1917-08-28

REPORT PRESENTED.

[Stage Direction]
Summary Report of the Geological Survey, Department of Mines, for the calendar year, 1916.-Hon. Mr. Meighen.


[Stage Direction]
Consideration in committee of Bill No. 125, providing for the acquisition by His
[Stage Direction]
Majesty of the capital stock of the Canadian Northern Railway Company-Sir Thoma3 White (Minister of Finance)-resumed from Monday, August 27, Mr. Dugald Stewart in the Chair.
Sir THOMAS WHITE:: I beg to move:
That further consideration of clauses 1, 2, 3 and 4, the amendments, and the title of Bill No. 125 shall be the first business of the committee and shall not further be postponed.
Some ihon. MEMBERS: Carried.


Some hon. MEMBERS:: Lost.
Motion declared carried: Yeas, 52; Nays, 25.
On section 1-acquisition of shares of Canadian Northern railway authorized:


Mr. JACQUES BUREAU (Three Rivers) (translation):: Mr. Chairman, when this
resolution was 'brought before this House some time ago with a view to considering the opportunity of taking this railway line, we 'had the assurance from the prime minister that on the occasion of this measure being submitted to the Committee of the Whole we would be allowed all necessary time to di-s-ouss it. Assurance waisi also given that we would have at hand all necessary information, so that we might deal intelligently, with the Bill now before us.
I submit, iMr. Chairman, that there is not one isingle man here who, realizing the duties he has to discharge as a member of this House, will venture to say that he has performed these duties and has done so in the light of the small amount of information supplied to this House.
I want to ask you, Mr. Chairman, whether I shall have to address people talking between themselves and paying no attention at all, or address myself to a House whose duty it is to give ear when a member has the floor?
As I say, then, we are called to pronounce ourselves on a measure by which this country is to be saddled with an enormous indebtedness, and we are not only asked to assume the liabilities of a bankrupt company, hut also to agree that the people may be made liable to pay this corporation or its promoters a sum of $60,000,000 or $100,000,000 for the privilege of laying a further burden of $600,000,000 upon the taxpayers of this country.
The first reason why I object- to our taking this measure into consideration, is that we have not enough information as to what we are purchasing. We are told that we are taking over 9,500 miles of railroad, ibut we 
have not had before the House any information as to the present condition of this railroad line. By taking over the main line, we are also getting control of many sections and branch lines; we do not know what these sections are, we do not know what their liabilities may be, neither do we know what -portion is guaranteed by the parent company. 'There is one of these branch lines, Mr. 'Chairman, which I -know better than, the other ones-; it is -that of the Quebec -and Lake St. John, and I beg leave to state that it is -a perfectly useless acquisition, as this section is- in competition-with the. National Transcontinental. I s-ay in competition, hut I should not use such an expression. The Quebec and Lake St. John -railway, if we consider the recent construction of the National Transcontinental, becomes- perfectly useless, I might even say an actual danger; in fact, this line has- been badly built from its very inception -and its operation is most expensive. During the winter months, if they try to clear -away the snow and the anen- use the least strength in shovelling the snow away the rails go off with the snow and the embankment is taken away. (Such is, Mr. Chairman, the -line the Government -are taking over, when they buy this Quebec and Lake St. John branch-road,
But, when we discuss those matters, the Minister of Finance -answers: W-hy, gentlemen, why are you asking for -information as to the- value of -these lines or as to the condition of these lines-? We are not buying the engines, we are not buying the -stations, we are not buying the physical property of that system, we -are- only buying the stock.
Well, Mr. Chairman, I should- like to know what that stock is worth. We are taking over the 'Canadian Northern Railway company. What is that Canadian- Northern Railway -company? Is it the interests of w-hi-ch the Minister of Finance is the representative, or is it the ra-ilw-ay line- which Wins over the continent? I-s it the stock that constitutes the -main interest of the road, or is it the physical property?
'Mr. Chairman, there is something besides this ro-ad itself, besides the -stock used to keep it running, the real estate comprised in its right of way, its stations -and the lands given to the company as -a -subsidy. It is stated that, in the province of Quebec, *a certain quantity of land -has been given as a kind of subsidy for the building of branch lines. Pertinently, I say that, if an allusion is thus made to th-e lands given to the Quebec and Lake 'St. John railway,

these is not an acre, not even -a square foot of land, now in the possession of the Canadian Northern railway, which is the property of the Canadian Northern.
All the lands-, Mr. Chairman, which have been granted, as a subsidy, for the construction of the Canadian Northern railway, have been sold, have been localized or transferred, either to private companies, or to lumber merchants and other commercial men. Consequently, if the lands whien are counted upon the assets- of the company, and localized in the province of Quebec, are any part of the lands granted to the Quebec and Lake St. John railway, I say that the representation made before the House is a false one, showing fictitious assets, but which have been bargained with and speculated on for several years past.
After all, Mr. Chairman, we: are called upon to have our say upon a mere business question. We are -asked to accept, as assets, on behalf of the people of Canada, a property the component details of which we absolutely ignore. Is there a business man 

and I appeal to the ;hon. Minister of Finance himself-is there a. business man -in this House, who would buy any trade whatever, who would buy any kind of business whatever, without having previously inquired as to the value of such trade or 'business?
And how, Mr. Chairman, could he know anything about it? The only way would be to get a detailed inventory, a full inventory of all the personal property, including the franchise and whatever constitutes the assets of the -company. This inventory, once completed, it would then be necessary to havie experts accustomed to estimate such values, who would put upon every article set down in the inventory, the value, not only the value of the article therein mentioned, but also the state or condition of such -article.
I submit, Mr. Chairman, that the information given to the House by the hon. Minister of Finance is not sufficient, and that the Minister of Finance is hiding behind the capital stock to tell us that we are not entitled to know what moveable or immovable estate and what lands do now make up the assets of the Canadian Northern company. I say that he does not do justice to the members of this House and that he does not do justice to the country, because we are not in a position to pronounce ourselves.
There is another way, Mr. Chairman, in which some hon. gentlemen try to justify, partly, the stand taken by the Government,
and that is by invoking the report of the Drayton-Acworth commission and therein they take whatever suits the Government and they set aside whatever does not suit the gentlemen to whom they intend to make a -present of the value, whatever it may be, of the company's stock once it has been estimated by the -commissioners who will be appointed.
It is shown, by the report of a commission appointed by the Government, that the stock has never cost one cent, that there has never been one cent spent in payment of that stock, and that, consequently, they have in no way contributed to the construction of the railway. It is watering of stock and nothing but watered stock.
It has been moreover stated by the Solicitor General, in 1914, that these securities or these stock were worthless, because they had cost nothing and because not a single cent had been paid for their exchange.
The Minister of Finance also told us, in 1914, as he has .stated and asserted it last night, before this House, that this stock was the property of the Canadian Northern and would remaiu its property.
Where is the member who could give me information as to the value, the condition and the running expenses of any of the Canadian Northern branch lines? No one can answer as to that, unless he has fo-und some information in returns; that are withheld from us; no one can certainly answer me from the information now before the House and which is at our disposal.
Now, Mr. Chairman, why should this House be called upon to-day to ratify a legislation whereby spme thing will be estimated, which has been admitted by experts, who have been chosen to form the Smith, Drayton and Aoworth Commission, as noc having cost a single cent; I refer to the payment of those shares. Why are we asked to appoint a new tribunal whose functions will consist in giving a value to a thing that has none? Is it in virtue of the principle laid down by the Government namely, that when they ask any commission to make a report, if that report meets their expectations, they will accept it; but on the other hand, if the same commission makes a report which does not suit them, they set it aside, they repudiate the commissioners, and a'pipoin-t a new commission -composed of members whose opinion has been ascertained.
We are asked to-day to ratify this transaction which shall be imposed upon us. The Minister of Finance says to us: "We know that the Canadian Northern company finds it impossible to meet 'ts obligations."


The CHAIRMAN OF THE COMMITTEE (Mr. Rainville):: I will call the hon. member's attention to the fact that he has spoxen twenty minutes


Jacques Bureau: I thought I had begun only at twenty minutes past three .


Joseph Hormisdas Rainville: I am prepared to assert that I was i-n my seat at a quarter past three; however, if the hon. member wishes to speak two or three- minutes longer, I believe I can grant it.


Jacques Bureau: I will take advantage of these two ot three minutes, to record my protest .against the Act which it is intended to impose on us and against the methods laid down. Yes, Mr. Chairman, I wish to strongly protest .against the Act which they intend to force through by means of a brutal majority, an Act to be forcibly passed under cover of the British flag. When I was a child, I have always been- taught that the British flag was the living emblem of liberty and of fair piety; neveT have I been taught that it could be used to cover, to shroud in- its folds the misdeeds of a Government, of an unprincipled and moribund Government.


Mr. ETHIER (Two Mountains) (translation) :: Mr. Chairman, I cannot allow to be placed upon the statute books of Canada ' an Act so iniquitous in its conception and so disastrous in its consequences, from an economic and financial point of view, without protesting with all the energy in my power against the iniquity which the present -Government is trying to perpetrate. Indeed this is one of the worst misdeeds of the Government since 1911, and especially since the beginning of this session. We need only go back to the 18th of May last to see that from that date, since the hon. prime minister lias1 retuined from England-, its object has been to take away strip by strip, hit after bit, all the liberties that were guaranteed to us by the -Constitution, before the present -Government, elected under false pretences, came into power in 1911. We have only to refer to the conscription Act, to. glance backwards, to examine the Act relating to the soldiers' vote, and we will find that the Canadian Northern Act, which is now before the House is the crowning piece of the present Government's efforts and -conduct since May 18 last. I am opposed to the passing of this Act, -and I am not the only one who objects- to it. I am in, pretty good company.
The hon. member for South Renfrew (Mr. Graham-) in- the -course of the remarks he made upon this Bill's second reading before the committee, has laid before this House the protest of a group of high financiers in Montreal. I do- not intend to again

lastique and it also runs from St. 'Canut to St. Jerome for over fourteen years, the Canadian Northern company hag not had a single full service on that part of its line. I say not one, for in that district we have only a freight train to which ie attached a passenger car and I would he justified in styling it " a cattle car." I have had myself the occasion to come before the Railway Commission to complain of this state of affairs on 'behalf of the residents of the St. Canut municipality.
On two occasions the Railway Commission ordered the Canadian Northern to build a station at St. Canut and <to appoint an agent. They did comply and built some kind of a shed where there are neither stove, bench nor chairs for the public, in any season of the year, and they appointed an agent, a man. who kept a hotel close to this shed. Since then, it has been set aside, the Canadian Northern scoffed at the Railway Commission's decision, and that was fourteen years ago; the road has been given up. Four years ago another branch line was built, a section running .from St. Andre, Argenteuil, up to Montreal, passing through the county 'of Two Mountains, along the Ottawa river, St. Plaoide, St. Benoit, St Eustache, to allow their connecting, so they said, with the tunnel they bored under Mount Royal. Nevertheless, that section of the road is not yet opened and apparently is abandoned. The Canadian Northern, had an interest in bringing that railway line towards Cartierville, St. Lament and the tunnel. With what money did Mackenzie and Mann buy all the land in what is now called the " model city " ? Where did they get the millions in-order to speculate upon the Montreal lots around the tunnel they have built? From the 'Government's money, and to-day they want tO' resell them after having taken in all the profits. And it is this company, this octopus if I may so call it, which the Government intend to favour by taking over a worthless, dislocated property. Besides*, all this has been proven, it is admitted, it is known by the whole people, and the people shall protest, as they know how to protest. The people will protest at the coming elections which, I hope, will soon take place, not only against that iniquitous conscription Act, but also against the measure now before us. And, toy tne way, I might be allowed* to say that I consider the Maekenzie-Mann deal, the White Bill, such as introduced for the purchase of the Canadian Northern, far worse than the conscription Act.. From the standpoint
['Mr. Ethier.]
of the country's financial interests, this measure is worse than the conscription Act, for, at least, conscription may help, may contribute to aid our allies and our own overseas; but the Canadian Northern purchase will only contribute to assist Mackenzie and Mann and the rotten speculators whom we do not know, hut whom we suspect of being at the bottom, of this transaction.
'Mr. Chairman, I stated, art the beginning of my remarks that we were used to see iniquities perpetrated by the present Government; I said it was not the first one and; from, what we can see, it will not be the last one either. They so well feel the weakness of the measures submitted that they aTe forced to use violence, to use the gag, to use the closure in order to overcome the people's representatives and to ignore their own mandate.
I see that to-day IMr. Chairman pays a special attention to the members on his left. He .now glances at me, meaning that my time is over. However, last night he had a stiff neck, probably, for .he only had his eyes to. the other side of the House, never looking this way; hut to-day, he is sharp-sighted, we cannot go beyond our twenty minutes.	Well, Mr. Chairman, I am
through, I how before the order of the present Government's executioner and I resume my seat.


Mr. KNOWLES:: Mr. Chairman, this measure is so far-reaching in its consequences that it is a. matter for regret that those of us who have not spoken before are by the action of our autocratic Minister of Finance limited to speaking for only twenty minutes. I suppose that quite fifty Liberals have not yet spoken on 'this Bill, which involves our embarking upon one of the greatest policies Canada has ever entered upon. There has been no unreasonable discussion of the Bill, yet the Minister of Finance takes it upon himself to say that the people's representatives shall be confined to twenty-minute speeches. His only reason must be that he fears open discussion of this measure. If he were anxious to have this measure fully discussed, he would not resolve in his heart that at least fifty of the people's representatives should be refused the opportunity of discussing it, because you cannot discuss a measure like this, involving the far-reaching principle of public ownership, in anything like twenty minutes. I do the Minister of Finance no injustice, but rather pay him a compliment, when I say that he

would be more highly thought of in Canada if he had encouraged discussion of this measure instead of endeavouring to apply the gag and forcing it through Parliament, and it comes with especially ill grace from the Minister of Finance, a gentleman for whom many of us have a high regard, for his ability and other qualities. The fact remains, and the minister knows it just as well as we do, that in the public mind he is very closely linked up in personal friendship and financial interest with Sir William Mackenzie. The people know that; they believe that such is the case, and as a friend of the Minister of Finance, I say that it is an unfortunate thing for him that he has chosen to choke off discussion of this measure, which involves the possibility of our paying out huge sums of money to Mackenzie and Mann. I know nothing about tne personal affairs of the Minister of Finance, aDd desire to know nothing about them, I am speaking of public matters, and I say it is a public belief in Canada to-day that the Minister of Finance is where he is because of the Mackenzie and Mann influence and the Z. A. Lash influence. I have been credibly informed that it was on the nomination of Sir William Mackenzie and the late Minister of Militia and Defence that the Finance Minister secured his appointment.


Sir ROBERT BORDEN:: There is not the slightest foundation in fact for the assertion my hon. friend has just made.


William Erskine Knowles: The Prime Minister's statement must be accepted, of course. The fact remains, however, that the ^public mind is convinced that the Minister of Finance is where he is because he is a pet of those interests, and the Minister of Finance would better preserve the name which he has reason in many ways to be proud of, if he were the last person to force through Parliament a measure of which Mackenzie and Mann are going to be the beneficiaries. I make that statement in all friendliness and in all manliness.
I desire to say further, that there is a suspicion throughout Canada that this Government is extremely close to the Mackenzie and Mann people and to the Canadian Northern. That is not a belief of a day's growth, but has been in the public mind for some years. There has been a strong belief in the public mind that in the Minister of Finance the Canadian Northern have a very close friend; I do not say an improper friend. It is also a common belief that in the late
Minister of Public Works they have a very close friend; I do not say an improper friend. It is also a common belief that in the late Minister of Militia and Defence, and in the present Minister of Railways and Canals the Canadian Northern have very close friends. In view of the public belief that this is in many ways a Canadian Northern Government, it is unfortunate for the Government that they should force this measure through Parliament without a fair opportunity for discussion being permitted to those who desire to criticise the Bill. I would go further and say that the suspicion in the mind of the people will not, unfortunately for the Government, be at all lessened by the choice that they have made of an arbitrator. It is not for me to discuss Sir William Meredith in any personal way. I am in the habit in a humble way of appearing before judges, and I am not going to take advantage of my position in this House to say anything with regard to a judge that is unfair or in any way ungentlemanly or unmanly. But I will say this : that once a man accepts an appointment like this in connection with a transaction that is generally looked upon in Canada as a shady transaction'-and Sir William Meredith knows that-he becomes a fair subject of examination and criticism. In the public interest we must ask ourselves:	Is Sir
William Meredith an arbitrator of whom we on this side of the House can approve? Speaking for myself, I say without any hesitation that Sir William' Meredith is an arbitrator of whom I do not approve absolutely and entirely, for many reasons.


Sir GEORGE FOSTER:: That will be the death of Sir William Meredith.


William Erskine Knowles: If the minister will
allow me, in my humble way, I am going to discharge my duty to the country, notwithstanding his ironical remarks. [DOT]


George Green Foster: Will you permit a question?


William Erskine Knowles: I have only twenty
minutes.


George Green Foster: I wish to remind my hon. friend that if he goes on in this way his twenty minutes will be up and he will not have approached the question at all.


William Erskine Knowles: My hon. friend asked me if I would permit a question, and under the belief that he was going to ask one I sat down, but as he evidently has not car-

Tied out his intention I will proceed. The reasons why I do not approve of Sir William Meredith are these: We have here a stupendous task for some man-some man who is more or less versed and well informed on the question with which he is going to deal. Sir William Meredith is not versed or well informed on the highly technical matters with which he will be called upon to deal. If Sir William Meredith had been engaged for many years in the study of these questions, ae the Minister of Finance or the comptroller of the Railway Department, Mr. Graham Bell, have been it would be a different thing. But ;Sir William Meredith is no longer young; he has reached an age when it is impossible for him to grasp new things of the magnitude of this railway problem, and do justice to it. We can be sure that the Canadian Northern will have to look after their interests men who are in the prime of life, whose minds are alert and well-versed in these matters. Any of us who have seen contests in the courts knows that it will be impossible for Bir William Meredith to do justice to the people's interests in that tribunal, and I should be failing in the discharge of my duty if I did not say that I believe that a man of the age of Sir William Meredith, who is now not far from four score, will not be equal to the great task before him.
I plead even at this date with the Minister of Finance to choose some other man; for he can find some other man who would be more equal, mentally, and by information, training, and learning, to this task. The Minister of Trade and Commerce turns it into a joke, but when it comes to a question of spending $60,000,000 of the people's money, even the smile on the face of the Minister of Finance at this moment will not make me say other than that this is a matter too grave to be dismissed with a smile from the Minister of Finance or an ironical remark from the Minister of Trade and Commerce.
We have Sir Henry Drayton, a man who has studied railway matters closely, and who in his capacity as solicitor for a great corporation in the city of Toronto has no doubt become very well versed in these matters. He is in the very prime of life, and a friend of hon. gentlemen opposite; he would be incomparably .superior to Sir William Meredith as an arbitrator. It is a remarkable thing that in all these commissions the Government never think of appointing anybody but friends of their own, and that is another thing I have against [Mr. Knowles.l
Sir William Meredith. It is well known that he is a Tory of the Tories he is the right hand man-the man Friday, so to speak-of the Ontario Government. It is a well known fact that for years they have taken counsel with him in all the great measures they have brought down, and that he helps draft their -legislation. That is the belief in the public mind, and instead of doing anything to aggravate the suspicions of the people, the Government Should endeavour to inspire them with confidence. That in itself is>
an unanswerable argument why a man should be appointed who is considered to be entirely dissociated from politics and from all political activity, and people have not that belief about Sir William Meredith. Whether it is true or not I cannot say, but the fact remains that Sir William Meredith is still believed to be very closely associated with the Conservative party. The Government seem to think that they must always appoint friends of their own to these commissions. But that is a source of weakness to the Government. If the Minister of Finance wishes to appoint a judge to this position, why does he not endeavour to restore public confidence by appointing a judge who is not the appointee of the Conservative party? What did the Liberals in Manitoba do in connection with the investigation into the Agricultural College and other buildings? They appointed a man fresh from the Bar. Mr. Justice Galt, the appointee of the late Minister of Public Works. If the Government want a judge they could have appointed Mr. Justice Cassels.


Mr. LEMIEUX:: Hear, hear.


William Erskine Knowles: Mr. Justice Cassels has had long experience in these matters. Although an appointee of the Liberal party, while at the Bar he was a supporter of the Conservative party. He is in every way far better qualified for this position than Sir William Meredith.


Mr. PUGSLEY:: The Government would not appoint him after the Quebec and Saguenay case.


William Erskine Knowles: It makes the public mind more suspicions than ever, and that is the point I am urging for the sake of the Government itself. It ought to allay public suspicion, and restore public confidence by reconsidering the suggestion that Sir William Meredith should be an arbitrator. The matters which have been dealt with in this debate are so long and so deep

and so big that I cannot discuss them in the ten minutes I have left. There is, however, one point about which I wish to speak, and that is if there is compensation to be paid, and I 'have not for a moment said that compensation should not be paid -I have quarrelled only with the system of dealing with compensation-if there is to be compensation paid we should have further knowledge of the particulars. I might say a great deal with regard to the details, but time does not permit. I do contend, however, that we should have more knowledge of the pledgees of this stock. I think it was the hon. member for Calgary (Mr. R. B. Bennett) who stated that we should have nothing to do with the pledgees. I do not entirely agrqe with that in any sense. We should have more knowledge of these pledgees. The companies of Mackenzie and Mann are so interlocked that it is quite possible that many of the shares of this company were pledged to the bank, together with the shares of some of their subsidiary companies. There is a lumber company known as, I think, the Big River Lumber Company, which is owned by Mackenzie and Mann. Three years ago it had over $1,000,000 credit in the Bank of Commerce. I do not know why the bank would lend a million dollars to that not very well-known lumber company. We should know what that stock is pledged for, and whether it is interlocked with some other stock as collateral, or pledged absolutely and entirely as an isolated pledge identified and ear-marked by itself as collateral or security. When the arbitrators come to ascertain what is the value of this stock, that question will be immediately presented to them. The .minister will understand, with regard to the lumber companies, for example,-I forget their names, but there are many of them in British Columbia-that when the arbitrators come to ascertain the value of this $60,000,000 stock, the argument will no doubt be made to them along the line that the stock (has an especial value to Mackenzie and Mann, because it gave them control of the railway, and the control of the railway helped the subsidiary lumber companies, and the other companies they owned. I hope the minister catches my point. I do not think he is paying very much attention.


William Thomas White: I am listening to my hon. friend.


William Erskine Knowles: My hon. friend then is like Caesar; he can do several things at
the same time. I was going to say there is every possibility that Mackenzie and Mann will go before the board of arbitration and say " this stock we are possessed of has an especial and enhanced value to us, because it gives us control of the Canadian Northern Railway Company, and the control of that company makes our lumber companies and our saw-mills very, very valuable," and they will want compensation because of the loss caused to them by the taking away of that stock. The minister will agree that it is a well-known principle of arbitration law that the board of arbitration must ascertain the compensation to be paid to the c'aimant on the basis of the loss to him, but the minister should safeguard it here that it should be absolutely the market value-the earning value-that there should be eliminated from this any special value they might claim because of the fact that the control of the railway would operate for the benefit of the other subsidiary companies or industries of which they were the owners. That should be made clear to the arbitrators, so as to get rid of the evil results of these underlying securities or interests. _ I have only one word more to say to the minister, and I hope he will listen with an open mind. He is a young man yet, and I wish he would reform his methods with regard to making railways pay. I will tell the minister how to make railways pay.


William Thomas White: I will listen now.


William Erskine Knowles: I may be wrong, but I will give it for what it is. worth. My idea with regard to a railway is that it has something to sell, that is, transportation. The way to make a railway pay is to get a lot of things for it to transport. Railways are not an end in themselves, they are a means to an end. When you build a railway, you have not reached your goal. Your goal is to carry goods. If a man builds a boot factory, his goal is not only to make boots, but to get the boots sold. The way to make your railway pay is to have your transportation in demand, so that people will buy it. How will you do that in Canada, when you are prohibiting it, and strangling it, as you strangled it in 1911 by discouraging the production of wheat in our western country? The way in which you could make these three railways pay, would be to make an agricultural proposition in Canada for the production of wheat in those great zones of prairie land, and produce wheat in such quantities that the railways would have lots

to handle. Yet the Government seem to think it is their duty to adopt and enforce a policy that will prohibit the purchase of transportation, that will prohibit men from raising wheat and grain of all kinds, the carrying on of which would be the source of life to the transportation companies. If the minister will not only listen to this but heed it and put it into practice, he will do a great deal to redeem himself with regard to this proposal. If you could take things as you found them in 1911 and look back at the multiplication table, and see the way in which the wheat production rune you will see that for the ten or fifteen years prior to that under the Laurier policy it had been multiplied by ten. If the minister could have kept that ratio up, instead of choking it off, we would have had plenty during these five or six years to keep those railways as busy as they could be, and make them as rich as they could be. The way to make a success of our transportation problems in Canada is to build the country u]5 so that the railway companies will have so much business that they will be kept busy, and the people of the country will be made rich at .the same time. I am tired of this Toronto legislation, and this privileged legislation-[DOT] and I do not care whether Clifford Sifton is at the back of it or not. It does not need Clifford Sifton to queer it. It is already queered. The people of Canada believe this matter is being run too much for the interests of the privileged, classes, and if the minister would develop the Dominion along industrial. lines, especially developing the agricultural interests of the country, he would help hie railways, and would help the whole of Canada. He would help his friends the manufacturers and the large companies, just as well as he would help the farmers.


Mr. J. G. TURRIFF (Assiniboia):: The railway condition we are up against now is no doubt the result of a good many years of great prosperity and development in the West. The fact, however, remains that we are up against a very serious proposition, which has to be dealt with, and to be dealt with in the near future. . Under ordinary conditions, and in. ordinary times, I should have favoured, and favoured as strongly as I could, that this road should have gone into the hands of a receiver, and be dealt with on that basis, letting the water out of the 6tock, if there is any water in it, and letting every creditor take his chances in the railway business and in that railway com-
pany as the rest of us would have to take in any business .transaction into which we went which does not turn out successfully. But we are not under such conditions now, and I do not think such a course would be feasible. We have a tremendous debt facing us at the present time, which is being increased at the rate of almost one million dollars a day. We do not know when it is going to stop. We do not know what the amount of our debt will be when we get through with this war. If by allowing this railroad company to go into the hands of a receiver the result was that we had to pay a higher rate of interest on account of the black eye to Canadian credit and Canadian, finance it may be the most expensive way we could possibly deal with the present railway question. On these grounds I am not at the present time in favour of this railway being allowed to go into the hands of a receiver.
There are some features of this Bill that I do not like but at the same time I am free to confess that if any one asks me to propose something better I do not know how to do it. I da not mean that I am in a position to know how to do it as well' as many other hon. gentlemen in thisHousewho have given more time and attention to the question and understand these matters a great deal better than I do. But, as far as I can make out, in a general way, it seems * to me that the proposition is a fairly reasonable one.
There are two things that I want to bring before the committee that cannot be done in connection with this railway system. One is that this company must not, by any manner of means, be allowed to. get into the hands of the Canadian Pacific. There is no doubt that the Canadian Pacific is a well managed business institution and that it is doing good work. I am not here to make any criticism of the Canadian Pacific railway. But those in charge of the Canadian Pacific railway have enough on their hands at the present time. The main point I want to make in this connection is that the Government will have on their hands the Intercolonial, the Transcontinental and the Grand Trunk Pacific, and it would be a calamity to Canada, in my judgment, if by any possibility the .Canadian Northern, or any single branch line of that system should be eliminated instead of a part of the Government main line from the Atlantic to the Pacific, or that these branches should be put in the position of being feeders to the Canadian Pacific railway main line rather

than to the two main lines that the country is going to have on its hands. The people of Canada would not permit the Canadian Northern to become a part of the Canadian Pacific Railway system. There is another thing that the Canadian people will not stand for in my judgment. The Canadian people will not stand for any more millions being poured into the coffers of the Canadian Northern as long as it is in the hands of Mackenzie and Mann.
I am glad to know that in this House there is very little difference on the question of principle. As far as I have been able to discover in this debate, it is generally accepted on both sides of the House that the Government has to take over this road and it is simply a question of terms. There is one point that I want to bring to the attention of the Government and that is that in the interest of the people the Government has to be mighty careful that nothing is allowed to be done which under any circumstances would allow the old Grand Trunk Railway Company of Canada, either by purchase, lease, or traffic arrangement to come under the control of the Canadian Pacific Railway Company. I believe that we are going to be forced into the position of taking over all the railways of the country except the Canadian Pacific Railway, and if we have to take that position it is absolutely essential for the West that we shall have the Canadian Northern branch lines to gather freight in the West and that we shall have the Grand Trunk lines to gather freight in the East. If you have that you have something to work upon, you have a chance to put these roads in such a position that they will eventually become paying propositions. If, on the other hand, through any carelessness in dealing with this matter, the old Grand Trunk Railway Company should be allowed to get into the hands of the Canadian Pacific Railway, you would have all the gathering power of the Canadian Pacific Railway at this end and in the West, plus the gathering power of the Grand Trunk in the East, contributing to make one main line pay handsomely, while the other two main lines from the Atlantic to the Pacific would be starved.
Another thing has to be considered-it was pointed out by an hon. member yesterday-and it is that the railway companies are asking for an increase of freight rates. It was stated yesterday that they want an increase of 10 per cent, whereas, my
memory is that they have asked for an increase of 15 per cent. If an increase of 15 per cent in the freight rates is necessary to make the Canadian Northern and the Grand Trunk pay, it is certainly not necessary to grant such an increase to the Canadian Pacific Railway. But, if it is done for one it has to be done for the other. You cannot give an increase of freight rates to the Canadian Northern and the Grand Trunk without allowing the Canadian Pacific Railway to take advantage of these increased rates. The result would be that we would probably be handing over $18,000,000 or $20,000,000 a year to the Canadian Pacific Railway. Under the circumstances there is no necessity for doing that. Therefore, if this proposition will cost the country something it will not cost it any more than it would if we gave them an increase in freight rates. The biggest objection that has been developed in connection with the debate so far is as to the amount that -might possibly be paid to Mackenzie and Mann. Personally, I do not think there is a great deal coming to Mackenzie and Mann. 'I am also of the opinion that, if there is not much coming to them, under a fair arbitration, there will not be much given to them.
One arbitrator, whose duty it will be to see that not more than a fair value shall be given to Mackenzie and Mann, will be specially appointed by this Government; another will be selected by the railway company, and -a third by the first two. These men will surely -approach their duties with honest intention and open minds. If it is found that nothing or only a small amount is due to the Canadian Northern Railway Company, it is absurd to talk about $50,000,000 or $60,000,000 being paid out. I have a good deal of faith in the honesty of arbitrators when they come to deal with a question of this kind. I have hope that if nothing is due, nothing will be paid. According to the Drayton-Aeworth report, the commissioners are not against arbitration. I quote from page LXII of the report:
And if in recent years the Canadian Northern shareholders were carried away by a wave of unreasoning optimism, at least it may be said for them that almost the whole population of Canada shared their expectations. We think that, on the whole, the equity of the case would be met if the Canadian Northern shareholders were permitted to retain a moderate portion of the $60,000,000 of shares which they now hold.
On page LXXXVII they say:
We recommend that the question be considered whether Canadian Northern shareholders



shall be perm'tted to retain a moderate proportion of the $60,000,000 shares which they now-hold ; that the precise proportion, it any, and the relation of that proportion to their share of any future profits of the Dominion Railway Company be fixed by arbitration.
Messrs. Drayton and Acworth, then, favour arbitration. The only difference that I see between their proposal and that of the Government is this: the commissioners favour arbitration in respect of what proportion of the $60,000,000 of stock Mackenzie and Mann should hold and what they should get in the way of future profits of the road. The Government proposes arbitration in respect of the equity of Mackenzie and Mann in the railway company and how much should be paid for the $60,000,000 of stock. I repeat that I have faith in the honesty of arbitrators appointed in cases of this kind; I feel that they will do justice to the country. If it can be clearly shown that Mackenzie and Mann have equity in the road and should be paid something for it, I do not know that anybody would be very much opposed to their receiving an amount in- respect of that equity. Personally, I think it would be money well spent if a few million dollars would get rid of Mackenzie and Mann for good; if it would separate them from Canadian railways and Canadian matters generally. They have been no credit to Canada, except that they have built a big road upon the credit of other people.
The Government is adopting the principle of Government ownership of railways. Once they take over this road, the Government cannot stand still. We shall be taking over the operation of 9,000 miles of railroad in addition to the 1,400 miles of the Intercolonial, to say nothing of the Transcontinental. That means that we have to go further. Without saying anything about the method that the Government is adopting, I believe that the taking over of this road by the Government meets with the approval of the people generally. It is better to take this step than to continue to pour millions of dollars into the Mackenzie and Mann sieve. I have never favoured Government ownership of railways, but I see now that we have to take action; we have to adopt the principle of Government ownership. It is the best way out. The people whom I represent would rather have the road taken over and operated by the Government than allow it to go into receivership or Continue to pour millions into it without undertaking Government ownership or control.


Mr. MICHAUD:: I object most emphatically to the measure introduced by the

Government in respect to the Canadian Northern Railway. New Brunswick is under no obligation to the Canadian Northern, or to the Government, in connection with this transaction. The people of that province have kept away from this railway corporation, but I am sorry to say that they will have to assume part of the obligation involved in paying a certain amount of money to this company. I have received a resolution passed by the town of Edmundston, in my county, protesting against the purchase of this railroad. I desire to put it on record so that my electors will know that I have taken their request into consideration. The resolution reads:
Whereas the Canadian Northern Railway has been almost entirely built and financed by public money, in the shape of bonuses, grants and loans, including the loans made by the Dominion Government;
And whereas the Dominion Government are now proposing to take over the road, and to assume the liabilities thereof, amounting to some $350,000,000, and to pay Messrs. Mackenzie and Mann for the capital stock still held by them ;
And whereas the Dominion Government has already loaned this company $45,000,000, taking as collateral security the assignment of 45 per cent of this stock, although the stock represents no capital investment and will have no value until the railway shall have become a financial success, which it is not.
Resolved that we, the undersigned, most emphatically protest against the purchase of a bankrupt railway at the price of a solvent concern or any payment being made for the common stock of the company; and insist that if the Government, which is now a creditor to the extent of many millions of dollars, finds it necessary to make further advances in order to protect its claims against the company, it shall safeguard the interest of the general public, whose agents, it is, by taking over the assets of the company without further payment to the promoters, who, as is well known, have already made enormous profits out of the promoting and building of the road with public money and have amply recouped themselves for any investment of their own capital and time.
The resolution is certified by Thomas Guerette, town clerk.	*
It was alleged yesterday by the member for Vancouver (Mr. Stevens) that members of the Opposition were influenced in some way in their attitude towards this measure. The people of New Brunswick have no influence behind them; they are not interested in this company directly or indirectly, but they will be called upon in the near future, when this measure goes through, to become responsible for a part of the $40,000,000 or the $60,000,000 that will be paid to Mackenzie and Mann. Some provinces are anxious that the Government shall take over this railroad. No doubt those provinces are

under obligation to Mackenzie and Mann; capitalists in those provinces have bought the debentures or bonds of the company. But at this moment, when everybody is taxed very highly to meet the expenses of the war, we are called upon to pay Mackenzie and Mann, two railway men tin Canada, an enormous sum. In New Brunswick we have lately been called upon to tax our people to the extent of half a million dollars, and the people are called upon to-day to pay still further taxes to finance this proposition. The labour men, who work for small wages, were taxed under the municipal laws to raise this half million dollars. The people of the province of New Brunswick insist that this Bill should not be passed, because we do not want to assume other liabilities. In New Brunswick to-day we are under heavier expenses than any other province of Canada in proportion to our population, and if we are called upon to pay out more money to complete the purchase of this railway I do not know what will become of us. I have heard it alleged that some members in this House are personally interested in this measure, and that others are indirectly interested. If that is the case, I am very sorry to hear it. It reminds me of the fact that in England lately the rich people have met, and I believe have decided to make what they call an economy pudding. There are too many members of this House' who have met together and have prepared the economy pudding. I am sorry to hear that, because the people of the country have lost faith in the administration of affairs by this Government.
I am against Government ownership of these railways. I have had experience of it in my own. province for the last six years. I have seen railways operated by the Government, namely the Transcontinental in New Brunswick and the Intercolonial railway. It is really a shame to see the way the Transcontinental, especially, has been administered by this Government. I say that no government in my opinion can operate a railway to advantage. When the Transcontinental was built it was a first-class road, but the Government .could not operate it with advantage and profit. There is to-day, lying alongside the Transcontinental from Moncton to L^vis, enough freight for export to fill 250 cars a day for a period of three months. The freight is lying alongside the line, and there is no organization to export it. Before the Government took hold of the International
318}
Railway, we had a "Daily express and good accommodation"; we knew the time the train would leave one station and arrive at the next, but to-day we have very little satisfaction in the administration of this Government railway. I am glad to say, however, for the benefit of the Minister of Railways, that, within the last month or two, an express has been, established on the Interprovincial railway, running three times a week. I say that the public will not endorse the application of closure to such a measure as the one before the House. They do not think we are bound to pass a measure through without giving an opportunity to the members of the Opposition to discuss it thoroughly and intelligently. Many members of this House have protested that 20 minutes is too short a time in which to express their views on such a great measure. In conclusion, I wish to say that Mackenzie and Mann have obtained enough money from this country. The Government should have .taken hold ol this railway, not by means of the measure before the House, but under the .authority of the .statute of 1914, which reads as follows:
If authorized by the Parliament of Canada, the Governor in Council may on such terms and conditions (if any) as Parliament may prescribe, at any time while any event of default shall exist and be continuing, by order declare the equity of redemption of the Canadian Northern and of all other persons whomsoever In the mortgaged premises to he foreclosed, and thereupon the equity of redemption of the Canadian Northern (.and of such other persons) in the mortgaged premises and every part thereof shall be and become absolutely barred and foreclosed, and the same shall thereupon be vested in His Majesty In right of the Dominion of Canada.
Under this authority I beg to submit that the Government does not owe one cent to the Canadian Northern. The people of the country cannot afford to pay any more money to this company, and if we have authority to take hold of it, we should do so at once, and stop making payments to them.


Mr. TURGEON:: I do not very often
occupy the time of the House, except when I think I should express my opinion in the interests of my constituency, and I believe that I could not justify myself before my electors if I did not state my views on. this particular question. Coming from a constituency in the Maritime Provinces which is traversed by the Intercolonial, it has been my duty, on more than one occasion, to express my opinion on the operation of

force, would have given us cruisers and destroyers to help the Empire at this hour. It was a sore day, the 11th day of September 1911.
As I say, our financial potsition is such that we cannot properly equip the roads we have to-day. At the beginning of this session I asked the Minister of Railways if it was his intention to take over the Caraquet and Gulf Shore Railway, as branch lines for the Intercolonial, and he answered that owing to the war it was very difficult to get the money, and he would have to postpone consideration of that question till some later date. I accepted his statement in good faith. If the reason he gave at that time was good, it is good to-day. He could have taken over this railway for a few hundred thousand dollars, and many other branch lines could also have been acquired at a total cost of less than a million dollars, which would have been of great advantage to the Intercolonial railway. But if financial conditions are such that one million dollars cannot be spared for the taking over of branch lines for the Intercolonial, how can the Government expect the .people of this country to support them in taking over the Canadian Northern involving this great expenditure, especially when we have not yet properly equipped the Transcontinental.
According to the Dr ay ton-Ac worth report we should have to spend $40,000,000 on the Canadian Northern for equipment, and $30,000,000 for additions and betterments in the next five years. Then there are also the fixed charges, and the amount we shall have to pay for the stock. The Minister of Finance said that the taking over of this road was the beginning of a policy of the nationalization of railways in this country. While I am in favour of the nationalization of railways, I say that Canada is not in a .position to take over this road, which will be a drain on the country for many years to come. In the last resort I would rather the Canadian Pacific took over the Canadian Northern Railway than the Government, or that we gave .a few million dollars to keep the Canadian Northern going for another six months or a year. This Parliament is a dying Parliament. In forty odd days it will have no life, and in three or four months .a new Parliament will have come from the people with a mandate to deal with the railway question. My time is up.


Mr. D. D. McKENZIE (North Cape Breton):: The question which we have to

consider is so large that one approaching it with a time limit of twenty minutes finds himself somewhat in the position of the boy in the old adage who proposed to storm Gibraltar with a pistol. Time seems to be precious to the present Government, and I do not blame them for feeling at this stage of their existence that time is getting to bs of the essence of the contract. We are told that there are certain species of spirits and devils that can only be handled and dealt with by prayer .and fasting, and I suppose the Government realize that if they are to save their political souls, all worldly affairs should be put on one side as quickly as possible, and prayer and fasting he the order of the day for the few remaining days at their disposal. That is the only excuse which I think I could plead on behalf of hon. gentlemen opposite, for tying the people's representatives in this Parliament down to a time limit of twenty minutes. We have been pressing them hard for the last six months or so, to put the millionaires of this country within some certain limits. We were trying to get them to cut down certain, lords and dukes in this country who are paying their way into titles of that character, according to the lore we get from the Imperial Parliament. We were asking that they be put upon a certain limit; but they had the cash, they had the pull, they had the power and the. privilege, and they have been permitted to go on; some of them making $5,000,000 of profits out of the poor people of this country within a comparatively short period. While the power of closure was in the hands of the Government, and in the hands of the Minister of Finance, to put a closure on the profiteers of this country, they took mighty good care not to exercise it, because it would interfere with business and profits, and emoluments, and privileges, which they hoped to enjoy under the wing of these characters at a later stage of the game. When it comes down to the representatives of the poor people of this country, men*who like myself are here untrammelled and uhr [DOT] chained, free to speak for the poor people of this country, the Minister of Finance does not turn a hair in putting the closure on me quickly, confining my whole privilege to twenty minutes or less i.n dealing with such a great subject as. this. The question of time has a peculiar turn in the hands of the Government. When it is a question of five years of Government, why it is but as yesterday in their eyes. It is like a vapour which appears for a little while and

then passes away. In their eyes it is as a snowdrop in the river, a moment white and then melts forever. But it is another thing altogether when it comes to deal with time in respect to their friends who are paying the penalty in jail for their rascalities. That is a different thing entirely. Then a day becomes as a thousand years, and the Minister of Justice goes around with tickets-of-leave and a	year	of Jubilee in	hispockets, by which the doors of the jail are opened and those culprits are let loose upon an, innocent people. When they find the country may be against the proposal they bring down, and the wrath oi the people is about to break forth upon their heads, and when they know that proper and free voice of Parliamert in putting	the	facts	before	the peopleis adding	to	their	danger	and	cutting short	the	time	within	which	thestorm will break upon their heads, they resort to this alternative of cutting our time down to a miserable twenty minutes. Why, Sir, on the question of time, the only act of constructive statesmanship that stands to the credit of the Minister of Trade and Commerce for his six years of office is an effort to interfere with time and daylight. So, they are experts on the question of time. The hon. Minister of Trade and Commerce, finding time heavy upon his hands, and finding that the conditions arose under which he and his Government must go and give an account of himself to the people, he tried to strike on a scheme that might add a little to their time, and he started to put back the clock. The clock would yield, of course, but he found that the roosters of this country, who were in the habit of crowing at four o'clock in the morning, refused positively to crow at three. The hon. gentleman who has been accustomed to globe-trotting during the last few years, and knowing the crowing time of the rooster in India, the rooster in England, the rooster in California, the rooster in the New England states, and in New Zealand and in Australia, knew they were crowing at very different times, and he thought it would be well to introduce an Act that would bring about an amalgamation of the crowing of roosters the world over. In this, however, he failed. He found that he had to give it up, for the rooster put down his legs at an angle of forty-five degrees and said:	"This far
shalt thou go, and no further." The Minister of Trade and Commerce has found after all his efforts that he had to come hack to the Minister of Finance and say: "I have failed in commanding the other
crowing birds, you are the only bird that crows at will, and you will have to go to it." This was done, and the Minister of Finance crows on every occasion. He crows with his hat on, and he crows with his hat off. The Minister of Finance also crowed over the Secretary of State-and let me congratulate the Secretary of State, now that I have for the first time mentioned his name in that capacity. This is a union government we are having now; a union in the sense of concentrating half a dozen offices in the one man, as they evidently cannot get anybody to step aboard the ship in her present precarious condition. When the Minister of Finance was crowing in praise of the Secretary of State, then and now the Solicitor General, there was no stint in his crowing; and let me give him at least one consolation, that whatever else may be questioned about him he is the boss bully of the crowers of the whole aggregation and federation of the universal combination of the financial roosters. He is the financial crower of the roost. [DOT] He crows when he has money; he crows when he has no money; he crows when he pays low interest; he crows when he pays high interest; he crows when he is going to get the Canadian Northern on the bargain of 1914, and says that it is absolutely and completely good, and that nothing can be comparable with it in the heavens above, in the earth beneath, or in the waters under the earth. You would think nothing could be more lusty than such crowing, tout he comes down in three years, at another time, when there is another bargain made, and the crowing of 1914 is put absolutely in the shade by the crowing in regard to the new bargain. So you do not know when to put any confidence, or trust, or finality, in the crowing of the Minister of Finance. He crows for reciprocity, and he crows against it. He crows for free wheat, and he crows for no free wheat. In all those cases we have at least one consolation to offer to the Minister of Trade and Commerce that while he might not be able to control the fantastic notions of time as carried in the breasts of ordinary birds, he has one bird on a string that answers his every pull, and crows for the Government at every hour of the day and at every hour of the night. So much for the question of time.
We have no evidence before us to-day, and we never had any evidence that Mackenzie and Mann wanted this transaction at all. My right hon. friend! who' leads the Opposition asked that a committee toe appointed before whom Mackenzie and

Mann or their representatives -might appear and be questioned -about the transaction, giving us, as one man to another, the condition in which the road stood or in which it stands to-day, so that we might know whether or not it was necessary for the people of this country to burden themselves with the enormous debt they are asked to assume. The Prime Minister said he would take the matter into consideration. This was in the early stages of the Bill. Nothing -can be more satisfactory in negotiating a bargain of this kind than to have the parties face to face. Reports are good enough, but reports are prepared for a purpose. Reports are prepared and are put on the table of the House supporting the bargain and putting it in the best light it can possibly be put. There is not a man in this House who is doing business for himself who would be satisfied with information of that kind. For instance, if he were buying a house, or buying land, or buying a railway, he would ask the seller to come before him and lay all his cards on the table face up, and state clearly and definitely what was the nature of the transaction into which he asked the purchaser to enter. That would have been the proper course; that is what the people would have expected. 1 appeal to hon. gentlemen opposite along business lines, and I ask them if they are prepared to go back to their people and say: We have been asked to buy a railway which involves you in a debt, an undertaking on account of principal money, of something like $650,000,000 and a yearly expenditure of something like $30,000,000 or $40,000,00 to keep the enterprise going. If they tell their people that story, and if their people are intelligent, as I presume they are, they will ask them: Have you inquired into this matter; what sort of a bargain have you made; are you getting value for the money that you are spending; is the transaction one in the interest of the Canadian people? And these hon. gentlemen will have to say in reply: We know nothing about it except what we have learned from the reports which have been laid on the Table. But nine-tenths of the hon. gentlemen who are voting for this Bill and supporting the Government have never read a line of these reports, or, if they have, they have not read enough to give them any conception of what kind of a bargain this is.
I submit that we have not the knowledge of this business that we should have before entering upon such a huge undertaking. I submit that this Parliament at this stage 
should not be entering upon this transaction. We were elected in 1911 to serve the people for five years and to look after the affairs of Canada. In 1911 such a question as the public ownership of railways was not before the people. There was not a word about it. I have no mandate to talk here upon any question, or to support legislation, or to impose new responsibilities on the people, with regard to matters that were never discussed when I was elected to this House. Up to the end of our five years' term there had been nothing said about the question of the public ownership of railways. Our terms were up and under ordinary conditions we should have gone back to the people for a new lease of power to ascertain what their will was. The plea upon which an extension of time was given to the Government is well known to the people. It was given for the purpose of looking after war conditions and nothing else except the ordinary routine business of the country. I submit, Sir, that we are here now by virtue -of our own vote, by our own authority, and that we have no business to start out upon new and unbeaten paths and strike out upon a policy that never was submitted to the people. When this question came before the Government the business answer to the parties interested woulc^have been: We are here by virtue of our own votes, we are here simply for .a year helping along war conditions, and it is not our right to start out upon a new condition of things which was never submitted to, and never approved of, by the country. Instead of that, we are launched upon this new idea, this new experiment.
Hon. members from the province of Ontario have always said that the Intercolonial was- a failure, that it was a millstone around the neck of the country, that it was a drain on the federal treasury, and I am sure that I can gather from their speeches that they would all be willing to get rid of that railway proposition. If that has been the experience of hon. members in this House with respect to the Intercolonial-I do not agree with their position at all-why then, without consulting the people, and with the meagre information we have before us, are we launched forth upon a project which means the taking not merely a line of the length of the Intercolonial but of nearly nine times the size and fifty times the obligation upon the treasury of this country which the acquisition of this road implies? That is a reason why we should not be launched upon this new idea and policy until we have had an

opportunity of consulting the people about it.
While the government ownership of railways may be all right in itself, I am not at all in favour of it. I believe that the success of any enterprise is more assured in the hands of private individuals than in the hands of the Government. We have the example of the Canadian Pacific Railway itself. It is not a government-owned railway. I cannot talk from experience very much about this railway but a number of speakers in this House have claimed that it is the greatest success among enterprises of its kind to be found anywhere in the world. If that road has been such a great success and such a great agency in the development of this country under private ownership, if it is getting along and paying back everything that it has a right to pay back to the Government, and if it is paying its way splendidly as it goes along under private ownership, what is the matter with another road alongside of it and passing through much the same territory, if kept within proper limits, operated under private conditions and by proper management, making the same success as this great undertaking? The experience in this country is that you do not find enterprising and far-sighted railway men conducting railways under public ownership. Apparently the reason is that personal advancement, as a result of ingenuity and enterprise, is not so rapid or assured on a government-owned railway as it is on a railway which is privately owned. Anybody who has managed a railway will agree with me that if a railway is looking for a first-class live manager it will go to a privately owned road where personality and individuality in the management are encouraged. One of the great drawbacks in connection with the governmentrowned railway is that men who are hired by the Government simply become a part of the machinery and move along at the slow pace that that machinery demands. Be that as it may, I want to point out that if we were going to take this road over we should have done it under the conditions and arrangements that were made in 1914. Then we had the assurance of the Prime Minister, the Minister of Finance and the Solicitor General that everything was in readiness to take the road over if default should be made. I want to impress upon these gentlemen who have put their words on record and given us that assurance that the people expect them to carry out their promise. They were acting
for the people of this country and they have no right to change the conditions of the agreement of 1914 without consulting the people.
The Secretary of State, who was then in charge of this measure, said that everything that the Canadian Northern owned had '[DOT]been put in the hotchpotch, absolutely under the control of the Government. There it stood; out of that it could not go; if default occurred, we had the whole thing. We hold hon. gentlemen to that bargain; if they make a worse one, they are not keeping faith with the country.


Some hon. MEMBERS:: Time.
Mr. MeKENZIE: I am sorry that my time is up, for I have done nothing more than touch upon this great question.


Mr. GUTHRIE:: I rise to give the conclusions which I have reached in regard to this important measure. I agree with the last portion of the remarks of my hon. friend (Mr. McKenzie) who has just spoken I so voted on the amendment offered upon the second reading of this Bill by the member for SouEh Renfrew (Mr. Graham). I thought that the legislation of 1914, particularly section 24, was binding upon me as a representative of a constituency in this Dominion. When the statute of 1914 was placed before the House it was made in very express terms, so express as to take away what might be the' ordinary rights of mortgagors before the courts of law and equity of the land. That section provided that in the event of default the Government of Canada might take over the road, foreclosing absolutely all rights of the proprietors of the road, and of other - persons if any, notwithstanding any statutory enactment or any rule of law or equity to the contrary. In view of that enactment, I felt it was my duty to vote for the amendment proposed to the motion for the second reading of the Bill. But this House saw fit in its wisdom to defeat that amendment, and I have now to decide, according to the best judgment that I can exercise on the matter, what disposition should in my opinion be made of the Canadian Northern railway, having regard only to the interests of the people.
I believe that the people, had they had an opportunity of expressing their opinion upon the question, would in very large majority support the proposal for government ownership of the Canadian Northern railway at the present time. I know that that is the feeling of {he people in that part

of Ontario from which I come. The people believe and I believe that the time has come when the Canadian Northern railway-should be taken over by the Government, whether in pursuance of a definite policy of government ownership, or merely on account of the financial assistance that we have hitherto given that road. It is true that there are other ways of dealing with the Canadian Northern railway. There is the method of putting the road into the hands of a receiver, who would attempt reorganization of its affairs. I would not hope for any good results from such a proceeding. The first difficulty that the receiver would meet would be the question of additional capital. The infusion of new capital is necessary before reorganization of the road can be attempted, and if the figures submitted to the House are correct -and I believe they are-any new capital taken in would come from one source only -the Government of Canada. I believe that tile Government has already a sufficient investment in the securities of the Canadian Northern Railway Company. I do not, therefore, favour receivership. Then there is the method of proceeding under the winding-up clauses of the Railway Act. That does not commend itself to my judgment either. True, it is a logical way of proceeding; in ordinary circumstances it would be the proper way of winding up such an enterprise. But the ramifications of the Canadian Northern Railway and the amount of capital involved are such that this method would he too slow, too tedious. Moreover, when the road should be offered for sale under the Exchequer Court judgment, only one corporation in Canada would be in a position to buy it. For these reasons, I do not favour proceeding under the winding-up clauses of the Railway Act. There i6 no other alternative than that proposed by the Government.
'The Government's proposal is not as good as the proposal embodied in the amendment of the member for South Renfrew, but, believing as I do that the Government's proposal means the nationalization of that road, its acquirement and operation by the people, I feel bound to support the Government in this measure-having regard to the fact that the proposal which I myself would have preferred has been voted down by a substantial majority.
I have no fear for the result of an arbitration; I believe that questions are, perhaps, more fairly arbitrated than they are judicially decided. I am con-

fident that the arbitrators will arrive at a conclusion fair and adequate as between the py-ties. If the proprietors of the Canadian Northern Railway still have a real financial interest in this road, I do not believe that any man would seek to deprive them of it. If they have no financial interest in the road-and the Drayton-Acworth report says that they have none-then the arbitrators will so find. I cannot conceive that uny injury will be done to the people through submitting to arbitration the question of what interest the proprietors still have in the road. This legislation eventually will vest the road in the people of Canada; it will be part of a Government-owned system. The people whom I represent feel strongly on the question of Government ownership of railways. While I believe that we might well have depended upon our statute of 1894, and the covenant of the proprietors of this road, I am quite satisfied, in view of the fact that that proposal has been rejected by a majority of the House, that the present proposal should become law.


Mr. L. A. LAPOINTE (St. James, Montreal):: I feel constrained before the Bill passes to say a few words in explanation of my attitude towards it. The district which I represent should, it seems to me, express its opinion upon this measure through me as its representative. I first desire to take exception to some statements made by the Minister of Finance (Sir Thomas White), who on one occasion said when discussing the measure:
* The fundamental issue of the transaction which is now before the House is that the Government of Canada is acquiring a great railway system. It is the beginning of public ownership of Canadian railways-I do not say of all Canadian railways; hut it is a great step forward.
I take exception at once to this proposition of the Minister of Finance, because I believe that the nationalization of one railway at a time, and another railway at another time, is wrong, although I would be inclined to the opinion that it would be a good thing, and in the interest of the country at large to nationalize all the railways at the same time. If you begin by the nationalization of one railway or another, it means the competition of public money against private enterprise, so that the money of the people will be spent in operating a railway to compete with anotheT railway which is run by private investment. This idea is condemned, even in a country, like Australia, where everything has been nationalized. They took one great

railway man from Montreal, Sir Thomas Tait, to effect the nationalization of the Australian railways, and he has made a great success of the nationalization of the railways in that country. My first objection, therefore, is that I think it is a mistake to attempt to nationalize only one railway. My second objection is to a statement of the Finance Minister when he says:
The question of purchasing the $60,000,000 stock owned by the majority shareholders is really a secondary and subsidiary question.
A secondary question, a mere bagatelle, a small affair, and the minister does not seem to care. He proceeds .to say:
We must acquire the $60,000,000 par value of the Canadian Northern stock, in order to get control of the system.
I differ from the Minister of Finance. He knows perfectly well that it is not necessary, under the circumstances, to buy $60,000,000 stock of the company in order to get control. He has been connected with many companies where there must have been disagreements among shareholders, and in which somehow or other one party of shareholders got control of the majority of the stock. I think the Finance Minister is wrong in arranging to buy $60,000,000 of stock of the company. Immediately before the words "$60,000,000" in the Bill we find the words "par value" in brackets, par value would mean $100 a share, and this might be taken as a suggestion to the arbitrator that that figure might be fixed at par value. I differ with the hon. minister because I believe that no practical man would make such an arrangement as is set out in this Bill. I would advise the minister, in the circumstances, to expropriate from Mackenzie and Mann, who have in round figures $58,000,000, the amount of such stock which would be sufficient to give the Government control of the railway. The Minister of Finance holds, in trust for His Majesty, $40,000,000 stock in the railway. That represents 400,000 shares. A practical man would say that, as [DOT] the Government has already 400,000 shares, they would simply acquire sufficient additional stock to give them control of the road. Why should the Bill not read in this way:
His Majesty will acquire 100,000 shares and one share more.
One hundred thousand shares would mean $10,000,000, and one additional share, $100, would give the Government control. The hon. minister understands that calculation very well, because he knows that one share additional will carry control. The hon. minister proceeds with this Bill and pays
no attention to the argument of my hon. friend from Calgary (Mr. R. B. Bennett) about the pledgees. Hon. members heard the great opposition that he made to the word " pledgee." What does that mean? Did the hon. member for Calgary know that Mackenzie and Mann held $58,000,000 of the stock, and that the Government required $51,000,000 to get control; that, besides, there was $2,000,000 held in hand for certain officers or employees, that there was $1,600,000 deposited in the province of British Columbia, and $4,014,000 held by Mackenzie and Mann, Limited, pending uncompleted financial arrangements for distribution? What does this $4,014,000 mean? It would not harm Mackenzie and Mann if the Government had said: "We will take this $4,014,000 of stock." It would have left only $7,000,000 to be expropriated. I do not concede there is any value to that stock. But we have never heard that Mackenzie and Mann put any money in that enterprise. The stock came to them in the ordinary way as promoters, I suppose. They first allotted to themselves $10,000 worth of shares each; $10,000 to Mr. D. B. Hanna, and $10,000 to Mr. E. R. Wood. Mr. R. J. Mackenzie has $10,000 worth of stock and Mr. Z. A. Lash, whose name has often been mentioned here, has only $2,000 worth, and several others have also $2,000 each.
You will not, by expropriating 100,001 shares, put these men into bankruptcy. They will hold the balance of their shares just the same, hut we may punish Mac-zenzie and Mann who are both guilty in this affair. We shall take away from them in round figures $10,000,000 worth of stock, and they will not lose one cent by the transaction.
I call attention to these remarkable words of the Minister of Finance in one of his
speeches:
This transaction, although it is a large one, is a comparatively simple transaction.
In the first place he said that it was a large one. Yesterday he said that it was a secondary affair, a mere bagatelle. Yes, a very simple transaction to put on to the shoulders ef the taxpayers of this country a burden of millions of dollars when he had this opportunity, as he himself explained in the same speech:
The Dominion Government is already

and this fact, I am afraid, is lost sight of in this House-the owner of $40,000,000 stock of the Canadian Northern Railway Company; that is to say, we are a minority stockholder in that company. There are $60,000,000 par value of shares still outstanding. Instead of con-


Some hon. MEMBERS:: Time.


Louis Audet Lapointe: Wait. I am not through with you hon. gentlemen who call out "time" and "gag." Although you may gag me to-day, there is one thing we are sure of, you will, as a moribund Government, have your turn.


Joseph Hormisdas Rainville: Order. The hon. member should address his remarks to the Chairman and not to hon. members.


Louis Audet Lapointe: When I am addressing the Chairman of the Committee, I am at the same time practically addressing the Government. You, Sir, will call me to time in a few minutes. Remember, Sir, that you will soon have the "gag" yourself. On the 7th of October next the Government will have the gag; they will have to go to the country as they should have done long ago. The audacity oi a government to propose such measures on the eve of an election is-well, I leave it to you, Sir, to say. The people will speak at the proper time and will say exactly what they think of such an important transaction being undertaken in the last moments of a moribund Government and a moribund Parliament. I cannot speak to any elector of any constituency in Montreal who does not put this question to me: When is the election coming on? Are this Government going to dare to do anything before they come before the people? Yes, the Government are ready to do anything, because they believe that after themselves there will be the deluge.
At six d'clock the committee took recess.
After Recess.
The committee resumed at eight o'clock.


Mr. LAPOINTE (Kamouraska) (translation) :: Mr. Chairman, my most serious objection against the Bill now before us is similar to the one which I, raised against the Conscription Bill passed in the course of this session.
Parliament, as it is now constituted, has certainly no authority to adopt a measure of such an extreme importance. We are now sitting, not in virtue of a mandate from our electors, but by reason of our own act, ratified, it is true, by the Imperial Parliament, but unsanctioned by the popular will. Those who are sitting with me on this side of the House know that, last year, I was far from favourable to the proposal of extending the life of the present Parliament. However, as it appeared to be the desire of the majority of the people in the other provinces of this country that there should be no elections during the war; as such a representation was*made to us, we did not want to be alone to oppose what then seemed to be the will of the people or, at least, what was represented to us as being the popular will. As my colleagues,

I voted in favour of that extension, but upon one condition: It was then stated to us and we were promised by the Government, by the Prime Minister himself, that, in this Parliament the life of which was thus prolonged, no contentions measure (would be submitted to the House; that we should only take up measures having some connection with the war and of such a nature that they could command the aid and obtain the support of all the members of this House. We have assented to that extension by reason of that promise on the part of the right lion. Prime Minister and in pursuance of a well defined agreement. The present Parliament does certainly not represent the majority of the country. It is not a representative House. There are at least twenty-five vacant seats. Several members are drawing from the Government salaries for military or other functions; twenty seats and over should be, in pursuance of the redistribution Act, passed a few years ago, now occupied by representatives of the people, but they are not, and I think I might well quote these words applied by a French writer to the French chamber of deputies at a certain epoch of its history: "The nation is reflected in this House as in a broken mirror." Under such conditions, is it fair, is it reasonable, is it constitutional, is it even decent to come to the House of Parliament and ask them to adopt a measure whose effect will be to increase our national debt by an amount of $653,246,949.39, according to statistics compiled by my hon. friend from Pietou (Mr. Macdonald), which were laid before the House yesterday, an increase which will carry this country's total indebtedness to the fabulous total of $2,248,538,000.41.
I contend that this House has neither the mandate nor the authority to pass such a measure.
Now, this action on the part of the Government- becomes even more arbitrary when it is accompanied by the rigorous application of the rules of this House which are actually imposed upon us. It is assuredly tyrannical-I believe the word is still within the limits of moderation-to employ the gag in order to have such a measure passed by a Parliament such as we constitute just n-ow.
What did the Prime Minister say on August 7, 1917, when the resolution preceding this Bill was introduced into this House?
The leader of the Opposition asked that a committee be formed in order to consider the very proposal now before us. And the Prime Minister said:
What I suggest to my right hon. friend is to study and perhaps to adopt the proposed resolution in Committee of the Whole. Then, we could examine his idea before the second reading. It is desirable, of course, that all the necessary information in connection with the matter should be supplied, but the debate which will take place on the proposed resolution may also take place in committee, after the second reading. There is no reason why it should not be done in either case.
Mr. Chairman, it was upon that promise from the Prime Minister that the House assented to the adoption of the resolution in the committee, and, when we did come to that stage in the Parliamentary proceedings, where the Prime Minister said we would have all the required latitude to discuss this Bill, scarcely had three or four members, on this side of the House, criticized the proposal, when the Government imposed the closure o,n us and prevented any further speech on our part.
When, for the first time in Canadian parliamentary history, this Government had the regulations of this House so revised as to have the right to impose closure and restrain the freedom of speech of which we had always been so proud, in the course of the observations I then made upon such a proposition, in 1913, I spoke as follows:
The resolution which we are asked to pass will put in the hands of some ministers a dangerous weapon. That weapon will be still more dangerous when such ministers owe their position to lobby wire-pulling, to services of a suspicious character ,to a deep knowledge of intrigue.
. (Mr. Chairman, (I did (not .believe, or rather, I foresaw even then what might happen after such a tyrannic resolution as the Government forced this House to adopt, and what we are having here to-night is the result of the attitude then taken by the Canadian Parliament. 'There is an attempt made, Mr. Chairman, to prevent the discussion, on its own merits, of the Government's proposition, 'by putting up the theory of the nationalization of public utilities and railways. As far as I am concerned, I am not an out and out supporter of State ownership, probably because I have known too much about the Intercolonial administration. I represent a county tributary to the Intercolonial and I have always lived along the Intercolonial, I am conscious of all the drawbacks inherent to that system. Many object to a railway being administered by the Government service. In theory, it may be possible that, under certain conditions, such -a system would prove advantageous, but why discuss to-day that phase of the question, when the members on this side of the House have not attacked the principle of State ownership, but have rather assailed this


Mr. GRAHAM:: Before this Bill is finally rammed through committee I want to say two or three words. I expressed my views fairly explicitly, I think, on the second reading of the Bill, but I consider this an opportune time to emphasize very briefly what I have perhaps -said before. We have heard a good deal about the nationalization of railways. The Government has harped on that string pretty strongly at times, but I am not sure that, if the acid test were applied, my hon. friend the Minister of Finance would prove to be a public ownership man himself. I should not like to crowd him too closely for fear he might fall from grace and express his real view-s on this question. The

nationalization of railways and of all public utilities is a policy that has made rapid advancement, and possibly Ontario is as far advanced in that line as any of the provinces, but I submit that the question of the nationalization of the Canadian Northern Railway plays but a very small part in the considerations which led up to the taking over of this system. The railway situation in Canada is one that demands attention. It has been pointed out by several hon. gentlemen that there are two or three ways in which relief can be afforded or a remedy applied. Speaking for myself, I am not averse to the taking over of this system under certain conditions. If the Canadian Northern were paying its way at the present time, I would urge the postponement of consideration of taking over the system at least till the war was over, and we had some idea what our future responsibilities would be. I am inclined to think, although we have no proof that Mackenzie and Mann themselves have asked for this legislation, that the Government would either have had to give them a grant or make some other disposition of the system.
As outlined in -what I had the privilege of stating in this House some days ago, I am rather against the idea of a receivership. I know that a great many of the ablest financial men in Canada take a different view-at least I have been very sharply criticised in correspondence for taking the position I did in regard to a receivership. Still, as the governments, both federal and provincial, have guaranteed many of the securities of the road I cannot get away from the idea that it would not be a good thing for Canada just now to allow a system whose securities we have guaranteed to get the name of having gone into the hands of a receiver.
Now we come to what has been done. I have no hesitation at all in saying that I oppose this measure, and am prepared to oppose it at every stage unless the Government will take some other method of transferring the Canadian Northern system to the people of Canada. It has been argued very strongly by some hon. gentlemen that it would be unfair to take the property of any man without giving him an opportunity at least to state his claim. That in itself sounds fair, but in this case the company has contracted itself out of any claim, and has done so knowingly. It did not make that contract without a price, and the price was the guaranteeing of bonds, by the Government to the amount of $45,000,000. This

question seems to- have got so far into the political arena that hon. members of this House who ordinarily view affairs from a business standpoint decline to consider this question as a business man- would. If such an agreement had been made between any two men in this House it would have been carried out without any question of hardship arising; the contract would have been carried out as a matter of course. The argument has been made, and has been dilated upon, that the legislation of 1914 did not contemplate the taking of the equity of redemption without compensation. For the life of me I cannot see how any person can consistently argue that; for every utterance by members of the Government that has been quoted in this House from Hansard points in exactly the opposite direction. Over and over again the fact was impressed upon us in thi9 House that if the legislation of 1914 were allowed to go through, this country, through the Government, could without process of law take possession of the Canadian Northern system should default take place. The Government had that contingency in its mind, because in the Act of 1914 it provided the whole machinery by which the road could be kept running after it had -been taken over on default.
If hon. gentlemen will read section 22 they will instantly see that it provides for the operation of the line. So, clearly, there was no question in the minds of the Government as to what would happen if default took place. If the Government's present contention were correct, it would not have provided that machinery, but would have waited * until to-day to do so. Let me read what section 22 says:
Upon the happening- of any event of default and at any time or times while the same shall continue, it shall be lawful for the Governor in Council after such notice to the Canadian Northern as the Governor in Council may direct, to declare to he vacant the offices of the directors of the Canadian Northern and of any of the constituent or subsidiary companies which may he subject to the legislative authority of the Parliament of Canada, and to appoint a board or boards of directors in lieu thereof respectively (any former director being eligible for appointment).
2. The power of appointment herein conferred upon the Governor in Council shall he a continuous power and shall be exercisable from time to time and so often as any event of default may exist and be continuing.
I want to call the attention of the committee to the fact that the Government not only provided for the taking over of the road, but provided in detail in the statute all the machinery for taking it over auto-

matically. Nothing can be clearer. It was distinctly understood by the Government and by every member of this Parliament that the Canadian Northern contracted itself out of any equity of redemption in the stock.
But let us look at the marginal note on section 24. The legal officers of this government surely understand what they are doing, and in a marginal note they interpret the section. Let me Tead the interpretation placed by the (Government of Canada, through the officers of the Justice Department, I presume, on section 24. The marginal note is: "Equity of redemption foreclosed on default and vested in His Majesty." As a layman I need not argue any more. I submit the interpretation put upon section 24 by the Government officers themselves is full justification for the statement that in the passage of this Act of 1914 the Government never dreamed of giving any person anything for the equity of redemption in this stock. Let me go a little further. There is in this Act the word "pledgees." It may seem insignificant, but the hon. member for Calgary (Mr. R. B. Bennett) put his finger on the spot the other night. I submit, Sir, that if there were no pledgees of this stock there would be no legislation of this kind this session, but that the statute of 1914 would be carried out as it was to be carried out, and the property of this company would be the property of the people of the Dominion of Canada through the foreclosure provided under section 24 without process of law. The common stock of the Canadi m Northern Railway system has been pledged for certain loans, and the enactment we are now discussing is, in my humble judgment, to provide that the security which at the present moment has no value and is held by those pledgees shall be made valuable through this legislation. I submit further-and perhaps I may take issue with some of my friends on this- that the arbitration clause in this Bill is not for the benefit of Mackenzie and Mann, but for the benefit primarily of the pledgees to whom Mackenzie and Mann have pledged this stock. Without this legislation that stock would probably have no value for many years to come. The Drayton-Aeworth report provides for Mackenzie and Mann as individuals by suggesting that a certain amount of the common stock of the Canadian Northern Railway system may be given to them. This would be common stock to be issued by
the company formed under the recommendation of the commission, but it would be common stock of the Canadian Northern. They suggested that to recompense Mackenzie and Mann as individuals for the work they have performed, a certain amount of this stock might be given them, and while this stock was not at present valuable it was their hope and their belief that in the years to come it would be of some value, and it might serve as a recompense to Mackenzie and Mann as individuals. That, however, would not have suited the occasion, and the pledgees would not have an actually valuable security, consequently, Mackenzie and Mann are an excuse, but the pledgees are the real men behind the guns. I am talking very plainly, because I believe what I say to be the truth. If the Government had desired to give Mackenzie and Mann something as the holders of this stock, they should have done it directly, in a moderate way, or made a suggestion to that effect, and allowed them something for the great work they have performed in the building of this road. But that would not have protected the pledgees, and the common stock those pledgees hold now as collateral for a big loan would have been worthless, and it would be the bankers, not Mackenzie and Mann, who would have to lose. I submit again, this legislation is for the protection of the pledgees rather than for the protection of Mackenzie and Mann as individuals. I believe that under the legislation we are now passing the pledgees will be entitled to have a say in the appointment of the arbitrators. Consequently, the men with whom we are dealing for five-sixth of this stock are not Mackenzie and Mann, but are the pledgees of Mackenzie and Mann, and they will have more to say about this arbitration than will the principals in it. I do not know how much this arbitration may award; it may be a large amount, but my hon. friend from Calgary asked the Government the other night if it would not be wise to make a provision in the Bill by which the Government might refuse to accept the award of those arbitrators if it were considered extravagant. If my memory serves me- and I think it does-some member of the Government intimated that this would not be an unwise provision, but so far I do not see anything to show that the Government is going to put it into effect, as I believe it should do. This arbitration may bring in an award of $40,000,000 or $50,000,000. There is nothing in the directions given to the arbitrators to prevent them from coming



to such a conclusion. I asked the Minister of Finance about a certain report that had been made by the directors. That report *will undoubtedly come before the arbitrators in some way, and if it is of the nature I believe it to be, it might possibly influence the result of the arbitration to a very marked degree. I shall not discuss the personnel of the board. I have been told that Chief Justice Meredith is to be a member of it and that Mr. Lash is to be a member. I do not know whether that is correct or not. I will say, however, that I am entirely against this proposal as it is put forward. I believe the time was opportune and ripe for taking over the Canadian Northern under the contract we made with them and they made with us, which was set forth in the statutes. That is the only way the road should be taken over. As I said before, I am very firmly of opinion that if there had been no one but Mackenzie and Mann in question-if there had been no pledgees *-this property would become ours in virtue of section 24, which provides for foreclosure without process of law. My objection is just as strong to the method of taking over the road as it was in the first place, and it will continue to be so until this Bill passes out of the House of Commons. I shall have to sit down very shortly, but before I do so I wish to point out that the Hudson Bay railway now beinj^ constructed by the Government will form an integral part of the Canadian Northern Railway system. These two systems will connect at Le Pas Mission by a bridge constructed over the Saskatchewan river, and the Government taking over this system may be in a position to save monty in the construction of shops on the Hudson Bay railway; in other words, it may make some difference, if those two systems are connected, if the shops were located to serve both systems. At the present time the Hudson Bay railway is a separate entity, and would probably have those shops and all the machinery and overhead expense by itself, part of which might be saved if it were operated in connection with the Canadian Northern railway. I have no more to say, and I would not be allowed to say it if I had.


Mr. J. J. HUGHES (Kings, P.E.I.):: Mr. Chairman, I desire to say a few words on the proposition now before the committee from the point of view of the ordinary citizen and taxpayer-the man, after all, who is going to pay the shot. There are certain

facts and circumstances in connection with this matter which enable one to form a fairly correct conclusion in regard to it. One of these facts is that Messrs. Mackenzie and Mann, who built this great line of railway, have not put one dollar of their own money into the enterprise. They have built it with money obtained from the people in the form of land grants, guarantees given by the provincial governments and the proceeds of bonds sold in the markets of the world, a large part of th'ese bonds being guaranteed by the Government of Canada. They employed the money raised in these various ways in the building of this road. In the construction of the road Mackenzie and Mann, beingthemselves the contractors and having no competition, made -very large fortunes. They are very wealthy men apart altogether from this railway system. They are said to be multi-millionaiies, and to have vast sums invested in various enterprises in Canada, the Argentine Republic, Brazil and Mexico. They have money invested in coal mines in Nova 'Scotia, timber limits in British Columbia, and street railways in various parts of the country. No matter what may happen to the Canadian Northern system, they are wealthy men. No matter what becomes of the common stock, they are rich and the people of Canada who have provided all this money owe these gentlemen nothing. Since this Government came into power the Canadian Northern Railway company has received from the public in one way and another some $76,000,000. I think it was in the session of 1912 that Parliament gave them a grant of $16,000,000, in round figures. Last year they received another gift of $15,000,000, and in the session of 1914 there was a guarantee of bonds to the amount of $45,000,000. That guarantee has been considerably discussed and it is known to every man in this House that at the time that legislation was passed the power was taken by the Government, in the event of default by the owners of the road, to take the road over without any responsibility therefor, or any legal proceedings. My horn friend from South Renfrew (Mr. Graham) stated, on his knowledge and on his responsibility as an ex-minister of the Crown and a member of this House, that proceedings would have been taken in the way provided for by the legislation of 1914 to obtain possession of this road if it were not that influential men in this country, who are near to and have close connections with this Govern-

ment, and who are the pledgees of this common stock, would not stand to benefit largely unless the common stock were given a value.
In June, 1916, the Government appointed a commission to ascertain what this railway system and the common stock were worth. Mackenzie and Mann had issued $100,000,000 of common stock against this railway, $40,000,000 of which the Government holds and $60,000,00 of which is held by Mackenzie and Mann, but is now pledged largely to the Canadian Bank of Commerce. This common stock never cost Mackenzie and Mann or any other person one cent. The commission appointed by this Government to inquire into the value of this road and of this common stock reported that the stock was worth nothing. That was the report of Sir Henry Drayton, the chairman of the Railway Board, and Mr. Acworth, an English gentleman of large railway experience and financial knowledge, the best man that the Government could find for this work. Not only did these gentlemen report that this stock was worth nothing, but they also reported that the known outstanding liabilities of the railway, which the Government are assuming, amount to some $68,000,000 over and above the total value of the railway. That report not being satisfactory to the Government, and probably not being satisfactory to the pledgees of this stock, the Government is proceeding to appoint a commission to give this stock a value. Whatever value is given to it the people will be just that much out of pocket. It is said that the Canadian Bank of Commerce is the holder of $51,000,000 of this stock, and, that being so, the Canadian Bank of Commerce is very materially interested in the value that may be placed upon the stock. It holds it as collateral for advances made to Mackenzie and Mann. Whether the money so Taised by Mackenzie and Mann has gone into the construction of this road or not the members of this committee, so far as I know, have no knowledge, and neither the Government nor the Minister of Finance has given that information.
There are large financial concerns in the city of Toronto that are very closely related to each other and closely related to this Government. The Canadian Northern, the National Trust Company and the Canadian Bank of Commerce have interlocking directorates and are all closely associated. The representatives of these interests are the men who will have the appointment of one of the arbitrators. I have said these in-
319i
terests are closely associated with this Government. I have been informed, for in-etance, that the Canadian Bank of Commerce has gone very far in its efforts to assist the Conservative party and to assist this Government, and has used its influence as a banking institution for this purpose.
I am prepared to believe the information that I have received in this respect. As a matter of fact, I know that the Canadian Bank of Commerce, at least in some instances, has undertaken to say who shall and who shall not be members of this House. They have, in some instances at least, used their influence as a banking institution to hold over citizens of this country engaged in commercial enterprises the threat that if they exercised their political rights as free citizens they would incur the displeasure of that institution and would be seriously injured in their commercial operations. In the session that was held here in August, 1914, just after the outbreak of war, the bankers of Canada obtained very large concessions from the Government on account of the probability of adverse financial conditions coming upon the country. The understanding was- I think it was expressed by the Minister of Finance at that time-that the banks should do their duty in endeavouring to carry on the financial business of the country as it had been conducted during the few preceding years. The Bank of Commerce took advantage of the fact that it was the only bank in certain parts of the country, and of the further fact that shortly after the outbreak of war the Canadian banks came to an arrangement among themselves that they would take on no new accounts and they would endeavour to give to their customers so far as reasonably possible the accommodation that they had previously received. The Bank of Commerce, knowing that they had a monopoly of business in some places and that the business of their customers would not, under the circumstances, be taken over by any other banking institution, made the threat, and exercised the power and the intimidation to which I have referred.
The legislation now proposed is largely to benefit the pledgees of this stock and to give it a value, notwithstanding the fact that a commission appointed by the Government, consisting of experienced men from Canada, Great Britain, and the United States, decided that that stock had no value. Now the Government propose to appoint a commission of arbitrators with a view to giving

the stock a value-at the instance, no doubt, of the pledgees, the largest of whom is the Canadian Bank of Commerce, an institution that is using its influence and its enormous financial power in the way that I have indicated. Is there not ample reason for the ordinary member in this House being suspicious of this legislation? We are coming to a condition in this country that will not be far removed from that in which the British people found themselves some centuries ago, when wealthy men and large corporations could nominate and cause to be elected men of their own choice to represent the people in Parliament. If legislation of this kind goes through Parliament; if the financial corporations and interests have it in their power to exercise in this way the enormous advantages which they possess, representative government and the independence of Parliament will not be worth very much in 'Canada. Under these circumstances it is no wonder that the people are alarmed. Every phase of this legislation is open to suspicion. In order to shut off ordinary discussion of this measure ; in order to force this legislation through Parliament, the 'Government have taken the drastic step of applying the closure. This is a time when the people have great reason to be very careful of what is done in this House and in this Parliament. When, after some months, we know what we have to pay for this stock-which a commission of experts declares to he worth nothing- we shall know better than we can know now the influences that are behind this Government, urging them to force legislation of this kind through Parliament, not for the benefit of the whole people, but for the benefit of certain interests in this country.


Some hon. MEMBERS:: Time.


James Joseph Hughes: I -am subject to the Chair.


Joseph Hormisdas Rainville: The hon. member has two minutes more.


James Joseph Hughes: The taking over of this road by the Government under the legislation of 1914 might be all right, but the passing of this legislation and the taking over of the road under the circumstances that I have pointed out is a very serious matter indeed.


Rodolphe Lemieux: I have already spoken on one or two occasions, although not at great length, on this question, but I desire

to make a few more remarks to the committee. First, as to the weapon used in this discussion, namely, closure, I have only this to say, that in ordinary times, in fact at all times, the closure or gag is nothing but a bludgeon to prevent people from expressing their free and untrammelled opinions, but, under present conditions, with a Government represented as it is on the ministerial benches, I am rather pleased to see that they have -adopted this procedure which shows their intention to prevent the country from being informed by gentlemen on this side of the House. We know that closure was introduced in England when the Irish Parliamentary Party were obstructing the proceedings of the House of Commons. At that time the Irish party did not complain of the introduction of closure, because, as Mr. Parnell rightly said, "We will make the world listen to our grievances." I stated the other day that the press of this country had been ominously silent, that it looked as if the press had been bought, body and soul, in order to keep the lid on this transaction; and, after the lobby which has been carried on in this Parliament since the beginning of the session, I understand why the Government is anxious to enforce closure, in order to prevent revelations being made. I am glad that the Government has adopted this weapon in order to sandbag its political opponents at the present juncture, thus the country will be made to listen, and to inquire why this extraordinary procedure has been adopted, when there has been no obstruction within the walls of this House. I listened the other day to the remarks of my hon. friend from Red Deer (Mr. Michael Clark). He said: I am surprised that we are here, after eight months of a session; we should not be debating in -this House, but should be pitching sheaves in the western prairie. He added that he did not understand why all this delay and all this discussion. Let me say, in all sincerity and frankness to my hon. friend, that if there -has been delay the responsibility lies with the Government. The measure before the House, the most important piece of legislation which has been, introduced in Parliament since the Grand Trunk Pacific Bill was passed, has been placed before us in the dying hours of a dying Parliament, and the Government must flDear the responsibility, and not the members of this House who protest strenuously and sincerely against this transaction. I am surprised that a Liberal like my hon. friend from Red Deer-


Mr. GAUVREAU:: He is no more a
Liberal.


Rodolphe Lemieux: -should complain that there is discussion over this transaction. Does he not know that hundreds of millions of dollars are involved in this transaction, and that the Minister of Finance has done us the injustice of not bringing with him, and laying on the table of the House, one bit of correspondence exchanged between the vendors and the purchasers? Who, in the country, will believe that there have not been written documents in the negotiations which took place between the Government and the Canadian Northern Railway company? Do hon. gentlemen believe that the sacred cause of war, of which my hon. friend the member for Red Deer is apt to speak every now and then, is well served by this Government catering to the desires and wants of Messrs. Mackenzie and Mann?
I say that at all times sentiment is, at best, a sorry substitute for sound finance, and the " win-the-war " cry raised in this connection will not impress people because it is only a sham to cover an act of piracy. My hon. friend from Pictou (Mr. Macdonald) asked the other day:	But with whom are you
dealing? I thought it was a very naive question-with whom is this Government dealing at the present juncture? They are dealing with a coterie of knights, most of them millionaires, but willing-anxious, indeed-to add to their millions, some of them banded together to deliberately loot and plunder the Canadian treasury. In the days of real chivalry-and it was in the olden days-it was said that the knights were contributing their blood and the common people their money and their prayers. We have reversed the position nowadays, the people are contributing their blood to the cause of war, but the plumed knights are getting the plums and the booty, and some of them are good enough to give us their prayers. The press has been silenced, and the Minister of Finance was rather short in his remarks to this House when he introduced his resolution. He thought, as a matter of course, so deeply has he been dealing in millions and rnillions since the beginning of the war, that this Parliament was not entitled to know much about this scheme. But more than that, he has even refused an invitation which he received from his home city, Toronto, to discuss publicly at Massey Hall the question now at issue. I have seen in this House men of as high
a stature, politically speaking, as my hon. friend the Minister of Finance. Sir Charles Tupper played a part in the history of Canadian confederation. He was largely responsible for the Canadian Pacific contract, and when the terms of that contract were discussed before the House of Commons in the '80's he accepted the challenge of those two great political giants, Sir Richard Cartwright and Edward Blake, and did not think it beneath his dignity to leave Parliament and meet them in Montreal, Toronto and the large centres in Canada, and discuss with his opponents the contract made with the Canadian Pacific railway. And yet the Canadian Pacific had hardly more importance, financially speaking, than the present proposition. More than $600,000,000 is added to the public debt, and yet my hon. friend who is responsible for that measure refuses to discuss in public in his own city the whys and wherefores of this legislation. He received the following letter from Toronto:
August 17, 1917.
Sir Thomas White,
Minister of Finance,
Ottawa, Ont.
Honourable Sir:-
I have been instructed by Ward 4 Liberal Association, of which I am secretary, to invite you to address a public meeting in Massey Hall on the question of the purchase of the Canadian Northern Railway.
Great alarm has been expressed by the citizens of Toronto as to the proposals of the Government with reference to this purchase, and the interest of the Canadian Banlt of Commerce therein is a matter of much speculation.
If you will kindly advise me what day next week would be suitable, we shall arrange for the meeting.
Yours truly,
(Sgd.) John Callahan.
What was the answer of the Minister of Finance?
Ottawa, August 20, 1917.
Dear Sir:-
I have yours of the 17th instant in which you kindly invite me to address a public meeting on the question of the acquisition of the Canadian Northern Railway system. It does not appear to me that any discussion is necessary as the question is being fully debated in Parliament. I am not aware that there is any public apprehension such as you mention with reference to the purchase, which means that the entire system will be acquired for the people of Canada and will constitute a most important forward step in the direction of public ownership. For your information, I enclose herewith an extract from Hansard showing the remarks of your leader, Sir Wilfrid Laurier, upon the subject in 1914, in which he suggested arbitration as a mode of acquiring the

common stock of the company. Thanking you for your courtesy.
Yours faithfully,
W. T. White.
He adds to that letter a postscript enclosing the amendment moved by the leader of the Opposition in 1914 and seconded by my hon. friend from St. John (Mr. Pugs-ley). But what a flimsy pretext! As it has already been answered during this debate, I will not weary the committee by giving further reasons why it should not have been invoked by a serious gentleman like the Minister of Finance. The minister has refused to face his own city of Toronto because, as he says, it is not in the public interest to discuss that issue. He has ignored the people of Toronto just as he has ignored the financial people of Montreal. The people of Montreal have been taken to task by the Solicitor General (Mr. Meighen). Oh, he says, some Montreal financial men have awakened; a protest has been signed, but it is only Montreal-and, he couples the name of Montreal with the question of conscription in order to becloud the issue. Let me say to my hon friend that not only is Montreal protesting against thi9 piece of legislation, but Toronto is also protesting against it. The great Liberal conven-t'on held at Winnipeg has a opted a resolution against this measure; the Single Tax Association of Ontario and the Constitutional Club of Toronto have passed resolutions against it. Let me quote the last paragraph of a resolution adopted by the Constitutional Club of Toronto:
And whereas, the audacious and resolute efforts now being made by the Government of Canada to commit Parliament to the purchase of Canadian Northern Railway stock resolves itself into an attempt by predatory private interests to loot the treasury of the Dominion, therefore, he it resolved, that the people, in view of the foregoing considerations, demand the impeachment of all members of Government and of public services such as the Imperial Munitions Board, who at present or in the past, have either personally or in the capacity of directors of incorporated' companies, been connected with any of the financial institutions involved In the affairs of the Canadian Northern Railway.
P. F. Cronin, President.
M. Lacey, Secretary.
The Solicitor General the other day made light of the protest circulated in Montreal by the most influential association in that city. There is in Montreal a lawyer of renown, the son of Sir Alexander Campbell who once was Postmaster General in the administration of Sir John A. Macdonald

some time after Confederation. He is the first commercial lawyer of the province of Quebec. He has represented the largest interests	before	the	Privy Council.
He has had a long and successful career at the Bar. He has, on many occasions refused from both political parties the highest position on the Bench. I therefore do not hesitate to invoke his opinion as against that of the Solicitor General- not that I minimize the ability of the Solicitor General, but every one in this country knows that Mr. C. S. Campbell, K.C., is at the head of his profession. This is what he says:
The Canadian Northern Railway has never earned interest on its debts. Great expenditure is needed to put it in efficient shape. Its bonds have always sold at less than face value. Its stock has been declared worthless by two experts named because of special ability to form an opinion.
This stock it is now proposed to purchase at a price to be fixed by arbitrators, one named by the sellers and one by the friendly buyers. And buyers and sellers have had undisclosed verbal negotiations. No one can doubt the result.
Canada is paying 8 per cent, for money. The two-year 6 per cent, notes netted 96.11.
Money at 8 per cent, cannot be poured with impunity into a system running behind every day.
The whole proceeds of the new income tax for years to come will not suffice, and this tax we want for war and not to relieve present holders of doubtful securities.
Sir, this letter is signed by one of the friends of the Conservative party, by an honest Tory, who says that this country may be deeply involved; that the income tax, which will weigh so heavily on the taxpayers of this country will be, so to speak, engulfed in order to meet the liabilities of the Canadian Northern Railway. I ties of the Canadian Northern railway. I tive party to heed that statement made by one of their friends.
As a representative of the province of Quebec, I have one word to say, not from a sectional point of view, but from a business point of view, about the condition which this transaction is going to create as regards the credit of my province. I am proud to say-and I know the Minister of Finance will not deny my statement-that the credit of Quebec is excellent; that the finances of that province have been well administered. As he can see from, this morning's Montreal Gazette, of all the provinces of the Dominion, Quebec has a substantial surplus to show this year. He knows that the bonds of the province of Quebec are quoted at par in the markets of the world, and that is higher than the price

at which the bonds of the Dominion of Canada are quoted. I am proud to say that on behalf of my province which has of late been so much vilified, by so many people. Quebec, I am prouder still to say, has always refused to be encircled by the tentacles of the Canadian Northern railway. Quebec has always refused to guarantee the bonds of the Canadian Northern railway, and she has never given subsidies to its doubtful enterprises, and now Quebec must be punished, forsooth, because she has refused to impair her credit by dealings in questionable policies.
Just one word more, and I am through for the present. Sir Lomer Gouin, the distinguished premier of my province, and Mr. Rourassa, in an admirable article in his newspaper. Le Devoir, only a few days ago, have raised their voices against the raid which is being made on the treasury of the province of Quebec as a result of that transaction. Let me read what Sir Lomer Gouin said the other day:
The province of Quebec has not guaranteed the bonds of a railway company, but other provinces have guaranteed them to. the extent of $20,000,000 and $30,000,000 and even $100,000,,000. Now that the railways are built, some of which are bankrupt, or on the eve of becoming bankrupt, the Government of this country which has no longer the confidence of the people is about to run us into debt to the extent of $700,000,-000, of which about $100,000,000 will fall upon the province of Quebec.
I regret that I have spoken longer than I should, but may I conclude by quoting the pious message which, in my judgment only adds insult to injury in the present circumstances, which Sir Byron Edmund Walker has just issued for the benefit of this country. I receive the Monthly Commercial Letter issued by the Canadian Bank of Commerce, and I notice in the last issue the following words:
Public attention is still taken up with the problem of giving effect to the general and earnest desire to apply the moral and physical resources of the nation to the prosecution of the war in a fuller and more effective manner. Compulsory service-
Mark the gradation.
Compulsory service, a new tax upon incomes, and the proposed acquisition of the entire capital stock of the Canadian Northern Railway are among the important measures advocated by the Government.
On the next page he preaches economy and thrift. Sir, I am quite willing to tighten my belt for the (soldiers at the front, but not for the looters and plunderers.


Some hon. MEMBERS:: Time.


Rodolphe Lemieux: I am through. My hon. friend says-


Joseph Hormisdas Rainville: Order.


Some hon. MEMBERS:: Order. Sit down.


Rodolphe Lemieux: In the name of Canada, of my province, and of my electors, I protest against this iniquitous legislation, and let me add in conclusion that when I see Sir Clifford Sifton directing from the Chateau Laurier with Sir Wm. Mackenzie the affairs of the Government, I say the time has come to cry: "Stop thief! Stop thief!''


Mr. GERMAN:: I wish I could give my twenty minutes to my hon. friend from Rou-ville (Mr. Lemieux) because he can do greater justice to this question than I feel I can do. I have a few more words to say on this measure before the official guillotine is applied-and I might say that in my opinion the operation of that guillotine will have more far-reaching effects than simply stopping discussion of this Bill in the House to-night; I believe its effect will be as disastrous to the Government as it is to the discussion of this Bill in Parliament. I regret very much that the Government has seen fit at this early stage of the discussion of so important a Bill, to apply the closure rules. I think that before that was done the Minister of Finance should have explained to the House what he meant when he said: I believe I can give the committee good reasons why the legislation of 1914 should not be put into effect. It will be remembered that the Prime Minister, the Minister of Finance, and the Solicitor General prided themselves all through 1914 on the legislation of that year providing security for the $45,000,000 guarantee of bonds. They prided themselves on the easy, expeditious, and effective manner in which in case of default, the Government could take over these properties under section 24 of the Act. In regard to the security and the manner in which it could be realized, they pledged themselves in their speeches when the Act of 1914 was under consideration, that if default was made proceedings would be taken under section 24 to realize on the assets of the Canadian Northern railway. I challenge the Minister of Finance to-night before the debate closes to explain to the people of Canada and to this Parliament why proceedings are not being taken under that section, and what he meant when he said: I believe I can give the committee good reasons why the legislation of 1914 should not be put into effect. The

Minister of Finance has made several speeches on this Bill, and has often reiterated that statement, but that is as far as he gets, and unless he explains what he means by the words I have just quoted we must come to the conclusion that there are no reasons why section 24 should not be put into force, and that there are ulterior reasons for taking over the road in the manner provided for by this legislation.
There is another question in connection with this Bill which I have not heard discussed in this committee or in the House, and it is this, and it seems to me that it requires explanation. Section 1 of this Bill provides that:
His Majesty may acquire the six hundred thousand shares of capital stock of the Canadian Northern Railway Company (par value sixty million dollars), not now held by the Minister of Finance in trust for His Majesty, on such terms and conditions satisfactory to the Governor in Council as may he set out in an agreement to he made between His Majesty and the owners or pledgees.
I ask the Minister of Finance to explain what that agreement is to be. What is the agreement for, and what is it to contain? If the Government takes over the shares of this company the Government will own the company in toto. The company has nothing in regard to which they can make an agreement. I would like the Minister of Finance to tell us, if he will, what that agreement is about. He must enlighten this House. We are giving the Government what might be called a blank cheque. We are giving them authority to make an agreement with the Canadian Northern Railway company, and with the pledgees of the stock of that company, and there is not a man in the whole Dominion of Canada-outside of the Government, and possibly Mackenzie and Mann, and the pledgees-who at this moment knows, or apparently will know, what that agreement is to be about. I say, Sir, that the Government has no right at this time to force through the House an Act of Parliament which gives the Governor in Council the right to make an agreement with the railway, unless Parliament knows what the terms of that agreement are. What is the agreement to be for? Is it in connection with the stock? Why i-s the agreement with the owners? The Government is to take the stock, the owners will have nothing to do with it. Is it to be with the pledgees? The right of the pledgees can be no higher than the rights of Mackenzie and Mann. If this stock is pledged, as I believe it is, to the Canadian Bank of Commerce, it has been pledged since the Act 
of 1914. If it was pledged since that Act was- passed the pledgees took it with full knowledge of what that Act contained, and the rights of the Government to take that stock in the event of default. In law the rights of the pledgees are no higher, and cannot be any higher, than the rights of the owners. If the Government could take the stock from the owners without compensation, as the Act provides, they could take it from the pledgees without compensation in exactly the sa_me manner. The Minister of Finance does not appear to be particularly interested in what is taking place, knowing that he has an official axe which will chop off discussion at two o'clock, and that this Bill will then go out of committee. But I may tell the minister that he will have an audience to reckon With after this Parliament is dead, and gone, and to this audience he will have to pay attention, and he will have to give an accounting, and make an explanation. I may also tell him that before this Bill becomes law we must have an explanation as to what that agreement is to contain. They say that upon the making of the agreement at least five-sixths of the stock is to be handed over. Can it be an agreement for the operation of the railroad. Surely there is no necessity for an agreement of that nature before the handing over of the stock. The Government takes the stock, and if the Canadian Northern Railway company as at present constituted see fit to retain their directorship and go on and manage the road, they will do so. That agreement can be made between the 'Government and the Canadian Northern railway after the stock is taken over, and it would not be necessary to put in an Act of Parliament such as this is, any conditions regarding an agreement for the operation of the road, because this Act contains nothing in regard to the operation of the road. We must have an explanation as to what that agreement is to be. We are absolutely in the dark on that point. With that provision in the Bill, the Government can make an agreement with Mackenzie and Mann and with the Canadian Northern that the stock they hold is to be taken at a price to be fixed by arbitration, but that stock will he held by the Government and returned to Mackenzie and Mann if in the future Mackenzie and Mann can make financial arrangements to relieve the Government from responsibility. The Minister of Finance shakes his head, but I say, Mr. Chairman, that is so as a matter of law. This Parliament is giving the Gov-

emor in Council authority to make an agreement 'in. connection with this property, with the owners and pledgees. It is a blanket agreement.


William Thomas White: For what? For
the purchase of the shares.


William Manley German: That is what we do not
know.


William Thomas White: It says so.


William Manley German: Not at all. It does not
say so. It says that His Majesty may acquire those shares on such terms and conditions satisfactory to the Governor in Council as may be set out in an agreement to be made between His Majesty and the owners and pledgees of not less than five-sixths of the stock. What is the agreement to contain? Not the purchase of the shares, the Minister of Finance surely cannot seriously suggest such a thing as that. It is not an agreement to purchase the shares, so far as this Bill is concerned. It does not say anything about purchasing the shares. In any event why is an agreement necessary to purchase the shares? It does not require an agreement with Mackenzie and Mann to purchase the shares, nor yet does it require an agreement with the pledgees to purchase the shares, because the pledgees have no higher or greater rights than Mackenzie and Mann. If the Canadian Bank of Commerce holds, as it is stated they do, $51,000,000 of that stock in pledge, they took shares with full knowledge of what the Act of 1914 contained, and with full knowledge that the Government had the right, on default to take over the whole property without paying Mackenzie and Mann one penny for it. That being so, why is an agreement necessary for the purchase of the shares? I submit it is no such thing, and the Minister of Finance is deliberately evading the question when he makes that contention. He knows there is no necessity for an agreement for the taking over of those shares. We must have some explanation as to that, either to-night or later on in this session; because I may state to the Minister of Finance that though he can closure this Bill through to-night and force it through the committee without giving an explanation which the committee requires and is entitled to have, and without giving an explanation which the country requires and is- entitled to have, we shall have another chance before the Bill becomes law, which chance I apprehend will be taken
advantage of, and the Government will have to explain to the House what the minister means when he says that he can give good reason why the Act of 1914 should not be put into operation in taking over this property. Furthermore, we are entitled to have a draft agreement showing what is to be done, the same as we had in 1914 when the Bill providing for the guaranteeing oi the $45,000,000 was before us. Why should we not have this agreement now, to know what arrangement the Government intends to make with Mackenzie and Mann and the pledgees of this stock? We are entitled to have it, and we must have it if at all possible before this Bill becomes law.
The Finance (Minister stated that the arbitrators could decide that nothing should be paid for this stock. I differ from him because he says in the Bill that the stock is to be acquired for a price to be determined by arbitration. There is to be a price even if there is no value. The royal commissioners stated that there was no value. It is nonsense, in the face of their report, for any one to argue that there is a value. But, notwithstanding that the commission say there is no- value, the Governments say that a price is to 'be paid. They recognize immediately a value because there can be no price paid for a thing unless the thing has a value or unless there is an assumption of value, because price recognizes value. The Government speaks about a price to be hereafter determined. The arbitrators start out with the tacit as,, sumption on the part of the Government that -the -stock has value. Then they can fix such price as may be determined. But, outside of, and beyond that, I call upon the Minister of Finance to explain to the committee what he means by the statement that he could give good reasons why the Act of 1914 should not be made effective. I want to know what those reasons aTe. The Minister of Finance, the Prime Minister and -hon. gentlemen- on the other side have discussed this matter from every angle, but this one. Why do they not put into effective operation the Act of 1914 which they said would be so effective, so -speedy and so just to the owners of the railway? Then, I -say, we are entitled to know what the agreement is to contain, what it is to be and we should have a draft of that agreement placed before Parliament so -that, before it is entered into, Parliament may know exactly what it is -authorizing the Government to do. I have, Mr. Chairman, finished my remarks in connection with this matter and I trust the Minister of

Finance will do us the justice to explain what he meant by that expression.


Mr. TOBIN:: Mr. Chairman, I think it
my duty to say a few words on this important question. I was somewhat surprised. when my hon. friend from Bou-ville (Mr. Lemieux) finished his speech a few minutes ago, to hear a noise on the Government benches. I thought hon. gentlemen opposite were chloroformed, but they must have wakened up because we had not heard from them for some time. I am surprised, in view of the legislation passed in 1914, that the Government have not taken advantage of the provision contained in that Act to take over the road. If you look at the statutes of 1914, you will see that it contains the following provision:
22.	Upon the happening of any event of default and at any time or times while the same shall continue, it shall be lawful for the Governor in Council after such notice to the Canadian Northern as the Governor in Council may direct, to declare' to be vacant the offices of the directors of the Canadian Northern and of any of the Constituent or Subsidiary Companies which may be subject to the legislation authority of the Parliament of Canada, and to appoint a board or boards of directors in lieu thereof respectively (any former director being eligible for appointment.)
2. The power of appointment herein conferred upon the Governor in Council shall be a continuous power and shall be exercisable from time to time and so often as any event of default may exist and be continuing.
23.	The directors so appointed by the Governor in Council shall hold office during the pleasure of the Governor in Council, and any such director may be removed and another appointed in his place. Vacancies occurring from time to time may be filled by the Governor in Council. The said boards respectively shall have all the powers of a board of directors elected by the shareholders and acts of the board requiring the authority and approval of the shareholders shall if authorized by the Governor in Council be as valid and effectual as if authorized or approved by the shareholders.
24.	If authorized by the Parliament of Canada, the Governor in Council may on such terms and conditions (if any) as Parliament may prescribe, at any time while any event of default shall exist and be continuing, by order declare the equity of redemption of the Canadian Northern and of all other persons whomsoever in the mortgaged premises to be foreclosed, and thereupon the equity of redemption of the Canadian Northern (and of such other persons) in the mortgaged premises and every part thereof shall be and become absolutely-barred and foreclosed, and the same shall thereupon be vested in His Majesty in right of the Dominion of Canada any statutory enactment or any rule of law or equity to the contrary notwithstanding.
That is what the Government could have done.. It could have availed itself of the provisions of that statute. This is purely a business proposition between two par-
ties, the Government and Mackenzie and Mann. I would ask you, Mr. Chairman, if you would go into such a deal, where such a large amount of the money of the people of Canada is involved, without the necessary information. I do not think so. I am surprised at the action of my hon. friend the Minister of Finance. I have been informed that he was the manager of the National Trust Company, but I am sure that, as manager of that company, he would not consider such a proposition without taking the advice of the best experts, investigating it and ascertaining the assets, revenue and liabilities of the company. For my part I cannot understand why, in face of the report made by the commissioners appointed by this Government, the Government would bring in any such legislation as this. If you will look at the Drayton-Acworth report you will find the following statement:
Value of Canadian Northern Undertaking.
Cash Investment.
The property investment of the Canadian Northern Railway system is stated in the balance sheet of June 30, 1916, at $494,112,489.34. This figure admittedly has been written up to include $100,000,000 of capital stock. And this stock, as we have already said, was issued without any cash consideration. We have endeavoured to ascertain the actual cost of the system. From the company's official reports and special statements supplied to us, we have ascertained that the maximum cash investment that can have been made in the property is $383,302,451.33.
The report says further:
But money cost is not all. We decided also to ascertain the approximate value, on the basis of reproduction cost, of the property as it exists to-day, and we rely on Professor Swain's valuation for this purpose. This valuation is, in his opinion, a liberal estimate of the fair cost of reproducing new, at pre-war prices of labour and material, the system at present existing. It includes property belonging to the system at its estimated cost, if it had to be acquired or constructed to-day. And therefore it not only gives the company credit for lands which it in fact owns, even though it obtained them as a grant; but it also credits the company with the increment of land values since the date of the original acquisition. And these two items are quite large.
A little further on we find the following:
We conclude, therefore, that the shareholders of the company have no equity either on the ground of cash put in, or on the ground of physical reproduction cost, or on the ground of the saleable value of their property as a going concern. If, then, the people of Canada have already found, or assumed responsibility for, the bulk of the capital; if they must needs find what further capital is required; and if they must make up for some years to come considerable deficits in net earnings, it seems logicallv to follow that the people of Canada

should assume control of the property. We return later to the Canadian Northern Company in order to set out our recommendations as to its ownership and management in the future and as to the terms to be offered to the existing shareholders.
^According to this report, the liabilities of the company are gTeateT than its assets. Yet the Government is going blindfolded into an undertaking that will involve an expenditure of hundreds of millions of dollars. Is it reasonable that these millionaires, Mackenzie and Mann, should unload this property on Canada? I submit that it is not reasonable. Speaking in this House on May 18, 1914, page 3943 of Hansard, the Minis-er of Finance said:
I have dealt with the question of securities, and come now to the question of remedy upon default. Some hon. gentlemen have said: why do you not take security upon the stock? I need not tell the lawyers of this House that a creditor stands in a higher position than a stockholder, and that except for convenience it is not at all necessary to take the stock of any company for security. If I have a mortgage on a company's undertaking I do not care very much for the stock as security except that it is advisable to have the stock in order that I can take possession of the company, put in my own receiver.
I think it is about time that the minister acted upon the principles that he set forth in 1914 and put the Canadian Northern system into the hands of a receiver. The Government should withdraw this Bill; that course would be more satisfactory to the people than the passing of a measure that will involve an expenditure of over 5600,000,000.
The hon. gentleman said further:
What security have we? I have seen a good deal of financing in my time, and I know something of law although my hon. friend from Pictou (Mr. Macdonald) does not think so, and I want to say this: I have never seen as effectual a means of entering into possession of a property upon which a mortgage is held as has been devised by the Solicitor General in connection with this transaction. And further -he will not mind this coming from me-I take off my hat to the Solicitor General for the way he has performed the legal work In connection with this transaction which is one of the most complicated that has ever come before the House.
I am afraid that the people will not take off their hats to the Solicitor General or to the Minister of Finance for what they have done in connection with this measure. Speaking in the House on May 14, 1914 (page 3733 of Hansard), the member for St. Antoine (Sir Herbert Ames), a good business man, who has some standing in the province of Quebec, said:
There is another feature of this matter which, I think, is well worthy of consideration. What
is to happen in case of default? We have hitherto been dealing with the situation in case of success ; the Government has very carefully looked ahead in regard to what might happen in case of failure. Ordinarily it is a very slow process to foreclose a railroad and for the bondholders gradually to take possession of the physical assets thereof. The Government in this case, however, has supplied a method of quick procedure whereby the axe drops instantly and whereby there can be no coming back for further assistance. It is definitely stipulated in this undertaking what shall constitute any event of default.
Why does the hon. member for St. Antoine not persuade the Government of which he is a supporter, and with which he has considerable influence to drop the axe and appoint a receiver for this road? That is what the business men of Canada want. Why does the member for St. Antoine not ask the Government to drop the axe and thus save the Canadian taxpayers millions of dollars?
With regard to the amount that this transaction will cost the country, I have before me the figures given last evening by the member for Pictou (Mr. Macdonald).
I am surprised that the Government does not seem to consider seriously what will be the tax upon the people in respect of this undertaking. This road will cost Canada $653,246,949.39. That is a considerable tax upon the people of this country. I contend that such a measure as this should not be put before the people-at a time when so much money is being expended for war purposes and for carrying on the ordinary business of the county-simply to give a present to two millionaires of Toronto. These men have obtained money from nearly every province except Quebec-and Quebec will have to be taxed with the other provinces to meet this expenditure. The Prime Minister, in answer to a question put yesterday in regard to pensions, said:
My hon. friend from Pictou (Mr. Macdonald) made an inquiry with regard to a resolution on the Order Paper with respect to the Board of Pension Commissioners and the rates of pension. Hon. gentlemen will remember that on March 14, 1916, a committee was appointed for the purpose of taking into consideration the rates of pensions. On the 10th May, 1916, the committee made a unanimous report. The chairman of the committee, on the 18th May, moved that the report should be commended to the consideration of the Government. Parliament prorogued on the same day. There was not an opportunity to bring in legislation at that session. Accordingly, on the 3rd June, 1916, the recommendations of the committee were put into the form of an Order in Council and passed under the War Measures Act. By a resolution on the Order Paper it was proposed that a similar committee should be appointed this year to take into consideration representa-

tions that had been made to the Government from various quarters, and more particularly by several organizations of returned soldiers, as to the desirability of increasing the rates of pensions then allowed. This was urged for various reasons, several of which have a great . deal of force. We have reached the conclusion that it would be impracticable to deal with the matter in a thorough and satisfactory manner at this session and that it is a subject which should be dealt with finally and permanently by the new Parliament which is to be summoned in the early future.
Apparently the Government have no time to attend to the wants of the widows and orphans of the men who have gone to the front to fight our battles; yet they have time to attend to the millionaires. No, Mackenzie and Mann cannot wait. They say: "You cannot afford to put this company into the hands of a receiver." What about the Farmers' Bank. Where was the Minister of Labour in 1910, when he used to weary the House for hours and hours wanting the Government to recoup the stockholders of the Farmers' Bank? Do we hear anything about that from the Government benches now? Hundreds and hundreds of poor people lost their money by the failure of that bank. Their money was stolen from them. What did the Government do? The poor people can wait, but the millionaires cannot wait. The people of this country can well call this Government a government of millionaires. In an editorial in the Morning Citizen of August 21 I find the following paragraph:
The Citizen thinks that the Government is wrong in referring the all important matter of the valuation of the 600,000 shares to arbitration. The Acworth-Drayton report says that these shares are practically worthless. If they have no equity of any value, why should the country pay for them any amount a board of arbitrators may decide? The matter is not one for arbitration but for action by the Exchequer court. Briefly, the fact that the administration has not taken advantage of its legal recourses against the company in the circumstances should not compel it to the other extreme of generosity with the money of the people. The matter is one of tremendous interest to Canadians. At present it would seem that the Government is in an untenable position. Indeed its proposal, if enacted into law, will do a grave injustice to the tax burdened people of Canada.
Last evening the Minister of Finance, who is generally pretty fair in his remarks, gave this House to understand that Mr. F. N. McCrea, the member for Sherbrooke, was a director of the Bank of Commerce, and the hon. minister's friends on the other side cheered him. I think the members of the House understood the minister to say that Mr. McCrea was a director of the bank. At any rate, he insinuated that he was. 
Mr. McCrea is not a director of the Bank of Commerce, and never was. He was a director of the Eastern Townships bank, which was taken over a few years ago by the Bank of Commerce, and I think they pensioned off all the directors- of the Eastern Townships Bank, and Mr. McCrea was one of them. I think the Minister of Finance should not play upon words, but tell the House that Mr. McCrea is not a director of the Bank of Commerce.
I have here a statement from the Annual Financial Review-Canadian, May, 1916, which gives a list of the directors of the Bank of Commerce, which reads:
The Canadian Bank of Commerce. Head office Toronto, Canada. Directors:	Sir Edmund Walker, C.Y.O., LL.D., Toronto, President ; Z. A. Hash, K.C., LL.D., Vice-President, Toronto; John Hoskin, K.C., LL.D, D.C.L., Toronto; J. W. Flavelle, LL.D., Toronto.
I presume the last mentioned name is familiar to all members of the committee. The other names are as follows:
A. Kingman, Montreal-; Hon. Sir Lyman Melvin Jones, Toronto; Hon. W. C. Edwards, Ottawa ; E. R. Wood, Toronto; Sir John M. Gibson, K.C.M.G., K.C., LL.D., Hamilton; Robert Stuart, Chicago, 111.; G. F. Galt, Winnipeg; Wm. Farwell Sherbrooke, D.C.L. ; Hon. Geo. G. Foster, K.C., Montreal; Chas. Colby, M.A., Ph.D., Montreal; A. C. Flummerfelt, Victoria, B.C.; G. W. Allan, K.C., Winnipeg; H. J. Fuller, Montreal; F. P. Jones, Montreal; H. C. Cox, Toronto.
General Manager, John Aird; Assistant General Manager, H. V. F. Jones.
Mr. McCrea's name was never on the list of directors of the Bank of Commerce. It is somewhat surprising that this Government should press this legislation as public opinion is strongly against it. If you go into the city of Montreal and meet any business men, Conservative or Liberal, they will tell you that this is the most damnable legislation that ever came before this country.


Some hon. MEMBERS:: Order, order.


Edmund William Tobin: Some gentlemen express
themselves that way. I would not say that the Government would steal, but people say this is a big steal. Here is a resolution passed by the Constitutional Club of Toronto. The hon. Finance Minister comes from that city. The following paragraph appeared in the Toronto Globe on August 25, 1917:
Impeach All Those Connected With C.N.R.- Sweeping Resolution Passed By the Constitutional Club.
A resolution has been passed by the Constitutional Club, demanding the impeachment of all members of the Dominion Government and of public services, such as the Imperial Muni-

tions Board, who at present or in the past have, either personally or in the capacity of directors of incorporated companies, been connected in any of the financial institutions involved in the affairs of the Canadian Northern Railway.
The "resolution sets forth that Parliament has prolonged its own existence beyond the limits prescribed by law, and that it does not adequately represent the country. It also quotes the statements of Mr. R. B. Bennett, M.P. to the effect that the public life of the country has been corrupted, and declares that the Government has admitted the existence of interlocked directorates and personal interests among financiers and financial institutions associated with the affairs of the Canadian Northern
Railway.	,,
The resolution was moved by Mr. T. A. bean-lan and seconded by Mr. Archibald Draimin.
I am against this legislation, because it is not in the interest of this country, and I am against it being considered in the last days of a dying Government. The life of this Parliament expired in October, 1916, and I have no mandate from my people to vote for such a measure. This Government has taxed this country up to the hilt for the benefit of their friends. Now, this is a large amount of money, something that is going to tax every man, woman and child in this country for years to come, and I vote against the measure because I consider it is not in the interest of this Dominion.


Mr. ROBB:: Having listened to the instructive and convincing address of the bon. member for Montreal (Mr. Lafortune),
I am inclined to think that the members of the Government are now perhaps sorry that the closure has been put on, and that they are therefore unable to give vent to their feelings on this important question. Having in mind the legislation of 1914, the arguments of the ministers in presenting that legislation and the arguments of their foltowers in (supporting it, we on this side have reason to-day to question why at this time the closure has been put on. All the arguments of the ministers in presenting the legislation of 1914 and the arguments of those who supported them were an effort to convince the House and the country that that was the last call; that the legislation of 1914 was so carefully drawn up, so ironclad, if you will, that whenever Mackenzie and! Mann or the Canadian Northern Railway company defaulted in their interest payments, automatically the Canadian Northern railway with its connections, mines, timber limits, elevators and valuable rights along. the harbour fronts, of this country, would all lock, stock and barrel, become the property of the Canadian people. And, so we wonder to-night why
it is that the Government, having this legislation in charge, have adopted the closure.
Is it because they are afraid of their own supporters? Is it because there is rebellion amongst the supporters of the Government who find it hard to swallow this indigestible pill that is being presented to them? The Government supporters may swallow this " high finance " pill, coated with a ' win-the-war " covering, but the electors, the taxpayers, the men who will be loaded with this debt, will not swallow the pill so easily.
I am sure hon. gentlemen opposite, from following the public press and from the many telegrams and messages which, I can imagine, have been sent to them asking why they allow this legislation to go through without any protest, are not altogether ignorant of the protests that have been made by representative financial interests throughout this country who heretofore have given loyal support to the Conservative party.
I am sure the Government must be aware that throughout this country there is great unrest at this time when the Government propose, at one stroke of the pen, to increase the public diebt of this country by over 1600,000,000. I am sure the people will take the first opportunity of registering their protest against a Government which has so arbitrarily attempted to put through Parliament what a recent speaker has termed a gigantic steal. I, as representing taxpayers of the county of Huntingdon, wish to take exception to the remarks of my good friend the hon. member for Montcalm (Mr. Lafortune) who never loses an opportunity to tell us that Montcalm is the best county in the Dominion of Canada. I invite the hon. member for Montcalm, to attend, next week if he will, the exhibitions in the united counties of Chateauguay and Huntingdon, and there he will see what is really the best county in the Dominion of Canada. Not only is . that county a representative agricultural and industrial county, but perhaps there is no section in all the Dominion that is so representative of the two great races that make up this country as the united counties of Chateauguay and Huntingdon. It is true that the Canadian Northern railway does not run through those counties, but we have other good railways operated by private interests; the service is all that could be desired, and whatever may be the opinion of electors in other districts in the Dominion of Canada, in the county which I have the honour to represent, we have no great faith in public ownership.


Mr. GLASS:: You are behind the times.


James Alexander Robb: 
Mr. A. K. MACLEAN (Halifax):: Mr. Chairman, I have not taken any part in the debate upon this Bill, and before it closes to-day I desire to address the committee very briefly on some phases of it. As far as the principle of the acquisition of the shares of the Canadian Northern Railway company is concerned, I find myself in agreement with the vast majority of hon. gentlemen on both sides of the House, that is, that in the failure of any matured alternative proposition, the acquisition of the shares of the company is about all we can do under the circumstances. I hardly am able to agree with those hon. gentlemen who have suggested liquidation proceedings and the appointment of a receiver.

There are difficulties in the way of that procedure, although I admit it has merits. But, we must remember that we are dealing with a railway system and not with a railroad. Upon this railway system there are quite a number of securities issued and, in fact, some of the securities issued by this company and guaranteed by the Government do not cover the entire system. It wou'd be impossible, even if the road were forced into liquidation, to have a sale of the property as a system. It is possible to work it out, but there would be tremendous difficulties in the way and it would take a long number of years to put ourselves in the position that we will be in by acquiring the shares under this Act.
I rise, however, to direct the attention of the committee particularly to clause 4 of the Bill. This clause enacts that the arbitration to be appointed shall determine the value of the snares to be acquired and the arbitrators shall proceed in a summary way and may apply their "own judgment in determining such value. The section proceeds to say that the arbitrators
may receive .	.	. such reports and statements authenticated in such way as they may decide and such evidence as they may deem necessary or helpful.
The matter at issue is really one as to the determination of the value that the company is to receive for the shares. That is the important question. If the board is unanimous in its finding there is no appeal and the value is to be determined upon the judgment of the arbitrators. Therefore, the question which will be before the Board of Arbitrators is a very important one and a very serious one for the country and for all interests involved. I think that every hon. gentleman will admit that this is an extremely difficult problem. In the first place, we are not acquiring the road by expropriation or condemnatory proceedings and we are not entering into possession of the property as mortgagees. We are involuntarily acquiring the road. The arbitrators will be confronted with the problem of deciding what principles will be involved, or invoked, in determining the value of the shares. It is important that we shall determine - if we can, by statute, what principles shall guide the arbitrators in fixing and determining the value to be paid for these shares. Personally, I do not see much need for the appointment of a Board of Arbitration to determine the value of these shares. I think it might as well have been done by the Government themselves. They might have at least studied the matter, made a recommendation to 
Parliament and asked Parliament for its approval. I would just as soon take the judgment of some members of the Government as I would that of the Board of Arbitrators to be appointed.
They would, I think, be in a better position than this proposed board would be to determine the value. What is the position of the Government? They have the Dray-ton-Acworth report. They would have the testimony of their own auditors who have been engaged in the auditing of the accounts of the Canadian Northern Railway system for the past two or three years; they would have the evidence of the engineers of the Railway Department, who must know every mile of tihat system, because of examinations made prior to the payment of subsidies; they know the cost of the railway; they know the reproduction cost; they know its financial earnings and the cost of operation; they have just as good an idea of the prospective value of the railway as any board that could be appointed. I think, therefore, that it would have been in the interests of the country and acceptable to Parliament if, in presenting the proposal to acquire the shares of the company, the Government had recommended to Parliament what in their judgment was the value of the shares to be acquired. Then we should have been through with this question once for all and Parliament and the country would have known what they were liable for in this connection.	*
I said that difficulties would be encountered by the board of arbitration in determining the value. The valuation of a railway is quite a modern term; the idea is new. Prior to the days when railways were valued for purposes of fixing of rates, no one ever heard tell of the valuation of a railway upon this continent. I doubt very much whether the physical property of any railway system was ever valued in Canada, or in the United States, except within the past few years, when it became a matter of policy on the part of state and national Governments to fix the rates of freight to be charged by transportation companies. In determining the value of railways for purposes of fixing rates certain principles have been established. The question occurs to me whether the principles that have been fixed by utility boards in Canada and) the United States will obtain when you come to fix, not for purposes of rate control the value of a railway which you are acquiring. As I said before, we are hardly expropriating the road;

the proceedings will hardly be condemnation proceedings; they are hardly like the proceedings followed whem the value is being estimated for the purpose of fixing rates. 'So that the question arises; what principles wijl guidte the board of arbitrators when they come to fix the value? In some courts of the United States it has been held that in the fixing of railway values for purposes of rate control and in the fixing of railway values for the purposes of condemnation proceedings-or, as we term it in this country, expropriation- different principles should obtain. One Teason why I think the 'Government should have determined, by negotiation or otherwise, absolutely the amount which should be paid, if any, for the acquisition of the equity in the Canadian .Northern system is that so many principles wild be invoked by the owners and pledgees of shares that no one can say approximately what amount may be awarded by the board. The valuation will be determined by the board according to their own judgment; the judgment of one set of arbitrators might differ vastly from the judgment of another. If they are unanimous in their finding, notwithstanding the fact that the amount fixed may be absurdly high, there is no appeal. I think that the statute should set down some principle for the guidance of the arbitrators, ISome hon. gentlemen iwho are lawyers can easily anticipate Claims that will be made to establish the values. For instance, there is the franchise value, the market value, the strategic value, the value of good-will, and the going	value. It	has	always	been
recognized in this country-at least it has in the United States-that there is such a thing as franchise value. The member for Calgary (Mr. R. B. Bennett) referred to a judgment delivered by Mr. Justice Brewer of the United States. I forget the name of the particular case to which my hon. friend referred, but I wish to give to the committee an extract from a decision made by this distinguished jurist upon the matter of franchise value:
When by the taking of the tangible property the owner is actually deprived of the franchise to take tolls, just compensation requires payment not merely of the value of the tangible property itself, but of the franchise of which he is deprived.
There is little doubt that the franchise value will be urged as a basis for estimating the value of the shares in this particular
case. I submit, however, that it should not enter into the judgment of the arbitrators. This franchise-at least, most of it-was granted by the Parliament of Canada, and as we propose to acquire the equity in this road, it should be clearly set forth that no allowance shall be made for the franchise value. In most of the provinces of Canada to-day municipalities impose taxes upon public utilities and directly and specifically tax the franchise. It may be that the Canadian Northern system franchise has, in some provinces or in some munic'palities, been taxed. If we wish to avoid payment upon a claim of this kind, I submit that we should provide in the statute that no allowance ,be made by the arbitrators for franchise value.
Then, take the strategic value, which is referred to in the Drayton-Acworth report. The Public Utilities Board of the State of Washington some two or three years ago were engaged in the valuation of all the railway systems in that state for the purposes of rate control. That commission, perhaps not properly, decided that there was such a thing as strategic value in a railway. I think the judgment of the board was regarded by text-book writers and by jurists in the United States as not well founded.
I only refer to it for the purpose of calling the attention of the Government and the committee to the fact that, unless there is a statutory protection for the country in that respect, that the same argument will be invoked by the owners of the shares when they appear before the Board of Arbitration. The Washington State Board considered that where a road is so located that it cannot be paralleled and made to suffer from competition it occupies a strategic position which is to be recognized in the determination of value. There may be many instances where the Canadian Northern Railway system might well invoke that argument. For instance, I understand they pre-empted the only remaining route from Edmonton to the Pacific coast. I believe this is true, at least in so far as a great part of the territory of that mountain section is concerned. Are we prepared to entertain the suggestion that, because they Xire-empted the only possible remaining route from the prairie country to the Pacific coast, their system has in this respect some strategic value and that therefore the arbitrators must consider that point m fixing the price which is to be paid by the country for these shares?

Then I want to direct the minister's attention also to two or three other principles which are involved in the fixing of values. I do not think the minister has given enough consideration to clause 4, and that there is not a sufficient limitation to the principles which the arbitrators may invoke in assessing the value. For instance, there is the principle of goodwill and the principle of a going concern, or the going value. I believe going value is the term. Good-will and going value are principles well settled by the courts of this country and the courts of the United States. We know what they are. I do not intend to occupy the time of the committee with a statement of the substance of these definitions, as given by the courts from time to time, but I say that we should be careful that the Board of Arbitration may not invoke to too great an extent these standards which will enable them to give the owners of the shares a value which Parliament and the country never anticipated. In many well known instances in Canada and the United States arbitrators have taken the structural value of public undertakings and have arbitrarily added 10, 20 or 30 per cent. They have reached the value in this summary and arbitrary way. I submit that in the acquisition of an undertaking of this size we should be careful by our legislation to make it impossible for arbitrators in 'a summary and arbitrary way to fix an unreasonable value which cannot be corrected by Parliament or by any other power in this country if the arbitrators are unanimous in their decision. Public Utility Board in the state of New Jersey in a certain case which I have in mind, after having fixed the structural value of a public utility which was being acquired, said there should be added to that an additional valuation of 30 per cent. One may say that this will not be done, and cannot be done, in the case of the acquisition of the shares of this railway, but there is nothing to prevent it. It is true we are acquiring merely the shares, but you may be sure that the owners of the shares will invoke all these principles, when the matter comes before the Board. And, after all, when you come to fix the value, there is no difference between the acquisition of the shares and the acquisition of the physical property of the system. Then, in ascertaining the value of the road, the promoters' interest have frequently been considered. I could give to the committee a statement made by the late James J. Hill, an eminent railway man, well known not only to this country but [Mr. A. K. Maclean. J
to the entire world, who stated that in determining the value of a railway it was proper to take into consideration the time and labour of the promoters, and the facts that dividends had been deferred, and that they had received no payment whatever in connection with their promotion, except possibly some salaries. It is true, this statement which I have given to the committee as having come from James J. Hill was merely his own statement, given in evidence, before some body in the United States, but the principle has also been established by many courts in the United States, and particularly in recent years by Public Utility Boards.
I have enumerated to the committee only a few of the arguments and contentions which will be advanced and presented to the board of arbitration in fixing the value of these shares. The statute merely says that the board shall fix, upon their own judgment, the amount which shall be paid to the shareholders. Section 4 of the Bill does not pretend to lay down any principle by which they shall be guided, except in so far as the section is amended by the amendment presented yesterday by the Minister of Finance, to the effect that reproduction cost shall be based upon values of pre-war days.


William Thomas White: The hon. gentleman is overlooking the fact that an amendment has been proposed, to strike out the clause under which the arbitrators may use their own judgment.


Alexander Kenneth Maclean: I have been referring to that. That is in the original Bill.


William Pugsley: That amendment stood with the others.


Alexander Kenneth Maclean: I was not aware that the w-ords "apply their own judgment" wrnre struck out, although, on reflection, I remember the Minister of Finance informing the member for Calgary (Mr. R. B. Bennett) a few days ago that he proposed striking it out. I am not sure there is any great value in striking out these words. I am not impressed with the view that the elimination of such w'ords strengthens the section. I think they are still at liberty to apply their own judgment. I believe that section 4 should eliminate some of the standard principles which are usually invoked in such circumstances in the fixing of the values of public utilities or railway systems. I have mentioned only a very few of these principles. Many others might be mentioned, but I do not purpose detaining the committee at any greater length by
\

50U1
enumerating them or by any reference to them whatever.
I repeat what I said at the beginning, namely: that I regret that the Government, in presenting to Parliament their proposal to acquire the shares of the Canadian Northern, did not at the same time present their view as to the value of the equity in those shares. I have as much faith in the judgment of some of the members of Government as I would have in the judgment of the arbitrators who will be appointed-even more, because the Government would have a better appreciation of the public view of this question and would not be so apt to be influenced by the many specious arguments which, I know, will be advanced for the purpose of impressing the Board of Arbitrators as to what is the real value of these shares. I therefore think that even now the Government, with all the evidence they have before them-and they have practically everything that could be presented to the board-should undertake to re-open negotiations with the owners or pledgees of the shares and come to Parliament and state the amount, if any, which, in their judgment, is the value of the equity in those shares, and then let us dispose of the matter at once. But failing that, I say that section 4 of the Bill should be amended in such manner as to indicate, further than has already been done, the principles which should guide and influence the arbitrators in determining the value of the shares to be acquired by the Government of Canada, and specifically to eliminate some of the methods which are ordinarily invoked by the owners of public utilities in endeavouring to establish abnormal values for those utilities when acquired by governmental or municipal bodies.


Mr. SCHAFFNER:: Although the Canadian Northern railway Iras many important branches in the East, that road is essentially a western road. It is a western road in its inception, and most of its lines are in the West. I wish to place on record a strong hope and desire that, whoever the arbitrators may be who are appointed to do this work, at least one of them will be selected from Western Canada.
I wish to refer for a moment to some of the remarks made by the hon, member for Huntingdon (Mr. Robb) who certainly was not very familiar with the facts. If I understood the hon. gentleman aright, he said that he never knew additional railways to cause lower freight Tates. There is one instance of that, and that is the Canadian Northern. Every one from Western Can-
320i	!	;	[	|
ada knows that tire building of the Canadian Northern in Western Canada had a very great deal to do with the lowering of the freight rates to farmers and others in that part of the country. He also' referred to the telephone system of Manitoba. While that question may have nothing to do with the acquisition of the Canadian Northern railway, his facts were not correct in respect to that telephone system as he proved later on in his address. No other province in Canada to-day has a telephone system that is giving greater satisfaction that the telephone system of Manitoba. The hon. gentleman said that he was prepared to advocate increased freight rates for the reason that labour and everything-else that enter into the carrying on of railways to-day cost more than they did a few years ago. He said that the telephone-rates in Manitoba were higher to-day than they were a few years ago. That may be the case, but the citizens of Manitoba are today finding no fault with the bargain made by the Roblin Government in connection with the telephones of that province, and if it costs a little more to conduct the telephone system in that province to-day than it did five or six years ago, the reason is exactly the same as that given by the hon. member for Huntingdon why the freight rates should be increased, namely; that it costs more-and that is a question I need not elaborate-to run either freight trains or telephone systems to-day than it did a few years ago. I simply hope my request will not be overlooked, that one of those arbitrators may be selected from Western Canada.


Mr. SINCLAIR:: This debate has lasted a considerable time, and we have not yet heard the last word on this question. I am somewhat surprised that we have heard so little from the opposite side of the House. There is a feeling that there is too much partisanship in Canada, and there is a revolt, I understand, against what is known as machine politics. I should suppose that we have never had a greater exhibition of what I would describe as machine politics than we have had in this House during this discussion. We are proposing by this measure practically to double, or more than double, the public debt of this country, and since three o'clock this afternoon-it is now after one a.m.-hon. gentlemen. opposite have not responded at all to the challenges that have been thrown across the floor from this side of the House. They have practically been dumb in the

face of the arguments that have been put forward from this side of the House to show why this Bill should not pass. I say that is machine politics with a vengeance.


William Pugsley: They will speak when no one can answer.


John Howard Sinclair: The Minister of Finance has succeeded in gagging every man who sits behind him, with the exception of the hon. member for Souris (Mr. Schaffner), who is the only man we have heard on that side of the House since three o'clock this afternoon. I have had the honour of a seat in this House for the last twelve years or more, and I have never until tonight, seen a case in which the Opposition was able absolutely to silence and cow the Government on a question that came up for discussion. If there was any justification at all for the proposal of the Government, do you not think, Sir, that some arguments would have been presented from the Government side? But we have had the the spectacle of hon. gentlemen sitting dumb while argument after argument has been put forward from this side of the House to show why this measure should not pass. Is it any wonder that we are suspicious and think that some sinister influences are at work on the other side of the House to keep them silent? Is it not proof of the statement that has been made by hon. members on this side of the House, that the money-masters of Toronto are influencing the Government in this matter?
We are proposing practically to double the public debt. Hon. gentlemen opposite have said that we are getting something by the transaction, that we are getting an asset. The test of an asset, to my mind, is what it will produce. Does any hon gentleman in this House expect that this is a good investment, or that it will produce even running expenses and interest? This railway system is not now producing running expenses and interest in the hands of private owners, who are doing everything that can be done to make money out of the system. Our experience of government ownership is that a government cannot do as well as a private company. It is not to be expected, therefore, that this Government will be able to do anything more than pay the running expenses out of the earnings of this road, and they will do well if they succeed in doing that. If we are adding over $400,000,000 to the public debt-I do not put it at $600,000,000, although I believe it will reach that figure in the end-

the people will have to pay interest on that debt. I have the honour to represent a county that has not been fairly treated by this Government, or by former Governments, in railway matters. I am sorry to say that I represent a non-railway county.
1 represent men who have all their lives been paying the interest on railway subsidies for the benefit of other parts of Canada, and it is a serious matter for the people I represent to know that their burdens in that respect are to be doubled without any expectation of the enormous expense that is being incurred being of any advantage to them, or of very little advantage. This doubling of the public debt is a serious matter, because we are now paying such an enormous interest on the money we have borrowed. When this Administration came into power the Government could borrow money easily at four or four-and-a-half per cent. They are now paying the enormous rate of about six per cent; that was the rate paid for the last loan [DOT] which was' floated.
I want to direct the attention of the Minister of Finance to the fact that .the savings of the people of this country, which are very large, are bringing only three per cent. How is it that the Minister of Finance has not managed to secure some of this enormous sum of money that is packed away es the savings of the Canadian people, for which they are getting only the trifling rate of three per cent, when at the same time the minister is floating bonds among the millionaires of New York, and among our own millionaires at home, at the rate of six per cent? I have a friend in Nova Scotia, a merchant who has now retired from business and is doing some thinking on malters of this kind. In a letter to me recently he asked me to ascertain how much the savings of the people amounted to, which were netting them only three per cent interest. I asked the question in the House a few days ago, and the Minister of Finance answered as follows:
Mr. Sinclair:
1.	What was the total amount on deposit in savings banks of all kinds in Canada on June 30, 1917?
2.	How much was on deposit in Government savings banks at said date?
Sir Thomas White:
1.	Approximately $998,856,922.61.
2.	Dominion Government savings banks, $13,167,436.64. Post office savings banks, $41,105,644.92.
So that in the Government savings banks of both kinds there was the sum of $54,273,081.56. While the savings of the people

amounted to $998,000,000-practically a billion dollars-the Minister of Finance was able to secure only $54,000,000 of that money for the use of the country. Would it not be a good thing for the people of Canada, and a good thing for the revenue of this country, if the Minister of Finance, instead of taking trips down to New York and paying New York millionaires six per cent for the money he borrows, were to give a little more interest to the people who have deposited their savings in the banks of this country, or at all events were to secure the savings for the use of the public?
Is it not an, amazing thing that we have the enormous amount of about one billion dollars on deposit, nearly all in the commercial banks, and that the Government has not been able to secure more than $54,000,000 of that amount? There must be some reason for it. Is the reason that the Government is endeavouring to favour the banks and leave all this money under their control so that they may borrow it from the people at three per cent, and lend it to the Government at five or six per cent, and charge the people who borrow from them as high as seven per cent or eight per cent? It looks that way. It looks as if the Minister of Finance was standing in with the money-masters of Toronto. The merchant who wrote me made this remark in his letter in regard to the loans which have been made recently in Canada:
How do matters stand re Government war loans? If I understand the situation the United States Government issued its celebrated Victory Loan at three and a half per cent and paid no commissions. This for 2,000 million dollars was a smaller proportionate issue than was $350,000,000, the amount of the three issues in Canada for the Dominion. We paid from one-half to one-quarter of one per cent in commissions, say $1,250,000, and sold five per cent bonds at 97i. Our $350,000,000 thus netted us $340,000,000, and as we pay five per cent on the face value, we pay 5.15 per cent on the net amount.
He was not speaking of the last loan but of the first three.
The average duration of these bonds is fifteen years. How do we compare in our financing with our next door neighbor?
340 millions at 3|% for 15 years amounts to $178,500,000 interest.
340 millions at 5.15% for 15 years amounts to $262,650,000 interest.
A difference in favour of the United States of $84,150,000.
That is to say, on a loan of $350,000,000 for 15 years, and the Canadian people will have $84,150,000 more to pay for interest than will the people of the United States. The President of the United Statee called
the financial men together and explained to them that he wanted a victory loan-a loan to carry on the war-and the bankers were so generous and so willing to help that they agreed to hie proposition, and this enormous loan was floated without one cent of commission having been paid. The Minister of Finance has paid a very large commission to his friends the Canadian bankers. Not only has he done that, but he went to the United States a few weeks ago and paid an enormous commission to the brokers and bankers there-$3,750,000 in commissions, a quarter of a million dollars of which went to one of the Canadian banks, or to a certain gentleman in the city of Montreal. That is the way my hon. friend has financed his loans. It becomes a serious question.


William Thomas White: My hon. friend is doing an injustice to the Bank of Montreal. I made a statement yesterday correcting a report which had appeared in connection with- that.


John Howard Sinclair: Do I understand the
minister says now that he did not give any commission to the Bank of Montreal?
'Sir THOMAS WHITE: A Tebate of one-quarter of one per cent of the commission was obtained for the Government by the Bank of Montreal.


William Pugsley: What was the commission paid?


George Perry Graham: One and three-quarters per cent.


John Howard Sinclair: Does it not mean that the Bank o.f Montreal receives one-quarter of one per cent on the whole loan?


William Thomas White: No.


John Howard Sinclair: How much does it receive?


William Thomas White: My recollection is that on a previous loan it was one-thirty-sixth.


John Howard Sinclair: Every member in the House understood it as I did. In any case, I do not care whether the Bank of Montreal got the money or not; I would prefer that the Bank of Montreal should receive it rather than have it go to the New York brokers. The point is, the minister paid altogether too much for his commissions in view of the fact that the president of the United States is able to float an enormous loan of two thousand millions without paying a cent in commissions.

We have to take our choice in regard to this matter. There are two ways of dealing with it. We on this side of the House propose that we should assume control of the Canadian- (Northern railway system under the legislation of 1914. The proposal of the Government practically .admits that there is value in this stock. They do not say how much that value is-, but by the proposal they are making to the House and the country they admit there is some value. The owners of the stock claim it is worth $60,000,009, and by passing this legislation we run the risk that the arbitrators may decide that it is worth $60,000,000. If they do, the people of this country will have to pay for it. The legislation of 1914 was carefully explained by ministers and by hon. gentlemen opposite at the time it was going through the House. We were told that if the Canadian Northern. Railway company, or Mackenzie and Mann, made default in the future, after having received this large advance of $45,000,000, we had machinery in this statute to take possession of the Toad without foreclosure and without any legal proceedings. Why not do it? We were asked in 1914 to advance this $45,000,000, and we were told that that was the last time we should be asked to advance money to that railway, that the Canadian Northern people were not to come back to us, and if they did we should be in a position to deal with them. It is now proposed to hand out a large additional sum to these people. The statute of 1914 is clear. No one pretends to dispute the fact that it contains provision for taking over the road. The Prime Minister said so; the Minister of Finance said so, and the Solicitor General, who drew the Act, so explained it. Hon. gentlemen on the other side of the House made speeches on that occasion which form part of the history of this affair ,and they all told us in the plainest language that if default was made this Act of 1914 would be resorted to, and that it would be effective. The Minister of Finance was satisfied. He used this language:
I take off my hat to the Solicitor General for the way in which he has performed the legal work in connection with this transaction. I was dealing with the question of remedy upon default-	.
Well, that is the question we are dealing with.
-and was pointing out that we have a much better control than would be afforded by the security of a majority or all the stock of the Canadian Northern.

That is to .say that, under the Act of 1914, we were in a bettter position than we shall be in now by taking over the stock of the company. Will he not admit the principle that it is his duty to do the best he can for the country as the Minister of Finance and as the trustee for the people? He made the positive statement that this Act of 1914 put us in a .better position than if we owned all the stock of the railway system. He now proposes to take the stock of the railway system and he refuses to resort to the remedy that he provided1 in 1914. There is no good reason for it. The Prime Minister put h.imself on record in the plainest language to the effect that we had under this Act of 1914 a perfect Temedy, and that if the circumstances aroise which have arisen it would be effective. This is what he said:
It is also provided by clause 24 that if au- ' thorized by the Parliament of Canada, the Governor In Council may in case of default declare that the interest of Mackenzie and Mann in the Canadian Northern railway is absolutely barred and foreclosed and that all the property and assets thereof subject to any outstanding obligations shall thereupon vest In the Crown in the right of the people of Canada.
There is no suggestion of arbitration there. He simply says in the plainest and most forcible way that if default is made this property will pass to the Crown for the right of the people of Canada without paying Mackenzie and Mann any additional money therefor. The Prime Minister further said:
The enterprise must proceed. If the expectation of those who believe the enterprise can be carried to a successful conclusion are disappointed, then a summary method has been provided by which the road can be taken over, the system reorganized and either be transferred to another corporation constituted for the purpose or pass into the ownership of the people.
There is no suggestion of arbitration there and there is no talk of confiscation. Hon. gentlemen have been telling us that it would be confiscation to take this road under the Act that is provided, the Act of 1914. I submit it is not confiscation. We are not taking anything from these people. In the first place they did not put a dollar into this stock. We know how this stock was constituted; we made it here. We did the whole thing ourselves. It is absurd to talk about confiscation; we know that there is not a dollar of money in it. We know that any right they may have had, has been forfeited by the default they have made.


Joseph Hormisdas Rainville: Will the hon. gentleman be kind enough to bring his remarks to a conclusion?


John Howard Sinclair: I am just through. I regret that I am not permitted to say all that I would like to say on this important question. I want to say, however, that I am decidedly opposed to paying any more money to Mackenzie and Mann. They have already become millionaires at the expense of this country and there is no reason why the country should be mulcted in a large sum of money to take over this stock when under the law of the land, under a law passed by this Parliament, we have the right to assume control and to take it over without the- payment of any money.


Mr. R. LANCTOT (Laprairie-Napierville) (translation):: Mr. Chairman, as the representative on one of 'the finest counties of the province of Quebec, as representative of an agricultural county, and .being myself a farmer, I believe I would not be doing my duty if I did not protest, as strongly as I possibly can, against this iniquitous legislation whereby the country shall be mortgaged for t'he. pretty amount of $650,000,000.
I put the question to you, Mr. Chairman, is it decent that a measure of this importance be referred to us, be imposed upon us by a Parliament which, for twelve months, has had no mandate from the people and after the Government have, on several occasions, through the right lion. Prifne Minister, pledged themselves, were the Parliament's existence extended, not to introduce into the House any contentious measure? Messrs. Mackenzie and Mann's railroad has received large subsidies both from the federal and from the provincial government, as well as from various Canadian municipalities. With such subsidies reaching so fabulous a total, we should lie led to believe that this railway would have been a success, but I think it is rather the contrary that has been the result. According to the Minister of Finance, the railway is in bankruptcy, and I - think I am right in believing that Messrs. Mackenzie and Mann are actually worth millions.
Since 1911, the Government, who seem to have a great deal of affection and pf gratitude for (Messrs. Mackenzie and Mann-and I do believe that they actually owe them a debt of gratitude for the 1911 election-have always come to us, at every session, and asked us to assist the Canadian Northern by way of bond .securities. Finally, in 1914, the Government made a contract with Messrs. Mackenzie and Mann. For my part, I would have thought that the solvent party-should have taken 60 millions of the 100 million obligations and that the insolvent party should have held the balance, i.e. 40 millions. But, nevertheless, the railway
company took good care to keep the majority of 'the bonds, in order to be able, later on, to have the Government pay them their 60 millions ; so that it is the insolvent party who manages the business, that is to say, Messrs. 'Mackenzie and Mann. As many other .members who have spoken before me, II am of the opinion that it is not necessary to buy 60 million worth of stock to become the owners of that railway. It seems to me that the purchase of 11 .millions of that stock would have been sufficient to become the masters of the situation.
For my .part if this railway is in bank-rupty, I would rather prefer 'letting it go into the hands of a reoeiver, then, at least, we would know 'the actual amount of the company's liabilities as well as the financial standing of its promoters; we would also find out how many millions those gentlemen have invested in private enterprises in Mexico, in South America and even here, in this country. Is it not a fact, Mr. Chairman, that Air. Mackenzie lives in a magnificent palace in Toronto, estimated at two or three million dollars, I believe? If such is the case, how is i't that a man obliged' to sell the Government an insolvent concern, can nevertheless find the means of living in luxury in a palace and that, meanwhile, the people are taxed to the utm'ost in order that these gentlemen may live at our expense?
Let us now 'pass to the financial side of the question. If we add to the National debt those new liabilities we are to. take over in consequence of this Act, we reach the incredible .sum o.f $2,500,000,000. Under such circumstances, how cam any one pretend that the people of Canada can run the war and the railways besides? For my part, I unhesitatingly declare that it is time, more than ever, 'to stop .both the war and what I >would call the railway scheme.
In this railway policy, I see the repetition of the old story: elections are at hand. Indeed, what do we find? 'Messrs. Mackenzie and Mann spend almost every night with the ministers or with the Prime Minister himself, in order to have the conscription .Bill passed. Sir William Mackenzie is here, in Ottawa, since the Premier's return from 'England1; they have worked together, to impose upon the people of this country this nefarious conscription Bill, thinking it would be most popular, that the whole country would welcome it and that it would allow the formation of a coalition government. They wanted the peo-of this country to swallow that pill. It is always those same people, those same individuals we see behind, the curtain; Mac-


Mr. ALPHONSE VERVILLE (Maison-neuve) (translation):: Mr. Chairman, as representative of such a large city


An hon. MEMBER:: 
Mr. C. A. WILSON (Laval) (translation):: Mr. Chairman, I will not ask you to keep your eye on me, for your official position does not permit you to watch anything , but the hand of the clock -maT-king the hours which will take u.s up to two- o'clock that fatal -hour of the day which shall follow this one.
I will not ask you to listen to -me, because you are impatient, officially, to hear the two strokes of that clock which, like -unto the mechanism' of a -safety vault, will open at two- o'clock sharp the doors of the Public Treasury to-morrow morning, and thus allow the -smiling Finance Minister to freely enter, the voice of the last keeper of the treasury having then been stifled.
In rising, Mr. -Chairman, I have not the least pretension, not even the pretension that -any -argument I might make would in -any way advance our cause. The only pretension I may have is based upon a most mathemath-ical and mechanical truth, that I will only advance the discussion by twenty -minutes and that is -all. (What proposition- is there now before us, Mr. Chairman? A -money proposal.
When, in 1913, the closure w-as imposed upon us, I believed, in my " candeur naive to use the poet'-s expression-that the Government then in power would only use such a measure under most extraordinary circumstances:	when the country's
safety would be at stake, when any invasion from -any foe whatever, would put the country's security in dir-e peril. But not at all, Mr. Chairman, for the -second time closure is applied, and it is about -a -money matter. The first time this measure was applied, if my memory serves me right, it was a question of some 535,000,000 which the then government -wanted to take from the national chest to make a gift of it to the mother country, England, for -a well known, plainly stated object, there was no possible equivocation. The idea was to increase the empire's nav.a' force, to pay a certain -amount to -the imperial treasury, for the construction of three dreadnoughts, at an approximative cost of some ten or twelve millions each, if I ire-member well. We objected to- that proposition made by the Government, although the House was perfectly informed as to- the nature of this expenditure, of the -application of this money, of how it should be employed, -and for my part, I never tho-ught, -for one moment, that the
535.000.	000 -which we were to put into the hands of the British Minister of Finance would be wrongfully expended1; but we objected to the very principle of -the Act, we said-and rightfully so-that if we had
535.000.	000 to -spend, it were better to- spend them f-or a Canadian navy than -to -aid the imperial admiralty, and events -have justified us.
I will not further refer to that political episode, only -to -recall wha-t I was saying

Mr. Chairman, I repeat it, it is an. extraordinary measure we are now discussing; but. still more extraordinary, on .account of the considerable amount of expenditure involved and as to the change of policy which it is intended to inaugurate; for they have but one preoccupation in their mindiSi; to satisfy the appetite of tho.se who, having done a bad (business, will retire, not as *honest people, free from .all liabilities .and of all obligations-if the proposal was to send them back home in .such a condition, I would in no- way object-but with millions in their pockets and with the qualification which was applied to them, in the name of the Government and rightfully too, by the hon. member for Calgary.


Mr. LAFORTUNE (Montcalm) (translation) :: Mr. Chairman, the hon. member for Laprairie-Napierville (Mr. Lanotot), when speaking this afternoon, stated that he represented the finest county of the province of Quebec. I take exception to this assertion, and I .say that the county of Montcalm, which 1 have the honour to represent, is just as fine as his, if not finer, fqr it is one of the finest dounties of the province of Quebec, and even, one of the finest in the Dominion.
When, in 1913, the question arose for passing this extraordinary Act, not to say worse about it, this gag Act, I have strongly objected to it. At a memorable sitting of the House, I spoke during four hours and a half against it, and it was considered a new record, at the time. [DOT] I was then told; have no fear, Mr. Member for Montcalm, that gag Act will pass, but we will never apply it, except in cases of extreme urgency, I wiae afraid of these gentlemen., I had not much confidence in their declarations, and I rwas not mistaken.
They played a fine trick on us, Mr. Chairman, when they imposed us this gag, for did it not exist to-day I can tell you that we would keep you here long to prevent you from passing this infamous Act, this wretched and .miserable Bill which you will adopt presently -through your servile majority, who will applaud with .both hands [DOT] your triumph, when the vote is taken. Ah! how proud they will be, how happy they will be to take over a property under such conditions.
'The hon. Solicitor General has said: Ah! it's only Montreal that is speaking. Well! let him come to Montreal, the Solicitor General. iHe will be welcome; he may come to the Monument National and make a big speech in order to explain the Canadian Northern Railway Bill; he may bring 
along with him the .Prime Minister; you will see how well they will be' received, for the people down there are most anxious to see both of them. You may try to accompany them, Mr. Chairman, you will be so welcome the three of you, we will give you a splendid night of it, Mr. Chairman; as for us, we will not impose on you the gag. We will let all of you speak, the Prime Minister, the Finance .Minister and yourself, as long as you please; you will see how funny it will .be.


An hon. MEMBER:: Can they speak about conscription?


David Arthur Lafortune: Yes, they can speak about conscription, if they feel like it, we will give them. " carte blanche," a free ride.
When we read the papers, when we .hear what is said up hill and down hill and what is going on every where we go; when we listen to the public talk, it is really painful to hear what the people are saying about you, Mr. Chairman; about these gentlemen, I should say, for I do not want to be personal, that will come on later, when the fight has started. For to-day .lot us remain in the strict limit's of legality. When we hear everything that is being said about the present Administration, we can't help wondering if we are living in a civilized country.


Mr. BOULAY:: 'Speak louder.


David Arthur Lafortune: If I am not speaking loud enough, draw nearer. I speak loud enough, Mr. 'Chairman, to perhaps 'know on what side the gentleman will vote; I do not know, I do not want to blame him now, but I am anxious to see.
, When they were told in 1914; do not advance those 45 millions to Mackenzie and Mann, it's money thrown away, then, the hon. gentlemen would say; it's a fine transaction, it's-for the country's good, if the Mackenzie and Mann obligations are not paid, are not observed, are not executed, we shall take over the road and that will answer the Government's purpose, it will be to the people's benefit. In vain did we protest against these .gentlemen, we did not succeed, the $45,000,000 were advanced, guaranteed, and you can see to-day where we stand, In what a fix we are.	.
II heard an hon. member sitting on your right, Mr. Speaker, a man whom I believed "to be sincere and serious, when he stated that M'aekenzie and Mann had spent their whole life-time in bribing everybody, in defrauding ever and everywhere. I had thought that this gentleman would vote against the sale of the Canadian Northern,

but, after having declared that this was a disgraceful transaction, that these men had spent their life in bribing and defrauding, he has the daring, this hen. member, to rise up and vote in favour of the sale. Well, I believed him to be Isincere, ,1 thought he was a business man; I may assure you that he has seriously fallen in my estimation.
When your humble servant now speaking to you, Mr. Chairman, will have said that the owners of this railway have spent their life in corrupting everybody, that they are disgraced, fallen and degraded men, you will not see him rise up to vote for such a transaction; I would have the courage of my opinion, of my convictions and I would not be a party to such a scandal.


Herménégilde Boulay: Does the hon. .member for Montcalm always speak the truth?
jMr. LAFORTUINE (translation): I might ask if my interlocutor has always spoken the truth.


Herménégilde Boulay: Would the hon. member read Mgr. Bruchesi's letter?
Mr. LAFORTUiNE (translation): I would rather be silent than to gainsay my own bishop, a thing you cannot do; I would rather pass for being in the wrong than to begin a fight against the archbishop of Montreal, .and what I have said was relevant, I will let you know that, Sir. And, as to the learned member who has just made such a remark, I would like to know whether he can very well throw me the first stone, for I never did any shuffling, any way.
Mr. Chairman, Mackenzie and Mann are notorious millionaires, and in order to reward them for not having respected their engagements, they were given titles of honour, they were knighted. Isn't that fine! Reward those who don't keep their pledges toward the State and give them the highest titles. Well, the people do not like that. 'Generally, when men are crowned with such high honours, given titles so lofty as that of Sir, it is on account oi honourable conduct, because they have won their bars and received a well-deserved reward, but when I hear the member for Calgary call them thieves, scoundrels, bribers, and declare that these men have passed their lives in bribing everybody, I'd rather not be knighted; under such circumstances, it is an almost worthless and emp+y honour.
In my province, Mr. Chairman, where I have the honour of practising as Crown Attorney for the twelve past years or so,
if a man lies to obtain any tiling of even little value, we call that false pretences; such a party is arraigned before the court and, upon conviction, he is sentenced to jail. .Here, it is all the reverse. The more values one can get under false pretences, by doing all sorts of criminal .acts, the more honours one is sure to receive. What a fine country! What an encouragement for those people who try to .be honest!
I was just speaking of millionaires. But, Mr. Chairman, one must make a distinction in this matter. Some men are found who have become millionaires, thaniks to their energy, to their labour, their good conduct or their skill in honest transactions. We must admit that there are millionaires of this kind; let us respect those who have made their millions in honest transactions, but not those who accumulate their wealth through fraud and bribery, as stated by my hon. .friend from Calgary (Mr. Bennett).


Herménégilde Boulay: Will my hon. friend allow me to put him a question?
Mr. LAFORTUiNE. (translation): Certainly, most certainly so.


Herménégilde Boulay: Would my hon. friend kindly tell me when the gentlemen. he is alluding to has been knighted?


David Arthur Lafortune: I regret it, but I do not keep an almanac of those things', I wonder why my hon. friend puts me suclh a question. Is it for curiosity's sake? Informations are generally asked by people who don't know a thing, but such is not the case with my hon. friend, who must know what is going on among his good friends.


Herménégilde Boulay: Have not these gentlemen been knighted under the late administration?
Mr. LAFORTUiNiE (translation): My hon. friend seems to be well informed. The hon. gentlemen who spoke before me have repeatedly reproached the Minister of Finance and his friends with refusing to produce the list of tthe debenture holders, stating that this had nothing to do with the case. In our province, when a man who is put a question refuses to answer, it is the same as if he pleaded guilty. When men of such a high standing as tlhe Minister of Finance and his colleagues refuse to show the list of the debenture holders, it looks had, it squints, as we say. When they take the trouble of saying that the total amount is $600,483,280.39; it's the 39 cents that amuses me; thirty-nine cents! How important that is! And we ask them the list

of the debenture holders. No, do they answer, that would take too much time, we would have too much trouble in getting it. Well, gentlemen, am I wrong in suspecting there is a snake in the grasis? Am I not right in isuspecting that we would find in that same list certain names which would compromise some of the Government's friends or of their relatives, such as fathers, mothers, brothers, sisters mothers-in-law, fathers-in-law, brothers-in-law, sisters-in-law, uncles, aunts, nephews, nieces or cousins of either sex? Why not give, Mr. Chairman, to the people, represented by the .member to your left as by those to your right, tlhe exact list of all those holding such debentures? Because it would be too incriminating to do so. One cannot draw any other conclusion. And if I fake the given word of the bon. member for Calgary that these bribers, these bandits have distributed stock right and left, to Peter, Dick and Harry, it is readily conceived that the publication of such a list would perhaps compromise a great number of gentlemen who hold such debentures; but when the people will be called upon to judge the conduct of those who are now in power, there will .be no gag. Ib my county, where we will discuss this question, you will not be there, Mr. Chairman, with your gag. Everyone will speak, and you will not be always watching the clock to call time.
Woe to the members who shall vote this transaction ! iWIhat says Lord Sbaughnessy, not a friend but a political adversary, the most qualified, the most upright, the most honourable and the most competent man on the subject you can find in the whole Dominion? What does the president of the Bank of Montreal .tell us, and what do say the managers of all our important industries who have .condemned that transaction?. Are they not worth as much as the hon. member for Calgary, who is ever ready to cry out against everyone, who has found fault with all our friends and who has just voted to-day in favour of a measure which he had so forcibly denounced?
When I said, in 1913-1914, that that transaction was a disastrous one, I was perfectly right, and when I saw, in those days, the hon. member for Red Deer (Mr. Clark) who had the floor after me, speak for two hours, condemn the Government, say all kinds of things against the Government- he spoke two long hours to prevent the $35,000,000 vote-and when I see him, today, bestowing praise upon the other side,
I say: how much the times have changed, how changing is this gentleman's polities! After having said all he did say against the  _
hon. members to your right, after having supported Ifor so many years the right hon. leader of the Opposition (Sir Wilfrid Laurier) and then to come back and insult him by calling him the St. John the Baptist's lamb ! That man has fallen a great deal in my .consideration. Be Conservatives, be Liberals, what you please, but if you do not share my opinion, the opinion of your leader, you .have not the right to abuse him, to insult him, as the hon. member for Red Deer has just done.
The hon. member for Maisonneuve (Mr. Verville) has made a remark which I consider too broad. 'He will allow me to draw attention to what he has said, that gold controls Governments. I do make one exception. Gold has never controlled tihe late administration, gold has never in any way influenced the right hon. Sir Wilfrid Laurier; gold may perhaps, control the present Government, but the late administration came out victorious in all it undertook; it has honorably fallen, and never has any one had. occasion to say against Sir [DOT]Wilfrid Laurier's administration that gold or money, favours or honours have ever influenced it.
We have struggled to prevent this grant of $35,000,000, we were unsuccessful. From Monday mom until midnight on Saturday, we slept and ate in the Honse. That law was voted in the House, after the gag had been imposed upon us; hut, fortunately, there was in those days a Liberal Senate, a Senate composed of distinguished and serious men., of whom the majority were Liberals!, .and the Government could not carry away from the country that sum of $35,000,-
000.	(But times have changed; new men have been recently appointed to the Senate *where they form the majority. And with these new members, they have succeeded in .passing the conscription Act, as they will be successful in having them vote this sale o.f the Canadian Northern Railway. There is no doubt about it. It is all prepared in advance, the deed is already drawn up, signed and sealed, and if it is not registered, it shall soon be.
Where are these millions to go, where will go the Government millions for that stock which, has been declared worthless? We do not know, and the hon. Minister of Finance does not want to tell us.
When something is to be done and there is something to de-dbct, when people refuse to speak, to play above hoard, I am airaid of such things, yes, I am afraid of such transactions; I like a man who plays an open hand, I like an administration that

has nothing to .suppress, that has nothing to conceal, that submits to the House, to the country, all it knows; and the reasons given by the Minister of Finance, in my humble opinion, as the hon. member for Kings, P.EjI. (Mr. Hughes) who spoke before me, has said, are that the transaction is not genuine, it is not a first-class transaction.
A MEMBER: Time, time.


David Arthur Lafortune: Mr. Chairman, if my time is up, I will immediately take my seat, for I ask favours from no one. Is my time up, Air. Chairman?
Mr. RAlINVILLE (translation): The hon. member has spoken one minute over, butiMr. LAFORTUNE (translation): If my time has expired, I do not want any favour, I withdraw, delighted to bow to you.


Mr. PROULX (Prescott) (translation):: 
Mr. MORPHY:: I would like to know the name of the paper the hon. gentleman has been reading for the last fifteen minutes. 3214


Edmond Proulx: The paper is Le Devoir of Montreal and the writer is Mr. Henri Bourassa. If the hon. member for North Perth (Mr. Morphy) understood the article the must .admit that the writer must have studied the question very fully.
Some of my colleagues have pointed out that it was a daring injustice towards the province of Quebec to hold her conjointly liable, with the other provinces, for the obligations the latter have assumed: towards the Canadian Northern. And this remark is justified, when we find that obligations to the total amount of $107,514,642.27 have been guaranteed by the different provinces, while the province of Quebec did wisely stand .aloof.
It has been suggested, the other day, that instead of entrusting .an arbitration committee with the estimation of this capital stock, it would be better to submit the matter to the Exchequer court. Last year, when the Government wanted a maximum valuation fixed for the Quebec and Saguenay, the question was laid before the Exchequer court; but, as the latter did not render a decision favourable to the Government and, more particularly, to the. member for Montmorency .and Charlevoix (Sir Rodolphe Forget), the Government dad not think it wise to go back to the same sign. Now, they want us to believe, that this arbitration will be absolutely fair, for all the interested par-ties, because Sir William Meredith, the (Chief Justice of the province of Ontario, shall be asked to give his decision upon that transaction; when actually, the Government's object is to favour tbe holders of these. 60 per cent of the capital stock, the greatest part of which is in the hands of the promoters of this. line. It might perhaps be relevant, at this point, to recall the. fact that the latter will also have the choosing of the other commissioner. When, the Government have had an important commission to .appoint, they have always, like the Ontario Government, resorted to the Chief Justice of the province, Sir William Meredith, may be possessed of a deep legal science, he may thoroughly know the jurisprudence of the country, but when, it comes to a railway matter, would not another party, another railroad president, Lord Sh.aughne.ssy, for instance be more competent to determine the value of the capital stock of any company whatever, for, in such a case, he. must rely upon the present and the future receipts of the company? There are other considerations I would, like to offer to this

House, but I find myself compiled to omit them, for I am told that my allotted time is up. Tn the name of my constituents, in the name of the province of Ontario, I strongly protest against this measure, because it is a legal brigandage, because it will cost, from the start the sum of $30,000,000, $40,000,000, even perhaps $50,000,000 and we shall receive capital stock which, according to the Government's commission, represents no value -at .all.	[DOT]
I was forgetting, Mr. Chairman, that in this House to-night, might overrides rght, therefore I will speak no longer on this subject.


Mt. JOSEPH DEMERS (St. John and Iberville) (translation):: tions and o-f revolt against the autocracy that has reigned here in Ottawa, for the few years past. I have already stated that I would not let myself be gagged and, therefore, I take my seat.


Mir. ARTHUR LACHANCE (Quebec Centre) (translation):: 
Hon. Mr. SEVIGNY (translation):: Will my hon. friend allow me a question?


Arthur Lachance: Certainly.


Albert Sévigny: Would my hon. friend rather see the Government advancing, this year, a sum- of fifteen o-r twenty -million dollars in order to meet the -needs of the Canadian Northern?
Would my hon. friend, who does not approve -the measure now before the House, be disposed to recommend that the Government grant, -a sum, let us say of $25,000,000, or would the hon, member be dispo-sed to do what the Government did three years ago? My -hon. friend understands the question.


Arthur Lachance: I -may reply to- -the hon. minister that the question is a very simple one in our opinion, -it ie that we have here -an Act, and if the Government pretend they want the nationalization-
.Several MEMBERS: Order, order! Vote, Vote. Yout time is'up.


Arthur Lachance: I will therefore tell the -hon. minister that I have laid down, at the very opening of my remarks, the principle upon which I intended

to give my observations. I say that the Government have it now in their power to answer the question he has just put to me, without^ spending a single cent-


Several MEMBERS:: Order, ordeT! Vote, vote. Your time is up.


Joseph Hormisdas Rainville: The hon. member having been interrupted by the hon. minister of Inland Revenue (Mr. Sevigny), it as only proper that the hon. member should have time to conclude his remarks.


Arthur Lachance: I was then saying, Mr. Chairman, to conclude my remarks that for me the situation is rather foggy ; we do see, in the background, large financial institutions, we do see banks, big capitalists, investment associations and trusts of every denomination, all restlessly active and lying in wait for these millions; but, it is unfortunate that the Government did not want to assist in disentangling the occult ramifications of all this transaction and in letting the public know who wall receive this money first, and who will get it later. Nevertheless, there remains an undeniable, self-evident fact: it is that the Government are going to pay $60,000,000, when, under the Act of 1914 they would not have to give one single cent.
Therefore under such circumstances, I [DOT]believe it is my duty to vote against the proposed Act.


Mr. J. E. ARMSTRONG:: Mr. Chairman- The CHAIRMAN: It is two o'clock. The question is on clause 1. Shall clause 1 be carried?


Some hon. MEMBERS:: Carried.


Some hon. MEMBERS:: No.
Section agreed to on division; yeas 63, nays 36.
On section 2-Transfer of shares:


Joseph Hormisdas Rainville: Shall section 2 be adopted?


Some hon. MEMBERS:: Carried.


Some hon. MEMBERS:: No.


Some hon. MEMBERS:: Take the vote.


Joseph Hormisdas Rainville: I declare section 2 carried on the same division.
On section 3-After transfer Canadian Northern Railway Company may be assisted:


Joseph Hormisdas Rainville: There is an amendment to this section. All the words after
Fund" on line 4 are struck out and the following substituted therefor:
Provided, however, that until authorized by Parliament the total of such advances shall 
not exceed the sum of $25,000,000. A report of any such advances showing in detail the purposes for which they were applied shall be presented to Parliament by the Minister of Finance within twenty days after the opening of the next ensuing session thereof.
The question is on the amendment. Shall this amendment be adopted?


Some hon. MEMBERS:: Carried.


Some hon. MEMBERS:: No.


Louis Audet Lapointe: I rise to a point of order. Was there any notification of the gag in respect to this amendment?


Joseph Hormisdas Rainville: That is not a point of order. The amendment formed part of the clause. I declare the amendment carried, and the section as amended carried, on the same division.
On section 4-Appointment of arbitrators:


Joseph Hormisdas Rainville: There is an amendment to this section. The words "and may apply to their own judgment in determining such value" in line 24 are struck out, and all the words after the word "Fund" in line 37 are struck out and the following substituted therefor:
In determining the value of the said six hundred thousand shares the arbitrators, should they regard it as expedient to take into consideration the reproduction cost of the Canadian Northern Railway system, shall not include therein the increase in value, due to the war, of labour, materials, equipment or of any property.
I declare the amendment carried and the section as amended carried, on the same division. Shall the title of the Bill be adopted?


Some hon. MEMBERS:: Carried.


Some hon. MEMBERS:: No.


Joseph Hormisdas Rainville: Carried on the same division.
Bill reported and amendments read the first and second time and concurred in.
On motion of Sir George Foster, the House adjourned at 2.12 a.m. (Wednesday).
Wednesday, August 29, 1917.