1917-08-17

SUPPLEMENTARY ESTIMATES FOR 1917-18.

[Stage Direction]
A message from His Excellency the Governor General, transmitting a supplementary estimate for the year ending March 31, 1918, was presented by Sir Thomas White (Minister of Finance) read by Mr. Speaker to the House, and referred to the Committee of Supply.
HARVEST HELP FROM UNITED STATES. On the Orders of the Day:
Mr. W. E. KNOWLES (Moosejaw):: I desire to ask the hon. Minister of the Interior (Mr. Roche) certain questions with regard to the regulations under which harvesting help may enter Canada, and, with the permission of the House, I will read a short extract from a letter, which shows the circumstances in the district south of Swift Current, where the entry 'offices are far apart: 1
1 live on the International line forty miles south of Admiral, and am familiar with conditions on both sides of the line. The last three years there have been hundreds cross at harvest and threshing time, but this year the report has spread that the regulations are so drastic that they are afraid to come into the country.
In view of this report, I would ask if the minister could not issue an announcement that bona fide harvesters will not be inteT-LMr. Macdonald.]
fered with, and that they need not travel to far distant points to get the necessary certificate.


Mr. ROCHE:: Such an arrangement has been entered into between the Government of Canada and the Government at Washington. The deputy minister is working out the details. It is the intention of the Government to waive tire immigration regulations. Such an announcement will be made -in fact, it has already been made in the press.



PRICE OF BRAN IN CANADA AND UNITED STATES.

[Stage Direction]
On the Orders of the Day:
Mr. E. W. NESBITT (North Oxford):: Has the Minister of Trade and Commerce taken any steps to confirm or contradict the statement contained in the clipping from Farm and Dairy, which I read the other day, as to the price at which Canadian millers were selling bran in Canada and in the United States? It is only fair that I should state my reasons for asking the question. I have a letter from the manager of one of the largest mills in Canada in which he states as follows:
At Montreal and points, taking same rates, the price of bran was $35 per ton sacked, in comparison with
Buffalo	 $41.00
Toledo	 40.00
New York	 41.00
Boston	$38.00 to 40.00
Philadelphia	$41.00 to 42.00
It would depend, of course, somewhat on the duty on 'bran going to the other side whether the prices were higher there than here.


Sir GEORGE FOSTER:: Inquiries are being made, and the information so far obtainable goes to show that bran is not sold at lower prices on the other side, as compared with prices charged to our own farmers.



CAPTAIN WILLIAM AVERY BISHOP V.C.

[Stage Direction]
CONSPICUOUS GALLANTRY Op A CANADIAN OFFICER.
On the Orders of the Day:
Sir EDWARD KEMP (Minister of Militia):: I desire to refer to the case of a Canadian officer who has been honoured on three different occasions for distinguished conduct at the front. The record of one person being awarded these three distinctions is most unusual. In a supplement to the London Gazette, dated August 11, is

contained the approval of His Majesty the King for the award of the Victoria Cross to Captain William Avery Bishop, whose father resides at Owen Sound, Ontario. Captain Bishop belongs to the Canadian Cavalry, and was attached to the Royal Flying Corps. He already possesses the Distinguished Service Order and the Military Cross. Reference has already been made to the matter in the press, but I thought it desirable to convey the facts to the House in order that a record of them may be placed on Hansard. The paragraph in the London Gazette reads as follows:
The award was made for most conspicuous bravery, determination and skill. Bishop, working independently, flew first to an enemy aerodrome. Finding no machine about, he flew to another aerodrome about three miles southeast, and at least twelve miles behind the German line. Seven machines, some with engines running, were on the ground there. He attacked these from about fifty feet up, and a mechanic who was starting an engine was seen to fall. One enemy aeroplane got off the ground but from a height of sixty feet Bishop fired fifteen rounds at very close range and it crashed to the ground. A second machine got off the ground ; Bishop fired thirty rounds at one hundred and fifty yards' range and it fell into a tree. Two more machines then rose. One he engaged at a height of one thousand feet. The enemy machine crashed to the ground three hundred yards from the aerodrome. Afterwards Bishop emptied the whole drum from his machine gun into a fourth enemy aeroplane and then returned to his station. Four hostile scouts were about one thousand feet above him for about a mile on the return journey, but would not attack. Bishop s machine was very badly shot about by mach ne gun fire from the ground.



CANADIAN LOAN IN NEW YORK.

[Stage Direction]
- On the Orders of the Day:
Mr. E. M. MACDONALD (Pictou):: I desire to call the attention of the Minister of Finance to the following statement appearing in the American press:
Wall Street reported that the largest check which has ever passed through the New York clearing house was paid yesterday by the Liberty National bank. The check was for $96,111,111, drawn by J. P. Morgan & Co. to the order of the agents of the Bank of Montreal for the credit of the Minister of Finance and the Receiver General of Canada.
In answer to a question which I asked in the House the other day, the statement was made that the net proceeds of this loan amounted to $96,250,000. This statement shows a difference of $138,889. I would like to know which statement is correct.


Sir THOMAS WHITE:: The statement which I gave my hon. friend. The $111,000 represents the interest.


Edward Mortimer Macdonald: But it is $138,000.


William Thomas White: There is another fact which has a bearing upon this question. The Government availed itself of the very capable services of Sir Frederick Williams-Taylor, of the Bank of Montreal, who negotiated the loan, and received a rebate of one quarter of one per cent commission; so that the flotation expenses were about one and three quarters per cent instead of two per cent. My hon. friend will see, if he disregards the item of interest, and makes allowance for one-quarter of one per cent, that the answer which I made is accurate.



WESTERN COAL SUPPLY.

[Stage Direction]
On the Orders of the Day:	*
['I should like to have it recorded that the Bill is carried on division.\nMotion agreed to and Bill read the third time on division.\nOn motion of Sir Robert Borden, the House adjourned at 10.12 p.m.\nSaturday, August 18, 1917.']
William Erskine Knowles: Yesterday the Minister of Trade and Commerce (Sir George Foster) intimated that to-day he would make a statement with regard to the supply of Pennsylvania coal in the West.


George Green Foster: I do not know
that I can say'anything very definite about it. The facts which are apparent are these. First, there is a great and unprecedented call for coal in the United States. Second, both water and railway carriage are inadequate for the quick supply of coal, and that reacts upon the output of the mines. That applies particularly to the eastern and middle portions of the United States. As regards the lakes, the chief difficulty has been and is the matter of railroad transport from the mines to lake ports. Lack of means of transport has had the effect of causing several, perhaps many, grain and ore vessels Ito come 'back to the north with water ballast rather than with coal. Everything that can be done by the United States authorities and by the Fuel Controller is being done to co-ordinate the transport facilities and to hasten the delivery of coal. As to what will be accomplished, I cannot' speak definitely at present.


William Erskine Knowles: Will the minister kindly tell us what is being done? The condition that he speaks of with regard to transportation is well known.


Mr. SPEAKER:: Order.


George Green Foster: I do not know
that I can tell my hon. friend what is being done; that would take a long time.


William Erskine Knowles: You have lots of time.


George Green Foster: All I can say
is that, in short, everything possible is being done by the Fuel Controller and his aides who are acting in close co-operation and sympathy with the authorities on the other side of the line. If my hon. friend wants to know the exact number of cars that are hauling coal or the exact tonnage that is being hauled, that I cannot give him at this time. A great deal of examination would be necessary to procure that information.



[Stage Direction]
Consideration in committee of Bill No. 125, providing for the acquisition by His Majesty of the capital stock of the Canadian Northern Railway company-Sir Thomas White (Minister of Finance) -resumed from Thursday, August 16, Mr. D. Stewart in the Chair.
On section 1-Acquisition of shares of Canadian Northern railway .authorized:
Mr. 'GRAHAM:	When the Government
took over the 40 per cent of Canadian Northern shares they appointed representatives on the board of directors. These representatives must have made some report to the Government; I imagine that they would make a report with regard to the Drayton-Acworth report. Have they done so, and if so, should not the minister give us that report?
William Thomas White: There was communication from the directors representing the 'Government on the board with respect to the Drayton-Acworth report, but we have not regarded it as expedient to make it public; it might have an effect in connection with' (the arbitration proceedings. It is of a confidential character, and the Department of Justice thinks that it should not be made public. It calls attention to the omissions from the report to which I referred the other day. [DOT]


Mr. GRAHAM:: Was it signed by the
Government directors only, or by the entire board of directors?


William Thomas White: I think it was signed by the three Government directors only. Certain information was asked for last evening, which I am endeavouring to obtain, but which I am not yet in a position to give to the committee. As this information was asked for in connection with section 1, my suggestion is that that sec-
tion be allowed to stand and that we take up sections 2, 3 and 4 with a view to seeing whether we can make some progress with one or more of them.
I desire to give notice of some amendments with Tespect to clauses 2, 3 and 4, and in connection with those amendments I desire to make a few observations to the committee. It has been drawn to my attention by members of the House that section 3 gives the Governor in Council very wide powers indeed as to paying out money, issuing securities and giving guarantees. I wish to explain to the committee why that wide discretion was considered necessary in. connection with this measure. It is possible to estimate with a reasonable degree of accuracy the shortage which would require to be made up to meet underlying interest indebtedness incurred and to be incurred and for betterments and the purchase of rolling stock. But it is not possible to estimate what amount of money will be required to meet maturing shortterm obligations. I explained to the House that a number of short-term obligations of the Canadian Northern Railway company would mature from time to time during this and next year. I expressed the hope that the Canadian Northern Railway company would be able to meet those obligations by renewing them or making fresh issues from the proceeds of which they would be paid. However, on account of war conditions it is not certain that they will be able to do that; therefore it was considered advisable that the Dominion Government should take this power, this wide discretion, in order to be in a position to take care not only of underlying interest charges that the net earnings were not sufficient to meet needed betterments and equipment payments, but also one or more, possibly, of these short-term obligations, if it should chance that the Canadian Northern Railway company should' not be able to provide the necessary funds to meet them as they matured. The result is that this clause was drafted, which is very wide in its terms; indeed., when. I was -considering it I thought that it was too wide in its terms. I believe that so far as possible Parliament should be acquainted with the objects for which expenditures are made; in other words, that wherever possible there should be an estimate. I have accordingly drafted an amendment to section 3, of which I now desire to give notice. Before reading the amendment I would call the attention of the committee to the concluding portion of subsection 1 of section 3, which states that the Governor in Council may guaran-

tee payment in whole or in part and may give the obligations or securities of the Government in connection therewith.
The object of that was that the Government, instead of paying cash, might give its securities, and it might be able to guarantee a debt and in that way continue the obligation without immediate payment. But on thinking the matter over, I have reached the conclusion that I would rather he without those powers; that is, I would rather that the Dominion Government, instead of issuing securities in payment of obligations and instead of giving guarantees, to which of course there is a certain objection, should pay cash in connection with such financing as it has to do for this system. The amendment of which I purpose giving notice is this:
That all the words after "Fund" on line 4 page 2, of the Bill be struck out and the following substituted therefor:-
Provided however that until authorized by Parliament the total of such advances shall not exceed the sum of $25,000,000. A statement of any such advances showing in detail the purposes for which they were applied shall be presented to Parliament by the Minister of Finance within twenty days after the opening of the next ensuing session thereof.
As nearly as I can estimate, $25,000,000 ought until the next session to carry the system, including payments of obligations so far as we are able to estimate that they will fall due and cannot be renewed-and that is to some extent a matter of conjecture-and take care of all the interest payments and the payments for betterments and instalments upon rolling stock.
The hon. member for Calgary (Mr. E. B. Bennett), in his very interesting and able speech yesterday, referred to another matter which, I think is of some importance. He referred to the fact-and it is an undoubted fact-that the cost of labour and of material of all kinds is very much higher to-day owing to war conditions than it was in the period preceding the war or than it is likely to be in the period succeeding the war. The point he made was that the arbitrators might, in reaching a conclusion as to the value of this, stock, be guided, to some extent, by the reproduction cost of the physical assets of the Canadian Northern Railway company on a basis of war conditions. He thought it would be desirable that that should be obviated. Personally I would not be disposed to agree with the view that the arbitrators in valuing stock would, if they considered, in connection with such valuation, the reproduction cost of the physical assets of the system, regard the higher prices during war
conditions as governing that cost. The point was made yesterday by the Solicitor General that, if the Government were expropriating the physical assets of the Canadian Northern Railway company, possibly such a oouirse might be adopted. My own view is that, even in that case, it would not be adopted by a board of arbitrators, because it seems to me it would be manifestly wrong to take the inflated prices of material and equipment of every kind and the high cost of labour into account in reaching a conclusion as to the fair price to be paid for the physical properties of a railway company expropriated at a time like this. My opinion is not entitled to the weight of that of either the hon. member for Calgary (Mr. R. B. Bennett) or the Solicitor General (Mr. Meighen). . In this connection, however, I would like to call attention to the view of Professor Swain, to which I referred the other day, as to the principles of valuation. Professor Swain at page 4 of his report emphasizes earning power as to the principal test of value, and I will quote him again for the information of the committee. He says:
There is no sentiment about a commercial property like a railroad. The real value of such a property is measured by its earning power and by nothing else. No matter how costly or how inexpensive it may have been originally, its value in exchange will be measured by its earning power. Prospective earning power, perhaps under altered conditions, must of course be considered. Some properties, therefore, have a so-called "strategic" value, because, while they may earn nothing by themselves, they may be combined with other properties in a way to produce or enhance earnings.
Then his statement, on the next page with regard to the valuation of physical assets is this:
Just what the present value, or the fair present value may be, is not easy to state, and probably cannot be stated. The courts, however, have frequently stated what it is not. They have again and again laid down the principle that it is not original cost. In some instances they have stated that it is not the cost of the reproduction new, but it is generally admitted, I think, that both the original cost and cost of reproduction new, and also the depreciation, depending upon circumstances, are all elements which may affect the judgment as to the "fair value."
He emphasizes earning power actual and potential, but in connection with a railway system such as this, my own view would be that if potential earnings were considered at all, it could be considered only as to the company in private hands as it is to-day, and in the serious financial

position in which it is. I stated that the other day. I would not admit for a moment that the prospective earning power of this system in the hands of a strong Government able to finance it should be considered by the arbitrators. On page 6, Professor Swain deals with this question which was Taised by the hon. member for Calgary and as to which I purpose giving notice to-day of an amendment. This is what Professor Swain says:
These principles were briefly discussed with your commission before the beginning- of the work. The problem, therefore to be performed by the force under my direction, was to ascertain the cost of reproduction new of the properties in question at the present time. By the phrase "at the present time" is not to be understood the present moment, in view of the inflated prices for materials and labour which have come about as a result of the war; but rather, the fair cost of reproduction new, assuming that the properties were to be reproduced at fair average prices prevailing during a brief period of years just before the war.
Professor Swain, therefore, in dealing with the question of reproduction cost in war time, clearly states that the inflated prices for material and labour are not to be taken into account, but rather that there should be considered the fair cost of reproduction "assuming "that the properties were to be reproduced at fair average prices prevailing during a brief period of years just before the war." I do not make his sentiments my own, because I do not think the matter is one on which I am called upon to express an opinion. But I desire to make the point ithat it is not probable that a board of arbitrators in fixing the value of the stock of the Canadian Northern Railway company would be guided, in their deliberat-tions by the bearing which the high prices prevailing during the war have on the cost of reproduction. But after all is said and done, the question is a legal one, and one upon which I think no chances should be taken, and I therefore give notice that when we reach section 4 I shall move to add the following to subsection 2:
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.


Edward Walter Nesbitt: Does my hon. friend propose striking out the words "as of the date of the said agreement," in subsection 2? Otherwise, I think they will' conflict with his amendment.

/


William Thomas White: The hon. member for North Cape Breton (Mr. McKenzie) raised the point the other day, and I am not sure that it makes any difference whether we change the words or allow them to stand, but when we are considering the subsection I shall be glad to hear the views of the committee, and if it appears that the words should be, changed at an earlier date selected, we can make the change.
There is one other amendment of which I wish to give notice, and that is that all the words after "Fund" on line 38, page 2 of the Bill, be struck out. The subsection will then read:
The amount of the value so determined shall be paid out of the Consolidated Revenue Fund.
The subsection as it now stands suggests that these shares might be paid for by the issue of securities, or by an indebtedness secured by the deposit of securities. Personally, I do not like arrangements of that kind, and I would rather, as I stated in connection with the previous section, that the Dominion pay cash.


Edward Mortimer Macdonald: Has my hon. friend considered the point suggested by my hon. friend from Calgary with reference to the phrase "the said arbitrators. . . . may apply their own judgment in, determining such value"? I agree with my hon. friend from Calgary, if I understood him correctly, that if the arbitrators may apply their own judgment it will be no use allowing an appeal to the Supreme Court.


William Thomas White: I am extremely obliged to my hon. friend, for I had overlooked that point. The reason why those words were inserted was that the arbitrators might be able to proceed expeditiously in determining the value of the stock. But there does appear to be a doubt, so far as concerns an appeal to the Supreme Court, that if these words are left in, the court might find itself unable to review the award on the ground that the arbitrators had acted, not only as arbitrators, but as experts. I confess that I think it could be argued that to use their own judgment would mean using their own judgment having regard to the evidence. I am inclined, however, to the interpretation which has (been placed upon the words by the hon. member for Calgary and the hon. member for Pictou. I think it would be better that the words be left out, and I shall move accordingly:	.
That the words "and may apply their own judgment in determining such value," appearing on lines 24 and 25, page 2 of the Bill, he struck out.


Mr. R. B. BENNETT:: The minister and my hon. friend from Pictou misunderstood me if they assumed for a single moment that I said these words should be left out. I pointed out that under the decision of the Supreme Court they had very great value.


William Thomas White: Then I misunderstood my hon. friend. I understood him to say yesterday that the Supreme Court had refused to set aside the award in a certain case because the arbitrators in the exercise of their own judgment had decided in a certain way. The principle that I thought was at stake was this: If arbitrators, in addition to being judges, so to speak, are made experts, so that they may act upon their own opinion in addition to considering evidence, the Court of Review might say, "How can we come to a different determination when it is open to these arbitrators to exercise their own judgment not only upon the evidence but with regard to tlje valuation"? However, when the amendment is before the committee we can hear the arguments, and if it is considered advisable that these words should be left as they are, it may be done.


Mt. ROSS:: I would suggest that in subsection 3 of section 4, after the words " so determined," the words "if any " should be added. In section 24 of the Act, under which you say you are acting, the Crown was to take over this railroad upon such terms as would be prescribed. If the wording remains as iit is, it is presumed you are going to -pay the money.


William Thomas White: It does not occur to me that, it is necessarily so, because the *arbitrators' award will either be for a certain amount of value, or it will not. As it stands, if (the arbitrators came to the conclusion that there is no value, of course nothing would be paid out of the Consolidated Revenue Fund. It is only in the event of their reaching the conclusion that there is value that payment is made. However, when we come to the subsection we will consider that point. My suggestion is that we take up section 2.


Sir WILFRID LAURIER:: The motion of my hon. friend is that section 1 should
stand, with a view to providing the information which has been asked for. I have been away for a day or two, but so far as I know we have not yet had complete information as to what we aTe going to acquire by this Bill. We acquire the stock of the Canadian Northern Railway company, ,and in that way we take over the whole system. The Canadian Northern Railway system is a very extended one, covering all the provinces of the Dominion -not entirely, but in some part-with the exception of one. If there was only one charter there would be no trouble. But, as my hon. friend is aware, the main charter controls quite a number of subsidiary charters. All these are to be acquired, and we do not know what they are. I think we should have a detailed statement of all the subsidiary charters controlled by the main charter. For instance, there are charters in Nova Scotia which are covered by this main chanter. There is also a very important question as to whether we acquire the Montreal terminals under this present Bill, and whether we acquire the Model City, which is an adjunct of the Canadian Northern Railway -company in Montreal. I would suggest to my hon. friend that before we take up section 1 we -should have a detailed statement of the different charters which will be covered by the Act now -proposed.


William Thomas White: I agree entirely with my hon. friend. It is surprising how often we agree on matters non-political.


Wilfrid Laurier: Of course, I am -always right when we agree.
-Sir THOMAS WHITE: My hon. friend could readily find the information he seeks in the statute of 1914 dealing with the agreement for the guarantee of the $45,000,000 bonds.


Wilfrid Laurier: What chapter?


William Thomas White: I think it is chapter 20. I have the information before me. I will place it upon Hansard, and lay it upon the Table of the House. This information was -sent me by Mr. Mitchell, assistant to the vice-president of the Canadian Northern Railway system:

Canadian Northern Railway System.
Statement Showing Capital Stock of Affiliated Companies held by the Canadian Northern Railway Company as at June 30, 1917.
Capital Stock	How	Owned.	Outstanding.	C.N.R. Co.	%	Public.Bay of Quinte Railway Company	$ 1,395,000	$ 1,395,000	100	Canadian Northern Pacific Railway Co	25,000,000	25,000,000	100	Canadian Northern Alberta Railway Co....	3,000,000	3,000,000	100	Canadian Northern Western Railway Co....	2,000,000	2,000,000	100	Canadian Northern Saskatchewan Ry. Co..	1,000,000	1,000,000	100	Canadian Northern Manitoba Railway Co....	250,000	250,000	100	Canadian Northern Ontario Railway Co	10,000,000	10,000,000	100	1. Canadian Northern Quebec Railway Co	9,550,000	( 2,000,000 ) 5,144,600	74.7	$2,405,400Northern Consolidated Holding Co. Ltd....	(See Note No. 1).	Canadian Northern System Terminals, Ltd..	2,000,000	2,000,000	100	Central Ontario Railway Company	3,331,000	3,329,000	99.9	2,000Duluth, Winnipeg & Pacific Railway Co....	6,000,000	3,060,000	51	2,940,000Halifax & South-Western Railway Co	1,000,000	925,000	92.5	75,000Irondale, Bancroft & Ottawa Railway Co....	53,500	53,000	99.06	500Mount Royal Tunnel & Terminal Co. Ltd...	5,000,000	5,000,000	100	Marmora Railway & Mining Company	100,000	100,000	100	Quebec & Lake St. John Railway Co	
Qu'Appelle, Long Lake & Saskatchewan Rail-	4,524,000	4,002,800	88.46	521,200road & Steamboat Co	
Niagara, St. Catharines & Toronto Railway	201,000	201,000	100	925,000	922,000	99.67	3,0002. Niagara, St. Catharines & Toronto Navigation	Company, Limited	100,000	100,000	100	The Minnesota & Ontario Bridge Co	100,000	100,000	100	The Minnesota & Manitoba Railroad	400,000	400,000	100	The Lake Superior Terminals Co. Ltd	500,000	500,000	100	The Canadian Northern Telegraph Co	500,000	500,000	100	The Winnipeg Land Company, Ltd	100,000	100,000	100	The St. Boniface & Western Land Co	
3. The Edmonton & Slave Lake Railway Co... .	250,000	250,000	100	The Canadian Northern Railway Express	Company,. Limited	1,000,000	1,000,000	100	4.	The Canadian Northern Transfer Co. Ltd... The Canadian Northern Steamships, Limited. 5.	Brockville, Westport & North-Western Rail-	2,000,000	2,000,000	100	way Company	$80,279,500	$74,332,400	$5,947,100
Notes:-
1.	The Canadian Northern Railway Company owns $2,000,000 of stock in the Canadian Northern Quebec Railway Company and owns 71.9% of stock in the Northern Consolidated Holding Company, Limited, which owns $5,144,600 of stock in the Canadian Northern Quebec Railway Company, so that the Canadian Northern Railway Company owns or controls $7,144,600 of stock or 74.7%.
2.	Owned entirely by the Niagara, St. Catharines & Toronto Railway Company.
3.	Amalgamated with the Canadian Northern Railway Company.
4.	Owned entirely by The Canadian Northern Railway Express Company, Limited.
5.	Company owns entire physical property. No stock issued.
Certified correct,
Toronto, August 3rd, 1917.


Mr. A. K. MACLEAN:: The statement
shows in each case what amount of shares of each constituent company is held by the Canadian Northern?


William Thomas White: Yes.


Wilfrid Laurier: There are several newly organized companies which are not mentioned in the statute of 1914. The Mount Royal Tunnel and Terminal Company, Limited, for instance, has been acquired since. I would suggest to my hon. friend that he .should have a schedule made as part of the Bill, showing everything we acquire.

W. G. Foreman, Chief Accountant.


William Thomas White: I do not know
that we can arrange to have it as part of the Bill.


Wilfrid Laurier: Why not?
What is the objection?


William Thomas White: It is a question of fact. If anything should chance to be overlooked-


Wilfrid Laurier: Quite true, it is a question of fact, but if it is not in the Bill it may be a question of lav/. If you hate it in the Bill there is no question of fact. It is law.


William Thomas White: My hon. friend
wants a declaration in the Bill as to the constituent companies in the system?


Wilfrid Laurier: Yes.


William Thomas White: I have considered that and I am not sure as to whether we should make a declaration or not. I thought that, perhaps, some property might be overlooked. Of course, that might be overcome by the wording. I will consider it.


Wilfrid Laurier: I would like my hon. friend to consider the advisability of including all subsidiary companies so that we would know exactly what we are acquiring. We are .acquiring the stock of the Canadian Northern Railway company, but there are many subsidiary companies, and I think it is advisable that we should know what they are and have them set out in the law.


Richard Bedford Bennett: I think that, perhaps, there is some little misapprehension as to that portion of it at all events. The schedule to the statute of 1914 contains the names of the companies that comprise the Canadian Northern Railway system. Amongst those you will find the Mount Royal Tunnel and Terminal Company, Limited. That is found at the top of page. 14 of the statute, chapter 20r The names of the companies are those which my hon. friend has given, the Bay of Quinte Railway, the Canadian Northern, the Canadian Northern Pacific, the Canadian Northern Alberta, and so on, and then follow the names of subsidiary companies, such as the Marmora Railway and Mining Company, the Mount Royal Tunnel and Terminal Company, the Niagara Company, and the Northern Consolidated. As I understand it, there was a limitation imposed at that time upon the Canadian Northern Railway system creating any further subsidiary companies without the consent of the Governor in Council. No further companies, I am advised, have been created since 1914, which are owned by the Canadian Northern Railway Company. I gathered from what the leader of the Opposition (Sir Wilfrid Laurier) said a moment ago that there was the Montreal Terminal Company.


Wilfrid Laurier: Yes.


Richard Bedford Bennett: 
William Thomas White: There is no
change.


Mr. MURPHY:: Would my hon. friend (Mr. Bennett) tell me what lease he is referring to?


Richard Bedford Bennett: A lease by the Mount Royal Tunnel and Terminal Company to the railway company for
4 p.m. the use of its facilities. The method adopted was the usual one adopted under circumstances of this kind. You create a company with power to issue securities and the securities have to be guaranteed by the rentals to be paid for the use of the terminals. In this case the Mount Royal Tunnel and Terminal Company, which owns the terminal facilities in Montreal, leases them to the Canadian Northern, but in order to give the securities any value they had to have behind them something more than the physical property of the Mount Royal Tunnel and Terminal Company. Therefore they leased the terminals at a rental to the Canadian Northern Railway system, including the Canadian Northern Quebec, and the rental is equivalent to the annual interest charges upon the securities. That has been assigned to trustees for the purpose of enabling the securities to be sold, but they have behind them something more than the mere physical property upon which they were issued.


Charles Murphy: Is that lease contained in any of the papers which have been brought down?


Richard Bedford Bennett: That lease was set forth in the statute passed by Parliament in 1916. We had it before us, and we considered it in the Railway Committee. The lease itself is set forth in the schedule to the Act. In so far as the Mount Royal Tunnel and Terminal Company is concerned, the position would be that the Canadian Northern Railway and the Canadian Northern Quebec have rented the terminals for an annual rental equivalent to



interest charges upon the securities. The Model City and the Port Mann terminals, which I apprehend are what are referred to by trie leader of the Opposition, are in no sense the property of the Canadian Northern Railway Company. They illustrate the second point I complained of yesterday, namely, the exploitation of subsidiary companies by these gentlemen to create inflated values, 'resulting in loss to small speculators. For instance there was $1,000,000 lost by one group of speculators through the Port Mann enterprise alone. But, we do not get that. A subdivision was made and the land was sold but	not	a (single share of	the
capital stock of the Model City, the Port Mann terminals, the fishery, or timber, of any of these companies come to us. That is my understanding of it as a result of the best consideration I have b&en able to give the matter from a perusal of the various documents in the statute-books, and I have no further information with regard to it. The Minister of Finance proposes to offer an amendment to one of the sections. But that amendment is not ample for the purpose of safeguarding the public interest. What we should say in the statute is that the question to he referred is: What is the present cash value per share of the outstanding shares of the capital stock of the Canadian Northern Railway Company? What we are endeavouring to fix is the value that appertains to the shares as shares and not the value that appertains to the $60,000,000 that would carry control. That is best illustrated by the experience in connection with the Northern Pacific. Members of this House who have been reading the life of the late Mr. J. J. Hill will (recall that Mr. Harriman attempted to get control of the Northern Pacific on the open market and that he nearly had control. It is interesting to remember that he would have secured control of the company if he had been able to secure the holdings of the two Scotch Canadians. That stock was bid up to $1,000 a share. That did not represent the intrinsic value of the shares, that was not the real value that attached to them; it was only the value that attached to them because possession of them carried with it the ability to control the corporation. Shares amounting to $60,000,000 carry with them control of the Canadian Northern system and it must be remembered that, control always has a market value. Whether it be a small or a big corporation, v control has its value. Whoever has con-
trol in this case can elect the directors and thereby control the operation of 9,500 miles of track, with all the subsidiary enterprises and at the same time control $40,000,000 cash during the year. Another illustration of the value of control is given by the Equitable Life Insurance Company. The Equitable Life is perhaps one of the greatest of our American financial institutions; yet it only has a capital stock of $100,000 and its dividends are limited to seven per cent per annum. The outstanding insurance is computed in the billions and its revenues in the hundreds of millions. General Dupont, since this war began, gave $7,000,000 or $8,000,000 to get control of the $100,000 of stock. These particular illustrations I submit, would warrant this House in inserting in this section adequate language to provide that what we pay Mackenzie and Mann for the equity of redemption; that is, the value of their shares, is not for control but for the value of $60,000,000 of shares in relation to the capital (Stock of $100,000,000. What the arbitration has to determine is the value of the outstanding shares.
The conclusion after that is a problem in multiplication-simply multiply the number of shares by the value fixed by the arbitrators.
With reference to the expression "their own judgment,?' my hon. friend from Pic-tou (Mr. Macdonald) did not follow me, and my hon. friend the Minister of Finance (Sir Thomas White) could not have read what I have stated in Hansard-and I do not blame him for that. I was pointing out that it was desirable the words remain there. The expression "their own judgment" should be retained as, in the event of the acquisition of shares, you could not view them as you could a parcel of property. In the acquisition of a piece of property by expropriation, you can view the premises, and I desire to apply the principle here so that if the arbitrators travelled over the property of the railway company and saw its physical condition in arriving at the value of the shares, they would, in the exercise of "their own judgment," come within the provisions of the McKinnon case, and thereby enable the citizens of the country to have the benefit of the evidence, and the exercise of the judgment of the arbitrators in fixing the price to be paid for the shares of the company if such price is to be determined by reference to the value of the assets.


William Thomas White: What about the question of appeal?


Richard Bedford Bennett: That in no sense destroys the right of appeal. The Supreme Court of Canada said it would set aside the judgment of the Supreme Court of Alberta and sustain the award, not because there was no appeal, or that it was an improper case in which to appeal, but because the fact that the arbitrators did exercise their own judgment did not in any sense destroy the validity of the award or limit the right of appeal.


William Thomas White: I agree with the hon. gentleman. But suppose that the Government is dissatisfied with the award, and appeals to the Supreme Court. When this question of the amount of the award is being considered before the Supreme Court it may be argued on behalf of the company that the Supreme Court is not in a position to review the judgment of these arbitrators because by the express terms of the legislation they are authorized to use their own judgment. The Supreme Court would have before them the evidence, but there would be another element which they would not have before them; that is, the facts on which the arbitrators' had exercised an expert judgment. It occurred to me that that was ithe point the hon. gentleman from Calgary was referring to. It still strikes me as a pretty important point with regard to the question of appeal. I did not understand the statement of the hon. gentleman from Calgary as to the Supreme Court in the McKinnon case refusing to disallow the award. I thought the Supreme Court refused to disallow the award on the ground that the arbitrators were pemitted to exercise their own judgment.


Richard Bedford Bennett: No.


William Thomas White: However, I did
not follow the argument closely.


Edward Mortimer Macdonald: I am inclined to agree with the hon. Minister of Finance ae to the effect of those words which it is proposed to strike out, and I think my hon. friend from Calgary in his argument yesterday was endeavouring to point out the danger that would ensue from these words being left -in, so far as the effect on an appeal court is concerned. Because, manifestly, the Board of Arbitrators would arrive at a conclusion not merely upon the evi-" denee submitted to them but by the exercise of their own judgment. They might take an expert view of the situation not based upon the evidence, and might arrive at the amount of the award in that way. You can well understand how the appellate
293J
tribunal would say: It is impossible for us to enter into the question whether or not the best judgment of the arbitrators, exercised 'beyond the evidence, was a matter in which they erred. The argument of my hon. friend from Calgary, I think, requires most careful deliberation before coming to a conclusion, and perhaps it would be well that the consideration of this question should standi over until the minister has brought down the information which he intimated he intended to bring with reference to section 1. That is the section which provides for the taking over of the stock and is the vital section of the Bill-the whole principle of the measure is contained in section 1. The data as to who are the holders of the stock which is to be taken over is so material that the consideration of the whole measure turns upon that to a very great degree, and I should like the minister, in that connection, to intimate what information he can give us with reference to the $25,000,000 of convertible stock. Does he expect to be able, to give us any information which would indicate that a number of the stockholders were likely to come in and avail themselves of an award which fixed the value of the stock at a very high figure, and would enable them to get more than par for it? It is impossible for us to predicate in any way what award this tribunal might give, in fixing the value of the stock. Any one who has had any experience with reference to valuations or testing the question of value in the courts knows the tremendous number of matters that can be taken into consideration, more particularly in the case of an enterprise of the extent and possibilities of the Canadian Northern. So that I think we should have some information about the liability that is likely to arise, in addition to the nominal registered holdings of $100,000,000. We should understand the facts with regard to this extra $25,000,000, which, under the law, the holders could convert into common stock, for, if that is done, we shall be dealing, not with $100,000,000 of common stock of the company, but possibly with $125,000,000.


William Thomas White: There is no chance in the world, having regard to the earnings of the company, of the income debenture stockholders converting their holdings into common stock on the ground tRat their holdings are worth par. My hon. friend knows this company is not earning sufficient over its operating expenses to pay its fixed charges. There is a

deficit, and it is not only unthinkable, but it is perfectly absurd, to- say that the Board of Arbitrators might find any such value in this stock as he suggests. Further than that, we are only buying 600,000 shares. No debenture stockholders would have any right to come in under this agreement. The agreement which will be entered into under the authority of this legislation provides for the purchase of only 600,000 shares. There is no right accruing to holders of the income convertible debenture stock to change their debenture stock for stock of the company, and get the price determined by the arbitrators.


Edward Mortimer Macdonald: My hon. friend says we are only purchasing 600,000 shares. If that is all he is purchasing, and there is going to be $25,000,000 outside, why should he go to the trouble of purchasing 600,000 shares? Why not purchase 11,000 shares and get the control?


William Thomas White: Because there is no chance in the world of the debenture stockholders becoming shareholders by exchanging their debenture stock for shares, for the earnings of the company are such that this stock is of little, if any, value as it stands now.


Alexander Kenneth Maclean: When must they elect?


William Thomas White: January 1, 1919. They have $25,000,000 of debenture stock, which is an obligation of the company. My hon. friend asks why do we buy 600,000 shares? Why do we not confine ourselves to 51 per cent? To me it is perfectly obvious that the Dominion Government, while buying this stock, should buy all of it. They do not want a majority of the stock, with a minority stock to deal with. Their proper course is to buy all the stock.


Richard Bedford Bennett: I agree that we should acquire every dollar of the stock, but I do not agree that we should be subject to the chance of the holders of $25,000,000 worth of minority shares coming in and owning one-fifth of this road after we have put our money into it. That right should not be standing there. After we have put from $25,000,000 to $50,000,000 into it, certain men over in England will say: This is a good thing for us! just now there is no income in this company; I paid a big price for these income certificates; I can get no money out of them-and I would -much rather be a partner with the Dominion of Canada than have an outstanding

obligation with the Canadian Northern. What they will do is to exchange these income certificates for common stock; then we shall (find ourselves unable to deal with this enterprise as we please, in view of the holding overseas or somewhere else of this $25,000,000 worth of minority shares.


Alexander Kenneth Maclean: Does the income stock not pay dividends?


Richard Bedford Bennett: Of course not;
the income certificates do not pay any dividend. They are five per cent income certificates, and they pay a dividend only when the surplus over the fixed charges is available for dividend purposes. They are just what their name indicates; an income certificate is a certificate the income of which is chargeable against surplus income after paying all fixed charges. -Therefore, unless there is a surplus aftej paying all fixed charges, there is no dividend on the income certificates. As a matter of fact, the income certificates that are outstanding were issued with respect to a special portion of the property. I understand that complaints have been made by the holders of the income certificates in England that upon the property on which these were originally charged there was a surplus available for dividends, because the Canadian Northern prairie section is a very profitable section. Theirr contention was that what they had was an income certificate against income in respect of that property, not in respect of the losing sections of the line in British Columbia and in eastern Canada. They have not established that point to the satisfaction of anybody, but I know that they have made that claim. It is not divulging any confidence to bring this to the attention of the committee, because these certificates can be bought on the open market. Some investors in England paid $106 for $100 par value of these certificates. The Canadian Northern received, I think, $25,000,000 net, after paying commissions. What the Solicitor-General (Mr. Meighen) said yesterday is sound: this Parliament extended the time for conversion by statute in the Act of 1914 until January 1, 1919. Section 12 of the Act reads as follows:
The capital stock of the Canadian Northern is hereby fixed at the sum of one hundred million dollars subject to increase only by the Parliament of Canada:
Provided that for the purpose of exchange of Income Charge Convertible Debenture Stock, secured by trust deed made to the British Empire Trust Company, Limited, and the National Trust Company, limited, dated 6th

May, 1910, not exceeding- twenty-five million dollars in all, there may, during the period of the option of exchange given by said Trust Deed to the holders of said debenture stock, viz., the years from January 1,	1916, to
January 1, 1919, inclusive, and during any extension of that period, be issued to such holders who may exercise said option, such amounts of capital stock, over and above one hundred million dollars as may be required for the purposes of such exchange, not exceeding one hundred dollars ($100) of capital stock for one hundred dollars ($100) of debenture stock and not exceeding in all twenty-five million dollap'rovided that the Canadian (Northern may extend the period of said option from time to time. The said additional twenty-five million dollars of capital stock is hereby authorized and shall be set apart for the sole purpose of such exchange and any fully paid stock deposited with the trustees of said trust deed for such purposes may be returned to the depositors
thereof:	.	,	. ,
Provided, also, -that no further issue of said Income Charge Convertible Debenture Stock shall be made under said trust deed.
As these income certificates are on the open market, something should be done to prevent, say, John Smith from going to the London Stock Exchange, buying $1,000 worth of these income certificates and becoming a partner with the Dominion of Canada in the ownership of the Canadian Northern. That is my case. '
. Mr. MEIGHEN: There was considerable discussion about these bonds in 1914. To understand the position it is necessary to make amply clear the nature of the bonds.
I do not know what it is secured on; my own understanding w.as that it was secured on the Canadian Northern Railway -Company's properties of every kind; that is to say, the properties of the parent company alone. The issue -was otf this nature: the Canadian Northern Railway Company made the issue, secured on their own property, and there were two exceptional provisions in the trust deed which secured the issue. One was that the debentures were to be entitled to dividends only out of profits over and: above previous fixed -charges -and operating expenses. Where there were no profits there was no accumulation, and they could not exact a dividend out of one year's profits by reason of a failure to pay dividend -before. That was the first exceptional provision. The other exceptional provision was this: the holders of these debentures were entitled to exchange debentures for stock-$100 debenture for $100 stock-at any time between the dates specified in the Act, January 1, 1916, and January 1, 1919.


Richard Bedford Bennett: It was not -as long as that at first, '


Mr. MEIGHEN:: These were the dates.


Richard Bedford Bennett: That period was extended by statute.


Arthur Meighen: My hon. friend is
wrong; we did not extend it -by -statute. Reference to the Act will sho-w that. Section 12 reads:
Not exceeding twenty-five million dollars in all, there may, during the period of the option of exchange given by said Trust Deed to the holders of said debenture stock, fiz.-the years from January 1, 1916, to January 1, 1919, inclusive.
That was the period fixed by the original trust deed within which the option of exchange might be exercised. Of course, the company has the right to exte'fid that at its pleasure, but they cannot be compelled to extend it. That is still the effect of section
12.	Selling at the time they did, no doubt that provision for exchange enabled them to sell those bonds at a higher figure than they would otherwise sell for. It being clear that that dividend on those stocks is a first charge on the profits of the company -over and above, of course, previous fixed charges and operating expenses-those bonds would bear a five per cent dividend before the stock could bear any dividend at all; or, indeed, before the stock could have any dividend-bearing value.
'Mr. NESBITT: My hon. friend told the member for Pictou, in answer to a question, that these stocks were cumulative.
I do not think they are.


Arthur Meighen: They are not cumulative; that is what I am emphasizing. So that inevitably these debentures would bear a five per cent dividend before any stock for which they were exchangeable could hear any dividend. This business conclusion, therefore, follows: there was some reasonably early prospect of the stock bearing more than five per cent dividend, and after they had borne a five per cent dividend no one would ever think of exercising the option of exchange. They have only this year within which to exercise it, unless the company sees fit to extend. Of course, if this Bill goes through we shall own the company, and may extend or not. just- as we see fit.


Edward Walter Nesbitt: As a matter of fact, they are entitled to that 5 per cent before any dividend is paid on the ordinary stock.


Arthur Meighen: Yes, they are absolutely entitled to that. A man cannot get a cent of dividend on hi-s stock until the holders

of those debentures get 5 per cent on their debentures.


Edward Mortimer Macdonald: Those debentures are really preference stock?


Arthur Meighen: 
Richard Bedford Bennett: If we took possession under the Act of 1914 we would wipe them out.


Arthur Meighen: We could do that, but we would suffer infinitely more by doing that, because they would have a charge against the company just the same.


Richard Bedford Bennett: No, there would be no stock.


Arthur Meighen: There would be no stock for which the debenture holders could exchange their debentures. We would have to adopt a different course altogether, and that would inflate the value of the other properties, and it would cost the country a great deal more to carry out the transaction in that way.
Consequently, as there is no reasonable prospect of any exchange, and inasmuch as we should not take away the assets of people without making provision for the valuation of those assets, I do not think we should take action now. Suppose the worst

came to the worst; suppose those people in England, and those'citizens of Canada, of whom there is probably a greater number of them in England, who hold this debenture stock, should immediately come to the conclusion that under the efficient management of this Government that stock will immediately reach a value over par and consequently be worth more than the debentures, some of them who came to that conclusion might exchange. It would then be open to us to provide a similar measure to this and submit that stock which they exchanged to a court of arbitration for the determination of its value, and then we could take it. We would not be at any great loss because for every $100 worth of stock we then expropriated, we would get rid otf $100 of debt-$100 of debt would be exchanged for $100 worth of stock, and we would get the stock. Consequently, the debt would be gone, so that we would have nothing very great to fear.
In the first place, then, there is no reasonable possibility of any o.f those debentures being exchanged. Secondly, if there is, it is difficult to arrive at any just or practicable way of extinguishing that right of exchange. Thirdly, without extinguishing that right, we are in no peril whatever. While we do not wish to be partners with any one in this property-and the hon. member for Calgary is right when he states that we should own it out and out-we have a very fair method of extinguishing the interest of any partner who might possibly come in under this legislation.


Edward Walter Nesbitt: I quite agree with the Solicitor General that it is not within reasonable possibility that the debenture holders would want to exchange. I do not think they would exchange on the expectation of the road earning a dividend on those debenture shares or on the commbn stock, but if the common stock were submitted to arbitration for valuation and the value fixed by arbitration, if they could exchange then and get the same value for their stock as that fixed by arbitration, I for one, if I were a holder of that stock, would much prefer to take my chance of getting a certain amount on the dollar in that manner to taking a chance on the road earning a dividend.


Richard Bedford Bennett: I thought that was what the solicitor mentioned yesterday, namely, that a section should be added, giving those debenture holders the opportunity of exchanging their 5 per cent debenture income certificates for the same amount of cash as fixed by the arbitration for the

value of the stock, if they wanted to do that, as my hon. friend now suggests.


Edward Walter Nesbitt: That would be using
them only fairly and justly. That is the only reason I can see why they might wish to exchange, because I think there is no reasonable probability of the road, within many years, earning the interest charges.


Arthur Meighen: Under this legislation,
of course, after they made the exchange and got the stock instead of the bonds, they would not have the right to say: We are entitled now to ask you to take that stock from us at the rate fixed by the arbitrators for the other stock you are now taking. The hon. member for Calgary suggests that we should give them that right.


Richard Bedford Bennett: Yes. Why should they not have it?


Arthur Meighen: We would lose nothing
by letting the legislation go as it is, because we can at any time send this stock to arbitration, should it ever come in.


Edward Walter Nesbitt: If they exchange before
the arbitration took place, would they not he entitled to rank?


Arthur Meighen: 'No, because this Bill
provides only for buying 600,000 shares.


Mr. McCREA:: It would be wise to postpone this discussion unitil we get the necessary information. The hon. member for Pictou (Mr. Macdonald) last night asked for certain information in particular as to who were the present holders of this stock, and if I understood the Minister of Finance aright, he promised to get that information. As yet, however, we have not received it, and there is other information to which we are entitled. Evidently, the Government brought down this measure without being equipped with the necessary information that the people of this country and we, as their representatives, are entitled to have. We are entitled to information concerning a thousand and one things-


Wilfrid Laurier: Leave out the one.


Francis N. McCrea: -but the information has not yet been furnished. The hon. member for South Renfrew (Mr. Graham) last night referred to a disputed account. A contractor had made a deposit of some $18,000, of which $5,000 had been refunded, there [DOT]being still outstanding $13,000 which the contractor claims, but which claim the Canadian Northern do not recognize. In addition to that the contractor claimed the
balance of some $18,000 making a disputed account outstanding amounting to about $31,000 that evidently the Canadian Northern do not acknowledge. If we are to take over the stock of this road and become the owners, taking the place of Mackenzie and Mann as regards the financing of the road, it is well we should know how many of those outstanding accounts are floating around and not acknowledged or settled. We should know many things in connection with this transaction before we pass it through this House. There is, for instance, the question of the basis on which the arbitrators will determine as to the value of this stock.
The hon. member for Calgary suggested two bases:	First, the actual cost of the
Toad less depreciation, and secondly, what it would cost to reproduce the same property under present conditions. If the latter is adopted, no one can say what we should have to pay, because the cost of labour and material used in every kind of railway construction has increased in very great degree. The gate is left open, the arbitrators can adopt whichever course they see fit. I think the safer and wiser way would be to deal with the stock from the point of view of what assistance it had been in the construction of the road. I notice that the commissioners say in their report that there is no money to be derived from the sale of the stock which was used in the construction of the road. If that be true, and I do not think there is any doubt about it, what need is there to arbitrate to find out the value when the stock has no value?
The hon. member for Calgary also told us yesterday that prior to the legislation of 1914 the capital stock of the company was $70,000,000, but then, by a simple stroke of the legislative pen, we created $25,000,000 more stock, which represented no actual value. To-day, we are asked to place a value on that $25,000,000 of stock by arbitration.
I think it would hasten the passage of this Bill if we adjourned the debate and proceeded with some other business until we get the necessary information. I have never been disposed to delay the proceedings of this House, but I certainly am not disposed to allowing this legislation to go through, if I can help it, until we are	given full information,	and I
trust that members on both sides of the House who are interested in the welfare of the country will support me in that suggestion. It will be a bad enough bar-

gain when we have all the facta before us, but in a matter of this magnitude, involving the expenditure of $600,000,000 we should at least know how bad a bargain we are making, and should not pass this legislation in any light or hasty manner. I repeat that the Government have not shown a disposition to give the House the information to which it is entitled, and I again urge the Minister of Finance to adjourn this debate and proceed with some other business, because I think by .so doing he will make just as quick progress.


William Thomas White: I am afraid my hon. friend has not read Hansard in so far as it records this debate, nor the documents which have been already filed. I think it would be impossible in a transaction of this magnitude to give the uttermost details in connection with minor claims such as my hon. friend has referred to. The hon. member for South Renfrew (Mr. Graham) brought up the question of claims last night, and I gave a full explanation with regard to the particular claim he referred to. It is a claim that is not admitted; it is contested. My hon. friend would not contend that the Department of Railways should insist upon the payment of a contested claim without investigation. The Department of Railways have investigated this particular claim, and have suggested a mode of solution which appears to them, and appears to me, to be reasonable, but which has not been availed of by the parties who have complained about the matter. Not only that, but there is ample money in the way of drawback in the Department of Railways to take care of that claim. All that was stated last evening.
As far as the stock is concerned, I stated that I would endeavour to get the information for the House, and I am doing so. When, my hon. friend says that the Government has come down to the House without adequate information, so far as the purchase of stock is concerned, for carrying out this transaction, I do not agree with him. For this reason: The Dominion Government owns 40 per cent of the fully paid up stock of this road. We provide in the agreement for the acquisition of the remaining 600,000 shares. We know where we can get five-sixths of the shares. We know that 51 per cent, which is more than five-sixths of the 600,000 shares other than those held by the Dominion Government, will come in. That leaves only 9 per cent of shares. If the 9 per cent come in they will be dealt with under the agreement.

If they do not come in, there is power in the Bill enabling the Government to declare that they are vested in His Majesty, and their owners will be entitled to the ' price which the others receive.
So far as the Government's programme before the House is concerned, for providing the machinery to take over the remaining capital stock of the Canadian Northern railway, it is complete. All the inforinm-tion as to the general financial position of the company is already before the House in the blue books which have been published and in the statements which have been laid upon the Table. More than that, the House is generally familiar with the Canadian Northern Railway situation, which has been before the House for practically the last ten years. In 1914 a most thorough investigation was made by accountants and experts with a view to determining the facts. The sessional papers of that year are full of information respecting the Canadian Northern. We have the balance sheet certified by the auditors, and we have our own auditors carrying on a continuous audit. We have had Government directors on the board for the past year. While there may be a number of outstanding accounts, some of them" contested and others not, it seems to me that we have substantially before us the information which would enable the House, which is not a judicial body, to come to a conclusion such as Parliament comes to on a question of this kind. In all these large transactions, whether it is a question of building a transcontinental railway, or of affording assistance to the Grand Trunk Pacific or the Canadian Northern, while it is desirable to have all reasonable information, it is not possible to get down to the meticulous information that would cover every particular point. If, however, there is any information that is not before the House other than that which has been asked for, and which it is reasonable to ask for and possibly to get, I shall be disposed to use my best endeavours to obtain it for the House.
We might go on with the other sections until six o'clock, and take u,p some other Bill this evening. I thought possibly the Income T,ax Bill might be taken up, if the committee is -of opinion that we cannot make much progress with regard to section 1. The Prime Minister is not here, and I would prefer that hon. gentlemen would address themselves to section 2, with a view to seeing whether we cannot make some progress.


Wilfrid Laurier: There is a good deal of force in the remarks made foy my hon. friend from Sherbrooke (Mr. McCrea), that the information first supplied by the Government was rather scanty. I must say the Minister of Finance has been very courteous and ready to give any information asked for. I think the amendment which he has proposed had better wait until we come to discuss that section. In the meantime, I would ask for more information than we have received so far, upon some other points. I have asked information as to what we acquire, and my hon. friend has satisfied me that in acquiring the stock of the parent company what we acquire is limited to what is set forth in the schedule of 1914. So far, so good, and we understand where we are.


William Thomas White: The information I gave is brought down to date.


Wilfrid Laurier: Yes, I understand. As a point of law everything is detailed in the Act of 1914. We acquire what is stated in the schedule to the Act of 1914, nothing more and nothing less. A moment ago I mentioned The Mount Royal Tunnel and Terminal Company, which is .a very important part of the terminals of the road. My hon. friend has not given us any information, so far -as I know, as to the liabilities, possibilities, and obligations we are assuming when we acquire this company. The Mount Royal Tunnel and Terminal Company provides for the terminal of the road at Montreal. I do not know whether the tunnel has been completed or not, but I understand it is practically so. There is, however, a great deal still to be done in connection with the completion of the terminus at Montreal, .and we have had no estimate as to what it will cost to complete that portion and make it a working enterprise. At the present time the Canadian Northern has no terminus in the western section of Montreal. It has a temporary terminus in the east end of the city. Like the Canadian Pacific, the Canadian Northern must have two stations there, one in the east and one in the west. I do not know whether it is using the eastern station or not, but, in any event, it must have a western station, and there will be a great liability upon the Government to complete this. My hon. friend from Calgary (Mr. R. B. Bennett) called attention yesterday to the terminal in British Columbia. He said: The Canadian Northern is the owner of Northern Pacific, stock. That will now belong to us. If you take the line from Vancouver
to the Kamloops valley, a large quantity of property has been acquired. As regards British Columbia we find that there is $4,725,945.51 in the banks, and the total liabilities with respect to western lines uncompleted is only $1,612,000, so that there must be in the banks of British Columbia a large sum of money arising from the sale of securities that has to be used for the construction of terminals and lines which we are bound to construct.
We have had no information whatever upon those lines which we are bound to construct in British Columbia. My hon. friend will realize that Parliament cannot be expected to pass this Bill until we have positive information on these points.


William Thomas White: I think I gave the House the information my right hon. friend asks for, respecting the terminals.


Wilfrid Laurier: I did not see the figures.


William Thomas White: It is no trouble
giving them again. Three terminals have been referred to, the Montreal terminal, the Toronto terminal, and the Pacific Coast terminal. The estimated cost to complete those terminals is as follows: the Montreal terminal, 5578,000; the Toronto terminal, $388,094; the Pacific Coast terminal, $1,-500,000-a total of $2,466,094. Add to that the estimated cost to complete lines already under construction, as follows: western lines, $1,612,005, eastern lines, $110,000, a total of $1,722,005. This makes the estimate of the requirements for the construction, programme the Canadian Northern has now under way, $4,188,099. As provision to meet these payments, there is cash in trust accounts, representing the proceeds of bonds which have been sold, and applicable to the construction of these terminals, and those western lines $3,683,831-


Wilfrid Laurier: That is in British Columbia.


William Thomas White: Yes-government guaranteed securities $217,160, Canadian Northern four per cent debenture stock, $287,108, making a total of $4,188,097. With regard to the last item, Canadian Northern four per cent debenture stock, $287,108, my own opinion is that it is not readily saleable. The Comptroller of Railways is in close touch with the operations of the company, by reason of the guarantees and the subsidies which the Dominion Government has given in respect of their lines. He has checked these figures very carefully and there'seems no reason to doubt their accuracy. I shall get the other information for my right hon. friend.


'COMMONS
William Erskine Knowles: What is meant by completing the programme of the Canadian Northern?	.


William Thomas White: Probably I should has said, the programme actually under construction-not the ultimate programme.


William Erskine Knowles: Does it mean continuing every branch so that it -will no longer be a blind line, for example?


William Thomas White: No. Only the work actually under construction; with the idea of determining what is the outstanding liability and what funds there are to meet it. Of course, in any railway system, as my hon. friend knows better than I do, because he is from the West, extensions will have to be made continually. The construction of those extensions will depend, first, upon the urgency of the need for them, and secondly, upon the financial situation. I have no doubt that the Canadian Northern Railway system, the Grand Trunk Pacific system, and even the Canadian Pacific have had extensions in contemplation on many lines, but the programme has been held up by reason of war conditions, and difficulty of financing.


Wilfrid Laurier: The information my hon. friend gives is partly satisfactory, but it is not complete.


William Thomas White: What else is
there?


Wilfrid Laurier: For instance, my hon. friend says it will cost $578,000 to complete the terminus in Montreal, if I caught the figures correctly. It is impossible that half a million dollars will complete the terminals in that city-the actual, present programme. But, as to what it will cost to complete the terminals in Montreal we have no information. A railway is always building, always spending money. The Canadian Pacific, the Grand Trunk, the New York Central, are always constructing and building, but these .railways are going concerns; they are railways in operation. The Canadian Northern, to a certain extent, is a going concern, but it is only partially so. It is not a going concern in Montreal to-day. The Canadian Northern is not completed to Montreal, and it is of the greatest importance, with reference to its own profit and the interests of the country, that it should be completed to Montreal. I am quite a believer in the Canadian Northern and I believe that when it is completed, as it was conceived by its promoters, from Edmonton to Montreal, it will have a very great future

before it. But it is to be completed and that is what we want the information about. My hon. friend has not told us .how many millions of dollars will be necessary to complete the entrance of the Canadian Northern to Montreal. He has information only in reference to the programme that they have in contemplation this year, or that they had, perhaps, three years ago, when they were interrupted by the war. But this programme is not complete and it must be considerably supplemented in order that the Canadian Northern, may become a going concern especially in the eastern part of Canada.
Sir THOMA'S WHITE: I am informed that the present construction programme is adequate to meet the needs of the system at this time.


Wilfrid Laurier: Do I understand that $500,000 or $600,000 will bring this Tailway to the terminals on Dorchester street?
'Sir THOMAS WHITE: The Comptroller of Railways informs me that that is so. I have no personal knowledge about it. The expenditure on terminals might be quite unlimited. Take Toronto, for example; for many years they have been getting on with a station wholly inadequate to the traffic requirements.


Wilfrid Laurier: But there was a station.


William Thomas White: There was a
station. I understand there is to be a temporary station in connection with the Canadian Northern at Montreal, approved by the Board of Railway Commissioners. It is better to have a temporary station than not to have a station at all. But if we can look forward, as I think we can, to greatly increased business the time will come when this temporary station will not serve the purpose and when a proper station will be built. I do not think it is possible at this moment to .say 5 p.m. how many millions are to be spent on that terminal. Over a course of years, or in a generation, a great many millions might be spent on a terminal. The safeguard is that the company is not permitted to go beyond this programme.


Wilfrid Laurier: My hon. friend tells me that $570,000 will cover the expenditure on the terminals at Montreal. I understand that that expenditure will provide

a temporary station and enable trains to come to Dorchester street?


William Thomas White: The Comptroller
informs me that is absolutely correct.


Charles Murphy: Might I suggest to my
right hon. leader (Sir Wilfrid Laurier) that he might be too'easily satisfied. I happen to know something about the Mount Royal terminal and station. While $570,000 may be sufficient to bring a train into the temporary station that, it is now stated, will be erected there, nothing at all is said about the enormous amount that will be paid by way of compensation and damages for land that has been taken and which has not yet been settled for. The claims have reached a huge sum. I happen to have personal knowledge of some of them, and I submit to the Minister of Finance that there should be placed before this committee, in addition to the information which has been asked for and which the minister has promised to bring down, a statement showing the actual amount determined so far to be paid and the undetermined claims that will have to be paid for land taken by the Mount Royal Tunnel and Terminal Company. The claims for land in and about the city of Montreal must run into a very large sum indeed. This committee should have the information before it is asked to put through the Bill. The request made for the postponement of the consideration of the Bill *was based on two grounds. It was based by my hon. friend from Pictou (Mr. Macdonald) upon the necessity of considering the amendments that have been proposed, and, secondly, by my hon. friend from Sherbrooke (Mr. McCrea) upon a request for further information. In connection with the amendments might I suggest that if possible the amendments which were forecasted by the hon. member for Calgary (Mr. R. B. Bennett) might be submitted to the committee also, so that if there is any postponement of the discussion we shall have the benefit of having these amendments before us and we can consider them all. I would like to ask the hon. member for Calgary a question. Did I understand him to say that if the holders of the income certificates were to exercise their election within the time specified and the exchange for common stock were to take place, >sueh exchange would he made for a portion of the present $100,000,000 of stock.


Richard Bedford Bennett: No, I said that
any exchange would involve an increase in the capital stock beyond $100,000,000 and would introduce new shareholders into the enterprise.


William Thomas White: I shall endeavour to get the information which my hon. friend requires in regard to the claims. I think the Comptroller of Railways can obtain it for him. iSome of the claims are in the courts. I am unable to say at the moment what the sum total will amount to. The fact that they are in the courts is not a reflection upon the company, because the claims may or may not be just. A portion of a bond issue was paid in connection with these charges in order to provide money for completion, and there is a balance on hand Which it is estimated will take care of the construction programme in immediate contemplation.


William Erskine Knowles: There is other information that I would like to have. The minister said that there was a specified sum of money available to complete the work which is called for by the programme. That amount must have been arrived at by some system of accounting or by a statement of some sort. I would like the minister to give us some information showing how that sum was arrived at and where geographically this programme is to be put into effect.
For example, in my riding there is a piece of the Canadian Northern railway which runs fifteen or twenty miles from the international boundary, and goes westward to Bengough, which is about straight south of a point between Regina and Moosejaw. But the line stops there quite suddenly and unexpectedly, although they have a portion of the supplies to continue the railway further. I am in doubt as to what the hon. minister calls building according to programme. This is at present a blind line, and it was never intended it should stop there. It was to serve the country west of that place, and that was the justification for building the railway, because people west were more urgently in need of the transportation. Does he mean that money now lies in the bank earmarked for that? Is it earmarked for the road beyond Bengough, or only up to Bengough? Because the road beyond Bengough was more essential to the people of that district than the road up to that point.
There is another line north of the Saskatchewan river, passing westerly south of Kindersley, between that and the south Saskatchewan river. This line stops east and about 20 or 25 miles south of Kindersley. Money has been borrowed on the bonds for the building of that road. I *cannot conceive that the money borrowed and lying in the bank is just enough to provide for construction exactly as far as the road happens to be built. That is

inconceivable, because they did not get the money mile by mile. I should like to know how far these two particular lines are covered by money that is earmarked for the completion of the line.


William Thomas White: That would involve an examination of the legislation authorizing the construction, and the trust deed under which the bonds were issued, whose proceeds my hon. friend has referred to. I have asked the Comptroller of Railways to obtain the information, and I suppose he will furnish it later.


William Erskine Knowles: If they have been able to arrive at a sum which would likely complete the road, surely they must know where the road will be when it is completed?


William Thomas White: It is quite possible the money they have in hand, representing the proceeds of the bonds, would not be sufficient to construct the railway which they had in contemplation when the project was entered upon, because of the increased cost of labour and material at the present time. I beg to move that the committee report progress.


Edward Walter Nesbitt: Would the hon. minister adjourn the debate till Monday?


William Thomas White: We have to obtain certain information, and we will proceed on Monday or Tuesday, when I hope we shall be able to make progress.


Wilfrid Laurier: With regard to the land damages in Montreal, arising out of the construction of the tunnel, has the Government any information as to the unsettled claims for damages? They amount to a very large sum, and I hope the Government will give us the information.


Richard Bedford Bennett: Much of the information asked for by the right hon. gentleman (Sir Wilfrid Laurier) is already contained in the Canadian Northern blue book. On page 10 of that book we have a list of the unguaranteed securities, as follows:
Mt. Royal T. & T., 5 per cent rent charge bonds, $9,191,366.72.
Those bonds are secured by mortgage on the rental, as I pointed out, equivalent to five per cent of that amount, and if my right hon. friend will turn to page 11 he will find that, in London, $790,000 of these bonds are hypothecated for loans there. There is none of them in Canada, but in New York, due on the 1st September this 
year, there is a loan of a million and three-quarters secured by the hypothecation of two and a half million of those securities, and that money is paying for these temporary structures.
Progress reported.


WAR TAX UPON INCOMES.
[Stage Direction]
Sir THOMAS WHITE moved the third reading of Bill No. 117, to authorize the levying of a war tax upon certain incomes.
Wilfrid Laurier: I hope the hon. minister will not take that up now.


William Thomas White: I understood it was agreeable to hon. gentlemen that we might proceed with the discussion of this Bill.


Mr. PARDEE:: As I understand this matter, the hon. Minister of Finance has practically said that the income tax is being introduced in lieu of what is known as the
business profits war tax.


William Thomas White: No, that is not correct.


Frederick Forsyth Pardee: As I understand the matter, the business wiar tax is to come to an end, and will not be continued after the end of the year.
.Sir THOMAS WHITE:	The business
profits war tax, by its terms, coimes to an end on December 31st of this year. When that measure was introduced, it was thought the war would be at an end by that time. I stated expressly the other day that we should tax abnormal business profits resulting from the war, and in the next Budget that I bring down we shall deal with that matter.


Frederick Forsyth Pardee: Can we take it in this way: that the present War Tax Profits Bill expires December 31, 1917?


William Thomas White: By its terms.


Frederick Forsyth Pardee: Will there be a renewal?


William Thomas White: I have stated that next year a taxation will be imposed on excess business profits. I stated also the other day that it might be necessary to make some allowance for necessary plant extensions, but I laid down the principle, as strongly as I could, that abnormal business profits due to the war must be abnormally taxed.


Frederick Forsyth Pardee: 
The DEPUTY SPEAKER:: I know that
Mr. Speaker, if he were here, would make .a ruling in respect to this motion. At eight o'clock, I assume that he will have something to say with regard to it. In the meantime, the discussion on the amendment may proceed.


Mr. MICHAEL CLARK (Red Deer):: I am aware, Sir, that the third reading of the Bill is not usually taken advantage of for an extended discussion, and in anything that I say to the House I shall keep that well in mind. I had not an opportunity of saying anything on the second reading of this Bill, and I should like to make one or two observations at this .stage.
A shrewd man said in his biography: " Nations seldom accept advice from individuals, however reasonable; they are taught less by theory than .by facts and events." If this House had been teachable by theory on a question of direct taxation, we should have had an income tax before

to-day, and I should have had some responsibility for its existence, because since I came to this House nine years ago I have taken frequent opportunities of pointing out the disadvantages of indirect taxation and the superiority of direct taxation. The war, however, has been a great fiscal .schoolmaster, as well as a great -schoolmaster along other lines, and personally, while I have something to say in the way of suggestion to the hon. minister, I -beg to offer him my hearty congratulations that-somewhat tardily, I am afraid^-he has learned from the course of the war the necessity of putting on some direct taxation.
I was very much interested in the remarks of the hon. member for Kingston (Mr. Nickle) yesterday. He drew attention to one of the points of superiority of direct over indirect taxation when he very clearly said that direct taxation has a tendency to fall more upon the shoulders of the rich than upon the shoulders of the poor. In this w,ay it is diametrically opposed in its incidence to taxation of an indirect nature under a tariff, which, as a matter of fact, falls more upon the poor than upon the rich.
He might have gone on to point out another advantage of direct taxation, and a very great advantage in this regard. The minister has said that he anticipates that $20,000,000 will be raised under the Income Tax measure as he has introduced it in this House. If we were to raise that $20,000,000 *under a tariff, we should permit people within our own shores to take, for their own aggrandisement, two, three or perhaps four times that $20,000,000 out of the pockets of the taxpayers, at the same time that we got the paltry $20,000,000 for the *benefit of the State. That seems a very absurd way of raising the revenue of a country, and there is no controverting the fact that, when we take, let us say. $20,000,000 by duties on goods imported into the country, by raising the price of goods of a similar kind produced in the country, we at the same time transfer two or throe or four times that $20,000,000 from the Dockets of the consumers into the pockets of those incidentally protected by the customs tariff. That, with the advantage pointed out by my hon. friend from Kingston, would seem to me to be enough to convince any reasonable body of legislators that there are very great advantages in direct taxation over those possessed by indirect taxation.
fMr. M. CIarlc.1
I want, however, to do the Minister of Finance the obvious credit of saying that I think, so far as my knowledge of the history of Canada goes, he is the first Minister of Finance who has raised any direct taxation in the Federal Parliament, and, .after all, it is but bare justice to do him that credit. He deserves credit to that extent, and he has earned that credit, not always with the encouragement which he has a right to expect from every one in war time. When the minister introduced his excess profits taxation, I remember the hon. member for Pictou (Mr. Macdonald), night after night, castigating my hon. friend for introducing the tax. I am sure the minister remembers that also.


William Thomas White: He does.


Michael Clark: That does not represent the full measure of the hardness of the minister's case, because when he proceeded to carry out his previous promise by which he was bound to let the tax lapse at a certain period, just as my hon. friend from Pictou had pursued him with horse, foot and artillery, for putting the tax on, so my hon. friend from North . Cape Breton (Mr. McKenzie) pursued him with horsd, foot and artillery for taking the tax off. I do not think it is possible to conceive of any Minister of Finance, unless he had gifts superior to those of human beings, pleasing two critics holding such diametrically opposite views. The surpassing ability of the right hon. leader of the Opposition (Sir Wilfrid Laurier) as a leader is shown by the fact that he gathers both those followers holding diametrically opposite views under the capacious shadow of his own garment. I hope this will not be taken in bad part, because I do not mean it so.


Mr. McKENZIE:: For of such is the Kingdom of Heaven. His followers come from the East and from the West.


Mr.   M@: 
Sir HERBERT AMES:: The House is
shortly to be called upon to consider an amendment which proposes to increase the ' amount of tax that shall be levied under this Income Tax Bill on those of larger incomes. I want to put in a plea for that organization with which I have been connected for the last three years. I would ask the members of the House Seriously to consider how an increase in the tax upon higher incomes will affect those who have entered upon serious obligations of their own accord. If it were proposed that the income tax rate on higher incomes should be made greater to cover the year 1918, I would raise no objection. I quite concur in what has been said, that those who have the money during these times should be the ones to contribute as much as they possibly can. But I would call the attention of the

House to this. The income tax which will be payable, on lelt June next will be based on a statement filed on 28th February, 1918, covering the income of the year 1917. Now, during the year 1917, the people of Canada have taken upon themselves (voluntarily very large obligations. Never in the history of the war has there been a year in which the -siibscripltions to various war charities have been so generous and so universal as in the year 1917. During the year many and many a man has asked himself the question, "How much can I possibly do without in order that I may put my name down for the largest possible amount for one of the war funds?" Many of these men have voluntarily reduced to a very considerable extent that portion of their income which they are free to spend upon themselves, not in any wiay anticipating that an income tax would 'be brought in by Parliament this year. Now, I contend that you are going to place upon these men a double burden. They have already of their own accord assumed a heavy load, and you are going to lay upon them a still greater burden.
There are a few people in this country-very few, I am glad to say-who have not given of their means to the Patriotic Fund and other war charities, but have hoarded *and held all they had 'and all they could make. These men are held up again and again to the contempt and scorn of their fellow-citizens, and are receiving only-what they deserve in the way of contumely. I do not care how heavily they may be taxed! but I want to testify on behalf of the Canadian people that for one man of that kind, there are twenty who are contributing generously and have been doing so since the war began. In every community wheTe a campaign has been conducted our attention has been drawn to one or two men who will give nothing, but you can at the same time secure a list, if you care to, of a score of men who are denying themselves daily in order that they may give. When the history of this war comes to be written there will be no brighter page in the whole record than that which records the efforts to do something that have been made by those who, for various reasons, could not go. to the front, but who endeavoured in their turn to do all they could to back up the men on the firing line. That spirit has been practically universal from one end of the Dominion to the other, not a single province excepted.
It has been my duty since the war began to act as a sort of apostle to the stay-11 Sir Herbert Ames.]
at-homes. I was six years beyond the military age, and physically unfit to enlist, and as I could not go to the front I gave my whole time to another work which was the best I could get under the circumstances. During the past three years I .have travelled up .and down this country again and again from Halifax to Vancouver, and have spoken in every city and town of considerable size in the whole Dominion, and 1 want to say that universally the people of Canada have been ready -and willing to make sacrifices. Again and again we have asked communities to give us not only all they needed for themselves, but something over which might be spent in more hard-pressed districts, and with the exception of five towns in Ontario-Sarnia, Preston, Orillia, Fort WTilliam and Kenora- every area that I know of in the province of Ontario has given not only what it needed for itself, but an additional sum to be spent out in Alberta and Saskatchewan, in the far West and along the Pacific coast. If any one had told me at the beginning of the war that the Patriotic Fund would be able to raise between $5,000,000 and $6,000,000, I would have confessed that I did not believe a larger sum was possible, yet a fair computation to-day will show that there has been raised for the various war charities in Canada since the war began between $50,000,000 and $60,000,000 in money and food supplies, not one dollar of which would have been raised had not the hearts of our people been right. Our generosity has been an astonishment to ourselves; it has been a stimulus to our neighbours to the south of us, and has been the subject of congratulation from other parts of the Empire. I think that this year alone no less a sum than $20,000,000 has been pledged and will be paid by the people of Canada out of their revenues to the various war funds which are well known to us all.
Last fall we reached the apex of our demands. The Manitoba Patriotic Fund, although independent of ours, works on exactly the same lines and is in constant touch with us, so that when I give figures regarding the Patriotic Fund I give figures for Manitoba also. Last fall we realized that we had about 65,000 families to look after, scattered throughout the Dominion. The fundamental principle of the Patriotic Fund has always been that every community should raise what it could, and put that sum into a common purse, to be dispensed in each district according to need.

Some 01 me wealthy districts of the East that sent comparatively few men were able to send a considerable surplus of money to districts in the West that had sent nearly every available man of military age, and in that way the burden has been distributed. We realized, however, that we should have to meet during the year 1917 a monthly expenditure of approximately $1,000,000. We could not Think for a moment of allowing our soldiers' dependents to be in need this year, and so we carefully prepared our campaign. We alloted to each province, and to every part of each province, what we considered to be its fair share, and there is not a province in the whole Dominion but has given the full amount asked for. The result has been that we have already received in cash $8,500,000 in the first six months of this year.
We have another eight and a half million dollars due and payable during the remainder of this year, and considerable sums payable in January and February.
My contention is that people having voluntarily assumed large burdens for the year 1917, called upon as they will be to pay this income tax in addition at the rates already specified, they should not, at least in the first instance, be overburdened with an excessive amount. It is not fair to imagine that a man's whole income for 1917 remains with him, apart from the amount which may be taken out of him by this income tax. The first year of the war, 1915, we took in about $6,000,000, 85 per cent of which came from voluntary subscriptions. On analyzing it we found that the rural districts were not giving as freely as the cities. We found the reason to be that it was very much more difficult to organize campaigns in the rural sections than in the cities, not that there was any less willingness to give in the rural communities. We had recourse to the county councils, and wherever a county council was willing to make a unanimous appropriation and levy its contribution as a tax, we regarded it as a voluntary gift. We received a large amount in this way. Of the $15,000,000 or $16,000,000 we expect to receive during the present year, 63 per cent is voluntary, 16 per cent comes from provincial grants, 15 per cent from county council grants, rand 6 per cent from various municipalities, that is, the grants of city councils and so on Last winter, when we made these campaigns, we told all those who subscribed that we wanted them to pay upon a monthly basis.
We told them if peace was declared they would not have to pay any further subscriptions after the date of peace negotiations, for it was our endeavour to keep on hand a sufficient surplus to take care of the returned men for a time after peace was actually declared. So, we have a large number of these continuing subscriptions coming in to us in very considerable amounts from month to month. Our revenue is almost uniform. Every month is practically the same as the preceding month. It is very popular, indeed, to talk about the sacrifices of the poor man, and let me pay a tribute to the working people of the Dominion of Canada, who, from one end of the country to the other, are giving us their day's pay, sometimes a day's pay a year, sometimes a day's pay each quarter, and somfr times a day every month. Hundreds of thousands of dollars have been paid in to us, taken each month out of the pay envelopes of the working men of Canada. The working men of Canada, however, are not the only ones who are making sacrifices. The rich men of the country are also making sacrifices. More than once I have heard men say " I do not want to have one dollar more when this war is over than I had when it began, and every dollar I have in the way of surplus, I give it to some patriotic fund." I know of other men who have cut down their living to as economical a basis as they can, in order that they may give large subscriptions, and any campaign committee in any city will tell you they are absolutely surprised at the sums men supposed to have only normal incomes are willing to deprive themselves of in order to give to those funds. Many men are giving a very large percentage of their incomes at the present time, in the full expectation that that would constitute their main war contribution for 1917. When you say that a man with an income of $10,000, for instance, has practically all of his income left, do not forget that he may have already promised to give out of that income for patriotic purposes a very much larger sum than the tax gatherer proposes to collect from him. Not everybody in Canada is a profiteer. Not every wealthy man is rolling in wealth because of this war. There are a great many industries in this 'Country that are not making money and there are a great many men reputed as wealthy who were never so poor in their lives as during this war, yet these men are giving generously and saying nothing about it. The percent-



age of those who make extreme profits is small, taking Canada as a whole. I would be the last to defend these people in the smallest degree. Where abnormal profits are being made from munitions, or from any other source, I would vote to take a very large share of those profits. At the same time, we should not consider that every man reputed to be fairly comfortably off has become a millionaire from day to day during this war.
This income tax is new. It is more or less experimental. It seems to me, in view of the fact that it was unexpected, it should not be made excessive. We should consider the obligations people have already voluntarily assumed for 1917. In all probability, it will be necessary to re-impose this tax, because the war will not end in a few months. Either the present Finance Minister, or some other Finance Minister, will within twelve months have to deal with the tax again, and probably will increase the rate on . the higher incomes. People will not complain if that be done for the year 1918, because they see it coming, and can make their arrangements accordingly. If I am fortunate enough to be here in 1918, and it is then proposed to place a larger tax on the higher incomes, I, for one, shall raise no objection. I wish, however, to say to the Finance Minister that if the tax is increased he must expect that the Patriotic Fund will not receive as much as it has received up to the present, and it may be necessary for him to add $10,000,000 to his income tax in order that that sum may be given to the Patriotic Fund. I do not believe that after a heavy income tax is introduced, we shall be able to get from voluntary giving anything like the sums we are to-day receiving. We shall probably continue the organization, and we shall probably endeavour to utilize those sources of revenue which the income tax will not affect, but since our revenues come largely from givers in the cities, I do not think those other sources will be sufficient for our needs. We had voluntary campaigns not long ago in connection for the needs of the current year. Montreal gave us $3,000,000; Toronto, outside of York county, gave us $2,500,000; Hamilton, $650,000; Ottawa, $400,000; London, $300,000; Brockville, $150,000; St. Catharines, $100,000; Halifax, $200,000; Vancouver, $400,000; Victoria, $200,000; Edmonton, $150,000; Calgary, $175,000; Quebec, $250,000. The greater part of this money is voluntarily subscribed and is being paid monthly, and will not all be paid up for another eight or nine months.

Speaking again of the men of wealth, I feel we should put on record some of the noble gifts they have made since the war began . We well remember the gift of $500,000 made by Mr. J. K. L. *Ross. I heard indirectly that Mr. I rules Carruthere, of Montreal, had given to various war funds about $200,000 since the outbreak of hostilities. Mr. A. Hamilton Gault gave $100,000 for the P.P.C.L.I. Here are several men whose gifts, I know have gone into six figures since the war began: Sir Edmund Osier, Sir Edward Kemp, Sir Herbert Holt, Mr. Huntley Drummond, the Bilks' of Montreal and the Ross', of Quebec. These men men have all given in the most generous possible manner. I have a list here of our subscribers in Montreal and I see that 240 men have given $508,000. I could put the names on Hansard if it was desired but I see that it is just six o'clock. I have a list here of .thirty-one men in Toronto who gave $143,500. In London thirty-three men gave $135,000. Hamilton also has been very generous. I trust that, whatever the future may bring for the patriotic fund, the present relief organization may be continued. We are administering a million dollars a month at no cost whatever to the subscribers inasmuch as the interest on our bank balance pays all the cost of administration from the Atlantic to the Pacific. We have been able to isecure this year $15,000,000 at a cost of less than one-third of bne per cent for the raising of it. We have a voluntary staff in every part of Canada, composed of people who are taking up this work for the love of the cause and who are endeavouring in that way to do their bit. I trust that whatever this or .any government may do it will not break up the existing relief machinery which is running so smoothly. My plea to this House in connection with the income tax is that it should remember the voluntary obligations which have been assumed by the people of Canada for the year 1917 and that, if it is planning to make the tax fall more heavily upon the larger givers, this may be postponed for another year.
At six o'clock the House took recess.
After Recess.
The House resumed at eight o'clock.


Hon. FRANK OLIVER (Edmonton):: I
wish to make a few remarks, and as the hon. member for West Middlesex (Mr. Ross), who had the floor at six o'clock is not present, I may as well proceed.

I agree with a great deal of what has been said commending the action, of the hon. Minister of Finance in bringing down a measure providing for an income tax. I think the principle of the measure is desirable from many points of view. It is direct taxation, and, therefore, it is definite. Those who pay know how much they are paying, and the money is paid into the treasury. It is not the same as a tariff imposition, under which for every dollar paid into the treasury two or more dollars are paid into the pockets of those who have the 'benefits of the tariff provision. To that extent I desire, therefore, to add my support, to that which the Finance Minister has already received. . But, when I agree with the principle and the desirability of establishing a principle, I am also compelled to follow the criticism that has been made by other members on this side, in recognizing that the upward graduation of the tax as the hon. minister proposes it does not appear to me to be adequate, considering the circumstances in which we are placed to-day. In these special circumstances, when extraordinary expenditures are being made, when debt is being piled up as it is to-day, it appears to me that there should be a heavier levy on the larger incomes than is imposed by the measure now before the House. To that extent I would agree with those who have taken exception to the measure. I am also compelled to agree with the remarks made by the hon. member for West Lambton (Mr. Pardee), that it is unfortunate and undesirable that it should be held out to the country that in consideration of the imposition of the income tax, there is contemplated, or may be contemplated a remission of the excess profits tax. It is true the excess profits tax has been criticised from varying points of view, It has been said, of course, that no taxation is pleasing, and that it is an easy matter to find fault -with any form of taxation, and no doubt the excess profits tax imposed by the Minister of Finance a couple of years ago has points and features that press unequally or unfairly, and is capable of great improvement. At the same time, I am sure the Finance Minister must recognize that, from this side, speaking generally, he received support for the principle of the excess profits tax. There was disagreement as to details, but I do not think there was any disagreement as to the principle that there should be such a tax. Some people objected that it was excessive, but I 294}
am compelled to take the view that it was below the mark rather than in excess, considering the circumstances in which we are placed. It was imposed especially as a war measure, as I understood the matter. It proposed to deal with a condition which existed, in which excessive profits were reaped because of the existence of war. It is only natural, right and proper, that when such excessive profits are being reaped by reason of the existence of war, and when it is obvious that these excessive profits must cease when the war ceases, there should be excessive or extreme taxation upon these profits in order to balance the situation; that is to say, a heavy tax on excess profits, and especially on war profits* is a proper measure of taxation at this time. And if it is contemplated, as it *appears to be, that the excess profits tax shall cease, to be replaced by the present, income tax, I consider that to be exceedingly objectionable legislation. I consider that the principle involved in the remission of the excess profits tax is a bad principle, and that that remission is not balanced by the imposition of the income tax. It has been said here to-day that the advantage of the income tax, or of any direct tax, is that it can be made to bear more heavily upon the wealthy than upon the people of ordinary means, whereas a tariff tax must bear more heavily upon the man of lesser than upon the man of greater means. For that reason, looked at from a proper economic standpoint, the income tax is essentially a desirable form of taxation. But when we find that the special taxation taken from war profits and levied because of war conditions is to be abrogated, and in the place of that is established an income tax, which, being lightly graduated upward, rests more heavily, in proportion, upon the men of lesser income than upon the men of greater income, I can only take the view that the minister, while adopting a sound principle, has not given that principle the effect that should be given to it.
We must have money to carry on the business of the country. If that money does not come from one source, it must come from another. If it does not come from the excess profits of those who are fortunate under war conditions, if it does not come from the man with large income* then it must come from the man with a small income, either through the income tax or through the exactions of the tariff. This is a tim-e and an occasion in the history of this country during which, while-there has been a vast outpouring of money

into the lap of Canada, those who are dependent upon their labour, whether of hand or of brain-that is to say, whether the artisan who works for wages or the office man who works for what he is pleased to call salary-are, by the cost of living, subjected to a heavier burden than they have ever before been called upon to bear. That is to say, owing to the advance in the cost of the necessaries of life the man who receives a fixed salary or a fixed wage is closer up to the limit than he e%rer was before. That being the case, this is not the time to increase either directly or indirectly the burdens upon that section of the community. Whatever increased burden of taxation is imposed should be levied upon those who are able to bear it; upon the man who is reaping excessive profits out of war conditions or the man who by reason of good fortune is in the enjoyment of the larger income and therefore can spare a greater proportion of that income to assist in the upkeep of the country during these strenuous times. The man of smaller salary necessarily has to spend that salary in order to live; the burden of taxation upon that man is greater in proportion, although much less in amount, than that whibh rests upon the man of the larger salary. A single man in receipt of say $1,500 or $2,000 or a man with family in receipt of $3,000 a year has but a small margin, between the cost of living and the amount of his salary; that is, according to the ordinary standard of living. I do not wish to be understood as saying that the single man receiving $1,500 or married m.an receiving $3,000 a year should not pay income tax; I quite agree that he should pay income tax; but, as compared with - the amount paid by the man who has an income of say $10,000, the amount of the tax imposed upon him is necessarily out of proportion to the difference between his salary and his experises. The man with the $10,000 income can cut down his expenses without unreasonably reducing his standard of living, but the man with the $2,000 salary cannot cut down his living expenses without seriously affecting his standard of living. There is room for the talcing of the larger proportion from those whose incomes are greatest.
In following out the schedule submitted by the Finance Minister it cannot be argued that the proportion taken from a man of large means bears the same relation to the difference between his cost of living and his revenue as in the case of the man with the smaller income. That, I think, should be remedied; it is a condition that mili-

tates seriously against the merit of the proposals of the Finance Minister. I want to make this suggestion. It is borne in upon the people that the cost of living has tremendously increased in recent years. It has increased by one-half in four years, while salaries and wages have not increased in anything like that proportion. While I make the plea that the heavier burden be laid upon the man of larger means, I also make the plea that the tariff should be reduced so that the burden would be* lightened upon the man of lesser means. The man almost the whole of whose ifacome must be spent in maintaining himself and his family should have some measure of relief by a decrease in the customs tariff on the necessaries of life. An increase of revenue should be taken from those who can afford to pay it and the burden of the high cost of living should be lifted in some measure from those who are . less able to pay. This country is going up against the wall, so to speak. The cost of living is increasing. Taxation is necessarily increasing, and the means of meeting that high cost of living and that increase of taxation are not being provided, notwithstanding the enormous outpouring of wealth into the lap of Canada as a result of the war. I would urge, therefore, that the income tax measure should- not displace the war profits tax; that the war profits tax should be increased; that the income tax should be graduated more steeply in its higher figures, and that the tariff should be reduced with a view to reducing the cost of living to those whose outlay is necessarily within such a close margin of their income.
I was attracted by the plea made by the member for St. Antoine (Sir Herbert Ames) for consideration, in the imposition of the income tax, of those men of wealth who have contributed liberally to the Patriotic Fund. There is, I think, some merit in"lhe hon. member's contention. The purpose of the Patriotic Fund is essentially a national purpose. It makes provision that is an absolute necessity to the credit of the country and to the maintenance of -Canada's position in regard to the war. I have never looked upon the Canadian Patriotic Fund as -something that should be a matter of private enterprise. I have -always looked upon it as something that should be borne by the nation and that -should be dealt with by the nation. I was never able to understand why there should be paid out of the Dominion treasury to the dependents of the

soldier overseas a separation allowance that is admittedly less than is requisite to provide those dependents with a decent livelihood. Whatever amount is reasonably necessary to maintain the dependents of the soldier overseas should be provided out of the Dominion treasury, and anything less than that is not doing justice to the soldier and is not creditable to the country. There is plenty of work for an organization such as the Canadian Patriotic Fund in taking care of special instances of difficulty or hardship that necessarily result because of men leaving their families and going to serve their country. I have heard the hon. member for St. Antoine (Sir Herbert Ames) argue that it is not possible for a Government to take care of the many exceptional cases that must necessarily arise, and that, therefore, there is a reason for the existence and administration of the Canadian Patriotic Fund. I quite agree with 'that. That, however, is not the point. The point is that the Canadian Patriotic Fund, under certain circumstances, pays to the dependents of the soldier a fixed amount, and my contention is that that fixed amount should be paid out of the Dominion treasury.


Herbert Brown Ames: It is not a fixed amount; it is a variable amount, and that is the crux of the whole situation. The Government cannot discriminate, but the Canadian Patriotic Fund can. The Government can consider the dependents only as appanages of the men and the Government has to give the families through the men the same sum, whether they need it or not, no matter what the cost of living or the size of the family may be. The Canadian Patriotic Fund approaches the matter from an entirely different angle. It looks into the case of each family separately. It does not take the soldier into consideration at all. It simply says: How much is needed, in addition to the existing income of the family to bring that income up to the scale of decent subsistence for that family, and the sum differs in every province. I would be glad to-night, or .at any other time, to hand to the hon. member the monthly statements for April, May and June, and he will see from them that, in no two places in the Dominion of Canada, is exactly the same amount given to families differently circumstanced. There are no two places in Canada where there are identical conditions. In Prince Edward Island we give to the average family $10.24 per month; in Nova Scotia,
$11.83; in New Brunswick, $13.87; in Newfoundland, $13.14; in Ontario, $15.03; in Quebec, $16.17; in Saskatchewan, $22.58. We give twice as much in Saskatchewan as we do in Prince Edward Island because the cost of living in Saskatchewan is considerably higher than it is in Prince Edward Island. We give to the average family in Southern Alberta $19.10 per month, and in Northern Alberta, $19.58; in greater Vancouver, $20.25; in Victoria city, $21.54; and in British Columbia generally, $20.79 per month.
The point I am taking is this, that the Government cannot discriminate-if the Speaker will allow me to finish this matter with the hon. member for Edmonton-between families. It will have to give the soldiers' family in Prince Edward Island the same amount that it gives the soldier's family in Alberta, and if it were to do that, it would be giving to families - in Prince Edward Island a great deal more than they required. The only way in which the Government could satisfy every one by an indiscriminate method would be to give the maximum rate throughout Canada, and in that case it would be giving a great deal more than would be needed by the families in some of the provinces. We have estimated that we do for about $12,000,000 what the Government could not do for less than $20,000,000, because in each case we discriminate according to locality and according to the needs of each individual family; and if, in doing that, we can save $8,000,000 a year, and, at the same time, bring the families up to a decent state of subsistence, it is surely better that we should do that work than that the Government should do it.


Frank Oliver: I cannot altogether agree with the position taken by my hon. friend. My point is that if it takes $30 a month to provide decent subsistence for the dependents of a soldier in Prince Edward Island, the Government should pay that $30, and if it takes $40 to provide decent subsistence for the dependents of a soldier in Alberta, the Government should pay that $40. There is no reason why the Government should not discriminate between province and province in the payment of separation allowances for soldiers, any more than there is reason why it should not discriminate in the payment of salaries of its officials; and, as a matter of fact, it does discriminate in regard to the salaries of its officials. There are certain allowances paid in western Canada that are not paid in eastern Canada in the public service of the conn-

try, and there is no reason why there should not be a similar discrimination between province and province in the payment of separation allowances. As to discrimination between families, once you bring the payment from the public treasury up to what is admittedly required for the decent subsistence of the family, then the work of the Piatriotic Fund comes in, and if there are special cases, then there is room and opportunity for those people who are desirous of showing their benevolence and who take an interest in the welfare of our soldiers and their dependents to exercise that benevolence, care and supervision about which my hon. friend speaks, and which I do not 'wish for one moment to belittle in any way. When it is recognized that a certain fixed amount is necessary as reasonable subsistence to the dependents of the soldier, that sum should be paid out of the Dominion treasury. It is the country that the 'soldier is serving, not his neighbours particularly, nor those who are of patriotic o>r benevolent mind, and the country should pay whatever is right and proper for the maintenance of his dependents. If the present rate of taxation is not sufficient for that purpose, then the rate of taxation should be increased until it is sufficient. Perhaps this is not an appropriate time to discuss the merits of the Patriotic Fund, 'but my hon. friend (Sir Herbert Ames) favoured the House with his views in regard to the matter, and I have taken the liberty of following him to this extent.
I said, in the beginning of my remarks, that I was quite willing to agree that those men of wealth, who had contributed liberally and who were still contributing liberally to the Patriotic Fund, should have their contributions recognized as part of their income tax-bufr only if the whole of the money required for the maintenance of the dependents of the soldiers is taken from the Dominion treasury, as, in my judgment, it should be taken.
I do not desire to withhold in any way the credit that is due to the men of wealth who have contributed of their means to the maintenance of the dependents of soldiers, and I certainly would not wish to see them taxed double, but I would like to see those men of wealth who have not contributed as they should have done made to contribute either through a war profits tax or an income tax or in some other way, so that they may pay their share of the obligation that rests upon them as citizens. I do not,want to detract in any way from- the work my 
hon. friend has done or from the good-will of those who have made the contributions, but I say ithat the system of making the dependents of our soldiers subject to the control and direction and at the mercy of an organization that stands where the country should stand, tends (to lower the standing of our soldiers and their dependents, tends to depress the patriotic enthusiasm that caused those men to volunteer and, in its moral effect, is an injury, and I am compelled to say an injustice to the men and their dependents. I hope that what I am saying will not be considered as any reflection upon the good intent of everybody concerned, but I say that you cannot make men and women and children subject to that which of necessity has the appearance of charity, without lessening their self-respect, and when you do that you take away what is best in them and do them irreparable harm when you are really trying to do them good.
My suggestion is that the contributions of the rich to the Patriotic Fund should be recognized in the income tax, but that the burden now carried by the Patriotic Fund should be carried direct by the Dominion treasury, and if it is necessary the income tax and the war profits tax should be increased in order that that money may be paid ouit of the treasury.


Edgar Nelson Rhodes: With respect to the
amendment moved this afternoon by the hon. member for West Lambton (Mr. Pardee), section 54 of the British North America Act, the rules, and the invariable practice of this House, prescribe that any motion which is designed to levy a tax can only be introduced by a minister on the previous recommendation of the Crown. The amendment of the hon. member for West Lambton, if it has any object at all, is designed to levy an increased charge upon the people, and is 'therefore, for the reasons I have indicated, clearly out of order.


Frederick Forsyth Pardee: I just wish to refer you, Sir, to page 431 of Bourinot which says:
All the authorities go to show that, when the Government have formally submitted to the House the question for the revision of customs and' excise duties, it is competent for a member "to propose in committee to substitute another tax of equivalent amount for that proposed by ministers, the necessity of new taxation to a given extent being declared on behalf of the Crown.''
It is also competent for any member to propose another scheme of taxation for the same purpose, as a substitute for the Government plan.


Mr. MIDDLEBRO:: Read the next sentence.


Frederick Forsyth Pardee: But it is not regular to propose a new and distinct tax, which is not a mere increase or diminution of' a duty upon an article already recommended by Government for taxation, though it is the function of this committee to impose rather than to repeal taxes.
I submit that my amendment proposes to the Government the same scheme of taxation they have" themselves proposed, but in a larger form. I would also point out that the amendment simply asks that this scheme of taxation be submitted with the Government's approval. It asks nothing further than that. I .submit that I am doing exactly what Bourinot says it is competent for any member to do, namely, " to propose another scheme of taxation for the same purpose, as a substitute for the Government plan." Bourinot gives his authorities in a foot note on the same page. I am simply proposing the same scheme of taxation in a larger form, and I am asking that it be done with the consent of the Government, and that the Bill be referred back to the committee. With all deference to you, Sir, I therefore submit that the amendment is in order, because Bourinot expressly states that while it is not regular for a member to propose an entirely different scheme of taxation, it is competent for him' to propose another scheme of taxation for the same purpose, although it is in a larger measure.


Edgar Nelson Rhodes: 
Frederick Forsyth Pardee: May I ask you, Sir, to rule upon the point that I am asking the Bill to be referred back with the approval of the Government?


Edgar Nelson Rhodes: I may say to the hon. member that after consulting the authorities I have not been able to ascertain that in any instance the consent of the Government has been given to a motion of this character being made by a private member, and except it should be so it would not be in order.


Frederick Forsyth Pardee: I must, of course, bow to your ruling, Mr. Speaker. At the same time I believe that the clause within the resolution which only refers it to the House, or to the committee, with the approval of the Government-


Sir ROBERT BORDEN:: The Government would first have to obtain the approval of the Crown.


Charles Murphy: The hon. member for St. Antoine (Sir Herbert Ames), in discussing the measure before the House, pointed out what he apprehended as a menace to the future success of the Patriotic Fund, which has been under his charge since its inception, and which he has undoubtedly administered to the general satisfaction of the Canadian public. My hon. friend from Edmonton (Mr. Oliver) has dealt with the observations of the member for St. Antoine, and has taken the position that the benevolence administered through the medium of the Patriotic Fund is an obligation which the Government should assume and administer. With that view I concur. I also desire to point out to the House that a couple of years ago, when speaking in the debate upon the Address, I took the position that all these funds should be in the charge of the Government, that all moneys to be paid out on account of the war should be

raised and distributed by the Government, and that no part of the work should be left to private initiative, private benevolence or private administration. My hon. friend from St. Antoine has supported his view of the matter-a view to which his experience, I admit, gives great weight-by stating that if the fund were administered by the Government instead of as it is now administered, there would be an increased burden of $8,000,000 upon the country.


Herbert Brown Ames: We have uncollected balances, arising from pledges which have been made, which we expect will yield us from $8,500,000 to $10,000,000 in the course of the next nine months. Until those pledges are paid, it seems to me it would be double taxation to assess unduly the persons who are paying those large sums of money.


Charles Murphy: That is not exactly the point to which I allude. I understood if the work were taken over by the Government, it would cost the country many millions more than it is now costing-some $8,000,000 I think my hon. friend said.


Herbert Brown Ames: Yes, in this way. In the first place this fund is administered without any expanse whatever, inasmuch as the interest pays the administration expenses; in the second place, by being able to discriminate between families, and only give a family the supplementary assistance necessary to bring it up to the scale of decent subsistence in the particular locality, we are able to vary the sums we give to families in different provinces, whereas my contention is the Government would have to treat every family from one end of Canada to the other in exactly the same way, just as a soldier's pay has to be the same whether he comes from Prince Edward Island or from the Yukon. If the Government took it over, the supplementary grant would have to be sufficient to meet the highest requirements of the most expensive province, and if that were done we estimate it would cost the Government about $21,000,000 to do what we are doing for about $12,000,000.


Edgar Nelson Rhodes: I hope the hon. member for Russell (Mr. Murphy) will not enlarge upon the discussion on the Patriotic Fund.
It had a bearing, inasmuch as the hon. member for St. Antoine referred to it as one of the reasons why the amendment of the hon. member for West Lambton (Mr. Pardee) should not be adopted on the ground that it would take a larger share 
from the larger incomes. It has not the same bearing upon the discussion of the third reading of the Bill. While I do not wish to restrict the hon. member unduly, I hope he will make his remarks upon the Patriotic Fund as brief as possible.


Charles Murphy: I promise I will not infringe upon the time of the House at any length with reference to this matter. I may, however, be permitted to conclude my observations on the point by saying that I do not admit the last position taken by my hon. friend (Sir Herbert Ames), and it is rather surprising to me that he should offer such a candid criticism of the administration of affairs by the Government. I would commend the methods of my hon. friend to the Government, particularly the one _ by which he says the cost of administration is defrayed by the interest he is able to secure upon the principal fund collected.
Now, just a word or two with reference to this Bill. I do not question your ruling, Mr. Speaker, with regard to the amendment offered by the member for West Lambton. I regre't it was not within the rules of the House, and that the object sought by my hon. friend could not have been attained in that way, but still the same end may be attained if the Minister of Finance will forget his difficulties with the Canadan Northern Railway Bill and be receptive to the advice which has been tendered him in connection with this measure. He can surely do this of his own motion. The amendment of my hon. friend from West Lambton merely asked the committee to apply in practical operation two principles-first, that taxes should be levied upon those best able to pay them; and, second, that in the case of this particular Bill, a greater burden should be laid upon those in receipt of large incomes. Leaving aside my hon. friend's amendment, I may point out that the Bill itself brings up the whole question of the taxation methods adopted by the Government, and the result to be obtained therefrom, and necessarily causes us to take public opinion into consideration with regard to the Government's methods of taxation and with respect to the results which have accrued from the application of those methods. I desire to place before the House two views upon this aspect of the matter. One of these views I wish to present from a Canadian standpoint, and the other from the standpoint of a recognized authority in the United States. If the Minister of Finance

will not hearken to the advice that is tendered to him in all friendliness from this side of the House, it occurred to me that possibly he might give ear to the advice that rpay be obtained for him from the pages of a Government publication. I hold in my hand a small pamphlet on the title page of which I read:
For Free Distribution.
National Organization for War. by Stephen Leacock. Reprinted for the National Service Board' of Canada.
On the back of the cover there are various mottoes encouraging national thrift, national saving, and national investment. I might explain that this pamphlet contains an article written by Mr. Stephen Leacock. The National Service Board of Canada, a creation of the present Government, and presided over by my hon. friend from Calgary (Mr. R. B. Bennett), thought so much of the advice given in this article of Mr. Leacock's that they had it reprinted and distributed as a government pamphlet. That being so, and in case my hon. friend the Minister of Finance may not be familiar with the contents of this pamphlet, I desire to quote from it briefly so that he may know what practically another branch of the Government, of which he is a member, thinks of the method and the measure of his taxation. After an introduction dealing with the war and the position of affairs in this country under war, this pamphlet says-page 3:
To and fro we go about our business. We pay our easy taxes, and subscribe to our so-called patriotic loan, so issued that the hungriest money-lender in New York is glad to clamor for a share of it.
Then this National Service Board pamphlet lays down a certain principle in regard to the war tax, and in the course of what it has to say on this point, I find the following dictum:
The so-called' War Tax is but a small part of a man's earnings.
After discussing that principle at some length, the pamphlet proceeds:
War brings with it the peculiar phenomenon of war prosperity.
Then the author, who is so highly thought of by the National Service Board as to have his pamphlet officially adopted for circulation in Canada, applies this dictum to the Dominion of Canada, and having made the application, he proceeds thus:
In and through it all moves smug hpyocrisy, suggesting the little words and phrases that are to salve the soul; teaching the manufacturer to call himself a patriot as he pockets his private gains, and to shout for trade, more trade, that he may cram his pockets the fuller; teaching the farmer that his own fat, easy industry is war itself, and that he may count his fatted cattle in the light of his stable lantern and go to bed a patriot; teaching all the drones and parasites, the lawyers, the professors, the chefs and the piano-players, the actors and the buffoons that in going on with their business they are aiding in the conduct of the war.
1 think, Mr. Speaker, you will admit that that is a very candid criticism of one branch of the government of the day by another branch. If I were to adopt it as expressing my own views, I would say that it leaves nothing for me to add to the criticism on that point. It follows that criticism by presenting, through the National Service Board, to the Government, what should he the real war policy. It goes on to say:
Every cent of the money that can he gathered up by national thrift should be absorbed by .national taxes and national loans. Our present taxes are, for war time, ridiculously low, as far as all people of comfortable, or even of decent, means are concerned. And they are made with one eye on the supposed benefit to industry.
The author of this pamphlet goes further and suggests a policy in regard to loans:
Over above the taxes we need a succession of Government patriotic loans, not money-lenders' loans at market and' supermarket rates, but patriotic loans in the real sense, at a low rate of interest, let us say four per cent, and issued in bonds of twenty-five dollars, with a dollar a year as interest.
But, in addition to this advice which is tendered by one branch of the Government to the other, the author further enjoins the absolute necessity of practising economy, and that is done in this way:
But first let the Government-of the dominions, the provinces, the cities and the towns-itself begin the campaign of thrift. At present vast sums of money are being wasted in so-called public works, railways in the wilderness, cement sidewalks in the streets, post offices in the towns-millions and millions that drain away our economic strength. In times of peace these are excellent. For war, unless they have a war purpose, the things are worse than useless. The work of the men who labour at them is of no value, and the food and clothes that they consume must he made by other men.
I do not think, if I took up the time of the House for the rest of this sitting, I could add anything to the excellent advice given to th? Government, and particularly to the Minister of Finance, by the National Service Board of 'Canada through this pamphlet circulated by the National Service Board, of which my hon. friend from Cal-

gary (Mr. E. B. Bennett) is the distinguished 'chairman. That is a home view, a view at close hand, of the method and measure of the taxation for which the Minister of Finance has stood sponsor.
It may be of interest to the House, and will I am sure (be of interest to the Minister of Finance, to hear very briefly the view which is entertained in the -adjoining republic of his taxation measures, and particularly of the one which is now before this House. In the Montreal Gazette of Monday -last I noticed an article dealing with a pamphlet which has been issued by Mr. Otto H. Kahn of Kahn, Loeb and'Com-pany on the subject of the war tax. In the course of that pamphlet the' writer lays down this principle:
The cost of the war must be laid according to the capacity to bear it.
Mr. Kahn goes1 on to discuss the measure which is now before this -House, and in the course of his analysis of it, he has this to say:
Within -the last few days it has been announced that the Canadian Government has introduced a Bill for the imposition of an income tax. The rates proposed are moderate for a war tax, the highest percentage of taxation being considerably less than one-half the rates fixed by our House of Representatives.
Moreover, the Act as introduced by the Government provides that income -taxation will be remitted to individuals up to the amount which they are now paying directly or as members of a co-partnership or as shareholders in corporations, for excess war profits, taxes and other special war taxes' under the existing law.
In fact, if the newspaper reports are correct, it is the announced intention of the Canadian Government with addition of the income tax, to reduce or abolish the excess profits tax at the end of the present year. Accordingly, while America, under the Bill pending in Congress, would provide an unprecedently high income tax, and excess profits tax, Canada would have hut a moderate income tax, and that tax apparently would not be in addition to, but largely or entirely in place of the excess profits tax.
The enrichment of corporations or persons out of profits resulting from a war in which this country is engaged is rightly abhorrent to the public conscience.
I commend that criticism from a recognized financial authority to the consideration of my hon. friend the Minister of Finance. I do so for the reason that there seems to be an impression that the taxation in this country is as high as that in the United States. According to the statement of Mr. Kahn, it only approximates about one-half of the rates provided in the measure now before Congress.


William Thomas White: Our business
profits taxation is very much heavier.
Mr. MUEPHY The hon. gentleman says it is very much heavier, but he himself is authority for the statement that tha-t tax is to be discontinued.


William Thomas White: No, I stated two or three times that the profits tax is to be continued, and that it will be dealt with in the next Budget.


Charles Murphy: After this year?


William Thomas White: After this year. This tax, by its terms, comes to an end December 31, and I stated this afternoon, as I have stated on several occasions recently, that when this tax was proposed it was thought the war would be -at an end by next December.


Charles Murphy: The hon. minister says this tax will be continued, and will be dealt with in the next Budget?


William Thomas White: Yes.


Charles Murphy: Is there to be another Budget this year?


William Thomas White: No, next year.


Charles Murphy: How can the hon. minister give a guarantee as to next year?


William Thomas White: I do not know who can give a better guarantee.


Charles Murphy: My hon. friend expects to be here next year?


William Thomas White: Yes.


Charles Murphy: All I can say is that my hon. friend is very much alone in that view. However, we have more serious business to transact at the present time. I commend the criticisms that I have submitted to my hon. friend's very careful consideration, and I hope that even before his next Budget to which he alludes he will provide for a more equitable distribution of this Income Tax, and will particularly see that those in receipt of large incomes shall pay a much larger percentage than thv.y are going to pay under the present measure.


Mr.  D. C. BOSS@West Middlesex: As
the hon. Speaker ruled the amendment out of order, I feel that it is incumbent UDOn me to say a few words on the third reading of this measure. This Bill introduced by the Finance Minister may be all right as far as it goes; but, coming from the city of Toronto, as he does, I would not expect it to go very far, and my expectation has

been realized. Judging from the views I have heard expressed throughout the country by the man on the street and taking my own personal view, the taxation imposed by this Bill by the Minister of Finance is considered to be a very meagre form of taxation. In this House one question probably has been uppermost in our minds, and that is the question of making the sacrifices of our people, to some extent, a matter of equality, if it is possible to make an equality between sacrifices of men and sacrifices of money. For my own part, and speaking, l think, for every member of this House,
I can say that is an impossibility. But there is this to be said: that a sacrifice in money is a greater sacrifice if a man has to habituate himself to a smaller income than if the law leaves to him a larger income.
I think this Act as presented is not going to satisfy the people at all in regard to comparative sacrifices between the poor and the rich. I was very much interested in the remarks of the hon. member from St. Antoine (Sir Herbert Ames), for whom I have the highest regard, and who, I believe, ha6 done an immense service to the country in connection with the Patriotic Fund. In principle, I do not believe the Patriotic Fund should be dependent upon voluntary subscription. I do not believe the soldiers and their dependents should have to rely on what looks like charity. They have done too much for this land and for freedom for us to ask them or their families to be dependent on what looks like charity. I believe that ' is a matter which should have been handled by this Government, and should be paid for by the Canadian people as a part of their taxation. I may say in passing- and I do not want to digress and depart from the rules, but I think it is relevant to the subject-that as far as my country is concerned, it affects the question of taxation generally. My county, Middlesex, part of which I have the honour to represent, has considered that as a cardinal principle, and they have given to the Patriotic Fund $72,000 a year. In addition to that, generous men have contributed in a very liberal manner. The hon. member for St. Antoine (Sir Herbert Ames) said, among other things, that he has heard patriotic rich men say that they did not want any more money when this war was over than they had when it began, or words to that effect. I am the last man in this House to detract from what has been done by the wealthy men of Canada in the way of assistance in this war. I believe their
hearts are in it, just as much as are the hearts of the plain people of this country. But I ask you, Sir, if there is any class of men in this country whose hearts should be more in this war than the wealthy men of this land? They have more to be protected than the poor man. They have more at stake, and if any person or class of persons should be willing to make sacrifices in this war, it is the wealthy men of this land. When patriotic rich men have said that they do not want to be any richer when the war is over than when it began, it is a very-shall I put it mildly?-low idea] of patriotic duty. No man, rich or poor, should want to be as well off when the war is over as when it began. If he is stirred by patriotic emotions, if he has the love of Empire at his heart, and the desire to save the Empire and civilization, he should be willing to be much poorer when this war is over than when it began, if this war means anything to him; for, as .Lloyd George has said, if Germany wins this war, nothing else matters. The member for St. Antoine says that the wealthy man is willing to give of his wealth; that he does not want to be any richer when this war is over than he was when it began. I have read of wealthy men making similar professions; talk is sometimes very cheap. I have read in the public press- and it has not been denied-that one very wealthy man in this country said "To hell with profits."


William Sora Middlebro: Order.
Mr. ROSS; That is a quotation; if it is offensive to him, the hon. member for North Grey need not listen to it. It is all very well for wealthy men to make such professions as "to Sheol with profits"-if you like to put it that way. But the man who said that was willing to take $5,000,000 in a year for himself or his company from the poor people of Canada. During this war we want not professions but acts. We should make the wealthy men of this country-in a reasonable, not in a cruel way-pay their share of the burden that is imposed upon us by reason of our participation in this war. Can the sacrifice of the wealthy man who has an income of $100,000-who under the income tax will pay $14,900 and who professes that he is willing to do so-be compared with the sacrifice of the poor widow who, not merely professing that she is willing to sacrifice her three sons on the altar of her country, actually does sacrifice them? There is no comparison at all. The wealthy men of this

country should bear a fair share of the burden of sacrifice made by the Canadian people for the cause of civilization.
The Minister of Finance introduced two measures into this House recently, one of which we discussed to-day. I would characterize the measure now under consideration as the Millionaires' Belief Act. Under this measure the wealthy men will not be asked to make any sacrifices. They are doing nothing to win the war. Whatever they may do from patriotic motives, they are doing nothing under compulsion by this Parliament as a matter of sacrifice. As to the other measure introduced by the Finance Minister, that with relation to the Canadian Northern Bailway system, I would characterize it as The Millionaires' Aid Act -because, to my mind, that is all it is.
The Minister of Finance stated some time ago-although, in the vernacular, he is a little bit wobbly on the subject-that the excess war profits tax would cease to be effective on December 31, 1917. I understand that he intimated in the House this afternoon-I was not here when he did so- that he had changed his mind in so far as profiteering in connection with munitions and war supplies was concerned. I am rattier surprised; nevertheless, I compliment him on his change of heart. As a member of this House, who has the interests of the people at heart-I mean not particularly the people of Toronto, or of the large cities, but the people as a whole- I say emphatically that the Minister of Finance makes a great mistake. When he brought down his Budget he pointed out what he considered to be the many virtues of the excess profits war tax. He pointed out that in the first year of its operation he was getting $12,500,000, and that he would likely get $15,000,000 when the whole returns were in. He said that in the second year he would get $20,000,000, but that he could not . say what he would get in the third year-I do not quarrel with him in that respect, because it would be difficult to calculate the amount that would probably be received. He pointed out what a wonderful law this was; how easily and economically it worked; how everything was simplicity itself in connection with the collection of the tax; how the cost of collection was only one-half of one per cent. Well, the war is still on; the financial necessities of our country are greater than they ever were. The minister deems it necessary to go to the American market to borrow $100,000,000 and to pay thereon almost seven 
per cent interest. Yet, although men are making millions of dollars in the manufacture of munitions and of war supplies, at the expense of the people, my hon. friend says that he will cut off the excess profits tax, so far as it relates to ordinary business profits, at the end of the year 1917. No such action has been taken in England; I submit that this tax should be continued in Canada for the advantage of the people and in order that we may be able to carry on the war to a successful conclusion. Persons who are now subjected to that tax should be required to pay their share. Some of them are making immense profits out of the war, and in view of t-he fact that the end of the war is not yet in sight, there is no reason why they should not continue to pay the tax which has been imposed upon them. It was pointed out this afternoon that a gentleman with highei ideals than some others had turned into the treasury $675,000, an amount which ha considered to be in excess of what he ought to have made. In the light of all these considerations this tax on excess profits should be continued at least until the end of the war, and Parliament should at this session make statutory provision to that effect.
The Government may think that they are following the wishes of the people in passing this very moderate form of taxation. Before this taxation measure was introduced, we had meetings of public bodies all over the country. We had meetings of the labour people, meetings of all the church courts, meetings of the great agricultural classes in the West.


Mr. LABOR:: Hear, hear.


James Hamilton Ross: Some of my hon. friends are rather sorry for it, I know; they may yet have reason to be more sorry than ever. What has been the general expression of opinion of all these public meetings? They have said: If the Government is going to enforce a compulsory Military Service Act they should just as sedulously enforce compulsory money service upon the people. They have said that in no uncertain tone.
I ask the Prime Minister if the opinions of those people are not to be considered? Is he going to pay no attention to the well-considered opinions of the labouring men of this country? Is he going to pay no attention to the strong opinions expressed by all the religious bodies? Is he going to pay no attention to the opinions of the great agricultural classes as they were recently expressed in the West? Let us take, for instance, my own church-the Scotch

Presbyterian Church in this country. What was the expression of opinion of that body? They said, without any indefinitenese1: If we are going to have compulsory service in regard to man-power, we should have compulsory service in regard to money-power. Does this country consider that the opinion of the General Assembly of the Presbyterian Church in Canada, composed of men, some of whom are probably-and I do not wish to say this rudely-the superiors or the equals of men in this House, should not have some attention paid to it? Those men come from all walks of life, from the professional classes, the working classes, the clergy. Their opinion before the people of this country is just as good, just as potent and has just as much right to consideration as the opinion of any hon. member of this House or of any public body in this country. The Scotch people of this country have in this war given of their sons and of their money without stint, and those people convened in their General Assembly have a right to expect from this Government that their opinions, solemnly expressed, shall receive due consideration,.
Under the system of taxation submitted to us in this Bill, every opinion that has been expressed by those bodies, labouring, religious, agricultural, has been entirely disregarded, and we are exacting no sacrifice from the wealthy men of this country. My contention in that regard is stronger when one considers that the Minister of Finance says to this House that, except in regard to the manufacture of munitions, he is going to discontinue the tax which has, for the last two years, been imposed upon this country in regard to excess profits. I know this amendment has been ruled out of order by Your Honour, but I consider it is very unfortunate that, under the rules of the House, you should have that power. I know you have exercised it with absolute impartiality, as you always do. I have no doubt that you may be right in ruling this amendment out of order, but although the Prime Minister has said in *reply to my hon. friend from West Lambton (Mr. Pardee), that the consent of the Crown must be obtained for the submission of an amendment calling for an increase of taxation, we know that, as a matter of practice, the recommendation of the Crown means simply the recommendation of the Government, and in this democratic country, we should alter our rules so that any hon. member of this House may be able to submit to the House an amendment for which I believe not only Liberals on this side but
Conservatives on the other side would vote if they had the opportunity.
We are passing through strenuous times, and the end is not yet in sight. We are going to need all our money and all our men in order that victory may be ours. The people of Canada, rich or poor, have but one heart in this issue; they intend to win this war. Generally speaking, they are prepared to pay the price, and this Government, if it were really listening to the voice of the people and not to the voice of just a class of the people, would have submitted a measure of taxation that would receive the fuller approval of the people of Canada than the measure upon which we are passing to-night has received.


Robert Laird Borden: My hon. friend (Mr. Ross) has made a reference to me. Apparently he has not a perfectly clear idea as to the present legislation with regard to the business profits tax Act enacted in 1916. That legislation was enacted in 1916; the tax was payable during that year, in respect of profits made in 1915. It is payable this year in respect of profits made in 1916. It will be payable next year in respect of profits made in 1917.


James Hamilton Ross: I am quite clear in regard to that.


Robert Laird Borden: Well, if my hon. friend was clear with regard to that, he did not seem to express himself very clearly with Tegard to it, because if that idea is firmly rooted in his mind, I would have expected him to understand that there will be ample opportunity, at the next session, to take any action in respect of the profits that may be made by any company, corporation or individual in this country during the year 1918. We have already provided for taxation of profits made in 1915, 1916 and 1917. That is all dealt with, and the tax in respect of the profits of 1917 will be payable next year.
It will, therefore, be perfectly proper for the Parliament that is to be summoned in the immediate future to make any disposition it may see fit in respect of the profits, if any, that will be earned by any company, corporation, or individual next year.


James Hamilton Ross: If my right hon. friend will guarantee to me that he will be Premier of Canada at that time, and that that will be done, I shall be perfectly satisfied.


Mr. HAZEN:: The hon. gentleman has no faith in his own party.


James Hamilton Ross: I do not mean that.


Robert Laird Borden: My hon. friend seems to have a great deal of doubt as to what will happen if I am not Premier-


James Hamilton Ross: I know what will happen.


Robert Laird Borden: -and I am very much obliged for his expression of confidence as to what will happen if I am Premier.
He has not been very much clearer in his appreciation of what has been said by my hon. friend and colleague the Minister of Finance. The Minister of Finance has explained over and over again that the Business Profits Tax Act enacted in 1916 contained this section as the final clause of the Act:
The provisions of section 3 of this Act shall not continue in force after the 31st day of December, 1917.
I am not aware that any hon. gentleman opposite ha9 raised any question about that particular provision of the Act of 1916. Did my hon. friend raise any protest about it? He did not. It was in the minds of us all at that time that this war might probably reach a triumphant conclusion before the date mentioned in that section, and so the matter passed in that way, except that the Minister of Finance at the present session thought it necessary, in view of the financial situation which has developed through the unexpected length of the war, to increase largely in respect of the business profits earned this year, the taxation that was imposed by the Act of last year. Whenever the question has come up in this House as to the continuation of the business profits tax, the Minister of Finance has made his position perfectly clear. I happen to have under my hand what he said only this afternoon with regard to it, and it shows that the Minister of Finance has made his position perfectly plain. His statement was as follows:
Mr. Pardee:	As I understand this matter,
the hon. Minister of Finance has practically said that the income tax is being introduced in lieu of what is known as the "business profits war tax.
Sir Thomas White:	No, that is not correct.
Mr. Pardee:	As I understand the matter,
the business war tax is to come to an end, and will not be continued after the end of this year.
Sir Thomas White: The business profits war tax, by its terms, comes to an end on December 31st of this year. When that measure was introduced, it was thought the war would be at an end by that time. I stated expressly the other day that we should tax abnormal business profits resulting from the war, and in the next Budget that X bring down we shall deal with that matter.

Mr. Pardee:	Can we take it in this way:
that the present War Tax Profits Bill expires December 31, 1917?
Sir Thomas White. By its terms.
Mr. Pardee:	Will there be a renewal ?
Sir Thomas White:	I have stated that next
year a taxation will he imposed on excess business profits. I stated also the other day that it might he necessary to make some allowance for necessary plant extensions, but I laid down the principle, as strongly as I could, that abnormal business profits due to the war must be abnormally taxed.
The explanation already given, that the tax upon profits during the year 1917 will be exigible during the year 1918 should be entirely satisfactory. So, as my hon. friend from West Middlesex (Mr. Ross) has said that he would be perfectly satisfied if an assurance were given to him, and as I adopt the assurance that has already been given by the Minister of Finance, I am confident that the discussion leaves my hon. friend in a perfectly happy, contented and satisfied frame of mind.
The hon. member for Russell (Mr. Murphy) was good enough to indulge in a little chaff towards my colleague the Minister of Finance, with regard to the probability of his presenting a Budget next year. If I should follow his example in that regard I might say that it is very fortunate for my hon. friend from Russell that he presented his criticism of this measure now, as he may never have another opportunity. He was a little in error as to the authority he quoted. It was not Mr. Kuhn, but Mr. Otto H. Kahn, a very well known financial authority in the United States, and a member of the firm of Kahn, Loeb & Company, who has written several treatises with regard to business and taxation.


Charles Murphy: That is the name I quoted.


Robert Laird Borden: My hon. friend called him "Kuhn."


James Hamilton Ross: His pronunciation must he bad.


Robert Laird Borden: I would call to the attention of the hon. member for Russell and of the hon. member for West Middlesex that when they compare taxation in this country with taxation in the United States they should bear in mind that the business profits tax prevailing in

Canada is very much higher, so I am informed by the Minister of Finance, than any corresponding taxation in the United States at the present time. More than that,
I am ssured by the Minister of Finance, who has made a careful study of the systems of taxation prevailing in the various countries in the world during this war, that the business profits tax of 1916, as 'amended by the Act of 1917, imposes a heavier taxation on profits of that character than is imposed in any other country in the world. So there can be little fault found from the standpoint of my hon. friend or from the standpoint of any one else, with the course which has been pursued by the Minister of Finance in that regard. War-business profits in Canada to-day are paying a heavier tax than similar profits are paying in any other country in the world. So [DOT] much for that.
With regard to the income tax, it is perfectly true that the income tax as recently introduced in the Congress of the United i States is heavier than the income tax proposed here. It was introduced there upon a certain scale, and that scale has been considerably increased. The scale proposed toy the Bill which is now under consideration corresponds approximately, I think, with that which was first introduced in the Congress of the United States. But we shall not have exhausted the legislation that may be possible in this country by the passage of this Bill. The Minister of Finance, in introducing this measure, bad to take into account more than one consideration. In the first place he bad to take this into account; that in so far as this legislation (imposes taxation during the year 1917, it is retroactive in respect of more than half of the year. He had also to take into account what has been put forward very clearly and cogently by the hon. member for St. Antoine, namely that a igreat many persons in this country who are contributing this year as in the past very abundantly and generously from their incomes towards the Canadian Patriotic Fund ought to be considered in that regard. Notwithstanding what has been said by my hon. friend from West Middlesex in depreciation of those people in this country who are blessed with this world's goods, I hold that the vast majority of them are entitled to every commendation for the splendid way in which they have come to the aid of the Canadian Patriotic Fund. Simply because a man may be found here and there
who, although blessed with abundant means, has not done his duty as others have, it is neither fair nor just to oast aspersions upon the community as a whole, because the community as a whole has risen splendidly to the need of the hour.


Frank Oliver: Would the Prime Minister be good enough to say who in this debate was casting aspersions?


Robert Laird Borden: The hon. member for West Middlesex (Mr. Ross), as I understood him.


James Hamilton Ross: I rise to a question of privilege. I think the Prime Minister has entirely misrepresented my remarks, unintentionally, I believe. I commended those wealthy men as a matter of fact. Many of them have done noble things. What I said was that as'a class they should bear their burdens with the poor people of the country, rand I still say so.


Robert Laird Borden: I did not in the least suggest anything to the contrary, but I understood the hon. member for West Middlesex to speak in some such sense as I have mentioned. I am very glad indeed that he did not desire to be understood in that way. On more than one occasion he referred in a somewhat depreciative tone to the people of Toronto, apparently considering, for some reason which I cannot comprehend, that they had failed to do their duty in this regard. I believe the people of Toronto have risen splendidly to the need of the whole country, and have done their full duty in this war in every respect.
The Minister of Finance thought it desirable, for the reasons which have been mentioned, that he should fix the scale of taxation as it is proposed in this Bill. In the first place, he had before him the example of what had been done in the United States. The scale there has since been increased. In the second place, he had before him the fact that this Bill is retroactive for more than one-half of the year 1917. In the third place he had to take into account the fact that those who have contributed so splendidly and generously to the Canadian Patriotic Fund without the expectation that heavy taxation would be imposed upon their incomes, ought to be given for this year the consideration which is rendered by this Bill. All these matters, however, leave it entirely open to the Minister of Finance to take up the question again at the next session and have it dealt with by a Parliament fresh from the

people. There is no doubt that that will be done, so that under the circumstances it seems to me the measure as proposed meets the situation up to the present time. There will be occasion, no doubt, to take it up, for another reason. If we begin taxation upon a heavy scale on incomes in this country, it is hardly within the bounds of probability that the Canadian Patriotic Fund can expect to receive the liberal contributions which have been made to it from private sources in the past, and therefore there may be occasion, on that account, for the Minister of Finance to take the matter up from that point of view, with the intention of making provision for a need which otherwise cannot be met. The hon. member for St. Antoine has, if I remember correctly, spoken of the possible necessity that this may have to be done in another year, and the splendid organization which has been built up by those responsible for the direction and management of the Canadian Patriotic Fund would insure the effective and useful expenditure of any moneys which might be devoted by the Government for that purpose. However, these-are all matters which will have to be considered at some later stage. In the meantime, I venture to submit with a great deal of confidence that the measure proposed by the Minister of Finance is one which meets the situation for the present and will lend itself to such amendment as may be found necessary in the future.


Frederick Forsyth Pardee: May I ask the Prime Minister a question? As the member for St. Antoine, whom he has quoted, practically said that but a very small proportion of the Patriotic Fund came from the rich man, and the contributions came largely from the poor man, might it not be that this measure of taxation was still taking from the poor man more than he ought to pay, at the same time leaving the rich man practically immune?


Robert Laird Borden: I did not hear the hon. member for St. Antoine make the statement referred to, and I am not aware of the statistics. I would point out to the hon. member for West Lambton (Mr. Pardee) that this measure exempts unmarried persons in respect of an income of $1,500 or less, and it exempts married persons in respect of an income of $3,000 or less. Therefore it does not seem to me it would bear very heavily upon the class of persons he has in mind.


Frederick Forsyth Pardee: Might I say that the Prime Minister's answer is not a reply to my question?


Robert Laird Borden: Then I did not understand the question.


Frederick Forsyth Pardee: The member for St. Antoine said that the rich man contributed about one-quarter of the Patriotic Fund, and the rest of the people contributed the balance. My question is this:	Under the
present Bill, if you take the incomes from $6,000 up, which I think will be considered 'by any man in this House as a fair income, irrespective of what may be his circumstances, he may-


Edgar Nelson Rhodes: Order. The hon. gentle man is proceeding to make a speech.


Frederick Forsyth Pardee: I was just going to ask
a question, your Honour. Is it not fair to suppose that under this Bill the poor man is still being mulcted, whilst the man with an income of over $6,000 is being practically left alone?


Robert Laird Borden: The terms "rich" and "poor" are relative terms. I do not know what my hon. friend has in mind. I can onljt repeat that no married person will be "mulcted" under this Bill unless he has an income of more than $3,000, and no unmarried person will be "mulcted" under this Bill unless he has an income of at least $1,500. Therefore, it does not appear that the evils my hon. friend has in mind can possibly occur.


Daniel Duncan McKenzie: 
[Stage Direction]
Motion agreed to, and Bill read the third time and passed.

[Stage Direction]
House again in committee on Bill No. 100 respecting Game in the Northwest Territories.-Mr. Roche.-Mr. Rainville in the Chair.
On section 4-Regulations:
William Roche: Owing to some criticisms
that were offered, we allowed several sections. to stand over for further consideration. The criticisms were made particularly by the hon. member for Edmonton (Mr. Oliver) who stated that he would like to see incorporated in the form of a statute what we had proposed to put in the form of regulation. To meet the wishes of the hon. gentleman, and after consideration, we have decided to amend this clause by striking it out and substituting another. I therefore beg to move:
That section 4 be struck out and the following substituted therefor:
4. (1) Bxcept as hereinafter provided, the following shall not be hunted, taken, killed,
shot at, wounded, injured or molested in any way during the following times of year respectively :
(a)	Moose, caribou, deer, mountain sheep and mountain goats between the first day of April and the fifteenth day of July, and between the first day of October and the first day of December;
(b)	Minks, fishers and martens between the fifteenth day of March and thel first day of November;
(e)	Otter and beaver between the fifteenth day of May and the first day of October;
(d)	Muskrats between the fifteenth day of May and the first day of October;
(e)	White fox between the first day of April and the fifteenth day of November;
(f)	Partridge, prairie chicken, ptarmigan and other species of grouse between the first day of January and1 the first day of September ;
(g)	Wild geese and wild duck with the exception of eider duck between the fifteenth day of December and the first day of September.
(2)	Except as hereinafter provided, no eggs in the nest of any of the said birds or in the nest of any other species of wild fowl, shall be taken, destroyed, injured or molested at any time of the year.
(3)	Notwithstanding anything contained in subsections 1 and 2 the game therein mentioned may be lawfully hunted, taken or killed and the eggs of birds therein mentioned may be lawfully taken by Indians or Eskimos who are bona fide inhabitants of the Northwest Territories or by other bona fide inhabitants of the said territories and by explorers or surveyors who are engaged in any exploration, survey or other examination of the country, but only when such persons are actually in need of such game or eggs to prevent starvation.
(4)	Except as hereinafter provided, buffalo or bison shall not be hunted, taken, killed, shot at, wounded, injured or molested at any time of the year.
(5)	Except as hereinafter provided, musk-ox and wapiti or elk shall not be hunted, taken, killed, shot at, wounded, injured or molested at any time of the year except in such zones and during such period as the Governor in Council may prescribe.
(6)	Except as hereinafter provided, white pelicans shall not be hunted, taken, killed, shot at. wounded, injured or molested at any time of the year.
(7)	Except as hereinafter provided, the following shall not be hunted, taken, killed, shot at, wounded, injured or molested in any way.
Subclause (a) of Clause 6 of Section 4 :
(a) Wild swan, until the first day of January, 1928.
(b) Eider duck, until the first day of January, 1923.
(8)	Notwithstanding the provisions of subsections 1, 3, 4, 5 and 6, the minister or any officer or person authorized by him, may issue a permit to any person to take or kill at any time such mammals and birds or take the eggs or nests of birds, for scientific or propagation purposes.
(9)	Excepting a native-born Indian, Eskimo or halfbreed who is a bona fide resident of the Northwest Territories no person shall engage in hunting, trapping or trading or trafficking



in game without first securing a license so to do.
(a)	The fees for such licenses when issued to a bona fide resident of the Northwest Territories shall he:
For hunting and trapping, $2.
For trading or trafficking, $5.
(b)	The fees for such licenses when issued to non-residents of the Northwest Territories shall be fixed by the Governor in Council.
(10)	The Governor in Council may make regulations:
(a)	Regulating or prohibiting the use or
possession of poison, ammunition, explosives, traps, snares, spring-guns, firearms and other implements, appliances and contrivances for hunting, killing, taking, trapping, destroying or capturing game:	Provided that such prohibition shall not apply to such types of guns, rifles, traps and ammunition as are now in common use;
(b)	permitting the hunting, killing, taking, capturing or trapping of specimens of game for scientific or propagation purposes;
(c)	governing the issue of licenses and permits and prescribing the terms and conditions thereof;
(d)	authorizing the appointment by the minister of game officers and game wardens and prescribing their duties;
(e)	regulating the possession of and transportation of game;
(f)	for any other purposes which may be deemed expedient for carrying out the provisions and intentions of this Act whether such regulations are of the kind enumerated or not.
(11)	Any regulation made under the provisions of this section may be made to apply to the whole or any part of the Northwest Territories.
For caribou, deer, mountain sheep, etc., we are making the dates much the same as they now are in the Northwest Territories Game Act, with such slight changes as are necessitated by the migratory bird treaty which has been entered into between the United States and Canada and which has been confirmed by this Parliament. These amendments have been submitted to my hon. friend from Edmonton and I may say he approves of them.
Section as amended agreed to.
On section 7-Game officers to be justices of the peace:


William Roche: Every game officer under the authority of this Act and of the regulations was to be an ex-officio justice of the peace for the Northwest Territories. We are striking out this section, and, therefore, I move section 7 be struck out. Amendment agreed to.
On section 8-Game officers may appoint constables:


William Roche: In view of the elimination of section 7, it is necessary to change section 8, which, in its original form, provided for 
a person being brought to trial before a game officer. I therefore move:
That subsection 2 of section 8 be amended by striking out the words "or game officer" In the third line thereof.


[Stage Direction]
Amendment agreed to, and section as amended agreed to.
On section 10-Seizure:
William Roche: 
[Stage Direction]
Amendment agreed to, and section as amended agreed to.
On section 17-Separate offences:
Mr. RO'C'HE:	A person might consider
it desirable and profitable to take chances of offending on a large scale, if the killing, trapping, taking or capturing of each animal did not constitute a separate offence, and that was the reason this section was inserted. When this measure was before the House on a former occasion objection was taken to the words in this section " or having in his possession," and we are eliminating those words, and confining it to the killing, trapping, taking, or capturing. The section as amended will read as follows:
The killing, taking, trapping or capturing of each animal or bird contrary to the provisions of this Act or a regulation shall constitute a separate offence.

Amendment agreed to, and section as amended agreed to.
On section 19-Penalties:
William Roche: The maximum penalty for killing such animals as the musk-ox and buffalo, is made $600 and the minimum penalty $5 for other offences. The section, as amended, reads as follows:
Any person who violates any of the provisions of this Act for which no other penalty is provided, or of any regulation, shall be guilty of an offence andl shall be liable on summary conviction to-
(a)	A fine not exceeding $500 or less than $100 or to imprisonment for any term not exceeding six months or to both fine and imprisonment for any offence against subsections 4 and 5 of section 4.
(b)	A fine not exceeding $200 or less than $50 or to imprisonment for any term not exceeding three months or to both fine and imprisonment for any offence under subsection 9 of seotion 4.
(c)	A fine not exceeding $100 or less than $5 or to imprisonment for any term not exceeding two months or to both fine and imprisonment for any other offence against this Act or a regulation.
On section 18:


William Roche: This is a new section. I move that the following section be added to the Bill, as section 18:
18. (1) Whenever by this Act it is made an offence to do any act without holding a license therefor, the onus In any prosecution shall be upon the person charged, to prove that ha was the holder of the license required by this Act.
(2) In any prosecution under this Act the onus of proof as to his bona fide residence in the Northwest Territories shall be upon the defendant.


[Stage Direction]
Section agreed to.
On section 22-Commencement of Act:
William Roche: I move that this section be struck out.


[Stage Direction]
Motion agreed to.
Bill reported as amended and amendments concurred in.
On motion of Mr. Roche for the third reading of the Bill:
Frank Oliver: As the amendments have been run through somewhat hurriedly, I would bespeak of the minister a very careful comparison of the typewritten copies placed before the committee, and if there are found to be any differences the Bill could be referred back for correction.


William Roche: Yes.	*


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

[Stage Direction]
On motion of Sir Robert Borden for the third reading of Bill No. 122, respecting the Minister of Overseas Military Forces, the Parliamentary Secretaries of the Department of Militia and Defence, and Parliamentary Secretary for External Affairs.
Frank Oliver: I should like to have it recorded that the Bill is carried on division.
Motion agreed to and Bill read the third time on division.
On motion of Sir Robert Borden, the House adjourned at 10.12 p.m.
Saturday, August 18, 1917.