1917-08-27

QUESTIONS.

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

Mr. PROULX:: Referring to page 331 of the printed proceedings of the Special Parliamentary Committee on Returned Soldiers and to the applicants for the charter of the Canadian Association of Returned Soldiers, Ottawa District-enumerated thereon, namely, Kenneth Clarke Macpher-son, Joseph Bernard Henshaw, William Pemberton Morling, Joshua Zivian, John Reginald Phillips, Harry Lewis, Alexander Kirkwood, Hugh Spencer Ralph, William Craig, Arthur Lapointe and William Lewis:
1.	How many of the said applicants, in addition to Kenneth Clarke Macpherson and Joseph Zivian, are in government employ?
2.	What positions do they hold, and what salaries are they paid?


Mr. SEVIGNY:: 1.	Department of the Interior-three. Department of Militia and Defence-four.
2.	Department of the Interior: Joseph Bernard Henshaw, clerk, Accounts Branch, $1,200 per annum; Alexander Kirkwood, clerk, Registration Branch, $900 per annum; Harry Lewis, clerk, Seed Grain Branch, $900 per annum. Department of Militia and Defence: Lt. W. P. Morling, employed in Estates Branch, Militia Department, $4.10 per diem; J. R. Phillips, employed in Casualty Pay Office, Militia Department,

$3.35 per diem; Major H. S. Ralph, officer in charge of estates. Militia Department, $7.50 per diem; Wm. Craig, permanent Civil Servant, Inside Civil Service, Militia Department, $1,200 per annum.


MR. N. H. R. KNIGHT.
Mr. PROULX:: 1.	Is Mr. N. H. R. Knight, secretary of the Great War Veterans Association, in the employ of the Government?
* 2 If so, in what capacity, and at what salary?
3.	What amount has been paid to him to date?


Mr. SEVIGNY:: 1.	No.
2.	Answered by No. 1.
3.	Norman F. R. Knight was employed as Customs Landing Waiter from 21st to 26th March, 1917, when he resigned-the amount paid him being $14.52.


SAMUEL POMMEROY.
Mr. KYTE:: 1.	Is there at present, or has there been within the last twelve months, one Samuel Pommeroy, in the employ of the district engineer of the Department of Public Works at Winnipeg?
2.	If so, when was he appointed, what salary does he receive, and what are his duties?


Mr. REID:: 1.	Yes.
2.	(a) Appointed September 26,1916, in district Engineer's office, Winnipeg, and transferred as assistant superintendent of shipyard at Selkirk on July 1, 1917, (b) $100 per month, (c) the duties usually performed by such an official.


DAWSON POST OFFICE.
Mr. KYTE:: 1.	Is it the intention of the Government to expend any money for the improvement of the post office at Dawson, Yukon Territory?
2.	What amount, if any, is proposed to be spent upon the vault in said post office?
3.	Has the Government any report from any of its officials in Dawson asking for such expenditure?
4.	If so, will copy of such correspondence be produced?


Mr. REID:: 1 and 2. $10,000 placed in the Estimates for that purpose.
3.	Yes.
4.	Yes. '


QUESTION PASSED AS ORDER FOR RETURN.
Mr. MACDONALD:: 1. How many officers are employed or at- ' tached to the Department of Militia overseas, in the various departments and offices?

2.	How many non-commissioned officers and men, respectively, are so employed?
3.	What is the total amount paid per month for salaries to such officers and men?


UNOPPOSED MOTIONS FOR PAPERS.
[Stage Direction]
Mr. Currie.-For a copy of the report made by Captain Sir Henry Norman, Bart, M.P., Liaison officer of the British Ministry of Munitions to the French Ministry of Inventions, for the Right Hon. David Lloyd George, M.P., concerning the treatment and training of disabled and discharged soldiers in France.
Mr. Chisholm-For a copy of all letters, telegrams, petitions, communications and documents of all kinds referring to a request for having the mail for Marble Mountain come from Eden Platform instead of West Bay Road.

Mr. G. W. KYTE (Richmond) moved:: For a return giving the names, rank, pay nature and date of employment and previous service of (a) All officers employed in or connected with the Naval Service at Halifax, including patrol service; (b) All civilians appointed since November, 1911. Also giying a list of the number, names and rate of pay of returned soldiers or sailors included in (a).
Hon. J. D. HAZEN (Minister of Marine and Fisheries); I would suggest to the member for Richmond that he let this motion stand, together with the one following, which is the same except that it refers to Sydney. I called the attention of the deputy minister to these two motions this morning, and he informed me that without the employment of a special staff it would be impossible to get the information ready before the next session of Parliament. I fancy that the information my hon. friend wants is really not as extensive as this motion indicates, and I suggest that he discuss the matter with the deputy minister and let him know just what he wants. The matter may then be expedited and there may not be the necessity for such a voluminous return as would be necessary if this motion were adopted.
Motion stands.


PURCHASES IN CANADA BY BRITISH GOVERNMENT.
[Stage Direction]
On the Orders of the Day:
Mr. W. F. MACLEAN (South York):: I
should like to direct the attention of the Government to the following statement in the press of to-day
Toronto, August 25. The British Food Controller has notified the Canadian packers that no more Canadian bacon or hogs will be bought by the British Government.

Is there any foundation for that statement, and has it any relation to the rumour that the American Government expected the Allies, in view of the large loans that they had obtained in the United States, to buy provisions and munitions in that country?


Sir ROBERT BORDEN:: We have no information with regard to the matter alluded to by the hon. gentleman, except that which is contained in the press despatch. There has been no official communication on the subject.


William Findlay Maclean: There, is also a statement in the papers to-day that the purchase of munitions in Canada is practically to cease. What foundation is there for that statement? An official representative of the Munitions Board intimated in Toronto on Saturday that orders for munitions would from this time be greatly reduced.


Sir THOMAS WHITE:: In answer to my hon. friend (Mr. Maclean) and my hon. friend (Mr. Macdonald), who, I believe, raised the question on Saturday, I desire to read to the House a statement which was handed to the press by the Chairman of the Imperial Munitions Board. It is: Ottawa, 21st August 1917. Towards the close of 1916 the capacity for producing munitions in Great Britain had so Increased that the Minister of Munitions advised that it was unnecessary to continue the production of munitions in the United States for British account, except for a few special lines. The production in Canada, however, was continued as before.
The minister has now advised that it is unnecessary to continue production in Canada on the present scale. Tie has directed that certain lines shall be discontinued; that other lines shall be produced in lessened quantities; while some lines are to be continued as at present.
The effect of this will be to stop the production of shells and components at some plants which are now producing sizes no longer required.
In other plants, where shells are made of sizes of which a reduced output only is required, it will mean working during the day only, thus stopping night work. In other plants, however, where sustained production is required, operations will be continued night as well as day.
These changes have been anticipated by several important Arms, who have already resumed, or are planning to resume, their prewar activities in their own lines, while others are engaged in the production or preparation for production, of equipment needed for ships now under construction or to be built during 1918.
For the further information of the House, I may say that the Dominion Government
has advanced to date to the Imperial Munitions Board, for the purchase of munitions in Canada, the sum of $285,000,000. There has also been advanced to the Imperial Munitions Board by the chartered banks of Canada in the same connection the sum of $100,000,000. The Dominion Government, during many months past, has been advancing to the Imperial Treasury, for the purchase of munitions in Canada, the sum of $25,000,000 per month. During July, we advanced $35,000,000; during August we are advancing $35,000,000, and we have arranged to continue the advances of $25,000,000 a month, during September, October, November and December, so that the Dominion Government will continue to make the advances which we have been .making in the past. As I have pointed out, during July and August we increased the amount of our advances by $10,000,000 each month.
I may also say in this connection, as it has a bearing upon the question of the Imperial expenditure in Canada, that the Government arranged in July, in addition to undertaking the programme which I have mentioned, that is to say, of furnishing $35,000,000 in July, $35,000,000 in August and $25,000,000 per .month for the balance of the year, to furnish the sum of $50,000,000 for the purchase of cheese, hay, oats and flour in Canada. I have repeatedly pointed out to the House that the British Government can purchase on this side of the Atlantic only to the extent that they can raise money on this side of the Atlantic. In order to provide the farmers of Canada with an export market for their cheese, we arranged to provide $40,000,000, which is the export value at the prices fixed of the cheese production of Canada, that $40,000,000 to be paid out during July, August, September and October. In addition to that sum, $10,000,000 was supplied for the purchase of hay, oats and flour. The House will thus get an idea of the magnitude of our financial transactions in connection with the purchase of these supplies in Canada.


Sir WILFRID LAURIER:: Are those advances for cheese and hay made to the Imperial authorities?


William Thomas White: Yes.


Wilfrid Laurier: Who makes
the purchases and who have charge of the distribution of the money in this country?


William Thomas White: The Imperial
Government, as my right hon. friend may

recall, sent out a commissioner, Mr. McGowan, associated with whom are two officials of the Department of (Agriculture. They -constitute a Cheese Commission, who, after taking up the matter with the various cheese exchanges and, I think, representative farmers and dealers, fixed a price for cheese. The purchases to which I allude have been made by that Cheese Commission? .


Mr. MURPHY:: In view of the statement just made by the Minister of Finance in answer to the question asked by the hon. member for South York (Mr. W. F. Maclean), may I ask the Minister of Labour if the Government or the Department of Labour have done anything' to cope with the dislocation- of labour resulting from the curtailment of work in the munition factories?


Mr. CROTHERS:: Nothing has as yet been done ?
Mr. W. F. MACLEAN; The Minister of Finance says that he is financing for the purchase of Canadian commodities for the use of the British Government. I have also had confirmed the statement that -the British Government will now cease to buy our bacon production. If we financed the purchase of that bacon production, would they continue to buy from us?
-Sir THOMAS WHITE: Th matter has not been drawn to my attention. I have no doubt the British Government could arrange to finance the purchase of our bacon production.
-Sir SAM HUGHES: What control, if any, does the Canadian Government exercise over the expenditure of this money? By whom is it expended?


William Thomas White: The House is aware that, so far as concerns our expenditure in Great Britain and upon the continent-, we borrow money from the Imperial Government. The reason for that is obvious. That expenditure has to be paid in starling money or in the currency of France or Belgium. We, therefore, borrow from Great Britain all money necessary for our expenditures in Great Britain and on the continent in respect of our overseas forces. As a set-off to that expenditure, the Imperial Government asks us here to furnish them with credit from which they may purchase munitions, cheese, hay, oats, and 
other products. The Imperial Munitions Board was created by the Imperial Government. It takes its'instructions from the Imperial Government and gives orders to Canadian manufacturers according to instructions which it" receives from the Imperial Government. As to the details of this administration I am not familiar, because, as I have pointed out, it is an Imperial and not a Dominion Government board. The Imperial Government ask us to place the Imperial Munitions Board in funds from month to month to the- amount that I have mentioned. So far as our transactions are concerned, therefore, they are with the Imperial Government which furnish us with money in. Great Britain and. on the continent, we supplying them with money here with which to pay for their commitments for munitions and. other supplies.


Mr. MACDONALD:: Will the minister have any objection to ascertaining what particular class of munitions are to continue to be supplied and what are to be stopped, because there are certain sections of the country which are engaged in manufacturing munitions of a certain type, such as 4.5 inch shells, 18-pounders, shrapnel, and so on, and the employees in those factories have been notified that their services have 'been dispensed with? It is a matter of importance to the public to know whether" there is any likelihood of the production, of these munitions being resumed.


William Thomas White: The Chairman of the Imperial Munitions Board is out of the city at the present time. If the hon. member urgently desires the information, I should advise him to see the secretary of the board. "I will, however, make further inquiries and will probably make a further statement.


THE BABTIE REPORT-DR. BRUCE'S REPLY.
[Stage Direction]
On the Orders of the Day:
Robert Laird Borden: On various occasions some hon. gentlemen have expressed their desire that a memorandum made by Colonel Bruce with respect to matters set forth in a report of the commission of which General Sir William Babtie was chairman, shall be laid upon the Table of the House.
I have given the .matter the best consideration that I could, and I do not think it is a

document which ought to be laid on the table of the House by the Government.
It is not an official report, as Colonel Bruce was not requested or empowered by any competent authority to make the memorandum in question. That fact is further established by the circumstance that, as 1 am informed, he sent a copy of it to some hon. members of this House, which certainly he would not have done if he had believed it to he an official report in the ordinary sense.
There is also the further consideration that he has been seconded to the Royal Army Medical Service, and I am informed that the memorandum which he has prepared deals with the administration of that service. It seems, therefore, that the War Office ought to be consulted before any document of that kind put forward by an officer of the British service should be laid on the table of this House by the Government.	.
I should also like to correct a misapprehension, which, if I understand correctly, has arisen with regard to his opportunity to be heard before the Babtie Commission, of which Sir William BaWtie was chairman, and four very eminent Canadian surgeons, whose names I have already given to the House, were members. The proceedings of the Board show that Colonel Bruce was called as a witness on November 27, 1916, recalled on November 28, and again on the 6th of December, on which date he was twice heard, and also on the 16th of December. A memorandum has been placed in my hands containing an extract from the secretary of the board, in the following words:
"The Board directs me to say that neither General Jones nor Colonel Bruce asked to he allowed to be present throughout the inquiry being made by the Board."


Sir SAM HUGHES:: Which board-the Bruce or the Babtie board?


Robert Laird Borden: The Baptie Board. My hon. friend (Sir Sam Hughes) also made inquiry in this connection as to what changes and improvements had been made in the administration of the Canadian Army Medical Service. I have a telegram dated August 23, 1917 from Sir George Perley in the following words:
Prime Minister,
Ottawa.
Director Medical Services submits following:
Department is receptive to suggestions irrespective of their source. All suggestions, recommendations are carefully considered, and if deemed advisable are put into effect. Following are some improvements effected in this service since January 1, 1917.
(1)	Systematic routine inspection of Canadians in hospitals in United Kingdom to select cases requiring further treatment in Canada.
(2)	Establishment of a 1,300-bed hospital at Liverpool to assemble patients for Canada and facilitate prompt embarkation. Arrangements made for assembly insane patients for Canada at Mental Hospital near Liverpool for convenient embarkation.
(3)	Provision of hospital ship service from Liverpool to Canada for invalids.
(4)	Hospital accommodation in England has been expanded by over 5,000 primary beds and sufficient convalescent beds to adequately meet Canadian requirements. Arrangements completed for further expansion that will provide sufficient hospital accommodation for all tuber-culose and venereal patients.
(5)	Arrangements made by which War Office provides reliefs for Canadian medicals units in Mediterranean, these units returning for duty in England.
(6)	Greater economy in use of personnel by deciding number requisite for each medical unit and adhering to such limitation.
(7)	Completion of consultant and inspection service on systematic basis. All patients in Canadian hospitals inspected semi-monthly and routine inspections made of Canadians in British hospitals.
(8)	Improved system for controlling movement and prompt evacuation of patients from hospitals.
(9)	While segregation of Canadians in Canadian hospitals is impracticable and inadvisable, arrangements have been made whereby those sent to British hospitals are distributed to hospitals readily accessible to Canadian inspectors and convenient for movement to Canadian hospitals for final disposition.
(10)	Systematic inspection and control of hospital and medical records to ensure completeness and accuracy of same.
(11)	System for strict control of laboratory service.
(12)	Improved system of controlling hospital food supplies to ensure economy.
(13)	Abolition of dual control of Shorncliffe military hospital group by arranging with British authorities to resume their control and administration. The A. D. M. S., Canadians, Folkestone, at request of British authorities, carries out administration of this group and reports direct to British authorities on all matters pertaining thereto.
(14)	Abolition of dual administration of Red Cross Hospital by C.A.M.C. taking entire control.
(15)	Abolition of purchasing bureau for medical supplies and equipment by turning same over to Quartermaster General's branch.
(16)	Establishment of central medical stores where all medical supplies are received and carefully checked for distribution.
(17)	Improved control of expenditures of medical stores and supplies by more strict and systematic checking of indents from units.
(IS) Decentralization of medical boards and improvement of control through careful routine inspections and uniform standardization.
(19)	Improved medical board form for the purpose of meeting provisions of Canadian pension laws.
(20)	Standardization of fitness of soldiers
according to physical grades, with system of control to	provide uniform	classification
throughout service. .

(21)	Improved system of dealing with officer and nursing sister casualties by which convalescence is spent in hospital instead of on leave, thus controlling and shortening period of non-effectiveness.	-
(22)	Adoption of complete and systematic measures for prevention and spread of communicable disease.
(23)	C.A.M.C. Training School reorganized on proper military basis and staffed with personnel trained at front; an improved syllabus of training adopted based on experience gained in present war.
(24)	Fair and definite policy adopted for promotion of officers and other ranks.
(25)	Definite policy for giving officers overseas service which recognizes prior rights of those who have served longest in England; provision for return of officers of experience from overseas to serve in England or Canada.
(26)	More complete co-ordination with services in France and Canada.
(27)	More complete co-ordination, with exchange of all ranks, between Canadian Corps and medical units on lin.es of communications and at base.
(28)	Arrangements for temporary expansion of army medical units at front during time of action by detail of personnel from medical units on lines of communication and at base.
(29)	The majority of these improvements have been noted in monthly progress reports.



PERLEY.


[Stage Direction]
On the Orders of the Day:
Right Hon.   S@: Following an inquiry
made in the House by my hon. friend from Victoria and Haliburton (Sir Sam Hughes) and other honourable members with respect to supposed incre ses in the administrative staff overseas of the Canadian Expedition ,ry Forces I despatched a telegram to Sir George Perley on the 14th of August, as follows:
Ottawa, August 14, 1917.
Perley,
London.
General Hughes made following allegations in House on seventh instant. "The statement is made that whereas General Carson administered the whole of Canada's war department in England with less than fifty men, and did it well, there are now twelve hundred to fifteen hundred men, not counting the pay officers, doing the work of the Adjutant General's Office and other offices. In fact, I understand that only about . thirty men were employed by General Carson for this work." Please cable full statement for submission to Parliament showing what additions to departmental organization have been made and the reasons therefor. General Hughes also asserted that five or six buildings have been rented for accommodation of additional employees. Please cable statement as to this.



BORDEN.

[Stage Direction]
lo that I received the following reply:
[Sir Robert Borden.)
London, August 23rd, 1917.
Prime Minister,
Ottawa.
Referring your cable fourteenth regarding General Hughes' statement. Total number employed in connection with Administrative Headquarters at London, and Brighton on first December 1916 was one hundred thirty-four officers, five hundred sixty-six other ranks and civilians. On first August 1917 numbers were, one hundred thirty-nine officers, four hundred eighty-six other ranks and civilians. Brighton Headquarters having been absorbed in London, the reorganization provided for following branches:	General Officer Commanding, General Staff, Adjutant General, Military Secretary, Secretary of Headquarters and Quartermaster General including Director Supply and Transport, Director Ordnance Services, Director Veterinary Services and Remounts, Stationery Department, Messing (?) and Barrack Services, Surplus Baggage Depot, Postal Services and Purchasing Department. Regarding buildings, we gave up the accommodation at Hotel Cecil and Cleveland House, St. James Square, both of which were being paid for from Canadian funds and in lieu thereof obtained from Imperial authorities free quarters whicli we now occupy. This entails saving of large annual sum and concentrates Medical Services and other departments, including ministry, about Oxford Circus. As result of reorganization eleven training brigades, each with Headquarters Staff, were reduced to six and Cavalry Brigade changed to Cavalry Regiment [DOT] fifty-seven reserve battalions were reduced to twenty-four ; Crowborough and Brighton Headquarters were abolished and Hastings Command will be shortly.
Perley.
lhero is one word in this telegram, which has been translated "messing," of which I am not absolutely sure. It was a little difficult to decipher it, and the clerk who deciphered it fixed upon the word "mossing as the one probably intended.
Samuel Hughes: Does it say "Brighton on August 1st, 1916"?


Robert Laird Borden: It says, "On 1st August, 1917, numbers were one hundred thirty-nine officers, four hundred eighty-six other ranks and civilians. Brighton Headquarters having been absorbed in Eondon, the reorganization provided for following branches, et cetera, as I have alreadv stated.


Samuel Hughes: I do not understand "Brighton on August 1st, 1917," and then "Brighton August 1st 1917" again. I did not catch that point.


Robert Laird Borden: The first date given is December 1st, 1916.


Samuel Hughes: I thought it was August 1st.


Robert Laird Borden: On December 1st, 1916, as I understand it, there was a

headquarters at Brighton which has since been absorbed in the London Headquarters, so that there is one headquarters doing the work of the two which were in existence on December 1st, 1916.


Samuel Hughes: I understood it was August 1st. I was going to remark there was no such thing as headquarters , at Brighton on August 1st, 1916.
Sir .ROBERT BORDEN: It is December 1st.


Samuel Hughes: It also speaks of the administrative branches, not the Adjutant General's Department alone.



THE $100,000,000 LOAN.


[Stage Direction]
On the Orders of the Day:
William Thomas White: My attention has been called to an editorial in the Regina Morning Leader with reference to the $100,000,000 loan issue recently made by the Dominion Government in the city of New York, which does a great injustice to the Bank of Montreal. In this editorial the following appears:
But while the Finance Minister of Canada himself d id all the hard work in connection with the flotation of this loan, he allowed the Bank of Montreal a commission of I :l per cent, for lending him its assistance. In other words, out of this loan the Bank of Montreal receives the neat little sum of $1,750,000 as a commission. The commission originally arranged was 2 per cent., hut the Bank of Montreal remitted one-quarter of one per cent., or $250,000.
Why, asks the Toronto Star, and the Leader repeats the question, as we believe the people of Canada will repeat it, should the Bank of Montreal receive nearly two million dollars for its assistance to the minister, who himself negotiated the loan? Why should anybody make nearly two million dollars out of a loan negotiated for a patriotic purpose?
I desire to explain to the House, although so far as the House is concerned I believe the explanation is unnecessary, that the Bank of Montreal being our fiscal agents, the general manager, Sir Frederick Williams-Taylor, usually negotiates our foreign loans. In this case the underwriting and other commissions to the New York syndicate headed by Messrs. J. P. Morgan & Company, amounted to 2 per cent. The Bank of Montreal was able to obtain for the Government a remission of one-quarter of one per cent upon that commission of 2 per cent, leaving the net commission to the New York syndicate one and three-quarters per cent for underwriting and other commissions and expenses.


Edward Mortimer Macdonald: In connection with this same question, will the minister allow me? It was stated in one of the United States financial papers that the cheque which was made to the Dominion Government was for $96,111,111. The minister stated to the House that the proceeds of the loan were $96,250,000. Was the cheque the Canadian Government received a cheque for $96,111,111?


William Thomas White: Yes.


Edward Mortimer Macdonald: And, was the commission paid to the Bank of Montreal, out of the amount the Government received, or was it paid out of the original amount?


William Thomas White: I think what misled my hon. friend is the fact that the $111,111 was interest upon the amount from the date it was paid until the Bank of Montreal received it in New York for our account. The transaction was this: the issue was at 98; this would mean $98,000,000. Subtract from that $1,750,000, being commission at the rate of one and three-quarters per cent, and the net amount received was $96,250,000, as I told my hon. friend the other day. The $111,111 does not enter into it at all, because it is interest for some ten or eleven days. I am not absolutely accurate as to the number of days -upon the principal sum. I was dealing only with the principal, that is to say $96,250,000. That is the amount which was received for the loan.


Edward Mortimer Macdonald: If the $111,111 was
interest, then the amount the Government should have received would be $96,361,111.


William Thomas White: The $111,111 was
interest paid by Messrs. J. P. Morgan and Company in respect of the -money in their hands for the few days they had it before paying it over to the Bank of Montreal. When my hon. friend asks what the proceeds of a loan is, we understand by that term the net amount received, having regard to principal only, because as my hon. friend knows, interest is running upon the loan from the date of its issue. In this case the interest is $111,111, but this amount is not considered in making an answer as to the net amount of the loan.


Edward Mortimer Macdonald: Was it paid by J.
P. Morgan and Company to the Bank of Montreal or was it paid to the Dominion Government?


William Thomas White: As the Dominion has its account with the Bank of Montreal it would be paid to the Bank of Montreal

as our agent. The commission in connection with the underwriting and other expenses relating to the loan was paid to the syndicate headed by J. P. Morgan and Company, New York.



BOARD OF PENSION COMMISSIONERS.


[Stage Direction]
On the Orders of the Day:
Right Hon.   S@: My hon. friend from Pictou (Mr. Macdonald) made an inquiry with regard to a resolution on the Order Paper with respect to the Board of Pension Commissioners and the rates of pension. Hon. gentlemen wiR remember that on March 14, 1916, a committee was appointed for the purpose of taking into consideration the rates of pensions. On the 10th May, 1916, the committee made a unanimous report. The chairman of the committee, on the 18th May, moved that the report should be commended to the consideration of the Government. Parliament prorogued on the same day. There was not an opportunity to bring in legislation at that session.^ Accordingly, on the 3rd June, 1916, the recommendations of the committee were put into the form of an Order in Council and passed under the War Measures Act. By a resolution now on the Order Paper it was proposed that a similar committee should be appointed this year to take into consideration representations that had been made to the Government from various quarters, and more particularly by several organizations of returned soldiers, as to the desirability of increasing the rates of pensions thus allowed. This was urged for various reasons, several of which have a great deal of force. We have reached the conclusion that it would be impracticable to deal with the matter in a thorough and satisfactory manner at this session and that it is a subject which should be dealt with finally and permanently by the new Parliament which is to be summoned in the early future. There is, however, this consideration which the Government will have to take into account. Owing to the fact that since the committee made this report on May 10 last yeaT the cost of living in Canada has very appreciably increased, it is thought reasonable and desirable that, pending the consideration of this question by Parliament, there should be some increase made, that it should be made on a percentage basis and that it should take effect from the beginning of the present fiscal year, which is the first of 
April last. Accordingly, as soon as the prorogation of Parliament permits, the Government propose to take the question into consideration in that regard for the purpose of affording temporary relief at this time and with the view of having the whole question exhaustively and finally settled by a new Parliament fresh from the people as soon as that Parliament has been summoned.


Charles Murphy: Did I understand my right hon. friend to state that the Government had decided to grant an increase, and if so, what is the rate of increase?


Robert Laird Borden: That has not been determined. We thought the increase in the cost of living made it only fair and reasonable, as 'well as desirable, that there should be an increase, to date from the first of April last, pending consideration by a new Parliament of the whole subject in an exhaustive and final way. It seems undesirable that so important a question should be dealt with finally by this Parliament. Therefore, we propose to give temporary relief by the method which I have mentioned, .and the whole matter will then be entirely free for such disposition as the new Parliament may determine to make of it.


Charles Murphy: And the rate of that temporary increase will be determined after prorogation?


Robert Laird Borden: We will make probably a temporary percentage increase to meet the increased cost of living in the meantime, leaving it free to the new Parliament to deal with the whole question when it comes up for their consideration and determination.


Mr. NESBITT:: The increase will apply to the pensions that have been granted, as well as to those to be granted in the future?


Robert Laird Borden: Yes, all would be dealt with on the same basis.
EXTENSION OF FRANCHISE TO \TOM1EN.
On the Orders of the day:


Hon. WILLIAM PUGSLEY (St. John):: I call the attention of the Prime Minister to a question which i asked on Saturday. The Minister of Trade and Commerce stated that lie would bring the matter to the attention of the Prime Minister and that an answer would be given to-day. It was in reference to the resolution dealing with woman suffrage. My right hon. friend will remember

that he moved an amendment to the motion to which I moved in amendment to the amendment declaring that in the opinion or the House the Bill to grant woman suffrage should be passed during the present session. The matter stood over and I quite remember that the minister who was leading the House at that time gave an assurance that there would he an opportunity to discuss the matter and that a day would be set. I would like to know, therefore, if there will be a day set for the discussion during the present session.
SIR ROBERT BORDEN: I did not have my attention directed to my hon. friend's question. I will give my hori. friend's suggestion the earliest consideration possible and I shall look up the record to see what was said. Does my hon. friend remember the particular date upon which the promise of further consideration was made?


William Pugsley: I cannot say at the
moment.


Robert Laird Borden: Probably it
would be about the 16th day of May.


William Pugsley: About that time.
SIR ROBERT BORDEN: I will give my hon. friend an answer later.



PRIVILEGE.


[Stage Direction]
On the Orders of the day:
William Pugsley: Mr. Speaker.
I rise to a question of privilege. In the Toronto News of Saturday last there appears this despatch from Ottawa:
C.P.R. Leads Bitter Fight.
Opposition to Public Ownership Being Waged on Floor of House.
Ottawa, Aug. 25.-One of the things which goes to prove that the taking over of the Canadian Northern by the Government is in the direct public interest, is the bitter and unreasoning opposition to the Bill by Hon. William Pugsley and Hon. George P. Graham. During the obstructive tactics which have been adopted in the discussion of the legislation in the House, Mr. Pugsley has constituted himself leader of the private ownership clique against public ownership. It is freely rumoured that in doing so, Mr. Pugsley is merely acting as spokesman and general counsel -for the Canadian Pacific Railway. While the voice is the voice of Pugsley, the hand is the hand of Shaughnessy.
I desire, Mr. Speaker to give that statement an unqualified denial. I am not now, nor have I ever been in any way connected with the Canadian Pacific railway as counsel or otherwise. I have had no communication directly or indirectly with the Canadian Pacific railway or with any of its officials on the subject of the Canadian Northern railway.



OVERSEAS ADMINISTRATIVE STAFF.


[Stage Direction]
On the Orders of the day:
Samuel Hughes: Without desiring to
bring on any discussion on the Orders of the Day, I wish to ask my right hon. friend the Prime Minister (Sir Robert Borden) if he will be good enough-to relieve my doubt, and that there may be no equivocation- to furnish the following data:	What staff
was at Brighton in the middle of November, 1916?


Mr. SPEAKER:: This information cannot be given now. The proper course to take is to place a question on the Order Paper in the ordinary way and thus obviate the possibility of inaccuracy.


Samuel Hughes: Perhaps I can get
some of'the information now. I would prefer that the information with regard to the staff should not 'be limited to the admin-strative staff.


Edgar Nelson Rhodes: I must ask the hon.
gentleman to place his question on the Order Paper. The answer cannot possibly be forthcoming to-day.


Samuel Hughes: But, Mr. Speaker,
may I not. refer to the answer which has been given by the Prime Minister? The Prime Minister spoke of the administrative staff. My statement refers to the staff and the answer given by him places me in the position before the public of having made a certain misstatement.


Edgar Nelson Rhodes: Order. It is not competent for the hon. member to discuss at this stage an- answer given by the Government. If he wishes an answer to a further question on the subject I must ask him to place his question on the Order Paper.


Samuel Hughes: Mr. Speaker, I rise to a question of privilege. The statement which has been made to-day by the First Minister quotes me as having made reference to a certain number of clerks being employed in London. The answer of the Prime Minister speaks only of the admin-

istrative staff and it places them at over 500, but it does not take into account other staffs. The number employed has not been clearly stated.


Edgar Nelson Rhodes: Order. The hon. member is not speaking to a question of privilege. He is not calling in question any inaccuracy in the statement. The hon. member has a right to ask a question in respect to a matter of urgency, or in respect to a return or something of that character, but he cannot discuss the matter. If he wishes to ask a further question, the answer to which cannot be forthcoming to-day, I would ask him to put his question on the Order Paper in the ordinary course.


Samuel Hughes: I thank you, Mr. Speaker, for the information; I am following the very same procedure which has been known to exist here for a great many years. But I am entitled on a question of privilege to show that my statement in this House has not been contradicted here today by the statement made by the Prime Minister. There are a couple of other points but I shall not press them as a matter of privilege. I shall take an opportunity of putting them in the form of a question. I desire to ask the Prime Minister if .he has any statement to make with regard to Col. Wilson.


Robert Laird Borden: No, I wrote my hon. friend a letter on. that matter. I will give the House the information if my hon. friend desires.



CANADIAN RAILWAY SITUATION.


[Stage Direction]
Consideration in committee of Bill No. 125, providing for the 'acquisition by His Majesty of the capital stock of the Canadian Northern Railway Company-Sir Thomas White (Minister of Finance-resumed from Thursday, August 23, Mr. Rainvi'lle in the Chair.-
On section 1-Acquisition of shares of Canadian Northern railway authorized:
Air. W. M. GERMAN (Welland):: When this Bill was last in committee, I made a few remarks on its merits as I understood them, but as the Government appeared to be anxious that the committee should rise and the House proceed to other business. 
I curtailed my remarks and I therefore desire to resume them. As I said then, so far as I am personally concerned, I am in perfect accord with the suggestion of taking over the Canadian Northern and its assets and properties, in the public interest. The two questions which to my mind are of paramount importance in connection with the matter are, first, the cost or price which is to be paid for the property, and, second, the system of management which is to be adopted. So far as the system of management is concerned. I have no hesitation whatever in saying that this railway system, together with the National ' Transcontinental [DOT] railway, and the Intercolonial railway, the Prince Edward Island railway, the Hudson Bay railway all the railways owned by the Government, should be put under one Board of Management which should be absolutely free and independent of all political control, and that the combined properties should te operated by such an independent 4 p.m. board on a strictly commercial basis in the interests of the public. I believe that by this means, instead of being a gigantic failure, as the Intercolonial has always proved to be, the combined systems could be operated with success and so to redound greatly to the benefit of the people and the best interests of the country.
The question of operation is not so much to be considered in connection with this Bill, because the Government apparently intend to leave the operation in the hands of the present company, under its own control and supervision. But surely that management cannot last. It can be at the best but a temporary arrangement and a new Parliament will certainly have to deal with this question. I submit that the proper way to deal with it is on the lines I have suggested.
But the question for discussion here is particularly the terms on which this property is to be acquired, and to my mind, if the public ownership of these railways is to be a success, the principal thing to' be considered is that we should first, as is said by racing men, get away to a good start; we should start right in order to be sure that we shall end right. The first consideration in starting is the cost of this property, what shall we pay for it? The Government have introduced this Bill in which they set forth that they shall acquire this property at a price to be determined by arbitration. They therefore enact in the Bill that a price shall be paid for the outstanding stock, the 600,000 shares of stock still ouistand-

ing, this price to be fixed by arbitration. My contention is that, as there is no value to that stock, there is nothing to refer to a Board of Ar-trators, and there should be no arbitration in regard to the price of these outstanding shares. The Minister of Finance (Sir Thomas White) the other day, when addressing himself to this question, dwelt very strongly and somewhat lengthily on the equity of redemption, contending that mere was an equ'ty of redemption in the Canadian Northern Railway Company, which had a value, which value should be fixed. He said very emphatically that if there was a foreclosure, or if the property was taken over by expropriation, there would have to be a reference to the courts to determine the value of the property and the value of equity of redemption, and whether there was a value in the equity of redemption, and he contended that the value can be fixed under this Bill by arbitration as well as in any other matter.
I submit that there is no equity of redemption, that there is no value to the stock.


Mr. BURNHAM:: How could there be a foreclosure if there is no equity of redemption?


William Manley German: There is a very simple method of foreclosure which is provided for by the statute. This method of foreclosure was pointed out in 1914 by the Government very clearly and emphatically at the time that the Act providing for the guaranteeing of the $40,000,000 of securities was under discussion. At that time I read to the House certain language of the Prime Minister in regard to the method to be adopted in acquiring this property in the event of default. After I bad concluded my remarks the Prime Minister stated that the suggestions which I had made had been frequently made on previous occasions, and as frequently answered. But I had never heard the suggestions made; much less had I heard them answered. The Minister of Finance, in his remarks on that question on Thursday last, made a similar statement. He said, however, not that these suggestions had been answered, but that they could be. He said he could very easily explain why proceedings should not be taken under section 24 of the Act of 1914 to acquire possession and control of this property. I should like to hear that explanation from the minister; I have not heard any up to this time either from him or from any other member of the Government. I have read what the Prime Minister said in 1914; let me read what the Minister of Finance said on that occasion when dealing with the subject of what method should be adopted in acquiring this property in the event of default. He said, page 3,943 of Hansard, 1914:
It I have a mortgage on a company's undertaking I do not care very much for the stock as security except that it is advisable to have the stock in order that I can take possession of the company, put in my own receiver, and operate the company with my own board of directors. That is the only advantage. The stock does not give any higher security, but it makes the realization of the security a little more convenient. What security have we? I have seen a good deal of financing in my time, and I know something of law although my hon. friend from Fictou (Mr. Macdonald) does not think so, and I want to say this: I have never seen as effectual a means of entering into possession of a property upon which a mortgage is held as has been devised by the Solicitor General in connection with this transaction.
Then he goes on to say, at page 3,944:
I was dealing with the question of remedy upon default, and was pointing out that we have a much better control than would be afforded by the security of a majority or all of the stock of the Canadian Northern. What have we? Upon default, the Order in Council at once becomes a rule of court, and is absolutely beyond question so far as its authority is concerned. We can displace the board of directors of any or all of the companies bydirectors of our own choice, who are given power to carry on the road as provided in the resolutions, and it is open to the Government through Parliament to deal with that road by way of sale or otherwise, as may be expedient and in the public interests. It can be sold in whole or in part to a corporation, or it can be operated in the interests of the public of Canada.
I call upon the Minister of Finance to explain why he does not, under that Act, take over that property and operate it in the interests of the public of Canada. There is nothing to prevent his doing so; in fact, the majority report of the Drayton-Acworth Commission recommends it. At page LXXXIV, the commissioners say:
In the case of the Canadian Northern Railway Company no proceedings in court are requisite. Under the provisions of section 24 of the Canadian Northern Railway Guarantee Act, 1914, the Governor General in Council has power, when authorized by Parliament, to declare by order, if default is made by the company in payment of interest on the $45,000,000 guaranteed securities (the interest on which is at present being found by the Government) that the equity of redemption of the company is absolutely barred and foreclosed; and thereupon the whole property becomes vested in His Majesty in right of the Dominion of Canada.
I cannot understand what explanation the minister can make of his present atti-

tude on this question, having regard to these recommendations made by the commissioners!


William Thomas White: If my hon. friend will turn to page LVIII of the Drayton-Acworth report he will find the recommendation that the trustees acquire this stock, just as we propose to acquire it, and continue the company as a going concern. They say that if the company is not willing to do that it can be forced to do it under the legislation of 1914. They suggest that the Canadian Northern Railway stock should be conveyed to the trustees precisely as we have determined that it shall he conveyed to the Dominion Government.


William Manley German: Assuming that the minister is right in that, why does he not go further? If it is his desire to carry out the suggestions of the commissioners in one particular, why not carry them out in other particulars? The commissioners say, it is true, that the trustees should acquire the stock, but they say, also, that the stock has absolutely no value; they do not recommend that the trustees pay anything for it. If the Canadian Northern refuses to hand over the stock, which the commissioners say they should do without consideration, the Government can exercise their right under section 24 of the Act of 1914. Let the Government carry out the suggestion of the commissioners. Let them say to the Canadian Northern Railway Company: You must hand over that 600,000 shares of stock; if you do not do so, we will take proceedings under section 24 of the Act of 1914. The commissioners say not only that the shares are of no value, but that the liabilities against the property are many millions more than the property is worth. They do suggest, however, that a sort of honorarium ought to be given to Mackenzie and Mann for their services, their time and trouble; they mention $1,500,000 worth of stock as being the maximum consideration in that regard. There is no suggestion that Mackenzie and Mann or the Canadian Northern Railway Company should receive cash. They say that as Mackenzie and Mann have devoted much time and trouble to the building of a good road through a prosperous section of the country, the Government might reasonable consider it fair and equitable to give them some compensation for their years of labour. But what are the Government doing? They are referring to a board of arbitration the question of what

value shall be given to these shares at the time of the signing of the agreement between the Canadian Northern Railway Company and the Government.
The Government is actually suggesting that there is a value or price of some kind to be put on the shares, and no doubt the Canadian Northern will suggest that to their counsel who appear before the arbitrators. They will say to the arbitrators: There is some value in these shares; it is for you to fix what that value is. That value, moreover, is to be fixed as of the time the agree ment is signed, and at a time that agreement is signed, those shares will have a very much greater value than they have at the present time. If they have no value at the present time, the mere fact that the Government is taking over the property, assuming all the liabilities, gives a value to those shares which Messrs. Drayton and Acworth say have no value. Why should not the findings of this Royal Commission be accepted by the Government? The Royal Commission was composed of expert railwaymen. Mr. A. H. Smith, president of the New York Central Railroad, is one of the best railway men in America; Mr. W. M. Acworth is one of the leading authorities on railway matters, and Sir Henry Drayton is undoubtedly a man of experience in railway matters. They have gone into this question fully, impartially and with a desire to ascertain definitely and to put before the country clearly the true situation in regard to the whole railway problem in Canada, and to recommend to the Government and to the Canadian people what should be done in that regard in view of existing conditions. What do they find?
1 have already given the findings in this House and they might be stated again, because at the present time there is not any question of as great importance as this railway question. It is a matter that must be grappled with courageously and dealt with frankly, honestly and squarely in the interest of the people of this country. This is a gigantic undertaking for the people of Canada to assume, and it will require careful and honest management. This Royal Commission ascertained the value of the property from three different aspects. In the first place they valued it as a cash investment, the cash actually put into the property, and they found that to amount to $383,302,451. There is no reason in the world why any one should dispute the accuracy of those figures. The commission had the best men they could get to aid them in their inquiry, and I have not heard of those figures being disputed, even by the

Canadian Northern Railway Company. They also say:
We And then $370,000,000 to be the maximum possible cost of the Canadian Northern system as at present existing-. In other words, as indeed is frankly admitted- by Canadian Northern witnesses, the Canadian Northern shares represent no cash investment.
They also ascertained the value on the physical basis, and they say that the actual value of the road on a physical basis in its present condition is $357,409,678, and that -the equipment is at the present time worth $45,339,985, making a total of $402,749,663. Then they ascertained the value of the property as a going concern, and on that basis they say that the shares have absolutely no value. In view of all that, if the Government is desirous of dealing with this matter fairly, and honestly in the interest of the people who are to own the road, I cannot understand why the Government should assert that there is a value to those .shares.
On Thursday last the Minister of Finance stated that there had been something like $65,000,000 of an error made in the calculations of the Royal Commision; that there was about $25,000,000 of liabilities which had been added which should not have been added, and that there was about $40,000,000 of assets which had not been considered. I understand that is quite incorrect. I understand that those assets and liabilities, so called, were considered by the Royal Commission, and I believe, before the discussion on this Bill is concluded, it will be shown conclusively -that those assets and liabilities were taken into consideration and were dealt with along with the other assets and liabilities of the company. But, supposing there had -been an error as is suggested, what would the effect be? We find that the actual value of the property as ascertained by the Royal Commission is $370,000,000. What are the liabilities? According to the balance sheet of last year the liabilities of the Canadian Northern, leaving out the stock and a balance of about $39,000,000 which they claim as a profit, we have the actual liabilities of the company as $438,000,000. Assuming for a moment that there is an error of $65,000,000, that will leave $373,000,000 as the liabilities which the people of Canada will assume in taking over this property. The Royal Commissioners say that, under no possible circumstances, could the property have cost more than $370,000,000, so that even supposing there had been an error of
$65,000,000, as is contended, there is still a surplus of liabilities, over any -money which could have been put into the road, of more than $3,000,000.
That being so, I really cannot understand why the Government is deliberately attempting to give several million dollars more to these men or to their creditors- because that is what it will mean. I have no desire that Mackenzie and Mann should be dealt with harshly, but we must remember that Mackenzie and Mann took the chances of keeping all the stock in their own hands and of financing this great system by government guarantees and bonuses and land grants, without putting one dollar of their own private money into the enterprise, or paying one dollar for the stock. If Mackenzie and Mann had in the beginning associated with themselves some strong financial man who were really interested in railway operation, and if these men had put their money into the system and paid something for the shares, I would feel that they were entitled to get something out of it. But Mackenzie and Mann have financed the road altogether on public money. Not one dollar of their own money has gone into the road, and what is mores Mackenzie and Mann were the contractors who built the road for the company at their own price. Mackenzie and Mann gave the contract for building the road to themselves at their own price; there was no competition whatever, and they then sublet the work to other contractors, undoubtedly at a figure which would yield them a profit on the work. I, for one, do not believe that Mackenzie and Mann during all these years have not made money for themselves out of this gigantic enterprise. It is absolutely unbelievable. I cannot believe it myself, nor do I think any man in this country will believe it. Mackenzie and Mann themselves have never taken the trouble to deny it. It is true that Mr. Mitchell and Mr. Hanna have stated that the books of the company do not show that any money has been paid to Mackenzie and Mann, but every one knows that there are a thousand-and-one ways in which money can be paid out without it appearing in the books of the company as having been paid to any particular person, and until I see their statement under oath, I, for one, cannot and will not believe ihat Mackenzie and Mann have made no profit out of this enterprise from the beginning up to the present time.
I have given as distinctly as I could the views I hold on this question. As I



have said, it is a gigantic undertaking for the people of Canada to assume. We are running up in this country an enormous indebtedness in consequence of this disastrous war, but even before the war, there was an enormous increase in our public debt, and it behooves us who represent the people in this Parliament to take the greatest possible care that the indebtedness of Canada is not unduly and unnecessarily increased. By the taking over of this property we shall be adding enormously to our burdens. We are actually assuming a burden of many million dollars more than the property costs or could be duplicated for to-day, and on top of that, the Government is suggesting that Mackenzie and Mann have an equity of redemption in this property. Notwithstanding what has been said by the Royal Commissioners, the Government suggests that these shares have a value, and that the value should he fixed by arbitration. I deprecate as strongly as I can any- such suggestion. I say that the Government should act under section 24 in the manner they told this Parliament they would act. The Government in 1914 took credit for having so carefully safeguarded the interests of the people, and pledged themselves to the people of Canada that if default took place, they would take over the property and operate it, so the Minister of Finance said, " in the interests of the public of Canada." I call on the Government now to carry out in good faith the pledge which they made at that time, and which was embodied in the Aot of 1914. It is perhaps well that I should read section 24, in order that the matter may be fully understood:
If authorized by the Parliament of Canada, the Governor in 'Council may on such terms and conditions (if any) as Parliament may prescribe, at any time while any event of default shall exist and be continuing, by order declare the equity of redemption of the Canadian Northern and of all other persons whomsoever in the mortgaged premises to he foreclosed, and thereupon the equity of redemption of the Canadian Northern (and of such other persons) in the mortgaged premises and every part thereof shall he and become absolutely barred and foreclosed, and the same shall thereupon he vested in His Majesty in right of the Dominion of Canada.


Mr. MORPHY:: If the hon. gentleman
knew that there was an equity of say, one million dollars, coming to Mackenzie and Mann, would he advocate that the Government rob Mackenzie and Mann of that amount and put it in the treasury?


William Manley German: If there was an equity of a million dollars coming to Mackenzie

and Mann, I would say that they should have a million dollars. I do not want to rob Mackenzie and Mann. But what I cannot understand is why the Government should even suggest that there is an equity in the face of the statement thas has been made by men of the highest standing in this country and of long experience in railway matters, that there is no equity. What body of men oould be got together who could make a more thorough, a more honest, and a more trustworthy investigation that could be relied on implicitly, than the one made by Messrs. Drayton and Acworth?


John Hampden Burnham: Is it not true that they overlooked $25,000,000?


William Manley German: That statement has been made, but I have been told that such is not the case. I think it will be shown before this debate is ended that Messrs. Drayton, Acworth and Smith took those assets and liabilities into consideration. The Finance Minister shakes his head. But even assuming tbait a mistake was made, if we give them credit for $65,000,000, there is still a burden of liabilities over and above the value of the property, which, on whatever basis you make the calculation, amounts to about $3,000,000.
How can hon. gentlemen even suggest that there is such a value. I read the other day the remarks made by the Prime Minister in 1914. In speaking of the properties and the interests which were foreclosed he said: "It includes Mackenzie and Mann as a corporation and Mackenzie and Mann, individually . . . they agreed that they will not at any time make or .seek to enforce any claim," etc. It is all on Hansard, and there is no use repeating it. Mackenzie and Mann individualy agreed that in the event of default no claim would be made by them for compensation for any equity of redemption. They are estopped now from saying there is any value, seeing that they have agreed themselves out of court. That being so, how is it possible for the Government to justify placing the question as to the value of those shares before a board of arbitrators?


Mr. J. E. ARMSTRONG:: Might I ask
the hon. member for Welland a question? Does he not believe that Sir William Meredith as an arbitrator will deal out justice to the people of the Dominion?


William Manley German: It has been stated by an hon. member of this House, formerly high in the councils of the Government, that any judge who acted on a boaid for compensation was a grafter, or something of that

kind. That was the term he employed towards Mr. Justice Galt.


Joseph Elijah Armstrong: Does the hon. gentleman insinuate that Mr. Justice Meredith would, be a grafter if he were to receive any remuneration from the Government?


William Manley German: I do not insinuate anything. One of the hon. members of this House high in the councils of the Government made that etatement recently. I will not say it is true, hut the hon. gentleman endorsed it. Probably my hon. friend was one of the seventy who endorsed Hon. Robert Rogers.


An hon. MEMBER:: He does not deny it.


William Manley German: I say in view of the fact that the Government pledged itself in 1914 to the country and to Parliament that in case of default it would take proceedings under section 24 of the Act and take over this whole property, appointing its own directors, the Government should be censured, and I believe it will be censured by the people of the country for now coming down with a proposition to compensate Mackenzie and Mann for something into which they have not put a dollar of their own money, and for which they have, in my opinion at any rate, been more than liberally compensated. My contention is the Government should do as it agreed to do, and take over this property, as recommended by the Royal Commission and as it pledged itself to do in its statement made in 1914.


Mr. STEVENS:: I had not intended participating in this debate, as I was most anxious that we should hasten the closing of this rather protracted session, which is excessively burdensome upon those of us who are compelled to be away from our homes so long. It has, however, been borne in upon my mind during the past week or two that behind the opposition to this measure there is a very potent and subtle influence, which, in my estimation, smacks more of "direct interests" rather than of the political aspect of the question-an influence working behind the scenes, veiled from public scrutiny, a self-seekling power interested in defeating the measure. However, the hon. member for St. John (Mr. Pugsley) a day or two ago threw out a % challenge to hon. gentlemen on this side of the House to defend this Bill or this policy if we dared so to do. He rather insinuated that because we had remained silent we were afraid to support the policy the Government has brought down,
314*


William Pugsley: Hear, hear.


Henry Herbert Stevens: Well, because of that and of the other reasons I have mentioned, I consider it my duty to state to the House my views on the question and my reasons for supporting the policy of the Government. I do so with a great deal of confidence and satisfaction, because I feel that the measure the Government has presented to the House and to the country is a proposal which, when properly grasped by the people of the country, will meet with general approval. I support the measure because it marks a new era in the railway history of Canada. It is a step forward towards the acquisition of the control and direction and the ownership of the great railway systems of Canada beginning by taking over the second largest system, the Canadian Northern Railway, a system comprising some ten thousand miles of road. The main burden of the criticisms of hon. gentlemen opposite against the Government has been " why does it not act under section 24 of the Bill of 1914?" They suggest that for some sinister reason the Government is seeking to evade the powers given to it by Parliament under that Bill. I would like to call the attention of the committee to the wording of the section referred to:
If authorized by Parliament the Governor in Council may on such terms and conditions, if any, as Parliament may prescribe foreclose the equity of redemption_etc.
In other words section 24 of the Act of 1914 lays upon this Parliament the responsibility of saying in what manner the terms of the agreement shall be enforced or taken advantage of. That is exactly what the Government is doing. It comes before the House now after three years of war intervening since the passing of that Act, and says to Parliament: "This is what we recommend having in view the circumstances with which we are surrounded and the conditions which have been brought about because of the war since the passing of the Act of 1914." The idea is exactly what hon. gentlemen opposite have been urging upon the Government, namely the securing of control of the road. It is quite true that the method taken is not precisely that suggested in clause 24, but it is useless for hon. gentlemen to split hairs, legally speaking, over the question of foreclosure of the equity of redemption as against the purchase of the stock. Any hon. gentleman knows, who knows the law that if you foreclose a mortgage, the mortgagor has some right to be heard in that foreclosure. That

is a principle which runs through all British law, and hon. gentlemen opposite know it very well.


William Pugsley: And, section 24 was alleged hy the Government to be for the very purpose of avoiding foreclosure before the courts.


Henry Herbert Stevens: I do not claim to be such a lawyer as my hon. friend but I will make a suggestion, inasmuch as the British North America Act provides that the powers of legislation regarding property and civil rights belong to the provinces, is there not good room for an appeal against that statute under the British North America Act?


William Pugsley: Does the hon. gentleman ask me a question?


Henry Herbert Stevens: No, I am not, because I know if I asked the hon. gentleman a question he would take all afternoon to answer it.


William Pugsley: That agreement was
made, and the Government is bound by the statutory agreement.


Henry Herbert Stevens: I simply draw attention to a fact, which no amount of argument will dispel. The fact is there and I say there is ground for appeal against that law in that way. However, we will pass this over for a moment.
What do we get from hon. gentlemen opposite to help us out of this dilemma which they say we are in? What are the suggestions? Two or three suggest a receivership. Others suggest that we dispose of the assets of this company; others suggest liquidation, and still others suggest that we give them further loans and see if they will not work out their own salvation. All these suggestions have been made in a cursory manner not with any degree of seriousness and simply with a desire to confuse the issue which is now before Parliament.
Let me call attention to some of the suggestions which have been made. The right hon. leader of the Opposition (Sir Wilfrid Laurier) said very emphatically that we required three transcontinental railways in Canada. The hon. member for Rouville says that:
The Government has no mandate to commit the country to the immediate completion of that third transcontinental railway.
The hon. member for Sherbrooke (Mr. McCrea), following along that line, said the other day:
I am bound to say that whoever were responsible for two transcontinental railways being
,'5-Ir. Stevens.]
built, east of Port Arthur and some distance west of Edmonton, were very much lacking in judgment.
His own leader says:
I accept fullest responsibility for the policy -that this country required no less than three lines of railway.
With such a conflict of views as this, with no seriousness in the suggestions or criticisms, I ask what are we to accept as the policy of hon. gentlemen opposite in connection with this matter.
I wish to discuss one policy suggested by the hon. member for St. John (Mr. Pugs-ley) very frequently in the numerous times that he has addressed the committee. He has suggested that a valuation be made of the physical assets of the road, and that they be disposed of and divided among the security-holders.
That is suggested by the hon. member for St. John. I would like to ask him, or the hon. member for Pictou (Mr. Macdonald), how they propose to make this disposition of the assets of the road. Would they sell the track to one person, the rolling stock to another, the telegraph company to some one else and the express company to some one else, or would they sell the road as a going concern? If they are going to dispose of the road as a going concern, to whom would they dispose of it? There is only one company to whom they could dispose of it. I have a great deal of respect for the views of a corporation lawyer on matters appertaining to corporation rights, but I question the judgment of gentlemen who are corporation lawyers, when they are dealing with what is in the interest of the public in conflict with that which is in the interest of corporations. While I have a great deal of respect for the opinion of some of these hon. gentlemen, I question their judgment in a matter of this kind. I, ask how they are going to dispose of this road and to whom? If they are going to dispose of the institution as a going con-* cern, there is only one buyer, that is known to the country, and that is the Canadian Pacific railway. Either the Government must take over this system or the Canadian Pacific railway will take it over. The hon. member f-or St. John could not have been' serious when he suggested that the assets be disposed of and divided amongst the security holders. That, of course, is impossible.
Let ns look for a moment at the only possible manner of carrying out this suggestion, by disposing of it to the Canadian Pacific railway. Every one knows, and I

think the financial interests of this country particularly know, that the Canadian Pacific Railway is exceedingly anxious to acquire this system and that it would pay very handsomely for it. I think I am quite safe in saying that Lord Shaughnessy would not deny that there were negotiations to this end. But, Sir, the question that this House and this committee must ask is: Is it in the interest of Canada that the Canadian Pacific railway should acquire this system? I submit that there are only two alternatives. One is that the Government must take it and the other is that the Canadian Pacific railway should take it. Before an amalgamation can take place between any of the great railway systems in Canada, if I remember aright, the approval of Parliament must be secured, or at least	the	approval of	the	Gov.ernment.	The	only thing	that standsbetween	the	amalgamation of	theCanadian Northern and the Canadian Pacific railway is the Government. If the Government gave its approval, this amalgamation might, take place. I hold that the	time	has arrived	when	this
Parliament should be thoroughly seized of this fact and should make it utterly impossible, for the time being and in the future, for the Canadian Pacific railway to control the Canadian Northern system. On the other hand, I claim that this is the time to take the first great step towards the nationalization of railways in Canada.
A great deal has been said on this debate as to the gifts and assistance that have been given to the Canadian Northern. It is quite right that we should take all these things into consideration. But it is well that we should ask ourselves the question, when dealing with the Canadian Northern railway, as it is being constantly compared with the Canadian Pacific railway:	What
placed the Canadian Pacific railway in the strong position which it occupies in Canada to-day. Was it built out of the money of the investors? The hon. member for Welland (Mr. German), who has just taken his seat, spent a considerable time attacking the Canadian Northern promoters because they had not put, as he said, one cent of their own money into the system. As a matter of fact, they put in some money, but not .anything like the full amount required. Did the promoters of the Canadian Pacific railway put their own money -into the system to any great extent? Let us look at some of the figures. I find that the Canadian Pacific railway have received from the Dominion and the provinces:
Cash subsidies	$ 67,000,000 -
Lands sold	 123,800,000
Lands unsold	 119,250,000
For surveys by Gov., etc.. ..	37,750,000

In all, they have received gifts to the value of $337,000,000. As a matter of fact,
I am informed that the figure is greater than that but that figure is quite sufficient for the point I intend to make. The interest on the $67,000,000 of cash subsidies granted to the Canadian Pacific railway at 4J per cent amounts to in the neighbourhood of $3,000,000 annually. If you take the interest for thirty years you will find that nearly $100,000,000 of interest has been thus placed in the coffers of the Canadian Pacific railway. I include this interest for this reason:	The guarantees given to the Canadian Northern, of which I shall say something later on, are interest bearing and they have to pay the interest out of earnings from year to year. The gifts to the Canadian Pacific railway bear no inte*est. The value of the money is in the road and they have to pay no interest upon it. Then, we have this result, that the Canadian Pacific railway cost $354,000,000 according to the statement in their last balance sheet. That is for the road exclusive of equipment.
In other words, they have received in cash bonuses from this country, as a free gift, outright, from the people of Canada, a sum almost equal to the total cost of their road. Let us look at the corresponding figures for the Canadian Northern railway. They have received total cash subsidies from all sources of $38,800,000 as against $68,000,000 cash subsidies to the Canadian Pacific railway. Then they have realized from the cash sale of lands, and realized by way of debenture bonds, $34,000,000, a total of approximately $73,000,000, which they have received in outright gifts from this country this amount. In addition to that, they have equity in land to the value of $4,000,000 still in hand, or .a total of gifts of $78,400,000, as against $337,000,000 given to the Canadian Pacific railway. This should be taken into consideration when we compare these two great systems. To proceed with this comparison in another way, let me point out that in the Canadian Pacific railway annual statement, and also in the Drayiton-Acworth report, we find that the Canadian Pacific railway still have 11,500,000 acres of land, including townsites, etc., in their possession. Much of this is in localities close to transportation, close to

towns and villages, and in arable districts suitable for cultivation. They also show in the same balance sheet cash on hand of $57,000,000, and in addition to that $23,000,000 as a reserve against contingencies. I therefore ask if it would not be desirable, in this age and time, when there is such a demand for increase of production, that instead of holding these arable lands, the gift of the people of Canada, the Canadian Pacific railway should spend, or invest, its contingency reserve of $23,000,000 in the development of some of these lands close to the towns, cities and villages of Western Canada? That is a suggestion which I think is quite in order, and one that might well be considered by the Canadian Pacific railway. I go further. In 1909 the right hon. leader of the Opposition (Sir Wilfrid Laurier), who was then in power, and his Government, gave to the Canadian Pacific Railway Company the right to issue an additional block of stock amounting to $30,000,000. This was issued at $125 when the stock was selling on the market at $184, netting to the shareholders of the Canadian Pacific Railway Company $17,700,000. Then, in January, 1912, by the Act of 1911, another $18,000,000 was distributed at $150, when the stock was selling at $236 on the market, making another gift to the Canadian Pacific railway shareholders of $15,000,000. The reason I cite this, and the reason I draw attention to these figures which I have already cited, is that these gifts were given to the Canadian Pacific railway because it was known that, in the earher periods of construction, they would have difficulty in paying their way without levying exorbitant freight rates. The object in the construction of the railway was to encourage the transportation of goods throughout Canada. The object of the Canadian Northern railway is exactly the same, to encourage the development of the transportation facilities of this country and to keep down freight rates within reasonable bounds. But instead of applying the gifts of the country for the purpose of keeping down freight rates, these gifts have been used by the Canadian Pacific Railway Company for the sole purpose of swelling the dividends of its shareholders. .
The suggestion is made that we should allow the Canadian Northern railway to go into the hands of a receiver. I must say, to give credit to most of the hon. gentlemen opposite, that this has not been
CMr. Stevens.]
received with any very great 5 p.m. favour. But this' has been suggested, and my hon. friend from Calgary (Mr. R. B. Bennett) said that he was thoroughly in favour of it, although he bowed to the wishes of the majority. I simply wish to point out that if this road were allowed to go into liquidation or into the hands of a receiver, it would have an exceedingly serious effect on the credit of the country. Not only that, it would dissipate or destroy, to a large degree, the value of the organization built up by the Canadian Northern railway system. It is just as impossible successfully to follow out the policy suggested by the hon. member from St. John (Mr. Pugsley), namely, to dispose of the assets of the road and divide them among the security holders, as it is to let it go into the hands of a receiver.
Our great object at this time is to do two things, first to preserve the transportation facilities that have been developed in Western Canada and, second, to do this with as little loss as is possible. I am quite satisfied with the arbitrator appointed by the Government, that is Sir William Meredith. I do not think a fairer or more just man could be secured. I deprecate very much the reflections cast upon Sir William Meredith by the hon. member for Welland (Mr. German) a few minutes ago. Sir William is above reproach, one of the ablest men on the bench. This is, however, a question which affects western Canada particularly and one which perhaps a western man would understand better than an eastern man, and if I had had my way a western man would have been appointed as arbitrator; but as the Government have chosen Sir William Meredith, I am content as I think that, so far as character is concerned, no better choice could have been made.
I believe that the time has come when we should take a very broad and very generous and very deep view of this question of transportation in Canada. I believe that the time has come when all the railway systems of Canada should be taken under the control and direction of the Government. When I say all, I include the Canadian Pacific railway, because, in view of these very large grants that have been given to the Canadian Pacific railway, I am led to ask the question, has the Canadian Pacific Railway Company played the game with the country to the extent of these grants that have been given to it? Is the country getting the freight rates to

which it is entitled? Let me give the House one brief illustration of the freight rate problems that we are faced with on the Pacific coast. Up to about 1907, the Canadian Pacific railway gave the people of the Pacific coast the privilege of shipping freight 400 miles eastward as against shipments by Montreal merchants 2,600 miles westward; in other words, we paid as much to ship freight to Golden, B.C., as the merchants of Montreal paid to ship to the same point. There is no ground on which that can be justified, and yet that is what we are faced with. To-day we have the splendid privilege of shipping freight as far as Calgary, 600 miles, against the Montreal merchant shipping to Calgary 2,300 or 2,400 miles. I cite this to show that the freight rate question of Canada is one of the most important, and that the time has come when we should ask ourselves the question: Are we getting a square deal from this enormous railway corporation in comparison with the assistance given to it by the people of Canada in these grants of land and of cash? To my mind a Board should be appointed to administer the railway affairs of this country and to pay to the stockholders of the different railways taken over a fair and reasonable dividend. If you examine the reports of the Canadian Pacific Railway Company for as many years back as you care to go, you will find that these land subsidies that we gave to them for the purpose of minimizing the freight rates of the company have simply been spent in giving dividends to the shareholders and swelling the price of the stock of the company. I have no objection to the earnings of the Canadian Pacific railway being used up as dividends, but I do object to the proceeds of subsidies given by the people of this country being used in that manner.
We have a further suggestion from the honourable member for St. John (Mr. Pugs-ley) which I wish to consider for a very few moments. He says that the Government should expropriate the railway and the rolling stock of the company, and nothing more; that we should leave the company in existence; leave it its stock and its liabilities. His suggestion is that we should take possession of the physical assets of the road, but that we should let the company keep its organization, its officials, its telegraph and express companies-all the things that make the operation of a railway possible. But how would possession of the railway and its rolling stock
be acquired ? In order to take over the road and the rolling stock of the Canadian Northern Railway Company you would have to float a new government loan. It may be interesting for the committee to note the price paid by the Canadian Northern Railway Company for its money. For instance, the company floated loans amounting to $270,000,000 in Great Britain at a cost of 4 -347 per cent. Where could we get money at that rate or anything like that rate to-day? Honourable gentlemen on the other side have criticised the Government because they had to pay six per cent and more for a loan in the New York market. Yet they suggest that we should expropriate the physical assets of this road, purchase them outright, and leave the company in existence. I mention this merely to show how absurd it is to suggest that at this time we expropriate the road and pay off the securities to any considerable extent.
It has been suggested'by the member for St. John and others that the $147,000,000 of unsecured bonds of the Canadian Northern Railway Company should not cause the Government any anxiety, that, if there is not sufficient	money to pay for
them, they should be allowed to go. It	is suggested that, as these bonds
were sold at a very low rate, no serious loss would be involved if this course was adopted. As a matter of fact, $110,000,000 of the $147,000,000 of unsecured bonds were sold at about 96 on the British market, or at a cost to the company of 4j per cent- which is a very favourable issue. Moreover, practically the full amount of the issue of these bonds went into the road. Of the land grant bonds, $12,250,000 were sold in Great Britain at 94, the net cost to the company being 4-98 per cent. The proceeds of these, as well as of those that were sold in this country, went into the road. Notwithstanding these facts, hon. gentlemen opposite suggest that the Government should repudiate those bonds. This is what the member for St. John says:
There are something like $147,000,000 of securities which are not guaranteed by the Dominion or the provinces. I presume these [DOT] securities are held by strong financial men, by bankers and others, who could afford to lose a portion of their securities.
1 submit that it is unworthy of a member of this committee to suggest that simply because these bonds may be held by individuals who can afford to lose them, the country should repudiate its responsibilities and allow the bonds to go by

default. My contention is that the full proceeds of the bond and land sales of the Canadian Northern Railway Company have gone into the road. So far as we can gather from a most careful scrutiny of the accounts of the company-I myself have gone over them carefully, and I know that other gentlemen have done so-the proceeds of the sale of securities of this road have gone into its construction, none being diverted to other uses. That being the case, it is fair and reasonable that this country should recognize and accept the full responsibility of those securities. If, as suggested by the member for St. John, the bonds had been sold at 50, there would be some reason for asking for an' adjustment. But in view of the fact that they were sold at 96 and 98, there is no reason why we should repudiate any portion of the unsecured bonds of the company.
In 1914 the leader of the Opposition and the member for St. John suggested that in the legislation then being enacted we should insert a provision that the maximum purchase price of the stock should be $30,000,000. I assume that that suggestion was made eeriouely. It was not thought desirable, however, to accept the suggestion, at that time, because practically all the members of the House, especially the western members, expected that the Canadian Northern Railway Company would be able to pull itself out of its financial difficulties. Within a month or so after the House prorogued war broke out, and from that day to this it has been utterly impossible for the Canadian Northern or any other corporation to do its financing in Great Britain or in New York. But although this suggestion was not accepted in 1914, there is no reason why the principle should not be adopted to-day, in view of the changed circumstances. There is, however, this difference: At that time it was suggested that the value of the stock might well be set at $30,000,000. Here we make no limitation. Hon. gentlemen may say: Why do you not fix a maximum price? But if the Government had put in a maximum price of $5,000,000,	$10,000,000, or any other
amount, hon. gentlemen opposite-the member for St. John, the member for Pictou and others.-would have alleged that the Government intended to give Mackenzie and Mann that amount of money. The only sane and proper method is to leave the arbitrators absolutely free and untramelled in coming to a decision in this matter. I suggest to hon. gentlemen opposite who
[Mr. Stevens. 1
object to this Bill that the measure is a fair one; that it will give the country a railway system second only to the Canadian Pacific Railway system, and that it will be the first step in Canada towards the nationalization of railways.	_
Not only will it do that, but it will introduce that system in a manner that will enable us to work it out free from party patronage, so far as that is possible. I join with many others who have said previously in this debate that, if it is humanly possible, political and party patronage should be eliminated from the administration of the railways of Canada, and I believe there is a genuine effort to do that, I believe further the people of this country desire it.
We are faced with one issue-shall the Canadian Pacific railway control this country by owning the railway systems of the country, or shall the Government enter upon a project of a Government-owned railway system? That is the clear issue before us, and there is no use in disguising the fact. I am going to read to the committee extracts from an editorial on the front page of the Toronto Star, and I do not think any hon. genlteman will charge the Toronto Star with being a Tory paper, or prejudiced in favour of the Government, or, in any sense, tramelled in its opinions, because if it is one thing, it is radically democratic. I will read a few extracts from this editorial in order to impress upon the committee, much more forcibly than my own arguments would do, the seriousness of the present situation and the necessity of Parliament facing it, in order that the committee may realize that the time has come when we must choose between the continuation of corporate control and direction or government ownership and direction of railways. The editorial says:
The decision of the Government to take over the Canadian Northern railway and also its express and telegraph systems is, we believe, an absolutely right one, and if the details of the plans put forward need to be improved, Parliament is in session for the very purpose of doing such work in the public behalf.
That, I think, is worthy of consideration. I am willing to join with any hon. gentleman in improving the details of this Bill, but what we should do is to suggest any improvements that we think should be made, and not generally, as has been largely done in the criticism offered, to damn the Bill. The editorial goes on:
It is necessary that in Parliament, the press and throughout the country, every force favourable to public ownership should now be

exerted, because against the Government in this matter is being exerted all the influence possessed by the Canadian Pacific railway and all its allied interests. It is a formidable power that confronts the Government to prevent the nationalization of the Canadian Northern railway and its subsidiary companies. It is a power that does not hesitate to believe that it can pull down governments when it undertakes to do so.
Then it says further on:
The country has long enough been owned by the railways. It is time the railwaps were owned by the country-for the country has pretty well paid for them.
In view of the huge figures that I have given, namely, $337,000,000 as a gift to the Canadian Pacific Railway Company and the other figures we have heard so often, that clause has particular significance. The editorial goes on:
Every Liberal member of Ottawa who professes to believe in public ownership ought to show it now, and, instead of obstructing Canadian Northern railway purchase because of certain details, should strive to remedy defects and aid the Government in putting through this railway nationalization project.. . . Aside from party altogether there is before the country a straight public ownership issue. The Government proposes to take over the Canadian Northern railway. Opposition to this action is led by the Canadian Pacific railway and allied interests, and the aim is to prevent public ownership of the railway, express, and telegraph services concerned. People need make no mistake. If the Canadian Northern rail-wap were allowed to go into liquidation, if it dropped into a receivership, it would bounce from there into the hands of the Canadian Pacific railway.
That is exactly what I have been trying to point out this afternoon, namely, that if we allow this road to go into the hands of the receivers, into liquidation, or if we dispose of it in any other way, there is Only one place where it can drop and that, as the Toronto Star says, is into the lap of the Canadian Pacific railway. That is where the influences opposing this Bill so potently and forcibly throughout this country are so anxious to have it drop. They know perfectly well, if the present Bill can be defeated, if it can be delayed or put off, the chances of working up a measure which will bring about such a condition will, so far as the Canadian Pacific railway is concerned, be exceedingly bright.
It is suggested, in connection with the proposed amalgamation with the Canadian Pacific-and I commend this to my hon. friends from Western Canada in particular -that inasmuch as the Canadian Northern and Grand Trunk Pacific railways cannot handle the freight to-day at the present
rates and show a profit, there should be allowed an increase of 10 per cent in freight rates. That is not an unreasonable suggestion, but let us look at it for a moment.
If you allow a 10 per cent increase in freight rates to the Canadian Northern and the Grand Trunk Pacific, you will have at the same time to give it to the Canadian Pacific. Such an increase would mean an additional $30,000,000 from the shipping public of Canada. How much of that would go info the coffers of the Canadian Pacific? Exactly $18,000,000. The Canadian Pacific are paying a dividend of 10 per cent; they have $119,000,000 worth of lands unsold yet, and they have, therefore, no need of that increase at all. I suggest that the Government take over the Canadian Northern Railway Company and carry it on at the present freight rates. If there is a loss of, say, $12,000,000 on the operation of the Canadian Northern railway and the Grand Trunk Pacific let us foot the bill. Instead of the people of Canada paying $18,000,000 into the coffers of the Canadian Pacific, let us by a direct payment from the public treasury make up any deficit in the freight rates of the Canadian Northern Railway Company and Grand Trunk Pacific. That is an infinitely better proposition than increasing the freight rates,, because, as the saying is, the people pay the piper, and the $30,000,000 will come out of the pockets of tne people, whether you take it directly or indirectly. Therefore, we should take the first step in government ownership and nationalization of our railways by acquiring the stock of the Canadian Northern Railway Company. I have absolute and untramelled confidence in Sir William Meredith as a just, fair and honourable arbitrator on behalf of the people of Canada. How any hon. gentleman can, for one moment, question the fairness of an arbitration carried on under him is beyond me. If there is anything to pay it will, in all fairness, be paid, and we, as members of Parliament, and as representatives of the people of Canada are willing to see that that is done. If there is no value in those snares we may rest assured that Sir William Meredith will be the last men in Canada to declare a value where there is none.


William Pugsley: Is Sir William Meredith to be the sole arbitrator? Does not the Bill provide for three arbitrators?


Henry Herbert Stevens: Certainly.


William Pugsley: Sir William Meredith then will be in a minority?


Henry Herbert Stevens: The interest of the people of Canada is placed in the hands of Sir William Meredith. Furthermore, my hon. friend knows that there is provision for an appeal to the Supreme Court -in the case of a difference of opinion.


William Pugsley: If the Bill provides that an award will be made according to the opinion or judgment'of the arbitrators without evidence; how could you appeal to the Supreme Court for judgment without evidence?


Henry Herbert Stevens: My hon. friend is asking perhaps one of the most ticklish legal questions-I was going to say quibbles-that could be raised in connection with this Bill. That was discussed here in detail by the Solicitor General and the Minister of Finance. There is no question in my mind that, should there be a disagreement, there is a perfect right of appeal to the Supreme Court and besides the Bill has been amended to make that clear.


William Pugsley: Does not my hon. friend know that where a statute expressly gives the arbitrators the power to determine a matter according to their own judgment without evidence, it would be impossible to have an appeal?
, ^r-	: My hon. friend knows
that that is absurd. No board of arbitrators would decide on such a question offhand of their own judgment without evidence.


William Pugsley: That is just what the Bill says they may do. I was not aware that the hon, member for Calgary had first brought this point to the attention of the House, but I can well understand that he would do so. It is one of the most extraordinary provisions I ever saw.


Henry Herbert Stevens: That section has been amended anyway.


Charles Murphy: After listening attentively to the address of my hon. friend from Vancouver (Mr. Stevens) I think I am within the judgment of the members of -this committee when I say that his observations have made it clear to the House and to the country that the Government has decided to adopt as its defence to the criticism offered from this side of the House on the measure before the committee, abuse of the Canadian Pacific railway, or perhaps it would be more correct for me to say, attacks upon the Canadian Pacific railway. If that be the only defence that the Government has to the criticism offered,

then nobody on this side of the House, least of all the individual who is now addressing the committee, should object to the adoption of such cuttlefish methods by the Government. It is true that a campaign of this kind may for the moment becloud the issue, but it is still more true that such a campaign will not mislead the public for any length of time.
My hon. friend from Vancouver began his address by saying that there was a subtle influence at work behind the opposition to this Bill; an influence, I think he said, that was based on self-interest. I presume it is unnecessary to disavow any personal interest in my own case, but possibly it is just as well that I should do so, because I desire to make some further reference to this phase of my hon. friend's argument. What he said reminded me that after the speech delivered by the hon. member for Calgary (Mr. R. B. Bennett)-a prominent supporter of the Government, and a very important member of the Conservative party-the' Government press throughout the country took sudden alarm. The day following the delivery of that address, there were numerous editorials in the Government press throughout the Dominion sounding a note of warning and urging the Government in the frankest possible terms to pay heed to what had been said by the hon. member for Calgary, and to take every possible means to safeguard the public interest in connection with this legislation. The Ottawa Journal joined in giving that warning to the Government. Within a few days, however, a change was noticed in the editorial opinions of the Government press, and then for the first time it began to be stated publicly that the opposition to this Bill came from the Canadian Pacific railway and from the Bank of Montreal. The Ottawa Journal, I think, in 'referring to the memorial presented against this measure by some of the prominent citizens of Montreal, men ranking high in the professional and business life of that city, referred to the click of the cash register. My hon. friend from Vancouver this afternoon followed very closely in. the wake of that line of argument. I am told that my hon. friend from St. John (Mr. Pugsley) made a refutation of that accusation at the opening of this afternoon's session.
So far as I am concerned, I certainly voice no Canadian Pacific railway interests.
I have no more interest in the Canadian Pacific railway that I have in the Canadian Northern, and in opposing this measure I am acting solely upon what I conceive to

be my duty as one of the representatives of the people. The Ottawa Citizen on Saturday last dealt very briefly with this argument advanced by the Government press, and in the course of a brief editorial had this to say:
The attempt of the Government press to create the impression that the taking over of the Canadian Northern railway system by the Government has resolved itself into a struggle between the interests represented by the C.P.R. allied with the Bank of Montreal, and the Administration, is obviously political camouflage of the most amateurish sort.
The C.P.R. may desire the defeat of the present proposal; so may the* Bank of Montreal ; so may large moneyed interests in the metropolis and elsewhere. With that the people of the Dominion need not be concerned at this time. What is of the utmost importance is that the terms of the proposed acquisition be not lost sight of in this cloud of political dust. The outstanding fact is that the Administration proposes to arbitrate a matter of sixty million dollars, more or less, and that according to the terms of the bond between the Dominion and the Canadian Northern Company in 1914 the latter, as represented now in its holders of capital stock, is not entitled to one dollar of the money of the Canadian taxpayers.
I will have occasion to refer to the question of value later on, and I need not labour that point now. I desire, however, before proceeding to refer to one or two other matters that were touched upon by the hon. member for Vancouver. May I point out that in recalling the position taken on this side of the House in 1914, my hon. friend did not fully state all the terms of the amendment that was then introduced by my hon. friend (Mr. Pugsley). I will have occasion to go into that later on in my remarks, and I need not dwell upon it now. I mention it merely to point out that while my hon. friend's argument in that respect was incomplete, it was altogether in accordance with the line of argument which now emanates from the government press and from the supporters of the Government.
The hon. member for Vancouver also took occasion to give quite unnecessary testimonials of character to Sir William Meredith, who has been proposed as the Government arbitrator in this matter. I am not aware that any person on this side of the House has cast any reflection whatever on Sir William Meredith, but there is an observation that might have been made, and not having been made, I propose to make it. There is just the possibility that his political friends may overwork Sir William Meredith. It may have escaped the observation of hon. gentlemen on this
side of the House that even since the Minister of Finance announced that Sir William Meredith was to be the arbitrator in connection with the valuation of the Canadian Northern railway stock, the Ontario Government has placed Sir William Meredith at the head of another board of arbitration, and, as I say, it is just possible that his political friends, may overwork Sir William Meredith in showing their regard for him. It also is a matter of interest, I think, to make inquiry whether Sir William Meredith will be able to discharge the duties which ure sought to be cast upon him under this arbitration, since he has accepted, so the newspapers say, the appointment offered to him by the Provincial Government in connection with another matter. So much for the observations of my hon. friend from Vancouver.
In the earlier stages of this discussion hon. gentlemen on this side of the House, and I think possibly one or two hon. gentlemen opposite as well, sought to get from the Minister of Finance certain information that had not been brought down. From time to time the minister has laid upon the Table statements and correspondence containing a great deal of data of which the committee had not been previously seized, but I want to take this opportunity to point out that while a considerable amount of information has been furnished, that which has been brought down is not exact, and is by no means complete. In this connection let me remind the committee that when speaking on the 16th of the present month upon some details of this Bill, I pointed out a liability of the Canadian Northern Bailway Company with regard to the province of British Columbia, and for the information of the committee as well as that of the Minister of Finance I read an item from the Vancouver Sun of August 11 of the present year, and made inquiry regarding the liability there disclosed. We have not yet received information on that point, which is a question of such importance that I purpose to refer to it again briefly. According to the correspondence exchanged between the Prime Minister and the Premier of British Columbia there may exist an exceedingly large liability which this country is assuming in taking over the Canadian Northern Kailway Company; what I said will be found on page 4774 of Hansard, and I extract merely the portion containing the item that appeared in the Vancouver Sun of August 11, which is:

Victoria, Aug. 10.-The following telegram sent by Hon. John Oliver, minister of railways, to Sir R. L. Borden to-day:
"British Columbia has guaranteed the principal and interest on forty-seven million nine hundred and seventy-five thousand dollars of Canadian Northern Pacific railway company bonds and has contracts obligating the railway company to expend twenty-two to twenty-five millions to complete. Are the province's interests being protected? Please reply quickly.
The under-mentioned reply from Sir R. L. Borden has been received:
"The Government proposes to acquire all the capital stock of the Canadian Northern railway company which owns all the stock of the Canadian Northern Pacific railway company. Copy of the Bill now before Parliament ia forwarded to-day for your consideration. The company's obligations will remain as they were before such acquirement."
The newspaper item proceeds:
By Sir Robert Borden's telegram it will be seen that the Dominion Government assumes all the Canadian Northern railway's obligations in respect to the Canadian Northern Pacific railway, both financial and as to the completion by the latter railway of its existing contracts.
When I first drew this item to the attention of ithe committee I inquired as to the amount of the liability the Dominion of Canada was assuming in connection with' the obligation set out in this correspondence. Up to the present time, so far as I am aware, we have not received an exact statement as to that from the Government. I invite the minister to give us an exact statement in that regard while the Bill is before the committee and before we are asked to proceed to another clause. It will be within the recollection of hon. gentlemen that there was considerable discussion with reference to unpaid claims of contractors. Information was also asked on this subject. I must say information was brought down, but, like most of the information received from this railway company, it is in such general terms that it is impossible to tell what claims it covers.
I am led to refer to it again, and to repeat my request for specific information by reason of the fact that since publicity was given to the discussion of those matters in the House, contractors with unpaid claims have turned up within the precincts of the House and have told me, among others, about unpaid claims against the Canadian Northern which they had been pressing for settlement for a long time without success.
I submit it is due to this committee that the Minister of Finance should insist upon the Canadian Northern Bailway Company furnishing him with the names of the contractors who have unpaid claims, and that he should not be satisfied with a simple 
bulk statement as to the amount alleged to be still due and unpaid.
Information was also sought with regard to the outstanding liability of the company in connection with compensation for land taken for right of way, terminals, etc., and for damages in connection with the taking of such land. Again the discussion in this House has brought to the attention of people who have unpaid claims the statement made by the company regarding alleged settlements. Since the committee -last met I have been told of claims in the vicinity of Ottawa which have been standing for six or seven ye-ars, claims which the people who hold them say they -are sick and tired of pressing upon the company, and that the company continues to resort to every evasion and subterfuge in order to avoid settling. I have been told of one claim m particular in regard to which there has been an intimation made that now the Government is taking over tne Canadian Northern railway of course the company will not have to deal with the claim, but the parties interested will be obliged to look to the Government for payment. This, I may say, is in the vicinity of Ottawa. I am convinced there are others of very much larger amount in and about the city of Montreal. On a previous occasion I referred to the unsettled claims for compensation and damages for land taken in connection with the Montreal Tunnel and Terminal Company. Acting upon the representations I made to the committee on that occasion the Minister of Finance was good enough to make inquiry, and on the 23rd of the present month he submitted to the House a letter written him by one of the solicitors for the Canadian Northern Company bearing upon this subject The writer of the letter is Mr. Gerard Buel, a capable and honourable gentleman, whose acquaintance I enjoyed while he acted as Law Clerk in the Department of Railways and Canals. I have no doubt that Mr. Buel has correctly set out in his letter the information given him, but I am just as positive that the information is absolutely incorrect. Mr. Ruel's letter will be found at page 5124 of Hansard and is:
Regarding: land damages arising out of the construction of the tunnel, the situation is that at the present time outstanding claims for damages to the amount of about $50,000 are in the course of adjustment. All the land which the company has to obtain for the present terminal and the right of way has been acquired and paid for in full. Easements through the mountain have not in many cases yet been adjusted, the company claiming that owing to the dis-

tance from the surface practically no damage will be sustained. These claims are standing over by agreement until one year after the operation of the tunnel.
(Sgd.) Gerard Ruel.
Let us examine the statements made by the company in this letter. In the first place it is said that the situation at the present time is that:
Outstanding claims for damages to the amount of $50,000 are in the course of adjustment.
My observations have reference to the land taken for the purpose of this Tunnel and Terminal Railway Company both behind the mountain, and on the city side of the mountain as well as in connection with the boring of the tunnel. If this letter refers to the land embraced in that stretch of the right-of-way, then, Sir, I have no hesitation in saying, based upon my own personal knowledge, that the statement that all the outstanding claims for damages amount to about $50,000 is an absolute joke.
I know of one claim approximating $350,000 that has been made, and in connection with that claim they have offered in settlement, through the Montreal solicitors for the Canadian Northern, an amount in the vicinity of $53,000.


Mr. LEMIEUX:: I know that in settlement- of a claim made by the Hon. Mr. Rainville, ex-speaker of the Legislative Assembly of Quebec, they have paid more than $50,000.


Charles Murphy: I am speaking only of
those claims of which I have personal knowledge and in that instance alone the company's solicitors proposed a settlement on the basis of $53,000. But since the Minister of Finance gave notice of this legislation that proposal was entirely abandoned and of course they are taking the same position in Montreal that they are taking here-they will pay nothing and the country will have to pay the whole shot no matter what it is. There are two other unsettled claims in connection with the right of way of which I have personal knowledge and the aggregate of these three claims is six or seven times the amount mentioned in that letter. I have not the slightest doubt there are scores of such claims if we could only get at them. The second statement in that letter is that:
All the land which the company has to obtain for the present terminal and the right of way has been acquired and paid for in full.
That statement, in view of what I have just told the committee, is obviously untrue. It has acquired the land it is true, by taking the preliminary steps for expropriation under the Railway Act, but not only has it not paid for a large part of this land in full but for a large part of this land it has not paid anything at all, but is defying the owners by legal proceedings and by appeals after the matter has been submitted to arbitration and awards have been made against the company.
Further this letter states:
Easements through the mountain have not in many cases yet been adjusted, the company claiming that owing to the distance from the surface practically no damage will be sustained. These claims are standing over by agreement until one year after the operation of the tunnel.
Claims with respect to the easements might very easily reach up into the hundreds of thousands of dollars. I submit that even though it is correctly stated that by agreement these claims are standing over until one year after the operation of the tunnel the members of this committee have a right to know what these claims are, what they amount to, and by whom they are made in order that we may form some approximate idea and in any event that the country should know what yet remains to be settled for in connection with this class of claim. So much for that letter.
I submit generally in connection with the question of land damages and compensation, that there ought to be filed with this committee a statement in detail giving the names and the amounts of all unsettled claims, and further that until that is done we cannot properly proceed with an intelligent discussion of this Bill for the reason that neither the country nor the committee is in a position to know what the country is assuming by the adoption of this present proposal. A few days ago my hon. friend from Welland (Mr. German) referred to what he understood t-o be some long term contracts that had been entered into between the Canadian Northern Railway Company and certain of its permanent officers and officials. He pointed out that these contracts also established a liability that would be taken over by the country under this legislation and he asked for information on that point. If my memory serves me correctly the Minister of Finance promised to make inquiry regarding that. I too would urge upon the minister that if such inquiry has not been made, it should be made at once and that the committee should be furnished with full particulars of any contracts be they long term or short term, entered into between the

Canadian Northern and Mr. Z. A. Lash; between the company and Mr. Phippen; between, the company and Mr. McLeod; between the company and Mr. Mitchell, and, generally, between the company and all of its chief officials and officers. If that is not done, if this committee proceeds in ignorance of the state of facts in that regard, Parliament and the country may wake up, after this legislation goes through, to find that instead of getting rid of a set of men, whom the country has been led to believe will be got rid of by this legislation, these men have been fastened upon the country for a much longer term of years possibly, than if they had continued in the ordinary course to be in the service of the Canadian Northern. These long term service contracts may involve a very large sum of money but in any event, whether that be the fact or not, the point has been raised, the question has been asked, the Minister of Finance undertook to get the information. I now add my request to that of the hon. member for Welland and I urge that the information be brought down to this committee before we are asked to proceed with another clause of this Bill.
Under this same general head of information I wish to refer the minister to the observations of the hon. member for Calgary (Mr. Bennett) with reference to the income bond securities. As reported at page 4754 of Hansard, the hon. member for Calgary said
I am going to direct the attention of the Minister of Finance to the Income Bond Securities, that increased stock of $25,000,000 that is provided. When this country acquires this enterprise and becomes owner of its shares, the $25,000,000 stock will acquire some value, and under the legislation of 1914 it was provided that these shares might he exchanged for income bond securities up to the 1st day of January, 1919. I put this to the House in all seriousness:	If we exercise the power
under the statute of 1914, we destroy those shares and that right; but if, on the other hand, we buy these shares, we leave that right, and some people with $25,000,000 of income bond certificates, are going to be able to exchange them for Canadian Northern stock for $25,000,000.
The Solicitor General dealt with that point in the address to the hon. member for Calgary, and he challenged the statement that exchange of these securities for stock was likely to be made; in fact I think he said it was so unlikely as to be altogether improbable. I did not understand the hon. -member for Calgary to accept that view, and in view of some information that I have found in the Annual Financial Review

for 1916, I think it is very desirable that the whole matter should be cleared up. For the information of the Minister of Finance and of the committee, let me read this statement from page 516 of the Annual Review of 1916:
The Canadian Northern Railway Company.
5 per cent. 20-Tear Income Charge Convertible Debenture Stock-Secured by a general charge on properties of the Company subject to prior charges. The total amount of this stock at any time outstanding is not to exceed an amount equal to $10,000 per mile of the company's lines of railway. During the years 1916, 1917 and 1918 holders of the stock have the right to exchange their holdings for an equal amount of fully paid ordinary shares in the capital stock of the company. The interest on the stock at a rate not exceeding 5 per cent, per annum is payable on 2nd May and November, only out of the net earnings of the company. In and after 1920 the company is entitled to redeem the stock at par.
If this is the same class of security as was referred to by the -hon. member for Calgary (Mr. Bennett), then the possibility of exchange for common stock is much more immediate than appeared to be the case when the matter was under discussion between the hon. member for Calgary and the Solicitor General, and in view of this authoritative statement by the company itself, -for I assume that the company furnished this information-that such securities may be exchanged- -for common stock in the years 1916, 1917, and 1918, I invite the Minister of Finance (to make special inquiry with regard to that and to give this committee, at the earliest possible moment, the result.
At six o'clock the committee took recess.
After Eeeess.
The committee resumed at eight o'clock.


Charles Murphy: Mr. Chairman, when the committee rose at six o'clock I had just finished enumerating several matters in respect of which, in my judgment, the committee and the country are entitled to further and fuller information. In respect of each of these matters I again urge the Minister of Finance to procure the information asked for and to bring it down as soon as possible. Upon that head I do not feel that at the present time any further observations -are either practical or necessary.
We often hear it said that one of the greatest evils of democratic government, particularly of a modern democracy, is the growth and power of what is popularly referred to as the moneyed interests. In my

judgment this House and this country are face to face with an evil of that kind in the legislation now before the committee. In fact, the Bill now in your hands, Sir, is such a dangerous specimen of the evil to which I have alluded, that, with your permission, I desire to trace the genesis of this Canadian Northern railway proposal and in doing so to place certain important facts, as briefly as possible before the committee.
Speaking in this debate on the 16th of the present month, I stated that the present proposal grew out of an alliance that was formed in 1911 between eighteen gentlemen who came together in Toronto and who, in the assertion of what was their political and personal right, signed a letteT defining the position which they thought the country should take in defence of the financial interests which they personally and collectively represented. That alliance and that letter form the basis of this present proposal, as I propose showing. Let me recall the names of the gentlemen who signed the letter in question; they will be found at page 4774 of Hansard of this year. They are:
Sir Edmund Walker, John L. Blaikie, W. D. Matthews, W. K. George, Z. A. Lash, W. T. White, George T. Somers, R. S. Gourlay, Sir W. Mortimer Clark, R. J. Christie, Hugh Blain, H. S. Strathy, L. Goldman, G. A. Somerville, Wellington Francis, J. D. Allan, E. R. Wood, John C. Eaton.
That group of gentlemen represented particularly the Canadian Northern Railway Company, the Canadian Bank of Commerce, and the National Trust Company, of which at that time my respected and honoured friend the Minister of Finance was the general manager. After the election of 1911 these eighteen gentlemen used their influence and were successful in having one of their number appointed Minister of Finance; I refer to the hon. gentleman who now occupies that position. Since 1911 it has been a matter of common knowledge that the three institutions to which I have referred have more than once received favours at the hands of this Government. For the purpose of understanding the present position of affairs with reference to these three business and financial institutions and their connection with the proposal now before the House, it is necessary to run over briefly the interlocking directorates of these companies. Of the original eighteen gentlemen who signed the letter to which I refer and whose names I have just read, Mr. Z. A. Lash, Mr. E. R. Wood
and Mr. W. K. George are directors of the Canadian Northern Railway Company. These three gentlemen, with Mr. W. J. Christie, are also shareholders in the Canadian Northern Railway Company.


William Thomas White: I think my hon. friend is mistaken as to Mr. Christie. The Mr. Christie who signed the letter was Mr. R. J. Christie, of Toronto. Mr. W. J. Christie is of Winnipeg. Their only interest is as qualifying shareholders; they have no interest in the road itself.


Charles Murphy: I am not defining their interest at the moment; they are directors of the Canadian Northern Railway Company. The Mr. Christie who is also a director is not Mr. Christie of Toronto, but Mr, Christie of Winnipeg. With that correction the statement stands. Then, of the original eighteen, Sir Edmund Walker, Mr. Z. A. Lash and Mr. E. R. Wood are directors of the Canadian Bank of Commerce, of which Sir Edmund Walker is president and Mr. Lash vice-president.
The Canadian Bank of Commerce, as hon. members are aware, are pledgees of all Mackenzie and Mann's stock for advances which have been made against it. Mr. Z. A. Lash and Mr. E. R. Wood are both directors and vice-presidents of the National Trust Company. The National Trust Company, of which the Minister of Finance was formerly general manager, has acted as a trustee between the Canadian Northern Railway Company and the Government with reference to several financial transactions which have taken place during the last six years. So much for the way in which the members of that group of eighteen link up the Canadian Northern, the Canadian Bank of Commerce, and the National Trust Company with the present Government.
That does not by any means exhaust the interlocking combinations that have to be kept in mind in order properly to appreciate the legislation before the committee. In addition to those I have mentioned, there is our old friend Sir Joseph Flavelle, chairman of the Imperial Munitions Board, who is a director and the president of the National Trust Company, and who is also a director of the Canadian Bank of Commerce. Besides that gentleman we have Sir John Aird, general manager of the Canadian Bank of Commerce, a director of the National Trust Company and a joint shareholder in trust of $1,000,000 worth of stock of the Canadian Northern Railway

Company. In Parliament we have Sir Edward Kemp, who is a director of the National Trust Company, and Senators Nieholls and Richardson, who are shareholders of the Canadian Northern Railway Company, according to a statement submitted by the Minister of Finance the other day. Those three latter gentlemen will soon be called upon to pass their opinion upon this legislation. These interlocking directorates and combinations of financial interests are inimical to the public welfare. On this point, let me read this opinion of the Toronto Saturday Night, which, in its issue of August 18 last, referred at some length to the Government proposal for taking over the Canadian Northern railway:
There is a distinct feeling of uneasiness in Canada over the Canadian Northern nationalization scheme, now before Parliament. Not that the great majority of people are unfavourable to nationalization. Far from it. But there is strong objection to the terms under which this nationalization is to be effected. The question arises as to whether or not the stock of the Canadian Northern railway has a cash value, and whether or not the owners, or more properly speaking, the present holders of this sixty-thousand shares-it being generally understood that the stock long ago passed out of the hands of the promoters into the strong boxes of financial institutions which are holding it as collateral -have sufficient influence to guide the Government into paying more for the stock than it is worth.
Then, after referring, by way of comparison, to same kindred legislation in the United States, the article concludes:
Canadians are in no mood to pull the chestnuts of large financial institutions out of the fire just because they have become tied up with the Canadian Northern railway enterprise. The Federal Government may well be warned that the Canadian people are in no mood to be trifled with in this matter. The Royal Railway Commission in its report stated that the common stock of the Canadian Northern railway was of no value. Now we propose to leave it to another commission to ascertain the value of this stock. There is no disposition to treat the Mackenzie & Mann interests meanly, but as the Hon. George P. Graham suggested the other day in the House, if they are to be paid, let it take the form of a " recognition " of their services in the development of the country and not as a payment for stock which has been pronounced by experts to be of no value.
In harmony with the view expressed by the Toronto Saturday Night, my hon. frieud from South Renfrew (Mr. Graham) a few days ago read in the House a memorial from a group of leading financiers and professional men of Montreal, all of them I believe, without exception, strong supporters of the present Administration. In connection with that memorial, the hon. member also read an editorial from the

Montreal Gazette, one of the most outspoken supporters, in the press of this country, of the present Administration. Both memorial and editorial endorsed the position taken by the Toronto Saturday Night. To these opinions of important newspapers and citizens of Canada, may I be permitted to add that of the Montreal Star, a newspaper which, although claiming to be independent in its politics, yet manages to give an unvarying, I might say almost unbroken support to the Conservative party and which has given that support to the present Administration. The Montreal Star, in its issue of August 21, 1917, says:
Next to the war measures, by far the most important legislation before the Canadian Parliament is the Railway Bill. A wise solution of the railway problem means untold millions to Canada at a critical time in her history.
Owing to the financial embarrassments of the roads the Government was forced either to put into a receiver's hands both the Canadian Northern and the Grand Trunk Pacific, or to advance them more millions. It has made its choice. The Government is to give the Grand Trunk Pacific another lift of $7,500,000, and proposes to acquire the Canadian Northern stock at an arbitrated value. Messrs. Mackenzie and Mann during twenty-five years of railway exploitation, have proven their great ability as lobbyists. They have usually been able to persuade both the Liberals and Conservatives that Bills on their behalf presented to Parliament should become law without anything more than sham criticism. None of the politicians have seriously found fault with them so long as they could procure the adhesion of a majority of both parties in Parliament, and so they have had plain sailing. Every one saw that the crisis was only a question of time.
The Bill now before Parliament intended for the relief of Mackenzie and Mann and their creditors is decidedly weak in some of its provisions and dangerous in the extreme. Under the Bill as introduced there might be a staggering award. Mackenzie and Mann know how to engineer their schemes ; they must not be permitted to engineer the country into bankruptcy. It is too big a risk and there is danger that Parliament may be woefully negligent in this case, as it always has been with railway legislation.
So far there is no provision for securing honest surrender of the assets. Some have been left out of the official lists. For one of the largest subsidiary assets of the concern no adequate provision is made, and there are many other assets paid for by Government money that are not included.
If this relief Bill for the extrication of Mackenzie and Mann is to be raised above suspicion there must be provision for all the deliberations of the arbitrators to be open to the public and for the presence before the board of independent counsel representing ordinary taxpayers of Canada as distinguished from those who sit in Parliament to protect the railway interests, and there should also be a sweeping clause in the Bill that will guarantee the country against deception, and a sworn detailed schedule of assets, with a clause entitling the country to all assets omitted.

Once Mackenzie and Mann are settled with and they surrender to the Government the key to the company's secrets there may be a surprise for the country compared with which past disclosures have been mere trivialities and the country may come to realize that it has bought a white elephant that will cost millions every year.
Having regard to the fact that that article is published on the front page of a newspaper enjoying the standing of the Montreal Star, I must assume that the last paragraph in particular has been written with full knowledge of some secrets not disclosed, but which, the article says, when disclosed, will be of a character compared with which past disclosures have been mere trivialities, and the country may realize that it has bought a white elephant that will cost many millions every year.
As one of the representatives of the people I have read that article several times, and I have thought over it long and seriously. Personally, I do not know what is referred to in that last paragraph, but I want to say this, in all candour, in all honesty, and in all friendliness to my hon. friend the Minister of Finance: If he knows what that paragraph refers to, then as an honourable and an honest man-and he is both -I would a6k him to disclose that knowledge to this committee and to the House. If he does not know, then I would ask him to call upon the newspaper in which that article appeared to inform him, and through him to inform the country, what is meant by that statement. I would ask him particularly to ascertain whether the writer of that article is hinting at the possibility of the Bank Act having been contravened, and of advances having been made by the Canadian Bank of Commerce which that bank is not authorized to make under the Bank Act; and if so, whether the writer means that this legislation is the method adopted to get that bank out of the difficulty in which such a contravention of the Bank Act would involve it. It has been suggested to me that that is a con&tTuetion which could be placed upon that paragraph. I do not place such a construction upon it because I do not know enough about it, but I say to my honourable friend that having regard to the standing of the newspaper which published that article, and to the seriousness of the statements which it contains, it is in my judgment incumbent upon him to exhaust every means to ascertain what the writer of that article refers to, and to acquaint this committee, and this House, and through both, this country 315
with the information which seems to be in the possession of the writer of that article in the Montreal Star. If that is not done, then matters that now are wholly within the realm of suspicion will pass out of that realm and statements will be made which in the interests of our country should not be made. The danger, such as it is at the present time, confronting us through these interlocking directorates and the grouping of these financial interests will be small compared with the danger with which we shall be faced if the statements made in that article are not probed to the bottom, and if the fullest possible information is not procured, and communicated to the House and to the country.
Passing from that, let me direct the attention of the committee for a very brief space to the statute of 1914. That statute has been referred to by several speakers who have precided me in this debate. It was referred to by my honourable friend from Vancouver this afternoon. It has been recalled to this committee and to the House that when this statute was passed (the statement was made that within its,four corners there was provided a method for ending the dealings of Parliament and the country with the Canadian Northern, that if default should occur no further legislation and no further action would be necessary, because everything that would need to be done was provided for within the four corners of that statute. Now, when default has occurred, the Government chooses to ignore that statute. It is true that the Solicitor General proceeded in a general w&y to argue that, having regard to the present legislation the Government was, practically speaking, proceeding under the statute of 1914, and my hon. friend from Vancouver argued somewhat in the same way this afternoon. But may I recall to the committee that When the Minister of Finance introduced this legislation on the first of the present month, he never made mention of the statute of 1914, nor did he in a single word or syllable that he uttered pretend that the present legislation before this committee was in any way based upon that statute. In the course of his address on the day in question, answering an inquiry of my hon. friend from Rouville, he directed him for the information sought to the schedule of that statute, and that was the only reference made to the statute of 1914 by the Minister of Finance when he was introducing this legislation. So I say that the Minister of Finance, represent-



ing the Government-because he is responsible for this legislation, and not the Solicitor General-never pretended for one moment that the legislation before this committee was based on the statute of 1914. In fact, that statute was not mentioned by any hon. gentleman who took part in the discussion until after my hon. friend from South Renfrew had referred to it, and had based an argument in his speech upon it. The Government's action in this regard has excited widespread public interest. It has been referred to at publio meetings, and it has been discussed in the press all over Canada. Only this morning the Ottawa Citizen, in a leading editorial, after alluding to an article that had appeared in the Government organ in this city, took up this phase of the matter and said:
The Ottawa organ does not, for example, devote one word to a discussion of section 24 of the statutes, under which the Government guaranteed 45 million dollars' worth of the bonds of the company In 1914. This section is the crux of the whole matter; it is under that clause that the country is entitled to take over the system without the expenditure of an extra .dollar of the taxpayers' money. The matter is dismissed with a display of partisan rhetoric. Says our contemporary:
"The opposition arguments in parliament have been quite variegated. Hon. Mr. Pugsley contends that the Government should confiscate the road. He claims that the Government made provision for that when a Government loan to the road was made in 1914. Maybe so; but if the present plan is better, why object to it? And the Liberal parliamentarians in 1914 proclaimed that the present plan is better. They demanded it. TTiey advocated purchase of the company's stock by arbitration, with a limit price of $30,000,000. But now Mr. Pugsley demands confiscation.
The Citizen proceeds:
"If the present plan is better, why object to it?*' The present plan, briefly, provides for the arbitration of a matter which is not open to arbitration, and exposes the country to financial damages of very extensive range. We may be compelled to pay any sum the board of arbitrators decides we should pay, between 60 million dollars and one dollar. In any event, we are bound to be mulcted.
Of course the tu quoque argument must be introduced; it has proved such a valuable weapon in all matters wherein the administration have failed to bring forward reasonable arguments in support of their various measures since their advent to power. But our contemporary suppresses the facts...
And this part of the editorial I would commend to my hon. friend from Vancouver.
But our contemporary suppresses ' the facts when it merely states that the Liberals advo cated arbitration of the Canadian Northern stock several years ago, with a limit price of 30 millions. The Liberal proposition in amend-

ment to the Government's proposal to give the Canadian Northern the amount asked (45 million dollars) in 1914, was that the stock issue of the company should be reduced from 77 millions (instead of being allowed to stand at 100 millions as the administration proposed) to 30 millions, and that all of this stock should be placed in the hands of a trustee, for the benefit and security of the people of Canada, and that it should remain there five years, so that, in the event of default the Government would have power to take possession of the road without the expenditure of a single extra dollar. In the event of the road carrying on its operations and paying its way for five years, the country was to have the right to take over the stock by arbitration, provided it was thought desirable by Parliament that such a step should be taken. This is such an entirely different thing from the meaning intended to be conveyed by the bare statement that the Liberals proposed arbitration with a (limit price, in 1914, of 30 million dollars, as to lead to the conclusion that it is made by our contemporary either in ignorance or with a desire to distort the facts.
Instead, however, of accepting that amendment, which was proposed by Hon. Mr. Pugsley, the Government proceeded to draw up the agreement with the railways which is now under discussion. The chief jewel of this agreement was the clause which the administration is now discrediting. The task of protecting the interests of the country on this occasion was entrusted to the solicitor-general, and it was under the skilful direction of this minister that the famous clause was drawn up. Of it, at the time, the Minister of Finance said that he was lost in wonder-wonder that in one mortal could be compressed the wisdom and foresight to evolve a legal safeguard which could be so readily evoked on behalf of the people of the Dominion as that embodied in clause 24. Sir Thomas White said that he wanted to take off his hat to the solicitor-general for his wonderful ability and great ingenuity in this allimportant matter. To-day, however, the Minister of Finance is not lost in "wonder, love and praise," as the old hymn has it, but rather he is busy showing that the masterpiece of 1914 is in reality merely a legal frill, of no value in the agreement, and that it can be disregarded without in any way affecting the business in hand, which is to pay out an unknown sum of the money of the taxpayers to certain clever and accomplished railway contractors and promoters who have no legal claim to it.
In an attempt to discredit tihe Drayton-Acworth Commission and to give a value to the Canadian Northern railway stock which it does not possess, the Government has alleged that this commission, of their own creation, and headed by the Chairman of the Board of Railway Commissioners, omitted to take into account certain matters which should have been taken into account. In connection with this statement by the Government there is one very strange and very significant feature. It is a strange and significant thing that the Government has not asked the commis-

sion whether it did or did not make the alleged omissions, and it it did make the omissions what explanation it has to otter for having done so. That would be the natural and the courteous thing to do. Instead of doing this, however, the Government simply ignores the commission. The Minister of Finance stated in reply to an inquiry of mine in the House a few weeks ago, that the Government had made no application for information on that point. The Government chooses to ignore the commission and instead of going to the commission for an explanation of this alleged omission it goes to the Canadian Northern Railway Company. What is obtained from the company? The information obtained is set out in a letter of the financial comptroller of the Department of Railways and Canals, which was read in this House by the Minister of Finance on the 23rd of the present month, and which will be found on page 5139 of Hanr sard. I have not the slightest doubt in the world that the financial comptroller of the Department of Railways and Canals set out in this letter exactly what the company told him, and the criticism I have to offer regarding the contents of this letter applies altogether to the statement of the railway company and not at all to the financial comptroller of the Department of Railways and Canals.


William Thomas White: The financial
comptroller informs me that that information is from his own audit, and not from the officials of the railway company.


Charles Murphy: His audit certainly was an audit of the books of the company, and so was based on the information supplied by the company. With respect to the alleged omissions I find the following:
I may state that it is quite clear that there is an error in that part of the Commissioners' report; the following assets on the asset side
are omitted :
Cash	$25,000,000
Accounts	receivable	 8,890,000
Operating materials and supplies	 916,000
Earnings,	freight	in transit..	558,000
Lands Assets.
Lands unsold, 3,245,987 acres.
Deferred payments and accrued interest, $6,662,000.
On the liability side, there is a shortage of some $25,000,000.
If I understand the language of this communication correctly the two items of twenty-five million dollars are off-sets, one balances the other. That being so the $25,000,000 on either side need not he
315|
taken into account. But, I may point out in connection with these two items that even if the $25,000,000 cash was there, the commission which considered it its duty to estimate the value of the stock by ascertaining the value of the road could net have taken it into account, because it was not money that had been spent on the road; it was cash which might never go into the road but which might have been applied to something else altogether.
iSir THOMAS WHITE: But, the liabilities are on the other side.


Charles Murphy: The liabilities are on
the other side; so that we really need not go into that. Let me proceed to the next item-the accounts receivable. There is no statement to show what percentage of those accounts was good, and what percentage was bad. There is no statement to show what amount was realized and what percentage of those accounts the 'company failed to realize. Therefore I submit that that amount cannot be taken into consideration at all, and the Commission very properly did not take it into consideration. As to " operating materials and supplies," and "earnings on freight in transit" here again


William Pugsley: Would my hon. friend pardon me? We find in the statement submitted by the Minister of Finance that "accounts receivable" are only put at $7,044,000.


William Thomas White: What date?


William Pugsley: Down to April 30, 1917.


William Thomas White: That is to a different date.


William Pugsley: It is the last statement the minister furnished.


William Thomas White: No.


Charles Murphy: Conflict in statement only confirms what I have been trying to impress upon the committee-the necessity of having something which will he accurate and upon which this committee can proceed with some sense of having received the truth. But, with respect to these items, I was about to point out there is nothing to show how they actually worked out in the road's operation and in the conduct of its business. Until that is shown, the amount given as "assets" under these two headB can be regarded as merely approximate.
Then, as to "deferred payments and accrued interest on lands"-anybody who practises law must be familiar with these phrases. This account is exactly the same as payments in regard to which default

this road. Let the Government continue as many practical railway men as they please, bat let them get rid of the members of the eighteen who got together in 1911 and who have kept together in such significant fashion ever since.
In conclusion, I submit that the only terms upon which the people of Canada will approve the taking over the Canadian Northern system will be:
1.	The payment only of what the Canadian Northern may, upon proper investigation, be proved to be worth.
2.	The complete elimination from the management, control and operation of the road of Messrs. Mackenzie and Mann and Messrs? Walker and Lash.


William Thomas White: The hon. gentleman has, among other things, traced, to his own satisfaction at least, the genesis of this transaction, which, by the way, is the first step to be made by the Parliament of Canada in the nationalization of railways. He has traced the genesis back to 1911, when,-he says, eighteen Liberals of Toronto signed a manifesto against the Reciprocity agreement, and he finds, to his own satisfaction again, that these Liberals were all connected with the group to which the Canadian Bank of Commerce and the National Trust Company belong. I wish to point out to my hon. friend (Mr. Murphy) that he could not find in the city of Toronto more representative men than those who signed that manifesto in 1911. They were not of any one group at all. Let me point out to my hon. friend the names of those who signed that manifesto. There was Mr. John L. Blaikie, one of the most respected citizens of Toronto, president of the Canada Landed and National Investment Company. He was not connected with the group to which my hon. friend referred. Then there was Mr. W. D. Matthews, ex-president of the Toronto Board of Trade and vice-president of the Dominion Bank, of which Sir Edmund Osier is president. Then, Mr. W. K. George, ex-president of the Canadian Manufacturers' Association and of the Toronto Industrial Exhibition, and vice-president of the Sterling Bank of Canada; Mr. Somers, vice-president of the Board of Trade and president of the Sterling Bank *of Canada. Mr. R. S. Gourlay, president of the Toronto Board of Trade, and a piano manufacturer; the late Sir W Mortimer Clark, LL.D., ex-Lieutenant *Governor of Ontario, one of the most respected citizens not only of Toronto

and of Ontario, but of the whole Dominion; Mr. R. J. Christie, president of Christie, Brown & Company, and a prominent manufacturer-Mr. Christie is on the board of the Dominion Bank; Hugh Blain, of Eby, Blain & Company, leading wholesale merchant and director not of any bank, but of the Globe, the chief Ontario organ of the Liberal party; Mr. H. S. Strathy, director and for many years general manager of the Traders Bank of Canada; Mr. Goldman, managing director of the North American Life Assurance Company-not in any way connected with the group to which my hon. friends refers-Mr. J. A. Somerville, who held the same position in the Manufacturers Life Insurance Company-both well known insurance men; Wellington Francis, a prominent lawyer and director of the Standard Bank and of several companies in Toronto; Mr. J. D. Allan, ex-President of the Board of Trade; Mr. John C. Eaton, now Sir John Eaton, president of the T. Eaton Company, Limited, said to have 17,000 employees in his service. Sir John Eaton is one of the best known commercial men in Canada;	-though I am
not positive-that^\?8^>ri the board of the Dominion Bank. My hon. '*friend, therefore, is rather far-fetched m his argument when he traces the genesis, as he says, of this important transaction to the manifesto signed by eighteen citizens of Toronto with respect to reciprocity in 1911.
My hon. friend has said a good deal about the Bank of Commerce. I have before me a list of the directors of the Canadian Bank of Commerce and of its committees throughout Canada. I find that amongst the directors throughout Canada there are eighteen Liberals and nine Conservatives.
I find among the leading directors of the Canadian Bank of Commerce Hon. W. C. Edwards, a most intimate friend of the leader of the Opposition. I find that at the time the list was published the late Hon. Bir Lyman Melvin Jones was a member of the Board of the Canadian Bank of Commerce. He was reputed to be the closest intimate friend in Toronto of the leader of the Opposition. I find also the name of Mr. F. P. Jones, general manager of the Canada Cement Company, a strong Liberal; and of Mr. H. C. Cox, son of the late SenatorCox, one of the pillars of Liberalism, and one of the greatest personal friends of the leader of the Opposition. In addition to that, among the members of the Sherbrooke Committee of the bank I find the name of F. N. Mc-Crea, Esq., M.P., our respected colleague in this House. Tbe only reason I bring this

forward is to show that my hon. friend is somewhat far-fetched in his argument with regard to the political affiliations of the bank.
He has stated that the National Trust Company has obtained some Government business since 1911. I may point out to my hon. friend that trust companies which hold trust mortgages on railway enterprises to secure bond issues are usually named by the railway company subject to the approval of the Government. The very first trust mortgage that was executed by the Canadian Northern Railway Company to secure Government guaranteed bonds was executed during the regime of the Government of which my hon. friend was a member through the same National Trust Company. There is nothing strange, or unusual, therefore, in the National Trust Company being appointed trustee under the mortgage securing guaranteed bonds.
The hon. gentleman in the House the other night referred to Mackenzie, Mann & Company as the masters of the Administration. I have always understood that Sir Donald Mann was one of the pillars of the Liberal party. When Sir Donald comes to Ottawa, it looks like the scene of a great Liberal convention; most of my friends opposite are at the Chateau or at the club to do him reverence. We had better see things in their true light.
My hon. friend is trying to make out that a group prominently associated with the Conservative party are responsible for this legislation. Let me tell him that if he wants to get back to the real genesis of the railway situation that confronts us to-day and has confronted us for six years, he must go back to the railway policy of the late Administration. We are confronted, as I have pointed out, not with a theory but with a condition. I have pointed out where the responsibility lies for the railway policy ' which has produced the result that we have been discussing here for the last couple of weeks.	The genesis of it
was the guarantee of $35,000,000 on the line of the Canadian Northern between Montreal and Port Arthur. The genesis was the policy of connecting the Canadian Northern with the shores of the Pacific, as recited in the preamble to that Act under which $35,000,000 were guaranteed by the late Government in 1911. This Government has had to face and deal with a railway situation. Notwithstanding what my honourable friend may say about groups, the situation is simply this: the Grand Trunk Pacific and the Canadian Northern
systems will go into liquidation unless assisted by the Government. It is not a matter of groups at all. This is too large a situation to be dealt with, if I may say so without disrespect, in the petty partisan spirit in which it has been dealt with in this House and in this debate. Honourable gentlemen should not put forward arguments that they have put forward with regard to this situation; it is too large, too important.
My honourable friend has referred to the Drayton-Acworth report; he has said that the Government is seeking to discredit it. On the contrary, I stated that' it was an admirable report. Moreover, the Government's railway policy follows the main lines of the Drayton-Acworth report, so far as we can follow it to-day. The Drayton-Acworth report recommended the taking over of the Grand Trunk Pacific, and the Grand Trunk. We are not going so far as that at this time, but we are taking over the Canadian Northern in precisely the way that Sir Henry Drayton and Mr. Ac-worth recommended, at least so far as taking the stock instead of taking the physical assets of the road is concerned. In their report on this matter Messrs. Drayton and Acworth recommended the creation of a Dominion Railway Board. I quote from their report, page LVIII:
In order to give the Board of Trustees-
That is, the Dominion Railway Board, which they recommended should be formed.
-control of the railways mentioned, the following stock should be tranferred to them:
Canadian Northern.-The $40,000,000 common stock vested in the Canadian Government should be assigned by the Government to the trustees, and also (subject to, what we report below as to compensation for existing equities) the $60,000,000 still remaining in the hands of private persons.
The Drayton-Acworth report did not recommend that the Dominion Railway Board should take action under the legislation of 1914, although the Commissioners suggest that if the Canadian Northern would not transfer this stock, subject to certain consideration of their equity, the legislation of 1914 might be used as a club to make them do so. But what they suggested was that the $60,000,000 of stock of the Canadian Northern outstanding in the hands of private persons, should be transferred to the Dominion Railway Board! just as we are providing now that it shall be transferred to the Dominion Government. They do not suggest that we should foreclose under the legislation of 1914. We are

following the lines of the report so far as we can consistently with a programme which we are adopting, namely, the taking over first of the Canadian Northern Railway system. Although I do not emphasize the point because it has been referred to over and over again in the course of this debate, there is no doubt that there has been an omission of assets. The financial comptroller of railways has taken the matter up himself in the audit of the books, and he has drawn it to the attention of both Professor Swain and Sir Henry Drayton. There is no doubt that the land grants and the deferred payments on land sales were omitted with the cash and accounts receivable. Professor Swain, on page 43 of bis report, points out specifically that cash on hand is a physical asset. He also mentions the working capital, and he says:
Your attention is called to these two matters for the reason that neither have been included in the present valuation, and it may be desirable for you to inquire as to the cash on hand and to take account of it as well as of a proper allowance for working capital, in whatever use you may wish to make of the results of this valuation.
We are therefore adopting the mode prescribed by the Drayton-Acworth report, namely, of acquiring the stock rather than the physical assets of the system, and without doubt they were right in that mode because, as I have repeatedly pointed out in this House, it lends itself to the financing of the railway company.
My hon. friend (Mr. Murphy) has referred to a number of articles from newspapers of good standing, but I will point out to him that it is not possible for the Government to trace down all statements made in newspapers. We would not make very much headway with legislation in this House if we busied ourselves with taking up all statements made by newspapers, even those of high standing, throughout the Dominion, in relation to such legislation. My hon. friend read an article from the Montreal Star in which it stated that certain assets were omitted. I have no knowledge of such assets being omitted. In order that the House and the country may know that the Government has fairly accurate information with respect to this transaction,
I desire to say this: That the following investigations into the affairs of the Canadian Northern Railway Company have been made by this Government:
1. In respect of all lines subsidized, the expenditure has been checked both by the engineers of the Department of Railways and Canals and by the Government auditors. 
2.	In 1914, the Government appointed three auditors to investigate the finances of the company. A complete survey was made from the inception of the company down to the beginning of 1914. All receipts and expenditures of the company were investigated, and a complete report of the Government auditors has been tabled in the House.
3.	The legislation of 1914 called for the filing by the company of a condensed balance sheet of the whole system properly audited. This has been done. Since that date the engineers and the auditing staff of the Department of Railways and Canals have been keeping in touch with the construction going on on the system and investigating the expenditures in connection therewith.
4.	The legislation of 1916 provided for the appointment of independent Government auditors. We appointed one of the leading firms of .auditors, a firm of international reputation and standing, Messrs. Marwick, Mitchell, Peat and Company, well-known,
I have no doubt, to all the members of the House. They have audited all the books of the company for the Government.
5.	In addition to that under the legislation of 1916, we appointed a Royal Commission to investigate the affairs of the Canadian _ Northern Railway Company. This commission made a very complete report which has been under discussion in this House.
In addition to that, the directors of the Canadian Northern Railway Company appointed a board of New York experts to investigate the affairs of the company. That,
I believe, was made public.
_ We have, therefore, had very full information as to this, and I may say to my hon. friend that, so far as I know, there is no mystery in connection with the affairs of the Canadian Northern Railway Company. We have had their affairs under continuous investigation by the Railway Department, and we are not aware of any assets that have been omitted, nor are we aware of any disclosures which will be made such as my hon. friend has suggested.
I believe that this transaction carried out will result in the Dominion of Canada acquiring a great railway system which will, for the present and in the future, inure to the benefit of the people of Canada. The present position is that we are a shareholder to the extent of 40 per cent. All that we are doing is acquiring the majority interest, and we are acquiring it in a manner that would be considered fair as between

man and man. If the stock has no value, the arbitrators will so find; if it has some value, the arbitrators will so find. Why should we assume that the arbitrators will find a value that does not exist? We have given an earnest of our intention in the matter by appointing the Chief Justice of Ontario as one of the arbitrators. Unless the Chief Justice of Ontario agrees to the award as to the value of the stock, there is an appeal to the Supreme Court of Canada. Why should we not have confidence in our own courts? What reason have we to assume that the Supreme Court will deal with this matter otherwise than they deal with other matters, that is to say, fairly,
[DOT] judicially and impartially? What reason have hon. gentlemen opposite to suggest that any hut a fair result will come from this arbitration?	*
My hon. friend from Russell (Mr. Murphy), at the outset of his remarks, asked for a good deal of information, most of which has been laid upon the table of the House. He asked in regard to the Montreal Tunnel and Terminal Company as to damages. I laid upon the table of the House a statement by the solicitor of the company, a gentleman in whom I have every confidence, and I have been assured, since my hon. friend made his remarks respecting claims for damages, that that report deals with all claims of which the railway company has notice, save for this, that in some cases, the matter is to stand for a year. A tunnel is not an unusual thing in Tailway construction. Take the tunnels in New York. The experience has been that the damages are not very considerable by reason of the construction of those tunnels. My hon. friend has referred to many claims for damages of which he has heard.


Charles Murphy: Claims for compensation as well as damages.


William Thomas White: Very well. Claims may be well founded or they may be ill founded; there may be fictitious claims and there may be claims that are good. The position is that the railway company has made an accurate statement of such claims as have been brought to their attention.


Charles Murphy: They have done nothing of the kind. I refer to claims for land for which nothing has been paid.


William Thomas White: Land in connection with what?


Charles Murphy: With the right of way.


William Thomas White: I am speaking of
the claims for damages in connection with the Montreal Tunnel and Terminal Company.


Charles Murphy: I am speaking of that
also, and I have the paperk in my pocket.


William Thomas White: I am informed
and believe that the claims they have had to deal with are those set out in that report.


Charles Murphy: That is not correct.


William Thomas White: With Tegard to other claims, how far would that matter advance the discussion of this measure? This is a big transaction, a transaction in which we are acquiring the control of a railway system. Any claims for damages in connection with the Montreal Tunnel and Terminal Company will have to be dealt with in the usual way. If they are sound claims, they will he an obligation of the Tunnel ahd Terminal Company. The situation is not changed in respect to those by what we are doing. My hon. friend would not suggest that, in the taking over of a great railway system, the fact that there were some outstanding claims should stand in the way of a transaction of that magnitude. My hon. friend raised another question this afternoon. He said, are there long standing contracts between the company and its officials?
I am officially informed that there are no %uch outstanding long-date contracts. I am told there are only two contracts entered into, and those were in connection with operating men, and were cancelled some time ago.
I have given nractically all the information that my hon. friend has asked for. He also raised the question in reference to which the Prime Minister replied by telegram to the Prime Minister of British Columbia respecting the Canadian Northern. I have obtained a statement in regard to that. I do not believe it will advance the discussion of this matter very much, but still I have such regard for this House that I try to get all information that is asked for. The statement is as follows:
Canadian Northern Railway System, June 30th, 1917.
The following statement shows the lines of railway and other works of the Canadian Northern Pacific Railway which have heen aided by the guarantee of securities by the Province of British Columbia, also the extent of the guarantee in each case:-
1 (a) Main Line	 500 miles.
(b)	Vancouver Island.. 100 miles. 600 miles.

C.N.P, 4% Securities Guaranteed, $35,000 per mile.
C.N.P. 41% Securities (on Main Line only) $10,000 per mile.
2. Branch Lines:
(a)	Westminster to Vancouver.. 11 miles.
(b)	Westminster to Steveston.. 15 miles.
(c)	Victoria to Union Bay.. .. 18 miles.
(d)	Vancouver Island Extension 150 miles.
(e)	Kamloops to Vernon.. . . 145 miles.
339 miles.
C.N.P. 41% Securities Guaranteed, $35,000 per mile.
3. Terminals:	$10,000,000.
Vancouver,
New Westminster,
Port Mann.
Steveston,
Victoria,
Union Bay.
C.N.P. 41% Securities Guaranteed, $10,000,000. As to 1, the Main Line has been completed. The first 100 miles on the Island have been fully graded, but not railed on account of the impossibility of obtaining steel. So far as item No. 1 is concerned, there are practically no further obligations to be assumed with the exception of tracklaying on Vancouver Island Line.
As to 2 (a), the construction of the line between New Westminster and Vancouver has been deferred. In the meantime the company has entered into a running rights arrangement with the Vancouver, Victoria & Eastern railway to use their line between these points. This arrangement had the sanction of the local authorities, the line being opened for traffic by them accordingly. In view of the fact that this avoids duplication of lines and will answer the purposes of traffic for many years, it may be expedient to subsequently consider making this arrangement permanent.
As to 2 (b)-New Westminster to Steveston Line graded and track laid. Connection with Main Line at New Westminster end, including bridge over North Arm of the Fraser River yet to be constructed, this portion being deferred pending consideration of utilization of existing lines of another railway.
As to 2 (c), Victoria-Union Bay Lirie is coi.pleied and in operation.
As to 2 (d)-Vancouver Island Extension. Line graded to Alberni. Construction north of this point deferred owing to war.
As to 2 (e)-Kamloops to Vernon. Branch line from main line into city of Kamloops under construction and certain rights-of-way acquired. Construction on balance of line deferred owing to war.
As to 3-Terminals. The company's programme for terminals at Pacific Coast points involved an expenditure of approximately $10.000,000, of which the principal works were in the City of Vancouver. It was intended that these facilities would be provided from time to time to meet the requirements of traffic upon the opening of the various lines- The warhaving begun prior to the completion of any of the lines, this delayed the company's terminal programme. Contracts, however, were made with various parties for the necessary, filling of False Creek and the construction of a station, terminal, freight sheds, etc. This work is in progress at the present time and it is expected will be completed ready for operation early in the New Tear. The agreement 
with the Province of British Columbia does not specify the extent of the obligation of the company in respect to these terminals, it being merely provided that the proceeds of the guaranteed securities above mentioned should be entirely expended for such purposes.
It should be noted that the original contract with the province made under date of 2nd April, 1910, has been modified in certain particulars by special arrangements between the company and the province, and it is specifically provided in the contract that if, owing to unforeseen engineering difficulties or other circumstances beyond the reasonable control of the company, it will be impossible or impracticable to carry out absolutely the terms of the agreement, the Lieutenant-Governor may from time to time authorize amendments therein so long as the spirit of the agreement is not departed from.
With respect to the construction of the balance of the mileage referred to in 2, conditions arising out of the war have rendered it impossible at the present time to proceed with the further construction of branch lines. No change in these conditions can be expected until at least some time after the conclusion of the war, and even then unforeseen circumstances may arise which will require an entire readjustment of the arrangement between the company and the province with respect thereto.
Municipal Obligations.
The Canadian Northern Pacific railway has not entered into any contract with any municipality in British Columbia with the exception of the City of Vancouver, with regard to the False Creek terminals. Considerable progress has been made in the performance of this contract and the work is still under way, provision for this being largely included under the terminal securities guaranteed by the province. Owing to conditions arising out of the war, this work, in common with the work upon the lines of railway, has been more or less delayed, but the contract with the municipality makes provision for extension of time due to delays arising by reason of strikes.
That is the answer to my hon. friend with respect to the British Columbia situation. I think, I have covered most of the points he referred to, except what he stated in closing. My own view is that the Canadian Northern Railway Board will have to be constituted by the Government, of men of high standing, who will administer the affairs of that company in an absolutely efficient and non-partisan manner. The present board will have to be changed. The Government will have to constitute the board of the Canadian Northerii railway, when it becomes a government organization, in such fashion as to get the best results, not only from an operating standpoint, but also from the standpoint of the public interest. It is manifestly impossible for me to say how the board will be reconstituted, but it must be changed; there is no question in my mind about that.

As far as the operating staff is concerned, it would be a misfortune-I think my hon. friend will agree-if the railway company should lose the services of its skilled operating staff. That question to my mind should not arise. Looking to the future, and adopting, as I have said, the principles of the Drayton-Acworth report, one can see the operating board, appointed by the Dominion Government in some such fashion as has been recommended in the Drayton-Acworth report, administering the Canadian Government Railway system throug'iout Canada. That is what one would look forward to seeing, and I believe the people of this country will support a policy looking to that end in connection with the acquisition and operation of such railway systems as may come into the hands of the Government of Canada.
I am sorry my hon. friend looking at this great transaction, which, as I stated, is the first step towards railway nationalization in Canada, sees only the secondary and subsidiary features of it. The fundamental issue in the transaction which is now before the House is that the Government of Canada is acquiring a great railway system. It is the beginning of public ownership of Canadian railways; I do not say of all Canadian railways, but it is a great step forward. That is the main and fundamental fact. The question of purchasing the $60,000,000 stock owned by the majority shareholders is really a secondary and subsidiary question.


William Pugsley: A mere bagatelle.


William Thomas White: No, I do not say a mere bagatelle. My hon. friend must not put such words in my mouth. We must acquire the $60,000,000 par value of the Canadian Northern stock in order to get control of the system; in other words, in order to carry out the provisions of the Drayton-Acworth report in that regard, because they recommended not the faking over of the physical properties of the company, hut the acquisition of the stock. This Bill, and the resolution which preceded it, have been under discussion for many days. The discussion which has taken place here today is really discussion pertaining more to the second reading of the Bill than to the first clause. We have made no progress in committee. The transaction is, of course, an important transaction, but unless hon. gentlemen on both aides of this House are going to be here all summer we must make progress with this Bill. I therefore beg to move:
That further consideration of clause 1 be postponed, and that clause 2 be taken up.


The CHAIRMAN:: Sir Thomas White
moves that section 1 of the Bill be not now further debated, and that the committee proceed to the'consideration of section 2.


William Pugsley: Under what rule is that?


William Thomas White: It is a motion; not debatable.


Joseph Hormisdas Rainville: Under Rule 17 A.


William Pugsley: There has been no notice given of this.


Joseph Hormisdas Rainville: This motion is not debatable. I may read the rule, if the hon. member wishes.


William Pugsley: Read the rule.


Joseph Hormisdas Rainville: 17 A, Every motion heretofore debatable made upon routine proceedings except adjournment motions and every motion standing on the order of the proceedings for the day, or for the concurrence in a report of a standing or a special committee, or for the previous question, or for the third reading of a Bill, or for the adjournment of the House when made for the purpose of discussing a definite matter of urgent public importance, or for the adoption, in Committee of the Whole, or of Supply, or of Ways and Means of the resolution, clause, section, preamble or title under consideration shall be debatable; but all other motions shall be decided without debate or amendment.


William Pugsley: Mr. Chairman, this motion cannot be made without notice.


Mr. L. A. LAPOINTE:: What is the effect of this motion?


Joseph Hormisdas Rainville: The effect is simply to proceed to section 2.


William Pugsley: Under what rule? That cannot be done without debate.


Some hon. MEMBERS:: Carried.


Joseph Hormisdas Rainville: Order.


William Pugsley: The question is still under consideration, I respectfully submit, until the minister gives notice.


Joseph Hormisdas Rainville: Order.


William Pugsley: The question is still under consideration.


Joseph Hormisdas Rainville: The motion requires
no seconder.
The motion was declared carried on division.


William Pugsley: I make an .appeal to the House from your ruling, Sir.


Joseph Hormisdas Rainville: Order.


William Pugsley: This cannot be done without notice.


Joseph Hormisdas Rainville: Order.


William Pugsley: You cannot stop the
House without notice in this way. Of course, we may be overruled-we may be voted down-and closure may be applied contrary to the rules, but I appeal from your ruling. Sir.


Mr. C. A. WILSON:: Perhaps the Prime Minister would give the House the benefit of his opinion.
Mr. Speaker having resumed the Chair, the chairman reported:
In the Committee of the Whole it was moved by Sir Thomas White that the further consideration of clause 1 be postponed and that the consideration of clause 2 be now taken up. The hon. member for St. John (Mr. Pugsley) raised the point of order that such motion required notice and was debatable. The Chairman ruled that the said motion did not require notice and was not debatable. From this ruling the hon. member for St. John appealed to the House.


Joseph Hormisdas Rainville: Is it the pleasure of the committee that the consideration of clause 1 be postponed and that clause 2 be now considered?


Some hon. MEMBERS:: No.
Bourassa,
Cardin,
Demers,
Douglas,
Gauthier
(St. Hyacinthe), Gauvreau,
Hughes (Kings, P.E.I.), Kyte,
Lanctot,
Lapointe
(Kamouraska), Lapointe
(Montreal, St. James), [The Chairman.]
Lemieux,
Loggie,
Macdonald,
McKenzie,
Marcile (Bagot), Michaud,
Murphy,
Nesbitt,
Oliver,
Papineau,
Pugsley,
Seguin,
Yerville.-24.
The motion of Sir Thomas White was carried, Yeas 46; Nays 30.
On section 2: Transfer of shares.


William Pugsley: I think that this section requires a good deal of consideration, particularly when it is taken in connection with section 1. It refers to a certain agreement in section 1, but section 1 has not yet been passed. Still it is an agreement at which we have a right to look although we

do not know whether it will ultimately be passed. We have to consider it in connection with the clause now before the committee. This clause provides that upon making of said agreement these 600,000 shares shall be transferred to the Minister of Finance in trust for His Majesty. The section is based upon the idea that His Majesty will acquire by purchase the 600,000 shares of the stock as referred to in an agreement which is in contemplation and which is provided for in a previous section, the consideration of which the committee has decided to allow to stand. It is certainly extremely inconvenient that we should be called upon now to determine as to the passing of a section which relates to an agreement set out in another section in respect to which the committee has decided not to proceed to a conclusion. In my opinion the committee should not pass a section which authorizes the 10 p.m. taking over of shares by Order in Council as it is proposed by this section, which is dependent upon the making of an agreement of purchase. My hon. friend the Minister of Finance, has asked the majority of this House to shut off discussion and has thereby, by brute force, prevented a large number of members of this House, who are here representing the people of this country and who are desirous of letting the people of Canada know why they were opposed to this most objectionable measure. The Minister of Finance and the Government may think and the majority of this House may think that by shutting off discussion and making use of the closure to throttle the members of this House, they will appeal to the good judgment of the people of this country. But let me tell them that their course will not appeal to the judgment of the people. The people of Canada want to know more about this deal. They want to hear more on the question and they want to be informed more fully than they have yet been informed as to the reason why this Government has departed from the statutory agreement which was made in 1914, an agreement which was binding upon this House, binding upon this Government, and equally binding upon Mackenzie and Mann and the Canadian Northern Company. They want to know why this Government, having in 1914 pledged the credit of this country to the enormous sum of $45,000,000 upon the faith of a solemn agreement which the Canadian Northern Railway Company entered into and Mackenzie and Mann entered
into and which was embodied in the statute of 1914 and under the provisions of which they accepted of that aid, the people want to know why the Government is deliberately letting Mackenzie and: Mann free from the obligations of that agreement and is proposing to involve the people of Canada in a liability which may reach the enormous sum of $60,000,000 in addition to $500,000,000 and more of obligations which the country will be called upon to assume in connection with the purchase of this road. Are hon. gentlemen on this side of the House, by the force of majority rule, to be debarred -from expressing their views on this great question? Are they to be told that they are mere -automatons with no opportunity for discussion, no opportunity of expressing their opinion? I shall endeavour, Sir, to take advantage of the rights which are still left to us; we may not have them long. Under the closure rule, under the rule of the gag, my hon. friend, having first got the committee to order that these various sections stand-contrary to the spirit of the rules; contrary to the spirit that animates every free Parliament-can give notice that at the next -sitting of the committee he will ask the committee to vote that there shall be no further consideration of these clauses. He may then have the vote taken and the Bill passed without members of the House having fair opportunity for discussion. It is open for my hon. friend to do that; I judge from what he has -done to-night that he will not hesitate to do it. Well, having begun the closure, my hon. friend, I tope, will carry it through to its final conclusion. He has attempted what is outrageous; let him carry his outrageous procedure on to its logical consequences.
My ton. friend has made the statement that the Drayton-Acworth report recommends the purchase of the stock of the Canadian Northern Railway Company by arbitration. The report does nothing of the kind; my ton. friend is giving an entirely wrong impression to- the committee of the effect of the Drayton-Acworth report. The commissioners do say that the control of the stock of the Canadian Northern Railway Company should be vested in trustees, but they proceed to -say that the stock has no value; that the Government should -pay nothing for it. Let me read from the Dray-ton-Aeworth report, page XLIII, so that we may see whether my ton. friend has correctly stated what the report says:
We find, then, $370,000,000 to be the maximum possible cost of the Canadian Northern

system as at present existing. In other words, as indeed is frankly admitted by Canadian Northern witnesses, the Canadian Northern shares represent no cash investment.
Then, proceeding to deal with the physical aspects of the case so far as the property is concerned, they say, page XLIV:
We conclude, therefore, that the shareholders of the company have no equity either on the ground of cash put in, or on the ground of physical reproduction cost, or on the ground of the saleable value of their property as a going concern. If, then, the people of Canada have already found, or assumed responsibility for, the bulk of the capital; if they must needs find what further capital is required; and if they must make up for some years to come considerable deficits in net earnings, it seems logically to follow that the people of Canada should assume control of the property. We return later to the Canadian Northern Company in order to set out our recommendations as to its ownership and management in the future and as to the terms to he offered to the existing shareholders.	.
I draw the attention of the committee to the last words of this paragraph, in which the commissioners say that they will return later to the 'Canadian Northern Company in order to set out their recommendations as to its ownership and management in the future and as to the terms to be offered to the existing shareholders.
If you turn to page LXXXIV of the report you will see that the commissioners expressly declare that the Government has the power to take over the whole equity of redemption by passing an Order in Council under the provisions of section 24 of the Act of 1914. They say:
In the case of the Canadian Northern Railway Company no proceedings in court are requisite. Under the provisions of section 24 of the Canadian Northern Railway Guarantee Act, 1914 (4-5 Geo. V, Chap. 20), the Governor General in Council has power, when authorized by Parliament, -to declare by order, if default is made by the company in payment of interest on the $45,000,000 guaranteed securities (the interest on which is at present being found by the Government) that the equity of redemption of the company is absolutely barred and foreclosed; and thereupon the whole property becomes vested in His Majesty in right of the Dominion of Canada.
If words mean anything, that means, according to the declaration of these commissioners, that the total cash put into this property is some $370,000,000; that the outstanding securities and underlying obligations which the Government will be obliged to assume if it takes over the property amount to very much more than that. Without taking into account contingent liabilities, the outstanding securities and underlying obligations would amount to the enormous sum of $428,000,000-and I yery 
much doubt whether that is the total. Bearing in mind the amount of cash that the commissioners declare to have been put into the system, $370,000,000, you can understand that they are justified in declaring that the shareholders have put no money into the property; that the road has been built entirely by subventions of Governments and municipalities and by some unguaranteed securities which have been floated; that there is no value in the equity of redemption. They call the attention of the Government, in connection with that statement, to the fact that under section 24 there is provided a summary mode by which the equity of redemption may be barred and foreclosed by this Parliament without asking permission of the Canadian Northern Railway or of Mackenzie, Mann & Company, without any proceedings in court. One can well understand why Sir Henry Drayton and Mr. Acworth recommend that that course should be taken and why they direct the attention of the Government to the .fact that provision for the summary foreclosing of the equity of redemption was contained in the Act of 1914.
The commissioners recommend that the property should be transferred to a new company which should be organized and* which, they suggest, should be called the Dominion Railway Company. They say that there should be referred to arbitration the matter of what small proportion of stock in the new company-I think they estimated it at one-half of five per cent- shall be handed over to Mackenzie and Mann in consideration of the services which they had performed in connection with the Canadian Northern Railway system. One can see the reasonableness of that. The view of those commissioners was that the obligations of the Canadian Northern more than represented its value. Their opinion was that, dealing with it from every business point of view upon which you could deal with a railway, upon its actual cost, upon the cost of reproduction at prewar prices, or upon its earning power, there was no money in it for the shareholders, and that, therefore, the shareholders had no value in the equity of redemption. But they say: After you have formed your company to take over the Canadian Northern Railway system, it would be a reasonable thing to set aside one-half of five per cent of the stock of the new company, from which amount of stock Messrs. Mackenzie and Mann might, in case the operations of the road became sue-

cessful in the future, derive some little income. That would mean, if, as the commissioners thought would he done, the provisions of section 24 of the statute of 1914 were acted upon, the transferring over to the Government of the entire property of the Canadian Northern Railway system, all the stock of the subsidiary companies and all the property covered by -the mortgage of 1914. It would not mean the paying out of any money to Messrs. Mackenzie, Mann and Company. It w-ould simply mean the forming of a new company in which, as I have stated, they would have this small amount of stock, namely, one-half of 5 per cent. What is there in that report to warrant the Minister of Finance in stating that, in proposing to acquire the stock by arbitration, he is acting upon the recommendation of the commissioners? I defy him to read this report through from beginning to end and to find in it anything to justify the Government in bringing down the Bill now before us. The recommendations of the commission are entirely opposed to any such idea as that contained in the Bill. The Minister of Finance has also stated that the commissioners have made a large error in their assets. He says that the financial comptroller of railways has called their attention to the error. The minister, however, has not informed the committee as to what is the report of the commissioners. It would have been welcome if he had done so. I am told they say that there is no error in their report. I am told they say that they -took all the assets into consideration. I may be wrong in that, but it is most extraordinary that the Minister of Finance, while tellling us touiight that Mr. Bell, the comptroller of railways, has called the attention of the commissioners to this alleged error, has not made any statement to -the committee as to the reply of the commissioners, So far from there being any error, .as far as I am able to judge, all the assets wh-ich are properly on the page opposite the liabilities have been taken into consideration. By turning to page 41 of the report, I find this language of the commissioners :
The property investment of the Canadian Northern Railway system is stated in the balance sheet of June 30, 1916, at $494,112,489.34. This figure admittedly has been written up to include $100,000,000 of capital stock.
It is admitted upon every hand, that the $100,000,000 of capital stock, for which this Government pro-poses to pay through the medium of an arbitration, is all -water. It does not, as every one admits, represent a
single dollar of money invested in the Canadian Northern enterprise. If, therefore, we take $100,000,000 from the $494,142,489.34 given as the property investment in the company's own balance sheet, we have left only $394,112,489.34. The commissioners go on to say:
And this stock, as we have already said, was issued without any cash consideration. We have endeavoured to ascertain the actual cost of the system. From the company's official report and special statements supplied to us, we have ascertained that the maximum cash investment that have been made in the property is $38-3,302,451.33.
Therefore, the obligations which this Government will assume in respect of that pro-, perty are very 'much larger than the maximum cash investment, so that the equity of redemption can have no value. The commissioners continue:
The following tables, which have been accepted by the company as accurate, show:
1.	The source of money or credit.
2.	The disposition of money or debit items.
3.	A list of bonds of constituent companies assumed.
Then they give a full statement of the source of money or credit which was available to the company at different times, and they make the total, according to the company's own statement, $436,173,761.87, and then they show the disposition of money or debit items, and they show that the amount available for road and equipment was only $363,086,705.30. They add to that bonds assumed in part payment of lines purchased, amounting to $20,215,746.03, making a total of only $383,302,451.33. In that statement they have taken into con- , sideration the proceeds of all those land grant bonds, because they show land sales of 16,000,000 odd dollars, and they show the total cash realized from securities sold as being $302,713,872.69. What warrant has the Comptroller of Railways or the Minister of Finance for saying that they have not taken the proceeds of the land grant bonds into consideration? It may be true they have not taken the lands. Why should they? According to the suggestion of my hon. friend, they should put on the credit side of this account the proceeds of the land grant bonds that are issued and outstanding to-day against the lands to the enormous amount of $21,000,000, which the Government purposes asking the people of Canada to assume. Why should they credit the proceeds of land grant bonds and also give a credit for the value of the lands? That would be giving a double credit for the same security. They have not done that, and it

would be the most absurd thing in the world to do it. Nevertheless, the Minister of Finance tells us that the error is that they have not put in those 2,000,000 odd acres of lands, lands in Quebec and Ontario for the most part, and some 800,000 acres of raw prairie land. He says that they should be put in. That would be in addition to the proceeds of securities which have been issued against those very lands. The Minister of Finance heard my hon. friend from Welland (Mr. German) state that, if the Minister of Finance were correct, there might be an error of $65,000,000, and he did not correct him although he knew that, even by Mr. Bell's own statement, $25,000,000 of that on the credit side of the amount was to be wiped off by $25,000,000, which he said was short in the liabilities.
The Minister of Finance heard the hon. member for Welland make that statement, and I assume that he did not know what the figures were, or he would have corrected my hon. friend and1 prevented the information going out that a possible error had been made by these commissioners. When you take into account the fact that the $25,000,000 that Mr. Bell, the Government comptroller, says should be on the credit side, is counterbalanced by the $25,000,000 of liabilities that he eays are there, and when you also take into account the proceeds of the land grant bonds, and the liabilities that exist against the land to a far greater amount, I believe, than their value, you can see that the commissioners have taken into account every dollar which ought ,to be placed on the credit side of the question, and it is no wonder that the Minister of Finance has not presented to this committee the answer they made to Mr. Bell when this error in their report was pointed out. To my mind, the commissioners have not a shadow of doubt that their statement as to assets and liabilities is absolutely correct.
The Minister of Finance has said that this is a great undertaking. We are entering upon the principle of Government ownership, and the question of what we pay for the road is a secondary consideration, he says. When I suggested that the $60,000,000 that it was proposed to pay was a mere bagatelle, the Minister of Finance repudiated that idea, but yet he say6 that the $10,000,000 or $20,000,000 or $60,000,000 that we shall pay to the Mackenzie Mann interests, and to their financial associates in the city of Toronto, is a secondary consideration. I do not believe it is. I do not
[Mr. Pugsley. J
think the people of Canada will believe it is. When the people of this country come to the conclusion that there are liabilities outstanding in the vicinity of $500,000,000- the minister cannot tell us whether it will be $500,000,000 or $600,000,000-when they realize the enormous liability they will be called upon to assume, and that to put the lmes in that perfect order which a Government would feel bound to put them in, will mean the further expenditure of a great many more millions, perhaps running up to $100,000,000, when they realize that according to the statement of the Minister of Finance there is to-day, and will be for some years to come, a deficiency, so far as interest charges are concerned, amounting to no one knows how much- it is estimated at from $5,000,000 to $6,000,000, possibly more, but at all events an amount which will represent the interest on at least $100,000,000 more-when the people of this country find that contrary to the statutory agreement made in 1914, contrary to any agreement which exists on the part of this Parliament, they are being involved in the possibility of a further liability which may run up to at least $60,000,000, I do not think that the people of this country will look upon that as a secondary consideration. Speaking for my own province, I know they won't.
Down there we have a large number of railways, the taking over of which this Parliament approved of several years ago, and to the_ taking over of which, the faith of the Prime Minister and of the Conservative party was pledged several years ago; and yet the Minister of Railways has been telling our people that the Government cannot proceed to acquire those railways because of the war, and there being no money to spend while the war is on. The people of my province-and they are not limited to any one section of the province, but dwell in many different counties in New Brunswick and are deeply interested in this question, as the scores of letters I have received will show-claim that before this Government enters upon new obligations to which the country has in no way been committed, the solemn promise which was made by this Government should be carried out. My hon. friend the Minister of Marine and Fisheries has received representations that a road running, through a very important section of the province, and serving, as it would if it were in good order, a very excellent farming and lumbering country which is fairly well settled, is likely to be closed down because the Board of Railway Commissioners have ordered repairs to

be made to it -which the company is not in a financial position to make. They have made strong protests to my hon. friend the Minister of Marine and Fisheries, and what does he tell them? He tells them that the Government can do nothing while the war is on, but that after the war is over the road will probably be taken over by the Government and operated as a part of the government railway system. That is the story which is being told to the people of my province- to the people in the south, to the people on the north shore, and to the people in the county of Albert, all of whom are interested in seeing that faith is kept by the Government of the day to the people of that province. The story is sent out to those people by the Minister of Marine and Fisheries that they can hope for nothing while the war is on, because the Government has no money to enable them to carry out their promises as far as these branch railways are concerned. I do not know how the rest of the people of this country may feel as to assuming this enormous obligation in connection with the Canadian Northern railway, but I know that the people of the province of New Brunswick will feel that if the Government has no money for the -small matters connected with the improvement of the railway system of that province, it ought not to assume this enormous obligation in connection with the taking over of this road, the effect of which will be to strain the credit of this country to the utmost.
Let me ask a question which I asked the other day, when I had the opportunity of speaking before the committee on this Bill. Does my hon. friend think that -as Minister of Finance of this country he ought to consent to the carrying through of this measure at the present time? Does he think he ought to do so? He knows what it involves. He knows the possibility of the enormous liabilty which may be brought upon the people of this country. He knows that to-day he is paying for the last loan which he obtained for the people of Canada in the vicinity of eight per cent. Think of it, Mr. Chairman. The government of a country so prosperous as Canada, possessing the enormous resources which this country has, is obliged to-day to go into the money markets of the world and pay the enormous sum of eight per cent for the money which it requires to carry on the services of the country. The last loan, which was for the short period of two years, netted, according to the statement of my hon. friend, less
than $996,000,000. The information that I have is that it netted less than that. But if you put it at $96,000,000, there is a loss of $4,000,000 which has to be paid at the end of two years, and adding that to the six per cent interest which the bonds bear, we get the enormous rate of almost eight per cent for the money which the Government has borrowed through the arrangement with Morgan and Company, of New York.
Yet in face of that the Government moves merrily on, just as if its credit would never come to an end, and just as if the people Oif this country would tolerate paying 8 per cent to-day, and possibly 9 per cent or 10 per cent within the next six months

 the Government goes merrily on incurring these enormous expenditures, -and involving tihe country in those enormous obligations, and the minister gives the people the soothing consolation that they are entering upon a great movement for government ownership, and what they pay, whether it is $10,000,000 or $600,000,000, is merely a secondary consideration. Well, I congratulate my hon. friend that he is able-if he is able-to think that he will console the people of this country by a consideration of that kind. I think the people will feel they are paying pretty dearly for government ownership, particularly at this time when there is no necessity for it, when the railway company has not asked for it, when the necessities of the country do not require it and when the country needs all its money and all its credit to enable it to discharge its duty towards the Empire in the great world war in which it is engaged.


William Thomas White: 

his heroics were mock heroics. It 'has. been his policy and the policy of many others to compel the Government .to resort to closure upon this Bill. That was well known in advance of our bringing down this legislation; and therefore, we need not pretend to ourselves that there is any earnestness on the part of my hon. friend in this matter. I tbeg to move:	^
That the further consideration of clause 2 be postponed and that clause 3 be now considered.
Motion carried on same division.
On section 3-After transfer Canadian Northern Railway company may he .assisted:


William Thomas White: I gave"notice of an amendment to this section, and I now beg to move:
That subclause 1 of clause 3 of the Bill he amended by striking out all the words in the said subclause after the word "Fund" in line 4, page 2, and substituting therefor the following : "Provided however that until authorized by Parliament, the total of such advances shall not exceed the sum of $25,000,000; a statement of any such advances showing in detail the purposes for which they were applied shall be presented to Parliament by the Minister of Finance within 20 days after the opening of the next ensuing session thereof."


Charles Murphy: May I ask the minister if the terms of this amendment are similar to those of which he gave notice a short time ago?


William Thomas White: Precisely.


Edward Mortimer Macdonald: It will lie noticed that the effect of the amendment of the Minister of Finance is anticipatory of the expenditure which was found by the commission would be necessary within the next five years, this they estimated at $70,000,000. My hon. friend is evidently taking an instalment of it. I think it is most desirable for the information of the House and of the country that we should know while we are considering this section exactly the indebtedness the country is assuming as a result of this measure. I have prepared a statement, which I think will be found accurate, based upon the financial -statements brought before the House. The statement is as follows:
Amount of indebtedness placed on Canada by Government taking over Canadian
Northern railway:
Bonded indebtedness	$359,931,635	64Equipment bonds	
14,846,500	00
Income convertible debenture
stock	>	
25,000,000 00Loans and liabilities	
112.723,035	00
Equipment expenditures .. .. 40,000,000 00 [Sir Thomas White.}
Additions and betterments '. . $30,000,000 00 Interest on equipment bonds 645,778 75
Arbitrators award	
60,000,000	00Cost of arbitrators	
100,000	00Payment by Government to recoup banks	
10,000,000	00

The loans and liabilities are indicated at page 8 of the financial statement. The $40,000,000 and the $30,000,000 are to be found at page 40 of the Drayton-Acworth report, and represent the necessary expenditure for putting the road in proper shape and maintaining it during the next five years. The item of interest on equipment bonds is not included on page 8 of the financial statement.
Then we come to what would be the estimated amount to be awarded by the arbitrators. My hon. friend the Minister of Finance, in the various discussions upon this question has made it clear that it is conceded by the Government that not merely the present but the prospective value of the road, to a certain extent, and what it would cost to reproduce it, must be taken into consideration by the arbitrators. The Minister of Finance has, in the course of the discussion, made a case that will give to the gentlemen who act as counsel for the present holders of the stock some very important items for their brief. I have no doubt that as a result of the indications that have been given by the hon. gentleman, and the estimates that have been made as to the amount that the arbitrators may award to the holders as being the market value of their stock, the award will amount to $60,000,000. Then we have the cost of the arbitration which my hon. friends are providing for, is one which may be protracted in its nature, which will involve the employment of counsel of the very highest standing, to whom large fees will be paid, and the employment of experts from all over the country. I venture to suggest that 'Sir William Meredith will expect to be paid as much .as he was in the Meredith-Duff commission and he was paid a very handsome sum for his work in that matter. The Government will have to pay the costs and expenses of this arbitration, liaving regard to the amount involved and the extent of the legislation. I think we are justified in placing the cost at not less than $100,000. This item, as a consequence of this legislation, is a very serious one indeed. Then we have the payments that have been made by the banks for the June,

July and August interest as it became due. 'My right hon. friend' the Prime Minister the other day told us that the banks have protected the interest payments for this year as they fell due. It is difficult to ascertain *what the total amount of these payments is because the Minister of Finance is going to apply the closure to this measure without giving to the House or the committee information of the most necessary character and which the House and the country are entitled to. Notwithstanding the fact that on repeated occasions, by reason of the Minister of Finance having included in section 1 of this Bill, a provision that the pledgees of this stock would be satisfied, the minister has refused to give to the committee a statement as to the amount of money that the stock is pledged for, or where it was pledged, or any of the information which any Government is entitled to give to the committee or the House with reference to a measure of this importance. I have to make an estimate in view of the past payments, of which we have had evidence, and without the information that the minister could give us, and I estimate that these payments amount to $10,000,000. As a result of this computation, I submit to the Finance Minister that, as a result of this legislation, this country becomes saddled immediately w-e pass this measure with an additional burden of debt of $653,243,949.39. As a result of this legislation, in regard to which, for the first time in the history of Canada when dealing with an important financial problem, the necessary information has been refused to the House to enable it to give full consideration to the measure; in war time when taxation is being applied on every hand for the purpose ostensibly of getting money with which to pay for the war; these hon. gentlemen ruch recklessly info an expenditure which imposes upon the credit of Canada this enormous liability of $653,000,000 and upon which Canada will have to pay interest for all time. What is the result of the action of the Government in regard to the financial position of this country? It is shown by the following statement:
The Debt of Canada.
Gross debt	$1,542,000,000
Capital expenditure-
Main estimates	 21,113,550
Supplementary estimates . .	32,180,542
Canadian Northern obligations 653,243,949

So that, without taking into consideration a single dollar of the additional lia-316*
bility that is being imposed upon Canada every day as a result of the war measure, the effect of this measure of the Minister of Finance is that the debt of Canada will be, with respect to these matters alone, at the conclusion of this year, the enormous sum of $2,248,538,041. It is all very well to talk about the glorious principles of government ownership and about the asset that Canada has, but when we find that after fifty years of Confederation, the Finance Minister of this country has to go to our neighbours to the south of us to borrow $100,000,000 for two years, when he has to pay the interest .which he has to pay and has paid and has to float a loan at the figures at which he has floated it, as disclosed this afternoon, it will be seen by everybody that this hon. gentleman's management of the finances of this country has been anything but satisfactory. When my hon. friend goes again to J. P. Morgan & Company and the financial people of the United States, and when they learn that as a result of his management of the financial affairs of this country the debt of Canada has reached $2,250,000,000, they will hesitate to comply with his request for further assistance and the people will begin to realize where this Government and its policies has led them. I venture to say that if the policy of these gentlemen be maintained for any period of time underexisting conditions this country will be obliged to face repudiation of its interest under the management of hon. gentlemen opposite. That may be a fantastic theory that we do not want to discuss, but here at one fell swoop double the debt that Canada has contracted since Confederation is being 'added by this measure. Hon. gentlemen decline to give us information, refuse to tell us who is to get the money, refuse to tell us how much the stock is pledged for, who are the pledgees, and, in short, they decline all reasonable requests, -apply the gag and the closure and place upon Canada a liability of $653,000,000, under these conditions, saddling this country with a liability for all tame to -come -and creating a debt of $2,250,000,000. Hon. gentlemen are welcome to the record. The people will come before very long to realize the financial position in which Canada has been placed by the reckless disregard for the last two years by hon. gentlemen opposite of all those considerations which ought to weigh in regard to maintaining the financial prestige of this country.

Mr. MARCILE (Bagot) '(translation): Mr. Chairman, representing a truly rural county whose inhabitants must work hard in order to earn a living and must exert themselves unceasingly to support their families, I deem it my duty to rise in this House and to protest against the transaction now offered by the Government.
Mr. Chairman, we are on section 3 of the Bill which provides that we shall take the remaining five sixths of the stock of the Canadian Northern company, amounting to sixty million dollars.
Let me tell you, Sir, that this sum appears enormous to me and1 that I consider this a suspicious transaction, because so far we have net been able to ascertaih to whom we shall pay these sixty, fifty or twenty five million dollars, nor who are the holders of that stock and why it is so held.
If the information we have got be correct, we are inclined to believe that this amount of Canadian Northern stock is in the hands of friends of the Government among whom is found a gentleman whose position upon a certain question has changed-because he has had the promise that he would receive the par value of the stock he holds.
Now, Mr. Chairman, before section 3 is passed, it might be advisable to consider & while the situation of the Canadian Northern company, in order to know how that company originated, how it was managed and how it is that the remaining stock, the balance of those hundred millions, divided amongst the friends of the Government and of Mackenzie and Mann, must now be sold to the Government so that the company may come out of their financial tangles.
Originally, the Mackenzie and Mann partnership bought up a company which was called the Canadian Northern. This company has been subsidized by every provincial government-the Quebec government excepted-and by the federal government to the enormous extent of a hundred odd million dollars. 'They have been granted by the several municipalities in this country-save those in the province of Quebec-as a help, an amount of subsidies exceeding a hundred million dollars. The Canadian Northern company from the date of its organization has been granted enough subsidies to build its whole line from one end to the other, and let me tell you that notwithstanding the subsidies received the line has not yet been completed and the sum required in order to finish the Canadian Northern transcontinental road is accounted at several million dollars.
Now, Mr. Chairman, in our present financial conditions is it in the interest of this

country to acquire the stock belonging to the Canadian Northern, that is, the sixty million dollars remaining? Are we in such a financial position that we can get hold of so considerable an amount of stock, specially when the royal commission appointed by the present Government has shown that the stock held by the .Canadian Northern or Mackenzie and Mann is utterly worthless, and above all after having taken into consideration the Act passed by the present Government in 1914, by which the Government is not only authorized buit fully empowered in virtue of a mutual agreement between the Canadian Northern company represented by Mackenzie and Mann and *the present Government, to take hold of all the remaining .stock in the hands of Mackenzie and Mann without paying a single farthing should the company default.
When a country has to ask its neighbour a loan of money and to pay such a high rate of interest as eight per cent, I say the time has come when the Government which preside over the destinies of that country should ponder over it again before carrying their schemes any further.
In our present condition, in war time, when we are spending a million dollars a day, when we must pay large amounts to the widows and orphans of our .soldiers who fell at the front and pensions to the returned soldiers who were wounded on the battle fields, our disbursements are and shall be heavy as long as the war will last.
We must provide, as I have just said, for the pensions and also for the requirements of the country. At this moment we are neglecting all kinds of improvements on account of the war. How many useful schemes have been discussed in this House for several years-for instance, the opening of the Georgian Bay canal which would so greatly benefit the handling of the western grain and the transportation of produce between the east and the west-we are neglecting that undertaking, we cannot even start it and naturally our country is deprived of the benefits which would accrue from the opening of that canal. Once more, we overlook all this on account of the lack of money due to the war, but that does not prevent the Government from caring very little for the interests of the people, and from being ready to take hold of millions of dollars to hand them to people who are not entitled to them, if we refer to section 24 of the Act passed in 1914, chapter 20 of the Statutes of Canada.
Now, Mr. Chairman, it is idle to think that the people give their approval to such a transaction. From the Prime Minister

down, the hon. members on the other side [DOT]of the IHouse know very well that the people who pay, who earn their living by the siweat of their brow, blame the transaction now under review, and I am sure that at the proper time the Government will notice that the present transaction is denied by the whole country, but it will be too late.
With your consent, Sir, I shall refer to section 24 I have just mentioned which provides that in case the company should not meet its engagements the Government reserve to themselves the right of securing the remaining stock which did not belong to them. I shall read the controverted section :
If authorized by the Parliament of Canada, the Governor in Council may on such terms and conditions (if any) as Parliament may prescribe, at any time while any event of default shall exist and be continuing, by order declare the equity of redemption of the Canadian Northern and of all persons whomsoever in the mortgaged premises to be foreclosed, and thereupon the equity of redemption of the Canadian Northern (and of such other persons) in the mortgaged premises and every part thereof shall 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 nothwith-standing.
(Now, ,Mir. Chairman, has the Canadian Northern really defaulted? I say yes and our friends on the other side are also of that opinion since they present this Bill in order to seek authority from Parliament to secure the balance of the stock. As to that there is no disagreement between us; the difference of opinion consists in their maintaining that the Government must pay an optional amount for the balance of that stock, while we asgert that they are bound and entitled to get hold of it without any outlay, even if it be in the hand of Mackenzie and Mann.
When we passed the agreement of 1914, we thought the Government was in earnest; we allowed it to pass believing that in case the 'Canadian Northern should default the road .would come under section 24 of the Act and the 'Government would take hold of the balance of the stock which is ours by that very Act and for which Mackenzie and Mann are not entitled to receive a single cent.
Now, Mr. Chairman, I shall ask the hon. members of the Government and their supporters whether or not they have pondered over their present attitude; I could also ask them whether or not they really believe they are serving the interests of their constituents by voting for such an iniquitous measure as the one we are now considering,
that is, by taking the people's money, which is not theirs any more than if is ours, and handing it over to Mackenzie and Mann.
It might not be out of place to recall here the answer given for the Government by the hon. Solicitor General when we were discussing the legislation of 1914. Here is what I find among other things at page 3858 of the Hansard of that year:
The railway policy of the right hon. leader of the Opposition has another characteristic feature. Under the present Bill we have a summary method of taking over the road, a summary method which in effect gives us as security the other sixty per cent of stock.
We know we have the ordinary right which any mortgagee has, and the right which any guarantor of a mortgage has, the right by subrogation of getting into the shoes of the lender and in the event of default exercising the rights of a mortgagee and taking possession of the road as a receiver; we know we have that right, but we have the additional summary remedy of proceeding by mere Act of Parliament to take over the road as the property of the people of this country and eliminate once and for all, all other parties interested in that railway. And we have not only so arranged it that the interests of the Canadian Northern and all other persons whatsoever in the Canadian Northern system shall be eliminated, and that in the event of default all shall be the property of the Canadian people, but furthermore, the ten million dollars of stock in the townsite and the ten million dollars bonds are put into hotchpotch, although they are the property of Mackenzie and Mann, and although Mackenzie and Mann alone made investment in them, and in the event of our foreclosing and taking over the enterprise we ourselves get the whole benefit of the townsite. That summary method is given us.
Now, Mr. Chairman, here we have the Solicitor General (Mr. Meighen), one of the most distinguished lawyers of this, country, who states clearly and. formally that in ease of default by the company, the Government have the right of a mortgagee, that they have the right to .provide all the necessary safeguards for taking over .all the property of Mackenzie and Mann or of the Canadian Northern Railway company, and not only that property, but it says moreover that in spite of all the cautions we have taken in connection with various railway companies, we Shall take possession of $10,000,000 worth of property belonging to Mackenzie and Mann, townsites, etc., etc.
To-day by this Bill we are asked to acquire from Mackenzie and Mann the balance of *the $100,000,000 of stock and the Government says: "We will appoint a hoard of arbitration and we will abide by their decision." But, Mr. Chairman, if the arbitrators that are to he chosen decide that the value of the stock is the same as it was in 1914, and if we are compelled, to pay on the same basis as when we had to lend

Some hon- 'MEMBERS; The gag.


Mr. MAROILE:: 
William Pugsley: The hon. member for
St. Hyacinthe (Mr. Gauthier) has the floor.


William Thomas White: I gave way to two hon. members. I should like to say that I do not like to take any advantage.


William Pugsley: The minister is going to stop discussion on the section. He should not do that when the hon. member for St. Hyacinthe has the floor and I will appeal to the Chair. There is a limit beyond which he cannot go.


An hon. MEMBER:: He is afraid of it.


Mr. GAUTHIER:: I do not want to
impose my speech on the Minister of Finance if lie does not want to hear me.


Mr. ETHIER:: He is afraid of you.


William Thomas White: The hon. member will not be debarred from speaking if I have the floor, because he can speak on section 4 or he can speak to-morrow. I have given way to two speakers. We are on closure procedure. Who has the floor?


William Pugsley: Mr. Chairman, the hon. member for St. Hyacinthe has the floor.


Some hon. MEMBERS:: Order.


William Pugsley: No Chairman has a
right to turn his eyes from a member who lias the Floor.


Some hon. MEMBERS:: Order.


William Pugsley: I want to say-


Some hon. MEMBERS:: Hear, hear.


Some hon. MEMBERS:: Order.


William Pugsley: No one with any idea
of parliamentary rales would have the
indecency to do it .
Some hon. MEMBERS : Order.


William Pugsley: I appeal to the members here if the hon. member for St. Hyacinthe (Mr. Gauthier) had not the floor first. I, as one member of the House, protest. You have no right to do it. It is tyranny.


Some hon. MEMBERS:: Shame.


William Pugsley: You should be ashamed to do it. You had no right at all.


Some hon. MEMBERS:: Shame.


William Pugsley: I see that the Chairman desires to explain. We will allow him to do so.


Robert Laird Borden: Sit down.


An hon. MEMBER:: Call in the police.


William Pugsley: Call in the police as quickly as you like.


Rodolphe Lemieux: Call in Mackenzie and
Mann. Call in Sir Clifford Sifton.


Joseph Hormisdas Rainville: The nule provides-


Rodolphe Lemieux: I notified you, Mr. Chairman, that Mr. Gauthier wanted to speak before the minister.


Joseph Hormisdas Rainville: -the rule says that the first hon. gentleman who catches the eye of the chairman should have the floor. I was noticing both hon. gentlemen because I knew that they wanted to speak. The hon. minister got up first.


William Pugsley: No.


Rodolphe Lemieux: No.


Joseph Hormisdas Rainville: He was the first who caught my eye.


Rodolphe Lemieux: And you were notified that Mr. Gauthier wanted to speak, and you knew it.


Mr.   CHAIRMAN@: I had no business to take such notification, and I declare that' the Finance Minister caught my eye first and he has the floor.


Some hon. MEMBERS:: Shame.


Joseph Hormisdas Rainville: Order.


William Thomas White: I think that, under the rule, the chairman should, if possible, see hon. gentlemen on either side of the House alternately. There have been two speches on the other side of the House-


William Pugsley: But your intention is to close discussion.


William Thomas White: 
Louis Audet Lapointe: 'That is just what we were afraid of. That is the trick that was played on us.


William Pugsley: There is a motion
before the Chair now that must be withdrawn before this can be considered. The member for St. Hyacinthe (Mr. Gauthier) has a perfect right to speak.


Joseph Hormisdas Rainville: It is moved by Sir Thomas White that the further considera-

tion of section 3 with the amendment be postponed.


Some hon. MEMBERS:: Read it in French.
Motion read in French.


Mr. OLIVER:: May I ask a question? If the rule which you intend to invoke applies to the consideration of an amendment, then I do not read that in the rule and I would like to know where I shall find it.


William Thomas White: It applies to the whole section with the amendment.


Some hon. MEMBERS:: Question.


Joseph Hormisdas Rainville: The amendment being moved forms part of the section.


William Pugsley: The amendment is not carried yet.


Joseph Hormisdas Rainville: It is not to be carried now, it is to be postponed. Is it the pleasure of the committee to adopt the motion ?


Some hon. MEMBERS:: No.


Some hon. MEMBERS:: Carried.


William Pugsley: I desire to speak briefly to a point of order. There is always discussion on a point of order.
Some hen. MEMBERS: Question.


William Pugsley: That is perfectly absurd. We might as well go home if we are to have no-
An bon. MEMBER: We had better go home.


William Pugsley: I know hon. gentlemen think that, and the hon. gentlemen themselves are non-combatants. They might as well go home; in fact better. They would support whatever the Government proposed. It is difficult to know what they are here for at all. They might better be at home harvesting their crops.


Robert Laird Borden: That is not a point of order.


William Pugsley: The point of order is this: The ruling is that the motion that the section stand is to be determined without debate. I think that is straining the rule a good deal. Before the committee now is an amendment moved by the Minister of Finance. Surely hon. gentlemen have a right to speak to that amendment. How absurd it would be; what a gross injustice it would be, that you should rule that further consideration of an amendment moved to-night for the first time, upon which only one hon. gentleman has been allowed to

speak, should be postponed-an amendment proposed without any notice, without opportunity being giyen to the committee to discuss it. It seems to me to be clear that the amendment can be discussed. The member tor St. Hyacinthe should be permitted to speak to that amendment, if the proceedings are to be carried on with any degree of fair play. There is no desire on the part of hon. gentlemen on this side to prolong the discussion; we have not shown any desire to do that. To-day as much time was taken up by the Minister of Finance and by gentlemen on the other side as by gentlemen on this side. Let us have a fair discussion. The member for St. Hyacinthe surely ought to be permitted to speak to the amendment.


Some hon. MEMBERS:: Question.


Mr. L. J. GAUTHIER (fit. Hyacinthe):: Mr. Chairman, am I to understand that you do not allow7 me to speak even on this question which is now before the House?


Joseph Hormisdas Rainville: I do not refuse a reply to the hon. member for St. Hyacinthe, but there is a motion before the House, and: I simply dlesire to read this motion:
"It is proposed by Sir Thomas White, that further consideration of section 3 with the *amendments be delayed. "


Louis-Philippe Gauthier: Have I not the right
to address the House on this question ?
Motion, (Sir Thomas White) declared carried: yeas 38, nays 22.
On section 4-appointment of arbitrators.


Louis-Philippe Gauthier: Mr. Chairman-


William Thomas White: I desire to move the amendment that I gave notice of the other day.


Some hon. MEMBERS:: Order.


Louis-Philippe Gauthier: Mr. Chairman-


Joseph Hormisdas Rainville: The amendment is
before the committee.


William Pugsley: The member for St.
Hyacinthe has the floor.


Louis-Philippe Gauthier: The Finance Minister has just said that I would have an opportunity of addressing the committee on the section as it stands; now he wants to move an amendment. That is the kind of fair
play we are getting from the hon. gentleman.


Some hon. MEMBERS:: Order.


Louis-Philippe Gauthier: Mr. Chairman, I would like to discuss with you, if you please, the question as I understand it. The .Government have decided


Some hon. MEMBERS:: Question.


Louis-Philippe Gauthier: I am speaking to the question; if you do not understand, it is not my fault

(Translation) The point I raise, Mr. Chairman, is a point-as for you, you can understand me, if there are some on the other side of this House who don't. I admit that in your capacity of Chairman, you look at those you please, but you must listen to those who speak, when they have the floor. The Government want to impose closure upon a Bill which has been laid before the House and which every one has taken cognizance of. And now at this sitting of the House, the hon. Minister of Finance, who is personally in charge of his own Bill, proposes, at this very same .sitting an amendment which he prevents us from discussing. Is it fair that he should prevent us from discussing his amendment with the clause thus amended, to impose closure upon an amendment which has just been laid before the House? That is the question I raise. In the first place nobody previously heard of it. The Minister of Finance cannot pretend that we have discussed his amendment for too long a while, for he has just laid it before the House. Is there any obstruction as to this amendment? I say not. If there is any obstruction, what would you decide, in your capacity as Chairman, as to the amendment proposed by the Minister who is in charge of the Bill itself? I would like to have your decision on that point. If you absolutely mean to prevent me from speaking, there is still section 4 which we will discuss.
.Mr. RAINVlILLE (translation): In reply to the hon. member for St. Hyacinthe, I must say that the two amendments are laid before the House and in the Chairman's bands, and I see that the hon. member knew that, since he spoke of it a few moments ago.


Louis-Philippe Gauthier: It has just been submitted.


Joseph Hormisdas Rainville: Both have been laid here since Friday last, they were annexed to the Bill.


Mr. MARTIN (St. Mary's) (translation):: This ought to he debatable it seems to me.


Joseph Hormisdas Rainville: As to the >point of order raised by the hon. member fox St. Hyacinthe, I may tell him that these amendments are before the House since Friday last.


Louis-Philippe Gauthier: Has he not moved them to-night?


Joseph Edmond Marcile: I should ipoint ouit that to-night the Bill I now have before me has been sent to me and that it contains no amendments.


Joseph Hormisdas Rainville: They are in Friday's Hansard.


Louis-Philippe Gauthier: When we ask for a copy of the Bill and the employees of the House bring us the Bill without 'amendments, what should we think?
The Chairman (Mr. Rainville) read Sir Thomas White's amendment in English.


Several MEMBERS:: In French.


Joseph Hormisdas Rainville: It is moved by Sir Thomas White that the consideration of clause 3, with the amendments, be postponed just now*.


Louis-Philippe Gauthier: Mr. Chairman, is there an amendment, yes or no?


Joseph Hormisdas Rainville: 'Certainly, there is an amendment 'before me, before the Chairman, since last Friday.


William Melville Martin: Be fair, Mr. Chairman.


Louis-Philippe Gauthier: Do you give the precedence to the Minister of Finance or do I have the floor?
Mr. PUiGSLEY: Who had the floor? What courtesy was shown to the hon. member for St. Hyacinthe (Mr. Gauthier)?


Some hon. MEMBERS:: Go on.


William Thomas White: I just want to move this amendment of which I gave notice.


Some hon. MEMBERS:: Who had the floor?


Joseph Hormisdas Rainville: The hon. member for St. Hyacinthe had the floor.


Louis-Philippe Gauthier: privation. Who are those who are making sacrifices? Who are those who are giving contributions? Who are those who are living a life of self-denial? It is the common people.
With this legislation, you are going to raise the public debt to two>
billions one hundred million dollars, the interest on which will be over one hundred million dollars 'annually; moreover, you will have to pay pensions to soldiers' orphans, widows; in short you are piling up such a debt that the interest alone will absorb the larger part of the revenue of the country, and you will not be in a position to make, on behalf of Canada, the sacrifices that the honourable gentlemen on the other side are always talking about, that we, on this sid , .Are making, but which the hon. gentlemen opposite seem to ignore.
There are some people who believe that their mission in this world' consists in lecturing others, but they do not	feel themselves bound to put
their preaching in practice. The Government are giving to-day a fine sample of their state of mind. After a summary discussion on the three first sections of the Bill, we are now on section, 4 dealing with the appointment of arbitrators. The Government is trying to shift their responsibility in appointing a board of arbitration so that when that tribunal shall determine the value of the stock we -are about to acquire, the Government may be committed beforehand to the policy they are bent upon, but on which they wont give us any information.
I agree that the Government commands a majority in this House; they can secure the passing of any Bill they choose to propose, but I deem it to be my duty in the name of the county I represent, in the name of the province I come from, to say once more that the Government is saddling that province with a new burden., without any [DOT]useful purposes being attained, because we are in no way responsible for the present situation.
I say that the provincial governments, who have subsidized the Mackenzie and Mann concerns, are interested in having the central government redeem Mackenzie and Mann's debentures which they have themselves endorsed.
, I say that the Toronto financiers are interested in being reimbursed the advances made to Mackenzie and Mann, and t'he .Toronto financiers are interested as to the province of Quebec, as to Canada, even at *the risk of bankruptcy, even at the risk of

any future loan depreciation, should pass and endorse this legislation, but I may add that it is not the Toronto financiers who will pay whatever part of it that will be charged to us. I say that we have in no [DOT]way contributed to the present state of affairs and that we have a right to be heard, closure or no closure, gag or no gag.
Mr. Chairman, I would not make any threat to the members of the Government. I know they are most sensitive and shiver-ish; but we have therein the germs of popular reclamations which have shaken powers more solidly seated than the present Government, I say that there may be some danger, when the people have been saddled with the burdens you have put upon their shoulders with a war object, with the idea of participation, so that our effort may come in and help England's effort, the effort of the Empire.
I say that it is not without some danger that, upon a people on the road to. bankruptcy, the Government of this country may come and impose a debt which will amount to 650 millions of dollars and take over the totality of the shares in a company unable [DOT]to pay its interests year after year. That company is compelled to make an appeal to the Government. The Government have made advances; the Government have assumed the responsibility; that responsibility, they have the credit for it, but I say that it could have been discussed and that it could have been assumed. However, I ,do no.t see any good reason for the Government to do so in these critical times, when the Minister of Finance was forced to go to the New York financial market to negotiate a loan for which Canada has to pay one and three quarter per cent for commission and brokerage charges.
The ratio is enormous from the standpoint of high finance, and it has been brought about as a consequence of obligations assumed by Canada in. order to do ,what the country believed it her duty to do. Such obligations we have assumed, we are ready to endorse the responsibility, we are ready to bear the burden of the interest we shall pay, because the amount borrowed is necessary to the administering of our civil as well as of our military affairs; but what arguments can we give to our constituents if we should allow to pass without any protest, such an Act as this one? What reasons can we allege? Am I, Mr. Chairman, in such a position that I can go and say to the electors of St. Hyacinthe: I have .allowed that measure to pass without any protest; it is true that yon have in no way .contributed to put Mackenzie and Mann in

,the way of starting their construction and then leave it off unfinished; it is true that, in our county, we have never contributed at all to allow these gentlemen to grow rich, .whilst all the companies they have created went into bankruptcy one after another; it ,is true that, in our province, we have in no way aided these gentlemen to grow rich, .since all the companies they have organized .went to the wall one after the other; but .you must, nevertheless, bear your share of .these liabilities. Am I in a position to say to the electors o!f St. Hyacinthe county that they must face this indebtedness because it is in the public interest? The only argument offered by the lion. Minister of finance, to show that the Canadian Northern company must not go info tihe hands of a receiver, is that the financial credit of Canada would be destroyed, if the actual .value of this enterprise should be exposed. .Are you going to tell me that the credit of Canada will be imperilled by allowing to go into the hands of a receiver enterprises beyond the energy, the capacity, the comprehension and the credit of their promoters? We are told that, during the present crisis we are experiencing, in the midst of the present war, we have not the right to .injure in any way our national credit. But what a knock out blow, would not the .Government strike at our credit by saddling our people with a debt of 5650,000,000 for ,a railroad that does not pay its running expenses and which cannot do so for some years to come? Would Canada's credit be jeopardized by allowing this company to be .absorbed by another company, rather than having us assume the burden ourselves? I .say no. The hon. Minister of Finance told ,us himself, in one of his recent speeches, ,in this House, that there were only two corporations that could absorb the Canadian .Northern; the Canadian Pacific or the Government of Canada; but as the Canadian Pacific might perhaps feel like absorbing it, we should rather absorb it ourselves. What .business man would, for a moment, seriously discuss such a proposal? I put aside all the data and all the opinions which are given us from more or less authorized sources, and I only take up the main fact and our situation just as it is. I put the .question, what business man in this country who, being in the position of this Government and facing such a desperate condition as that of the Canadian Northern and .of Messrs. Mackenzie and Mann, and who .would have the chance of seeing it absorbed by such a powerful .corporation .as the Canadian Pacific, would not let it go at .that, instead of the Government taking up
.the burden rather than let it pass 'into the hands of another corporation; and would rather assume the liabilities under the pretence that it is needed as a ' feeder ' for the .Grand Trunk Pacific and the Transcontinental?
I have always understood that, so far as good finance goes, a man should never undertake anything beyond his means or his capacities, is the Government, to-day, in such a condition as to venture into operating this railway?
I deeply regret that I am unable to discuss this question in the language understood by the hon. Minister of Finance and !by the hon. Solicitor General, not that I have the pretension of either convincing or converting them; but they might understand, at least, that it is not partisanship that prompts me to raise objections against this measure, but that I am making these remarks merely and only from the standpoint of public interest.
, What! Mr. Chairman, such a transaction is proposed when the Government, ,in order to continue their contributions to .the war, to maintain their civil administration, cannot attend to it with their revenue, cannot even do so with the taxation although it be very heavy, almost distressing for a portion of the people, when the Government are unable to meet the exigencies of the conditions without having recourse to foreign aid? The Government of this country have just floated a loan of 100 million dollars, at the exorbitant and usurious rate of 8 per cent, and in the face of such a situation, the Government still venture to come before this Parliament and the country at large and say that, in spite of all the difficulties we run across, in spite of our contribution to the war, the Government, do I say are -bold enough to say: We have decided upon putting an extra debt of $650,000,000 upon the people's shoulders, because the advances assented to by the different provinces, by the municipal boards, by the debenture holders, in order to have this railroad completed, are in peril all those interested parties ask us, the Government of Canada, to intervene in order to save the situation.
. Tile Government of Canada have guaranteed some debentures; there is only one thing to do; if the first debtors are unable to pay, the Government will be in t'he position of .an endorser who has endorsed .a note bona-fide, expecting the promisor would meet his obligations. If the latter cannot do so, the endorser must pay, because he has accepted the promisor's debt. Every one admits, without however being

so sharp in financial affairs as may bo the hon. Minister of Finance, that, if the Canadian Northern should pass into the hands of a receiver, it would be taken at its actual value by whatever company absorbs it. Now, will the Canadian Government absorb the Canadian Northern at its actual value?
The Government may say yes, but every one entertains a doubt about it. Should not this doubt be cleared up? Should we not have a formal statement in order to reassure publie opinion? I will go further than any other member on this side of the .Bouse into the discussion 'of that transaction-useless to say that I am now speaking in my own name-in the face of the present conditions, when we are asked to purchase 9,500 miles of railroad subsidized by the provincial governments, by the federal government and by the municipal councils, it means to me that the Government should do everything in their power in order to reassure public opinion which has been stirred up.
, Do not play with edged tools. In your administration, as well as in your legislation, you should show (as (much .prudence as any business man should use, especially the prudence of a business man, for in a critical period .as the one we are now going through, he is obliged1 on account of the position he holds, to reassure the public opinion which is sitirred up.
It is a very easy thing to say to the Montreal financiers, for instance, who are protesting against this deal, it is most easy to tell them as the (Solicitor (General has answered them: that they are Montreal people, that Montreal is against conscription, that conscription has been voted and that the Canadian Northern (Railway Bill will also be adopted.
Well, let ns see. Should an honourable gentleman, in the position of the Solicitor General

witih .all thel responsibility of his position, with the responsibility he has in the Cabinet, being one of the advisers of His Excellency the Governor . General, .being one of the main springs of the Cabinet .who have in their hands the administration of the public weal-should he so express himself? II ask you whether that is an argument to offer to men who, having opinions similar to those held by the minister now on the Treasury benches, consider with awe and apprehension the Bill we are now dealing with. At present, public opinion is overexcited and rightly so; public opinion demands why this Bill in the last days of a Parliament almost dying .-which is now in session because one 
year's extension has been granted it-why bring up such a Bill in the last days of the session? But what is worse than all that, in iny opinion, is the fact of the Government, through the Minister of Finance, taking upon themselves the task of imposing this measure upon the House by resorting to the very means by which they can gag the Opposition.
Every one throughout the country, is saying that our press is no longer independent. Everybody says so. When men of high standing have reached the conclusion and say, not in low tones, but very loudly that public opinion has no longer any information from the press of this country, and .that the Government, w.ho have in their hands the destinies of Canada, are trying, during the last days of a session, which has lasted some eight mouths, to pass this Bill .under the closure system, do you believe, .Mr. Chairman, can the Government believe for one moment, that public opinion will be .quieted? It is possible that the transaction may be disputable; it is possible that, from .the Government's point of view, the transaction be necessary; it is possible that, with the insight particular to the ministers and especially to the . Minister- of Finance, it is possible, I say-and I am only .a party man-but, after all, I cannot understand why some men assume, without any reason, such a responsibility as that attached to the passing of this measure, without having imposed upon them the imperious .necessity of assuming such a responsibility. .But, why then, if necessity demands that the Government pass this measure, should the Government be forced to do more than .their duty? By imposing the closure, is not the Government doing more than their .duty? I answer yes.
, The Government come before the House, they explain their Bill, they defend it with General-with all the responsibility of his this measure, who is the Minister of Finance, and all the reasons he has set before .us may have their bearing. But we who represent the people after all, we contend .that we have not had sufficient explanations. Are you going to satisfy public opinion by preventing us from speaking? Is that a fair way of reassuring those who stand in awe? Is that the way to restore public confidence to say to those who demand further explanations: you are not satisfied with what we have given you, you .demand further explanations, we refuse to give you them; more than that, we shall take advantage of the regulations we have ourselves had adopted, and we shall impose that measure upon you, willy-nilly.

, I say to the Government-I have no .mission to give a guidance' to those who administer the country, and I do not pretend to do so either-but I have a duty to perform, I am a member of this Parliament, I sit in the council of the nation, being in contact with a large part of the population, I lay before the Government facts which militate in favour of an extensive discussion and if the Government, after having heard our arguments, find .them worthless, they are at liberty to reject .them, but there is not a single man in hiA senses who would not give up before evidence, be he the most inveterate partisan you could find in this country.	-
If the Government would openly give the Opposition all the information they ask, and thereby prove their good faith-for, any way, I would not pass any rash judgment- but in the face of the Government's insistence, of its manner of proceeding, of the impediments they are putting in the way of the free discussion of this measure, I say that those who believe that there is a snake in the grass are probably not mistaken.
, When we see men of the standing of those ,who have signed the Montreal manifesto, they may say what they please, the great majority of those who signed that document are men who hold the same political tenets as the hon. Minister of Finance.
Would any one for a single moment pretend that men supporting, as they have ever *supported in the past, by their votes, by their work, by their influence, by their money contributions the candidates, the policy and the Bills of the present Government; would any one pretend that when they took the stand they have taken in censuring this Bill, they were inspired with the desire of harming the Government? No one can pretend that. Will any one pretend that the signers of this memorandum wish to promote the Opposition interests? Why not at all. What is then their mover in making them condemn this Bill? Their prime mover is that, being friends of the present Government, and seeing that this .Government have entered into a dangerous path, they have the courage to sign a document in order to put them on their guard and prevent them from committing the iniquity they are in the way of perpetrating and, in the face of this calm, cool, rational .protest of business men, friends of the Government, who assume to put the Government on their guard against an administrative Act and a .legislative .measure, the consequences of which have such a vast scope as the Bill we are now discussing, I say that the Government should treat their friends
more confidently. It may be possible, Mr. Chairman, that from this side of the House, all that we do, all that we say shall ibe supposed to bear the stamps of partisanship, but *at least those who are not in the Opposition, the friends of the Government, who lay before the administrators of Canada the facts and the reasons which have induced them to sign this manifesto, should deserve some consideration.
But there is more than that; it is under the pressure of public opinion that these gentlemen have seen fit to warn the Government, and when warning the Government, the only answer they get from the country's administrators, is the gag and the closure, imposed upon the members of His Majesty's Opposition in this House. I say that the Government's responsibility is heavier than they seem to realize.
After these considerations, Mr. Chairman, I thank you for the attention you have paid to my words and for the freedom of speech you have granted me, and I ask the Government to discuss and allow the discussion of that measure with the widest possible latitude, in order to reassure not only the members of the Opposition, but to reassure commerce, to reassure finance, to reassure the public.
Some may contend that this Bill is very bad. The Government may contend it is very good. It is perhaps not as good as the Government claim it to be and it may perhaps not be so very bad as the Government's adversaries contend it is; but all I do ask, in my own name and on behalf of the electors I here represent, is that the widest possible latitude be granted for its discussion, in order that, from its discussion in it-he House, public opinion may have some reasons for seeing or for understanding the Government's action which, for the present, is neither excusable nor comprehensible.


William Thomas White: I beg to mover
That all the words after ''Fund'' on line 4, page 2 of the Bill be struck out and the following substituted therefor:
Provided, however, that until authorized by Parliament the total of such advances shall not exceed the sum of twenty-five million dollars. A statement of any such advances showing in detail the purposes for which they were applied shall he presented to Parliament by the Minister of Finance within twenty days after the opening of the next ensuing session thereof.
That the words ''and may apply their own judgment in determining such value", appearing on lines 24 and 25, page 2 of the Bill, be struck out.
That the following words be added to subsection 2 of section 4 of the Bill:
In determining the value of the said six hundred thousand shares the arbitrators should

they regard it as expedient to take in to consideration the reproduction cost of the Canadian Northern Railway system shall not include therein the increase in value, due to the war, of labour, materials, equipment or of any property.
That all the words after "Fund" on line 3S, page 2 of the Bill, be struck out.


George William Kyte: It will be a dark chapter in the history of this Parliament that will record the incidents of to-night. Vastly the most important piece of legislation of a civil character that has come before Parliament in many years is attempted to be disposed of in a manner that must impress the people of this country with the fact that the Government which is in control at the present time are seeking to shut off as much as possible discussion of this important measure. During the present session of Parliament we have witnessed a lobby such as was never before known perhaps in the history of the Dominion. We do know that interests friendly to and in the employ of the company that will be the beneficiary of this legislation have appeared by their agents, and have canvassed and imprecated members of this House in support of this legislation. Not only that, but they have endeavoured to becloud the real purpose which they have in view by advocating at the same time a national government. Conscription, national government, and the relief of the Canadian Northern railway, are the three policies of the Government at the present time. The Canadian Northern railway interests think this is a good occasion to come before Parliament, and under the guise of Empire-savers, under the guise of savers of this Government, advocate the entrance into Parliament of Liberals in order that they might have their interests protected by a union government. Lobbies of this kind are not unknown in the United States, and I believe this is the first time that a really concerted effort on the part of big interests has been put forward in this country for the purpose of influencing Parliament. In the Congress of the United States a few years ago, the Southern Pacific railway sought to influence the legislators of the Republic in a manner similar to the demands being made upon the legislators of Canada at the present time, and the following was written of the Southern Pacific lobby:	.
The most pitiable and at the same time the most disgusting spectacle that now offends the national capital is the Huntingdon lobby. The list of paid lobbyists and attorneys now number twenty-eight, and their brazen attempt to Influence Congress to pass the Pacific Railroad

Refunding Bill have become the disgrace of the session.
This great political machine was much more efficient than Tammany's or any other machine that ever existed, because it was non-partisan; it dominated the Democratic organization as easily as the Republican. Political manipulation is reduced coldly to the exact principles of science and business. It made politics a matter of scientific corruption and perfect organization, and by this means it secured astonishing results.
The Minister of Finance in the course of his observations thi6 evening referred to Sir Donald Mann as a supporter of the Liberal party, the inference being that Sir William Mackenzie, the other paramount partner in the combination, was a supporter of the Conservative paity. So I suppose it is designed that each of these two gentlemen shall influence the political party of which he is a supporter.
The Government has embarked upon a policy of conscription, in connection with which appeals are being made that all party strife shall be set aside for the moment, and the energies of this country, so far as our resources of men are concerned, shall be employed in the great struggle in which we are engaged at the present time. But it is rather extraordinary that while the Government are imploring the people of all classes to set aside party strife and join together for the purpose of promoting the interests of the Allies, they are not unmindful of the obligations which they owe to certain interests in this country. They hope under the cloak of the conscription policy, under the influence that this great question would naturally have on the minds of the people, to be able to smuggle through legislation of this iniquitous character. It reminds one of a German cruiser disguised as a hospital ship coming within range of a passenger vessel and destroying the helpless women and children who had taken passage on the ship. The Government think that by putting forward a conscription law, while the minds of the people are entirely occupied with the issue, they can pass legislation such as this through Parliament without comment and without opposition. While they might reasonably hope to smuggle legislation of this nature through Parliament under ordinary circumstances, how can they attempt to pass it through Parliament by means of the closure, which has been introduced in this House this evening?
The Drayton-Acworth report, referring to the stock which it is proposed this country shall buy, says:
The property investment of the Canadian Northern Railway system is stated in the bal-

iince sheet of June 30, 1916, at $494,112,489.34. The figure admittedly has been written up to include $100,000,000 of capital stock. And this stock, as we have already said, was issued without any cash consideration. We have endeavoured to ascertain the actual cost of the system. Prom the company's official reports and special statements supplied to us, we have ascertained that the maximum cash investment that can have been made in the property is $383,302,451.33.
So that the proposal before Parliament at the present time is to purchase from the Canadian Northern interests certain stock which the Drayton-Acworth report says is without any cash value. Speaking on the subject of the advance to the Canadian Northern railway in 1914 the Minister of Finance made some reference to the disposition of the stock held by the Canadian Northern railway. He said:
The whole argument against watered stock proceeds upon the basis of the public getting the watered stock and paying for it on the stock market of the world claiming to be entitled to receive dividends on their stock. This $68,000,000 or part of it may get into the hands of the public and be worth close to par.
The $68,000,000 of common stock of the constituent and subsidiary companies goes into the treasury of the Canadian Northern Railway Company to stay there.
That was an assurance which members of this House would have reason to accept at its full value but I was somewhat surprised to hear the Minister of Finance read a statement the other evening to the House as to who are the present owners of the common stock of the Canadian Northern Railway Company. Those who are not particularly interested as directors of the company who own the stock are the British Empire Trust Company Limited holding $324,000, John Aird and H. V. F. Jones in trust $1,000,000, and Mackenzie Mann and Company Limited $58,614,000. In regard to the stock held by Mackenzie Mann and Company the minister read the following letter from their secretary:
Mackenzie, Mann & Co., Limited, Toronto, August, 21, 1917. Hon. Sir Thomas White,
Minister of Finance,
Ottawa, Ont.
Dear sir:-
With respect to the $58,614,000 of stock of the Canadian Northern Railway Company standing in the name of Mackenzie, Mann & Company, Limited,, $51,000,000 is wholly the property of Mackenzie, Mann & Company, Limited; $2,000,000 is held in trust for certain officers and employees of long standing in the company; $1,600,000 is deposited with the province of British Columbia; and the balance, namely $4,014,000, is held by Mackenzie, Mann & Co., Limited, pending uncompleted financial arrangements for distribution
of same amongst Mackenzie, Mann & Company, Limited, Lazard Bross., London, England, and British Empire Trust Company, London, England.
Yours truly,
R. A. Macdonald,
Pro Secretary.
So you will see that the promise made by the Minister of Finance in 1914 that as regards the common stock of the company the door would be shut tight and it would be kept in the treasury of the Canadian Northern railway has not been realized. Now with respect to the legislation before us, I read from the statement of the Minister of Finance delivered on the same occasion. At page 3943 of the session of 1914 he said:
What security have we? I have seen a good deal of financing in my time, and I know something of law although my h'on. friend from Pictou (Mr. Macdonald) does not think so, and I want to say this: I have never seen as effectual a means of entering into possession of a property upon which a mortgage is held as has been devised by the Solicitor General in connection with this transaction. And further-he will not mind this coming from me-I take off my hat to the Solicitor General for the way he has performed the legal work in connection with this transaction which is one of the most complicated that has ever come before the House.
He was sipeakinig of the clause in the legislation of 1914 which would enable the Government, upon the company making default in the payment of interest, to take possession of the property and dispossess the Canadian Northern Railway Company without any other or formal proceedings by way of foreclosure or otherwise. It is intended to be argued, as it was argued by the Prime Minister a few days ago, that such action on the part of the Government would be drastic and would be in the nature of confiscation. We all remember the very strenuous fight that was put forward by the Solicitor General and the Minister of Finance in 1914 to enable them to get through the House of Commons the legislation which permitted the Government to advance the $45,000,000 to the Canadian Northern Railway nCompany. We know there was a divided party among the Government supporters. The hon. member for Calgary (Mr. R. B. Bennett) and the hon. member for Kingston (Mr. Nickle) both made very strong speeches against the proposal, and it was only after the Minister of Finance had made an express and specific promise that the common stock of the Canadian Northern railway would remain in the treasury of that corporation and that the Government



would enter into possession of the property of the company the moment default was made, that support was found in sufficient numbers among the followers of the Government to pass that legislation through the House. But, Sir, those promises made by the Finance Minister and the Solicitor General have been thrown to the winds, and we are now asked not only to take possession of the property of Mackenzie and Mann under the legislation I referred to, but we are asked to pay for it at a price to be ascertained, notwithstanding the fact that the commissioners who were employed to report upon the proposition stated the common stock had no value whatever. The hon. member for St. Antoine (Sir Herbert Ames) also spoke in the debate, and he rejoiced over the fact that the Government would be able to enter into possession of this property without any further litigation and without any payment. As appears on page 3733 of Hansard, 1914, he said:
There is another feature of this matter which, I think, Is well worthy of consideration. What is to happen in case of default? We have hitherto been dealing with the situation in case of success; the Government has very carefully looked ahead in regard to what might happen in case of failure. Ordinarily it is a very slow process to foreclose a railroad and for the bondholders gradually to take possession of the physical assets thereof. The Government in this case, however, has supplied a method of quick procedure whereby the axe drops instantly and whereby there can be no coming back for further assistance. It is definitely stipulated in this undertaking what shall constitute any event of default. It is so clearly defined that there can be no possible misunderstanding. Should the Canadian Northern railway fail to pay interest on the securities which are to be issued in connection with the guarantee which we are now authorizing, or should they fail to carry out any of the conditions in the trust deed as accompanying that guarantee, they would commit an event of default. Should the Canadian Northern on any of the previously guaranteed securities or hereafter guaranteed securities fail to pay the interest, they would commit an event of default. If any part of the system goes into the hands of a receiver; if any branch of the whole tree shows signs of decay that is an event of default, and in any of these events the Government can drop the axe without delay. I have heard this agreement described somewhat as a case where the culprit has confessed judgment and has been let out on suspended sentence. Some elements of the agreement certainly can be compared with such a case. The trial is over. The applicants for aid admit that without our help they cannot complete the road. We have undertaken to give them a last chance and it will never be necessary for them to come here nor will it be necessary for Parliament to listen to another discussion such as is taking place this session. They have been tried; I may almost say they have been found guilty and let out on suspended sentence. If there is an event of default; if they fail to perform
fMr. Kyte.]
the obligations that by this new trust deed are placed upon them, the axe drops and that is all there is to it. There is a summary method, therefore, by which the Government steps in and takes possession of the whole enterprise. The Government can replace the directors by Order in Council; the new board of directors will have all the rights that would be given by a board of directors elected by the shareholders and they can deal with the physical property as they see fit. Then the Government can declare the mortgage foreclosed, and can enter into the benefit of the equities, subject, of course, to the consent of Parliament. If the Government, in such event, enters into control, it may become the owner of the system by assuming the responsibilities and powers as provided by this proposed legislation. The Government could then arrange the whole financial system involved so as to protect all concerned. The Government can operate; the Government can lease, or the Government can create a new railway company to manage the road and enter into ownership if so desired.
The Minister of Finance stated this evening that the fundamental principle contained in the Bill now before the House is the principle of government ownership. He says that they are about to secure the possession of this great railway enterprise, and that the aspirations of certain classes in this country will be realized as regards the government ownership of this railway system. But from the speech I have just read, which was delivered by the hon. member for St. Antoine in 1914, and from the speech delivered by the hon. Minister of Finance in 1914, this legislation is not necessary because under the legislation of 1914 they can take possession of the property and either lease it to another corporation, create a new company, or operate it as a government railway. Why is it that the Government have changed their minds? Why is it that the proceeding which appeared to them so plain and simple in 1914 is not feasible now? We know that certain transactions have taken place in regard to the common stock of the Canadian Northern since 1914, and this notwithstanding the statement made by the Minister of Finance that the door would be closed and that the stock would remain in the treasury of the Canadian Northern. An argument has been made that Mackenzie and Mann have equities in the common stock of the Canadian Northern, that there is some value in it to be ascertained. I read from the Drayton-Acworth report a moment ago the statement of these commissioners that the common stock has no value whatever. If so, what in the world is the Government going to "arbitrate for? I have the figures which were compiled from that report and I find the following:

Reproduction cost, new	$397,441,567
Value after deducting depreciation 357,409,678 Cost of reproduction of equipment 56,590,000 Value after deducting depreciation 45,339,985 Valuation of lines and equipment 402,749,662 Outstanding bonds, debentures,
notes and other liabilities over 400,000,000 Physical property held by subsidiary companies	 10,000,000
The amount of outstanding liabilities which I have given, totalling over $400,000,000, does not include liabilities to contractors which are still unpaid by the Canadian Northern Railway Company. As against liabilities of $402,749,662 there aTe only assets amounting to $390,000,000. Is it any wonder that the commissioners appointed to go into this matter have reported that the common stock has no value? Again, I ask, why is it that the Government have come before Parliament to get legislation through to enable them to arbitrate to give value to common stock which their own commissioners state has no value whatever?
There are communities in this country that are lacking railway accommodation owing, it is said, to scarcity of money on account of the war. The excuse that the Government always gives against an expenditure of money, if it is not accompanied by good party results, is that it is not possible for them to provide money .to further develop the railway requirements of this country. For many years the subject of the acquisition of branch railways in the Maritime Provinces has been discussed in Parliament. Resolutions adopting the principle of the Government acquiring branch railways and operating them as parts of the Intercolonial system have been passed by Parliament and accepted by the Government. But there is no expenditure of money. From the greatest to the smallest [DOT] expenditures are not made except with an eye single to party advantage. We all remember that in t'he session of 1911 the late Government placed in the Estimates $1,000,000 to provide for the construction of a railwaiy from Halifax to the harbour of Musquodoboit, in the county of Halifax. There was also an appropriation of $1,000,000 placed in the Estimates for a railway from Sunny Brae, in Pictou county, to the town of Guysborough, on the southern shore of the province of Nova Scotia. After the advent of the present Government they struck from the Estimates vote for the railway in Guysborough, which is represented by an opponent of this Government, but 317*
the appropriation to provide for the construction of a railway in the constituency of the right hon. the Prime Minister was retained in the Estimates, and that road was constructed. There was also a demand for the construction of a railway in the county of Victoria, represented by my hon. friend on my left (Mr. McKenzie). My hon. friend had succeeded in impressing upon the late Government the advantage in the public interest of constructing that branch line, but when this Government came into power, because the hon. member for North Cape Breton is not a supporter of the Government, nothing was done in the way of extending that railway through that part of the country. With respect to the constituency which I have the honour to represent, there was also a railway question, which had been presented to Parliament for some years, and which had been accepted by the late Government. Steps were being taken do acquire the Cape Breton railway, which was being operated between Point Tupper and St. Peters, and to extend the system to Sydney and Louis-burg. Since the advent of .this Government nothing further has been done. The Minister of Finance is undertaking tremendous financial obligations with respect to the Canadian Northern Bill. My hon. friend from Pictou (Mr. Macdonald) referred this evening to the enormous interest and commissions paid by the Minister of Finance to obtain the last loan of $100,000,000 which he got in New York. Taking into account the yearly interest, discount and commission, the rate at which he obtained that loan cannot be less than 8 per cent. That is a new record in regard to the financial affairs of the Government. When we take into account the enormous burden which will be added to the taxpayers of Canada in respect to this transaction, and the fact that there is a very widespread feeling that the Government are not actuated solely in the public interest in dealing with the matter in the way they are, it would have been well for the Finance Minister to have gone a little further and once and for all to have settled the whole problem of railway transportation in Canada. They are by this legislation acquiring at least the control of the Canadian Northern railway system which extends from Quebec practically to Vancouver. Further, in Nova Scotia, there are those railway problems that I have just referred to. The construction of a railway from Sunny Brae to Guysborough, the construction of a rail-

*way in Victoria and the acquisition of a railway in Richmond and its extension to Sydney and Louisburg, would involve an amount which would be a mere bagatelle compared with the enormous expenditure *which the -Government are undertaking with respect to the Canadian Northern proposition. If this Government were actuated by a desire to serve the public interest, and not simply by a desire to serve party interest, they would adopt the statesmanlike plan of dealing once and for all with the railway problems of this country and giving the people from Sydney to Vancouver a railway, if not owned, at least controlled by the Government and affording to communities served by branch railways, especially in the Maritime Provinces, the advantages with respect to freight rates that are enjoyed by those who live along the line of the Intercolonial railway.
But I am very much afraid that the Government are not actuated in the interest of the public, are not so much interested in the cause of Allies when they bring forward a policy of conscription as they are anxious to bring in a policy that will excite the minds of the people of this country and, while the minds of the people are excited on the question of conscription, they hope to put over such deals as the Canadian Northern deal, which they are in a fair way of accomplishing. But the Finance Minister and the Prime Minister are deceiving themselves if they think they can get away with these deals under the shadow and under the concealment of a conscription law. The Government, when they appeal to the people, will be dealt with upon their record, and their record is not one to invite strong support in any section of this country. It will not be forgotten by the people of this country that from 1914 to 1917 the Department of Militia and the whole war machinery of this country have been operated almost solely with a view to party advantage and' to placing in the hands of the party friends the largest possible percentage of the public moneys voted for war purposes by this Parliament. The whole conduct of the Government with respect to these fiscal and other matters which are vitally interesting to the people of this country will be dealt with when the time comes. They will deal with the question of the Canadian Northern railway and the efforts of the Government to pay to the Canadian Northern railway good money out of the treasury of this country for stock that is not worth one dollar, according to

the report of the commissioners appointed by the Government to inquire into it.
I am afraid that by any appeal I may make to the Finance Minister to go a little further with his railway policy, inasmuch as he has adopted a very reckless policy with respect to the Canadian Northern railway will not be heard. I shall not succeed in influencing him to throw his partisanship aside for the moment and deal fairly and equitably with counties represented by liberal members, as well as giving railway accommodation to friends and supporters of the Government in various constituencies in Canada. But, as I said, there is a ray of hope. The 7th of October will soon come, and disillusion will come then; the people of this country will have an opportunity of dealing with this Government upon its merits not only as regards conscription but as regards every other matter of policy in which they have betrayed the interests of this country.


William Thomas White: I beg to move that further consideration of clause 4, with amendment, be postponed, and that the title of the Bill be now considered.


Frank Oliver: Is it intended that an amendment such as this shall be put through as a part of the section?


William Thomas White: I have included them both in my motion.


William Pugsley: You are putting it through by closure; the who-le thing is done without consideration of the clauses.


Frank Oliver: Is it the intention, when the consideration of the section is resumed, that the amendment and the section shall be considered together or will they be considered separately as is usual, and as is absolutely necessary (to give reasonable consideration to the question?


Robert Laird Borden: The amendment will be voted on and then the section as amended will be voted on.


Frank Oliver: Is it understood that the amendment will be considered by itself, that is, will be discussed separately from the section, or will there be a single discussion on the section and the amendment?


William Thomas White: A single discussion.


Robert Laird Borden: A discussion on the section and the amendment at the same time.


Frank Oliver: At the same time? I submit that is not according to the rule of dis-

cussion, nor is it possible to have a reasonable discussion under those circumstances. It is a very remarkable divergence from the ordinary rules of debate. I do not find anything in the rules of debate that warrants that course, and certainly we cannot have a proper consideration and discussion of the amendment and of the section unless we consider them separately and vote on them separately.


William Pugsley: Would the minister keep the axe suspended for one moment, by consent? Of course I have no right to speak except by consent. I wish to call attention to the fact that the arbitration provision is unusual. There is no provision to meet the condition of what
1 a.m. might happen if tire pledgees and company should decline to appoint an arbitrator. In the meantime, the Government will have taken the stock and begun to spend money on the road. Then there is no provision in case of the death of an arbitrator.


William Thomas White: The Arbitration
Act.


Mr. E. LAPOINTE:: I wish to draw the attention of the Prime Minister to certain words uttered by him on the 7th of August when the resolution which preceded this Bill rvas introduced in the House.


Some hon. MEMBERS:: Question.


Joseph Hormisdas Rainville: The hon. member


Ernest Lapointe: It is on page 4386 of Hansard. The Prime Minister allows me to refer to it and you will be kind enough to listen. The right hon. leader of the Opposition (Sir Wilfrid Laurier) had made a Suggestion that a committee should be appointed to consider the resolution. The right hon. gentleman replied:
I would suggest to my right hon. friend that we might go into committee on the resolution and perhaps pass it, and then, before the second reading takes place, we could consider my right hon. friend's suggestion. It is desirably, of course, that all information that is relevant should be afforded, but whatever discussion could take place upon the resolution could also take place in committee after the second reading of the Bill.
Upon those words of my right hon. friend, the resolution was allowed to pass. Now that we are in committee after the- second reading of the Bill, is it fair that we should be prevented from carrying on the discussion that the right hon. gentleman said we would have an opportunity for?


Robert Laird Borden: I think that we not only had all the opportunity referred
to but a great deal more. We have been at it for a good many days.
Mr. iE. LAPOINTE:	I have had no
chance to say a word yet.


Robert Laird Borden: My hon. friend has been deprived of the opportunity by others on his own side of the House who have monopolized the time. He will be given great opportunity to-morrow because none of these gentlemen who have beep speaking for an hour and one-half at a time can speak for more than twenty minutes tomorrow.


William Pugsley: Two o'clock in the morning comes very quickly.
Motion, Sir Thomas White, carried on the same division last recorded.
On the title of the Bill:


William Thomas White: I beg to move
that the further consideration of the title be, postponed.	.


[Stage Direction]
Motion agreed to.	'
William Thomas White: I give notice that at the next sitting of the Committee of the Whole House on this Bill I will move that the further consideration of clauses 1, 2, 3 and 4, the amendments and the title of the Bill shall be the first business of the committee and shall not further be postponed.


Ernest Lapointe: When will there be that ample opportunity for us to speak on the Bill that the right hon. gentleman spoke of?	_


Robert Laird Borden: To-day.
Progress reported.
On motion of Sir Robert Borden, the House adjourned at 1.10 a.m. (Tuesday).
Tuesday, August 28, 1917 .