1917-08-25

A FIXED PRICE FOR WHEAT.

[Stage Direction]
On the Orders of the Day:
Mr. OLIVER:: I wish to refer to a matter in regard to which I asked the hon. Minister of Trade and Commerce a question yesterday. Is the fixed price of wheat until August 31 applicable only to the wheat of last year's crop, or is it applicable to new wheat coming forward?


Sir GEORGE FOSTER:: Old and new.


Frank Oliver: At what date did that
proposition take effect? I want to draw the minister's attention to the fact that on the 24th the cash price of No. 1 and No. 2 Northern wheat in Winnipeg was $2.40, No. 3 Northern, $2.38. In Minneapolis, No. 1 Northern, $2.60 to $2.65, and No. 2 Northern $2.55 to $2.60.


George Green Foster: The order took effect, as far as the price and inclusion of the new crop is concerned, on the date of the promulgation of the order, somewhere between the 15th and 20th of the month. I forget the exact date.


Frank Oliver: It was the date I wanted to get.


George Green Foster: My hon, friend will remember that I read the orders and they were placed on Hansard about ten days ago.



RELEASE OF THOMAS KELLY.

[Stage Direction]
On the Orders of the Day:
Hon. RODOLPHE LEMIEUX:: I notice in the Citizen this morning a statement that Thomas Kelly who was sentenced to some two years and a half in the Stoney Mountain penitentiary, on the verdict rendered at the Manitoba Assize Court, has been given ticket-of-leave by the Minister of Justice. Some days ago I asked that hon. gentleman (Mr. Doherty) if any petitions had been received by the Department of Justice, and he answered in the negative, gentleman (Mr. Doherty) if any petitions since, and is there any correspondence in the matter to be laid on the Table of the House? If Kelly has been given a ticket-of-leave on account of his health, I ask that the medical certificates be laid on the Table of the House.
Hon. 'C. J. DOHERTY (Minister of Justice) :	I think the hon. gentleman
must have misunderstood me, if he apprehended that I had said that there had been no petitions for the release of Kelly. Petitions were received at different times. Since the hon. member referred to the matter on a former occasion, it 'has been represented to us that Kelly's health was in such a condition that there was actual danger of death. We had previously received representations with regard to his health. Since he has been confined to the penitentiary it has been necessary to hold him under medical treatment all the time, and the penitentiary surgeon, who unfortunately died recently, some time ago expressed the decided

opinion that Kelly should be released.
I have not the dates of his last report on the subject, but 'I think it was in June. He had previously reported in April, .and I think even before that, expressing his opinion that Kelly should be released. His last Teport was to the effect that he would not take the responsibility of his being longer detained, and we caused Mr. Kelly to be examined in March or April, I think, by Dr. Lafleur, of Montreal, who, I think, the hon. gentleman knows, is a very eminent gentleman in his profession, and, as a consequence of his report, we did not feel justified in acting upon the Teport of the jail surgeon. But quite recently it was reported to us, as X have said, that the prisoner was in such a condition that there was danger of his death. Upon that information coming to us, which came through members of his family, who had been gathered at the penitentiary by reason of his critical condition, I caused the prisoner to be examined by Dr. Popham, of Winnipeg, a physician of very high standing, who,
I am quite satisfied, is above any suspicion of expressing an opinion other than his genuine professional opinion. He reported that he found Kelly in bed suffering from gastritis, with a very high temperature-I forget exactly what it was and rapidly losing in strength; also that Kelly had lost weight really to .an alarming extent, I cannot mention just now the number of pounds, and there was no prospect of improvement under existing conditions. Under those circumstances I felt that I should entirely fail in my duty if I did not recommend that Kelly should be transferred to a hospital, where he could receive proper treatment. I made that recommendation and a ticket-of-leave for that purpose was issued. Should Mr. Kelly recover, the question, of course, would remain open as to whether he should not be returned to the penitentiary, or whether further action should be taken. But certainly the circumstances left it beyond doubt, I think, that no other course was open to us that to allow this man to have the treatment that, upon high medical professional recommendation, was considered necessary for the preservation of his life



WELLAND CANAL DYNAMITERS.

[Stage Direction]
On the Orders of the Day:
Rodolphe Lemieux: Some
years ago three men were sentenced-


Mr. SPEAKER:: Order. If the hon.
member wishes to ask further questions with respect to Kelly, I respectfully submit that he should put them upon the Order Paper.


Rodolphe Lemieux: I do not wish to ask w'th respect to Kelly. Some years ago three men were condemned to long terms for attempting to blow up the Welland canal. I understand that they have been released by the Minister of Justice. Will he say when?


Mr. DOHERTY:: One of the men was released by a higher Authority than the Minister of Justice-he died in the penitentiary. The second was released, I could not say accurately when, but I think some two or three years ago. The last one was released, I think, about a year ago. I shall be glad to get the exact dates. The two men were released after having served terms very much longer than those served by men in the Mother Country for like offences whose sentences were also commuted.
Mr. LEMIEUX'. They were sentenced to twenty years?


Charles Joseph Doherty: Speaking from memory,
I think they were sentenced for life.



PRIVILEGE-MR. SINCLAIR.

[Stage Direction]
On the Orders of the Day:
Mr. J. H. SINCLAIR (Guysborough):: I rise to a question of privilege. I do not often refer to anything that I find in the newspapers, but when the newspapers get astray to the extent of $350,000,000, I suppose we ought to pull them up and put them right. I have been represented in the Ottawa Journal as saying that if the Canadian Northern Railway Bill went through it would increase the public debt to the extent of $800,000,000. I never made any such statement. I was replying to the statement of my hon. friend from Red Deer (Mr. Michael Clark), that the soldiers were doing a great deal of thinking, inferring that when they came home they would insist on some necessary reforms. I ventured to say in reply that when the soldiers went away the public debt of this country was $350,000,000, roughly speaking; that ,if we put this Bill through, the public debt when the soldiers returned would be $800,000,000, meaning that there would be an addition of $450,000,000, and not an addition of $800,000,000 as stated by the Journal. The other question was whether that debt was a net debt or a gross

debt. That depends largely on how you look at it. At present the road is not paying interest and running expenses, and I inferred that under public ownership it would not do any better, so that if the people of this country have to .tax themselves for the interest on the 3450,000,000 we might as well at once add that amount to our net debt, as that is what it would mean. All I have to say about the writer in the Journal is that if he read what was said in Hansard he either intentionally misconstrued what I said or else was too wooden-headed to understand plain English.



MUNITIONS CONTKACT.

[Stage Direction]
On the Orders of the Day:
Mr. E. M. MACDONALD (Pictou):: I am sure that many hon. gentlemen have heard from many portions of the country where munitions work is being carried on that instructions have been sent out to discontinue the manufacture of munitions. In various places in my province this word has been received from the Imperial Munitions Board. As it has been said that the financing of this board has been done by this Government, it is a, matter of importance that the country should know why it is that the manufacture of shells, has been stopped. Perhaps the Minister of Trade and Commerce would tell us, in the absence of the Minister of Finance.


Sir GEOBGE FOSTEK:: I should prefer that the full answer be given by the Minuter of Finance or the Prime Minister, but if there be any stoppage of the manufacture of shells in this country or any diminution, as I believe there is to be, it is because^ the variety of shell the manufacture of which will be diminished or discontinued is not now needed from Canada, as they are able to produce them in sufficient quantities in Great Britain.


Edward Mortimer Macdonald: I should like a fuller statement, because I d.o not think my right hon. friend's statement is complete.
SirGEOEGE FOSTEE: I said I could not make a full statement.
method of peesenting inquieies.
On the Orders of the Day:


Mr. W. E. KNOWLES (Moosejaw):: I wish to ask a question of the Minister of Militia.
He is not in his place, but as the question would necessitate his referring to the

records in his office, I shall place it on Hansard in order that he may see it. I am in receipt of a letter from a correspondent, a constituent o.f mine-


Mr.   SPEAKEE@: If the hon. gentleman will put his question on the Order Paper the answer will be forthcoming as quickly as if he asked it in the House, inasmuch as, in the absence of the minister, an answer cannot now be given.


William Erskine Knowles: It is quite in order that I should ask the Government-


Mr.   SPEAKEE@: The hon. member has himself admitted that an answer cannot be forthcoming to-day. I would therefore ask that he should proceed in the regular way.



SUPPLY.

[Stage Direction]
House again in Committee of Supply, Mr. Eainville in the Chair.
Department of Railways and Canals-Canadian Government .Railways, rolling stock, $25,000,000.
Mr. COCHEANE:: This vote is to. provide for the purchasing of fifty engines from the Montreal Locomotive Works-thirty Mikados at $48,750, ten Santa Fes at $56,000, and ten Pacifies at $47,300. Then there are to be purchased fifty locomotives from the Canadian Locomotive Works, Kingston, at $48,750. There are also 6,000 box cars, as follows:
1.000. 40-ton steel-frame box cars purchased from Canadian Car and Foundry Company at $2,417 each; 1,000, 40-ton steel-frame box cars purchased from Eastern Car Company at $2,417 each; 2,000, 40-ton steel-frame box cars purchased from Canadian Car and Foundry Company at $2,647.50 each; 1,000, 30-ton steel-frame stock cars purchased from Canadian Car and Foundry Company at $2,271 each; 1,000, 40-ton steel-frame box cars purchased from the National Steel Car Company of Hamilton at $2,647.50 each.
Then there are fourteen 10-wheel Chicago Great Western Kailway second-hand locomotives amounting to $4,748,700 for further purchase of rolling stock that may be required.


Mr. PUGSLEY:: What does that rolling stock consist of?


Francis Cochrane: Freight cars.


Edward Mortimer Macdonald: Is that for the Canadian Northern or only for the Transcontinental and Intercolonial?


Francis Cochrane: What we purpose
doing is to use what is necessary on the

Government roads and then distribute the rest where necessary.


Edward Mortimer Macdonald: That means on the
Canadian Northern?


Francis Cochrane: Yes.


William Pugsley: Have those contracts
been already let in anticipation of this vote?


Francis Cochrane: Contracts for 6,000
cars have been let.


William Pugsley: When are deliveries to
take place?


Francis Cochrane: They are all to be delivered before 1st February next. The deliveries are to start in October.


John Howard Sinclair: Have those cars been
ordered in Canada?


Francis Cochrane: Yes.


John Howard Sinclair: What is the price of
a box car now, and what was the price before the war?


Francis Cochrane: For the same style of car, the price before the war was about $2,200; the price now is $2,647.50.


Frank Oliver: Did I understand the
minister to say that a part of this rolling stock was intended to supplement the present rolling stock of the Canadian Northern?


Francis Cochrane: I said that we would use what was necessary on the Government roads and then distribute the rest where it was most needed on the Canadian Northern and the Grand Trunk Pacific. There is a great shortage of equipment on all the railways.


Edward Mortimer Macdonald: The minister's present action is in accordance with the position taken by the hon. member for South Renfrew (Mr. Graham) some two years (ago, that we should order more rolling stock. The minister has put off doing so to a very late date, and I question whether he will he able, in view of the difficulty of getting raw material, to secure delivery of those cars by the first of February. The minister states that he has purchased some secondhand rolling stock in the United States. From whom was that purchased, and what was the price per locomotive and per oar?


Francis Cochrane: We purchased fourteen second-hand locomotives from the Chicago Great Western railway at $12,300 each, or about one-quarter of what we are paying now.


Mr. COPP:: Can the minister give us the
dates of the contracts for these locomotives and cars?


Francis Cochrane: The first contract was let in May; the last was let about a month or six weeks ago.


William Pugsley: Were any second -hand cars bought in Chicago?


Francis Cochrane: Not in Chicago, in
Ohio.
Mr. PUGSLgY:	What were they?


Francis Cochrane: We bought 400 steel
cars in Ohio at $450 each. I am sorry to say we have received only 100 of them, and there is a little difficulty in getting the balance. '


Edward Mortimer Macdonald: In addition to that, some second-hand passenger cars were purchased?


Francis Cochrane: That was last year.


Edward Mortimer Macdonald: No second-hand passenger cars are to be purchased out of this appropriation?


Francis Cochrane: No.


Edward Mortimer Macdonald: Is there any provision for the purchase of second-hand passenger cars?


Francis Cochrane: Not this year.


William Pugsley: Is the Government
building any rolling stock in Canada? We have most excellent workshops at Moncton; we have workshops at Quebec in connection with the Transcontinental-


Francis Cochrane: They are not equipped.


Mr PUGSLEY:: Then they ought to be
equipped. At Transcona we have very laTge workshops. Is the Government engaged in building any locomotives or cars at any of those places?


Francis Cochrane: We are building some
vans at both Moncton and Transcona.


William Pugsley: Those would be conductors' vahs.


Francis Cochrane: Yes, and we are doing repairs. It is difficult to keep up with the repairs on the system at the present time.


William Pugsley: WTiat are the Transcona shops being used for now?


Francis Cochrane: For repairs, not only for the Government railways, but for the Grand Trunk Pacific.


William Pugsley: It was rumoured some two years ago, or perhaps later than that,

that a portion of the Transcona shops had been leased to a company for the manufacture of shells. Is that correct?


Francis Cochrane: Yes.


William Pugsley: Are shells being manufactured there?


Francis Cochrane: Yes.


William Pugsley: Does that interfere with the construction of locomotives and cars?


Francis Cochrane: No. ,


William Pugsley: About what portion of the Transcona shops are being utilized for building these vans and for repair work for the railway, and what portion for making shells?


Francis Cochrane: A very small portion is being used far making shells. I have not the exact floor space.


William Pugsley: Who are the lessees of that portion of the Transcona shops?


Francis Cochrane: A Montreal concern. I do not know who they are.


William Pugsley: Was the contract made with the Department of Railways?


Francis Cochrane: No, it was made with the Grand Trunk Pacific before it was taken over.


William Pugsley: Who pays the rent and wnat rent is being paid?


Francis Cochrane: I have not that information with me, but I will get it for the hon. member.


William Pugsley: I am rather curious to know who the parties are who have leased those shops and the rent that is being paid.


Francis Cochrane: The information was laid on the Table in a return last session.


William Pugsley: I should' be glad if the minister lyould get it from his officials.


Francis Cochrane: I will do it.


Frank Oliver: I think the committee should be informed as to how much of this large amount of rolling stock is required
by the present Government railways_the
Intercolonial and the Transcontinental. I understand from the minister that part of this rolling stock is to be used on the Government railways, and part distributed between the Canadian Northern and the Grand Trunk Pacific. That is a very general statement, and may cover the fact that possibly 50 or 75 per cent of this $25,000,000 
for rolling stock should properly be added to the liability the country is about to assume in respect to the Canadian Northern. The minister, I am sure, will be able to tell us what the requirements of the Government railways are, so that we may know jn fact how much of this amount is being added to the Bill for the Canadian Northern.


Francis Cochrane: It has been estimated by my officials that we will need all the cars ourselves on the Government railways, with the exception of possibly two thousand	these two thousand together
with any others we may have to spare, will be used in helping out not only the Canadian Northern but other railways. The Grand Trunk, as everybody knows, is very short in equipment, as regards both power and cars. An arrangement has been made between' the railways of Canada and the coal shippers of the United States whereby cars bringing coal to this country will be returned to the United States empty. The shippers of stone and gravel in different parts of Ontario are in consequence unable to get cars, and they have been here asking us to buy equipment and lease it to the Grand Trunk.


Frank Oliver: I do not wish to criticise the minister for buying these cars; quite the contrary, rather I agree with the hon, member for Pictou (Mr. Macdonald) that it would have been sound policy to buy this rolling stock sooner. Nor do I find fault with the policy of leasing the rolling stock to railways that are not able to provide their own equipment. All I wanted to know was how much of this expenditure should be added to the bill for the Canadian Northern. My hon. friend says that two thousand of these cars will not be required on the Government railways. If the cars cost $2,500 apiece, I may be correct in saying that this expenditure of $5,000,000 should be added to what we are to pay for the purchase of the Canadian Northern. I am not finding fault with the minister for providing this equipment for the different roads, but we should be informed how much it will cost as regards the Canadian Northern and the other roads. *


William Pugsley: The minister speaks of the distribution of cars among the different railways. I quite agree that that is desirable. I think it is greatly to be regretted that the Government waited till three years after the war before taking .any steps in this direction.


Francis Cochrane: There is not a single year in which, we have not bought rolling stock.


William Pugsley: The minister ought to have bought rolling stock. The Government roads and other railways have been continually short of equipment. The Minister of Trade and Commerce (Sir George Poster), a few days ago, referred to the most admiralble arrangement that has been made in the United States, where the railways have joined together and appointed a small executive, which, so far as transportation is concerned, makes all the railways of that country, some eighty-five in number, into one system for all practical purposes. The executive has control of the distribution of the cars, and 'the minister stated that very satisfactory results had followed from that arrangement. But there was one thing he failed to point out, though I pointed it out my-self some few weeks ago, and that is that the railway companies were induced to take that action by the Government of the United. States. It was the Government of .that country that, immediately	on	the	breaking	out of	thewar, summoned in conference the presidents of all the railway companies of the United States, and it was	at	the	insistent	request	of
the Government that this arrangement was entered into. I am very sorry, and I think it is very much against the transportation interests of the country that the same thing was not done in Canada when the war broke out. The government railways, the Grand Trunk, the Grand Trunk Pacific, the Canadian Northern, the -Canadian Pacific, and any other smaller railways-and there are some in Canada-should all have been parties to an arrangement Whereby rolling stock could be placed by a small executive where it was most needed in order to meet the transportation requirements of the country, just as is done in the United States. However, it is never too late to do good, and I am very glad that at last, following the example of the United States, the Government is moving along these lines, even if only a very short way.


Mr. R. B. BENNETT:: I am sure my hon. friend has overlooked one fact, namely, that the railways in the United States are solvent. The railways now being operated by Mr. Willard are not railroads in the hands of receivers. If they were in the hands of receivers the conditions to which my hon. friend refers would not obtain. As the
Grand Trunk Pacific railway last year earned less money by operation than it required for the hiring of its equipment, and as the-Canadian Northern was behind from $5,000,000 to $7,000,000 in net revenue to supply its fixed charges, the difficulty of operating in the manner indicated by my hon. friend must be very apparent and very great, because each company is out now to get all the profit it can, in an endeavour to meet its fixed charges. And the competition that obtains here does not obtain to the same extent and in the same manner in the United States. There the presidents of the different roads got together, and Mr. Willard was appointed chairman of a small executive. Under his direction cars are allocated to certain lines for certain .purposes, but not to interfere with the revenues of the different roads. But where you have so much duplication, where two systems are not earning fixed charges, and the other system is earning enough to pay the fixed charges of both, the situation is difficult to deal with, unless the Canadian Pacific is willing to part with some of its money. It is perfectly obvious that you would have to take part of the net revenue of the Canadian Pacific Railway obtained from the carrying of traffic, passenger and freight, at fixed rates common to all roads as determined by the Board of Railway Commissioners, and pay it over to the other two roads to -make up their deficit. That is the position; it is very unfortunate, but that is the fact.


William Pugsley: I think my hon. friend 'has exaggerated the difficulties. Jf the executive in the United States takes rolling stock from one road and sends it to carry the traffic of another, there would necessarily be allowed to the company whose cars were taken a reasonable per diem remuneration for the cars so used; and that is 'how it would work out in Canada.


Arthur Bliss Copp: How many of these six
thousand cars are being made by the Canada Car Company?


Francis Cochrane: Four	thousand.


Arthur Bliss Copp: Who has the contract for
the other two thousand?


Francis Cochrane: The	National Car
Company and the Eastern Car Company are making one thousand each.


Arthur Bliss Copp: I understood the minister to say that one part of the contract was let in May and another part about a month ago.


Francis Cochrane: One contract was let in May, to the Eastern Car Company, and the other to the Canada Car Company.


Arthur Bliss Copp: Are any of the cars under that contract ready for delivery at the piesent time? Is delivery being made a:-the cars are built?


Francis Cochrane: The first cars, will lie delivered in October.


Frank Oliver: I wish to '*evert to a discussion which I had with ibe minister some time ago in regard to the lifting of rails on the Grand Trunk Pacific west of Edmonton. We had somewhat warm words then, and the minister very strongly impressed upon the House and the country that the rails of the Transcontinental were of a certain size and boring, which obliged him to take rails from the Grand Trunk Pacific west of Edmonton, although it would have been more in accord with public policy if they had been taken from the Canadian Northern. I understand the Government has taken up the rails of the Grand Trunk Pacific and has replaced some of them with Canadian Northern rails, the reason being that although the Canadian Northern rails are of the same weight and quality they are bored somewhat differently and for that reason it was not advisable that they should be sent to England, inasmuch as they would have to be laid under fire, and there was a disadvantage in the possibility that the rails might not match. I think the minister made some remarks which reflected upon my patriotism and interest in the success of our endeavours in Europe, but of this I will not say anything further. I have a letter from a man who is employed in a railway battalion in France, and it may interest the House and the 'country to know what he has to say on this subject. He says:
The Huns left Bapaume on the 17th of March, and not only was the town wrecked but the railway was more than wrecked. What rails he left he blew up/at the joints, which broke the end of each rail. Where there was a deep fill it was mined and lifted out and the road bed was practically a line of shell holes. Well, we had a train of ammunition in on Easter Sunday and it was moved up in trucks. We had to use all kinds of rails, short and long, large and small. The engines here are not as heavy as the ones at home, so. we can use light rails, and the great, guns are mounted on thirty, wheels and reach over one or more raiis and some twelve joints in the car, so they play around the sharp curves as easy as a regular car, and as their heft is distributed over so much rail it allows us to use a light rail or anything we have. I was in the shops rebuilding fishplates to join up the different size rails. We had a lot of rails from England that have a ball on either side

and no base. They are set in castings called chairs. We joined up all this sort of steel and got the trains going and pushed the road on towards the front. When the train got in there was no limit to material. Rails poured in from everywhere. Ties and bridge timber piled up like small mountains. There was no lack of such material.
I think under the circumstances, and with that evidence, it will be clear that there was no warrant for the minister's suggestion that it was necessary to exchange the Grand Trunk Pacific rails for Canadian Northern rails or to take the Grand Trunk Pacific rails.


Francis Cochrane: All I can say is that we followed the instructions received from the British Government. I think they know what they want. In any event, I am prepared to give them what they ask, as long as we have it.


Mr. MURPHY:: The item under discussion is an item of $25,000,000 for the purchase of rolling stock. I think the minister exp'ained that a portion of this is to provide funds for the purchase of some 6,000 freight cars, the price for which is stated to be about $2,600 each, I believe. May I ask if that is the order that was given to Rhodes, Curry & Company?


Francis Cochrane: They are the same as the Canada Car Company.


Charles Murphy: When is delivery of those cars to be made?


Francis Cochrane: From October to 1st
February. They are all to be delivered by 1st Februray next.


Charles Murphy: My inquiry, a? the minister may surmise, is based on the fact that these are war prices. My recollection of previous purchases leads me to think that the prices now being paid are double or more than double what they were.


Francis Cochrane: No, that is not the case.


Charles Murphy: If those deliveries were to run after the war, the purchase could not be justified as a good business transaction. However, if the whole 6,000 are to be delivered before February next, it is a different matter.


Francis Cochrane: The contract is that
they shall all be delivered by February next. Of course, there are three different concerns building those cars. The Canada Car Company is only building 4,000, the Eastern Car Company 1,000, and the National Car Company 1,000.

, Mr. COPP: I would like to draw the attention of the minister to a question I put before'him when his regular estimates were under discussion, with regard to the relaying of the rails to the Sackville and Dorchester wharves. Since the matter was up before I have received a letter from a gentleman in Dorchester who is particularly interested in it. I will not place the letter on Hansard, but I would be glad to send it to the minister for his attention. This gentleman is manager of a large stone company down there which is using the wharf for the transportation of stone. He says " if some such thing as this is not done the Dorchester Stone Works Company will be put out of business." The stone is quarried and cut during the summer, and it is absolutely impossible to ship it until the rails are relaid.


Francis Cochrane: Will my hon. friend tell me if they can get boats to bring the stone there now? I understand they cannot.


Arthur Bliss Copp: I am not sure. I simply mention this letter to bring the matter to the attention of the minister. There is a sketch attached to the letter showing that the relaying of about 200 yards of rail would be sufficient to obviate the necessity of hauling the stone over some very heavy hills.


John Howard Sinclair: Has the minister any
plans in regard to increasing the Tolling stock in the refrigerator service for the transportation of fish? This question was bi-ought to the attention of the minister by a committee of this House last year, and it was urged that something should be done. It was pointed out that the Intercolonial railway was not in a position to carry perishable products of that kind by express from the East to Montreal and Toronto. There is a special interest in the transportation of fish at the present time when it is proposed that there should be two meatless days every week. The cities of Ontario have to be supplied with fresh fish, I suppose, either from the Pacific ocean or from the Atlantic. The facilities are certainly not good at the present time. It is a reproach to the Intercolonial railway that, after it has been running for nearly half a century, it is not possible to-day to send a package of fresh fish in a refrigerator car from Eastern Canada to any of the cities in Ontario. If we wish to send a whole carload there are facilities for it either by express or by fast freight; but I am referring now to smaller packages for which there are no facilities in refrigerator
312*
cars. I do not know whether the minister is working out any plan to meet that want or not, but when we are embarking upon the expenditure of a large amount for rolling stock, I would like that matter to be kept in view.


Francis Cochrane: We have ordered 100 refrigerator cars and I think they are delivered; if not they will be delivered before the end of the month.


William Erskine Knowles: Does this include the purchase of any private cars?


Francis Cochrane: No.


William Pugsley: I have seen in the press quite recently that different ministers have been obtaining private cars, and, among them, the hon. the Minister of Customs (Mr. Reid). He is the latest minister to have -a private car. I would ask if that car has been purchased and is being looked after by the Department of Railways and Canals, or whether it was purchased directly by the Department of Customs and is being looked after by the officials of that department?


Francis Cochrane: He has no car. He uses a car once in a while the same as any other minister, but the car he uses belongs to the country and is controlled by the Government.


William Pugsley: How many private cars does the Government have at the present time?


Francis Cochrane: Six, including the
Governor General's car.


Mr. CARROLL:: What officials in the service of the department does the minister consider entitled to private cars?


Francis Cochrane: I do not know that any of the officials of the department use private cars except officials on the railway.


William F. Carroll: What officials on the railway are entitled to private cars?


Francis Cochrane: Certain of them.


William F. Carroll: Does the minister think that in times like these, when the people are being urged by the Government to produce and save, it is right that the superintendent of a certain section of the railway should spend $150 or $200 a day of the country's money rolling around
4 p.m. in a private car when he could, just a-s well as the ordinary citizen, be carried in a Pullman. Private cars are attached to the ordinary trains

making them much' heavier and delaying ordinary passenger traffic. It is time that the department of railways should give this matter attention. It- is not fair to the country or the travelling public that an ordinary superintendent of the railway, who is neither a king nor a peer, should he entitled to this kind of entertainment with cooks, servants and everything that a millionaire could get by his money.


Francis Cochrane: The hon. gentleman
certainly knows 'better. He is making statements that are nothing but foolishness. There is not a railway superintendent on any railway in the country who does not have a private car. It is his home, his office, his sleeping apartment, his everything, and it is impossible for a superintendent to do his work without one either on the Intercolonial or any other road in Canada. If the Government is going to be in the railway business it must follow the practice adopted on all railways.


William F. Carroll: I may be foolish and know nothing about railways, but I do know that we are told by members of the Government from the Prime Minister down that this . is a time -when public money should not be spent recklessly. I do not think it is a proper answer to make to an hon. member of this House, however humble he may be, that he is foolish and does not understand what he is talking about. I have travelled over the Intercolonial too much not to know what is going on. I think that the Minister of Railways owes ordinary courtesy to a member of this House who asks a question in good faith.


Mr. KYTE:: Have under-secretaries equally the use of private cars with members of the Government?


Francis Cochrane: I think the under-secretary of one department has had a car once or twice.


William Pugsley: Which department?


Francis Cochrane: Militia.


William Pugsley: When the minister said that the Government had six private cars he .meant, I presume, that they had six in addition to the cars which are used by officials at headquarters at Moncton?


Francis Cochrane: Yes; these are official cars.


William Pugsley: These six cars are just for the use of those whose headquarters are in Ottawa?


Francis Cochrane: Two of them belong to the Governor General.


George William Kyte: I do not think the minister quite apprehended my question. I asked him if the under-secretaries had equally the use of private cars with the ministers?
Mr. 'COCHRANE: I said one under-secretary had had one once.


George William Kyte: To say that an under-secretary had one once is not an answer to my question. Assuming that an under-secretary desired the use of a private car, could he have the use of it?


Francis Cochrane: Yes, if there was one available.


George William Kyte: When an under-secretary wishes to travel in state and comfort, he has the right to use a private car if a private car is available?	.


Francis Cochrane: Yes.


George William Kyte: And the cost which is involved in the transportation of a private car is borne by the Government and not by the under-secretary?


Francis Cochrane: Yes, and it is borne by every railway in the country, too.


George William Kyte: Railways have not undersecretaries, as a rule, who travel in private cars.


Arthur Bliss Copp: Apparently the minister misunderstood the question asked by my hon. friend from South Cape Breton (Mr.- Carroll). He asked him as to the number of cars which were in use iby officials on the Intercolonial. I presume he misunderstood the question, because he answered by saying that the superintendents should have private cars. Inasmuch as we have the information in regard to the number of private cars kept for the use of the Government, it would be well that the committee should know how many private cars are in use by officials of the Intercolonial and what officials are entitled to the use of these cars.


Francis Cochrane: The general manager, the general superintendent, and each of the superintendents have private cars. It is good business to give -them private cars, too. They do all their work on these cars; they live in them, practically. This is not a new system; it is the system that has been in use for years and years not only on the Intercolonial, but on every road in this country.


Arthur Bliss Copp: I am not raising the point as to whether it is good business or not.

How many district superintendents are there?


Francis Cochrane: Four.


Arthur Bliss Copp: Who have private cars at Moncton? I am not in a position to speak positively, 'but I understood the general traffic manager also had a private car.


Francis Cochrane: I do not think so.


Arthur Bliss Copp: He always used one. Mr. Tiffin had one.


Francis Cochrane: In olden times, not
now.


William Erskine Knowles: I think the hon. minister said there were six private cars belonging to the Government. How many have we secured since the Government came into power?
Mr.	COCHRANE:	Two.Mr.	KNOWLES:	Is it permissible	for
a minister's private secretary to use a pri-cate car?


Francis Cochrane: No, but the private
secretaries have a right to go with the ministers.


William Erskine Knowles: But are they used by
.the secretaries when the minister is not present?
Mr.	COCHRANE:	I do not	know.Mr.	BURNHAM:	Are these	not office
cars?


Francis Cochrane: Yes.


Mr. BURNHAM:: 
George William Kyte: This would be a good time
to obtain' further information as to the policy of the department with regard to private cars. Heretofore, we have had a certain number of Cabinet ministers, but the number has been increased from time to time until we have now, I think, sixteen. It is conceded that they have the right to use private ears when they desire to travel that way. A new policy has been adopted of appointing under-secretaries, and I should like to know if, when they desire to travel, they are to have the use of private cars at public expense quite irrespective of whether or not they are travelling on public business. The Minister of Railways stated on one or two occasions that the Under Secretary of the Militia Department travelled in a private car.
I should like to know if on any occasion the Under Secretary of the Militia Department desired to make a trip to the Maritime Provinces, would he, as a matter of right, have a private car at his disposal, and have the cost of transportation in that way paid by the Government?


Francis Cochrane: I made the statement two or three times that if a private car were available I thought he would have the right to use it.


George William Kyte: The minister made the statement. I naturally thought that that implied that if the under secretary desired to use the car on public business he would have the right to it. I infer that the minister goes further, and that he means that the under secretary, no matter whether he is travelling on public, or private business, has the right to travel in a private car- and his family, of course.


William Erskine Knowles: Does the minister know whether any members of the Railway Commission of Canada ever go so far as to accept the present of a private car from an incorporated railway company while they are on personal trips, such as holidays?


Francis Cochrane: I have not any information as to that. They have their own car, at any rate.


William Erskine Knowles: Would they have the right to have their own car hauled free on private business, such as a holiday trip?


Francis Cochrane: The different railways furnish the Board of Railway Commissioners with passage all the time, and I think they are willing to haul the cars, whether on business or pleasure, but I have not any information on that point.


William Erskine Knowles: Will the hon. gentleman look into it, if he has time?


Francis Cochrane: I do not know why I should.


William Erskine Knowles: I was going to give
the reason for my question. It may be foolish, but I must discharge my duty. I do not think the Board of Railway Commissioners should be under obligation to any railway. They are in a judicial position.	*


Francis Cochrane: Perhaps a member of Parliament should not be under obligation.


William Erskine Knowles: Two blacks do not make a white.


William Pugsley: We have the right to travel free by law.


William Erskine Knowles: Yes, and that is another matter.


Francis Cochrane: The members made
the law, not the railways.


William Erskine Knowles: I may go a long way
with the minister, and I might say that the members, might for their own self-respect pay the money to the railway companies for fares, and if the people wanted to reimburse them, let them do so. I hold the view that the Board of Railway Commissioners should not accept any personal favours from any railway. They are adjudicating upon matters in which one of the contestants is the railway company and the other may be a comparatively unknown and obscure citizen. An official whose position calls upon him to discharge duties in an impartial manner should not be under the slightest obligation to either of the litigants. If my view commends itself to the minister and if he finds that the practice is what I have indicated. I think he should look upon it with disfavour. Will the minister look into the matter and give it consideration?


Francis Cochrane: I do not think I will.
I do not think it is my business to look into it. I have perfect faith in the Board of Railway Commissioners, and anything they take in the way of transportation from the railways would not have much effect on them.


William Erskine Knowles: They are human, like
every one else. I am not going to attack them. They are not heTe, but, in defence of the public interest there should be rules laid down so that there would be no suggestion of anything like their receiving favours from the railways, I would go further, and although the reason does not apply so strongly, I would say that judges who are acting, where railways are litigants, should not accept favours. It is the constant duty of the Railway Commission to hold the scales of justice evenly between the railway companies and private citizens.


Francis Cochrane: And it is the duty of legislators to legislate for the railways. You take a pass from the railway company, and still you are kicking.
{Mr. Knowles.]


William Erskine Knowles: No. I never took a pass, that I recollect.


Francis Cochrane: The hon. gentleman
is the exception.


Richard Bedford Bennett: The point raised by the hon. member for Moosejaw is one that has engaged the attention of legislatures and Congress of the United States. The statutes of most of the western states prohibit any legislator from accepting transportation, and when I was entitled to transportation on some of the roads by reason of my professional engagements, I used to have to sign a statement that I was not a member of any legislature of any state through which the road in question passed. In most of the western states, if not all of them, there are now statutes absolutely prohibiting any member of the legislature from accepting transportation, and rendering liable not only the railway company which gives tile transportation but also the recipient as well. In the United States they have the Interstate Commerce Commission, which performs to some extent the functions of our Board of Railway Commissioners, and very drastic and extreme regulations have been passed by that commission. I quite agree with the hon. member for Moosejaw that we should enact legislation. It is not for the Minister of Railways to do it; it is for us here, and for the Railway Committee if they so desire in dealing with the Railway Act, to declare that no transportation shall be issued to judges, if you please, or to others. It would be competent, and probably not improper, for Parliament to declare that no public servant, and no one occupying the position of a judge in the cases mentioned by the hon. member for Moosejaw, should receive favours from railway companies. The same argument could he applied to telegraph companies, and in that case my hon. friend from Moosejaw could not be the recipient of any form of pass that would entitle him to free service on the part of the telegraph company or the railway. That is the point he is making, and if hon. gentlemen will read the volumes and volumes of discussion which took place in the United States until they reached the point they have now-attained, I think it will be found that the question is really worthy of consideration by Parliament. Not that I think it has any effect on the minds of the judges themselves; I do not think it has; but it leaves the public in the position of the poor litigant with the idea that he is being unfairly treated, and that men are biased

against him by reason of what they receive, which is a. bad feeling to have in the country. It will be remembered that before the irftroduction of the present Railway Act every member had an annual pass, and I believe the late Minister of Railways was right and the Government was right in declaring that every member of Parliament should have free transportation on the railways, in order to remove the possibility of it being said that a favour was being extended to one member by a railway company which was not extended to another, because in some instances, if a man became vigorous in his onslaughts against a railway company, that company claimed the right to withdraw his transportation. That was the evil aimed at by the present legislation, which I think is sound, unless1 you pass a statute prohibiting railways from issuing transportation to a member of any legislature. If members of Parliament are to receive free transportation, it must be by Act Of Parliament; if not, the railway companies must be subjected to heavy fines for issuing transportation to members.
As to private cars, the Canadian Pacific railway supplies each district superintendent with a small car. It is marked on the end "business" or "official." It is usually without a name and has only a number. That is a greater workshop than the room a man has in any terminal of the road. Counting uip the hours of the district superintendent-there are three districts centering in Calgary, and I have the facts from district superintendents-he spends more hours in his icar in a year than in his office and his home. Thfen you come to the divisional superintendent, and he has a car. His duty is to control not only one division but several. One division superintendent-they have now changed the name as between districts and divisions^-who is now assistant general manager qf eastern lines, one year showed me his mileage. He had travelled in a year more than the distance around the world, on his oar day and night. He could not do his business without that car. The business of the railway could not be done without these cars. If the Canadian Pacific Railway, in the pursuance of sound business principles, supplies officers with cars, I think that the country must do the same with its officers, or fail in its duty. The higher officials are supposed to use official cars on official business; but in practice, if an official of the Canadian Pacific railway wants to go on Ms holiday, he
takes his car with him. If Mr. Hall of Winnipeg wished to go the coast he would take his car, and if Mr. Tiffin, for instance, wants to go to St. Andrews he, of course, takes a car. It is one of the perquisites they enjoy. The salaries in this country are so insignificant as compared with those paid in other countries, that if you add the whole thing together, it is not a high salary for a railway man.


William Pugsley: The Intercolonial salaries have become pretty generous.


Richard Bedford Bennett: The salary paid to Mr. Gutelius was $5,000 less than he now enjoys. He is employed on a shorter road. The Delaware apd Hudson took him over. There is no reason why I should not tell this story to illustrate the attitude of public men towards these matters. There was once a prime minister of Canada who conceived the idea that he would like to have great business men operating the Intercolonial and he suggested to the greatest living railway man then in Canada the necessity and the desirability of getting these men. He said: You know I would not mind paying $5,000 a year for such a man. That distinguished railway man replied: If you will give me a hundred of them at that price I will take them to-morrow, because you cannot get railway men for $20,000 a year or $25,000 a year. The president of one road in this country, who is now dead, was employed by the Southern Pacific at $55,000 a year, as was made known in certain threatened ligitation. That was under the late Mr. Harri-man. It is not uncommon to see the president of a railway receiving $100,000 a year. That is a large salary, hut if we are to conduct business in this country-and we are going to have now a very large mileage; we shall probably shortly see operating 15,000 miles of rails- we must supply our officials with the same sort of accommodation as men in similar service on other railways enjoy. And we must pay salaries suitable to men who assume such large responsibilities. We cannot get away from that. It its not pleasant to contemplate, but it must (be done. I have thought it unfair for members to go into the back sections of the country and complain of the payment of these salaries. One is no better than the other. If we were in opposition and you were in power we would probably be doing the same thing.


Frank Oliver: I think the hon. gentleman should speak for himself.


Richard Bedford Bennett: I am glad that I am not able to -speak for my hon. friend from Edmonton (Mr. Oliver), because I should be sorry to think that I would give expression to some of hi-s ideas. Human nature is human nature, and those in opposition are necessarily making capital against the Government of the day; but it is fair to say that we -should educate the people of this country into the belief, even in the country districts, that men discharging large responsibilities for the Government must ibe paid what they -are paid by private enterprise, and that the same facilities that are provided for the conducting of private business must be provided to carry on the public business. To point out that this man has a private car and some one else has some other kind of car, serves no useful purpose. The official car is useful for the proper discharge of the duties of the officials, and I think that the House should agree in that view and let it be understood that, so f.ar as we are able, we propose to put this country behind our servants, because they are our servants, for the purpose of doing the best that is possible for the country. One, of course, expects these discussions. They are always incident to the passing of estimates, but I do not think they serve any useful purpose.


William Pugsley: I am inclined to think my hon. friend is encouraging the establishment of an era of extravagance in the public service. Take the manager of the Intercolonial. There has been no better manager, no more successful or satisfactory manager, than Mr. Pottinger, and Mr. Pot-tinger's salary, I think, during the thirty-five or iforty years he was connected with the railway, never exceeded $6,000 a year. When the Minister of Railways came to -appoint a manager he took Mr. Gutelius, who. I am satisfied, had never received over $10,000, and gave him a salary of $20,000 a year.
Mr, COCHRANE:	.Another road took
him at $25,000.


William Pugsley: That may be. Perhaps there may be reasons. That road desires intimate connections with the Intercolonial. That -road has an opportunity to get traffic originating .in northern New Brunswick, of getting the traffic between the Intercolonial and New England points.


Richard Bedford Bennett: The Delaware and Hudson does not even touch it.


William Pugsley: In connection with the
Quebec Central?


Richard Bedford Bennett: My hon. friend's geography is as bad as his facts.


William Pugsley: Perhaps I am wrong,
but, at all events, we know that Mr. Gutelius never gave the same satisfaction-nothing like the same satisfaction to the public -as Mr. Pottinger gave.


Francis Cochrane: He did not do the
same business either.


William Pugsley: I do not believe Mr. Gutelius managed the road better than Mr. Pottinger.
Mr. KY'TE: Not as well.


William Pugsley: And Mr. Pottinger did
not have the s:ame wrecks on the Intercolonial either-I say it advisedly

that we have had since Mr. Gutelius became manager. This Government has certainly entered upon an era of extravagance. All their officials are -receiving much higher salaries than were paid previously. I think that Sir Collingwood Sehreiber never received, during all the years he served under the late Government, upwards of $6,000 a year, although he was one of the best railroad engineers in the country and occupied the position of deputy minister, and chief engineer oif the Government system of railways. I do not think that in this country, it is necessary to give these extravagant salaries. I believe good men-the very best men-can be secured to perform the duties of these positions just as satisfactorily as these high-priced men, for salaries not very much higher than those that have been paid during the last fifteen or twenty years.


William Erskine Knowles: Inasmuch as the hon. member for Calgary (Mr. R. B. Bennett) said that this matter was raised for political purposes, I desire to say that in that respect I plead no-t guilty. When an estimate like this is under discussion, hon. members are surely justified in asking whether any of the money is to be used for the purchase of private ears or not. The Government must not -be too touchy in regard to questions that are asked. We are asking questions in order to get information to which we have a perfect right. The number of private cars this Government is purchasing may be^ quite justifiable. The question is whether it is a matter of economy for Government officials to have private cars or not. If it is, then they should have them, but the number of pri-
[Mr. Oliver.!

vate cars may increase so as to become a nuisance. As one of my hon. friends on this side of the House said, these private cars are a great- inconvenience to the ordinary traveller on a railway. Not long ago I was travelling on the Canadian Northern to Toronto, and I wanted to make connections through Toronto to Winnipeg.
I found three private cars attached to the train. There was no need of those three cars at all; two of them were not occupied by the men who owned them. That, of course, was their business, and not mine, as the railway was not a government-owned line. The private car question, like any other question, is one that is quite justified so far as it is reasonable, but beyond that it becomes an abuse. When we have every parliamentary under-secretary running around the country in a private car, and any man on the railway commission sending out a private car with his wife and children to the seaside, that is a thing that should be stopped; it is vicious at the foundation; it is a loss of economy, and it has a bad influence on those receiving favours who should not accept them. I do not know why the minister said so much about hon. members of this House using passes. I suppose he meant our Tailway certificates under the Railway Act. I have travelled in -that sense on what he calls a pass. What I had in mind was the real pass. The minister surely did not mean to suggest that I had bothered him for passes, because I never did so. I never used any on his railway, either for myself or any one else. If my wife got one, I promise the minister I will send it back.


Francis Cochrane: I was not^alluding to that.


William Erskine Knowles: The minister spoke as though he meant that I was trying to get passes.


Francis Cochrane: I was speaking about the members' certificates; I was not alluding to anything else.
Canadian Government Railways-purchase of steamers "McKee" and "Drummond," $1,020,000.


William Pugsley: Will the minister explain this item?


Francis Cochrane: They are two steamers we bought for the purpose of carrying coal from Sydney to Levis. One was bought for $515,000, and the other for $505,000. They have been on that work ever since.


William Pugsley: Were they purchased in England?


Francis Cochrane: No, in this country.


William Pugsley: Are they second-hand steamers?


Francis Cochrane: Yes. One was bought from the Algoma Central Company and the other from the company of which Mr. James Playfair is president-I forget the name of the company.


William Pugsley: What, is the tonnage and the age of each steamer?


Francis Cochrane: They were built in 1908. The tonnage is 3,400 tons.


Arthur Bliss Copp: They are carrying coal for use on the Intercolonial?


Francis Cochrane: Yes.
Canadian Government Railways-to provide for building of two wooden ships, $600,000.


William Pugsley: Will the minister explain this item?


Francis Cochrane: We let contracts for two wooden ships to be built at North Vancouver, one contract to Wallace Shipyards, Limited, and the other to Harrison & La-mond, of Vancouver. The price was $230,000 in each case. Those contracts were let some time ago, but both firms cancelled them, refusing to go on with them. They claimed that the price was altogether too low. We have not made any other arrangements for the construction of these ships since then, but we hope to be able to get two boats. The idea was to put on these two boats to run between-Vancouver, Halifax and St. John, and also down to Bermuda.


William Pugsley: Were tenders called for the vessels?


Francis Cochrane: We asked for tenders from the different shipyards, and these firms signed contracts, but they have since cancelled them and refused to build the ships.


William Pugsley: If it is decided to go on with the construction of -these vessels, I hope the minister will call for tenders in a public way, instead of inviting tenders from the owners of a few shipyards. In that way the East will have an opportunity of . tendering as well as -the West.


Charles Murphy: What is the tonnage to be?


Francis Cochrane: It is 2,500 tons each. Mr. PUGSLEY: What power would they have?


Francis Cochrane: Gasoline engines.


William Pugsley: That is the Diesel engine, I suppose?
Mr. COCHlRANE: Oil engines. They will use sails as well.


William Pugsley: Is the minister now anticipating that there will be an increase in cost which will bring the total up to $600,000?


Francis Cochrane: They won't take them on any other terms except cost plus ten per cent.


William Erskine Knowles: Is there any information as to the standing of these firms? Had they built many ships before taking this contract?


Francis Cochrane: The Wallace Shipbuilding Company have had several contracts.


William Erskine Knowles: Is that the firm Mr. Bowser is a director in?


Francis Cochrane: I do not know.


William Erskine Knowles: I am informed he is.
Would they not have to put up a deposit on a contract like this?


Francis Cochrane: They refused to put
up a deposit.


William Erskine Knowles: The contract was entered into by the Government without a deposit?


Francis Cochrane: Yes,


William Pugsley: Is it not unusual for
the minister to invite people to enter into a contract and for the contract to be let without any deposit being made?


Francis Cochrane: Yes.


William Pugsley: May I not get a promise from the minister that if he goes on with the construction of vessels he will call for tenders on the Atlantic and Pacific coasts?


Francis Cochrane: I think that is a fair proposition.


William Erskine Knowles: If I remember correctly, Mr. Bowser at the time of the election was making considerable political capital out of the fact that he had arranged for the carrying on of this industry in British Columbia, and he himself was a director of this company.


Francis Cochrane: I have never heard that in any shape or form.


William Pugsley: As I understand it,
these vessels are intended to ply from At-
lantic ports like St. John and Halifax in winter, and Montreal in the summer-


Francis Cochrane: Not from Montreal.


William Pugsley: From Atlantic ports, we will say, and to pass through the Panama Canal on to the Pacific coast, making regular voyages between Eastern and Western Canada via the canal. So there is no reason why tenders should not be called for on both the Atlantic and Pacific coasts.


Francis Cochrane: That is true.


William Erskine Knowles: What is the financial standing of this company? How was it they were let off so easily? How much paid-up capital have they?


Francis Cochrane: I do not know.


William Erskine Knowles: Does the minister mean to say that he entered into a contract vdthout any depo'sit being made, and without inquiring into the financial standing of the companj''.


Francis Cochrane: We were perfectly safe without a deposit, because we were to pay them on progress estimates, and we would have had a capable man there to report to us from month to month the progress they were making. So it was not necessary to get a deposit.


William Erskine Knowles: I wish to respectfully criticise the minister's view. If the public service demands that there should be ships, the public service demands that a contract should be entered into which there is reasonable ground to believe will be carried out. If we need ships, we should not play with the business. In this case, certain men in a certain place had the option of going ahead with a contract or throwing it up. If they saw they could make a profit they could go ahead, and if, after looking into the 'matter Carefully, they thought they could not make a profit, they could throw up the contract. If the minister lays that down as the established policy of the Government, even with the poor financial head that I .have I could be a millionaire in a very short time. I could simply pick and choose between the contracts, going on with this one here if I could make a profit, and dropping that one there if I could not make money on it. If the minister never bothered to enforce the contract it would be nice pickings. I think we have here a dangerous precedent, which is not altogether unlike the principle laid down in Winnipeg, where a minister, finding that the contractor had tendered for a little less

amount than would see him through, paid the difference.


Francis Cochrane: But I have not.


William Erskine Knowles: This is just the reverse of that. In this case, the man is let off without being called to account. If it happened that the figure was one which subsequent fluctuations of the market with regard to labour and material justified him carrying on, he would have the option of making a very profitable deal with the Government. On the other hand, he could never lose, because if the market fluctuated against him he could throw up the contract. It is altogether to the disadvantage of the Government to do business in that way, and I wish to place myself on record *to that effect.


Mr. STEVENS:: In justice to the minister and to the firm who failed to carry out their contract, it should be pointed out that just subsequent to the letting of this contract the Munitions Board entered into the business of building wooden ships in British Columbia and other parts of Canada and secured practical control of the material entering into the building of ships. There were only a limited number of mills in British Columbia capable of sawing the timber necessary for certain parts of these ships, and the Munitions Board immediately arranged for the control of the output of these mills, with the result that many shipbuilding firms were unable to get material for their private work or for work in connection with Government contracts.


William Erskine Knowles: Does the hon. gentleman mean to say that the Munitions Board deliberately interfered with the securing of supplies by these shipbuilding-firms who were going to build for the Government? Or did the board incidentally and accidentally take the material away from them?


Henry Herbert Stevens: The hon. gentleman's
word " deliberately " implies malicious intent.


William Erskine Knowles: Let us say, forseeing
the results.


Henry Herbert Stevens: In any event, the results were the same. The Munitions Board found, and it has been found, I think, in the United States in the construction of wooden ships there, that the only satisfactory basis on which to lot the contracts is, cost plus a percentage. The fluctuation in the price of materials makes it impossible to gauge the price with any accuracy. The Wallace firm entered into this con-

tract because it already was constructing ships for a private concern-the Brown-Oarruthers group, who were building under a British Columbia law which g^ve them a bonus. By the time the negotiations with the Wallace firm were completed, the Munitions Board had entered the field and materials had risen in value to an enormous degree, and it would have resulted in very serious loss to the Wallace firm if the Government had insisted on the exact terms of the contract. I do not think any member of this House desires to take advantage of a commercial firm because of abnormal conditions. I would point out that, having in mind such a case as this, the British Government clothed itself with statutory power to enable it to allow a contractor to abandon his contract without loss, if he could show that he had to abandon it on account of the peculiar conditions arising out of the war.


William Erskine Knowles: That is not the case here.


Henry Herbert Stevens: We have not such a law here, but it is a very reasonable precedent to follow.


William Erskine Knowles: Those are not the circumstances here at all.. The minister cancelled the contract without knowing anything about it. He knew nothing about the financial standing of the company.


Henry Herbert Stevens: He is one*of the wisest ministers here, and I think he knows pretty well what he is doing.


William Pugsley: Perhaps he was guided by the wise head of the hon. member for Vancouver (Mr. Stevens) who knows the right thing to do from a political standpoint when it is necessary. I would presume that my hon. friend from Vancouver had suggested to these gentlemen: I will see the minister and get him to let you out, and then you can get a contract at cost plus ten per cent.
"Mr. COCHRANE: That is absolutely untrue.


Henry Herbert Stevens: It is absolutely without foundation.


William Pugsley: We have ten plus in the estimate all right.


Some hon. MEMBER:: Order.


William Pugsley: The original contract
was for $460,000 and we find an estimate now for $600,000, so the minister has the ten plus in his mind.


Francis Cochrane: I certainly have not. I refused to do it.


William Pugsley: Then the minister was requested to do it by my hon. friend?


Francis Cochrane: No, not by my hon. friend; by the people themselves, and by the board of trade out there; and I refused to do it.


William Pugsley: I think it is a peculiar condition of affairs that the minister should voluntarily allow a contracting firm which engaged to build two vessels for the Government and which is under legal obligation to carry out its agreement to abandon its contract. It is evidently a very reliable firm, otherwise it would not have contracts with the Imperial Munitions Board. This is such a peculiar condition of affairs that the minister should give some explanation to the House, and I think he should bring down the contracts and the correspondence before he asks the committee to pass this item. Of course, it is all very well for us to show our sympathies, but still a contract is a contract, a bargain is a bargain. This strong financial company undertook to build those vessels, and entered into a binding contract. The minister had so much faith in them that he did not require them to put up a deposit, as he always does and as every minister does in respect of public works, which deposit would be forfeited if the contractor failed to carry out his contract. The minister chose to trust them, and he took their contract. They are bound in law to carry it out. The minister has seen fit to release them from this contract, and he finds now that he will have to pay a very much larger sum in order to get the vessels built, and is providing in his Estimates a very muck larger amount than the original contract called for. I think under those circumstances the minister should not ask the committee to pass this item until the contract and the correspondence are before us. I was greatly surprised at the statement of my hon. friend from Vancouver (Mr. Stevens) that the Munitions Board has taken charge of the output of the mills. That is not what they do, according to the information given me by the director of the Munitions Board. Such a thing as that was not suggested. It is only that they require to know that the contracting firm will have a reasonably satisfactory opportunity of securing timber; but that the Imperial Munitions Board commandeers the output of any mills or any manufacturers of lumber is something I do rot believe.


Henry Herbert Stevens: I did not make that
statement.


William Pugsley: Yes, my hon. friend said they had taken charge of the output of the mills thereby preventing the Wallace Shipbuilding Company from carrying out its oontract with the Government. I was greatly surprised to hear that statement because it is entirely contrary to what I understood has been the practice of the Munitions Board. In the city of St. John a contract was given by the Munitions Board for the building of two vessels, and the contractors got their timber where they could or where they pleased. The Munitions Board does not undertake to supply timber. The contractor has to supply it himself, and I am quite satisfied, unless my hon. friend ie able to assure the committee to the contrary, that the matter of securing timber is a matter entirely up tp the contracting firm. If the Wallace Shipbuilding Company has taken a contract from the Munitions Board at cost plus, under which they are absolutely sure of getting the cost of building and ten per cent, I am quite sure it is they and not the Munitions Board who control the output of. those mills and that they have voluntarily taken a more profitable contract and given up the contract they had with this Government, and the Government has voluntarily released them.


Henry Herbert Stevens: The Wallace shipyards
have no contract from the Munitions Board for wooden ships. They had contracts for steel ships, and they have already launched one or two. They had contracts which, I think, are about completed now from a private firm for wooden ships. As to the Munitions Board commandeering the lumber, I never made any such statement. What I said was that when the Munitions Board entered the field, before the construction of those vessels commenced, they arranged for the output of certain mills which were the only mills able to cut certain long timbers required in the construction of those vessels.


William Pugsley: Do I understand they arranged with the mill- owners?


Henry Herbert Stevens: Yes,


William Pugsley: Under contract with the millowners?
Mr. 'STEVENS: I do not know whether it was under contract, or how it wras done. They arranged with the millowners so that

they controlled the full amount of the output. Those mills are cutting to capacity, not only for British Columbia shipbuilding, hut for shipyards in Eastern, 'Canada as well.
IMr. COCHRANE:	I will agree to put a
copy of the contract and of the correspondence on the Table.


William Pugsley: In the meantime we should let this stand.


Francis Cochrane: What is the use of letting it stand?


William Pugsley: Because when we get this information we may take an entirely different view of the matter.
The CHAIRMAN (Mr. Stewart) I may say the resolution has already been formally passed.


William Pugsley: No, Mr. Chairman. It has been informally passed.


The CHAIRMAN:: Formally passed.


William Pugsley: The only item which was passed on to-day was $25,000,000 for rolling stock.


Joseph Hormisdas Rainville: There is only one resolution, and the resolution has been formally passed.	*


William Pugsley: When, Mr. Chairman? The CHAIRMAN: Some time ago.


William Pugsley: To-day?


Joseph Hormisdas Rainville: Yes.


William Pugsley: No, Mr. Chairman. The only item under consideration to-day 'was the item for rolling stock.


Francis Cochrane: The boats are under consideration.


William Pugsley: The item under consideration was for rolling stock. Then we came to the purchase of the two steamers, McKee and Drummond. Now we have reached the third item. It will not do to take that position, because we have been discussing these items, and we must insist upon our right to discuss them.


Joseph Hormisdas Rainville: I only take what is before me.


William Pugsley: Then what you have before you, Sir, is a mistake. The minister knows perfectly well that since we have been here this afternoon we have been discussing rolling stock, and we are now discussing the building of two wooden ships. I
remember once a lawyer in New Brunswick continued to argue after the magistrate had adjourned the court. He said: " Am I addressing an adjourned court?" The magistrate said: " You certainly am." If that applies, we .have been addressing the committee upon items long after they have been passed. I think you had better reverse your judgment, Mr. Chairman.


Joseph Hormisdas Rainville: I cannot. The resolution has already passed, and is marked so.


William Pugsley: That cannot be.


George Green Foster: My hon. friend had better let it go as passed. He knows he is only doing a lot of very nice and skilful feeling. He has all the information his head can hold, and more than he can digest. He will get the contracts and the correspondence, and then if he wants to raise a row about it he can do so. But, what is the use of holding up such a very large item as this for a little information with reference to a contract?


William Pugsley: The $25,000,000 item has been passed.


George Green Foster: The resolution can only be passed as a whole, and the Chairman seems to have taken it that it was passed, and so marked it. My hon. friend who is in the Chair now cannot go back on what he finds in the record. My hon. friend (Mr. Pugsley) will make it easy for the Chairman who was, and for the ' present Chairman, if he will simply allow the item to pass as the committee understands it has been passed, and he will get the information lateT.


William Pugsley: I would like very much to oblige my right hon. friend, but at the same time there are certain rules of procedure which we must follow. Take, for instance, the Public Works item; he will find a hundred sub-items under one general beading. The practice is always to>
take them sub-item by subiitem and each one is passed separately. The mere fact of the passing of one sub-item does not mean that all are passed. If the chairman has got it wrong, we must get him right. My right hon. friend asks us to treat as passed a subitem that has never been under consideration at all.


Francis Cochrane: You have been talking about it for over half an hour.


William Pugsley: About the question of
ships?


Francis Cochrane: Yes.

Mr.^PUGSLEY: We were, but the chairman has brought us up with a round, short and sharp turn, and he tells us that we are out of order and that all these items have been passed because we considered this one sub-item. The Minister of Trade and Commerce (Sir George Foster) speaks of this as a small thing. Six hundred thousand dollars a small thing? My right hon. friend has become so accustomed in recent months to thinking in millions, and hundreds of millions, in connection with the Canadian Northern railway and other matters that this item of $600,000 is a mere bagatelle, a fleabite. The difficulty about this matter is that if the Minister of Railways -gets all his items through we may not see him again during the session. The session cannot last much longer now.


Francis Cochrane: I think I have been here pretty regularly during the session.


William Pugsley: Yes, my hon. friend
has. but he has been waiting to get his Estimates through and when he gets them through we may not see him again. It is always objectionable to allow an item to go through before important papers and contracts have been brought down. When I was Minister of Piublic Works the present Minister of Trade and 'Commerce would not allow me to get a vote through for a public building until I had brought down all the plans. I remember that on one occasion I had to bring down a cartload of plans prepared by the different architects and lay them on the Table. He seems to have changed his ideas as to the proper thing to do. I leave it to him whether it is unreasonable, to ask that we should have the contract. This is a most extraordinary situation. I do not believe there is another minister who would assume for a moment that the committee would absolve him from blame in having relieved a substantial firm from a binding contract or would permit him to get the item passed without giving the House the contract and correspondence which, in his opinion, warranted him in taking 5 p.m. such an extraordinary course. I appeal to my right hon. friend- my economical and prudent friend, a man who was supposed to be the watch-dog over the actions of his colleagues, the one man who was supposed to be in the past extraordinarily economical, who watched every penny of public money to see that it was not wasted-to say whether the action of the minister (Mr. Cochrane) is justifiable or not. Here my right hon. friend is face to face with the fact that this Government fMr. Cochrane.]
has thrown away $100,000 of the money of the people and has relieved a perfectly substantial shipbuilding firm from the performance of its contract when the minister knows that he will have to pay $100,000 to have that contract carried out.


Francis Cochrane: He has not to do anything of the kind.


William Pugsley: He may al*andon it altogether. I assume that when the minister asked for the money last year he did so on the understanding that it was in the public interest that these ships would be built.


Francis Cochrane: I did not ask for it last year. This is the first time I have asked for it.


William Pugsley: Or the year before?


Francis Cochrane: No, never before.


William Pugsley: Yes.


Francis Cochrane: No.


William Pugsley: Yes, last session, the Minister of Customs (Mr. Reid) who was acting for the Minister of Railways (Mr. Cochrane) asked for it.


Francis Cochrane: He did not ask for anything for shipbuilding.


William Pugsley: Yes.


Francis Cochrane: No.


William Pugsley: I very distinctly remember the statement that we were going to acquire two vessels for the purpose of carrying freight between the east and the west of Canada.


Henry Herbert Stevens: That was early this session.


William Pugsley: The matter came up this session? *


Henry Herbert Stevens: It came up early in the
session in the budget debate.


William Pugsley: Then the position is
that the minister entered into a binding contract on behalf of the Government for two ships without any vote from Parliament?


Francis Cochrane: Yes.


William Pugsley: That strikes me :is even more reprehensible.


Francis Cochrane: All right, but my hon. friend carried on the same practice.


William Pugsley: No, never; that would
be an unheard of thing when the late Government was in power. Did the minister, without any vote of Parliament, actually

enter into a contract in which he pledged the people to pay $460,000 for two ships? Is that what the minister says? Yet he says that we must pass this item and he refuses to give us any information.


Mr. CROTHERS:: Did not the Government of which you were a member enter into a contract for the construction of the Transcontinental railway without the consent of Parliament?


William Pugsley: No; that was subject to the approval of Parliament.


Thomas Wilson Crothers: Yes, but you entered
into, the contract before you submitted it to Parliament.


William Pugsley: No, it was subject to
the approval of Parliament. That is often done. The Government of Sir John Macdonald entered into a contract for the construction of the Canadian Pacific Railway but it was subject to the approval of Parliament.


Thomas Wilson Crothers: This is subject to the approval of Parliament too.


William Pugsley: Not at all. Does the
minister say that the contract is subject to the approval of Parliament? What does the minister say about that? He says nothing. Under these circumstances I think the contract really had better be brought down before the vote is passed.


Francis Cochrane: I am willing to bring the contract down.


William Pugsley: Bring it down before we
pass this vote?


Francis Cochrane: No, why should I?


William Pugsley: Why should you not?
We are here acting for the people of this country. We have evidence before us that the minister without any authority from Parliament, entered into a contract which while it was binding on the Crown, was not binding on the Wallace Shipbuilding Company under which they pledged themselves to build two ships for $230,000 each, or $460,000 for both.


Francis Cochrane: We will let the item drop if you like.


William Pugsley: I would not like to have you do that.


Francis Cochrane: You cannot have every thing your own way.


William Pugsley: I do not have many things my own way; it is not often that I
can persuade the minister to do anything like that. Perhaps after all the minister had better drop it. In war times we should not spend money unless it is necessary. It would be a very good idea to drop it. But I do not ask him to do that if he will bring down the contract.


Francis Cochrane: I will bring it down.


William Pugsley: Bring it down before we pass this item.


Francis Cochrane: No, the item is passed. 1 will bring down a copy of the contract on Monday.


William Pugsley: Before this item passes?


Francis Cochrane: No, the item is passed.


William Pugsley: I must differ from my hon. friend.


Joseph Hormisdas Rainville: I have to insist that this*item is passed. That is what I find before me. If the ^minister and the committee are willing that the discussion should go on, I have no objection.


Sir WILFRID LAURIER:: This item was not passed. You were not here, Mr. Chairman, but everybody who was here knows that it was not passed.


Joseph Hormisdas Rainville: These are the resolutions, and a resolution can only be put in this place after it is carried. The items are discussed, the resolution is put before the committee and is carried, and that disposes of it.


William Pugsley: That never was done.


Joseph Hormisdas Rainville: That is what the record shows. '


George William Kyte: There is another matter requiring further consideration. That is the standing of the Wallace Shipbuilding Company. I have a recollection that the corporation and the personnel of that company cut some figure in British Columbia politics during the period of the provincial election a year ago. I think it was stated in the press at the time that this company, which had had a corporate entity for some years, had not done any business, but suddenly became revived during the progress of the provincial election campaign and my recollection also is that ex-Premier Bowser appeared as a director of that company, and, inasmuch as that company purported to do business with the provincial government, ex-Premier Bowser had to retire from the directorship. I recollect having obtained that information from a perusal of

the press of British Columbia a year ago, and I think it would be well if the minister would give the committee some information as to the financial standing and the responsibility of that company, as well as the names of the directors, with whom the Government purported to do business under the contract referred to.


William Erskine Knowles: I think there is no doubt this item is not carried. We all understand it. On the succeeding page you will find bracketed together perhaps a dozen items, and the clerk runs them off one at a time. It does not follow that, because the first of those items is passed the last one is passed, nor does it follow in this instance, that because two items are passed,, the third item is passed. The committee assented, after a discussion not at all unreasonable, to the $25,000,000 rolling stock, and the item we now have before us is to provide for the building of two wooden ships. There is no minister whose estimates I would more willingly expedite, than those of the Minister of Railways. I like the way he administers his department. I think he administers it, on the whole, pretty fairly, and in a manly way; but in this instance I feel that he has information in his possession that we should have before we consent to this item. In the first place, he entered into a contract before Parliament authorized the expenditure of the money, which, in itself, is an un-usal and abnormal way of doing business. The normal way is that the expenditure is first authorized and the money voted by Parliament and then the minister is entrusted with the details of making the necessary contract. ' In this instance, the minister has taken upon himself to anticipate the approval of Parliament, an unusual position, and, therefore, not one in which we are to be less careful than usual, but more careful, and the minister should be the last to ask us to do anything which might be approaching a loose way of doing business. If I were to undertake the responsibility of acting in .an emergency for a principal I should think that was the very case where the fullest disclosure should be made to the principal and I should not say to him: "Here, you ratify that, and when I get ready I will bring down the reasons which compelled me to take the course I took." I think the unreasonableness this afternoon is not on this side of the House in asking that all these things be disclosed to us before we ratify what our agent has done, because the minister, after 
all, is the agent of Parliament in the expenditure of money. More than that, there are the very exceptional circumstances under which the contract was allowed to lapse; there must surely be some further explanation of that. The explanation given by the hon. member for Vancouver is no explanation at all. Let us suppose that the condition of .affairs had been reversed, and that the price, instead of proving non-attractive, had proved very attractive to the contractors, would they have excused, forgiven and released the Government? Are we handling immense sums of the people's money so as to give the person at the other end every favour and consideration? Would the minister do that if it were his own business in Sudbury, Sault Ste. Marie, Toronto, or anywhere else? No, he would not. If he had taken his chances on the rise or fall of the market, on the increase in the supply or demand of an article, and the party at the other end of the contract, with his eyes wide open, had taken his chances, if the developments in that commodity had been in favour of the minister's end, so that he found his bargain a profitable one to him, he would be the last man in the world to release the man at the other end. He would say: " Some day I will get stuck myself; it will be all in a life time. You take your medicine now and I will take mine at some other time." There should be some further explanation than what has been given as to why the Government released this company in such a very easy way. No reason was suggested until the hon. member for ' Vancouver strolled into the Chamber. He had so plausible good-natured, calm an explanation, like pouring oil on the troubled waters-and yet when you come to examine it, it does not amount to anything. He says that the Munitions Board and the Government wanted something to be built which required long timbers and the demand for long timbers was increased and while nobody controlled .the material-the Munitions Board did not commandeer it- yet by some chance those who had the material saw an opportunity of making a better deal with the Munitions Board, and the contract was allowed to lapse. But wThat is the serious aspect of it all? It is this-that in .this great struggle in which we are engaged it was found, that it was necessary that we should have wooden ships, and yet, instead of having them built, the time in which they might have been built has been allowed to slip away.

And the minister gives us no explanation for the great delay that has occurred because the whole contract has lapsed. It is not merely the money consideration, the question of time is even more important. All these weeks and months have slipped away, and we are without that thing we need, namely the wooden ships for our transportation. We must presume it was necessary to have them, and if it was necessary to have them, then time must have been the essence of that very necessity; and I say the minister, instead of asking us to pass this item with our eyes shut, should be the very first to say "There will be the fullest explanation upon it before the people's representatives are asked to pass this item."


William Pugsley: There is a very important principle involved for the protection of the committee in the suggestion made 'by the hon. gentleman that because you find the name of the chairman to this resolution you are going to treat it as adopted. I have	the votes and proceedings
of yesterday, and the resolution is not in the records as adopted, and it has not been adopted to-day. I have been here, and hon. gentlemen opposite have been here, ever since the House opened at three o'clock. My right hon. friend the Minister of Trade and Commerce, the Minister of Railways, and other gentlemen on the other side, have been here. The resolution has no date. The chairman has simply .signed it, I suppose in anticipation of the fact that it might be adopted. These items have .been under discussion to-day, and the only items which have been passed are the two first, one for the purchase of rolling stock, which we discussed for half an hour and more, and the other for the purchase of the steamer McKee and Drummond. We have now reached the third item, and it has not .been declared passed. As one member of the committee, I insist that it has not been passed, and we have a right to. discuss it.


George Green Foster: I think what
has taken place is what might very naturally take place. The chairman read the resolution which covers three items. There was a fair discussion on the principal item, a short discussion on the next, and there was .some talk on the third. Several times hon. members would .say "carried," "carried." and then some member on one side or the other would rise and follow out the item still further; Although we have said "carried" the chairman waited until

Mr. PUGSLEY; He never said "carried" as to the third sub-item.


George Green Foster: I do not know about that. The Chairman evidently understood it was carried and so marked it.


William Pugsley: He does not mark it "carried," he simply signs it.


George Green Foster: There was no effort to crowd the vote through the committee in any way.


Joseph Hormisdas Rainville: I
should be sorry if I had made any mistake, but I have been in the habit of considering each page placed before me as an item. In the resolution on the page before me, which calls for the vote of $26,620,000, there are the three items. That is resolution 437, and that was the resolution before the committee.


William Pugsley: But you were taking it sub-item by sub-item.


Joseph Hormisdas Rainville: Unfortunately that
was not done; I read the three items together, and when I said "carried" I referred to item 437.


William Pugsley: But in the Public Works Estimates given on page 11, item 457, there are twenty sub-items. You call each subitem.


Joseph Hormisdas Rainville: I would read all the items, and if any hon. member asked for information, for instance about line 4, I would stop and permit him to ask for that information, and I would call "carried" when all the items in the resolution had been discussed in that way.


Wilfrid Laurier: I appeal to the Minister of Trade and Commerce that there is no reason for this discussion. The practice has always been that the resolution is called. It may be composed of several items, absolutely disconnected. Here are three. These are taken one by one. We were on the third, which was being discussed when the Chairman left the Chair and the hon. member for Lunenburg (Mr. D. Stewart) took the Chair. The Chairman (Mr. Rainville), assuming it would be carried without further discussion, marked it. But the invariable practice is, when you have a resolution of several items, to take up each sub-item, and the resolution is carried when all are agreed to. The minister will agree on that point.


George Green Foster: My right hon. friend is correct. This is merely a mis-



understanding, and I am sure that, if It is the desire of hon. gentlemen, the Chairman will be willing to consider this item as being allowed to stand.


Joseph Hormisdas Rainville: If it is the pleasure of the committee, I have no objection.


Mr. LOGGIE:: I thought it would interest the minister to know that a telegram came to Ottawa to-day saying that a car of fish supposed to be shipped by the Maritime Fish Corporation could not be shipped owing to lack of equipment on the railway. The car was intended for Toronto.


Francis Cochrane: Who received the telegram?


William Stewart Loggie: Matthews-Black well, Limited.


Francis Cochrane: I have not heard of that before.
Railway subsidy-to provide amount required to be paid for the Quebec, Montmorency and Charlevoix Railway, the Quebec and Saguenay Railway, and the LotbiniSre and Megantic Railway, and' for the equipment, appurtenances and properties used in connection with such railways, to be acquired under the authority of a statute passed at the last session; and to provide for the cost of completing, equipping and operating the said railways-the operating expenses to be chargeable to revenue-revote, $3,667,745.07.


Rodolphe Lemieux: Will the minister explain this item?


Francis Cochrane: It is a revote from last year. The vote last year was for $4,000,000. The difference between the two votes was spent on construction last year. We are trying to protect the road by putting in stone to prevent the current from washing out the ballast. Formerly, a quantity of timber and other material was put in the sides for that purpose.


Rodolphe Lemieux: This amount is not only for construction purposes, is it?


Francis Cochrane: No.


Rodolphe Lemieux: What portion of the $3,667,745.07 will go towards the construction, what portion towards the payment of the bonds and what portion towards the equipment, appurtenances and properties in connection with these railways?


Francis Cochrane: It is estimated it will cost $1,492,194 to finish the construction, of which $492,194 is the amount found for depreciation of the Saguenay railway. That is, it will take $1,000,000 to complete the construction, and $492,194 to take the place of the depreciation that has occurred.


Rodolphe Lemieux: How much of the
amount will go towards the price of the railways acquired by the Government?


Francis Cochrane: Whatever Mr. Justice Cassels finds.


Rodolphe Lemieux: Mr. Justice Cassels ha= found already. Has he not given a judgment in that case? I have in my hand the reasons for judgment, and the matter is still before the courts, because I understand, by a hurried inquiry I made this morning, that an appeal has been lodged by the railway companies against the judgment of Mr. Justice Cassels.


Francis Cochrane: There is an appeal in connection with the gas property which has nothing to do with this.


Rodolphe Lemieux: 
Francis Cochrane: No, it is not included


Rodolphe Lemieux: I may have some comments to make on that later on. To proceed.
If on the other hand the value placed upon the Quebec, Montmorency and Charlevoix Railway is less than $2,500,000 then the difference between the value as ascertained and the $2,500,000 is to be deducted from any sums that may be found due in respect of the other two railways.
Sir Walter Cassels says further:
The agreement refers to it in the following language:
"It is understood and agreed by and between all the parties hereto jointly and severally that in case the Exchequer Court of Canada fixes the value of the line of railway and other property set out in schedule *C* hereto at a sum less than $2,500,000, the difference between the sum so fixed and the sum of $2,500,000 shall be deducted from the aggregate amount of the purchase price to be paid for the lines of railway and other properties set out in schedules 'B' and 'D' hereto.
"The intention of this agreement being that in no event shall His Majesty be liable to pay for the said three lines of railway and other properties a greater amount than the value thereof as fixed by the Exchequer Court less the sum of $2,500,000, the amount of the bonds to be assumed by His Majesty as aforesaid."
The judge explains that he takes it for granted that the various railway companies had good titles to the properties that were transferred to the Department of Railways. He also explains how he had arranged the proceedings before the Court, as follows:
I came to the conclusion that the only practical way of arriving at a result would be to adopt the method adopted in the arbitration in which I acted as counsel for the Canadian Pacific Railway Company, in regard to what was known as the Onderdonk sections of the railway in British Columbia.
"He says further:
Competent experts were employed by the Crown to make a minute examination of the three lines of railway and to furnish in detail what they considered the proper amount to be deducted for depreciation. A large amount of time was occupied by these gentlemen in making this inquiry. Subsequently the railway companies, by their counsel, accepted as

correct the amounts as found by the experts for the Crown. The amount of the depreciation to be offset against the value of the railways has therefore been settled. The figures I will deal with later.
He says further:
Another question of considerable importance is in regard to the offset referred to in the statute as subsidies.
And he explains that he had to deduct from the actual value not only the federal subsidies but the provincial subsidies as well.


Francis Cochrane: He also refused to allow interest during construction.


William Pugsley: He allowed it during actual construction, but the Company claimed it during several years.


Francis Cochrane: No.


William Pugsley: The company was
claiming interest right along for several years.


Francis Cochrane: I know, but we refused to allow it during oonistruotion. The witnesses admitted it would require three years to build the road.


Rodolphe Lemieux: Now, as to the account as filed toy the railways. As I have said, there are three railways, the Montmorency, the Quebec and Saguenay and the Lotbin-ifere and Megantic. The judge said:
I will deal first with that relating to the Montmorency division. The first item is dated July 1, 1898: road and equipment, real estate, buildings, etc., Montmorency division, $2,038,149.49. This starting point is assumed by the railways to have been the cost of construction up to that date. At the date in question, namely, the 1st July, 1898, according to Colonel Wurtele, the road had been constructed as far as Ste. Anne's. The mileage of this road was about 21 miles, and it may be that they were running a mile or two beyond. Even if it were granted that 22 miles instead of 21 miles of the railway had been constructed at that date, the cost would be in the neighborhood of $92,500 a mile. Colonel Wurtele puts it about $100,000. It seems a high figure. It is stated by counsel for the railway company that a certain portion of the right of way beyond Ste. Anne's had been procured. This may or may not be so. The proof before me is lacking on this point. Here there is a distinct difference between the views put forward by the counsel for the railway company, and the counsel for the Crown. The counsel for the railway company contend that what the court has to do, is to find the cost as if it were an accounting between the directors of the railway and its shareholders; and that this amount being shown by the books of the ' company as the amount expended at that date, should therefore be accepted as the cost. Numerous witnesses were called, gentlemen of good standing-accountants from Montreal- who gave evidence as to the custom in regard

to the charging up of interest, etc., to capital account.
When I deal with the case of the Saguenay Railway, the absurdity of this contention put forward on the part of the railway company will be apparent. The directors of a company might have to pay fifty per cent commission for obtaining a loan of a million dollars. It would undoubtedly be quite right as between themselves and their shareholders to charge this fifty per cent in their accounts. So also they might delay construction for a period of say 20 years, in the meanwhile paying interest on this bonded indebtedness. As between the directors and their shareholders, as a matter of book-keeping, it may be quite reasonable to charge up every item of expenditure. But the case before me is of a different character. I am not dealing with the accounts as between the shareholders and their directors. What I have to ascertain Is the value as between the vendor and the purchaser and that value must be the actual cost of the railways, less subsidies and less depreciation.
He goes on:
Now it is admitted that these two items of $500,000 referred to in schedule "A," and also the item of $794,869.58 floating liabilities, comprise part of this item of $2,038,149.40. Crown counsel in their statement were of opinion that these two items of $500,000 and $794,869.58 should be taken as the cost up to that date, namely July 1st, 1898. I do not agree with that contention. I fail to see how it can be assumed without further proof that the proceeds of these interim bonds, namely $500,000, went into the construction of the railway. They may or may not. That is a question of proof. The bonds were held by the various parties shown on page 15 as Schedule "A." They were held as collateral security by the various parties. What the nature of the debts due to these various parties is I would have thought susceptible of proof-at all events before such an item can be allowed, further inquiry will be necessary, and so with regard to the liabilities.
The judge put aside this first claim of $500,000.
It would be impossible to accept Colonel Wurtele's evidence as proving the fact that these two particular items went into the construction of the railway. Other evidence would be required before I would be willing to accept those two sums of $500,000 and $794,869.58 as having been expended in the construction of this 21 miles of railway.
So here are two items, totalling $1,294,869.58, which are put aside by the judge for good and valid reasons, and I would strongly object^to these two items reappearing in the Estimates and being paid to the company when it was understood last year, by the statute passed by thi6 Parliament, that the judge of the Exchequer Court would fix the amounts due to the railway companies for the actual value of the railways.


Charles Murphy: Do these two items reappear in the Estimates?


Rodolphe Lemieux: I do not know. The hon. gentleman does not say so.


Francis Cochrane: We do not propose to pay anything unless the judge gives a verdict for it.


Rodolphe Lemieux: I have dealt now with
the two biggest items which are put aside by the judge of the Exchequer Court in the case of the Montmorency railway. To show the discrepancy between the experts of the company as to the ooet of construction, 1 shall call the attention of the oom-mitte to this remark made by the judge:
I may call the attention of counsel to the fact that in the trust deed, Schedule "D," at page 19, there is the estimate of cost of constructing certain extensions. The total is 11 miles-and the total estimate is $149,947, which would be under $14,000 a mile- and while of course the main railway previously built may not have been built at that low figure, the contrast between the two figures, namely, $92,500 a mile, and the $14,000 a mile, is striking.
It shows that there was lots of bookkeeping in the office of the company. Now he comes to the Lotbiniere and Megantic Railway, and says:
Dealing with the Megantic Railway the amount involved in connection with this railway is, comparatively speaking, not very large, hut I think that further proof of a similar nature to that suggested in regard to the Montmorency Railway should be forthcoming. The only evidence given is that of Mr. Robhins, the manager of the railway, and is mere surmise. He may or may not be correct when he states that it would1 probably cost about $11,000 a mile.
No direct evidence is adduced as to the actual cost of the construction of the railway. Now he comes to the Saguenay Railway, which is the third white elephant. He says:
Mr. Matthews, the manager of the railway, was called as a witness. He states that the construction of the Quebec and Saguenay Railway was started in April or May, 1911. Previous to that he believes exploration surveys were made. He points out that the main construction on this road stops some time about September, 1912, hut that certain small constructions were continued for quite awhile.
As I intend to make some extended remarks on this subject, we might as well call it six o'clock.
Progress reported.
On motion of Right Hon. Sir George Foster, the House adjourned at 6 p.m.
Monday, August 27, 1917.