1917-08-08

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Vol. I-Pages .	.	1-1124 Vol. IV-Pages . . 3187-4242II "	.	.	1125-2138	V "	.	. 4243-5270III "	.	. 2139-3186	VI "	.	[DOT]	5271-6094


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J. de LABROQUERIE TACHE

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House ol
Commons ©ebates
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Wednesday, August 8, 1917.
The House 'met at Three o'clock, the Speaker in the Chair.

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(Questions answered orally are indicated hy .asterisks.)

Mr. KYTE:: 1.	Who are the members of the Hospitals Commission?
2.	When were they appointed?
3.	What salary or remuneration do they receive?
4.	How much has each been paid to date, (a) for salary, (b) for travelling and other allowances?


Sir ROBERT BORDEN:: 1 'and 2. The following are the present members of the Military Hospitals Commission, with the dates of their appointments: The Hon. Sir James A. Louglheed, P.C., K.C.M.G., President, June 30, 1915; the Hon. Thomas W. Crothers, P.C., K.C., October 14, 1915; W. M. Dobell, Esq., October 14, 1915; Hon. Colonel Sir Rodoiphe Forget, M.P., June 30, 1915; W. K. George, Esq., October 14, 1915; Robert Gill, Esq., May 18, 1916; Lloyd Harris, Esq., October 14,. 1915; J. S. H. Matson, Esq., June 30, 1915; D. Lome McGibbon, Esq., October 14, 1915; the Hon. J. S. McLennan, June 30, 1915; Brig.-General Sir H. M. Pellatt, C.V.O., June 30, 1915; F. W. Peters, Esq., April 4, 1916; Lieut.JColonel C. W. Rowley, June 30, 1915; F. J. Sheipherd, Esq., M.D., April 4, 1916; Lieut.-Colonel Clarence F. Smith, June 30,	1915; Lieut .-Colonel Thomas
Walker, M.D., June 30, 1915; Smeaton White, Esq., June 30, 1915; the Director General of Medical Service, Ottawa, June 30, 1915; W. F. Nickle, Esq., M.P., December 14, 1916; Hector Mclnnes, Esq., K.C., March 16, 1917.
3.	The members of the Commission receive no salary or remuneration.
4.	(a) None. (b) The following is a statement of amounts paid to members of
the Commission for expenses: The Hon. Sir James Lougiheed, from June 30, 1915, to May 27, 1917, $3,052.50, (this amount covers travelling expenses for the period from June 30, 1915, to the 27th May, 1917 the work having fallen upon the president to travel from the Atlantic to the Pacific several times in Connection with the establishment of convalescent homes and hospitals) ; Lieut.-Colonel C. F. Smith, from June 30,
1915,	to February 24, 1916, $128.40; Hon. J.
S.	McLennan, from June 30, 1915, to March 26, 1917, $685.10; F. W. Avery, Esq. (deceased), from June 30, 1915, to February 19, 1916, $114.70; Brig.-General Sir H. M. Pellatt, from June 30, 1915, to April 8,
1916,	$110; Smeaton White, Esq., from June 30, 1915, to April 8, 1916, $150; Lieut.-Colonel
T.	Walker, from June 30, 1915, to September 6, 1916, $377.65; Lieut.-Colonel C. W. Rowley, from June 30, 1915, to November 10, 1916, $390.45; W. K. George, Esq., from October 14, 1915, to August 10, 1916, $152.70; the Hon. T. W. Crotlhers, from October 14, 1915, to December 30, 1916, $40; W. M. Dobell, Esq., from October 14, 1915, to September 20, 1916, $1,150.41, (itlhis amount covers the period from October 14, 1915, to September 20, 1916, and includes a voyage overseas to investigate similar work in France and England); R. Gill, Esq., from May 18, 1916, to November 15, 1916, $56.35; Dr. F. J. Shepherd, from April 4, 1916, to June 30, 1917, $412.80; F. W. Peters, Esq., from April 4, 1916, to April 20, 1917, $163.50;
J.	S. H. Matson, Esq., from June 30, 1915, to April 30, 1917, $410.


MR. GEO. F. HENDERSON, K.C.
Mr. McCOIG:: 1.	Is Mr. Geo. F. Henderson, K.C., chairman of the commission appointed by the Government to review the report of Mr. W. F. O'Connor,
K.	C., High Cost of Living Commissioner, on the operations of cold storage corporations in Canada, the same person who appeared as counsel for certain food supplying corporations alleged by the City of Ottawa to he charging extortionate prices, at the Government investigation of cost of living conditions held at the City Hall, Ottawa, in January last, at the request of the municipality on behalf of its citizen consumers?



2.	Was this investigation conducted at the request of the citizens through their city council by Mr. W. P. O'Connor, K.C., acting for the Labour Department on the question of the high cost of living?


Mr. CROTHERS:: 1.	Mr. Henderson represented the Ottawa Dairy 'Company, Ltd., as their counsel, at an investigation into the cost and price of milk, held in January, 1917, 'before W. F. O'Corunor, K.C., as an examiner under the Order in Council No. 2777, of November 10,
1917.
2.	Yes.


ASSISTANTS TO POOD CONTROLLER.
Mr. ROSS:: 1.	Has H. P. MoCue been appointed to act in any capacity with the food controller, or in connection with the Government?
2.	If so, in what capacity? What are his qualifications for such position and what is his salary?
3.	Who are Messrs. Willison, Todd & French, appointed to assist the food controller, and what are their qualifications for this work?
4.	Are such appointments, if made, in harmony with the national thrift and economy advocated by the Government and the food controller?


Mr. HUGH CLARK:: 1.	Not with food controller.
2.	Answered by answer to No. 1.
3.	W. A. Willison: Active in newspaper and educational work, connected with the News Advertiser of Vancouver, B.C. for some time, connected with the Toronto Daily News for several years as staff correspondent and associate editor, an accredited correspondent of the Toronto Daily News in London, England, for two and a half years during which time he was closely associated with the Canadian troops at the front, and made a special study of the educational and publicity work in connection with the food problem in Great Britain.
5.	E. Todd, B.S.A.:	Practical farmer,
graduate of the Ontario Agricultural College, district representative of the Department of Agriculture for a number of years, farm director of the public institutions of the province of Ontario for over five years, being in charge of the farms at the twelve provincial institutions. His work included purchase of large quantities of provisions, being in special charge of the meat supply and the public institutions abattoir, and the growing, storing, canning and preserving of fruits and vegetables and otherwise provisioning a population of upwards of eight thousand.
F. W. French: Employed in the Department of the Provincial Secretary, Ontario, for a number of years, studying and in-
stalling office systems within the department, business manager of the Hospital for Insane at Whitby through a large part of the construction period, assistant direc-or of Industries, Ontario Reformatory, Guelph, having charge of the reorganization of the various industries and the installation of modem cost-accounting systems throughout. Resigned his position with the Ontario Government to take up like work with Robert Simpson Company, Limited, at better pay, and was temporarily released by them to take up the present work, at as nearly as may be the same remuneration to him as was paid by the Robert Simpson Company.
4.	Yes.


SONORA PREVENTIVE OFFICER.
Mr. SINCLAIR:: Why was a change made in the personnel of the Preventive Office at Sonora, Guysboro County, N.S.?


Mr. REID:: In the interests of the public service.


RIMOTJSKI PUBLIC WORKS ENGINEER.
Mr. LANCTOT:: 1.	What was the cost of the heating of the office of the engineer of the Department of Public Works at Rimouski, Mr. J. C. Tachd, during the fiscal year ended March 31, 1917?
2.	From whom was the coal and wood bought, and at what price per ton or cord?


Mr. ROGERS:: 1.	The department pays Mrs. J. C. Tache $30 per month rent for office accommodation at Rimouski which includes the heating.
2.	No information in the department.


Mr. LANCTOT:: .
1.	How many employees are there in the office of Mr. J. C. Tachd, engineer, at Rimou-ski?
2.	What are their names, occupations and salaries?
3.	Upon whose recommendation has each one of the said employees been appointed?
Mr. ROG6RS:
1.	10 employees.
2.	J. C. Tache, district engineer, $2,800; L. G. Trudeau, senior assistant engineer, $1,500; Alex. Bailey, assistant engineer, $1,200; Maurice Leblanc, general foreman for Bonaventure Co., $1,200; A. Lavoie, general foreman for Rimouski, County, $1,200; Jerome Legare, draughtsman, $1,100; Theodore Dery, junior assistant engineer, $900; Miss E. Caron, stenographer, $780; J. A. Turcotte, clerk, $900; Ernest Bois, messenger, $240.
3.	No information in departmental records.


Roch Lanctôt: What was the total amount spent for the office of the engineer of the Public Works Department at Rimouskt, Mr. J. G. Tachfe, during the fiscal year ending March 31, 1917, in salaries, including that of the engineer, rent, office supplies and heating?


Mr. ROGERS:: 


FUEL CONTROLLER'S STAFF.
Mr. KAY:: 1.	Has the Government come to any decision as to the number of secretaries, assistants and office employees, which will be required in the office of the Fuel Controller?
2.	Have any appointments been made?
3.	If so, what are the names of the persons appointed?
4.	What salary is paid to each?


Sir GEORGE FOSTER:: The only help that has been ordered under pay for the Fuel Controller up to the present time has been the appointment of which I spoke yesterday, of Mr. H. P. McCue. Whatever help may be necessary in the future, that is the condition of things as it is to-day.


LIEUT. ROSWELL fBLAIN.
Mr. MICHAUD:: 1.	Is Lieutenant Roswell Blain, whose home is in Brampton, Ont., and who originally enlisted in the 126th Battalion, subsequently transferred to the 116th Battalion, in Canada at present time?
2.	Has he been discharged or is he home on furlough?
3.	Is he still drawing pay?
4.	If not, when did it cease?
5.	Is Lieutenant Blain's wife drawing separation allowance?
6.	If so, what amounts have been paid her?
7.	From what date did the separation allowance start?
8.	If not drawing separation allowance at present, when did it stop?


Sir EDWARD KEMP:: 1.	Yes.
2.	On furlough.
3.	Yes.
4.	Answered by No. 3.
5.	Yes.
6.	His wife is drawing the separation allowance to which she is entitled according to rank of her husband.
7.	February, 1916.
8.	Answered by No. 5.
WESTERN BUILDING INSPECTOR. *Mr. LEMIEUX:
1.	Has Mr. Gerrie, of Winnipeg, been recently appointed building inspector for the West in the Public Works Department?
2.	If so, was he recommended by the Civil Service Commission?
3.	What is his salary?


Mr. ROGERS:: 1.	Charles Gerrie, appointed building inspector for Manitoba, Saskatchewan and Alberta, on 5th July, 1916.
2.	No; the outside staff of the Public Works Department does not come under jurisdiction of the Civil Service Commission.
3.	$150 per month.


BUSINESS PROFITS WAR TAX.
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On the Orders of the Day:
Mr. F. B. CARVELL (Carleton, N.B.):: I wish to ask the Minister of Finance if it is possible to have a clear statement of the policy which the Government intends to pursue regarding the publication of details of the taxation under the business profits wiar tax. I referred to this in the House some two or three weeks ago in the absence of the Minister of Finance, and the Prime Minister said he would bring it to the attention of the minister, but I have heard nothing further about it. I wrote to the Minister of Finance giving the names of four or five companies who I know have made large profits in the province of New Brunswick. I, received the reply that no returns had been filed for the first year. I have received no further information. I am not bringing this up with a view to finding fault with the answers I received from the Finance Minister, but I feel it is a matter of so much importance that the House is entitled to a straight declaration from the Governrhent as to how much or how little information the public are to receive in reference to matters of this kind. I do so largely because the hon. member

for North Grey (Mr. Middlebro) was able to give to the country certain detailed information with regard to twenty-three of the most important companies that come under this Act, and when I ask for information regarding other companies, I am unable to obtain it except to be treated as confidential. While it might be some pleasure to me to have private information, it is of no public value, and therefore it could not be used.


Sir THOMAS WHITE:: When the Business Profits War Tax Act, which was introduced in the session of 1916, was under consideration, the statement was made that returns would be brought down provided a resolution of the House was passed asking for such information. It was thought inadvisable that details of private business should be given, There seems to be a consensus of opinion that such details should not be made public. There is a provision in the Business Profits Tax Act providing <a penalty against any official of the 'department giving any information to the public respecting the details given dm the return made by ithe taxpayers under that Act. I have given this matter a good deal of consideration, because any hon. friend from Oarleton has raised the point in the House. I do- not 'desire that the administration, of this Act -should be exempt from criticism. I think that would-not be in the public interest. I shall' -always be -prepared to discuss any resolution -referring to the 'administration of that Act in respect to the assessment of 'any firm or company -carrying on business in Canada, and subject to its provisions. .	_
My hon friend has asked, What is the policy which the Government will adopt with reference to this? The conclusions which I have reached are: I think that a member of Parliament, us a member of Parliament, is entitled to know the amount for which any taxpayer is assessed. I think that, if he desires detailed information showing the amount of capital, the reserve and profits and other intimate particulars- of the business of any individual or concern carrying on business in Canada, he ought to move for such information, and in so moving he should give the grounds upon which he desires it. He should lay a foundation which would justify the Government in placing before the country the intimate details of the private business of those engaged in commerce and industry. Then each such motion could be dealt with upon its merits. The Government could take the 
position that this information, by reason of the foundation which has been laid and the argument of the member asking for it, should be 'brought down, or, on the other hand, the Government could take the position that no proper -foundation had been laid, and that the information should not be brought down. My own view is that a member asking that information	of	a confidential	nature
should be brought down and made public should lay a foundation, indicating that the assessment had not been properly made. Then, if such position were prima facie sustained in the argument, the Government would, I think, be justified in bringing down the information.
It is a very important matter to business firms in Canada that the intimate details of their private business should not be made public to their competitors. I believe 99 per cent of the business concerns will subscribe to that proposition as being sound, and only fair to them. They do not desire to escape taxation, but they do not want their competitors to know the details of their private business. I am not speaking of public utilities, or of public companies where returns are required by legislation or otherwise; I am speaking of the business of companies generally. Further, I may say that since this question has -been raised I have asked the Acting High -Commissioner in London, to ascertain from the Chancellor of the Exchequer, the practice in Great Britain, and I am informed, in reply to my cablegram, that under no circumstances would they permit the publication of detailed information relating to the business of individuals, firms, 'and companies carrying on business in the United Kingdom, and subject to the excess profits tax. The Government should, I think, take the position that we do not desire to be exempt from criticism. If there is a measure in force in Canada providing for taxation, the administration of that measure is a proper subject for debate in the House. On the other hand, we must be fair and just to the business community. The position therefore, is, as I have indicated, and it is not in any way inconsistent with the furnishing to the hon. gentleman for North Grey (Mr. Middlebro) of the assessments of a certain number of firms which paid during the first year the highest amount of business profits taxes. I have written to my hon. friend (Mr. Carvell) stating -substantially what I have stated here to-day

If a member of Parliament, as a member of Parliament, desires to know how much " A " is assessed for, I think he should know, but if he desires to make public information relating to the details of private business, I think he should move by way of resolution in this House, and lay -a foundation setting forth fully his Teasons for making such motion and the ground upon which it is made.


Frank Broadstreet Carvell: Suppose that I, as a
member of Parliament, should apply to the minister to obtain the amount for which any firm or corporation had been assessed, would he consider that was purely confidential to myself, or would I be entitled to use it? I assure him that unless I could use it it would be of no value to me.


William Thomas White: I stated that information would be supplied to a member of Parliament as a member of Parliament. When he gets that information-, it is for him to use it in such manner as he thinks he is justified in using it, having regard to the responsibility of his position as a member of Parliament. There is a differentiation in my mind between giving information as to the amount of assessment and the details of a man's private business, which latter I do not think -should be given. My hon. friend refers to one or two oases in which he received an answer from my department. The assessment for the second accounting period has not yet been made.
In one of the cases which he asked -for information, there was no such company as my hon. friend named, and I suggested that he should see the 'Commissioner of Taxation. I do not believe there is an office in the 'Government that is more open so far -as information is concerned than my own; it has always been my object to keep it so. At the same time, unless there are grounds for the charge that full information has not -been supplied or that the assessment has been wrongfully made, it is not in the public interest that these matters which we have been discussing should he made public.


Mr. KYTE:: ll asked the Minister of Finance some months ago for the amount of the earnings and war tax of the Ogilvie Flour Mil's company up to the end of the accounting period terminating August 31, 1916. The Minister of Finance about July 15 stated that the figures had not been worked out by the department. Can he supply the information now?


William Thomas White: The assessment on the second accounting period is now being made; we will have until September to make it up. The department is very busily engaged in going over the multitude of returns that have come in and it will be well into the fall before these assessments are settled. I think I gave -my hon. friend some information with regard to the first year.



THE CANADIAN RAILWAY SITUATION.


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Consideration resumed in committee' of the proposed resolution of Sir Thomas White (Minister of Finance) respecting the Canadian Northern Railway company, Mr. Rainville in the Chair.
William Thomas White: 
Mr. MARCIL:: Has any information been asked for or brought down with regard to Model City, which Mackenzie and Mann are establishing near the tunnel in Montreal? Considerable interest is taken in this matter by the citizens of that city.


William Thomas White: I do not understand that that land is vested in the Canadian Northern-though if I am mistaken, I should be glad to 'be corrected. Mackenzie and Mann have 'hundreds of enterprises throughout Canada and elsewhere. If this matter has any relevancy to the discussion of the acquisition of $100,000,000 of stock of the Canadian Northern Railway system, I shall endeavour to obtain what information I can about it.


Charles Marcil: The citizens of Montreal were told that this Model City was being opened up in connection with the new tunnel. In fact, it cannot be reached except through the tunnel. All the land which could be purchased on the north side of the mountain was acquired and promises were made that a magnificent city would be laid out there. What I wanted to know was whether that enterprise had any connection with the Canadian Northern system or its subsidiary companies.


William Thomas White: I am not aware that it has any connection, hut I shall inquire, and if I find that it has I shall make a statement In regard to the matter.


Charles Marcil: It is only fair to the public that the minister should explain exactly how the .matter stands.


William Thomas White: I can obtain information about it only if the Canadian Northern owns the land. If it is some subsidiary enterprise owned by Mackenzie and Mann, or others, it has no connection with this resolution; it would have no .bearing upon our determination of the issuev


Charles Marcil: In the statement that has been issued, certain lands owned by the company are dealt with; I thought that these might be in the same category.


Mr. PUGSLEY:: The debentures amounting to $21,000,000 which axe to be assumed by the Government have as their sole security the sales agreements of lands in the West, about 800,000 acres of unsold lands, and the cash proceeds of the sales which are in the hands of the National Trust company. They do not cover the land grants either in Ontario or an Quebec. My hen. friend will, I think, see the importance, before .asking the committee to authorize the country to become liable for these debentures, amounting to the enormous sum of $21,000,000, of furnishing information with regard to these lands, where they are situated, what sales have been made each year since the Government be-

came represented on the board of directors pursuant to the resolution of 1914-because the assurance was then made that the Government would he so represented-and what has been the .average value per acre of the lands .sold. My hon. friend will find that when those lands are all sold there will be a large shortage, .amounting to several million dollars, which the country will be obliged to .assume, iand I think the people are entitled to have the information for which I have asked.


William Thomas White: As I stated last night, and as the Prime Minister stated, I utterly fail to follow the argument of my hon. friend from St. John. The Canadian Northern Bailw.ay company issued its debentures to the amount of about $20,000,000.


William Pugsley: $21,000,000 is nearer the correct amount.


William Thomas White: Well, say $21,000,000. If they had had no lands at all to pledge, and had issued their debentures and taken the proceeds and used them in the construction of the system, if we took over the stock of the Canadian Northern Railway company, that would not in any way lessen or diminish the indebtedness of that company in respect of the issue of debentures. Instead of issuing those debentures unsecured, the Canadian Northern Railway company had land, and in order to make their debentures more attractive to the investing company, the Tailway company pledged the land as security for the debentures. My hon. friend says that when the transaction is at an end, there will he a shortage representing the difference between the amount realized from the sale of the lands and the amount of debenture stock issued. Assuming, for a moment, that that will be so-I do not know whether it will be or not-I ask: How does that affect this question? In what different position is it from other debenture indebtedness of the Canadian Northern? My hon. friend suggested last night that the Government might have nothing to do with those lands.


William Pugsley: Hear, hear.


William Thomas White: The Government does not get into privity with the debenture holders except to this extent: They are in precisely the same position, >as with the other debenture holders. If those debentures are paid off in time, the Canadian Northern Railway company will have whatever security is left there, in lands, deferred pay-

ments, cash in trust or otherwise. This particular debenture issue is in a better position than is any unsecured debenture issue of the Canadian Northern, because it has those lands as collateral. My hon. friend asks for certain information as to where these lands are situated. I think I can give that to him. The Canadian Northern Railway company had in the provinces of Manitoba, Saskatchewan and Alberta, 4,002,848 acres of those lands. There have been sold 3,159,720 acres, leaving unsold
843.128	acres. The value placed upon those
843.128	remaining acres is $15 per acre, making a total of $12,646,925. In addition, the Canadian Northern Railway Company, has a land grant from the province of Quebec of 402,860 acres, all unsold; from the province of Ontario, a land grant of 2,000,000 acres, all unsold, those lands in both cases being valued by the company at $3 per acre.
Mr. 'PUGSI.F.Y: I do not know if the minister is aware of the fact, but if the documents laid on the Table are correct, those debentures do not cover the land grant of 2,000,000 acres in Ontario nor the land grant of 402,860 acres in Quebec. On the contrary, those land grants are both hypothecated together with other securities, as the minister will find by turning to page 10 of the statement.


William Thomas White: I am not dissenting from that statement. I am giving these particulars for the information of the committee. In the province of Nova Scotia, there is a' land grant of 150,000 acres, all of which has been sold. The deferred payments and accrued interest on the land grants I have mentioned were $7,140,996, less commissions on the collecting of the instalments, $478,887, leaving balance due on deferred payments and accrued interest on sales of $6,662,109. I understand that the 4,000,000 acres of land referred to were, originally obtained by Messrs. Mackenzie and Mann as contractors in connection with construction of certain railway lines which they built in Manitoba. Those lands belonged absolutely to them. As the system grew, they transferred those lands which they owned to- the Canadian Northern Railway Company, and they now appear amongst the assets of that company. In 1899, the company issued a land grant mortgage to the amount of $2,000,000, the proceeds of the mortgage being used for the purposes ot railway construction.


William Pugsley: On what lands?


William Thomas White: On the land
grants.


William Pugsley: In the West?


William Thomas White: 
William Pugsley: What are these last
lands?


William Thomas White: Part of the 4,000,000 acres in the West. In addition to the above, the Canadian Northern obtained 120,000 shares of stock in the Canadian Northern Prairie Lands Company, which, at par, amounted to $600,000, and in exchange that company gave 'the lands company 200,000 acres of land. The stock has been paying 10 per cent isince its issue, and provision has been made from the sales of lands to retire the original stock at par. This was a transaction in connection with their issue of debenture stock, and the point I make is this, because I fail to see what bearing this has upon the question-


William Pugsley: I will show the minister.


William Thomas White: I do not see what bearing it has, and I do not think it has any bearing at all, if we are going to take the stock.


William Pugsley: What I was arguing was that you should not take the stock; you should expropriate the railway system.


William Thomas White: The Canadian
Northern Railway Company issued debentures to the extent of $21,000,000, and the proceeds went into the road. If there had been no collateral, the railway company would not have been in as good a position to-day as regards the collateral, namely, the lands, which represent -a substantial value, no matter what the precise amount may be. Therefore, I do not follow my hon. friend when he suggests that the railway company should not retain these lands. Why should the railway company give up its equity in valuable lands, even if those lands are pledged to secure -an issue of debenture stock. My hon. friend says that he is in favour of expropriation.


William Pugsley: I am not in favour of
engaging in the enterprise at all while the war is on, or so long as present conditions continue. What I said was that if the road was to toe acquired, it should foe by expropriation, the country paying foT the property what it is actually worth.


William Thomas White: My Iron, friend put forward that argument last night, and I pointed, out to him that if the Government expropriated this system, including all the physical assets of the several railway and other companies embraced in it, we Should have to find a very large amount oif money-my hon. friend said about $300,000,000. I pointed out to him that, from the standpoint of financing in times Like these, it was very much better to continue the companies as they are, permitting them to do their corporation financing, and assisting them only to the extent that was necessary, rather than to attempt to expropriate the physical properties of the whole system., and having to find some $300,000,000 to do it with, because the indebtedness would have to be paid off. I pointed out further-and it has been pointed out frequently in connection with the Canadian Northern Railway system because the question has been before the House many times-that if the Government foreclosed and took possession, there would at once he liquidation proceedings in connection with all the companies included in the system.
My hon. friend has radically changed his mind on this question because in 1914, as was pointed out by the Prime Minister last night, he suggested that the stock should be acquired and that it should be valued by arbitration. More than that, he suggested that a maximum amount of $30,000,000 should be fixed.


William Pugsley: The minister is not stating the facts correctly. If he would read the resolution he would see that by the amended clause the company was to have control of the system, provided they made no default If they made their interest payments promptly on the $45,000,000 and on all the other securities, things were to be allowed to run as they were for five years, the Government having the option of taking the stock by arbitration in case the company pulled through and took care of its liabilities for that period. But in case of default, the Government would have the right to take possession of the railway.


William Thomas White: My hon friend
has taken two or three different views of 
this Canadian Northern Railway situation. He has a different solution every time the question comes up.


William Pugsley: And if he has, he does not differ much from the Minister of Finance.


William Thomas White: We have had a consistent policy. In 1914 we took $40,000,000 of their stock in return for our guarantee. That left only $60,000,000 to acquire, and we are now proposing to acquire it. My hon. friend (Mr. Pugsley) has a different view every time this question comes up and he is always prepared to make his view fit in with what he thinks the political exigencies demand. In 1914 he was in favour of taking over the stock of this road .at a maximum price of $30,000,000. More than that, his leader-and I shall place this upon Hansard before this dehate is closed-moved in 1914 that immediate steps be taken to acquire the stock of the Canadian Northern Railway Company at a price to be fixed by arbitration, but not to exceed a maximum of $30,000,000. I shall be very much surprised if my hon. friend from St. John did not vote- for that resolution.


William Pugsley: I certainly did.


William Thomas White: He says he did, and now he wants us to expropriate. At a time when the financial conditions are qs they are, he wants the Government to provide $300,000,000 to. expropriate the property He goes back upon the view which he has expressed1 on more than one occasion, goes back upon the view which his leader expressed, and which he voted for in 1914.


Mr PUGSLEY:: Was it not then represented to the House that the total liabilities did not exceed $300,000,000? To-day we find them, put at $400,000,000. We do not know just what they are.


William Thomas White: My hon,. friend
is pretty good at explaining, but I think it will tax even his powers to explain his change of view.


William Pugsley: 
William Thomas White: 
William Pugsley: The minister is not so much of a child as he would try to make himself appear. He assumes that because settlers, or land purchasers from the States, come in and go all over a tract of land,

picking out here and there from the best, which they buy at $16 an acre, that the rest of the land is worth $16 an acre. I can take the minister into sections of the Northwest, where he will find lands worth from $15 to $20 an acre, and even find some land worth perhaps $40 an acre, depending upon the location. In the same township, he will find hundreds and thousands of acres of land which would not sell for $5 per acre-land which no one wants, being either alkali or rough broken land, which is not saleable at all. The "American invasion'' was beginning in 1902, when thousands of settlers from the United States came into this country. They went over those lands in Saskatchewan, Alberta and Manitoba which are comprised in the land grant of the Canadian Northern system, and they picked out the very best lands in those districts. We have no right to assume that the land which is left to-day is worth anything like the same price as the land which was then chosen by those settlers. I venture to say a great portion of the land bought by people from the United States was purchased at from $2.50 an acre up to, perhaps, $16 per acre. The minister says the proceeds of those land bonds went into the railway. If they did, does not the country pay the company for them? For the sake of argument let us say the railway is valued at $100,000, and $25,000 represent ' the proceeds of the sale of land debentures which went into the railway. Does not the country pay that $25,000?


William Thomas White: -In valuing the stock, does my hon. friend mean to say that he would only consider the amount spent on the road, and would not consider its liabilities?


William Pugsley: In valuing the stock, you must consider all the liabilities. The trouble is when you propose to value the stock you start out with the idea that it has a market value. The commissioners whom you appointed to investigate the matter say it has no market value. Anybody who has given any thought to the subject will agree that in all human probability a judge of the Exchequer Court would not allow a valuation up to the amount of the securities. All I am arguing for is that this country shall simply pay what the property is worth, and let the proceeds of the sale be divided among those who are holders of the securities and who may be entitled to it. If under a valuation there is anything left after paying off the obligations, then of course the

holders of the stock would be entitled to get their share of it.
My hon. friend has referred to what occurred in 1914, and spoke of the position I took at that time, and of the 4 p.m. 'amendment which was moved, hut he has not stated all that took place. When it was proposed to lend the company .a sum of $45,000,000 it was represented to this House, which took the word of the Government, that with that $45,000,000 the company would be ialble to pull through, and would not come back again to Parliament for more assistance. That was the assurance which was given to this House. We believed the statement of the Government, and we, on this side of the House, said that the company was coming in a bankrupt condition, admitting that unless it was aided to the extent of $45,000,000 it could not pay its liabilities, and could not continue (business, hut must go to the wall. Our view was: " assuming what you say is true, land that this will enable the company to pull through, provide, as a condition to the company getting this $45,000,000 aid, that it shall hand over to the Governor in Council all of its issued stock. Place that stock in the hands of the Government, so that if there should be any default, and if -the company should not toe Able to pull through, then the Country will have that stock without paying anything more, or giving any further assistance. Stipulate that it shall be held for five years, and lif during those five years there is no default, then the Government will have the right-the railway having kept the road going, paid its liabilities, met its interest -and demonstrated that it could carry its affairs along-if it should be the will of Parliament to take over the road, it shall be taken over at a valuation which shall not exceed $30,000,000."
Is not that a different proposition from what is before us to-day? All the promises held out to the people of this country through this Parliament have proved to be false. The company was not able to carry on its business, and, apparently, was not able to provide the necessary rolling stock, or make the necessary betterment, if we are to believe the Finance Minister to-day, and give way to the arguments he puts forward in respect of this resolution.
To-day the liabilities are admitted to be upwards of $400,000,000. In 1914 the Government led us to believe they were only $300,000. Is the position very different by reason of the vast increase in liabilities beyond what we were told they were in

1914? The conditions are different for another reason, that in 1914 there was no war on. The Government could then borrow money in the markets of the world at 3 per cent per annum. Even the Provincial Government of New Brunswick of which I was formerly a member floated a large loan not many years before that at 3 per cent. To-day the minister is obliged to go out of this country down to the markets of the United States and borrow money at the enormous rate of 6 per cent per annum. The credit of this country is being strained to the utmost. Burdens unthought of and deemed to be impossible of realization some years ago are to-day being put upon the people of this country, and they are responding cheerfully in order to carry on the war and to do their portion to enable the Government to assist the Empire to the fullest extent possible;. and in this time, when the minister knows that this is the condition of affairs, he is coming and asking the people of this country to undertake an additional burden running up to the vicinity of half a billion dollars and to assume an unknown liability which may amount to thirty, forty, fifty ox sixty million dollars more, to go into the pockets of Messrs. Mackenzie and Mann. They are also putting this country under the necessity of spending in the near future many millions more in building the road up to standard at which the people of this country will expect it to be maintained in case it is acquired by the Government-and the minister is doing all this in face of the deplorable financial position in which Canada stands to-day, and in face of the enormous rate of interest which the country is obliged to pay. The minister talks about me changing my mind. How is it with [DOT]him? Last year when he came before Parliament he gave us to understand that, in his opinion, it was a thousand times better to give temporary assistance to this railway, to carry it over these troublous times, and he told us that he would look


William Thomas White: My hon. friend
is misrepresenting my position. I said in my speech last year that these repeated applications for aid had become intolerable and that we would appoint a commission for the purpose of finding a permanent solution for the railway situation in Canada.


William Pugsley: But the minister did not intimate that he would take over this great liability and incur these enormous obligations while the war was on. He said that he would deplore any movement that would involve the country in such a great liability.
He said we must look, first of all, to the credit of the country, to, the obligations which Canada must bear in connection with the carrying on of the war, and the only conclusion that could be drawn from the argument of the minister was that after this report would be made and when the times would become good again, when the war would be over, when the credit of the country would be re-established and prosperity would come to us again, then the Government would decide what should be done in connection with both of these great railway systems.
I have thought it desirable to make these remarks in answer to the statements made by the Prime Minister and the Minister of Finance yesterday.


Frank Broadstreet Carvell: I was not able to be in the chamber yesterday, and did not hear all the Minister of Finance said. I should like to know if he could tell the committee how much money it would take to meet the present liabilities of the company. Can he also give any estimate, based upon reasonable facts, as to what it is going to cost to finish the system? For instance, we know that the Montreal terminals are in a semi-completed condition; that the Vancouver terminals are in the same condition; that there are enormous trestles on the North Thompson river and on the Fraser river, and that there are unfinished or uncompleted portions of the work all over the system. Before Parliament can intelligently decide upon this thihg we ought to know exactly where we stand, because, as I understand the resolution, it is the intention of the Government to preserve the entity of the Canadian Northern railway, .with which I must say I agree in a sense, because under present financial conditions it would be a serious matter if we were compelled to liquidate all its liabilities. The Canadian Northern railway is to be maintained as an entity, but purely under Government control. Now, if it be under Government control, the Government must go on and finish the road, and I think the committee should have as nearly accurate figures as the minister can give as to what it will take to pay of the present liabilities and complete the Toad as at present laid out. I do not mean this year; it might take two or three years to do it.


William Thomas White: I made a pretty .full statement last evening covering all the matters to which my hon. friend has referred. With regard to the Montreal and Vancouver terminals, there is part of the

proceeds of ithe $45,000,000 remaining with the receiver general available for finishing those works.
So far as concerns rolling stock, I pointed out last night that the Drayton-Acworth report dealt with that, and that while the company had stated that it would require $25,000,000 worth of rolling stock, the report of the commission was that, in their opinion, it would require $50,000,000 of rolling stock, spread over five years. But it was stated in the report that that was on the basis of the business of the system being increased by 90 per cent. I pointed out that it would be the object of the Government that the public of Canada should be served, so far as possible, by the Canadian Northern1 railway being adequately equipped with rolling stock, and I said that the Minister of Railways was giving orders for cars for the purpose of still further equipping the Intercolonial and the National Transcontinental railway. I said also that, while it might require large sums to ideally equip any railway, the company could reasonably get on with such expenditures for rolling stock and other equipment as might be possible, having regard to financial conditions. I do not believe myself that would present a very considerable financial burden, that is in financing the company to the extent necessary to purchase rolling stock for, as my hon. friend knows, the ordinary railway company furnishes itself with rolling stock by issuing what are called rolling stock debentures. The Canadian Northern railway will remain as a going concern and can issue debentures secured upon rolling stock purchased, provided it is in a position to pay down a certain small percentage at the outset. My hon. friend is familiar with the way in which these debentures are retired by paying off each year the interest and part of the principal. My hon. friend has information that the company has spent its earnings in betterments and other instalment payments, principally upon rolling stock, and that it has run behind to the extent of the interest upon its underlying securities, which is a matter of some $15,000,000. I stated that the company would require, in order to go on until the spring of next year, some $20,000,000 or $25,000,000, and instead of the Government making them a loan, we determined we would take over the stock, so that any advances made would enure to the benefit of the people of Canada.
So far as the short term loan situation is concerned, there is something like $98,-

000,000 spread over two years, but those loans are all very well secured in many cases by Government guaranteed securities to an amount more than representing the short date notes which had been issued against them. What I would look forward to would be-just as during the past two years-the company renewing those loans as they fell due, or making one or two short date issues, for the purpose of obtaining the money to retire the present short date issues as they matured. In other words, the company will continue its corporate financing after the Government becomes the sole stockholder. That is one of the advantages, as I submitted, in our maintaining the corporate entities of the Canadian Northern and all the other underlying subsidiary and constituent companies.


Mr. GERMAN:: Are these land grant bonds or debentures secured in any other way, excepting on the land itself? As I understand, there are no liens against the physical property of the Canadian Northern railway. Are these four per cent land grant bonds, 1909 and '99, etc., and land mortgage debentures secured by a mortgage on, for instahce, the Canadian Northern Railway system, or are they secured by mortgage on the land itself?


William Thomas White: Before the Bill is considered in committee, I shall inquire particularly into that matter, but I may say to my hon. friend that the debentures, while they are the obligation of the Canadian Northern railway, are secured only upon the lands which were owned by the Canadian Northern, the equity of which, of course, is still in the company.


William Manley German: Then the Canadian
Northern would be personally liable for this, indebtedness, but there would be no lien for the amount of that indebtedness against the Canadian Northern railway itself. I presume these unguaranteed securities are secured by a mortgage on the physical property of the railway?


William Thomas White: Yes.


William Manley German: And in priority to the trust deed taken by the Government in 1914?


William Thomas White: Yes.


William Manley German: So that if foreclosure proceedings were taken under the trust deed of 1914, the mortgage securing what I would call the unguaranteed securities would have priority, and would have to be paid off?


William Thomas White: Yes.


William Manley German: I presume that is so. That clears the situation somewhat to my mind. I stated when this resolution was introduced that I was opposed to the proposition for more than one reason. I am opposed to the proposition because, in my opinion, it does not go far enough. Last year, when the Government asked Parliament to grant further aid to the Canadian Northern Railway company, the Minister of Finance stated, as he has stated to-day, that a commission would be appointed to inquire into the whole railway system of Canada, and to report as to the best means of dealing with the whole railway system. That commission was appointed, composed of three of the best men that the Government could get-three undoubtedly exceptionally good men. These men have reported, and two of them, Sir Henry Drayton and Mr. Acworth, have made the majority report. They have reported in favour of a scheme altogether different from the scheme which the Government is proposing. Their report is absolutely at variance in my opinion with the proposition which tlie Government had suggested. I would have been glad to have seen the report of the majority of that commission more fully carried out than is being done.
I	think the time most opportune when the Government should have courageously taken over this whole matter, in view of . the duplication of railway lines across the Dominion of Canada, which are paralleling each other, and which are absolutely unnecessary. There are brancn lines being projected all over the country which are not necessary for the development or the needs of the country. I think it was the duty of the Government, and the people expected the Government, to take a more courageous stand in. this matter and follow out, to a very large extent at any rate, the recommendation of Sir Henry Drayton and Mr. Acworth. But they aTe ncx doing that. I am not at all in accord with the report of the majority of the commission in regard to the Grand Trunk I quite agree with the statement of the hon. gentleman from South Renfrew, that the report is a very harsh one in regard to the Grand Trunk railway, which is the pioneer road of the country, but it is not necessary to develop that position at the present time. I wish to state, however, that I would have been in favour of a broader and more courageous policy, one which would have gone further in the way of public ownership of these railway systems than this proposition goes. Whatever we may have thought in the past in regard to public ownership of railroads, we mu6t change our opinion at the present ' time, if we are to keep pace with the opinion of the public, because it is an undoubted fact that the wheels of democracy are revolving very rapidly. The democratic juggernaut is advancing rapidly, and those who stand in the way will be crushed under its wheels, whether they are lords, barons, knights or premiers.


William Thomas White: Then do not stand in the. way.


William Manley German: And I tell the Government they must not stand in the way. The people are determined to have public ownership of these utilities, and it will come. As far as I am individually concerned, I am in favour of the proposition of the Government for taking over the Canadian Northern railway, so far as it goes, but not at all in the manner in which they are doing it. In 1914 I, at any rate, advocated the taking over by the Government of this whole system. I stated then that the Canadian Northern system was bankrupt. The Prime Minister acknowledged it was bankrupt. The Solicitor General acknowledged that they had to have assistance from the Government in order to complete the lines, or bankruptcy stared them in the face. It is bankruptcy to-day, in so far as being capable of going ahead and doing business is concerned.
As the Finance Minister has stated, they must have $20,000,000 or $25,000,000 immediately to tide them over then present difficulties. That being so, it is the duty of the Government to take over this road. But under what system should it be taken over? I say most emphatically and I believe that in this I am borne out by the majority of the people-that the system that the Government is adopting in taking over this road is not the best system. The member for St. John, has said in that I agree-that there should be an expropriation of this property. Hon. gentlemen opposite try to surround this question of expropriation with a .considerable degree of mystery. But there is nothing mysterious in expropriation proceedings; such proceeding are being taken every day; they are being taken continually by the Government. The very day the Government began expropriation proceedings in respect of the Canadian Northern Railway system, the people would become the owners of that system; the Government could take .possession of it and begin to operate it, just

as the Minister of Railways and Canals can take possession of lands on the new Welland Ship canal. He begins his expropriation proceedings-he does not wait to have the value of the lands fixed-and the moment he begins those proceedings the title to the land is vested in the Crown and the Government can begin operations on it at once. If the parties cannot agree as to the value of the land, the matter is left to the decision of the Exohequer Court. There is no reason why the same proceedings should not be taken with regard to the Canadian Northern Railway system. There would be no delay; indeed, it would be a quicker transaction than the present method, because the Government, by virtue of their right of eminent domain, would become the owners of the property the moment they began expropriation proceedings.


Mr. BURNHAM:: Who would provide
the operating staff?


William Manley German: The operating staff would be provided by the Government just as they propose to provide an operating staff now. There is no difference.


William Thomas White: I understood my hon. friend to say that he was in favour of the Drayton-Acworth report. Does he not know that what he now suggests as to taking immediate possession of the system and operating it is opposed in the recommendations of the Drayton-Acworth report?


William Manley German: The Drayton-Acworth report recommends that the Government take over the property, but not by purchasing the stock.


William Thomas White: I wish to correct my hon. friend; he is entirely wrong.


William Manley German: The Drayton-Acworth report says that the stock has absolutely no value and that Mackenzie and Mann have by law no right to any compensation. If any compensation is given, it is a matter of charity; it is an equitable right which they may have if all things prove to be in accordance with their hopes. The Drayton-Acworth report simply says that the Government should take over this property. In that the Finance Minister and myself differ; but I shall refer the House shortly to the words of the report. I contend that the proper way to acquire ownership of this road is by expropriation proceedings. When they begin expropriation proceedings of any kind, the Government state the amount that they are willing to pay for 
the property. There are a large number of mortgages-whether you call them debentures, debenture bonds, debenture stocks or debentures of any kind, they are mortgages against the Canadian Northern railway system-securing the people who have advanced money for the construction of the road; and those mortgages are registered against the property. There is no mystery about that; the mortgages are there, and their total amount is easily determined. If the Government thought that Mackenzie and Mann were entitled to any honorarium by reason of their years of work they could add the total amount of the mortgages to the amount of the liabilities against the company. They could simply say to the Canadian Northern Railway company: here is $450,000,000; we will pay that for the property. That amount is to cover all the legitimate liabilities against the property. What would then happen? The Government would immediately become the owner of the property. If the Canadian Northern Railway company did not see fit to accept the $450,000,000, the matter could go to the judge of the Exchequer Court and the valuation be there determined. If they did accept the $450,000,000 the Government would see to it that that money went to the security holders. But the minister says: under that plan you would 'assume greater liabilities. I submit that you would not be assuming any liabilities at all. The men who now hold mortgages against. the property would be perfectly willing to allow the mortgages to stand. They are not .anxious to get their money; in fact, the money is not due. The Government takes the property .subject to the mortgages and when the mortgages are due they will attend to them. Suppose the Government is expropriating farm lands for canal purposes. Suppose the land is worth $10,000, and there is a mortgage against it for $10,000; and suppose the owner is further indebted to Tom, Dick and Harry around the country in very large sums of money. The Government expropriate the land and they say: we will give $10,000 for it. They do not necessarily have to pay the $10,000, because the mortgagee is perfectly willing to let his mortgage stand there if the Government is willing that St shall so stand. Simply because they have expropriated the land and (are liable to pay the $10,000, they are not liable to pay all the other indebtednesses of the owners of that land.


Mr. MEIGHEN:: The hon. gentleman will admit that the party who held the mortgage
[DOT]would have the right to collect for the land expropriated, if he wished to do so.


William Manley German: If the mortgage was due, he would have the right h>
collect it, but not otherwise, unless there was a clause in the mortgage providing that any change of ownership would give the mortgagee the right to collect. If I sell to the Solicitor' General a farm which has a mortgage on it, the mortgagee cannot collect the amount of the mortgage unless there is a provision in the agreement that any transfer gives him the right to collect.


William Thomas White: Suppose expropriation proceedings were taken and my hon. friend represented an unsecured creditor for a large amount. My hon. friend could take out an order for a receivership. Does he not know that when an OTder for receivership is taken out, having regard to the terms of the mortgages securing the underlying issues of the Canadian Northern, the principal becomes due and payaible and the whole of these companies can be thrown into liquidation. That is what we are trying to avoid.


William Manley German: That of course, is beyond the comprehension' of any man who knows what would likely happen. They may have that legal right, but you would get the property without any difficulty. In my opinion, there would be no difficulty from that source.


Arthur Meighen: There could not possibly be any greater difficulty. Every man with a claim would force liquidation. His mortgage would become due. What was worth fifty cents the day before liquidation would be worth $1 and the Government would have to pay it.


William Manley German: Not at all. The Solicitor General is quite wrong. The Government would be the owner of the property subject to the mortgages that were against it. If there were any unsecured creditor who thought that the Government was offering less for the property than the property was worth, he could undoubtedly institute proceedings. That would not necessarily put the whole matter into liquidation.


Arthur Meighen: Not if we paid up the debt.
(Mr. GERMAN:	Not at all, because the
judge of the Exchequer Court would immediately proceed under the expropriation proceedings to ascertain the value of the property, and as soon as he had done that, his decision would be final, and it would
cut out all the unsecured creditors. Thete could not be any difficulty of that kind at all. Any unsecured creditor could, if he saw fit, appeal from the decision of the judge of the Exchequer Court to a judge of the Supreme Court, as to the value of the property.


Arthur Meighen: That might be the end of it, but what about any man's claim in respect of which he could at any time throw the company into liquidation, and immediately liquidation proceedings are instituted, liquidation follows. At the same time, the bondholders have a right to their money and can call upon the Government for it.


William Manley German: How?


Arthur Meighen: If all the claims, unsecured and otherwise, could be paid, then everything would be paid just the same as now when we are taking over the stock.


William Manley German: My hon. friend is bringing up a question which could not possibly arise and which only emphasizes the difference between the Government's proposition and the proposition which I think they should adopt. I presume the Government purposes forcing through their proposition as they have outlined it. The best, most proper and quickest way would have been the expropriation. The Prime Minister said yesterday in reference to these land grant bonds that the $21,000,000 or thereabouts, which is a liability against the Canadian Northern Railway company, is not .secured on the property of that company.


Robert Laird Borden: Only on the
land.


William Manley German: Only on the land. If the Government take the physical property of the Canadian Northern Railway company, they would not be bound to pay that $21,000,000, because they took the property. That money is not secured on that property, and the holders of those bonds would be relegated to the land on which they have the security and that would be all, except that, as the Solicitor General says, they could bring an action for the liquidation of the company, and that is the only remedy they would have.


Robert Laird Borden: By expropriation proceedings, does my hon. friend mean that he would dismiss altogether the unsecured claims against the property?


William Manley German: No.


Robert Laird Borden: Then, "why should you dismiss claims secured on only part of the property?
' Mr. GERMAN: What I say is this, and I .am coming to the last point in regard to the matter. This point was raised the other day by the hon. member for South Renfrew (Mr. Graham). I refer to speculation in those unsecured claims. By expropriation proceedings we would know how much money from those unguaranteed securities went into this road; how much money was actually advanced. Hon. gentlemen must remember that as soon as this scheme passes through this House, those securities will rise enormously in value, and there will be an enormous amount of speculation in them. The Government will have to pay 100 cents on the dollar for security which, so far as benefit to this road is concerned, yielded only about 60 cents on the dollar, or there will be forty or fifty million dollars paid to the holders of those securities to recompense them for securities on which they paid only, perhaps, .50 per cent of the money which they are getting. That is why I raise that point.


Arthur Meighen: On what securities did they only receive 60 per cent? No securities in the world are of that character. There were securities sold slightly under par on a 4J per cent basis and some on a 3| per cent basis, which have since gone down in value because money is worth more now than it was then; it is worth more to the Government to-day than it was then. It might not pay the Government to discharge those securities.


Mr. GRAHAM:: The securities of some of the subsidiary companies.


Arthur Meighen: They did not sell down to 60 per cent.


George Perry Graham: They fell to 70 per cent.


Arthur Meighen: All the securities sold fairly high.


William Manley German: Under the Governments proposition, the position would be that the creditors could dictate terms, whereas under expropriation proceedings, we would be able to dictate terms. I am not suggesting that (he Government should repudiate by a f-action of a cent any proper liabilities cf the 'Canadian Northern railway, but by expropriating, the Government would be in a position to dictate the terms and do justly by those people without allowing them to rob the treasury of Canada, as I am afraid they will do if the proposition of the Government is adopted.

The Government is purposing to refer to a board of arbitration the question of the value of this stock. This is the first time in my experience in matters of this or any other kind that a proposition was ever made to refer to arbitrators the question of fixing the value of something which every one admits has no value, Every one, in this House or out of it, knows full well that the report of Messrs. Drayton and Acworth as to the value of that stock is absolutely correct, and they report that that stock has no value. Let us see what they say, and it is proper that this should appear very fully on Hansard. In the first place, at page 41 of their report, they speak of the value of the Canadian Northern undertaking. They estimate the value from three separate points of view-from the point of view of the cash investment, from the point of view of the physical basis, and from the point of view of its value as a [DOT] going concern. They say, from the point of view of a cash investment, that the maximum cash investment that can have been made in the property is $383,302,451. That is based on the report of Professor Swain, the highest possible authority on railway matters. According to the balance sheet, the liabilities against the company, without considering the value of the $100,000,000 of stock of the parent company and the $5,000,000 of stock of subsidiary companies, amount to something over $470,000,000. As to the cash investment, $383,000,000 actually went into the property, and there are liabilities amounting to $470,000,000 against it. On that basis the commissioners find that $383,000,000 would be the maximum possible cost of the Canadian Northern Railway system as at present existing. In other words, it is frankly admitted by Canadian Northern witnesses that the shares represent no cash investment.
What about the physical basis? The cost of reproducing is calculated in the same way, and the figures are to be found on page 43 of the report. The commissioners give practically a summary of their previous finding. They say:
We find then that, on the physical basis, the value of the property of the Canadian Northern shareholders is distinctly less than the amount of the liabilities against it. On this basis the equity of the shareholders must be regarded as non-existent.


John Hampden Burnham: Does not my hon. friend think that if the stock cost nothing or next to nothing, it would be good business to get control of the Canadian Northern in that way?


William Manley German: If we acquire the stock, whether we acquire it for something or for nothing, we have absolute control over the Canadian Northern railway.


John Hampden Burnham: If its value is nothing or next to nothing we need only pay a dollar for the purpose of making the agreement legal. Is not that good business?


William Manley German: Yes, but the liabilities of the company have also to be taken into account.


Arthur Meighen: The hon. gentleman says that we have to pay all the liabilities in any event.


William Manley German: Any legal and proper
liabilities.


Arthur Meighen: When we take the stock, we shall certainly not have to incur any liabilities that are not legal and proper.


William Manley German: I am not so sure. Arbitrators are to be appointed-


Arthur Meighen: They do not decide the question of liability.


William Manley German: They decide the value of the stock, and that is the point to which I am directing my remarks at the present time. It is in respect of that, that I propose to take as strong exception as I can. My hon. friend from Peterborough says that if we get the stock for nothing or next to nothing, we shall be making'a good bargain. Very well, but the reason I am objecting to the appointment of these arbitrators is that I fear they will make us pay $15,000,000 or $20,000,000 for stock that is worth nothing.


Robert Laird Borden: Why did my
hon, friend vote for acquiring it by arbitration in 1914?


William Manley German: I am not so sure that I did, but at all events the hon. member for St. John has explained that very clearly and very successfully.


Arthur Meighen: He did not touch it at all.


William Manley German: I am touching it now. Whatever I may havie done in 1914, I know what I am going to do now. I know what the people of Canada expect us to do, and what they will approvfe of and disapprove of, and I am very certain they will disapprove of the appointment of arbitrators in the manner proposed, when they know all the circumstances connected with it.
'The Minister of Finance said three years ago that the railway, with the $45,000,000 270
advanced, would be practically on a sound financial basis, and would require no further assistance. That is one reason why we might have voted for acquiring the stock by arbitration at that time. Last year, when $15,000,000 was advanced for the road, the Minister of Finance said: "We will not continue this yearly advancing of money, but will .appoint a board of commissioners to ascertain and report upon the whole railway system of Canada, and when we. have received their report we shall know what to do." The Government now have the report in their hands, and I ask them to carry out the recommendations that have been made, instead of doing what they now propose. The Minister of Finance says that in regard to arbitration, he is carrying out the recommendation of the commissioners, but I beg to differ with him. The report [DOT]does not recommend that an arbitrator be appointed by the Government; there is no such suggestion in the whole report. The commissioners say on page 62, under the heading "Arbitration Recommended":
But under the scheme we propose, the trustees will operate the Canadian Northern lines as part of a combined system. . . .We suggest that if it is decided to permit the present shareholders to retain a portion of their holding-
They do not suggest that the shareholders be paid oash. To continue:
.	.	. if it is decided to permit the present
shareholders to retain a portion of their holding, the Act of Parliament constituting the Board of Trustees shall contain a provision for arbitration between the trustees and the Canadian Northern Company, and establishing an arbitration board to act forthwith. The trustees should appoint one arbitrator-
Not the Government. It is the trustees who are to be appointed by the Government who are to appoint an arbitrator. The Canadian Northern shareholders appoint the other, and those two arbitrators agree on the appointment of an umpire, and failing agreement, he umpire is to be appointed by the Chief Justice of the Exchequer Court. I say thalt in that there lies a distinction as well as a difference.


Robert Laird Borden: Who was to appoint the arbitrator under the proposal of my hon. friend in 1914?


William Manley German: I do not remember, I am sure. I have not taken the trouble to look it up, .and I really do not care at the present time.


Arthur Meighen: Does not the hon. gentleman think that the Government, who he ad-



P.EVISED EDITION COMMONS

[Stage Direction]
mits had succeeded in 'appointing the (three best commissioners possible, might be trusted to appoint one arbitrator?
William Manley German: I do not think so, and I will give reasons why before I get through. Let us see what these .arbitrators are to determine, and let me say, first of all,^ that the scheme recommended in (the majority report is not the scheme proposed ,by the Government. My hon. friend can whistle to keep up his courage, if he sees fit, but the people of Canada will appreciate that the two 'schemes are not the same.


William Thomas White: We are adopting the mode .suggested by the Drayton-Ac-worth report in dealing with the Canadian Northern. There is no hoard of trustees now. The recommendations of the Dray-ton-Acworth report for the creation of a board of trustees could not he carried out.


William Manley German: If you are abandoning the Drayton-Acworth Teport in that respect, why not appoint a judge of the Exchequer Court to determine the v^lue, if there is any value. Let us now see the difference between the Government's reference to the arbitrators, and the reference suggested by the commissioners.
At page 62 of their summing up they say:
We think that, on the whole, the equity of the case would be met if the Canadian Northern shareholders were permitted to retain a moderate portion of the $60,000,000 of shares which they now hold.
That is not a reference to arbitration to find the value of the stock. They say equity would be met if ithe shareholders were permitted to retain a moderate portion of the stock. They say, further, after speaking of the manner in which the trustees should be appointed:
the arbitrators should he empowered to decide two questions.
Not the value of the istock at all, but, what proportion of the Canadian Northern common stock may fairly remain the property of the present holders.


Arthur Meighen: And what they should get on it.


William Manley German: What portion may fairly remain the property of the present common stockholders, and
what proportion of the earnings of the Dominion Railway Company may fairly he regarded as attributable to the 5 p.m. Canadian Northern lines. To illustrate our meaning, we will assume that the arbitrators decide that five per cent of the Canadian Northern shares still remain the property of the existing holders-

That would be three million dollars worth of the stock.


Arthur Meighen: There is no argument
in it, and of course the hon. gentleman knows that. I did not see that Sir William Mackenzie had uttered such a statement.


William Manley German: That is the ground upon which he put it, as I understand the matter.


Arthur Meighen: If he said that, it is
the poorest exhibition of his intelligence I have ever seen.


William Manley German: It would be a poor exhibition of intelligence on tbe part of any one else.


Arthur Meighen: As a matter of fact, he did not say it at all.


William Manley German: Might I ask my hon.
friend what he did say?


Arthur Meighen: I saw the statement
that in his opinion it was worth $60,000,000 hut he did not say the Government had fixed the value of it because we took $40,000,000 of it as security for our assistance to the company in guaranteeing $45,000,000 of bonds.


William Manley German: Did he say what was
taken?


Arthur Meighen: I did not see that he
said that.	,


William Manley German: Our position in regard to this board of arbitration is as I have stated it. In the first place, it is not a hoard appointed in compliance with the report of Messrs. Drayton and Acworth, and it is not a board appointed to inquire into and determine the things which Messrs. Drayton and Acworth decided a hoard should be appointed to inquire into. In those particulars it is altogether at variance with the Drayton-Acworth report, and to say that the Government will appoint this board of arbitrators or the Government will appoint one arbitrator and the Canadian Northern railway will appoint ,another, .and these two will appoint a third, and if they are not unanimous there shall be an appeal, does not mean very .much. I will venture to say they will he unanimous, and there will he no appeal, and for this very reason-and if I hurt any one's feelings I cannot help it. I will state my belief. Owing to the influences which will be at work behind the appointment of this arbitrator-we have a member of this Government who has been very closely identified with .Mackenzie and Mann from the inception of their organization, and who has been, it is alleged, anld I believe alleged properly, one at any rate of the dominating factors in this Government. I refer to the hon. Minister of Public Works. Those gentlemen started their career in railway building and in politics at practica'ly the same time-seventeen years ago; and what was the first business connection they ever had?


Arthur Meighen: When did the hon. gentleman start his political career?


William Manley German: Twenty-six years ago.


Arthur Meighen: You were a little ahead of the Minister of Public Works.


William Manley German: Twenty-six years ago I was first elected for the county of Welland, and I can tell my hon. friend that at every election since I have been re-elected with increased majorities.


Arthur Meighen: I understood my hon. friend was out for seven years, so that would leave them about the same time.


William Manley German: My hon. friend is entirely mistaken. I was not out for one year. For twenty-six years I have represented the county of Welland in the Dominion Parliament and in the local legislature, and I 270J
have been elected every time with increased majorities. My hon. friend may take any consolation he likes from the knowledge of what has happened in the county of Welland. Seventeen years ago those gentlemen began their careers together. I mention this because when men are for years closely connected in business operations, and closely connected in their personal arrangements, to my mind it goes without saying that those men would naturally have a strong inclination to help one another. What happened in Manitoba at that time? In December, 1899, the Government of Mr. Greenway was defeated by the Conservative party under Hugh John Macdonald, on the policy of Government ownership of railways. That was the policy which defeated the Greenway Government. Mr. Hugh John Macdonald formed a government in January, 1900, and remained as Prime Minister until October, when he was pushed aside and Mr. Roblin assumed the ofiice of Prime Minister, with Robert Rogers as Minister of Public Works. What was the first act in the political career of those two gentlemen in regard to the Mackenzie and Mann outfit? At that time there was a line of railway in Manitoba known as the Northern Pacific railway. Messrs. Roblin and Rogers, ostensibly acting in the interests of public ownership, with ,a view to purchasing the Northern Pacific railway for the Govemr ment, in compliance with the policy of the party which put them in power, went to St. Paul and purchased that portion of the Northern Pacific in the province of Manitoba. Before they got back to Winnipeg they handed it over to Mackenzie and Mann. That was the beginning of operations between Mackenzie and Mann and Roblin and Rogers, and the pathways of those gentlemen have lain side by side from that day to this. Those pathways have been marked by milestones which in a great many cases are objectionable. That is only one out of perhaps scores of instances. There was also the increasing of the guarantees on the subsidies.
Mr. Greenway had granted to the Manitoba Railway and 'Canal company a subsidy of $8,000 a mile, and had taken security on all the terminals and rolling stock of that company. When these gentlemen came into power, they immediately increased the subsidy to $10,000 a mile and abandoned their security on the rolling stock .and terminals. From that time until the present these men have been closely allied in all their enterprises, and I say that a man who has occupied that position

in close connection with Mackenzie and Mann during all these years is not a man who should appoint an arbitrator to decide so great a public question as this question of taking over that stock at a valuation, when it means so much to the people of this country, when $30,000,000 or $40,000,000 may be very easily given to Mackenzie and Mann for something that is not worth the report which they issue every year. I say that is one reason why I object absolutely to this Government having the right to appoint an arbitrator. I say that I believe that influence will be detrimental to the appointment of an arbitrator, as a rqan so appointed would naturally be in' sympathy with Mackenzie and Mann. The Minister of Finance (Sir Thomas White) is in *close touch with gentlemen who will be beneficiaries of this money. The hon. minister sits here. He will not deny that the men who are the creditors of this Canadian Northern system and will benefit by any money, and very largely benefit by any money, which will be paid for this stock, are the most intimate personal friends of his own. I will say very frankly, what every person believes, that the influence of these men was very large in putting the Minister of Finance in the position in which he is at present. Now I say. that with influences such as that, whether there would be anything wrong or whether there would not be anything wrong, with influences such as that behind two of the leading members of this Government, the people of this country will not be satisfied with the award of an arbitrator appointed by these gentlemen.
That being so, I say that the proper course for the Government to pursue, the only proper course for the Government to pursue if they intend to refer the question of the value of this stock to arbitration at all, is to refer it to a man who stands higher than any other man in Canada as a man capable of deciding a question of this very kind, and that is Sir Walter Cassels, a man of the greatest uprightness, a man whose character is absolutely above reproach, a gentleman who had, while practising his profession, as wide or wider experience in matters of this kind than any other lawyer in Canada, in connection with Canadian Pacific and Grand Trunk Railway problems, pertaining to this very Canadian Northern railway. No man could be better fitted to give a decision as the value of this stock, if it is to be referred to any one for the purpose of fixing a value, than the senior judge of the Exchequer Court; and 
I say that a decision by Sir Walter Cassels would be a decision which would meet with the absolute approval of the people of Canada, no matter what it might be. There would be no feeling that there had been any influence whatever to induce him to give a decision other than what he believed to be the true, righteous interpretation of the reference; and I say to the Government that it is their duty, at this time and before this Bill goes through, to cut out this question of appointing arbitrators and to refer this matter to the senior judge of the Exchequer Court. If they do not do that, what will be the effect? The people of this country will believe, and I say it with all seriousness, that there is some ulterior reason why the Government refused to refer this matter to the judge of the Exchequer Court and why they refer it to arbitrators one of whom is to be appointed by Mackenzie and Mann, the others by this Government. I say there will be a feeling that there is this ulterior object in view, some reason other than a desire to get at the real merits of the case.
Then I say that the reference should not be a reference of the value of the stock at all. The stock has no value, as every one admits. What should be referred is just what Messrs. Drayton and Acworth say should be referred:	what are Mackenzie
and Mlann to be entitled to in the proportion of this stock, and what would be the fair cash value, settling it once for all, to pay them out of the prospective revenues of this company?
There is this further in connection with the matter. Messrs. Drayton and Acworth say in their report that Messrs. Mackenzie and Mann have never received any compensation for their services, and for that reason they should receive some honorarium now from the Government. Now, have they not? Here is something that impresses itself on my mind very strongly: We have in evidence taken by this Royal Commission the evidence of Mr. Mitchell, a clerk in the offices of the Canadian Northern, and of Mr. Hanna. These gentlemen assert that Mackenzie and Mann have received no compensation. Well, it has always appeared to me most singular that neither Sir William Mackenzie nor Sir Donald Mann, 60 far as I have been able to ascertain, has ever said himself that he never received anything out of this company. So far as I have been able to ascertain neither one of these gentlemen has ever verbally or over his own signature,

much less under the sanctity of an oath, pledged his word that he has received no compensation. And is it not most astonishing that these two men, who were the contractors, the contracting firm, building this whole transcontinental line of railway practically from the Atlantic to the Pacific for the last 17 years, the sole contractors-subletting their contracts to subcontractors, but the sole contractors so far ae the company is concerned-have built this whole line, and have never made anything out of it? It would be a most astonishing thing, to my mind, and I cannot understand it; and what is more, I cannot believe it until these gentlemen have pledged their word, at any rate, that they have received no compensation. What about the model city at Montreal? My hon. friend from Bonaventure (Mr. Marcil) asked a question as to whether the model city was included in this, if it is Owned by Mackenzie and Mann or a company in which they are the chief shareholders. That concern was built by reason of the terminals of the Canadian Northern in Montreal. Is it to be supposed that they, owning that property, are not making enormous sums of money out of it? And they could only own it, and as a company come into existence, by reason of the Canadian Northern. When any man stands up and tells me that Mackenzie and Mann have never made any compensation for themselves out of the construction of this railway, from the beginning up to the present time, I cannot believe, and certainly will not believe it unless they pledge their oath to it. Then I say that these two men should make a statement, because it is on that ground that Drayton and Acworth report that Mackenzie and Mann should be paid something by reason of the fact that they believed Hanna apparently of course, and so do I, and Mr. Mitchell. They say that these men said that Mackenzie and Mann have received nothing out of it and consequently should receive an honorarium, not in cash, so far as this matter is concerned, but so much of the capital stock and then ascertain, by reason of the possibilities of future dividends what that capital stock is worth.
I say that the only proper method for the Government to adopt, if they carry on the scheme as they have outlined it and take over the stock, is to refer to the senior judge of the Exchequer Court the question as to what Mackenzie and Mann would be fairly entitled to, in view of all the circumstances, as compensation for the services they have rendered to the country.


Mr. DAVIDSON:: Is it not true that Judge Cassels was formerly a member of the firm of Blake, Lash and Cassels, Toronto?


William Manley German: He was.


Avard Longley Davidson: And Mr. Lash, of that firm, is the chief counsel and one of the principal stockholders in the company?


William Manley German: Sir Walter Cassels was one of the prominent members of the firm of Blake, Lash and Cassels; and Mr. Z. A. Lash, of that firm, is prominently connected with the Canadian Northern Railway company. But, notwithstanding that, I have no hesitation in saying that the people of this country would have absolute and implicit confidence in any decision that Judge Cassels would arrive at in regard to this matter. Every man in this House who knows Judge Cassels woujd have implicit confidence in his decision. The Prime Minister, the Minister of Finance, and the Minister of Railways would have absolute confidence in his decision. Why does the Government not appoint him? There must be some reason other than a desire to arrive at a fair and just compensation for Mackenzie and Mann, and to render a decision which would be fair in the interests of Canada.
The Government proposes, when this road is taken over, that "so soon as five-sixths of said shares has been transferred as aforesaid, the Governor in Council may assist the Canadian Northern Railway company," and so on. Now, evidently that company is to be carried on under the same name, and I gathered from the statement of the Finance Minister the other day that it was to be carried on by the people who are at present operating it. The Minister of Finance stated that Sir William Mackenzie would be willing to give his services for the good of the country, although not necessarily for nothing, and that Mr. Hanna and the other officials of that company would be quite willing to continue in office. I know that Mr. Hanna is a very excellent man, and I doubt if the Government could get a better. But, so far as I am concerned individually, I think the Government should not only take over this line of railway, but they should have ,a policy to bring the Canadian Northern, Intercolonial, National Transcontinental, and Hudson Bay railways all under one management, a board of eminently capable business men, who would be absolutely free and independent of politics, and who would represent the people of this country to as great an extent as possible. That is the only

sort of management with which the people of Canada will be satisfied. Those railways are not Government roads, they are the people's roads, and the people will have, if not immediately, at any rate in the very near future, a greater control of the railways than they have at .present. Ilf the people cannot vote directly for directors, my opinion is .that this Parliament should elect the directors. You could have a board representing all sections of Canada -say, two from the Maritime Provinces, and two from each of the other provinces, with a general manager, bringing the number up to fifteen. These men would be elected each year by joint ballot of the Senate and House of Commons. In such a board representatives of the whole of Canada from the Atlantic to the Pacific, and non-political-.because in the selection of men of that kind in that way politics would not enter at all- you would get the best men that could possibly be got. They would carry out the people's wishes in regard to the management of the people's railroads. In my opinion that scheme is advisable and should be adopted. So far as arbitration is concerned, I say with emphasis, and without any doubt at all as to the wisdom of the procedure, that any question of valuation or compensation to Mackenzie and Mann should be decided by the senior judge of the Exchequer Court of Canada.


Arthur Meighen: I do not purpose to traverse the speech made by the hon. gentleman from Welland. Nothing new would be brought out in doing so. He has now announced his adherence to what he calls a scheme of solution. In the various discussions that have taken place in the House, he has announced his adherence to admost every imaginable scheme. He started at one end and has gone down the list, 'and supported each in turn. Now he is simply reverting, turning to the first again, and taking an adverse stand on each of the various schemes he has heretofore supported. However, there is no use following that matter. I only rose to refer to something new in his address. He drew a very interesting analogy between, the career of the Minister of Public Works (Mr. Rogers) and Mackenzie & Mann, Limited, and argued that because the one commenced his career in politics contemporaneously with the career of the other in railroading, there was some link or chain of interest binding them from the beginning. I interrupted him to ask when he began his career, and he said twenty-six years ago, and that continuously

since that he had been a member either of the legislature of Ontario or the House of Commons of Canada, without interruption.


William Manley German: I withdraw that. I was out one year.


Arthur Meighen: He withdraws the statement now. We will see what he will do later on. Let me remind him that if the coincidence of contemporaneous periods of careers is an argument showing connection, then he is much nearer Mackenzie and Mann than the Minister of Public Works. It is sixteen or seventeen years since the Minister of Public Works entered public life. It is twenty-six years since the hon. gentleman from Welland commenced his public career, and Mackenzie and Mann entered public life just at that time. The analogy is more favourable to him, as an associate of Mackenzie and Mann. But he has not been in public life continuously since 1891, if he gave correct information to the compiler of the Parliamentary Guide. He entered the House of Commons in 1891 as member for the county of Welland at the general election, but was unseated. He was elected then to the Ontario Legislature at the general election of 1894, three years afterwards. Is that right or wrong? Will the hon. gentleman speak up, so that it will be recorded on Hansard?


William Manley German: I was in the House of Commons for two years, 1891 and 1892, and in the winter of 1893-1894 I was elected to the Ontario Legislature-


Arthur Meighen: In 1893 or 1894? I do not know about these matters myself; I am asking for information.


Charles Marcil: I would ask the Solicitor General, has the session not lasted long enough, without going into matters of this kind?


Arthur Meighen: The Parliamentary
Guide shows he was out three years. This is either right or wrong. The hon. gentleman told us he was sitting continuously in one House or the other.


William Manley German: I said with the exception of one year. I sat in this House in the long session of 1891. I was in this House in 1892, and in that year the Supreme Court decided against me in the appeal from the decision of the election trial, when I was unseated. My unseating and disqualification were confirmed, and in the following year I contested the seat against Mr. Mc-Cleary for the local legislature, and defeated him, he being the sitting member

for Welland. I have defeated every Tory that has appeared on the scene since then, and I intend to continue to do so.


Arthur Meighen: The hon. gentleman will know better than I do. He may correct the statements in the Guide.


Some hon. MEMBERS:: Talk railroad.


Arthur Meighen: All right.


Mr. McKENZIE:: Perhaps the hon. gentleman had better read Judge Galt's report in the case in Winnipeg.


Arthur Meighen: I stated that the hon. gentleman (Mr. German) was reverting now, and taking the negative side of every scheme on which he took the positive side before.
I have no doubt that so long as the question of the Canadian Northern continues to be before Parliament he will pass over all the various schemes until he has completed the record of taking both sides of every one. The compass will be gone round again .and again; he will .support arbitration one day and expropriation the next. Then he will return and argue against ar-birtation, and the next day he will argue against expropriation. If .arbitration is a wrong method to-day and expropriation is a right method before the Exchequer Court, why was expropriation .a wrong method in 1914 and arbitration a right method? Why was it that Sir Walter Cassels was not eulogized as the proper man in 1914? Why did the hon. gentleman advocate arbitration? Why can we not take 'him at his word? Why can we not take his advice and depend upon its standing, having the assurance that when we adopt it he will not immediately repudiate it? In 1914 he did not argue in favour of expropriation. He did not say that this was a subject that could, under the Expropriation Act, properly or fittingly go before the Court of Exchequer.


William Manley German: I told my hon. friend in 1914 that it was the duty of the Government to take over the whole $100,000,000 of stock. If that had been done you would not he having this trouble now.


Arthur Meighen: I will read what my hon. friend's leader said on that occasion, and I will read the resolution which .my hon. friend himself voted for. The right hon. leader of the Opposition (Sir Wilfrid Lau-rier) said:
I said a moment ago that my intention was simply to summarize the views and the policy which we have laid before the people on this
question, and X summarize them in a few words. We must carry on this enterprise; we cannot allow it to go by default; we cannot allow anybody or anything to come in which would imply anything detrimental to our credit in England; this enterprise has to be carried out; but, instead of carrying it out in the way proposed, we propose that we should carry it out by other means-that we should take absolute control of the enterprise; and for that purpose, I beg to move, seconded by my hon. friend from St. John (Mr. Pugsley) :
That the said Bill be not now read a third time, but that it.be resolved that under existing circumstances no assistance should be given to the Canadian Northern Railway Company unless at the same time it is provided that the Government have power, within a reasonable time to acquire the ownership of the entire stock of the company at a price to be fixed by arbitration, but not to exceed thirty million dollars.
The reason why the hon. gentleman now objects to arbitration is that it suggests a value-though no specific value is even suggested.


William Manley German: Does the hon. gentleman pretend that there is no difference between the conditions then and the conditions now?


Arthur Meighen: But there is no difference between Mr. Justice Cassels then and Mr. Justice Cassels now. There is no difference between the principle of arbitration then and the principle of arbitration now.


William Manley German: No one suggested what board of arbitration the matter should be referred to. The resolution simply said that the price should be fixed by arbitration.


Arthur Meighen: Then, that is not arbitration; it is expropriation?


William Manley German: Not at all. It is not expropriation; you would be referring the matter to the judge of the Exchequer Court as arbitrator.


Arthur Meighen: Does the hon. gentleman want this matter referred to the judge of the Exchequer Court as arbitrator?


William Manley German: I am not saying that at all.


Arthur Meighen: I think my hon. friend had better look over some of the old schemes rather than try to think of new ones. It was suggested in 1914 that we should take, not the rails, not the right of way, not the physical property of the company, but the stock; and that we should fix a maximum price of $30,000,000. Would that not suggest that there may have been a value of at least $30,000,000 in the stock? The resolution now before the committee does not suggest a dollar of value. If the arbitration board find that there is no value in the stock, we have no value to pay for the

stock. The hon. gentleman cannot trust the Government of Canada to appoint an arbitrator, because he thinks we will help Mackenzie and Mann. Did we help Mackenzie and Mann when we appointed the commission whose report my hon. friend lauded this afternoon? Did we confer with them and appoint men that we knew would bring in a report to their advantage when we appointed Sir Henry Drayton, Mr. Ac-worth and Mr. Smith? The hon. gentleman says that these are the best men we could have selected. Why should we select good men as commissioners and poor men as arbitrators. I have no doubt at all that if in this resolution we had proposed that the matter be left to the Exchequer Court, the hon. gentleman would have said: Why did you not do what I fold you in 1914 and what the hon. member for St. John (Mr. Pugsley) himself reaffirmed in 1916? The hon. member for St. John last year referred back to this resolution and said: That was the step to take then as well as the step to take to-day. How is it that my hon. friend's view changes so quickly when we take that step? What would suit the member for Welland? (Mt. German) Immediately we follow his advice, he says that is the worst advice we could follow. He asks the Government to assume that when he advises the Government he does not mean what he says; indeed, does not know what he is talking about.


Frank Broadstreet Carvell: I have listened this
afternoon with a good deal of interest to the remarks of the member for Welland (Mr. German), as I always do, and also to what the Solicitor General (Mr. Meighen) has said. Really I do not know what the Solicitor General is driving at.


Arthur Meighen: The member for Welland.


Frank Broadstreet Carvell: Then my hon. friend's aim was very poor. He failed both to reach his mark and to make it clear what he was aiming at. Every man in the committee is entitled to have views of his own, and he ought not to be kicked around too badly if he expresses them. Anyway, I am going to take the responsibility of giving some of my views on this question. First, I may say that I cannot agree with the Government; neither can I agree with the member for Welland. I do not believe that any member of Parliament ought to be asked to vote for a proposal which he thinks is unsound, simply because the juggernaut is going and public opinion is such

that it ought not to be withstood. My opinion has always been that if a man has opinions of his own, he had better assert them and try afterwards to convince the public that he is right. If he is not right, then he cau let the public do what they have a mind to do about it. That may be a very independent attitude, but I have alwaj s taken to at v'ew.
I do not believe in public ownership cf any kind. I do object to the Government going as far as they are going in respect to the proposed ownership of the Canadian Northern railway system. The Ministei of Finance stated that it was the intention to appoint a commission that should be subject to Parliament, not to the Government. Well, if the Government can do that, it is a wonderful step in the right direction. But no man who has lived in the Maritime Provinces all his life as I have done can honestly say that he is in favour of the public ownership of railways. I know that in Ontario there is a fetisih in respect of public ownership; men are worshipping the public ownership of everything. But it will not be many years before they come back to sound business principles. We had an illustration of that in the House the other evening. In Ontario they have had public ownership-of utilities in the way of electrical energy- the greatest administration of electrical energy which the world has known. There is no doubt that the Hydro-Electric Commission of Ontario has done wonderful work. But they are commencing to get up against the wall. The Minister of Railways (Mr. Cochrane) was compelled to call upon his supporters to vote for an amendment to the general Railway Act of Canada absolutely to put out of existence a competitor to the Hydro-Electric because it stood in the way of this juggernaut. You would not find a better illustration in the records of Canada, from Confederation down to the present time, of the failure of public ownership.


Mr. COCHRANE:: That is hardly a fair
statement. The reason why the Conservatives voted as they did on that point was stated in the committee when that company was getting its rights from this Government. It was that the rights of the municipality in certain streets should be protected. Sir Edmund Osier asked to have this amendment put in, and he was told by the minister and by the lawyer who was putting the matter through, that it was put in.


Frank Broadstreet Carvell: I am not going to go into the details of that. I simply bring it up as an illustration to show that when public ownership starts out to usurp the proper functions of business men, those who have charge always come to the end of their tether; they always come to the time when they cannot carry on things as a business proposition, and then they have to resort to power of some kind in order to work out their scheme, exactly as the HydroElectric did in the case in question.
There was another point made by my hon. friend which struck me very strongly and that was that, in his judgment, there ought not to be arbitration under present conditions. He illustrated the fact that the Minister of Public Works (Mr. Eogers) commenced his public career about the same time as the Canadian Northern Railway company began their career in Manitoba as railway builders. He naturally would argue from that, that the people of Manitoba should have gone on with public ownership and not have public utilities handed over to the Canadian Northern or Mackenzie, Mann and Company. He referred to the devious ways of Mackenzie, Mann and Company and the Minister of Public Works during some years that followed in Manitoba politics, and I think he naturally would have drawn the conclusion that all the troubles were because in Manitoba they had not adhered to the principle of public ownership in railways. The path trod by these firms in Manitoba was a "Great White Way" in comparison with the path trod by an hon. gentleman in Manitoba over the question of public telephones. If in the political history of Canada there is a paragraph or chapter that absolutely condemns public ownership of any public utility in this country, it is the story of the administration of the telephone system in Manitoba during the last seven or eight years. From the very inception of the purchase of the Bell Telephone system in Manitoba down to about three years ago, the path has been one which I would not want to follow, which I do not believe any hon. gentleman in this House would want to follow, and which, in so far as any one instance will condemn a system, must condemn public ownership of public utilities in Canada. If the minister could operate the Canadian Northern Railway system entirely free from political interference, he might get along fairly well, but certainly not as well as private enterprise would get along. He cannot, however, do that; he cannot run a railway in Canada of the magnitude of the Canadian Northern and keep political influence out of it. We have had an experience of that in the Maritime Provinces. I believe the present Minister of Railways started out to run the Intercolonial for a year or two fairly divorced from politics, but two years had not passed before you could not hire a man to bhovel gravel for two days at a time unless he went to the man who controlled the patronage in the constituency, and that has been the case ever since. It is idle to speak about hiring a man on the Intercolonial who is not recommended by the man who controls the patronage, and the minister knows that. The minister knows it would be as impossible for him to hire twenty-five men who were not recommended by the man who controls the patronage in their constituency las it would be for him to fly.


Francis Cochrane: The trouble nowadays is to get men, no matter who recommends them.


Frank Broadstreet Carvell: The minister knows he has to have the recommendation of the patronage committee.


Francis Cochrane: That is not true.


Frank Broadstreet Carvell: My hon. friend knows it is true.


Francis Cochrane: It is not true.


Frank Broadstreet Carvell: I tell the minister it is true. The minister may think it is not true; he may think he is not administering the railway in that fashion, but if he asks his general manager what he can do in the face of the patronage committees, he will find that the general manager is absolutely powerless. I do not believe the minister can run the Canadian Northern, which is about ten times the magnitude of the Intercolonial, as a Government road and keep patronage out of it.


Charles Marcil: The Government do not intend to do so.


Frank Broadstreet Carvell: I do not think they do, because I find in the last clause of the resolution these words:
That the necessary qualification shares for directors may be transferred to or allowed to remain in their names by the Minister of Finance on such conditions as he may determine.
That simply means that the Minister of Finance or the Government appoint the directors under such conditions as they may determine. They put enough stock in a director's hands to qualify him, but he is

simply a creature of the Government; he sits on the hoard as a member of the political machine, and'the road will be run as the greatest political machine Canada has ever known. Think of the Minister of Railways running hotels, telegraphs, telephones, townsites, express-


George Perry Graham: Steamboats.


Frank Broadstreet Carvell: 
Mr. MIDDLEBRO:: Would not that make us practically owners of the road, which is what my hon. friend objects to?


Frank Broadstreet Carvell: We are that now. The moment we took over 40 per cent of the stock of the Canadian Northern in 1914, *we became, not legally, but as a matter of practical business, the owners of the road and became bound to see the thing through no matter what happened.


William Thomas White: My hon. friend
is making a very fair argument, and I do not like to interrupt him. As I understand it, he has suggested that we should make an advance of $20,000,000 and that we take a certain amount of stock as secur-

ity. W'hat would my hon. friend do this time next year, when the same question would arise again, and $20,000,000 more be needed to pay the interest on the underlying securities?


Frank Broadstreet Carvell: I do not know. I should be in the same position as my hon. friend was in two years ago.


William Thomas White: I think we had better deal with it now.


Frank Broadstreet Carvell: We hope the war will be over this time next year. That is a wish that I am sure every hon. member of this House and every one in this country sincerely joins in, and when the war is over, things will be clear that are now dark. We can then grapple with the whole railway situation, ascertaining exactly what our financial liabilities and the prospects for the future are. But, as it is, we are here embarking the country on a scheme involving an expenditure of $140,000,000 or $150,000,000, and under a management which cannot possibly be economical or businesslike from any standpoint. I was reading this afternoon the minority report of Mr. Smith, and was very much impressed with two statements that I read. They so thoroughly coincided with my own views that I feel like placing them on Hansard. The first is found on page 102:
Compared with the total outlay involved in producing railroads by the Government for itself, as, for instance, the case of the Intercolonial or the Transcontinental, from three to six times that amount have been used to realize equal results. This shows distinctly the value of enlisting and retaining private enterprise.
If this statement be true, that the governments of this country from Confederation down to the present time have spent in building Government roads six times as much as the Canadian Northern has spent-and he was dealing directly with that company-it is an amazing statement. It so attracted my attention that I read it two or three times. I do not mean to say that the Canadian Northern lines are in as good a state physically as the Government lines. Mr. Smith, after discussing what government ownership would mean, the extra cost of construction, operation and management -and he certainly puts up a pretty strong argument against government ownership- concludes with these words:
Upon these fundamental truths, I base my firm conviction that the brightest outlook for the future of your great Dominion can be assured through the extension of private railroad enterprises. The hope of honour and the reward of public approval must he open to
human kind to get the best results from human endeavour.
I tell you, Mr. Chairman, that if you take away from the Canadian Northern enterprise the hope of honour and reward, the ambition of the human being, you will absolutely divest it of everything that has made it the great enterprise it is to-day, and there is no disguising the fact that it is a great enterprise. I do not know whether money has been taken out of the road or not. I am something like my hon. friend from Welland in that respect I do not believe that they have handled $400,000,000 without using a little on the side for their own purposes, although I have no evidence to that effect. I should like, however, to see a statement in writing, not to say an affidavit, that such is not the case. There is no use shutting our eyes to the fact that Mackenzie and Mann have worked up a wonderful railway organization in Canada. Their financing has been a marvel; I do not know how they have done it. They have built up an organization of very bright men.


Mr. LEMIEUX:: They have got money
from the Government.


Frank Broadstreet Carvell: The Government might hand over $400,000,000 to my hon. friend or myself, 'but I do not think either of us would get the same results with it that Mackenzie and Mann have. I give them credit for that. I think they are wizards of finance. I do not think the public have given them sufficient credit for the manner in which they have handled that end of the business. Then there is a wonderful personal element Tunning through their whole system. I know a number of their men, and perhaps I may be pardoned for mentioning two who, outside the principals, I regard as the greatest among them-Mr. Hanna and Mr. Moore. These gentlemen have impressed their personality^and many others besides them-on the whole organization from top to bottom. The Government may take over this system and say, "We are going to keep Mackenzie and Mann and some of their organization," but they will not be able to do it. Once the present officials realize that political power is interfering with their management, it will not be six months 'before they, if not Mackenzie and Mann themselves, will say, "I won't have a member of Parliament dismissing or appointing a man through his political influence." It would not be six months before the whole present organization would be disbanded and gone. I do not see any necessity for doing away with the men who

are absolutely necessary to keep this enterprise going. I do not see any necessity lor the Government taking over control of the road. I believe the present organization can run the road better than the Government. I believe that sufficient money should be put up to pay off the company's indebtedness, and as much of the stock should be taken over as is available, for extra security-not that I think the stock is worth anything. I believe that five-sixths of the stock would be available. With five-sixths of the stock in their hands there would be no question as to the Government having control over the road, and if Mackenzie and Mann were not handling things properly, the Government would have it in their power to interfere at any time. That, of course, involves the next question, whether or not the Government should go on and buy out whatever the equity of Mackenzie and Mann may be.
At six o'clock the committee took recess.
After Recess.
The committee resumed at eight o'clock.


Frank Broadstreet Carvell: When the committee adjourned at six o'clock I wias giving some reasons why I was opposed to public ownership of railways in particular, and of public utilities in general. I was pointing out that in my opinion the Government should put up whatever money was absolutely necessary to tide over the Canadian Northern for a year, and see what the future would have in store for us. I was pointing out, also, that in my judgment the personal element in the present Canadian Northern organization means a great deal. I still believe they can manage the affairs of the railway, 'both from the operating standpoint and from the financial standpoint, very much better than the Government of Canada oo-uld. I find, in looking over the statement laid upon the Table, as to the liabilities that are maturing within the next year, that $3,000,000 off equipment notes are maturing; about $10,000,000 of different bonds are maturing in London, and there are other large amounts off bonds payable on demand outstanding in Canada. There are also $10,000,000 of demand securities for liabilities in London. Thus $35,000,000 to $40,000,000 of securities or liabilities mature within the next year, or on demand. The moment the Government of Canada takes over the stock of this road and makes it a Government-owned and Government-controlled proposition, depend

upon it every dollar of that money will have to be paid. It is very simple. The price cf money is going up every day, and a man who has funds invested at four and a half or five per cent, with the Government of Canada behind it, will say; " I want the money," and the Government of Canada will have to raise it, because reinvestment can be made at a much better rate of interest. My contention is that if the Canadian Northern were still running this enterprise they could go to those people 'and say: "we cannot give you your money; there is no use talking about it, we have not the money, and we cannot get it; we will pay your interest, but you must renew the principal." I believe they could renew it on a basis that would mean millions of dollars over and above what could be done by the Government if it were taken over. If the Government takes the railway over it will have to pay every dollar in full at maturity, and will have to go to the markets of the world and borrow this money. Speaking offhand, I cannot see how we are going to get along on less than $100,000,000 of actual money, which this country must produce next year if we take over the road, to carry out the proposals as set forth in this resolution, while, as I say, I believe the Canadian Northern organization could finance it on one-third of that amount. They do like the rest of us when we get hard up and cannot pay our debts in full. Of course, I know this does not apply to the Minister of Finance, because he has lots of money. When I say "the rest of us" I mean some of my friends around me.


William Manley German: Bailiff-proof.


Frank Broadstreet Carvell: more than the liabilities -or worth perhaps *as much; but they will be able to show an earning capacity which you are taking away from them, and you are taking away that earning capacity just at the time when it becomes a real earning capacity-because up to the last few years it has been problematical, but now it is a real earning capacity-and you are going to say to an arbitration : you will have to take all these matters into consideration. We all know how these things go. I know from my little experience with arbitrations of right of way and other things in connection with railways, all these matters must be taken into consideration; and the result will he that we will pay to Mackenzie and Mann $10,000,000 or $20,000,000 or $30,000,000, which we ought not to pay and which we have no license to pay to them at the present time. But, on the other hand, if they, through their energy and ability, have worked up an organization which has a money-earning capacity, then let them work it out. Why take it away from them? Why pay them money which they (have not earned? Rather leave it in their hands and let them work it out, and if there is any money in it let them make it. I think, myself, that if you allowed this road to go on for four or five years more it would be iself-sustaining. I realize that next year we iwill probably have to put up more money, and, perhaps, the year after. But we are in it. I think it was ian improvident bargain three years ago. When the proposal to guarantee $45,000,000 was up I was opposed to it, and, while I have net looked up my remarks, I have a very good recollection of the attitude I took. I was opposed to granting the $45,000,000. Then, in .addition to that, you have granted them $15,000,000, making $60,000,000, and now you are proposing to put up $100,000,000 next year. I say that is not good financing .under present conditions; it is not good 'business for Canada. The proper business for Canada .at this time is to put u.p just as little money as she can get along with and leave this road in the 'hands of the men who have made it a fairly successful enterprise up to the present time, taking, of course, all the security which they can give you, taking the stock, enough of it to put it beyond question that you have a majority and have control. In fact, I would take practically all the stock. I would hold 'it as a trustee and let these people go on and see if they cannot work out theiT own salvation. It will not become any worse in -a year, because if you control the 
expenditure of money which you put up it will not be wasted, and the .property will increase its earning capacity. You will not have to spend the $100,000,000 that we are going to spend next year, and if you (have to take the road over a year from now, or two years from now, you will have saved probably $50,000,000 or $75,000,000.
That brings me to the last .point I wish to discuss, that is, the method of arriving at the amount of compensation, if compensation is rto be paid. I entirely .agree with my hon. friend from Welland (Mr. German) in the statement he made this afternoon. I do not believe in handing this over to an arbitration board. I believe the arbitration would go at the matter in a sentimental way, in a manner which a judge of the Exchequer Court would not. If we have to arbitrate or to pay Mackenzie and . Mann for their equity, surely the determination of the amount to be paid them should be put in the hands of a man who will apply all the technical rules and knowledge which ought to be applied in arriving at the real value of this enterprise. We have all had experience with arbitrations. I do not believe there is a lawyer in this House who, if he is honest, will not tell you that he has all his lifetime advised clients not to arbitrate.
I have laid it down almost as a settled rule in my practice, invariably to advise clients not to arbitrate, because arbitrators, appointed as -you appoint them here, will always give and take. One party will build up an unreasonable contention. I will venture to say that Mackenzie and Mann will claim before this board that they are entitled to $100,000,000, and no doubt the Government arbitrator will say: You are entitled to nothing. Then they will go on and argue and argue, and finally divide the difference. That is what happens in most arbitrations, and the result will be that Mackenzie and Mann will get three times what they are entitled to. Whereas if this is given over to the Exchequer Court you will at least have it decided on well-known principles which should govern the assessment of compensation in matters of this kind. So, Sir, for these reasons, I am very much opposed to the proposals contained in this resolution, and I hope the Government, even at this late date, will see their way clear to reconsider the matter and to put up as little money as they can to tide this road over for a year, or possibly two years, in the hope that the war will end-and surely it will end in that time. If, at that time, you had only the Canadian Northern

to deal with, there would not he such a strong argument for delay; but you have still the great railway problem of Canada, staring you in the face. If you take over the Canadian Northern, have you settled the railway question? No, we have the Grand Trunk Pacific, we have the National Transcontinental and we have the Intercolonial.


Rodolphe Lemieux: And the branch lines.


Frank Broadstreet Carvell: We have the branch lines -branch lines all over Canada. Why, if the government of this country talk about taking over the Canadian Northern because they cannot run, how in the world are they going to avoid taking over branch lines all over the country which cannot run for lack of finances? The Minister of Marine (Mr. Hazen) knows that in his own constituency there is a branch line which practically is being closed down because they cannot get finances to run it. I realize that it is a small enterprise compared with the Canadian Northern, but it is as important to the people in that constituency as the Canadian Northern is to the people in. any other part of Canada. How will the Government justify taking over the Canadian Northern and leaving other systems in Canada, small though they may be, that are unable to run because of lack of funds? Every branch line of the Intercolonial-and I refer to the Intercolonial because I presume there are very few branch lines elsewhere that do not belong to the big systems-has just as much right to come to the Finance Minister and say: We cannot go on without financial assistance, and to claim financial assistance, as the Canadian Northern. And my hon. friend is establishing a principle which he cannot get away from. He is establishing a principle which must be followed out in every portion of Canada.
So, Sir, for these reasons, I can only say that I hope the Government will stop to consider and see if they cannot withdraw from the position they have taken; put up just the least possible amount of money in order to keep this enterprise going for a year or two; and then you will have the whole railway situation-or whatever government may be here at the time, because I think it is very doubtful if my hon. friend will be the gentleman who will have to work it out, but somebody will.


George Perry Graham: For this and other reasons.


Frank Broadstreet Carvell: The Government will
have the whole problem of the railways
of Canada to face at that time, and it is much better to face these questions after the war is over, when we know what our liabilities are, how much money we are going to raise, and where we are going to raise it. We will start out with a knowledge of the actual condition of affairs, which is better than starting out now on an expenditure of $100,000,000 to $150,000,000 but I do not believe that the Finance Minister knows where he is going to look around and get the money.


Mr. A. K. MACLEAN:: What are the
maturities of the Canadian Northern within the next fifteen months that the Government would be obliged to extend, and what, in the judgment of the Finance Minister, is the least amount that should be advanced in the next fifteen months for equipment? I understood the hon. gentleman to say the net earnings could take eare of the interest account, providing it is not expended upon equipment, extensions and betterments.


William Thomas White: The financial
position of the Canadian Northern is substantially this. Assuming net earnings of $11,000,000, the Canadian Northern have to apply that, as I pointed out the other day, for betterments and improvements, and for instalment payments upon equipment- principal payments on equipment. Having regard to the situation that exists at the present time-the liability incurred for interest, the payment on underlying securities, and the situation so far as concerns the next twelve months we will say-the rough estimate that I made after discussing the matter with the officials was that from $20,000,000 to $25,000,000 would be required. In other words, if we took the course we adopted last year, and made a round vote to the Canadian Northern of the sum required to meet liabilities and payments to be made in respect of interest upon securities in priority to the $45,000,000 mortgage of the Government, for betterments and for instalments upon rolling stock, about $20,000,000 to $25,000,000 would be required. With regard to short-term maturities which fall due over the next couple of years, I hope that the Canadian Northern officials will be able to renew those with the Government, the sole owner of the stock, just as they would expect to renew them if sixty per cent of the stock remained in the hands of private owners. I do not agree with the hon. member from Carleton (Mr. Carvell), and I will tell him why. After all, if money is seeking invest-

ment, it is a question of interest rate to be paid. These short-term loans of the Canadian Northern are pretty 'well secured. The loans in New York are secured with a substantial margin, upon bonds guaranteed by the Dominion Government and certain of the western provinces. That is very high-class collateral, and I expect the Canadian Northern officials will be able to renew the loans by Teason of the fact that the Government is the sole owner of the stock. What I have said is subject to this, that in these war times no man can tell what condition we may be in after one month or two, and it is possible that in one or more instances the Canadian Northern might not be -able to extend those loans. If they do not, then I think the Government, as sole owner-for it will be sole owner through its ownership of $100,000,000 of capital stock of the Canadian Northern- should protect its property. Assume we brought down a vote, as suggested by the hon. gentleman from 'Carleton, for $20,000,000 or $25,000,000, as we did last year, it is quite possible-although I do not apprehend it will take place-that during the year the Canadian Northern might not be able to renew one or more of those loans. Then you would have a difficult situation on your hands again. The real fact of the matter is that the essence of this Canadian Northern situation is that the Dominion Government, and the governments of nearly all the provinces of Canada, are so involved by their guarantees given during the years of the construction of this system that default cannot be allowed, and the Government, after giving the matter its most serious attention, and realizing all that my hon. friend from Carleton has put forward, reached the conclusion that if this system is not to be allowed to go into default, and if, in order to prevent default, the Government of Canada is obliged to put up $15,000,000 to $20,000,000 a year, and become practically sponsor for the financing of the system from year to year, we must take the next step and own that system for the people of Canada. The hon. gentleman from Carleton made a very interesting and very fair speech on this subject, and I asked him, when he suggested that we should take the course we took last year, what about next year? My hon. friend threw his mind ahead a year and considered the parliament of that time.
I think there is no doubt whatsoever that, war or no war, the Canadian Northern Railway would have to make application for assistance. I pointed out last year, in the -speech in which I introduced the esti-[*air Thomas White.]
mates for the Canadian Northern and the Grand Trunk Pacific, that the time had come when we should appoint a commission, with a view to reaching a final solution of this railway problem, the greatest problem in Canada, outside the war, without a doubt.
I stated also at that time that the solution might involve taking over one or more of the railway systems of Canada, and that there might be involved the possibility of the nationalization of all the railways of Canada. I pointed out to the House pretty fully the other day that the last was a very large order indeed, having regard to the fact that we are in the midst of a war and having regard also to the financial problems touched upon by certain gentlemen opposite. But, after giving the matter our best consideration we reached the conclusion that we should take this property for the people of Canada in order that, if we are to pay out huge sums of money year after year, the fruition of that expenditure should inure to the people of Canada, not to the private owners of the road. In other words, if we are to continue to finance this system, it must be owned by the people of Canada.
I do not know that it is necessary that I should refer to the remarks made by the hon. member for Welland (Mr. German); I thought he had a very weak case when he had to resort to personal aspersions. This railway problem has been the most difficult problem with which any Government of Canada has been called upon to deal, outside of the war. Every year it presents itself, and it would continue to present itself. This year, after considering the whole situation and having regard to all the financial questions involved, we reached the conclusion that we should take this forward step, which is a step in the line indicated by the Drayton-Acworth report. To take over the whole of the railway systems would, I believe, be too serious a step for a Government to contemplate, having regard to the burden of the war. But by taking over the Canadian Northern and by lending assistance to the Grand Trunk Pacific-I pointed out that we could not deal with the Grand Trunk Pacific at this time as we are dealing with the Canadian Northern because most important negotiations would be involved with the Grand Trunk Railway company-it seemed to us that the proposals which I addressed to the House were the best under' all the circumstances, and I believe they are. I do not believe there

is any other solution of this . Canadian Northern railway problem that will meet the approval and support of public opinion in this country. I think that the Government have taken a proper step, and that looking to the future, we can see the working out of the recommendations of the majority report. No one can say at this stage how this railway, the Intercolonial, the National Transcontinental, and the Grand Trunk Pacific, if we should acquire it later, will be administered. It might be proper to administer them all by a board of experts constituted somewhat as suggested in the Drayton-Acworth report. I absolutely subscribe to the principle that if this system is to he efficiently administered it must be administered absolutely free from partisan interference.


Frank Broadstreet Carvell: I am glad to get that
admission.


William Thomas White: It is not an admission; that has been my principle throughout with regard to all these matters.


Frank Broadstreet Carvell: Does the minister feel
that it is possible to 'get the same results from mere officials that you can get from men who are vitally interested, as the owners and managers of a railroad are?


William Thomas White: A good deal of weight is to be attached to the opinions put forward by my hon. friend; but the trend of public opinion is unmistakably along the line of these proposals. Nor is it a recent trend; it has gradually developed over a course of years. The whole tendency of public administration has been towards enlarging, not restricting, the functions of Government. I think we must look forward to that; I think we must have sufficient confidence in ourselves to believe that we can administer these enterprises; that we shall obtain officials who will manage them as efficiently as private enterprise will manage them. But even if we do not succeed in managing them quite as efficiently as private enterprise would manage them, still the advantages that will accrue to the public from public operation will more than counterbalance any defects in administration. This problem, as I say, has been here for years past-the problem of aiding these railways from time to time so that the systems may be completed and so that they may render service to the people. We believe that the time has come when we must discontinue affording this annual aid and [DOT]lay down the principle that if the Government is to do the financing the people must
have the benefit of the ownership of the system. I listened with much interest-I always do-to what the member for Carle-ton said, but I believe that this is the step called for by all the circumstances existing to-day, and the step that the people of this country demand, if these roads are to be maintained, as I think they should be, as solvent going concerns.


Frank Broadstreet Carvell: I do not intend to go over all the ground again; I shall refer briefly to the chief arguments advanced by the minister. He says that we have to put up money every year; I agree with that.


William Thomas White: My hon. friend said, over a period of five years; that is possibly correct.


Frank Broadstreet Carvell: I was arguing that, while you might get along with $15,000,000 or $20,000,000 a year, if you advanced money annually to the Canadian Northern railway system, the moment the Government attempted to operate the road they would put out $50,000,000 a year instead of $15,000,000. The Intercolonial is a Government enterprise; it goes through a good country; it is as badly operated as anything in the world could be, and we get no interest out of it. I believe the Minister of Railways does claim that he had a surplus of a million or two last year, but that was all by doing Government business; it was only a matter of bookkeeping. You get no interest on your investment, and you put out millions every year in order to keep the thing going. Sometimes I feel that I should like to know how much we are putting out on the Intercolonial railway every year; it would run into many millions. The same thing will happen if the Government take over the Canadian Northern railway system; we will put up millions-not $15,000,000, or $20,000,000 a year, but $50,000,000, $60,000,000, or $70,000,000. My hon. friend is correct when he says that there is a great trend of public opinion in Canada, especially in Ontario, in favour of public ownership. Public ownership of all sorts of utilities has been tried, but I have yet to see the public utility in Canada that in the matter of sound business management would compare for a moment with privately-owned and privately-operated utilities.
This afternoon I referred briefly to the Manitoba telephone system. The Manitoba Government took over the telephone business under very favourable circumstances. Does the minister know that to-day in no other place in Canada are the people pay-



ing such enormous prices for telephone service as the people of Manitoba are paying for a very indifferent service? They are, in many cases, paying from fifty to seventy-five per cent more for the service than the people in the Maritime Provinces are paying where the systems are privately owned and managed. Any public utility in Canada always costs more to operate under public ownership than it would if operated by a private enterprise. We are trying in this country to apply certain ideas and conditions that have been worked out fairly successfully in the Old Country. The bigger cities of Europe have operated tramway systems and other public utilities with a good deal of success; but for all that, we would not put up for two days with the service they have in those big cities.


William Manley German: Is my hon. friend sure about the tramways?


Frank Broadstreet Carvell: I am not sure, because I did not compare the tramways owned by the public with those owned by corporations. Take the telephone system in England. A man will wait half an hour to get telephone connection in England. He does not use the telephone; he uses the telegraph, simply because the telephone service is twenty years behind1 the times. The telegraph service is not any too good, but the telephone service is horrible. Yet we are told: Look at what the English people are doing; they are running the telephones in England. Yes, they are running them, but the people of this country would not put up with the service for two days.
My hon. friend speaks about the operation- of railroads. I have been on Government-owned railways in Germany, Holland and France and the first-class accommodation on many of the roads in Germany is not equal to what we call the tourist class in Canada. The people of Canada would not put up with the accommodation for a moment. If you are going to have public ownership of public utilities in Canada, and if you are going to get down to anything like the cost of operation by private corporations, you will have to make the service inferior, because in Canada you cannot operate a public utility for the same money as a private corporation can and give the same service. In my experience of travelling over a portion of the world, I do not think I have ever seen such an excellent service as the Canadian Pacific railway gives us. I go to New York very frequently; I travel along the northern part of the United States and there is no service there equal to that of the Canadian Pacific railway.


George Perry Graham: You ought to travel between Ottawa and Brockville. It takes four hours and fifteen minutes to go seventy-three miles.


Frank Broadstreet Carvell: There is no doubt that the Canadian Pacific is giving the finest service in the world to-day, and that is simply because the Canadian Pacific has been built up by men who have started at the bottom. Many of those men are alive to-day. It is unfortunate that many of them are passing .away. There is not a man at the top in the Canadian Pacific Railway company to-day who did not start at the bottom, and each one feels he has a real interest in the operation of the road; he feels he is a proprietor in some sense. There is a loyalty to the system that you cannot find on the Intercolonial, or any other Government-owned mad. I realize I am speaking to-night very much in opposition to current opinion in Canada. Nevertheless, those are my views, and I am stating them, no matter how they are received by the press and the people of Canada. Should my hon. friend happen to be Minister of Finance four or five years longer he will regret that he did not take the advice we are giving him this evening and not launch on this great principle of Government ownership of the Canadian Northern, which must inevitably carry along with it Government ownership of the Grand Trunk Pacific and possibly of the Grand Trunk as well.


Mr. MURPHY:: In presenting certain information to the committee this afternoon, the Minister of Finance said that he thought he was bringing down all that had been asked for. Some hon. gentleman on this side-I think the hon. member for Rouville (Mr. Lemieux)-asked the minister if he cpuld bring down the names of the shareholders and also the names of the directors.


Rodolphe Lemieux: The bondholders.


William Manley German: The names of the shareholders and directors were asked for.


Charles Murphy: To that list I would ask the minister to add the names of the pledgees of the stock to which he 'has referred and also the names of the contractors referred to in the printed statement as having unsettled claims. There are, in Ottawa and vicinity, some contractors who, to my knowledge, have unsettled claims, and if will be interesting to note if their names will appear on 'the list presented by the

minister or not. In that way we shall be able to judge as to the reliability of the statement .made iby the company. I should be glad to have that information from the minister before the Bill founded on the resolution is submitted to the House for discussion.


William Thomas White: It would be impossible for us to obtain the names of the bondholders of the Canadian Northern Railway company, as those bonds pass .from hand to hand and a holder to-day might not be a holder to-morrow. I do not think that matter would have any bearing upon the question before the committee, which is as to whether the Government shall acquire the entire capital stock of the Canadian Northern company. I will endeavour to get the other information asked for by my hon. friend. There is a further statement which I said I would lay upon the table of the House when the Bill is in the committee stage, when there will be ample time, to discuss all its provisions; that is the balance sheet for the fiscal year of the company which ended on June 30, 1917. I think I can get that substantially correct. Hon. members will understand that in a railway system as large as this, two or three months are required to check all the vouchers to a certain date. I will endeavour to get that statement. I think that is substantially all that has been asked for, but if when the Bill is in the committee stage, any further information is required, we could get it fairly expeditiously, without a delay of more than a day or so.


Charles Murphy: Will the minister get the information asked for before the Bill reaches the committee stage?


William Thomas White: I can get some. I might be able to get the balance sheet, although I hardly think so. I might be able to get the names of the shareholders. I will, at all events, endeavour to do so.


George Perry Graham: Suppose a constituent
of mine asks me: How much are you paying for the Canadian Northern? What shall I say to him?


Alexander Kenneth Maclean: Perhaps it is as well that you do not know.


George Perry Graham: An hon. member says: Perhaps it is as well that you do not know. I have been in a quandary as to. just what I would tell him. I know what the guaranteed liabilities are; I know what the unguaranteed liabilities are;
I know what the short-term liabilities are; but I do not know yet what it is going to cost us during the next three years for betterments, rolling stock, etc. That is what I had particularly in mind. There are certain works such as the Montreal tunnel and terminals, the terminals at Vancouver, and other works of a similar nature but of less importance. The Finance Minister, replying to a question with reference to the Montreal terminals, said that there was a certain amount of the $45,000,000 guaranteed bonds still with the Receiver General, and the proceeds were to be applied toward the completion of the Montreal terminals. How much remains in the Receiver General's hands, and is it sufficient to complete the terminals at Montreal?


William Thomas White: I am told so.


George Perry Graham: I should also like to have the same information regarding the Vancouver terminals, and other improvements of a smaller nature. These will come under the immediate liabilities, if liabilities they are.


William Thomas White: I will ask the Financial Comptroller of the Railway Department to have a statement prepared showing the financing in connection with the Montreal tunnel and the Vancouver terminals. My recollection is that an issue of bonds was made by the Montreal Terminal and Tunnel company. These bonds were sold in New York and the proceeds applied to the construction of the tunnel and the terminals. The amount required to complete the work is available, I am informed by the Railway Department, from the proceeds of the $45,000,000 of bonds guaranteed by the Dominion Government remaining in the hands of the Receiver General. The same statement is made respecting the Vancouver terminals. But I will obtain that information specifically and give it to the House when the Bill is in committee.
There was one point I inadvertently overlooked in answering my hon. friend from Russell (Mr. Murphy) and that was with reference to the item of $1,300,000 due to contractors. I am told by the Financial Comptroller of the Railway Department that ' practically all the contractors' accounts, with the exception of about $100,000, have been completely cleared up, and that this $1,300,000 represents principally drawbacks against construction. While there may be some contested claims outside, I do not think that they are of any considerable consequence. But I shall endeavour to obtain that information so that when we are

considering the Bill in committee it will be available to hon. gentlemen.


George Perry Graham: I understand that some claims have been made within the week.


William Thomas White: If the claims are against Mackenzie and Mann, our taking over of the stock of the Canadian Northern would have no immediate bearing on that, except that those claims could no doubt be settled out of the award to be made by the arbitrators in respect of the value of the shares, if they are not settled in the meantime. However, that aspect of the matter does not immediately concern the proposal before the committee.


George Perry Graham: The difficulty is this- and I urged it before: The ordinary contractor will not differentiate between the Canadian Northern and Mackenzie and Mann. He will say: The Government has taken over a mile of road that I have built, and I have not got my money; and I want it. The Government will have to make provision to meet those cases.


Rodolphe Lemieux: I shall reserve what I have to say on this matter until the Bill comes before the House, but whether the Bill comes up now or later, I wish once more to register my protest against this legislation. I believe that it should not have been brought up during the present session; indeed, it should not have been brought up during the war. The Government creates the impression throughout the country that we have money to burn. According to rumour, and, indeed, according to legislation passed since 1911, this Government might well be defined as being the creation of the Canadian Northern, and it looks as if it would end with the Canadian Northern. My hon. friend the Minister of Finance, who is versed in the classics, should remember that famous apostrophe of Mirabeau during the French Revolution. Addressing himself to his colleagues in the Assembly, at the time the Minister of Finance was proposing that Frenchmen should contribute one-quarter of their revenues to maintain and save the State, he said: "Messieurs, la banqueroute est a vos portes et vous de'liberez," or, "Gentlemen, bankruptcy is staring you in the face, and yet you are discussing." I think it is well to remind the Minister of Finance this evening of those words of Mirabeau, because if bankruptcy is not staring us in the face, we are living in most crucial times at all events, and yet we are discussing whether or not we shall make another gift of several million dollars to 
Mackenzie and Mann. From the day he became Finance Minister, my hon. friend has thought of nothing else but giving slices of Canada's fortune to those two gentlemen.
Last session $15,000,000 was given to them. In 1914 their bonds were guaranteed to the amount of $45,000,000, and the Government took a share in the company, promising the country that this would he the last call on the public treasury, and that it would save the situation. This year we are to take over the company and control the whole $100,000,000 of stock. Last year my hon. friend appointed a commission of three most distinguished gentlemen-Mr. Acworth, an authority on railways in England, and, indeed, in Europe; Mr. Smith, one of the best railway men in America; and the Chairman of our own Railway Commission, Sir Henry Drayton. They prepared a report which has been published throughout the country, and which states in the most emphatic manner that the stock of the Canadian Northern company is valueless, and that Mackenzie and Mann are not entitled to any equity. And yet my hon. friend comes before Parliament in the dying days of this session, on the eve of a general election, with a proposition that Canada shall acquire the whole system by getting control of the stock. But whilst we assume all the liabilities he proposes to leave the management to the same individuals. He has the temerity to propose to the Canadian Parliament that the value of the stock shall be determined by arbitration. One arbitrator will be appointed by the Government, another by Mackenzie and Mann, and those two appointees will *appoint a third. I am not so gullible as to believe that these three arbitrators will not be friends of the company; everybody knows that they will he. Mackenzie and Mann will appoint a friend of their own; the Government, which is the creation of Mackenzie and Mann, will appoint a friend of Mackenzie and Mann, and the two together will appoint a third friend of Mackenzie and Mann. In this way a combination will be formed to fleece the country of several million dollars. My hon. friend must not forget that he stated not long ago that the public debt of this country amounted in round figures to one billion dollars; that we shall owe at the end of this war nearer two billion dollars than one and a half billion dollars; that we are spending every day towards our military effort about $800,000; that we are borrowing today at six per cent, selling our bonds at 98.

Yesterday, the Prime 'Minister chided me because I dared speak of economy on the appointment of a new minister overseas, and two under-secretaries. He said that my advocacy of economy should not be taken too seriously. Sir, if the Canadian Northern had not chloroformed the press of this country, my hon. friend would know what is the sentiment of the .people from one end of Canada to the other, and he would realize what the people think of this transaction which in my humble judgment is nothing less than a scandalous transaction. Not to speak of economy! When the revenues of every man, woman and child of this country -are being taxed in order to replenish the Treasury of Canada so that we may meet the contingencies of the war. My hon. friend has read Gladstone, the greatest Chancellor of the Exchequer England ever had. I read in one of his speeches many years ago the following words:	" A Chancellor of the Exchequer who is not ready to be cheese-paring is not worth his salt." Does my hon. friend realize the situation to-day? Does he not know that every man and woman in this country is working and saving in order that we ,may pass successfully through the present awful crisis? We have not saved one penny on the ordinary expenditures of the country. I say to my hon. friend that we had a right to expect from him in 1914 that in view of the waT he would reduce the ordinary expenditure by at least twenty-five or thirty per cent. He has not done so; on the contrary, he has increased it. At the end of the session last year my hon. friend came with another scandalous proposition-the Quebec and Saguenay deal. The scheme involved several million dollars, and was referred to the Exchequer Court. Sir Walter Cassels declared in his judgment that at least three-quarters of the claim made by the owners of the Quebec and Saguenay railway should not be paid by the Government. If this transaction goes through, the least my hon. friend should do would be to discard the idea of an arbitration which admittedly will go in favour of Mackenzie and Mann, and refer the whole question as to the value of the stock to Sir Walter Cassels, a man eminently fit to preside over .such a transaction, and in whom the .people of this country have every confidence. I am sincere when I register my protest against this resolution, and I say again, if the press of Canada had not been chloroformed by the Canadian Northern, there would not be room enough in. this building to hold all
the protests and all the petitions which would be made against this scandalous deal.


William Thomas White: My hon. friend (Mr. Lemieux) has been the first to introduce a political bias into the consideration of this question. He has waxed quite rhetorical over the fact that during the last four or five years the Government has had to deal with the Canadian Northern Railway situation. I would like to ask my hon. friend what he had to say during the years when the foundation was laid, so far as the Canadian Northern Railway company, the Grand Trunk Pacific Railway company, and the National Transcontinental Railway company are concerned, for all the difficulties- which have confronted this Government since 1911. Does my hon. friend think this Government went out looking for those railway problems? Those problems were here when we came into office. They have been with us every year, insistent, and urgent. They could not be evaded by the Government, if it had any regard to the credit, of this country, or of its provinces, or to financial conditions, or to the public service rendered by the transportation companies of Canada. What is the essence of the railway situation to-day?' # It is that we have three transcontinental railway systems where we ought to have two. I am not desirous to-night of carrying on a controversial discussion, but it has been started by my hon. friend from Rouville, and I must say something in defence of the Government with respect to the charges my hon. friend has made against it. We found the National Transcontinental unfinished. The Transcontinental from Moncton to Winnipeg which was to have cost $60,000,000 according to the estimate of the then Finance Minister, stands Canada to-day at $200,000,000. Does my hon. friend say this Government is responsible for that expenditure? Who is responsible for the $200,000,000 expended on the National Transcontinental? Take the Grand Trunk difficulties, referred to in the Drayton-Ac-worth report. Who is responsible for the bargain which brought about the situation by which the Grand Trunk is liable as guarantor to the extent of $5,000,000 annually on the securities issued by the Grand Trunk Pacific? Is this Government responsible for it? This Government cannot be responsible, because that bargain was entered into in 1904, -many years before the present. Government came into power. We had to provide money for the completion of the National Transcontinental. We had to make loans to the Grand Trunk Pacific if it was

to be completed. Although the Grand Trunk Pacific, and the Canadian Northern as well, were enterprises originated by the Government of my right hon. friend (Sir Wilfrid Laurier) when in power, I have always dealt fairly, as Minister of Finance, and this Government has always . dealt fairly with the Grand Trunk Pacific. We finished the National Transcontinental. The money was found, and the work was completed.


George Perry Graham: It is not completed yet.


William Thomas White: It is in process of completion. I suppose, as my hon. friend is aware, it may be said that railways are always in process of completion. My hon. friend knows that immediately after coming into power we made a loan of $16,000,000 to the Grand Trunk Pacific. We made another loan, of $8,000,000 to the Grand Trunk Pacific last yeaT. This year we have brought down an estimate of $7,500,000 for the same company. We did not do that because we want to do it, in the *sense of desiring to spend the money; we did it because the situation calls for financial aid if those roads are to continue to be operated. We have not gone out looking for an opportunity to spend money for the National Transcontinental or the Grand Trunk Pacific.
What I have said also applies to the Canadian Northern. When we came into power we found the road partially completed between Montreal and Port Arthur, with a guarantee of $35,000,000 upon it given by the late Government. This was not nearly sufficient to finish the line, and the Government found itself in the position in 1914. just as we find ourselves in the position today, of having to extend further aid to the Canadian Northern company ot allow the whole system to go into default, with great loss of money in connection with the guarantees given by the Dominion. I need not refer to the extensive aid by way of guarantee given to the Canadian Northern Railway system in the West. That is well known to the House, because it has been so frequently discussed here. The point I desire to make is that this Government found a certain railway situation when it came into power; that that railway situation has developed, has gone en to its inevitable conclusion in the completion of those lines, and that the Government of Canada has been meeting that situation as best it could from year to year. As I say, I am not disposed at this time to be critical of my right hon. friend (Sir Wilfrid Laurier) in regard to his Grand Trunk Pacific project. This is not a good time to be con-

troversial. We all realize that the times are serious. I have refrained from introducing any partisan or controversial matter into this debate because I think the attention of the House and of the country should be fixed, so far as possible, on our prosecution of the war, because that is the principle business of the time. But we are confronted with a condition and not a theory. If it was a theory we should not have to bring down these proposals. But it is a condition, a condition arising out of what was done by this Parliament and. by the legislative assemblies of the provinces of Canada years ago. We are confronted with a condition which has been fully disclosed in this House, and it has been common ground on both sides of the House-my hon. friend's leader, the right hon. leader of the Opposition (Sir Wilfrid Laurier) has taken the position again and again-that these roads must not be allowed to go into receiverships. If they are not to go into the hands of a receiver, they must be saved, and the only way to save them, so far as I know, is to continue to finance them. My hon. friend speaks of arbitration; he condemns the Government for the proposal that these shares should be valued by arbitration. Let me tell him that he voted for that in 1914.


Rodolphe Lemieux: I would refer the whole matter to Sir Walter Cassels.


William Thomas White: My hon. friend voted in 1914 for valuation by arbitration on an amendment moved by his leader, the right hon. leader of the Opposition. My hon. friend cannot deny that.


Rodolphe Lemieux: But we had not a debt of a billion and a half dollars then, and we were not at war.


William Thomas White: My hon. friend can sing high and can sing low, and can blow hot and cold. It would not make any difference-he would be opposed to any proposal that this Government brought down in connection with this railway matter, for which we are not primarily responsible at all. My hon. friend would object. If we had brought down a proposal that this should be referred to the court, my hon. friend would have fallen back on his position, of 1914 and said that the value should be determined by arbitration; he would say it would take two years to determine this in the courts, and that in the meantime the matter would be hung up indefinitely, and he would have all kinds of suspicions against the Government. That is what my hon. friend would do because, while he is a good fellow per-

sonally, he cannot help being a violent and truculent partisan in the House.


Mr. MACDONALD:: What about yourself?


William Thomas White: It is impossible for me to be a partisan that is a matter of temperament. My hon. friend from Pic-tou (Mr. Macdonald) has a great advantage over me in that respect, because he was born a partisan.


Edward Mortimer Macdonald: I admit it frankly, you don't. You are not frank.


William Thomas White: It is a great help -to my hon. friend. It is a great help to a man to be born with a bias.


Edward Mortimer Macdonald: Like you have, but you do not admit it.


George Perry Graham: Some men are born with it, and some acquire it.


William Thomas White: I am not arguing in a controversial manner. I think that both sides of this House,at this critical time, should take into consideration the conditions which surround this railway problem, the most important, next to the war, that we have, and discuss it in a businesslike manner, eliminating partisanship and political controversy altogether. It is too big a problem to be mixed up with the political situation-altogether too big a problem.
I have given all the reasons that moved the Government to take the course we have taken, and notwithstanding the strictures of the hon. member for Rouville I believe it is the course which will best meet the railway situation and will be a step forward in the policy of preserving for the people what the people have financed; and I believe that it is supported by public opinion throughout this country. I do not agree with my hon. friend for one moment that the press otf this country has been chloroformed. On the contrary, the policy which we have .adopted is a policy which has been advocated by the great majority of the press throughout Canada, not only recently, but for a considerable time past. The press of this country are a great public influence, and, so far as I have been able to judge, on the whole a great influence for good, and for progressive government. My hon. friend from Rouville might do a good deal worse than follow the judgment of the press. I do not know .any better way of forming the judgment of a public man than for him to study assiduously
the editorial expressions of the press. They are good public men who are in charge of newspapers in Canada, and they know the trend of public opinion. My hon. friend is entirely wrong in casting reflections upon the press of the country. There has been a widespread expression of opinion since these proposals have been brought down, and they have met with general .acceptance.
I may say to the hon. member for Rouville that in Ontario, from which province I come, these proposals are received .as embodying the proper policy to be pursued by the Government of Canada in connection with this most difficult question. I say to my hon. friend that he would make no headway in Ontario-il do not believe he would make any headway in the West-


William Manley German: Not with your arbitration attached to it.


William Thomas White: -in attacking the policy of public ownership which the Government has introduced. In answer to my hon. friend from Welland (Mr. German),
I would repeat what has been said many times to-day, that in determining upon arbitration we are following the method which was suggested by the Drayton-Acworth report .as to the number of shares which might be allowed to remain with the present owners and as to the earnings which .might be attributable to those shares.


William Manley German: You are not doing that.


William Thomas White: times-the water has gone over the wheel, the wheat is out of the straw; it is waste of time for this House, at this of all times, to discuss the question of the, railway policy. We have three transcontinental railway systems in Canada; no matter what we may say about the past, they are here; they have their requirements; the situation must be met, and it is for the Government of the day to determine what is the best policy to be adopted in order to meet it. These proposals which we have brought down represent the policy which we think right, and which we regard as in the public interest at this time, and I believe they will met with the general approval of the people.


George Perry Graham: My hon. friend said he did not wish to discuss the water that has gone through the mill, but he did it just the same. The matter under consideration is the Canadian Northern, and I will confine my remarks to that concern. The hon. gentleman knows I am not averse at any time to discuss the other matter, but this is what we have in mind, and I will just refer to it for a moment. If the policy of the late Government, with which I had something to do, had been carried out, we should not have been found in the position we are to-day in reference to the Canadian Northern system. I do not say for a moment that that system would not have had its difficulties, and that we should not have had to come, in a measure, to its relief, possibly owing to financial stringency and unforeseen conditions. But the policy of the late Government in connection with the Canadian Northern was this: to first connect its gathering system in the West with the Atlantic system, before it ventured across the Rockies. Aid was given to that system to reach its coal mines, but the late Government refused absolutely to give aid to the Canadian Northern system west of the Rocky mountains for the time being. Messrs. Mackenzie and Mann then went to the British Columbia Government, and made an arrangement with the late Sir Richard McBride, building the British Columbia end of this road under a provincial, not a federal, charter. They came again to the Dominion Government, and were again refused any aid, for the time being at least, for that portion of the transcontinental line. They entered into an agreement with the late Sir Richard McBride, by which he aided them very liberally, as we find by this statement laid on the table of the House-$40,000,000 I

think. In connection with that aid Mackenzie and Mann entered into a signed agreement with Sir Richard McBride that that portion of their transcontinental line should not come under the jurisdiction of the Dominion Board of Railway Commissioners. So extreme was that arrangement that Mackenzie and Mann agreed that if any person attempted to bring that portion, even as to through rates, before the Board of Railway Commissioners, they would appear personally and oppose the application. Now, this Government, coming into power, reversed that policy altogether, and they came to the aid of the Canadian Northern railway west of the Rocky Mountains. I submit that if the Canadian 'Northern railway had strictly adhered to the plan of first connecting up its gathering system on the prairies' with the Atlantic seaboard, and got that system into operation before they attempted to build the British Columbia end of the line, they would not have been in the serious condition we find them in to-day.
I asked the Finance Minister a question, and he said he was going to answer, but we got away into something else. I said, suppose one of my constituents were to ask what is the Canadian Northern system going to cost us, what should I tell him?


William Thomas White: As to stock?


George Perry Graham: No, everything.


William Thomas White: All that we are buying is the stock.


George Perry Graham: We do not know what we are going to pay for that.


William Thomas White: No, because we do not know its value. It may be little or it may be more. It will be for the Board of Arbitrators to determine that. I stated yesterday that I would not be frank if I did not say to the House that the Government, after acquiring the stock of the system, intended to continue it as a going concern, and while we are not legally liable for the debts of the company, any more than my hon. friend would be liable for the debts of the Canadian Pacific railway if he happened to buy some of the shares, at the same time the Government intends it should continue as a going concern, and, of course, would from time to time render such assistance as might be necessary to that end. The hon. membeT from Carleton (Mr. Carvell) made some pretty shrewd observations to-night, among them the statement that he thought the Canadian North-

ern in a period of five years would fie selfsupporting. I find a considerable opinion among those competent to judge that this Canadian Northern Railway system is likely in time to be a decidedly paying concern.


George Perry Graham: It depends on the management.


William Thomas White: Yes, it depends largely on the management, and, of course, upon conditions, but there seems to be no doubt that the Government is taking over a good railway system. It is well located, with excellent grades, and with alignment that leaves nothing to be desired. I feel quite optimistic with regard to the future of the Canadian Northern Railway system, once it gets over this trying period referred to by the hon. member from Carleton. My hon. friend (Mr. Graham) says his constituents might ask him, what liabilities will the Government have to assume? I think he might reply something like this:	In
the stock ownership of a Tailway system is embraced the physical properties, the plant and equipment of the system. Those are assets which every year produce a certain amount of earnings. So far as the Canadian Northern is concerned, those earnings will probably in time be able to take care of underlying interest charges, betterments and improvements, and possibly purchases of a certain amount of rolling stock. Supposing that situation is reached, we have a great property that produces every year sufficient revenue to take care of the operating expenses, the fixed charges and the other matters I have mentioned. Therefore, the question of liability need not at that time particularly disturb the people of Canada any more than the liabilities of the Canadian Pacific railway to-day disturb its shareholders. The Canadian Pacific railway has liabilities, -but the earning power of the company is so great that no shareholder is in the least degree disturbed as to these liabilities, because the earning power is ample to take care of the interest upon all the bonded debt, and also pay handsome dividends to the shareholders. So far as the immediate situation is concerned, I have told the House that on account of the Canadian Northern being unable, owing -to war conditions and to the position of its securities, to do new financing-as a railway company in a better position would be able to do, at least in peace time-to provide for betterment, for rolling stock and for expenditures of the capital nature, the Dominion Government might have to provide fifteen or
tiventy million dollars every year, for the next three or four or even five years, as my hon. friend from Carleton has stated, in order to meet underlying interest charges and to assist the company in its financing. But this situation differs from the situation which has hitherto prevailed, and which would continue to prevail if the Government brought down a Bill to aid the Canadian Northern by way of loan, as it did last year. All the expenditures which we shall make from this forward will be for the benefit of the property which is owned and controlled by the people of Canada.
That is the essential difference between the situation now and the situation that existed hitherto. With regard to the value of the shares themselves, my hon-. friend may tell his constituents that he approves of the manner of ascertaining the value, because the course adopted was the course re-commended by the leader of the Opposition. As soon as he tells his loyal constituents that the right hon. leader of the Opposition recommended that course in 1914, I am positive that they will be quite satisfied and will vote for him as usual.


George Perry Graham: The name of the leader of the Opposition is the best name in my constituency, by all odds.


Charles Murphy: Just like the West.
-Mr. GRAHAM:	But the people might
change their views, as my hon. friend did, for instance, in certain matters- connected with the conscription measure. I am afraid that I shall have to make up an answer myself for my constituents, because they will not understand the one given by the Finance Minister.


Edward Mortimer Macdonald: Is it intended that the operation of the road under the auspices of the Government will begin when the transfer of the stock is -made, or will it be postponed until aftpr the val-ue has been fixed by -the arbitrators and the -amount has been actually paid over?


William Thomas White: Under the terms of the agreement, as soon as the five-sixths of the stock is vested in the minister, the Government will be in a position to aid the Canadian Northern in connection with its financing and to control the board.


Edward Mortimer Macdonald: Will the Government at that time make -any changes in the board that will interfere with the present method of operation by the directors now in control?


William Thomas White: It is premature to make any statement in advance of con-

sideration of the question by the Government when it becomes the owner of the shares. But the Government will have to consider the personnel of the Board of Directors of the Canadian Northern and determine what, if any, changes should be made. I mean that the Government will then be in a position to determine the personnel. I pointed out the other day that the road is well managed. So far as the operating officials are concerned many of them are of the highest standing; I mentioned two or three of them by name. It is not in mind that any changes will take place. The Government's function will be to appoint a Board of Directors to administer through the officials the affairs of the road. The Government will not be brought into immediate privity with the officials of the road; in other words, the Government will be the sole stockholder of the road and as such will be entitled to name the board of directors. The directors will have general supervision over the affairs of the company just as the directors have now.


Edward Mortimer Macdonald: The Government will be the owners of the stock and in that respect there will be Government ownership of the road, but there will not be Government operation. That would seem to be the purpose. My hon. friend lauded the desirability of Government ownership of railways. That phrase "Government ownership of railways" is very broad in its acceptation. It may mean that the Government simply have title to a railway and that somebody else is operating it, or it may mean that the Government owns and operates the utility. In this case we are having Government ownership in the former sense, not in the latter. My hon. friend since he became Finance Minister, has frequently come to Parliament in regard to the matter of aid to the Canadian Northern. We - remember that in the early stage of his career he came to us and wanted us to vote $15,000,000 for that purpose. On that occasion he gave the House the impression that if we voted $15,000,000, that ' would be the last time of asking; that ithe Canadian Northern Railway company would be able to handle everything in connection with their affairs and that the country would not have any further trouble in the matter. We had a homily to-night from my hon. friend with regard to some views expressed by the member for Rou-ville (Mr. Lemieux). My hon. friend forgets that he supported my right hon. leader in 1904 in his project of assisting in the construction of the Grand Trunk Pacific rail-
way and that he remained a supporter of that proposal right down to 1911. Certainly my hon. friend cannot deny that he is a political acrobat-I do not know whether that is worse than being a partisan or not. My hon. friend exercised his acrobatic propensities in 1911 in respect of the matter of trade between Canada and the country to the south of us. Only quite recently, after denouncing free wheat and all such things as matters emanating from the Evil One, my hon. friend, with the greatest possible ease and eloquence, dilated upon the glorious advantage of having free wheat and freedom of trade north and south. I have said that when he asked us for the $15,000,000 for the Canadian Northern, we were told that that was the last time of asking. When he asked for $45,000,000 the proposal was opposed on this side of the House, an amendment being moved for a six months' hoist and issue being taken in the matter as between the parties. My hon. friend said that the country should congratulate itself upon the fact that it had obtained forty per cent of the stock and had made a good bargain. All that my hon. friend said in 1914 when he proposed the advancing of $45,000,000 will be called up in evidence against him before this board of arbitration which he proposes to appoint to fix the value of the stock. All his statements will be available for the counsel of the Canadian Northern people when they go before this board of arbitration. They will argue that if my hon. friend could buy $40,000,000 of stock for $45,000,000, the old rule of proportion would enable the board to ascertain what $60,000,000 of stock was worth. They can make a very fair argument to any tribunal based upon my hon. friend's attitude at that time. My hon. friend is now trying to ride the Government ownership horse, and in order that he may do so he is assuming a debt for this country in the vicinity of $600,000,000. My hon. friend is taking a very large order. He had the temerity the other day, on August 1, when the member for Edmonton (Mr. Oliver) intimated that the country was assuming a liability of $500,000,000 to say:
That is entirely incorrect. The corporate entity of the Canadian Northern railway and of all the companies in the system is being preserved, and we are going to operate through the Canadian Northern Railway company. It is not even an indirect liability.
It is the liability of those companies, and the Government will own the $100,000,000 of stock besides the stock it owns to-day. The statement that we are adding $500,000,000 to

the national debt of Canada is absolutely and entirely incorrect.
My hon. friend was simply quibbling when he made that statement. He knows that just as well as any other hon. member. He argues that (because a shareholder of the Canadian Pacific railway is not liable on fully paid up shares for the amount of the mortgage debt of the Canadian Pacific railway, the Government of Canada is not liable when it owns the whole stock of the Canadian Northern. That is a very plausible argument for the man on the street who is not a business man or who does not understand how this thing is being worked out. But the Minister of Finance of this country has no business to come before this Parliament and make such a statement, because he knew and every other hon. gentleman here knew when he made that statement, that by the purchase of the equity of redemption of the road; this country, by every moral obligation that appertains to Governmental action was committing itself morally and practically to the total liabilities of the Canadian Northern railway. The minister holds up his hands in holy horror over the suggestion that a receiver should be appointed at this moment, regarding it as a terrible thing in the interest of this country. But what would he say if the interest on all those outstanding securities was not paid, or if those current liabilities to the extent of $98,000,000 were not paid by the Canadian Northern-and there is nobody hereafter to go around and look for money but my hon. friend-what would he say if one of the people interested in this liability of $98,000,000 applied to the courts for a receiver for the Canadian Northern? Would my hon. friend pay the bill or would he not?


William Thomas White: What is the es-ential difference between the situation when we acquire the stock and our position now with a mortgage of $45,000,000 next after all underlying securities?


Edward Mortimer Macdonald: The minister must remember that to-day there lare outstanding $147,000,000 worth of securities of the Canadian Northern which are not guaranteed by anybody.


William Thomas White: They are a charge upon the system.


Edward Mortimer Macdonald: If the minister will look at the addendum	on page 7,
he	will find that	there is	a
5 per cent income charge convertible debenture stock of $25,000,000 and Imperial
Rolling Stock company, Limited, equipment trusts of $14,846,500, which means over $39,000,000 more. That means that there are $186,000,000 o.f securities that are not guaranteed. The minister is making .the country liable for them by becoming the purchaser of the equity of redemption. The minister says: What more liability are we incurring now than the liability of $45,000,000 we had before? He knows that liability comes only after the underlying securities; he knows that, as the matter stands to-day, the Government are not liable for those $186,006,000.


William Thomas White: No, he does not. The Government are not legally liable in either case. The argument my hon. friend is making is that they are morally liable by owning the stock. The point I am making is that his argument would apply to the Government as guarantors of the $45,000,000 just the same -as with respect to all the.other underlying securities, including the unguaranteed stock which is a charge upon the undertaking, and in priority to the $45,000,000 mortgage.


Edward Mortimer Macdonald: Not at all, .because at this moment you have the $98,000,000 of current liabilities which are not paid and which will have to he paid. The minister knows that any one of those creditors who go to make up that $98,000,000 could come into the court in the event of failure 'to pay his account and ask the court to appoint a receiver.


William Thomas White: My hon. friend is entirely overlooking the collateral to that $98,000,000 of short term loans, against part of which is Dominion guaranteed security coming in priority to the $45,000,000.


Edward Mortimer Macdonald: Not a great part.


William Thomas White: A considerable part.


Edward Mortimer Macdonald: You might find a stray amount. The minister is simply dodging the issue. He knows that the point I make in regard to this matter cannot be controverted. No matter what the situation has been in the past, the Government of Canada, by virtue of becoming the owner of the equity of redemption in this property, makes itself liable for every one of the securities, and if there is an attempt made by anybody to whom the Canadian Northern owes, say, $1,000,000 for balance due for construction, to put the railway into the hands of a receiver, the minister would have

to call upon the Government to pay that money, just the same as he would have to pay the whole amount. The result is that to-day there are, according to this statement, approximately $399,000,000 of guaranteed and unguaranteed securities. In addition to that, there are $98,000,000 of current liabilities, as set out on page 8. That means $498,000,000, or approximately $500,000,000. Then, there is the interest charge which the minister has to provide for this year, and there are the expenditures that must be made for this year. When the Government takes title to the stock, which they will do upon the signing of the transfer of five-sixths of that stock, what is the source to which Messrs. Mackenzie and Mann, operating the Canadian Northern railway, will look for money for the purpose of providing betterments during this year? There is only one source-the Government of Canada. Hitherto, Mackenzie and Mann were compelled to resort to their own methods of financing, and they did so. Now they will simply come to the Government of Canada and say: We do not have to go to New York in war time and look for money, and pay large commissions and sell stock at a low figure, or sell our securities at a low price; we come to the Government of Canada, for whom we are operating this road; you are our bankers, our superiors, and you will have to provide that money. Therefore, in addition to the $500,000,000 which are added at one swoop to the debt of the country, there are these liabilities for which the Government becomes responsible. The result is a profound disregard for that public opinion which the minister says exists in Ontario in regard to this question of Government operation. The Government says in effect: We are liable for all the debt, but we .are going to let Mackenzie and Mann go on and operate the road. That is the situation in which we are.	.
' Sir THOMAS WHITE: That is not correct.


Edward Mortimer Macdonald: My hon. friend spoke of the fact that the gentlemen who were operating the road-


William Thomas White: I was speaking of the officials of the road; I was not speaking of the members of the board. I mentioned the other day Mr. McLeod, Mr. Hanna and Mr. Mitchell, as very competent officials.


Edward Mortimer Macdonald: Those are the gentlemen who have been operating the road in the past; they are operating it now.


William Thomas White: I think they are good officials.


Edward Mortimer Macdonald: The minister says they are good officials. He is going to let them operate the road. The result will be that instead of going to Messrs. Mackenzie and Mann, as they have gone in the past when they required money for betterments, they will go to my hon. friend. That is the only difference.
I am not again going into the question of arbitration, to which I referred the other day. The minister says that it is a modification of the suggestion contained in the Drayton report. What I am concerned about more than anything else is the way in whiqh this matter is to be dealt with. According to the history that my hon. friend is providing for the counsel who are to be engaged in the case, the additional amount which Canada will be compelled to assume will to my mind be very large. My hon. friend has: chosen to proceed in that way, but personaly, I think it would have been better to clean up this whole thing.


William Thomas White: How?


Edward Mortimer Macdonald: Appoint a receiver to operate the road as a trustee, and then it would have been open for the country to deal with it. Some hon. gentlemen seem to think a receiver is a most dreadful proposition, but as a matter of fact there is not a lawyer in the House who does not know that a receivership is very often the best way of dealing with a company that has got into difficulties, no matter what kind of a company it is. Here we have a large amount of securities which have been issued in the past and have not been guaranteed. I venture to say that where they have been disposed of they have been sold at a large discount from their face value, and large amounts have been paid in commissions. Why should the country be compelled to pay millions of dolllars to men who made their money in that way? If we adopted the method I have suggested we should know exactly how much money had gone into the road, an adjustment could be arrived at under a proper accounting system, the road could continue to be operated, and the whole matter would be cleaned up. My hon. friend stands aghast at that proposal, as do some other hon. gentlemen. Yet these are serious times. The financial problems pressing on the country are of the most grave character, and day by day they are becoming more serious. When I

see my hon. friend going down to New York, and I see it advertised in the New York papers that Canada's securities are being offered there at 98 and that the parties who purchase them receive 6.7 per cent on their investment, then I say we are in a very peculiar financial situation, this security being only a two-year term proposition.


William Thomas White: Does my hon. friend happen to know what interest return the Imperial Government securities offered in New York, paid secured by high class collateral? Does my hon. friend not know that we have to have regard to that in our issues?


Edward Mortimer Macdonald: My hon. friend is
speaking of something which does not for one moment help towards a solution of the problem I am dealing with. My hon. friend is paying 5 per cent in Canada for his money, while the United States Government are paying only 3J per cent. The moral I was endeavouring to point out was that my hon. friend is compelled to offer his security to-day on a two-year basis, and the parties who are purchasing them are receiving 6 per cent on their investment. My hon. friend is increasing the debt of this country by this proposal and impairing out borrowing power in the New York market to the amount of $500,000,000 more. My hon. friend's suggestion that this does not mean an increase in our national debt may pass as an argument along the concession lines, but when he goes down to New York to look foT money again, he will find that the shrewd bankers there, who are looking forward to making New York the money centre of the world will say: "Since you were here before, you have directly or indirectly assumed liabilities in addition to what you had before of nearly $600,000,000; your borrowing power is thereby impaired, because you have to pay interest on that amount each year, and we shall therefore have to charge you more; we cannot underwrite this lean at the figure we did before." Having in mind the financial conditions that will confront this country in the future, he ought to have been prepared to look to almost .any resource before saddling this country with this liability, which will meet us at every turn whenever we seek to borrow money in the markets of the world for any purpose whatsoever. I have ventured to deal with this phase of the matter because it seemed to me that my hon. friend was not quite candid in his remarks to the House on this subject.
Resolution reported, and read the first time.


Mr. SPEAKER:: When shall the resolution be read a second time?


Sir WILFRID LAURIER:: To-morrow?


William Thomas White: Does my right
hon. friend suggest that the resolution be read a second time to-morrow, and the Bill then introduced?


Wilfrid Laurier: Yes.



LIVE STOCK EXCHANGE.

[Stage Direction]
On motion of Hen. Mr. Burrell (Minister of Agriculture) the House went into committee to consider the following proposed resolution. Mr. Davidson in the Chair.
Resolved, that it is expedient to provide that there shall he a live stock exchange in connection with each stock-yard operated under these provisions, of which every commission merchant doing business at such stock-yard shall be a member; that the by-laws of such exchange be subject to the approval of the Minister of Agriculture; that such by-laws provide for commission merchants giving security to account for proceeds of sales received; that the Governor in Council may authorize the said minister to license such merchants and to prescribe a fee therefor; that the construction, equipment and management of stock-yards be as prescribed by regulations to be made by the Governor in Council and by by-laws to be approved by the said minister; that the stock-yards be subject to inspection; that stock-yards not managed as required by regulation may be closed after notice; that the said provisions shall not apply to existing stock-yards until after not less than three months' notice; that the Governor in Council may by regulation prescribe how live stock, meat, poultry, eggs and wool shall be graded, packed and marked; that penalties he provided for violating the Act and for assaulting or obstructing officers while in performance of their duties.
Mr. NESBTTT:: Would the minister expi ainr	,


Mr. BURRELL:: This- resolution and the Bill founded upon it is the result of a good deal of discussion in the country amongst the live-stock men, and the result also of a good deal of investigation by our own department. As the House knows, the stockyards of the country are practically the only market the producer of live-stock has outside of his chances of selling to the ordinary buyer who comes along. The producer has to sell his stock to the droveT or the ordinary buyer who comes along and take what price he can get, or ship his cattle to the stock-yards and take his chances there. While the stock-yards, therefore, of which there are six in Canada-one at Calgary, one Edmonton, one at Win-

nipcg. one at Toronto and two at Montreal
afford the very best market for the producer of live-stock, and provide a stimulus for producing more live-stock, a great many criticisms have been directed to the conditions which exist in some o'f the stockyards, and there is a very strong feeling amongst live-stock men throughout the country that there should be some Government regulation and control of the stockyards.
For instance, as the principal buyers in the stockyards are packers, exporters and butchers, it is quite obvious 'that the man who ships a carload of live stock to the stockyards is, in a sense, taking .a leap in the dark, and has to depend on the integrity, the honesty and efficiency wij>h which the stockyards are managed, as well as on the integrity of the commission man with whom business is done. In the United States, Where there are some enormous stockyards, as my hon. friend knows, there have been tendencies towards monopolies on the part of great packing-houses and other corporations, and the farmer, the producer of live stock, has always felt that he is very much the under dog, I do not say the same conditions exist to the same extent in Canada, hut I know there have been strong protests (to the Government of the United States about conditions there, and we did not feel it was a happy condition to exist here. Therefore, it was thought better to take it in time, and have some kind of Government supervision of the stockyards management, in order, not to impose any improper restrictions on the stockyards, but to give the farmers and dTovers of live stock in the country the security they should have in what is their particular market, an absolute knowledge that they would get a fair and square deal all round. I do not think it is necessary to explain the various provisions that will be embodied in the Bill, because they will be discussed at length when the Bill is introduced. We have wished to take some stops which will lead to a better system of standardizing our live-stock products, net only to strengthen our export market, but in order to keep the export .market which we have happily gained during the .progress of this war.
As all men who have studied the question know, the war has seen the replacement in the British market of a great many commodities of Danish, Russian and other origin, by an increase of exports from the United States, .and a very great increase in the agricultural exports of Canada, to such 
an extent that it is (felt if the conditions can he maintained and our flow of exports continued, it will provide the very strongest stimulus for the development of our country. This export trade is of vital importance, because if a steady increase in production occurs here it can only be warranted by a steady export trade, and in this way it re-acts on the whole market. That is, briefly, the purpose of the Bill which is to be founded upon the resolutioh.


Edward Walter Nesbitt: I am one of these who would be very glad to assist the farmer by every means to get an honest deal. What I wanted the minister to explain was just how this Bill will help the farmer. I quite appreciate if a person ships stock in, say, the Toronto live-stock market, he must take his chances as to what he gets for it. He generally ships to a commission man there, and the commission man sells to the packer. As a rule the farmer does not do the shipping himself, unless he is accustomed to go to the market, and knows the ways of the market. The resolution says:
That it is expedient to provide that there shall be a live stock exchange in connection with each stock-yard operated under these provisions.
As a matter of fact, is there not no# a live-stock exchange?
Mr. BUR/RELL: Not at all stock-yards.


Edward Walter Nesbitt: Does not 'the buyer who buys from the farmer ship the live-stock to the order of a commission man, or a broker?


Martin Burrell: Yes.


Edward Walter Nesbitt: And, does not the latter sell them publicly to the packers? I do not wish to be understood as criticising my hon. friend. I am only asking for information.


Martin Burrell: I thought all those details would come up again and be more fully considered when the Bill was under discussion. My hon. friend's statement is correct, except that I do not think there are live-stock exchanges in connection with all the stock-yards. What we propose is that every stock-yard shall have an exchange, and that no commission man shall operate in these stock-yards unless he is a piember of the livestock exchange, and no live-stock exchange shall operate unless its by-laws have been approved by the minister. In that way, the department will have a reasonable knowledge of

whether an exchange has conducted its business on proper lines. It would also involve the bonding of ithe (commission men on the exchange. There may be cases, particularly in the West, where farmers ship their live-stock long distances, and some commission men may not always do the fair thing. At the present time there is no check upon them. We propose to have them bonded and to have the by-laws of the live-stock exchange submitted' to our approval, so that all along the line there may be a fair knowledge of the transactions which are made, and some guarantee that reasonable treatment will be accorded to the producer. It is chiefly in the interests of the producer that this Bill is brought forward. My information is that no stockyards management will object to reasonable government regulation, and 1 do not think they should object. There are many ways in which a shipper might not get a fair deal. For instance, some of the packers, .transportation companies, and so on, might have a stronger pull in the running of the stock yard, and there might easily be an allocation of space and facilities that would be much more in favour of the wholesale man or packer than of the individual shipper. There is also variation in the fees charged.


Edward Walter Nesbitt: Are you going to regulate the fees? .


Martin Burrell: Yes, we have power to regulate all those things.


Edward Walter Nesbitt: Supposing I shipped a carload of cattle, and was not satisfied that the commission merchant or broker to whom I shipped had dealt fairly with me, what recourse would I have?


Martin Burrell: We propose not to allow a man to operate as a commission merchant on the exchange until he can satisfy, through the exchange, with whom we will deal-


Edward Walter Nesbitt: The exchange will be a body corporate?


Martin Burrell: Yes. He will not be allowed to operate unless he can give absolute security as regards his integrity and financial standing. It will work out some- " thing in the same way as the bonding of the grain men on the Winnipeg Grain Exchange. There is some criticism as regards the prices of feed, and as regards weights. We propose to have supervision of the scales, and details of that kind, in order to insure that the operations will be
uniform and satisfactory, and the producer of live stock operating in this way will know he has all the encouragement and protection that can be afforded him, because he is going to get a fair deal.


Edward Walter Nesbitt: Do you propose to have an inspector in the yards to see about the weights?


Martin Burrell: We would probably work very largely through the live stock exchange. The exchange would have to operate under our approval, through its constitution and by-laws, so that if there was any dispute or grievance at any time we could take it up through the exchange. We would reserve power to close the stock-yards if we wished, and license commisison men to carry on their business irrespective of the exchange. Not that we are anticipating anything of the kind, but the whole tenor of the Bill is simply to provide, in the interests of the producers of live stock, what I think should possibly have been provided before, some Government regulation and supervision of the stock yards which are a sort of semi-public utility.


Mr. THORNTON:: Is it the intention that only live stock commission merchants shall be members of the exchange?


Martin Burrell: Yes.


Charles Jonas Thornton: A drover could not be a member?


Martin Burrell: It is intended to apply only to commission men.


Charles Jonas Thornton: And every sale should be through a commission man?


Martin Burrell: I should not like to speak positively of that now, but practically all the business is done in that way in the stock-yards. A man sends his stock there and it is sold on commission. This is only to systematize the business, and to give additional securities to the shipper, it was felt that the bonding feature was necessary. The matter has been discussed very vigorously in the West. Two years ago the Saskatchewan Government appointed a commission to investigate the live-stock industry, and one of the most vigorous recommendations was that some control of the stock-yards should be established. The Western Live-stock Union, the great organization of stock producers west of the lakes, has also for the last two years been passing resolutions along the same line. That the stock-yards have helped live-stock production is evident because in

Edmonton, since the establishment of the stock-yards, the condition of the shipper has been greatly improved, although the features that this Bill is intended to improve may be still in existence there.


Charles Jonas Thornton: Would it undertake to regulate the conduct of a live-stock commission merchant?


Martin Burrell: Yes.


Charles Jonas Thornton: Because there are
grievous and well-founded complaints of the treatment that drovers and farmers get from commission men.


Martin Burrell: There will be ample provisions in the Bill to exercise the fullest control in the interests of the shipper. I was going to suggest that, after the resolution is reported, the Bill to be founded on it should be referred to the Committee on Agriculture, where it could be fully discussed without taking up the time of the House.


Mr. MORPHY:: Why does the minister
go so far here? The general discussion would indicate that this was a Bill relating to live-stock, but the resolution also gives this commission apparent power to regulate how meat, poultry, eggs and wool shall be graded, packed and marked. That seems to be a very broad departure. Am I to understand that every farmer who ships to that exchange must be subject to the regulations of this board?


Martin Burrell: It is not viery well explained in the resolution, because the resolution embodies the whole Bill, but that is a separate feature entirely. The livestock exchange and the stock-yards is one section of the Bill, and the Act to be cited as the Live-stock and Produce Act. The second part contains a clause which aims at the other feature, namely, the intention of the department and the Government to do something in the direction of generally supervising our live-stock products, bacon, eggs, wool and various other commodities, in which case we propose to consult all the interests thoroughly before passing the Bill. It is intended to link up the whole system contemplated by this Bill with the export trade.


Hugh Boulton Morphy: Why is it necessary in
this Bill to interject a clause providing for penalties for violating the Act or for obstructing an officer in the execution of his duty under it? It seems to me that the ordinary Criminal Code would apply to that, especially if the officer is a public officer.

It does not seem to me that a Bill dealing with farm produce or livie-stoek should have incorporated in it a clause of that kind. What is the reason for it?


Martin Burrell: Similar provisions have been inserted in a number of other Acts, both in my department and in others. This was done after consultation with the Parliamentary Counsel.


Hugh Boulton Morphy: In a Bill like this, applicable to the countryside at large, I can see danger of that clause being taken advantage of by an inspector to take to himself power to which he has no right by threatening men with criminal prosecution under this section. It seems to me to be giving a drastic power to an inspector dealing with ordinary trade commodities, which should not be put in the Bill, because of the danger that an officer enforcing the Act might attempt to bulwark his own power by a threat of serious criminal prosecution. There has been some feeling of uneasiness on the part of the public because of the power that has been acquired by these stock commission merchants, and the law is sufficiently drastic to give any man all the protection he needs without incorporating a common, everyday clause of the Criminal 'Code in an Act respecting merchandise.


Mr. WILLIAM SMITH:: It appears to
me that the Minister of Agriculture (Mr. Burrell) is taking a step in the right direction. This measure deals with a very important part of agriculture, live-stock. I would suggest to the minister that this reso- ' lution should be sent to the Committee on Agriculture, where it might be discussed in all its details, and no time would be lost.


Edward Walter Nesbitt: I think no harm would be done if we allowed the drover to sell on the stock exchange or stockyard. I see no reason why I should not ship a bunch of steers or cattle to stockyards, and sell them without the intervention of a commission man. I do not think the Bill should force sales through the hands of a commission man. I understood the hon. minister to say, in answer to my hon. friend (Mr. Thornton), that that was the intention of the Bill. That would mean that no person outside of the big brokers on the exchange would be allowed to sell stock. I ask the minister to consider that question, because I think his object is to make the market as open as possible, and to regulate it as well as possible to protect the interests of the ordinary greenhorn.


Martin Burrell: Our feeling in regard to the penalty clause was that it was really part of the protection. It is a protection to the farmers. However, all those details might he very much better discussed in committee, and I propose doing as my hon. friend from South Ontario (Mr. Smith) suggested, and will refer the Bill to the Agricultural Committee. So we need not discuss details now.
Resolution reported.
Mr. BURRELL moved for leave to introduce Bill 123, respecting live stock, founded upon the resolution.


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

[Stage Direction]
On motion of Hon. Mr. Doherty for the second reading of Bill 97, to amend the Criminal Code respecting jurors:
William Pugsley: Would my hon. friend -allow this Bill to stand? The hon. leader of the Opposition (Sir Wilfrid Laurier) is not present. I know he has had communications from at least one of the governments of the provinces upon this subject, and I feel quite sure he would like to be heard when the discussion takes place.


Mr. DOHERTY:: The Bill contains one clause, and I rather hoped it would not give rise to discussion, but I do not desire to proceed with it in the absence of the right hon. gentleman (Sir Wilfrid Laurier).


William Pugsley: To-morrow?


Charles Joseph Doherty: I will bring it up 'tomorrow.
On motion of Hon. Mr. Doherty, the House adjourned at 10.30 p.m.
Thursday, August 9, 1917.