is the same case as that of the extensions in the West to which my hon. friend (Mr. Oliver) referred the other day. We could give them a minimum of aid to carry them during the present year, looking as I have said, to a permanent solution of the question through the investigation that is to be held. The Canadian Northern officials are well aware of the necessity of completing their transcontinental line as early as possible, and they will endeavour to finance the completion of it, if what the hon. gentleman states is correct, and I do not question his view of it.
At six o'clock the committee took recess.
The committee resumed at eight o'clock.
To provide for inquiry and report upon the railway situation of Canada, $150,000.


Edward Walter Nesbitt: I was not here when the resolution for the Canadian Northern railway was passed, and, with your permission, Mr. Chairman, I would like to say a word or two with regard to it. When these resolutions were first introduced I had made up my mind very distinctly that the only thing to do with the Canadian Northern was'to put it into the hands of a receiver. It was necessary, I thought, to find out just what constituted the Canadian Northern in its various branches, and to keep track of the receipts. As to this loan, I have no doubt that the minister will see that the proceeds are devoted to the purpose for which they are intended. In Speaking of receipts, I refer more particularly to the general receipts for freight and passenger traffic, etc. I was strongly in favour of the appointment of a receiver for this road, because in that way we could keep close track of what is done with those receipts. The Canadian Northern resolution contains the words " such mortgages to contain such terms and conditions as the Governor in Council may approve." It is possible that under that provision the Minister of Finance may be able to appoint someone to have charge of receipts and disbursements. There is a good deal of feeling in the country, whether rightly or wrongly I am not prepared to say, .that the receipts from the railway are not used entirely for the purposes of the railway. I am not as much afraid of the credit of the country being injured by the appointment of a receiver as some people appear to be. However, this is a very serious time so far as finances are concerned, and it is just

possible that the appointment of a receiver for a railway the size of the Canadian Northern might be detrimental to the credit of the country. This being the case, no doubt the difficulty in connection with keeping track of the operation of the railway and knowing exactly its merits and demerits will be overcome by the operations of the commission that the minister proposes to appoint. This will be done, of course, only if the men selected are competent for the position and have an exact knowledge of the conditions affecting the railways throughout this country. As to Government ownership, it is quite possible that through the improvements that may take place in the management of Government railways, we shall be in a position at some time to take over and nationalise the railways, but I do not think that we are in any such position now. The history of the management of Government railways in the past is not such as to encourage us to take on more railways. Last year, according to railway statistics, the proportion of expenses to receipts of privately-owned or corporation-owned railways, including the Canadian Northern, was a little over 72, and of Government railways a little over 102. That would not encourage me by any means to vote for the acquirement and operation of all the railways under Government control. Besides, if the Minister of Finance should have to go to New York or to England or to Europe for money, I do not believe he would get any, because the financiers of this continent, as well as those on the other side of the water, know to a nicety what the cost of the operation of Government railways is in this country, just as they know the cost of the operation of privately-owned or corporation-owned railways. Certainly it would be no inducement to financiers to loan money to Canada in this time of stress if Canada were to pile on top of her present debt, and the debt that has to be incurred during the coming year, the sum of two and a half or three billion dollars for the purchase of these railways. It is possible that time will rectify that condition. When it does, I shall be perfectly willing to see the railways nationalized, but until that time I am not so willing. When I first read these proposals, I was strongly in favour of having the whole of the capital stock of the Canadian Northern assigned to the Government-not handed over to the Government for ownership, but handed over in trust to be handed back when the present operators 
succeed in paying their liability to the Government. I was in favour of that suggestion in 1914, if I mistake not, but after the minister's explanation this afternoon as to the position of the Government in the matter of taking over the railway in case of default-and they are at present in default-and in view of the fact that this is a demand loan, I am not so .much in favour of that proposal now as I was. For the reason which I have given,, I am not so strongly urgent upon a receivership, because, as the minister has pointed out, it is possible that to place this road in the hands of a receiver would injure the credit of the country. If, then, we are not going to take the railways over or put them into the hands of a receiver, the next best thing-probably the best thing-is to appoint this commission, provided they are qualified for the work. As the hon. member for Calgary said this afternoon, in a year from now we ought to be in a position to know just exactly what Ve should do with regard to the railway situation in Canada. It should be discussed, I think, entirely from a non-partisan standpoint ; there is no necessity to enter into recriminations or reflections of any kind in dealing with it. The railway situation is here, and we have got to face it. I personally am not at all despondent over the railway situation, and I think that the members of this House, when they have the exact facts before them, will be quite capable of dealing with that situation in the same manner as a Board of Directors would deal with it, without any recriminations or any partisanship, and in a manner that will be in the best interests of the country. ,


Frank Oliver: I should like to know why it is that, when the Government are operating the Transcontinental railway and the Canadian Northern railway are operating their own road, the Transcontinental, instead of operating trains between Winnipeg and Quebec, which is the proper eastern terminus of the Transcontinental, operate their trains from Toronto to Winnipeg in competition with the first-class service of the Canadian Pacific railway and also the Canadian Northern railway. Running trains there, the National Transcontinental must run over 500 miles of line which is either leased or operated under running rights. They operate in competition with the Canadian Northern to the disadvantage of both the National Transcontinental railway and the Canadian Northern.


William Pugsley: The Acting Minister of Railways the other day made the announcement that on the 1st of June a direct first-class passenger service would be inaugurated between St. John, Halifax and Winnipeg, over the National Transcontinental railway.


William Thomas White: The hon. member for Edmonton (Mr. Oliver) has drawn attention more than once to the exports of the past year. Without desiring to prolong the discussion, I wish to bring to his attention some very striking figures to show the extraordinary efforts that have been put forth, and	successfully	put forth, in
connection with the export business of Canada.	I looked it up and was
surprised to find that Canada during the past year had done so well. For the 11 months ended February, 1915, the grain, wheat and flour exported from Canada amounted to 90,000,000 bushels, whereas foT the 11 months ended February, 1916, the export of grain, wheat and flour amounted to 180,000,000 bushels, just twice as much. So that for the 11 months ended February, 1916, twice as much grain, wheat and flour was exported from Canada as for the 11 months ending in 1915. There is another curious feature in connection with our export business for the same period. Whereas, for the 11 months ending February, 1915,
36.000.	000 of foreign produce, grain, wheat and flour, were exported from Canada, for the 11 months ended February, 1916, only
11.000.	000 were exported. So, while the exports of grain, wheat and flour of Canadian produce were doulbled, the amount of American produce of the like kind exported from Canada fell from 36,000,000 bushels to 11,000,000 bushels. Then, dealing with totals, I find that the total exports for the 11 months in question in each of the years mentioned were 127,000,000 bushels of both Canadian and foreign produce of grain, wiheat and flour, whereas for the 11 months ended February, 1916, no less than 191,000,000 bushels were exported. So we have the extraordinary fact before us that in this year the exports from Canada are enormously in excess of the exports of any other year. I am not saying that this is not as it should be; I am drawing attention to these very striking figures to show that, notwithstanding the shortage of tonnage upon the Atlantic, Canada had been able to increase her exports to such an extraordinary degree as is shown by these figures.


Frank Oliver: The figures are certainly
very striking and very satisfactory. As figures they are most interesting; but when you say that you say it all, because the fact remains that at the beginning of this month there was, according to the latest returns,
125,000,000 bushels of surplus export grain west of the lakes, and that because of that surplus of grain being west of the Great Lakes at the beginning of this month the people of the West are not able to increase their acreage this season as they would have done if they had been able to dispose of it. As they are not able to increase their acre-_ age, the country does not offer the same attraction to immigration that it would have offered if the acreage could have been increased. My hon. friends on both sides this afternoon were agreed that the question of securing productive occupation of the prairie was the great problem, and they had various ideas as to how it could be solved. I will give a solution of it. If they will secure for the man who now has produced the grain the prompt sale of that grain and a fair price for it, they will then have an effective immigration policy. But they can print all the beautiful literature they please at whatever expense they like, and say what they please in it, and put as many pictures into it as they choose. So long as a man hauls his grain 15 miles to the elevator in the month of May, after he has harvested, and cannot sell it because the elevator is full, and the elevatbr is full because the railroad did not take the grain away, and because of the embargo put on the transportation of grain by the railway companies, for one reason or another-you cannot argue against such a state of facts as that, and you cannot get the people to come and settle in this country in the hope of developing it when, on the evidence of their senses, they cannot sell the grain they have produced. This is absolutely pertinent to the question. 1 do not care how much we have exported. We are being asked to finance these two railroads on the plea that we had overbuilt our railroads and did not have traffic to make them profitable enterprises, while the condition is that we have the traffic and it has not been handled. The answer to that is not given by telling us how much we did, when there is so much that we did not do.


William Thomas White: I think that my hon. friend is scarcely fair in his statement, because he has overlooked the salient fact that the crop of last year in the West was really two crops in one. Our railway

ii- -

system was designed to take care of a certain normal situation. Of course that situation was likely to increase. Last year the West was blessed with two crops in one, and I think it is not an extraordinary fact-although nobody would be more desirous than I to see the crop moved out quickly- that the whole of the crop of last year has not yet been taken out. Personally, I would be very much pleased if it had been taken out, but we all know that the railway companies could not take out a double crop with machinery that might have been perfectly capable of taking out a normal crop, or even a crop considerably in excess of the normal. They had to deal this year with a double crop situation in the West, and I thought that my hon. friend would be interested in seeing the figures which I produced for the information of the committee, because they show that the export of our wheat and wheat flour was twice as large during the 11 months ending February of this year as it was for the same period of the previous year. While we have not been able to meet the situation in its entirety, I cannot help thinking that, having regard to the scarcity of tonnage which has prevailed upon the Atlantic, it is a very notable record which I have exhibited to the committee.


Frank Oliver: There is no question that it is a very creditable record, but it is not creditable enough. That is not the point. The point I wish to insist upon is that here we are dealing with what is said to be a desperate situation, which exists for lack of traffic, while the fact is that we have the traffic which we have not handled in the time in which it ought to be handled. That is a situation which the Government has not risen to meet. We are told that we have too many railroads, and the evidence is that we have not handled the products which we had on hand, and which ought to be handled in order to make our business a success. The two conditions of fact do not meet at all. There must be mishandling or mismanagement somewhere, for which our friends who are in control of the affairs of the country must accept their full measure of responsibility.
Another point is that in the statement of exports of Canadian grain-I presume my hon. friend has the figures-I think something like 70 or 75 per cent of our exports of last season's crop went by way of the United States, and only the balance went through Canadian ports. The share of the cro-p that went to Buffalo went by lake

transportation. We have three lines of railways running from the prairies to the sea, and every bushel of grain that finds an outlet over the lakes was a bushel of grain taken away from the possible traffic on one or other of these three lines of railway. When we have the condition that we have to-day, our railways bankrupt for lack of traffic, and our traffic going in such an enormous proportion to the United States, instead of to our own ports, 1 repeat it is for the Government to make the explanation, and the explanation cannot be made on the basis of a capable and competent management of the affairs of this country.


George Perry Graham: It is now half-past eight, and we have just been handed a mass of documents relating to the Quebec and Saguenay proposition, which, we are told, is to be taken up to-night. It is the first information we have had concerning it, and I just want to say, for the benefit of the Minister of Railways, that it is showing scant courtesy to the House. It is impossible for those who asked for this information to digest it in the time allowed; perhaps they were not expected to have time to digest it.
With regard to this other item, it would have been better, to my mind, if the Government had been able to give us the names of the three commissioners, for the simple reason that the experience of us all is, first, that the work of a commission largely depends upon the calibre of the men who compose it. If the Government cannot give us the names of these men, I think it ought to have given us a copy of the instructions which it proposes to place in the hands of the commissioners. We all know that, no matter what the subject may be, or what the calibre of the men forming a commission may be, their work depends on the powers which are given to them. This commission might he composed of the best men that could be secured in the world, and their report might not be worth five cents to the people of Canada. The Government will say: You can trust us to give them full scope. I am not going to say that Parliament cannot trust the Government, but men have different ideas even as to the meaning of language. What those of us Who are not of the legal profession might think was a pretty wide latitude, legal gentlemen might regard as no latitude at all, or longitude either. The commissioners are thus tied up in a box, and can only move a few inches each way. I think

it would have been more satisfactory if the Government had been able to give us a copy of the instructions in the identical language in which they propose to confer certain powers upon this commission, so that every member of this House could judge what the commission intended to do, and how far it could go. The value of the report will depend on the wording of these instructions. Presuming the commission is not armed with as wide powers as it ought to have, it is not stretching one's imagination to think that it might go to the offices of one of the railway companies and be refused certain information which Parliament might desire it to have. The commission might be in quest of some practical information, such as the experience of certain other roads or of financiers; and unless they were given the fullest possible powers, and those powers were clearly defined, they might be unable to get that information for us. I make that suggestion to. the minister, and I do not think it would be a very difficult one to carry out. If the Government has in mind just what powers they propose to give to tfiis commission, a discussion for an hour or so, in which we would be able to give our ideas, might put the matter in even better shape.
There is another matter to which I wish to call attention, particularly the attention of the Minister of Finance. I submit that this committee has a right to have placed before it an estimate of the cost of operation of the National Transcontinental for the year. I know I shall be told that there is a statute. But that statute was not designed to cover the enlarged operation now proposed. The House should know what money the Government proposes to expend, so that we could discuss the proposition of the Government intelligently. Every year an amount is put in the Estimates for the Intercolonial, and we discuss it thoroughly, perhaps too thoroughly sometimes; but at all events the rights of the members of Parliament are preserved to them when they have the opportunity of discussing expenditures in that way. When the operation was only on a small scale there was perhaps not so much objection to the Government not submitting estimates, but now that the Government has taken over the Transcontinental and proposes to expend millions in operation each year, it is unfair to the House not to submit an estimate. We should be given the opportunity of discussing what is to be done with the money
251*
and the question of operation; and then when the report comes in at the end of the year hon. gentlemen would be able to see whether their directions in regard to the expenditure of the money had been properly carried out.


Mr. REID:: I was not in the House when the hon. gentleman rose to speak, but I have been told that he stated that the documents relating to the Bill I have on the Order Paper were not given to the House until 8 or 8.30 this evening.


George Perry Graham: I said they came to the House at 8 or 8.30.


John Dowsley Reid: And the hon. gentleman considered that I had treated him with scant courtesy. I think it is hardly fair for him to say that, because he was sitting in the House this afternoon at two o'clock when I handed in the documents that are now before him, and I think he must have heard me say that I was laying them on the Table.


George Perry Graham: I did not hear anything of the kind.


John Dowsley Reid: The hon. gentleman was in the House at the time, and surely he can not censure me for not having heard what I said. As soon as the Orders of the Day were called, I handed in the papers, and I took it for granted that he heard what I said. A few minutes afterwards I thought I saw the hon. member reading them, but that turns out not to be the fact. I do not think I could have done anything more. I was unable to get the papers at an earlier date. The hon. gentleman walked out of the House shortly after I handed in the papers, and I thought he was reading them. Under the circumstances I think it was hardly fair for him to accuse me of discourtesy. With regard to my hon. friend's suggestion that we should give an estimate of the proposed expenditure on the National Transcontinental, it is quite true, as he says, that a certain amount is placed in the Estimates for the Intercolonial every year. But the Intercolonial was built fifty or sixty years ago, and has been in operation for many years. On the other hand, we have only been operating the Transcontinental for eight or ten months, and it is not fair to ask us to put in an estimate of what it will cost until we have been operating the road a little longer. No man living can give an approximate estimate of the cost of operating the Transcontinental during the coming year. Surely

we should (be allowed to operate the road for one year in order to get an idea of what it will cost before being asked to submit an estimate to Parliament. At the end of the fiscal year, on March 31st last, when we had been operating the road for only eight months, how could we tell what a year's operation would cost?


John Gillanders Turriff: Add a third of a year's expenses to the amount spent at the end of eight months.


John Dowsley Reid: We want to run the road for a year and see what it will cost, and then next year we shall 'be able to submit a statement to the House, and there is no doubt that an amount will be put in the Estimates for the Transcontinental, and that the road will be treated in that Te-spect just the same as the Intercolonial and other railways operated by the Government. I submit that it is only fair that we should be allowed to run the Transcontinental for one yeaT before being asked to submit an estimate. There is no other reason than that why an estimate should not be given.


George Perry Graham: I am sorry there is a misunderstanding between the minister and myself. I regret I did not hear what he said this afternoon. I never repeat private conversations, and I am not going "to now, but I understood the minister was going to send me the documents at ten minutes to two; I was told so by a gentleman. I stayed in all afternoon waiting for them. They were not discovered until 8.20 in the Clerk's office. What the minister says about the Transcontinental is loud, but not strong, and for this reason: the Government should not segregate itself from Parliament. It is not the Government that is running this railway, but Parliament, and hon. members are just as much interested in it as is the Government, and have a right to know what the Government propose to do, so far as the Government can tell them. The manager can surely give an approximate estimate of what he proposes to do on the Transcontinental this year; that is always done in the case of the Intercolonial. It is true there is never a year but what he comes back for $1,000,000 or $2,000,000 more. It depends on the traffic; if the traffic is heavy expenses are greater, and if the traffic is light the expenses are less. That is to be expected in the case of enterprises where it is impossible to give a very

close estimate. I am not charging the minister with any wrong-doing in holding back this estimate, but what I am saying is that as we are taking the Transcontinental over as a business proposition the manager should give an approximate estimate of what amount will be needed for the year. When hon. members go home to their constituencies they will be asked: " What is it going to cost to operate the Transcontinental? I see you are taking it over." and we shall have to tell them that an estimate was never given to' the House. The point I am making is that the Government is taking to itself authority which the Parliament never intended it should have, for it was never thought that the Government would operate the Irancontinental permanently. I say the Government should submit an estimate of the cost just as in the case of any other public work. But as the minister has said that he will submit an estimate next year, I will not say anything further on that point. If the road is to be permanently operated by the Government the appropriation ought to be asked for in the usual way.


John Gillanders Turriff: How does the minister
propose to get the money for the operation of this road if he does not put an item in the Estimates?	*


John Dowsley Reid: .Under the Act, all the expenses of operation can be taken out of the Consolidated Fund. The desire of the Government is td get that money in the same way as we got the money for the operation of the Intercolonial. We are waiting until we get out organization complete. We have not the train service thoroughly organized on the Transcontinental between Moncton and Winnipeg, but when we get out power and our cars so that we can give the system a fair trial, we shall know what the road will cost. As soon as we are in a position to make a proper estimate of the cost of operation of'the Transcontinental, that will be placed in the Estimates in the usual way, but it must be borne in mind that the road was taken over only last July. The hon. member for South Renfrew (Mr. Graham) states that we know what it is costing from Toronto to Winnipeg, and if we ask him what it is costing to operate the Transcontinental between Toronto and Winnipeg he can give us the figures. If he wants the figures for the cost of operation between Cochrane and Moncton or any other portion of the Transcontinental up to the present time, I will telegraph and get them

for him, because there is no desire to keep the figures secret. As soon as it is possible for the Kailway Department as a whole to get the Transcontinental into the same position as the Intercolonial, so that we can come to Parliament and say: Our estimate for the operation of the Transcontinental is so and so, that will and must be done, no matter who is in charge of the Railway Department.


Mr. ROBB:: Will the minister tell us
what the Government proposes to do in the way of improving the service between Cochrane and Quebec? The minister must know that since the operation of the road was started that service has been most unsatisfactory and unfair to the people of that district.


John Dowsley Reid: Probalbly the hon. gentleman was not here the other evening when this matter came up. The operation between Cochrane and Quebec has since it was started been a local service. We had neither the equipment nor the organization complete. I stated here the other evening that there will be a through service from Halifax and St .John to Winnipeg commencing, we expect, about the first of June. Of course, you cross at Quebec. Up to the present time the arrangement has been that we run three days a week and the Canadian Northern run the other three days. It is our intention to have a through passenger train that will go right on from Quebec to Winnipeg.


James Alexander Robb: Daily?


John Dowsley Reid: I do not think it will be a daily service to start with. We will run it in connection with the train from Tor-, onto, the two meeting at Cochrane, and the train will go right through. We will, of course, put on whatever service is necessary.


John Gillanders Turriff: Before this item carries, I want again to impress upon the minister that as soon as possible the Transcontinental should be used as a route for the outlet of the western wheat. There is no doubt that wheat can be carried over that road at t'he summer rate of lake and rail, show a profit, be a big advantage to the grain producer, and give a large amount of freight to the railway. In that way we would take a great deal more of our grain to our own ports. This last year, about 75 per cent of our crop went to American ports, and with the summer rate that the Government has put in force, there is an opportunity of furnishing freight and work for the Government railroads, cutting down the loss, if there is going to be a loss, in operating them, and of operating the roads to the advantage of all concerned. I trust the minister will give the matter his best attention as soon as he can get sufficient rolling stock.


John Dowsley Reid: I certainly agree with the
hon. member that we should operate the Transcontinental as much as possible. What is surprising me at the present time is this. Our rate from Armstrong to Quebec is six cents and I understand that the rate from Winnipeg to Armstrong is six cents. I have not made inquiries of late but I am informed that the lake and rail rate from Montreal to Port Arthur is nine cents. Therefore, wheat shipped from the West all rail through to Quebec should get to Quebec for about three cents less than if shipped via Port Arthur, lake and rail, to Montreal. I do not know whether that is the way it works out or not, but those are the rates in force, and if that is the way it works out, why is not the wheat being shipped all rail to Quebec? I understand there are about 18,000,000 bushels of grain along the Grand Trunk Pacific that has to come east, and I cannot understand why that grain is not sent over the Transcontinental to Quebec, instead of via Port Arthur to Montreal. Perhaps my hon. friends from the West will make inquiries as to the situation and find out where the trouble lies, because our six cent rate from Armstrong which is on the same line as Fort William, is still in force, and wheat shipped via Armstrong goes right down to Quebec instead of going to Montreal.


James Alexander Robb: One explanation may be
that perhaps there is not vessel space at Quebec to take away the grain as fast as it will come in, the minister must also not forget that this six cent rate' is not in force to Montreal where there is the largest milling capacity in Canada, and a great deal of the wheat going out by vessel from Fort William and Port Arthur to Montreal is perhaps consigned to the large millers in Montreal for export.


John Dowsley Reid: As those vessels take full
cargoes of wheat, they can take it just as well at Quebec as at Montreal. At all events some grain should be going to Quebec where we have an elevator capacity of one and a half to one and three-quarter million bushels, and yet there is no wheat going that way. If there is that difference of

three cents in the rate, the wheat should go that way, because the vesels can be got at Quebec just as well as at Montreal.


John Gillanders Turriff: I think this is a question for an energetic Minister of Railways who will attend to business, do some advertising -and send two or three men over the Grand Trunk Pacific to point out to the shippers the advantage of shipping to Quebec. The shippers are accustomed to shipping via lake and rail and they may not know of the advantage to be gained by shipping by this route. Therefore, instead of depending upon outsiders, I think the acting minister should take the matter up himself.


John Dowsley Reid: I have advertised this rate
pretty well this session and it should be known in the West.


John Gillanders Turriff: The minister is going
in the right direction, but it is a good plan not to depend upon others for what you can do yourself.


George Perry Graham: Will any member of the Government condescend to reply to my suggestion as to the powers to be given to the commissioners?


William Thomas White: My hon. friend
thought we might have explained the terms of the commission which we purpose to issue. The terms of that commission have not been settled, but I stated in general words what we had in view, namely, that full report should be made upon the
9 p.m. physical and financial condition of the railways of Canada and upon the general railway situation, in order that we might be in a position to adopt a policy which would prevent these recurring -visits for temporary aid, and settle the railway situation in permanent fashion. The powers which will be given to the commission will have to receive careful consideration on the part of the Government in order that that end which we have in view will be accomplished. I am not able to present the wording of the commission which will be issued, because its terms have not yet been settled, but it seems to me that it is only a matter of language apt to clothe the commissioners with the powers to obtain for us the information which we desire for the purpose which we have in view. I stated in introducing these loan proposals to the House that we not only desired the information which we thought a commission could furnish us respecting the physical and financial conditions of the

railways and railway companies of Canada, but that we hoped to obtain from the commission suggestion and advice as to what distribution or rearrangement or linking up of lines and systems would give the best economic result for the enormous amount of capital which had been expended upon the railways of Canada. We have in mind a commission clothed with wide powers which will bring in a comprehensive report, as a result of which we shall know what policy, at least in our view, should be adopted to settle, as I have said, in permanent fashion this railway situation with which we are confronted. This problem cannot be side-stepped or escaped. This loan proposal is a measure of temporary assistance, and if the action which we propose to take were not taken, in all probability at the next session of the House, and possibly at the next after that, we might be confronted with a similar situation to that which confronts us to-day. There is every reason, therefore, why the Government should seek a permanent solution, and obtain the best advice which it possibly can get from the ablest experts available for the purpose in order that it may solve the problem which is presenting itself at recurring intervals and which demands solution.
The personnel of the commission has not yet been settled by the Government. The suggestion is put forward that the Government should be ready with the names of the members of the commission. I need not say that it is not an easy task to settle upon the names of men of the ability and of the impartial judgment which will be required to investigate the railway situation of Canada. Some hon. gentlemen have said that we should find these men in Canada; others suggest that they should be found in the United States. Undoubtedly there will be a difficulty in finding them in Canada, for the reason-speaking only for myself-that it would not he easy to find competent men in this country not connected with the existing railway situation and who could bring impartial judgment to bear upon the matter. The railways are competitors one with the other. It is possible that one or more of the men may be found in Canada, but whether found in Canada or in the United States, my own view is that they should be men of eminent ability and of such standing that they will command the confidence of the public, men who will deal with the matter without bias, without prejudice, unin-

fluenced by any interest in the existing situation. To the problem of finding those men the Government must address itself. We have not fixed on three as the number. We stated that we would appoint three directors upon t'he board of the Canadian Northern Railway Company and three directors upon the board of the Grand Trunk Pacific Railway Company. I may say that it is not the intention of the Government to appoint so-called dummy directors, as has been suggested this afternoon, as representatives of the Government upon the boards of these two railways. We shall endeavour to find outstanding men who have the interests of the Government at heart and who will command the confidence of the people of Canada. The suggestion has been put forward during the progress of this discussion that there should be an audit of the revenues -and expenditures of the Canadian Northern. It was not suggested that there should be a similar audit of the revenues and expenditures of the Grand Trunk Pacific, but the two lines stand on the same footing and there is just as much reason for the one as for the other. We have provided for that. We have an estimate of $10,000 for the purpose of retaining and paying two firms of auditors for carrying on a continuous audit, beginning May 1, of the revenues and expenditures of the Canadian Northern Railway Company and of the Grand Trunk Pacific Railway Company. We feel that by reason of the guarantees and loans which we have made to these two railways we have a very vital interest in the conduct of their business from this time forward, or at all events until they are in such position that they will no longer need Government aid, if such a condition ever arises. It is our intention to appoint firms of auditors of very high standing who will command the confidence of the people. As it has been suggested that the net profits of the Canadian Northern railway system may have been diverted for other than railway purposes, I would call the attention of the committee to this fact,-because I do not believe that any hon. member desires to do any injustice to the Canadian Northern railway management-that the accounts of that company which have been laid before the House are audited by -an eminent Winnipeg firm of very high standing, Messrs. Webb, Read and Hegan, chartered accountants. Personally I see no reason to believe that the net earnings of the Canadian
Northern Railway Company have been used for any other purpose than the purposes of the railway; in fact, that is borne out by the statement that we have before us. For the fiscal year 1915, which ended on .Tune 30 of last year, there was a net profit of $6,000,000 and for the present year there is an estimated net profit of $9,700,000. The net profits of that road have not been diverted to other than railway purposes. We can see where they have gone. The net profits, that is to say the amount of revenue in excess of operating expenses have gone, generally speaking, to two purposes. They have gone to pay interest upon underlying securities, that is to say, fixed charges; or they have gone to pay indebtedness incurred or expenditure made upon construction, or for the payment oi instalments of equipment securities. There is an indebtedness, as I pointed out to the committee, in respect of those items, but the net earnings of the company so far as they went unquestionably were applied to that purpose.
As I stated, you have first the report of the administration of the Canadian Northern itself, and then you have the certificate of a very reputable firm of auditors in Winnipeg. In addition to that, we propose to appoint three directors upon the board of the Canadian Northern and three upon the board of the Grand Trunk Pacific, to keep the Government informed as to the administration of these railways. We propose, also, that there shall be an audit of the expenditures and revenues of each company on behalf of the Government, and it is our intention to name in this connection auditors who will command the confidence of the Canadian* public.


George Perry Graham: The minister has brought up another point. I thought it had been decided that there were to be three commissioners, but apparently the Government does not know whether there are to be three or more than three.


William Thomas White: I never mentioned any limitation of the number of commissioners to be appointed; there may be three or more than three, as the Government shall decide.


John Gillanders Turriff: No chance of having
less than three?


William Thomas White: For myself, I think there should be at least three.


John Gillanders Turriff: At the rate the Government are going in appointing directors and

commissioners they will hardly find applicants enough possibly.


William Thomas White: Well, you know we have a population of eight millions.


John Gillanders Turriff: But you must not interfere too much with recruiting, you know.


George Perry Graham: The newspapers announced that there were to be three commissioners and how they were to be appointed; the Government to appoint two, one a financier, and the other a railway man,, and these two to appoint a third. I discussed that the other night. But, to come back to the other point: Will this commission be instructed to report and make recommendations, and will the Government feel that it is bound to accept the recommendations they make? Or will they be asked to report, as the lawyers say, the evidence, and not make recommendations ?


William Thomas White: They will be
asked to advise generally as to the railway situation >and to report as to what arrangement, distribution, or linking up of the lines or systems will give the best economic results. We cannot make any commission a dictator; we cannot abdicate the functions of the Government or of Parliament in favour of any commission. But we hope the coznmission will give us the benefit of expert knowledge to enable us to find a permanent solution of the railway situation. Speaking for myself, I should think it extremely inexpedient that the Government should devolve upon the commission the powers of Parliament. Obtaining expert advice is one thing, but whether the Government and Parliament should accept that advice is another. I do not think we should fetter ourselves in advance.


John Gillanders Turriff: As to conferring upon a commis.iion the powers of Government, the hon. minister has forgotten that, only two or mree weexs ago, at the instance of the Government, our function in regard to railway charters were turned over to the Railway Commission. But I leave that aside. The appointment of this commission is of vast importance. It seems to me that it would be better to take whatever amount of money the Government intends to spend in the salaries of these commissioners, and spend it in getting say two men, one man to deal with the physical conditions of the railways, and how they can best be worked for the general advantage of the people,

and the other to look into the finances of the road. Or, instead of appointing three men at comparatively large salaries, get the best man you can find in America and give him the salary you would pay to the three. If you were to do this, I believe you would have a report that would be worth ten times as much as one made by three men. If you have three men on a commission, the work is done by the best man of the three-he practically decides the whole business. As to the gathering of information, that is a matter for clerical and other assistance. I should be in favour of a small commission.


George Perry Graham: That is part of what I had in mind. The minister will notice that the newspapers are giving him advice as to the personnel of this commission. He has been advised not to neglect to have as one member of the commission a man who is in favour of Government ownership. Another portion of the press tell him that the report will be incomplete unless he has a labour representative on the commission. There are two distinct lines of advice that I have particularly noticed. If suggestions and recommendations are to be asked by this commission, in addition to an investigation of facts, it will be all the more necessary to be very, very careful as to the personnel. If it were possible to have all shades of opinion on the commission, it would be very well; but that might easily make the commission top heavy.


Mr. MEIGHEN:: How many does the hon. member suggest as the membership of this commission?


George Perry Graham: I would not have more than three at the outside. I have tried commissions, and I have found that the larger the commission the more trouble you have in arriving at a conclusion. As the hon. member for Assiniboia has said, the acquiring of technical information does not need a commission; the commissioners should be able men who can digest the information when they get it. I do not think I will say more on the subject. The Government has my views. I would merely urge that the instructions to be given to the commission should first be drafted and then thought over for several days, and looked at in the light of full and mature consideration. Upon the powers given to the commission will depend the usefulness of their work.


Mr. McKENZIE:: I do not know whether the minister will attach much importance

to my knowledge of railway matters, but I would like to give, not only to the Minister of Railways but to his colleagues, my idea on this subject. I think there is danger in making the mistake of not developing talent in our departments by going all over the country looking for commissioners. I think that the proper policy would be to employ big men in the various departments of the Government-and big men are needed in every department-pay them large salaries if necessary, and place responsibility upon them. That would be very much better than going outside when any big question arises and employing men at high salaries, perhaps to learn the business in hand at the expense of the Government, and then to leave the service of the Government. By having men of ability permanently employed in the departments they would be constantly at hand to give the Government the benefit of their advice and assistance in carrying out the recommendations which they might make, whereas outside commissioners, when employed in this way, are of no further use to the Government after they have made their report. The Government employs a general manager of the Government railways at a salary of $20,000 per annum. He is, I believe, a thoroughly competent man,- if he is not he is not capable of earning this salary,-and the Government will not be able to secure better advice than he should be able to give by the employment of any outside commission. There is the further fact that when a report is made by the outside commissioners, who may he employed, the officers of the department may say: If you had consulted us in the first place we could have given you better advice than you have received; the plan that has been recommended to you is of no use. The practice of employing outside men to do responsible work in the departments is not a good one. We see it constantly in the Justice department. Not long ago when a little Bill was to be drafted we had lawyers from Halifax, Quebec and Vancouver gathered here to draft it.


Arthur Meighen: What Bill does the hon. gentleman refer to?


Daniel Duncan McKenzie: It was a Bill in connection with the war laws. A few days ago a man was added to the Department of Justice, which of course was carrying out the idea I suggest, and I think is the proper course. We should not have lawyers gathering around, like crows around a carcase whenever there is any legislation to be drafted.
As - to the nationalization of railways, I am opposed to it. I believe that we should encourage individual energy, enterprise and initiative instead of putting everything into a common pool, which tends to kill individual enterprise. We should take a leaf out of the book of the United States, where there has been little nationalization. The United States have developed to their piresent greatness through individual effort and enterprise.
To provide for a continuous audit on behalf of the Government of Canada, commencing May 1st, 1916, of the revenues and expenditures of the Canadian Northern railway and Grand Trunk Pacific railway systems, $10,000.


Edward Walter Nesbitt: This is apparently carrying out what I was suggesting, having an audit of the receipts and disbursements. I did not know, when I made my remarks, that this item was in the Estimates.


Frank Oliver: There are two questions in connection with the Canadian Northern railway which I think might well be considered at this juncture. One is in connection with the Hudson Bay railway. The Government-owned section of the road runs from the Saskatchewan river to Hudson bay, and is connected with the railway system of the Northwest, through the Canadian Northern main line at Prince Albert, by a branch line, 90 miles in length. The'sole ownership of that branch lies in the Canadian Northern railway. It would seem desirable that, if the Hudson Bay road is to be operated as a Government proposition, it should ultimately be extended southwesterly as far as Regina or Moosejaw; but for the time being there would be an immediate advantage in the ownership of the branch connection from Hudson Bay Junction to the Pas. I think it wise to go on record now as suggesting that that would be a proper matter to be taken under consideration and dealt with, because it will probably have to be done at some time, and this would seem to be as appropriate a time as any to make the arrangement.
Another suggestion has been made by the Quebec Board of Trade; that is, that access for the Transcontinental into Montreal should be secured over the Canadian Northern railway branch from Montreal to Harvey Junction.


John Dowsley Reid: That is 116 miles.


Frank Oliver: It seems that the mileage from Winnipeg to Montreal is something

less by that Toute than by Cochrane, North Bay and Scotia Junction, while of course the traffic ie hauled over the rails of the Transcontinental for a very much longer distance, and the grade is good all the way into Montreal. I do not know whether these points have been suggested to the minister, or have come to his attention, or whether he has any views on the subject. It would seem to me that, in dealing with the Canadian Northern, this would be a suitable time to make arrangements with the- Canadian Northern for the future to acquire permanent rights over these two pieces of railroad.


John Dowsley Reid: The suggestions are good. With reference to the Hudson Bay connection, the hon. member knows that it will be a year or so before that road is out of the hands of the contractors. The commission which is to go to work almost at once will no doubt consider the whole railway situation, as it concerns the West, as well as other parts of Canada, and no doubt they will take up that point in their investigation. With regard to the connection between Hervey Junction and Montreal, that matter has come before me. * The suggestion is a good one, and is being taken up with the view of making the connection, so far as Montreal is concerned. There is no trouble in making arrangements of that kind. We can arrange it satisfactorily either by consulting together, or through the Board of Railway Commissioners. The advantage would be that we would be able to take the whole trainload over the Transcontinental, with the exception of a stretch of about 106 or 116 miles, and where you are dealing with a six cent rate, by bringing it over the Temiskaming and Northern Ontario railway and then over the Grand Trunk railway, there is very little left for the Transcontinental. As I have said, the suggestion is a good one and is being considered, and it may be taken advantage of before another year. I am in hopes that the whole railway question will be in such a shape next session that we will all be seized of the facts through having the advice of good men who will look into the matter thoroughly.
Progress reported.



[Stage Direction]
Hon. J. D. REID (Acting Minister of Railways) moved the second reading of

Bill No. 101, to authorize the acquisition of lines of railway between the city of Quebec and Nairn Falls and between Lyster and St. Jean des Chaillons.
He said: This Bill is for the purpose of acquiring as part of the Government railway system three lines of railway. One is known as the Quebec, Montmorency and Charlevoix railway, extending from St. Paul street in the city of Quebec to St. Joachim, a distance of about 43 1/5 miles. This road has already been in operation for many years.
George Perry Graham: In what direction does it run?


John Dowsley Reid: From Quebec, east along the St. Lawrence-that is the electric railway- to St. Anine de Beaupre, and further on. To. Ste. Anne de Beaupre is a distance of about 20 miles, and the railway runs along the St. -Lawrence to the point I have mentioned.


John Gillanders Turriff: On the north shore?
* Mr. REID:	On the north shore. As 1
have said, this road has been in operation for many years, and has been a paying proposition for some time.


John Gillanders Turriff: They should not sell it then.


John Dowsley Reid: It is a part of the system.
We are also acquiring the Lotbiniere and Megantic railway extending from Lyster in the county of Megantic to St. Jean des Chaillons in the county of Lotbiniere, a distance of about thirty miles. This road has also been in operation for a number of years and is a paying road. The other road we are acquiring is what is known as the Quebec and Saguenay railway, extending from its junction with the Quebec, Montmorency and Charlevoix railway at St. Joachim in the county of Montmorency to Nairn Falls in the county of Charlevoix, a distance of about sixty-two and eight-tenths miles. This road is completed. Nairn Falls is about six miles from Murray Bay, and has some pulp and paper mills.


Frank Oliver: How far is that from the Saguenay river?


John Dowsley Reid: About thirty or forty miles. This road was originally to go to Baie St. Catherines . The object in purchasing the Quebec and Montmorency is to have the road run right into the city of Quebec. The earnings of the Quebec, Montmorency and Charlevoix railway are as follows:

Gross earnings	. $217,802	94Operating expenses ..	. 146,559	40'Net earnings	. . 71,243	541911.	Gross earnings	. $245,039	04Operating expenses ..	. . 166,719	68Net earnings	. . 78,319	361912.	Gross earnings	. . $273,395	84Operating expenses . .	. . 197,157	02Net earnings	. . 76,238	821913.	Gross earnings .. . .	. . $293,985	75Operating expenses ..	. . 217,497	23Net earnings	. . 76,488	521914.	Gross earnings .. ..	. . $311,528	17Operating expenses. . . .	.. 228,496	60Net earnings	. . 83.031	57
The earnings of the Lotbinifere and Megan-tic railway are as follows:
1912.
Gross earnings ....	..	$14,025	26Operating expenses	..	..	8,047	55Net earnings	
5,577	71
1913.
Gross earnings	^	$34,870 07Operating expenses	..	..	27,964	97Net earnings	
6,905	10Gross earnings	
$30,259	47Operating expenses	..	..	28,993	89Net earnings	
1,265	58
The Quebec and Saguenay railway has not been completed and is not in operation, and has therefore no earnings to show. As to the cost of these railways-'the Quebec Light, Heat and Power Company, which owns the Quebec and Montmorency railway, gives the following statement of capital expenditures on the Montmorency division to March 31, 1916: The Quebec Light, Heat and Power Company, Limited, to June 30, 1910, $270,390.84; the Quebec Railway, Light, Heat and Power Company to March 31, 1916, $251,819.05, or a total of $2,992,209.89. The above cost includes all capital cost but makes no provision for the increased value of the different lands owned by the company, particularly its terminal property in the city of Quebec.


John Gillanders Turriff: Do I understand that
this 30 miles cost on an average $91,000 a mile?


John Dowsley Reid: That figure includes the terminals in Quebec, which were very expensive. Then the road is electrified.


Daniel Duncan McKenzie: Has the minister any reliable reports on these roads?


John Dowsley Reid: We have had our engineers
go over the road, and their reports aTe included in the papers that have been submitted. The cost of the Lotbiniere and Me-gantio railway, which was purchased only two or three years ago, was $285,075.95, plus cost of surveys of line, legal and trust fees, etc., $64,132.70, or a total of $349,208.85. I am giving the statement of cost as it has been given to me.
The Quebec and Saguenay railway was, I understand, incorporated on May 20, 1905, the incorporators being E. D. Garneau, Hon. Charles Langelier, George Tanguay, M.P.P.; Narcisse Rioux, Hon. Alexander Taschereau, William Price, Mark Workman, McLea Walbank and W. G. Ross. That railway extends from the east end of the Quebec and Montmorency road on to Murray bay, the original intention being to go to St. Catherines bay, and making that a winter port. The charter was amended on the 28th day of February, 1907.


Daniel Duncan McKenzie: Is it a provincial charter or a Dominion charter?


John Dowsley Reid: A Quebec charter. Evidently the work did not begin for some time, because my memorandum shows that construction was begun on the 15th of April, 1911, and the work was stopped in September, 1912.


John Gillanders Turriff: Construction on the Quebec and Saguenay railway apparently had to cease as soon as reciprocity was defeated.


John Dowsley Reid: The fact that reciprocity was defeated, even supposing it caused the stoppage of this work, was a good thing for the Dominion of Canada. This railway will be revived again, and I hope it will be as successful as the defeat of reciprocity was. About 87 per cent of this railway is finished. The amount that has been expended upon it up to the present time is as follows: The company issued bonds to the extent of $4,684,400. $2,500,000 worth of those bonds were sold at 84 cents on the dollar, and $2,184,400 were sold at 82 cents on the dollar, realising together $3,822,315.42. They have expended all this money and $1,050,000 more in cash, all of which has been put into the road. Therefore they have put into the road $4,872,315.42 of actual cash, and there is due for small claims, a balance for right of way and other accounts, $461,000, making a total of $5,333,315.42, which the company claim has been paid out for the construction of this road so far as it has gone. They received from the Dominion Government in cash at

one, time for subsidies $132,000, which amount was paid to cancel $144,000 worth of the bonds that I have mentioned. Another subsidy, amounting to $116,000, has been deposited with the trust company, and has not yet been paid out to the Quebec and Saguenay railway. Therefore, they have received altogether in subsidies $248,000, but we get back $116,000 of the subsidies so paid, so that the total subsidy that the railway has received is $132,000. I understand that, according to their charter, they were to have received 189,000 acres of land and $3,000 a mile from the Quebec Government, but of that nothing has been given to them up to the present time.
In regard to the condition of the road, at the present time, according to the report of Mr. Beckwith, from Mile 30 to Mile 51 upwards of 95 per cent of the road is finished; from Mile 51 to Mile 56, which is about the heaviest part of the work, 40 per cent is finished; from Mile 56 to Mile 62, 95 per cent of the road is graded; from Mile 62 to Mile 65, there are several unfinished rock cuts, but about 85 per cent of the total work is finished.


John Gillanders Turriff: Does my hon. friend, when he says that the road is finished, mean that the grading is finished, or that the rails have been laid?


John Dowsley Reid: The roadbed has been graded; the ties are there, but the rails are not laid. From Mile 65 to Mile 79 a number of washouts have occurred, but about 85 per cent of the roadbed has been completed, and we have a great many ties to place on this road. From Mile 79 to Mile 81, 6,000 feet of the light work has gone, but otherwise that part is completed; from Mile 81 to Mile 85, 95 per cent of the work has been completed, and from Mile 95 to Nairn falls it is completed. That is the condition of that part of the road from St. Joachim to Nairn falls. There have been several estimates as to what it will cost to finish the road and put it in the condition in which it was when the contractors ceased work. Owing to the road having been left without any work being done on it since 1912, there are a'number of washouts, etc., which must, of course, be repaired.


Edward Walter Nesbitt: Will the minister give the estimates of the cost?


John Dowsley Reid: The contractors thought it would cost about $700,000 to complete the road.


Edward Walter Nesbitt: That is to put it in the condition in which it was before?


John Dowsley Reid: To put the road in the condition in which it was before and to lay the rails, making the road all complete and ready for operation.


George Perry Graham: There are different
weights of rails along the road-56 and 67 pound rails?


John Dowsley Reid: There are not many rails there, only enough for about eighteen or twenty miles altogether, and those rails are lighter than the ordinary. The reason this railway has cost so much is that it was built to Transcontinental specifications and there was a great deal of hard rock-cut. The cost for reproducing and placing it in condition for operation and completion one contractor estimates at about $700,000. Our engineer who went over the road estimated it at something over $1,000,000.


Daniel Duncan McKenzie: What engineer?


John Dowsley Reid: I think his name is Beckwith. In fact two or three engineers of the Intercolonial went over this road. The road was originally proposed to give a service to the people who are living on the north shore. We all know that the people on the south shore are well served with railways, while those living on the north shore have no railway accommodation.


Daniel Duncan McKenzie: Perhaps the minister will give us information as he goes along. I see by the Bill that the road is 62.8 miles long.


John Dowsley Reid: Yes, that is the Quebec and Saguenay.


Daniel Duncan McKenzie: How much is completed and open for traffic, and how much unfinished?


John Dowsley Reid: I gave that information at the beginning. Mile 30 is the end of the Quebec and Montmorency and the commencement of the Quebec and Saguenay. From mile 30 to mile 91 is the distance the hon. gentleman mentioned. I stated that from mile 30 to mile 51 the work was upward of ninety-five per cent completed, and according to the statement I have, the road is eighty-seven per cent completed throughout.


John Gillanders Turriff: According to the figures as I have taken them down, something over $5,000,000 has been expended on 62-8 miles, of which the grading is only 871 per cent completed, with no rails laid, no sta-

tions built, but, I presume, with the bridges built, although I am not sure as to that. Figure that out, and you will find that this road has cost more than completed railways even in difficult parts of the country. I think it would be advisable for the minister to explain where the money has gone.


John Dowsley Reid: I explained that these are
the figures given me by the Quebec and Saguenay Railway.


Wilfrid Laurier: Has there been no audit?


John Dowsley Reid: Not by us; but we only agree to pay what it actually cost, up to a certain amount. Perhaps I had better state now what our proposition is, because that will afford me an opportunity to explain an amendment that I shall propose
10 p.m. to this Bill when .we get into committee. The. cost of the Quebec and Montmorency railway, as I stated, was $2,992,209.89. There are bonds on this railway of $2,500,000. We propose, if it is proven to the satisfaction of the Exchequer Court that this money has. actually been spent on the road, to assume the $2,500,000 of bonds for the railroad and the terminals.


William Pugsley: About $70,000 a mile.


John Dowsley Reid: If it cost that. The Exchequer Court must be satisfied that the amount has actually gone into the road.


George Perry Graham: Irrespective of whether
it is worth it now or not?


John Dowsley Reid: If it is necessary to have this part of the road in order to have the through road from Quebec to Murray Bay and St. Catherine's bay, if it is extended. By taking this road we can reach Quebec city. That is the reason why we require this piece of road, and, as I have stated, it is a paying road. Now, from St. Joachim to Nairn Falls, according to this statement, they have spent $5,533,315. It is with regard to this that I shall propose an amendment, asked for by Judge Cassels of the Exchequer Court, with a view to making it plainer and providing that he may be able to go thoroughly into the matter. I shall propose to add to the Bill the following words:
Said value to be the actual cost of said railways less depreciation, but not to exceed $4,465,000 exclusive of outstanding bonded indebtedness which is to be assumed by the Government, but not to exceed in all $2,500,000.


Edward Walter Nesbitt: That is on the short piece?


John Dowsley Reid: The short piece is the electric road and steam road, which has been
earning the amounts I have stated. And even if they can show, as they say they can easily show, that they have expended the amount I have stated, the Judge of the Exchequer Court will not be allowed to exceed $4,465,000, but not that amount unless it is shown that much money has been expended on the Quebec and Saguenay, the Lotbin-iere and Megantic, and the Quebec and Montmorency.


William Pugsley: The amendment seems to rather tie the hands of the Judge of the Exchequer Court, because, while it fixes a low valuation, it makes no provision for a reduction on account of the Dominion subsidy which has been paid. If the minister thinks that the cost ought to be considered instead of the value, ought not the subsidy to be deducted?


John Dowsley Reid: Of that $132,000 has been paid, and $116,000 has not been paid. We propose that they must show that they have actually expended on the three roads $4,465,000 of cash.


Mr. SINCLAIR:: Will that include in- '
terest on the money that they have invested from year to year?


William Pugsley: What I meant was that if he had regard only to the' amount actually expended, the judge of the Exchequer Court would not be allowed to deduct the $132,000 which has already been paid by the Dominion by way of subsidy.


John Dowsley Reid: I think the subsidy should
be deducted; we can take that up in committee. The Quebec and Saguenay state that they have expended $5,333,315 less the subsidy of $116,000, leaving $5,217,315. Hon. gentlemen can see that if we put in the words " actual cost " without limiting the amount, we would have to pay the $5,300,000. Replying to the hon. member for Guysborough, I may say that during the construction of a road interest is always added to the cost of construction until the road is completed.


John Howard Sinclair: At what rate?


John Dowsley Reid: I do not know what the rate is. I can easily have that information when we are in committee.


John Gillanders Turriff: One of these roads, the Quebec and Saguenay, stopped construction in September, 1911.


George Perry Graham: It synchronized.


John Gillanders Turriff: Yes, it synchronized with the defeat of reciprocity. According to what my hon. friend says now, he would propose to pay interest from the time the road began construction up to the present moment.


John Dowsley Reid: No, I said during construction, until the road was completed.


John Gillanders Turriff: My hon. friend talks
about paying the cost of the road. Does he mean that whatever statement the present owners of the road put in as the cost of the road would be accepted, or does he mean that the cost would be based upon what it could have been built for? This road may have been built, for all we know, along the same lines as the Canadian Northern was built. Certain men who owned the road taking the contract and switching it to 25 or 30 per cent of the money they were getting for building the road, thus making private profit.


John Dowsley Reid: Tenders were made and contracts let; the prices must have been reasonable, because some of the contractors failed with the work and other contractors had to take it up and complete it. The amount that is to be paid is the amount that actually went into the road, the right of way, and terminals. The judge of the Exchequer Court is the man to decide whether the statements submitted to him are correct as to the money expended on this railway. No person will put in accounts by which there will be any money made out of this transaction. The information I have is that these lines will serve quite a population in that locality. I am informed that in the county of Charlevoix there are 22,000 people without railway accommodation. This line enters the county of Chicoutimi and Saguenay and will be of service to a number of people in that district. The population of that county is some 65,000, as shown by the census. It will serve the county of Montmorency, which has a population of 15,000, and it will be of benefit to the city of Quebec, the population of which is about 90,000. It will also be of benefit to the people in Quebec county, of which the population is 27,000. My view is that this road will be of considerable benefit to the neople along The north shore, who should have had railway accommodation before this. Part of this road has been in operation for many years and has been of great benefit to those who have had the advantage of that operation, as is shown by the earnings that I have given. The line from the end of Quebec and Montmorency to

Murray Bay, will, I believe, have good earning power. Very many people go down to Murray Bay and along the north shore during the summer. A great many people, many of them farmers, live along that route, and to them this line will be of great benefit. I discussed this matter with our railway management, and they believe that the road will be quite an advantage to our transcontinental system. Having regard to all the conditions, I have no hesitation in recommending that this road be purchased and put in operation at the earliest possible date.


Wilfrid Laurier: What about
the railway on the south shore?


John Dowsley Reid: There is a short line, about 30 miles in length.


William Pugsley: Is that a branch of the Intercolonial?


John Dowsley Reid: Yes, it is a branch line of
the Intercolonial, it is on the south side.


George Perry Graham: It is not a branch line
yet.


John Dowsley Reid: It will be when we acquire it.


William Pugsley: What I mean is, does
it connect with the Intercolonial?


John Dowsley Reid: Yes. As I have shown, the earnings are not very large, but they are on the right side, and this line will be a feeder to the Intercolonial.


William Pugsley: Why does not the minister allow that to come under the statute^of 1915, which provides for taking over branch lines of the Intercolonial?


John Dowsley Reid: Even if we did take it over
under the Branch Lines Act, we would have to come to Parliament and have the transaction confirmed; therefore we might just as well bring it in now and include it in this legislation. We are really bringing it in under the legislation to which my hon. friend refers, and confirming it at the same time. As this line connects with the Intercolonial, we could have brought it in under the branch line legislation, as the hon. member suggests, but we would have to come to Parliament for the other two lines in any case. The Prime Minister assured the House that if any roads were taken over under that Act which were not in connection with the Intercolonial, he would come to Parliament and have the acquiring of them confirmed as we are doing.


William Pugsley: The road on the south
side of the St. Lawrence does not come within the minister's- promise to my right hon. friend the leader of the Opposition, because that would come under the statute of 1915. By this Bill the minister is making an entirely different provision. Under the Act of 1915, an agreement had been come to as to the price; but here he is providing that, these two roade shall be picked out, an exception made in their case, and the price to be paid is to be fixed by the Exchequer Court. Whether or not the Government may deem that price to be reasonable, they will be bound to pay. That is (the difference, and I think it is very exceptional and favourable treatment that is being afforded to these two Toads as compared with the roads enumerated in the statute of 1915.


John Dowsley Reid: Of course we could do as the hon. gentleman says; but this is just as convenient and I cannot see that it is not in the interest of the Government to do it in this way.


Mr McKENZIE:: Does the minister not see that he is simply appointing another commission? It is this pernicious practice of appointing commissions; he is making the Exchequer Court a commission. Is it not possible for the minister to bargain for anything?


John Dowsley Reid: It is not fair for the hon. gentleman to make that statement. The Exchequer Court was organized for the purpose of settling any claim that any person might have against the Government, or to adjust matters if the Government is purchasing.


Daniel Duncan McKenzie: The minister need not explain to me what the Exchequer Court is; I know that quite well.


John Dowsley Reid: If the hon. member knows, it is not fair to make the statement he has made. I believe that every hon. member in this House will be satisfied that, whatever decision the Exchequer Court makes in connection with these roads or any other matters that may come before the court.


George Perry Graham: But you tie up the Exchequer Court with conditions.


Mr REID:: Only in . so far as the maximum amount to be paid is concerned; and I think it is right, in the interests of the Government to do so, because we say that the actual cost is not to exceed a certain amount. The statement is made to the
Government that there has been a very much larger amount than this expended on the road, and for that reason we say: We will limit the amount to this maximum. If, when the statements are put before the judge of the Exchequer Court, he is of the opinion that there has not been this amount expended on these Toads, then he has power to fix a lower price: That is the reason we limit the maximum.


Wilfrid Laurier: Has my hon. friend taken any steps to verify the figures given to him of how much has been put into the road? He says it has been stated that more than this amount has been put into it. I presume that statement has been made by the company, that they have expended more than appears. Has any audit been made, and have these figures been verified?


John Dowsley Reid: No, we have not gone that far because we have the figures showing what has been paid. We feel perfectly satisfied that, as the whole matter has to come before the Exchequer Court, ',he court will take good care to see that that amount has actually been expended or has gone into the road; and for that reason it would hardly be necessary for us to go that far. We have confidence in the Exchequer Court carrying out the provisions of the Act.


George Perry Graham: The Exchequer Court, tc put it shortly, was established to decide claims of contractors. A contractor does not go to the Exchequer Court and say: I spent so much. The Exchequer Court decides certain disputes under his contract. If the Government were expropriating a building, the Exchequer Court would decide what the building was worth, not what it cost for its construction, although that might be an element in the evidence. What I mean by tying up the Court is that the Government is compelling it to take what was put into the road as a basis, even if one-half of what was put into it has floated away. Suppose the road had been constructed, and a million dollars worth of it had been washed away.


John Dowsley Reid: They have got to reproduce it.


George Perry Graham: That is all right. My hon. friend ties up the Exchequer Court to give a decision based on the amount that was invested. Unless in their judgment value was received for that investment, the basis is no good at all. Suppose the road were extravagantly built, supposing, for reasons that occur sometimes in railway construction, it cost the company one

million dollars and they got value for only one-half a million dollars, there is no provision made for an allowance for that in the Exchequer Court. The judge must take into account what they expended. The basis ought to be the value of the work that is there, no matter what it cost. That, I think, would be the simple way. The Exchequer Court should not be tied up as is here proposed.


Hugh Boulton Morphy: Does the hon. member mean the value based upon the cost at the time of construction, or what, if it were constructed to-day, that same work would be worth?


George Perry Graham: The judge ought to have full liberty to take everything into consideration.


Hugh Boulton Morphy: Then you are opening it up to a dangerous point.


George Perry Graham: If the Government is going to pay the value and no more or less, the judge ought to be the one to determine what the value is. If you take the road as a going concern-my hon. friend need not be alarmed-portions of it have a high value. I am pointing out that the minister is tying up the Exchequer Court on a certain basis on which the court will bring in its findings, and that is not a correct basis; it ought to be the value of the property at present, no matter what it cost.


Hugh Boulton Morphy: My idea is that the present value might be a great deal more than its cost when constructed; and if it is opened up in that way, the country may pay a great deal more than the money put in to build the road.


George Perry Graham: I can assure my hon. friend that will not be the case.


Auguste-Charles-Philippe-Robert Landry: I wish to remind hon. members that the question before the House is the second reading of the Bill.


Arthur Meighen: I think I appreciate the point raised by the hon. member for South Renfrew (Mr. Graham). His contention is that no special limit should be placed upon the Exchequer Court in determining the value; that the Exchequer Court should be governed by the same conditions as it is governed by in other matters when values come before it for determination. It is well known that, under the law governing expropriations, the Exchequer Court considers the various elements, all in varying degree, depending on the case that happens to be before it; sums those elements up and

reaches a valuation. What these elements are and what the law is, there is no need to dilate upon; it is well known to hon. gentlemen opposite. If in this case no basis were provided for the Exchequer Court, it would be difficult, if not indeed impossible, to arrive at a determination. As the hon. minister has stated, the intimation that a basis of value would be desirable came from the Exchequer Court itself. I can quite understand why such an intimation should come in this case. Ordinarily the basis of allowance by an Exchequer Court, or indeed by any court, on an expropriation; is the damage .done to the parties from whom the property is expropriated, and the damage would be the value of the property to that party; the loss he suffers by its severance from him and by its being taken to become the property of the expropriator. It naturally would appear to the judge of the Exchequer Court that in this case it would be very difficult to have any means of arriving at a basis where all these elements would come in. Here is a road for example, the Quebec and Saguenay, 62:8 miles, which runs through a country yet unprovided with railways, which has been built at a very great expense on account of the character of the country through which it runs. That railway if it were completed, would serve a certain population that exists there to-day. I do not know how the value of that railway could be estimated. It is a matter of potentiality. It is a matter of estimating the future, of estimating, not only the conditions that prevail now, while the railway is in embryo, but of estimating what may be the prospects of the road as conditions develop by the operation of the railway itself. It may be that the railway handled by the company in whose hands it is, would be a losing proposition for a time. One man might say that it would be a losing proposition always; another might say differently. There would be nothing of a tangible nature to go upon, because it is a matter, not of existing conditions, but of potentialities that are buried in the nature of the conditions themselves.


Daniel Duncan McKenzie: I understand that we
are not expropriating this railway, but taking over the road for what it may be worth?


Arthur Meighen: Yes.


Daniel Duncan McKenzie: It is not in the nature of an expropriation but of a purchase?


Arthur Meighen: That is true in one
sense. While I am on the point, I may answer the hon. gentleman in full. The Act of 1915, under which we are empowered to act, gives the minister the power to take over a road, and under a clause in that Act, he may exercise all the powers of expropriation. That power is given in a clause on the second page of the Act, if my hon. friend will turn it up. The minister is not required to exercise the powers of expropriation, but he has the powers of expropriation vested in him by that statute.


Daniel Duncan McKenzie: You are not going
to exercise them here?


Arthur Meighen: Oh, yes; we will have the power to exercise them as soon as this Bill passes, because we take the roads under the provisions " of an Act to amend the Government Railways Act and to authorize the purchase of certain railways." Taking the road under that, we get the powers of that Act, and we would be able to exercise the power of expropriation. But whether we choose to exercise it or not, or whether we choose to make an agreement by way of purchase with the necessary provisions for the protection of the Government, and then refer that agreement, either under the Act of this session, or simply under this Act, the [DOT]course before the Exchequer Court would be to determine the value of the road, the valye of what we get, and under the very peculiar circumstances that prevail here, expropriating a railway, part of which is only a railway in embryo, the ordinary rules would he very difficult, indeed, of application. Consequently, it appeared to the judge of that court that a basis of valuation was essential.
Before I deal with the method of arriving at a basis, I may say that the words I have used so far apply pretty accurately, also, to the first thirty miles of the Montmorency and Charlevoix road. That road also has a certain value now. But it may have a much greater value when the addition is completed, the Quebec and Saguenay railway, which connects it up with Naim Falls. It may have an added value by virtue of the possibility of the extension of that line to St. Catherines Bay, which is claimed to be a winter port.


John Gillanders Turriff: No.


Arthur Meighen: I said what is claimed to be a winter port; I am not giving a decision, because I have not the evidence of my own judgment on that matter which the hon. member for Assiniboia apparently has.


John Gillanders Turriff: I lived until I was grown up 100 miles east of that point on the St. Lawrence river, where you could not see across the river, and there was no winter port there, but solid ice all the winter through.


Arthur Meighen: It may be a long time since my hon. friend was there.


John Gillanders Turriff: It is a long time, about forty years.


Arthur Meighen: Conditions might have changed.


Wilfrid Laurier: Would it not be well to ascertain whether conditions have changed?


Arthur Meighen: It would be before we build the road. We are not holding out the prospect of building it yet. What the hon. member has said only illustrates and emphasizes the point I am making, the very great difference of opinion as to prospects. There would be nothing substantial and tangible upon which the Exchequer Court could proceed in estimating the value of a potentiality like that.


John Gillanders Turriff: You could trust the
judge.


Arthur Meighen: We do trust the judge? That is what we are asking the House to do, and the judge asks that Parliament fix a basis, and we propose to trust his judgment in making that request.


John Howard Sinclair: How is the amount arrived at?


Arthur Meighen: I will explain that. In arriving at a basis, in getting at something that would be a basis, we had in mind these considerations: The road has been built by a private company. It was intended to be built for gain. The presumption is that they would build it to the best advantage; consequently, it would be clear [DOT]that even under ordinary conditions the actual cost of the road, not necessarily the [DOT]bonded indebtedness, but the actual money that was translated into the road would be a very important consideration to the judge. However, the fact also appeared that this part of the road had been constructed for some time, and there would be depreciation, and we knew by virtue of our own officers' reports that there would be wash-

outs and the like. Consequently, it was essential that depreciation should be taken off. I think it also right that the subsidies should be taken off, and the actual money that went in, and is now buried in the road, less that depreciation and less the subsidies, would be the value.


Edward Walter Nesbitt: The depreciation for wear and tear during the time the road was lying idle.


Arthur Meighen: There is tear perhaps, but not wear, because the road has not been used. As to the way the amount is fixed, that is the amount they offer the road at, but not having proof, and not wishing to assume the responsibility of saying that that amount of money has gone into the road, and that there is not sufficient depreciation to make it less than that now, we refer that to the Exchequer Court; but we put a limitation because we do not wish the amount to exceed that at which the company are ready now to dispose of it. I think that that answers all the questions which have been raised.


William Pugsley: I have been looking over the amendment which the Acting Minister of Railways said he would propose, and I would like to know whether it applies to the whole three railroads or to the first two only.


John Dowsley Reid: To the three.


William Pugsley: Let me read the amendment.


Arthur Meighen: I have seen it.


William Pugsley: It strikes me as very peculiar. (Reads):
The said value to be the actual cost of said railways less depreciation, but- not to exceed $4,465,000, exclusive of outstanding bonded indebtedness which is to be assumed by the Government, but not to exceed in all $2,500,000.
That is, the value of the three railroads should be fixed by the Exchequer Court, but it is not to exceed $6,965,000. That applies to the three railroads?


Arthur Meighen: Yes.


William Pugsley: Are they all owned by the same company?


Arthur Meighen: Yes.


William Pugsley: They seem to be separate corporations.


Arthur Meighen: I would not like to get involved in a discussion as to title, because it is very involved, I can assure the hon. gentleman; but the stock, I understand, is

pretty much controlled by the same company, and the intention is that the value of the whole three railroads shall be arrived at by that process. The $2,500,000 are long distance bonds at a low rate of interest, which, I understand, there is no object at all in paying off. They will stand against the Montmorency and Charlevoix Railway. The whole valuation will be taken, and the . equity in the whole, over and above that $2,500,000, must not exceed $4,465,000.


William Pugsley: I have no objection to urge against the Government acquiring these railways, because I have not sufficient knowledge of the country, or of the railways themselves, to enable me to express an opinion. Therefore, I do not wish to be understood as opposing the acquisition of these railways. That is a matter in regard to which, as far as I am concerned, the Government must be answerable to the House. But one thing that seems to me to require explanation is why this mode of taking over the roads has been adopted. It differs very materialy from the provision made by Parliament in the year 1915 for the taking over of branch lines for the Intercolonial. In that Act it is provided that no branch line shall be taken over unless in the opinion of the minister it can "more conveniently and usefully be operated as a part of the Government Railway system, or which might be deemed necessary or desirable for the more efficient operation of the said system." The Government could not take over any branch line pf the Intercolonial unless in the minister's opinion it fulfilled either one or the other of these conditions. But in this case Parliament is asked expressly to authorize the minister to acquire these three roads with the approval of the Governor General in Council.
There is another very great distinction. In the Act of 1915 the purchase is to be a matter of bargain between the Government and the railway company. In this case the Government seems to abdicate altogether its function of determining the price which it will pay to these companies, it being provided that the Government shall pay whatever the Judge of the Exchequer Court might deem a proper amount. And this amendment absolutely ties the hands of the Judge of the Exchequer Court by providing that he shall be bound to allow the actual cost of the railways less depreciation.


John Dowsley Reid: Not the actual cost.


William Pugsley: Yes, it says so.


John Dowsley Reid: A maximum amount is fixed.


William Pugsley: But not exceeding so
much. It does not give the judge of the Exchequer Court or the Government any discretion to take the roads over at a price which it would be reasonable for the Government to pay. In that respect it is different from the Act of 1915, which leaves the discretion entirely to the judgment of the Governor in Council. We know very well that there may be many railroads-we have some in New Brunswick-whose owners would be delighted to get one-hali the actual amounts which those roads cost. It is perfectly well understood that the Government had no intention of paying what the roads cost, but would insist on getting them at a valuation which would be likely in the not distant future to yield at all events some return, even though it might be small, on the money invested by the Government. For some reason the Government is making a departure from the Act of 1915 and is specifying that so long as the actual cost Qf these roads, outside of the bonded indebtedness, does not exceed $4,466,000 the judge of the Exchequer Court shall be bound to allow that amount, even though the roads may cost twice as much as might have been reasonably and necessarily expended on the construction, and even the condition of the roads may be such as to require the expenditure of a very large amount of money to put them in a reasonably fit condition for traffic. I think some explanation should be given why the Government is departing from the provisions of the Act of 1915. It does seem to me that if the Government is going to leave this matter to the Exchequer Court it should at all events provide that the amount should not exceed the actual reasonable and necessary cost of the construction of the lines. Those are the words which Parliament has adopted in reference to subsidies. As you are aware, Mr. Speaker, Parliament provides that where the cost of a railroad exceeds $15,000 per mile the Government may grant an additional subsidy upon the cost of the road up to $21,000, so as to allow of a subsidy of $6,400 a mile being granted. Parliament does not allow that increased -subsidy to be given on the actual cost, but stipulates that it shall only be given on the actual, reasonable and necessary cost of the construction of the line. It does seem to me that if the gentlemen who own these roads are desirous of getting rid of them, or of transferring to the Government the burden 252i
of completing and operating them, they ought to be satisfied to take what the Judge of the Exchequer Court would deem to be the actual, reasonable and necessary cost of construction. That I think would be a reasonable proposition to make. My contention, therefore, is that the Government, instead of coming down here with a separate Bill providing in respect of these roads provisions entirely different from those which obtain in the Branch Lines Act of 1915, should have amended that Act of 1915 to make it apply to branch lines of the Transcontinental as well. That would have been a simple proposition. While I am on my feet I desire, with all due respect, and in all kindness, to say to the Minister of Railways that there will be a very strong feeling of disappointment among the people of the province from which I come that, before- carrying out the provisions of the Act of 1915, which provides -for the taking over of branch lines of the Intercolonial, the Government is bringing down now a provision for the taking over of two new lines which were not contemplated by Parliament at that time, and with respect to the taking over of which no provision was made. I wish my hon. friend the Minister of Marine and Fisheries was in his place. He ought to be as deeply interested in this matter as I am, for his constituents are very deeply interested in this question. As long ago as the year 1911, before the general elec-tins, the hon. member for Kings and Albert (Mr. Fowler) sent a hurried S.O.S. call from St. John or Sussex to the then leader of the Opposition, now the Prime Minister, and who was then in Charlottetown, asking in most pressing terms for the views of the	right hon. gentleman
with regard to the taking over of branch lines	of the Intercolonial.
It is stated that it was the policy of the Conservative party to take over all those branch lines of the Intercolonial which could be operated to advantage in connection with the Intercolonial. In New Brunswick, there are quite a number of branch lines, the taking over of which has been agitated for a good many years, and the people in the various counties interested were delighted to receive from the then leader of the Opposition that assurance which was published broadcast in the Conservative newspapers and which, no doubt, had a very reassuring effect upon the people. Hon. gentlemen can realize how much it would influence the people of the constituencies interested in

voting in favour of the hon. member for Kings and Albert (Mr. Fowler) and other Conservative candidates. There is a railroad running from Hampton to St. Martins, only some thirty miles in length. There is a railway in York county known as the York and Cqrleton railway. There is a railway in Kings county known as the Elgin, Petit Codiac and Havelock railway. There is another railway called the Harvey and Salisbury railway. >
There is another railway known, as the Moncton and Buc-touche railway, and another from Kent Junction to Richibucto known as the Northern railway.


John Dowsley Reid: Those are all old timers.


William Pugsley: There is. one from Bathurst to Tracadie in the county of Gloucester; and there are also some in Nova Scotia and some in Quebec. The people interested have been looking for years for the taking over of those branch lines. What I complain of is that these pre-election promises should be regarded just as the Kaiser regarded the treaty which it was thought would preserve the neutrality of Belgium, that is, that they should be regarded as mere scraps of paper which the Conservative party could break at will. I am sorry the hon. member for Kings and Albert and also the Minister of Marine and Fisheries are not here, because their constituencies are interested in this question. They felt that before entering upon new engagements, these old, timeworn promises of the Conservative party ought to be carried'out. The taking over of all these branch lines that I have mentioned would hot cost anything like the amount which it is proposed to expend on these three railroads which are mentioned in the Bill before the House to-night.
Before I take my seat I want to call attention to the extraordinary statement which my hon. friend the Solicitor General has made to-night, that this amendment is made at the suggestion of the judge of the Exchequer Court. Let me ask how it is that the judge of the Exchequer Court would make a suggestion of that kind before such a Bill is passed, before any proceedings are taken or could by any possibility have been taken in the Exchequer Court. How is it that he could make a suggestion as to the amendment to be made in this Bill and that the Government is not acting upon its own judgment, but upon a suggestion made by that judge? Perhaps the Solicitor General will enlighten us on that?
[Mr. Pugsley.l


Arthur Meighen: Perhaps we had better get into committee, as I have already spoken.


William Pugsley: I would not like my hon. friend to get out of order, because that would be bad. Not many days ago the Minister of Justice told the House that in his opinion it would be quite impossible for Parliament to constitute this Royal Commission presided over by Chief Justice Meredith and Mr. Justice Duff into a court which would enable them to make inquiries and to issue commissions for the purpose of making inquiries. Almost at the very time that the minister was making that statement, there either stood upon the Order Paper, or had been been passed, a Bill which provided that this Exchequer Court, without having any expropriation proceedings before it, might make inquiries as to the value of property which the Government might think of buying or selling. None of us thought at that time of the purpose for which that Bill was introduced. It appears now that it was introduced and that it has been passed1 for the very purpose of enabling values to be placed upon those railways which the House is being called upon to consider to-night. I have no doubt whatever that the action of the Minister of Justice, in proposing that Bill to the House and having it passed, has been in anticipation of the railroad legislation which we are now being called upon to consider. Ft may be, of course, that the attention of the judge of the Exchequer Court was called to that Bill when it passed, and possibly that may be the explanation why he has given this information to my hon, friend.


John Dowsley Reid: That was not it at all.


William Pugsley: I can certainly conceive of no other explanation of the judge of the Exchequer Court obtruding his views upon the Government before any question relating to the subject had come before him. There are no expropriation proceedings before him; there is no intimation; there is no proceeding of any kind. or description, and there could be no proceedings of any kind or description before the judge of the Exchequer Court which would justify or explain his making any intimation to the Government, and I can only imagine it is done because the previous Act which has been passed by this Parliament at the instance of the hon. Minister of Justice has been brought to his attention and he has been informed that it was intended to act

with regard to these railways. That would be an explanation why this amendment has been suggested. I can think of no other.


Hon. T. CHASE CASGRAIN (Postmaster General):: As two of these railways run through a country with which I am tolerably familiar, I think it is incumbent upon me to give a few words of explanation to the House. As to the railway which runs from St. Jean des Chaillons on the St. Lawrence to Lyster on the Grand Trunk and further north to the intersection of the Intercolonial, I am not so familiar. It runs through the county of Lotbiniere and also through a part of the county of Me-gantic. For the most part it runs through very good timber land, and I have no doubt that if it is properly managed and operated, it will prove a good feeder for the Intercolonial.
I am more familiar with the topography of the country through which the other two railways run. The old Quebec and Montmorency railway runs from Quebec to St. Joachim, through part of the county of Quebec and through part of the county of Montmorency, my old constituency. This runs through parishes which are prosperous and uniformly populous, through what is known as La C6te Beaupre. There is practically one continuous village from the station at Quebec down to St. Joachim.


William Pugsley: Is that the electric railway that runs down to Montmorency Falls?


Joseph Philippe Baby Casgrain: Yes; that railway
passes first through the parish of Beau-port which is a very prosperous parish in the county of Quebec.


John Gillanders Turriff: Who operates the road at
present?


Joseph Philippe Baby Casgrain: The Quebec Railway,
Light, Heat and Power Company, which holds the Quebec street railway also, and which, I believe, is the holding company for this other company, the Lotbiniere and Me-gantic. It then passes through a parish named St. Gregoire below Montmorency falls. It also has a line on the ridge which runs to the upper part of Beauport three or four miles from Quebec, to the Kent House at the Falls. The lower line, after leaving the parish of St. Gregoire, runs through the populous parish of L'Ange Gardien, and through the large parish of Chateau Richer, thence to and through the town of Ste. Anne de Beaupre, where, as hon. members are aware, there is a famous shrine, to which thousands of pilgrims go every year, especially in the summer. It then runs
through the parish of St. Joachim which is the terminus of the old Quebec and Montmorency railway. From this the line proceeds to Petite Riviere St. Frangois, through a country that is sparsely populated and most difficult for railway construction, on account of its mountainous character, but eomingdown to this parish of Petite Riviere St. Frangois, there are two populous parishes on the brow of the hill-St. Tite, which is a mile and a half from the river, and St. Fereol three miles from St. Tite. These must have a population combined of 3,000. There is a considerably wooded country there, and no doubt if the railway is run through the region it will have quite a freight as well as a passenger business. Then, from the parish of Petite Riviere St. Frangois we go on to the populous parish of Baie St. Paul with from 2,500 to 3,000 population, including the parish of St. Urbain. Then, passing along the shore of the St. Lawrence, we come to Les Eboulements and St. Irenee, famous watering places, and then to Murray Bay. This place has been known for many years as a famous watering place and its reputation is increasing every year. I have no doubt that if a railway were run to that point, there would be traffic along the line in lumber and timber; while at Baie St. Paul and also at Murray Bay there would be industries of various kinds.


Edward Walter Nesbitt: What kind of timber is it?


Joseph Philippe Baby Casgrain: Pulpwood, there are large quantities of it. This country has never been provided with railway communication. A combined railway and steamer route was established some
11 p.m. years ago by which Murray Bay could be reached. At great expense the Government built a spur line from the Intercolonial railway from St. Pacome to Riviere Ouelle, where communication is maintained with Murray Bay for six months in the year; but for the other six months communication is greatly interrupted by the ice, the winds, and the snow storms on the St. Lawrence. Sp this population is almost completely deprived of any communication except by stage coach with the city of Quebec. It seems to me that we can profit by the experience gained by the building of the Lake St. John railway. The climate, soil and general characteristics of the country through which this line of railway will run may be compared with that served by the Lake St. John railway. Before the railway was built to Lake St. John there was only 10,000 of a population in that region. There is to-day a population of

almost 100,000, and when I was up there last summer I was surprised at the statistics handed to me showing the exports from that region-cereals, dead meat, cattle, and all kinds of farm products. It is now a rich country, and hon. members will be surprised to find in that northern part of the province so rich a region. There is no reason why the same development should not take place in the region to be served by the railway which it is proposed to purchase if this Bill goes through. A great deal of money has been spent in the construction of the railway from St. Joachim to Murray Bay, and the line has been to a great extent ballasted, and was at one time ready for the rails. Vast sums of money have been expended on this enterprise. When one takes into consideration the fact that this part of the country has always been deprived of railroad communication, why should we not conclude that it is time that the population of the north shore of the St. Lawrence should have the same measure of assistance that other parts of the country have received? There has been a question as to the amendment proposed by the Minister of Railways. It seems to me that the proper time for discussing the meaning of that amendment is when the Bill is in Committee of the Whole. I have no objection, of course, to the very enlightening observations made by hon. gentlemen opposite, *especially those of my hon. friend from St. John (Mr. Pugsley). But, if I am not mistaken, the suggestion of the amendment came because a case of this kind had been before the Exchequer Court, and it was found necessary to put wording of this kind into the Bill to meet difficulties such as were encountered in that case. I have forgotten at the moment the name of that case. The amount to be paid is to be an amount ascertained after full investigation by the Exchequer Court. This is the security which the Government gives to the country that no fanciful amount will be paid for the railway, but only its real value to the country. The Bill should go to the committee and then we can discuss more completely and with fuller information the wording of the amendment proposed.


James Alexander Robb: I desire to point out one feature of this proposal which strikes me, and that is that the Government seem to have no confidence in their own administration. This evening the Minister of Railways asked for and obtained a vote of

$150,000 to provide the expense of a commission to inquire into the railway situation, and the Minister of Finance made a very pressing speech, and gave to the House the impression that the Government were considering the nationalization of all railways in Canada. Scarcely had this $150,000 been voted to- inquire into the railway situation in Canada when the Acting Minister of Railways asked for the passage of a Bill to acquire three railways. Is it because he lacked confidence in the commission that is to be appointed? It seems to me that the logical, business way of going about this would be to await the report of the proposed commission so that we should have full information concerning these railways which we propose taking over, as to their earning value, the country through which they are going, and so on, and be in a position to decide whether or not it would be profitable for Canada to take them over and hitch them up with the Government railway system. I submit that for the consideration of the acting minister.


Joseph Philippe Baby Casgrain: I wish to correct some statistics I gave a moment ago concerning Baie St. Paul. I said that the population aggregated about 3,000. I am told that the aggregate population of the town and parish of Baie St. Paul is now over 5,000.


Frank Oliver: We have been discussing the railroad situation in Canada for a couple of days. We have had before us the question of the two transcontinental railways. We have had information to the effect that the resources of Canada are being strained to the limit in the effort to carry these enterprises to completion and over the present difficult financial situation of the country. Every suggestion that has been made as to the lack of satisfactory character in the proposals of the Government with regard to those railroads has been met by the assertion that the country could not afford more money; that the financial resources of the country were being strained to the limit to meet the needs of these great enterprises in which the whole credit of the country and its future welfare was involved. As my hon. friend the member for Huntingdon said a few moments ago, just as soon as these two proposals were adopted, the Acting Minister of Railways comes forward with a proposition which would argue that Canada had money to throw to the birds; *that there wa6 no lack of money in Canada for railroad propositions. A proposal is

being submitted to Parliament to-day such [DOT]as never was submitted before in the history of this country. Nothing was ever submitted that would approach this proposition in its character, and certainly the country never was in such a condition as it is to-day, eo ill prepared to deal with a proposal of this kind. We have no money to adjust matters with the Grand Trunk or with the Canadian Northern that would enable the traffic of this country to be carried, but we have $4,500,000 that we can pay out in cash, 'we will assume $2,500,000 of bonds and we will be prepared to spend anything from $1,000,000 to $5,000,000 in cash in respect of a railroad of the length of 135 miles. That of itself is a very fair order, but when we remember that of the 135 miles of railroad that is proposed to be dealt with, .30 miles has been completed for I do not know how long, is in operation, is serving the purpose for which it was built, has no connection with the other railroad with which it is associated, has no legitimate claim upon this country, we must come to the conclusion that there is no reason in the world why this railroad should be taken over by the country except that at the present time presumably it does not earn interest on its bonds and the owners deem it desirable that the country should assume the responsibility of paying that shortage of interest. The same condition applies to a portion at any rate, if not the whole of the Quebec and Montmorency railroad, a railroad which has been in operation for years, doing a large business, paying its operating expenses with some surplus, but not enough to pay interest on its bonds. This railroad has no claim whatever on the country in any shape, form or manner except the claim that the owners of the property desire this country to pay for them that which they are not able to earn and pay for themselves. I submit, Mr. Speaker, that no such proposal	was	ever brought before	the
Parliament of Canada as in the cases	that I have mentioned, the
Lotbiniere railway and the Quebec and Montmorency railway. The lines are completed, the country has no responsibility, whatever in respect of them; they are in operation. We are asked, at a time when money is more needed than ever it was before, for more urgent purposes than it ever was required before, to hand out mil. lions for the purpose simply of relieving the proprietors of these two properties of
the losses of interest which they are carrying at the present time.
There is also a demand that we shall assume responsibility for completion of .62 miles of uncompleted road of the Quebec and Saguenay line. This road is partially completed; .grading is done, I understand, to the extent of 85 per cent. We are to pay for this work that has been done, and by so doing we are assuming the responsibility for completing the enterprise whatever the cost may be. While the Acting Minister of Railways suggested that the Toad was 85 per cent completed and that ?1,000,000 would be necessary to complete the 60 odd miles, it has been suggested to me that $2,000,000 or $3,000,000 would be very much nearer the requirement to secure completion of the line. The Postmaster General has put before the House the claims of the people who are living along the line of these two railroads. He has stated their numbers. He has given, I presume, the most favourable facts with regard to their requirements. We do not need to discuss the railroad situation there. No doubt the people of that locality desire railroad communication. No doubt they need railroad communication; no doubt railroad communication would be vastly to their advantage. But there are throughout this broad' Dominion thousands of instances where an equal number of people are needing railroad communication just as much as these people are, and where that railroad communication would not cost a fraction of what it will cost in this case.
Then, let it be remembered that these people who will benefit by the construction of this railroad have, during the whole summer season, the advantage of deep water navigation along the whole line. That is to say, they are not at all in the same position as the people living on the St. John railway line. That country was altogether isolated from communication until the St. John railway was built. These people are living along the shores of the St. Lawrence and they have boat communication all season long. So, while they are under a disadvantage during the winter, they are not at all in the same position as people dwelling in an inland locality who have not the advantage of river navigation. The amount of traffic that is to be carried by this railroad, supposing it is completed, has not been represented by the Postmaster General. It may be large; but I submit that the fact that neither of the two completed railroad sections included in the pro-

position earns interest on its cost of construction, is fair evidence that this extension of one of them would be in exactly the same position, if not in a very much woTse position because of the higher cost of construction and the smaller volume of traffic available to support that cost. It seems to me that the Minister of Finance, who is the guardian of the treasury-and no one will say that he is not, under ordinary circumstances, an efficient guardian- should be heard from upon this proposition. He has told us how he has limited the aid to be given by the Government to the two great transcontinental railway enterprises, whose success is of vital importance to every man, woman and child in the Dominion, and while he spoke of having been successful in restricting the amounts they are to receive from the Dominion treasury to the limit before the House, he is a party to the placing before Parliament of a< proposal that will, on the face of it, call for more money than the proposal that he brought before this House as regards the Transcontinental railway, and more than half as much as the proposal which he places before this House in regard to the Canadian Northern railway. Where is my hon. friend from Calgary (Mr. Bennett) P Surely he should be heard from on this occasion. Surely if it is unfair to the country and to the- Treasury to make these proposed loans to the Grand Trunk Pacific and the Canadian Northern railroad, to serve great national enterprises for great national purposes, it must foe a far greater wrong to spend this vast amount of money for the purpose of relieving certain gentlemen, no doubt very creditable gentlemen, no doubt very enterprising gentlemen against whom nothing in the world is to be said. Why should they be relieved of their unfortunate responsibility any more than anybody else? Why should these gentlemen have the preference over every other man and every other enterprise throughout the country that has happened to make miscalculations, or possibly to have fallen on evil days. I think the Minister of Finance and the member for Calgary, and our other friends on the opposite side of the House who have been so insistent on protecting the treasury and the rights and interests of the people of Canada during the past few days, should be heard from very strongly in regard to this proposal, which 
certainly, I think I am safe in saying, is unique in the history of Canada.


John Gillanders Turriff: My hon. friend the Acting Minister of Railways suggested that we should discuss this matter for an hour. We have now discussed it for almost two hours, and it is half-past eleven. We have received some information, and we have before us certain papers that we have had no opportunity of examining. I would like to look at the map to get some idea of where the roads run. I suggest that we have .made as much progress to-night as we can make, and that it would be advisable to adjourn now.


Mr. ROGERS:: It is still very early, and we know that this legislation has been practically before the House for some considerable time. It is within the knowledge of the hon. members opposite, and the facts in relation to the location are well known. Surely my hon. friends have all the information they can reasonably require to allow the Bill to go to committee, where vve could discuss it in detail.


John Gillanders Turriff: We can discuss it for three hours yet if my hon. friends wish.


Edward Walter Nesbitt: The minister says that
we have had it before us and have all the information we can get. The Minister of Railways gave us information that we will be able to see in Hansard and to understand and to grasp more completely than it was possible to do from listening to his remarks. It would be better to adjourn so that we can discuss this more intelligently to-morrow.


Arthur Meighen: Would it not be better to get into committee where the information could be given in a more orderly manner.


Wilfrid Laurier: I am ready
to allow the Bill to take its second reading. Not that I want to commit myself to it at all; I want to reserve my judgment. I may say to my hon. friend opposite that the information we have received is very scanty. First of all, it is not treating the House fairly that, within two or three days of the period when we expect to have the blessing of a prorogation a matter of this importance should be brought before us for consideration. The matter should have been submitted for the consideration of the House days before. When the second reading was moved at eight o'clock to-night, the very voluminous correspondence was brought down.


John Dowsley Reid: I brought it down at two
o'clock.


Wilfrid Laurier: No one could see it until eight o'clock to-night.


John Dowsley Reid: I handed it in at two o'clock, and it was then before the House.


William Pugsley: The clerk took it to his office and nobody knew of it.


Wilfrid Laurier: The clerk
took it, and nobody on this side saw it until eight o'clock.


John Dowsley Reid: I explained that when the
House opened at two o'clock I handed it in.


Wilfrid Laurier: Does my hon. friend think that is an explanation at all?


John Dowsley Reid: No, I am not saying it is.


Wilfrid Laurier: Very good;
then, do not bring it up. I have here the report of some engineers; but I do not see a word of the correspondence that has passed between the company and the Government. We ought to have that correspondence so that we can see the reasons why the Government have been induced to take up that road. I do not imagine that the Government have come to a decision on a matter of this kind without having some facts placed before them by the company. Then we are told by the minister that he had the matter submitted to his engineers or the officials of this department and that they recommended the purchase of the road; that the officers in their report highly approved of it. There is not a word of these reports in the papers that have been brought down. Then the minister has told us that the road is not yet completed, that there are some 16 miles still to finish. There are no specifications of the work to be done; not a word of specification, and before we commit ourselves to the building of the road we ought to have a specification as to its character, as to stations, tracking, and so on. Then there are rivers along that line- I do not know how many, but there are a few-and there is no statement as to whether bridges have been constructed or not. Before we take up the matter again, I think we have the right to expect that all this information will be brought down.


Robert Rogers: I fail to see how the right hon. gentleman can undertake to leave to the impression that information has not been brought down, for I think a very considerable amount of information has
been submitted, all, I presume, that the officers of the department thought was necessary. However, as my right hon. friend suggests, the Bill can be read a second time, and I can assure him that all the information in the department will be available to him when we reach the committee stage to-morrow. We are desirous of placing before the House all possible information at our disposal because there is nothing at all to hide.


Wilfrid Laurier: The Government is full of good intentions, but lacking in execution.


[Stage Direction]
Motion agreed to, and Bill read the second time.
Wilfrid Laurier: Before we
pass from that matter, I am informed, and I think it is a fact, that no work has been done on the Quebec and Saguenay railway for the last four years.


John Dowsley Reid: Since 1912, I am informed.


Wilfrid Laurier: I am informed also that a section of the line has been very much damaged in consequence, and I see no statement as to the damage. We ought to have that also.


William Pugsley: I think there is a statement of what it would cost to bring it up to what it was before.


John Dowsley Reid: I think there is a lot of information, which the right hon. gentleman said had not been submitted, in the report of Mr. Beckwith, the engineer, who went thoroughly into the whole matter in November, last year. A statement with reference to bridges and other matters will be found in that report.


William Pugsley: It seems to me that the minister might favourably consider a provision that the judge of the Exchequer Court should deduct from the actual cost the damage which has been done by reason of the road lying idle, and what it would cost to bring it up to what it was before.


Arthur Meighen: That is in the amendment.


John Dowsley Reid: It says in the amendment "less depreciation."


William Pugsley: Does the minister think that that would cover it?


Arthur Meighen: That is what is intended.


John Gillanders Turriff: I would ask that the Minister of Railways be prepared tomorrow to give some reason why, after

having had its own engineers go over the road and make valuations, the Government is not dealing with the matter directly, instead of submitting it to the Exchequer Court.	[DOT]


PARLIAMENT BUILDINGS FIRE.
Robert Rogers: I beg to lay on the table of the House the report of the commission appointed to investigate the Parliament Buildings fire in February, 1916, together with the evidence.
On the motion of Mr. Rogers, the House adjourned at 11.31 p.m.
Tuesday, May 16, 1916.