1917-08-23

SALARIES OF CLERKS AND EMPLOYEES, HOUSE OF COMMONS.

Sir ROBERT BORDEN moved:: That the recommendations of the Hon. the Speaker, laid on the table of the House on 
the 15th and 20 th instant, respectively, relating to increases in salary to certain clerks and employees of the House, under the provisions of the Civil Service Amendment Act, 1917, be approved.


[Stage Direction]
Motion agreed to.


Mr. SPEAKER:: Questions Nos. 4 and 9, standing in the name of the hon. member for Laprairie-Napierville (Mr. Lanctot), contain allegations as to fact and innuendoes, which, it seems to me, are not in proper keeping with the spirit in which questions are to be asked. I would, therefore, ask the hon. member to recast his questions in a way to conform to the spirit of the rule with regard to questions.
Questions allowed to stand.


Mr. A. K. MACLEAN:: 1.	Was a steamer or motor boat, called the Scout, purchased by the Government of Canada from any person or persons at Halifax, N.S.?
2.	If so, from whom, when was she purchased, and what was the price paid therefor?


Robert Laird Borden: Will the hon. gentleman (Mr. A. K. Maclean) give an idea as to what department of Government this question relates?


Mr. A. K. MACLEAN:: The Naval Department, I should think.


Mr. HAZEN:: I called the attention of the deputy minister of Naval Affairs to the question this morning, and he said that it could not relate to that department.


Alexander Kenneth Maclean: We will let the question stand, and when I ascertain by what department it was purchased I will write a letter to the head of that department.
Question allowed to stand.


[Stage Direction]
On the Orders of the Day:
Mr. LEMIEUX:: I notice in the Supplementary Estimates that there is an amount of $3,667,745 in connection with the Quebec and Saguenay Railway and other companies. On two different occasions I asked my hon. friend the Minister of Railways and Canals (Mr. Cochrane) if he would introduce, as was stated and rumoured, any implementing legislation with regard to the purchase of the Quebec and Saguenay Railway or with regard to construction. He an-

swered in the affirmative. I would like to know from him, or from the Prime Minister, if his answer is in the Supplementary Estimates in the form of a re-vote or does he propose to introduce any implementing legislation?


Mr. COCHRANE:: It is in the Supplementary Estimates in the form of a re-vote.


Rodolphe Lemieux: And there will be no implementing legislation?


Francis Cochrane: No.



CANADIAN RAILWAY SITUATION.


[Stage Direction]
Consideration in committee of Bill No. 125, providing for the acquisition by His Majesty of the capital stock of the Canadian Northern Railway Company-Sir
Thomas White (Minister of Finance-resumed from Friday, August 17, Mr. D. Stewart in the Chair.
Sir THOMAS WHITE:: Mr. Chairman, when this Bill was under consideration in the committee recently, I was asked certain questions relating to the cost of construction of the Mount Royal tunnel and terminal, in regard to the programme of construction work in the province of Saskatchewan and in reference to the shareholders of the Canadian Northern Railway Company. I have obtained that information for the House and I now beg to place it on Hansard. With regard to the Mount Royal Tunnel and Terminal Company, Limited, I have a statement of the estimated cost of construction, the estimated expenditure to April 30, 1917, and the balance required to complete as at April 30, 1917. The statement is as follows:
Mount Royal Tunnel and Terminal Company, Limited.
Statement of Estimated Cost of Construction Expenditure to April 30, 1917, and Balance required to Complete as at April 30, 1917.
Classification.
Tunnel	
Terminal	
Mount Royal Station	
Electrification	
Branch railway (from West Portal to Junction
with C.N.O, Ry.)	
Engineering and Contingencies	
Real Estate and Taxes	
Property damage, etc	
Interest	
Less proceeds from sale of stone and equipment
Total
Estimated
Cost.

$	512,254.00
10,401,361.09
59,889,107.09
Expenditures to April 30, 1917.

Cost to Complete.

Note.-In addition to the above:
(a)	The has been expended on right of way for connection with harbour, 1,316,806.41.
(b)	There are deferred payments amounting to $174,828.50 on property acquired for extension of present terminal.
With regard to land damages, the hon. member for Russell (Mr. Murphy) asked a question and I have here a memorandum prepared by the solicitor of the company to this effect:
Regarding land damages arising out of the construction of the tunnel, the situation is that at the present time outstanding claims for damages to the amount of about $50,000 are in the course of adjustment. All the land which the company has to obtain for the present terminal and the right of way has been acquired and paid for in full. Easements through the mountain have not in many cases yet been adjusted, the company claiming that owing to the distance from the surface practically no damage will be sustained. These claims are standing
over by agreement until one year after the operation of the tunnel.
(Sgd.) Gerard Ruel.
A question was asked by the hon. member for Moosejaw (Mr. Knowles) with reference to the programme of construction in Saskatchewan, as to which I have obtained a letter from an official of the company.
Toronto, August 21st, 1917. Hon. Sir Thomas White,
Minister of Finance,
Ottawa, Ont.
Dear Sir:-
With reference to the inqu'ry of Mt. Knowles regarding programme of construction work (Hansard, page 4818), the information asked for is as follows:-



T$te amount at credit of Trust Account Treasurer, Province of Saskatchewan, in respect of construction of branch lines is $1,202,825.24. This is held in respect of the extension of branch lines in the province of Saskatchewan, including the lines from Gravelbourg westerly, Vonda north easterly and Bengough westerly. The reason why these lines have not been proceeded with is that it is impossible to obtain rails except in very limited quantity and at unreasonably high prices. For this reason the company decided after the outbreak of the war to defer as far as possible the construction of further branch lines till normal conditions were resumed. There have been several exceptions v/here the conditions of transportation were specially acute. These included the following lines; Elrose Extension West of Eston, Thun-derhill Extension West of Preeceville, St. Paul de Metis Line.
With respect to the two lines specially referred to by Mr. Knowles; the first line, Bengough West, has been deferred ; the second line, South from Kindersley (Elrose Extension), is included in the present construction programme.
Yours truly,
A. J. Mitchell, Assistant to Vice-President.
I was asked to obtain a list of the shareholders of record in the stock register of the Canadian Northern Company. I have here a certified statement under the seal of the company as follows:
The undersigned Assistant Secretary of The Canadian Northern Railway Company hereby certifies that the holders of shares in the oapital stock of the said company as of this 'date, namely: June 30th, 1917, are as follows:-
The minister of Finance and Receiver-General of Canada, in trust, for His Majesty.. . .$ 40,000,000	00
Sir William Mackenzie	
10,000	00Sir Donald Mann	
10,000	00Mr. D. B. Hanna	
10,000	00Mr. E. R. Wood	
10,000	00Mr. R. J. Mackenzie	
10,000	00Mr. Z. A. Lash	
2,000	00Hon. F. Nicholls	
2,000	00Mr. R. M. Horne-Payne	
2,000	00Hon. H. W. Richardson	
2,000	00Mr. W. J. Christie	
2,000	00Mr W. K. George	
2,000	00The British Empire Trust Company, Ltd	
324,000 00
John Aird and H. V. F. Jones,
in trust	 1,000,000	00
Mackenzie, Mann & Company,
Limited	 58,614,000	00

R. P. Ormsby, Assistant Secretary.
This is the record of shareholders as on June 30th. The secretary informs me there have been no changes since, and, indeed, no changes for a year before, except that certain shares were transferred to the names oi directors in order to qualify them. I think I should point out that, so far as concerns the Government directors, Mr. W. K.

George, Mr. W. J. Christie and the Hon. H. W. Richardson, I understand, have no personal interest in the shares which were transferred to them to qualify them as directors of the company.
It is also fair to say that I have received a letter from Mr. E. R. Wood, referring to a debate here last week, in which he states that, apart from the qualification shares transferred to him, he has no interest, directly or indirectly, in the Canadian Northern Railway Company.
With reference to the holding of Mackenzie, Mann and Company, Limited, of $58,000,000 of par value, I have this letter from tbe secretary of Mackenzie, Mann and Company, Limited:
Mackenzie, Mann & Co., Limited, Toronto, August, 21, 1917.
Hon. Sir Thomas White,
Minister of Finance,
Ottawa, Ont.
Dear Sir:-
With respect to the $58,614,000 of stock of the Canadian Northern Railway Company standing in the name of Mackenzie, Mann & Company, Limited, $51,000,000 is wholly the property of Mackenzie, Mann & Company; Limited; $2,000,000 is held in trust for certain officers and employees of long standing in the company; $1,600,000 is deposited with the province of British Columbia; and the balance, namely $4,014,000, is held by Mac-' kenzie, Mann & Co., Limited, pending uncompleted financial arrangements for distribution of same amongst Mackenzie, Mann & Company, Limited, Lazard Bros., London, England, and British Empire Trust Company, London, England.
Yours truly,
R. A. Macdonald, Pro Secretary.
Those are the official statements of the holdings of the stock of the Canadian Northern Railway Company. So far as I am aware, that is all the information I was asked for by hon. gentlemen opposite in connection with this Bill.


Rodolphe Lemieux: When were the shares held in trust, to the amount of $1,000,000, by Mr. Aird transferred in trust to him? Could we have the transfer book of the company to see that?


William Thomas White: I do not think they were so transferred. On the face of it they stand in the names of Mr. Aird and Mr. Jones-$1,000,000 of the stock of the company. I asked for the list as of June 30th, and I make the statement, as I was assured by the secretary that no transfers had taken place since." I thought it advisable to get a list of shareholders prior to the date of the discussions in this House.

There is no doubt that the list of shareholders is the correct list, and I am informed further that there had been no changes in the names of shareholders for practically a year previously except for the purpose of qualifying directors.


Mr. PUGSLEY:: Is the Finance Minister prepared to give the House information as to the shareholders of Mackenzie and Mann Limited?


William Thomas White: I understand
Mackenzie and Mann are proprietors of Mackenzie and Mann, Limited, but I suo-mit that has no bearing on the question before the House. We are not purchasing the shares of Mackenzie and Mann, Limited. We are about to purchase the shares of the Canadian Northern Railway Company. My own view is that it is not relevant to this discussion to know the names of the shareholders, but on account of the discussion which developed in the House I thought it advisable to place upon the Table the list of shareholders as of record. This transaction, although it is a large one, is a comparatively simple transaction. The Dominion Government is already-and this fact, I am afraid, is lost sight of in this House-the owner of $40,000,000 stock of the Canadian Northern Railway Company: that is to say, we are a minority stockholder in that company. There are $60,000,000 par value of shares still outstanding. Instead of continuing assistance to the company, as we have in the past, we say that we will acquire the $60,000,000 of shares outstanding, thus making the Dominion Government the sole shareholder, instead of a minority shareholder of the Canadian Northern. I submit that the question as to who are the shareholders of Mackenzie, Mann and Company, Limited is not relevant to the section now under discussion by the committee, but I express the view, with some confidence that Messrs. Mackenzie and Mann-that is Sir William Mackenzie and Sir Donald Mann-are the proprietors of Mackenzie and Mann, Limited. But we are not buying their stock.


William Pugsley: I would have thought
it was of importance to the country to know who were the shareholders of the Canadian Northern. It would be equally important to know who were the shareholders of Mackenzie, Mann and'Company, Limited, who own, from the statement of the minister, $51,000,000 of this stock of the Canadian Northern. The organization of Mac-
306J
kenzie and Mann, Limited, if 'ft is a limited liability, would enable them to hold this stock and transfer it over to different people, and I would assume the pledgees (who are referred to in this Bill) of the stock of the Canadian Northern, are gentlemen of corporations who have received stock from Mackenzie and Mann, Limited in pledge. Therefore, I would think that when, by this Bill, the pledgees are given authority to name one of the arbitrators jointly with Mackenzie and Mann Company, Limited, it would not be unreasonable that the House should be informed as to who those pledgees are, and as to whether or not they received the stock from Mackenzie and Mann Company, Limited.


William Thomas White: We have given that information. My hon. friend now states that what he desires to know is who are the pledgees of the stock of the Canadian Northern Limited, but he did not ask that. He asked me who were the shareholders in Mackenzie and Mann Company, Limited.


Mr. MACDONALD:: I asked who werethe pledgees.


William Thomas White: The Solicitor General informed the House the other night that, as tlo $51,000,000 of the stock held by Mackenzie, Mann and Company, Limited, that stock is, with other assets of Mackenzie and Mann, Limited, pledged to the Canadian Bank of Commerce by the company. If my hon. friend were carrying on a large business, having contracts, bonds and stocks of companies, amongst others the stock of a railway company, whether the Canadian Northern or Canadian Pacific, and doing business with his bank, he would know that he would give a pledge in respect of all the assets of his firm. It is not the case, as I pointed out to the hon. member for Edmonton, of a specific lo-an against a specific security. The general balance of account between Mackenzie, Mann and Company and their bankers is, I understand, secured as a general balance of account of any firm is secured, by a pledge to their bankers, including among others, these securities. It has never appeared to me that this question is relevant to the consideration of the section now before the House, because it is for the arbitrators to determine what is a fair value for the shares. If we were buying shares of the Canadian Pacific Railway Company, and my hon. friend from

St. John was so fortunate as to own $100,000 worth of stock which he pledged with other assets to the bank, it would not occur to me that this House would be desirous of knowing what amount he owed the bank, in [DOT]respect of that pledge. The real question is, shall the Government buy the stock, and secondly, what is the price that should be paid for it? We propose to have the matter determined by arbitration, and our arbitrator is to be the Chief Justice of Ontario.


William Pugsley: We want to understand whether the whole $51,000,000 of stock held by Mackenzie, Mann and Company is pledged to the Canadian Bank of Commerce, together with their other assets.


William Thomas White: Yes.


William Pugsley: The whole amount is
pledged?


William Thomas White: Yes.


William Pugsley: I do not propose t>o
discuss the question as to the importance of it. It seems to me it could be well argued that Parliament should be informed on that subject. My hon. friend (Sir Thomas White) says that we seem to forget that the Government already owns 40 per cent of the common stock of the Canadian Northern. Let me say that neither this House nor the country is likely to forget that, because, simultaneously with the getting of that stock, the country became committed to the enormous liability of $45,000,000. That is a fact that the country is not apt to forget. Neither is the country apt to forget that because the very next year or the second year after that obligation was entered into, the country is called upon to pay $15,000,000 more into the enterprise-and one of the arguments advanced in favour of it is that the country had previously, in 1914, become committed so enormously by guaranteeing the bonds to the extent of $45,000,000, it could not, without affecting the credit of the country, refuse the additional $15,000,000. Therefore, the country is riot likely to forget the circumstances under which that common stock was acquired, which common stock, I do not hesitate to say, is intrinsically just worth the value of waste paper.


William Thomas White: And my hon. friend recollects that he was in favour of arbitration to determine the value of these shares, fixing for them a maximum of a very large amount?


William Pugsley: Yes, I remember, too, that at that time my hon. friend, the Minis-

ter of Finance, assured Parliament that if $45,000,000 were guaranteed the company would be able-he believed he could inform the House with full confidence-to go on and complete its entire system. He said they had $45,000,000 available for all the purposes of the road, and .there was no likelihood of their coming back for further assistance, and the resolution which I had the honour ol moving was to the effect- and my hon. friend forgets that, apparently -that the stock issue should be reduced from $77,000,000 .to $30,000,000, so that, instead of standing at $100,000,000, as the Government proposed it should stand, it should be reduced to $30,000,000, that all of that stock should be placed in the hands of a trustee, for the benefit and security of the people of Canada, and that it should remain there for five years, so that, in case of default, the Government would have power to act upon it, and speedily take possession of the road, without paying out any money; that, in case it was carried on successfully for five years, paid its interest, and its expenses of operation, and became a successful enterprise, this Parliament would have the right-if it was thought desirable to take over the road and have it operated as a Government work- to take the stock by arbitration.
Does not my hon. friend think that the circumstances under which that suggestion was made are very different from the circumstances with which we are confronted to-day? Does my hon. friend forget that in 1914 he assured Parliament that through the remarkable ability and the wonderful and unprecedented ingenuity of the Solicitor General a plan had been prepared which was embodied in section 24 of the Bill, under which Parliament would have the right to foreclose by Order in Council the equity of redemption in the Canadian Northern Railway Company and in all the subsidiary companies, and if Parliament thought fit to do so it would in that way, acquire an absolute title to that property without foreclosure proceedings and without the payment of any more money, but solely in consideration of the enormous sums which had been poured into this railway system in the past, and in consideration of the vital assistance which is being asked for in 1914? Has my hon. friend forgotten all that? Has he forgotten that he said he wanted to take off his hat to the Solicitor General in recognition of the wonderful ability and the great ingenuity which he had displayed in fram-

ing this resolution under -which Parliament could so speedily act in the interests of the people of this country? He must have forgotten all this, because to-day he is telling Parliament and telling the country that it would be nothing short of an outrage to act under the authority which was then given to the Government at the suggestion of those who are now occupying the treasury benches. He says now it would be an outrage to act upon that wonderful provision which was framed by the Solicitor General, and which was proposed by my hon. friend when he asked Parliament to assent to the Bill. I have been drawn away from the question I proposed asking the minister by reason of his referring to circumstances which I think he would be glad to forget in view of the action which he is now asking Parliament to take. My hon. friend says in the statement that there are in the treasury of the province of Saskatchewan something over $1,000,000, and that that is held in trust and will be available for the purpose of completing certain branch lines in that province. I would ask if that is the ease. With reference to all the other current assets mentioned in the statement which has been laid upon the table of the House, each held on account of Dominion Government, $4,471,611.12; province of Manitoba, $239,350.64; province of Alberta, $3,104,966.24; province of Ontario, $407,487.43; province of British Columbia, $6,403,989.06; would all those amounts be amounts that are not payable to the company to-day but would be payable in the event of their completing certain railways in those various provinces? From what the minister says I would assume that to be the case.


William Thomas White: These figures are a year old.


William Pugsley: I presume in respect of those amounts there has been little change. We have not been favoured with a printed statement for the last year, therefore we must be pardoned if we refer to the statement the minister laid on the table of the House for our information.


William Thomas White: This statement
is correct as of June 30, 1916. Those were the moneys held in trust account in respect of securities which had been sold, the proceeds of which would be available for the construction of railway lines.


William Pugsley: They appear on the
credit side of the balance sheet. Would the minister inform me what items there are on the debit side representing this twenty odd million dollars?


William Thomas White: It would be included in the temporary loans and the funded debt. If my hon. friend will allow me to explain: Supposing there is an issue of bonds of, say, the Canadian Northern Railway Company or the Canadian Northern Saskatchewan, guaranteed by the Government of Saskatchewan; those 'bonds are sold, and when they are sold the amount would be shown among the liabilities of the company. If the money was not actually paid out in construction it would appear on the other side of the cash trust account. If my hon. friend is under the impression that they are on one side and not on the other he is entirely in error.


William Pugsley: I do not suggest that for a moment, but I could not see any specific items to correspond with them.


William Thomas White: There is no specific item.	'


William Pugsley: Then I would understand those bonds were so.


William Thomas White: Or pledged for a
note issue.


William Pugsley: And, the money lies there? These figures are not represented by any items in construction account.


William Thomas White: Except such as would be spent.


William Pugsley: I see there is due to
other companies on construction account $16,666,957.26. Has the minister obtained any information from any outside source with regard to the 'value of the land grant? I urged very strongly that in view of the enormous liability of some $21,000,000 in land grant bonds outstanding, which are in no way essential to the railway system, whatever else [Parliament was asked to do it should not be asked to deal in any way with the stock of the land company, which would create a moral, if not a legal obligation, to make good these land grant bonds. In that connection the minister told me he would ascertain whether the land grants of the province of Quebec and of the province of Ontario were included, or whether Ithose bonds simply covered the lands in the western provinces.


William Thomas White: When my hon.
friend asked me the question I informed him correctly, although I was not positive of it myself, that the lands in the province of Ontario and the province of Quebeo were not pledged .under the bond mortgages. The lands which were pledged were those in the West to which my hon. friend

has referred. We have no means of knowing the value of those lands. In any event, it would be a matter of estimate. The only means we have of knowing their value would be the sales which have taken place. I laid upon the table of the House and placed upon Hansard a statement showing the sales made, and having regard to the prices obtained from those sales, it would appear that about $15 an acre was the price. I believe that is the price at which their auditors have taken the lands in. I do not say those lands are worth that money. It seems to me that would have to be taken into consideration by the arbitrators appointed, if they regard it as desirable to value the assets of the company. I am not quite able to follow the argument of my hon. friend with respect to those lands, because he seems to suggest that we should leave them out; that we should not take them in at all. That could be done 'only if we repudiated the liability of the bonds which had been issued, secured by them. I understood my hon. friend the other day to suggest that we should do that, that is, that we might not pay the bonds outstanding which had been issued against those land grants by the company, but I would point out to my hon. friend that that part of the debenture debt, although secured by those lands, is the same as any other part of the debenture debt, because the proceeds went into the construction of the railway.


William Pugsley: How does the minister know that?
Sir THOMAS WHITE; That is established by the Government auditors who are working on the books now, and by the company's own auditors. I do not think anything could be more clearly established than that.


William Pugsley: In that case will the minister tell me the amount of cash realized from the sale of those bonds?


William Thomas White: According to the blue book issued in 1914, 5 per cent land debentures were issued to the amount of $16,274,068.60. The proceeds were $14,092,245.94.


William Pugsley: Those figures should be looked into.


William Thomas White: They have been gone over a dozen times.


William Pugsley: There is in the blue book issued in 1914 a statement as to 4 per cent land bonds issued to the amount

of $3,196,426. The proceeds are put down as $3,679,125, or in other words, the proceeds are about $500,000 more than the par value of the 4 per cent land grant bonds. I am sure that even the Canadian Pacific never issued any of its land grant bonds so much above par value.


William Thomas White: There is an explanation about that.


William Pugsley: Perhaps the minister will give me the explanation. I cannot find it. In what year were they issued?


William Thomas White: If my hon. friend will look at page 7 of the Financial Statements, he will find the information. If my hon. friend is particularly curious with regard to the matter, I can readily get the information he requires.


William Pugsley: What does the minister think about the matter?


William Thomas White: I think it is very probable and I will tell my hon. friend why. There was a four per cent land grant issue that contained the assignment of a contract from the Government, and that issue was adequate to take care of the interest charges. My hon. friend knows that the interest rates towards the beginning of this century were very low. This rate of interest was very favourable, almost as good as that of a Government security. The financial comptroller of railways tells me that that debenture stock produced the amount shown in the blue book of 1914. If my hon. friend thinks the matter is of essential importance we could make further inquiries and see if, by any chance, there is an error in connection with it. I do not believe there is any substantial error; in fact, I do not believe there is any error at all.


William Pugsley: waited until default took place, as it must take place unless the Government comes to the assistance of the road, they would be able under the provisions of section 24 to step in and acquire the entire system without involving the country in this enormous liability.
I desire to repeat that this is not the time to pour out these.millions of money to Messrs. Mackenzie and Mann. The Minister of Finance has found the people of Canada so responsive to his demand for taxes that he thinks the people are able and willing to pour their millions freely into the treasury of this country. He forgets that he has made the people of Canada believe that he wanted these enormous sums raised by way of taxation in order to enable Canada to do her part in carrying on this war. The people have never dreamed that these moneys which he has been taking out of their pockets were to be poured into the lap of Mackenzie and Mann-these favourite sons of fortune whose headquarters are in the beloved home of my hon. friend the Minister of Finance, the city of Toronto. When the people of this country find that the moneys which they have so freely contributed for the purpose of assisting the country in doing her part in this war are to be given away to these gentlemen, they will entertain a very different opinion. The people of Canada do not understand the iniquitous provisions of this measure at the present time, but the people in the great cities are learning from the newspapers what it means, and before long, if the discussion continues for any length of time, the people throughout the country will know what it means, and a storm of indignation will go up from the Atlantic to the Pacific which I think will astonish even the Minister of Finance.


Mr. MEIGHEN:: I shall not attempt to make reply to the purely show features of what I may describe as the speech to the press gallery of the hon. member for St. John. There are, however, serious members of the committee who are anxious that no substantial feature of the subject before us shall be in any way obscure. I have heard the warning of the hon. member for St. John, that we are going to have to	pay	at least	sixty	milliondollars for	this	stock, on	the	determination of	its	value by	the	arbitrators, and he assures the country that the stock is not worth a dollar. He knows that in the height of his wisdom. He has no 
confidence that men like Sir William Meredith, and an appointee agreeable to him or to the Chief Justice of the Exchequer Court of Canada, will be anything but mere victims of the chicanery of Mackenzie and Mann. I do not know that the committee has any reason' to assume that the Chief Justice of Ontario and the Chief Justice of the Exchequer Court would not be proof, and could not select men who would be proof, against the chicanery of Messrs. Mackenzie and Mann, -just as much >as the hon. member for St. John is proof against it. I have no reason to assume that such men would be mere putty and clay in the hands of the Canadian Northern any more than the hon. member for St. John would be putty >and clay in the hands of either the Canadian Northern or the Canadian Pacific.
As to these land grant bonds, I do not know what the hon. member for St. John has in the back of his head. I do not know what he is trying to express. I have not been able to get my mind around any complete idea that he is trying to give the committee. What are these land grant bonds? The Canadian Northern Railway Company became the possessors of a large grant of land. It formerly belonged to Mackenzie and Mann, then to Mackenzie-Mann, Limited and, in return for stock, it became the property of the company. The Canadian Northern then were the owners of more than 4,000,000 acres of land in Western Canada. What happened? The Canadian Northern Railway Company issued land grant bonds and secured them on that land grant.


Mr. MURPHY:: In the West?


Arthur Meighen: Yes, they are all in Western Canada. There was, first, a land grant bond issue of $7,000,000, the proceeds of which were applied to the Canadian Northern Railway, just the same as the proceeds of every other bond issue of the Canadian Northern Railway Company. Then, subsequently, they issued another, but not being able to secure as much money as they desired to get for the purposes of the railway on that land grant, what did they do? They procured Mackenzie and Mann to put in the townsites as additional securities and the townsites were then added'to the security of the land grants and the whole was made the basis for another issue the proceeds of which also went into the road. The committee must remember that these bonds were the bonds of the Canadian Northern Railway Com-

pany, were the promissory notes of the company which they are obliged to pay and which can be got rid of by one method and one method only and that is lepudia-tion. No other method in the world can get rid of them. No mere construction of words will get rid of them. You may repudiate them, of course, but that is the only way. Other issues of bonds have beau made since then. Vi hat are those sub ie-quent issues? They are issued guaranteed by the Government, there are mortgages made on the road, tnd which are made to secure the money that we have advanced. There is the consolidated bond issue. What is the po3.tion of the securities? My hon. friend assumes that the land grant is not worth nearly as much as what is against it. I do not think he is at all correct. Even if we could in honour or law repudiate this debt, where would we be? We would, of course, lose the security. What is the fact? My hon. friend says that these lands are just the tail end, the leavings of the original lands. I am afraid he does not understand the way lands are sold by railway companies in the West. It is not as if a farmer comes along, looks at a piece of land and says: " I will take that " and another farmer comes along and says: " I will take that" with the result that after the good land has been picked out you have only the worst land left. That is not the procedure at all. They put values on that land in accordance with the quality and location of the land, the values which they think the land ought to have. There is just as likely to be good land left as good land sold. Then, it comes down to a question of the fairness of the value put upon the land by the company. Instead of the sales of land indicating that it is valueless, they indicate the very opposite. Valuations arrived at by lands actually being sold now show a tremendous equity in these lands, amounting to several millions of dollars. Lands have been sold at the following rates:
Average Bate
Tear.	Per Acre.
1913	$15	361914	15	231915	15	531916	16	37
This shows an increase in the last two years in the average price per acre of these lands. Any one will inform the committee, who knows anything about western farm landis, that the prices are higher to-day than they have been at any period in our history.


Charles Murphy: Is that the case in the three provinces?


Arthur Meighen: That would apply to the three provinces. I understand that Canadian Pacific Railway lands are selling better now than they have at any other time.


Charles Murphy: Of course a part of their land is irrigated.


Arthur Meighen: I know that there is
a part of their land irrigated but I do not
think that irrigation has anything to do with the question because it has not been a very pronounced success.


Edward Mortimer Macdonald: Are there many sales being made?


Arthur Meighen: I think sales are being made pretty freely.


Rodolphe Lemieux: Does my hon. friend
include in the term " lands " timber limits?


Arthur Meighen: No; these are farm
lands.


Rodolphe Lemieux: I am informed that they have very large timber limits in the British Columbia section.


Arthur Meighen: I do not think those
are included in the land grant at all. I do not know anything about the timber limits.


Charles Murphy: These are agricultural
lands?


Arthur Meighen: These are agricultural
lands, as I understand it, entirely. I would point out that the increased rate at which they have been able to sell these lands indicate that the proportion of good land left is about the same as it was at the beginning. I only make that argument as a matter of inference, I do not make it as a matter of personal knowledge but clearly from the record it would appear that the land that is left is likely to be a fair average of the land that has been sold. At all events the land generally is much higher in value now than it was. That is a fair assumption, based on recent sales, and consequently if we adopt a scheme which would dishonour the obligations of the Canadian Northern the proceeds of which obligations went into this railway, we would in all likelihood forfeit assets of tremendous value. As to taking the valuation of the land; no doubt that would be part of the duty of the arbitrators. We are getting the land as a part of the property of the railway company and consequently it would be for the arbitrators to ascertain

what the land is worth. The Drayton-Acworth commission did not pretend to do that. They did not deem it their duty and I think rightly so but the arbitrators now, no doubt, would find out what these lands are worth. My hon. friend harks back again on the question: Why did you not value the land? We have done it in substance and in effect. We have not valued it specifically. Why? Because to value it specifically would mean for the time being at all events the disintegration of the system. The entity of the company would be destroyed. While the company might exist, it would not own the railway. It was an accepted principle that if we should fix any terms or conditions for ascertaining the value, it would subject us to the application of every rule of law which would tell against the Government and against the people of Canada, as against the plan, the parallel line, which we are following, and which puts us in a much stronger position before the arbitrators especially when we are taking the stock instead of the assets themselves.


Edward Mortimer Macdonald: Why arbitrate at all?


Arthur Meighen: In order to get at the value.


Edward Mortimer Macdonald: But you said that if they defaulted they would lose all claim, and that the property would be the property of the Government.


Arthur Meighen: That is what I say as between Parliament and Mackenzie and Mann; if Parliament deems it fitting and honourable to confiscate these lands, Mackenzie and Mann cannot complain. But that does not say that we must deem it fit or honourable or in the interests of Canada.


Edward Mortimer Macdonald: I do not think you had anything about honourable in it in 1914.


Arthur Meighen: Nothing about honourable in 1914 ! I think my hon. friend would do what is in the interest of the country, and I do not think it would be in the interest of the country to confiscate.


Edward Mortimer Macdonald: This is what my hon. friend said:
The idea ot 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 ques-

tion and untrammelled in every way to deal with the property of the Canadian Northern as it may be advised an the interests of the people of this country.
Could anything be more absolute?


Arthur Meighen: -Nothing more true.


Edward Mortimer Macdonald: Well, you are not
doing it.


Arthur Meighen: That is what we are doing. The Parliament of Canada is free and untrammelled and can do what it deems fit in the interest of Canada, and I stand, in the name of Canada to say it is not in the interest of Canada, and it is not fitting to confiscate the property of any man. It is not in the interest of Canada and it is not fitting, at the bidding of whomsoever, corporation or otherwise, to confiscate the property of any man.


Edward Mortimer Macdonald: You said in 1914: we make it absolute that neither the company nor any one interested in it can come here in the event of default and say: " You are confiscating our property without compensation," because it is all settled.


Arthur Meighen: That is what I said, that is what 1 say to-day. As between us and -them, they could not. But the general interest of Canada does not call for it, and the circumstances of the case do not call for it. If my hon. friend believes that the legislation of that time, as it stood at the third reading-and it stood at the third reading just as it is now-if it provided that upon default there should be confiscation, nothing more or less, why did he support an amendment that, instead of confiscation, there should be a submission of the *stock to arbitration? Why did he support that amendment if it was provided that the people of Canada could get the property for nothing? It is because he did not believe it and does not believe it now.


Edward Mortimer Macdonald: Does my hon. friend mean to say that his statement was not a direct intimation to the country that the country was getting an absolute right to the equity of redemption of Mackenzie and Mann in the Canadian Northern Railway?


Arthur Meighen: It got the right to deal with the equity of redemption as it saw fit. Parliament has not the absolute right to confiscate without the complaint of the party interested unless the party agreed to it. But because we then got the right to do it, that does not say that it is to our interest to do it or in the interest of the

people of Canada, and it does not say it is honourable to do it.


Edward Mortimer Macdonald: Do I understand my hon. friend to say that, now the Parliament of Canada has the right to confiscate and take this equity of redemption without payment to Mackenzie and Mann, notwithstanding that, it is in the interest of Canada that you should pay them?


Arthur Meighen: We have the power to do it undoubtedly, and I so intimated then and I so pronounce now, but it is not in the interest of Canada that we should do it. It is in the interest of Canada to pay for property that we take what that property is fairly worth.


Edward Mortimer Macdonald: We have paid for it already.


Arthur Meighen: Then why did the hon. gentleman vote to arbitrate on it in 1914? We have perhaps the strongest tribunal which the personnel of this country can provide to determine the value of this stock. I know that the people of Ontario have confidence in the Chief Justice of Ontario, and that no agitation which hon. gentlemen may try to engender in this country will ever shake the confidence of that province in the Chief Justice. I believe the people of every other province of Canada have equal confidence that that Chief Justice will not submit the name of a third arbitrator or submit to the name of a third arbitrator who is not strong, true, capable and fair, and if they do not agree on a third arbitrator, then the Chief Justice of the Exchequer Court names the third arbitrator, so the people of this country are secure that there will be strong, capable, able men, who will be able to protect the interests of Canada when this goes to arbitration. What more do the people of Canada ask? We are told that the cities of Canada-the word was very indefinite

are becoming opposed1 to this legislation. I have heard of some talk in one city, but not in any other.


Rodolphe Lemieux: Where?


Arthur Meighen: In the city of Montreal.


Rodolphe Lemieux: That is an important city.


Arthur Meighen: An important city it is true, but I have not heard of any dissatisfaction in any other, and I do not think hon. gentlemen opposite will be able to escape from the conscription issue in this country, in Montreal or in any other city, under the cover of this Bill.


Mr. DEVLIN:: Never mind conscription; we are discussing the Canadian Northern Railway.


Mr. GRAHAM:: When the hon. member for St. John (Mr. Bugsley) referred to the city of Montreal or to the cities of Canada, he undoubtedly had in mind the deliverance of certain leading men in Montreal. But these are men, as I look at some of the names, who are interested all over Canada; their investments are not confined to the city of Montreal.


Rodolphe Lemieux: And they are mostly in favour of conscription too and good Tories, but disgusted at this.


George Perry Graham: As a matter of fact, I know that some of these gentlemen are strong conscriptionists.


Arthur Meighen: They will vote all right then.


George Perry Graham: My hon. friend must not get these issues mixed up in condemning these men for what they say on the Canadian Northern. He must not opine that they are against conscription. Some of them are very strong conscriptionists, but apparently they object to the conscription of the country's wealth for any individual person.


Some hon. MEMBERS:: Hear, hear.


Rodolphe Lemieux: Give the names first.


George Perry Graham: I think I had better read the article just as it is. It is in the Montreal Gazette which, by the way, of late particularly, has girded up its loins in Toryism, and is writing very strong articles on almost everything, against Liberalism and in favour of its friends.


Rodolphe Lemieux: In favour of conscription, too.


Mr GRAHAM:: Let me read this article, just to be sure that this is hot really just a local objection, and ascertain by reading the article the contents and value of the deliverance of these men. I submit that the deliverance is by very important men, and if it be an important deliverance, we have a combination that ought to carry great weight. The article reads:
The following criticism of the policy of the Government in respect of the Canadian Northern Railway is made:
The Government Bill to authorize the purchase by it of the capital stock of the Canadian Northern Railway is half way through the House of Commons and will shortly be in the Senate. If it becomes law, it will impose on Canada, at a time when the country is under an unprecedented strain, a burden of

unknown magnitude. One certainly greater than any ever before imposed upon this country, with the exception of the war debt.
The purchase of a defined piece of railway property is one thing. The buying of stock in a company with unascertained assets and unknown liabilities is another. Once the Government becomes the principal owner of the common stock, it must provide out of loans or taxes for all the debts of the railway due or to become due and for all future losses in operating. The estimates of expenditure still necessary to be made run into enormous figures. No one knows what the real extent of its obligations are. The railway has bonds outstanding and debts unpaid; so have its subsidiaries. There are guarantees given by it to other companies, unpaid balances on contracts and upon accounts, but to what extent is unknown. What its assets are is equally unknown. It operates and is interested in railway companies, land companies, telegraph companies, tunnel companies, lumber com

panies and hotel companies, but no one knows how far it owns them, what their assets or liabilities are, nor to what extent the railway company is responsible for their liabilities.
No other railway company nor any other group of business men would consider such an acquisition except after elaborate examination and reports from accountants and appraisers on the assets and liabilities, and then only subject to a solvent guarantee that all supposed assets would be delivered and that no undisclosed debts or obligations would appear. To find out these things, where such examination and guarantee cannot be had, the usual course in the United States has been to place the road in the hands of a receiver, whose staff can ascertain them and place them before those interested an accurate and' clear statement. Systems quite as large, notably the Union Pacific, the Atchison, Topeka and Santa Fe and the Rock Island, have in the United States been through this process and have emerged from it with capital written down to correspond to the actual values, in a solvent condition and able to perform their duties as public servants.
The only examination so far had into the affairs of the Canadian Northern has resulted in the opinion of two out of three railway experts that the stock proposed to be purchased was worth nothing. This means that whatever its nominal value may be, the unsecured debts are more than enough to prevent its being sold to any reasonably prudent purchaser. In view of the fact that no money was paid to the company-
That should read "paid by" the company, I think.
-for the stock and that the company has never been able to earn anything upon it, there was and is no reason to expect any other result from examination.
No agreement or obligation to purchase Is (produced. In fact, nothing has transpired except verbally and then between members of the Government not named and persons whose names are not disclosed. In fact what is to be paid, who is to get paid for it, what the cost and the attendant obligations are, no one knows. The smallest transaction in common life could not be concluded in such a way, and any attempt to do it by trustees responsible to a court would unquestionably be a

breach of trust, and this is the largest and most onerous undertaking ever contemplated by any Canadian Government, and the most risky. It is safe to say that no road capitalized above its earning power can ever be a useful public servant, nor can any road bought by a government for more than its worth ever be anything but a continuous drain on the taxpayer.
The Canadian Northern Railway was built as a private speculation. Its bonds were sold to financiers at a disoount No money was received into its treasury for its stock. Nothing has been made public which would justify the taxing of other citizens of this country for the purpose of giving fictitious value to these* bonds and stocks. The interest and other charges on Canada due to the war increase every day and even now are so great that it is difficult to say from what source they can be paid without an economic strain never hitherto undergone and a cutting down of expenses not yet even begun.
The credit of the country abroad is less than it has ever been. The last loan of $100,000,000 at 6 .per cent for two years netted only $96,111,111. In other words, the country is borrowing money at a charge of more than 8 per cent per annum. Note.-According to the Hamilton Times of August 17, Sir Thomas White stated the net proceeds to be $96,250.000, not $96,111,111, and that the commissions and charges were 13 per cent. He was speaking of a two-year 5 per cent loan. The cost would be 8 per cent if the 13 per cent comes out of the $96,250,000, but not otherwise. Its future credit may depend entirely on the belief of foreign bankers that good money will not be sent after bad, and that speculative enterprises will be allowed to find the financial level called for by their intrinsic merits.
The undersigned, all of whom as investors, have a stake in the prosperity of this country desire to call the attention of their fellow-countrymen to the grave risk they all are running of having their own earnings diverted for the purpose of securing profits to bondholders and stockholders of a concern, the equity in whose enterprise has been declared by the only people at all in a position to form an opinion to be of no value. It is also urged that the strongest possible protests be made before it is too late to all senators and members of Parliament.
Montreal, August 20, 1917.
P. W. Molson, James Law, H. R. Drummond, Geo. E. Drummond, Armand Chaput, Ferd. Prudhomme, Zeph. Hebert, A. J. Brown, C. S. Garland, H. A. Ekers, Chas. Chaput, A. Guy Ross, Joseph Ainey, C. Meredith, C. S. Campbell, W. R. Miller, George Caverhilt, Wm. McMaster, H. W. Blackwell, Andrew J. Dawes, Robert Hampson, George R. Hooper, George W. Sadler, W. W. Hutchison, Wm. C. Finley, F. H. Wilson, G. F. Benson, A. Craddock Simpson, James Morgan.
This is a statement made by very prominent businese men of Montreal, and I imagine the majority of them, from what I know, usually look with pleasure on the actions and conduct of this Government.
I would not say that they do so at present. I think, perhaps, they are wavering a little now that some matters have been exposed,

but, generally speaking, I think the majority of these men are supporters of the Government. They are evidently strongly opposed to the taking over of the Canadian Northern, and particularly to the manner of taking it over. On page 8 of the Gazette appears an editorial headed "The Railway Policy," which I will read to the House.


The CHAIRMAN:: This discussion is of such a general character that I think it should have taken place on the second reading of the Bill. It is for the committee to decide whether we will discuss the general principle of the Bill in committee, or whether we will take it up clause by clause.


George Perry Graham: I am discussing clause 1, which is the whole Bill.


Joseph Hormisdas Rainville: There were many statements in the long article which the hon. gentleman has read from the Gazette which were not relevant.


George Perry Graham: I will submit to any ruling the Chair makes. Clause 1 is the essence of the Bill. It refers to everything that was referred to in the article which I have read. Clause 1 reads:
1. His Majesty may acquire the six hundred thousand shares of capital stock of the Canadian Northern Railway Company (par value sixty million dollars), not now held by the Minister of Finance in trust for His Majesty, on such terms and conditions satisJ factory 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, and for a price to be determined by arbitration as hereinafter provided.
The article I have read was protesting against this clause.


William Thomas White: Has the hon. gentleman concluded hie statement?


George Perry Graham: I have concluded on the question of order.


Joseph Hormisdas Rainville: men the Bill wae before the committee on a former occasion the hon. gentleman who* was acting as chairman did not have time to call the clause before the Finance Minister made his statement, and discussion followed.


George Perry Graham: We must be on clause 1.


Joseph Hormisdas Rainville: As the hon. gentleman has read clause 1, I presume that clause is before the committee.


George Perry Graham: Then we must be on some clause, to be in order.


Joseph Hormisdas Rainville: As the hon. member has Tead the clause now, clause 1 is before the committee.


Rodolphe Lemieux: We are in the " claws " of Mackenzie and Mann, that is *all.


George Perry Graham: This editorial refers to the meat of the whole thing. It is fair to say that the Montreal Gazette is opposed to government ownership of public utilities.
I will read the editorial:
The Railway Policy.
We print in another column a protest against the purchase of the Canadian Northern Railway signed by many of the leading capitalists of Montreal, and this protest-is not lightly to be disregarded. The point at issue Is this, is the country to take over a burden that other shoulders should bear? Will the ownership of the Canadian Northern impose upon the people a financial obligation avoidable without danger to national interests? If the Government was divorced from the enterprise, the answer is easy. Like any other business undertaking the property should stew in its own juice, and' undergo the course of liquidation through receivership, emerging therefrom in stronger condition in respect of liabilities both of current and of capital account. That appears to be the view of the financiers whose statement we print, and there is, force in the view.
The Canadian Northern must be carried on as an operating road. It serves a great territory and a large community of people whose welfare is dependent upon the operation of this railway, but having exhausted its financial resources the alternative of Government ownership by acquisition of the common stock, or through the medium of a receivership is the only one presented.
To Government ownership we are opposed. A reorganization of the capital liabilities, through the medium of receivership is the other resource. The liability of Canada in either event remains, the Government and the provinces having guaranteed the great sum of $211,000,000 of bonds of the company. It is, however, necessary to learn the extent of the liability taken over by Canada in the Bill now before Parliament. What assets are acquired? What obligations incurred? If there be a margin on the debit side of the account, if Canada is assuming a debt over and above existing guarantees, the public may not unreasonably ask why. The railway is a fine property with excellent prospects, but after all is said, it is a business venture, which should be allowed to face the consequences of all business ventures. One thing is certain; the country should not be saddled with any avoidable liability. The debt created by the war is already large, and constantly increasing. New sources of taxation have to be tapped. TIhe outlook is by no means bright in respect of the Dominion finances and before the additional obligation of taking over the Canadian Northern Railway is incurred, it is necessary at the least that we should know precisely what is being purchased in the way of asset, and what is being incurred in the way of liability.
Having read those two articles to place the viewpoint referred to toy the Solicitor General and the hon. member for St. John before the committee, I can only say the case might have been fairly met had the Government proceeded under the statute of

1914, as I submit they have not, without introducing this new legislation to provide for the payment of equity which is declared to have no value, and which I cannot but believe the statute of 1914 contemplated would not be of value. If that Act were relied upon to obtain possession of the Canadian Northern we would have been pursuing the course outlined in 1914, a course which I believe every member of Parliament thought would have been pursued in the event of default.


William Thomas White: My hon. friend has read two articles from the Montreal Gazette, with reference to this Canadian Northern purchase Bill. In both articles, so far as I have heard them, there was put forward the view that there should be a receivership, and the opinions expressed were against public ownership. That is the gist of the communication addressed to the Gazette-receivership and antagonism to public ownership. 1 will take the time of the committee to give my views with respect to the whole railway situation with which we are confronted, because it has a direct bearing upon the question which has been raised. The Gazette article states that the Government has no knowledge of the assets and liabilities of this system. That statement is absolutely incorrect in every particular. The Comptroller of the Railway Department has been through the books of the Canadian Northern Railway system time and again. In 1914 we had special audits made of the assets and liabilities of the company. If hon. gentlemen will take the trouble to look up the statute of 1914 they will find set out there the stock-holdings and the bond-holdings of the Canadian Northern Railway system which were pledged, with all the undertakings and all the assets of every kind whatsoever of the Canadian Northern Railway system,, with trustees to secure the $45,000,000 bond issue guaranteed by the Dominion Government. Within the last two months we have had one of the best fiftns of auditors in the world, Messrs. Marwick, Mitchell, Peat & Co., make a most careful audit of the entire situation of the Canadian Northern Railway, both as to their assets and liabilities.


Emmanuel Berchmans Devlin: What are their liabilities?


William Thomas White: If my hon. friend will look at the balance sheet which has been laid on the Table, he will find the liabilities, and he will ajso find a statement of the assets. We have exhausted every effort to ascertain fMr. Graham.]
the precise situation. Messrs. Drayton, Acworth and Smith made a painstaking examination of the entire situation; and before we make an agreement the audit will be continued down so as to verify the present figures. We are not going into this with our eyes shut. We know what we are taking over. We know what the Canadian Northern system consists of, and we know what the liabilities are.


Emmanuel Berchmans Devlin: Without interrupting the minister-


William Thomas White: My hon. friend
is interrupting. I will answer the questions of my hon. friend later on.


Emmanuel Berchmans Devlin: Very well.


William Thomas White: Supposing the
Government of Canada was taking over the Canadian Pacific Railway to-morrow, as has been talked of-it has not been put forward by the Government, but it has been talked of through the country-does my hon. friend suggest we should expropriate the physical undertaking of the Canadian Pacific Railway, or should we buy its shares? The only suggestion which has ever been put forward, so far as I know, is that we should buy those shares at a price, or guarantee a certain dividend upon those shares. Supposing we came to ascertain how much we should guarantee as dividend on the shares, or how much we should pay. for the shares, could there be any fairer way devised than to submit the matter to the arbitrament of a board constituted as this board is to be constituted?- There must be some way of reaching a conclusion as to a fair price for whatever the Government is purchasing. That is exactly the position so far as the railway situation in Canada is concerned, and there is no use blinking it. Business men outside cannot understand this situation as the Government understands it, because we have been confronted with it for the last six 'years. It is not a theory; it is a condition. Ever since we have come into power, the Canadian Northern Railway Company and the Grand Trunk Pacific Railway Company have been in such a condition that they must have help or they would not be able to go on. There is no question about that. Who is responsible for that?
When it comes down to dealing with what this Government is doing now, let us ask ourselves why we are doing this, and why we are obliged to do it. What is the position of the Government with regard to the railways of the country? The policy of the National Transcontinental, which involved

an expenditure of $200,000,000, and the policy with regard to the Grand Trunk Pacific, in respect of which we have had to bring down grants for millions every year, and in respect of which there is in the Estimates a grant to-day of $7,500,000 to meet one year's shortage; the situation under which we have had to help the Canadian Northern to complete its construction and to carry on-all that has been the result of the policy of hon. gentlemen opposite. I do not wish to be understood as criticising them at this time with regard to these matters. I simply desire to say this, that this Government has been confronted with a situation which it has not brought about, which has been brought about by a policy of a Government which was in power before we took the reins of office, and we have had to deal with that situation as best we can. What are the alternatives with regard to the Canadian Northern Railway system? There are just three. The one mentioned in that article in the Gazette, and mentioned by one or two hon. members in this House, is to appoint a receiver. Both Government and Opposition in this House have time and again stated that they are opposed to that course. Hon. gentlemen opposite, through their leader, have expressly stated, time and again, that a receivership is not to be thought of. The hon. member for South Renfrew (Mr. Graham) has taken that position. So far as I know, those hon. gentlemen opposite who have been connected with the late Government, and their followers, have taken that view, namely, that there is not to be a receivership. I think that is a sound view. Sir Henry Drayton and Mr. Acworth thought that was a sound view; they said it would not do to have a receivership of this road. It is idle, at this stage when this Bill is before the committee, to say that we should have a receivership, because both sides of the House, as well as the commission we have appointed, have expressly and distinctly stated that there must be no receivership. Why is that a sound view? It is put forward that in the United States there have been receiverships of railways, but there have been no railways in the United States whose credit have been involved with the credit of the Federal and State Governments in the way in which the credit of this railway is involved. The point is that the credit of the Dominion through its guarantees, and the credit of the provinces, Ontario, Manitoba, Saskatchewan, Alberta, British Columbia, through their guarantees, are absolutely involved with the finances of this railway company, and consequently if we throw the system into liquidation, the most calamitous results would ensue so far as concerns the credit of the Dominion and of the provinces. There is no question about that, and that has been the ground upon which both sides in this House-and after all it is the parties in this House that have to determine policy-have determined against a receivership and against liquidation. Hon. gentlemen say to me: Why do you not foreclose? So far as the equity of the situation is concerned, if an ordinary mortgage is foreclosed, the court usually orders a sale in order to determine if there is any value in the equity of redemption. At common law in the old days, they would foreclose. Equity steps in and says: That is not fair; you must offer the property for sale to see if there is an equity of redemption. In other words, it is equitable that an investigation or sale proceedings should be had, in order to determine whether the owner of a property which is mortgaged are entitled to any equity. Even if we put into effect the legislation of 1914-and I believe I can give the committee good reasons why it should not be put into effect-it is stated in that legislation that we may foreclose, subject to such terms and conditions as Parliament may prescribe.


William Pugsley: If any.


William Thomas White: If any. I say, it would be open to Parliament and it would be equitable for Parliament to hold just such an investigation as we purpose holding in order to find out if there is any equity. It is nonsense to speak about large sums of money by way of award. What is the position of this company? This company is not earning its fixed charges. It is earning $11,000,000 over its operating expenses, and its fixed charges are $15,000,000. It is therefore, idle to speak of an award running into $25,000,000 or $30,000,000. Is it common sense or good sense? What do Messrs. Drayton and Acworth say? Although they found, as they stated, no existing equity, they said that it would be equitable to allow something to the owners, and they suggested an arbitration for the purpose of determining what amount of stock the present proprietors of this road should have in the Dominion Railway Company which they suggested should be incorporated. I pointed out to the House that, in that report of Messrs. Drayton and Acworth, a perfectly admirable report, an excellent report, thought out most carefully

in all details, they had by inadvertence, overlooked certain assets of the company. I have here a letter from the financial comptroller of railways. I made the statement to the House upon information which he had given to me. His letter, which is dated August 15, 1917, reads:
Dear Sir:-
Referring: to our conversation of this morning in which you asked whether in your remarks in the House of Commons yesterday, as reported in Hansard, pages 4644 to 4648, inclusive, you had correctly conveyed the information which I had previously furnished you, that in the findings of the majority report of the Royal Commission appointed to investigate the railway situation in Canada, that the statement, based on Professor Swain's valuation of the physical property of the Canadian Northern Railway system showing there was no equity, was in error.
I may state that it is quite clear that there is an error in that part of the Commissioners' report; the following assets on the asset side
are omitted:
Cash	$25,000,000
Accounts	receivable	 8,890,000
Operating materials and supplies	 916,000
Earnings,	freight	in transit..	558,000
Lands Assets.
Lands unsold, 3,245,987 acres.
Deferred payments and accrued interest, $6,662,000.
On the liability side, there is a shortage of some $25,000,000.
Yours faithfully,
(Sgd.) G. A. Bell.
I stated expressly to the House the other day, and I state again now, that the difference between book assets and book liabilities is not a test as to the value of the common stock. It hy no means follows that the common stock is at all equal in value to the difference between the assets and liabilities of the company. The best test is earning power, as was pointed out by Professor Swain, and in trying to reach a conclusion as to what arbitrators might fairly adjudge, we must bear in mind that this company, although its future prospects are promising, is not to-day earning' its full bond interest. The Government is confronted with a condition and not a theory. If we do not allow this railway system to go into the hands of the receiver, with all the consequences which I have mentioned, there is only one of two destinies for the Canadian Northern Railway Company, and no hon. member here can dissent from this proposition. If the Canadian Northern Railway Company does not go into the hands of a receiver, there are in Canada only two organizations strong enough to hold it: One is the Dominion Government

and the other is the Canadian Pacific Railway Company. You have three alternatives: receivership and liquidation; ownership by the Government of Canada, or ownership by the Canadian Pacific Railway Company.
Let us look at the matter from another *standpoint. Apart altogether from the Canadian Northern Railway Company, we are confronted with the Grand Trunk and the Grand Trunk Pacific Railway Companies. There is no use in our closing our eyes to the fact that every year we have had to aid the Grand Trunk Pacific to the extent of millions of dollars. What is going to be its future? Are we going to continue, year after year, aiding this railway?
Let us see what lies ahead of the Dominion of Canada. How many railways are we going to have on our hands? We have already the Intercolonial, which is ours. We have the National Transcontinental from Moncton to Winnipeg, which line is ours. The Grand Trunk Pacific railway must come in. There is also the Grand Trunk, which has liabilities in connection with that railway. I do not forecast the future with respect to that situation, but I say that the Grand Trunk Pacific in the West and the National Transcontinental need the Canadian Northern railway in the West to supplement them, if we are going to make them a success. Therefore, whether people are in favour of public ownership or not, the matter comes down to this, that if we are going to carry out the railway policy which has been forced upon us by the situation I have described, we need, in addition to the National Transcontinental and the Grand Trunk. Pacific, the Canadian Northern railway system in the West.
We need it because the Grand Trunk Pacific has no feeders. Who is responsible for all that? What is the Government to do? Should the Government let the company be wrecked and bought up here and there, bit by bit? No. Looking to the future we know we shall have the Grand Trunk Pacific and we may have other roads. We have the National Transcontinental. And what about the Canadian Northern, which fits into the Grand Trunk Pacific system in the West? Hon. gentlemen opposite have moved resolutions in this House-and the statement I shall make is not going to be a sweeping statement with regard to them, because I believe there are mixed opinions among hon. gentlemen opposite about this

matter; indeed, they have so expressed themselves. Some of them, I believe, are in favour of public ownership; some are opposed to it, and some are in favour of a continuation of aid from year to year. But they have united upon a resolution, and let me say that every word in the article read from the Montreal Gazette by my hon. friend (Mr. Graham) was opposed to the resolution for which he voted the other day in this House. He voted the other day for a resolution under which we were to take over the entire Canadian Northern system, lock, stock and barrel, by foreclosure, 'and in the worst way, not in the best way, as I shall show my hon. friend in a minute. Everything that my hon. friend read from the Montreal Gazette, if he believed it, was a condemnation of his vote the other day, because he voted for taking over the entire system, lock, stock and barrel. But not only that. In 1914 he voted for acquiring the stock in precisely the same way that we are acquiring it now; but he proposed to do it in a more foolish way than we are 'adopting, because he fixed a maximum price of $30,000,000, which we would never have thought for a moment of fixing. Why was the course he took the other day a foolish course as compared with the course we have adopted? We are now in the fourth year of this war. I listen to honourable gentlemen opposite sometimes, talking about money rates. Therd are no better fellows that I know than hon. gentlemen opposite, and when I say that they sometimes fail to realize that we are in the midst of a war I do not mean in any way to impeach their interest in this war, because it is just as great as my own. What I mean is this: Do they realize that we are in the fourth year of this war, and that financial conditions in this world are as they are to-day? They do not. I realize it, because I am brought into contact with it every day, and have to face it. It is true we have to pay a higher rate of interest for money. Why? Because the world has been for years at war; that is the reason why I realize, as I think no other man in this House realizes, that to our financial position we should give the most attentive consideration from day to day, and week to week, and month to month. Do hon, gentlemen opposite think that we on this side of the House desire to take over a railway system unless it is in the public interest to do. so? But what is the alternative? Although we are at war, this railway situation is here 307
and we have to face it. Hon. gentlemen opposite can sidestep it, but we cannot. We have to face it and we lay down this proposition: That so far as the
5 p.m. Canadian Northern system, is concerned, instead of going on paying out $15,000,000 or $20,000,000 every year to make good the shortage and enable them to carry on, we will take over the system for the people of Canada. Back of a good deal of criticsim of this measure-
I do not say back of all the oriticsm-is antagonism to the principle of public ownership, rather than criticism of method. The Dominion of Canada has had quite an experience in public ownership. It owns a great system of railways to-day. It owns the Intercolonial and the National Transcontinental. Throwing our imagination ahead we can eee what lies before us, and the question is, shall we acquire the Canadian Northern system or not? Personally, I believe that in five years' time the Canadian Northern system, in the hands of the Government and financed by the Government, will be a great system, but if we let it go into liquidation we shall lose it to the people of Canada.


Mr. CARVELL:: It depends on how much money you squander in connection with it.


William Thomas White: We won't squander any money in connection with it. If we do not do that, we should have only a straight line of railway from Moncton to Prince Rupert, with no feeders in the West. The hon. member for Carleton is as levelheaded a man as there is in the House, practically speaking, and he knows as well as any man, that a straight line like that is not going to give the results that we should like to see given by a transcontinental system owned by the Government. What did the Drayton-Acworth report say about that? They point out that the Canadian Northern system is vital to the successful operation of the Grand Trunk Pacific in the West, and they also indicate that the Grand Trunk is complementary to the Canadian Northern in the East.
Hon. gentlemen opposite say: Why don't you foreclose and take the physical properties? Hon. gentlemen who put that forward have not thought the matter out. If we were not at war, if we could readily raise $100,000,000, $200,000,000, or $300,000,000 that we do not require for the purposes of war, it would be feasible, but it is not feasible to-day, and I will tell you why. If we foreclose on the .Canadian Northern railway under the mortgage, what do we get? We



get the roadbed and the physical properties of the Canadian Northern Railway company. We also get the stocks and' bonds of the underlying companies; hon. gentlemen have overlooked that. The stocks and bonds of the underlying companies, which are included in the assets of the system as laid before this House, will still be outstanding. So that the difference would be this : Instead of owning $100,000,000 of stock of the Canadian Northern Railway company, which would enable us to control the Canadian Northern railway and all its constituent and subsidiary companies, we should have the physical property of the Candian Northern railway only, and the stocks and bonds1 which are embraced in the trust mortgage which was taken under the legislation of 1914.


William Pugsley: Does my hon. friend say that that would be the result if section 24 were acted upon?


William Thomas White: The mortgage
which was taken embraced the undertaking and the physical assets of the Canadian Northern Railway company, and there is pledged in addition to that, the stocks and bonds mentioned there.


William Pugsley: In which case the statute says that the whole system would be vested in His Majesty, subject, of course, to the outstanding underlying liabilities.


William Thomas White: Let us see what position we should be in. Hon gentlemen talk about our serious financial position due to the war. Now what would he our position if we took over the physical properties? Lt us assume that my hon. friend is right, and that we should take over the physical properties of all the underlying companies, although by the mortgage it is the undertaking of the Canadian Northern railway and the stocks and bonds of the underlying companies that are pledged. But let us assume he is right, although he is not right. If we have the physical properties of the Canadian Northern railway, and the Canadian Northern Quebec, the Canadian Northern Ontario, and of the other constituent companies, what becomes of all the underlying liabilities? They are there and have to be taken care of. How could we get title in fee simple to the properties of the Canadian Northern Railway system, without clearing up the indebtedness? Suppose that under the statute we reorganize; what does that mean? It means creating a new company, and negotiating with the present bondholders of the exist-
ing companies, because the hew company would be a separate entity.


William Pugsley: Why has all that to be done? Why would not the new company take it, subject to all that?


William Thomas White: What about the floating indebtedness?


William Pugsley: If you take the stock you have to pay the floating indebtedness.


William Thomas White: Supposing we
foreclose and wipe out the Canadian Northern and its shareholders? There are outstanding to-day over $100,000,000 of short-date liabilities for which the Canadian Northern is liable. Supposing we foreclose and take all the properties of the Canadian Northern away from them, what is the legal position? The legal position is that the Canadian Northern, without any other assets, is liable for these short-date obligations. Does my hon. friend mean to say that a railway company in that position, and which is only a name, because we take its property away from it, can renew its loans?


William Pugsley: Why not, because these bankers in New York only hold guaranteed securities as collateral, and they would be glad to substitute notes of the new company.


William Thomas White: I do not agree with my hon. friend for a minute. We take away all the assets of .the railway company and leave only a name. There are outstanding liabilities for notes secured by collateral, guaranteed or not guaranteed, and these loans-will he called. What happens to the Canadian Northern? It has to be foreclosed and a receivership is the result. That receivership means default under the trust mortgages upon the property. The principal may become due and payable and you have the whole financial situation about your ears.


William Pugsley: Those difficulties are all imaginary.


Edward Mortimer Macdonald: Have you not to take care of the short-date securities now?


William Thomas White: Yes, because the Canadian Northern to-day is a running system.


Edward Mortimer Macdonald: That does not make any difference to the amount of the shortterm notes which you must renew.


William Thomas White: It makes all the difference in the world if you have taken

away the properties of the Canadian Northern. Does my hon. friend not realize what the effect will be?


Edward Mortimer Macdonald: Now you are only quibbling.


William Thomas White: I am not quibbling. Then you have the unsecured indebtedness of the Canadian Northern. Suppose you foreclose and take away the assets and properties of the Canadian Northern, what about this unsecured indebtedness?


Edward Mortimer Macdonald: You have to take care of this short-date obligation now.


William Thomas White: The obligation can be financed now, but it would become altogether different if you were to 'foreclose, because if a receivership were appointed all these other things would happen.


William Pugsley: If a receivership were appointed you have section 24 and you would become the absolute owner of the whole Canadian Northern system. How could a receivership adversely affect the new company?


William Thomas White: It would affect it very seriously. If my hon. friend will look at the trust mortgages securing the bond issues against the Canadian Northern he will find that one event of default is the appointment of a receiver. A receiver of what? Of the present company. If a receivership takes place default occurs under these mortgages and you have this financial situation that I have mentioned.


William Pugsley: Then section 24 is not so good as the minister said it was in 1914?


William Thomas White: It would be in ordinary times. In ordinary times a complete arrangement could be made to finance the Canadian Northern. The Government could substitute its securities for other securities which run from 20 to 40 years and the situation could be dealt with in that way. It cannot be dealt with to-day at all. It is not possible having regard to the financial condition. Thus, to-day, the proper course to take is the course which preserves /the Canadian Northern Railway company as a corporate organization in order that it may continue its financing. There is a loan of $11,500,000 coming due in New York. The Canadian Northern has to renew that loan in New York. If the Canadian Northern were wiped out as an entity that loan would have to be met, and you would have a
307J
financial situation of some gravity. As far as the course we are adopting is concerned, it is the best course having regard to finance. It is a course which is greatly preferable to foreclosing if the principle is adopted that the equity of redemption, if there is any value in it, is entitled to be valued. If that principle is adopted, and I submit it would be adopted by Parliament, as it is adopted by the courts, that is the most preferable course and it is the course that hon. gentlemen opposite voted for and is practically the same as that which we favour on this side of the House except that the one that we put forward is better from the standpoint of finance to that which they have put forward.
The statement that we do not know what the assets and liabilities are is not correct. We have made a very full investigation. Over a course of years that investigation has been proceeding. Auditors have gone through the books. The accounts of the company have been verified, and will be verified further, as to the financial condition, before any agreement is entered into. This House has ample information upon which to reach a decision upon a question as large as this. If you were taking over a small concern with assets of a few hundred dollars you would examine into everything to the minutest detail. I suppose that could be done. Of course, the Government would never be taking over anything of that kind. An individual would pursue that course but when you are taking over a great railway system like this, if you get at the liabilities, the bonded indebtedness, the floating indebtedness, the physical properties, the bonds, stocks and other securities it holds, and its earning power, you have substantially all the information necessary upon which to form your judgment because this is such a large transaction that you cannot get down to a matter of the uttermost detail.


William Pugsley: The minister asks:
What about the unsecured floating indebtedness? I take it that is the unsecured floating indebtedness which the Government must assume. What is the amount of that? We have had no actual information as to the unsecured floating indebtedness.


William Thomas White: The fact of the
matter is that my hon. friend has been so busily engaged in connection with the soldiers' votes Bill and other matters that he has not taken the trouble to examine the information which has been placed before
**4854

Parliament because this is all in the blue-book.


William Pugsley: Would the minister give it to us, succinctly, in round figures?


William Thomas White: My hon. friend
will find it in the balance sheet of April 30, certified to by the auditors and which we placed on the Table the other day. This transaction should be considered in the light of the railway situation. It must be considered in that way having regard to the fact that we have four transcontinental railway systems in this country, that the Government has the Intercolonial, the National Transcontinental and that it will probably have the Grand Trunk Pacific. Are we going to lose the Canadian Northern at this time?


William Pugsley: We do not need to lose it under section 24.


William Thomas White: But the hon.
member for South Renfrew (Mr. Graham) set up the criticism, which he made his own, from a newspaper to the effect that publio ownership was a mistake .and that there should be a receivership. I am addressing myself to that. I say that this transaction must be regarded as a step forward in public ownership. If we lose this Canadian Northern Railway company in the West, we will not have feeders for the Grand Trunk Pacific company.


William Pugsley: Better build 100 branch lines in the West than take this.


William Thomas White: If we eliminate receivership as a possibility, and it has ben opposed by both parties in this House, there are only two possible destinies for this railway, the Canadian Pacific railway Or the Dominion of Canada. My own strong view is that the people of Canada will insist that this Canadian Northern railway should belong to them.


Some hon. MEMBERS:: Hear, hear.


William Thomas White: That is my own view of it. We are preserving the Organization of that railway in the way we are taking it over, with a plan that is absolutely fair for determining the value of the common stock which we do not hold. In a word, the transaction is this: That the Dominion of Canada owns 540,000,000 of this stock; we are the minority shareholders. Mackenzie, Mann & Company, Limited, hold the whole balance. Instead of continuing to pay out money, the ultimate benefit of which would go to them, we say: We are going to buy you out so

that the ultimate benefit of whatever we pay over will enure to the people of Canada, and to do that we suggest arbitration -and I do not know any fairer way.


William Pugsley: The statement of the
minister makes the situation worse than I thought it was-decidedly worse. The minister has said that there is in the vicinity of ,5100,000,000 of unsecured-


William Thomas White: No, those are the short-date obligations.


William Pugsley: The minister said unsecured floating indebtedness.


William Thomas White: No.


William Pugsley: I asked the minister to state the _ amount of the unsecured floating indebtedness. He said I would find it in the blue-book. The hon. member for Pictou (Mr. Macdonald) informed me that it -was 596,000,000.


William Thomas White: He is entirely wrong.


William Pugsley: What is it? The minister should say what the unsecured floating liability which we are assuming under the purchase of this stock by arbitration is, because the moment we become the Canadian Northern Railway company we, ipso facto, become liable for all the obligations of the company, both secured and unsecured. Therefore the country has a right to know that.


William Thomas White: If my hon. friend looks at the balance sheet of June 30, 1916, he will see:
Temporary loans against deposit as collateral of inter alia Government Guaranteed Securities, the value of which at current prices exceeds the amount borrowed	$55,912,861.80
Due to other companies on Construction Account (Secured). .$16,666,957.26 Current Diabilities-*
Payrolls	$ 1,822,708.23
" Audited vouchers and other floating liabilities... 11,161,443.88

Thus there is a total of about $13,000,000 current liabilities. I did not say $100,000,000 unsecured, I said $100,000,000 representing short-date securities.


William Pugsley: They are securities. I thought the minister used plain language. I understood him to say: What about the unsecured floating indebtedness amounting to $100,000,000? There are the words of the minister, and I was surprised that there

was such an enormous unsecured floating indebtedness. JJow the minister explains that what he meant was an indebtedness to bankers against which they hold securities guaranteed by the Dominion Government and other good securities. Therefore I must assume for the moment, until the minister makes another statement, that practically there is very little unsecured floating indebtedness or floating unsecured indebtedness.
The minister says that section 24 of the Act of 1914 contained admirable provisions which could be well acted upon if these were not war times. I am unable to follow my hon. friend in the suggestion that that section is not just as good in war times as it would be in any other time. I have read with very great care the remarks which were made by my hon. friend in 1914 when he was seeking to persuade Parliament to authorize the Government to guarantee these bonds to the extent of $45,000,000. I have read his language with regard to the very great advantage it would be to give to the Government the power, or to reserve to Parliament the power, in the form of a statutory agreement

that is what it was an agreement entered into by the Canadian Northern interests-that in case default should be made the Government would be authorized to act and to declare by Order in Council the equity of redemption in all the premises covered by that mortgage to secure the $45,000,000 foreclosed. Now, what are the premises? The premises are the physical system of the Canadian Northern Railway company and the various constituent companies composing the system. What further are the premises which are mortgaged in that mortgage to secure the bonds guaranteed by the Government under the legislaion of 1914? They are all the various stocks in the subsidiary companies and the bonds, if there were any, which were held by the Canadian Northern Railway company. They all pass, under that mortgage, to the trustees appointed to secure these debentures. They are the premises which are covered by the mortgage, and under the provisions of section 24, the moment the Governor in Council passed that order for foreclosure, the equity of redemption would be absolutely wiped out and His Majesty would become the owner of the system. The position would 'be exactly the same as if, instead of purchasing the stock of the Canadian Northern Railway company, they, under legislative authority, were authorized to make a transfer of their equity of redemption in
the Canadian Northern Railway system and all the constituent companies and in these various stocks, to His Majesty. Let me read again the words of that section, because I think it is very important that the country should understand it.
'Sir THOMAS WHITE: So do I.


William Pugsley: This Parliament, acting in good faith, upon the representations and the assurance of the Government as to the course which they would take in case there was any default, authorized this enormous obligation to be entered into. What are the words:
If authorized by the Parliament of Canada, the Governor in Council may, on such terms and conditions (.if any) as Parliament may-prescribe, at any time while any event of default shall exist and be continuing, by order declare the equity of redemption of the Canadian Northern and of all other persons whomsoever in the mortgaged premises to be foreclosed, and thereupon the equity of redemption of the Canadian Northern (and of such other persons) in the mortgaged premises and everjr part thereof shall be and become absolutely barred and foreclosed, and the same shall' thereupon be vested in His Majesty in right of the Dominion of Canada, any statutory enactment or any rule of law or equity to the contrary notwithstanding.


William Thomas White: What are the mortgaged premises uuder that statute? Get the definition.


William Pugsley: They are, as I remember it, the whole Canadian Northern Railway system.


William Thomas White: Look it up.


William Pugsley: We will find it in schedule 1 of the Act of 1914.


William Thomas White: And schedule 2.


William Pugsley: Take them both. Let
us read them. These are the stocks.


William Thomas White: Exactly.


William Pugsley: The hon. minister
knows what stocks are. This section says:
The Bay of Quinte Railway Company-
Certain amounts are given here, but I will not read them.


William Thomas White: Pardon me, the point I make is this: that the mortgaged premises include not only the physical assets of the Canadian Northern Railway Company, but, in addition, the stocks and bonds of the constituent companies.


William Pugsley: Quite so, and I presume that was all in the mind of my hon. friend the Solicitor General and the Minister of


Mr. STEVENS:: Does my hon. friend advocate that the Government of Canada should exercise its powers so as to evade or repudiate its liabilities simply because, as he suggests, they may not be properly secured5


William Pugsley: No, I am not suggesting that. For the moment I am meeting the suggestion of the Finance Minister to the effect that these obligations, being outstanding, would in some way embarrass the Government if it acted under section 24 and became the owner of the system, or was obliged to form a new company. Having become the owner of the system under the authority of section 24, and having formed the new company, what -would the Government do? It would at once inquire into the securities which it had taken over under that order. It would find a certain number of valuable securities in the city of New York -securities guaranteed by the Governments of the Dominion and of the different provinces. It would find certain loans had been made against these securities. I ask you, Sir, if the new company, known to be a company acting for Hie Majesty, would have any more difficulty in securing a renewal of those loans than the Canadian Northern Railway company itself would have? Would not its security be as good as or better than that of the Canadian Northern Railway company? It would own all the property the Canadian Northern Railway company owns today, and the company would be a new one free from all entanglements and obligations of every kind and description, and having at its back the Government of Canada, as representing His Majesty the King. Yet the minister says this new company, organized under those circumstances, would have difficulty in renewing its short-term obligations held by the bankers of New York against absolutely good guaranteed securities. The minister has formed the idea, based upon something I do not understand, that if section 24 were acted upon it would give somebody an opportunity to put some company into the hands of a receiver. As a matter of fact, it would not do anything of the kind. It would simply put His Majesty, or the new company to which His Majesty would transfer the property, subject to these outlying securities, in exactly the same position as if the Canadian Northern Railway company transferred its equity of redemption to the Crown under legislative authority.


William Thomas White: What would happen with regard to the floating indebtedness?


William Pugsley: I have just spoken of it. My hon. friend is now speaking of some secured indebtedness.


William Thomas White: I am speaking of both. Take the unsecured indebtedness.


William Pugsley: I cannot find any unsecured indebtedness, except about one million dollars.


William Thomas White: Take the indebtedness which is secured, but not by Government guaranteed security.


William Pugsley: Secured by what?


William Thomas White: Say, by Canadian Northern debenture stock, or by some other security not guaranteed by the Government
in other words, not high-class collateral.


William Pugsley: What is the idea of the Government when it takes over the stock of the Canadian Northern Railway Company? It is that the Government will go to the holders of those securities, to the bankers who have lent money, who hold those short-term notes and say to them: We new represent the Canadian Northern Railway company, and we want you to extend those loans. What would hinder the Minister of Finance from doing exactly the same thing if a new company were formed to hold the equity of redemption? Could not his representative, through this new company, go ro those bankers in exactly the same way and say: We now own the equity of redemption in these securities that are pledged ro you; we want you to extend your loans against them? Would not the bankers do that just as well for the new company with the Government of Canada behind it and owning all the stock of it, as if the Goven-ment went to them saying: we own the stock of this old company, the Canadian Northern? Where would be the difference? In the ^ne case you have a new company free from all entanglements, free to act as it might in the best interest of the country. In the other, you have an old company with many entanglements, about which we know nothing to-day, but about which we may discover something later on if. this legislation goes through.


William Thomas White: Does my hon. friend take the position that the new company would pay or provide for the payment of all the unsecured as well as the secured loans?


William Pugsley: Certainly, just-


William Thomas White: What is the use in doing that if the value of the equity of redemption under the legislation of 1914 would have to be considered?


William Pugsley: It would not have to be considered at all.


William Thomas White: That is'just the point.


William Pugsley: I am answering the point that the Minister of Finance made that there would be, in connection with a new company, inconveniences and difficulties which would not exist if His Majesty acquired the stock of the old company.


William Thomas White: But there would at least have to be a substitution.


William Pugsley: A substitution of liabilities, certainly.


William Thomas White: What then is the advantage?


William Pugsley: There is no advantage to Mackenzie, Mann and Company, Limited. There is an advantage to the country, namely, that the country may be saved from the further payment of $60,000,000. The advantage to the people of this country is that they would be saved from paying whatever amount those three arbitrators might determine should be paid, having in view as I have said, not merely the value of the stock to-day, but its prospective value based upon its prospective earnings, which amount there is no obligation legal or moral upon this country to-day to pay if we choose to act under the provisions of section 24 of the statute of 1914. I am endeavouring to meet the objection that the Minister of Finance has so speciously put forward that there are some difficulties in connection with a new company.


William Thomas White: There would be.


William Pugsley: There would not be one iota of difficulty, and no one knows that better than the Minister of Finance. He is only putting that up as an argument in order to try to escape, if he can, from the consequence of his not acting upon the legislation of 1914. He says that, in some way or another, if the equity were foreclosed by Order in Council, somebody could put the property into the hands of a receiver. That could not be done, because His Majesty, as the owner of the system, would meet the liabilities, would meet the interest charges, just as the Crown is bound to meet the interest charges if it becomes the owner of this $60,000,000 worth of stock, and just as any man purchasing the equity of redemption in a property would be obliged to pay the taxes and the interest upon any mortgage which might be upon the property.


William Thomas White: I was dealing with the case in which the Government would
foreclose and not pay the unsecured or floats ing indebtedness, or the short-term liabilities. I said that, if that were not done, then receivership of the Canadian Northern would follow with the consequences I mentioned.


William Pugsley: The minister was assuming that the Government, in case they foreclosed the equity of redemption under section 24 of the statute and formed a new company, might act differently with respect to the outstanding obligations from what they would do if they took over the stock of the Canadian Northen Railway company.


William Thomas White: That was the argument of hon. gentlemen opposite.


William Pugsley: I thought the minister was arguing that if, in some way or another, section 24 were acted upon and the equity of redemption foreclosed by Order in Council, somebody would be able to put this system into liquidation.


William Thomas White: I was discussing the consequences which would follow from not paying those unsecured or short-term liabilities, because I understood hon. gentlemen opposite were putting forward the suggestion that we should foreclose and no more. In confirmation of that, might I point out to my hon. friend that he himself suggested to-day that we should repudiate the liability on the debenture stock which was issued with the land grand as security?


William Pugsley: The debenture stock?


William Thomas White: Yes. My hon. friend suggested that we should foreclose and not assume that particular indebtedness.


William Pugsley: Does the minister say that the debenture stock was issued against the land?


William Thomas White: It was issued with the land as security.


William Pugsley: Does he mean that there are $46,000,000 of securities out against those lands?


William Thomas White: The land grant debenture stock of which ,my hon. friend was speaking.


William Pugsley: I call them land grant bonds.


William Thomas White: But they are a liability of the company.


William Pugsley: I thought the minister had in view the land grant bonds. Surely the minister meant-certainly his language would lead one to believe that he meant that, if section 24 were acted upon and the equity of redemption were foreclosed by Order in Council, there would necessarily arise a condition of affairs under which creditors would be able to put the system into the hands of a receiver. I am glad the minister did not mean that. I did not see how such a result would follow. Of course, I realize, and every one realizes, that, if the Government became the owner of the equity of redemption by virtue of an' Order in Council, foreclosing under an agreement entered into in 1914, and if the Government did not pay the interest upon the obligations against that property,
. there would be a receivership, and there would be a foreclosure of those mortgages. My answer to that is this: that the Government could, in the name of His Majesty, become the owner of the property under an Order in Council barring or foreclosing the equity of redemption, and then be, so far as all those outstanding securities are concerned, in exactly the same position as the Canadian Northern is in to-day. If any of those bonds run for 40 years, they would still run for 40 years; if any of them run for 20 years, they would still run for 20 years. Therefore, there would be no inconvenience whatever, but on the contrary, there would be the advantage of having a new company with a new organization, which would be acting for His Majesty under the provisions of the statute of 1914.
What would we get rid of in that way? We would get rid of the probability of having to pay out an enormous sum of money under this arbitration to the holders of the stock of the Canadian Northern. Is that not something to get rid of? Some honourable gentlemen opposite argue that it would be confiscation to take that course. Surely, it would not be confiscation to carry out an agreement that has been entered into. Suppose a man has a mortgage on my property and the interest upon it amounts to the rental and the taxes and the cost of repairs, and I go to him and say: 'I want to borrow $5,000 more upon the property; I have faith and believe that I can carry the thing through;
I agree that if you will lend me $5,000 you can take charge of the property if I make default in the payment of the interest; I will hand you an agreement releasing my [Sir Thomas Whited
equity of redemption in the property; it is yours, without your being obliged to take any proceedings for foreclosure or putting the property up for sale. I act upon the agreement and the mortgagor acts upon it. Could I isay afterwards that I was treated most shamefully because my agreement was simply carried out in the letter and in the spirit in which I made it? Is not that exactly the same position as between Mackenzie, Mann and Company and His Majesty, as represented by the Government of the day? After they have received millions and millions of the public moneys Mackenzie, Mann and Company ask for further assistance. They said to this Government " Give us the assistance and if we do not pay the interest upon the money, if we make default in any respect, we agree that Parliament may authorize you, simply by Order in Council, without any legal proceedings whatever, to bar our equity in the property and take over and become the absolute owners of the system." That was the agreement, and all we ask is that it be carried out.
At six o'clock the committee took recess.
After Recess.
The committee resumed at eight o'clock, Mr. Kainville in the Chair.
Mr. PUGSLEY Mr. Chairman, just before recess I was speaking of what I thought was the untenable position taken by my hon. friend the Minister of Finance that if this railway system was acquired in any other way than by taking over this stock, it might lead to complications. I thought I largely answered that argument of my hon. friend. Indeed, I understood that he admitted that there would not be any complications arising with respect to a new company, if the Government acted under section 24 of the statutes of 1914 and foreclosed equity of redemption under the statutory agreement, and that if a new company were organized by the Government it would stand in a position just as good as that of the Canadian Northern Railway company. In the one case the Government would own all the stock of the new company and in the other case, by virtue of this Bill, the Government would simply own the stock of the Canadian Northern Railway company. I was endeavouring to deal with the question from the standpoint of the Government taking over the system and becoming liable for the underlying obligations. Of course, if the Government were simply to expropriate the property

and have it valued by the judge of the Exchequer Court, I have very little doubt, from the evidence which we have as to the actual cost of the road, that the Government would get the system for a great deal less money-for many millions less than is represented by the existing securities. There are something like $147,000,000 of securities which are not guaranteed by either the Dominion or any of the provinces. I presume these securities are held by strong financial men, by bankers and others who could afford to lose a portion of their securities just as well as the country could afford to pay them money which is not represented by the system. But, if the Government decide that it is better, for reasons connected with maintaining the public credit, to pay this $147,000,000 of obligations which are unsecured by any public authority, a proposition with which I do not at all agree, when it does seem to me that the road ought to be taken under the authority of the statute of 1914 and under the statutory agreement which was then made, instead of taking a step which means in all human possibility-indeed I think, necessarily means-handing out a great many more millions of the money of the people of Canada to Messr-i. Mackenzie and Mann and their associates.
I am sorry that I did not have an opportunity of hearing the Solicitor General (Mr. Meighen) this afternoon, as possibly he referred to the remarks which I had made. I was obliged to leave the Chamber to attend a committee meeting. But I shall have an opportunity of seeing his remarks in Hansard, and possibly there may be an occasion later on in the discussion of the Bill when I can give attention to his observations in case they seem to require some reply from me.
The Minister of Finance gives an extraordinary reason for taking over the Canadian Northern Railway system. When he seemed to fail in argument as to the reason for this extraordinary step upon other grounds, he said: "Why, Mr. Chairman, we must look ahead; there is a great transcontinental railway system extending from Moncton to Winnipeg already owned by the Government, and built with Government aid from Winnipeg to the Pacific ocean; it is capable of being a great railway system, and the Government must take it over in the near future." That is the effect of what my hon. friend said, but, he added: "That road has no branch lines," or, "that road is lacking in branch lines, and we want the Canadian Northern
railway in order to supplement the Grand Trunk Pacific system." Is it to be suggested for one moment that this Government is to be plunged into an obligation of $500,000,000 and upwards in order to secure a system of branch lines for the Grand Trunk Pacific? Did any one ever hear of such an extraordinary suggestion? It will be better to wait until the Government acquires the Grand Trunk Pacific system, and then build all the branch lines necessary to tap the country north and south. You could build all the branch lines you want in the Canadian West, even at present prices of labour and materials, for $20,000 a mile. For $40,000,000 you could build 2,000 miles of branch lines to feed the system of the Grand Trunk Pacific. But, instead of that, my hon. friend suggests, as [DOT]a reason why we should take over the Canadian Northern Railway system and bind the country to this vast obligation, that we want branches in order to feed the Grand Trunk Pacific system. If that is the best reason my hon. friend can give, I do not think his proposal will give very much satisfaction to the people of this country.
There is another reason why this measure should not be pressed. It is taking a very great departure; it is providing for the government ownership of a great railway system. This question has never been submitted to the people. Speaking for the people of my own province, I am satisfied I represent their opinion when I say that they are not in favour of imposing this vast obligation upon the Canadian public at the present time. I deny the right of this moribund Parliament- this Parliament which died a constitutional death nearly a year ago, and which is in existence to-day, not by the votes of 'the people, but simply by our own votes, and as the result of a resolution which we passed requesting the Imperial Parliament to extend our parliamentary term-to commit the people of Canada on this question. This moribund Parliament has no mandate from the people to impose upon them an obligation of $500,000,000 and upwards, which is but the beginning of the financial obligations which will be imposed by reason of the acquisition of this system. It h<*s no constitutional or moral right to do it.
I must not detain the committee, because I know there are many hon. gentlemen on this side of the House who desire to speak. Hon. gentlemen on the other side who may feel constrained as supporters of the Gov-

eminent to give their adherence to this extraordinary measure will want to explain to the people why they are prepared to take that course. The people will demand from them an explanation on the floor of this House of their reasons for so doing. There are hon. gentlemen on this side who would deem it to be their duty to call the attention of Parliament and of the people to the objectionable proposals which are now under consideration.
I regret very much indeed that a measure so important and so far-reaching in its consequences, involving the people in tremendous obligations at this time when the country requires its full credit in order to raise the moneys which are necessary to carry on the war, should be brought down so late in the session.
It is over seven months since Parliament first met, and this measure might have been presented for consideration long ago. It is impossible to properly consider it before the expiry of the life of this Parliament. It might be well for the minister to have printed for circulation the statements which he presented a few days ago. Time should be given in order that the people of Canada may become acquainted with all that this measure means. They have not had time for that yet and that time cannot be given if this measure is to be put through before the extended life of this Parliament expires. The people are becoming aroused, and as they become more fully acquainted with the measure, I am satisfied that the feeling against it will become stronger and stronger.


Emmanuel Berchmans Devlin: 
William Thomas White: No. I would refer my hon. friend to the report of Sir Henry Drayton and Mr. Acworth, which contains Professor Swain's physical valuation of the road, and I would refer him to Professor Swain's remarks about the word " value " which he says is one of the most difficult to define. No one could state offhand the value of a railway system such as the Canadian Pacific railway, Grand Trunk railway or Canadian Northern railway. That would be one of the matters which a board of arbitrators might consider. I am unable to give the precise value of the Canadian Northern Railway system, but the book value is shown in the reports placed before Parliament, and the physical [Mr. Pugsley.l	.
valuation of Professor Swain, with the comments thereon of Sir Henry Drayton and Mr. Acworth, appear in their report.


Emmanuel Berchmans Devlin: Am I properly informed that the general debts of the company amount to $402,000,000?


William Thomas White: The auditors report, which has [been presented to the House, shows the funded and floating indebtedness.


Emmanuel Berchmans Devlin: What provision has been made by the Government to raise the money necessary to pay for this road?


William Thomas White: I am glad my hon. friend has asked that question because it shows, if I may say so without offence, an entire misconception of the transaction. If we expropriated the Canadian Northern Railway system, took over all the physical properties and paid1 off the indebtedness, then we should have to raise a very large amount to do it, but that is precisely what we are not doing and what it would be very unwise, or I might say impossible, to do at this time. I pointed out on a previous occasion that the Canadian Northern Railway debt is pretty well funded, that is to say the securities have been issued for a long period of years, maturing twenty, thirty or forty years from now. That is the principal part of the debt. One advantage that we get from maintaining the corporate organization of this company is that we do not have to raise money to pay off the indebtedness as shown by these balance sheets. The Dominion Government simply becomes the sole shareholder of the company and the company goes on financing just as in the past.
Another point is that the Dominion Government is not brought into privity with its creditors, legally speaking. It is a mistake to say that the Dominion debt is added to, speaking legally and strictly, because it is not. We are acquiring $60.000,000 of stock in addition to the $40,000 000 we have, so that we shall be the owners of $100,000,000 of fully paid-up stock in the Canadian Northern railway which concern will continue to run as a corporation. Its obligations will be the obligations of the Canadian Northern railway as they are to-day. But the Dominion Government will, of course, help it to run. If the Dominion took over the Canadian Pacific railway to-morrow it would not have to raise money to pay off all the funded indebtedness of the system; it would run it as a corporation, and the earnings of the road would take care of the bonded indebtedness and

4S63
would pay a substantial dividend upon the shares.


Emmanuel Berchmans Devlin: Would the minister state to what companies the amount of $16,666,957 is due?


William Thomas White: I do not regard it as relevant to the discussion to say that so much is owed to this company or to that institution. That is a domestic matter between the company and its bankers here and in England.


Emmanuel Berchmans Devlin: We will have to pay this will we not?	.


William Thomas White: No, the company will pay it. If the company is unable, out of its earnings, to pay all its indebtedness, then the Dominion will have to make advances to it as in the past, but with this essential and vital difference, that the Dominion Government will own the company and that the advances we make will be for the benefit of our own company instead of another.


Emmanuel Berchmans Devlin: Will the Government own the physical assets?


William Thomas White: No, the stock.


Emmanuel Berchmans Devlin: How does the minister make the difference? We will own the stock of the company, but we will not own any of the physical assets, and we assume all liabilities?


William Thomas White: No, we do not.


Emmanuel Berchmans Devlin: Who will own the physical assets?


William Thomas White: The company.


Emmanuel Berchmans Devlin: And who will own the stock in the company?


William Thomas White: The Dominion Government.


Emmanuel Berchmans Devlin: I must say that I cannot consent, as a member of this House, to the people I represent becoming the purchaser of nothing-according to the Government- for which we will have to pay a very large sum of money. This proposed purchase of 600,000 shares of stock which will involve obligations running into hundreds of millions-advancing money constantly to a company, gradually, as the minister says, not all at once-is a policy I could not conscientiously support. I do not intend to speak often in committee on this subject, but I want to place myself on record as saying that this, to my mind, is about the worst transaction the Government has ever
entered into. I say that with all respect to the Government. I mean that it is the worst in the value that the Government is receiving for wrhat it is purchasing. To sum up the whole situation, it seems to me to resolve itself into this. It is apparent that we are getting something, but what that something is the Government do not know and cannot tell us. We are going to pay something for that something; to whom we are going to make payment the Government does not know or will not tell us. We are going to pay a certain amount for that something, how much the Government does not know or will not tell us. We are going to get something apparently of value-or else we would not buy it-what the value is the Government does not know or will not tell us. We are going to assume debts and obligations; to what extent the Government does not know or will not tell us. Apart from the debts we are going to assume, and the values we are going to get-if we get anything of value-we are going to become purchasers of 600,000 shares of stock, but the Government cannot, tell what it is worth. The Government is going to arbitrate, and has named its arbitrators. Other arbitrators will be named, and we will pay the amount that arbitration will fix for that stock. We will assume that liability, in addition to the other liabilities and debts of the company. Where we are going to get the money to pay these liabilities, the Government has not told us. It is well known that money is very expensive; rates of interest are extremely high; we are obliged now to impose taxes upon the people of this country in every shape and form; we require every possible resource of this country towards the winning of the war. We have imposed an income tax for that purpose. The Government is asking the people to assume terrific obligations under this measure; to what extent they cannot say; and this at a time when the people are hardly able to bear the obligations imposed upon them by the war. I say emphatically that I want to see this country developed along sound lines. I want to see every resource of this country utilized to the advantage of the people and to the advantage of Great Britain and the Allies; I want to see a proper and sound programme carried on by the Government of this country; and for one, I am not prepared to give my consent, on behalf of the people I represent, to the assumption of liabilities and debts for something which apparently is valueless, or the value of which the Government cannot tell us.


William Thomas White: I beg to move
that we proceed now to consider section 2. We have considered section 1 for two or three days in committee, and I would like to have some progress made.


Edward Mortimer Macdonald: Before leaving section 1, I should like to call the attention of the minister to the fact that he has not given us the information I asked for when we were in committee before, as to the names of the pledgees of the stock. That is a matter of very great importance, in view of the fact that, under the Act of 1914, Messrs. Mackenzie and Mann, the contractors, covenanted with the Government to give up all possible claims which they might have for commission and otherwise. It is important to know who the pledgees of the stock are, and when the stock was pledged with them. For, if it was pledged since the Act of 1914, the pledgees of the stock, as a matter of law, would have no better or greater title than the original owners of-the stock had; and by reason of the fact that the Act of 1914 was a public statute, they would be bound to know the law, and their rights would he subrogated to' the rights of the original holders. They are therefore, in no better position than the original holders. One of the terms of the agreement ratified by the Act of 1914 reads as follows:
The contractors covenant that they will not at any time make or seek to enforce any claim tor 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, understanding,, agreement, or stipulation of any kind, heretofore or hereafter made, whereby or whereunder they, or any one or more of them, may now or hereafter be entitled to receive from the Canadian Northern, or from any of the constituent or subsidiary companies, any construction profits in respect of work heretofore undertaken, or as consideration for transfers of properties rights or franchises already transferred, or to be transferred under sub clauses (a) and (b) of this clause, 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.
The Drayton-Acworth Report says:
The property investment of the Canadian Northern Railway system is stated in the balance sheet of June 30, 1916, at $494,112,489.34. This figure admittedly has been written up to include $100,000,000 of capital stock. And this stock, as we have already said, was issued without any cash consideration.
I called the attention of the minister, as a matter of law, to the fact that this $100,000,000 of stock, the value of which is to be arbitrated under .the proposal of my hon. 
friend, has ibeen found by the commission appointed by himself to have been issued without, any cash consideration, and the suggestion in this report that anything should go to the holders of the stock is based upon the theory merely that they had spent a good deal of time in connection with the matter and were entitled to something by way of honorarium. But whatever right they had on that ground wa3 relinquished under the provisions of the agreement of 1914, and the stock not having been issued for value, as evidenced by the statement in the report of the commission- and also by the statement of my hon. friend from Kingston (Mr. Nickle) in 1914 that the whole of the stock of the Canadian Northern was simply watered stock-the result is that the pledgees of the stock have no rights whatever as a matter of law, and the owners of the stock have no rights whatever as a matter of law, they having covenanted not to make any claim on the Government in any way for any services or any conditions such as are shown in the clause I read. The minister should tell us who are the pledgees of this stock; in whose hands the stock is at the present time; for what it was pledged, and when it was pledged-because the first section which he asks the committee to allow to stand is the section that provides for paying money to certain pledgees. I submit, this House has no right to enter at this time into an agreement with some party or parties unknown who are stock pledgees, if the Government know-as they must know-the names of the parties so described, and if, as a matter of fact, those parties have no higher or greater rights than the original holders of the stock in 1914. My hon. friend will recall I asked him for that information, and he ought to give it to us.


William Thomas White: The statement has already been made twice. My hon. friend must have been out of the House this afternoon.


Edward Mortimer Macdonald: The minister gave the names of the holders of the stock.


William Thomas White: The names of the holders of the stock were in the certified list of the shareholders which I laid upon the Table. I stated, and the Solicitor General (Mr. Meighen) stated the other evening, that the assets of Mackenzie, Mann and Company, Limited, including this stock which they held among other securities, were pledged to their bankers in the

ordinary course of business and by the usual banker's pledge. I stated their bankers were the Canadian Bank of Commerce. As to the point my hon. friend makes in regard to Mackenzie, Mann and Company having agreed to waive their claims for any consideration in respect of their services before the trust mortgage of 1914 was acted upon and before those securities were issued, Mackenzie, Mann and Company were obliged under seal to execute that agreement as it appears in the statute. The greatest possible care was taken in connection with that transaction. Not only did I give it my personal attention in the summer of 1914, but I took it up in a voluminous correspondence with Mr. James Bicknell, K.C., who acted fbr the Government. In the history of the Government no work has ever received more careful attention.


Mr. R. B. BENNETT:: Why don't you
use it now?


William Thomas White: Use what?


Richard Bedford Bennett: The 1914 legislation.


William Thomas White: We have been
discussing that. We discussed it on the second reading, and we discussed it here to-day. The reasons have been given why we prefer to buy the $60,000,000 of stock instead of acting under the legislation of 1914. They are reasons which appear to me, and I think to the Government, and I should hope to the House, as being sufficient. The stock was issued by the company to Mackenzie, Mann and Company, Limited. It may be that the Drayton-Ac-worth report states there was no cash consideration given for it, but I would point out that this report overlooks the land grants which were the property of Mackenzie, Mann and Company, Limited, and which were transferred to the Canadian Northern Railway Company. They were part of the consideration. I am not here to emphasize what Mackenzie and Mann did for that stock, but the stock was issued, and, we have every reason to believe, validly issued. The statute of 1914 declared the capital stock issued to be $100,000,000, of which the Dominion Government owns $40,000,000 and these other parties $60,000,000. By that statute, as I recollect it, that stock was declared to be paid up. That stock is in the hands of its owners, according to the statement I laid on the Table. The principal owners, Mackenzie, Mann and Company, who carry on a very large business in Canada, pledged that stock with
their bankers in the ordinary course of their business. I pointed that out this afternoon, and I am now repeating it.


Edward Mortimer Macdonald: When was it pledged, and for what amount?


William Thomas White: I do not know. It was pledged with the other assets in the ordinary course of business. As I already indicated, if we were to take over the stock of the Canadian Pacific Railway Company, and the hon. member for Pictou owned 1,000 shares which he had hypothecated, with his bank together with other bonds and stocks, the amount of the pledge would not be a relevant matter in connection with the valuation of that stock. The pledgees cannot have any interest in the stock except its value.


Edward Mortimer Macdonald: And the amount
they put up.


William Thomas White: No, not at all. I do not agree with that in any sense. Take the case of an unlisted stock which is pledged to a banking institution; that institution cannot have any higher rights than the owner of the stock, in the sense of getting a higher value than the stock is worth under expropriation proceedings. My hon. friend knows better than most gentlemen in this House that they would not be allowed to make evidence as to what was loaned against it. The question is not pertinent and not relevant. I have obtained for this House all the information that is relevant to the consideration of this section. If there is any more information that is relevant which I have not obtained, I want to get it, but I cannot be securing information as to this transaction and that transaction on the part of the stockholders who have acquired the stock, which has no bearing upon the question before the committee.


Edward Mortimer Macdonald: But it has. If my hon. friend had not put it in the Bill that this payment is to go to the owners and pledgees, then it might be a different matter.


William Thomas White: The point is this -and the hon. member from Pictou knows it as well as I do, if not better, because he is a practising lawyer-'that this is an ordinary deposit agreement under which stock is to 'be acquired. The pledgee has a limited interest, because the owner has transferred the stock to him in consideration of a certain advance. Now, in order, to get that stock we have to get it under the terms of this agreement. The owners

and pledgees should lodge it, and if they do not lodge it the agreement does not become operative. If they lodge it, whether owners or pledgees, then it (becomes subject to the terms of the agreement, which are .that the value is to be determined by arbitrators, and when so determined is to be paid over to the proper parties. Who are the proper parties? It is so elementary that I hate to trouble the House about it; the hon. member knows there is nothing in it, but he is raising it simply for the purpose of discussion. He knows perfectly well if owners and pledgees bring their stock into the agreement-the stock so bought by the Government at a price to be fixed by arbitration-the pledgees are in a position to transfer that stock into their names and make themselves the legal owners. As a matter of fact, it was not absolutely necessary that the word " pledgees " should be in the Bill at all.


Edward Mortimer Macdonald: Why mention it then?


William Thomas White: It was not necessary. I am talking to a committee of business men and good lawyers. Everybody here knows that if stock is pledged to an institution it is within the power of that institution to transfer the stock into its name, and obtain legal ownership of it. The man who transferred it to the institution has an equity interest in it, but the legal ownership is in the institution. The word " pledgee " is not necessary, but .it does no harm. Take the case of a government expropriating real property, and assume there is a mortgagee, has not the mortgagee a right to come in and be heard?


Richard Bedford Bennett: Not unless he is the registered owner


William Thomas White: But he is the registered owner, because he has registered his mortgage in the registry office. Speaking in a strict sense, I say that gives him, as my hon. friend knows, legal title, because the property has been conveyed to him under the law, say, of Ontario-I know that is the case in that province. If a pledge of stock is given to an individual or an institution, it is open to that individual or institution to transfer that stock into his or its name on the books of the company. That individual or that institution then becomes the legal owner. The fact that pledges are mentioned in this makee no real difference, but there is no real objection to it because there are two parties unquestionably interested in stock:

First the man who has pledged the stock, because he may pledge it for only a part of its value, although if he pledges it for its full value, he is liable under the covenant and is interested in his security, but there is no objection to the holder and the pledgee being mentioned in the agreement because the pledgee is entitled to put it in his own name. The matter is so elementary that I do not want to discuss it.


Edward Mortimer Macdonald: My hon. friend is
asking this committee to pass a certain Bill in which he uses these words-
And the owners and pledgees of not less than five-sixths thereof.
-referring to the parties with whom the contract is to be made and with whom the Government are authorized to make the contract. The minister gives the committee the names of the owners of the stock; he tells us generally that that stock is pledged to the Canadian Bank of Commerce, but he does not tell us for how much it is pledged, when it was pledged, or any of the conditions of the pledge, all of which are questions relevant to the discussion by virtue of the provision of the statute of 1914. He says the matter is of no importance. I say to him that it is of importance, otherwise he would not put that clause in the Bill. If it is of no importance, let it be stricken out.


William Thomas White: I am not particular.


Edward Mortimer Macdonald: The people are entitled to know -with whom the country is going to make this agreement ana whether those parties have any right greater or less than those of the owners of the stock-


William Thomas White: They cannot have greater rights.


Edward Mortimer Macdonald: -who have covenanted to give it up and who have no claim whatever to it against that of this country. Every dollar, therefore, given out under this arbitration is so much money taken out of the public treasury absolutely without justification and in face of the solemn assurance of this Government, made in 1914, that no more money would be asked for. The minister has not given and will not give us the information for which we are asking. Yesterday, I asked the minister for some information which is necessary in regard to the consideration of every part of this Bill. Certain obligations of this company fell due in June, July and August of this year. It was common report that cer-

tain banks in the country advanced to this company money for the purpose of meeting those obligations as they fell due. I asked the minister yesterday to tell us what were the amounts which fell due in those months; what banks made the advances in order to cover them, and whether those banks made the advances as the result of any assurance given to them by the Minister of Finance that they would be protected. The country have a right to receive that information.


Robert Laird Borden: The Canadian Northern Railway Company required advances for the purpose of preventing it from being forced into liquidation during almost the whole period, I think, in which its affairs, as well as the affairs of other railway companies, were being investigated by the Board of Railway Inquiry which was appointed last year. The Government did express to the bankers of the company the hope and the request that the company would not be allowed to go into liquidation pending that investigation. That action was taken for the reason that it would be perfectly idle to commence and carry on an inquiry into the affairs of this company and the Grand Trunk Pacific Railway Company and permit them to go into liquidation while the inquiry was pending. The same expression of hope and request was made during the period after the report was made while the matter was under consideration toy the Government.


Edward Mortimer Macdonald: I thank the Prime Minister for the information he has given to us. We would be glad if the Minister of Finance would go further and tell us exactly what amounts were paid by those banks in the months to which I referred.


William Thomas White: I have not the information. The assurance given or the request made was by the Prime Minister who dealt with this matter.


Edward Mortimer Macdonald: Could not the minister ascertain it? It is of importance in relation to this question.' .


William Thomas White: I do not think it is of any importance.


Edward Mortimer Macdonald: It is very important to know what advances were made within the last three months. That information does not appear in any returns that have been brought down.


Mr. MICHAEL CLARK:: Before this section is left, I should like to be permitted to express .a wish that I could say anything to bring to an end within a reason-



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able time discussions which are becoming, to say the least of it, somewhat prolonged. We are in the eighth month of this session of Parliament, and the matter is becoming serious to some of us who think we could do more for the war by pitching sheaves than by listening to the same thing said so many times over. I rose for the purpose of saying that I listened with the utmost care to what appeared to me to be a very lucid and convincing statement by the Minister of Finance this afternoon on the general question, and I am persuaded in my mind that, when the people of this country read that statement in connection with the statement made the other day by the Solicitor General, they will come to the conclusion that in this legislation the Government is making an honest effort towards a proper solution of a problem of enormous magnitude and seriousness. That is my honest conviction about the object of the Government and about what the people of the country will think about it.
It is usually said that there are three possible solutions of our railway difficulties. I have a fourth which has never, been mentioned in the course of these debates, and I do not suppose that my mentioning it will carry much conviction, but it would be a solution if it could be arrived at. My solution of the railway difficulty is to make the railways pay. It would not matter much whether they belonged to the Government or to private companies if they were paying concerns. You can make them pay only by making them do business, and to do business is to trade. If you will allow our railroads to trade freely, they will do more business; they will make more money, and they will pay. Of course, when I put the matter in that way, I think I should carry a great deal of conviction to both sides of the House; but if I reverse the words and speak about free trade, I should at once be looked upon as a kind of mountebank. I am afraid that is too strong meat for either side of the House just yet, and I am, therefore, bound to take the current opinion that there are only three possible solutions of this question. I feel, as a patriotic Canadian, proud of the country of my adoption in which I expect my grand-children and my grand-children's children to be brought up with future generations, that there is no upstanding Canadian who wants to face the question of a receivership. Some hon. members spoke about a receivership being a bogey. I never suffered from bankruptcy, but I should not think that bankruptcy is any /
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bogey. It is a bad thing for an individual, and it will be a very much worse thing for this nation at a time when we are facing problems of magnitude greater than any that have been, dreamed of since Confederation, and when we wish to keep the credit of our country as high in the financial world as our soldiers have put it in the military world upon the field of battle.
With regard to the second possible solution of this question, which has not been without support from my own. side of the House in the course of this debate, namely, the handing out of more money to the Canadian Northern, I am perfectly sure that the people of this country who give any thought to the subject at all are sick of that process. They do. not want to shovel out any more money to private individuals for the running of this road, and the reason is not far to see. It is an interminable process which does not seem to get us any further forward, and in addition to that, it has this cardinal objection, that there is a very sound suspicion in the minds of our people that the money does not all by any means find its way into the railroad. The people are sick of that process.
Then, what is to be done with the situation? We are brought to the third possible solution.-the solution which the Government, as I believe, in good faith, are trying to take-and that is the nation must take over this road. I do not know how far the people of this country will be disposed in the course of time to go, but they must take over this road and run it themselves. That is the simple question; that is the general question. I do not think that the masses of our people are much concerned with the legal refinements which have constituted most of what we have heard in this debate. 1 do not think they are very much concerned about what was the exact legal import of what was in the Bill of three years ago. Why, we departed from that a year ago by giving more money away, and followed on that occasion a course which had support on both sides of the House. I do not mean to say that .it was supported by every one on both sides of the House, but there were a number on both sides who last year departed from the supposed settlement of three years ago, and supported the giving of more money. There is no end to that process.
The great value of the settlement under the process that is proposed by the Government is that the road passes into the hands of the people, and whatever money is put into the road from now on will accrue to

the benefit of the people of Canada themselves.
With regard to the general question of government ownership, I am perfectly certain that a large number of our people are in favour of a trial of the principle. The war has altered men's thinking on this and on a great many other topics. We have found out, under th,e extreme pressure and exigencies of this war, that the state can do things that we did not dream of in our early days of absolute indi-9 p.m. vidualism. We have found out something of what states can accomplish amidst the hardships and trials of war. That has altered men's thinking, and I venture to think that when our soldiers come back, those of them who do come back, by the experience they have had, will prove to our people that they have learned to think, and think deeply, of these national problems. I have met a number of our returned soldiers, and it is surprising to observe the development they have undergone on the intellectual side, and the deep thought they are putting into the problems that confront this nation. They will have an enormous effect upon the thoughts of oiur people and upon the course of our people in regard to these problems.
It is a fact that railroads are owned by many other countries, and are owned and run with success, and if we say that they cannot be owned and run with success by governments in Canada we pass a very severe condemnation upon the public morality of our own people. I want to say further that I fear it is broadly true-and here I know I am voicing the sentiment of a large number of our people and the very best of our citizens-that since Confederation down to the present moment the railroads have owned the country by having a very large ownership in the politicians o.f the country. I value the brave words that fell from the lips of my hon. friend from Calgary (Mr. B. B. Bennett) upon that subject the other day, and I want to say that the people of this country know that there was a great deal of truth in his words. It is true that he seemed to concentrate his indignation upon one particular set of railroad operators in the remarks he made upon that subject. I am afraid that those operators are not the only ones who have, to use the word of my hon. friend, debauched young men as that young man on the Pacific coast was debauched. I am afraid all the railroads in Canada are still doing a little

debauching, not only of young men. but also of men who are much older and ought to know a great deal better. It is broadly' true-and we may as well face the fact- that the railroads have owned Canada since Confederation, through owning ou.r politicians. There are a great many people who think the process should be reversed, and that, by Canada owning her railroads and freeing her public men from the evils to which my hon. friend and neighbour from Calgary referred the other day, our public life will be purified, and a development of public spirit in public affairs will take place. I am perfectly confident there is a strong body of opinion behind the principle of government ownership, and that body of opinion, when it is instructed, when it knows what is being done by this legislation, will be behind the Government in these .proposals.
Joseph Hormisdas Rainville: Sir Thomas White
moves that the committee now consider section 2.


Mr. GERMAN:: I do not see why there
should be a motion to proceed to section 2 so early. Is this the beginning of the closure? It is certainly its necessary concomitant. I hardly think the Government will undertake to shut off discussion in a matter of this importance. I want to ask a few questions on section 1.


William Thomas White: We won't use the closure against you now anyway.


William Manley German: All right. I think my
hon. friend will find that the people of this country are not all so gullible as my hon. friend from Red Deer, (Mr. M. Clark) in thinking that this transaction savours of all .possible sanctity and righteousness. I don't know whether it is true, but I have been told, that there are some long-standing contracts, aggregating a very large amount of money, for salaries, between the Canadian Northern and some, at any t rate, of its employees. Does the minister know anything about that?


William Thomas White: No, but if my
hon. friend makes the statement positively that the matter is of some consequence I shall be glad to inquire into it. I do not mean to say that he is not asking his question in good faith, but I do not think the work of the committee should be delayed to investigate statements that are not of consequence.


William Manley German: To what extent is the Canadian Northern the owner of the rolling stock used in its operations? Is the
308*
rolling stock owned by the Canadian Northern, or under some sort of lease with some other company who is the real owner? When the Government acquire the stock of the Canadian Northern, they may find that they are not the owners of any of the rolling 6toek of that line.


William Thomas White: My hon. friend is entirely in error. The Canadian Northern, like most of the other railroad companies, finances, so far as its rolling stock is concerned, by issuing either directly or indirectly securities against the rolling stock. The modus operandi is this: A railway company desires to buy, let u5 say, $10,000,000 of rolling stock. They pay from twenty to twenty-five per cent in cash, or $2,000,000 to $2,500,000; then they pledge the rolling stock either directly, or, more usually, through a rolling stock company to a trustee.
They issue their securities for $10,000,000 upon these terms. The securities mature at the end of one, two, three, four, five, and so on up to ten or twenty, years. Generally they are not so long as that. In each payment of the debenture there is included a certain amount of principal as well as interest, so that each year an amount of the principal of the rolling stock indebtedness is paid off. When the securities come to an end the rolling stock is all paid for because they have paid not only the interest but the principal. Of course, the rolling stock is, in the meantime depreciating. In the accounts of the Canadian Northern Railway Company there is a statement, showing the amount they have paid on account of principal and interest for rolling stock. That is the system which obtains with scores of large railway companies. It is the favourite and most advantageous way of financing the purchase of rolling stock by railway companies. Rolling stock securities ;are usually considered of a high character because, in the event of a receivership, the receiver has the road to run and he will pay the maturities with respect to rolling stock; otherwise he would lose the rolling stock because the trustee would take it off the system. 1


William Manley German: I appreciate what the Minister of Finance has said in regard to that matter. I know the modus operandi regarding the purchase of rolling stock and the issue of securities of that kind. But I was informed that the rolling stock held by the Canadian Northern was in an altogether different position. It is well that the country should know what the situation is, because I think the people only desire

to know, honestly, frankly and fairly what they are getting and what they are paying for it. So far as I am individually concerned, I am not at all opposed to the people owning the Canadian Northern Railway system-in fact I am rather in favour of it, if it is taken over under a proper method and the people are not paying for it more than it is worth or entering into obligations which will increase the indebtedness of the country to an enormous extent. Our indebtedness is now being increased very rapidly and such an arrangement as is proposed may increase that indebtedness to a greater extent than the credit of the country will stand. It is a question of what we are paying for this property. Then, there is also the question of the system that is to be adopted in operating the property after it is purchased. However, that is a matter that we will have to leave in abeyance until the purchase is made although it too is a question of importance. But, the main question to my mind is: Are we getting a property which is worth the money that we will be obliged to pay for it? The Minister of Finance this afternoon condemned very strongly a proposition to foreclose. He said that the Government is adopting the only system that can be equitably and fairly adopted in taking over this property. I would point out what appears to be a far better way and the way which was suggested, and not only suggested but positively advocated, by the right hon. the Prime Minister (Sir Robgrt Borden) in 1914 when this Parliament authorized a guarantee of the bonds of this company to the extent of $45,000,000. As reported in Hansard of 1914, volume 4, page 370, the right hon. gentleman said:
The country, however, may be confronted with conditions in the future which will render prompt and vigorous action necessary. We have made provision for immediate and summary action in case default shall be made-
I apprehend that it is in the mind of every hon. member that default has been made. The Canadian Northern, if not in actual failure to pay, have defaulted by reason of the fact that they have been unable to earn their fixed charges and could not have paid if the Government had not lent them the money to enable them to pay their indebtedness to the Government. The Prime Minister said:
We have made provision for immediate and summary action in case default shall be made.
What does that mean?
The definition of default Is set forth in the 21st clause of the resolution; and, by the 22nd
|Mr. German.]
and subsequent clauses it is, in effect, provided that, if such default takes place-
I assert that such a default has taken place.
-'the Governor in Council may, upon such notice as he deems expedient, declare vacant the offices of the directors' of the Canadian Northern Kailway Company, or of any of the allied companies, and may appoint a new board or boards, upon which very extraordinary powers are proposed to be conferred. Among such powers are the creation of any additional securities, the making of arrangements with the holders of any outstanding securities, and the transfer, with or without compensation, of the Canadian Northern system, or any part thereof (subject to then existing charges) to any corporation created by the Parliament of Canada for the purpose.
There was one method which the Prime Minister stated might be adopted and which, they were providing, should be adopted.
Making of arrangements with the holders of any outstanding securities, and the transfer, with or without compensation, of the Canadian Northern system, or any part thereof (subject to then existing charges) to any corporation created by the Parliament of Canada for the purpose.
Why is that not being done? If that can be done there will be no possible question of the payment to Mackenzie and Mann of the value of the stock. Further:
It is also provided by clause 24 that, if authorized by the Parliament of Canada

That is the section which the Minister of Finance adverted to this afternoon.
-the Governor in Council may, in case of default, declare that the interest of Mackenzie and Mann, in the Canadian Northern Railway system is absolutely barred and foreclosed, and that all the properties and assets thereof, subject to any outstanding obligations, shall thereupon vest in the Crown in the right of the people of Canada,
This is the clause to which the Minister of Finance directed the whole of his argument and it is the clause in regard to which he said that we would be violating the equities if we should take the road over by virtue of it. But I say that we are not bound at all to take over this road under that clause. Then further the Prime Minister goes on:
So if, as apprehended in some quarters, the road cannot, with the assistance now afforded, be brought to a successful conclusion, the Government and Parliament of Canada will have the situation in hand better than by any possible method at the present time.
How are those words being verified in this transaction which the Government is endeavouring, at this late stage of the session, to force through this House-and by their action to-night intend to force

through under closure rules, because there is no reason why the Minister of Finance should have suggested that this clause should stand over and that we should proceed to another clause unless his intention was, as soon as the clauses had all been gone through in this way, to invoke the power of closure and stop discussion.


William Thomas White: Oh, no.


William Manley German: I shall be ready to retract it all if my suspicions are not well founded.


William Thomas White: I did not think we should get so far as that.


William Manley German: The Prime Minister goes on:
In effect we propose to provide in the first place that a certain amount shall he available for the early and immediate completion of the road, and, if the road is not carried to completion by means of that aid, then the people of Canada, through their Government and Parliament, are enabled in the most effective and vigorous way to grasp the situation, and carry to completion, for their own benefit, one of the great transcontinental railway systems of Canada.
I ask the Finance Minister and the Government and gentlemen who are supporting them to adopt the words of the Prime Minister uttered in 1914, under the clause in that agreement which gives them power so to do, and,
in the most effective and vigorous way grasp the situation and carry to completion for the benefit of the people of Canada one of the great transcontinental railway systems of Canada.
-and do away, obliterate altogether, this idea of paying Mackenzie and Mann five, six, or ten millions of dollars for a stock which the Drayton-Acworth 'Commission have already reported is absolutely valueless. There is no question of foreclosure, there is no question of arbitration. I was chided a few days ago by hon. gentlemen for having at that time supported a resolution providing for arbitration, while I am now suggesting that, whatever is to be paid to Mackenzie and Mann should be fixed by the Chief Justice of the Exchequer Court. As I said that night, and as is borne out by the statement of the Prime Minister, the representation was that that money was sufficient to complete the line and if it did not complete it, then there was an expeditious, effective and complete method of taking over the whole system without paying any more money. The Prime Minister further said:
Some of the features of the agreement should also be called to the attention of the Ho. se.
I am bringing this to the attention of the House and of the country hecause the Finance Minister so particularly emphasized this feature, that there was an equity, a redeemable equity, the value of which should be considered by somebody, he says by arbitration. Now, let us see what the agreement that they entered into at that time provided for. The Prime Minister said:
Some features of the agreement should also be called to the attention of the House. Prominent amongst these is the release of aB claims for contractors' profits, commissions or otherwise, against the Canadian Northern Railway. The provision to which I wish to call attention, and which is, in my opinion, a very important one, will be found on page 19 of the Orders of the Day. That clause reads as follows: ,
"That the contractors"-
Which includes Mackenzie and Mann as a corporation and Mackenzie and Mann individually.
-"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, understanding, agreement, or stipulation of any kind, heretofore or hereafter made, whereby or whereunder they, or any one or more of them, imay now or hereafter be entitled to receive from the Canadian Northern, or from any of the constituent or subsidiary companies any construction profits, in respect of work heretofore undertaken, or as consideration for transfers of properties, rights of franchises already transferred, or to be transferred under sub-clauses (a) and (b) of this clause, 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."
In the face of that statement made by the Prime Minister himself, how in the name of all that is sensible can members of this House, having the interests of the country at heart, representing their constituents as they do, deliberately stand up and vote that, notwithstanding that stipulation by Mackenzie and Mann themselves that they would not at any time thereafter in the event of default make any claim or demand for commissions or for transfers of stock or otherwise under .subclauses (a) and (b)-how, I say, can these gentlemen conscientiously stand up and support the proposition submitted to this House? I bring this to the attention of the House because the agreement itself conclusively answers the statements made by the Finance Minister this evening. He says: you should not expropriate, you should not foreclose,

without taking into consideration the equities which Mackenzie and Mann -have in the property, without taking the valuation of the property, without going into the whole matter, and substance of the physical value, the earning power and otherwise, to arrive definitely at a correct value of this property, and then ascertain whether Mackenzie and Mann -are entitled to compensation. I do not wish to deal harshly with Mackenzie and Mann or any other person, nor do I wish this House to do so; I have a great deal of sympathy for them; they have done a great work, and carried on this enterprise for all these years. But they are no different from other men. To use the venacular of the street, they bit off more than they could chew; they had a bigger enterprise than they could carry through, particularly with this monetary stringency, and the road has become a failure. Other men have failed, and the Government has not come to their rescue. Mackenzie and Mann have been interested in railway building for twenty years or more. This enterprise was started twenty years ago. Every one knows what their situation was then, what it has been since, and what it is to-day; that is a matter of public notoriety. No one need make any suggestion as to what their position is financially and otherwise; it is well known throughout the country. I submit, these men are not fentitled to any .sympathy from this House or from the people of the country. They are entitled to be dealt with fairly, honestly, frankly and justly, and only in that way. In view of the statement made by the Prime Minister three years ago, that there was a speedy, efficacious and complete remedy by taking over this property, and that thero was a release by Mackenzie and Mann of all equities in the property, without a shadow of a claim to be paid anything. I say that we are simply doing justice to the people of this country in standing by the agree-? ment which was made at that time and *saying to these gentlemen:	It is unfortunate for you, we regret we have to do it, but the exigencies of the situation at present make it imperative that we must enforce the obligation imposed in that contract, take that property from you, and put in our own directors; and unfortunately, we will not be able to pay you anything for the difficulties you have encountered and for what you have gone through in those years. I submit that those are views which will .meet with the approval of the people. They are my views at any rate, and I submit them to this House, and I have confidence that 
they will be approved of by the people of. the country generally.


Mr. SINCLAIR:: I desire to say a few words-


Robert Laird Borden: I was going to move that the committee rise, and that we take up another Bill. If the hon. gentleman from Guysborough wishes to speak now I will give way.


John Howard Sinclair: My purpose in asking
leave to say a few words was to reply to the speech of my hon. friend from Red Deer. That hon. gentleman did not deal with the main question before the committee. As I understand it, the question at issue between the two sides of this House is whether we shall pay anything to Mackenzie and Mann for the 600,000 shares of stock we are proposing to acquire. The hon. member for Red Deer did not touch that question. I understand the Government is proposing to pay for that stock at a value to be fixed by arbitration. They do not say how much they are willing to pay, but they are submitting the question to arbitration, which means that they place some value upon the stock. The owners of the stock, I understand, claim that it is worth par, which means that they claim the enormous sum of $60,000,000. It will be for the arbitrators to say whether the people shall pay $60,000,000 for this stock which we, on this side of the House, contend is not worth anything. Our position on this side is quite clear. We say that this stock does not represent any investment; it does not represent a dollar of .money advanced by Mackenzie and Mann or .any one else; it is nothing else than water; that we own it now, under the default made under the conditions of the Act of 1914, and that we are in a position to-day to assume the ownership of that stock without paying any money for it. My hon. friend from Red Deer did not deal with that position at all. He said there was one thing he knew well, and that was that the people of this country are not in favour of shovelling out any more money to Mackenzie and Mann. I was glad to hear him say that, because that is the exact position we take on this side of the House. If these arbitrators decide that the stock is worth $60,000,000, than the people of Canada must shovel out $60,000,000 to Mackenzie and Mann, and the hon. gentleman from Red Deer tells us that the people are not in favour of doing that. I want to place myself on record as opposed to paying anything more to Mackenzie and

Mann for this stock. The hon. member referred to the time when the soldiers would come back. He told us they were doing a lot of thinking, and when they came back they would be interested in the financial affairs of Canada. I believe that is true. They not only have to fight for the existence of (Canada, but they andi their children will have to bear the burden of the public debt. When the soldiers went away there was a public debt of $350,000,000, roughly speaking; -when they come back after this legislation goes through, if it does go through, there will be a debt, independent of the war altogether, of some $800,000,000, and the soldiers will want to know the names of the men who imposed that debt upon them, and upon the people of Canada, and I do not want them to read my name among those who will be on record as having done that.


Mr. EDWARDS:: Will that $800,000,000 be a net debt, or a gross debt?


Mr SINCLAIR:: I regard it as a net debt. The ownership of the road is poor comfort if we have to tax ourselves to pay the interest. If we assume the whole debt of the Canadian Northern, there will be isomewhere in tlie neighbourhood of $800,000,000 independent of the war debt, if we pay all the liabilities connected with the taking over of the company, and I assume we are going to do that.


William Thomas White: We are going to own the road.


John Howard Sinclair: I object to paying the amount which it is proposed to settle by this arbitration. There is no question in regard to public ownership, as I understand it, between, the two sides of this House. The attitude we take on this side means public ownership just as much as the attitude of hon. gentlemen opposite means public ownership, because, if our proposal carries, and the Government takes charge of this stock under the provisions of the Act of 1914, it means that we must assume the existing liabilities of the road, and if we take the stock over by arbitratioh, it means the same thing. The difference is that in one case we shall have to pay whatever the arbitrators decide for the stock, and that will be an addition to the debt of the people of bills country, and that is the part of the debt I particularly object to. It has been said in this House over and over again, that if we take over this property without arbitration it means confiscation.
I want to put myself on record as opposed to that idea. It does not mean confiscation. As I understand it we have a legal right to take this stock now under the Act of 1914. We are not asking for the road. We are not asking for this property. If we had decided to take the property of Mackenzie, Mann and Company and pay them for it, and if we refused to arbitrate and give them its value, that.would be confiscation. That, howeveT, is not what is happening. They are pushing the property on ue. They say: "We cannot keep it ourselves. We cannot carry on. We cannot pay our interest and carry on the business of the road. You must take it off our hands, and you must pay us for it." I think that is an unreasonable proposition, and I think the Government cannot justify itself in taking that stand in face of the legislation of 1914.


Rodolphe Lemieux: Mr. Chairman-


Robert Laird Borden: I had an arrangement by which another Bill was to be taken up. I hope my hon. friend from Welland (Mr. German) will not consider me discourteous if I do not answer him at the moment.


William Manley German: Not at all, I shall simply feel that there is no answer.


Robert Laird Borden: I was about to give my reason foT not answering my hon. friend, which is that what he has just said now has been said and answered quite a dozen times already. My hon friend from Guysbo rough '(Mr. Sinclair) seems to have rather peculiar views as to what net debt means. He attributes as a debt of this country what is owing in respect of this road, but he does not take into account the fact that the country will have an exceedingly valuable asset in the road. Of course, if that is really good logic, the defence and the arguments which have been made on this side of the House in support of the measure could not count for very much, but I venture to think my hon. friend would hardly be inclined to apply that reasoning to his own affairs.
An arrangement was made by which the Military Voters' Bill should he taken up, particularly for the purpose of considering . certain amendments which had been prepared by the Minister of Justice relating to questions that were brought up yesterday. I therefore hope my hon. friend from Rou-ville (Mr. Lemieux) will he able to restrain himself for the present and at some future date give us the benefit of the views he was about to inflict upon tihe committee I move that the committee rise, report progress, and ask to sit again.
Progress reported.



THE MILITARY VOTERS' ACT, 1917.


[Stage Direction]
The House again in committee on Bill No. 127, the Military Voters' Act, 1917.- Hon. Mr. Doherty-Mr. Rainville in the Chair.
Frank Broadstreet Carvell: Is it the intention of the minister to consider the proposed amendments now, or is it his idea simply to submit them, allow us time to go over them, and bring them up to-morrow?


Robert Laird Borden: It might be
worth while to run over the amendments, and the sections of the Bill.


Frank Broadstreet Carvell: The Prime Minister will understand, it was hoped we would get those amendments earlier in the day.


Robert Laird Borden: Yes, I quite appreciate that.


Frank Broadstreet Carvell: It is difficult to insert a word here, and take out a word there offhand, while <we are considering a section. I have a copy of the amendments to be proposed, and I think that as drafted they very correctly represent the discussion we had earlier in the day. But this draft does not seem to contain the amendments which were proposed yesterday. I presume the minister takes it for granted that those amendments are part of the Bill.


Mr. DOHERTY:: I am under the impression this contains the amendments that were not adopted yesterday.


Frank Broadstreet Carvell: I see, for instance, there is very little in this in regard to scrutineers. I think, perhaps, the minister's intention is that the amendments which were proposed yesterday are considered as having been passed.


Charles Joseph Doherty: Yes.


Frank Broadstreet Carvell: And these are additional amendments?


Charles Joseph Doherty: Yes. If the sections stood they stood as amended.


Robert Laird Borden: I think it would be best for the minister to put them on as a notice of motion now, so that hon. members may see what they are.


Charles Joseph Doherty: In that event I would suggest that we go on with the sections from where we left off, and when we have passed over all the sections of the Bill we may then take up these amendments and others that may possibly arise.

On section 12-Custody and count of ballots:


William Pugsley: I understand that certain amendments are to be proposed by the Minister of Justice. I would suggest that we begin at the first section which is amended, and take the Bill section by section until it is disposed of. It does not seem right to go through a Bill, consider a section, and then pass on to another without finishing the first. One section should be disposed of before proceeding to another. In that way we shall know how to deal with the others, because they are all related.


Charles Joseph Doherty: I certainly understood that the committee reached the understanding last evening that we should go over all the sections first, with a view to receiving suggestions with regard to them, letting them stand as we went along, with a view to passing amendments to meet the suggestions. I had supposed that that understanding would be followed out this evening. Then we should be in a position to go back over the sections that are standing, and, there having in the meantime been opportunity to consider the suggested amendments, we should take up those amendments in their order.


William Pugsley: It is not intended to take up the suggested amendments this evening?


Charles Joseph Doherty: Not unless we reach
them, and unless when we reach them it is possible to deal with them.


William Pugsley: I would not like to interfere with any understanding the committee has had, but it strikes me as being very unusual to take up the later sections of the Bill without dealing with and disposing of the former ones, because the determination as to the previous sections of a Bill would influence one in regard to the attitude to be taken as to those later on.


Frank Broadstreet Carvell: Under the previous section, it is provided that there is to be no polling after eight o'clock of the day fixed for polling in Canada. Is not thirty-one days a very long time in which to get those boxes to London? It seems to me that is deferring the decision of the election for a long time. Under this arrangement it would be probably six weeks from the time the election is held in Canada until there is any finality about it. I realize there will be some difficulty in getting in those

boxes, but I cannot see why that should take thirty-one days.


Charles Joseph Doherty: There is room, perhaps, for question as to whether the delay may not be too long. It is provided in this section that boxes that have not been received by the thirty-first day, shall not be counted. Inasmuch as we have to cut them off absolutely at the expiry of the delay, it was thought desirable to make quite certain that the delay should be long enough. As to that precise period, I am disposed to place myself in the hands of the committee. If there is error in the delay, it is on the side of its being too long.
With regard to the different subsections of this section, we speak, in various places, of the Secretary of the High Commissioner and likewise of the Canadian Commissioner to France. There is an error in the designation. The proper designation of the officer described as the Secretary of the High Commissioner is the "Secretary of the High Commissioner's Office." That is his proper title. The gentleman described as the Canadian Commissioner to France should be correctly described as the "Com-misssaire General du Canada en France." It appears, by the Order in Council originally constituting the office, that the name was created only in the French language, so that there is no English name properly to designate him. I have separate amendments for each place. Perhaps I might move, in a general way:
That where the word "Commissioner" appears in the section as applied to the Secretary of the High Commissioner at London, there be substituted for it the words "Commissioner's Office", and that wherever the name "Canadian Commissioner to France" appears, there be substituted for it "Commissaire General du Canada en France".


[Stage Direction]
Amendment agreed to.
Frank Broadstreet Carvell: What appears to be an omission in subsection 3 of this section is provided for by paragraph (e) of subsection 1 of section 4, which says:
Six scrutineers, three to be appointed on the nomination of the Prime Minister, and three on that of the leader of the Opposition. The appointment shall state the respective addresses at which notices given under this part may be served. One of each nomination may be present on each occasion of the opening of ballot boxes, and at the examination, application and counting of ballots, and every scrutineer shall have and may exercise all the rights of a candidate or his representative at any poll.
I think that is- sufficient, because subsection 3 of section 12 provides that the ballot shall be opened only in the presence of the returning officers and clerks.


Charles Joseph Doherty: I might point out that subsection 1 requires that notice shall be given to the -scrutineers before these operations are begun. As I understood it, notice to scrutineers implied their presence, but it might be better to make it clear by inserting it wherever there is occasion for it.


William Manley German: Why is there so much
delay in counting the ballots? They are not to be counted until the thirty-first day after that fixed for polling in Canada.


Charles Joseph Doherty: The delay is provided
in order to make sure there will be time for all the ballot boxes overseas to reach their destination.


William Manley German: Why not begin to count them as -soon as they come in?


Charles Joseph Doherty: As the ballots come in the envelopes will be assorted and distributed -among the different constituencies to which they apply. The ballot boxes will be counted when all the boxes are in or on the thirty-first day, which is the time when the axe falls.


William Manley German: How will the officers '
know when the last ballot box is in? They might not be in within thirty-one days.


Charles Joseph Doherty: They should all be in
before that. The ' reason why the ballots are not counted immediately they come in is that you would not have all the ballots belonging to a constituency until all the ballots from everywhere had come in and had been assorted. It may be that thirty-one days' delay is too long, but I would rather err on the side of giving perhaps -a little too much time, than risk a number of ballots being left out by making the time too short.


Charles Murphy: Apart from the time limit fixed for counting, is any other method provided by which it will be known when the ballot boxes are all in?


Charles Joseph Doherty: By law we assume to be all in on the thirty-first day after the polling day.


Alexander Kenneth Maclean: Might it- not be wise to provide that the counting may proceed before the thirty-first day if it is found that all the boxes are in? Some record will be kept of the boxes, and it will be known when they are all in.


Charles Joseph Doherty: That might be done. It might be wise to provide for that if there was reason to think this delay was too long.
If we do that, we shall have to provide that any counting done earlier
10 p.m. than the thirty-first day shall be be done after notice to the scru-

tineers. It has been assumed here that as we were fixing a specific date on which the counting would be done there was no need to provide for notice to the scrutineers, who would have already been notified of the preliminary operations and would be assumed to know when the counting was to take place. If we are to make provision for an uncertain date, it will involve very considerable remodelling and the necessity of a new notice being given.


Alexander Kenneth Maclean: I think most of the boxes would be in before the thirty-first day.


Charles Joseph Doherty: That is not impossible.


Frank Broadstreet Carvell: I think there is a great deal of force in what the minister says as to fixing a precise date on which the counting shall take place. The only thing I do not understand is why it should be necessary to allow thirty-one days from the polling day. It would only be a matter of a few hours, I should think, before the ballots in the British Isles would arrive in London, and the ballots on the continent in Paris. It seems to me unreasonable there should be such a long delay.


Edward Mortimer Macdonald: The thirty-one days does not apply to Canada?


Charles Joseph Doherty: No, it relates to the proceedings in France and England. I would suggest that this section might perhaps be carried, and we could give a little thought whether it might not be desirable to modify the length of the delay.


Mr. CARA ELL:: We could let the section carry, on the understanding that we could go back to it.


Charles Joseph Doherty: It would be well that we should specifically state the right of the scrutineers to be present, and therefore I would move:
That the subsection be amended, by inserting in the 27th line thereof, after the word "shall" and before the word "open", the words "in the presence of such scrutineers as may attend".


[Stage Direction]
Amendment agreed to.
Alexander Kenneth Maclean: It might be well, at the end of subsection 4, to require these statements to be made in triplicate.


Frank Broadstreet Carvell: One of these should be delivered to each scrutineer.


Charles Joseph Doherty: I have no objection.


Frank Broadstreet Carvell: That is the practice in Canada. The deputy returning officer gives a signed statement to.the scrutineer representing each side before he closes the poll. 
It would seem: to be only reasonable to carry out the same provision there.


Charles Joseph Doherty: If we propose to do that we will have to make it in quadruplicate, beoause the present provision requires him to hand a duplicate to the secretary of the High Commissioner and to the Commissioner to France. If we want to provide copies for the scrutineer of each side we would have to have four altogether. I suppose he may give copies.


Frank Broadstreet Carvell: Yes, he may give copies- "and shall deliver copies thereof to each scrutineer present."


Charles Joseph Doherty: I beg to move:
That subsection 4 be amended by inserting at the end thereof: "Copies of such statements shall be delivered to the scrutineers in attendance."


[Stage Direction]
Amendment agreed to, and subsection 4 as amended agreed to.
On section 12, subsection 5-Vote for a party counted as vote for a recognized candidate:
Alexander Kenneth Maclean: The word "party" there, of course, refers to "political party" in lines 6, 7, 8, and elsewhere?


Charles Joseph Doherty: Yes, I think it is fairly clear from the context in the other provision. In view of the provision of the ballot for "Government," "Opposition" and "Independent candidate," we might insert the words "Labour party." If we insert those words, there is no purpose in stating "other party," because it will not be possible to mark a ballot for any party except the party that figures on the ballot paper. Therefore, I beg to move:
That subsection 5 be amended by striking out, in the 49th line, the word "other" and substituting the word "Labour."


Edward Mortimer Macdonald: It is to be observed that if there is to be a delay until this official recognition is given by the leaders of both parties it will delay the casting of the votes on the other side? The subsection provides that this recognition shall take place within five days after the nomination, You will have to communicate with Great Britain. How are you going to communicate to the soldier the names of the official candidates?


Charles Joseph Doherty: We have made special
provision for the notification of that recognition. We have taken means to have immediately communicated to the soldiers the names of the candidates proposed. If the

soldier does not know the name of the man whom, say, the leader of the Opposition has designated as the candidate of his party, he is quite sure of getting his vote applied to the candidate by simply voting for the Opposition. This is only for the purpose of identifying the man to whom will go the votes that are given to the Opposition. We must give some delay for these gentlemen after nomination to determine their respective candidates, and I do not think that any serious evil results if we do not make special provision for communicating that to the soldiers.


Alexander Kenneth Maclean: Suppose that it should happen that the Prime Minister was unable to state the candidate recognized by him? It would hardly be possible, but it might happen that there would be two candidates nominated, both of whom were supporting him. They might both be Independent Conservative candidates. What would be done with votes cast for the Independent? Of course a voter can protect himself by voting for the individual, but I suppose that many votes would be lost if what I state happened.


Charles Joseph Doherty: If a man votes for the
Government and the Government has no candidate, there is no means by which we can transfer that vote to any candidate.


Charles Murphy: Is there not opportunity for infinite confusion and conflict in this section? It says within five days of the day of nomination the Prime Minister and the leader of the Opposition and the recognized leader of any Independent party." There may be several parties, and there may not be a recognized leader for each. There may be the parties that o.ur press friends speak of that are being incubated every day at the Chateau Laurier. There may be any number of parties with no ability to recognize -a leader. If that continues up to the election, how will the votes be counted?
Mr. DOHERTY':	I do not see how you
could meet such a case.


Mr. KNOWLES:: How would it work out in a constituency where a person of independent views runs 'who is acceptable to the Government because his views on what is recognized as the outstanding issue, namely, conscription, are acceptable to the Government? If there were two candidates, one conscriptionist Liberal and one straight, common Liberal, how would they be distinguished? Would the conscriptionist Liberal be called a Government candidate?


Robert Laird Borden: It would depend upon what the Prime Minister or the leader of the Opposition would say.


John Howard Sinclair: Suppose both claimed
him?


Robert Laird Borden: All the happier for the candidate who gets bath the Government and the Opposition vote.


William Pugsley: The Prime Minister and -the leader of -the Opposition might trade off one for the other.


William Erskine Knowles: Let us suppose that
there are two men running neither of whom is ideal to the respective leaders, the Prime Minister saying: I am not going to have that man on my list because, for certain reasons, I do not want him, even if he does support conscription,-
Mr. PUGSLEY': He might be a free trader.


William Erskine Knowles: -would there be no allocation of votes for that man at all?


Robert Laird Borden: The votes will be thrown away in that case.


William Erskine Knowles: Then the candidates are really driven to receive the endorsation of one party or the other.


Robert Laird Borden: In this sense, that Opposition votes cannot be counted for any candidate unless he has bean recognized by the leader of -the Opposition and, similarly, votes cast for the Government cannot be counted for any candidate unless he has been recognized by the leader of the Government. -


Charles Joseph Doherty: I move to amend the [DOT]section by inserting in the third line of page 10, after the word "independent" the words " or Labour party."


Edward Mortimer Macdonald: Do I understand the effect of .this section to be that the names of candidates are to be cabled to Great Britain and the list of them will be sent to 'he different camps and the recognition is to be commuinicated' within five days after the official nomination? What is to be done with that so far as sending it to the other side is concerned?


Charles Joseph Doherty: We have no express provision for its being sent to the other side at that time. It does not come to tie required until we are allotting the ballots and we assume that would be known to the Clerk of the Crown in Chancery. -


Mr. CURRIE:: What is the objection to placing on the ballot "member of the Conservative party" and "member of the Liberal party" instead of using the words "Government" and "Opposition." We hear so much about other governments that we can never tell whether anybody can support any government; it may not be in vogue about the time the vote is taken. I think that, in the interest of party government, the parties should he named there without any disrespect to anybody in the House, we all see every morning that we are to have a new government. One gentleman has been given the making of governments in this country and he has been busy for about two months. This House has been sitting by waiting for this Government to come through and I do not think there is a single soldier in the trenches who would feel inclined to vote for any government that this gentleman would bring forth. I refer to Sir Clifford Sifton. Sir Clifford Sifton, as we all know, has figured in the courts during the last year.
It was shown he was the recipient of about a million francs, which, as a middleman, he squeezed out of the French Government and French people for whom we are sending our soldiers to fight. In the interest of the people of this country let us have the names of the parties there, so that the soldiers will know what party they are voting for. I am a Conservative, and don't make any bones about it, and I think the Conservative party is the party in this war, that party will win the fight that is coming on. and we had better put that name at the top of the column.
Mr. A. K. (MACLEAN: Put it in the statute.


John Allister Currie: I am a Tory, and the other parties are Liberals, with all due respect to them.


William Pugsley: I.f I understand the suggestion^ it is that the words "Government" and " Opposition " should 'be struck out, and a space left for the name of the candidate. I was going to suggest the same thing. I do not think there is any advantage in this great departure of allowing the ballot to be cast for Government, Opposir tion or Independent candidate. We had better pursue the old practice of having the names of the candidate placed on the ballot. Let the elector write the name of the .person for whom he wants to vote. I see no reason to make the change.


William Erskine Knowles: In this election there
will not be the clean-cut cleavage between

the parties which formerly existed. Our friends in. the trenches simply have the knowledge which they possessed when leaving here, and I think it is a fair presumption that they have not at their fingers ends details of things that have happened during the last few months, and we know that throughout the whole of Canada men who were keen opponents of one party at one time are no longer in that class, and might be altogether out of sympathy, in a want of confidence motion, with their party. What my hon. friend has said with regard to the government to. be formed by Sir (Clifford Sifton, if there was any injustice done to any person because of that, *if the boys at the front would resent it, I suppose another notice could be published of those not under his wing, and I think this list would be the one that would be favoured more toy the soldiers. In justice to Sir 'Clifford Sifton, the sum of money which he made out of the French Government was made in a horse trade, and it was well laid down policy of this Government that the finer rules and principles of life do not prevail with reg.ard'to horse trading. This was shown in the Kings county horse deals.
With regard to the .money Sir Clifford Sifton made, we .must remember that fact, and judge him as we would judge any other man desiring to make money as a horse trader. I very strongly endorse the suggestion of the hon. member for St. John that the names of the candidates be inserted. I was going to further suggest, because there will be a great absence of information in the minds of the electors, that a certain number of geographical maps be printed by the department, and that these be available to the soldiers also. Each province might be divided into electoral districts on the maps.
I do not know so much about any part of the country except my own, and I know that the redistribution has transformed the district, for example, so that hundreds of men who used to live in the Moosejaw electoral district have no idea what riding they are in. It is divided into four complete ridings, and parts of other ridings taken in. These men would have no accurate knowledge as to the ridings in which they should vote. Can the Minister of Justice inform us if there are any electoral geographical maps?


Charles Joseph Doherty: They are furnished by the clerk o.f the Crown in Chancery to all the officers who are doing the counting and assorting, and it is precisely on account of that fact that it is important for men to vote for Government, Opposition, or Inde-

pendent candidate, because an elector, such as the one described by the hon. gentleman, one who is not quite certain of the electoral district to which he belongs, might vote for a man of a particular name, but if he has made a mistake in the electoral district to which the vote belongs, and puts in the name of the candidate of whatever party he desires to vote for, his 'ballot will be lost. Whereas with this ballot, you have an advantage, because the man who is uncertain as to his constituency marks his ballot Government or Opposition, as he sees proper,'and care is taken to see that the vote goes to the candidate in the constituency in which that man is entitled to vote. It is a great protection for the voter against the consequence of error, as to constituencies, and, with the best precaution that can be taken, errors will, I fear be very prevalent.
Subsection 6-Vote for person by name accepted if he is a candidate:


William Manley German: It seems to me that, under this section, there might be some considerable injustice. I think it should be provided that, in the event of a person being a candidate in an electoral district other than that to which, in accordance with the endorsement or marking on the envelope, such ballot had been applied, and if there appeared a bona fide intention of voting for that candidate, such candidate should not be deprived of the vote. Provision should be made to rectify a clear mistake.


Charles Joseph Doherty: I do not see how we could rectify it. If a man has a vote in one electoral district, and he votes for a man who is a candidate in some other district, he is not a qualified voter in that district. I think it is impossible to meet the case suggested by the hon. gentleman.


Frank Broadstreet Carvell: I think that if the hon. member for Welland will consider the matter he will see that his suggestion might lead to a great injustice. You might take a constituency that was strong one way or the other, where a man's vote was not needed very badly, he could simply transfer his vote to the next constituency. I am afraid it would open the door to things many of us would not like to see. He must state to the officer under oath where his residence is, and if he is not sure about it, under section 12, subsection 2, they will look over electoral charts and make up their minds where that man resides, and where he should vote.


Robert Laird Borden: You might as well abolish all those provisions, if that suggestion were adopted.


Frank Broadstreet Carvell: A man ought to be compelled to vote only for a candidate representing his electoral district.


Charles Joseph Doherty: The other evening a question was raised in regard to the mutilation of a ballot. If it should happen that a man wrote on the ballot the name of the candidate for whom he voted-he being a voter in the electoral district for which that man was a candidate but at the same time marks a cross after either " Opposition " or " Government," what would happen to the ballot? I think there was general agreement that if he wrote in the name of the Opposition candidate and also put a cross after " Opposition " he would only have doubly clearly expressed what he wanted, and the (ballot should be counted for the Opposition candidate.


Frank Broadstreet Carvell: But suppose he did it the other way?


Charles Joseph Doherty: There is where the question arose. Supposing a man voted expressly by name for a candidate who was a candidate in the constituency in which he was a voter-say he voted by name for a gentleman who was a Government candidate, and put a cross after " Opposition." I think in the absence of any provision on the subject that ballot would have to be rejected, because the man would have voted for tooth sides. It was urged with a great deal of force that the expression by which a man had voted for a candidate by name should be taken as clearly indicating his real intention, and that the ballot should not be set aside merely because by some possible mistake he port this cross after the name of the other party. I was very much impressed with that. I think all the presumptions are that that man clearly intended to vote for the individual whose name he put down, but was in error as to what party that individual represented. To meet that view I move to amend subsection 6 by adding the following words:
"Where any ballot paper bears on Us face a vote for a person by name and is also marked as a vote for a party other than that of which such named person is a candidate, such ballot shall be counted as a vote 'for the candidate named thereon."


William Pugsley: I do not think that should be, because there you have the name of the candidate, and you have the

man putting a cross in the square opposite the party which that candidate does not represent. As an illustration, he is voting for a man who is a Government candidate, and then he puts the cross in the Opposition square. What right would these returning officers have to say that he intended to vote for the Government candidate any more than he intended to vote for the Opposition, or vice versa? It seems to me in a case of that kind the ballot would have to be rejected. In case a man were to put the name of the candidate and then put a cross in the square of the party the candidate represented-


Charles Joseph Doherty: In that case I would
make no provision, because none is needed.
Mr. PUG'SLEY: Surely it would not do in the other instance, because it would be entirely uncertain as to how the man intended to vote.


Charles Joseph Doherty: It was urged with a good deal of force that we must endeavour to ascertain the intention of the voter, and carry it out. While unless you make a provision in the law about it, the reasoning of the hon. member for St. John would lead to the conclusion that you must reject the ballot. I think, with all respect, that all the presumptions in that case are that where the mistake occurred was not with regard to the individual this man named but with regard to the name of the party to which that individual belonged. It ie well to remember that though we talk about parties, and Opposition, and Government, after all in an election in each constituency what is sought to be determined is, what man has the majority of the votes? Here you have the express declaration of the intention to vote for the man, and I would feel -^although I am not disposed to insist upon it-that we were quite justified in saying that rather than reject the ballot we would count it for the man for whom, there is such a very strong presumption, the voter intended to vote. I may say there were quite a number of members here the other evening, who are not now present, who entertained that view.


[Stage Direction]
Amendment agreed to, and subsection as amended agreed to.
On subsection 7-Ballot not rejected for uncertainty if intention of voter can be seen on mere inspection :
Alexander Kenneth Maclean: I would like to ask the minister if I am correct in assuming that no mark is to be placed on the ballot [Mr. Pugsley.}	I
by the officer taking the vote in Europe? Should not there be a direction that when the ballot is handed out it should be marked by the officer in charge, so that it can be identified when it comes back?


Charles Joseph Doherty: What we relied upon for
getting back the identical ballot that was given out was the fact that the marking was to be done in the presence of the officer. If you insist upon markings, signatures, .and so forth, you will indispose the soldier to engage in this thing. We have to simplify it as much as we can.


[Stage Direction]
Section agreed to.
On section 13-Duty of every returning officer under part III to send certificate, ballots, etc., to general returning officer:
Alexander Kenneth Maclean: If a recount were demanded of a poll within Canada, how would those ballot boxes, ballots and other papers be procured? In the meantime, they would have been sent to Ottawa.


Charles Joseph Doherty: The provision is that the returning officer does not send forward those papers until the delay for asking for a recount has expired.


George Perry Graham: The delay 13 for how many days?


Charles Joseph Doherty: Four days.


Alexander Kenneth Maclean: The numbers might be given, but it might take two weeks to get the documents.


Charles Joseph Doherty: Once notice of demand for a recount is given, the returning officer should not send them away pending a proceeding. He does not send them away until he has made the 'final addition of the votes.
On section 14-Declaration of election by general returning officer:


Edward Mortimer Macdonald: I think we should
provide for verification of'the cable. Otherwise, we might have the returning officer returning a member for a certain constituency who might afterwards be unseated owing to an error in the cable.


Robert Laird Borden: I suppose a
mistake of that kind could be corrected without any special provision. Of course, a telegram is liable to error, and so is a letter. I remember being told a very interesting incident by the Clerk of the Crown in Chancery when I was a very much younger member of this House than I am now. He said that happening to look up some documents, purely ;by accident, I think, relating to a particular election,

after the parliamentary term had expired for which the election took place, he discovered that through a mistake in a return by one of the returning officers the man who had been returned was not actually elected, but was returned and sat for the whole parliamentary term. So accidents are possible under any system. What my hon. friend suggests is that we should have some better means of verification than by a telegram. The only difficulty about that is the delay it would occasion. The delay has already been alluded to by the hon. member for Carleton (Mi4. Carvell).


William Pugsley: Is it not correct that the cablegram is only for public information? Must not the returning officer await the statements before making the declaration, as provided in subsection 4 of section 12?


Robert Laird Borden: Yes. I was
rather misled by 'the suggestion of iny hon. friend from Pictou (Mr. Macdonald). The telegram is only for publio information, and the formal return must be made later.


Edward Mortimer Macdonald: >1 was going to suggest that we follow the same practice in regard to the verification of the announcement of the results as was provided by an amendment yesterday with regard to the verification of the names of the candidates sent to Great Britain. The names must be cabled back for verification. I am only suggesting that the cable should be verified before the announcement is made.


Robert Laird Borden: As the cable is
only for public information, perhaps we might leave it to the discretion of the, officers.


Charles Joseph Doherty: All these things, if 1 am not mistaken, are officially announced in the' Gazette. What I had in mind was that this sort of information will be so generally known that any error in a telegram would correct itself, because people will have the information from other sources. But I have no objection to having the telegram repeated.


Edward Mortimer Macdonald: Suppose the steamer went down with the returns-some ballots nearly went down on the Lusitania-the telegram might be the sole basis on which to make the returns. Is any provision made in case the returns are destroyed?


Charles Joseph Doherty: No special provision is made, but the general rule would apply, that where the best evidence is destroyed you couM resort to secondary evidence.


Mr. PARDEE:: The certificates are to be given to each party.


Charles Joseph Doherty: Yes. They are in duplicate. The High Commissioner keeps one,, and sends one over here.


Edward Mortimer Macdonald: This is a new law and abrogates the old in regard to the return of members of Parliament. Suppose that the authentic and official documents on which the returning officer makes his return are lost. My hon. friend says, take the next best evidence, as at common law.


Robert Laird Borden: The same thing would apply.


Edward Mortimer Macdonald: You cannot act without a statutory provision.


Charles Joseph Doherty: The High Commissioner gets the return in duplicate and sends one over here. If that one gets lost
11 p.m. he has the other one. It is a duplicate, not a mere copy. It is as much the original statement as the one that was lost.


Edward Mortimer Macdonald: I quite understand that, but what is the returning officer in Canada going to do in,the meantime without any returns?


Charles Joseph Doherty: The provision is that he does not announce the election till he gets the returns. We are providing against the first statement being lost on its way over, by having a duplicate in the High Commissioner's office. I suppose we could provide, if it is really thought necessary, that under those circumstances, the returns can be established by secondary evidence; that is, by producing copies or evidence of another sort.


Edward Mortimer Macdonald: I submit in all seriousness that if this question of the return of members of Parliament was reviewed in the courts it would turn entirely on the construction of the statutes, and if there was no provision for the returning officer making the return upon secondary evidence the return would be set aside on the ground that he had no authority to make it. There is another thing that should be remembered. Suppose there is any postponement i or delay in the forwarding of returns. That might mean that the return of all the members to the House of Commons would be delayed, because we are all in the same boat. The returning officer cannot act until he gets the returns, and the returns may be delayed for an indefinite period owing to an accident.


Robert Laird Borden: I do not think anything could be done to meet that, un-

less we were to provide for an indefinite number of originals to be filed with the High Commissioner. The minister has gone so far as to provide duplicates. If one is lost the other is there. You will be in a position either to use that duplicate or to give secondary evidence of it.


Edward Mortimer Macdonald: You would need to say so in the statute. It may be that the return for every hon. member of this House might be delayed indefinitely unless you state in the statute that in the event of the loss of the return the contents of the duplicate may be verified in some way, and the return made.


Charles Joseph Doherty: We might perhaps treat that section as we have treated some others. I will think the matter over.


[Stage Direction]
Section agreed to.
On section 15, subsection 1-Final addition and recount in London of votes polled in United Kingdom or Europe:
Charles Joseph Doherty: This section gives an answer to the question which was asked in connection with section 13.	[DOT]


Edward Mortimer Macdonald: Are we to understand that the only way in which any one can get a remedy by means of a recount is to have the recount in England and to incur the expense that such a proceeding will involve? Why cannot these ballots be sent to Canada and be recounted here, if necessary? A candidate who desires a recount will have to retain English counsel, and a man who desires to avail himself of that remedy will need to have a bank behind him.


Robert Laird Borden: The difficulty is the danger of the ballots being lost under present conditions.


Edward Mortimer Macdonald: I think it would be worth while taking some chance about that. Anybody who knows anything about retaining solicitors and counsel in England knows what an expensive matter it is. This applies to hon. gentlemen on both sides. Surely some remedy could be had in Canada. Any one connected with the legal profession knows what it means. Any hon. gentleman, who is not a lawyer and who wants to have any question brought up, must retain Canadian counsel, the Canadian counsel must communicate with some solicitor in England and then this solicitor must hire counsel to attend these hearings. It is a tremendously onerous proposition. Surely there ought to be some provision for a recount in Canada.


Robert Laird Borden: Of course, the election is being conducted under extraordinary conditions, and we cannot have in England or France the same conditions as those which prevail in Canada. It is purely a question of whether you shall have the delay and danger of transmitting these ballots to Canada or whether you shall have a recount in Great Britain. It is a question for the committee.


Mr.   MAIODONALD@: It is not a party
question. It is a question in which every member of this House is interested. If there is any mistake, or if there is any question that a candidate for this Bouse wishes to have investigated, he might as well understand that he cannot have a recount in Canada but that he must go to tremendous expense, so much so that he cannot have a recount unless he has a large amount of money.


Robert Laird Borden: I think my hon. friend's idea of the additional expense is somewhat exaggerated. You would not require counsel. A solicitor in England would do all the work. Solicitors in Great Britain do a good deal of work in the courts under the modern practice'there. There is no need to retain counsel unless someone wants to go to that additional expense. All you would require would be some junior solicitor to attend for the purpose of seeing that these ballots, if they had been properly marked, had been counted.


Edward Mortimer Macdonald: Look at the procedure :
shall be instituted and had at London, England, before a person who may be designated for the purpose by a judge of the High Court of Justice of England. Such proceedings shall be initiated by an application to the High Commissioner or Acting High Commissioner of Canada at London that he secure the appointment of a recounting authority.
There is no compulsion on him to secure it.


Robert Laird Borden: We have to depend, in this respect, upon the comity of nations to a certain extent, upon the expectation that the judges in Great Britain will act in conformity to what after all is only a request. I have no doubt that tihe judges in England would assist in carrying out the Act. We really have not jurisdiction to tell them to do so. We have every confidence that they will act in the manner suggested and assist us to carry out the Act.


Edward Mortimer Macdonald: If an hon. member of this House finds he is twenty or thirty votes behind he will want a recount. How is he

to get it? It says here that such application shall be made -within four days after the time fixed in the Canada Gazette and the London Times. Is he to move by affidavit?


Robert Laird Borden: Oh, no.


Edward Mortimer Macdonald: I want to see the procedure.


Robert Laird Borden: After the judge has appointed a person to discharge the duties which the county court judges discharge in this country, the procedure will be the same; either he or some one on his behalf will have to make an affidavit, I suppose.


Edward Mortimer Macdonald: There are some very dose decisions in regard to what is sufficient for affidavits for recounts.


Charles Joseph Doherty: By section 15 all the provisions of part 3 with regard to recounting are made applicable, with the substitution for the word " judge," of the words " recounting authority." You make application to the High Commissioner, you ask him to get a recounting authority appointed, and when he is appointed you proceed before him just as before a judge here. Power is conferred upon the recounting authority to extend for such reasonable periods as may be necessary the times limited for taking any step in official addition or recounting proceedings affecting any votes polled under this Bill.
Mr. A. >K. MACLEAN: Part 3 of our Act gives four days between the opening of the returning officer's court and the commencement of recounting proceedings. *


Robert Laird Borden: There is authority to extend the time.


Charles Joseph Doherty: The Governor in Council is empowered to fix a date from which the four days will count. .
I wish to move the same amendment that has been made to section 12. I shall move in respect to this group of clauses, that, wherever the words " secretary of the High Commissioner of Canada " appear, there shall be substituted the words " secretary of the High Commissioner's office," and that wherever the words " Canadian Commissioner to France " appear, there be substituted the words " Commissaire General du Canada en France."


Edward Mortimer Macdonald: Is any attempt being made under this law to forward these ballots to Canada? Under the law of to-day
30fk
an affidavit must be made of incorrect statement or improper adding, and it must be made positive. It seems to me that part 3 would have to be amended in regard to the deposit. This provision applies to Quebec and Alberta and the Yukon. Do I understand that no deposit is to be required for a recount on the other side?


Charles Joseph Doherty: We have provided that all those provisions contained in part 3 shall be applied, and that the recounting authority shall be the equivalent of a judge. I would understand that to mean that when you go before that recounting authority you must satisfy him you are complying with the requirements of the law.


Edward Mortimer Macdonald: With whom are you going to deposit the money? There are special officers referred to in part 3, but no provision with regard to this. Part 3, of the statute refers to the matter.


Charles Joseph Doherty: I would think that it would be quite within the power of the recounting authority to say: "If you do not make the necessary deposit, the recount will not go on."


Edward Mortimer Macdonald: Deposit with whom?


Charles Joseph Doherty: The recount authority. We have to adapt conditions over there, and I do not think there is very much doubt that we, having transmitted this duty to the recount authority, he could act. We cannot send all these officers over from Canada, but the substantial obligation to make the deposit exists, and I do not think it would be any excess of power of the recounting authority to require that the deposit be made. He could find somebody reliable with whom to make the deposit.
Mr. MACDONALD We make part 3 applicable to conditions in England, but how will the deposit be made? In some provinces in Canada we deposit the money with the Clerk of the Court; in other provinces it is deposited with somebody else. You do not say anything as to who shall hold the deposit in England. If you are going to provide for security for costs, you should provide where the money shall be deposited otherwise the judge in England designated for this purpose would very fairly say: "There is no provision with regard to security for costs here." The statute should be made clear. A party might lose his recount, after going to a lot of expense, if the deposit were not made properly. Applications for recount in Can-



ada are set aside when deposits are not properly made.


Charles Joseph Doherty: In order that there may be no difficulty we might add to subsection 2 the following words:
And the recounting authority shall have power to determine with whom the deposit described shall be made.


Alexander Kenneth Maclean: There is apparently no way of a candidate learning the result of the count in England, or in Europe, unless he has an agent at hand, who would communicate that information to him. The result is not telegraphed to Canada until the final counting, which can only be after the recount, if there is one. I cannot suggest a way out of the difficulty, but the candidate in Canada has no means of determining whether or not he should ask for a recount.


Charles Joseph Doherty: If we go back to the
section that deals with it, the provision is that when the counting is completed the counting officer hands a certificate of the result of that counting to the High Commissioner in England, who telegraphs it at once to the general returning officer, and follows that up by sending over his statement, and the returning officer, upon that statement, is empowered to proclaim the result of the election. There is no provision to send to levery candidate in Canada notice of what that counting is. It would seem to me it might be fairly assumed that, when all that information is communicated to the general returning officer here, and is furthermore in the hands of the scrutineers representing the respective parties upon the other side, there would be no real difficulty in a candidate ascertaining it. I have not the slightest doubt that that information will be public property in Canada the day after the telegram comes.


Alexander Kenneth Maclean: What section requires a telegram to be sent to Canada?


Charles Joseph Doherty: Subsection 9 of section 12, which reads:
(9) Upon receipt of the statement, mentioned in subsection four of this section, of the votes applicable to each candidate in an electoral district, the secretary of the High Commissioner and the Canadian Commissioner to France, respectively, shall communicate the text thereof by telegraph, and such document itself by registered post, to the general returning officer.
Immediately on the statement being sent in, it will be cabled to this country, and followed by sending the statement by mail.

Then, as we amend subsection 4 of section 12, it will require that copies of such statements-that is the statement of the result of the counting-shall be delivered to the scrutineers in attendance.


Alexander Kenneth Maclean: I do not see how it can be improved, but there is not much chance of a candidate asking a recount in four days.


Charles Joseph Doherty: Section 14 makes it the duty of the general returning officer, when he receives the information here, to communicate it to any person who asks for it.


George Perry Graham: That means he will make it public.


Charles Joseph Doherty: And a candidate has only to ask for it, and he will get it.


Edward Mortimer Macdonald: Does the Minister of Justice understand that these provisions with regard to recount do not affect the right to a recount being had in Canada, with respect to the votes being cast in Canada?


Charles Joseph Doherty: I do not think it possible that those conditions could deprive the candidate of the right to have a recount of the ballots cast in Canada.


Edward Mortimer Macdonald: Would you put in a saving clause? You have one general returning officer. Your returning officer in each county does not return anybody. There should be some amendment to part 3, in order to make it clear you could serve a returning officer in a certain time. How would a man in British Columbia serve the returning officer in Ottawa?


Charles Joseph Doherty: The obligation of the
ordinary returning officer at home is to send all his papers to the Clerk of the Crown in Chancery. We have substituted the obligation to send them to the general returning officer. We have left the rest of the law as it was. The provision stands entirely unaffected, hut that operation will be stopped if somebody makes an application to the judge for a recount. All we have done with part 3 is to make its provisions applicable overseas, with the substitution of these different things, but we have not made them inapplicable to the operations here carried on under part 3, and those operations remain subject to the provisions of part 3.


Edward Mortimer Macdonald: If the minister will assure me that if after looking into' this matter I have any suggestions to make it clear I shall have the right to make them-


Charles Joseph Doherty: If I should be in error about it, I shall be glad to have it brought to my attention.


[Stage Direction]
Section agreed to.
On section 16-Emergency poll:
Charles Joseph Doherty: There is a printer's
error which I would like to correct. I think the word " be " should be inserted at the beginning of the third line, and I move that the section be amended in that respect.


Alexander Kenneth Maclean: The Governor in Council might be called upon very unexpectedly to grant a poll. I think the section should require notice to the candidates at least. It might happen that you would not have time even to put up notices. I know the British Columbia vote at Halifax was taken on less than twenty-four hours' notice, and a great many did not know it was being held.


Charles Joseph Doherty: The Governor in Council is empowered to make provision for the polling of the vote. I think there are not apt to be very many cases in which this will arise, and I believe the Governor in Council may be entrusted to make reasonable provision.


Frank Broadstreet Carvell: There is nothing in this section to the effect that the provisions which will be hereinafter enacted regarding the scrutineers being present shall be adhered to.


Charles Joseph Doherty: I should think the Governor in Council would consider that in making provision for the holding of the vote on a different date. I do not understand that it would alter the matter of holding the poll.


Alexander Kenneth Maclean: Except that he
might not have time to carry it out at all.


Charles Joseph Doherty: If there is not time to carry it out at all, I suppose the Governor in Council would not try it. All he is empowered to do is to make provision for the polling of their votes in the manner by this part provided. He cannot change the manner.


George Perry Graham: Read the balance of the section.


Charles Joseph Doherty: (Reading):
On a day prior to their departure, and may modify the provisions of this part relating to time or procedure in so far as may be necessary to render such polling possible.


Alexander Kenneth Maclean: 
Charles Joseph Doherty: I think the question for the committee is whether under those exceptional conditions it is willing to entrust the Governor in Council to provide to meet them. If it is not, of course I do not know how we can very well deal with it. I am willing to insert any words that may be useful.


Alexander Kenneth Maclean: I only mention it so that the attention of the minister may be drawn to it.


Mr. McKENZIE:: Will this Act apply to home guards, where there are home regiments?


Charles Joseph Doherty: It would apply to the militia on active service. Militia on active service may be away from their homes just the same as the Canadian Expeditionary Force.


[Stage Direction]
Section agreed to.
On section 17-Offences and penalties:
Edward Mortimer Macdonald: Of course, this section is of no. value unless there is some amendment to the Militia Act by which the doing of these things would be a military offence. It could not be enforced outside the country. I suggest to the minister whether we could amend the Militia Act.


Charles Joseph Doherty: It strikes me as a somewhat remarkable thing to try to make these duties military duties. While it is quite true that if the offences be committed outside of Canada we will not be able to apply the punishment-at least I take that to be the law-it is also true that those things may be brought about by people who are in Canada, although the operation itself is actually effected outside of Canada. Those parties in Canada would be subject to the punishment. Then we must remember that this statute also has application in Canada for the taking of military votes in Canada. As to the suggestion that we should make this offence a violation of military duty, it would certainly be extreme to apply it to people who are not military officers.


Edward Mortimer Macdonald: It would be of no value to those who were not military officers nor attached to the force. This may be only mere ornamentation and intended to apply only to stray persons in Canada, who may be connected, in some way or another, with the force; but suppose men connected with the taking of the votes in England or France found that some fraud had been

committed, there is no way in which any penalty could be imposed on them, unless the minister would amend the Militia Act 'so that anything made an offence under this measure could be dealt with by the military authorities. The trouble about the whole thing is that military offenders can not be punished unless the Imperial authorities pass some complementary legislation.


Charles Joseph Doherty: The whole proceeding is distinctly a civilian affair, and it seems to be rather unfair to seek by our law to make a man who happens to be a military officer amenable for an offence for which a civilian doing the same thing would not be amenable. If the hon. gentleman will look over the section he will find that many more of those things can be done in Canada than he conceives. People in Canada,
- for instance, may seek to prevent the delivering of those messages. This provision is far from being mere ornamentation.


Edward Mortimer Macdonald: It simply means this, that anything in the way of infraction of the law that can be committed may be committed in England and France, and nothing will be done to the party who commits the offence. Will the minister see if he can find some way of carrying out my suggestion?


Charles Joseph Doherty: I shall be glad to think about that as well as about other matters. At first glance it strikes me as an extraordinary proposition that we should make offences of this kind military offences.


Robert Laird Borden: So far as I am able to understand the suggestion of my hon. friend, I do not think it would advance the matter one whit further.


Edward Mortimer Macdonald: I make the suggestion only as a possible solution. There is no sense in inserting in this Military Voters' Act a quantity of fanciful infractions of the -law, and penalties, and things of that kind if they are to .be only of as much value as waste paper. Can not something better be devised?


Robert Laird Borden: My hon. friend is mistaken. This section has an application in Canada and therefore, it is not purely ornamentation. Outside of Canada, it has at least a certain moral effect; it is there on the statute book. If we should attempt to convert offences of this kind into military offences, we would simply be attempting to evade 'the plain provisions of the Militia Act and the corresponding Act
[Mr Macdonald.]
in the United Kingdom to which, in the final analysis, we have to resort for the enforcement of military law.


George Perry Graham: You might make ad
these men honourary colonels and bring them under the Militia Act.


Robert Laird Borden: In efiect, what my hon. friend would suggest is this, that we should make offences under this measure offences under the statute of the United Kingdom. If we enact that, we would not be a bit further along, because the same objection that might be raised to this could be raised with regard to that.


Edward Mortimer Macdonald: I do not think so. I think that under our statute relating to military matters, the King's regulations are made effective in Canada and applicable to the forces. The King's regulations are in force in Canada, because it is so stated in the Militia Act. I simply want to suggest consideration of the question as to whether or not something can be done.


[Stage Direction]
Section agreed to.
Mr. WRIGHT:: Will soldiers have to vote in their capacity of soldiers? There must be some hundreds of soldiers employed in the city of Ottawa, and the same is true of other cities. They will have a vote in their capacity of civilians as well as in their capacity of soldiers. Will those men have an opportunity of voting in either capacity; that is, can they vote as citizens or vote as soldiers?


Charles Joseph Doherty: The soldier may exercise either vote. He cannot, of course, exercise both.


George Perry Graham: Is there any provision by which a soldier can go home and vote?


Charles Joseph Doherty: We are trying under this measure to make provision so that the soldier away from home will have the poll brought to him. We are, therefore, not making a provision to let him go home to vote. He votes for his own constituency, but he votes, under this system, in his camp or wherever he is. If he happens to be at his home, he may vote there.


Frank Broadstreet Carvell: I would suggest that
the minister give notice of these amendments and then, between now and to-morrow, we could take them into consideration and try to frame a measure as it will be with these amendments. If all the amendments were comprised in this typewritten document, the matter would not be too bad, but certain amendments have

already been adopted. I suppose, if we take Hansard of yesterday and these proposed amendments, we shall find out how the legislation reads.


Charles Joseph Doherty: Before we deal with that matter, the ballot form and also forms B and D require amendment.


Frank Broadstreet Carvell: The hon. member for St. John notified me before leaving that his constituency is not described correctly. It should be "the City and Counties of St. John and Albert.''


Charles Joseph Doherty: The electoral districts affected are St. John, Ottawa, Halifax, South Cape Breton and Richmond. I beg to move that:
Form A be amended by striking out in line three after the word "particular," the word "person" and substituting the words "candii date or candidates designated by name,"' and by striking out the word "person" after the word "such" in the fourth line thereof and substituting the words "candidate or candidates." Further, by striking out the words "une per-sonne en particulier" in the seventh line thereof, after the word "pour" and substituting therefor the words "un ou des candidats en particulier designCs par ieurs noms" and by striking out in the eighth line the words "cette personne" after the word "de," and substituting therefor the words "ce ou cea candidats." By inserting in clear black type, the words "in the electoral dictricts of Ottawa, Halifax, South Cape Breton and Richmond, and the city and counties of St. John and Albert, two candidates may be voted for"- Dans les divisions Electorates d'Ottawa, Halifax, Cap-Breton Sud et Richmond, et St. Johnj on peut voter pour deux candidats." By erasing the straight line in' the first space. By1 making a fifth white space and inserting the words "I vote for the Labour candidate"-. "Je vote pour le candidat Ouvrier."


[Stage Direction]
Amendment agreed to.
Charles Joseph Doherty: I beg t-o move that Form D be amended by adding to the last word thereof the words, "I have not previously voted at this election."


[Stage Direction]
Amendment agreed to.
Alexander Kenneth Maclean: I would suggest to the minister that No. 1 space should be wider. It will be remembered that in four instances two names may have to be written within that space.


Charles Joseph Doherty: Perhaps we might have that done.
Progress reported.
On motion of Sir Robert Borden, the House adjourned at 12.05 a.m. Friday.
Friday, August 24, 1917.