1917-08-01

QUESTIONS PASSED AS ORDERS FOR RETURNS.

Mr. KYTE:: What amount has been paid to the Sydney Daily Post, newspaper, by all the departments of the Government for printing and advertising, since the 1st day of November, 1911?


Mr. SINCLAIR:: What is the gross amount paid to the Halifax Herald, the Evening Mail, Halifax, and the Royal Print and Lithographing Company, Halifax, by all departments of the Government for printing, advertising and all other services since November 1, 1911?



QUESTIONS.

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

Mr. KYTE:: 1.	Who are the censors employed at Louis-burg, N.S., and what is the pay of each?
2.	What are their hours of employment?
3.	Are deductions made from their salaries on account of absence from duty?
4.	What are the ages of the censors?
5.	Have the services of S. P. Challoner, as censor, been dispensed with?
6.	If so, for what reason?


Sir EDWARD KEMP:: 1 and 4. Censor, R. J. Macdonald, $7 a day, 41 years; assistant censor, D. S. Hooper, $5 a day, 37 years; deputy assistant censors, N. F. Cooke, $4.50 a day, 29 years; W. T. Hayden, $4 a day, 24 years.
2.	The work of the station continues for the whole twenty-four hours, and during Sundays and holidays. Each assistant censor or deputy assistant censor works for fifty-six hours in the week, a proportion of this time at night.
3.	Members of the censorship staff are entitled to two weeks a year leave with pay, and to reasonable sick leave.
5.	Yes.
6.	To promote the efficiency of the service.


EMPLOYMENT OF MR. THOMPSON.
Mr. LEMIEUX:: 1.	Has a Mr. Thompson, of Winnipeg, been recently appointed a plumbing and heating 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.	Yes, appointed July 12, 1916, as a plumbing and heating inspector for the West. '
2.	No, the Civil Service Commission has no jurisdiction over appointments to outside staff of Public Works Department.
3.	$2,000 per annum.


MILITARY DISTRICT No. 6-DENTAL CORPS.
Mr. TURGEON:: 1.	What officers are on duty in Dental Corps in Military District No. 6?
2.	How many, and what are the names of officers who are devoting their whole time to said duty, and what are the names of those who are attending private practice?
3.	Who are receiving separation allowance for their wives, and what date did separation allowance commence?
4.	What are the dates on which the married officers of this corps went on duty?


Albert Edward Kemp: 
UNOPPOSED MOTION FOR PAPERS.
[Stage Direction]
Mr. Kyte:	For a copy of all correspondence, letters, telegrams, instructions and notices calling for tenders, relating to the awarding of the contract for carrying the mails between the railway station and post office at Point Tupper, N.S., during the present year?


[Stage Direction]
On the Orders of the Day:
Right Hon.   S@: Mr. Speaker, I rise to a question of privilege. The House is aware that I very seldom notice any attack made upon me outside of this House, in the press or otherwise, but I find a report of a speech by Sir Clifford Sifton, delivered two days ago, which I cannot allow to pass unnoticed. Sir Clifford Sifton is reported in the Globe of yesterday as having addressed the Canadian Club at Winnipeg, and as saying, among other things:
Sir Clifford did not think that the people of Canada had any call to find fault with Laurier on the war until the day that the conscription policy was announoed in Parliament. Sir Wilfrid now said that he was unable to endorse fully the policy of conscription. His attitude was taken because he believed that it was his duty to the province of Quebec. In other words, Laurier abrogated his title to leadership. The plain, unavoidable and inevitable fact was that if Sir Wilfrid Laurier were to win this election Canada would go out of the war.
I have to say in reference to this, Sir, that from anything which I have ever said in this House or out of it, Sir Clifford Sifton
could not draw the inference that any attitude which I have ever taken was in deference to the province of Quebec. Neither on this occasion, nor any occasion in my public life, did I ever take an attitude in deference to one province alone. The policies which I have opposed were not opposed from the point of view of one province, but from the point of view of Liberal principles and with respect to all the provinces of Canada and irrespective of race or creed. This is my position to-day. I have stated before, and I repeat, that my attitude to-day, on the 1st of August, 1917, towards the war is the same as it was on the 19th August, 1914. I am in this war to the end, but I am in this war not upon compulsion, but upon the voluntary principle of enlistment.



COAL PRODUCTION IN WESTERN MINES.

Hon. T. W. CROTHERS (Minister of Labour):: Hon. members will be pleased to hear the message which I have received from the Director of Coal Operations in western Canada. The telegram reads:
Calgary, Alberta, July 28, 1917: Hon. T. W. Crothers, Minister of Labour, Ottawa. Daily production district eighteen, seventeen thousand five hundred tons coal and seven hundred and fifty tons coke. Output gradually increasing. Seventy-seven matters under dispute between the operators and miners finally adjusted to-day; will forward "report next week.
W. H. Armstrong,
Director Coal Operations.


Mr. OLIVER:: Has the Minister of Labour any information as to the price being paid

by consumers of coal in the West at the present time as compared with the price before the strike?


Thomas Wilson Crothers: I have no information on that point.


Frank Oliver: Would the minister be good enough to make inquiry in regard to that matter, because I have seen it stated that there is a difference of fifty cents a ton against the consumer.


Thomas Wilson Crothers: I might say that under the order appointing Mr. Armstrong director of coal operations, the price to be charged for coal is subject to his approval.



PRIVILEGE.


[Stage Direction]
On the Orders of the Day:
George William Kyte: I rise to a question of privilege. On Monday afternoon, discussing the O'Connor report, I used the following language:
I recognize that a member of this House, speaking on any public question, does so with a full responsibility, that anything he says may, by reason of his being a member of Parliament, be clothed with greater weight and effect than it otherwise might be. I shall, therefore, not go into details except to say that there is a general rumour-I do not know how well authenticated; if it is not true I will he the first to withdraw it-but the statement is made that facilities for the carrying of bacon from the William Davies Company from Canada to England are afforded largely by the ships which are carrying munitions across to Great Britain.
Then followed this dialogue between the Minister of Trade and Commerce and myself:
Sir George Foster: Has my hon. friend any authority for that except rumour?
Mr. Kyte: I have stated my authority, and I shall be the first to withdraw it if it Is not true.
Sir George Foster: Would it not he better that the statement should not have been made if you did not know it was true?
Mr. Kyte: I think there is rather too much of an inclination to pussyfoot with regard to matters in which the big interests are concerned.
Sir George Foster: Better to pussyfoot than to insinuate untruths, which are very damaging when put forth by a member of Parliament. If my hon. friend meant anything by his insinuation, it was that, in some wrongful way, the British Admiralty connived at the carrying of William Davies Company stuff and discriminated against others. I do not believe there is a word of truth in it.
Mr. Kyte: What I have said I have said.
Sir George Foster: I know you have.
Mr. Kyte: And I have stated that if it is not true the William Davies Company have

ample opportunity to deny it, and I shall he the first to accept their denial.
A isitotememt was issued by Sir Joseph Flavelle in ithe form of a letter addressed 'to the Minister of Trade and Commerce. It is in the following language:
My dear Sir George Foster:
The member for Richmond, N.S., (Mr. G. W. Kyte) is reported in the morning papers as stating that "facilities for the carrying of bacon from the William Davies Co. to England were afforded largely by ships carrying munitions across to Great Britain during the past year," the inference apparently being that I secured some preferred relation for the William Davies Co. for the movement of bacon products to Great Britain.
It should be an adequate reply to state that the William Davies Co. have been under contract with the imperial authorities to ship a given quantity of bacon each week-


Mr. SPEAKER:: Order. I hope that the hon. member does not intend to read a letter which has already been excluded from Hansard. If he washes to rise to ia question of privilege it is competent for him to refer to the substance of the letter, but not to read it.


George William Kyte: I think the House would prefer that I should give the ipsisisima verba of the letter. A 'statement appears in the Montreal Gazette this morning which places me in a rather unfavourable light, and on a 'question of privilege I submit that I am entitled to read this letter as affecting the case. I would like Your Honour's permission to read the letter rather than to give my rendering of its meaning.


Edgar Nelson Rhodes: I think it incompetent for the hon. member to read the letter; I have already given a ruling on that point. He may give the .substance otf it.
Mr. KYTEj I understood that Your Honour's ruling was that a member of this House could not bring in ;a letter written by a private citizen unless upon a question of privilege. A statement has been, made contradicting the statement which I made, and on a question of privilege I should like to read it. The letter continues:
-the price for which has been fixed by the imperial authorities in Great Britain.
For such contract bacon the minister of shipping in Great Britain arranges for transportation and instructs the director of overseas transport in Canada to provide space for it. As the movement of this bacon overseas is wholly under the control of the minister of shipping in Great Britain no action is taken by any officer of the William Davies Co. tot secure space for such shipments.
For the bacon which is forwarded on consignment to Great Britain the company secures ocean space in the ordinary manner. I am advised that there have been weeks at a

time when space for consignment bacon was unprocurable and that there have been other periods when the freight was so extreme that the company did not take the space. In any case the company's position was the same as that of any shipper seeking to secure ocean accommodation from the various shipping companies.
I address this letter to you because I observe that in the proceedings of the house you asked the member for Richmond for his authority for this statement.
Tours faithfully,
J. W. Flavelle.
Inasmuch, as this statement cl Sir Joseph Flavelle is not a denial of the allegation made by me, I have nothing to withdraw.



THE CANADIAN RAILWAY SITUATION.


[Stage Direction]
On the motion of Sir Thomas White for Committee of Supply.
Right Hon.   S@: 
Mr. GRAHAM:: That is upon all kinds of securities?


Sir THOMAS WHITE:: On common stock, first, second and third preferred, and on guaranteed stock, but not on bonds or debenture stock, because those represent liabilities. The commissioners recommend that after a precise figure has been agreed upon between the directors of the Grand Trunk Railway company and the Government of Canada or the Dominion Railway Company trustees, the directors should prepare a scheme of equitable proportion between the different classes, and procure the assent and legal authority necessary for bringing the scheme into force.
As to financing by the Dominion-Railway company, the commissioners express the opinion, that .as the Dominion Railway company would have not only the Grand Trunk, the Grand Trunk Pacific, and the Canadian Northern company, but also the unencumbered properties of the Intercolonial and the National Transcontinental railways, they would be able to issue securities and, in large degree at least, carry on their own financing. 1 may say that at the time this report was made the outlook financially was not as critical as it is at the present time. The commissioners seem to assume that the Board of Trustees would be able, without great difficulty, to float securities in the United States. My own view is that, on account of the entry of the United States into the war and the prevailing financial conditions there, it by no means follows that the task of the Board of Trustees of the Dominion Railway Company in floating the securities would be an easy one at the present time. According to the recommendations of the commissioners which I have placed upon Hansard, the Canadian Government would assume towards the company practically the position of guarantor of existing liabilities.
The two commissioners recommend that in older to force, if necessary, the pri'rate owners of the stock of the Canadian Northern Railway company .and the owners of the ordinary, first, second and third, and guaranteed stock of the Grand Trunk Railway company to accept the recommendations made by the commissioners, the Government should, if necessary, take out orders for receivership with a view to having the Board of Trustees who are to administer the Dominion Railway company appointed receivers; in which event, in the opinion of the commissioners, the shareholders in question would be willing to agree to their recommendations and accept, in the ease of the Canadian Northern Railway Company shareholders, the proportion of stock and the proportion of earnings provided for in the report, and in the case of the Grand Trunk shareholders, the reduced amount under the $3,600,000 per annum which these shareholders have been receiving annually on an average during the past ten years. So much for the report of Sir Henry Drayton and Hr. Acworth.
I now come-and I shall be as brief as possible-to the report of Mr. A. H. Smith, who is a practical railway expert, and the

president of the New York Central Railway System. Mr. Smith recommends a settlement between the (government and the Grand Trunk Railway company. He says:
The railway cannot carry out its part of the contract, and should be relieved of further embarrassment.
He is speaking with regard to the engagements of. the Grand; Trunk Railway company in connection wih the securities of the Grand Trunk Pacific. He would relieve the Grand Trunk Pacific Railway company of the obligation to lease the National Transcontinental. He would require the Grand Trunk Railway to lease the Grand Trunk Pacific to a 'board of trustees at a rental equal to the annual fixed charges Mr. Smith's proposition is practically this: The Grand Trunk is embarrassed and unable to fulfil ita obligations to the public of Canada by reason of its contingent liabilities in respect of the bonds of the Grand Trunk Pacific. There is also responsibility in connection with the leasing of the National Transcontinental. He says that in his opinion it i6 in the public interest [DOT]that the Grand Trunk should be relieved of that responsibility.


George Perry Graham: Of both responsibilities.


William Thomas White: Of both responsibilities. Putting it as simply as I can, Mr. Smith's recommendations are these-confine the Canadian Northern to the West altogether. Make the Canadian Northern take a lease of the Grand Trunk Pacific, because the two systems are in a sense complementary the one to. the other. Let the rental reserved in such lease be equal to the net annual fixed charges of the Grand Trunk Pacific. Confine the Grand Trunk to the East. Let the Grand Trunk take a lease of the Canadian Northern system from North Bay eastward. That leaves the "bridge lines," the Canadian Northern line from North Bay to Winnipeg, the Transcontinental line from North Bay to Winnipeg. These are the lean portions, running through territory where there is very little traffic. He says, let the Government assume those lines, vest them in a board of trustees and lease them, upon such terms as may be proper, to the Grand Trunk or the Canadian Northern. In other words, let the Government bear a share, at least, of the burden of maintaining those "bridge lines." With regard to the railways of Canada, the conclusion reached 'by Mr, Smith in his summing up is as follows:
Let the Canadian Pacific alone; let the Grand Trunk operate the eastern lines now

held hy that company and the Canadian Northern; let the Canadian Northern operate the western lines now held by that company and the Grand Trunk Pacific system; let the Government operate the connections or procure their operation by private companies; all of which should he done under arrangements that are equitable.
Continuing, Mr. Smith makes the following observations:
There is extensive duplication of lines in the West. The unsuccessful Grand Trunk Pacific lines are found among the successful Canadian Northern lines. Public policy demands the unification of these lines, for great economies could thereby he accomplished. There is extensive duplication in the East; the new Canadian Northern lines among the older lines of the Grand Trunk proper. Great economies in proposed investment and operating expenses await the joint working of those properties.
Then he makes the observation which I have already cited, as to leasing the bridge lines.


George Perry Graham: Those would be the lines between North Bay and Winnipeg?
SiT THOMAS WHITE: The lines between North B'ay .and Winnipeg. I ho.pe the House will pardon me if in a matter of such extreme importance I seem to be taking a little more time than would ordinarily be justified. Mr. Smith's precise words are:
The Government may well afford to take them over and maintain them as necessary parts of the public investment in the country's development. ... It may be necessary in working out this plan to grant some additional and temporary aid to the Canadian Northern, and it will be necessary to effect some compromise with the Grand Trunk Railway Company which will enable this company to continue.
We have called in the experts, and they have differed. There are, however, certain points of agreement in their reports which I propose to mention to the House. The reports, both minority and majority, are clear that the Canadian Pacific Railway system is thoroughly sound and should not be interfered with. Both reports agree as to the serious financial position of the Canadian Northern Railway company and the Grand Trunk Pacific Railway company. I have pointed out that the report of Sir Henry Drayton and Mr. W. M. Acwortfh dwell with emphasis upon the heavy contingent liability which the Grand Trunk Railway company has assumed in connection with its guarantees of the 'bonds of the Grand Trunk Pacific Railway company. All agree that no assistance is necessary for and no interference is desirable with the Canadian Pacific Railway company. They

agree that the Canadian Northern Railway company >andi the Grand Trunk Pacific Railway company should he saved from liquidation. They put forward the respective constructive recommendations in connection with those two systems as I have-indicated to the House. In the differing views Oif these experts and confronted as we are with this all-important and most difficult and perplexing railway problem, what is the solution which the Government has to propose to this Ho-use? I will preface what I have to say by the observation that the great desideratum is efficient transportation service to the public of Canada. 'If the railway companies are financially crippled, if they are plunged into liquidation and dislocated by receiverships and liquidation proceedings, not only do the railway companies suffer but the public suffers by reason of the ensuing detriment to the public service; and if ever there was a time in Canada when most efficient railway service to the country was needed, it is the present.
If these roads are crippled, if they are financially unable to meet their liabilities, if they are unable to make needed betterments and purchase rolling stock, then the grain, and other agricultural commodities, and the manufactured products of Canada cannot go forward to their destinations and the whole trade of Canada, in every part of the country is immediately affected.
I need not. say the Government has given this question its most serious-I may say, its most profound-consideration. We realize the importance of transportation to this country. We realize the financial conditions with which this country, and indeed the whole world, are to-day confronted. It appears to us that in meeting the situation there should be, as recommended by the commissioners, a forward, constructive policy that will appeal to the people of this country. It seems to me that the continuance from year to year of the large financial assistance which we have been granting to these companies is against public opinion and public policy while the ownership of these roads remains in private hands. The true policy would seem to be that which will ensure not only the best public .service but a substantial degree of public ownership in order that the benefit of the large financial assistance granted from the public exchequer during the critical .period of the development of these roads shall enure to the benefit of the public when the enterprises reach a period of fruition. If the public does the financing, the public should enjoy .the ultimate reward.
While saying .that, we must not at this time-at this most critical juncture of this war-overlook our credit. There are those in Canada who lightly suggest taking over the Grand Trunk Pacific, the Grand Trunk, the Canadian Northern and the Canadian Pacific and administering all these systems under the principle of public ownership. I need not say to this House that 4 p.m. that is not a financial responsibility which .should .be lightly undertaken at any time let alone at a time like this entering, as we are, the fourth year of the most expensive wax in the history of the world. I am not overlooking the fact that the earnings of these companies would largely take care of the interest upon the securities but the very fact that the Government would take over all the railway systems undeT a general scheme of naturalization would at this time, in my opinion, be a serious matter, to put the matter .moderately, to the credit of the Dominion and to our prospects for future financing. Notwithstanding this we believe that, having regard to the financial condition of these roads, the time is opportune and that we should not neglect the opportunity of taking a courageous step forward towards the end which I have indicated.
What is the position of the 'Canadian Northern and of the Grand Trunk Pacific to-day, because these are the two roads which are more immediately under our consideration? J-ne liiiaiiiues in Lite Ccuiadictn I'a.nLuu are all that you might desire. The finances of the Grand Trunk railway are entirely satisfactory with the exception only of their contingent -liability which is a very heavy one in respect to the securities of the Grand Trunk Pacific which they have guaranteed. The position of the Canadian Northern to-day is this: The company has a certain amount of net earnings. Its revenues are such that, after paying all fixed charges, it has a surplus. On that statement one might ask: Why should the Canadian Northern require any aid from the Government of Canada? The answer is very simple. Any railway system requires continually to make expenditures of a capital nature, not only on needed extensions-and I believe very few of these are being made at the present time-but on betterments, and requires to expend vast sums in the purchase of rolling stock in order that the public may be served and that the business may be carried on profitably. The essence of the situation, in so far as the Canadian Northern is concerned, is that, although the company makes net earnings, any surplus cash it has on that

account it requires to pay for betterments and rolling stock. The result is that the company is short of cash for the purpose of paying interest upon its underlying securities. If the cash is used for betterments and for the purchase of rolling stock, it is obvious that it is not available for the payment of the underlying interest charges. Put it the other way. If it is used for the payment of underlying interest charges, the necessary betterments to the road cannot be made nor can rolling stock be purchased. It is not possible for the company, as it would be if the war was not on, to issue further securities for the purpose of paying for these betterments and acquiring rolling stock? That is what a company does in peace times when conditions' are such that it can float its securities, but the prolongation of the war has made it impossible for the Canadian Northern to float any additional securities, to issue any further debenture stock, and consequently it has to take its earnings to pay for betterments and the purchase of rolling stock and to meet the instalment payments on account of principal maturing on rolling stock. It is therefore unable to pay its underlying interest charges.
In addition to this, the company has had to do a great deal of short date financing. There is outstanding, secured, for the most part by Dominion or provincial guaranteed bonds or debentures, short term loans floated in New York or London. The amount of that ordinary, short-term liability is about $100,000,000, extending over a period of two years or more. It is not possible for the company, by the issue of permanent securities, to fund that debt. Therefore, it is obliged from time to time to renew these short-term securities, and to carry on as best it may from year to year. The company have, in the past, come to the Government and asked us, as they did last year, to make them a loan of a sufficient amount to take care of the underlying interest charges and to meet the maturing instalments of principal upon rolling stock.
The Grand Trunk Pacific has no branches to speak of, and no feeders, and the revenue is noit quite sufficient to meet its operating expenses. That is to say, there is no surplus available for the payment of underlying Interest charges, and the position of the Grand Trunk Pacific is Shat, if they are to continue as a solvent going concern and serve the public, they must have a sufficient amount advanced to them by the Government, or by the Grand Trunk Railway company-land that is not practically possible

for the Grand Trunk railway-to meet, first, the deficit upon operating account, iand, secondly, their underlying interest charges. The amount which is required in the case of the Grand Trunk Pacific to meet fixed charges and to meet the deficit upon operating account, land for needed betterments, and for necessary purposes of rolling stock, is about $7,500,000 for the coming year. In the circumstances, .and bearing in mind, as I have stated, that our policy is to be ia constructive one, we have the following proposals to lay before Parliament. We do not think we should grant further .aid to the Canadian Northern Railway company while it is privately owned and controlled.


Some hon. MEMBERS:: Hear, hear.


William Thomas White: In connection
with that company, it is to be remembered that when we gave the subsidy in 1913, and a guarantee of $45,000,000 in 1914, we provided that the Government of Canada should become the owners of a certain portion of the capital stock of the company. The capital stock which was so acquired amounted to 400,000 shares, of the par value of $40,000,000, out of the issued stock of $100,000,000. These 400,000 shares, which represent a paT value of $40,000,000, now stand in the name of the Minister of Finance, in trust for His Majesty, and axe owned absolutely by the Government on behalf oif the people of Canada. There are, ^therefore, $60,000,000 of par value of the stock, representing 600,000 shares, in the hands of private owners and pledgees, because the greater part of the stock is pledged. We propose, Mr. Speaker, to 'acquire the whole of this $60,000,000 of stock for the people of Canada. With the $40,000,000 par value of stock which we now have, we shall be the absolute owners of the Canadian Northern Railway system. Whatever money we expend in payment of fixed Charges, for betterments or foT rolling stock, will enure to the direct and sole benefit of the people of Canada. We think it desirable, in the interests of efficiency of management, and for the purpose of financing, that the system should continue to be administered as a corporate entity. Therefore, we propose, as I have stated, to acquire all the outstanding stock.


George Perry Graham: Does that mean all the subsidiary companies, from the Atlantic to the Pacific, including those in Nova Scotia?


William Thomas White: I was going to deal with that a little later, but I will anticipate to some extent, to say this: the

Canadian Northern Railway system, as my hon. friend knows, consists of many constituent and subsidiary companies, railway companies, express companies, transfer companies, elevator companies and steamship and telegraph companies. The $100,000,000 capital stock of the Canadian Northern absolutely controls all those subsidiary and constituent companies which my hon. friend has mentioned, so that what the Government will obtain by acquiring the ownership of $60,000,000 stock of the Canadian Northern Railway company, which is the portion of the company not now in our hands, but in private hands, will be the control of the entire Canadian Northern Railway system from Halifax to Vancouver.


Some hon. MEMBERS:: Hear, hear.


William Thomas White: Then, with regard to the Grand Trunk Pacific, I shall elaborate a little more fully later on in my remarks; but with regard to that company the situation is complicated by the fact that the Grand Trunk Railway company is, as I have stated to the House, largely involved by its guarantee of the Grand Trunk Pacific securities. It is, therefore, not possible for us, even if we were disposed to do so, at this time to deal with the Grand Trunk Pacific Railway Company in the same manner that we propose to deal with the Canadian Northern Railway company, because a long negotiation would be necessary with the Grand Trunk Railway company, in order that the public interests might be safeguarded before the Grand Trunk was relieved from any or all of its liabilities in connection with the matters which I have mentioned. Our policy with regard to the Grand Trunk Pacific for the time being is this: we propose to make a demand loan, repayable at six per cent, secured by a mortgage to the amount of $7,500,000. I shall present to the House an estimate for that purpose in the supplementary estimates which are soon to be brought down. We shall take the power to constitute the Board of Directors of the Grand Trunk Pacific as we see fit. Personally I would look forward to the Government some day acquiring the Grand Trunk Pacific system, because with the Canadian Northern Railway system belonging to the Government, as we propose, the two systems could usefully co-operate in the West, to the facilitation of economical administration and better service to the public. That would involve, as I have stated, negotiation with the Grand Trunk
Railway company, which would take time to consummate. It is not our intention to release the Grand Trunk Railway company from their obligations in respect of the Grand Trunk Pacific Railway company. If in the future an arrangement could be made with -the Grand Trunk Railway company which would absolutely safeguard the public interest, it would, in my view, be proper for us to consider taking over also, as part of the Government-o^ned railways of Canada, the Grand Trunk Pacific. That, however, is a matter that we are not able to deal with at this time. I make the suggestion and lay some emphasis upon it for the reason that, having acquired, as we shall, the Canadian Northern Railway system, it would be advisable to have in connection with that system any lines that are naturally complementary to it. However, for the present all that we propose is to make a demand loan to the Grand Trunk Pacific of $7,500,000, with interest at six per cent, secured by mortgage, to be availed of for the purpose of paying interest upon underlying securities, and of making necessary expenditure for betterment, rolling stock and any deficit on operation. '


George Perry Graham: What will the mortgage cover?


William Thomas White: The mortgage will cover all the undertaking, giving that word its widest meaning in law, of the Grand Trunk Pacific, including, of course, the stock which the Grand Trunk Pacific holds of the Grand Trunk Pacific branch lines. It will be precisely the same kind of mortgage as that which was executed last year to secure the loan of $8,000,000 which we made to the Grand Trunk Pacific for purposes similar to those which I have mentioned.


Mr. MACDONALD:: Where will that mortgage rank in comparison with the other securities?


William Thomas White: It ranks next
after all existing securities.


Mr. GERMAN:: Are the existing securities not fully equal to the value of the property?


William Thomas White: Offhand, I should
say yes. Although I do not desire to argue the matter here-we can argue it later in committee-one must take into consideration the fact that the Grand Trunk Pacific Pailway company serves a large settlement in the West, and even at the cost of a certain loss of interest per year, I think


William Manley German: What does the minister
propose to pay for that stock?


William Thomas White: - That is a very proper question, but if my hon. friend will have a little patience I shall come to that in a moment. Of this $60,000,000 of par value stock of the Canadian Northern Railway company, about five-sixths is available for transfer in the near future. It is held by private owners and by pledgees. The balance of it is held in outside hands, a considerable part of it, I believe, in Great Britain. The member for Welland (Mr. German) has stated what price we are going to pay for that stock. We propose to acquire the stock, as I have stated, for the public of Canada. How do we propose to pay for it? We propose to have the value of that stock determined by arbitration in the method 'recommended in the Drayton-Acworth report. In that report it was recommended that in order to determine the amount of stock in the Canadian Northern Railway company which should be Apportioned to the private shareholders of the Canadian Northern Railway .system, -a Board of Arbitrators should be constituted, one arbitrator to be named by the Dominion Government, one by the owners or pledgees of the stock and the other to be chosen by these two. In case of non- agreement as to the third .arbitrator, the report recommended he should be named by the senior judge of the Exchequer Court. We propose to follow that method as to the valuation of the $60,000,000 par value of shares of the Canadian Northern railway which we shall acquire. We propose, in the event of the arbitrators not being unanimous as to the value, that there shall lie an appeal to the Supreme Court of Canada, both as to law and as to facts.
It appears to us that no fairer method could be devised of determining the reasonable value of the 600,000 shares of the Canadian Northern Railway Company stock, which we are acquiring.


Mr. PARDEE:: Will the minister be able to acquire all the stock? Suppose he is not able to do so?


William Thomas White: I am glad my hon. friend raised that point, because I overlooked it. Five-sixths of the 600,000 shares can be acquired in the near future.


Edward Mortimer Macdonald: By voluntary sale on the part of the parties who hold the stock, not by appropriation?

TTTr THOMAS WHITE: The value of the
600.000	shares is to be determined by arbitration, subject, as I have intimated, to an appeal to the Supreme Court. The resolution which I shall present to the House will provide that when five-sixths of the shares are vested in the Minister of Finance, under an agreement to be entered into between the owners and pledgees and the Governor in Council, the Governor in Council may declare that the whole of the shares are vested in His Majesty, and that the other owners and pledgees shall be entitled to receive their pro rata and proportionate share of the amount determined by the arbitration as the fair value of the
600.000	shares.


Edward Mortimer Macdonald: 
William Thomas White: We know, as a matter of fact, that the pledgees and owners will transfer their shares upon the terms which I have mentioned. My hon. friend from South Renfrew (Mr. Graham) has asked me what this Canadian Northern railway system embraces, and I should like in that connection to say something as to the advantages of the purchase of the Canadian Northern.


Edward Mortimer Macdonald: Before the minister goes on to that, is it intended that immediate possession of the road is to be obtained, or is the whole matter to stand until title is obtained after arbitration?


William Thomas White: We are preserving the corporate entity of the Canadian Northern Railway company. When we get the stock, we are absolute masters of the Board of the Canadian Northern Railway company and of its entire administration, and the board, as we constitute it, will be the Board of the Canadian Northern Railway company carried on, for its shareholders, who will then be the people of Canada. In other words, the private ownership of the shares is entirely eliminated.
I am now going to speak of the advantages of the purchase of the Canadian Northern railway system. We shall, by this transaction, acquire 9,513 miles of the Canadian Northern railway system, with branches in all provinces of Canada except New Brunswick and Prince Edward Island, and including 6,000 miles of branches in western Canada. That system
has entry ibo every important city and centre in the Dominion of Canada. We shall have all the adjuncts of the road, including telegraph companies, express companies, steamship companies and elevator companies. The Canadian Northern owns, [DOT]amongst other assets, the Lake Superior terminals, with five elevators, lat Port Arthur, with a capacity of 10,000,000 bushels. It owns ia steamship line with six ships on the Great Lakes. It owns the Canadian Northern Telegraph company, and within the laslt few years the 'Canadian Northern Telegraph company has acquired the Great Northwestern, Telegraph company, the stock of which is vested in the Canadian Northern Railway company, the two systems having some 1,500 offices throughout the Dominion of Canada. The Great Northwestern Telegraph company, which operates the Canadian Northern Telegraph Company, has connections with the Western Union Telegraph company of the United States, and connects with its cable service across the Atlanie.
As I have said, we shall own all the underlying companies, some thirty of them, the capital stock of which is vested in the parent company. These include the Halifax land Southwestern, the Canadian Northern Quebec, the Canadian Northern Ontario, the Canadian Northern Saskatchewan, the Canadian Northern Alberta, and the Canadian Northern Pacific. What more has the Dominion of importance in connection with tills question of the acquisition of the Canadian Northern railway system? It has the Intercolonial, which has now access over a leased line to Montreal. When the bridge is built across the St. Lawrence, the Intercolonial will have access over the Canadian Northern, Quebec to the terminals of the Canadian Northern in Montreal. The ownership and control of the terminals of the Canadian Northern in Montreal, and, indeed, in all parts of Canada, of the Canadian Northern railway system, are vested in the Canadian Northern Railway company, ian,d they will now be under the control and ownership of the Dominion.


Mr. MURPHY:: Does that include the Mount Royal Tunnel and Terminal company?


William Thomas White: The Mount Royal Tunnel and' Terminal company is owned by the 'Canadian Northern, the stock of which is now acquired, and therefore in that wiay we own that company.
This opens up a great vista to the imagination of the members of this House and



the people o'f this country, because It means that 'the 'people of Canada will own, not only ia highway from Halifax to Vancouver, but a great transcontinental railway system in its grades, curvatures and connection second to none.


Mr. ROSS:: 
William Thomas White: There may be
one or two in which a small amount of stock is outstanding, but in nearly all' the cases of the thirty and more companies which are embraced in the Canadian Northern Railway system, and which my hon. friend will find in the Act of 1914 under which we guaranteed $46,000,000 of securities of the Canadian Northern Railway system, the Canadian Northern owns all the stock, so that through the ownership of the Canadian Northern, we acquire ownership and control of these subsidiary and constituent companies.


Mr. LEMIEUX:: What about the tramways controlled by the Canadian Northern?


William Thomas White: 
William Thomas White: After the completion of the Quebec bridge, the Intercolonial could come over the Quebec system to Montreal. 1 do not say that it will give up its present line at all, but there will be access in that way.
There is one other feature to which I would draw attention-as I must ask the pardon of the House if I have trespassed unduly upon its time and patience. We are confronted to-day with a very serious transportation question in the Dominion of Canada. Financial conditions are naturally critical in all the markets of the world. These railway companies-and I am not speaking now of the Canadian Pacific company or of the Grand Trunk Railway company proper-hut these other roads have been unable to sell their securities, are unable now to sell their securities, and the result is that necessary betterments have not been made; some extensions in the West, for instance, that should have been made have not been made; necessary rolling stock has not been acquired, or at all events on the scale on which it should have been acquired, and it has been the financial situation which has largely brought that about. These proposals which I am laying before Parliament will assist the credit of the Canadian Northern, no longer privately owned, but owned by the people of Canada. They will enable us 'to renew its loans, to carry it along, to acquire the necessary rolling stock,-for ourselves now, and will enable us to continue the Grand Trunk Pacific as a going concern, enable it to avoid default, enable it to make the necessary betterments and to purchase indispensable rolling stock. In other w.ords, the proposals which we now lay before Parliament, will, I am confident, improve the entire railway situation in Canada, and greatly enure to the benefit of the people of this country.


Edward Mortimer Macdonald: The hon. gentleman has not stated who are to compose the directorate of the Canadian Northern.


William Thomas White: The position is this. The Dominion Government will own the stock of the Canadian Northern Railway company. Owning that, it wall absolutely control the board of directors and its personnel, and when the Dominion Government acquires control of that stock, it will be for the Dominion Government to say who shall be the directors of the Canadian Northern Railway company; that will be the legal position without any doubt. In the appointment of the board of direc-

tors and the general administration of the Canadian Northern Railway system we shall, of course, have to consider what is in the interests of the public. Speaking offhand, I should say this. There are on the staff of the Canadian Northern some exceedingly capable officials-men like Mr. McLeod, Mr. Hanna and Mr. Mitchell, the operating heads of the several departments. My own view is that the Government would be wise to retain as far as possible the services of these men in connection with the administration of the system.


George Perry Graham: Sir William Mackenzie too?


William Thomas White: My hon. friend has raised the question of Sir William Mackenzie. Let me say this: I believe that Sir William Mackenzie and Sir Donald Mann will co-operate with the Government in every way possible to facilitate and carry out this transaction, and will be prepared at any time to vacate theii seats on the board at the request of the Government of Canada. As to the board, we shall have to get in the stock first and complete the transaction, and then it will be open to the Government to determine what is the best course, having regard to the public interest, to pursue with regard to the board of directors and the general administration of the Canadian Northern Railway company.


Edward Mortimer Macdonald: Is the Government going to accept the recommendation contained in the majority report, that this board be an independent body entirely free from political and .any other influence?


William Thomas White: We have not
taken that step. As I stated, the commissioners differ in their views as to the policy to be followed. I feel personally, (having regard to financial conditions, that it is not practical or expedient for the Dominion Government to take over the Grand Trunk, the Grand Trunk Pacific and the Canadian Northern at the present time, or to take the further step that has been suggested by some,* of taking over also the ' Canadian Pacific railway. But my hon. friend will observe that we have taken one step forward, and a very signal and important step towards the operation of the railway systems of Canada for the public benefit. I believe that this policy which 1 have had the honour to announce to the House to-day will mark a new era in the history of transportation in Canada, af-255J
firming as it does, the principle that if the people are called upon to finance the railways of Canada, the people shall derive the ultimate resultant benefits.


Mr. NESBITT:: Will the administration of the Canadian Northern be placed under the Governor in Council?


William Thomas White: If my hon. friend will realize the legal position I think it will be perfectly clear to him that the administration of the line will not be under the Governor in Council. It is true that the Governor in Council, through the ownership of the stock, will have the power to elect the board, but we propose that the operation of the Canadian Northern Railway system shall be through its boards of directors. The administration of this system will therefore be under the boards, and not immediately under the minister, as the Intercolonial is under the Minister of Railways. In other words, we shall not have the actual physical property in this system, but we shall have control of the stock in its entirety, and we shall name the boards, and the boards will in turn, through their executive officers, administer the system.


Sir WILFRID LAURIER:: My hon. friend did not say whether the Government intended to follow the commissioners' recommendation that the boards be self-constituted


William Thomas White: The Dominion
Railway Company Board, could hardly be self-constituted because it would have to be constituted in the first place by some authority, but after it was constituted the vacancies arising would be filled by the remaining members; in other words, it would be a complete sovereignty in itself-self-perpetuating. It would be outside the control of the Government and outside the control of Parliament-although I am not quite sure as to the latter statement because Parliament, I suppose, has power over anything under its jurisdiction. No it would not be free of Parliament.


Wilfrid Laurier: It could not
be free of Parliament, of course, but according to the report of the majority it would be free from Parliament to the extent that their acte could not be undone except by Parliament.


William Thomas White: It would be independent, subject to change by Parlia-

roent. There is no doubt about that. But, we havie not determined to carry out the recommendations of Messrs. Drayton and Aeworth in their entirety, for the reasons I have given. At the .same time we have made a great step forward towards acquiring a beneficial interest in Canadian railways for the people of Canada.
I beg to give notice of the following resolution which I shall move in Committee of the Whole to-morrow:
Resolved, that it is expedient to provide:
1.	That His Majesty may acquire on such terms and conditions satisfactory to the Governor in Council as may be set out in the agreement to be made with the owners and pledgees of not less than five-sixths thereof, and for a price to be determined as hereinafter provided, the six hundred thousand shares of capital stock of the Canadian Northern Railway Company, (par value sixty million dollars), not now held by the Minister of Finance in trust for Hiis Majesty.
2.	That the Governor in Council shall appoint one arbitrator, the said owners and pledgees shall appoint another, and the two so appointed shall appoint a third, or failing agreement as to such appointment, the third arbitrator shall be appointed by the Senior Judge of the Exchequer Court.
3.	The said arbitrators shall determine the value of the said six hundred thousand shares as of the date of the said agreement and the said arbitrators shall proceed in a summary way and may apply their own judgment in determining such value and may receive with respect thereto, such reports and statements authenticated in such way as they may decide and such evidence as they may deem necessary or helpful, examine witnesses under oath and hear the parties by counsel or representatives and that the. unanimous determination of the arbitrators shall be final, but should the determination not be unanimous an appeal from such determination shall lie to the 'Supreme Court of Canada on behalf of the [DOT]Governor in Council, or of the owners or pledgees, upon any question of law or fact, such appeal to be made within thirty days from the rendering of the determination.
4.	That the amount of the value so determined shall be paid out of the Consolidated Revenue Fund, or otherwise secured in accordance with the terms of the said agreement.
5.	That upon the making of said agreement, at least five-sixths of the said six hundred thousand shares shall be transferred to the Minister of Finance in trust for His Majesty, and if there be any of said six hundred thousand shares not transferred as aforesaid, the Governor in Council may declare said shares to be the property of the Minister of Finance in trust for His Majesty, and the same shall thereupon become the property of His Majesty and shall be paid for pro rata *with the shares so transferred.
6.	That so soon as said five-sixths of said shares has been transferred as aforesaid, the Governor in Council may assist the Canadian Northern Railway company, or any company included in the Canadian Northern Railway system, in paying and settling any indebtedness of such company or postponing the payment thereof on such terms as may be

agreed upon, and for such purposes may make advances out of the Consolidated Revenue Fund, may guarantee payment in whole or in part, and may give the obligations or securities of the Government in connection therewith.
7.	That the Canadian Northern Railway company, and each company included in the Canadian Northern) Railway jsystem, tehall from time to time do such acts and things, make and issue such agreements, obligations and securities in connection with the payment or settlement or postponement of payment of the said claims as the Minister of Finance may require.
8.	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.
Hon. GEORGE P. GRAHAM (South Ren-few): The Minister of Finance has dealt with the problem which, next to the war, is, perhaps, the greatest problem with which Parliament has to deal. The question of how successfully this scheme will work out will depend largely upon its operation, and we have not the details of this operation before us. In general, I might say that the programme outlined by the minister this afternoon, if carried out independently of any attempt at political patronage or political management, will give the people of Canada a full opportunity to try out government ownership on a large scale. At the moment, I can scarcely see just how the minister proposes to operate this new system and divest it of all political interference. Government ownership, and particularly government operation, is surrounded with difficulties with which I have had reason to be familiar, and to my mind the only way government ownership can he made successful is by placing its operation in the hands of a board which will not have to be continually giving a detailed account of what it is doing to every member of Parliament. This larger scheme is not like the Intercolonial. If this resolution passes the scheme will be operated by the people of Canada on a large scale, in competition with the Canadian, Pacific railway, the best-managed transportation system in the world. Unlike the Intercolonial, the roads dealt with in this new scheme were not built as a bond of Confederation; on the contrary, the scheme must be operated as a straight business concern. In order that this may be accomplished, I submit to the minister that, in working out the details of government ownership on a large scale in Canada, we must begin right by divesting it of all political environment; in no other way will government ownership be given a fair trial.

I am at present just as strongly of the opinion as I have ever been that the productiveness of Canada in the years ahead of us will make of practical use all the railway facilities we have. When the era of financial stress came upon those railway projects, it was not peculiar to them, but was common to every business in the Dominion. Shortly before the war all business concerns and all undertakings were in the same condition, and capitalists the world over told them they must take in sail and begin to economize. Following that came the war, and it was almost impossible for projects-those of any ordinary nature at least-to secure financial assistance. As the months and years have gone by, this condition has become more stringent, and we find that enterprises which might have been successful under ordinary conditions are not successful.
In our western country, instead of hum dreds of thousands of new settlers coming in to cultivate the soil and to make traffic for these roads east and west, we 'are now looking about to see how many men we can fake out of all Canada for the preservation of the Empire. Our business conditions have been changed and the railways aTe in the same position as many other concerns -with this difference, 'that many others have been saved by the war, while the railways have been injured to the extent that, on account of the war, we are now called upon to finance them.
Let me take up the question of liquidation. My hon. friend has istated that it would he injurious to the credit of Canada if the railways were allowed to go into liquidation. I am approaching this question from the viewpoint of wiar conditions rather than from that of ordinary conditions. I acknowledge that at least eevenity-five per cent of the railway companies in the United States have gone through receivers' hands at different times. But I realize that there is this difference, that these lines in the main were not state-aided, and the credit of the country was not iso much ,at stake with them as was the credit of private enterprise. Bnt we in Canada, both federally and provimcially, have become co-partners to a very large degree with those enterprises by guarantees of bonds as well as giving aid, (and we are not in the same position as 'are the people of the United States, where many railway companies go into the receivers' hands. If the conditions were the same, and if there were no war, I might be inclined to allow some of these lines to go into the receivers'
hands and have what you might call a cleam-up. But I hesitate to take that view at the present time for the reasons I have stated. On the maintenance of the 'credit of Canada depends our ability to do our share in the war, and, looking at .it from that viewpoint, personally I 'am inclined to go a long way towards preventing liquidation.
Let me take the Canadian Pacific railway first. The Canadian Pacific railway dis, perhaps, the greatest transportation system in the world, taking into consideration .all its ramifications. Art the present time, no matter what my views on Government ownership, I think it would be a mistake for Canada to assume the responsibility of taking over a road that is an .absolute success in every particular. Not that it would not be a good thing for Canada, perhaps, but we are undertaking a large obligation in whiait we are doing .in addition, to what the war is costing. It is possible that Government ownership will not he the success that, we would hope iit .to he financially speaking,, and under these conditions I think it would be a 'mistake, at the present time 'at least,, to interfere with that great transportation! system, the Canadian Pacific.
Niow let me take the Grand Trunk railway. The Grand Trunk, I believe, ought to lie very close to the hearts of the Canadian people, sentimentally. It is the pioneer of all these railways. It was with us in Canada in pre-Confederation times. It went about securing large investments in the old laud to he made in this country. If any of the lines be entitled to consideration at the hands of the Canadian people for pioneer work, for the opening up of this older part of Canada, that line is the Grand Trunk. I have no brief for the Grand Trunk, but I am pointing out that in the discussion of the various railway problems we must not forget that the old Grand Trunk brought millions of money into this country and secured eompara-5 p.m. tively small aid when this was not much of a country. Its system in. eastern Canada, as well as in the United States, I think, to state my own view, was hardly treated fairly by the Dr-ayton-Aeworth report. I have read that report carefully. I know some of the difficulties surrounding these railway problems, and I am inclined to believe that the report is harsh to the old Grand Trunk with regard to its conception, growth, operation-and difficulties at the present time. It maybe because I have lived nearly all my life-on the line of the Grand Trunk that I feel

that way. But I have read that report over carefully, and I say again that I am inclined to think that it deals harshly with the old Grand Trunk in some of its -statements concerning the operation of the road. The Grand Trunk has assumed large obligations in connection witfi the Grand Trunk Pacific and also some obligation in connection with the operation of the National Transcontinental. Owing to the conditions which have arisen, over which to a large extent the railway itself had no control, it finds itself to-day in a straitened position owing to the guaranteeing of the bonds of the Grand Trunk Pacific. That is a matter for adjustment, I suppose, later on when the Government bring that matter before the House.
Now, I take up the Canadian Northern railway. The Canadian Northern has the beet gathering system in western Canada without any doubt. It has 6,000 miles of roads in that area. Its branches, although very cheaply built in the beginning, penetrate perhaps the best part of our great western country. I was not An sympathy with building the line through to the Pacific coast at the time it was constructed but I am inclined to take the situation as it presents itself to-day without harking back to what has been. Its line from Winnipeg to Fort William is in good condition, or was, when I travelled over it not very long since. In the East it has quite a large number of disconnected lines. I call them disconnected because they are such lines as that running from Halifax to Yarmouth -the Halifax and South Western. There are some pieces of line here and there throughout Ontario. The question will arise: If the Government -takes over the
600,000	shares of stock and becomes the owner of the Canadian Northern mainly, with the control of all its ramifications, how much money is it going to cost for betterments and for the completion of the works now in hand by the company? The Government becoming the owners of the Canadian Northern stock, of course, cannot allow the Montreal tunnel to go unfinished. It will have to assume the obligation, I presume, in connection with the completion of the works at Vancouver. And in thousands of ways it will have to assume liabilities that are not included in the main issue of 600,000 shares but that will have to be met.
The Government, becoming the proprietor of the Canadian- Northern -system, will h-ave to assume its liabilities, and, it being Gov-emmentrowned, the Finance Minister will

discover that what the people will accept from the Canadian Northern they will not accept from the Government, either in the way of operation, or extension of lines, or completion of work now under construction. So that in this problem' before ns we are not enabled, even if we knew the price the arbitrators would place on the stock, to say what liability the Government is undertaking on behalf of the people of Canada, until we know what they will have to spend in the immediate future for the completion of work now on hand by the Canadian Northern. In addition to that, there is a great scarcity of rolling stock on all the railways on both sides of the international boundary, Government railways included; and the Government, immediately it assumes possession of the road, will have to begin the purchase of rolling stock, motive power and other incidentals, of which the Canadian Northern is now somewhat short.
As to details, I should not like to commit myself at the present time, concerning the management, particularly because, after all, the success of this whole undertaking, so far as the people of Canada are concerned, will depend on the management. The amount of money that may be required to take over this system is not such a great thing to the people of Canada. It is not of supreme moment, although of great interest, to the people, how much money will be required to get the rolling stock, motive power and all the betterments; but it will be of supreme moment to the people how this Government system is to be operated. I might intimate, in passing, that the Government in securing control of the stock of the Canadian Northern, could not well be criticised by us on this side of the House, if the details are right, because we proposed that course three years ago, when the Government last gave aid to this line. I am a little inclined to congratulate myself on another point made by the Minister of Finance, which I fear hon. gentlemen opposite did not think much of at the time: that is the provision made when giving guarantee to the eastern lines of the Canadian- Northern for connnection between it and the Intercolonial at the city of Montreal. That now will be an important factor in the linking o-f the Intercolonial with the western system.
Let me call attention to the other road. The Grand Trank Pacific and the Transcontinental combination were never intended to be what they are no-w. Their present condition is- not indicative o-f the original -idfea. The Grand Trank Pacific today is -a local road between Winnipeg and

Prince Rupert, without any connection, without any outlet of its own at either end. Owing to the conditions existing, the Grand Trunk Pacific was not enabled to put a steamship line from Prince Rupert to the Orient, and, as a consequence, the through traffic from the Orient, which was expected to come hy that short route over Canadian territory from the Pacific to the Atlantic, has not been realized. Just what arrangement the Government will make in that connection remains to he seen,, hut until the Grand Trunk Pacific or the Government provides steamship facilities'between Prince Ruipert and the Orient, that line will be nothing more than a local line. If, in aiding the Grand Trunk Pacific with the view probably of taking it over later, there is any expectation of it being a self-sustaining line, it can only foe made so 'by giving it a steamship connection and providing it with a through traffic. I am ready to concede- and this I brought to the attention of the late Mr. Bays several times-that the Grand Trunk Piacifie was not provided with a sufficient number of feeders in the western country. Others were in ahead of it; I will not discuss how or why, but the Grand Trunk Pacific has not the feeders it ought to have in that country. In looking to the future, in addition to a steamship connection, provision will have to be made, either through the company or by the Government with the company, for the construction of many more feeders. Take the Transcontinental railway-that much discussed line. The minister kept away from it, and so will I, because the weather is warm and we might start a discussion which would not end till the election was over. But I want to call the attention of the people of Ontario and Quebec to the fact that the National Transcontinental line from Quebec through Northern Ontario runs through a magnificent stretch of country for a great many miles, and although, at the present -time, it is largely non-productive, and a link in a chain of transportation which does not now pay, I believe that in the years to come the Transcontinental will have a local traffic that will vie with the local traffic of any of the roads in the older parts of Canada. When the Ontario Government, at the head of which at that time was the late Sir George Ross, proposed building a road into New Ontario from Toronto, a great many people, irrespective of their political leanings, thought it was a wildcat scheme and would never pay; but the result has been that, in the construction of that road, the greatest
mineral deposits in the world were brought to light, and Canada has received the benefit during the last few years. That new country through which the Transcontinental runs, both in Quebec and Ontario, will, I believe, in the years to come, produce a traffic, and the production along that road will more than pay for the operating expenses and carrying charges. But we are just in a condition now when everything seems to be working against development and expansion, and in these matters we will trust to the future with an optimism which I believe we, in Canada have not lost, and will proceed with the development of our country slowly now, but prepared for a larger development when the clouds of war have rolled away. If we were to apply the same acid test to the Intercolonial as has been applied to some of the other roads, we should find the Intercolonial asking for help all the time. I do not refer particularly to present conditions, although I think they may not be as good as they used to be. The Intercolonial was constructed as a bond of Confederation and pledge between the East and the West-hut it has not paid interest. If it had been the Canadian Northern, Grand Trunk Pacific or Grand Trunk, it would be in the same position to-day as these lines, and would have been coming to Parliament asking for money to pay interest on capital. Although it does not appear so, every year we in Canada are paying interest on the construction of the Intercolonial, and rightly so. I am just pointing out that some railways are not, under the stress of the present time, able to meet certain demands, and the Intercolonial would be in the same position if we applied the same acid test to it as we apply to these other lines. If the Intercolonial had had to borrow the money, or if this Government had borrowed it, giving the Intercolonial as security, the Government would have had to come to the rescue and pay the interest, as guarantor of the bonds.
The Finance Minister, a few moments ago, referred to some criticism directed [DOT]against the Grand Trunk Railway company because of its paying dividends while it required betterment and rolling stock. In one respect that criticism is unfair. I believe that the Interstate Commerce Commission of the United States acts under ;a statute, the provisions of which would not permit a railway company to expend earnings upon capital betterments rather than pay interest to its shareholders. One mam has described a betterment, or 'a proper capital expendi-


Mr. GLASS:: My hon. friend would not say that it would be a good policy to acquire the road and then rent it to another railway company?


George Perry Graham: The hon. gentleman himself would not, would he?


Samuel Francis Glass: Decidedly not.


George Perry Graham: I think we agree on that.


William Manley German: Mr. Speaker, I cannot allow this occasion to pass without expressing my positive disapproval of toe proposal of the 'Government. The Minister of Finance .stated that in certain respects the majority and minority reports of the Royal Commission appointed .by the Government were in agreement. He said that they agreed in the recommendation

that no receivership should be appointed for these roads, and in order to -avoid that condition he takes over the Canadian Northern system. But the Government is doing one thing which the. Commissioners were absolutely unanimous in condemning. The majority and the minority reports condemned in express, emphatic and sensible terms the taking over of this system by the Government and its operation as a Government enterprise similar to the operation of the Intercolonial railway. That is the position which the Government has adopted with regard to the Canadian Northern system. Although 1 am not in full accord with the majority report made by the Commission, I believe that the Government should have gone much further in following out the recommendations contained in that majority report.
Instead of taking over the Canadian Northern Railway system by itself, the Government should have worked out a scheme of amalgamation of all the roads mentioned in that report, namely, the Grand Trunk, the Grand Trunk Pacific, the Canadian Northern, the Intercolonial and the National Transcontinental. I agree with the statement in the report that the Canadian Pacific Railway company should have been left out and should be left out of the scheme -at the present time. But outside of that, and I believe it will he shown when the details of this proposition are discussed in committee-the only justifiable scheme to adopt and the only scheme that will give satisfaction to the people of Canada will be one that will amalgamate the Grand Trunk, the Grand Trunk Pacific, the Canadian Northern, the Intercolonial and the National Transcontinental. Then we could devise a scheme whereby all those systems should be worked absolutely free and independent of Government control.
We have seen what Government control means on the Intercolonial. Every man in Canada will agree with me in the assertion that so far as our experience goes in the working of the Intercolonial railway, Government control has not been a success. I am not opposed to Government ownership, but I am diametrically opposed to Government control, that is, to the operations. being absolutely and exclusively under Government supervision, and I believe the people of Canada will be opposed to it. But there can be no difficulty in having Government ownership under control which will be non-partisan, non-political and for the best interest of the country. Many details in connection with this will have to be discussed at great length, and I will endeavour to place my views further on
record when the matter comes before us in committee. For the present I content myself with stating that the Government is adopting the one course which has been unanimously condemned by the three members of that Royal Commission.


Rt. Hon. Sir ROBERT BORDEN (Prime Minister):: Mr. Speaker, my hon. friend (Mr. German) promises that we shall hear from him later at greater length on this subject. I would assure my hon. friend that he has an entirely erroneous impression	as to what	the Government
does propose. It	is not proposed
that the Canadian Northern railway system shall be operated under direct Government control as the Intercolonial is operated. It is proposed that this road shall continue to he operated by the corporation in which it will still he vested, notwithstanding the fact that the Government will have acquired the whole of the stock. The corporation will he there just the same as before. The road will be in the ownership of that corporation just the same as before, but the people of this country will own all the stock in that corporation.
I agree entirely with what the hon. member for South Renfrew (Mr. Graham) and the hon. member for Welland (Mr. German) have said as to the necessity of working out some system by which the road, the stock of which we purpose acquiring for the people of this country, shall be operated without partisan interference. I do not say without political interference, if you use the word "political" in its highest sense, because the Parliament of Canada in that sense must always control any great undertaking, the virtual ownership of which is vested in the people of Canada; but so far as party or partisan interference is concerned, those hon. gentlemen have not expressed themselves too strongly to suit my views, and I entirely agree with them in that regard. We are to have a new Parliament elected in this country in the early future. It may be, it doubtless will be, the duty of that Parliament to consider the best means lby which the true policy, as to which I agree with my hon. friends, shall ~ be worked out; but in the meantime, all we propose is that the road should be operated by the corporation in which the road is vested at present, and we do not in the least intend that the road shall toe taken over and operated by a department of the Government as the Intercolonial is operated at the present time.
My hon. friend from South Renfrew takes n optimistic view of the situation, and I

agree with him in that regard. He says that the products of Canada will require all our railway facilities. That may toe very true. The view which has impressed itself upon me in that regard is that we have not too much Tailway mileage in Canada, but I doubt very much whether that railway mileage is precisely in the place where it ought to be. I am rather under the impression that we have too many transcontinental lines and not enough Draneh lines, especially in the western part of this country. If we had all the railway mileage better distributed, I do not think we would have any too much, but the difficulty is that we have three transcontinental lines, and one of them has not the feeders or branches which, amongst other things, are essential for its profitable and efficient operation. I agree entirely with the hon. member for South Renfrew that the Grand Trunk Pacific, for example has not had a fair opportunity in its operation. The outbreak of war and other conditions have prevented that project from toeing carried out precisely in the way in which it was anticipated, and naturally that road has not had the opportunities which it otherwise would have had.
So far as both the Canadian Northern and the Grand Trunk Pacific are concerned, th Government would have been very glad if the position could have been sustained, so that a new Parliament might deal with the situation that has arisen. But under the circumstances that was not practicable, and the Government had to take some effective action or the roads must go into receivership and liquidation. We all agree that this would toe unfortunate and might be disastrous under present conditions. By reason of the necessity of negotiations, probably prolonged, with the Grand Trunk Railway company, we have decided to sustain the situation in respect of the Grand Trunk Pacific very much as we did last year. I hope hon. gentlemen, in considering that aspect of the question, will realize the intimate connection which was intended between the Grand Trunk Railway system in the East and the Grand Trunk Pacific in the West. I hope also they will agree that that connection must not be wholly eliminated. Although the original project may not he capable of being carried out in its entirety, nevertheless, by some suitable arrangements between the Grand Trunk railway and the Grand Trunk Pacific railway, if the latter road should pass into the ownership of the people of this country, as seems almost inevitable, the connection between those two systems

should be maintained, and the interest of
the people of Canada will, I think, lie in that direction. But all this cannot be carried out in a moment, especially it cannot be carried out by a Government which has resting upon its shoulders every day heavy responsibilities in connection with the war and the necessity of giving a very considerable portion of time to parliamentary duties. Therefore, so far as that part of the matter was concerned, we thought it wise and prudent in the public interest that we should content ourselves with sustaining the situation in order that it might be taken up when there is more opportunity for the close study, careful consideration and prolonged negotiation which will be necessary. But, so far as the Canadian Northern is concerned, the only reasonable solution of the difficulty was to vest the whole stock in the people of this country, and to carry on the operation pending the summoning of the new Parliament, by corporate management, without bringing it under the direct control of a department of the Governments There was ia unique opportunity for accomplishing that purpose, so 'ar as the Canadian Northern railway is concerned; that is to say, more than five-sixths of the out-standing stock was vested in owners or pledgees who were immediately available, and with whom we could consider the situation.
With respect to the liabilities of the Canadian Northern Railway, to which my hon. friend from South Renfrew has made allusion, it is perfectly true that the acquisition of the entire stock, which virtually vests the ownership of the entire Canadian Northern railway system in the people of this country, imposes on us the obligation of looking after the liabilities. But that will be taken into account when the value of the stock comes to be determined by the board of arbitrators, or, in the last resort, by the Supreme Court of Canada. It is equally true that works now under construction by the Canadian Northern railway, so far as they may be essential for the efficient operation of the road, must be carried on to completion. The fact that money will have to be provided for that purpose will also have to be taken into account when the value of the stock comes to be determined.


Mr. A. K. MACLEAN:: About how much money is required to complete the undertakings of the Canadian Northern railway?


Robert Laird Borden: I really could not say offhand, but it is very proper that such information should be given, and I shall

direct the attention of the Minister of Finance to my hon. friend's inquiry.


Frank Oliver: Where does the money go that is paid on account of the stock?


Robert Laird Borden: It will go to the pledgees and owners of the stock.


Frank Oliver: It will not in any degree be available for betterments?


Robert Laird Borden: No. My hon. friend from South Renfrew has alluded to the necesiS'iity of Tolling stock, .and I quite agree with him. I think the Canadian Northern will require a great deal of rolling stock, but I think my hon. friend will also *agree that no more profitable investment of the public revenue of this country could b e made than in the pro vision of rolling istook for that purpose. The Canadian Pacific railway, I believe, has per mile of road a very much greater equipment of motive power and rolling stock than any other railway in Canada, and it should be the duty of the Government 'to see that the rolling stock of the Canadian Northern railway is brought measurably up to that very high standard. It will be possible, I think, for some co-operation to take place between the Intercolonial, the Transcontinental, the Grand Trunk Pacific and the Canadian Northern in respect of rolling stock. I should observe also-'and I think imy hon. friend from South Renfrew will *agree with this-that the very numerous branches and feeders that have been constructed in connection with the Canadian Northern in Western Canada can be brought into some measurable service for the Grand Trunk Pacific. I am advised that this can very readily be accomplished, and if so it points in a direction along which the country may have to (proceed later on; that is, some kind of co-operative management of all the railways of Canada. It is really necessary for the railway ooimipanies of Canada and the Government to get together, as soon as lan opportunity can he found, to ascertain whether there cannot be an effective co-operative management of this great railway mileage of Canada, which 'aggregates pretty well up to 40,000 miles. I am not speaking at the 'moment of putting compulsion on the railway companies, but after the war is over we shall have very important pr oblems * to deal with, and, perhaps, none of them will be more important than the problem of transportation, the problem of seeing to it that the net earnings of the railways in Canada shall be sufficient, if possible, to meat the fixed charges. I have discussed this subject somewhat with people who are iin a position to speak much more authoritatively about it than I can, and I am convinced that it is not beyond the bounds of possibility 'and practicability that there shall be in this country some such co-operative management as that to which I have alluded. The remarkable economies which would result from it are beyond question. I will noit dwell upon that point. Documents which I have had tue opportunity of examining lead me to the conclusion that such a proposal is practicable and that the saving would be great. Let me illustrate. Suppose it could be made clear that through such co-operative management from $90,000,000 to $100,000,000 of new construction by a great railway system in this country would become unnecessary.


George Perry Graham: Double-tracking, for instance.


Robert Laird Borden: Yes. The
answer that one usually receives in respect of such suggestions is that any such scheme is impracticable, because the company over whose lines another company has running rights, always operates the road to its own advantage, and the company possessing running rights does not get a fair chance. I am not at all convinced that this answer, which is continually put forward, is absolutely final or conclusive. Persons with whom I have discussed the subject, and who should know what they are talking about, are rather inclined to agree with me in that respect. Railway facilities already existing ought to be used to their full extent before any great corporation should be permitted to spend from $90,000,000 to $100,000,000 or any other considerable sum in new construction which practically duplicates that already existing. Who is to pay interest on the cost of unnecessary new construction? The public of this country, and no one else. And, therefore, if we can avoid such expenditure by using to their full extent the railway facilities already existing, we help to solve one of the difficult problems which will lie before our people in the immediate future. So I think that it may be necessary for the new Parliament, when it is summoned, to give careful consideration to this question along the line which I have suggested, and I venture to believe that very great advantage will accrue to the people of this country if some such proposal can be .successfully worked out.

My hon. friend (Mr. Graham) spoke of the National Transcontinental railroad as running through a very fine district in Northern Ontario and Northern Quebec. I had the privilege of going over that road for the first time in December last, on my way from Quebec to the Pacific coast, and I entirely agree with what the hon. gentleman has said as to a considerable extent of that country which is eminently suited for settlement. If I remember correctly, according to the statements of those who are familiar with the country, this district is said to comprise an area of 25,000 or
30,000	miles at least, and I hope we may live to see a prosperous population settled there and assisting in. its development.
I do not know that I can add anything further to the discussion at the moment. We realize that the proposals which the Government has put forward, and which according to our judgment are wise and sufficient to meet the situation that has developed, must be carefully and attentively considered by the committee of the House to which they will be referred, and we shall be prepared, so far as possible, to afford full information on all matters which may be relevant to the discussion that will then take place.


Edward Mortimer Macdonald: I do not rise for the purpose of expressing any definite or positive opinion on the proposal made by the Minister of Finance this afternoon, for the simple reason that it is largely indefinite in character. The proposal is in regard to a subject which has engaged for a long time the attention of hon. gentlemen who have been interested in the welfare of the country, and which has now been considered by a special commission appointed by the Government to make an inquiry and report which commission is divided in its findings. Under such circumstances it is difficult to arrive in a moment at a definite conclusion just whether such a proposition as has been indicated to-day is or is not in the interests of the country. So far as one can gather from the Minister of Finance, it is proposed to advance to the Grand Trunk Pacific Railway company, the money necessary to pay their bond interest for this year, upon the same basis as last year. There does not appear to be any new condition attached to that proposal and there does not seem to be anything that calls for special comment. With regard to the other branch of the subject-the acquisition of the capital stock of the Canadian Northern
[iSir Robert Borden.]
Railway company-the minister has in many respects run counter to the report and the recommendations of the commission headed by Sir Henry Drayton. As I understand it, the Government proposes to purchase the capital stock of the Canadian Northern railway which it does not now own, and enter into an .agreement with the holders of five-sixths of that remaining stock by which title will foe acquired; the value to be paid for the stock to foe fixed by arbitrators who are to foe appointed in the manner indicated by the minister. In thereby taking over the other one-sixth, compulsorily if necessary, the Government will obtain the entire stock of the Canadian Northern railway and become owners of that enterprise. The minister, however, did not tell us-and this is a matter in regard to which I ask information-what is the total bonded indebtedness of the Canadian Northern. The purchase of five-sixths of the remaining stock of the Canadian Northern is a comparatively simple proposition compared with the amount of liabilities which the Government and the people of Canada will have to assume as a'result of that equity. It is like buying an equity of redemption in a very large and expensive property against which there is a large mortgage. The question as to whether the bargain is or is not a good one will depend upon the size of the mortgage. So far as I can gather from looking at the report, I would estimate that the amount of the mortgage, or bonded indebtedness of the Canadian Northern railway to-day is in the vicinity of $400,000,000, which means that on that ground alone the Canadian people will be assuming an aditdon of $400,000,000 to their debt. Resides that, we must take into consideration the amount of outstanding indebtedness not secured by bonds or mortgage securities upon those various railways which are included in the Canadian Northern system-indebtedness to banks-of which we have heard something in previous years; indebtedness, in regard to unpaid accounts; indebtedness to contractors; indebtedness to other people who have business with the concern; indebtedness upon equipment bonds or temporary securities of that kind,' and so on.
Before we can come to any conclusion in regard to this matter, the House should know we are not buying a pig in a poke, and just how much the people of Canada will become liable for if they purchase this stock. If we can have any conception of the liabilities from the information given

us in past years, I would estimate in regard to the items I have mentioned that the liability the Canadian people will assume on that ground alone would be in the vicinity of $500,000,000.
Then comes the question in regard to which we would want very clear information, as to Ithe basis upon which the value of this outstanding stock is to be determined by the arbitrators. Is it to be upon the present value of the enterprise or upon its prospective value? Every one who has had anything to do with the determination of arbitrators' values knows that the basis upon which values are arrived at may vary very considerably, depending upon the point of view from which the arbitrators are asked to regard the matter. I am in accord with my hon. friend from South Renfrew in my admiration of the possibilities of the Canadian Northern, particularly in the western country. I think it covers a portion of the West which is bound to give to Canada tremendous returns in future years. That being so, if the value of this outstanding stock is to be based upon the prospective value of the road, the arbitrators may give any amount imaginable and entirely beyond estimation at this time. Apart from the amount the arbitrators may allow for the present and prospective value of the stock, which is nothing more nor less than the equity in the property, Canada agrees by this proposition to assume a new indebtedness of $500,000,000.
I am one of those who do not regard it as a situation which would be of necessity a calamity if one of our enterprises, railway or otherwise, should pass into the hands of a receiver. Hon. gentlemen have always had held up to them the idea that for a concern to be in the hands of a receiver means that some awful calamity is going to happen. Every one who has studied the situation in regard to receiverships applied to railway and other enterprises in the United States knows that you have the best guarantee possible for the prudent and wise operation of a concern, when a receiver is in charge of it. Not only in connection with railway enterprises, but in connection with industrial enterprises in every part of the commercial world, it has long been recognized that a receivership is often resorted to for the purpose of extricating a concern from a situation into which it has fallen through bad management or for some other reason.
I am not here to say that a receivership is the course which should be adopted.
Upon that point I should like some information. For the moment I am entirely open-minded upon the question as to whether or not, having regard to the tremendous obligations which Canada has assumed, and must assume, in connection with the war, ;and remembering that already, according to the statement of the Minister of Finance, the debt of Canada is $1,250,000,000, which is more than the whole net debt of the United States was before the war, an addition to this debt, alt one swoop, of $500,000,000, iis a proposition that demands from this House the moist serious consideration th.at it has ever given to .any matter that has come before it and in regard to which we should have the fullest possible information in order that we in this House and 'the people generally should know just the extent of the liability we are assuming. In the good days before the war thq assumption of liabilities was a thing that the Canadian people undertook with the lightest possible heart, but day by day we iare .beginning to realize having, in common with all countries of the world, assumed tremendous liabilities, that w-e in this new land, as the Finance Minister has frequently said, must avoid .the creation of a condition under which taxation would become .so great that .it would be a imenace to Immigration.


Mr. NICKLE:: As a matter of fact and of law, has not Canada practically under-' taken these obligations .already by guaranteeing, provincially and .federally, the bonds of the Canadian Northern railway?


Edward Mortimer Macdonald: Net necessarily.


William Folger Nickle: Why not?


Edward Mortimer Macdonald: There are dispositions which might be made of this railway to other parties. If a friendly receiver were appointed .and if an arrangement were made for sale under the direction of the court the .matter might possibly be oleianed u,p. As a lawyer, I would not accede to my hon. friend's .proposition that because the country has advanced money to .an enterprise, therefore, we are bound to go on .and take it over and work .it.


William Folger Nickle: Of course, that is not an answer to my question at .all.


Edward Mortimer Macdonald: What does my hon. friend want?


William Folger Nickle: My question was this: Has not Canada practically assumed .an obligation equal to that which my hon. friend mentioned by the provincial and Dominion

gua-ran-teeis of the bonds of the Canadian Northern?


Edward Mortimer Macdonald: My hon. friend
means that because we (have given guarantees we have assumed the obligation?


William Folger Nickle: That is my point.


Edward Mortimer Macdonald: That is a question that is well worthy of consideration but that does not mean that it is only possible to deal with the subject in one way. My hon. friend from South Renfrew suggested a possible action to be taken by this Government as a result of getting the ownership of the property. The Finance Minister was exceedingly lacking in any information as to what would be the policy of this Government in regard to the operation of this enterprise. My hon. friend (Mr. Nickle) says that because you have a mortgage on a man's property you must finance him for all time to come. That is the logic of my hon. friend's proposition. But, that does not work out in business matters, whether you are dealing with a question of $100,000,000 or $200,000,000 or one of only $5,000. If you guarantee a man for $5,000, my hon. friend's proposition is that you must assume that liability for all time.


William Folger Nickle: My proposition is this: If A gives a mortgage on his farm to B, and C endorses a promissory note as collateral security for the payment of that mortgage, C thereby undertakes the obligation under that mortgage.


Edward Mortimer Macdonald: My hon. friend, I am sure, will agree with this proposition: that because a person has given aid to another person or enterprise, that does not ' mean that he is obligated for all time to finance that person or enterprise?
At six o'clock the Hmse took recess.
After Recess.
The House resumed at eight o'clock.


Edward Mortimer Macdonald: On such an important matter as the one under discussion, I am sure the House will agree with me when I say that I regret that the minister this afternoon did not give us greater detail. He dealt with the proposition generally. We were told that the Government propose to take over 60 per cent of the stock of the Canadian Northern, which represented the stock held outside of that held by the Government at this time, and to pay for that stock by an arbitration which, so fiar as the

personnel of the arbitrators was concerned, should be held in accordance with the recommendations contained in the report of Sir Henry Drayton. I find on looking at that report that, 'if you take it literally, there is nothing really to .arbitrate, because we have the fact-which the minister did not mention this afternoon-that upon this railway, which it is said we are going to purchase by getting 60 per cent of the stock at an arbitrary value, there is a bonded indebtedness of $400,000,000, and the report of -Sir Henry Drayton states that the total cost of the Canadian Northern was only $370,000,000. On page 43 of the report, in the statement giving the result of the findings of the commission, Sir Henry Drayton says:
We find then $370,000,000 to be the maximum possible cost of the Canadian Northern system as at present existing. In other words, as indeed is frankly admitted by Canadian Northern witnesses, the Canadian North ern shares represent no cash investment.
Further on he says:
We conclude, therefore, that the shareholders of the company have no equity either on the ground of cash put in, or on the ground of physical reproduction cost, or on the ground of the saleable value of their property as a going concern.
The result is that Sir Henry Drayton has found that this 60 per cent of the shares of this company, in the words which I have quoted, have no value whatever, and yet we are agreeing to enter into an arbitration with the gentlemen who own- that stock-and give them the right to appeal to the Supreme Court of Canada from the finding of the arbitrators-to ascertain whether they are to be paid something. I suggested before recess that before this matter is discussed again the Government should tell us the basis upon which this value is to he arbitrated. Is it upon tne present or upon the prospective value of this stock? Or are there to be any conditions laid down, so that the arbitrators will have before them some basis to go on, in the face of the express findings of Sir Henry Drayton that the stock itself has no value whatever? Having purchased the stock at the arbitrated value, the Canadian people, according to the proposition as I understand it, render themselves liable for interest upon the bonds amounting to $400,000,000- in other words this $400,000,000 of bonds is added to the debt of the country. In addition to that-taking the figures given l-ast year, and counting in round numbers, there are debts amounting to $100,000,000 to be paid by the company, and which the people of Canada will have to pay. In

addition to that, according to the report of Sir Henry Drayton, it requires $70,000,000 to provide for the necessary additions and betterments, in order to make the Canadian Northern a workable proposition. According to values which may be given by arbitrators, once it is assumed they can go on and give a valuation based upon prospective value in the future, $100,000,000 is not too big an amount to fix as that which may be awarded as the value of the stock to be taken over by the Government. But let us put it at only $50,000,000. The result is that the debt of Canada, as a result of this proposal made in war time, with the existing debt of $1,250,000,000, is to be increased by $620,000,000. That is to say, the debt of Canada, without any further war expenditure, will amount to $1,870,000,000, involving in interest charges, say at 4 per cent, of something like $24,000,000 or $25,000,000 added to the burden of the country. The .proceeds of the income tax will be completely swept away, and there will be, in addition, a burden on the people of at least $5,000,000. These are the figures as they appear to me. I am taking the ordinary proposition, based upon the fact that when a person buys a property which is mortgaged, he becomes liable for the debt. If my figures are incorrect, I shall be glad if the hon. gentleman, when he obtains the exact figures, will correct me. My hon. friend said that it was a matter of great importance that the Intercolonial was to be able to have western connection with the Canadian Northern. He apparently forgot that the Intercolonial, by reason of the Transcontinental, already has communication with the West, and that there are now in operation trains which are advertised as Government trains, by which people can go directly on a Government railway from anywhere in the East as far as Winnipeg. That phase of the question seems a little superfluous in view of the existing condition. As to this whole matter, I reserve my judgment until we obtain fuller data which the minister should have given to-diay.
On one portion of the subject my hon. friend was singularly lacking in the information which he gave us. We were told that the Government were going to take over the Canadian Northern Tailway. Who is going to operate it? Nobody knows, from the explanation of my hon. friend. Certainly it is not the Government, because the right hon. Prime Minister, speaking later, said that this railway was not to be operated by the Minister of Railways or
by the Government as such. So that we are not to have government owner-ship in the proper sense of the term, neither are we to have, apparently, the method of operation which has been recommended by Sir Henry Drayton in hie report, namely, the creation of a holding company to -be composed entirely of independent men of broad experience to deal with the question entirely apart from politics and from patronage-and patronage, as every one knows who ha6 given the matter any consideration-is a menace to anything like Government operation of government utilities. If it is not to be a government-operated road, nor a road operated on the basis recommended by Sir Henry Drayton, how is it to be operated? The Government has three directors on the Canadian Northern by virtue of the legislation of last year, and the only difference, so far as I can gather, between the proposition of my hon. friend this afternoon, and the system adopted in the past is that, instead of three, we are to have seven or nine directors, as the case may be

according to the number of directors of the Canadian Northern-who will be appointed by the Government; and it was intimated that the gentlemen who were already connected with the Canadian Northern in an official capacity, and who were good men, would be retained, and their services would be available. That is a very indefinite proposition. We in Canada all know what is contained in the proposition of government ownership of government railways, or the government operation of any utility, but certainly this is not government operation. Are we to have a body made up of the type of director that we have been putting on the Canadian Northern and on the Grand Trunk Pacific in the past, who are really not railway operators, but whose doings are controlled entirely by the men who are the motive forces in the enterprise, and who know about the operation?
Is that what it is to be? Certainly this is not Government, operation; certainly it is not operation by an independent body whose actions shall be free from polities or patronage. According to the data which the minister has submitted, the control which is to- be exercised over this railway, in connection with which the debt of Canada is to be increased some $620,000,000, is such as to involve no responsibility to the people of Canada as a whole.
The proposal which my hon. friend laid before the House this afternoon, involving

such, a .tremendous charge upon the Canadian people at this juncture, requires the fullest possible consideration. I shall not detain the House by discussing the Grand Trunk Pacific, because in respect to that company the proposal made by the Government is one simply of marking time; of taking no step so far as the interests of that company are concerned. But the proposal with regard to the Canadian Northern is a very drastic and important one, and I .aim sure that the House .and the country will await with considerable interest the fuller information which the Government will have to give us before they can ask the House to accept the proposal they have submitted.


Frank Oliver: Mr. Speaker, the subject before the House bears more directly upon the prairie West than upon any other part of the country. Of the railroads of Canada that have been mentioned by the Minister of Finance the Intercolonial, the Grand Trunk, .and the Canadian Pacific give, I suppose, inine-tenth-s of the railway service of eastern Canada. The Canadian Northern gives only a small part of the railway service of eastern Canada, and the Grand Trunk Pacific does not touch it at all. The proposals of the Finance Minister relate to the Grand Trunk Pacific and to the Cana dian Northern. Therefore, the interests o,' the prairie West and of the West generally in his proposals is more direct than is that oi any other part of the Dominion, and that affords a reason for considering the subject from a different angle.
I desire to take exception to the attitude, both of the commission appointed by the Government and of the Government itself, towards what they are pleased to call the railway problem of Canada. To the western country the railway problem is the problem of securing railway facilities necessary to the development of the country. But when you come east of the Great Lakes, the- railway problem seems to be of an entirely different character. It resolves into simply a question of finance, without consideration of that side of the financial question which grows out of the development of the country by railway construction and the affording of railway facilities.
It is assumed in eastern Canada that because these two railway enterprises, the Grand Trunk Pacific and the Canadian Northern, are unable to meet their obligations, they were ill-conceived and are a burden upon the country rather than an aid to its

development and progress. That is not the view that prevails west of the Lakes, and with all due respect I submit that it is not the correct view. We have had experience in the western country of railway accommodation at the hands of a single railway enterprise. [DOT] Our experience was this: although that enterprise was in the -same efficient hands that it is to-day, the [argument was made that because 'that one railway company and its lines then existing were adequate for the traffic of the country as it then was, there was no warrant for further railway construction and .still less fo the introduction of competitive railway enterprise. It was a fact that for many years when the Canadian West was served by the Canadian Pacific railway, that country did not progress, no.r did eastern Canada progress.
The progress of eastern Canada depends on the progress of western Canada, and the .progress of western Canada depends, in larger measure than upon any other factor, upon railway facilities under conditions of competitive .service. There had to be cither railways, ot the country could not have become populated; .it could not have become productive. Other enterprises than those already in existence had to be originated; either men and other inspiration bad to be secured, or we would not have had or could not have had the western progress that resulted from the extension of competitive railway facilities, and we could not have had the expansion of trade, industry, and wealth in eastern Canada that followed that western expansion. The Canadian. Pacific railway was built across Canada at a time when there was not sufficient traffic for that railway. But it was good business to build it then, because if the railway waited for the traffic there never would ibe any traffic, and there never would be any railway.
The development of the continent of North America has followed railway enterprise. Railway enterprise has gone ahead of requirements; that is how our country has developed. The Canadian Pacific railway was an outstanding and startling instance of railway construction in advance of actual requirements. It was many years after the Canadian Pacific railway was constructed before the business caught np to the facilities; the Canadian Pacific railway was a struggling enterprise during those years, dependent in large measure on Government assistance in one form or another. In time the Grand Trunk Pacific and the Canadian Northern enterprises were begun
a

mad carried through, largely on Government assistance.
Either of those railroads had more traffic to start on than the Canadian Pacific had when it was constructed across the continent, and each one has greater possibilities of traffic than the main line of the Canadian Pacific has had at any time in its existence. There is just as much necessity for the Grand Trunk Pacific and for the Canadian Northern in the development of the western country as there was for the construction of the Canadian Pacific in the first place, and there is just as much reason to believe that in due time the development of the . country will catch up with the railway facilities thus furnished an<^ make those enterprises just as successful in every way as the Canadian Pacific has been,-subject, of course, to the greater values in the way of lands that the Canadian Pacific has received at the hands of the Government. It was an unfortunate fact that just as those two railroads were being completed as transcontinental enterprises, the war broke out. The effect of the war was to prevent individual enterprise from going into occupation of the new country made available and accessible by railway facilities, so that the growth of traffic that undoubtedly would have followed the construction of those roads, had the war not occurred, did not take place, simply because the war was on. There is no other enterprise in Canada that has been so hard hit by reason of war conditions as these two railroad enterprises. That was not the fault of the inception of the roads, nor-of the management of the roads,'nor of the country through which the roads run. Their failure to make greater progress than they have made is due to conditions that were not under their control nor under the control of any one else, and those enterprises should not be condemned by public opinion in this country because of that fact. As a western man, I protest against the point of view taken persistently by the Government of the day, as well as by the commission which they appointed, that because those railroads have not been profitable enterprises from the moment of their completion therefore they were ill-conceived and should not be considered to be legitimate enterprises and should not be supported in the conduct of their business.
It is true that, having been completed, they are not paying their way; and not paying their way, they, of course,
are in the same position as any one else who incurs an obligation and is unable to meet that obligation when it becomes due. They become subject to forfeiture, that is, they are subject to be thrown into the hands of a receiver to-morrow. The only question is one of policy-whether that course would be in the interest of the country or not. I am perfectly satisfied to see those companies go into the hands of a receiver to-morrow. But if that course were taken, there is no question that when they came out of the hands of the receiver they would come out as part and parcel of the Canadian Pacific Railway system. I have nothing but praise and commendation for the Canadian Pacific railway, for its management, for the results flowing from its operations; but I, with other pioneers of the West, have had experience of a condition under which we depended upon a single railway company for our railway facilities, and that condition was not satisfactory; it did not tend to the upbuilding of the country, and in my humble judgment, it was in a large measure the cause of the stagnation from which the West suffered for many years. That condition was not relieved until the element not only of railway development but of railway competition entered into that country. Therefore we have to consider whether we desire to maintain those two railway companies as going concerns for the sake of preserving the element of railway competition throughout that country.


Mr. SCHAFFNER:: Is my hon. friend arguing that there should be three transcontinental railways in this country?


Frank Oliver: I believe there is to-day more room for three transcontinental railroads in Canada than there was for one in 1886 when the Canadian Pacific railway was finished. The Canadian West and British Columbia are the reason for the transcontinental railways. It certainly is >a fact that there are more than three times as many people, there is more than three times as much production and wealth between the Great Lakes and the Pacific to-day than ini 1886. If my hon. friend says that the country has already been developed, I can. only tell him that the Prairie West, as he knows, has not been developed beyond say, fifteen or, at the most, twenty per cent. What we have to-day to offer in business for our railroad companies is not more than one-fifth of the business that we ultimately shall have to offer when that country is fully developed. There is a greater future before the three railroad companies to-day



than there was in sight before the one railroad company when its transcontinental line was completed.
I was speaking of the desirability of maintaining railway competition in the western country by supporting, so far as is reasonable, the three railway companies as separate institutions. If those railway companies were being operated extravagantly or incompetently, if the money that they earned was being wasted, then certainly they should not be continued, they should not be supported, they should be called to account, and some other arrangement should be made. But so far as I am aware, there is no suggestion that either the Grand Trunk Pacific or the Canadian Northern are being operated otherwise than efficiently, honestly and economically- efficiently, beyond any comparison with, we shall say, the operation of our Government railway system, and beyond any question, more economically than our Government railway system. If there is any criticism to be madp of those companies in regard to efficiency, honesty or economy of operation, I have not yet heard it. That being the case, and the railroads being in the hands of companies that are operating honestly, efficiently and economically, it seems to me that there is a good case for the Government to come forward and give such assistance as is necessary in order to keep them up as going concerns. The Government has on previous occasions come to the assistance of these companies. On this particular occasion, they come to the assistance of the Grand Trunk Pacific with ,a six per cent demand loan of $7,500,00 They estimate that this is sufficient to carry the company in its operations for another year, and hope that development will occur later on that will enable the company to carry itself. My impression is that this is a desirable form of aid to the Tailway. It is businesslike, it is a clear-cut proposition; we know exactly what we have to do. We know where the money is going and what use will be made of it, and it seems to me that if we are to give the railroads assistance at all, this is the best form in which to give it. Let me make this suggestion, however. I think the Government would have been well advised if in past years they had adopted an attitude of support, instead of an attitude of antagonism, towards these railroads, an attitude which tended to discourage these enterprises and to discourage the men who were concerned in them. It is more than possible that had the Government of the day preserved a
fMr. Oliver.]
proper attitude towards these railroad companies, had they recognized them in their capacity as builders of the country, as concerns that were entitled to the support of the people of Canada within reasonable degree, these railroads would not have needed to come to Parliament for the amount of aid they are receiving at the present time.
Now, I desire to speak of the aid to the Canadian Northern railway. I am very much at a loss to understand why the Canadian Northern is being dealt with in this way, as compared with the Grand Trunk Pacific. I am at a loss in following the general outline placed before the House this afternoon by the Minister of Finance and the Prime Minister, and I am still ippre at a loss when the details of the subject are considered. In the case of the Grand Trunk Pacific, we know what our aid is going to cost us. In the granting of that aid we have the assurance of that honesty, efficiency and economy which has been shown in the management of the road up to the present time. But when we deal with the Canadian Northern, we first of all forego the advantage that we have in regard to the Grand Trunk Pacific-'because we are taking control of the Canadian Northern; we are going to manage the road ourselves; we are going to have a transcontinental road from Halifax to Vancouver under our management and control Well, Mr. Speaker, judging by the results of our management of the Intercolonial and of the Transcontinental, I can only look at such a proposal as a calamity to the people of Canada, both in the matter of their finances and in the matter of the service that will be given to the public by the railroad. The proposed action of the Government adds nothing to the railway facilities of Canada. There are just as many miles of railway in Canada to-day as there will be after this action is taken; and when the Government ask us to accept their management as better than that of the railway company, as more satisfactory to the people, as giving a better service generally, I can only say that they are asking us to accept something for the support of which there is not one bit of evidence. We cannot expect the results from that railway under Government management that we have had under the management toy the company.
The Finance Minister explains that we are to toe the owners of the road and that this will toe an advantage to us. But how do we become the owners of the road? By

purchasing $60,000,000 of capital stock. The minister does not tell us how much we are going to pay for this stock, but says there is going to be an arbitration, and that we will pay whatever the arbitrators say we must pay. Now we have the evidence of the Drayton Commission that the stock is not worth anything, and if we are going to buy stock on the market, having appointed the Drayton Commission and having their evidence, surely that furnishes a sufficient basis upon which the minister could announce to the House what the ownership of this railroad is going to cost the country in hard cash. But he does not tell us that; he carefully avoids even a suggestion as to that. It comes down, then, to this. In order that this country shall assume the operation of 9,000 miles of railway-and this Government has never shown the ability to operate 2,000 miles of railway efficiently, economically or satisfactorily-we are to pay in cash an unknown amount, which, however, may be in the neighbourhood of $60,000,000. That is the proposition he has laid before the House. If he has something more definite to give us, he certainly should have given it to us. Why are we arbitrating on the value of $60,000,000 of Canadian Northern stock when we have the beet possible evidence to prove that the stock is not worth one cent? Why are we arbitrating on a subject like this? Is it to get control of the road? We own $40,000,000 of that stock today, and if we paid even at par for $11,000,000 more we would control the road. The country is being led by the Minister of Finance into' a position where we may have to pay dollar for dollar for $60,000,000 of stock, when the most that we need is $11,000,000 to give us just as complete control of the road as would the purchase of $60,000,000 of stock.	[DOT]
Now I ask why .are we not informed in regard to that question? For m>
part I am compelled to take issue with the proposal of the minister on that ground, and say it is improper, and uncalled for-that [DOT]there is no warrant or possible justification for it. In regard to the control of the road,
I want to know by what process of reasoning it is assumed that our control of the Canadian Northern railway will give us better service than we are getting now, with a less rate to' pay for it. Are we getting better service on the Intercolonial or the Transcontinental and are we getting it at a less rate? Is there anything in the management of our Government railroads to 2564
warrant us in believing that we can manage the 9,000 miles of the Canadian Northern as well as it is being managed to-day? To state the case is to show how absurd it is. There is no warrant for such a suggestion. We are being asked to take over the Canadian Northern railroad, and pay for the taking over of it, in order that the country may be saddled with the obligations of the company, in regard to which obligations my hon. friend did not enlighten us. Following the remarks of my hon, friend from Piictou (Mr. Macdonald), I say this is not a proposal that should be brought before Parliament, or placed before the Canadian people, at this time. .It is by all odds the most outrageous proposition that has ever emanated from the Government-and that is a large order. We must assume all the obligations of the Canadian Northern railroad; we must meet those obligations and we must discharge them. We must also assume obligations to the people of the country to continue the service of the Canadian Northern is now giving. Why should this be done? My hon. friend told us that the Canadian Northern was earning its fixed charges and something over. Surely the Canadian Northern is not in such a position that a further reasonable loan, as is made to the Grand Trunk Pacific, would not enable it to carry on. Surely we should be better off to pay in cash what would enable the Canadian Northern to continue business rather than that we should take the responsibility for everything it owes, and pay anywhere from $10,000,000 to $60,000,000 for the privilege of doing so, and then give the country an inefficient railway service, whereas we have had a measurably efficient railway service in the past.


Mr. CURRIE:: Does the hon. member claim that efficient service was given by the Canadian Northern? It is not so many weeks since hon. members on the opposite side of the House were complaining because grain had been standing all winter. That is not efficient service. For instance, in the Goose Lake district, they had not a single oar out all fall or spring.


Frank Oliver: That was the same condition as prevailed on the Canadian Pacific.


John Allister Currie: Gan the hon. gentleman name a place on the Canadian Pacific where that was the case?


Frank Oliver: Sure.


John Allister Currie: It is not in accordance with the custom of the road.


Frank Oliver: There was mo more complaint on that score in regard to the Canadian Northern than there was in regard to the Canadian Pacific. It w.as a matter of arrangement between' fbe railways and the Government, by which, for some reason or other, the railways were allowed to put an embargo' on the hauling of the grain. The railways were permitted to- ignore the Common Carriers' Act, and this embargo was put on by .all the companies.
In placing upon this country a direct financial obligation, as stated by my hon. friend from Piotou, running up to half a billion dollars, at this time and under present circumstances, the Government is not doing a service to the country, which, to quote my hon. friend's favourite expression, will enable us to win the war.


William Thomas White: Does imy hon. friend seriously suggest that we axe taking up a direct liability of $500,000,000?


Frank Oliver: Yes.


William Thomas White: 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.


Frank Oliver: The Government will he the owner of the property.


William Thomas White: Of the stock.


Edward Mortimer Macdonald: What difference does that make?- It is an absolute quibble.


William Thomas White: It makes all the difference in the world. If my hon. friend from Edmonton (Mr. Oliver) is the owner of a large holding of Canadian Pacific stock, for instance, could it be said that he is liable personally, if his stock is paid up as this stock will be, for all the debts of the Canadian Pacific Railway company? It is absurd.


Frank Oliver: What I tell my hon. friend is that the Government owns the stock of the Canadian Northern.


William Thomas White: It is a stockholder.


Frank Oliver: It owns the railroad. It has taken over the stock, so that it will be liable for the debts of the Canadian Northern. Did not my hon. friend tell the House this afternoon that one result of the taking over of this stock would he to establish the credit of the Canadian Northern? How would it establish the credit of the Canadian Northern, if the Government was not responsible?


John Allister Currie: If the Canadian Northern had a first-class credit, such as the Canadian Pacific or the New York Central, and i}, wanted to raise $50,000,000 for equipment, for instance, it would not need to come to this House for the money. The reason the Canadian Northern is here looking for money is just because its credit is impaired, and it will come here year after year when it has no money.


Frank Oliver: Unless the Government
manages the business of the Canadian Northern infinitely bfetter than it has so far managed that of the Intercolonial or the Transcontinental, instead of the Canadian Northern earning interest on its capital cost and something on operating expense, it will not be earning any interest whatever on its capital cost. It is a fact that since the Intercolonial was built it has never earned a dollar on its capital cost, under government management. The Transcontinental will not earn a dollar under government management. It is a calamity to the country that such conditions should be forced upon it.


Samuel Francis Glass: My ton. friend will admit that the same conditions prevailed during the regime of the former Administration between 1896 and 1911?,


Frank Oliver: Certainly?


Samuel Francis Glass: With reference to the Intercolonial?


Frank Oliver: Certainly.


John Allister Currie: Why did the hon. gentleman and his colleagues launch into such an extensive programme of railway building as they did in the West if new railways are not a paying proposition?


Frank Oliver: I do not know that it would he profitable for myself and my hon. friend to argue out that point. At the beginning of my remarks I gav6 the reasons why the late Government entered upon that policy, that railway enterprise, and I showed that this country had benefited enormously as a result of it. But the late Government did not enter upon a policy of government ownership of the Transcontinental railway from Winnipeg to Quebec. This Government saw fit, for the petty political purpose of discrediting their predecessors, to discredit that enterprise, and as a result it has to date been a failure. But that rwas not the fault of the project, nor it it the fault of their projects that at the present time the Grand Trunk Pacific and the Canadian Northern are not paying their way. It is a fact that when we own the railway we have the assets as well as the liabilities, but we have to provide for the liabilities. If we own the railway that is an offset against the liability. That is true, but the liabilities are our liabilities, and we have to see that they are provided for or else we lose the asset. I say, with all deference to the Minister of Finance and his ability-and also to his parliamentary under-secretary (Mr. Currie) -that the minister is not improving the financial position of Canada in the markets of the world by the transaction that he is putting before us to-night. It is a most unfortunate thing from every point of view that this country should be subjected to such a hold-up at this particular time for money to-pay for something that has no value. For what reason this is being done neither I nor any other man can tell outside of the circle of the Government. We can guess, but we do not know. When, in addition to that, we are asked to assume responsibility for the management of 9,000 miles of railway, with tile obligations that go with it, 1 say that this Government is doing the country its greatest disservice.


Samuel Francis Glass: I want to ask my hon. friend (Mr. Oliver) a question. He made the remark that there was no equity, no value, in the stock of the railway. Does not my hon. friend think that the equity in the road is worth what any outside railway or corporation would be willing to pay for it? It does not matter what its liabilities may be, it
does not matter what the condition of the road may be, the equity in the road is what anybody else is willing to pay for it. My hon. friend says that $60,000,000 will be awarded as the result of the arbitration. My hon. friend, I am sure, does not believe that any such thing would be possible in the Exchequer Court which would be the court to make any such award. Notwithstanding that the road has all these liabilities, my hon. friend has admitted that it has future possibilities equal to'those of the Canadian Pacific which now stands out as the greatest railway success in the world. With its feeders, and with the country it will serve, all admit that there are tremendous future possibilities for that railway. Under these circumstances there must be some equity. If the road has been economically constructed and managed, if the moneys that have been spent have not been wasted, the value must be there. Supposing that the Canadian Pacific were willing to give $5,000,000 or $10,000,000 and to take over the road, then that is what the road would be worth.	. .


Frank Oliver: It is admitted that this company is in default, and under the present circumstances if those to whom it owes money close in upon it the road is forfeited; there is nothing coming to the owners and the stock is not worth anything. While in the future it may be worth something, it is not worth anything to-day, and it is only to-day we are dealing with.


Mr. D. D. McKENZIE (North Cape Breton):: I do not profess to be a railway man, Mr. Speaker, but I represent people who are tax-payers and who pay some of the revenue and indebtedness of the country. As such representative I do
9 p.m. not think I should allow this discussion to go by without recording very briefly my views on the proposal that the hon. the Minister of Finance (Sir Thomas White) has presented to-day. I did not think that the minister was sufficiently candid with the Canadian people with respect to the proposition that he is putting before them. I listened to every word that the minister said. I have been watching this proposition since he introduced legislation last year for the purpose of appointing the commission whose report we heard read in part to-day. When that resolution was proposed I said to the minister that, if he wanted my opinion, it was against the public ownership of railways. I did not expect my opinion to have any weight with the minister at that time. But. I am still of the same opinion,

that the public ownership of, railways generally speaking, is not a good thing for this country. I say that more particularly with respect to a developing country such as the Northwest is. In an old. well-settled country, such as that between Montreal and Toronto, where a section of the Grand Trunk railway is being operated, and where no development ie necessary so far as spreading the branches of the railway are concerned, I would not be opposed to the principle of Government railway management. But when you go to places like the West, where it is necessary to branch out, spread the operation of the railway and use it as a colonizing road, I submit that there the Government sphere of activity should end. There, it is admitted, it will fail, because what may be a success as a private enterprise, under the control of individuals such as Mackenzie and Mann- who, with any faults they may have had, have done more to develop this country and the Northwest than any other two. men in Canada-may not be a success und.er Government management. I submit, therefore, that Government ownership, to use a slang term, will fall down on a colonization project, and it should not be attempted.
If the people of the West will trust themselves as far as the spreading out of the branches of any government-owned railway is concerned to Government ownership they will find it will be a failure.	I am basing this on my own
dearly-bought experience in the part of the country from which I come. We have government railways and government-operated railways in Nova Scotia for nearly fifty years, and our experience during that time is that we have one straight line of railway, extended, at different periods, from Truro to Sydney, without a single branch to outer parts of the country, and these parts are starving and dying for want of proper development, because the Government, whether Liberal or Conservative, would never give the necessary railway facilities.
As to the kind of bargain the 'minister 'tells us we are making, he has given us a glowing picture of what the country was getting for the money we are to expend. We are getting 9,000 miles of railway. We are getting express companies, telegraph companies, and all kinds of utilities that the mind of man could conceive of, and one would think that we were getting something that had real cash value in it. But right at the end of that statement that we are getting such an enormous amount of prop-

erty, it is admitted that the company which has the real title to the (property, both legal and equitable, cannot raise one dollar on it. The adoption of the minister's proposition means that the country acquires property that is so loaded with indebtedness and stress of liability that its owners, although an enterprising concern, could not raise fifty cents on it, because it is already pledged to its full value, and if it went under the hammer to-morrow, it would not bring enough money to pay the claims that are now standing against it, for which the company is absolutely and legally liable. The minister should make that plain to the people of this country. If they are going to spend money for the purpose of getting hold of certain property, they should be told that it is already mortgaged so heavily that they are really getting nothing at all, and that, if they pay off the mortgage, it will take every dollar the property is worth, and more. What better position are we in than the man who buys a second mortgage or a third mortgage? If a man takes a third mortgage on property, or an assignment of a third mortgage, if that third mortgage is to be any good, is he not making himself liable to pay off the mortgages ahead of him? Everybody understands that. We are told that we are taking over something that may represent $60,000,000 of stock. We are taking it ever, I suppose, because it is worth something;-if it is worth nothing, why are we bothering with it? I would not suppose, Mr. Speaker, that the stock of a company that is on the verge of going into the receiver's hands is a very inviting proposition on the market. We are told that we must come to the rescue of this company, otherwise it must go into the receiver's hands, and just as it is on the verge of going into the receiver's hands, unless it receives assistance, we are told that we must spend something like $60,000,000 to buy its stock. I submit, Sir, that that is a poor proposition, and one which, under present conditions, should not be presented to the Canadian people. We have enough obligations to meet at the present juncture, and the end of our great liabilities is not in sight. We must hear cheerfully all our war obligations,' and, if it can be avoided at all, I do not think any further obligations should be cast upon the people of this country, until we are relieved to some extent of the great responsibility which the war conditions place upon us. The minister tells us we have to buy this stock, worth nothing of course, and possibly pay $60,000,000 for it, in order to get control of the voting power of the company.

I do not think that is necessary. If this company is in need of money it comes to Parliament, .as a suppliant, asking fox consideration. I do not want to deal harshly-with any company that is obliged to come to this House for proper assistance, hut when they are in the hands of the Government and of Parliament, and such conditions' can be attached to assistance given as will give us control of the management of the concern, I think we need not bother with this stock. I think it was two years ago that the $45,000,000 guarantee was given. Legislation was introduced into this House .at that time and conditions were embodied in that legislation that gave the Government power to appoint a certain number of directors on the Board of Management of that company. If they axe going to get more money now-and I suppose that is what -they are after-why take this roundabout and cumbersome way, with this diffi-oult-to-understand proposition that is being put to us? The point, we are told, is that we get control. Why take that mysterious, intricate and difficult way of getting control, when the Act of Parliament, which will give them the loan, can provide, .as a condition precedent to the granting of the money, that we must have a sufficient number of men on the board to absolutely control the management? Doing this, we shall not be encumbered with .this useless stock, which is no good. If any security is required let us get another mortgage. Some day the property may be worth enough money, and the road may be sufficiently prosperous to pay back every dollar of this money. I submit that we should do with the Canadian Northern on this occasion as we did when we gave them 'aid some years ago, and as we are doing with the Grand Trunk Pacific-give them some aid, and take a form of security for it, .and not go through the form of pretending to own the property of the company when we do not own it -at all. It will go on just as it did before. It will be Mackenzie land Mann property, or the Canadian Northern; in all its operations it will be just as it was, and we shall simply have this useless stock. Why bother with them, and why have the reputation of being in this concern, for the *purpose of paying off the liabilities, when iit is not necessary to do that? Let us give them the amount of money which is necessary to carry them along. If they need it they must have it, just the same as the other companies, and let us have the same relation to the one company as to the other.
I do not want the people of Canada to suppose for one moment, as they might suppose if they accepted the speech of the hon. minister without further consideration, that they are getting a splendid bargain, and are obtaining a magnificent property, practically free from any encumbrance, and that henceforth everything will be in our hands.
This country should not at any time burden itself with a colonization railway or with any railway the development of which requires to be carried on as the Mackenzie and Mann roads must be carried on if they are to be successfully operated. The operation of these railways will be better carried on by the concerns that have been interested in them from the beginning and have brought them to whatever degree of success they have attained. I am opposed to Government-owned railways under these conditions. I would feel, Sir, that I was not doing justice to myself or to the people whom I represent if I did not register this protest before you leave the Chair.


George William Kyte: Mr. Speaker, I had not the advantage of hearing the Finance Minister (Sir Thomas White) make his statement to the House this afternoon, but I gathered from such of the debate as I had the privilege of hearing that the Government's proposal is to take over the whole of the Mackenzie and Mann railway system. After supplying additional funds to put the road on a proper financial basis, the Government practically takes it over and will operate it as part of the Government system of railways, in connection with the Intercolonial. This is a gigantic development of a problem which has been before this House more or less frequently during the past ten or twelve years. Resolutions have been moved in this House from time to time setting forth the desirability of the Government taking over certain branch railways in eastern Nova Scotia, consolidating them with the Intercolonial Railway system, and thus securing to the communities served by these branch railways better railway facilities and cheaper transportation rates. I had the privilege on more than one occasion of arguing that it was the bounden duty of the Government, having regard to the interests of the communities served by these branch railways, to deal with this question. Prior to the defeat of the late Government, provision was made for the construction of certain branch railways in

Nova Scotia* and the acquisition of a branch railway that is operated in the constituency which I represent. The sum of $1,000,000 was placed in the estimates in the session of 1911 for the construction of a railway [from the city of Halifax to the settlement of Musquodoboit, in the county represented by title Prince Minister (Sir Robert Borden). An equal sum was placed in the estimates for the construction of a railway from Sunnybrae, in the county of Pictou, to the town- of Guysborough, on the southern shore of Nova Scotia. After the present Government came into office, they struck out ithe appropriation for the construction of the railway from Sunnybrae to Guysborough, but they preserved the item of $1,000,000 for the construction of the road from the city of Halifax to Musquodoboit. Since that time this latter railway has been completed and is in operation; but the branch railway from Sunnybrae to Guysborough has not been dealt with. Neither has any action been taken looking to the acquisition of the Cape Breton railway, which operates from Point Tupper to the town of St. Peters.
The reasons urged by the present Minister of Railways against the further development of railway accommodation in Nova Scotia is scarcity of money. When the present Government came into office they found an overflowing treasury. The late Finance Minister enjoyed surplus after surplus for many years, and the advantage of his methods of financing was reflected in the large' sum of money which was found in the treasury when the present Finance Minister took office. Notwithstanding that they had an overflowing treasury in 1912 and 1913, the Government argued against the further development of railways in the Maritime Provinces upon the ground that the financial obligations which they were under did not permit them to enter upon that further development. After a period of the leanest years that have been experienced in the history of the Dominion, when obligations unheard of and unthought of in the past have been incurred for the purpose of carrying on our part in the war, this Government, apparently without very much hesitation, undertakes to appropriate a vast sum of money for the purpose of acquiring the Canadian Northern Tailway and its branch lines throughout Canada. If this Government intend going into the acquisition of railways on such a vast scale as is contemplated by the statement made by the Finance Min-

ister this afternoon, I would ask him to make a job of it. Let us once and for all complete the operation of purchasing railways throughout Canada, and, in addition to acquiring the Canadian Northern system extending from the Pacific to the Atlantic, provide for the construction of the railway from Sunnybrae to the town of Guysborough and for the acquisition of the railway from Point Tupper to St. Peter's and its extension to the city of Sydney. Then our whole system of railways will be completed. Taking into account the enormous sums of money which the Government has provided for the financing of the Canadian Northern railway system and the enormous amount which the Finance Minister must provide lor the further financing of that system, I am sure that I am not asking too much when I ask him to make a small appropriation for the further construction of the roads that I have mentioned and the acquisition of the smaller railway which operates in my constituency. Then, as I have said, the whole railway system of Canada will be dealt with and properly systematized.
The Canadian Northern Railway company have an interest in a railway operated in the county of Inverness, known as the Inverness railway, running from Port Hawkesbury to the town of Inverness. It is operated in connection with a coal mine owned by Mackenzie and Mann. Is that railway to be taken over as part of the Canadian Northern system?


William Thomas White: I am not positive whether the Inverness railway is embraced in the Canadian Northern system or not. If my hon. friend will look up the Act of 1914, he will see whether the stock of that road is embraced in the Canadian Northern system. I am sorry that I cannot answer my hon. friend, but I have not especially turned my mind to the subject.


George William Kyte: I can understand that the minister would not have his mind charged with that. Another railway, however, which is owned and operated as part of the Canadian Northern, is the Halifax and Southwestern.	.


William Thomas White: That is included.


George William Kyte: After the legislation contemplated by the Finance Minister is put through, nearly all the branch lines in Nova Scotia will become part of the Government system. I would again ask the minister finally to dispose of this question and to consider whether he can include in his proposals the acquisition of the Inverness

and Richmond railway, operated in the county of Inverness, and of the Cape Breton railway, operated in the county of Richmond, with a view to consolidating the branch railway lines in Nova Scotia and giving the people in those communities the advantage of a government-owned and operated railway, for which they have been asking so persistently for many years and upon which depends the progress of these communities.


Rodolphe Lemieux: 
William Thomas White: The hon. member correctly states 'a press report of this morning, I think, in the Citizen. No more incorrect statement could by any possibility be made. The $20,000,000 obligation which matured to-day in New York is principal, not interest, and the money had been provided and was lying to the credit of the Dominion Government in the Bank of Montreal in New York before this loan was put on.


Rodolphe Lemieux: That does not (alter the fact that every now -and then the Minister of Finance, with the responsibility that rests upon him as the treasurer of the country, will have to meet in the not distant future very heavy liabilities, and he should reflect twice before burdening the people of this country with this new scheme of the Canadian Northern. I do not see how the Minister of Finance can sleep nowadays with the huge responsibility that rests upon hiis shoulders. How can he he serene and yet be playing with millions and hundreds of millions of -dollars? Our national debt bias reached enormous proportions, unthought of some years ago. Does he realize where we are going to land with the present war situation? In the midst of our financial perplexities he practically says to the Parliament of Canada: We shall acquire $60,000,000 worth of stock of the Canadian Northern railway system; the road will be

ours from the Atlantic to the Pacific, but we do not know as yet what liabilities we are going to have loaded upon us. Sir, my bon. friend -is living in & fool's paradise, and such transactions as this are -apt to bring us to the verge of bankruptcy. I do not believe that the minister will carry this transaction through, because I notice this afternoon that, contrary to all expectations, his friends on the other ei-de of the House were no-t -so cheerful -as they usually were w-hen such transactions were brought up before. If it does go through, however, he will bitterly -regret it, because I believe the people of 'the country will not stand for it. It w-ill be interesting to read to-morrow the telegrams and letters that he will receive -from all parts of Oanad-a. The Canadian people are sick and ti-red of the -perpetual raid-s that -are being made on the treasury of the country by this omnivorous Canadian Northern railway system. I bear no -ill will towards that system, but we -are -at war -and our war -liabilities should not be lost sight of. Sir, I -am -glad of one thing; it is that my native province^ is o-f all provinces not involved in the affairs of the Canadian Northern railway. I refer ftio Quebec.


Frank Oliver: Let me remind the hon. member that the Quebec and Saguenay railway is located in his province.


Rodolphe Lemieux: 1 cannot believe that with this Greek gift of the Canadian Northern the Minister of Finance will h-ave, shall I say, the brass-the audacity-


William Thomas White: The temerity.


Rodolphe Lemieux: -the temerity, to add -a new Quebec and Saguenay raid, after the judgment which has been rendered by Si-r Walter Cassels in the Exchequer Court.
I cannot believe it. Has my hon. friend lost all sense of proportion? Does he believe that at this time, when we are spending in round figures at the rate of $800,000 a day, the country is in a position to ac-require the Canadian Northern Railway system, and also to implement the Quebec and Saguenay legislation that was introduced in the dying days of last session, and which made my honest and hon. friend from Kingston so sick? I appeal to the patriotism of my hon. friend the Minister of Finance. Surely the taxpayers of this country have enough to carry during the present war, without placing on their shoulders this further heavy load.


[Stage Direction]
Motion agreed to.

[Stage Direction]
The House in Committee of Supply, Mr. Rainville in the Chair.
Militia and Defence

Grants to associations and bands, $50,000.
Edward Mortimer Macdonald: I should like to ask a question in regard to the first item "Allowances, Active Militia Corps." I have in mind a case where the officers of a regiment made arrangements with the officials of the department for the purchase of kilts. The officers gave their notes for the purpose of raising the money, expecting to be refunded, out of the advances that are made for this purpose from year to year. I refer to the 78th Regiment. I was wondering whether any of these allowances have been paid.


Albert Edward Kemp: Since the war began, the department has not set aside any funds for this purpose. After the war is over, the question will have to be considered.


Edward Mortimer Macdonald: Then why take this vote?


Albert Edward Kemp: This is for command pay, drill instruction, care of arms, allowances to corps of the -militia, etc. The , amount asked for last year was $100,000, but as many rural corps are practically non-existent now, we have reduced the vote to $80,000 this year. Whatever clothing i* used by the militia is paid for out of the War Appropriation Fund.


Edward Mortimer Macdonald: There is no vote
then, out of which the men could be refunded?


Albert Edward Kemp: We have had no such vote in the estimates this year or last.


Edward Mortimer Macdonald: What is proposed to be done under the heading "Engineer Services and Works"?


Albert Edward Kemp: This has reference to work done by engineers fitting up camps and all that sort of thing.


Edward Mortimer Macdonald: These camps are only held for the purpose of training overseas forces?


Albert Edward Kemp: Yes. That comes out of this vote.


George William Kyte: Is the work at Camp Borden being done under the supervision of the Department of Militia and Defence?


Albert Edward Kemp: Any work in connection with the housing of the overseas forces there comes under my department. The Imperial Government, however, has spent a very large sum of money at Camp Borden on the Flying Corps. The buildings at Camp Borden belong to the Imperial Government, but ithey are on the property of the Dominion Government.


George William Kyte: That work is being done under the Munitions Board?


Albert Edward Kemp: Yes.


Charles Murphy: Would the minister be good enough to explain the apparent decrease of $33,000 from the vote taken for this purpose last year?


Albert Edward Kemp: The Dominion Rifle Association have not drawn their grant for the last two years, and that accounts for $20,000.


Edward Mortimer Macdonald: Referring to the vote for bands, every one must have noticed that as the war has progressed there has been practically no music available in connection with military matters. We all know the effect music has, and it occurred to me that some of the returned soldiers, even though engaged in other employment, might be encouraged to form bands in connection with the old militia regiments. It is a bad thing for a country that music should die out altogether. While I am very glad that the bagpipes music-the music of the Scotch Highlanders to whom I belong-has become more appreciated every day since the war began, still it might receive more encouragement. I do not know how the vote will 'be expended, because I think a very large percentage of the regimental bands have gone overseas. Certainly that is true of the East, and it is impossible to-day to find music for any purpose, even in connection with the return of the boys from the front. Can the minister tell me how this vote will be expended, and whether some effort could not be made along the lines I suggest?


Albert Edward Kemp: Of this amount
$14,500 is paid to the active militia in allowances, and it is paid upon the authorization of the officers commanding the different units. There is no intention to curtail the expenditure in connection with the bands. I quite agree with my hon. friend from Pictou (Mr. Macdonald) that it would be a very undesirable thing to do. While I am not so closely connected with the Highlanders as he is, my ancestors having come
from the country that lies just south of Scotland, yet when I see a pipers' band I always feel it is very inspiring. A great deal has been done for recruiting by the pipers' bands, and we have met with considerable success through them in the United States.


Edward Mortimer Macdonald: Could not the minister ask his officials who have to do with the expenditure of this vote to see whether something could not be devised in the way of special encouragement? There are only $14,000 paid to regimental bands. All the regimental bands in the East have gone. They are the boys who went without any difficulty or question. It would be money well invested, and the returns would amply -justify the expenditure if the Militia Department could see its way to foster a greater interest in music. At the present time, outside of the larger cities where they have permanent musicians, you will not hear music anywhere. I went through the country during the past winter, and this absence of music was commented upon in almost every place I visited.


Albert Edward Kemp: It is no doubt
accounted for, as stated by my hon. friend, by the fact that a great many of the bands went overseas, and the instruments are now on the other side. The question of the return of those instruments came before me a short time ago, and I may say that everything will be done to see that they are returned to the proper units. When the old bands come back, I hope we shall have a return to former conditions.


Charles Murphy: The minister stated that the item under discussion covered $20,000 a year for the Dominion Rifle Association, which had not been claimed for two years,
I understand. It is almost certain it will not be claimed this year, because there will not be any need for it. I would suggest that the vote should be reduced by that amount.


Albert Edward Kemp: The item of $20,000 is not included in this vote. It was included in the vote of $83,000 for 1916-17. We are only asking $50,000 this year.


Alexander Kenneth Maclean: I would like to ask the minister if the hospitals which are being constructed in Canada under the supervision of the Hospitals Commission have the approval of the Department of Militia. Has the department direct control of the undertakings, and are they subject to the approval of the department, or is the matter in the hands of the Hospitals

Commission, and have they the power to determine how much shall be expended in the erection of hospitals? I may say I have in mind one of the hospitals in Halifax.


Albert Edward Kemp: The Department of Militia and Defence has spent some money on hospitals in Halifax. Money is being spent also by the Military Hospitals Commission. This money is appropriated out of the War Vote to the Hospitals Commission for the purpose of building hospitals, and the Hospitals Commission controls that bi'anch of the service.


Alexander Kenneth Maclean: Has the Department of Militia anything to do with it?


Albert Edward Kemp: Not with respect to the buildings.


Alexander Kenneth Maclean: I would like to say, with respect to the erection of a building at Halifax, that there appears to me to have been an unnecessary expenditure. It matters little whether the Department of Militia is directly responsible or not, because the Government is responsible for the policy of the commission. In that case the Government of Nova Scotia desired the Hospitals Commission to pay part of the cost of the construction of an addition to the Victoria General Hospital, which is a government institution, and undertook to contribute to the extent of $25,000 or $30,000 themselves. For some reason or other the Hospitals Commission declined to consider this proposal. I submit they were guilty of a great error of judgment in not ac-' cepting the offer of the Nova Scotia Government. It is true that eventually the property would revert to the province, but the hospital was to be available to the commission as long as necessary for the welfare of the soldiers. There was the further advantage in accepting the offer of the Nova Scotia Government that the medical staff at present engaged in the hospital would have been available^-for attendance upon the disabled soldiers who might be in the hospital. .
The medical staff of the Victoria General Hospital is the largest in Halifax and the leading surgeons and physicians are members of it. Unfortunately, the medical staff selected by the Department of Militia in connection with the forces is not composed 0-f the leaders of their profession. It would mean much to the inmates of the hospital-I mean the .soldiers-to have been attended by the leaders of the medical profession, and this would have cost the country nothing. Tlhe Hospitals Commission

were informed by the Government that the services of the medical staff would be available for isuch ia purpose. I think the attention of the minister should he directed to this matter. I am sorry that I have not with me the correspondence which took place between the Government and the Commission, I cannot hut express the opinion that it is extremely unfortunate that the offer made by the Government was not accepted; its - acceptance would have been a benefit to Canada and ito the men who are obliged to be inmates of this hospital.


Albert Edward Kemp: My bon. friend's question does qot come under the Militia Department at all. I will draw the 'attention of the Military Hospitals Commission to what he has said, as recorded in Hansard, and will endeavour to have :am answer for him, to he available when^the supplementary estimates of the department are brought up. I may say that there will be supplementary estimates. This email number of estimates will end at No. 97. We *are at No. 87 now. If we can get through with these this evening we can possibly defer further discussion of any of these matters until the 'Supplementary estimates are before the c&mmittee, when I hope to be able to answer by hon. friend about the Victoria hospital staff being at 'the disposal of the Commission.


Alexander Kenneth Maclean: I want to ask another favour of the minister. I wall not expect a reply now, but if he or his deputy would write me a letter at some time it would be quite acceptable. This question has been before the House on more than one occasion. lit is as to the exact disposition of our troops .at the present time and the number of effective enlistments since the beginning of the war. I would like a statement showing: The total number of enlistments, the total number of effective enlistments, the number killed, the number who served overseas but have since returned to Canada, the number at present in England; the number in France; the number in Canada who have not yet gone overseas; and lastly the number in hospital in England. I understand that there was a Cana-
10 p.m. dian wastage of 80,000 or 83,000 of men enlisted and who were obliged to drop out from one cause or another. If I had the figures covering these several items in detail I think it would give me the information I desire.


George William Kyte: Has a military hospital been established in Sydney by the Hospitals Commission?


Albert Edward Kemp: I am unable to speak with respect to the Military Hospitals Commission. It does not come under the department as far as buildings are concerned but any question regarding the Military Hospitals Commission I will endeavour to have answered when the supplementary estimates are on. Perhaps by that time we shall have somebody here who knows about the affairs of that commission.


George William Kyte: The Military Hospitals Commission was appointed by the Government and I assume it reports to the Minister of Militia.


Albert Edward Kemp: No, Sir James Lougheed is the chairman of the commission and I have reason to believe that the very voluminous report that was laid on the table of the House a few weeks ago by my right hon. friend the Prime Minister (Sir Robert Borden) will contain all this information.


Edward Mortimer Macdonald: Was that report
printed?


Albert Edward Kemp: I could not say, but I remember the Prime Minister laying it on the Table.


Edward Mortimer Macdonald: Reports laid on the Table and not printed are no good.


Charles Murphy: On the page succeeding the one on which the items under discussion appear I observe that the details are given and among these details I notice an item of $40,000 for Connaught rifle range. I observe further that apparently there was no vote for any purpose in connection with that range last year. Would the minister explain what the money is required for?


Albert Edward Kemp: To pay the balance of an old contract.


Charles Murphy: To whom?


Albert Edward Kemp: Bate & McMahon are the contractors.


Charles Murphy: Is this an ascertained amount for work done under the original contract, or is it for extra work since the contract was supposed to be completed?


Albert Edward Kemp: It is to finish up the work; it is an old contract.


Charles Murphy: Is it for work already done?


Albert Edward Kemp: Yes, that is my information.


Charles Murphy: And this amount has been ascertained as being due to the contractors?


Albert Edward Kemp: Yes.


Charles Murphy: Has a certificate been issued to the contractors for the work?


Albert Edward Kemp: No certificate has been given yet; it is an outstanding debt.


Charles Murphy: It has been ascertained as being due- to the contractors?


Albert Edward Kemp: Yes.


Charles Murphy: In connection with the same range I am informed there is a very large quantity of hay grown there, cut and disposed of-some 800 or 900 tons, I am informed. Could the minister say by whom that is disposed of, to whom sold, and to whom the proceeds go?


Albert Edward Kemp: There is no hay this year on this rifle range. It is let out by tender as pasturage to the highest bidder.


Charles Murphy: I was speaking more
particularly of last year when there was hay cut and sold. To whom was it sold and what amount was received?


Albert Edward Kemp: It was sold by tender; it was a small sum-about $200.


Charles Murphy: My information is that the quantity is very much larger than that -700 or 800 tons of hay.


Albert Edward Kemp: The figures are not here. I will make a note of it.
Halifax defences, $50,000; Esquimau defences, $20,000.


Alexander Kenneth Maclean: Can the hon. minister explain the purposes of these two votes?


Albert Edward Kemp: That is the engineer services and works. There is an item for Halifax lumber yard of $60,000. This is for the erection of buildings on the new property purchased for a lumber yard. The present property belongs to the Imperial Government.


Alexander Kenneth Maclean: It was given to the Railway Department in connection with new railway terminals at Halifax. Upon this land there were some buildings which were occupied for military purposes. I presume this vote is for the purpose of

erecting buildings for military purposes elsewhere?


Albert Edward Kemp: Yes.


Alexander Kenneth Maclean: Where were they to be erected? On the property purchased from Mr. Mitchell?


Albert Edward Kemp: Yes.


Alexander Kenneth Maclean: Are not the buildings there now quite sufficient?


Albert Edward Kemp: They are not suitable. They have to be replaced by better buildings.


Alexander Kenneth Maclean: I have heard it rumoured that the Government purpose buying property next to the Mitchell property, the William Robertson & Son property.


Albert Edward Kemp: We have not any information on that particular point.


George William Kyte: Are the censors appointed by the Department of Militia and Defence!!,


Albert Edward Kemp: Yes.


George William Kyte: Can the hon. minister say whether or not returned soldiers have been appointed to the positions of censors in the province of Nova Scotia?


Albert Edward Kemp: Most of them were appointed at the beginning of the war, and I do not suppose many have been appointed since, but the instructions are that returned soldiers should be appointed, if available.


George William Kyte: There were very frequent
changes in the censors at Sydney and Glace Bay, and I am interested to know whether or not the policy of appointing returned soldiers to Government positions has been carried out in the Department of Milib'a.


Albert Edward Kemp: Yes, I can assure the hon. gentleman that the policy of appointing returned soldiers, whenever it, is possible, has been carried out by the Department of Militia and Defence. A statement was laid on the Table in respect of that matter a short time ago. I think all the deparments were asked to furnish a return as to the employment of returned soldiers. The Militia Department furnished a return.


George William Kyte: There is a great number of returned soldiers in the county of Cape Breton, particularly in Sydney and Glace Bay. A club was organized a few months ago in Glace Bay for the entertainment of returned soldiers. The membership was probably about one hundred. I noticed in a list of censors employed at Louisiburg the

names of N. F. Cook, drawing $4.50 a day, aged 29; and W. D. Hayden, $4 a day, age 24. Mr. R. T. McDonald, Chief Censor, 41 years, was- in receipt of $7 a day. Mr. Macdonald was formerly a merchant doing business at a place called Reserve Mines, and he had no special qualifications for the position of censor more than any other man with a fairly good education possesses. It seems to me it is Tather extraordinary, when the Militia Department and this Government are making such efforts to get men to recruit for overseas service, that we have young men, such as Cook and Hayden, of the age of 29 and 24 respectively, drawing $4.50 and $4 per day, enjoying positions of censors, when there are probably 75 to 100 returned soldiers in the town of Glace Bay, and probably 150 returned soldiers in the constituency of South Cape Breton wandering about the streets without employment. They are unable in many cases to return to the avocations in which they were employed before the war, but many of them, to my knowledge, have sufficient attainments of scholarship to discharge those duties. I understand there is a movement on in Ottawa to release men from the Government service in order that their services may be available for overseas. I would certainly urge that the Minister of Militia and Defence should examine the staff of censors at Louisburg, and eliminate those young men who are vigorous, unmarried in most cases, having no dependents upon them, and enjoying these positions, and that he should appoint returned soldiers, who have given their services to the Empire and who have suffered in that service. When so much effort is being expended by this country to get men for overseas service, it seems to me the question of political patronage ought to be eliminated entirely. It is well known that, from the outbreak of the war up to the present time, party patronage has been rampant. All appointments, not only those of high degree, but those of very lowest degree, have been made entirely according to the exigencies, of party patronage. 'I make a special appeal to the Minister of Militia and Defence to-night, in view of the efforts that are being made to establish, a national Government in this country, to do away with political patronage. The idea of a national Government has in its base and origin the elimination of party patronage. I would like to see the Minister of Militia and his colleagues in the Government give some earnest of their intention to form a real national Govern-

ment to carry on the war apart from the influence of party patronage, by beginning with the censors employed in the town of Louisburg, eliminating from that service the men who have been appointed by virtue of party patronage, and giving the appointments to returned soldiers. It is very well for us to orate at public meetings and national gatherings about what we should do for returned soldiers, but I am bound to say, as far as the constituency I represent is concerned, that the obligation of the Government to returned soldiers seems to end with a pious declaration as to the desirability of giving returned soldiers preference as regards public positions. The censorship in^the county of Cape Breton has been a scandal for the last two or three years. There has been wrangling going on, and charges being made of selling those positions, and that appointments were made for consideration given to certain parties who claimed to have control of those appointments.
This afternoon I put a question to the minister wih regard to a gentleman who was very efficient censor on the staff at Louisburg, but whose services have been dispensed with. I asked whether his services had been dispensed with, and if so, for what reason. The answer given was that his services had been dispensed with to promote the efficiency of the service. It is common knowledge in that part of the country that this man's services were dispensed with because -he refused to pay over a portion of his salary to the person claiming to control the party patronage and upon whose recommendation the appointment of this censor was made. The fact that I got such an incomplete and unsatisfactory answer to my question justifies the suspicion that this man's services were dispensed with for reasons which the Department did not desire to make public. But that is not the only case. Others in the employ of the Militia Department in the county of Cape Breton hold on their positions by virtue of certain payments they make out of their monthly stipend to the men who recommend their appointment. If we aTe going to have a National Government, it can only be by the elimination of this system of duress which has been imposed upon applicants for public positions in the past. I do not think the Government can satisfy the people that they are sincerely desirous of bringing about a National administration, during the period of the war, at all events, free from party and from patronage, when such conditions
are allowed to exist in Nova Scotia without any attempt at remedying them. No ap-r-nirit^eut even of the lowest and most insignificant kind-the appointment, for instance, of a man to haul coal to the residents of the censor's staff in the town of Louisburg-can be made unless it has the recommendation of the person in charge of the patronage. Some time ago an officer in charge of a company down there was brought to task because he ordered the laundry 'to be sent to one laundry-man in the town of Glace Bay rather than, to another. He was summoned before the high and mighty personage who controls the personage and claims to speak for the Minister of Militia, and asked upon what authority he dared to put that patronage into the hands of a laundryman who was not in political sympathy with the Government at Ottawa. That is getting down about as low as we can get in matters of this kind. Perhaps there would be some excuse for the exercise of this prerogative while the Government was administering the affairs of the country upon a basis of party patronage, notwithstanding that we were in a period of war. But in view of the Government's assurance, and of the assurance of people who have authority to speak for the Government, that they are honestly determined to wipe out party patronage and to form a real National Government, they should give some proof of their sincerity by eliminating party patronage from the Militia Department in respect of such appointments as those to which I have referred.


Albert Edward Kemp: I am under the impression-I speak subject to correction- that most of the men to whom my hon. friend refers were appointed in the early stages of the war and have now become experienced in the work. As positions become vacant, they ought to be filled by returned soldiers if suitable men can be found to do the work. I may say that up to May 10, 1917, 2,514 returned soldiers had been employed by the Department of Militia and Defence in various parts of the country. Wherever possible, we have tried to put returned soldiers in vacant positions, always giving them the preference, in fact, an order in council was passed to that effect. I am not familiar with the circumstances to which my hon. friend refers, but my own idea is that as soon as positions become vacant they should be filled by returned soldiers. Of course, that is subject to our being able to find men who are capable of doing the work. I suppose

the work of censorship requires men of special qualifications; men of sufficient education, who can be thoroughly trusted.


George William Kyte: The men who now occupy these positions had no experience when they were appointed. In fact, on 'account of the cibanacter of the 'appointments, we were of the opinion that no particular qualifications were required. Any sort of business derelict who was of the proper party stripe was picked off the street and given one of these positions, without reference to qualifications. There are scores of returned soldiers in the constituency of South Oape Breton, who, to say the least, have qualifications equal to those of the men who are now on the staff, and whose names were given to me by the minister 'this afternoon.
- In view of the fact that there are on the staff young -men between the ages of 24 and 29 years, without dependents, who received appointments by reason of political pull, the minister should not wait until vacancies occur; he should create vacancies by dismissing these men and 'appointing returned soldiers in their places. We require men at the front; let these men be relieved of their duties 'and let them enlist for overseas service and do their bit as these returned soldiers have done. When they come back they will 'then be in line for appointment and promotion by this Government.


Albert Edward Kemp: I suppose the Military Service Bill will reach these men?


George William Kyte: I am afraid that the Military Service Bill will not reach some of the men if their services are required at home during the next election.


Albert Edward Kemp: I would not say that.


Edward Mortimer Macdonald: The minister should nlot overlook the assertion of the member for Richmond (Mr. Kyte) that .a man who was performing the duties of censor at the place mentioned was dismissed because he would not give a subscription to the man who had the patronage. The minister may lay down the rule that nobody may serve the Country in war time iand receive remuneration unless he is 'recommended by the man who has charge of the patronage, but neither he nor any other minister can justify the action of the person who has charge of the patronage in demanding money from a person who is employed by the Government. The minister would be taking a very peculiar position if he assumed responsibility for action of this kind without investigating the matter.


George William Kyte: Some time ago there was an agitation among the censors down there for an increase of pay. The ubiquitous patronage dispenser was Johnny-on-the-spot again. He said: for a certain sum of money I will go to Ottawa, and I will see that your salaries are increased. The story is that he came to Ottawa and upon his return he presented a bill for some $350. One of the censors refused to contribute to this amount, and was accordingly dismissed from the service. If the minister would like further information on that subject, I will give him, in confidence, the name of this young man, in order that he may satisfy himself with regard to the matter. The thing has become so scandalous that it has practically killed recruiting in that part of the country. If during the last year recruiting has not been as successful as it has been before, those are some of the reasons. In 'tlhe face of those conditions, is it to be wondered at that men will not enlist for overseas services when they find that the money voted by Parliament to provide them with the equipment necessary for the positions which they occupy overseas is being frittered away by patronage dispensers, and that practically everything is sold to the man who pays the most for the position he is seeking at the hands of the Government?


Albert Edward Kemp: I shall be glad if tl]e hon. member will give me the name confidentially. I will treat it in the same way as he gives it to me.


Edward Mortimer Macdonald: As has been frequently stated during the past three or four years, the ministers of this Government have been in the habit of disposing of .matters of this kind in a casual way. The idea of trafficking in money for supplies in war time is incredible. I cannot conceive of any one at this time putting up with that kind of thing, and in view of the statement made by a responsible member of Parliament, the minister should immediately institute a thorough investigation into the whole matter and should assume the responsibility of dealing with such a case. It is all very well for hon. members opposite to appropriate all the patronage and place these matters on the lowest possible level, while speaking about idealism and appealing to the highest possible motives; but when a party undertakes to insist upon getting money from a public servant, and when, on his refusal, that man is dismissed, then the depth of infamy is reached, and the minister cannot by any casual

method dispose of the matter. He ought to institute a full investigation, and if the statement is correct, the man who dispenses the patronage ought not to be permitted to exercise that power any longer.


Albert Edward Kemp: The hon. member for Richmond has promised to give me the name confidentially. As soon as he does so I will have an investigation made in regard to the matter, treating the information furnished me by the hon. member as confidential.


George William Kyte: Now that the minister is in a penitent mood-I do not mean as regards any misdeeds committed by himself, but as regards misdeeds committed by his predecessors-will he give me a little more frank information in regard to the last [DOT]question I asked? I asked if the services of a certain censor had 'been dispensed with, and, if so, for what reason? The answer given is : "To promote the efficiency of the service." That means something or it means nothing. If his cervices have been dispensed with in order to promote the efficiency of the service, the minister ought to -be in a position to tell me frankly in what respect this man's services have been inefficient. I do not ask him to reply in the House so that the matter will be put on record, but I would like if he would chow his good faith and determination to deal fairly with these matters in the future by telling me confidentially what the actual reasons -for dismissal were, and what he means by this Teply. If there is anything to the discredit of this gentleman, I do not want to have it appear on Hansard, because that would not be fair to him, but under all the circumstances, the minister ought to give me privately the information for which I am asking.


Albert Edward Kemp: Was that question asked to-day?


George William Kyte: It was answered to-day.


Albert Edward Kemp: The matter to
which my hon. friend refers is the answer given to the department by the chief censor. I do not know anything about it.


George William Kyte: The answer is signed by the deputy minister.


Albert Edward Kemp: It was referred
to him by the chief censor. That is the chief censor's answer to the deputy minister. The chief censor is a responsible officer. I should be surprised if he would make a reply that was untrue.


George William Kyte: I quite appreciate the fact that the minister would not have the correct information at the present time. Probably the chief censor would not feel justified in giving me what he might regard as confidential information, tout the minister and I have discussed this matter with the common object of improving the conditions I am complaining of, and I ask if he will get the information from the chief censor and give it to me privately later on.


Albert Edward Kemp: The hon. member for Richmond, as a responsible member of this House, has made certain statements here. I have told him, as far as one matter is concerned, that I will investigate it. I will also look into this matter; but so far as giving private information is concerned, I shall have to consider what course I shall take after investigation is made.


George William Kyte: Is the minister not prepared to give me any fuller information in regard to my question?


Albert Edward Kemp: I did not say that; I said that I would look into the matter of which the hon. member complains.


George William Kyte: I trust I shall not be obliged to change the very good opinion which I had of the minister and which I expressed a few moments ago.


Albert Edward Kemp: I can guarantee that my hon. friend will have no reason to change his opinion regarding myself.


George William Kyte: I trust I shall receive from the minister further proof of his -determination to improve the conditions I have mentioned and to deal frankly with any member of this House who has an honest determination to assist him in improving those conditions.


Frank Oliver: I desire to bring to the attention of the minister a memorandum transmitted to me by the hon. A. 0. Rutherford, Director of National Service for northern Alberta. He encloses a copy of a report made by a gentleman- in Edmonton who was appointed by a committee of citizens to make a report. It is in regard to the needs of the families of soldiers who have been either disabled or killed. It appears that there is found to exist a somewhat serious condition amongst those families, either by reason of the inadequacy of the pension or in its terms being inapplicable to the cases. I noticed in a newspaper a few days ago that a poor woman, whose husband had been killed and who has several -children, had been brought



before a magistrate as being insane, and the decision was that her condition had resulted from lack of nutrition. The case was a very deplorable one and attracted a good deal of attention. I am afraid there are other cases, because this committee has been appointed, and this is a part of its report.


Albert Edward Kemp: That is in regard to pensions?


Frank Oliver: In regard to the condition of those dependents who would be entitled to pensions. May I take the liberty of reading the part that is material?


Albert Edward Kemp: Certainly. I have nothing, however, to do with pensions. That matter comes under the -direction of the Minister of Finance. The Pension Board is under the Finance Department; but if my hon. friend desires to place anything upon Hansard, I will direct the attention of the Minister of Finance to it.


Frank Oliver: As this matter relates very intimately to the question of soldiers, I am sure the minister will take a sympathetic interest.


Albert Edward Kemp: Certainly.


Frank Oliver: The report says in part:
Firstly. I will deal with dependents who have been left with property on which there are unpaid balances or mortgages or other encumbrances. In every instance of cases of this class the correspondence shows quite clearly that the pensions being deceived are entirely inadequate to enable these people so situated to live, and to take care of the payments that are now and will iq due course become due. It would appear, therefore, that we would be failing in our duty to those who have so nobly laid down their lives in the great cause for which our Empire is at war, if we, as a people, did not do all that was in our power to evolve some plan whereby these people could at least be protected against the very probable contingency of losing entirely what equity they possess in these several properties I would suggest, therefore, that representations in regard to these cases be compiled and forwarded to the Government at Ottawa, together with a recommendation for their attention and assistance in financing, on the easiest terms possible, these people, until such time as they may be able to find an opportunity to dispose of the same in such manner as they will be able to obtain at least the amount of the equity that they possess therein.
Secondly. There are the cases of those who have no property interests, hut who are dependent entirely for their subsistence on the moneys received as pensions from the Government. It is gleaned from the correspondence received that some are at present quite content with the present conditions. In the majority of cases, however, it is stated most emphatically that the amount of pension does not permit of the ordinary necessities of life

even in the summer time, when, by reason of climatic conditions, less nourishment will suffice, produce is at its cheapest, and there is no need of warm clothing, light or fuel; but all express grave fears as to how they will be able to subsist when winter is here and there is fuel and other necessary comforts to be provided. In one or two instances, I find there are people who come under this class, but who are receiving some assistance, such as, for instance, being allowed to board with friends, and are, therefore, for the time being, comfortably cared for, but in no case of this kind is there assurance that assistance of this nature is likely to continue for any definite period.
In dealing with these cases under review it is evident that the health also has a great deal to do with the manner in which one can exist on the moneys so allowed. Then, again, you must consider the different -temperaments of the people, as, while one may be content and happy with one standard of living, the same standard would not-by reason of health or otherwise-suffice for another, nor do I consider it right and proper that any widow or dependent who has made the greatest sacrifice that any human being can make in giving up their loved ones, should be asked to live in a lesser state of bodily and mental comfort than they were, at the time their loved ones enlisted, able to enjoy.
This is, I believe, a matter of sufficient importance to warrant a full, complete and immediate investigation on the part of our Government, and I would suggest, therefore, that you forward to Ottawa your request to that effect.
Thirdly. We were asked to consider the need of some provision being made for the children of soldiers who have by the loss of their father and mother become orphans, and in which case the allowance made by the Government is totally inadequate to clothe, feed, house and educate and in other ways care for them until they are fitted to take their place in the world as wage earners.
There are a few (I understand about 50) at present in this city and district, who come under this classification, and it would only be reasonable to assume that this number would in the near future be very materially increased.
These children should not become the odjects of chaiity, but rather do I consider the Government should make some provision for them, either by paying to people in private homes and willing to undertake the work of rearing these children a sufficient remuneration for this duty-the children to be at all times under Government supervision-or to establish boarding-schools for this purpose.
Fourthly. Cases have been brought to our attention where Canadians have for some reason or other enlisted in the Imperial army, while their dependents have been for some time prior to the war and are still residents of this country. The pensions received from the Imperial Government represent a mere pittance as compared to the cost of living in this country. It would, therefore, appear only right and proper that our Government should make some provision for such cases as these, and any other special case that might from time to time arise.
That is the report made to the Committee of citizens by the gentleman whom they

appointed for the purpose. It was transmitted to me by the Director of National Service, and I thought it only proper that it should be drawn to the attention of the House.


Albert Edward Kemp: Was the whole
report read by my honourable friend?


Frank Oliver: I read the material portions of it, leaving out the introductory matter.


Albert Edward Kemp: I know the Minister of Finance has the question of pensions under consideration, and I will draw his attention to this report to-morrow.


George William Kyte: In regard to the question of patronage, I desire to call the minister's attention to two or three other instances just to show how small and petty this matter has become in our part of the country. Two or three days after the war started, a few R. C. R. men from Halifax were sent to the Marconi station. They accidently procured the services of a Liberal teamster to carry them and their luggage from the railway station to the Marconi station, a distance of three miles. Within a week the Liberal teamster was informed at the railway station that they could not give him any more goods for the R. C. R. men, as the trucking had been handed over to a Conservative teamster. Shortly after the commencement of the war, about 90 men of the 94th Militia were stationed at the Marconi Towers. Liberal merchants applied to be allowed to tender for supplies, but were refused. Every dollar's worth of supplies that these men required was bought, not by tender, but from Conservative merchants on the recommendation of the dispenser of patronage down there.


Albert Edward Kemp: What date was
that?


George William Kyte: In 1914. The same thing occurred in the construction of barracks for these men. Barracks were to be built at the Marconi station for the accommodation of the 94th. Public tenders were not asked for although the official stationed in Halifax having this work in charge,, was asked to have the specifications forwarded to public offices in the county. A local Conservative was given the contract without public tender, and no Liberals could procure work. Men were brought from a distance by teams daily, while just as good workmen living alongside Marconi Towers were actually refused work

on account of their politics. One old man, a Liberal in politics, with a sick wife to support, was given the contract to truck coal to the barracks from the town of Louisburg, three miles distant, at a rate of $1.25 per ton. Last November or December, this job was taken from him, and a man about 35 years of age eligible for overseas service was given the contract at a rate of $1.50 per ton.
I say that if there# is any doubt in the mind of any hon. gentleman as to why recruiting is falling off, at all events in the province of Nova Scotia, these incidents should furnish, the answer. The people are thoroughly disgusted with the manner in which employment in connection with the Militia Department has been secured, and consequently no enthusiasm can be found amongst the men, who realize that the question of winning the war-the question of the service of men in battle line- depends entirely upon the question of patronage and party and political pull. I repeat, if we are going to have a change, if a national government is to be formed it is up to the Minister of Militia and Defence to see to it that the causes for the grievances complained of in that part of the country are completely eradicated.


Albert Edward Kemp: My hon. friend said that this incident in connection with the furnishing of supplies for the men stationed at the Marconi Towers occurred in 1914. Now the War Purchasing Commission was not appointed until 1915. Since it commenced operations, I can say from personal knowledge that there has been no patronage in any shape or form in connection with supplies of any kind. I have no knowledge whatever of the incidents to which my hon. friend has referred.


Edward Mortimer Macdonald: When two battalions were being recruited in my county in 1916, the patronage was at the disposal of the, person who has confidence of the minister. Naturally I protested to the Minister of Militia of that day-I think it was to my hon. friend himself-that tenders should be called for. The commiesion had been in operation for some months at that time, and there was some suggestion that quartermasters were supposed to do this and that, but it made no difference.
When it came to a question of the doctors who were to examine the recruits, a carefully prepared list was made of the doctors in the town, and no man was allowed to examine recruits in my county unless he was on the list. There was only one Liberal doctor in that list and he was in an out of

the way part of the county where there was no other doctor. My hon. friend should not attempt to create the illusion that patronage is not in vogue, because it is, and it is connected with everything affecting his department. The men who have the patronage are consulted' in all things, and every one who has had. anything to do with recruiting knows it.


Albert Edward Kemp: My hon. friend knowns that the supplies for the troops in every province of the Dominion are purchased on tender. I do not know of the incident to which he refers but sometimes a regiment may be sent to a place suddenly without there having been sufficient time to get the tenders out, and for a week or so supplies may be purchased to feed the troops. There is a regular system of asking for tenders, and tendering, and that is the system which has been in vogue. There can be no possible question about it. The reports of the War Purchasing Commission are published. There are four volumes of them, and they have been placed upon the table of the House.
Headquarters and district staff, $205,600.


George Perry Graham: The hon. minister told me the other night, in reference to two officers at Kingston, that there was a reduction of the staff. I have received information that some one has already been appointed in the place of one of those gentleman. Is my information correct?


Albert Edward Kemp: An officer of the Permanent Force has been detailed to fill one of the positions. He is on salary permanently, and there is no extra expense to the Government.
Mr- GRAHAM: Then, the work this other officer was doing must have been necessary?


Albert Edward Kemp: Yes, the work was necessary.


George Perry Graham: What was the name of the officer who got the appointment?


Albert Edward Kemp: He did not get the appointment. He is on the permanent staff.


George Perry Graham: What is his name?


Albert Edward Kemp: Colonel Maunsell.


George Perry Graham: Where does he come from?


Albert Edward Kemp: 
Edward Mortimer Macdonald: In the early part of the session a return was brought down which indicated that in 1911 there had been an increase in the permanent Civil Service in the Militia Department at Ottawa from 101 to 128, and in the temporary employees from 103 to 2,078; that altogether there had been 2,964 temporary Civil Service employees employed by the department since August 1, 1914; that the amount paid for salaries and expenses in the department had increased from $168,812.74 yearly to, $1,454,361.14 yearly. I would like to know what portion of that amount was paid out of the regular military vote, and what portion of it was paid out of the war vote.


Albert Edward Kemp: All the temporary appointments are paid out of the war vote.


Edward Mortimer Macdonald: What is the purpose of this vote we have before us?


Albert Edward Kemp: Those are the officers of the headquarters staff; it is not the same thing.


Edward Mortimer Macdonald: On June 18 an order of this House was made for a return giving the number of people employed in connection with the military district of Nova Scotia. This was one of the returns I was very anxious the minister should bring down, but he has not done so. I would like to have his assurance that it will be brought down to-morrow.


Albert Edward Kemp: I thought it was amongst the returns I brought down.


Edward Mortimer Macdonald: No.


Albert Edward Kemp: What is the title of it?


Edward Mortimer Macdonald: On 18th June a
question was asked which might have been answered. I complain of the minister's method in dealing with these things. Questions are asked, for instance, as to how many persons are employed at a certain place, and so on, and the minister says: "Stands as order for return." There is no reason why it should be so.


Albert Edward Kemp: When I brought these returns down yesterday, I asked the officer who has this matter in charge about them, and he told me that the one in respect to the officers at Halifax was nearly ready. Asking that a question stand for a return is not done with the idea of evading anything; it is because it takes so long to get the information, and the return is more or less voluminous. There is a tremendous

amount of work involved, and you cannot get those things from outside places in a very short time.


Edward Mortimer Macdonald: 
Albert Edward Kemp: The decentralization has affected it. I will bring it down as soon as possible.
Permanent force, $2,300,000.


Edward Mortimer Macdonald: Will the minister be good enough to tell us how many persons are connected with the permanent force of Canada to-day and where they are located?


Albert Edward Kemp: There are 29
lieutenant-colonels, 30 majors, 73 captains, 152 lieutenants, 3 nursing sisters, 69 warrant officers, 292 staff sergeants, 296 sergeants, 167 corporals, and 1,745 privates, a total of 2,856.


Alexander Kenneth Maclean: Where are thue men located? What does "Permanent Force" mean now?


Albert Edward Kemp: It is the same permanent force. They have been recruited up to strength to take the place of those who have gone overseas.


Alexander Kenneth Maclean: Where are they?


Albert Edward Kemp: They are doing
garrison duty and instructional work at Halifax, Montreal, Esquimalt, Toronto, London and Kingston.


Edward Mortimer Macdonald: With regard to the question of the friends of boys who are at the front desiring to get them home and desiring to get word of them, I do not think there is much good :n going to the department. Would the minister be good enough to tell us if there is any way in which we can make application so that the matter can be dealt with speedily and effectively? Members of Parliament write to the department and we are told that the matter is not under the control of the department but that somebody overseas must be communicated with. Whom can we speedily apply to in a proper case?


Albert Edward Kemp: I have no objection if the hon. gentleman will write to the minister. I get hundreds of letters every day regarding these matters. Letters from members of the House receive my personal attention as far as possible. There are rules by which we are guided in respect to the matter. It is very difficult to get any
one back from the front. I have a staff who attend to all the requests that are made in a very courteous and efficient way. No matter who makes the request no matter from whom it comes, a reply is sent.
Mr. MACDONALD. I have no complaint to make but I am pointing out that we write to the minister and the minister writes to us that what we ask will be a difficult thing to accomplish. Is there any reason why a member of Parliament should not write to somebody on the other side in regard to a matter of this kind?	[DOT]


Albert Edward Kemp: If a. letter is
*sent to the responsible minister, Sir George Perley, London, he will see that it gets every attention and that it reaches the proper official. Or, if a letter is sent through the department there it will receive attention. I fancy that most of these inquiries-come to the department.


Edward Mortimer Macdonald: In case of injury or death the friends apply to a member of Parliament and it would be an advantage if the member could communicate direct with somebody overseas without going' through the roundabout process of first applying to the department here. Is there anybody that we could cable? A friend of mine had a boy killed, he wrote to me .and I wrote to tne department. I have no complaint to make of the department beyond the fact that the red tape of communicating with the department and through the department with the other side means a loss of time. Naturally, the friends who have been, bereaved, or whose Iboys have been wounded, would like to have things done more expeditiously. Why should not we as members of Parliament know somebody over there to whom we could cable if necessary, or to whom the friends of the dead or wounded could cable, for some definite information. Because, when a boy is wounded, his friends do not know what his condition is and moments seem like hours, days and years. Could not the minister arrange that we could communicate with somebody over there?


Albert Edward Kemp: When matters are sufficiently urgent, and when it is not thought desirable to communicate by ordinary letter, cables are sent making in-quiries-either through the re-
11 p.m. cords branch or the adjutant's branch or direct from my own office through my own private secretary.


Edward Mortimer Macdonald: A- boy is wounded
and his parents get the stereotyped advice from the department that so-and-so is wounded. Amongst the multitude of men that we are paying for in connection with this matter, both here and on the other side, is there not somebody whose business it would be to give advice in a particular case where a boy is missing or is wounded and his friends at home are unable to tell what has become of him or where he is? I wish the minister would arrange something of that kind.


Albert Edward Kemp: I would think
that the deputy minister over there, Colonel Walter Gow, would attend to any request of that kind.


Edward Mortimer Macdonald: If the minister
would take some steps to have this done it would be a very great convenience.


Albert Edward Kemp: I will take the
matter up and see that an understanding is .-arrived at that any one cabling shall receive .every consideration in that regard.
Royal Military College, $185,000.


Edward Mortimer Macdonald: I am glad to see that the minister has increased the vote for the college tills year. I think every Canadian ought to be proud of the splendid work th-at is being done by the college and of the boys who have gone from the college to the war. There is an extra amount of $25,000 proposed. Would the minister explain how it is proposed to expend this money?


Albert Edward Kemp: This is to provide for the extra cost of clothing and supplies largely for the cadets.


George Perry Graham: How many cadets are
there?


Albert Edward Kemp: There are twenty extra to provide for this year.
Salaries and wages, $250,000.


Edward Mortimer Macdonald: What number of
men axe employed under this vote ?


Albert Edward Kemp: I have all the
names here, covering a good many pages, but it has not been totalled up. Possibly the number would be about 400.


Alexander Kenneth Maclean: What is meant by "boat crews, Halifax"?


Albert Edward Kemp: 
Alexander Kenneth Maclean: It is for the services of men in connection with steamers for use for military purpose in the harbour, doing patrol work?


Albert Edward Kemp: And carrying provisions and troops to McNab's Island, etc.
Schools of instruction, $150,000.


Edward Mortimer Macdonald: What is this for?


Albert Edward Kemp: The transportation of officers who have to he gazetted for the Canadian militia previous to appointment to the Expeditionary Force is charged to this vote because they must belong to the Militia Department before joining the Expeditionary Force.
Survey, $40,000.


Alexander Kenneth Maclean: 
Albert Edward Kemp: Yes, the survey
work is going on all the time. The staff and plant are there. We have a very efficient staff for work.
Transport and freight, $50,000.


George Perry Graham: Am I right in supposing the reduction in that 'amount iiis on account of there being .no training camp?


Albert Edward Kemp: Yes, and the work is going on in connection with the militia.


Edward Mortimer Macdonald: Why do you want a vote of $50,000 to transport the active militia? Would that not come out of the war fund?


Albert Edward Kemp: I have 'the details here. There are various items for the trans-pcurt and travelling expenses of the permanent force, attending schools of instruction, and so on.


Edward Mortimer Macdonald: You have no active militia now to transport. It is the Canadian Expeditionary Force that is instructed and not the active militiamen.


Albert Edward Kemp: They must be
qualified as officers of the active, militia before they are made officers of the Canadian Expeditionary Force.


Edward Mortimer Macdonald: I know of a case in which tihe commanding officer of militia 'has had his recommendations turned down with regard to boys who wanted to go to the Schools of Instruction. That occurred in connection with my own regiment in my own county, where the major 'had made recommendations and they .were diisre-

gairded, and the recommendation of the man who had the patronage, who never took the slightest interest in the militia in 'his life, and never had anything to do with it, was acted upon. Nobody could be permitted to go, or get his instruction, unless he was recommended by the man who had the patronage in imy county. I hope that practice will be stopped. I know it of my own knowledge, or I would not say it. I hope the minister will keep that in view.


Albert Edward Kemp: That is something which bad not been drawn to my 'attention, nor to the attention of my colleagues.


Edward Mortimer Macdonald: Competent commanding officers, who have a thorough training in regard to regimental matters, (are told that their recommendations muist be disregarded iand the recommendation of the man who never took any interest in military matters is acted' upon.


Albert Edward Kemp: I am sure that does not prevail through other parts of the country, or anything approaching it.
Training areas and lands tor military purposes, $200,000.


George Perry Graham: Is that to buy new land?


Albert Edward Kemp: These estimates were made some time ago. It is not at all likely that we shall need the whole of this vote, and there is no intention to spend it all. It is to settle some outstanding claims in connection with Valcartier and Petawawa camps, which are now 'before the Exchequer Court.


Edward Mortimer Macdonald: What was General Gwatkin's rank prior to his being appointed General Officer Commanding?


Albert Edward Kemp: He was an officer in the British army.


Edward Mortimer Macdonald: What corps was he attached to?


Albert Edward Kemp: He was Director of Training under General McKenzie.


Edward Mortimer Macdonald: Was he made a General by my hon. friend's predecessor?


Albert Edward Kemp: I am informed that he was.


Edward Mortimer Macdonald: He was not made a General by any British authority?


Albert Edward Kemp: I understand that tie is not a General in the British army.


George Perry Graham: The 156th Battalion was broken up the day after it got to England,
but it was reorganized some weeks afterwards. I rather suspected that the reason for its reorganization was the fact that the Minister of Finance was over there at the time; the battalion partially comes from his county. That battalion was organized in Leeds and Grenville county, and an officer, Lt.-Col. Bedell, was brought back from overseas to take charge. That battalion is now reorganized, but Lt.-Col. Bedell is not with it. It has a new commanding officer, Lt.-Col. Graham, I think, formerly of London. Nearly all the officers who went over with the battalion have been disposed of otherwise. Of course, there is considerable comment with regard to this on the part of persons who assisted in raising that battalion; in fact I myself had something to do with it.


Albert Edward Kemp: Is the regiment intact?


George Perry Graham: I think so. It is being used as a depot battalion; they draft men from it occasionally. It is attached to the Fifth Division, a portion of which is in England. Could the minister furnish me with information as to why nearly all the officers who went over with this battalion have been attached to other units and new oQicers placed in charge?


Albert Edward Kemp: I shall get the history of the whole thing for my hon. friend and send it to him.
Civil Government-Department of Militia and. Defence, salaries, including H. M. Garrison at $1,850, $187,700; contingencies, $19,500.
Mr.- MACDONALD: Who are the two officers in the First Division, subdivision A?


Albert Edward Kemp: Mr. Beard, in charge of the Records Branch, and Mr. Lemieux, Superintendent of Stationery and Printing.


Edward Mortimer Macdonald: Where were they before?


Albert Edward Kemp: Mr. Lemieux is a very old employee of the department; he has seen 27 years service. The material over which he has control amounts in value to $1,500,000; before the war it amounted to only $100,000. He is an excellent official. Mr. Beard has under him about 630 clerks. The Records Office is in the building on the comer of Elgin and Slater streets. I invite any hon. gentleman who would like to see for himself how these records are kept to step in there when the staff is at work. Mr. Beard is an excellent officer; he has

been very much overworked since the war began.


Edward Mortimer Macdonald: What is the position held by Major Margeson?


Albert Edward Kemp: 
Edward Mortimer Macdonald: I would like to have the assurance of the minister that he will bring down that return in reference to Halifax.


Albert Edward Kemp: I will see that it is brought down.


Edward Mortimer Macdonald: Has the minister
had any word from Sir George Perley since this afternoon in regard to the Bruce report? Or has he reconsidered the question and decided to bring it down?


Albert Edward Kemp: The cable was sent. I have not had any conversation With the Prime Minister since.


George Perry Graham: The minister does not
need to send for the information. He has it; it is the Prime Minister who has not the information. As we have put through these estimates so expeditiously, if anything in reference to war expenditure should occur to the minds of any hon. members, I assume that on the supplementary estimates we shall be at liberty to discuss such matters?


Albert Edward Kemp: Certainly.
Progress reported.
On motion of Sir Edward Kemp, the House adjourned at 11.40 p.m.
Thursday, August 2, 1917.