1917-08-16

QUESTIONS.

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

Mr. J. J. HUGHES:: 1.	What are the names and addresses of the medical men employed hy the Government or the Militia Department in connection with recruiting in Prince Edward Island?
2.	What pay or allowance does each of these medical men receive?
3.	What is the total amount paid to each of these medical men since the beginning of the war to the present time?


Sir EDWARD KEMP:: 1.	Lieutenant-Colonel S. R. Jenkins, senior medical officer at Charlottetown, whose duties include the examination of recruits.
2.	$4 a day.
3.	$2,753.56. This sum includes the pay
received by Lieutenant-Colonel Jenkins while officer in charge of the Rockhead hospital, Halifax.	*


THE STEAMER GRILSE.
Mr. PROULX:: Who is the officer in command of the Grilse, in the Naval Service Department, and what was his previous occupation?


Mr. HAZEN:: The officer in command of H.M.C.S. Grilse is Lieutenant Commander W. Walker, R.C.N. He was formerly first lieutenant of H.M.C.S. Niobe.


LIEUT. WEBB.
Edmond Proulx: What was	the previous	occupation	ofLieutenant Webb, who is now	in command	of
one of the steamers of the Naval Service?


John Douglas Hazen: This officer is not in command of any	vessel. He	performs	the
duties of naval ordnance officer at Halifax. He is a retired lieutenant, Royal Navy.
. LIEUT. WOOD.


Edmond Proulx: What was	the previous	occupation	of
Lieutenant Wood, who is now in the Naval Service Department in charge of the Acadia?


John Douglas Hazen: Was formerly a sublieutenant, Royal Navy Reserve, and a duly certificated officer of the mercantile marine.


THE STEAMER LAURENTIAN.
Mr. PROULX:: 1.	From whom did the Department of the Naval Service purchase the steamer Lauren-tian?
2.	What was the price paid for her?
3.	Was this steamer ever the property of the .Government under any other name?
4.	What was the price at which she was sold by the Government?
5.	To whom was she sold hy the Government?


Mr. HAZEN:: 1.	Canada Steamship Lines, Ltd.
2.	$50,000.
3.	No.
4.	Answered by No. 3.
5.	Answered by No. 3.



QUESTIONS PASSED AS ORDERS FOR RETURN.

Mr. GIRARD:: 1.	What are the names of the officers who have done recruiting duty in the district of Saguenay during the year 1916-17?
2.	What were their respective ranks?
3.	During what period were they on recruiting duty?
4.	What were the respective salaries of these officers?
5.	What amount has been paid to each of them on account of salary and expenses respectively?


Mr. GIRARD:: 1.	How many soldiers have been enlisted in the district of Saguenay during the year 1916?
2.	How many have been discharged?
3.	How many of these soldiers are now in the military service?
4.	How many of them are in England or at the front?
5.	How many of them are yet in this country?


Mr. FORTIER:: 1.	In connection with the employment of Rev. Colonel Dr. A. E. Burke by the Government as a chaplain, was he furnished with a book, or a number, of Railway Transportation Warrants such as are used by those in military service?
2.	Did Rev. Dr. Burke have several of these warrants filled out in the C.P.R. office at Toronto, whereby he and some friends were routed to Winnipeg, via Chicago?
3.	Did the Government pay for these trips represented by these warrants? If so, how much?
4.	Has Rev. Dr. Burke been commissioned, instructed, or authorized in any way by the Government to work among the Ruthenians in Canada?
5.	If so, what work is he doing, and what amount is he to receive therefor?
6.	Is Rev. Dr. Burke engaged in any secret service work for the Government, or is he to be so engaged?
7.	Has the Government .knowledge of the presence and movements in Canada of a certain count or nobleman whose mission from abroad has to do with certain foreign-born citizens in western Canada?
8.	Is Rev. Dr. Burke in any way associated with this count, or nobleman, and his work, and if so, is such association with the knowledge and approval of the Government, and are public funds to be paid therefor?



THE NATIONALIST PARTY OF QUEBEC.


[Stage Direction]
On the Orders of the Day:
Right Hon.   S@: Mr. Speaker, My attention has been drawn to the statement that the Nationalist party of the province of Quebec is about to put candidates in the field on its own behalf against Liberal and Conservative candi-

dates, and I am told the suggestion is being made that there is some collusion between the Nationalist party of the province of Quebec and my government or the friends of my government in regard to this campaign of the Nationalist party. The suggestion is also made that because the friends of the present Government and the Nationalist party both opposed Sir Wilfrid Laurier in the election of 1911 that there is now some connection or collusion and that my supporters and friends are in fact encouraging the Nationalist party of Quebec in the course which they are adopting.
I desire to make a most emphatic, unreserved, and comprehensive denial of this statement. There is not and never will be any conection or collusion whatever between my friends and supporters and those of the Nationalist party of Quebec.
I regard the attitude of the Nationalist party of Quebec in this war as unpatriotic, and I consider that it is the first duty of myself- and my friends to assist in defeating that party and to prevent it, so far as we are able, from being in a position to exercise any political power in Canada,



WESTERN COAL SUPPLY.

[Stage Direction]
On the Orders of the Day:
['I will try to get that information but it would be quite impossible to get it by to-morrow.\nProgress reported.\nOn motion of Sir Thomas White, the House adjourned at 11.35 p.m.\nFriday, August 17, 1917.']
Mr. W. E. KNOWLES (Moosejaw):: May I ask the Minister of Labour if he can give us any information as to the prospect of getting anything like the usual supply of Pennsylvania coal in the West during the coming winter. Perhaps he could make a statement later on. I have lately been in the West, and the matter is looked upon with great gravity. The people are by no means convinced that Mr. Magrath is competent to take the Government's place in this matter, and would like the minister to act up to his responsibility.


Sir GEORGE FOSTER:: The Fuel Controller reports to my department or to me as minister, and whilst not wishing to take away any prestige from my colleague a9 a source of information, I am quite willing to place what information I have at the disposal of my hon. friend and the House. I received this morning a report from the Fuel Controller, and to-morrow I will make a short statement of how the matter stands.



[Stage Direction]
On the Orders of the Day:
Right Hon.   S@: The hon.

member for Edmonton (Mr. Oliver) asked me a question yesterday and I replied to him that I would make a statement in the House as quickly as possible with reference to what was involved in the telegram which he read and the question which he put. I am obliged to do that in a little fuller way than simply an oral and categorical answer, in order to give the information which I think is necessary, and to give the status of the case in point.
The Non-Partisan League protest against the action of the Board of Grain Supervisors in fixing a maximum price of $2.40 for No. 1 Northern at Fort William and affirm that, as admission duty free to the United States, was made possible by Act of the Government, the advantage of the higher price in the United States should not be denied.
In normal times this position would be justifiable. But these are abnormal times and the conditions imposed by the war introduce and give force to. other considerations. The British and Allied Governments are in urgent need of supplies of wheat and are appealing to Canada and the United States for their total available surplus. That appeal is accentuated by the practical impossibility of readily getting supplies from Australia, India, and Argentina on account of the difficulties of transport. To carry supplies from Atlantic ports to "Great Britain and the Allies, ships have been diverted from Oriental, Australian, and Mediterranean services, and the Royal Wheat Commission are loading a large number of vessels simultaneously at Atlantic ports. An even flow of grain is necessary in order to prevent ruinous delay in the despatch of these vessels and to keep up the supply for the Allied needs.
Canada was therefore urgently pressed to forward for shipment all its surplus of the crop of 1916-17, for August delivery. This surplus was lying mainly in storage in the elevators and held for highest possible prices, and sales at greatly advanced offers were not forthcoming. The Board of Grain Supervisors, appointed to secure and facilitate the movement of this grain, faced this situation.
The United States Government had no authority for fixing prices on their side of the line pending the passage by Congress of necessary legislation, and any attempts by the Allies to purchase for present pressing needs would have unduly promoted speculative prices in that country. If no maximum price had been fixed in Canada,
the attempt to purchase for pressing August delivery would have sky-rocketted wheat prices, flour would have followed wheat and bread would have followed flour, and the Allies and all consumers in Canada would have suffered for the benefit of a limited number of holders of grain in store, bought at much lower prices.
The board herefore decided to fix what many considered the high price of $2.40 for No. 1 Northern at Fort William and to stop dealing in futures on the Exchange. That action has aided in securing the required supply of wheat for the Allies and has prevented a large speculative rise in wheat, which would have been closely followed by a corresponding increase in flour and bread-stuffs in Canada, which would have greatly enhanced the present high cost of living.
It appears to be a case in which the general and public interests of the vast majority must be considered paramount to the gaining by a few of a temporary higher speculative price. The board has not stopped the export of wheat by individual farmers, but has only required information of quantities and grades shipped.
The board has fixed no prices for the crop of 1917-18.
Now that the required legislation has been passed at Washington, and the Controller of Food Prices appointed, co-operation between the two countries may be expected to control and equalize the prices of wheat in both. The immediate effect of the completion of this legislation in the United States and the organization founded thereon has been to cause a rapid fall in wheat prices in that country, and to-day's transactions are below the fixed Canadian price.
As to the composition of the Board of Grain Supervisors, the Government gave the most careful consideration to that matter. The intricacies and the involved character of the business under supervision and the complex and widely extended mechanism connected therewith made it necessary to have some men intimately acquainted w.ith the trade as members of the board, and an endeavour was made to represent fairly the consuming and producing interests. Mr. Wood, as President of the Canadian Council of Agriculture, Mr. Rathwell, as a prominent farmer of Saskatchewan, and Mr. -Crerar, who is an influential member of the Grain Growers' Association, specially represent the producers' interest.
It is admitted that the fixing of a maximum price for wheat carries logically the-

regulation of the price of flour and other staple food products. These matters are now under consideration, and the completion of United States control legislation will render co-operation possible in the operations of the Canadian Food Controller.


Mr. OLIVER:: The hon. minister (Sir George Foster) has not answered the question I asked.


George Green Foster: What was the question? [DOT]


Frank Oliver: The question was: Is it intended to maintain the present fixed maximum price of wheat, while the price of grain in the United States is as it is, and, to continue the prohibition of export?


George Green Foster: It is not intended to interfere with the orders of the Board of Control as already issued, and $2.40 is the fixed maximum price for the balance of the 1916-17 crop in store. At the present moment the price of grain, glade for grade, is less at Minneapolis than it is at Winnipeg. I think that answers my hon. friend's question.


Frank Oliver: I am sorry to say that it does not answer it yet. I want to know if the prohibition" of the export of grain from Canada to the United States is to be continued.


George Green Foster: My hon. friend will see that the action of the board would be absolutely nugatory, if they fixed a price of $2.40 for the wheat in storage with the purpose of getting it to the Allies, and then allowed those who held that wheat in storage to skite it off to the United States or some other country.


Frank Oliver: If I may be allowed to say a word on a very important question-


Mr. SPEAKER:: If the hon. member (Mr. Oliver) had placed his question on the Order Paper in the first instance, this discussion would have been obviated.


Frank Oliver: Was the British Government not buying American wheat at the same time it was buying Canadian wheat? Was the price of American wheat not fifty cents higher a bushel than the fixed price on the Canadian side? If the British Government was paying that rate to the United States dealer, why should they not pay it to the Canadian dealer?


George Green Foster: I was not aware that they were paying $2.40 for wheat in the United States, I have no information on that subject.
[Sir George Foster.!


Frank Oliver: They must have been paying it, because that was the price in the United States.
Mr. KNOWiLES: With regard to the 191718 crop, the statement referred to the cooperation between our authorities and the United States authorities. Is it meant by that, that unless the United States fix a price, our people will not fix a price?


George Green Foster: I do not think we can make any statement as to what will take place contingent on something else occurring.


CANADIAN RAILWAY SITUATION.
[Stage Direction]
The House resumed the debate from Wednesday, August 15, on the motion of Sir Thomas White for the second reading of Bill No. 125, providing for the acquisition by His Majesty of the capital stock of the Canadian Northern Railway company.
Mr. R. B. BENNETT (Calgary):: Mr. Speaker, I am sure that every member of this House-for that matter every citizen of Canada-has the most profound sympathy with the Prime Minister and the members of the Administration who are charged with the responsibility of carrying on the Government during the greatest conflict of .all the 'ages, but, while our main purpose in Parliament must be to carry forward this war to a successful termination, nevertheless, side by side with that purpose there are large domestic problems which must be dealt with. The economic and financial stability of the country must be maintained, our production must be increased, and we must make every effort in our power to endeavour to at least maintain the credit of our country, and enable it to meet the demands that must be made upon it financially.
The largest domestic problem that must engage the attention of the people of this country is that connected with transportation. The war was not an inherited legacy of this Administration. It came since this Administration was called into existence, but the transportation problem, in its present acuteness, was the legacy that was inherited when this Government came into power in 1911. Any thoughtful man, reviewing the history of the past in this country, must be convinced of that fact, and my hon. friend from Sherbrooke (Mr. McCrea) last night very properly put his

finger' mpon the weak spot of the legislation that has been passed in Canada during the past fifteen or twenty years. It serves no useful purpose, Mr. 'Speaker, to dwell upon the past. It serves no useful purpose to endeavour to allocate blame. It is a condition, and not a theory, that confronts this country. We have four systems of rail transportation. We have the Government system, the Grand Trunk system, the Canadian Northern system and the Canadian Pacific system. We cannot, by any thought or act change those facts as they exist. They are with us, and with them are the responsibilities arising out of the legislation that called them into being. There is just this that might be said on behalf of those of us who, in the years that are past, have suppoited Conservative policies and programmes:	that
there has not been placed upon the statute books of this country, by this Government, a single Act passed by this Parliament that has had to do with the initiation of any one of those enterprises. It is true this Government had something to do with respect to the enterprises to which I have referred, but the one enterprise that the Conservative Government must be responsible for is that system known as the C anadian Pacific 'railway. The other two enterprises were fathered by the Liberal party in their entirety, and that party must take .all the glory and blame that attach to such fatherhood. These are the facts, and it is idle at this time to discuss that question, and it serves no useful purpose to endeavour to blame one party or to approve of the action of the other party. I do not purpose to endeavour to review the legislation which has led up to the existing condition. We have spent millions of dollars in establishing terminals at Halifax, Fort William, St. John and Vancouver, and in providing rail facilities for the handling of traffic that we hope will one day come into being.
All this we have done in faith, faith being the evidence of things not seen and the substance of things hoped for. If at times our faith far outran any warrant that there might have been for it; if at times our optimism was somewhat stronger than that which our sense of cahtion should have induced, at least we recognize the fact: that we have provided transportation facilities in this country to meet the needs of a population at least three times greater than we now have. How to take care of that condition until the population of
7,500,000	shall have been expanded into 30,-
000,000 is a question that must receive careful consideration on the part, of every thoughtful man in this country.
It is an elementary rule of transportation that he who uses the transportation facilities should pay for them. It is a rule, of transportation that the man who travels or transports his freight or traffic should pay for that service. Unfortunately, however, the service provided far exceeds the demands made upon it and if the credit of the country is locked up behind the enterprises then the taxpayers as a whole must be called upon to pay that which, according to the principles, that govern transportation, should be paid only by those who use the facilities. That is the reason why the farmer of the West must continue for many years to pay directly for the upkeep of two transportation systems that do not earn sufficient money to meet the fixed charges upon their outstanding indebtedness. That is a fixed and definite charge which, because of the creating of facilities beyond the demands of the community, must be met by the taxation of all classes, rich and poor, the farmer and the artisan. That measure of taxation is large, and it is increasing. It is something that we must meet, in every sense of the term, frankly and honestly. There is no use glossing it over;, we must look it fairly in the eye.
I want to show to-day that the maintaining of the credit of the two roads to which I have referred involves a charge on the taxpayers of Canada of not less than $1,-
500,000	a month or $18,000,000 per annum. That enormous sum, which must be met by general taxes upon the people, should, according to every fixed rule governing transportation, be met only by those who use the facilities. It will not be. That means a direct tax upon the grain producer of the West; it means a direct tax upon the steel producer and the manufacturer of the East.	Moreover-I make this observation in passing-when, we placed wheat upon the free list and allowed it by reason of our Order in Council free access into the markets of the United States, at one stroke of the pen we increased the obligation that must be borne by the taxpayers of Canada as a whole. Why? Because last year the Canadian [Northern alone handled 138,000,000 bushels of wheat which it moved east. If my hon. friends opposite are correct in saying that wheat will move no longer east, but south, the revenues of these transportation companies will be lessened to the extent that the haul-

ing of that wheat east would earn. The result is an added tax upon the wheat producer-and I am not sure that he will not have to bear an added burden in the form of taxation to meet the deficit in connection with our transportation facilities to an amount equal to, if not exceeding, the benefits that will accrue to him by reason of the increased prices. That is an economic consideration that should be steadily kept in view in the discussion of matters affecting transportation.
I have in days past-in fact, at almost-every session since this Parliament met- discussed at some length the history of our transportation facilities. I shall not weary the House to-day by again going over that discussion. The condition that confronts the Government, this Parliament, and the people of this country, has arisen under the circumstances to which I have alluded. I should like to correct the false impression of the member for Edmonton (Mr. Oliver) who indicated the other evening that the war had lessened the traffic of the railways. This war had added tremendously to. the revenues of the railways. When you look at the Trade and Commerce returns of Canada and observe that there has been a great expansion in our exports and a great increase in our imports, you will realize that the demands made upon our transportation facilities have accordingly increased. Hence it is that the operating revenues of the Canadian Pacific are larger this year than ever before in its history; that the operating revenues of the Canadian Northern are larger this year than ever before in its history. I regret, however, to say that last year the operating revenues of the Grand Trunk Pacific were less than the amount , of money received for hire of its equipment. The surplus equipment rented produced more net revenue last year to the Grand Trunk Pacific than its operating revenue. Perhaps its location had something to do with that. The two roads in question have operated, notwithstanding the conditions of trade and commerce in this country, at a loss. The net revenue of the Canadian Northern for the year ended June 30, 1917, was something like $11,500,000, but the fixed charges against its revenues-fixed charges for interest upon its bonds, for rental of properties leased, and for equipment- amounted to the very large sum of over $15,000,000. If you add to that the interest which is not added in the blue book submitted to the House-interest upon the $15,000,000 that was loaned by the people to that road and which absorbs an addi-

tional $900,000 per annum-you will observe that the total fixed charges of the road will amount to nearly $20,000,000 per annum. If you look at page 7 of the blue book you will find the statement that there is an annual interest charge of $14,405,643.13; to that is to be -added equipment obligations payable under the scheme by which a certain sum per annum of principal and interest is paid for equipment, absorbing a further sum of $3,735,000. $3,735,000 plus $14,405,000 makes $18,000,000, and to that is to be added the interest upon the loan referred to at page 11 of the blue book, $15,000,000 at six per cent per -annum, making $900,000 more. So that the total sum exceeds $19,000,000 of fixed charges to maintain that system when it is completed. In the meantime its capital is being depleted by the payment of interest out of the proceeds of bonds. The delay in the completion of construction is absorbing day by day large sums by way of interest beyond what was contemplated when the terminals, for instance, at Montreal were conceived. Just that much less money, therefore, is available for construction, and the burden that must be borne by the people is greater to that extent. This $20,000,000 in round figures is the sum per annum that the Canadian Northern must earn as a surplus out of its operations to meet its fixed charges. I am advised-my judgment may not be worth very much, but my estimate of the earnings of the system was, at least, more nearly correct than that made by the Third Vice-President of the Canadian Northern railway three years ago-that we cannot hope in less than five or seven years to' earn $20,000,000 of surplus in the operating of that road when it is completed, even under the very best conditions we can conceive of. $20,000,000 is a very large sum to earn by way of surplus. It means an operating revenue of nearer $80,000,000 than any other figure I can name, having regard to the newness of the system. A ratio of 100 to 25 as between gross earnings and operating expenses would not be unfair, having regard to the character of the system and the difficulties that must be experienced in the operation of a new venture.
Under these conditions, with this system in this condition, with its bonds guaranteed by the provinces and by the Dominion, with the guarantees underlying the fourth mortgage that we made in 1914, and with the additional obligation restmg upon this road by reason of the outstanding securities in England being treated as being partially

guaranteed by this country because of our fourth mortgage which ranks after those securities, we have to do one of three things, and there is, it seems to m , no getting away from that. We have to determine, first of all, whether or not we shall let that property go into the hands of a receiver, second, whether we shall give it financial aid, and third, whether we shall acquire the' road and the stock by one of three methods:
(a)	By negotiation, agreement and purchase;
(b)	By expropriation;
(e) By virtue of the Statute of 1914.
So far as the question of a receivership is concerned, the Drayton-Acworth report found against it; the Minister of Finance said that it was impossible to think of a receivership in this country at this time. For my part, I have never been afraid of this bogey of a receivership. I said in 1914 that if I had my own way (which I did not have, perhaps fortunately for this country), that road would have been put into the hands of a statutory receiver; Mackenzie and Mann would havie been replaced, and qualified receivers, appointed by this Parliament and subject to this Parliament, would have administered that property as a trust for the purpose of completing it, *when we could have determined what we should do with it. That was the course advocated by me at that time. A receivership need not be such a bogey as it appears to be in the minds of some persons; 75 per cent of all the roads in the United States have passed through the hands of receivers, and the result of a receivership could be only one thing: It would remove from the control of the property the Mackenzie and Mann interests; it would conserve it for the people whose money built it, and it would enable the people of Canada to acquire some first hand knowledge of the whole venture, which knowledge we do not yet possess. I am, however, in the position of one who is told by men who occupy official positions-and whose opinions, by virtue of their office, are entitled to a consideration that must be denied to mine

that a receivership cannot be thought of. Some hon. gentlemen opposite agree with that view; gentlemen who have held high office hold that view, and the best consensus of opinion on this side is the same. I wall, therefore, subordinate my opinion to theirs, and we shall dismiss the question of a receivership. But were I in a position of authority to-day, instead of the legislation which is now being submitted to the House, I would preserve
the identity of the Canadian Northern by the appointment of a statutory receiver or statutory receivers, occupying the position that Mackenzie and Mann occupy, and I would advance such moneys as might be necessary to place the undertaking on its feet as was done in the case of the Wabash, the Bock Island, and the Chicago Great Western railways, and, those receivers' certificates would have prior claim over the interest on the 4 per cent perpetual debenture stock of the Canadian Northern and over every other security except those guaranteed by the provinces and the Dominion. Fortunately, perhaps, for this country, I have no power, but no gentleman residing outside of Canada and occupying first-class business positions, positions of the very highest importance, see any difficulty in carrying that out as a business proposition. But it will not be done, so we will dismiss it from consideration.
As to the second point, namely, giving financial aid to this road, the Canadian people are not disposed to make further loans to Mackenzie and Mann. The consensus of opinion in this Parliament and outside of it is that we have lent all the money we should lend and made all the advances we should make to those gentlemen, and that the time has come when those with whose credit and money the road has been constructed, should have, at least, a dominant voice in its administration. We must remember that the men in charge of that corporation, whether we like them or dislike them, have control, in this country, of traffic facilities measuring 9,500 miles and are in charge of annual revenues of over $40,000,000. They are but trustees. It is admitted that, although they have given some time and attention to the financing of the road and that they have done that work admirably, they have no cash investment in it; and that being the case, they occupy the position of trustees of a great enterprise for the Canadian people. As they are unable to finance it, I submit that, if the collective credit of Canada must finance the enterprise, then the people of Canada must direct how that enterprise shall be completed; how its facilities shall be used; how the traffic shall be regulated, and what shall be the character of the service it shall give to the people who have financed it. I, therefore, without further elaboration, dismiss the question of additional financial aid to the road.
I pass on to the consideration of the third alternative that presents itself to' Government or to Parliament, and that is the acquisition of the property, whether it be the


'COMMONS
[Stage Direction]
physical property or the stock. There were open to the Government three methods by which they could acquire the road:
(a)	By agreement, negotiation and purchase;
(b)	By expropriation;
(c)	By the exercise of the powers conferred by Parliament upon the Government in 1914.
The Government have chosen (a) with a combination of (c). They purpose acquiring this property, or the shares that represent it, by negotiation, agreement and purchase, together with ;a submission to arbitration of the question as to what shall be paid for those shares and that property. 1 will not take up the time of the House at this moment to discuss the question of expropriation. It was open for this country to expropriate the property without reference to the statute of 1914 to which I shall presently refer. It is fair, however, to say that that method was eliminated. Let us now proceed to consider the other methods of acquiring the property. I take it that it is the common sense of Parliament that the property should be acquired; in fact, the amendment moved by the hon. member for South Renfrew (Mr. Graham) contemplates an approval of the principle of the acquisition of the system. There is no doubt as to that, and my hon. friend very properly nods assent. We may, therefore, say that this House is a unit in assuming that we shall acquire control of the Canadian Northern system. That involves two questions:
1.	How shall that be done?
2.	How shall the price, if any, that .is to be paid, be determined?
I am not in accord with the Government's legislation upon the first point, and I shall show that, upon the isecond point, there must he very important amendments made or this country is going to suffer enormously. That is my position with relation to those two questions.
Perhaps it might be well for me to discuss for a moment the legislation of 1914, merely for the purpose of enabling us to have a clear appreciation otf the circumstances under which it was enacted.
You will remember, Sir, that at that time the owners came to Parliament and said they required 8100,(XX),000, and if we would raise 845,000,000 they would raise $58,000,-000-the proceeds of the 845,000,000 bond's we guaranteed plus the 858,000,000 being equivalent to 8100,000,000. We guaranteed the 845,000,000, and as compensation for that guarantee we obtained certain benefits, and these must always be kept in mind {Mr. R. B. Bennett.]	:
in the consideration of the problem as it now presents itself. First, we took as security for the 845,000,000 a first specific mortgage or charge upon certain properties which are set out in the schedule to the Act. But before we did that, we created the Canadian Nbrthern Railway system, which system was made up of a large number of companies, the names of which are set out in that schedule. In addition to that, we took a further charge upon securities that were already hypothecated for the purpose of providing for the payment of the consolidated perpetual debenture stock of the system. For instance, the telegraph system is mortgaged to the hilt, but we took the capital stock of the telegraph company and a mortgage, subsequent in point of time, of course, to the mortgage on the securities with respect to the telegraph system. And so with respect to many other matters. I will not waste the time of the House nor trespass upon the patience of hon. gentlemen except to point these things out shortly. Then we determined the capital stock of the road. We fixed it at $100,000,000. We already owned 87,000,000, and we got 833,000,000 more, which made $40,000,000 of stock in our possession in 1914. By a stroke of the legislative pen we created
823.000.	000 more of stock, and that $23,000,000 of new stock added to the stock that was then held by the proprietors, made $60,000,000 of stock that remained in their hands. That- $60,000,000 of stock, if the House follows me, represented 823,000,000 of new stock called into being by a stroke of the legislative pen, and our stock represented
133.000.	000 which was given to us in addition to the 87,000,000 we already possessed, and the 87,000.000 we already possessed was created by the company merely passing a resolution to say that there should be $7,000,000 more. It was felt that $100,000,000 was a fair capitalization of the system. Sixty million dollars remained in the hands, as it was then said, of Mackenzie and Mann or their interests -and this is important in view of what I am to say later. That is to say, it was represented to this Parliament in 1914 that Sir William Mackenzie and Sir Donald Mann, and Mackenzie, Mann and Company owned or controlled 860,000,000, being the difference between $100,000,000 and the $40,000,000 we obtained. We guaranteed bonds and issued them. Part of them were sold and part of them we took hypothecation of and gave Dominion notes on account. In other words, we advanced $10,000,000 of legal tender of Canada against

$12,500,000 of those bonds to enable them to carry on their undertaking.	_
But that did not finish it. They came back to us again last year, and we made a demand loan of $15,000,000 at 6 per cent- and this is important in view of what I am to say later. In view of these facts, the Government has1 concluded- and in my judgment properly concluded-that the time had come to acquire control of the Canadian Northern company, its physical assets and properties, as well as its shares, if they could be obtained; it is not important whether we have them or not in view, of the legislation. What transpired was that the Minister of Finance advised the House that the president and vice-president of the road told him they could not continue further to finance the road without assistance. That is taken for granted in view of what I have shown with respect to their fixed charges; they could not meet them, as their revenues were insufficient. It was felt by the Government in 1914 that if Canada was to give its credit to this enterprise in the manner indicated, some provision should be made whereby, in event of default being made, the Canadian people could get possesston of the property into which they had put their money. I suppose some hon. gentlemen may remember my observations with respect to that. I observed that it was provided that default under section 31 arose under that trust deed in the event of there being failure to pay any charge under trust deeds or mortgages thereafter created. Now whether or not there is default on the $45,000,000 mortgage or on any other mortgage is a matter of absolute indifference to this House, for we loaned the company $15,000,000 on demand last year, and they have not paid it back. All we have to do is to ask them for it, and default is there, and that is an end of it. So we need not argue the question of default. I do not suppose any hon. gentleman would waste the time of the House asking whether or not there is default, for it is so apparent that it need not be argued.
So we have default, and there being default, there arises in the mind of this Parliament-because it is Parliament and not the Government that is charged with the responsibility-the question: What action shall we take in view of that default? The ordinary remedy for default is foreclosure. It is always open for the mortgagee to take possession, but a mortgagee's possession is always -a serious matter, and in 1914 I pointed out that I objected to the terms of the clause now under consideration, for the reason that if we exercised those powers we became mortgagees in possession, and as mortgagees in possession we'were liable for a strictness of accounting that in my judgment no Government dnd no Parliament should undertake. I made a further criticism, and it was this, that inasmuch as it is provided that in the event of default we may take possession of the physical property, there was no ready method available by which, having taken possession, we could foreclose the equity of redemption. I urged against section 24 the criticism that it could only be made effective if Parliament was in session, because it did not give to the Governor in Council any power to. foreclose the equity of redemption, but vested that power in this Parliament, and every member of this House has an equal responsibility for the exercise of that power. If authorized by the Parliament of Canada, the Governor in Council may on such terms and conditions, if any, as Parliament may prescribe, at any time while any event of default shall exist and be continuing foreclose the equity of redemption.
Let us for a moment ask ourselves what the foreclosure of the equity of redemption means. It merely means the wiping out of the stock; it merely means the destruction of it so far as value is concerned. Haying wiped out that stock, it would only be necessary to reorganize the company in the hands of the administration, and issue capital stock to the extent that might be necessary to represent the new investment the Government was putting into it. That is what is done in every reorganization plan. Some hon. gentlemen no doubt remember the reorganization plan of the Wabash last year and of the Rock Island system and of the Chicago Great Western and, more recently, within the last few weeks, the reorganization of the Missouri Pacific. What wras done in these cases was that a great financial house like Morgan's, or *Kahn, Loeb & Company make the necessary cash advance, make the necessary assessment on the old capital stock, and then reorganized with a new capitalization, sometimes with no change of name for the purpose of enabling the company to continue its corporate existence and carry on its business.
That section contemplated dealing with the determination of the compensation to be paid on the foreclosure of the equity of redemption. Of course, behind that, there is the very sound principle that this is the high court of Parliament; this is the su-
[Stage Direction]
preme court of this Dominion, and it is but in keeping -with the theory of our constitution and of our institutions that when this Parliament deals with a matter, a* a high court, it has the right to determine what compensation shall be paid for the foreclosure of the equity of redemption which may belong to any person with relation to any property. This high court of Parliament, sitting as the court of last resort-the tribunal of paramount importance -has the right to determine what sum shall be paid for the foreclosure of that equity. Parliament does not necessarily act by all its members sitting together and hearing the evidence. It is not necessary that we all have to sit here and hear the witnesses, to determine what value, if any, attaches to the equity of redemption. We can designate a committee, whose report we may or may not accept, or we may determine that this high court will appoint certain referees for the purpose of taking evidence and determining what value rests upon that equity.
I cannot agree with my hon. friends opposite in saying that without hearing testimony we should decide that no value attaches to that equity of redemption. To quote the words of the right hon. leader of the Opposition, we have not yet reached that "Prussian state of affairs," but we well might say: "Is this Prussia?" if we denied to any man whose property is being taken from him the right to establish that it had some value. I put it to hon. gentlemen opposite, is it consistent with the ideas of British justice and British fair play that Mackenzie and Mann, or anybody else-and I love Them not-should be deprived of their property without having an opportunity to establish its value, if it has any? What would hon. gentlemen opposite like to have done to themselves? Is there a single gentleman who would like to have the equity of redemption of his farm for instance, taken from him without having an opportunity of being heard before the tribunal that takes it? Not long ago there was a case decided in the Supreme Court, from the province of Manitoba, in which the holding was that notwithstanding the fact that the equity of redemption had been barred and taken from a farmer years before, he was still permitted to come in, pay off his mortgage, and get back his property. It is somewhat dangerous-I emphasize the word-for a body of responsible gentlemen sitting in this Parliament at this time to say to the people of Canada 
that we deny to any person the right to establish, if he can, that there is a value to that which you take from him. There is a great feeling of unrest in this country at the present moment. Sometimes I wonder if it will find manifestation in socialism, or anarchy, or something worse. 1 entreat hon. gentlemen to pause before they say to the body of excited and disturbed public opinion in this country at this time, that you are going to take property from individuals, without affording them an opportunity to present their case before those referees who have been appointed or who will be appointed by this Parliament to determine the value attaching to the equity of redemption in the property foreclosed.
There is another feature I would like to mention, because it appears to me to be rather important. I wonder if any honourable gentlemen have thought, as I am sure many of you have in days gone by, upon what rests that right of every man to have presented before any tribunal to which he may be directed the value of property that may be taken from him. Let us see what the Magna Charta said ^about it. It is a long time ago since John met the barons at Runnymede. By article 38, of the famous document, it was enacted and declared that no man should be dispossessed of his property except by due process of law. Upon this has been laid the foundation of the Constitution of the United States, and upon this it has always been open to the poorest citizen of this realm to go to any properly constituted tribunal and ask that his rights he respected.
Mr. LEMIEUX:: What about the Habeas Corpus?


Richard Bedford Bennett: Habeas Corpus has sometimes been suspended, but up to the present moment there has been no statutory suspension of the Magna Charta. Probably Habeas Corpus was a little later in point of time, but it is one of the great charters of the liberty* of the subject.


Rodolphe Lemieux: The Bill of Rights.


Richard Bedford Bennett: Bill of Rights,
and all these other charters upon which rest the foundation of our liberty and our
freedom


Rodolphe Lemieux: Hear, hear.
Mr. R. B. BENNETT-the first being Magna Charta, why should it be lightly disregarded by Parliament? The late Mr. Justice Brewer o! the Supreme Court of the United States, in dealing with a case something like this, said:
"The equal protection of the laws-the spirit of common Justice-forbids that one class should by law be compelled to suffer loss that another may gain. If the state were to seek to acquire title to these roads, under its power of eminent domain, is there any doubt that constitutional provisions would require the payment to the corporation of just compensation, that compensation being the value of the property as it stood in the markets of the world, and not as prescribed by an Act of the legislature? Is it any less a departure from the obligations of justice to seek to take not the title, but the use for the public benefit at less than its market value?"
"Property invested in railroads is as much protected from public appropriation as any other. If taken for public uses, its value must be paid for. Constitutional guarantees, to this extent, are explicit: and in such condemnation proceedings no inquiry is permitted as to how the owners have acquired the property, provided only it be legally held by them.
And I invoke that principle, which is as old as Magna Charta, which has fonnd application in the statutes of this country from time immemorial, and which is the fundamental basis upon which the rights of all mortgagors have been based, in favour of a just and fair opportunity being given to the Canadian Northern railway to establish their value before referees.
Unless this Bill is amended in essential provisions, in my judgment it does injustice to the Canadian people, and a most serious and violent injustice, and works a wrong the extent of which cannot be measured in dollars. Let me present the case. What is the principle of the Bill now before the House? First of all it provides for the acquisition of shares in the Canadian Northern railway. That principle is sound. The Bill, however, says that His Majesty in Council is to enter into an agreement, and that agreement is between the owners and the pledgees of not less than five-sixths of the capital stock, for a price to be determined by arbitration. Since when were pledges introduced into this Parliament? If the hon. minister makes an agreement, he can only make it with the men who own the shares, and as the owners of the shares have pledged them he is going to make the pledgees a party to this agreement, instead of utilizing the power given him under the statute to which I have just directed attention.
Why should a third party be introduced in, this transaction? Why should any pledgee, however eminent, be introduced into this transaction? What do I care who may advance money in respect to these
shares or what sum he may advance? This House was told in 1914 that Mackenzie, Mann & Company and Mackenzie and Mann controlled these shares or owned them, and any man who took a pledge of them took it in knowledge of the statute and of that fact, and therefore it follows that this House should exercise the power given to it to take these shares and this property without regard to the rights of pledgees whose rights have arisen only since that statute, if the facts were as stated in 1914.
Let me go further. Are these pledgees to have anything to say in fixing the value before the referees? Let me put this illustration. Suppose that in 1915 I had gone to the bank to borrow $100,000, and suppose that I had put up as collateral 800 shares of Winnipeg Street railway. That stock was then worth $209 a share; to-day it is worth $36. Suppose I supplemented my collateral in 1915 by putting up some Canadian Northern stock. Obviously, since the Street Railway shares have fallen to a lesser sum than the amount of the loan, suppose some value now attaches to the Canadian Northern Railway collateral, are the pledgees to fix the value of the shares by indicating the sum advanced upon them? Is that to be a factor in fixing the value of the stock? I submit not. I submit that the very moment that we untertake to acquire these shares by agreement with pledgees that very moment we undertook to deal with a third party with whom we should -not deal. Nothing would drive me from that position. You may argue that these men are like second mortgagees, and have a right to be heard before the referee. The only right they have is the right to be paid off, so far as that is concerned. The position is clear. If we are to acquire -these shares by purchase we have no right to acquire them by an agreement with a third party, and Mackenzie and Mann who may have pledged them. Let us deal with the men who are the ostensible, registered owners of the shares. It is hardly necessary to say to the Finance Minister that unless the share register shows these men as owners of shares, they have no right under the law. The only right they have is the right to register, and if they do not register, the only person to deal with is the registered owner, and no one else. That is so elementary, that no bank taking collateral ever hesitates to place upon the register the name of its manager or of the bank itself as the owner of the shares held as collateral. I object, I strenuously object, I file my objection against any effort


Mr. MURPHY:: Hear, hear.


Richard Bedford Bennett: And, of course,
to my learned friend from Russell (Mr. Murphy) and myself that is the most important thing in the world.


Charles Murphy: Hear, hear.


Richard Bedford Bennett: That is the one thing we should like an assurance on. and I doubt not that before the Bill is through the House we shall have some such assurance.
Let us go a step further to the next principle that this Bill declares for. The next principle in the Bill is that the Governor in Council, without recourse to Parliament, is authorized and empowered to pay any sum of money whatever on behalf of the

Canadian Northern. I submit that is not right, and not in accordance with constitutional principles, not with the great principle that we should know what we vote supplies for. The people's money should not be left in the hands of any Government, to be dealt with as they may see fit, without regard to Parliament. Parliament is responsible, and not the Government. Section 3 of the Bill reads as follows:
3. (1) So soon as the said five-sixths ot the said shares have been transferred as aforesaid, the Governor in Council may assist the Canadian Northern Railway Company, or any company included in the Canadian Northern Railway System, in paying and settling any indebtedness of such company or postponing the payment thereof on such terms as may be agreed upon, and for such purposes may make advances out of the Consolidated Revenue Fund, may guarantee payment in whole or in part, and may give the obligations or securities of the Government in connection therewith.
As a matter of principle, we should have added to the* section the following words:
"For the year 1917-1918 not exceeding 

dollars." I make this suggestion because it is in accordance with constitutional precedent. It is not a sound doctrine that Parliament should give a blank cheque to any man, no matter how eminent he may be, with respect to domestic enterprises of a character such as this. In war time conditions differ, and it may be necessary to depart from ordinary rifles, for war purposes. But the power and supervision of this Parliament must be always exercised. If Parliament is true to its traditions, and to the functions for which it is created, it should see that money is voted for a specific purpose, and that we should limit the extent to which aid must be given. That is a small point, but it is essential to consider it, as part of the principle of the Bill.
Then we come to the next principle, that of arbitration, and with regard to that question I should like to make rather extended remarks. Personally, I believe it would be better to submit this matter to arbitration than to a single judge, for a reason which I will mention to this House. A -judge, under his oath of office, dealing with evidence strictly as evidence, and hearing testimony, would probably arrive at conclusions, having regard to the conditions of the law with respect to compensation (to which I shall presently refer), that might bring about results which, in my judgment, would involve very far-reaching consequences. The proposition is to appoint a tribunal ccmposed of three men, one to be
selected by Parliament, because Parliament must give its approval in general terms. The Government admits that. The railway is to appoint another member of the tribunal, and then an umpire is to be selected. That enables those arbitrators, in the very terms of the reference, to consider the whole situation, not only from' the standpoint of evidence, but from their own judgment with relation to it. My hon. friend from Pictou raised a question which seemed to me to be of some importance, because he said:
" How can these arbitrators arrive at conclusions based upon their own judgment?"
I remembered, then, a case in which I had been interested that came from Edmonton, McKinnon vs. the Calgary and Edmonton railway. That case was carried to the Supreme Court of Canada, and is reported in 43 Supreme Court Reports, page 379. I will read a short summary of the judgments.
In expropriation proceedings under the Railway Act, the arbitrators in making their award stated that they had not found the expert evidence a valuable factor in assisting them in their conclusions, and that, after viewing the property in question they had reached their conclusion-	-
These were their words:
"Reasoning from their own judgment, and a few actual facts in evidence."
Hon. gentlemen will observe that this Bill uses the words " their own judgment ". Those are the exact words the Supreme Court of Canada had to deal with. In the first instance, the Supreme 'Court of Alberta set aside the award, and increased the compensation, but the Supreme Court of Canada held that the award should be sustained, as it was not apparent from the language that the arbitrators proceeded without proper consideration of the evidence adduced, or upon what was not properly evidence. Therefore, they sustained the award. I, therefore, take it that the creation of such a tribunal of referees as I have stated would better safeguard the interests of the Canadian people, because there are few .men that could be selected i n Canada that, in the exercise of their own judgment, have not some knowledge of the operations of the gentlemen wbo own this system. I say that, under those circumstances, the selection of a tribunal to arbitrate value, rather than submission to a court, will bring about a result that, in my judgment, will be better in keeping with the desire of the Canadian people.
But let us go a step further. There is provision for an appeal, and the appeal is subject to there being a difference of opin-

lion among the arbitrators. Well, why appoint an umpire, if you are going to appeal in case of disagreement? Usually, the right cf appeal is not dependent upon there being a lack of unanimity, but in this case the right of appeal has been said to he subject to there being a lack of unanimity on the part of the referees or arbitrators. I am not disposed to question that. It seems to me that i3 a very excellent provision, but if you are going to appeal to the Supreme Court of Canada upon a question of law and fact, it is also proper that the interests of this country should be very well safeguarded with respect to those three words "their own judgment." To that extent, exceeding care must be exercised before the tribunal with reference to that phase of it. If an appeal to the Supreme Court of Canada is granted, in my judgment there should be the right of the Crown- which I believe was the subject of a paragraph in an international arbitration on one occasion-that if the amount of the award is, in the opinion of the Crown, too large, it may repudiate the award. Some such safeguard might well be thrown about this matter, in order to fix a maximum, to give to the Crown the right, in the event of there being a difference of opinion, of declining to take up the award. It is always open to a party to say whether or not he shall take up an award; people refuse very frequently to take up awards and pay the costs. There is no reason why such a provision should not be inserted in this Bill.
These are minor matters, but I submit there is one matter which is the crux of this whole section, with relation to arbitration. What is to be arbitrated? If the House will be good enough to observe the words of the section, they are as follows:
The said arbitrators shall determine the value of the 600,000 shares.
That raises a question of paramount importance. How is "value" ito be determined? I listened to the remarks of my hon. friends opposite, and I listened to the arguments of the hon. members on this side of the House, but I received little or no light with reference to it. I read the statement of Professor Swain, in the findings of the Drayton-Acworth Commission, but with little assistance. Now, what is to be determined is the value of the shares. Let us ask ourselves first of all, what legal principles guide and determine value? The first valuation of a railway line on the American continent was in the state of 
Michigan, with respect to taxation matters. The state of Wisconsin then took up the question and, as this House knows, the Congress of the United States provided for the creation of a tribunal to determine the physical value of the railways of the U ited States, and they fixed how that work should be done. The State of Kansas provided how the work should be done with relation to the railways in that state, and I am going to direct the attention of this House, for a moment, to the particular observation quoted from the report of Professor Swain, by the hon. Minister of Finance. The other day that hon. minister referred to Professor Swain's report, and pointed out the difficulties that eminent gentleman mentioned in determining what constituted value. Value is one of the most difficult things in the world to determine with relation to a railway, and if this Bill goes through this House as it now stands, there is no reason, indeed, why the expectations of my hon. friend from Pictou should not be realized, and that the owners of the Canadian Northern should not get $100,000,000. Sir William Mackenzie stated the other day that the stock was worth par, and I have no hesitation in saying that, in the language of this section as it reads without limitation or restriction, I can show in fifteen minutes that they could get $100,000,000. Let us turn to what Professor Swain said with respect to value. On page 5 of his report, he says:
To determine this physical value there are two, and only two, available bases:-
(1)	The original cost, or original cost less depreciation, according to circumstances;
(2)	The cost of reproducing the property at or about the time the valuation is made, or, the cost of reproduction new less depreciation, according to circumstances.
There are the two methods: Which one of them is to be adapted in this case? Wil' the basis of the valuation be the reprodac tive cost now less depreciation, or will it be the initial cast? The authorities in England and in the United States, and the authorities who have written on the subject are conclusive that what Professor Swain says on this point is absolutely correct in law. There are only two bases upon which the value should be determined: the original cost less depreciation, according to the circumstances, and the cost of reproducing the property at or about the time the valuation is made. If the eminent counsel representing the owners .and pledgees of the stock appear before that tribunal, they will contend that valuation should be made upon the basis of the reproductive cost of

the road to-day, less depreciation. Does this House, does the minister, for one single moment realize what that would mean? The reproductive cost of the road in war time, having regard to present values, would be a sum that would stagger the House. To safeguard the interests of the people, a clause should be placed in this legislation fixing the principle upon which this arbitration shall be held. I protest most vigorously against leaving the words of the clauses as they are, and open to such a construction. It cannot be denied that Professor Swain speaks with authority. These gentlemen, therefore, representing the owners and pledgees of the stock would come before the tribunal and pile up, day after day, evidence respecting the present reproductive cost of the property, showing the cost of structures, grades, fencing, bridges, cars and power. Let me give the House some little evidence with respect to that. I am told by authorities that no man in this House would question that the cost of labour in connection with putting in the dump alone-the .grade-would be from 18 to 40 p.c. more in the year of grace 1917 than it was in pre-war times. It may be suggested that 40 per cent is an extreme figure, but those who have to do with the matter tell me that in some sections of the country labour is so scarce that it would cost 40 per cent more to get the necessary labour than it would have cost in 1913-14.
Now let us come to the question of equipment. After all what is a railroad? A railroad supplies, first, a road upon which vehicles travel; second, the vehicles upon or in which passengers and traffic are handled, and, third, an organization for the collection of the traffic and for the administration of the company's affairs. Upon the first point, the question of the road itself, my information leads me to believe that it would cost from 18 to 40 per cent more to lay a grade now than it did in prewar times; and the cost of steel structures would be twice as much now as it was then.
Let us come to the facilities provided for the carrying of passengers by rail. I have taken the trouble to get figures as to actual cost. A passenger Pacific type engine in 1914 cost $23,350; last March the cost was $47,300. The Mikado type increased in cost from $39,250 to $48,750 in one year, from 1916 to 1917. The cost of the Santa Fe locomotive, freight type, has increased in one year $5,000. A shunting engine in June 1914 cost $16,600; to-day the cost is $30,000. A freight consolidated engine in 1914 cost
$22,500; now the price is $40,000. An ordinary day coach in October, 1914, under a pre-war contract, cost $16,250; the present cost is $30,000. In 1914 the cost of steel under-frame dining cars and sleeping cars was $30,000; to-day the cost is $45,000. A steel frame box car in 1914 cost only $1,095; to-day the cost is $2,417. The following are prices paid before the war for the type of
Wooden flat	 $ 900
Wooden box	 1,070
Steel platform cars	 850
Steel tank cars	 2,695
Van	 1,880
Refrigerator	 2,000
Steel pump gondolas	 1,346
Otis dump coal car	 1,530
Hart convertible steel car	 1.200
To-day the prices are substantially from 50 to 100 per cent greater; in most cases the cost has doubled. For instance, for a 100-ton wrecking crane, such as is used on big roads, the cost in 1914 was $18,905; today the price is $30,130.
Now we come to rails. In 1914, 80-lb. rails cost $31.25 a ton; to-day the price is $60-if you can get them at all. In 1914, ties, No. 1, cost 52 cents; now they cost 65; ties, No. 2, cost 44 cents in 1914; now they cost 55. Angle bars, 100-lb., that cost $1.94 in 1914, now cost $3.75. So that if evidence is laid before the tribunal of the reproductive cost new of that property, the gentlemen representing the owners and pledgees will build up a cost of perhaps $600,000,000or, $700,000,000, and according to the arguments now being adduced, the difference between that sum and the bonded debt will represent the equity in these shares. It is no wonder that Sir William Mackenzie, with that Bill before him, is talking about one hundred cents on the dollar for his shares. I submit in the utmost seriousness to the Minister of Finance that he ought to provide that present reproductive cost shall not be the basis of the arbitration in respect of this property. If it is to be reproductive value, then the value must be taken upon pre-war prices, as Professor Swain says in his report. Here is a singular circumstance: A man devotes a great deal of time to a certain matter; he makes a report; he says: I have arrived at certain conclusions as to the value of this property; I have made calculations upon pre-war prices. Here are the names of my engineers; here are my values. Upon that Messrs. Drayton and Acworth make a majority report and Mr. Smith makes a minority report. But they overlook one of the paragraphs in Professor

Swain's report; certain land values are not taken into consideration at all. That is very much to be regretted, for it throws doubt upon the authority of the whole report. But Professor Swain's report is valuable to the extent that he uses pre-war prices in fixing the reproductive value. Unless this legislation restricts the fixing of the value to pre-war prices on a reproductive value basis, in my judgment the door will be left open to almost any kind of decision in the world. Hon. gentlemen know that the $56,000,000 of equipment, after allowing for depreciation, could be sold to-day for much more than that amount. But that is all Professor Swain says it is worth, making allowance for prewar prices and for depreciation.
I have some very interesting figures in regard to this .matter, but I am sure that hon. gentlemen do not want me to take up the time of the House by reading them *all. In 19X2 the State of Kansas valued, for taxation purposes, the Union Pacific line running through that state. I have here the figures of every item with respect to it, and it may surprise the House to know how much that magnificently equipped Union Pacific line with splendid turn-outs, signals, 85-pound rails, first class ties and ballast, had taken from it for the purpose of determining the value. They took the cost of reproduction new and deducted from that the depreciation, and in that case the allowance was 75 per cent of the reproductive value as toeing the present value of that road. In another state lower figures were arrived at. I have here two sets of figures, but as no doubt this House does not want to listen to them, I will not read them; but every item, bridges, equipment, and so on, are carefully considered, just as those items were considered by Professor Swain in his report. It is essential, if the rights of the Canadian people are to be protected-and those rights, by virtue of the Statute of 1914, were given, not to a Government, although a Government must, under the constitution, initiate action, but to Parliament-that the Minister of Finance should leave the widest discretion to the committee so that we may surround this legislation with such safeguards as may be necessary to indicate the will of this Parliament and to prevent the will of the people being thwarted by cunningly-devised legislation-and Messrs. Mackenzie and Mann are past masters in securing by cunningly-devised words what will suit them.

I appeal to the Minister of Finance to prevent this wrong being done to the Canadian people, to prevent the cost now less the depreciation being taken, for the Canadian Northern Railway company is, as we all know, owing to its limited resources, under an enormous deferred maintenance charge, and is not kept up to the same standard of efficiency as is to be found on the Canadian Pacific to-day. I believe the Railway ''Commission estimated that the relative cost upon the Canadian Northern and the Canadian Pacific, with relation to ordinary maintenance, is about one to three; but every time you neglect to supply a new rail for one that is worn and a new tie for one that is broken, my hon. friend from South Renfrew (Mr. Graham) knows that you have an accumulation of deferred maintenance charges, and those deferred maintenance charges upon the Canadian Northern have become exceedingly large. I therefore, urge that this Parliament be permitted to exercise the widest possible latitude in surrounding this legislation with those safeguards which will ensure that the referees, in determining the value, will not have tnemselves confronted with a point of law which will go to the Supreme Court of Canada or to the Privy Council and be decided adversely to the people of Canada.
Anyway, this House has not yet been told what it is buying. There lies the difficulty that I am experiencing. Last year, as hon. members will remember, I asked that a report be made that would enable us to determine, with .some degree of certainty, what we were buying. This last statement that has been put on the Table by the Minister of Finance is a most illuminating document. I go out to the province of British Columbia and I find some constructed lines and some lines the 'bonds for which are sold, and yet in regard to which nothing has been done except to buy the right of way. Has this House been told what our obligations are in British Columbia? We have assumed these obligations. The Canadian Northern is the owner of Canadian Northern Pacific stock. That will now belong to us. If you take the line from Kamloops to the Okanagan 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. I should like to see before this House a statement with respect to every province of this Confederation dn regard to. the obligations of the Canadian Northern, a full statement, not so much of the liabilities in money, because those can be easily measured, but of the construction obligations, so that we might know what we are buying when we are acquiring the ownership of this system. The commission, however, did not deal with that. In the province of Alberta, we find that, for seven years or more, there has been lying in the banks money from the proceeds of the sale of securities for the construction of lines that are not yet built. Where are they? This House should know that. It does not know that, it knows, only in the most general way, what sums of money ere lying in the bank that may be utilized for the purpose of constructing those roads. We must remember that the Pirivy Council has decided that that money, once it is raised on tho.se bonds for the construction of a specific piece of road, cannot possibly be diverted to the construction of another piece. It must be used for those specific lines, and dn some cases, existing facilities will 'be duplicated because, as the manager has told me, the pressure by the politicians was so strong that the company had to construct duplicate lines. The money is there; the lines must be constructed; we must assume the obligations. Those facts must be brought to the attention of' the arbitrators when the matter is being dealt with. There must, therefore, be added to this measure a restriction and a limitation as to the method that is to be pursued with relation to the arbitration, and that the whole matter must be made subject to the legislation of 1914. My hon. friend asks: Why subject to the legislation of 1914? My answer is this: It will be remembered that the Canadian Northern Railway Company, Mackenzie, Mann and Company, Limited, Sir William Mackenzie and Sir Donald Mann entered into a binding agreement with His Majesty the King which is set out on pages 17, 18, 19 and 20 of chapter 20 of the statutes of 1914. One of the provisions of that agreement is:
That the contractors-
That is Mackenzie, Mann and Company, Limited.
.-will not at any time make or seek to enforce any claim for contractors' profits, commissions or otherwise, against the Canadian
Northern, or against any of the constituent or subsidiary companies upon or in respect of any express or 'implied contract-
And so on.	\
-or for commission or remuneration for services in financing, or for any other services heretofore rendered, and all such claims are hereby by them and each of them absolutely renounced and released.
That is a vital thing to consider in the arbitration, because there is nothing laid down more clearly in the books than that the cost of financing, the cost of promotion, brokers' commission, traffic development, are all matters that have to be considered in determining what the value of a property may be. This legislation which we are about to pass must be made subject in every respect to the terms and provisions of chapter 20 of the statute of 1914, so as to prevent the possibility of the difficulty arising to which I have alluded.
There are just two or three further observations I have to make, and I will then resume my seat because I have trespassed too much upon the time of the House. My submission is as follows:
1.	We should not enter upon the project of acquiring shares by the method mentioned in the Bill which involves the introduction into the transaction of third parties who may be pledgees of stock, and therefore,
2.	We should utilize the machinery provided by chapter 20 of the statute of 1914 at once and take possession of the physical assets or property as mortgagees in possession.
3.	Parliament in the exercise of the powers given should, in appropriate terms, refer to arbitration the determination of the value of the equity of redemption represented by the balance of the capital stock of $100,000,000.
4.	We should provide that in making the award regard should be had, if reproduction costs are considered, to pre-war prices only, and the submission should be made subject to the legislation of 1914.
There are other matters to which I might direct attention, but I have already trespassed entirely too long on the time of the House. In conclusion, I would entreat my hon, friend the Minister of Finance to safeguard this legislation by eliminating the pledgees and the third parties, and provide for the utilization of existing machinery and for the prevention of a wrong being done to the Canadian people by paying money to these men that should not be paid to them.

*580

There are three things these men have done to this country. First, they have exploited the credit of the provinces to their detriment and, in some cases, to their ruin. Second, they have brought about an inflation of values by the interests they have created in places like the Model City and Port Mann, which has brought about the financial ruin of many a small holder in the old land and in this. And lastly, they have corrupted the public life of this country. They have corrupted it alike in the provinces and in the Dominion, and if the members on both sides of the House were to tell the tale of contributions that have been made to party funds, it would indeed be an enlightening and a revealing story. But I hope this will put an end to all that sort of thing. Even before the ink was dry upon the certificate of character that Sir Henry Drayton wrote for these men, one of the directors of this very road was seducing a noble young man who had gone out to do service for his country by a gift of $15,-000-and that man is destroyed. That is what happened in British Columbia, and what happened in that province in relation to this system was happening also in relation to the Pacific Great Eastern. It is true that all the money went into the cost of the road; it can all be charged up to items in the ledger. But even if it cost us millions of dollars to be rid of these men in the public life of this country, I say it would be cheap for the sake of the public life of this Dominion in the midst of this great war.
But I do submit that, however great may be the millions that may accrue to the body politic, there is no excuse or reason why we should not utilize to our utmost extent the powers that we have to circumscribe and limit to the best of our ability the sums of money that may be paid to these men. I again appeal to the Opposition to once more agree that these men shall have an opportunity of presenting their case to these referees, and I appeal at the same time to the Minister of Finance to permit in committee these restrictions to be imposed on this legislation so as to prevent this country from ever again becoming, as it has been too frequently in times past, the victim of the rapacity and greed of these men.
' Hon. ARTHUR MEIGHEN (Solicitor General): Mr. Speaker, some three years ago I had to do intimately with legislation which concerned the subject now before the House. That legislation has had the effect of making the problem with which we are

now faced perhaps not a less comprehensive but a much less intricate one. By that legislation, what formerly was a heterogeneous and more or less disconnected system was gathered together into one definite entity, and the relations of the Government of Canada to that system were once and for all clearly defined. The problem that now confronts us is of equal magnitude with that which faced us then. Its magnitude, however, we do not grasp as we did in those days, because we are now in the presence of events which infinitely transcend the difficulties of that time in relation to railways or anything else. The problem now before us is great all the same. While I have been able to give some attention to the solution of the question, I regret that I have not been able to attend the sittings of the House and to follow the debate as it has proceeded, so as to enable me to reply to all that has been urged against the policy enunciated in this Bill. I have, however, had the pleasure of listening to the remarks of the hon. member for Calgary (Mr. R. B. Bennett). With much of what he has stated I am in cordial agreement, and if he will permit me, I compliment him that in the main he has approached the subject fairly. In so far as I shall place my views in conflict with his, it will be in an endeavour to show that the objections he urges against this course, as opposed to the course that he advises, are objections that apply not with great force to the Bill that is before the House, but that would apply in an infinitely greater degree to the course which he himself recommends.
He has made complaint because we include among those who are to be made parties to the agreement, and who will consequently be bound by its provisions-the agreement which is to follow this Bill and detail the conditions upon which both parties are to proceed to the arbitration-the pledgees as well as the owners of the stock. The pledgees were included simply because they are, in an equitable sense, partial owners of the stock. The legal owners of the stock are those who are concerned with its value, and although the pledgees are only concerned to the extent of what they have in the stock, they nevertheless have an ownership in it. They have an interest in it, perhaps an interest beyond its value. I do not see any peril in including the pledgees, because for the life, of me I cannot understand how the mere extent of any interest they may have in the stock has anything at all to do with the determination of the value of the stock.


Richard Bedford Bennett: I agree that it should not, but I say that it will.


Mr. MEIGHEN:: I am willing to trust to the arbitrators, and particularly to the Government arbitrator, the Chief Justice of Ontario. But apart from that, no matter what any bank or pledgee may have loaned against the stock, that is no element in the determination of the value of the stock. But dt was,thought well that inasmuch as they had an interest in the stock, they should be made, with the owners, parties to the agreement, so that all would go before the arbitration board on an equal footing and have a right to be heard. The *pledgees may have advanced $1,000,000, $10,000,000, $20,000,000 or $100,000,000. That may have been their idea of a proper security at the time they advanced the money, but it has no relation whatever at this stage as to what the actual value of the stock may be. I agree with the horn, member for Calgary that'an agreement with the owners of the stock would be an agreement whereby we might determine the value of the stock without reference to anybody else. But it seems to me that it is a little better and a little fairer that all who are interested in this matter should become parties to this agreement, and have the opportunity of going before the Arbitration Board and presenting such evidence that is evidence, not evidence that is no evidence at all; evidence that goes to show value, not evidence that goes to show what they at one time thought they might safely loan against the stock.
The hon. member for Calgary proceeded to refer to some income convertible bonds which occupy a relationship to this company different from the other debentures held against the road.
It Is a fact, as the hon. member for Calgary says, that there exists outstanding $25,000,000 of bonds which are a charge upon the road, and that the holders of those $25,000,000 of bonds are entitled to interest on their bonds only if the earnings of the road warrant it. It is further provided in the body of the mortgage deed which secures these bonds, that the holders thereof may within a limited time exchange the bonds for common stock of the company, dollar for dollar. It is quite true that if this transaction goes through our becoming owners instead of Mackenzie and Mann does not in any way affect the position of the holders of the income convertible bonds. They occupy exactly the same relationship to the company before
this transaction, as they will occupy when the transaction is completed. Consequently, they would be entitled before the first day of January, 1919, if my hon. friend's date is correct, to go to the Canadian Northern Railway Company, which will still exist, and say: "We want shares of stock in lieu of our income convertible bonds." It may be wise to take into consideration in committee whether or not that right should be abolished. I do not consider it a very substantial right. I do not think there is the faintest possibility of their exercising it. What they have now is a bond against the railway, in preference to all the stock, and I do not think they will consider that under government ownership and operation, no matter what the Government may be, that stock is going to be of greater value than $25,000,000 of bonds before the first day of January, 1919. I do not think any man in. this country, or in any country on earth,, will before the first day of January, 1919, exchange $25,000,000 bonds of that road for $25,000,000 of the common stock.


Richard Bedford Bennett: It is not $25,000,000' of bonds of the road; it is $25,000,000 of claim against income as earned.


Arthur Meighen: But, it is secured on the assets of the road. They can only get dividends if the dividends are earned. The bonds are secured on the assets of the road in this way: If the road should ever go into liquidation, or be sold, they would be entitled to rank in their proper order against tne proceeds of the sale. That is the security' they would lose in the event of a change, so that I would regard the possibility of such an exchange within a year and a quarter as being probably non-existent.


Richard Bedford Bennett: I hope my hon. friend realizes my objection was two-fold. My second point was that it makes these men partners with us in the enterprise.


Arthur Meighen: If there were such a
possibility, it might be well for us to consider in committee the wisdom of abolishing that right, but I do not think there is any likely, or even imaginable, possibility of an exchange taking place.


Mr. MIDDLEBRO:: Would not that be
an element which would go to decrease the value of the stock?


Arthur Meighen: It would be an element which would go before the board of arbitration in regard to the value of the stock. However, it seems to me there are phases worthy of much more consideration than:

the possibility of the holders of the mortgage bonds of the Canadian Northern exchanging them for common stock within the next year and four months.
My hon. friend also referred to the wisdom of giving the Crown the right to refuse to take up the award, by way of a precaution against the possibility of an award that the Crown in its wisdom, or as advised, would deem to he extortionate. I have the most profound respect for my hon. friend's legal opinion, and I understood him to say that it is a common law right of the Crown so to refuse. Whether that be so or not, I think, speaking individually, there is something in the suggestion made by the hon. member for Calgary. It may be a wise precaution that the Crown should reserve the right to refuse to take up an award, should it pro re extortionate. Of course, this is surrounded by some difficulties. At the same time, it seems to be worthy of consideration when we come to review the Bill in committee.
My hon. friend from Calgary proceeded to discuss the whole question of value as it would come before the board of arbitrators, and he seemed to feel that in the determination of value which will come before the board, the principles that will obtain before the tribunal to enable them to fix the value are such that there is grave possibility of a disproportionately large amount being allowed under the exceptional conditions existing at this time. He argues that the two principles upon which they can act are as stated by Professor Swain in his report,
. first, the actual cost of the property to he taken, less the liabilities against it, and, secondly, its reproduction cost, less what may be the liability against it. My hon. friend goes on to show that the reproduction of the physical properties of the company to-day would cost from 50 per cent to 100 per cent more than they cost before the war, and more than they would cost in normal times, and that if that principle is followed we are going to be condemned to a disproportionate price under the submission to arbitration. He also says that if the cost is to be taken it would be unfair to the country, because the cost of the road as built might far transcend what we ought to pay. I want to draw the attention of the hon. member for Calgary to the fact that we are not expropriating this road at all-let me repeat that-we are not expropriating the road. If we were expropriating it, as recommended by the hon. member for St. John, and as urged upon
[Mr. Meighen.I
us by the hon. member for Welland a few days ago-I do not know whether he has changed his opinion since-if we were to expropriate this road, in my judgment the hon. member for Calgary would be quite right, and we would be bound by the principles laid down by Professor Swain in his report. That, however, is just the course we are not pursuing. We are taking the common stock of the company. Would my hon. friend from Calgary say, if the first principle is applied, that the Government of Canada or the people of Canada have anything to fear?


Richard Bedford Bennett: Since my hon. friend has asked me, I say, yes. The stock having no value as a commercial enterprise, we must have reference back to the physical assets it represents, and I fear the trouble to which I directed attention will arise.


Arthur Meighen: My hon. friend sees the point now. We are taking the stock. We are not taking the physical assets of the company at all. If the first principle, namely, that what is paid for that stock is one of the determining principles of value, then of all the hon. gentlemen in this House, the hon. member for Calgary should be the last to fear, because he assured the House three years ago that these gentlemen paid nothing at all for the stock. If that principle is to prevail, we will get the stock for nothing, and the Government will be in possession of the. $60,000,000 of stock free and without price.
Let us proceed to the second principle, the application of which he fears-that the reproduction cost, less liabilities, ought to be a determining factor. That principle has little or no application, when we are expropriating no physical property. No matter what may have been its application in regard to physical property it can have no direct application at all in relation to the common stock. That is why we take the common stock, and that is why we do not expropriate as recommended by the hon. member for St. John (Mr. Pugsley) and the hon. member for Welland (Mr. German).
If we were to proceed in that way, as I think was countenanced in some measure by the hon. member for Calgary (Mr. It. B. Bennett) himself, in his Jater remarks, then these very principles would redound against us and would result in a tremendous payment by this country over and above what there is any possibility of our paying by the method pursued. What the hon.

member for Calgary argued is a forcible and destructive argument against the whole principle of expropriation as advocated by certain hon. gentlemen opposite. It closes the door against following any such course as they adopt, and it shows plainly to the House that the proper course is to take the stock and not the physical assets, because the value of the stock is determined by other factors altogether, outside and above the factors which the hon. member for Calgary has explained this afternoon. It may be, as I am just reminded by the hon. member for Calgary, that in determining the value of the stock, the reproduction value of the road may be considered, that the value of the road as it stands to-day or as it would cost to reproduce it to-day, may be an element that may be of assistance to the arbitration board. No one would suggest that that should be a determining element or that the value that we should pay for that stock should be what it would cost to reproduce the Canadian Northern Railway, less the liabilities against it. Why, there are companies in Canada to-day, as there have always been, and as there are in every country, who have a surplus of assets over liabilities in huge amounts, but who, by virtue of conditions which confront them, cannot pay a dividend on their stock, and could not sell their stock for anything at all. If we expropriate the stock we expropriate the stock, and every element of value and everything that goes to reduce the value of that stock must be considered by the arbitration board that is to determine what we shall pay.
My remarks or. those of any hon. member in this regard will in no way bind the tribunal. I apprehend that, at all events, the Government representative on that tribunal will know the principles by which he will be bound, without dictation from us. But it would seem very apparent to me that while what is suggested by the hon. member for Calgary (Mr. R. B. Bennett) may be taken into account, there must also be taken into account the fact that there is no earning power in this stock, at the present time at least, and that when stock is - put on the market it is the earning power that counts rather than the surplus of assets over liabilities. Furthermore, I should expect that the board of arbitration would take into account the fact that considerable financial difficulties are likely to surround this company before the stock can have an earning power, and while no doubt it
would appear that the prospective earning power would be a factor, the present earning power would be the great factor in determining the value. Indeed everything would be a factor which would be in the mind of an ordinarily shrewd investor who himself desired to buy the stock. Everything that would weigh in the market as to the value of the stock would weigh in the minds of the arbitrators in determining what the country should pay.
If there is one principle which is common to all arbitrations, if there is one principle that, better than another, expresses what is before an arbitration board or an expropriation tribunal, it is that the value of what is to be condemned is the value of that property in a fair and normal market. Consequently the proper way to approach this thing is for us to establish a tribunal which will stake the value, not of the physical assets and deduct from that the liabilities, as would be the case in expropriation, but to take the stock itself and to decide what, in a fair and normal market, all things considered the potential earning power, the present earning power, the assets behind the road, the liabilities behind the road,' all things considered, would be fair and reasonable for this country to pay. That is the course we are pursuing at the present time.
It appears to me that if we were to take the very course recommended by the hon. member for Calgary (Mr. R. B. Bennett) at the close of his address, then the arguments that he urges against this Bill, which are entirely ineffective as applied to it, would come back on his own programme with an utterly destructive force, and would put it completely out of consideration.
The chief contention against this measure on the part of some hon. gentlemen opposite is that we are not following the legislation of 1-914, and that if we pursued and followed that legislation, we should now simply extinguish the equity of redemption by our own arbitrary act and come into the possession of the road. I propose to address myself to that contention for a moment. In the first place, it is generally conceded that we must deal with the stock or deal with the equity of redemption. It is very generally conceded that we cam not permit liquidation at this time, and I do not want to labour that point any longer. It is further conceded, although, in this ' some hon. members opposite do not concur, that we should not continue the giving out of loans as we did in previous yeaTS. I am

certainly interested to hear the hon. members, especially the member for Edmonton (Mr. Oliver), at this stage. He has never been known to agree with the Government on any course whatsoever. No matter what course we pursue he is always able to come immediately to the conclusion that it is the worse possible course to adopt; not only that, but that it is the most outrageous which we ever adopted in the whole course of our history, and each one is worse than the one before. That superlative language he applies to this Bill, and he says that, speaking for himself, he would not take over this company but would continue the loans that we made last year. He would do with the Canadian Northern railway to-day exactly what we are doing with the Grand Trunk Pacific, namely make another loan. It was only a year ago, the last time that we pursued the course to which he now has reverted, that he told us it was the diametrically wrong course to take, that we were throwing $23,000,000 at what he called broken backed companies, and that the time had come then to take over the road .and for the Government to come into possession.
What is to 'be done in the face of an opposition that converts its policy, on a few days' or weeks' or months' notice, simply to be opposed to1 whatever may be the policy of	the Government at
the time?
I was amused also at the hon. member for St. John (Mr. Pugsley). It was shown to him that only three years ago there was moved by the right hon. leader of the Opposition (Sir 'Wilfrid Laurier), and seconded by himself, a resolution that the proper course to take then, before we gave any aid whatever, was to make it a condition that we might take this stock and arbitrate on its value, and that there should be a maximum of $30,000,000 fixed. When that was brought home to him in direct contradiction to the policy he advocated to-day he said; Yes, but three or four days before that, on the second reading, I moved something else altogether; I moved a long amendment to the second reading providing for a great many conditions, and this motion on the third reading should be read in the light of the motion on the second reading. And the reason he gave for the change in the motion as moved by the leader of the Opposition and seconded by himself was that it had to be changed in order to comply with the rules of Parliament; in a word, that he could not move

the old amendment to the third reading as it would be ruled out of order, and the reason they changed their policy was that they had to change it to keep straight with the rules of the House. That is the newest argument I ever heard, and I commend the ingenuity of the hon. member for St. John. I invite him to apply to all these changing attitudes on the part of the Opposition, the explanation that they have to change their policy in order to comply with the rules of the House of Commons.
We had first, three years ago, a motion by the hon. gentleman from Middlesex to wait until the following session, though he admitted that that meant liquidation. Next we had a motion to refer it to arbitration. Then, immediately this Bill was brought down in this House, we had the pronouncement by three or four hon. gentlemen opposite that it should be dealt with by expropriation before the Exchequer Court, and we now have the amendment by the hon. gentleman from Renfrew (Mr. Graham) that we should abandon the firs?, second and third propositions, and resort to confiscation. First, procrastination, then, arbitration, then expropriation, and lastly confiscation. Such have been the policies of the hon. gentlemen opposite with regard to this railway: We did not provide for confiscation in 1914, and I hope the Parliament of Canada will never provide for confiscation, so long as Canada is a country. We provided in 1914, as one condition of the assistance we gave to the Canadian Northern, that they should place themselves within the power of this Parliament, and should submit their equity of redemption to the disposition of this Parliament. The clearly expressed meaning of section 24 of this Bill is that the equity of redemption, by consent of the company, is disposable by the Parliament of Canada, on such terms and conditions as Parliament should see fit. Now, we have to determine what these terms and conditions shall be.
It is true we have power to confiscate, but I ask, what principle should govern this Government? I answer that the principles that should govern us in disposing of the equity of redemption are the clear principles of equity and honour, and not the principle of confiscation.
It has been argued that, by the legislation of 1914, as interpreted on behalf of the Government in this House, automatically, upon default, the equity of redemption vanished by Order in Council. Where is such a provision to be found in that legislation, and who said it on the floor of the House? Certainly I never said it. I invite hon.

gentlemen, and particularly the hon. member from Pictou (Mr. Macdonald), to point to any sentence I uttered on that occasion which, by any possibility, could be so interpreted.
We took no such power. We made no contract to automatically extinguish the equity of redemption. Is that done in ordinary life? When payment on a mortgage is in default, is the mortgagee given power to say that the equity of redemption is 'at an end, and that he can extinguish it or appropriate it to himself? Is that Common Law? No, the mortgagee is compelled, by the courts and legislation of our country, to determine the value of the equity of redemption, and to see that the mortgagor gets that value. How is the value determined? It is determined by compelling the mortgagee to put the equity of redemption up for public auction, and the highest bidder becomes the owner of the equity of redemption. In ordinary life that is determined in a fair and reasonable way, by so disposing of the equity of redemption. Is that method available to us to-day? Should we (have applied the method ordinarily applied in disposing of real and personal property? Will anybody 'suggest that we should have done it? It might have been done, and if it were what would be the result? Who in all probability would have been the highest bidder for this stock, which represents the equity of redemption of this company, if the Government had put it up for sale at public auction in the open markets of the world, even under conditions such as the present? I do not hear any answer, but I know what is in the back of the head of the hon. gentleman from Pictou (Mr. Macdonald). The answer would be: the 'Canadian Pacific Railway. And why? Because the Canadian Pacific has more to gain by the purchase of that stock and the stock would have been worth more to them than to any other individual or company upon earth. The fair and inevitable presumption is that a resort to the method suggested would have landed that stock in the possession of the Canadian Pacific Railway. Could thiis Government ever have pursued that course? Would that have been in the interest of Canada? Do hon. gentlemen opposite think that should have been done? We had the power to dispose of that stock and equity of redemption as we liked by the legislation of 1914. That course was closed to us by the ordinary principles of national prudence, because this country
would not now be a party to the amalgamation of the Canadian Northern with the Canadian Pacific. Consequently, some other method had to be adopted, and I appeal to the fairness of hon. gentlemen everywhere in this House and out of it, and I ask would it have been right, or decent, or honest, for this country to have stood between the holders of that stock and the purchasers of that stock, denied them a sale, and said to them:	Your stock is
of no value and we will appropriate it. That is confiscation, and that is the policy-and I hope the last policy-of hon. gentlemen opposite. "Oh," they say, "you have a commission, and that commission says the value of the stock is non-existant." That is the Drayton-Acworth Commission, which was appointed to investigate the whole of the affairs of three railways in this country, and to recommend to the Government what they deemed to be the better course to pursue in regard to those roads. It was not a commission appointed to determine the value of anything for purposes of appropriation. It was not a commission before whom the owners of that stock could be heard. Who ever heard, in any Parlia-unent in any country on earth, of the value of property being determined without the owners being heard at all? Who ever heard of resorting to the report of an ex parte commission to determine the value of property in this or any other land? But the hon. gentleman from Renfrew (Mr. Graham) is in a most remarkable position. Hesays:
I do not care whether this Drayton-Acworth report is right or wrong; it is contended by the Canadian Northern-and that has been referred to by tne Minister of Finance-that there are errors in the estimation of the assets and of the liabilities of the company, but I do not know whether the Canadian Northern is right or wrong, or whether the Drayton-Acworth report is false or true. He says furthermore:	I do
not care, because the amendment which I have moved does not depend on the truth or falsity of the Drayton-Acworth report. But the fact is that his amendment asks this House to decide that because the Drayton-Acworth report declares the equity non-existent, therefore it has no value, and we should confiscate it. So the hon. gentleman from Renfrew is in the position before this House and the country of saying, "On the face of that report, which may be true or false-and I do not care which-I ask this country to confiscate the property, and, without compensating them in any

way, make it the property of this Government."
That is not the course that tells in the end for the advantage of a nation. We are to be a borrowing country for years to come. We will require to borrow immediately after the war, and from the present time until the war ends. Are we going to make thi$ a borrowing country by confiscating property? This property is not all held by Mackenzie and Mann, and never was, so far as I know. I am not on record as ever saying that Mackenzie and Mann owned all this stock at any time. I do not know exactly what they owned in 1914, nor exactly what they own now, but in 1914 they controlled the stock, and they control the stock to-day. They have, I understand, approximately 51 per cent of the stock, and the Government of Canada has 40 per cent of the stock, so that approximately 9 per cent of the stock is held outside. In many cases considerable sums were paid for the stock; I do not know what has been paid for it. I do know, however, that a substantial portion of the nine per cent is held overseas; is held by persons over whom Mackenzie and Mann have no control whatever. Are we, in view of the report of a commission before whom neither Mackenzie and Mann nor any of these stockholders were heard as to the value; before whom these men overseas never appeared and never could appear; are we ruthlessly to gather in their property and make it our own without paying a dollar for it? That is the amendment to which the leader of the Opposition, I suppose, presumes to commit his party. 1 do not know what he will have to say for himself in the presence of the people of Canada. Did he ever in the course of his administration-to his honour, be it said, he never did- on the report of any ex parte commission, confiscate the property of any man? Why does he offer to do so to-day? I will tell you, Mr. Speaker, what is really at the bottom of this resolution. Illogical it is; confiscatory it is; damaging it is to this country; utterly indefensible it is from every point of view. It is introduced into this House simply because a certain convention in the city of Winnipeg-a convention by no means of happy memory; a convention that many hon. gentlemen in this House will have reason to be glad to forget-in the haste of the moment decided that this was the course to take; that this was one of the ways to line the convention up against the Government. That is why this amendment is intro-[Mr. Meighen.J
duced and this Parliament solemnly asked to vote for it. I should like to see the communications that passed between the hon. member for Edmonton (Mr. Oliver) and the leader of the Opposition with regard to this matter-perhaps they would account for the remarkable attitude of the member for Edmonton in respect to this amendment. A year ago he said: We ought to take over the property; to-day he says that we ought to continue to make loans, that we ought not to take over the property at all. Now he is going to vote for an amendment which says: We must take over the property and confiscate the value of the shares. Three positions in twelve months, in order to get in line with this historic convention that has done dishonour to the part of Canada from which I come. Certain hon. gentlemen opposite will be sorry that they ever were within the four walls of that convention hall.


Sir WILFRID LAURIER:: I assert here, upon my word, that not a communication passed between the member for Edmonton and myself during that convention, except what was published in the papers.


Arthur Meighen: Except the famous telegram?


Wilfrid Laurier: Except that.


Some hon. MEMBERS:: Hear, hear.


Arthur Meighen: Did the right hon. gentleman's telegram, which expressed the view that the resolutions were highly satisfactory, cover this resolution with regard to the Canadian Northern Railway stock?


Wilfrid Laurier: I had not seen the resolution at that time; I must say. It referred not to that resolution, but to another.


Arthur Meighen: I have been in doubt whether the words "highly satisfactory" referred to that illustrious war resolution, or whether they had general application. However, that point is cleared up at last. As there has been no request from the hon. member for Edmonton or from that convention that the leader of the Opposition depart from the principles of his own political life; that he depart from all the many policies that he has enunciated with regard to the Canadian Northern and resort at last to confiscation as the policy of his party, I hope that he himself will be found voting against this amendment. If it is not found in party necessity, certainly there is no reason for the amendment, either in justice or in common sense.

The terms of the agreement which will follow this measure will be entirely within the jurisdiction of and may be dictated by the Government; the shareholders, if they do not adhere to the terms stipulated in the agreement, will have to submit to the other alternative. Under the agreement the Government and the people of Canada will become, in effect, the owners of some 9,500 miles of railway and of about twenty-nine different companies operating various national utilities in every part of Canada. In proportion to our population, we become I think, the owners and operators of the largest system in any country in the world. We are .entering upon a tremendous undertaking, an undertaking that will demand the energy, the co-operation and the strength of the Canadian people; an undertaking that will be difficult, but which, if it fairly succeeds, will redound to the honour of this country. I know that there are objections to government ownership and to government operation. I believe that those objections are largely removed by retaining the corporate entity instead of providing for direct government ownership and operation. That is a fundamental requirement of the Drayton-Acworth report and of the Smith report; and that is why in the main, we adopt this method of disposing of the equity of redemption. If we followed specifically the Act of 1914, the Canadian Northern Railway Company would still continue to exist but it would not own the Canadian Northern Railway; that would be owned directly by the Government of Canada and would require to be operated by the Government or be subjected to the control of a new company created for the purpose. The method we follow under this Bill is in principle and in substantial effect the method devised and outlined by section 24 of the legislation of 1914. If we followed it literally rather than in this parallel way, we would for all practical purposes abolish the company; we would become directly the owners of the road. Furthermore, if in disposing of the equity in that way we had resort to arbitration, it would be the physical value that would count; we would not get the advantage that we get by bringing the matter before an arbitration board in the form of stock rather than in the form of an equity. We get an advantage by taking the stock instead of taking the physical road. Therefore, while in principle and in effect we follow precisely the line of section 24 of the Act of 1914, we do not follow it literally. [DOT] In this way we meet
the fundamentally important and essential condition laid down by the Drayton-Acworth report and we avoid the disasters pictured this afternoon (by the member for Calgary (Mr. Bennett).
I invite the House, therefore, to the consideration of this Bill as it is, and to the adoption of the motion for the second reading. When we get into committee the subjects brought to our attention by the member for Calgary can be fully and in detail considered. In my humble judgment, we are indebted to him for directing our attention to some of the points to which he referred, which may well receive favourable consideration at the hands of the committee. In the main, however, the principle of this Bill is sound. It is better to take this step rather than to continue making advances to the road. There will be disadvantages, but rather than continue as we have been doing we had better take this step. The public, I believe, demand that we do so. The public have a right to say whether we should allow the private management to continue, or whether we should enter upon public ownership of this road. That is what the second reading of this Bill means.
The passing of this Bill will mark a tremendous advance in the domestic affairs of Canada. It will put this country in a position of advance, perhaps, of any other country in the world, outside of Germany, in respect of government ownership of utilities. It will enable us to show, once and for all, whether government ownership of a tremendous enterprise like this is or is not a sound principle


Mr. W. F. NICKLE (Kingston):: Mr. Speaker, my views on the principle of the Bill before the House aTe so well known that probably little would be gained by my taking up the time of the House this afternoon in enlarging upon them. As I realize that it is desired that a vote should be taken before six o'clock, I shall occupy the attention of the House for only a few minutes.
In 1914 I directed some attention to the subject now under discussion, as to whether or not it was advisable that Canada should take a first step in the acquisition of her railroads, or whether it was advisable that we Should go on as we have been doing for many years, that is, subsidizing the railroads in this country. At the time I spoke in 1914, I had given some consideration and research to the problem of public ownership of railways in Canada,

and I was not unaware of ithe divergence of viewis there had been in the .past as to whether or not government ownership was a wise thing in this country. I quite appreciate the fact that, in the early days, Papineau, the great French leader, was opposed to public ownership. I realize also what a struggle there was in the 50's .and 60's in Canada as to whether the Government should themselves construct or whether they should permit private capital to construct those great new highways of steam that were coming into existence. Any one who has read the history of Nova Scotia cannoit be blind to the fact that Joseph Howe, that brilliant statesman, put up a magnificent fight that the railroads should belong to the people; that they should control those highways, and he felt that otherwise, in the days to come, they would be a source of corruption and irregularities in the public life of Canada. Sir Francis Hincks, the Inspector General of Upper Canada, seems to have held very divergent views on the subject. In the early days he was in favour of public ownership of railroads, but after coming into contact with .a great contracting firm in England, he seems to have changed his views, and when the project of the Grand Trunk railway wias launched in Upper Canada he leaned to the view that it should be constructed by private enterprise rather than by the Government. It is, however, of very little avail to discuss to-day the question as to which of those men were right or wrong. When one compares the history of the 60's with that of 1917, one must be impressed by the fact thiat the men of the former generation had exactly the same problems to face that confront u-s here to-day. Subsequently to the construction of the Grand Trunk railway, Canada was confronted with the problem whether she should take over the railroad or whether she should give aid. She guaranteed bonds; she gave subsidies; she assisted in every way possible the needs of the railway, but the lessons of those days seem to have been forgotten in the later period of our history, and we havte plunged into an orgy of giving cash subsidies and guaranteeing bonds that has brought us for solution the problem which the men of the sixties had to face.
To give the House some idea of the progress Government ownership and operation of railroads Las made, I might direct the attention of the House to the fact that in 1880 there were in the world only 10,000

miles of railways under Government operation and ownership, whereas at the present time there are 225,000 miles of railways under Government operation and ownership. Sweden, Germany, Italy-practically all-in all 55-the great countries of the world now own or operate their railways. I would be wrong if I were to say that they all do, because I would leave out the two great countries of the world that have not yet adopted a policy of government ownership. I refer to Great Britain and the United States, and yet the trend in that direction is so strong that it was but a year ago, when I was at a lunch given, by Sir John 'Hadfield'e firm to certain visiting parliamentary delegates in England, that I heard Sir John Hadfield say that, if England were to maintain her position in the industrial world after the termination of this war, it was absolutely necessary that she should control and operate her railroads. The war has demonstrated that this is practical and possible, because when the war broke out and England realized that she must control [DOT] her transportation, she took over and put under the control of the managers of the railways, representative business men and representatives of the War Office, the entire railway undertaking of Great Britain, and I do not believe any man will deny that that course has worked satisfactorily and well. The United States still maintains a system of private ownership and operation. That system is well entrenched there, and the railway interests have a great hold on the legislative bodies of the United States. I cannot say how soon that hold will be loosened. My good friend from Calgary (Mr. R. B. Bennett) this afternoon drew the attention of the House to the fact that many of the American railroads had gone through the hands of the receivers, and that would seem to indicate that private ownership in the United States has not been the success that might be desired for it. We in Canada, in taking over this railway, are taking a great step forward, and if I understand aright the purport of the Bill, there are two great principles in it. The first is that Canada should assume the ownership of this rail-wtay, and indirectly, through a board of directors, operate it, the object being to have the advantage of public ownership without the disadvantages, to free the railroad as far as possible from political influence or interference. The other great underlying principle of the Bill is that, if the stock has any value, the men who own the stock should be paid for their property.

As to the first principle, I think I have made it abundantly clear that I approve it, and as to the second principle, I wish to take the same position as I took in this House an 1914, and that is, if Mackenzie and Mann-I do not think there is any gentleman here who is carried away with the belief that I have any serious love for them-can prove that this stock has any value, they should be paid for it. That is my position here this afternoon.
I am opposed to the amendment as offered by the Opposition, because I think it enunciates the principle that, because a tribunal, on ex parte evidence that did not represent the views of all interested, reached the conclusion that a man's property was worth nothing, the State, by the inherent power that it has, should deprive that man of his property, without a hearing and an opportunity to prove its value. That is not sound, and it is not a wise doctrine to promulgate in this country. Whether this matter should be referred to the Exchequer Court or whether the value of this road should 'be determined by arbitration is a question on which much might be said on either side. That is a matter of detail. But if a tribunal is properly constituted-'and that is indicated by the fact that Sir William Meredith is to represent the Government on it-the matter will be fairly investigated and a fair price reached for the stock of the Canadian Northern railway.


Edmond Proulx: May I ask , a question?
'Mr. NICKLE: If my hon. friend will allow me to proceed, I'will answer questions after I have finished my remarks. My hon. friend from Calgary (Mr. R. B. Bennett) stated that we should not enter upon .the project of acquiring shares by the method mentioned in the Bill which, involved the introduction into the transaction of third parties, pledgees of stock. His point does not impress me, and I am not influenced by the same fear with which he is seized. The mere fact of making the pledgees parties to the agreement in no way enunciates the principle that, because the pledgees have advanced money on a stock, ipso facto that stock has a value. In my judgment, it makes no difference in the world as to the value of a stock whether, if it is handed over to me as collateral security, I advance 75 per cent on it, or whether I advance 10 per cent. If the stock is to be taken over by arbitration, the inherent value of the stock, not the amount of money I advanced on it, is the determining factor, and if I understand aright the principle of the Bill, that is what the Minister of Finance understands by the second paragraph of section 4. In fairness to the pledgees, he further says: if you wish to appear before the tribunal and be heard, that is your privilege. You have advanced money on this security and you have certain rights. I do not purpose taking those rights away from you arbitrarily and without your being heard, hut the value of the stock is in no way determined or influenced by what you advanced, its value is what it is worth to-day in the markets of the world as a stock.
I am not so confident, however, as to whether or not the hon. member for Calgary is not right in his second position, namely, that the cost of reconstruction is not something that might well be directed to the attention of the arbitrators in determining the value. You will observe, Sir, that subsection 2 of paragraph 4 says:
The said arbitrators shall determine thle value of the said six hundred thousand shares as of the date of the said agreement, and the said arbitrators shall proceed in a summary way and may apply their own judgment in determining such value, and may receive witn respect thereto such reports and statements authenticated in such way as they may decide and such evidence as they may deem necessary or helpful, examine witnesses under oath and hear parties by counsel or representatives, and the unanimous determination of the arbitrators shall be final.
It seems to me it might be advocated before the arbitrators on the part of the company that this stock has a potential value, that it has ajpotential earning power; and that, as the great bulk of the money that had gone into the undertaking had gone into it when the materials were less valuable than they are to-day, in determining the value of the stock, the present value of the physical assets as such should be considered as well as the potentialities of the road. It seems to me, therefore, that that is a matter that might have the attention of the Solicitor General and the Minister of Finance, so that when the measure comes before the House in committee they might be in a position to advise us as to what the best legal advisors of the Government think in reference to this contention.
The five minutes that I promised to take have more than run, but I would again like to aver that my vote shall be cast in favour of the Bill, because I think it declares for a very long step in the advancement of Canada's policy in reference to her railway construction, maintenance and operation.


Edmond Proulx: Would not the hon. gentleman have as much confidence in a judge of the Exchequer Court as in Sir William Meredith?


William Folger Nickle: I think each man is first-class, and it is a matter of indifference to me which is appointed.
The House divided on the amendment of Mr. Graham.
The amendment moved by Mr. Graham was declared lost on the following division:
TEAS. Messieurs:
Boivin,
Bourassa,
Brouillard,
Buchanan,
Bureau,
Cardin,
Copp,
Delisle,
Demers,
Douglas,
Ethier,
Fortier,
Gauthier
(St. Hyacinthe), Gauvreau,
Graham,
Guthrie,
Kay,
Lachance,
Lapointe
(Kamouraska),
Lapointe
(Montreal, St. James),
Laurier (Sir Wilfrid), Lemieux,
Macdonald,
Maclean (Halifax), McCoig,
McCrea,
McKenzie,
Marcil (Bonaventure), Marcile (Bagot), Michaud,
Murphy,
Oliver,
Pacaud,
Papineau,
Pardee,
Proulx,
Ross,
Seguin,
Tobin,
Turgeon,
Verville.-41.
NAYS. Messieurs:
Ames (Sir Herbert), Armstrong (Lambton), Armstrong (York, O.), Ball,
Bellemare,
Bennett (Calgary), Bennett (Simcoe),
Best,
Borden (Sir Robert), Bowman,
Boys,
Brabazon,
Burnham,
Burrell,
Carrick,
Champagne,
Clark (Bruce),
Clarke (Wellington), Cochrane,
Crothers,
Currie,
Doherty,
Donaldson,
Elliot,
Fripp,
Girard,
Glass,
Green,
Hanna,
Hughes (Sir Sam), Lalor,
Lewis,
McLean
(Queens, P.E.I.),

Meighen,
, Munson,
Nickle,
Nicholson,
Merner,
Middlebro,
Morphy,
Paquet,
Morris,
Paul,
Rainville,
Robidoux,
Roche,
Rogers,
Schaffner,
Scott,
Sevigny,
Shepherd,
Smith,
Stanfield,
Steele,
Stevens,
Stewart (Hamilton), Stewart (Lunenburg), Sutherland,
Thoburn,
Thompson (Yukon), Thornton,
Walker,
Wallace,
Webster,
Weichel,
White (Sir Thomas), Wright.-67.
PAIRS:
Ministerial.
Arthurs,
Bradbury,
Boulay,
Barnard,
Boyce,
Cockshutt,
Chabot,
Clements,
Davidson,
Descarries,
Foster,
Forget,
Henderson,
Hazen,
Jameson,
Kemp,
Marshall,
Morrison,
McLeod,
Northrup,
Reid,
Sexsmith,
Wilson,
White (Renfrew), Hartt,
Taylor,
Tremain.
Opposition.
Truax,
Cruise,
Boyer,
Achim,
Devlin,
Charlton,
Beland,
Knowles,
Carroll,
Lanctot,
Loggie,
Bickerdike,
Nesbitt,
Pugsley,
Kyte,
Robb,
Neely,
Molloy,
Carvell,
German,
Sinclair,
Power,
Wilson,
Gordon,
Thomson,
Mondou,
Chisholm,


Rodolphe Lemieux: I did not rise to record my vote, Mr. Speaker, because I did not see my pair, the hon. Minister of the Interior (Mr. Roche) present in the House, but as I saw him afterwards voting, I asked the clerk to record my vote in favour of the amendment.


Mr. NESBITT:: I was paired with the hon. member for Halton (Mr. Henderson). Had I voted I would have voted for the amendment.


Mr. SINCLAIR:: I was paired with the hon. member for Grenville (Hon. J. D. Reid). Had I voted I would have voted for the amendment.


Mr. McLEOD:: I was paired with the hon. member for Carleton (Mr. Carvell). Had I voted I would have voted against the amendment.


Mr. DAVIDSON:: I was paired with the hon. member for Cape Breton South (Mr. Carroll). Had I voted I would have voted against the amendment.
The motion of Sir Thomas White for the second reading of the Bill was declared carried on the same division reversed:
Bill No. 125 was thereupon read a second time, and the House went into committee thereon, Mr. Rainville in the Chair.
At six o clock the committee took recess1

After Recess.
The committee resumed at eight o'clock, Mr. Rainville in the Chair.	v
On section 1-His Majesty may acquire
600,000	shares of common stock.
Mr, GRAHAM: Before His Majesty acquires these shares of capital stock, I think we ought to have some assurance from the Government that contractors who have just claims against Mackenzie and Mann, either as contractors or as owners of the capital stock of the Canadian Northern Railway should be paid. Mackenzie, Mann & Company as contractors construct the road for Mackenzie and Mann as owners. There are various subsidiary companies making up the Canadian Northern Railway system. In the different provinces the road, main line and branches, has been constructed under charters with different names. In Ontario it is called the Canadian Northern Ontario Railway, in Quebec the Canadian Northern Quebec Railway. In British Columbia the road was constructed under a provincial charter, called the Canadian Northern Pacific Railway. These several companies make up the Canadian Northern Railway system. Mackenzie, Mann & Company as contractors constructed most of these lines for Mackenzie and Mann as owners of the railway. My contention is that the Government, in taking over all this property, takes the place of Mackenzie, Mann & Company, contractors, or Mackenzie and Mann, owners of the road, and should become responsible for all their just liabilities. I pointed out on the second reading that, of necessity, the Government will have to assume these liabilities. Several contractors who have performed work in this connection claim that they have not received their pay and have not been able to make any progress during the last two or three years towards getting their money. I know the Government could say in taking over the Canadian Northern Railway system that technically it is not responsible for the liabilities of Mackenzie and Mann as contractors or of any of their sub-contractors. But this is the situation: If the Government is -taking over, under a statute, property which has not been paid for, it certainly should pay for that property; buying the capital stock from the holders of the capital stock does not at all relieve the Government but rather involves the Government in the payment of these accounts. I do not pretend to say that every hatched-up account or every account that can be hatched up should be paid by the Government, but
I do say that where a contractor proves a legitimate claim this Government cannot in equity refuse to pay that contractor for work done on the highway that the government is taking over under statute. If these same men had built a house, as mechanics, they would have taken liens on the house, and no matter who purchased the house the liens would be enforceable. So I say, that although as railway contractors they cannot take liens on this property; in equity the Government ought to pay to these contractors every just claim.


Mr. MORPHY:: Would not such items
as the hon. gentleman refers to be deducted from the value of the stock in the ultimate analysis? In that case the money, if paid to the creditors, would really come out of what would be going to Mackenzie and Mann.


Mr. GRAHAM:: I care not particularly
where it comes from so long as it goes to the man who did the work and cannot get his pay.


Hugh Boulton Morphy: Does the hon. gentleman not think it would be so actually?


George Perry Graham: Technically and legally
I suppose that would be the way to do it. In other words, the account might be treated as if it were garnisheed by the contractor, and the amount payable for the capital stock be reduced to that extent and the money paid to the contractors.


Mr. WEBSTER:: How about the contractors from Brockville to Westport?


George Perry Graham: That was settled years
ago.


John Webster: They never got paid.


George Perry Graham: That road was sold under mortgage and would hardly come under this proposition. I may say, in response to the hon. member for North Perth (Mr. Morphy), that if the arbitration would say that the capital stock had no value, then, unless, the Government were prepared to assume this liability for property that they are taking possession of, that *had not been paid for, the contractors would not get their money.
There is more than one account of this kind. For several years contractors have been placing their claims before me and asking me if I could get a settlement from Mackenzie and Mann. I have no power to get a settlement of their claims, but I have presented some of them to the com-

pany. I have in mind one claim of a firm that built some 23 miles of railwav between March and Arnprior. The Government has all the particulars of this claim. An effort has been made for the last four years to get payment of this claim. There was some $18,000 of a hold-back kept until recently when $5,000 was paid. The contractor has been unable to get a settlement although the work .has been completed and he has been asking for payment of his whole account.
He has not been paid for his work at all. Much of this work has never been placed in any estimate over which there could be a dispute by the Canadian Northern or Mackenzie and Mann. There has been no estimate made for it; they just declined to make the estimaite. The firm of contrac-ors claim $37,000 of a balance due them. I shall read one statement of this claim to the House, and I think it is a strong claim -at least it ought to be settled. Procrastination of a claim of this kind, without refusal to settle, but holding out hopes that it would be settled in some way, is the most exasperating thing in the world. The statement reads as follows:
In reference to statement of claims herewith we would point out that since the fall of 1913, when the work in question was completed, we have made many appeals to the Canadian Northern Ontario Railway Company, both direct and through J. P. Mullarkey, for a settlement of our account and an adjustment of our claims. Not only have they shown no disposition at any time to investigate and consider our claims for shortages in the estimates returned for the work done, hut for three years they have withheld payment of over $18,000 of a ten per cent hold-back, which was due and payable thirty days after the completion of this work. About a year ago, however, we received an advance of $5,000 on account of this hold-hack, leaving a balance still of $13,679.87 as per statement herewith.
As to amount of $20,289.73 additionally claimed for work done and for payment of which no provision has been made, we have from time to time particularly urged that they send an engineer over the work for the purpose of conscientiously checking up our claims at the various points. The only advance that was made towards this end, however, was a flying trip made over the road by Division Engineer L. E. Rowley, on a motor car, and we have absolute proof that no more serious attempt than that was made to verify the legitimacy of our claim.
Early this spring, then, we decided to em; ploy an engineer ourselves, to re-measure the work and having advised both J. P. Mullarkey and the C. N. O. Railway Company of our action, invited them to send one of their own engineers along with ours and at the same time requested that they supply us with their engineer's cross-sections of the work, but no notice was taken of either invitation or request ; so that it was necessary for us to go

ahead with our re-measurement without their co-operation or assistance. This we did, and the enclosed statement of account and claims is compiled from our own engineer's notes and cross-sections conscientiously and conservatively made.
This inspection work, re-inspection, and re-measurement, was made by the contractors themselves, the Canadian Northern declining, though requested, to send an engineer along to check it up, and see if the statements were correct. I have another statement, which says:
We would like to call your particular attention to the fact that there are a number of items that constitute work done for which there is absolutely nothing in the estimates to cover.
That is, work performed by this contractor for which no account has even been paid, but the work stands there, being taken over by the Government now. There is no question as to the amount. They have never received a cent for this part of the work, and nothing has ever been put in the estimates. In this statement, from which I have just quoted, I find the following :
These include about six different sections of side barrow excavation, among which a section of 1,300 feet, station 955-968, might be particularly referred to; 71 cubic yards concrete pedestals for trestle at station 799; 20 cubic yards dry masonry for culvert at station 1189 ; 13 cubic yards dry paving in culvert at station 926, not to speak of the many sections of clearing and grubbing noted.
I have a further statement here which shows amount due on ten per cent holdback, $13,679.87. As a matter of fact, this company had this much cash in their hands belonging to this firm of contractors, and although the work has been completed, the contractors assert they have not been able to get the company to say whether it has been completed or not, but they still keep the hold-back, and there the matter rests.


Edward Walter Nesbitt: Were these gentlemen
sub-contractors of Mackenzie and Mann or of the railway?


George Perry Graham: The contract was through Mr. Mullarkey, who is the chief engineer of Mackenzie and Mann, the main contractors.


Edward Walter Nesbitt: Were they second subcontractors?


George Perry Graham: The way Mackenzie and Mann operated was this: They took the contract as contractors; J. P. Mullarkey is the chief contractor of Mackenzie and Mann, and, to all intents and purposes, is Mac-

kenzie and Mann. I think he took the contract foT the line between Ottawa and Toronto.


Frank Oliver: Was Mr. Mullarkey subcontractor under Mackenzie and Mann?


George Perry Graham: I do not know whether
he would be a 6ub-contractor. He does the work for Mackenzie and Mann, under their contract. In the statement of moneys claimed by these contractors I find the.following:
Claims for under allowances in prices,
etc	$3,155.60
Claims for shortages in quantities returned in estimates	 20,289.73
The total claim amounts to $37,125.20. I am not going to read the details of each of these items, or put them on Hansard. They include clearing of lands and other items. To my mind, this claim seems to be absolutely right, but, if it is not right, the Government, having taken possession of the road, should at once ascertain whether this is a correct statement of claim or not, and the matter should be settled. It is an outrage, when a man has to put up a certain amount of money for carrying out a contract, and when he claims it is all completed, and wants the engineers of the company for whom he has done the work to go over it with him, see if it is completed, and have a settlement, to be told that he must stand to one side, and get no satisfaction. To my mind, the Government cannot escape the responsibility of paying any just claim that may be made for the construction of the road, either against Mackenzie and Mann as contractors, or against them as owners of the capital stock, because, to all intents and purposes, so far as the public is concerned they are one and the same thing. I do not know that I can say anything more, but I think that, in order that there may be satisfaction among the men to whom Mackenzie and Mann owe money, or who have claims against them, the Government should announce that it will be their policy to pay any just claims that are found to exist against Mackenzie and Mann as contractors or against them as owners of the capital stock.


Charles Murphy: Up to the time my hon. friend from Calgary (Mr. R. B. Bennett) spoke this afternoon, the Government, as I recall their attitude since this discussion opened, did not manifest any disposition to accept suggestions by way of improvement of the method or the details of carrying out the transaction to which the Bill now before the committee relates. However, after the hon. gentleman from Calgary had spoken, and had delivered what I think, in the opinion of this House, was one of the most incisive, complete and masterly analyses of any measure ever submitted to Parliament, the Solicitor General (Mr. Meighen), who followed him, realized the position in which the Government and its Bill had been placed by that speech. The Solicitor General proceeded to indicate that in regard to certain matters of principle, and in re-gard-to other matters of detail, the suggestions made by the member for Calgary would probably receive consideration. The Minister of Finance will recall that a complaint, voiced, perhaps, with more effectiveness by the member for Calgary than by any other speaker in this discussion-although he was not by any means the only one who voiced it-was made as to the incompleteness of the information laid before the House with regard to the Canadian Northern Railway Company. The member for South Renfrew (Mr. Graham) has dealt with one branch of that aspect of the discussion. He has pointed out that there are a number of unsettled contractors' claims. He has argued that these contractors, having built the road which is to be taken over by the Government, having put up some of their own money in connection with that work, should be paid for their services and that the Government should assume responsibility for the debts so owed these contractors. I have knowledge of some of those claims. I recall some claims that were submitted to me by contractors who did work on the Sudbury-Port Arthur line, a branch of the Canadian Northern system which was constructed by the Mackenzie and Mann company. So far as I know, these claims have not yet been settled. One claim at least in connection with the construction of the telegraph line along that system has not yet been settled; there may be others. I could give the details and verify these before the Bill goes out of committee. But if the minister will admit the principle that the Government should pay these men, who have given value to the company, then we could postpone the discussion of the details.
Another very important matter was touched upon by the member for Calgary, to which allusion had not previously been made, and which the hon. Solicitor General found it convenient to overlook in what he described as his reply. I refer to the member for Calgary's enumeration of the existing liabilities in connection with unfinished

contracts for which the Government will become liable under the terms of their proposed legislation. Let me direct the attention of the minister and of the" committee to the situation in that regard as it exists in British Columbia in connection with the Canadian Northern Pacific Railway. A news item in the Vancouver Sun of August 11, 1917, is as follows:
Viotoria, Aug:. 10.-The following telegram sent by Hon. John Oliver, minister of rhjil -ways, to Sir R. L. Borden to-day:
"British Columbia has guaranteed the principal and interest on forty-seven million nine hundred and seventy-five thousand dollars of Canadian Northern Pacific railway company bonds and has contracts obligating the railway company to expend twenty-two to twenty-five millions to complete. Are the province's interests being protected? Please reply quickly.
The under-mentioned reply from Sir R. L. Borden has been received :
"The Government proposes to acquire all the capital stock of the Canadian Northern railway company which owns all the stock of the Canadian Northern Pacific railway company. Copy of the bill now before Parliament is forwarded to-day for your consideration. The company's obligations will remain as they were before such acquirement."
The newspaper item proceeds:
By Sir Robert Borden's telegram it will be seen that the Dominion Government assumes all the Canadian Northern railway's obligations in respect to the Canadian Northern Pacific railway, both financial and as to the completion by the latter railway of its existing contracts.
If the statement of the Premier of British Columbia be correct, there is an obligation of between $22,000,000 and $25,000,000. I submit that this committee is entitled to full information, not only in regard to this particular outstanding obligation, but also in regard to all other obligations coming within that category. That is information which, I think, should have been regarded as included in the general request for information made by hon. gentlemen on this side of the House. That is the second point upon which I should like the hon. minister to furnish the committee with details before we proceed to a consideration of the Bill.
I wish to refer to another matter in connection with which the committee is entitled to the fullest information. We have had discussion as to the pledgees of the stock, the holders of bonds and other individuals or interests who will be affected by or who are bound to become beneficiaries under this legislation. Information was asked from the minister as to the identity of these individuals and interests, but so far as I am aware that information has not yet been given to the committee. I

wish to recall the incident through which the Minister of Finance was brought into public life. I refer to the letter that was signed by the eighteen gentlemen in Toronto in the spring of 1911 against reciprocity. The minister Was one of those eighteen gentlemen. The complete list of the eighteen is given in the Canadian Annual Review for 1911.	_


Rodolphe Lemieux: So-called Liberals?


Charles Murphy: I am not prepared to vouch for the politics of the gentlemen who signed that letter, nor am I at the moment concerned about that. On page 48 of the Canadian Annual Review for 1911 I read this:
The signers of the manifesto mentioned, and in the order given, were Sir Edmund Walker-
Who, as everybody knows, is general manager of the Canadian Bank of Commerce.

John L. Blaikie, President of the Canada Landed & National Investment Co.; W. D. Matthews, ex-President of the Toronto Board of Trade and Vice-President of the Dominion Bank; W. K. George, ex-President of the Canadian Manufacturers Association and of the Toronto Industrial Exhibition, and VicePresident of the Sterling Bank of Canada ; Z. A. Lash, K.C., an eminent lawyer and capitalist ; W. T. White, Vice-President and General-Manager of the National Trust Company; George T. Somers, Vice-President of the Board of Trade and President of the Sterling Bank of Canada; R. S. Gourlay, President of the Toronto Board of Trade and a piano manufacturer ; Sir W. Mortimer Clark, K.C., LL.D., ex-Lieut.-Governor of Ontario; R. J. Christie, President of Christie, Brown & Co., and a prominent manufacturer; Hugh Blain of Eby, Blain & Co., and leading wholesale merchant and director of The Globe, the chief Ontario organ of the Liberal party; H. S. Strathy, a director and for many years General-Manager of the Traders Bank of Canada; L. Goldman, Managing-Director of the North American Life Assurance Co., and G. A. Somerville who held the same position in the Manufacturers Life Insurance Company-both well-known insurance men; Wellington Francis, a prominent lawyer and Director of the Standard Bank and several companies in Toronto; J. D. Allan, exPresident of the Board of Trade; E. R. Wood Vice-President of the Central Canada Loan and Savings Company, a director on many concerns and one of the leading financiers in Canada; John C. Eaton, President of the T. Eaton Company, Limited, and said to have 17,000 employees in his service.
Those are the names of the gentlemen who signed the anti-reciproedty manifesto in 1911. 'I would ask the minister to state to the committee whether, excluding himself, the gentlemen named, or the executors or the representatives of -the estates of those who have died, hold any of this stock, or are the pledgees of this stock, or are the

holders of any of those Canadian Northern bonds, and whether Sir Clifford Sifton is the owner or holder of stock or the pledgee of any of those bonds. The committee should have that information in order properly to appreciate the legislation before tire House. I, therefore, invite my hon. friend to give to the committee the information under the three heads I have enumerated.


Sir THOMAS WHITE:: My hon. friend
has considerable imagination to link up a letter signed by eighteen Liberals in Toronto against reciprocity with the question now before the committee. My hon. friend has read the names of eighteen very distinguished citizens of Toronto. He will admit that the names are all good, and that they were quite within their rights in signing the letter they did in regard to the issue of reciprocity, just as hon. gentlemen opposite have been quite within their rights in voting against their leader on the question of compulsory military service. My hon. friend asks me if I know whether any of those gentlemen whose names he has mentioned are in any way interested in connection with the Canadian Northern Railway company. As a matter of knowledge, I do not know any shareholder or* bondholder to-day of the Canadian Northern Railway company, and the only information I have is this, that I believe that Mackenzie, Mann & company, Limited, are the owners of 51 per cent of the stock cf the Canadian Northern Railway company. It would he a matter of surprise to me if the gentlemen mentioned, Sir John Eaton, Mr. Allan, Mr. George, Mr.


Charles Murphy: Mr. Lash.


William Thomas White: Mr. Last! is second vice-president of the Canadian Northern ; Mr. Woods is vice-president or director of fhe Canadian Northern; as to the others, so far as I am aware they are not in any way connected with the Canadian Northern as stockholders or bondholders. The Solicitor General points out to me that Mr. George is a director on the Canadian Northern, representing the (Dominion Government under the action taken last session. I should1 be surprised to learn that he had any personal interest in the enterprise. I do not know .any of the bondholders of the Canadian Northern, and, as I say, the only stockholders of whom I am aware are first, the Minister of Finance and Receiver General who owns $40,000,000 worth of stock, and, secondly, Messrs. Mackenzie, Mann & company, Limited, who are the owners
of about 51 per cent, that is, they have a controlling interest in the Canadian Northern Railway company.


Charles Murphy: Can the minister say as to Sir Edmund Walker and Mr. Lash?


William Thomas White: Mr. Lash is second vice-president of the Canadian Northern. Whether Mr. Lash holds any shares, and if so to what extent he is a shareholder, I am not aware. The bondholders are largely in Great Britain. The Canadian Northern has always been known as a close corporation, the principal stock being held by Mackenzie, Mann & Company, Limited. I have no further information with regard to the others, and I should be much surprised to learn that any considerable number of them, if any of them other than those who are officially connected with fhe company, are bondholders or stockholders in the Canadian Northern Railway company.


Charles Murphy: Will the minister get
that information? I can quite understand he might not have it himself, but the information ought to be obtained and placed before the committee. We ought also to know, in the same connection the indebtedness of fhe Canadian Northern Railway company to the Canadian Bank of Commerce.


William Thomas White: I have not the
information as to the indebtedness of the Canadian Northern to the Canadian Bank of Commerce nor to any other bank. The statements laid upon the Table show the floating indebtedness of the Canadian Northern -railway.
With regard to the claims mentioned by tiie lion, member for South Renfrew (Mr. Graham) and the hon. member for Russell (Mr. Murphy), the position is this: The Dominion Government is acquiring the shares of the Canadian Northern Railway Company; that is to say, instead of the present shareholders, the Dominion Government will be the sole shareholders. The corporate organizations of the company as well as the organizations of fhe subsidiary and constituent companies will remain as at present, the intention being to administer them as corporations, that is to say as they are being administered at present. The claims against those companies can he filed with the Department of Railways precisely as they are being filed to-day. The financial controller of railways, who is here to-night, tells me there aTe comparatively few claims against Mackenzie, Mann & company,



Limited, in connection with, the Montreal to Pert Arthur section. I ha vie the details of them here. There are five altogether, and there is in the department $72,000, or nearly enough to cover those claims, the amount involved being approximately $80,000. The department lakes up those claims and looks into them carefully. The ca6e referred to by the hon. member for South Renfrew has been under the most careful consideration of the Kailway Department.


Charles Murphy: It has been outstanding tor four years.


William Thomas White: The claim is contested, and, in the opinion of the Railway Department, justly contested. The Department of Railways offered a mode of settling the question by having a re-measurement. The contractors agreed to that.


Mr. COPP:: When was that offer made?


William Thomas White: Three or four
weeks ago, and I understand the mode of determination suggested has not been adopted by the gentlemen in question. The Dominion Government could not undertake to pay claims which are usually filed for the largest possible amount. The Dominion Government takes over the Canadian Northern Railway company, and that company continues just as it has in the past. Any claims which in the past could have been filed can now be filed. The Department of Railways, as my hon. friend knows, retains moneys from subsidies and from the proceeds of guaranteed securities for the purpose of covering those claims.


George Perry Graham: If the claim of which I have spoken is found to be a just claim, will it be paid?


William Thomas White: Yes, the Department of Railways says so. The money is in the Department of Railways for that purpose.


George Perry Graham: The difficulty has been this: the claim has been outstanding for years, and the contractors could never get the company to say whether the claim was a just one or not. The company would not go into particulars, but stood the contractor off, by saying they would send the engineer to look over the work. They never did so, however, except that a man once went over it in a motor truck, which goes at 25 miles an hour, and he could not see anything. I know something about this claim, because I attempted to get it settled, not months but years ago. The engineer did not make

any examination at all of the work, I am informed, and the company have always refused to get down to close quarters in considering it. I would not ask the Government to pay a claim that was not just for this contractor or anybody else, but now that the Government has taken over the road I should like to be assured that if this is a just claim the Government will see that it is paid.


William Thomas White: There will be no different procedure from that of the past, because the Department of Railways will still be the Department of Railways and will still investigate these claims. The Department of Railways, which is a department of the Dominion Government, has the money to pay these claims, provided they are just. 'My hon. friend does not suggest that the department should pay unjust claims?


George Perry Graham: No, I made that clear.


William Thomas White: The point I make with regard to the stock we are purchasing is that it does not affect these claims at all. As the department has the money to pay the claims, no question arises as to funds, and, therefore, it is only a question of the contractors or the sub-contractors establishing their claim to the satisfaction of the department. With all due respect to my hon. friend, I do not see that we should hold up the consideration of this Bill on any such consideration as he has put forward, because, as I have said, the money is in the department to pay the claims if they are just.


Edward Walter Nesbitt: WTdll the minister tell us just what he means by saying that the Department of Railways have the money?


William Thomas White: The department holds a drawback. The subcontractor who has a claim against the contractor files his claim in the Department of Railways, which has moneys belonging to the company.


Rodolphe Lemieux: Subsidy money?


William Thomas White: Yes, or proceeds of guaranteed bonds which it holds back. So the fact of the Government becoming the owner of the stock of the Canadian Northern Railway company does not alter the situation in the least degree. The subcontractor with a just claim can still file his claim with the Department of Railways against the railway. The claims that have been mentioned are under investigation by the department, and there is no doubt that it has the money to pay the claims if they

are established. The financial comptroller of the Department of Railways informs me that in the first case drawn to onr attention by the hon. member for South Renfrew, a reasonable proposal has been made to the subcontractor, but it has not been accepted, I believe. .


George Perry Graham: I know what it was.


William Thomas White: My hon. friend asked me with reference to the bondholders and stockholders of the Canadian Northern Railway company. I have no information whatever, nor do I believe it could be obtained, with regard to the bonds, because they pass from hand to hand. With regard to the stock, I understand that Mackenzie, Mann & Company, Limited, are the owners of about 51 per cent of the stock, which is sufficient to make operative the agreement referred to in section 1 of the Bill. As to who the other stockholders are, representing one-sixth of the capital stock, I have no information. Some are in England. I understand that the Government of British Columbia is also a shareholder. But Mackenzie, Mann & Company, being the owners of 51 per cent of the stock, are in the position to lodge stock and make operative the agreement under section 1. Then it is open to others to bring in their shares, and if they do not bring lin their shares the Governor in Council may declare that those remaining shares are vested in His Majesty subject to the terms of this legislation.


George Perry Graham: I know the modus oper-andi of the Railway Department pretty well and 1 know that in the case I have referred to the chief contractor can put obstacles in the way of the adjustment of the claim and postpone settlement year after year. He may say, for instance, that the road is in a state of semi-completion. That happened with me time and again. I .have often had to call in tihe chief contractor and say: " If you won't say something about this claim one w.ay or the other, I am going to pay this subcontractor." I have done that on several occasions. Now that the Government is becoming owner of the road, it is in a position to act in unison with the Railway Department and' act more promptly than the former owners of the stock. What I am trying to draw from the Government is a statement that they will take these claims up and have them adjusted, and not act as the former railway company did, which postponed the claims year after year. All I ask is that if a just claim is established it will be paid. I understand
291J	1
that there are only some $72,000 worth of claims to pay.


William Thomas White: Some of these
claims are too high.


George Perry Graham: Some may have to be reduced. The point I am making is that when the Government takes over the road it ought to see that these men who have done work for the company shall be settled with, and should it happen that the arbitrators find that the common stock has.a value the Government would be in. a position absolutely to recoup itself for any expenditures it might make in this way.
Sir 'THOMAS WHITE:	We have the
money anyway.
'Mr. MEJGHEN:	I have made inquiry
of the comptroller as to the specific claim mentioned by my hon. friend from South Renfrew. I believe it is the claim of Macdonald and Lynn, who were subcontractors under Mullarkey, who himself wa.s a subcontractor. It appears that the dlai n h::s been standing for some time, but the comptroller te'.ls me that it is only within very recent months that it has come before the Department of Railways and Canals.


George Perry Graham: That is true, I think.


Arthur Meighen: It came before the department in this form. Macdonald and Lynn claim that the measurements were wrong. They had been paid the full apportionment coming to them, providing the measurements of the Canadian Northern railway under which Mullarkey himself took his money were correct. They claim, however, that these measurements were too small, and consequently there was more money coming to them-. The proposal made to them by the Department of Railways and Canals was that a new measurement should be made, under which Mullarkey would take a readjustment, if necessary, of his moneys, and consequently, Macdonald and Lynn a readjustment of theirs. The condition of the remeasurement was to be that if the first measurement was right Macdonald and Lynn would stand the cost of the remeasuring; if it was not right, the Canadian Northern would stand the cost. That proposal seems eminently fair, but Macdonald and Lynn have not yet acceded to it, and that is why the claim is standing. It is a matter of perfect indifference to the department, except that they would like to see the claim settled. That is the proposal that has been made, I am informed, and the ones who have not accepted it are Macdonald and Lynn.


George Perry Graham: This may 'seem a small thing, (but it is a big thing to Macdonald and Lynn, because it means practically the profit on their work. Macdonald and Lynn have begged of the Canadian Northern, or of 'Mr. Mullarkev, who is technically a subcontractor but really Mackenzie and Mann's contractor, to send a man to have these measurements taken.
They declined to send the man. Macdonald and Lynn said: "Then, we will get an engineer up and you go with him." This they also declined. Macdonald and Lynn then went to "the expense of making all the measurements themselves. The Canadian Northern declined to send a man over with them to check up the measurements. Now the proposal is made that they shall have the same thing done now which the company refused to do a few weeks or a few months ago. Of course, that was before it came before the Railway Department. I would ask the Solicitor General if the work is completed, and as I understand him to say the Canadian Northern admit that it is completed, why do they keep this $13,600 as a drawback?


William Thomas White: The controller informs me that there are some outstanding claims in respect of sub-contractors' work, and that is the reason why the drawback is held. Does it not come down to about this-there is money to pay just claims, and if a claim is established as legitimate, it will be paid? There is no question as to the money.


George Perry Graham: That is so.


William Thomas White: All my hon. friend suggests is greater activity than has existed in the past. He says that by reason of the ownership of the road being in private hands there has been delay, and that it has been under the Railway Department for investigation, and he suggests that now when the Government becomes
9 p.m. proprietor of the road there might be greater activity with a view to having this settled. But it cannot' be settled until the Railway Department determines that the claim is just. I am sure no hon. gentleman would ask the Department of Railways to pay out money in settlement of an unjust claim. I do not think we can advance the matter further than that. If the claim is legitimate, there is money to pay it, and it will be paid.


Charles Murphy: My hon. friend has become accustomed to deal in such large figures and such huge amounts of money, Aleighen.]
that he has forgotten this trifling matter of $25,000,000 in connection with the Canadian Northern Pacific.


William Thomas White: What $25,000,000 is that?


Charles Murphy: The $25,000,000 which the Premier of British Columbia says is necessary to complete the contracts of the Canadian Northern in that province. I asked the hon. gentleman if it was one of the obligations the Government was taking over, and how many obligations of a like character there were.


William Thomas White: That obligation is not affected at all by what is being done here. The Canadian Northern Pacific, as my hon. friend knows, is a company whose stock is held by the Canadian Northern Railway company. After the Government acquires the capital stock of the Canadian Northern railway, the stock of the underlying company will still be held just as it is to-day, and the company will be carried on, and be responsible for such obligations as it has, just as is the case to-day. The status of the Canadian Northern Pacific, or, indeed, of any of the subsidiary or constituent companies, or of the Canadian Northern Railway company itself, is not changed. They are the same companies, with the same liabilities, and the same obligations. I am unable to pronounce offhand as to the merits of this matter. My hon. friend quotes a telegram, or a letter, from the Premier of British Columbia which is, of course, entitled to consideration.


Charles Murphy: I also quoted the reply of the Prime Minister.
, Sir THOMAS W5HITE: When the Government secures the ownership of this stock, the system will be run as it is being run to-day. The obligation will not be lost. From the standpoint of the government of British Columbia it may be a rather fortunate thing that this Government is taking over the stock of the Canadian Northern Railway company. Whatever the obligations of the Canadian Northern Pacific may be, they would be more likely to be carried out with the control of the Canadian Nor. them Railway system in the strong hands of the Government than if it were in the hands of any private owners, especially in times like these. I am quite unable to give any definite answer to my hon. friend, but I may say, it does not appear to me that the point he mentions really touches what we are doing, the status of all these companies being maintained.


Charles Murphy: My hon. friend is very patient and very courteous-	.


William Thomas White: Why should I not be?


Charles Murphy: -but he will pardon me if I do not enter into the discussion into which he wishes to lead me, or to lead the committee. I am not concerned particularly with the position of British Columbia in regard to this matter. I simply point out a specific instance of a class of claims mentioned by the hon. member for Calgary this afternoon. I have asked the Minister of Finance how many claims of that character there are, and what is the total amount; so that we may know what we are talking over, or what we are getting in this bargain, if it be a bargain; in other words, what obligations the Dominion of Canada is assuming in connection with this matter.


William Thomas White: The Department
ol Railways has only three claims on file in respect of the Canadian Northern Pacific, aggregating $170,000. Against these claims, they have $300,000 of subsidy moneys in their hands. The particular obligation to which my hon. friend refers no doubt arises out of an agreement with the Government of British Columbia. Whatever that obligation may be, it will still remain. I do not think it is possible to give definite information with regard to the extent of claims, except indebtedness, of such a system as this- a railway system extending throughout the whole of Canada, with branch lines which have beenprojected, where bonds have been sold and the proceeds deposited against construction. It would take months, or moie, to make any statement with regard to a matter of that kind. All we are doing is acquiring a great transcontinental system. There may be cases in which lines have been projected, where the company, through inability to finance, has not been able to make the extensions.


Edward Walter Nesbitt: But, if they have sold the bonds on those projected extensions?


William Thomas White: The proceeds
would be waiting for the construction to be made.


Edward Walter Nesbitt: In all cases?


William Thomas White: In all cases.


John Howard Sinclair: Does not the minister
think it reasonable that we should find out what this will cost? Before we embark on a transaction of this kind, w'e ought to know what the ultimate cost will toe-.


Arthur Meighen: It must be clear to the hon. gentleman that a transfer of stock of any company in no way affects the obligations, whatever they may be. By this transaction the Government of Canada does not become pledged to pay any debt whatsoever. All it pays for is the stock it is getting. I did not hear the first wire read, but I understand it is in regard to some claims in respect of construction still to go on.


Charles Murphy: No. It is a telegram from the Premier of British Columbia referring to a contract 'between the Canadian Northern Pacific Railway company and the Government of British Columbia, for the construction of some line or lines, and stating that it would require from $22,000,000 to $25,000,000 to complete that contract. The Premier of British Columbia inquired if the-obligation was being taken over by the Government. '


Arthur Meighen: That obligation would
not be taken over by the Government at all, and the reply of the Prime Minister would so indicate. I remember the reply, although I cannot recall its exact wording. The Government does not take over any obligation of the Canadian Northern Railway company. We take over certain stock of the company.
The obligations of the company will remain exactly the same as before. As to what the Government will do, ci rather as to what the Canadian Northern will do after it is controlled by the Government, with respect to obligations, I would say that, generally speaking, the disposition would be to carry out any honest obligations entered into in respect of construction- If there is a contract by the Canadian Northern Pacific in respect of construction, it will probably be found that there are moneys against that contract, the proceeds of securities guaranteed by the province of British Columbia; in other words, that the financing practically is already provided for by virtue of provincial legislation and contracts. Consequently while if there is a contract the obligation of the company to carry it out will be the same as before, it will not be an obligation involving net expenditure by the company because there will be moneys against it, the proceeds of guaranteed securities perhaps already realized. There is no reason for the company changing its policy in, respect to these roads.


Edward Walter Nesbitt: If they had the money there would be no excuse for not going on with the contract.


Arthur Meighen: Perhaps the moneys that are there are not sufficient to complete the work. Generally speaking, the company would assume the same attitude afterwards as before. It would go on with such contracts as the financial conditions permitted, and I presume the contracts read in such a manner that the option to proceed or not to proceed is open to the company; at all events, whatever was open to it before will be open to it still, and I know of no reason why the policy of the company should be changed.


Edward Walter Nesbitt: What would be the policy of the Government in case contracts had been entered into to build roads that very closely duplicate other roads?


Arthur Meighen: It would depend on the outlook, on the alternative courses open. I do not know of any such obligation binding on the company, and if there was an obligation for the expenditure of money that was not wise I should be very much surprised.


Edward Walter Nesbitt: If the money was given them for a certain purpose it could not be used-dor another purpose?


Arthur Meighen: No.


John Howard Sinclair: The minister has said
that what we were doing at present was taking over that stock, which is quite true. But is it not also true that we are embarking on the nationalization of a great transcontinental railway which has certain liabilities scattered over the country very generally, and that when we complete the work we are starting to do we shall own the road free from all encumbrances, and all of these things will have to be paid? I should be surprised if there were not scores of claims of which the Government has not yet heard. While we are only purchasing the stock to-day, is it not reasonable for us to ask the Solicitor General to give a statement of what he expects to pay in the end, what the ultimate liability of the country will be when we secure the road from end to end?


Arthur Meighen: That is all before the House. The responsibilities of the company are shown on the balance sheet, and there is no reason to doubt its correctness. These liabilities are shown on the balance sheet as of the 30th June, 1916. Another balance sheet was taken off on the 30th April, 1917, and another is in course of preparation showing all liabilities of every kind up to the 30th June, 1917.


John Howard Sinclair: Will the minister give
the gross liabilities of record now?


Arthur Meighen: The liabilities will be $578,000,000 less $139,000,000, about $439,000,000. I understand the total indebtedness of t'he company is under $425,000,000. That is liabilities of every kind and description. There are certain items that appear on both sides of the account, and in this way the total liabilities are reduced to less than $425,000,000.


Edward Walter Nesbitt: Do Mackenzie and Mann own 51 per cent of the $60,000,000, or of the $100,000,000?


William Thomas White: It is 51 per cent of the $100,000,000. That is $51,000,000 of the $60,000,000 outstanding.


Rodolphe Lemieux: The minister has given the total amount of liabilities that Canada is assuming by this transaction.


Arthur Meighen: We are no't assuming
these liabilities at all.


Rodolphe Lemieux: The company controlled by the Government will have to assume these liabilities. The Government is at the back of those liabilities and will have to make them good. Did the Minister of Finance, when this matter came to a head, convene any financiers, men of high financial ability in Canada, and tell them that the Government was committing themselves to this huge transaction, as he consulted financial experts before issuing his domestic loan? The other day when it was rumoured that the minister would issue another domestic loan, I met some of the bankers on the train from Montreal to Ottawa and I learned that they were called by my hon. friend into consultation upon that loan. I do not disapprove of that; on the contrary,
I think it is wise on the part of the Minister of Finance, before embarking upon any such large transaction, to consult, outside of Parliament, the best minds of Canada.
I should like to know whether, when he and his colleagues decided to bring this legislation before Parliament, he consulted outside of Parliament, men like the president of the Bank of Montreal, the largest institution in Canada, which in this country is something bke the Bank of England in the Old Country, or whether he consulted men of the ability of Sir Frederick Taylor and other financiers of mark in Canada, before committing the country to this transaction. I should like my hon. friend to answer the point raised by my hon. friend the ex-Secretary of State (Mr. AUGUST 16, 1917
Murphy). The Minister of Finance (Sir Thomas White) has dismissed, with a wave of the hand, the question which was put by that hon. gentleman. He asked for a list of the shareholders, bondholders and pledgees of the road, and the Minister of Finance simply answered that he did not know, and, as regards the shares of the Canadian Northern, that he understood 51 per cent were controlled by the company. We are supposed to be business men in this House. We are elected to represent the seven or eight million people who compose the population of Canada. We are committing the country to the extent of nearly half a billion dollars. We are now on the eve of making an agreement with the Canadian Northern, with a view to control the balance of the stock. I understand the hon. gentleman says that 51 per cent of that stock belongs to the Canadian Northern. It seems to me that we ought to know with whom we are going to make this bargain. If that stock is really in the hands of Mackenzie and Mann, or the Canadian Northern, or, as was reported this afternoon, partly in the hands of Sir Clifford Sifton, to the amount of $750,000, we ought to know the names of the shareholders of the Canadian Northern. My hon. friend will say, "What does it matter whether A, B or C holds a few hundred shares? You have the agreement before you. Is it a good or bad agreement?" It is important, indeed it is essential, in a transaction of that magnitude, that we should know with whom we are trading, and with whom we are trucking. There is a rumour in reference to the holding of the stock of the Canadian Northern, and my hon. friend (Sir Thomas White) will forgive me if I refer to it here. I do not impugn his personal honour at all in this matter, because the hon. gentleman stated some time ago, and I accepted his word, that he had no longer any connection with the institution which has been mentioned in connection with this transaction but it is rumoured, and repeated in the press-in subdued tones, because the press is chloroformed-and in the clubs, that the men who are behind this transaction, the big shareholders of the Canadian Northern, are effectively controlling the Government. I do not say it is true, but I suspect it might be true.


George Perry Graham: The Government is going to buy out the control.


Rodolphe Lemieux: My good friend the Minister of Finance laughs.


William Thomas White: I cannot help it.


Rodolphe Lemieux: The hon. gentleman
knows the political history of Canada for the past twenty years, surely. He was a member of the Liberal party in 1904. What happened then? Is it not a fact that the Canadian Northern in 1904 got control, a few days before nomination in the general election, of a powerful daily in Montreal, which, heretofore, had been supporting the Government; that, under the influence of the Canadian Northern, that paper made a right-about turn, just on the eve of nomination day? Is it not a fact that, at the same time, it was reported that the Canadian Northern would see that three ministers of the Crown would be arrested Sir Clifford Sitfon's name was mentioned as one of them-and that a number of candidates would be bought outright by the company, in order to get control of the Parliament to be elected in 1904? I am not repeating cock-and-bull stories. Let my hon. friend put the question to the member for South York (Mr. W. F. Maclean). He brought the whole matter before the House in regard to the election of 1904, and hon. gentlemen will see by reference to Hansard that he stated that there had been a deliberate conspiracy by that very company to get control of the Parliament of Canada.
I am not inventing the story. It is well known, and probably my hon. friend is well aware of it. Did it succeed? The plot failed miserably.


Arthur Meighen: They got a guarantee of bonds from the hon. gentleman's Government.


Rodolphe Lemieux: Let the megaphone of
Mackenzie and Mann keep silent for a few minutes. There has never been any insinuation or accusation against any of the members of the Laurier Government on account of that guarantee of bonds, and the hon. gentleman is the first to make the insinuation this evening, but it is only an insinuation worthy of him.


Arthur Meighen: What is the hon. gentleman making this last half hour?


Rodolphe Lemieux: I have not been making any insinuations. I stated two things, that the people are reporting, from one end of the country to the other, that the Canadian Northern have control of this Government, and that, in this transaction, they are the powerful interests represented. I stated what is current in the city of Ottawa, that Sir Clifford Sifton is interested to the extent of $750,000 worth of shares in the Canadian Northern. That explains the

activities of some gentlemen who want to form a win-the-war party, and who want to get a union Government. Such things happen in other countries, where people are perhaps less callous than they are in Canada, 'but they do not last. In France some years ago, at the time of the Panama scandal, it was proven unfortunately that mostly all the members of the Government and of Parliament were in the hands of the Panama companies, and there was nearly a revolution in France as a result of it. In England when, a few years ago, the Marconi scandal was rumoured, it nearly destroyed the career of the present Prime Minister of England, and there was only the suspicion that he had been given a hint to speculate in Marconi shares.
It is very generally stated throughout Canada that the Canadian Northern owns and controls the present Government, and that we are now embarking on a transaction the object of which is to make richer people who are already millionaires. These people, it is said, are afraid of the future; they think that their private enterprise is not safe, and that it is better they should be made secure by public ownership. I ask the minister to be frank with the country and to state positively who are the shareholders, pledgees and bondholders who will profit by this transaction. I want to know with whom I am dealing. I do not want to act blindly; I want to deal with A, B and C. I want to know these people who will get the money out of the Canadian treasury. I am a taxpayer; I am responsible to my electors for the taxation Bills which come before this House. In that respect I will give my hon. friend my support to a certain extent, reserving my right to criticise what I believe to be unjust. I believe, however, that the Income Tax Bill proceeds upon a right principle. On behalf of my electors, who will be called upon to pay the half-billion dollars involved in this transaction, I want to know to whom this money is going. Tell me, Mr. Chairman, of any transaction-not necessarily a transaction of this importance, but any transaction-in which the parties are not known by their names?


Arthur Meighen: The North Atlantic Trading Company.


Rodolphe Lemieux: My hon. friend, in order to make some defence of the scandalous proposal that we are now considering, is obliged to refer to the North Atlantic Trading Company. Did he approve of the absence of names in that case?


Arthur Meighen: I was not here.


Rodolphe Lemieux: Why does tny hon. friend mention it, then?


Arthur Meighen: Because the hon. gentleman approved it.


Rodolphe Lemieux: Yes, I approved it; but if I was wrong, is the hon. gentleman right to-day?


Arthur Meighen: We are not doing the same|thing.


Rodolphe Lemieux: If at that time the Government was misled by its agent in England, is my hon. friend right to-day?


Arthur Meighen: Certainly we are right.


Rodolphe Lemieux: My hon. friend is ready to involve the credit of this country to the extent of $439,000,000, as he said a moment ago; but he will not give to Parliament the names of the parties with whom we are going to deal. I protest most vehemently against that procedure. We have a right to know to whom this money shall go. Otherwise, we shall be compelled to believe that what is being said on the street is true; that you are making wealthier men who are already immensely wealthy.


William Thomas White: My hon. friend has been quite melodramatic; he has indulged in a good deal of what you might call romance. Departing from the sober discussion of facts, he mentioned street gossip and club rumour.


Rodolphe Lemieux: There is no free press; the press is chloroformed.


William Thomas White: I feel sorry for my hon. friend in his distrust of the press.


Rodolphe Lemieux: That is how the news was spread in the old days.


William Thomas White: I think a man's case is almost hopeless when he distrusts the press, because the last safeguard of liberty will be the press.


Rodolphe Lemieux: Not a gagged press, a free press.


William Thomas White: There is not
enough money in Canada to gag the Canadian press. My hon. friend is talking about a most important transaction. I usually talk to the House seriously about serious matters,and I shall answer my hon. friend' He has referred to this transaction as being a scandalous one. Let us consider for a moment the situation with which this Government is confronted. Let us go away from gossip and rumour; let us get down to facts. We have been

confronted with a great fact during the last six years, namely, the condition of certain railway systems for which the Government of which my hon. friend was a member was mainly responsible, the Grand Trunk, the National Transcontinental and the Canadian Northern Railway systems. We found the Canadian Northern Railway system, with its branches in three western provinces; with its lines through British Columbia half completed; with its line between Montreal and Port Arthur, upon which the Government of which my hon. friend was a member had given a guarantee at the rate of $35,000 a mile, a total of $35,000,000 uncompleted. We found that the Dominion Government under the Administration of which my hon. friend was a member had pledged its credit in connection with the Canadian Northern's financing. We were confronted, I say, with a grave fact, not with a theory. From time to time we have had to bring down to this House measures of assistance in order that the Canadian Northern Railway company with which was involved the credit of the Dominion, under legislation for which hon. gentlemen opposite were responsible, and with which was involved the credit of the provinces of Canada, might be enabled to complete its system and continue as a going concern. The responsibility for the Canadian Northern railway system was not upon- this Government, but the responsibility was upon us of seeing that the system was completed and continued as a solvent, going concern to serve the people. It is idle to talk of the eighteen who signed the manifesto against reciprocity. What has that to do with the Canadian Northern system?


Charles Murphy: That is what we want to know.


William Thomas White: What had it to
do with the Canadian Northern system, which was jn existence long before 1911, when the manifesto was signed?


Charles Murphy: If my hon. friend will
answer our question and tell us where the stock and bonds are held, we will find out what at has to do with it. If he does not, then we will suspect what it has to do with it.


William Thomas White: As I was saying, we brought down from year to year legislation that was necessary to complete the system and to continue it as a going concern. Last year we announced that the 'situation had become intolerable whereby
the Canadian Northern and the Grand Trunk Pacific were coming to Ottawa each year for the purpose of getting further assistance. I stated that we would appoint a commission, and I indicated that in order to solve tills question permanently it might be necessary to take over one or more of the railway systems of Canada- even to nationalize the entire system of railways. This year the Canadian Northern Railway company, for reasons that have been stated a dozen times to the House during the present session, found itself in need of further aid.
We determined to take over that system in order that it might be owned and controlled by and for the people of Canada. What other way of doing it is there than the way in which we are doing it or by expropriation? We have discussed the merits of the two modes of taking over this stock- the one, by expropriation, the other, by purchase of the stock. I do not intend to discuss that now. I am simply leading up to the point at which we are at present, namely, that, in order to save this system and to save the credit of the Dominion and of the provinces, we are taking it over for the people of Canada. What is the mode of taking it over? It is this: The Dominion Government having already $40,000,000 of the stock of the company, there remains outstanding $60,000,000 of stock.


Rodolphe Lemieux: Who owns that stock?


William Thomas White: Fifty per cent, of the entire issue, that is $51,000,000, is owned, as I have stated, by Mackenzie, Mann & Company, Limited. The agreement into which we are about to enter will provide that that $51,000,000 worth of stock will be deposited. Then there will be the right to the other owners and pledgees of the stock to come in and participate. If they do not do so, the Dominion Government may declare their stock to be vested in His Majesty, to be paid for at a price determined by arbitration under the provisions of this legislation. I have stated the position truly to the House. The 51 per cent of stock which, with the Dominions's 40 per cent, will give the Dominion 91 per cent, will come in at once. That leaves 9 per cent of stock. At present I do not know who are the shareholders of that 9 per cent of stock, and I do not believe that is relevant to the consideration of this question, because if the 9 per cent does not come in, the Governor in Council may declare it to be vested in His Majesty to be paid for at the price determined by arbi-

tration. If there is any information which I can get for the committee, I shall be glad to get it but, so far as I can see, the information asked for is not relevant to the consideration of this question, because we get in the 51 per cent which makes operative this agreement.
With regard to the bonds, it would not be possible for this Government, nor for any other Government, to ascertain the bondholders of the Canadian Northern Railway company. There must be tens of thousands of bondholders, principally in Great Britain. There are note-holders in the United States of America. Hon. gentlemen know that bonds and bearer notes pass from hand to hand; there is no registration of them, and the same remark can also be made with regard to stock. My hon. friend would have some difficulty in ascertaining the shareholders of the Canadian Pacific Railway company to-day. He knows there are Shares of that company, representing hundreds of thousands of dollars of par value, standing in the names of brokers or held in vaults endorsed in blank.


Charles Murphy: Even that would be information.


William Thomas White: I am giving the members of the committee the full information I have respecting this transaction. I have indicated-and I am sure it was unnecessary-why this transaction is being undertaken. It is not a question of buying stock for the sake of buying the stock. The transaction is to save this railway system as a going concern for the people of Canada, and the method we have adopted is by buying the stock. Let me ask my hon. friend from Rouville (Mr. Lemieux), who speaks about rumour and gossip connected with this transaction and who insinuates some impropriety in connection with it, would I be justified in making any insinuations in reference to the guarantee of $,'15,000,000 which the late Government gave in connection with the Canadian Northern from Montreal to Port Arthur; or with respect to the guarantees given in connection with the Grand Trunk Pacific and with the contracts let on the National Transcontinental, unless I had evidence to sustain them? Would I be justified in saying that there were rumours at that time respecting those transactions? I do not believe I would. This transaction is entered into for the purpose of saving the Canadian Northern Railway system. It seems to me to be the only way in which that can be done, unless you continue to 
give aid from year to year. My hon. friend (Mr. Lemieux) voted, in 1914, for a resolution in which his leader moved that the Dominion Government should acquire this stock by arbitration, precisely in the mode in which we are acquiring it, and he named a maximum price of $30,000,000. Supposing to-night I ask my hon. friend: Whom was he trying to help on that occasion? Would he not be justified in saying that I was unjust in my insinuations? My hon. friend is on record as having voted for that resolution. The real fact of the matter is that this talk is largely political, and my hon. friend knows that perfectly well. It is a pity, in connection with a transaction of this magnitude, undertaken for the purpose I have indicated, should be made the subject of baseless rumour and insinuation. The course my hon. friend has seen fit to adopt is not justifiable. There is nothing new about legislation brought down to assist railways in this country, the problem of transportation being as it is of the utmost importance to the community as a whole. Every year legislation of this character is brought down. Why then upon this occasion should there be any insinuations based upon what my hon. friend has termed " street rumour " or " club gossip "? I protest against the insinuations of my hon. friend. The transaction has been undertaken for the reasons I have given; it is one of the most important transactions ever before Parliament. I am always prepared to discuss seriously, before the House or in committee, any transaction for which I may be sponsor, tout my hon. friend is not fair to members of the Government when.he puts forward insinuations upon unsupported evidence. He has stated] that Sir Clifford Sifton is an owner of some of the stock of the Canadian Northern Railway company. I can state to my hon. friend, as I have stated before, that I have absolutely no information as to the stockholders of the Canadian Northern Railway company, with the exception that I believe Mackenzie, Mann & Company, Limited own 51 per cent of the capital stock which could be lodged so as to make this agreement operative.


Rodolphe Lemieux: I have never impugned the fair name and personal honesty of my hon. friend; I have never made any insinuations againsrt him; I believe he is acting in good faith; but I repeat this again: If he is anxious that those rumours should cease, he should do what any man of business ability-and the minister can claim

to have business ability-would do in a circumstance such as this. As he states, this is one of the greatest transactions that have come before this Parliament since Confederation. I do not believe, with the exception of t'he Canadian Pacific and the Grand Trunk Pacific, there has ever been a transaction of this magnitude. I ask in all fairness-are we not entitled to have at least the names of the parties who are going to benefit by this transaction? My claim is that the Canadian Northern is only a blind. We are going to pay out a large sum of money-whatever value will be attached by the arbitrators to the balance of that stock.
Besides that, we are assuming all the liabilities of the Canadian Northern company. I ask again, are not the common people of this country, whom you and I, Sir, represent, entitled to have the names of the parties who are going to benefit by this transaction? If there are no shareholders besides Mackenzie and Mann, well and good; it will be easy for us to discuss the transaction. The minister knows the secretary of the company, and with a stroke of the pen he could get this information from him.


William Thomas White: If he has it.


Rodolphe Lemieux: They have a list of the shareholders and of the pledgees, and they know where the bonds are. Surely Parliament is entitled to this information. My hon. friend says that this is a big order, and complains that I am suspicious. Am I not right in being suspicious, Mr. Chairman, when I hear the Solicitor General waxing eloquent about this transaction, defending the reference to the arbitrators, and calling black to-day what he called white in 1914 on this very question. Speaking on this question in 1914 my hon. friend said (Hansard, page 3693) :
Or, if we choose, we can ourselves, by Act of Parliament, legislate that that road is the property of the people of this country and that the interests of all persons whatsoever outside of the people of Canada are eliminated.
That is what my hon. friend said in 1914.


Arthur Meighen: It is quite true, too.


Rodolphe Lemieux: Perhaps my hon. friend will say whether the next sentence has the same ring of truth with it. My hon. friend had just said that we were passing this legislation to save the Canadian Northern from default, and, speaking of clause 24, he said:
The idea of that is that we are at this time making the interested parties and all stockholders parties to this contract and we say to them:	We now and here bind you that
should the day of default come you shall not appeal to the Parliament of Canada on the ground of your road being confiscated in any way whatever, but you here and now leave the Parliament of this country free from any such question and untrammelled in every way to deal with the property of the Canadian Northern as it may be advised in the interests of the people of this country. That is the summary procedure outlined here for taking over the road.
Hon. gentlemen might well drown those words in applause, because they are the condemnation of this transaction by my hon. friend. The company has gone to the wall; it cannot meet its liabilities. In 1914 we passed legislation to the effect that the moment the company went into default the axe would drop under section 24. My hon. friend gave notice to the stockholders, to Sir Clifford Sifton and others, that they could not come here and get value on that stock after the property has been confiscated. And yet, to-day, the Government come before Parliament and say: "We must save this company or the credit of Canada will be impaired." It was stated this afternoon that it would be much better to send the whole business into the hands of a receiver than to impair the credit of Canada to the extent of half a billion dollars. My hon. friend, who is quick at figures, will perhaps tell me just what the liabilities amount to per capita of our population. I have not made the calculation myself, but I ask my hon. friend was he not affrighted when he took this leap in the dark? He knows that our war debt to-day is over one billion dollars, and before the war is over it will be a very much larger amount. The population of this country is seven million or a little more, and yet my hon. friend comes before Parliament and coolly says that we must give the company more compensation. It is true that they are in default. It is true they have built their system with the public moneys of Canada and of the various provinces. It is true that we have ladled them out tons of silver and gold. Notwithstanding all that, during this terrible war, when the essential thing for Canada is to maintain unimpaired her credit in the financial markets of the world, my hon. friend says: "Yes, I have considered all that, and I now come before Parliament and insist that the Canadian Northern be satisfied." You may say what you like, Mr. Chairman, but I say that this is a scandalous transaction, and we should be given the names of those who are to benefit by it. The public have no voice in this matter, the press being absolutely silent, because it has been silenced, as it happens.
460G

unfortunately, in many democracies. It was silenced in New York by the ring that ran New York for so many years, and who, by the way, ended up in Sing Sing. It was silenced in San Francisco until the citizens took the law into their own hands. It was silenced in Chicago a few years ago when a few men were directing the municipal government of that great city, but the day came when a few honest voices were heard, and then the boodlers disappeared and public opinion came into its own.
In conclusion, I want to ask any of those hon. gentlemen who drowned in applause the words of the Solicitor General which I quoted a moment ago, whether they have seriously considered this question. Have they consulted their electors about it, and has it their approval? Were they ever authorized by their electors to countenance this legislation? I will not be stampeded by any one. I represent the farmers of the county of Eouville. I represent the people of this country.


Mr. SMITH:: Quebec.


Some hon. MEMBERS:: Shame.


Rodolphe Lemieux: Do not blame him. He wants to get a senatorship. The hon. gentleman will shortly be one of the C.O.D. senators. So we can well understand why he stands so firmly, not for the people of this country, but for Mackenzie and Mann, the masters of this Administration.


Arthur Meighen: It must be a very great solace to the heart of the 'hon. member for Rouville (iMr. Lemieux) to get off one or two of these orations occasionally.


Rodolphe Lemieux: I am not a megaphone.


Arthur Meighen: Did you, Mr. Chairman, ever see so fine a spectacle of the form', trappings 'and the suits of oratory without the substance at all? The hon. gentleman has at last reached that pitiable state of mental hopelessness where he is in the condition ascribed by Macaulay to Southey of being able to believe without reason and to hate without provocation. He also seems to have albundant- time for standing around street comers and listening to gossip, or slitting around the club, hearing something there, and retailing it before this Parliament, which, I must say, has much better to do 'than listen to street comer gossip.
" The masters of the Administration," because we offer, because we propose, to take from' fhetm their stock and pay its value arbitrated by a competent tribunal. Who were the masters of the Opposition in 1914, when the very same thing was proposed? 
Who was the master of the hon. member for Rouville when he wanted us, in 1914, to take the same stock for $30,000,000 at a maximum, and pay it to the very same men? Before he voted for that resolution, in 1914, why did he not stand in his might, and majesty, and grace, and demand that we know to whom that $30,000,000 was going? Why did he not ask the leader of the Opposition, whom he was following, to take care that this money did not get into tainted hands? Will he answer? Was he chloroformed then, as he says the press is chloroformed to-day? Ah, the chloroformed press ! What is the press that is chloroformed? Is the press to be described as chloroformed because it cannot follow the vaccillating, deviating, methods of hon. gentlemen opposite? How can it follow those hon. gentlemen now, if it followed them three years ago? Is the press expected' to turn, because hon. gentlemen turn their hacks on their representations? What is the chloroformed press? Is the Toronto Star chloroformed by Mackenzie-Mann money? Is that the insinuation? The Toronto Star approves of this transaction, and approves of this policy. Why does not the hon. gentleman answer? Is- the Toronto Globe chloroformed by the money ^^'Mackenzie and Mann? The Toronto Globe will thank the hon. gentleman for his insinuation. After to-night, the last man to mention insinuation in this House should be the hon. member for Rouville-standing here and regaling us with street gossip, and then lecturing us on insinuations. I do not know who are the stockholders of the Canadian Northern, and for my part I am not interested in knowing. I would deal with those stock-holders just the same if the stock were held by the Angel Gabriel as if it were held by His Satanic Majesty?


Some hon. MEMBERS:: No doubt.


Arthur Meighen: It did not make any difference to the hon. gentleman in 1914 whether he had the information or not, but it has become of great importance now, because he thinks he can throw some nasty thought into the minds of the people of Canada which he does not believe for a minute himself. Never until to-night have I heard the name of Sir Clifford Sifton mentioned in connection with the stock of the Canadian Northern, I had never heard it until I heard it from the lips of the hon. member for Russell and expatiated on later by the hon. member for Rouville. I know Mackenzie and Mann, Limited, are the owners of fifty-one per cent of the stock, and I know those are the only persons with

whom we have to deal. I know that, once we make our agreement with them, the others, whoever they may be, have to take their luck on the valuation fixed by the tribunal which values the stock of Mackenzie and Mann Limited. I know nothing whatever about it, but I would be surprised if Sir Clifford Sifton owned a dollar of this stock. I am ready to give the committee not only all I know but all I have any reason to believe as being correct. Fifty-one per cent of the stock is owned by Mackenzie and Mann. Forty per cent is owned by the Dominion of Canada; that is ninety-one per cent. Only nine per cent is left. A substantial part of this nine per cent was owned in England-and I suppose is owned there yet- in respect of a certain bond issue, or more than one bond issue, which was financed or underwritten by a banking firm there. I understand this banking firm got a certain amount of stock as a bonus for the underwriting of the stock. I am not sure if I remember correctly the name of the firm, but if my recollection serves me right it is Lazards. I also understand a director of the company over there, Mr. Horne Payne, owns a portion of the stock I do not know whether that is correct or not. Then the Government of British Columbia has a substantial portion of this nine per cent, which it holds as security for certain construction work of the Canadian Northern Pacific still incomplete. I am speaking subject to correction, and only from my recollection of the information given. I understand the government of British Columbia holds about $1,500,000; in any event, it is a substantial sum. Beyond that, I have never had the slightest information, beyond that I have never made the slightest inquiry, and o uld not give the committee a particle of information more than I have given. So far as I am aware, no member of the Government has any more information, and I doubt if an'- member ever happened to get that much.


Rodolphe Lemieux: Could you not exact that information from the company?


Arthur Meighen: I presume the company could give the stockholders recorded on their books.


Mr. MACDONALD:: Why don't you get it?


Arthur Meighen: Because it makes no difference in the world. Why did not my hon. friend get it three years ago?


Edward Mortimer Macdonald: Does my hon. friend say to this House and this country that it makes no difference who the owners of the stock are?


Arthur Meighen: Undoubtedly it makes no difference. We are dealing with Mackenzie and Mann, Limited, the owners of fifty-one per cent of the stock,
10 p.m. and it does not make five cents difference to the country who owns the rest of the stock.


Edward Mortimer Macdonald: My hon. friend says that Mackenzie and Mann are the registered owners of fitfe-sixths of the stock of the Canadian Northern railway. If he knows that, why does he not tell us who are the owners of the one-sixth?


Arthur Meighen: Because I don't know.


Edward Mortimer Macdonald: Why should they not tell us?


Arthur Meighen: It is not of any importance. whatever. If the hon. gentleman will just wait a moment, I will ask him a question. Before he voted for the same resolution in 1914, to submit the same stock to arbitration at a maximum value of $30,000,000, why did he not insist on getting the information he now seeks?


Edward Mortimer Macdonald: My hon. friend is
harping on that. This afternoon, for instance, he undertook to say that I moved in the House three years ago that the proposition should not be considered for six months. That is the species of casuistry my hon. friend deals in. He knows what I moved was a parliamentary motion. He knows that he and his Government voted down the motion of the hon. member for West Middlesex (Mr. Ross) that the whole question, should be investigated. And be knows that when this motion was voted down my proposition with regard to getting the stock was suggested simply as an alternative.


Arthur Meighen: What has that to do
with the question I asked? I asked why the hon. gentleman supported an alternative- a third, or fourth, or sixth, I do not know which it was-why did he support that alternative without the very information he is demanding to-night?


Edward Mortimer Macdonald: Because my hon. friend had, as a member the Government, voted down a resolution moved on this side of the House, asking that the information should be given.


Arthur Meighen: Not at all, there was no such resolution.


Edward Mortimer Macdonald: I beg my hon. friend's pardon. The resolution of the hon. member from West Middlesex was a direct

resolution asking for an investigation into the general affairs of the Company.


Arthur Meighen: But, not asking an
investigation as to who owned the stock. After Parliament voted down the resolution that would have required the names of the stockholders, why did the hon. gentleman support a resolution to pay shareholders whose names he had not?


Edward Mortimer Macdonald: We would have
found it out had the resolution of the hon. member for West Middlesex carried.


Arthur Meighen: Why did he not vote against it? What was the good of finding out who they were after the money was voted?


Rodolphe Lemieux: It was suggested to the Government. The Opposition did not pay it, the Government paid it.


Arthur Meighen: The same proposal precisely, the same principle that hon. gentleman voted for on their own motion in 1914 without inquiry as to who owned the other one-ninth of the shares, they are now opposing, and they say the country cannot deal with the stock until they know who owns it. I know of no objection to getting any information as to who owns the stock. Nobody ever said he would not get the information. I contend that it is not of importance to the committee, but if the committee considers that it is, I see no objection to getting any information available. I never considered that it made the slightest difference to the country, for whom I was acting, whether the stock was owned by Tom Smith in England or John Brown in Canada. I know that Mackenzie, Mann & <10., Limited, own the greater part of the stock and I presume that this country will presume that the- people of Canada will do just as fairly by any individual in this country or any other country as by Sir William Mackenzie or Sir Donald Mann.


Charles Murphy: The hon. gentleman has said that Mackenzie, Mann & Co., Limited own 51 per cent of the stock. Will he say whether this stock or any .portion of it is pledged, and if so, with whom?


Arthur Meighen: I do not know that I can say to whom it is pledged. Some is pledged to the province of British Columbia but I think the bulk is pledged to their bankers as security for various advances, which advances to a considerable extent I understand were made in respect to undertakings the primary object of which was

to bring freight to the company. I do not know the proportion, however, which can be said to be attributable to advances of that nature. My information is, speaking from recollection although I did not pay very close attention, that the whole of the stock is pledged and pledged in support of advances, and particularly to the bankers of Mackenzie and Mann.


Charles Murphy: Who are the bankers?


Arthur Meighen: The Canadian Bank of Commerce.


Charles Murphy: I have to express my personal thanks to the Solicitor General for the information which has just been extracted from him. If we had got that information earlier in the evening we would have made very substantial progress. Let me point out what has been going on in this House recently. Within the last two weeks the business of this House has on many occasions been transacted without the quorum required by the rules of Parliament. We have voted estimates without the necessary quorum. We have, indeed, enacted laws without the necessary quorum being present. Now, when a quorum is present, we are asked to pass, perhaps, as important a piece of legislation as ever came before Parliament, without having the information before us which would be insisted upon and exacted by the smallest company doing business in Canada.
Let me illustrate the .position of affairs. My hon. friend the Minister of Finance (Sir Thomas White), in speaking of the relations between this Government and the Canadian Northern railway, said that this Government came into power and found the Canadian Northern system. I submit that my hon. friend rather inverted the order of things-the Canadian Northern Railway system found my hon. friend and several of his colleagues and put them in power. That was the order of the happening. That having happened, let me illustrate the position of affairs. Up to that time the Minister of Finance had been the capable manager of the National Trust company. In that capacity he occupied a fiduciary position. He was, in point of fact, the trustee for those who had their investments in that company. To-day he occupies an analogous position with relation to the people of Canada. Now, while my hon. friend was manager of the National Trust company, if he had gone to a meeting of the board of directors of that company and had said: Gentlemen, here is a transaction through which I

propose to 'acquire for this company, we will say a railway, here is certain information with regard to it. If he had then been asked: With whom are we dealing, who are the beneficiaries, to whom our money is to be paid? And if my hon. friend had said: Well, I do not know these gentlemen, I do not know who they are-then I submit he would have been told to go and find out who these gentlemen were and not to come back to the board meeting until he had that information. The position is exactly analogous here. The hon. gentleman comes here in a trust capacity. He asks this committee and this Parliament to enter into a transaction, and when he is asked with whom, he says: I do not know. In effect, that is what he says, that personally he has not the information for which the Opposition asks. I for one, having had to endure the spectacle of business in this House being transacted, with regard both to estimates and to legislation, without a quorum, do not propose to sit here and take part in a transaction of this kind without registering my protest against the putting through of this legislation unless we are given the information for which we have asked, information which the Solicitor General has said, in part at least, is reasonable by virtue of the fact that he has furnished some of it himself, where this stock and where these bonds are registered. There are records, and what these records disclose should be made known to us. I agree that it may be impossible to find out at the present moment the stock holding and the bond holding, but at least we should have a knowledge of what the last registration discloses. Without that, I submit, it is improper in the highest degree to ask this committee to proceed with this legislation. I register my protest against such proceedings on the part of the Government.


Edward Walter Nesbitt: I know that the Solicitor General does not wish to misrepresent any one, and so, before leaving that question of the resolution voted on in 1914, I wish to say that the resolution set forth that the whole of the stock was to be pledged with the Dominion Government for a period of five years, and if Mackenzie and Mann in that time were able to make a success of the operation, they were to be handed back the stock which was to be held in trust. Thus, at the end of five years, it would not have been necessary for the Government to find out who held the stock, because they would have held it themselves.


Arthur Meighen: That was on a previous resolution moved by the bon. member for St. John (Mr. Pugsley).
Later on the bald resolution was proposed, seconded by the hon. gentleman from St. John, to the effect that no aid should-be given until the contract was made with the shareholders for the acquisition of the stock in a reasonable time, the value to be fixed by arbitration, but not to exceed $30,000,000.


Edward Walter Nesbitt: That was in the first resolution.


Arthur Meighen: 
Edward Walter Nesbitt: Has the hon. gentleman that resolution before him?


Arthur Meighen: Yes. At page 4634 of the Hansard of 1914, the resolution appears, and reads as follows:
That the said Bill be not now read a third time, but that it be resolved that, under existing circumstances no assistance should be given to the Canadian Northern Railway unless at the same time it is provided that the Government have power, within a reasonable time, to acquire the ownership of the entire stock

of the company at a price to be fixed by arbitration, but not to exceed $30,000,000.


John Howard Sinclair: The answer to my hon. friend is that if he had voted for that resolution the country would have saved $15,000,000, because he was proposing to advance $45,000,000?
Mr. MEIG'HEN: No, we would have to pay the $15,000,000 anyway, because that sum was to cover necessary expenses for betterment and interest on outlying securities. That money would have to be paid if the Government owned the road, just the same as if the company owned it.


John Howard Sinclair: The hon. gentleman has voted to advance $60,000,000 since that resolution was moved. If he had adopted the resolution moved on this side of the House he would have saved $30,000,000.


Arthur Meighen: No, the resolution said that if we had adopted that agreement we would advance $45,000,000, and would be able to get the common stock at $30,000,000 extra.


Frank Oliver: I think this co<mmittee
has something more important to deal with than what occurred three or four years ago. I submit that, whether our policy was well-judged or ill-judged has nothing to do with the responsibilities resting on the shoulders of the Government to-day. It is only fair, however, to consider the difference in the circumstances between the conditions three years ago and conditions to-day. At the time these matters were under consideration three years ago Parliament was considering the guarantee of $45,000,000 of bonds of the Canadian Northern.
I he guarantee had not been given, but was under discussion. At that time war had not broken out, and conditions were vastly different from those existing to-day, so that I do not think it is profitable, or to the point, that we should be instructed as to what one member or another member on this side of the House did three years ago, under circumstances entirely different. What was done then was done for good and sufficient reason, and what is being done to-day is being done for good and sufficient reasons, on our side of the House at any rate. Does the Government realize the difference between the conditions as they exist now, and as they were three years ago, when they gave that guarantee of $45,000? What was the debt of Canada at that time? Was it $300,000,000? What is it to-day? $1,200,000,000, or thereabouts, as I understood the Finance Min-

ister to say. Are the conditions the same in assuming a responsibility such as this, with a debt of $1,200,000,000, and the debt piling up and piling up, as it must do for an unknown period? Whether we considered wisely or not in 1914, we should consider wisely to-day where our money is going, what we are going to do with it, and where it is going to come from. If we are to meet the stupendous obligations that have piled up against us, and are piling up against us from day to day, which arise from circumstances not under our control, should we not take every care to restrict the growth of obligations that are under our control? Is that not a reason why we should most carefully consider the taking over of the vast responsibilities of the Canadian Northern railway, if that could possibly be avoided, and is it not a reason why we should consider carefully the payment of money for something that has no value? We are to buy $60,000,000 of the stock of this Canadian Northern Railway company, for what purpose? To give us control of the railway company and of the railway. We do not need to buy $60,000,000 stock of the company in order to get control of it. Mackenzie and Mann have control of the railway to-day and they have only $51,000,000 of that stock, and we could have control of the railway just as complete as Mackenzie and Mann have, if we acquired $11,000,000 of the stock. Therefore, the purchase by this Government of the difference between $11,000,000 and $60,000,000 of stock has absolutely no warrant whatever, except that it is in the nature of a hand-out to the parties concerned. Has Canada money to throw away under such circumstances? Is it confiscation to leave in the hands of whoever may happen to own it to-day $49,000,000 of the stock that they own? There is no confiscation about that.


Arthur Meighen: Does the hon. gentleman think it would be fair to the people of Canada to acquire eleven per cent more, own fifty one per cent, take control, and thereby finance the company, continue to finance it, and leave in the hands of private stockholders forty-nine per cent, which stock would get the whole benefit of that financing, and ultimately become of great value?


Frank Oliver: I am not so sure that the stock will ultimately become of great value, as a result of Government operation of the road, but I am sure it will become of great value as a result of this bargain. I am satisfied the arbitration provided for

in this Act will in fact, as in intent, convey to the owners of that stock money out of the treasury of Canada out of proportion to the value of the stock as a business proposition. It will mean depletion of the treasury of Canada; it will mean injury to the credit of Canada, for the benefit of the parties interested in that stock. Now we know who is interested in the stock; it is not Mackenzie and Mann, but the Bank of Commerce. It is not a matter of rumour or of supposition that the Bank of Commerce is one of that financial group in Toronto that has a strangle hold on the progress and prosperity of this Dominion; that group to render advantage to which this Government exists and for the benefit of which the Government has shaped its legislation since it took office. To-day, for the advantage of that member of the group, it proposes to make such a raid on the Dominion treasury as never was made in the history of the Dominion.


Arthur Meighen: Is that not the Cox
group that my hon. friend refers to?


Frank Oliver: I could not say; I do not know.


Arthur Meighen: That is the way I have heard it described-as the George A. Cox group.


Frank Oliver: Who is Mr. Cox?


Arthur Meighen: It is known as the Cox group. Senator Cox was at the head of the group at that time.


Frank Oliver: Where is the gentleman
whose name the Solicitor-General has used?


Arthur Meighen: He is dead.


Frank Oliver: For what purpose does
my hon. friend drag a dead man's name into this discussion?


Arthur Meighen: I did not drag any
name into this discussion.


Frank Oliver: My hon. friend did.


Arthur Meighen: Has my hon. friend
never mentioned in this House the name of one who had departed?


Frank Oliver: I am not talking about what I have done; I am talking about what my hon. friend has done.


Arthur Meighen: I have never dishonoured the name of any man in this House. , I mentioned the name of George A. Cox in connection with the group mentioned by my hon. friend. I do not impugn either him or the group.


Frank Oliver: Precisely, the group that is a menace to Canada.


Arthur Meighen: I did not say so.
(Mr. OLIVER: I say so.


Arthur Meighen: You lampooned him, I did not.


Frank Oliver: No, I did not. George A. Cox has passed from this life; he is before another Judge than this Parliament, jl did not bring his name here. I am dealing with men who are alive, and who are sitting before me in this House. I say that no such raid was ever made on the treasury of Canada as is being made under the terms of this Bill for the benefit of the Bank of Commerce, toy a Government which sits here in large measure because of the exertions and activities of the Bank of Commerce and their allies in the city of Toronto.
I was struck toy the suggestion of the Minister of Finance when he deplored the idea that the criticism made by the member for Rouville (Mr. Lemieux) had a political tinge. My hon. friend knows that he and his colleagues sit in the House as the result of one of the wickedest fake campaigns ever carried on in Canada; the most insincere, the most untruthful, the most discreditable that ever took place in this country. Yet my hon. friend deplores the idea of discussing matters that could be construed as having a political connection with a subject that is of the most vital interest to the people. If this proposal is being made honestly in the public interest, why is is not put before Parliament in an honest manner? Why aTe the facts as to the liabilities, the obligations to be assumed (by the people under this measure, not stated in so many words?


William Thomas White: I think the information that my hon. friend speaks of has been given very fully. The balance sheet of the last fiscal year of the Canadian Northern showed the liabilities as of June 30, 1916 I filed the other day a further balance sheet showing the assets and liabilities as of the end of April, which is the latest date at which it is possible to obtain such information. I have given, I think, all the information asked for. I have taken the trouble to have Hansard gone over very carefully with a view to seeing whether any information asked for by the committee had been overlooked. I may have a good many faults, but I do not believe that one of them is that of denying information to Parliament.


Frank Oliver: I am not accusing my hon. friend of denying information; I am saying that the most important Bill that has come before Parliament for many years does not contain the facts and the figures, or set forth the limitations in such manner as to give us to understand how far-reaching it is. It is not a matter of balance sheets; it is a matter of obligations expected or intended to be undertaken. When we asked the minister to-night what was the attitude of the Government with regard to the liabilities of the company, he told us that if there were funds in hand to pay those liabilities, they would be paid. But what will happen if there are no funds in hand to pay such liabilities? Those claims that may be made on construction or other account, are they to be paid, or are they to be repudiated? The committee wants to know just how far the Government is going to go in these matters. In one breath we are told that this does not mean any assumption of liability at all beyond the payment for the stock.


William Thomas White: That is the legal position.


Frank Oliver: 
William Thomas White: No, they did not.


Frank Oliver: I know they appreciated very largely in value, and I know those who had knowledge of the relations between the Canadian Northern and the Government were in a position to reap stupendous profits from that knowledge because of that increase in value. This whole transaction from beginning to end is one that does not appeal to the people of Canada as being an honest transaction, to say nothing about its being a provident transaction. We are to be compelled to pay out of the treasury of this country sums which may amount to $60,000,000 for that which is to-day our property under the statute of 1914; and we are doing that at a time when we are passing the hat to get money to maintain the dependents of our soldiers in the field; at a time when the women of Canada are knitting socks to be provided free to our soldiers; at a time when we are implored to save and serve; at a time when we are told that we must cut out personal "extravagance of all kinds, we must restrict individual expenditure in every line, we must restrict what we eat and what we wear; at a time when we are not able to meet, as we should do, all the demands made upon us because of the exigencies of war-at that time, upwards of $60,000,000 is to be taken out of the treasury of Canada to be handed over to the Canadian Bank of Commerce in order that we may have the privilege of carrying the present obligations of the Canadian Northern Railway company and the further inestimable privilege of mismanaging the 9,500 miles of the track which that company owns-


Edward Mortimer Macdonald: I was surprised, coming into the House late in the evening, to hear the Solicitor General, with that superior air which he has chosen to assume towards hon. members during the last year or two since his vanity has been flattered by the Conservative press of the country, telling the committee that he did not know who -were the owners of this stock and that he had not taken the trouble to inquire. In other words, this Government has reached the summit of audacity in regard to this matter. At a time when, as my hon. friend from Edmonton (Mr. Oliver) has told us, the Food Controller is telling us that we cannot eat what we want on two days of the week, when an enormous debt is being piled up on the shoulders of the people of this country, So that the Minister of Finance has been reduced to the lowest depths to which any Minister of Finance has ever been reduced, a responsible minister of the Government has the audacity to tell us that this Government desires to enter into a bargain with some people but he does not think it worth while to find out who they are. Ever since 1914, when, owing to the fact that we have in this Government a Minister of Railways who does not present to Parliament the propositions which his department fathers, the Solicitor General has been given important work to do in connection with railway matters, his vanity has been flattered by the Conservative press. Since his promotion to the Cabinet he has assumed a curious air of superiority to his fellow-members in this House. He affects an air of lackadaisical lack of interest in regard to matters. He always waits until just before the conclusion of a debate before he ventures, with his august majesty, to present his opinions upon any ordinary question that may interest this House; and when he does so, he takes occasion to make statements which he knows he would never venture to make if other hon. gentlemen had an opportunity before the debate closed of replying to them.


Mr. W. H. BENNETT:: Never.


Edward Mortimer Macdonald: The would-be senator sitting on the door-step waiting until the House rises-


Rodolphe Lemieux: He is not in the Senate yet.


William Humphrey Bennett: Perhaps the hon. member will never be there, because that requires a property qualification.


Edward Mortimer Macdonald: I am willing to be
classed with the poor men and not with the nabobs of this country.
292J


Mr. McKENZIE:: Perhaps my hon. friend will marry wealth.


Edward Mortimer Macdonald: My hon. friend from East Simeoe (Mr. W. H. Bennett) has not shown any great desire for the conscription of wealth. He is anxious to conscript anything but the money he has. He is conserving his wealth until he gets into the Senate, into which he has not shown very great signs of getting.


William Humphrey Bennett: Very well.


Edward Mortimer Macdonald: He is standing by
the wayside. When we find an hon. gentleman like the hon. member for East Simeoe who has been doing the dirty work of the Conservative party-


William Humphrey Bennett: I rise to a point of order. I ask that the hon. member withdraw the expression that I have been doing t'he dirty work of the Conservative party.


Edward Mortimer Macdonald: To what does -my
hon. friend object?


William Humphrey Bennett: To the use of that expression.


Edward Mortimer Macdonald: What kind of work has my hon. friend been doing?


William Humphrey Bennett: I ask the Chairman to rule on the point of order.


The CHAIRMAN (Mr. Dugald Stewart):: I do hot think the language used by the hon. member is parliamentary.


Edward Mortimer Macdonald: What part of it?


Dugald Stewart: That the hon. gentleman has been doing dirty work. That is my ruling.


Edward Mortimer Macdonald: I would be very
glad to qualify the expression if I could, in any other manner, fitly describe the performances of my hon. friend in this House.


William Humphrey Bennett: I rise to a point of order-


Edward Mortimer Macdonald: Let me finish. The use of the particular .adjective, which, under your judgment, Mr. Chairman, is contrary to .the rules of debate, I am willing to withdraw. My hon. friend, who is known to have been disappointed on different occasions during the session when people were appointed to the Senate, can allow the Solicitor General and myself to discuss this question without interruptions from him. The Solicitor General this afternoon, in that characteristic way o.f his of challenging somebody on the other side of the House to do something which he knows that other to be prevented from doing under the rules of

debate, challenged me this afternoon to show where he had declared that section 24 of the Canadian Northern Railway Act of 1914 meant an absolute foreclosure of the interests of that railway.


Arthur Meighen: I did not say that.


Edward Mortimer Macdonald: What did my hon. friend say?


Arthur Meighen: I said that I had never stated section 24 to mean that on default the equity of redemption automatically became the property of the Government. I stated most clearly that it did mean the foreclosure, and on such terms and conditions as Parliament should prescribe.


Edward Mortimer Macdonald: My hon. friend is
sidestepping.


Arthur Meighen: Not in the slightest.


Edward Mortimer Macdonald: My hon. friend did not use that language this afternoon. He challenged me to prove that the effect of section 24 was that this Parliament had the right, in case of default, automatically to take over the road without compensation.


Arthur Meighen: I did not say that either.


Edward Mortimer Macdonald: I will read what my hon. friend said in 1914, and we will see how far it differs from what he said this afternoon. Let me say this: If section 24 of the Act of 1914 gives this Parliament the right absolutely to declare that the equity of redemption in all the property of the Canadian Northern could be foreclosed without compensation, then my hon. friend had no right to challenge me on the subject this afternoon.


Arthur Meighen: I stated then, and I state again -now, that we (have the right to do it. I stated that the shareholders placed themselves absolutely in the power of this Parliament, who are to exercise that right in such a way as would be in the interests of this country.


Edward Mortimer Macdonald: My hon. friend went farther than that in 1914.


Arthur Meighen: Not at all.


Edward Mortimer Macdonald: My hon. friend is the greatest sidestepper in this House. He pronounces with more assurance, whether natural or acquired, on questions of law than any judge on the bench would assume. My hon. friend is on record as to the meaning of section 24, and in the light of his challenge to me this afternoon I will read exactly what he said. After enumerating

the various guarantees the people of Canada had that the Canadian Northern would not come back for assistance, and after stating that we would control the railway for all time, he went on to say, as an alternative proposition-(Hansard p. 3693):
Or, if we choose, we can ourselves, by Act of Parliament, legislate that that road is the property of the people of this country and that the Interests of all persons whatsoever outside of the people of Canada are eliminated. The idea of that is that we are at this time making the interested parties and all stockholders parties to this contract, and we say to them: We now and here bind you that should the day of default come you shall not appeal to the Parliament of Canada on the ground of your road being confiscated in any way whatever, but you here and now leave the Parliament of this country free from any such question and untrammelled in every way to deal with the property of the Canadian Northern as it may be advised in the interests of the people of this country. That is the summary procedure outlined here for taking over the road.


Some hon. MEMBERS:: Oh, oh.


Edward Mortimer Macdonald: I can understand the mentality of some hon. gentlemen who see sunbeams in cucumbers.


Arthur Meighen: We see one now.


Edward Mortimer Macdonald: The hon. gentlemen sitting behind the Solicitor General have caught his spirit of casuistry, and would in a Machiavelian way misdirect the judgment of the House of Commons and of the people of this country. If I understand the English language, the statement 'of the Solicitor General was that in case of default the Canadian Northern could not come to Parliament and say " You are going to confiscate our interests in this road." Parliament had the power to do exactly what it liked having regard to the interests of the country.


Arthur Meighen: That is right.


Edward Mortimer Macdonald: My hon. friend's
coadjutor this afternoon, the hon. member for Calgary (Mr. R. B. Bennett) in the midst of a very peculiar address in which he first of all denounced this measure, but subsequently worked himself into a mood where he was prepared to vote for it, held up his hands in holy horror at the suggestion that there should be any question of confiscation; Parliament should never consider the question of confiscating the equity of redemption. Yet the Solicitor General told us in 1915 that we were giving notice to the Canadian Northern people to this effect in case of default: "Don't you come here and suggest a proposition of confiscation. The Parliament of Canada

will deal with this problem in the interests of the Canadian people without any regard to any suggestion of confiscation." This afternoon he had the temerity to argue that in the interests of the Canadian people at this moment, instead of exercising our rights under the statute of 1914 and paying no money at all, we should initiate a new proposition under which this country is to be committed to a further additional expenditure of $100,000,000. If he has the temerity to suggest that that is in the interests of the people of Canada, all I can say is he is a casuist of the first order. Does he suggest that it is in the interests of the people of Canada to provide for an arbitration board to investigate, after the Drayton-Acworth report has told us there is nothing to investigate? Does he think it is in the interests of the people of Canada to arrange to pay to some person or persons unknown whatever sum of money might be arrived at by the arbitrators, without any reference to the rules of evidence, and having regard only to the fantastical basis of valuation suggested by the Minister of Finance? Does he mean to tell us that it is in the interests of the people of Canada to do that to-day, when he told us in 1914 that we could acquire the equity of redemption without any compensation and without anybody suggesting the idea of confiscation?
My hon. friend has had the temerity to submit to this House and to Parliament some perfectly wonderful propositions during the time he has been permitted to be the first lieutenant of the Prime Minister, but his temerity and assurance will, not enable him to satisfy either this House or the country that 'an arbitration by means of which certain unnamed parties are to receive from the Canadian people a sum in the vicinity of $100,000,000 is better than exercising the right which in 1914 he said existed notwithstanding any allegation of confiscation.
Hon. gentlemen come to Parliament and submit this proposition, the first section of which authorizes the Government to secure a certain amount of stock in trust for His Majesty "on such terms and conditions satisfactory to the Governor in Council as may be set out in an agreement to be made between His Majesty and the owners and pledgees of not less than five-sixths thereof." My hon. friend wants to know whether it is a matter of importance to know who are the owners and pledgees of the stock. In an airy way he suggested that he was not very much interested, and had not
made much inquiry into the matter. Either he or his colleague, the Minister of Finance, knows something about this matter. The Minister of Finance told us on August 1, 1917, that of this $60,000,000 stock, par value,, of the Canadian Northern, "about five-sixths is available for transfer in the near future, being held by private owners and by pledgees." How does the Minister of Finance know thai, unless he has made inquiry5


William Thomas White: We stated that.
My hon. friend was out. We stated who owned the five-sixths.


Edward Mortimer Macdonald: Who does?


William Thomas White: Mackenzie and
Mann.


Edward Mortimer Macdonald: Who are the pledgees?


William Thomas White: The Canadian
Bank of Commerce.


Edward Mortimer Macdonald: Of the whole of it?


William Thomas White: I am not sure.
I think substantially the whole of it.


Edward Mortimer Macdonald: "Not sure."-"Substantially". Of what use is information of that kind to the House? What is the use of my hon. friend coming to Parliament and telling us he is not sure?


William Thomas White: Will my hon.
friend allow me? The agreement becomes operative upon five-sixths of the stock being lodged. Mackenzie Mann & Company, Limited, are in a position to lodge that stock.


Edward Mortimer Macdonald: How can they be
if it is pledged?


William Thomas White: They would have to arrange with the pledgees. The agreement becomes operative when five-sixths- that is to say about $51,000,000-of the stock, is lodged.


Edward Mortimer Macdonald: My hon. friend told the House on August 1st, that all of that stock was available, therefore, he must have made inquiries. Now, there is no need of having any uncertainty about it. Who 'aire the registered owners of that stock, and who are the pledgees? That is what we want to know.	.


William Thomas White: That has been
stated as to five-sixths of the stock. We have not the information as to the balance. We may be able to get it.' The Dominion Government owns $40,000,000, and there are $51,000,000 to be lodged under this

agreement, that leaves $9,000,000 of sJoek in regard to which we have not information as to who are the owners. I believe a considerable portion of it is held in Great Britain. The Solicitor General m axle a statement in regard to it to-night.


Edward Mortimer Macdonald: My hon. friend told me a few moments ago in regard to the five-sixths that the great majority of it was pledged with the Canadian Bank of Commerce. He also said there was some part about which he would not speak. Why does not he deal with this very serious and important problem along the most frank lines? If this Government has nothing to conceal in regard to the matter, all it has to do is ask the proper authorities of the Canadian Northern for a copy of the stock register, to be laid upon the table of the House, showing in whose name the stock is registered, both in regard to the five-sixths and the one-sixth. There is no use of talking about one-sixth of the stock being held in England. If it is held in England the stock register of the Canadian Northern Railway company will show who holds it, if it is not held in England, then the stock register of the company will show where it is held. My hon. friend has intimated to the House that five-sixths is available for transfer in the near future. It is held by private owners, and by pledgees. That means my hon. friend must have had such communication with the private owners of five-sixths of the stock, and with the pledgees, that he was in a position to make an agreement with them based on the terms of this Act. Otherwise he would not have made the statement.


William Thomas White: That is the position as I understand it.


Edward Mortimer Macdonald: dian Northern railway was worth pax. As the income convertible debenture stock is convertible up until 1919, it is obvious to the House that there is no chance whatever of the $25,000,000 of income charge convertible stock being converted into stock of the Canadian Northern railway.


Edward Mortimer Macdonald: Not if the arbitrators give par for the common stock.


William Thomas White: My hod. friend is talking What he knows to toe nonsense when he speaks of the arbitrators giving par for the stock.


Edward Mortimer Macdonald: Not at all. Why
should they not?


William Thomas White: 
Frank Oliver: Clause 1 is the Bill.
Would the minister give direct answer to my question as to the intention of the Government in regard to liabilities of the company which could be established, and which we must meet? Is it the understanding of the Government that these claims will be paid off, or is the Government going to take the stand that it is not bound to pay them?


William Thomas White: I do not know
to what claims my hon. friend refers.


Frank Oliver: I am asking the general
principle.


William Thomas White: My hon. friend knows that we are not changing the status of the Canadian Northern railway ox of any of the subsidary or constituent companies, it is simply a change of the shareholders of the company. Instead of the present shareholders, the Dominion Government become shareholders. But, from a strictly legal standpoint, the Dominion Government does not become in privity with the creditors of the Canadian Northern Railway company. Of course the Government acquire the Canadian Northern Railway company as a going concern, and the result is that claims against the railway company, just claims, would still be just claims against the railway company, and the Dominion Government would from time to time have to finance the Canadian Northern railway as it has done in the last two or three years. The only difference now is that our financing will inure to the benefit of the people of Canada, because the stock is owned by the Government on behalf of the people.


Edward Walter Nesbitt: Is not the difference now that the Government really own the company?


William Thomas White: They own the stock of it.


Edward Walter Nesbitt: .They own the company.


George Perry Graham: They own the company.


Frank Oliver: It is established, then,
that the Government, by taking over the stock, is taking over the liabilities of the company?


William Thomas White: No, it is not.


Frank Oliver: That is the point I wish to make clear-yes or no.


William Thomas White: That is a different thing. The Dominion Government will become the stockholder of the Canadian

Northern to the extent of 1100,000,000. That is, they will own and control its stock, and the other companies will run as companies, will contract liabilities within their corporate powers, and carry on the business for which they were constituted. If the Canadian Northern requires to finance, as it does for the purpose of meeting its obligations, whether of underlying interest or otherwise, it would ask the Dominion Government to put it in funds for the purpose. The Dominion Government would make an advance to the Canadian Northern Railway company, and the Canadian Northern Railway company would ruse that advance for the purpose of paying its liabilities, whether on interest account or otherwise. The true position is that the Dominion Government is not legally liable in respect of the liabilities of the Canadian Northern or its constituent companies, but Willi continue this system, os a going concern; it is the purpose of the Dominion Government to continue this system as a going concern, and from time to time to finance it.


George Perry Graham: The stock being fully
paid up?


William Thomas White: The stock being
fully paid up. If the stock were partially paid up, there would be a liability on the unpaid stock.


Frank Oliver: It is the policy of the
Government to finance the company as a consequence of having the ownership of the stock.


William Thomas White: So far as the
interests of Canada require, the Dominion Government would from1 time to time finance the Oamadiiau Northern Railway company, in order to carry on the enterprise. That does not mean that the Canadian Northern Railway company, owned' by the Dominion Government, must at once commence extensions here, there, or the other place.


Frank Oliver: Not at all.


William Thomas White: It means that it will be run having regard to the existing financial situation and the transportation needs of the people of Canada whom it serves.


Frank Oliver: I think that is entirely
satisfactory. It is understood now, that, as a consequence of this transaction the financing-that is the carrying on of the Canadian Northern railway-will in fact be a charge upon the treasury of Canada ?


William Thomas White: I would not put it that way. I will tell you why: because it is in the discretion of the Dominion Government to make advances, or to withhold advances, and to decide as to the amount of advances; in other words, we own the stock, and it is for the Dominion Government to determine to what extent it will finance the Canadian Northern Railway system. But it is the intention that the Canadian Northern Railway system [DOT]shall continue to be operated, in the interests of the people of Canada.


George Perry Graham: The Finance Minister,
as holder of the stock, will ask the Finance Minister of Canada if he will advance him some money to carry on the undertaking ?


William Thomas White: He will ask the Government.


George Perry Graham: It resolves itself into
one and the same thing, with the entity of the Canadian Northern remaining intact.


Rodolphe Lemieux: I should like to know from my hon. friend concerning the implementing legislation, which it is contemplated to bring down in a few days as was stated the other day by the hon. Minister of Railways and Canals, as regards the Quebec .and Saguenay railway, which has for its object to pay the same group of gentlemen who are interested in the Canadian Northern. I am informed the same group of financiers are the bondholders of the Quebec and Saguenay and the Quebec and Montmorency. I am told they are creditors to the amount of $3,000,000 worth of bonds, and that the contemplated legislation has for its object the payment of those bondholders.


William Thomas White: I have no information as to the bondholders or where the bonds are held, nor have I had the legislation to which he refers before me. I have been engaged with other matters.


Edward Mortimer Macdonald: Will the hon. minister endeavour to give to the House a statement as to the registered stockholders of the Canadian Northern?


William Thomas White: I do not believe it would be possible to obtain it for tomorrow. I think we shall have to: do some cabling to get it.


Edward Mortimer Macdonald: If five-sixths of the stock is held by one group of people, and one-sixth held by others, a telegram to Toronto would get it.


William Thomas White: It would obtain the information as to the local register. I am not sure as to the other.


John Howard Sinclair: When procuring that information, will the hon. minister obtain information as to who holds the stock of the affiliated companies? If I understand the statement submitted to the House, there is about $6,000,000 of the stock of the affiliated companies held by people outside Mackenzie and Mann Limited, and it would be important to know also who the people are who hold that $6,000,000 stock of the affiliated companies.


William Thomas White: I will try to get that information but it would be quite impossible to get it by to-morrow.
Progress reported.
On motion of Sir Thomas White, the House adjourned at 11.35 p.m.
Friday, August 17, 1917.