1919-10-27

SENATE BILL.


[Stage Direction]
Bill No. 37 for the relief of Frank Thimm. -Mr. Nesbitt.

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

Mr. STEELE:: How many dismissals have been made from the Inside Civil Service since January 1, 1919?


Mr. GUTHRIE:: 301.


QUEBEC RIOT CLAIMS.
Mr. PARENT:: 
Hon. Mr. GUTHRIE:: 1.	One claim, that of the widow of Leon Belanger, constable.
2.	By letter.
3.	Nine.
4.	From Jean Marie Guarard and Mme. Veuve [Belanger.
5.	From Mr. Guarard, November 25, 1918, December 19, 1918, February 8, 1919, March 4 and 14, 1919, April 15, 1919, and May 20, 1919. From Mme. Belanger, February 11, 1919, June 24, 1919, July 31, 1919.
6.	Yes.
7.	Compassionate allowance voted by Parliament at the First Session of Parliament of 1919, and paid to the widow of Leon Belanger July 21, 1919.	v


RECOMMENDATIONS FOR TITLES.
[Stage Direction]
[Mr. MACKIE (Edmonton):
Was it the intention of Parliament when passing the resolution dealing with the question of titles of honour and titular distinctions that it would cancel all recommendations which had been made, prior to the passing of the same, in regard- to officers serving in Canada?
Hon. Mr. DOHERTY:: Stand.


Mr. H. A. MACKIE:: May I ask when I may expect an answer to this question?


Charles Joseph Doherty: The next time the question is reached.



GOVERNMENT COAL SUPPLY.


[Stage Direction]
* Mr. CASGRAIN:
1.	Is it the intention of the Government to discontinue the service of the ferry by the
C.G.S. Champlain, between Riviere Ouelle wharf, St. Irenee?
2.	If so, when?
3.	If not, why?
Hon. A. K. MACLEAN:: The present intention is not to discontinue this service, but to make it tri-weekly instead of daily, in conjunction with the proposed service from Murray Bay to Tadousac. LOTBINIERE AND MEGANTIC RAILWAY.
*	Mr. CASGRAIN:
1.	Is it the intention of the Government to buy the LotbiniSre and Megantic railway and; the Charlevoix and Montmorency railway?
2.	If so, when?
3.	If not, why?


Hon. J. D. REID:: 1. Any intention of the Government in regard to these railways will be made known in due course.
2 and 3. Answered by No. I.


QUEBEC AND SAGUENAY RAILWAY.
Mr. CASGRAIN:: 1.	How many passengers have been carried by the Quebec and Saguenay railway since it has been in operation, from July 1?
2.	What have been the net earnings of the Quebec and Saguenay railway since it has been in operation, if any?


Hon. J. D. REID:: 1.	Thirty-three thousand eight hundred and ninety-nine passengers have been carried on the Quebec and Saguenay railway from August, 1918, to October 1, 1919.
2.	Twelve thousand nine hundred and forty-one dollars and sixty-six cents represents the net earnings on the Quebec and Saguenay railway from August, 1918, to the 1st of October, 1919.


RIVIERE OUELLE TRAIN SERVICE.
[Stage Direction]
*	Mr. CLASGRA1N:
1.	Is it the intention of the Government to discontinue the service of the branch line between Riviere Ouelle junction and Riviere ouelle wharf?
2.	If so, when?
3.	If not, why?
Hon. J. D. REID:: 1.	It is the intention of the management of the railway to discontinue the train service between these two points.
2.	Not yet decided.
3.	See answers to Nos. 1 and 2.


PETITION FROM J. H. GARAND.
Mr. LANCTOT:: 1 Has the Secretary of State received a petition from J. H. Garand asking for the granting of a fiat for the recovery of the sum of $5,000 reward promised by the Government in connection with the attempted blowing up of the residence of Lord Atholstan at Cartier-ville?
2.	Has the request been refused?
3.	If so, for what reason?


Hon. Mr. DOHERTY:: 1.	Yes.
2.	Yes.
3.	Because in the opinion of the Minister of Justice it was contrary to good policy, that Mr. Garand,, being the manager of the Thiel Detective Agency which was engaged and paid by the Government to detect and apprehend the offenders, should at the same time, be permitted to claim the reward in addition for services for which the agency had already been paid.


ST. FIDELE WHARF-
Mr. OASGRAIN:: 1.	Has the Government received a petition from the inhabitants of St. Fidele, in the county of Qharlevoix, P.Q., demanding the construction of certain works at the wharf of said parish?
2.	Is it the intention of the Government to do such works?
3.	If so, when?
4.	If not, why?


Hon. Mr. SIFTON:: 1.	The Government has1 received such a petition.
2,	3 and 4. The petition has been submitted to the Engineering Department and will be considered when its report is received.



QUESTIONS PASSED AS ORDERS FOR RETURNS.

Mr. ETHIER:: 1.	What is the total cost of the classification of the Civil Service as authorized by Parliament, and prepared under the direction of the Civil Service Commission, up to date?
2.	What is the total cost of the stationery and printing of the first report made by the so-called experts appointed for that purpose; also the cost of the table of classification and salaries, forming the schedule of the said report already laid before the House by the Civil Service Commission, and which has been rejected and recognized unacceptable?
3.	What is the total amount paid to the so-called experts to date, and the number of days that they worked to prepare the said classification of the Civil Service of Canada?
4.	What is their salary, by day and by hour?
5.	How many clerks were employed by them, and what amount has been paid them to date?
6.	Are these so-called experts of British origin or American?
7.	If the latter, why has this work been given to American rather than British citizens?


Mr. ETHIER:: 1.	What are the names of the so-called experts appointed to prepare the classification of the Civil Service, as authorized by Parliament?
2.	What was their occupation previous to their appointment for this work?
3.	What are their qualifications and experience for doing such work?
4.	By whom h?ve they been recommended for such appointment?

5.	Is the Canadian Government aware that the American government rejected the classification of their Civil Service, made by the firm of Arthur Young and Company?
6.	Are the so-called experts for the classification of the Canadian Civil Service members of the said firm of Arthur Young and Company?


*Mr. DUFF:: 1.	During the present year, was a letter written by the President of the Privy Council to the other members of the Government, advising them that the Privy Council, upon the recommendation of the Repatriation Committee, had approved of an agreement being entered into with the Pathescope Company to provide a Canadian Weekly News Film Service for the moving picture theatres of Canad-a, and that the supervision of this work would be under the Department of Public Information?
2.	Wrhat were the terms of the agreement entered into with the Pathescope Company, and how much has been paid the company to date?
3.	Was ?any further -amount beyond that paid to the Pathescope Company expended by the Department of Public Information in connection with the moving picture business, and if so, how much?
4.	At the time the above letter was written by the President of the Privy Council, and the agreement made by him with the Pathescope Company, was there another department of the Government equipped with a moving picture outfit? If so, which department, and what did its moving picture outfit cost?
5.	Why was it not authorized to handle the class of work for which the contract was given to the Pathescope Company?
6.	When will the contract with the Pathescope Company expire?
7.	Is the Pathescope Company located in Toronto? If so, who are its officers and shareholders?
8.	Who represented the Pathescope Company in the negotiations with the President of the Privy Council, and by whom was the agreement drawn?



GRAND TRUNK RAILWAY SYSTEM.

[Stage Direction]
On the Orders of the Day:
Mr. JAMES ALEXANDER ROBB (Cha-teauguay-Huntingdon):: Mr. Speaker, in
the absence of the hon. member for Charle-voix-Montmorency (Mr. Casgrain), I desire to ask the Government when we may expect an answer to question No. 8, which reads1:
What is the amount the Government claims the Grand Trunk Railway system owes them'7
In view of the legislation now 'before the House, it seems to me that this information should be in the hands of the Government and the country.


Hon. J. D. REID (Minister of Railways):: I will try to get the answer this afternoon from the Grand Trunk officials and to answer it next time, but 'probably I will announce the amount to-day during the discussion.

MINERALS IN NORTHERN MANITOBA;



SURVEY RAILWAY.

[Stage Direction]
On the Orders of the Day:
Mr. J. A. CAMPBELL (Nelson):: In the edition of the Winnipeg Telegram, dated October 23, there is a rather extended article on the front page regarding the mineral resources of northern Manitoba and especially in regard to a proposed railway into the district in question. The article winds up by stating that the Hon. J. A. GaJder and the Hon. Arthur Meighen informed Premier Norris that a survey of this line would be undertaken this winter. Is that correct?


Hon J. A. CALDER (Minister of Immigration) :: So far as I am concerned, I never made any such statement to any person. Whether the Minister of the Interior made a statement of that kind, of course, I cannot say.


Sir SAM HUGHES:: Is the Government going to build the railway? That is the main thing.


James Alexander Calder: That is a matter that the Minister of Railways might reply to.


John Dowsley Reid: The Minister of Railways made no such statement.



GRAND TRUNK RAILWAY SYSTEM.


[Stage Direction]
House again in committee on Bill No. 33, respecting the acquisition by His Majesty of the Grand Trunk Railway System.-Mr. Boivin in the Chair.
On section 2-Government empowered to enter into agreement with Grand Trunk Railway Company for acquisition of entire capital stock of company, except four per cent guaranteed stock:
The CHAIRMAN:: When the committee rose at 8.30 on Friday evening, clause 2 had been under consideration during the evening. Shall clause 2 carry?


Mr. CAHILL:: I desire again to ask the Government what is the total amount at this date of the liabilities of the Grand Trunk undertaking which are being assumed by the Government, that is, exclusive of the amount that is to be arbitrated.


John Dowsley Reid: I will try again to give that all in detail so that there will be no doubt about it. The items are, of course, all in detail on page 39 of the blue-book, but I wiir give them much fuller. Let me try to explain this so that the hon. member will understand, and I am going to give him the principal and the interest as well, so that we shall see just exactly what the
whole liabilities and the different classes of securities are. We have first the Grand Trunk five per cent debenture stock, $20,782,491.38.


Mr. McKENZIE:: Does that amount appear in the blue-book in that form?


John Dowsley Reid: Yes, the items that I am going to read are all under the heading of liabilities. The hon. member will see that there is a total of $504,629,211.93, the items of which are all in the books of the Grand Trunk under the heading of liabilities. I should like to explain it all in detail, from top to bottom, and then the committee will understand it probably a little better. These are the liabilities:
Interest
Grand Trunk 5 per cent debenture	Amount.	per annum.stock	
$ Grand Trunk 4 per cent debenture	20,782,491.38	$1,038,124.58stock	
Great Western 5 per cent deben-	119,839,012.69	4,793,560.56ture stock	
Northern railway 4 per cent deben-	13,252,322.48	662,616.12ture stock	
Second mortgage	1,499,979.65	59,999.18equipment bonds Northern railway third mortgage	1,814,779.97	108,886.80bonds	
Canada Atlantic 4	70,566.67	4,234.00per cent bonds WeTington, Grey	16,000,091.77	640,003.68& Bruce bonds Matured bonds un-	295,893.34	24,000.00va irl	3,406.67	On which there Five year, per cent secured	seems to be	no interest.notes	
Three year 6 per cent secured	12,166,166.50	669,166.67notes	
Three year 6 per cent secured	4,866,666.50	292,000.00notes	14,598,539.80	876,000.00
Total.. ..$205,190,417.52 $9,168,591.59
To that we have to add the Grand Trunk guaranteed stock, $60,833,322.51, on which the annual interest would be $2,433,333.33, making a total of $266,023,750.03 with an annual interest of $11,601,924.92. That covers the debenture and guaranteed stocks and the fixed charges. My memorandum states that the interest on equipment notes and loans, amounting to $H1,601,964.92, is a charge against operation and is therefore not considered a fixed charge. The officials say that to the annual fixed charges should be added rental of leased lines $340,666; also the deficits on the United States lines, amounting to $1,639,317, estimating on th*

basis of 1918. That makes the total fixed charges $13,581,907.92. Against this the company receives interest on securities owned by the company which in 1918 amounted to $2,008,382.47. Therefore the total net fixed charges for which the Government are assuming responsibility amount to $11,573,525.45.
I have stated that the total liabilities in connection with the debenture stock are $266,023,750.03. Then on page 39 of the blue-book we have additional liabilities as follows :
iFirst preference 5% stock . .$ 16,643,99-9.78 Second preference 5% stock 12,312,'&6'6.50 Third preference 4% stock ..	34,884,534.9'5
Total preference stocks$ 63,841,201.23 Common stock	 116,583,124.44
Total preference and
common stocks ..	..$180,424,325.67
These are the stocks which will be submitted to arbitration and on which we will have to pay interest annually.


Mr. DEVLIN:: On what does the minister base his figures for those stocks?


John Dowsley Reid: I have given the par value. Then we have also the following liabilities:
Advanced by Canadian Government, $15,142,633.13.
This loan was made many many years ago. Then there are the following:
Notes unsecured	$ 3,916,362.18
'Current liabilities	 22,801,474.35
Reserves, fire insurance, etc.	3,4'55,344.861
Advances, etc	 7,286,995.75
Net income balance	 234,118.33
Equipment notes	 '5,344,207.54
Total	$5-8,181,136.14
That makes a total of $58,181,136.14, but we must remember that equipment notes, current liabilities, advances, and so forth are charged against operation, and are not a standing liability such as mortgages and stocks so that the total is $52,836,928.60.


Daniel Duncan McKenzie: The minister says these items are not to be taken into account with the other liabilities. Are they not to be looked after from the proceeds of the. road?


John Dowsley Reid: Certainly. But the last item I have read, for instance, net income balance $234,118.33, is a profit. That, of course, would not he considered a liability. The item immediately above, $7,286,995.75, is a book account. We . would add in the list of liabilities the item of $22,801,474.35 which is made up of interest on capital account accrued. Wages unpaid at December, 1918, amounting to $3,132,851.84, would fMr. J. D. Reid. I
be a charge against operation. Then on the opposite side of page 39 we have current assets as follows:
Sundry outstanding accounts. $43,838,831.44
Outstanding traffic accounts.. 1,581,862.15
Materials and supplies on
Rand	 6,407,195.57
Those are supposed to be in connection with operation and are not what we would call a direct liability against the property. Let me complete the statement I was giving. I stated that the debenture and guaranteed stocks amounted to $266,023,750.03, and the net fixed charges $11,573,525.45. We have to add to that, $180,424,325.67. Then there are equipment notes amounting - to $58,181,136.14, making a total of $504,629,211.84. That includes $116,583,124.44 of common stock, on which interest has never been paid, and $63,841,201.23 of first, second and third preference stocks. I think that answers the question as regards the total liabilities of the Grand Trunk.


Frank S. Cahill: I desire to know what
the total obligations of the proposed pur- ' chase amount to. Will the minister explain what is meant by the item, appearing on page 26 of the blue-book, " funded debt $448,703,356"?


John Dowsley Reid: The hon. member will see, under the heading, "'Capitalization " on the same page, the following:
In hands of public December 31, 1917, for the system, including 'the Grand -Trunk Pacific (1918) and American roads.
The Grand Trunk Pacific is therefore included in that item of $448,703,356, it and the American ro-ads representing a total of $275,000,000.


Frank S. Cahill: I w-ant to make myself
perfectly clear. What is the Government purchasing? Can the minister answer me that question?


John Dowsley Reid: They are purchasing the Grand Trunk system, the liabilities of which I mentioned.


Frank S. Cahill: Perhaps we shall get a
better insight into the proposition if we know what the Grand Trunk system consists of.


John Dowsley Reid: On page 34 of the blue-book there is a statement in regard to the system:
Grand Trunk Railway Company of Canada, owned by parent company, 3,382.9 miles.
There follows a list of railways controlled, leased or operated, and the Grand Trunk is merely a subsidiary company.


John Archibald Campbell: Are the American roads included in the statement appearing on pages 38 and 39?
Mr. J. 11. REID: The balance sheet on pages 38 and 39 shows the results of the operation of the American roads. We are purchasing the Grand Trunk system, and the Grand Trunk Pacific is a subsidiary company.


Frank S. Cahill: I understand that the Government purpose taking over a railway sys-. tern comprising the Grand Trunk and other companies or branches of railway. Now, what is the total mileage, and what are the liabilities against the total undertaking? I do not care about any individual company just at present; let us know first of all how many miles we are purchasing altogether and what all the liabilities amount to.


John Dowsley Reid: The Grand Trunk railway mileage is given on page 32, and we are taking over other lines, a long list of which appears on pages 32 and 33. These lines are: Atlantic and St. Lawrence; St. Clair Tunnel; Buffalo and Lake Huron railway; International Bridge; Champlain and St. Lawrence; Chicago, Detroit and Can.; Michigan Air Line railway; United States and Canadian railway; Cincinnati, Saginaw and Mackinaw railway; Lewiston and Auburn R.R.; Pembroke Southern railway; Trackage rights, T.N.Q.; International O.N.Y.C.; Central Vermont railway; Montreal and Province Line railway; 'Stanstead, Shefford and Chambly railway; Bethel Granite railway; New London N.R.R. and West River R.R.; Detroit Grand Haven and Milwaukee railway; Grand Trunk West railway; Pontiac, Oxford and Northern railway; Detroit and *Toledo Shore Line R.R.; iSaginaw and Muskegon railway. The total affiliated roads reported in the United States are given. Then there are:	Grand Trunk Pacific railway;
Grand Trunk Pacific Branch Line Company. The total Grand Trunk Pacific mileage amounts to 2,962. The total line owned, controlled and leased, Canadian, is 6,620, from which there must he deducted Lake (Superior branch operated by Canadian Northern. The total line operated in Canada is given at 6,431 miles and the total line operated in the United States, 1,367 miles, or a grand total of 7,799 miles. This comprises the Grand Trunk system which we are taking pvef.


Frank S. Cahill: What are the total liabilities against that system?


John Dowsley Reid: I read the total liabilities a few moments ago. With reference to the
Grand. Trunk Pacific, the Grand Trunk is liable for the interest on the debentures that they have guaranteed to the extent only of the interest on the guarantee and preference stock; or, in other words, the earnings of the Grand Trunk cannot be paid out until the interest on the debenture stock has first been paid. Then, of course, they could not pay any dividends on the guarantee of the first, second and third preference stock until their guarantees on the Grand Trunk Pacific bonds had been paid. If we take the system over we will be liable for, first, the interest on the debenture stock, say, $7,000,000, and the $2,500,000 of the guarantee plus the award of the arbitrators, if any, on the first, second and third preference and guaranteed stock. Then we will also be liable for the interest on the Grand Trunk Pacific debentures and any loss in - operation on the Grand Trunk Pacific line. As far as I can see, that answers everything in the hon. gentleman's question.


Frank S. Cahill: We will get back to the question again now. What are the total outstanding liabilities against the undertaking which the Governmeht proposes to acquire? That question ought to be plain enough surely.


John Dowsley Reid: They are set out fully on pages 38 and 39. I tried to explain them in detail a few'minutes ago. I do not know whether there is any way in which I can make them any plainer. If I could I would be very glad to do it. It would be impossible to give the hon. gentleman the exact amount for this reason: There is the $266,023,750; I have no doubt about that being a debt against the road, The other amount is $180,424,325.67, which is the common stock and the first, second and third preference stock total. The value of that would have to be appraised when the award is made. It would probably be a very small proportion of that amount. Outside of that, the other items are those which I have just read. There is the Government loan of $15,000,000, but I do not know what value would be placed upon it.


Mr. DAVIS:: The hon. member (Mr. Cahill) is asking practically what are the obligations against the subsidiary roads in addition to the obligations on the main road. The main road owns an interest in subsidiary roads which undoubtedly have bonded debts and debentures outstanding against them. What are these debentures which are totalled with the debts against the parent system and give the total liability of the whole system?


John Dowsley Reid: The total of $266,000,000 and the interest on that which is against the [DOT]Grand Trunk is all that we assume. Any other liabilities that there may be against subsidiary companies we are not assuming as we are the liabilities against the Grand 'Trunk system.


Fred Langdon Davis: It is true we are not going to be asked to guarantee all these debts, but if we are going to obtain the properties we have to see that the interest on these underlying claims is paid in order that we shall not Lose the properties. Therefore we ought to know what these obligations amount to.


John Dowsley Reid: We do not assume the liabilities on the subsidiary companies other than as I have stated. We only assume the liabilities that are against the Grand Trunk main system. We guarantee the interest on
Grand Trunk Ra: Obligations in respect of Guarantees, etc.
the $266,000,000 of funded debt. We are not in any way guaranteeing the interest with regard to the subsidiary companies.


Fred Langdon Davis: But there are these underlying obligations on the subsidiary systems which must be satisfied by the parent company, and we, as the successor of the parent company, are to draw the dividends from these systems. We would like to know what obligations stand against them and what wall be the nature of the interest which we acquire when we acquire the interest of the Grand Trunk in them?


John Dowsley Reid: I have a statement here showing the securities against the subsidiary companies outstanding, but the Grand Trunk own a lot of them. I suppose that is what the hon. member means. It is as follows:
lway System.
of Controlled and Subsidiary Companies.
Statement No. 2.
Note.	Class of Security.	Int. rate. -
		p.c.
A	G. T. Western 1st Mortg. Bonds	4A	" Gen. Cons. Mortg. Bonds	4A	G. T. Junct. lst.Mortg. Bonds	5A	D.G.H. and M. Ry.Equipt. Bonds	6A	" Cons. Mortg. Bonds	6Toledo, Sag. and Muskegon Ry. 1st Mortg. Bonds..	5Pontiac, Oxford and Northern R. R. 1st Mortgage	6B	Chic., Det. and Can. G. T. Junction Railroad	Capital Stock	4C.D. and C.G.T. Jc. R.R. 1st Mortg. Bonds	6" " Special Bonds 	5B	C.S. and M. Railway Capital Stk	
Michigan Air Line Railway 1st Mortgage Bonds....	5B	Atlantic and St. Lawrence R.R. Capital Stock	6" " 1st Mortg. Bonds	6" " 2nd	6" " 3rd "	6" " Island Pond Debentures	6B	Lewiston and Auburn Ry. Capital Stock	
*	6G.T. Milwaukee Car Ferry Company Gold Bonds	4*G.T. Milwaukee Car Ferry Company Gold Notes	Portland Elevator Co. Bonds	4N ew England Elevator Co. Bonds	3!C	Central Vermont Rly. Bonds	4Montreal Warehousing Company Bonds	4D	Toronto Terminal Rly. 6 & Notes	6Less:	Less: Principal not guaranteed by G.T. Ry	Net amount for which Grand Trunk Railway Company of Canada is obligated in respect of guarantees	Par value outstanding.	Annual Interest.	Par value owned by G.T. Ry.	Annual Interest on Par value owned by G.T.Ry.$ cts. 14,999,720 00 11,541,000 00 3.872.000	00 1.999.000	00 3.200.000	00 1.662.000	00	S cts. 599,988 80 461,640 00 193,600 00 119,940 00 192,000 00 83,100 00	$ cts. 4,035,304 00 11,541,000 00 2,933,040 00 39,000 00 398,800 00 1,662,000 00	$ cts. 161,412 16 461,6 00 146,652 00 2,340 00 23,928 00 83,100 00400,000 00	24,000 00	400,000 00	24,000 001.095.000	00 1.095.000	00 691,141 46 1.500.000	00 1,500,400 00 5.484.000	00 1.500.000	00 713.000	00 787.000	00	43,800 00 65,700 00 34,557 06 43,225 00 75,020 00 330,598 00 90,000 00 42,780 00 47,220 00	521,821 00 1,095,000 00 691,141 46 27,761 71 1,500,400 00 200 00	20,872 84 65,700 00 34,557 06 800 00 75,020 001,500,000 00 713.000	00 787.000	00	90,000 00 42,780 00 47,220 00438.000	00 300.000	00 67.000	00 30.000	00 200.000	00 400,000 00 11,750,000 00 1,000,000 00 4,000,000 00	26,280 00 18,000 00 3,015 00 1,350 00 8,000 00 15.000	00 470.000	00 40.000	00 240.000	00	438,000 00	26,280 00
110,000 00 180,000 00 1,633,300 00	4,400 00 6,750 00 65,332 00
			
			
70,224,261 46	3,268,813 86	30,206,768 17	1,382,784 06
30,206,768 17	1,382,784 06		
40,017,493 29 21,081,116 00	1,886,029 80		
			
18,936,377 29	1,886,029 80		
It will therefore be seen that the net amount for which the Grand Trunk Railway is obligated in respect of guarantees- that is on principle-is $18,936,377.29, and the total annual interest is $1,886,029.80. I want to add that while that shows the fMr. Da vis. 1
amount we are liable for, the Grand Trunk Railway and the subsidiary lines forming part of that great system are of such value that the revenue derived from the traffic contributes largely to the profits they have been making, to an extent, at all events,

sufficient to pay the $7,000,000 on the debenture stock and the amount of $3,600,000 which the payments on the guaranteed and first, second and third preference stocks have averaged during the last ten years.


Fred Langdon Davis: Does the minister say, then, that these additional obligations, amounting to about $40,000,000, added to the statement that he first gave of about $414,000,000 constitute the total of the Grand Trunk system's obligations to the public-that is, for stock and debentures?
Mr. 'CAHILL: Not stock, debentures and bonds.


John Dowsley Reid: The best way for me to explain that would be for me to state this: The total outstanding liabilities against the Grand Trunk would be $266,023,750, and, if the hon. gentleman wishes, plus whatever the award may be on the $180,000,000, representing $116,000,000 of common stock, and the first, second and third preference stocks. These three stocks and the $116,000,000 of common stock amount to $180,000,000, and whatever the arbitrators determine the value of that stock to be, would have to be added to the $266,000,000. At present we cannot say what that addition would be. Outside of that, the amount guaranteed by the Grand Trunk or their subsidiary'companies would be $18,936,377. Then there is an amount of $21,081,116 not guaranteed by the Grand Trunk Railway stocks, plus the equipment notes and current liabilities in connection with the company's operations.


Frank S. Cahill: I again ask the minister
to state what are the total liabilities to the public of this undertaking which the Government proposes to take over?


John Dowsley Reid: 'I do not see how I can make it any plainer.


Frank S. Cahill: Does the minister mean
to tell me that he proposes to buy something the liabilities of which he does not knowP	-


John Dowsley Reid: No man in this House or in Canada can give the total, because the award has not yet been made.


Frank S. Cahill: T am not talking about
the award; I am referring to the total liabilities.
Mr. ,T. D. REID:	The total liabilities
amount to $266,023,750.03.


Mr. DENIS:: The minister has repeatedly .said that the funded debt amounts to $266,000,000 in round figures, but on page 39 of
the blue-book the total funded debt is given as $173,558,544.62.


John Dowsley Reid: The amounts given
under the heading of "Funded Debt'' on page 38, $155,373,806.20 and $18,184,738.42, make the total of $173,558,544.62. Then further down there are the notes payable secured1: $12,166,666.50; $4,866,666.60; /$14,-598,539.80. These make the total of $205,190,417.52. We call those notes "secured notes" for this reason:	Instead of selling
debenture stock and having it in the funded debt they borrowed the money and deposited debenture stock as collateral security. Therefore we consider that these three items should be added to the $155,373,806.20 and $18,184,738.42, thus making the total funded debt $205,190,417.52. Then we are adding to that the item' of $60,833,332.51. The debenture stock and guaranteed stock taken together I am calling the funded debt; but it means the total of these items which 1 have given.
;Mr. DENIS:	It would have been much
clearer if a statement along the line of that which the minister has just given had been printed in the blue-book, because, as I have pointed out, the total funded.debt is stated on page 39 of the blue-book as $173,558,544.62. I think it is quite right to say that these notes payable, secured notes, should be treated as funded debt.


John Dowsley Reid: The $173,000,000 is debenture stock; it is really like a mortgage against the property. The other item is money borrowed on notes with a certain amount of debenture stock out as collateral security, and until this stock is really sold and registered as debenture stock against the property it is treated as a liability, as is shown in the blue-book. It is merely the method that would be employed by an accountant in keeping the accounts, pending the sale of the debenture stock and its being charged up against the property.


Frank S. Cahill: May I again ask the minister for an answer to my question? What are the total liabilities against this system? Is not that a plain question?


John Dowsley Reid: It is a fair question, and I tell my horn, friend frankly that I have answered it the best way I can, and in every detail. I have given the statements from the books of the Grand Trunk Railway Company showing the funded debt, the current liabilities, the amounts in connection with the proposed award, and so on. The hon. member wants me to state a certain sum and to make an estimate of the award.

Mr. CAHILL,- I did not ask the minister anything about the capital stock that is to he awarded; let us make that plain. I am asking what are the liabilities of the company. If the minister is not able to answer that question, surely he will not carry this transaction through. Before we proceed to an award we should at least know what this thing is to cost us; what the liabilities are against this undertaking.


John Dowsley Reid: I will answer my hon. friend again. The total liabilities of the Grand Trunk Railway System are $266,023,750.03. The amount that the Grand Trunk Railway System has guaranteed is $18,936,377.29; so that if you add $266,023,750.03 and. $18,930,377.29, you have the funded debt plus any amount that may be awarded.


Frank S. Cahill: What is the total?


John Dowsley Reid: $284,960,127.32 plus any amount that the arbitrators may award.


Frank S. Cahill: Do I understand the minister to say that this amount represents the total liabilities of the Grand Trunk undertaking?


John Dowsley Reid: Yes, that is the amount for which the Grand Trunk and its subsidiary companies are liable. Of course, there are other amounts that there are not guarantees for. In addition to that the Grand Trunk Railway Company ha/e guaranteed the interest on the Grand Trunk Pacific bonds. Then, there are the guaranteed stocks and the first, second and third preference stocks, they cannot pay any dividends on those to the shareholders until the other obligations have first been released. If. they do not earn the money, they do not have to pay it.


Frank S. Cahill: What is meant by the statement that appears on page 40? The statement, it is true, is rather old; it is headed "capitalization-December 31, 1917"?


John Dowsley Reid: It explains itself. Grand Trunk parent comipany, funded debt, bonds and debentures, notes, loans, amounted to $202,332,997. That was in 1917. The capital stock guaranteed or preferred amounted to $124,674,533. If the hon. member will turn back to page 38, he will find there, common stock, $116,583,124.44. That is practically the same as the amount of common stock given on page 40, of $116,583,120. The capital stock $124,674,533 is explained in detail on page 38.


Frank S. Cahill: If the minister will come back with me to page 40 and look at the

statement "Funded debt, bonds and debentures, notes, loans," which appears under the date line, and if he will follow that down to the total, he will find that the total Grand Trunk Railway system1, funded debt, bonds and debentures, notes, loans, amounts to $448,703,356. That is exclusive of the stocks. Will the minister explain that item?


John Dowsley Reid: If the hon. memoer will look at the statement he will see that the total-"reported under Grand Trunk Railway Company"-amounts to $205,989,280. That is explained in the statement I read a few minutes ago in regard, to the funded debt against the parent company. The total I gave was $205,190,417.52, of which the details appear on pages 38 and 39. To the funded debt, etc., of the Grand Trunk parent company amounting to $202,332,997 they have added on the statement on page 40, Buffalo and Lake Huron Railway funded debt, etc., $3,656,283, but the Grand Trunk own that. The funded debt is there; but the bonds are owned by the comipany. That gives a total of $205,989,280. There is the statement with regard to outstanding bonds that I read in a long detailed list a few minutes ago. Then there is shown on page 40 a list of railways including the Central Vermont Railway Company, Montreal and Province Line railway, Stanstead Shefford and Chamfoly railway, Detroit, Grand Haven and Milwaukee railway, Grand Trunk Western railway, Pontiac Oxford and Northern railway, etc., giving a total for affiliated roads reported in the United States, of $26,460,965. That makes a total for all lines except the Grand Trunk Pacific of $232,450,245, to which has to be added the Grand Trunk Pacific, bringing the amount up to $448,703,356. The hon. member can see that the statement of December 31, 1917, is slightly different on account of the statement being about two years old.


Frank S. Cahill: Is this the Grand Trunk system that the Government purposes acquiring under this legislation?


John Dowsley Reid: The Grand Trunk system would mean- the Grand Trunk parent company, all the subsidiary lines, including the list I have read, American and Canadian lines, plus the Grand Trunk Pacific, which is a subsidiary company of the Grand Trunk. When the arbitrators are considering their award, they must take in consideration the condition of every subsidiary company including the Grand Trunk Pacific. They must take into con-

sideration that it is a subsidiary company, because the Grand Trunk Railway owns all the stock in the Grand Trunk Pacific, just as it does in the case of all the other companies, and they must take into consideration the fact that the Grand Trunk Pacific is losing seven, eight or ten million dollars per annum, just as they would take into consideration any of the other subsidiary companies that might be showing a loss or a profit.


Frank S. Cahill: I am not speaking just
now about the award of the arbitrators. I want, first of all, to find out whether there is anything to arbitrate or not, whether the total liabilities against the undertaking are not greater than the undertaking is worth. Before you attempt to buy anything, you want to know what the total liabilities are against it. We have not quite arrived at the arbitration stage yet; we want to know whether there is anything left to arbitrate, so we want to know first the total obligations outstanding to the public against the complete system. At the foot of page 40, there is an amount of $448,703,356 of liabilities against the Grand Trunk railway system, which I presume is what the Govern- [DOT] ment proposes to acquire. That is the funded debt, and there will be other liabilities.
I, therefore, want to know what are the total liabilities at this time outstanding against the Grand Trunk undertaking as proposed to be acquired by the Government of Canada. Surely that question ought to be understandable?


John Dowsley Reid: I do not know how 1 can answer the question more clearly. The statement there shows the total liabilities against the Grand Trunk parent company and subsidiary companies. If you take page 40, it shows the total liabilities of all except the Grand Trunk Pacific of $232,450,245, of which amount $3,656,283 is owned by the Grand Trunk railway itself. But those are the total liabilities on which we shall arbitrate, plus the'*first, second and third preference and the common stock. Then of course, if you want to add to that the Grand Trunk Pacific Railway [DOT]Company and its branch lines, the amount outstanding against it, as shown near the bottom of page 41, is $216,253,111, on which there is a loss of eight or ten million dollars per annum. That, of course, has to be arbitrated on.


Frank S. Cahill: They will not arbitrate on what we are assuming.


John Dowsley Reid: The Grand Trunk Pacific is in the hands of a receiver and
we are not assuming anything until the award has been made. When it has been made, the Government will pay the interest on the debenture and guaranteed stocks, and whatever is awarded on the other stocks will be a liability which the Government will have to assume.


Frank S. Cahill: What is the total amount of the liabilities on the Grand Trunk Railway system which the Government proposes to acquire under this legislation?


Mr. ROWELL:: My hon. friend has already had the answer from the Minister of Railways. On pagfe 39 of the blue-book he will see the aggregate of the funded debt, bonds, debentures, notes and loans as of the date mentioned, which, if you take in the Grand Trunk system, speaking of the system as we understand it, including the subsidiary companies and the branch lines in the United States, and the Grand Trunk Pacific and its branch lines, amount to $448,663,356. That is the funded debt, bonds, debentures, notes and loans as of that date. That is the answer. Of course there will be some slight variation between the figures as of that date and the present time, but it would not be important in the general statement of the financial position. In addition to that there is, of course, the guaranteed stock of $60,000,000. That is not included in the amount I have given, because , that is not part of the funded debt as it now stands. I do not see what further information my hon. friend requires. It is all set out in that statement.


Frank S. Cahill: The Government have never stated the amount which the minister has just stated. That is what I have been asking for. My hon. friend said that $448,663,356 was the total funded debt of this undertaking.


Newton Wesley Rowell: Of all these various undertakings. That information was in tlje statement which was laid on the Table before this Bill was taken up, and it has been there right along for the information of my hon. friend.


Frank S. Cahill: Then there are also the
current liabilities. What explanation has the minister to give of those liabilities amounting to $22,801,474.35? Has that amount to be added to the liabilities we are assuming in connection with that undertaking?


Newton Wesley Rowell: The current liabilities are offset by the current assets. They will vary from time to time, from month to month, and from period to period. My hon. friend
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will find the statement of the current liabilities on page 39 of the blue-boolc, where they are shown as amounting to $22,801,474.35. The current assets are given on page 38 as $51,827,879.16.


Frank S. Cahill: What are the details of
those current assets? Is that $51,827,879.16 cash?


John Dowsley Reid: Take the last item,
materials and supplies on hand, $6,407, 195.57; that will be the stock. Outstanding traffic accounts, amounting to $1,581,852.15, will be the floating traffic accounts; sundry outstanding accounts, amounting to $43,838,831.44, make the total current assets $51,827,879.16. I have a detailed statement of that which I will read if my hon. friend desires. It is as follows:
Amounts receivable from other companies, individuals, etc....$8,388,0'82.41


Mr. J. H. SINCLAIR:: What companies does that include?


John Dowsley Reid: I have not those details here, but I could get them.


John Howard Sinclair: The information
as given by the minister is very indefinite. If he is going to give the details he should give us the names of the companies who owe this money.


John Dowsley Reid: Perhaps I had better continue with this statement first.
Loan to Central "Vermont Railway for construction and general purposes	$8,3515,964.71
That simply means that instead of the Central Vermont issuing bonds, the Grand Trunk advanced the money and charged it up against the Central Vermont. The usual thing when constructing or extending a road is to issue bonds from time to time, 'charging the amount against the road. In this case the Grand Trunk loaned the money.


John Howard Sinclair: Do we hold any security for that loan?


John Dowsley Reid: Only the stock of the Central Vermont railway. We shall control that railway.


Daniel Duncan McKenzie: Adverting to the first
item, if we have loaned money to one of our own companies, and the Grand Trunk has many subsidiary companies, these amounts must appear in the books. According to the minister's statement we have loaned a considerable sum to one company.


John Dowsley Reid: That $8,000,000 odd included several companies.


Daniel Duncan McKenzie: We are taking over
this system with all its subsidiary companies. It is no use saying we owe money to ourselves. We will never get this money back, because we are taking over the company with all its indebtedness and everything belonging to it. I think the country is entitled to know just what these amounts receivable are. It is no use saying we owe ourselves a few million dollars, which we cannot collect from ourselves.


Newton Wesley Rowell: We would make better progress if the minister were permitted to give the details, and my hon. friend would be in a better position thereafter to discuss intelligently any item which he desired to deal with. I do not-agree with my hon. friend's contention, hut I think he might allow the minister to proceed uninterruptedly with the details which he wishes to give the committee.


Daniel Duncan McKenzie: It would be time to send for the doctor if my hon. friend agreed with me.


John Dowsley Reid: 
Frank S. Cahill: Will the minister hazard a guess as to how much real asset there is in that $43,000,000? If the Central Vermont, the Grand Trunk Pacific and other railways become part of the general system, their individual assets disappear so far as the aggregate corporation is concerned. How much of that $43,000,000 can be realized as a real asset by the system?


Newton Wesley Rowell: The Central Vermont
Railway Company could have issued its bonds in ordef to raise the money it required for construction and other purposes, or could have raised it in some other way. As a matter of fact, the Grand Trunk railway loaned it the money and this loan is an asset of the Grand Trunk Company. If the Grand Trunk Company had not advanced the money the Central Vermont , would necessarily have had to procure it by some other means, and there would have been that additional obligation against the property of the Central Vermont. If that obligation were outstanding to some one other than the Grand Trunk itself, the stock of the Vermont Railway would be worth that much less.


Mr. ROSS:: But it is not.


Newton Wesley Rowell: To illustrate: Suppose you owned the stock of a company which required money for any purpose. If it borrowed the money from an outsider, then there would be an obligation against the Oompany for the amount.


James Hamilton Ross: It did not borrow from an outsider.


Newton Wesley Rowell: No; then the avance is an asset or the stock which we hold is worth that much more. The money has gone into the property, and as a matter of bookkeeping between the main company and its subsidiary company it is proper to charge it up against the subsidiary company.


Mr. EULER:: Does the minister mean to say that the stock of the Central and Vermont is at all affected in its value relatively whether the liability is owing to the Grand Trunk Railway Company or to any one else? I understood my hon. friend to say that the stock of the Central Vermont was in some way affected because the money was advanced by the Grand Trunk. What difference does it make, so far as the Central Vermont's liability is concerned, whether that liability is owing to the Grand Trunk Railway Company or John D. Rockefeller or anybody else?


Newton Wesley Rowell: I am not at the moment familiar with the exact position in which the Central Vermont stands in relation to the Grand Trunk Railway Company.


John Dowsley Reid: We own the stock.


Newton Wesley Rowell: Very well. Then the
Central Vermont needs the money for construction purposes. It could go on the market-


James Hamilton Ross: It did not.


Newton Wesley Rowell: The hon. gentleman will be kind enough to allow me first to answer the question of the hon. member (Mr. Euler). The company could go on the market and borrow money, issuing its bonds, and that would be an outstanding obligation of the Central Vermont. On the other hand, it could go to the parent company- the Grand Trunk-which owns its stock, and borrow the money. The Grand Trunk advances the money, which is an obligation of the company and an asset of the Grand Trunk.


William Daum Euler: The stock itself of the Central Vermont is worth exactly as much whether the liability is in the form of a bond which it owes to some one else or of cash advances made by the Grand Trunk company.


Newton Wesley Rowell: Quite so, but that is on
the 'basis that the advance to it is an asset in the hands of the Grand Trunk as a bond would be an asset in the hands of the holder to whom that bond was issued.


William Daum Euler: I do not question that, but the value of the Central Vermont stock is



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unaffected either way; whether the money was loaned hy outsiders or by the parent company.
Newton Wesley Rowell: Quit^ so, assuming that it is an asset.


James Alexander Robb: It miust be quite apparent
to hon. members who are favourable to the public ownership of railways in Canada that not only is the Government attempting to embark upon the policy of public ownership within the limits of Canada, but it is going into the United States. The minister has made a statement as regards the Central Vermont railway. In the memoranda presented to Parliament relating to the acquisition of the Grand Trunk, at page 51, there is outlined a number of obligations that Canada will be responsible for in addition to the debt of the Grand Trunk. There are certain guarantees given-by the Grand Trunk. The Grand Trunk has endorsed certain notes for which it is to be responsible. If we take over the property the people of Canada become responsible for these guarantees. Later on I hope to draw the attention of Parliament and of the country to the guarantee as it affects the Grand Trunk Pacific, but for the moment I wrish to deal with the Central Vermont railway. This statement with reference to the Central Vermont shows that:
The Grand Trunk railway guarantee the interest on the bonds by traffic contract up to an amount equal to 30 per cent of the gross receipts from interchange business.
So that we guarantee these bonds of the Central Vermont railway. In that connection it is interesting to see how far this railway in a foreign country will be able to carry itself, how far it will be able to pay the bonds, and to see how the people of Canada will be called upon to -make up the difference represented by the loss of traffic in connection with a railway operating in a foreign country. We have a statement of the Central Vermont railway business from 1910 to 1917 and in those years the statement shows a gross deficit of $423,782. In certain years it shows a surplus of $325,412, which leaves a net deficit for the seven and a half years' operation of $98,370, or an average annual deficit of $11,809. This is the undertaking that the Government is asking the people to embark in.


Newton Wesley Rowell: My hon. friend is referring to the statement at page 54, is he?


James Alexander Robb: Yes.


Newton Wesley Rowell: The facts are as set out in the statement; but the American con-

nections west to Chicago and east to Portland are amongst the most valuable assets of the Grand Trunk railway. My understanding of the situation is that the net profits of the Grand Trunk, by reason of its American connections, are very much larger than the operating deficit which it has had to pay in certain years. The figures which have been given of the earnings of the Grand 'Trunk are the earnings after all of these deficits have been paid and provided for. A very substantial amount of traffic originates on these American lines. The Grand Trunk system in Canada has the benefit of the haul, and the net result is that the American connections are very valuable to the Grand Trunk as a whole and are so considered by the Grand Trunk and by those who understand the railway situation. The Grand Trunk makes much more out' of the haul of this freight than any shortage there may be on the operation ol these roads.


James Alexander Robb: The fact remains that the people of Canada will be compelled to make up this deficit in the traffic earnings of the Central Vermont. The minister can make any explanation he chooses.


Newton Wesley Rowell: No, the people will not be, for this reason: The traffic which origi-.
[DOT]	nates on these American connections, being the traffic that originates in Chicago and the West and which is destined for American ports and goes to Portland, has a haul through Canada of which the Grand Trunk operating in Canada gets its pro Tata.


James Alexander Robb: Is the minister arguing that traffic through Portland goes over the Central Vermont?


Newton Wesley Rowell: No; I refer to the traffic that goes east on these railways. I may say to my hon. friend that \I am not familiar with the lines on the ground, and 1 am only speaking of the general situation
. as I am advised. The traffic originating in the United States passes over the Grand Trunk lines in Canada, and in a substantial measure, I understand, reaches the Atlantic ports over Grand Trunk connections. The result is that the Grand Trunk system in Canada gets the benefit of this haul of freight which very sub-
[DOT] stantially adds to the earnings of the Grand Trunk in Canada, because my hon. friend will realize that if you increase the volume of the traffic which you are able to handle upon your road you increase your percentage of profits. Your overhead is the same and your cost of

operation must .be maintained up to a certain standard. I! you can increase the amount of freight you haul you add to the net profits. The Grand Trunk in Canada profits not only to the amount of the deficit, if any, which it has to make good, but as a result of this business it gets a very substantial sum in addition, which it adds to the profits of the railway in Canada. If the people of Canada owned the Grand Trunk, instead of their being called upon to make good a deficit on the American lines, having these American connections would so add to the earnings of the Grand Trunk in Canada that there would be a surplus out of which could be paid the loss, if any, in the operation of these connections.


James Alexander Robb: The argument of the President of the Privy Council is that to wipe out these deficits that have existed in the traffic operation for the past seven and a half years the policy of the Government would be to divert more business to United States and away from Canadian ports.


Newton Wesley Rowell: No; I did not make any such statement. I stated the result up to date according to the information I have Teceived from the Grand Trunk officials who are responsible for the operation of the road and from the men who are responsible for handling the accounts and the business. The result is that they have received more out of the handling of this freight through Canada than is sufficient to provide for the deficit; in fact, so much more that it adds very substantially to the earnings of the Grand Trunk in Canada.


Frank S. Cahill: Did I understand the minister to s-ay that this $8,000,000 obligation of the Central Vermont is not regarded as an asset?


Newton Wesley Rowell: No, I did not say that at all; I said just the contrary.


Frank S. Cahill: How do you figure it? We are to own the Grand Trunk and we propose to purchase the Central Vermont. How do you propose to get the money from the Central Vermont, or how do they propose to get it?


Newton Wesley Rowell: We are not purchasing the two companies, we are purchasing the stock of the Grand Trunk. The Grand Trunk controls the Central Vermont and by getting control of the former we secure control of the latter. The Central Vermont has its assets out of which the claim could be realized if that was desired.


Frank S. Cahill: Where would the Central Vermont, under this arrangement get the money to pay this $8,000,000 to the Grand Trunk?


Newton Wesley Rowell: They could issue bonds against the road for that amount.


Frank S. Cahill: Then would that show a liability in addition to the $448,000,000 you spoke of as representing the present liability?
Mr. Rowell:	It would be a liability
against the Central Vermont.


John Howard Sinclair: When the Central Vermont has not been able to carry itself for the last seven and a half years, but comes out with a deficit, how is it ever expected that the company will ever be able to pay interest?


Newton Wesley Rowell: My information is that the Central Vermont has paid interest on all these outstanding obligations, including the interest on this loan from the Grand Trunk, and that the deficit is after all these obligations have been paid.


Daniel Duncan McKenzie: Where did the $1,639,637, that the Grand Trunk had to send in to the United States to make good the earnings of the road, go to last year?


Newton Wesley Rowell: That would be an adjustment of the accounts between the Grand Trunk and its subsidiary companies, and the money would be earned by the Grand Trunk carrying on its system in Canada the traffic which originated on its lines in the United States. I am speaking from what I am informed by the Grand Trunk officials.


James Hamilton Ross: How much of the $14,000,000 which the minister claims to be assets, is made up of similar indebtedness by subsidiary companies to the parent company, that is, indebtedness similar to the $8,000,000 owed by the Central Vermont to the Grand Trunk?


John Dowsley Reid: I have already given a list of $43,000,000.


James Hamilton Ross: Were those all similar to that $14,000,000?


John Dowsley Reid: Not all similar.


James Hamilton Ross: How much of the $14,000,000 is made up of similar amounts owed by subsidiary companies that the Grand Trunk own?


John Dowsley Reid: I have not got the detailed statement now before me, but it will appear in Hansard to-morrow, showing the figures in detail.


James Hamilton Ross: It would be very interesting to know the total.


John Dowsley Reid: There were three very large items:	$15,000,000 due by the Grand
Trunk Pacific; $8,000,000 due by the Central Vermont, and $7,000,000 due by the United States Government.


James Hamilton Ross: I do not count those as good assets.


John Dowsley Reid: The others could be
collected by issuing bonds against the road.


James Hamilton Ross: The liabilities of the system we are taking over would be increased by that much.


Newton Wesley Rowell: The interest on these
loans has always been paid.


John Dowsley Reid: The interest has been charged up to the companies concerned and they have always paid it.


James Hamilton Ross: Nevertheless, it would increase our liabilities if the Government assumed the dontrol of these roads.


John Howard Sinclair: I would like to
have an explanation regarding the $7,000,000 due by the United States Administration. Is that the net amount due, or is there any contra account to go against it, and how long has this amount been due?


Newton Wesley Rowell: It is a running account in connection with the operation 5 p.m. of-the Grand Trunk lines by the United States Administration plus, as I understand it, a certain amount due with respect to supplies and other commodities taken over by the United States Administration when these roads were taken over.
' Mr. J. H. SINCLAIR: When was that?


Newton Wesley Rowell: On the date the United States Director General of Railways was appointed. I should think it very likely, that a substantial part of that amount would be liquidated when the roads are returned by delivering to the Grand Trunk supplies of a similar kind, and possibly of equal value, for those taken over. My hon. friend will see that when a railroad system is taken over, certain supplies on hand are also taken over, and when the railway system is handed back there will be certain supplies on hand which will also be handed back. A substantial part of the amount in question, I have no doubt, will be liquidated in that Way.


James Alexander Robb: In addition to the deficit of the Central Vermont railway, the statement presented to the House also shows a deficit

on the Atlantic and St. Lawrence railroad (Norway branch) amounting to $1,272,496. The Central Vermont railway, in 1917, showed a deficit of $154,729. That is so far as our connections in the eastern part of the Grand Trunk system are concerned. When we turn to the western American subsidiary companies of the Grand Trunk railway-to be found at page 55 of the blue-book-we find a statement of deficits paid by the Grand Trunk railway in the last seven years. According to this, the Detroit, Grand Haven and Milwaukee railway showed a deficit in the seven years of $1,818,999, or an average of a little over a quarter of a million dollars a year-$259,654. That is the proposition the Grand' Trunk are asking the people of Canada to take over. The Grand Trunk Western showed a deficit on the seven years of $2,843,125. This is a road altogether within the United States, and yet this is the proposition which the Government are asking the people of Canada to take over and tax themselves for. The Toledo, Saginaw & Muskegon showed a total deficit of $545,563 in the seven years, or an average of $77,935 a year. The total deficit on these subsidiary companies in the seven years amounted to $5,205,687, or an average of $743,669, almost three-quarters of a million dollars a year, of railways that are within the United States.


Henry Arthur Mackie: Have the Government admitted that they are liable for these deficits during recent years?


James Alexander Robb: As soon as they become the owners of a road, the Government are liable for all the obligations of the concern, if I understand the situation correctly. Now let me put on record a statement of the business done by these railways. In 1918 the total tonnage done by these roads in the United States1-which may have originated in Portland or Chicago, or points tributory thereto in the adjoining republic- was 5,479,206.
That was the total tonnage carried over this system between points in the United States. The total business originating at United States points was 24,905,484 tons. The minister will have to make some further explanation to satify the people with regard to the deficits in respect of these United States lines.


Newton Wesley Rowell: Where does my hon.
friend get the figure of 5,000,000 odd tons?


James Alexander Robb: This is information I have
of the business carried by the Grand Trunk. It is from a source which I have every reason to believe to be reliable.


Newton Wesley Rowell: The figure Which I have of the traffic originating in the United States in the year 1918 is approximately 7,000,000 tons, and the gross receipts of the Grand Trunk Railway Company in Canada with respect to that tonnage are something over $16,000,000. That gives a gross return which enables the Grand Trunk Company to pay any deficits, to pay the cost of operation, and to have a substantial surplus to the credit as a result of the operation of these lines. That is why the Grand Trunk so greatly values these American connections. . If they were liabilities instead of assets, why would the Grand Trunk continue them and value them? We are not responsible for the obligations of these subsidiary companies, except in the cases where the Grand Trunk Railway Company has guaranteed their bonds. If it were considered desirable that these companies should be liquidated, that could be done. But that is not the position of these companies; they are considered a very valuable part of the Grand Trunk Railway system.


Mr. FOURNIER:: The Grand Trunk Railway Company has guaranteed interest upon Central Vermont first mortgage four per cent bonds, of which there are $10,732,000 outstanding, to an amount not to exceed thirty per cent of the gross earnings from the interchange of traffic between the two railroads. Of course, the interest varies with the variation in amount of traffic carried; but I would like to know what is the amount of interest that has been paid annually on this account during the last few years.


John Dowsley Reid: This arrangement is
somewhat similar to that which we have in connection with the St. John Valley radway, but in that case the division is forty and sixty per cent. I have not at hand the information which my hon. friend wants; perhaps I shall be able to get it in a few moments.


Emmanuel Berchmans Devlin: Did I understand the President of the Council to say that if we assumed the common stock of the Grand Trunk Railway Company we would not be responsible for the obligations of the subsidiary companies?


Newton Wesley Rowell: We are not responsible for the obligations of the subsidiary companies unless we directly assume them. We are making an investment. If the property is worth keeping, we would be foolish not to keep it and to pay the obligations because of the asset we would receive. But
88J
there is a real difference between an investment in a property the benefit of which we consider it desirable to obtain by discharging the obligations against it, and a direct obligation of the Government to discharge the obligations no matter whether the investment is worth anything or not.


Emmanuel Berchmans Devlin: Then do I understand that when we assume the common stock, it does not follow that we are going to become owners of the subsidiary companies as well?


Newton Wesley Rowell: We do become owners oi the subsidiary companies in that we become owners of the stock.


Emmanuel Berchmans Devlin: Then if we become owners of the subsidiary companies, do we not become liable for their obligations?


Newton Wesley Rowell: No, not if the Grand Trunk has not directly guaranteed them. But this is the situation; We own the stock. If the .company's assets are in excess of its liabilities then we would be exceedingly foolish not to discharge the liabilities of that company in order to get the benefit of its assets and its franchises. But if we have not incurred any direct obligations, and if the liabilities exceed the value qf the assets and franchises and we consider the property of no value, there is no reason why we should not give the stock away; we are under no obligation to pay the debts.


Emmanuel Berchmans Devlin: Following out the reasoning of the President of the Council, let me put it in another way. We shall not find out whether it will be worth while to hold these subsidiary companies until after the arbitration proceedings have been had ?


Newton Wesley Rowell: No.


Emmanuel Berchmans Devlin: Then when and how are we to find out?


Newton Wesley Rowell: The whole question of the position of all these subsidiary companies, their assets and liabilities, as well as the position of the Grand Trunk itself, its assets and liabilities, will be gone into thoroughly before the arbitration, because all these questions have a direct bearing on the value of the stock of the Grand Trunk and should all be taken into consideration by the arbitrators in making their award.


Emmanuel Berchmans Devlin: Then do I understand that the Government will come back to Parliament for power to purchase the subsidiary companies, if they deem it advisable to purchase them? Well, the minister need not answer that; I understand that there is


Newton Wesley Rowell: There is in my hon.
friend's summary so much with which I do not agree that I cannot say that it is right.


Emmanuel Berchmans Devlin: In what is it wrong?


Newton Wesley Rowell: I cannot recall all that my hon. friend said, but his statement with reference to the whole position is not as I understand it. Let me repeat. The Government is buying under arbitration the stock of the Grand Trunk railway. That gives it control of the subsidiary companies.


Emmanuel Berchmans Devlin: Does it give the Government the property?


Newton Wesley Rowell: It gives the Government the stock which controls the property.


Emmanuel Berchmans Devlin: We have the statement oi the minister the other day that it gave the Government the property. Surely my hon. friend is not going back on that.


Newton Wesley Rowell: I do not know whether
my hon. friend does not know the difference between stock ownership and having a. property directly vested in the person.


Emmanuel Berchmans Devlin: The minister will not get away with what I know or what I do not know. What I am asking for is a clear statement to be placed before Parliament and the country of what we are going to possess and what obligations we are going to assume. We are trying to get that piecemeal from the Government.


Newton Wesley Rowell: That has been stated so frequently that one statement more will

probably not help my hon. friend if he has not been helped by the statements already made. We purchase the stock of the Grand Trunk Railway Company through this arbitration. That gives us control of the Grand Trunk, it gives us ownership of the Grand Trunk stock, it gives us ownership of the road by ownership of the stock. The Grand Trunk owns the stock of certain subsidiary railway companies. When we acquire the stock of the Grand Trunk we acquire control of the Grand Trunk. The Grand Trunk owns all the others, so that by owning the stock of the Grand Trunk we acquire ownership of the others.


Emmanuel Berchmans Devlin: Of the subsidiary companies?


Newton Wesley Rowell: Yes.


Emmanuel Berchmans Devlin: That is the point.


Newton Wesley Rowell: The properties of the subsidiary companies will not be vested in the Crown; they will still remain vested in the subsidiary companies just- as the property of the Grand Trunk remains vested in the Grand Trunk. As the subsidiary companies are owned by the Grand Trunk and as we own the Grand Trunk, we own the whole thing, directly or indirectly in that way.


Emmanuel Berchmans Devlin: Does the minister say that we shall not be responsible for the debts of the subsidiary companies?


Newton Wesley Rowell: I said that if we had guaranteed or assumed any obligations of the subsidiary companies we would be responsible for them. We are not responsible for those that we do not guarantee or do not assume obligation to pay. But if a road is an asset; if its assets are in excess of its liabilities, we have an investment in the road, and we would, of course, discharge the obligations for the sake of getting the benefit of the assets. That is the situation.


Emmanuel Berchmans Devlin: That is just it. The minister says that if the road is profitable we shall assume the road and pay off the liabilities,
. but if the road is not profitable we shall not pay off the liabilities.
- Mr. ROWELL: Then we would lose the road.


Emmanuel Berchmans Devlin: The road would then go back, riot into the ownership or the possession of the Grand Trunk railway, but of the .private owners thereof.


Newton Wesley Rowell: It would go to the holders of the bonds, the creditors. If we did not pay the obligations, the creditors would take

the necessary proceedings to acquire title to the property and have it sold, realize upon it, in order to pay the debts.


Emmanuel Berchmans Devlin: My last question to the minister is this: Is the Government going to make a careful examination of and have a carefully prepared statement made in regard to the common and preference stock in the same manner as it purposes doing in regard to the stocks and assets of the subsidiary companies, or is it simply going to take the face value of the common stocks and the preference stocks, put that before the arbitrators for arbitration?


Newton Wesley Rowell: Most assuredly a careful investigation will be made. The members of a government that would do anything else would be fit subjects for a lunatic asylum.


Daniel Duncan McKenzie: I understand the minister to say that wre are facing a condition by which we may possibly lose all of these American roads.


Newton Wesley Rowell: I did not say so.


Daniel Duncan McKenzie: The minister says that if he finds they are not a paying proposition, he will let them go. That means that each of these respective companies may be put into liquidation and the road sold. That is the condition faced by the Canadian people.


Newton Wesley Rowell: I do not want my hon.
friend to misquote me. I said that there was power to do that; I did not say that we would do it. I pointed out in answer to the hon. member for Ohateauguay-Hun-tingdon (Mr. Robb) that these roads had been considered most valuable copnections, and on the information I have, it means a very handsome return to the Grand Trunk railway to have these connections. Under those conditions, if, upon investigation, that proves to be the case, it would be suicidal to any government to let them go.


Emmanuel Berchmans Devlin: But the minister told me that if, after an examination, the Government found them profitable, they would purchase them, but not otherwise.


Daniel Duncan McKenzie: What I mean is this, and it is perfectly clear. The minister seems to refuse to commit the Government as to whether or not they are going to take those American lines. They say: We will become responsible for any of the claims against these respective roads only provided that it is a profitable thing for the Government to take them. I am not misquoting the minister when I say that. It
remains for the future to prove whether they will be a paying proposition or not, and the minister says: If it is discovered that the running of these lines does not pay, we will not assume any responsibility. Then comes the alternative of the people in the United States who have bonds and other claims against these respective roads, to put them into the hands of a receiver in the courts of the United States. We are, according to the words of the minister, facing the possibility, at least, of a con.-dition of that kind.


Newton Wesley Rowell: No. According to thewords of the minister, we are not facing the possibility because, unless my information is wholly wrong, these roads are valuable assets. Everything indicates that they are valuable assets, and, therefore, any government, or board of railway management that would not continue their operation would be making a great blunder from a transportation standpoint and would' be creating a burden upon the portions of the railway in Canada which they should: not be called upon to -bear.


Daniel Duncan McKenzie: I hold in my hand a statement handed to me by the Department of Railways showing the earnings of the Grand Trunk railway, and in that statement is an item of $1,639,317, estimated loss on roads in the United States. That is the record we have, and in face of that, the minister is still hopeful that by some wonderful development we are going to make money. Last year the Grand Trunk found they had to send down to the United States $1,639,317, not being interchange of profit as the minister would let us understand, but a loss on those roads. That is the condition.


William Daum Euler: I do not think the minister wishes to create a wrong impression, but the impression appears to prevail on this side of the House that the Government has the option, of accepting or refusing to take over the roads which are the property of the Grand Trunk in the United States, through -the Grand Trunk owning the stock of these companies. I do not think we have any option. If this proposed purchase of the Grand Trunk system goes through, we will have to take over these roads in the United States whether they-are paying or not. We would acquire the -ownership of these roadis because the Grand; Trunk now controls them through holding; the stock. Is not that correct?


Newton Wesley Rowell: Absolutely.


William Daum Euler: Further, the minister states 'that the Government does not necessarily accept any liabilities or obligations of the subsidiary roads. Now the point I want to make is this: If these roads are losing money, if they cannot satisfy the bond-iholders by paying the interest or redeeming the bonds as they become due, is it not the case that these roadis may be sold for the benefit of the bondholders? If that happens, will not the Grand "Trunk system, of which we shall be the owners through holding the stock, lose the investment it has in these rold's? I assume the Grand Trunk put actual money into these roads as an investment. Now that investment may become prejudiced in years to come, if it is not now, through want of prosperity on the part of those roads, in which case, the Government of Canada through its ownership of the stock of the Grand Trunk, will lose its investment in these roads. Do we not assume the risk of a loss-I am not objecting to this-proportionate to, the interest we have in these roads in the United States?


Newton Wesley Rowell: Of course. Theoretically, we assume the risk of a loss on the whole transaction. Theoretically, it is conceivable that railways could not be operated at a profit in the United States, but practically the situation is/ this: By acquiring the stock of the Grand Trunk, which owns the stuck in these subsidiary companies, we acquire these companies. Past experience has shown that that stock is a valuable asset for the reasons which I have already given, and it may fairly be assumed that that condition will continue in, the future. My hon. friend must draw a distinction between our legal position, what we may legally do, and what from a business standpoint it would toe advisable for us to do. As to our legal position, take the case of a company whose Bonds or obligations we have not guaranteed-where we have guaranteed, of course,, we are committed- if it is found that the -operation of the road is unprofitable the stockholders may say: "We are not prepared to put up any more money to keep this road running. We will let it pass into the hands of the bondholders and let them realize upon it." Theoretically^ that is the position. Theoretically that is the position with any subsidiary company of the Grand Trunk, where the Grand Trunk has not guaranteed the obligations of that subsidiary company. But it is a wholly different question whether or not as a business proposition that would be a wise thing to do, and

as I have said, judging by past experience and on the information we have it would be a most unwise thing to do. The Grand Trunk should continue these roads in operation.


William Daum Euler: I think I understand exactly what the minister is driving at. He draws a distinction between a company whose stock we own and one whose bonds we have guaranteed. In the case of a company whose bonds we have guaranteed, it is perfectly true that if the earnings of the roads are not sufficient to take care of the road's liabilities the Grand Trunk will have to make good the amounts which they had guaranteed. They would, however, come into the possession of certain assets. So is not the minister making a distinction without a difference; because in the case of a company whose bonds we have not guaranteed but whose stock we own, if the bondholders foreclose on the road, is it not a fact that we will lose our investment in that road? What is the difference in the final analysis between losing our investment, and having to pay off certain indebtedness and perhaps obtaining possession of a questionable asset? We lose in both cases, do we not?


Newton Wesley Rowell: The difference would be
this:	In the one case we would have no
option; we would have to pay the obligation, and we wrould get an asset w-hether it was a losing proposition or not. In the other case w-e w-ould have the option;


William Daum Euler: Of what?


Newton Wesley Rowell: Of letting the road go to the bondholders.


William Daum Euler: And losing our investment.


Newton Wesley Rowell: The answer to my hon.
friend's question is this: If it is not worth our continuing to pay the cost of operation, the investment is not worth anything. We are not losing anything because we deliberately decide the investment is not worth keeping. However, I think it is hardly worth while discussing such remote contingencies.


Mr. OOPP:: On Friday evening when this Bill was being discussed in Committee, my hon. friend (Mr. Rowell) was good enough to suggest that hon. gentlemen on this side of the House, not having experience in dealing in stocks and bonds were very apt to fall into error in following the discussion. I quite agree there is some danger of an ordinary member falling into error in attempting to follow my hon. friend and the

Minister of Railways in discussing the different liabilities which we are asked to assume by the legislation, before the House.


Newton Wesley Rowell: I did not quite state what my hon. friend has said.


Mr. COPP:: My hon. friend said something very close to that. I will read what he said. Addressing the hon. member (Mr. Mackenzie King), he said:
He Is not, I believe, accustomed to dealing: with stocks and bonds in relation to corporation and finance, or he would clearly understand that the position he is taking is wholly untenable.
I think the fair deduction from those remarks was that if we understood the position he takes in dealing with stocks and bonds and finances generally we would be able to follow his meanderings. I think it is important to this Parliament and to the people of this country to know what liabilities we are assuming in taking over the Orand Trunk Railway system. I think we are entitled to that information in plainer and more direct and understandable language than we have had from the Minister of Railways or my hon. friend (Mr. Rowell) or anybody else who is standing sponsor for this Bill. The Minister of Railways read long columns of figures this afternoon which it was impossible for anybody to follow. We cannot remember all these different lines of railway and the different obligations we are assuming on account of each. Let us suppose, if our imaginations will encompass it, that the treasury of the Dominion of Canada was overflowing with money and we were prepared to pay cash to discharge the obligations we are assuming in taking over this road, but which we will not have to pay for	until the end of thirty years.
Will the minister state definitely now what the amount would be if we were prepared to draw our check to-morrow for the Grand Trunk Railway and the different subsidiary companies, including all the roads which we are taking over under this proposed agreement? Irrespective altogether of the amount that is to be left to arbitration, what is the total amount of the liabilities and obligations we are assuming?	.	'


John Dowsley Reid: I gave an hon. member that information in a statement I submitted this afternoon.
Mr. iOOPP: Give me in round figures exactly what you would have to draw your check for to meet the obligations that you are assuming, apart from the stock which will be left to the arbitrators to consider.


John Dowsley Reid: The statement I read this afternoon contained-


Albert James Smith Copp: Give me the full amount, just the totals.	.


John Dowsley Reid: On pages 38 and 39 appears the exact amount of the liabilities. I gave a detailed statement, and I cannot put the matter any plainer than I have already done. It is absolutely impossible to make it plainer.


Arthur Bliss Copp: The minister gave one statement in reply to my hon. friend (Mr. Cahill), and the President of the Privy Council, taking the same page of the same document, gave absolutely different figures; I took them down. I would ask either the Minister of Railways or the President of the Privy Council to spend a moment or two in an endeavour to give us the exact figures. I do not care where they get those figures from, but I do want those who are responsible for this measure, which will impose upon the people this gigantic obligation, to state in dollars and cents exactly what the check would be if they had to draw it tomorrow. That is a fair question, and one that can be easily answered.


Newton Wesley Rowell: It cannot be answered.


Albert James Smith Copp: Why?-I mean apart from what the arbitrators will deal with.


Newton Wesley Rowell: Yes. I will tell my hon. friend why his question cannot be answered. Take the $60,000,000 of guaranteed stock which we discharge by a four per cent obligation. If I said definitely $60,000,000 it would not be true.


Arthur Bliss Copp: Why?


Newton Wesley Rowell: Because, the position
would be different if we discharged it in cash. Money is worth to-day five and a half per cent, whereas we are able to discharge it by a four per cent obligation. You would have to discount that by a veTy substantial sum; I do not know how much. I do not know what four per cent for a $60,000,000 obligation for thirty years is .worth to-day, nor can any one say exactly what its cash value is. Similarly take the perpetual debentures. I do not know what they are worth to-day having regard to the rate of interest they bear. What we do know is that so far as the debenture stock is concerned, that is an obligation which we can take up after 30 years and on which in the meantime we pay four per cent interest. We can take that up at the end of thirty years or thereafter.


Frank S. Cahill: Does the minister say
"debenture stock"?


Newton Wesley Rowell: I meant guaranteed
stock. No one can say to-day what the cash value of that is.


William Daum Euler: Without reference to the possible discount, can the minister give us the face value?


Newton Wesley Rowell: The face value and the real value may be very different propositions. The face value has been given repeatedly.


Arthur Bliss Copp: Give* us in round numbers.


Newton Wesley Rowell: The face value of the
guaranteed stock is $60,000,000, but that is not what the cash value is by any possible means. That is not the obligation Canada would have to pay in cash.


Arthur Bliss Copp: We have the sixty million dollars; what else?


Newton Wesley Rowell: My hon. friend will see on page 38 that the funded debt amounts to $155,373,806.20. The second mortgage equipment bonds and certain other bonds, etc., amount to $18,184,738.42. Then there are certain equipment notes and loans, less credits, amounting to $5,344,207.54. Then there are secured and unsecured notes, $35,548,235.08. This last item includes notes unsecured, $3,916,362.18. If my hon. friend adds these totals together, he will have, leaving out the guaranteed stock for the time being, the obligations against the Grand Trunk railway.


Frank S. Cahill: What about the $22,000,000 or current liabilities?


Newton Wesley Rowell: Those liabilities are offset by assets vastly in excess. In dealing with the obligations that the road bears you cannot add the current liabilities without taking into account the current assets. Now, my hon. friend has the obligations of the Grand Trunk railway. In addition to that, if he wants the obligations of the Grand Trunk Pacific


Arthur Bliss Copp: I want all the obligations the Government are attempting to take over by this arrangement.


Newton Wesley Rowell: We are taking over only those we absolutely guarantee. My hon. friend uses the phrase, " talcing over." Unfortunately we are already in that position in relation to the Grand Trunk Pacific system. We have had to pay deficits right along on it, or would have had to do so

had we not refused. The total obligations of the Grand Trunk Pacific appear on page '42. Principal amounts to $216,253,111, which includes the branch lines.


Arthur Bliss Copp: Does that include interest up to date?


Newton Wesley Rowell: The Government has had' to pay interest until recently. It has not paid interest since the road went into the hands of the receiver.


Arthur Bliss Copp: What they have paid is included in this statement?


Newton Wesley Rowell: Yes; what the Government has paid is included in the loans advanced to the company.


Arthur Bliss Copp: Do I understand, then, that by adding these items together which the minister has just given we have the total obligation we are assuming by the legislation that is now before this committee, plus whatever sum is allowed by the arbitrators?


Newton Wesley Rowell: I did not say that. These are the obligations of the roads, off-set by corresponding assets. The obligations we assume are those which we directly undertake to assume under the agreement. It is all an investment, and in order to get the benefit of the investment we must take into consideration the assets and liabilities.


Arthur Bliss Copp: To get whatever assets the Grand Trunk Company and the subsidiary companies constitute we are assuming these obligations.


Newton Wesley Rowell: We get the several constituent companies with the obligations resting upon these several constituent companies and we get the assets with them.


Arthur Bliss Copp: I gather from the minister that the par value of the stock that would be arbitrated would be $180,000,000.


Newton Wesley Rowell: Approximately so.


Arthur Bliss Copp: Those are the two amounts.
The amount which my hon. friend has just given me and the award that the arbitrators give on the $180,000,000 par value of stock is what this country will pay for the assets we get from the Grand Trunk. Ia that correct?


Newton Wesley Rowell: That is not what we are paying for the assets. These are obligations against the assets we are getting. I think my hon. friend should add to that certain liabilities that are against the subsidiary companies in the United States, and amounting to $26,460,965.


Mr. MACKENZIE KING:: Before the
committee rose on Friday evening the President of the Council gave a reason why this measure should be hurried through at the present time. I want to make perfectly sure that I understand his meaning. As I gathered from his words, it was to the effect that if the measure were permitted to stand over for a short time certain influences would be at work between now and the next session of Parliament to prevent the measure going through. Am I right in understanding that to be the tenor of the hon. gentleman's remarks?


Newton Wesley Rowell: My hon. friend will see what I said if he looks up Hansard. 1 gave a number of reasons why I thought it was in the public interest that this legislation should go on through and one was that I believed that powerful interests opposed to it would utilize any short delay in organizing hostility to it. I have no hesitation in repeating that to-night. I believe the Government to-day is fighting the battle of the people, we are fighting in the public interest, and for the benefit of the whole people of Canada. It is one of the most important battles for the people that has ever been fought in the history of Canada.


William Lyon Mackenzie King: I think that what the minister has said is precisely what he said the other evening. He also at the same time made the following statement, which appears at page 1419 of Hansard. Speaking in reply to my hon. friend from Shelburne and Queens (Mr. Fielding) he said:
My hon. friend has the same right to be opposed to this transaction as I have to be in favour of it. But he will not be any less opposed to it in February next than he is now and my hon. friends opposite will not be any less opposed to it in February next than they are now.
In other words, what the President of the Council has said is that in so far as this side of the House is concerned, it is not likely to change its attitude towards the measure. It necessarily follows that the attitude of Parliament can only be changed because of some change on the part of hon. gentlemen on the other side of the House. He must see that his remark is a reflection on every member sitting behind him if he leaves it in that form. I want to be quite sure that I know what his meaning is because the powerful corporations to which my hon. friend has referred cannot exert any influence on this side of the House but, according to his own remarks, they can exert influence on hon. gentlemen sitting behind him.


Newton Wesley Rowell: I am sure the committee will appreciate my hon. friend's very ingenious application of my remarks.


William Lyon Mackenzie King: It is very obvious.


Newton Wesley Rowell: I made it quite clear that there would be no change in the men on this side of the House and mly statement says so. I further said, that being so and the men on both sides having evidently reached their conclusion as to what should be done, should we not go on with the Bill?


William Lyon Mackenzie King: My hon. friend, if he is not reflecting on the members of his own side, is reflecting on honorable members in general, because it is a reflection to say that the memlbera of Parliament are subject' to the influence of corporations in the matter of this legislation.


Newton Wesley Rowell: My words speak for themselves. I know what I said. I have nothing to withdraw. I have made no reflection upon any hon. member of this House.


Frank S. Cahill: Is it correct to say that the total funded debt to be assumed is $448,000,000?


Newton Wesley Rowell: I stated that the total funded debt as it appears at pages 40-41, including the Grand Trunk, the Grand Trunk Pacific and the subsidiary lines in the United tSates, bonds, notes, and loans is $448,703,356.


Frank S. Cahill: To the liabilities of the Grand Trunk system would be added $35,000,000 of current notes payable?


Newton Wesley Rowell: My understanding is that the amount is in this statement that I have already given.


Frank S. Cahill: No.


Newton Wesley Rowell: The moneys advanced by the Dominion Government to the Grand Trunk Pacific because they constitute liabilities of these corporations, are included in these figures.


Frank S. Cahill: Where, in the statement will I find notes payable and current liabilities included in this $448,000,000?


Newton Wesley Rowell: My hon. friend will find current liabilities on pages 38 and 39 amounting to $22,801,474.35.


Frank S. Cahill: That will be added to the total liabilities of this undertaking?


Newton Wesley Rowell: No; I do not think so; that is offset by current assets. It should not be included in the bonded obligations or obligations by way of loan?


Frank S. Cahill: If I owe my hon. friend
some money and tell him I have assets he will not accept that statement; he will want to know that the money will be paid now. Is the liability against the Grand Trunk which appears in this detailed statement at page 38 a liability against this undertaking which we are taking over?


Newton Wesley Rowell: It is so stated on this
page.


Frank S. Cahill: 'There is the $35,000,000
and there' is also the $22,000,000 representing current liabilities which will be liabilities against this undertaking?


Newton Wesley Rowell: No, the $35,000,000 or the greater part of it is included in the $448,000,000 but the $22,000,000 is not.


Frank S. Cahill: Where would it be in the $448,000,000?


Newton Wesley Rowell: I understand it is included in the amount of $202,000,000.


Frank S. Cahill: Does the Minister of Railways say it is in the $202,000,000?


John Dowsley Reid: Yes, I gave that statement to-day in detail. I gave the figure $266,000,000 which is made up of this $202,000,000 and the $60,000,000 guarantee. Those added together make the $266,000,000 and that is included in the statement.


Frank S. Cahill: What was included, the $35,000,000 of stock issued?


John Dowsley Reid: The greater part of the $35,000,000 is included in the $448,000,000, but not the $3,916,362 of notes payable-unsecured; nor the current liabilities of $22,801,474, the sum of $3,455,344 of reserves, or the sum of $7,286,995 representing advances to controlled companies, for this reason: The current liabilities are offset by the current assets, and we have assets on the opposite side of the account to balance at least three of these items,


Frank S. Cahill: There is a total funded debt of $173,000,000 in round figures, is there not?


John Dowsley Reid: Yes.


Frank S. Cahill: And there is an item of $35,000,000 notes, in round figures? What is the total of these, two items?


John Dowsley Reid: Two hundred and nine millions.


Frank S. Cahill: I would also like to know what total the minister has for the item to be found on page 40, " Grand. Trunk Railway Company funded debt, bonds and debentures. Notes-Loans?"


John Dowsley Reid: The hon. gentleman has been discussing liabilities taken from the annual statement to December 31, 1917, whereas the statement I gave to-day applied to 1918, and naturally there would be a difference between the two statements.


Frank S. Cahill: Before the House rises
for recess I would also like to ask the minister a question so that he can prepare the necessary information in the meantime. It must be quite apparent to the minister and to the committee as well that when we are entering into an undertaking of this kind we should have a statement up to date of the total liabilities that we are to assume under the present Bill and a statement of the total assets so that we may deal intelligently with the subject. It is all very well to say, ''You are going to arbitrate," but before you arbitrate it is necessary to see whether or not there is anything to arbitrate. Before we pass this legislation empowering the Government to pay $60,000,000 to certain shareholders, and before any arbitration is entered into, we ought to know what the liabilities against the undertaking amount to, and also what the assets are.


Georges Henri Boivin: Shall clause 2 carry? Mr. CAHILL: No.
At 6 o'clock the committee took recess.
After Kecess.
The committee resumed at eight o'clock.


Frank S. Cahill: Just before six o'clock I had pointed out that the amount of the funded debt was given in the statement of December 31, 1918, as $202,000,000. The minister said that the item of $35,000,000 should be added to the amount of the funded debt as given on page 38 of the statement of December 31, 1918. That would bring the total up to $209,000,000; I would like the minister to explain the discrepancy in these figures.


John Dowsley Reid: In that $35,000,000 there is an item of $3,916,362.18, notes payable unsecured. In reality that should be under ' Current Liabilities " or some other heading. The other three items of $12,000,000, $4,000,000 and $14,000,000 represent money borrowed on notes but secured by debenture stock as collateral; and in respect of these three items my hon. friend will see the following note at the foot of page 39:
$50,126,665.98 of Grand Trunk 4 per cent debenture stock further than above has been

Issued as collateral security for notes indicated thus.
The hon. member asked me a question something like this:	Supposing you had
the money, what would it take to clean up everything? Well, the $205,190,417.52 represents Grand Trunk debenture stock, some at four per cent, some at five per cent, some at six per cent; so that it would be hard to estimate just how much that stock would be worth if you were going to buy it. The same is true of the guaranteed stock, $60,833,332.51. The amount for which the Grand Trunk Railway Company is obligated in respect to guarantees of its subsidiary companies is $18,936,377.29. Adding these various amounts together, you get $284,980,127.32. Then there is the Grand Trunk Pacific and its branch lines, $216.253,111, so that the total liabilities, including the subsidiary companies, the Grand Trunk Pacific and its branch lines, and the lines in the United States, would be $501,233,238. These are figures which I myself have computed; they are subject to correction by my officials. I think, however, that they are fairly close to the mark. I asked the officials the other day to give me a statement of how the accounts stand right up to date. Of course, in most of these amounts there would be very little change-not enough to be of very serious import in this discussion.
Now, I.will sum up these figures in order that hon. members may see how they stand. The funded debt amounts to $205,190,417.52; guaranteed stock $60,833,332.51; guarantees on American lines, $18,936,377.29; total on Grand Trunk and subsidiary companies, irrespective of Grand Trunk Pacific, $284,980,127.32. If you wish to take in the Grand Trunk Pacific and its branch lines, add $216,253,111 to that and you get a total of $501,233,238.
In that amount are included 'moneys advanced by the Government in connection with the Grand Trunk Pacific. In addition to that the hon. member will see that there is an amount of notes p-ayable unsecured, $3,916,362.18 which should toe in the current liabilities. If we add that to the item of current liabilities amounting to $22,801,474.35, we have a total for the two items of $20,717,836.53 of current liabilities. But we have on the opposite' side current assets amounting to $51,827,879.16 which would go to meet the current liabilities, so that there are no interest charges, the one item toeing s apposed to offset the other. Then there are two other items, $3,455,344.86 and $7,286,995.75 as shown in the statement, tout if hon. members will look at the other side
of the account, they will find the same amount to balance them up; they are really simple bookkeeping accounts. My officials have not returned, but these figures are pretty nearly accurate. They are, however, subject to correction should my officials find any difference.


Frank S. Cahill: I want to go back to the statement again and straighten it -out if that is at all possible. In the Grand Trunk statement on page 40 the total funded debt, etc., is shown as amounting to $202,332,997. On page 39, there is an item of $173,558,544.62, another item of $15,142,633.13 and another item in connection with equipment amounting to $5,344,207.54. These three items would total about $194,000,000. If you add to that the item of $35,548,235.08' less the notes payable unsecured amounting to $3,916,362.18, you get an amount much larger than $202,332,997. I should like the minister to explain the wide discrepancy in those figures.


John Dowsley Reid: The item of $173,558,44.62 plus the three items of secured notes, that is, the $12,166,666.50, the' $4,866,666.60 and the $14,598,539.80, make up the amount I have stated, $205,190,417.52. The other item of $5,344,207.54 is equipment notes against the equipment, and the railways always take that as a charge against the cost of operation. The interest on the equipment, and' the deductions each year are taken out of operation and, therefore, that is not included in what we call capital account or what would be charged against the road; it is a liability against the equipment. What is really against the road is comprised in the amounts I have stated, guaranteed stock, funded debt, and so on, amounting to $501,233,238. The other items are liabilities in connection with operation, and there are assets on the opposite side to offset them.


Frank S. Cahill: In order to arrive at an intelligent understanding of this matter, it is necessary to know the total liabilities of the undertaking. We can then find out what the assets amount to. It was stated this afternoon that most of this $43,000,000 item consisted- of loans to subsidiary companies that may or may not be of any value to this undertaking. What I want to get at are the total liabilities of the undertaking that the Government is going to take over.


John Dowsley Reid: The total liabilities comprise the amounts that I have stated, totalling $501,233,238, a lot of which is stock at a low rate of interest, and the current

liabilities amounting to $26,717,836.53. Then there are advances to American and Canadian lines amounting to about $18,930,377, but as they are subsidiary companies, that is not considered in the capital liabilities against the Grand Trunk Railway system. I do not think I can put the matter plainer than to say that the total liabilities amount to $501,233,238.


Frank S. Cahill: Is that the funded debt?
.Mr. J. D. REID: Yes. What you call the guaranteed stock and the funded debt.


Frank S. Cahill: Plus the $35,000,000 item.


John Dowsley Reid: All of the $35,000,000 item except the item "notes payable unsecured" amounting to $3,916,362.18 is in- eluded in that amount.


Frank S. Cahill: Is the item of $15,000,000, advanced by the Canadian Government, included in that?


John Dowsley Reid: The Grand Trunk loan? No, that is not in at all. That $15,000,000 loan to the-Grand Trunk is in the books of the Government without having any interest added to it from the time it was first lent. It stands there simply as a liability, and the arbitrators will have to take it into consideration as a liability against the company when they are valuing the road.


Frank S. Cahill: Do I understand the minister to say that he had a more recent statement than this contained in the blue-book?


John Dowsley Reid: No. I said I was just reading off the statement I gave to-day.


Frank S. Cahill: Is that being presented today. for the first time?


John Dowsley Reid: This statement is of December 31, 1918, and I asked for a statement of all the liabilities right u|p to date, and the amount is only a little more than the amount shown in this statement.


Frank S. Cahill: About how much difference is there?


John Dowsley Reid: About $2,000,000 or


Frank S. Cahill: That is up to date?


John Dowsley Reid: Yes.


Frank S. Cahill: And this is the first time that information has been presented?


John Dowsley Reid: This is practically the first presentation of it. The blue-book we got out was prepared by our officials from the sworn returns which the railways make at the end of each year as to their financial

(position. The figures were compiled by the deputy minister and his staff. I asked the deputy minister to bring the statement right up to date the other day. But there is very little difference in the figures.


Frank S. Cahill: The most recent statement was the one you read to-day?


John Dowsley Reid: Yes.


Mr DEVLIN:: What was the total of the statement the minister read this afternoon?


John Dowsley Reid: It was $205,190,017.52.
To that had to be added $60,833,332.51 of guaranteed stock, making a total of $266,023,750.03. All the details were put on Hansard.


Frank S. Cahill: That statement only relates to the parent company?


John Dowsley Reid: And its subsidiary companies, but did not include the Grand Trunk Pacific.


Arthur Bliss Copp: There are two items on page 40 I should like explained., the item of $806,600 common stock of the International Bridge Company held by the public, and $808,900 of common stock of the Central Vermont Railway held by the public.


John Dowsley Reid: That is common stock held by the public. It was not included in my statement, because it is not a liability.


Arthur Bliss Copp: Are those two items included in the $180,000,000 that will be arbitrated on?


John Dowsley Reid: No.


Arthur Bliss Copp: I cannot quite understand what will become of this stock. It must be an asset.


John Dowsley Reid: We have not guaranteed it- It is held by the public and is not included in the stock that will be submitted to arbitration.


Arthur Bliss Copp: This stock must be held by part of the Grand Trunk system.


John Dowsley Reid: It is outstanding over and above our own stock. We are only purchasing the stock of the original parent company. If there is any stock of the two companies mentioned held by the public, it will continue to be held by the public. The public own a certain amount of common stock in a number of different companies.


Emmanuel Berchmans Devlin: In addition to the $15,000,000 advanced to the Grand Trunk-page 39- are there any amounts due by the Grand Trunk Pacific which will also be included in the arbitration?


John Dowsley Reid: No. The Grand Trunk Pacific is a subsidiary company and, of course, its assets and liabilities will all be taken into consideration by the arbitrators, but the only liabilities the Grand Trunk Pacific has are those towards the Government and the Grand Trunk. The arbitrators will take the whole of the Grand Trunk Pacific into consideration, and whatever the losses may be, some $8,000,000 or $10,000,000, they will have to be shown as losses, together with the losses of any other subsidiary companies. On the other hand, the profits will have to be taken into consideration. To clear up a point that was raised the other day I had the officials in

vestigate why the Drayton-Acworth report showed the Grand Trunk to have received $3,413,699.20 more than my statement showed they had received. My statement showed the amount to be $15,142,633.13. The sum of $15,000,000 odd is all that the Grand Trunk ever got. They did purchase some other concerns some years afterwards, ' which companies had received subsidies at the time the roads were being built. To make the matter clear, I may read the following statement:
Dominion, Government subsidies to companies now consolidated with the Grand Trunk Railway Company of Canada.
Beauharnois Junction	$	62,400.00
Victoria Jubilee Bridge	 500,000.00
Owen-Sound branch	 39,744.00
Grand Junction Belleville and
North Hastings	 21,888.00
Montreal and Champlain Junction 103,600.00
Northern Pacific Junction	 1,320,000.00
South Norfolk	 54,400.00
Waterloo Junction	 32,800.00
Canada Atlantic	 282,355.20
Ottawa, ArnpriOr and Parry Sound 932,512.00 Pembroke Southern	 64,000.00

Drayton report shows total $3,423,699.20, a difference of $10,000 which we cannot trace.
The committee will thus see -that these subsidies were al'l given to the railways prior to their purchase by the Grand Trunk and were not, therefore, paid direct to the Grand Trunk railway. I think it is well to have that point cleared up.


Emmanuel Berchmans Devlin: On page 12 I find:
First Mortgage Lake Superior
Branch	$ 7,533,000
Second Mortgage series	A	and B..	20,169,000
Debenture stock	 34,879,253
Loan from Dominion Government secured by debenture	stock..	..	15,000,000
Secured notes	 9,720,000
Doan from Dominion Government secured by bonds due 1st April,
1919	 10,000,000
Will these also be arbitrated?


John Dowsley Reid: Iif the hon. member will read further he will see that the total liabilities of the Grand Trunk Pacific amount to $216,253,111. This will all be arbitrated in connection with the Grand Trunk system. There is considerable money already advanced by the Government, and it will be taken into consideration in the arbitration.


Emmanuel Berchmans Devlin: That $15,000,000 is a loan direct in actual money from the Government to the Grand Trunk Pacific. The Government has vouchers to show for it, and why should that item be arbitrated?


John Dowsley Reid: It is really a mortgage, In valuing the road the arbitrators will naturally take into account all the liabilities, no matter to whom they are due, and we are entitled to place that as a liability against the Grand Trunk Railway Company.


Emmanuel Berchmans Devlin: Has the minister considered all those figures in the statement he has given us?


John Dowsley Reid: Yes.


William Daum Euler: What is the total amount of the indebtedness of the Grand Trunk Pacific to the Dominion Government?


John Dowsley Reid: All the items are in the statement on page 42. The last loan from the Government was in 1918, amounting to $7,471,400. Of course, since the 1st of February of this year there would 'be added to that the amount that the Receiver borrowed from the Government in the Receiver's certificate. This statement, however, shows exactly the amount they got from the Dominion Government.


William Daum Euler: Will the minister give us the items?


John Dowsley Reid: They are:
Loan from Dominion Government..$15,000,000
Loan from	Dominion	Government	10,000,000Loan from	Dominion	Government	6,000,000'Loan from	Dominion	Government	7,081,783Loan from	Dominion Government,191?	
5,038,054
Loan from Dominion Government,
1918 [DOT][DOT] 	 7,471,400


William Daum Euler: Has the interest been paid?


John Dowsley Reid: They kept paying the interest out of the amounts we advanced. No interest has been paid since the road went into the hands of the receiver. I am told by the deputy minister that we guaranteed about $76,000,000.


William Daum Euler: The liability of the Grand Trunk Pacific to the Government by way

of cash loans would be something over $50,000,000. The guarantees constitute $76,000,000. I had understood the cash loans to be higher, but in any case the total liability of the Grand Trunk Pacific to the Government reaches $126,000,000. Is that correct?
Mr. J. D. iREIiD: Yes.


Jean-Joseph Denis: If I understood the minister correctly, the total amount of the funded debt and guaranteed stock of the Grand Trunk, including the liabilities in respect of the Grand Trunk Pacific, is approximately $501,000,000
Mr. J. D. 11EID: That is right.


Jean-Joseph Denis: Therefore it is only if the assets exceed $501,000,000 that any value at all can be set on the stocks subject to arbitration. Am I correct?


Mr. J. D. REED:: Whatever the assets are over and above that will represent the value of the stock arbitrated on; otherwise the $180,000,000 would be worth nothing.


Jean-Joseph Denis: Supposing that the whole
of the assets of the Grand Trunk of Canada are valued to the amount, not of $501,000.000, but below that amount, say, at $450,000,000, in what position are we? Are we not in this position, that in this particular case we would be paying $51,000,000 too much for the road because we have $501,000,000 of liabilities? These liabilities we cannot escape, as I intend to demonstrate in a few minutes if I am contradicted on that point. I am contending that we are liable for the whole amount of the liabilities; consequently, the country being liable for $501,000,000 and the whole property being worth $450,000,000, we would be paying $51,000,000 too much for the property. Am I right or wrong?


John Dowsley Reid: The hon. member is
supposing a case, but I cannot see how the condition he indicates can .possibly arise.


Jean-Joseph Denis: Is it not possible that the Grand Trunk would only be worth $450,000,000?


John Dowsley Reid: You can put it at whatever you like. You might make it $100,000,000 or $200,000,000 just to make an argument. We had experts in connection with the DraytonAxworth report and they showed that the company were always able to pay interest on this funded debt, together with the interest nearly every year on the first, second and third preference stock. They went into the whole situation, valued the assets of the company and after going 
over the case they decided, notwithstanding the Grand Trunk Pacific's failure, and the loss that was made there, that the Government should agree to take over the road and pay interest in perpetuity on the funded debt and the interest on the first, second and third preference and common stock. After these experts going into the situation and making that report, knowing that the Grand Trunk is earning this money, I think the hon. member is going far afield when he supposes that the Grand Trunk should only be worth $450,000,000. Of course, if he wishes he can say that it may only be worth $100,000,000. iHe can suppose whatever he wishes. What we will be liable for is not $450,000,000; the roadbed itself is liable for that. We are not issuing the bonds of the Dominion Government; we are only guaranteeing to pay some $10,000,000 or $12,000,000 in interest on the money invested by the railway company and secured by the bonds of that company.


Jean-Joseph Denis: If I understand rightly the minister has joined issue on the point that we are assuming the liabilities of the company; in other words that we are simply buying the stock of the company, that we are becoming shareholders; but that in this status of shareholders we are by no means responsible for the liabilities of the company. Is that the stand taken by the minister?


John Dowsley Reid: The shareholders must deposit their first, second and third preference shares and common stock with the Government and transfer this stock to the Government. We are then the owners of the stock and we can do as we like with the company, of course, subject to the bonds against the railway. That stock will be valued, and whatever the arbitrators award we pay interest at four per cent. But we are undertaking to pay the interest only; we are not saying anything about paying the capital. We agree to pay in perpetuity 'interest on the debenture stock amounting to something like $7,000,000 in round numbers; we agree also to pay the interest in perpetuity on the guaranteed stock amounting to $2,500,000 in round numbers with the right to pay the cash and take it over at the end of thirty years. We are going to give Grand Trunk stock to the first., second and third preference shareholders and the common stock shareholders, as security for the amount we owe.


Jean-Joseph Denis: I said a minute ago that the country is assuming the whole of the liabilities of the Grand Trunk, not technically,

not legally, but practically, and this is why I say so: First of all, we buy the whole of the stock of the Grand Trunk which has a face value of $180,000,000. I will not try to find out what price we pay for it. Supposing rwe get it for nothing or for a nominal price. But we do not get for a nominal price the guaranteed and debenture stocks. The guaranteed stock to the amount of $60,000,000 we assume.


John Dowsley Reid: Yes.


Jean-Joseph Denis: The four per cent debenture stock to the amount of $156,000,000, we assume. The two together form a total of $216,207,138.71. We do not assume the payment of t-his debt but we pledge ourselves to pay the interest on that debt in perpetuity.


John Dowsley Reid: You are talking about the Grand Trunk Pacific now.


Jean-Joseph Denis: No, about the Grand Trunk.


John Dowsley Reid: That amount of $216,253,111 refers to the Grand Trunk Pacific.


Jean-Joseph Denis: I will explain my figures. I have taken, at page 38 of the book, guaranteed stock, four per cent, $60,000,000. There is no question about that. Then I am taking what is under the heading of " funded debt " on the same page:
Funded debt-	I
Grand Trunk 5% deb. stock? 20,782,491.38 Grand Trunk 4% Seb. stock 119,839,012.69 Great Western 5% deb. stock 13,252,322.48 Northern 4% deb. stock.. ..	1,499,979.65
Total deb. stock	$155,373,806.20
The interest on that funded debt, or on what is called the debenture stock, according to the agreement, is to be guaranteed by the Government. Consequently we are guaranteeing the interest on debenture stock amounting to $155,000,000 and altogether we are guaranteeing interest on stocks or debentures to the amount of $216,207,138.71.
Well now, we are guaranteeing the interest no matter what happens to the road. If the road be successful in the future our guarantee will foe of no use because we will not have to pay any interest. If the road should not be successful in the future and should not be able to take care of this interest, we will have to pay it; consequently I say we are assuming the liability of paying, or making good, the interest on a capital sum of $216,000,000, no matter what happens to the road. If the road becomes bankrupt we will have to pay the interest in perpetuity just the same. If the road should foe destroyed by a cataclysm all of a sudden, we will also have to pay the interest in perpetuity. Therefore, I say we are involved by this Bill to the amount of $216,000,000- not in the sense that we have to borrow any money to pay it, but in the sense that we are liable for the interest; and when we go to the bottom of things being responsible for the interest ..of a certain amount of money in perpetuity is equivalent to being responsible for the capital. Hence we are in the same 'position as if we were paying the $216,000,000, with this difference: That we do not have to borrow the money, but in so far as our liabilities, in so far as the credit of the country, and in so far as the putting up of the guarantee is concerned, we are bound to the extent of the sum mentioned. Starting from that point I say that the country has taken an interest in this road to the amount of $216,000,000 plus the award which I am leaving aside for a moment. After we have committed ourselves for this amount of $216,000,000 we can never let the company go into bankruptcy; this everybody will admit. If the argument is strong now that we cannot let the road go into 'bankruptcy-I do not think it is very strong, but it is put forward as very strong by hon. gentlemen opposite-it will foe many times stronger when we have committed ourselves to the extent of $216,000,000. We must take it for granted that in the future the Grand Trunk line has got to live, it has got to subsist, and it has got to run forever. Starting from the basic point that we cannot let the company go into bankruptcy, I say we are liable for the whole of the obligations of the company because every time the company is not able to fulfil its obligations, every time the company falls into arrears, every time there is a debt due on its part, if the company cannot pay the debt the Government will have nothing else to do but to go ahead and pay the money for the company, otherwise the creditors could .place the company in liquidation. For that reason, I say that we are involving the country for the full amount of the liabilities of the Company, which is $501,000,000. On the other hand, we need not hp too fearful of that, because on the other side of the ledger there -are the assets. But what are the assets? That is the point-what is the amount of the assets? The minister said a minute ago "We had this property valued and we had the report from experts." I thought perhaps I was approaching the matter with too critical a mind when I- attempted to say that perhaps they were not worth any more than $450,000,000. I hope they are worth more .	than that; but supposing they
9 p.m. are not, I say the country would . be losing the difference between


John Dowsley Reid: That includes the Grand Trunk Pacific liabilities.
Mr. EUEiER: If I understood the minister correctly, he stated in reply to the member for Joliette (Mr. Denis) that the only valuation that could possibly be placed upon the $180,000,000 of stock that is to be arbitrated would be in so far as the assets exceeded the $501,000,000 of liabilities. If I am wrong in that, the minister will correct me. That is interesting to me,' because the one thing of concern to me now is that a fair valuation be placed1 on that $180,000,000 of stock. That statement of the minister means, of course, that the matter of whether the assets exceed the liabilities of $501,000,000 is a purely business proposition. I would like him, therefore, to reconcile with that statement his other statement that the arbitrators ought to act generously. The question of generosity does not enter into business transactions, and I would like to be assured that so far as the Government are concerned the arbitrators will not be encouraged to deal with this matter in any other way than the ordinary busi-89
ness way) that, on the contrary, they shall valua'te the property according to what it is worth, without any particular reference to generosity. To the extent to which the .arbitrators exercise generosity, money is *taken out of the pockets of the Canadian people and given to the shareholders of the Grand Trunk Railway Company. The company ought to have simply what they are entitled to have; as a business proposition they ought not to get anything to which .they are not entitled. Moreover, surely the deal is big enough to justify the provision that Parliament be permitted to pass upon whatever award is arrived at by the arbitrators in connection with the valuation of the stock; the award of three men should not be final.


James Alexander Robb: Considerable stress has been laid by the minister upon the Drayton-Ac-worth report. My recollection is that Mr. Drayton, now Sir Henry Drayton, with Mr. Smith, general manager of the New York Central railways, made an extended trip over the railways in Canada. Afterwards Mr. Acworth arrived in Canada, and all the knowledge that he had of the railway situation here was gathered from reports submitted to him by the other two commissioners, who had made a trip over the roads. Mr. Acworth agreed with Mr. Drayton in presenting a report which cannot be considered as recommending government ownership. In fact, my recollection is that the Drayton-Acworth report emphatically 'expressed itself as against government ownership and government operation of railways What they recommended was a Board of Trustees, but Mr. Acworth had hardly got through with his job here when he went down to Washington and before a congressional committee there he was an expert witness, and the whole of the evidence submitted to that committee by Mr. Acworth went to show that (public ownership and public operation of railways had been disastrous to every country in which they were tried. That is the evidence of one of the commissioners appointed by this Government to report upon our railway system, and it is hard to understand how Mr. Ac-worth can reconcile the report as he presented it to the Canadian people with his evidence before the committee at Washington. While a good deal of stress is laid upon the Drayton-Acworth report in an effort to prove that they were recommending a measure of operation under trustees whereby all those roads could be linked up and operated together, not operated byCTa
government under a minister, there \V'as
.oveodw
.ckfofl ,i-MJ



another member of the commission who, I believe, it will be generally admitted, was the most expert railwayman of all the commissioners. I refer to Mr. Smith, general manager of the New York Central Railway system, a very large system covering a wide extent of territory. Mr. Smith was regarded" by railwaymen as ranking with the most expert railwaymen of this continent, and he reported absolutely against public ownership or against the Government interfering in any way with the Government taking over the Grand Trunk railway. His report to the Government was that they should let the Canadian Pacific and the Grand Trunk alone. He stated that the Grand Trunk had been so tightly tied up by the previous Government to the Grand Trunk Pacific proposition that it was crippling their distribution of dividends to the shareholders of the old parent Grand Trunk Railway Comlpany. The evidence goes to show that the Grand Trunk went into the Grand Trunk Pacific proposition willingly with their eyes open, and they accepted the conditions laid down by the Government of the day.


Newton Wesley Rowell: What did Mr. Smith
recommend that the Government should do?


James Alexander Robb: My hon. friend can find Mr. Smith's report in the report of the Royal Commission. I am not going to weary the House by reading it. It commences at page 91 and continues along. Mr. Smith recommends that the Government should leave the Canadian Pacific and the Grand Trunk alone, and that they should release the Grand Trunk from its obligations as regards the Grand Trunk Pacific.


Newton Wesley Rowell: Let the Government of
Canada take all the obligations and give the Grand Trunk all the valuable assets.


James Alexander Robb: I am not arguing in favour
of Mr. Smith's report. I was proceeding to argue that the Government of the day that made the bargain with the British shareholders who own the Grand Trunk railway, protected the rights of the people of Canada by tying the Grand Trunk up tight, and to-day we are not here looking after the interests of the British shareholders who made a bargain with the Government, we are here looking after the interests of the people of Canada. It might be wise for the Government to look after the interest of the taxpayers of Canada and allow Sir Alfred Smithers and his Board of Directors to look after the interests of the British or Dutch or German shareholders or whoever may own shares of the Grand

Trunk Railway Company. That is their business. They made a bargain with this country in connection with the Grand Trunk Pacific, and they gave certain guarantees. My judgment is that they should live up to those guarantees, and if they cannot live up to them, then let us do the same as any business ' man would do. Men come out to this country from Great Britain or Germany or Holland, and look for an investment. One man puts his money into railways; another man puts his money into real estate; another man puts his money into manufacturing. Is the Government going to step in and release from his obligations every man who makes a bad bargain? If the Government is going to take care of the man who puts his money into railways, it is just as much bound to protect the man who puts his money into real estate, or mines, or manufacturing, if he makes a bad bargain.
I want to come back again to the subsidiary companies that are not at all in Canada, that are in the United States where there is a large mileage of the Grand Trunk railway. Some of them go down through Vermont and part of New Hampshire; some run through Maine; some go into Michigan, and some into Illinois and Indiana. In this blue-book containing memoranda respecting the Grand Trunk Railway Company acquisition, there is at pages 54 and 55, a statement of the deficits on these roads in 1917. In 1917, the Central Vermont railway showed a deficit of $154,729; the Atlantic and St. Lawrence railway showed a deficit of $1,272,496; and the western subsidiary companies-that is, the Detroit, Grand Haven and Milwaukee, the Grand Trunk and Western, the Toledo, Saginaw and Muskegon-showed a deficit of $1,302,154. Adding these together, you get a total deficit of $2,729,379 on the subsidiary companies which the Government proposes to turn over to the people of Canada-subsidiary companies that are operating outside of this Dominion, that are operating in the United States. What does that total deficit of $2,729,379 represent? We are inviting the people of Canada to-day to subscribe to a Victory Loan at five and-a-half per cent, and if we capitalize the deficits on these roads in 1917, we find that we are inviting the people of Canada to subscribe for $49,625,072. That is the amount of money that represents the deficits which this Government is proposing to turn over to the people of Canada in the subsidiary companies of the Grand Trunk railway as of the year 1917. I submit to my hon. friends in all seriousness: Would

it not Be well to pay a little attention to the taxpayers of Canada? It has been quite apparent this afternoon that even the members of the Government, including the Minister of Railways and the President of the Council who have had this matter before them and have been looking into it for more than a year, are not quite clear on the whole situation. Would it not be well to say to Sir Alfred Smithers: In view of conditions throughout this country and the echoes coming in from the different provinces, we do not feel justified in going on with this bargain; we do not believe that the taxpayers of the Dominion are prepared to shoulder this burden, and you had better live up to your contract made with the previous Government. If they cannot live up to that contract, let them go into liquidation if necessary. It would not be the first time that railways have gone into liquidation on this continent; receiverships are not new in railway experience.
I have a statement here shoeing that in, 1910 thirty-nine railways in the United States went into the hands of a receiver, in 1913 forty-nine, and in 1915, eighty-five railways with a .mileage of 23,834. Will any one tell me that the United States suffered because of these railways going into the hands of a receiver? They were able to weed these roads out, and that is the only correct basis of dealing with this Grand Trunk muddle. It is a muddle and the deeper we go into it the more muddled it seems. I appeal to my friends opposite to take a little more interest in the taxpayers of Canada and a little less interest in the shareholders overseas, because their directors will take care of their interests.


William Lyon Mackenzie King: Can the minister give the House the names of the other companies with which the Government is asking power to enter into an agreement? This clause provides that the Government shall have the right to enter into an agreement with the Grand Trunk Railway Company of Canada and with such other companies and interests as the Government may think necessary.


John Dowsley Reid: It may be necessary to enter into an agreement with some of these subsidiary companies. That is why those words are there.
Mr. MiACKENZIE KING: Can the honourable minister give the names?


John Dowsley Reid: I have given the names of all the subsidiary companies. They will be found on pages 40 and 41 of the bluesy
book. To mention only one, the Montreal Warehousing Company is absolutely owned by the Grand Trunk Railway Company. Now we might have to enter into an agreement with that company. It would be purely a formal agreement.


William Lyon Mackenzie King: It is not anticipated that the Government will go outside of the companies mentioned on pages 40 and 41?	,


John Dowsley Reid: No.


Mr. FIELDING:: If the Montreal Warehousing Company is entirely owned by the: Grand Trunk there will be no need of mak

ing an agreement with that company, because the Grand Trunk through its ownership of the common stock of the subsidiary company controls that company.
iMr. ROWELL:	These words were only
put in as a matter of extra caution, to make sure we had an absolute title to the stock. It may be that an agreement in some form would have to be made with the stockholders; they would have to be parties to-the agreement. These words were put in simply so that the Government could make an agreement with whatever parties were necessary in order to secure title to the stock we are purchasing under the arbitration.


William Stevens Fielding: It is to be presumed in the case of the subsidiary companies either that they are owned entirely, or that the controlling part is owned, by the Grand Trunk. In either case it would not seem to be necessary to make a separate agreement, because if the Government becomes the owner of the Grand Trunk stock all they would have to do would be to call a meeting, invoke what they want, and carry it out. Can the minister tell me to which classes of stocks is attached the voting privileges?


Newton Wesley Rowell: All these stocks have the voting privilege. My hon. friend will find the different classes of stock, and the voting privileges attached to each, on page 57 of the blueJbook.


William Lyon Mackenzie King: With reference to the words "and interests" does that term include the possibility of acquiring such properties as hotels that may be owned by the railways?


John Dowsley Reid: Yes.


William Lyon Mackenzie King: The Government contemplates taking over hotels as well?


John Dowsley Reid: Yes, they are assets; the Chateau Laurier, for instance.


William Lyon Mackenzie King: Does the Government propose to run the Chateau Laurier?	.


Newton Wesley Rowell: The Government, when it takes over the stock, takes all that the stock carries, and it carries all the property of the Grand Trunk Railway.


William Lyon Mackenzie King: That is understood. The Government, then, is making an agreement not only for taking over the subsidiary roads, but all the hotels and the management of the hotels?


John Dowsley Reid: We are taking over the assets, and as the hotels are an asset, we shall take them over, too.


William Lyon Mackenzie King: Is the Government going into the hotel business under this agreement?


John Dowsley Reid: We are taking over all
the assets.


William Lyon Mackenzie King: Will the minister answer my question direct?


John Dowsley Reid: We are taking over the Grand Trunk system and all the assets of that system. The hotels are part of the system just as the Canadian Northern hotels are part of the Canadian Northern system. We are to-day operating that system. The Canadian Northern has hotels.


William Lyon Mackenzie King: The President of the Council the other evening speaking of the haste with which the Government is trying to put through this legislation gave as a reason that the Government was anxious to enter into an agreement with the Grand Trunk at as early a date as possible. I would like to ask the ministers if the Government has contemplated submitting this agreement, when it is entered into, to Parliament for approval?


Newton Wesley Rowell: No. We are now asking authority to make the agreement. The central terms of it are set out in a letter which has been submitted to the House and are also in the Bill now before us.


William Lyon Mackenzie King: 
Newton Wesley Rowell: No. That is my hon. friend's statement of it, but his statement does not make it so. The terms upon which the company is to be acquired and upon which Parliament is asked to pass judgment are set out in the Bill and in the letter which has been submitted to the House.


William Lyon Mackenzie King: If the Government does not contemplate submitting the agreement to Parliament for approval,
I should like to move to amend this clause by adding thereto the following words:
This agreement shall be submitted to and be subject to ratification (by the Parliament of Canada.
In submitting this amendment I would draw the attention of the House to the fact that when the Government entered into a contract with the Grand Trunk Railway for the construction of the Transcontinental it brought down to Parliament the agreement which it proposed to enter into with the Company, and had the agreement submitted to Parliament in the form of a schedule attached to the Act. I have in my hand the Statutes of 1903, 3 Edward VII, Chapter 71, an Act respecting the Construction of a National Transcontinental Railway. On page 9 of the Act there is a schedule which has the following:	,
This Agreement made the twenty-ninth day of July, 1903,
Between:
His Majesty The King, acting in respect ol the Dominion of Canada, and herein represented and acting by the Honourable William S. Fielding, Acting Minister of Railways and Canals,	.
of the first part;
And
Sir Charles Rivers Wilson, C.B., G.C.M.G.; The Right Honourable Lord Welby, G.C.B.,; John A. Glutton-Brock, Joseph Price, Alfred W. Smithers, all of the City of London, England; Charles M. Hays, Frank W. Morse and William Wainwright, all of the City of Montreal, in the Dominion of Canada, and John Bell, of the City of Belleville, in the said Dominion, representing herein and acting on behalf of the Grand Trunk Pacific Railway Company, a company to be incorporated by Act of the Parliament of Canada at the present Session thereof,
of the second part.
Then follow the terms of the agreement, with the following clause:
50. This agreement shall be submitted to, and be subject to ratification by the Parliament of Canada.
The words which I have suggested as an amendment to the present clause are the identical words that form part of the agreement entered into at the time the contract was made between the Grand Trunk

Railway Company and the Government for the building of the National Transcontinental. I submit, Mr. Chairman, that if Parliament is to have any control at all of the expenditure, and have full knowledge of the contract which the country is asked to enter into at the present time, this step is absolutely necessary. May I remind the House, further, that this session of Parliament was called for the special purpose of approving the Treaty of Peace between the Allied and Associated Powers and Germany. An international contract had been entered into and it was thought necessary to bring Parliament together to obtain its approval to the Treaty before the country .should be made a party to it. If that step was a wise one in regard to that international obligation, I contend that a similar step is equally wise in regard to one of the largest transactions which for some time we have been called upon to enter into in this country, if indeed it is not the largest transaction the country has ever had occasion to consider.
Amendment negatived: Yeas 26, nays 49.


James Alexander Robb: Before the clause carries I may point out to the Government and their (supporters that they have now refused to the people of Canada the rights which Mr. Smithers, representing the Grand Trunk railway, took good care to preserve for his shareholders. In clause 7 it is distinctly provided that this agreement shall not be valid until it has been approved and ratified by a majority of the shareholders. If we take over the road, will not the taxpayers of the country be the shareholders? And who represent the shareholders but the representatives of the people in this Parliament, including hon. gentlemen who have just voted away the rights and privileges of the people, which rights and privileges Mr. Smithers has taken every care to preserve for his shareholders?


Jean-Joseph Denis: I think I may avail myself of the present fair attendance of hon. members to move a second amendment. A few minutes ago I gave some reasons why the five stocks should all be submitted to arbitration. As I pointed out, when this Bill passes the country will be bound, not according to my figures, but those given by the Minister of Railways, to liabilities amounting to $501,000,000; and if the asests of the company should total only $450,000,000 the country will be the loser to the extent of $51,000,000. In order to prevent this I submit that not only four stocks, but all five should be arbitrated. I pointed out a moment ago, and I shall now repeat the statement, that this is the advice given in the Drayton-Acworth report. What harm could it do if the five stocks were submitted to arbitration? The Grand Trunk Company would not suffer thereby. We would have those assets valued and pay the company their full amount. My amendment is to the effect that we should not be obliged to pay more for the Grand Trunk than the assets are worth. As things stand, we shall commit the country to liabilities of $501,000,000, irrespective of the amount of the assets; and in order that the country may not be bound to pay more for the Grand Trunk than it is' worth and shall not pay in advance $60,000,000 for the guaranteed stock, which, after all, may be worth nothing, I think that the guaranteed, stock as well as the other four stocks should be submitted to the arbitrators; and-


Georges Henri Boivin: Order. I must direct the attention of the committee and of the hon.. member to the fact that he is repeating absolutely the speech which he made a short time ago. That is entirely contrary to the rules, and it is my duty to draw the hon. member's attention to the fact and to request him not to repeat the speech he has already made.
Mr. DENIlS: I submit to your ruling, Mr. Chairman. I was merely trying to advance the same argument in another form, but if I am following too closely the trend of my previous remarks I will discontinue. However, I will state my point in a few words. We are now binding the country to liabilities which we know, namely, $501,000,000, as against assets which we do not know, I shall now give a new reason in support of my amendment. The Grand Trunk owes a debt to the Dominion directly and indirectly -directly for moneys which the company owes, and indirectly for guarantees which the Grand Trunk Company has given to the Grand Trunk Pacific, which is the property of Canada. If the Grand Trunk Company were to be liquidated this debt would be preferred as against the four per cent guaranteed stock of the company.
If the assets of the company should not be sufficient to pay all the debts, the debt of Canada should be paid in preference to the four per cent guaranteed stock amounting to $60,000,000. Is it not a great advantage for the country to have a preference for the payment of its debt against the Grand Trunk over the $60,000,000 of guaranteed stock? We are simply inverting the position, as a result of which this $60,000,000 of guaranteed stock will have a prefer-


William Stevens Fielding: The motion of the hon. member (Mr. Denis) deals with what I regard as the gravest objection to this measure if we follow it out in detail. Every argument that can be advanced about the arbitration on the value of the preference and common stocks, can be applied with equal or greater force in the case of the guaranteed stock. There is danger in respect to this arbitration on $180,000,000 of preference stock and common stock. There is so much danger in it that it has alarmed some hon. gentlemen opposite. The hon. member for Springfield (Mr. Richardson) confessed the other day that he was very

much disturbed over the matter, but he informed us that after having talked with some person-he said that he would not betray secrets by naming him, but somebody-in very close relation to the Government- he was in a position to say that we would have an opportunity of scanning the details of this matter at a later stage of the discussion; in other words, that we were to have the agreement submitted to this House. My hon. friend was lured into a support of the measure by an assurance of that kind. He knows now that that assurance, if it was intended to be an assurance, was entirely unwarranted, because we have received the statement to-night that this agreement will not be submitted to the House, and that my hon. friend is not going to have an opportunity of scanning the terms to which he attached such great importance.
It is an alarming thing, especially in the light of some other arbitrations, to think that $180,000,000 of this stock, of various kinds, of the Grand Trunk is to be submitted to the uncertainties of arbitration. The danger is the uncertainty. But when you come to the guaranteed stock there is no uncertainty; the danger is the absolute certainty that the Dominion of Canada is going to be made to pay up to at least $30,000,000 more than the fair value of the stock. There is no room for any question about that. I submit it to any business man in this House. Here is a stock called the guaranteed stock-not guaranteed by any government; it is merely a phrase used by the Grand Trunk, the stock is guaranteed by the Grand Trunk. The ordinary market value of that stock was 40 to 50 a short time ago. A few days ago I gave quotations showing that it had advanced to 48. We are going to give that stock a four per cent guarantee of the Government of Canada. This agreement is going to make the Government of Canada pay forever four per cent on that stock, unless they care to redeem it by paying the capital amount thirty years hence. A stock which was 45 or 48 a month ago is going to be made by this Act of Parliament worth 90. There is no escape from that. A four per cent guarantee by the Government of Canada is worth in ordinary times par and more than par, but these are not ordinary times; money is high. I am taking it at an ordinary figure. When this transaction is consummated, and when this stock is no longer the guaranteed stock of the Grand Trunk but the guaranteed stock of the Government of Canada, it is going to be worth 85 or 90, and the difference be-

tween its fair value a month ago and the value which is to be given) to it by what we are doing will be nearly $30,000,000 of the money of the people of Canada. There is no hon. gentleman sitting there who, if he were dealing with a personal transaction, would not say that it was a monstrous thing.


Newton Wesley Rowell: My hon. friend has conjured up a bugaboo in connection with this transaction iand has sought to convey the impression that this means a serious loss to the people of Canada. One has only to look at the transaction to see how incorrect my hon. friend's view is. The question of how the value of these stocks should be distributed between the different classes of stockholders is of no importance to the people of Canada. It makes no difference whatever in so far as the people are concerned whether the whole of the compensation goes to the holders of the guaranteed stock or is distributed among the guaranteed, preference and common stock holders. The only question in which we are concerned is the total amount that should be paid. That is the one thing that concerns the people of Canada. My hon. friend knows that if we made a cash offer to-day of $2,500,000 annually, and it is on record by the statement of Mr. Smithers and the Grand Trunk themselves, every dollar of it would go to pay the dividend on this guaranteed stock. If we were to offer $2,500,000 as an immediate cash offer, which we have offered, every dollar would go to the guaranteed stock because this guaranteed stock takes priority over all the preference and common stocks both in the matter of dividends and in the distribution of assets if the company were liquidated.
The Grand Trunk, referring to the Government's offer of $2,500,000 for the first three years, put the situation in this way: that this offer would mean the payment in full of the guaranteed stock immediately. In other words, if the Grand Trunk accepted the cash offer of $2,500,000 as the minimum offer for the first three years, it would do exactly what we are now doing: it would pay interest at four per cent on the total amount of this guaranteed stock, and it would place this stock in exactly the same position as it will be placed by reason of the guarantee. The whole question is this: is this stock worth the $2,500,000 annually in interest and is it worth possibly something more? The Government believes it is worth that and that we are safe in assuming the guarantee of this interest. We offered cash;
the Grand Trunk refused the cash. We not only offered this amount of cash, but we offered more. We offered, after the end of three years, $3,000,009 for four years; we offered $3,600,000 after that in perpetuity. The Grand Trunk refused that. They said it was confiscation if any one of these terms were imposed upon them. What we have done, so far as regards the minimum cash payment which we offered of $2,500,000, which would have paid four per cent on this stock,-we have guaranteed that. It does not add one dollar to the obligations which this country will have to pay because it will go towards the payment of the interest on this stock. Let me put it this way: if we arbitrated the guaranteed as well as the other stocks and if the award for this guaranteed stock, preference stock, and common stock, was $2,500,000 per annum, then it would all have to go, as the Grand Trunk President himself states, to this guaranteed stock-all that guaranteed stock would be in exactly the same position as it is to-day. I am quite aware, as everybody knows, that the effect of the Government's guarantee has been to appreciate to some extent that stock; but it does not add anything to the obligations which the people of Canada will be called upon to pay. We submit these facts to the consideration of the House and we maintain that the agreement is perfectly fair. One other consideration and I am through: anybody would know that stock under such conditions would appreciate to some extent on the market. It has a chance for appreciation just as the stock appreciated when the agreement with reference to the Grand Trunk Pacific went into effect. As a matter of expediency, we would have preferred to arbitrate the whole thing. But we could not get an agreement for arbitration on a satisfactory basis, unless we agreed to provide lor the guaranteed stock in this way. We believed the stocks were worth this amount and that this amount should be applicable to the guaranteed stock. That 9 p.m. is where the law would make it applicable in any case, and we consented that it should be so applicable.
Let me say in conclusion, that the Government has taken the position, and I submit it is a fair position, that the Grand Trunk railway, which has lines of feeders throughout Ontario and Quebec, should not pass into the harms of the Canadian Pacific Company.	.


Some hon. MEMBERS:: Oh, oh.


Newton Wesley Rowell: Yes, we have taken the position that the Grand Trunk railway should not pass into the hands of other railway interests which would be adverse io those of the people of Canada. Separation of the Grand Trunk Pacific and the National Transcontinental from the Grand Trunk would not only be a colossal blunder, it would be a national crime, because you would impose upon the Government of Canada the obligation of maintaining a railway which, separated from its feeders, could not be made a financial success. No wonder Mr. Beatty said they did not wish to assume the Grand Trunk if they had to take it with the obligations of the Grand Trunk Pacific and he added that they did not want the Grand Trunk Pacific because it paralleled their line. I say it would be nothing short of a national crime to take away from the Grand 'Trunk Pacific and the National Transcontinental the only system of railways which can possibly make them a success. I care not what the motives may be that inspire my hon. friends opposite, in the course they are pursuing but if it were successfull, then it would make government operation of railways in Canada a colossal failure and would enable private interests from one end of this country to the other to say that public ownership could never be made a success in Canada. I care not what the motives of my hon. friends may be in opposing this legislation; their course would not only render public ownership a lamentable failure but would involve this country in the loss of millions of dollars in operating great stretches of railway without the feeders necessary to their success.
What further? If this railway passed out of our hands and into the hands of the other great railway controlling the situation in Ontario and Quebec, you would find in these two provinces a reproduction of the conditions which the people of Manitoba and Western Canada faced more than twenty years ago. My hon. friends know that the situation in Western Canada, when that country was held in the grip of a railway monopoly, was such that it almost produced an incipient rebellion. Are we to sit quietly here and see a railway monopoly established throughout Ontario and Quebec and see the people of these provinces forced into the position in which Manitoba found herself some years ago? The Government is fighting the battle for the people of Canada to give them a fair chance for honest competition in railway management and honest competition in railway accommodation. My 
hon. friends know that the men who are interested in defeating this legislation are only too happy to see it defeated whether the means employed be dilatory means, the postponement of consideration, or by actual opposition to the Bill. I do not wish to question the right of a man who is honestly opposed to public ownership under all considerations to oppose this Bill, blit if he is not honestly opposed to public ownership under every possible condition the present agreement is one that should be supported by him as well as by the people of Canada as a whole. *


William Stevens Fielding: Once more, Mr. Chairman, for the twentieth time in this debate, the President of the Privy Council, absolutely unable to meet the point at issue, draws a red herring across the trail in order that he may divert attention from the real question which is involved.


Some hon. MEMBERS:: Oh, oh.


William Stevens Fielding: We are discussing the motion made 'by an hon. member in the form of an amendment. That motion does not discuss the question nor the principle of public ownership. We have had that discussed again and again; but whenever we bring up any matter bearing directly on one part of this transaction, and especially if it is a weak and defenceless portion, the hon. gentleman rushes in with an impassioned declaration in favour of public ownership. The hon. gentleman talks a good deal about motives; there is good ground for suspicion of motives in this matter when the hon, gentleman pursues a course so utterly lost to all reason and logic. Again the hon. gentleman brings in the bugaboo of the Canadian Pacific. The amendment has nothing to do with the Canadian Pacific. Why does the hon. gentleman again draw in that bugaboo? I repeat what I said the other night, and the hon. gentleman knows it is true-the Canadian Pacific cannot get this property unless it comes to the Parliament of Canada and obtains the necessary authority. The hon. gentleman knows that and yet, again and again, he drags in this bugaboo of the Canadian Pacific, hoping that the public would not understand this camouflage of the whole miserable transaction.
Mr. ROWELL; Will the hon. gentleman permit me. to ask him one question?


William Stevens Fielding: Yes.


Newton Wesley Rowell: If the Canadian Pacific Railway Company came to this Parliament

for legislation of that kind, would the hon. gentleman approve it?


William Stevens Fielding: There is another sample of my hon. friend's logic. It will he time enough when the Canadian Pacific comes here to consider that.
Some hon. MEMBEES: Oh, oh.


William Stevens Fielding: Would the hon. gentleman himself approve of it?


Mr. BOWELL:: No, I would not. I would not he a member of a government which would put in the hands of one railway company corporation, a monopoly of the transportation of the country.


William Stevens Fielding: If that be true, then what becomes of the great principle of public ownership which my hon. friend champions? If the principle of public ownership .is as great and as holy as he represents it ,to be, why does he draw the line and say: ''We will grab the Grand Trunk, but we won't take the Canadian Pacific"? When the hon. gentleman says that he would not. take the Canadian Pacific he is abandoning his whole argument in respect to public ownership.


Mr.   EOWELL@: Pardon me; my hon. friend has certainly misunderstood me. I said that I would not approve of the Canadian Pacific taking the Grand Trunk. That was the question, and that is what I said.


William Stevens Fielding: It will be time enough to deal with that question, I repeat, when it comes up; it is not here now.
Some hon. MEMBEES: Oh, oh.


William Stevens Fielding: What hon. gentleman who says "Oh" would undertake to determine what he is going to do in a session of the Parliament of Canada which is yet to be held? I have an open mind on every question that comes before Parliament. I am not going to commit myself on any question which is for the next Parliament; I will see the measure when it comes and deal with it on its merits.
Again and again the President of the Council has dragged the Canadian Pacific railway into the discussion. He has done it so often and so clearly without warrant that there is a well-grounded suspicion that he cannot maintain his position in respect to this matter; that he cannot defend this bargain on its merits. The other ruight I was trying to find out where the urgency came in, and I asked the President of the Council to bring down any correspondence which showed that the Grand Trunk Eail-way Company were seeking to get rid of
their road. But there has not been a line to show anything of the sort; the urgency, as I pointed out, is entirely on the part of the Government who are trying to grab the Grand Trunk. When the hon. gentleman was asked for an explanation of the alleged urgency, what did he say? "Oh," he said, "iif we do not do this thing now, public opinion will be organized against it." I wonder whether the hon. gentleman realized the force of the admission that he then made. If we do not put this Bill through now, the people of Canada will have time to understand it, and if they understand it he is afraid that they will not approve of it. What was my honourable friend's argument in reply to that suggestion? He made an observation just as he was moving that the committee rise; I had no opportunity of noting it at the moment. Answering the argument-a reasonable argument, I think -that I advanced, he intimated that he was not afraid of legitimate public opinion. He said:
My hon. friend knows the influence of corporations in the past in carrying on organized propaganda, apposing or supporting legislation. Members of this House and the people of the country know what has happened in that regard in past years.
The honourable gentleman has no right to talk in terms of mystery. What does he mean by that statement? He is not afraid of public opinion, but he is afraid of some corporation. He is afraid of some corrupt influence being exerted-upon whom? Upon the men who sit around him? Who are the men who are going to be bribed and corrupted by the Canadian Pacific Eailway Company if this proposal does not go through at this time? I ask my honourable friend to give an explanation of that mysterious statement. He is not afraid of public opinion, but he is afraid of some corporation, and the corporation which he has spoken of again and again is the Canadian Pacific Eailway Company. What does he mean when he .suggests that that great Company is going to bribe Ihe members of this Parliament or the people of this country? There is no explanation of it at all; the honourable member owes an immediate explanation to the country. He has placed^ on record his belief that if this transaction does not go through now, public opinion will be aroused in this country against it. Am I not stating the case exactly? Is that not what he said? Then when we asked: why should not public opinion be organized against it? he says: I am not afraid of legitimate public opinion,

but I am afraid of the corrupting influence of the corporation. I think that he owes it to the Canadian Pacific Railway Company to withdraw that remark, for it can have but one meaning-that the Canadian Pacic Railway Company will bribe members of this Parliament to defeat this Bill.


Newton Wesley Rowell: I do not know whether my honourable friend was in the House at the time, but the Leader of the Opposition (Mr. Mackenzie King) raised that question this afternoon and I gave my answer then; it is on record. My hon. friend's remarks are not justified by anything I said.


William Stevens Fielding: I regret that I was not present, but I think that all I have said to-day is fair and reasonable; it, too, will stand on Hansard.	'
Now, we come back to the real question, the question of the amendment before the committee. The hon. gentleman talks a great deal about the distribution of moneys in this transaction. We are not concerned about the distribution of moneys. This transaction is not a bulk transaction. For the purpose of our present discussion; for the purpose of considering the motion of my hon. friend, we do not need to go back into the correspondence; all the facts are before us in this Bill.
Several classes of stocks are to be acquired, and it is proposed that certain classes of these stocks shall be acquired by arbitration. We must deal with these latter classes on their merits; they form one section of the financial transaction. We are to have them dealt with by arbitration There is risk in it and danger in it, but at all events we understand how it is to be done.
Now, we come to another class of stocks, and let us not mix it up with the others; there is no question of distribution about it. The other class of stock is the four per cent guaranteed stock, so-called, of the Grand Trunk Railway Company; and we are going to make that a guaranteed stock of the Government of Canada. I am obliged to repeat myself on that point. That slock was worth on the market something under 50-48J was the quotation 1 read from a London paper. We are going to give that stock, by this proposal, a value of 85 or 90; and that stock is being traded in the London market to-day at huge profits to every one who touches it. You must look at this transaction separate and apart from all the others; you must not mix it up with the Canadian Pacific or with the other stocks or with any other
[Mr. Fielding. 1
thing. Here is a simple, straight transaction: you are going to take $61,000,000 of stock which a few days ago was worth only from 45 to 43-something under |60-and you are going to give that stock a value ol nearly 100-certainly 00-and the difference, representing about $30,000,000, is to go into the hands of speculators in London. There is no excuse for it; there is no defence for it; the public will not be misled by the dragging in of other questions. Who, looking at this proposal as a business man would, purely on its merits, would not say that it is utterly unsound and should not be carried out?


Emmanuel Berchmans Devlin: It was most unfortunate that the President of the Council .'(Mr. Rowell) should have lost his temper, because we were getting along very nicely and making some progress. More information was being given us by the Minister of Railways than by the President of the Council. I say this for the President of the Council: He has proved himself an exceptionally good lawyer. It is puzzling to us to know just whose brief he is holding. Is he holding a brief now for the Minister of the. Interior? Is he holding a brief for the Minister of Railways? Is he holding a brief for the Canadian Northern Railway? Or is he holding a brief for himself? He has shown in every way a degree of legal tact which is familiar to all students of law. Law students are generally told that if they see that they are getting the worst of a case their best course of procedure is to make a straw man, hammer at it, get vicious, hammer at it some more and frighten the other fellow. The President of the Council employed these tactics to-night very well. He built up a straw man that nobody was thinking of or speaking of-the Canadian Pacific Railway Company. Then, after hammering the Canadian Pacific for all he was "worth, he started to build up a second straw man -the motives actuating the Opposition in seeking information. Now, had he been interested just at the time the Minister of Railways was speaking he would have observed that the Minister of Railways gave a statement here to-day which was given for the first time. After persistent questioning upon a subject of paramount interest to the people of Canada, we succeeded in getting a revised edition of a statement which had previously been submitted.
I think I voice the sentiments of the whole Opposition when I say that in spite of all the lecturing of the President of the Council (Mr. Rowell), the Opposition is going to

continue to do its duty; it is going to stand by the people and for the people, and it is going to find out for the people just what they are being asked to sanction. If it takes another week to do that, and if the Government do not want to be frank and to come out with the whole statement, then we shall keep at the matter until we get the whole statement out, so that the people of this country who are going to be committed to an expenditure exceeding $500,000,000 will know what they are committed to. The President of the Council could have told us all that he had to tell us in a quiet manner; it was not necessary at all in telling us to get as mad as creatures that I dare not speak of in this House, but he tore up and tore down and he hammered, and one would wonder if he were really angry at certain results that were coming in to-day, or if he were disturbed by the statement made by the Minister of Railways (Mr. J. D. Reid) that we were going to buy hotels by this agreement. Perhaps he had been seized of the possibility of the Government's taking over the Chateau Laurier, and it may be bothering him whether he will have to continue giving the right to hotels in certain quarters to sell liquor under a license, or, perhaps, to sell it without a license, or how long the Government may have to refrain from bringing down threatened prohibition legislation. I cannot work into the minister's mind, and I cannot for the life of me say what made him so mad to-night. It may be that the President of the Council, from moralist to preacher, from preacher to dictator, from dictator to democrat and from democrat to autocrat, has gone on and assumed a new phase, and I really believe that it may be summed up in this. The President of the Council has become an actor. Any man who can, on a question respecting the uplift of the whole of us, respecting the use of tobacco, for instance, get just as angry in this House as man ever could get, and work himself up into the state into which he worked himself to-night, must be an actor, or I do not know what an actor is. But with all that, it seems to me-and I hold no brief for any of my friends seated beside me-that the statement made by the hon. member for Shelburne and Queen's (Mr. Fielding) was very fair; it was simply seeking for information that could easily be given with a "yes" or "no," or with a few figures. It was not necessary at all to get angry about the matter. It is a mistake on the part of the Government to think that they are going to prevent us from getting a bold,
broad, statement of what this country is going to be committed to, by reading us curtain lectures. Words were uttered by a man whom I hold in very high esteem in this country, and perhaps with your permission, Sir, I may repeat them:
In the meantime while the Government is through the instrumentality of the public credit and otherwise, using every endeavour to alleviate conditions which have inevitably arisen out of the war and overcome the effects of the sudden cessation of the activities which it created it is the clear duty of all citizens to earnestly co-operate with the Government and with one another to the end that with the exercise of patience, goodwill, and high patriotic spirit we may tide over successfully, this most trying and critical period in the national life of the Dominion.
The gentleman. (Sir Thomas White) who uttered these words occupied the position of Minister of Finance, and he used them as part of his Budget speech in June last, in this very House. I ask hon. gentlemen now who have some thought and concern for the rights of the people of this country, who did not, a few months ago, when the leader of the Opposition moved his amendment, vote away the last vestige of the rights of the people, to consider well those words uttered by the ex-Minister of Finance, and to give approval to the amendment now moved by the hon. member for Joliette (Mr. Denis). What does this amendment mean? It means simply to throw the whole thing before the arbitrators and to let them place a value upon it. We have been told time and again that we must pay this 4 per cent on the guaranteed stock and that we must pay the 4 per cent on the debenture stock, but that the rest will all be arbitrated. The hon. member for Joliette places a fair proposal before the House. I ask the House to adopt it because then, at least, the country will know what is the proposition before it, and the country is certainly not aware of the liabilities that are being assumed today.


Frank S. Cahill: The amendment moved
by the hon. member (Mr. Denis) is in exact accord with the recommendation of the Drayton-Acworth report which has been cited here as the authority of the Government for going on with this legislation. The President of the Council made no reply whatever to the amendment. I should like to ask the Government what was the cause of their receding from the original suggestion of the Drayton-Acworth report? That should be made plain to the country. The President of the Council said that they suggested arbitration. Person-

ally I think the suggestion in the Drayton-Acworth report was a very generous one, perhaps too generous. Until we know the value of the assets of this undertaking we are rather reckless in making any offer of an annuity to the shareholders of that company, but since it was made, and the Drayton-Acworth report was cited as an authority for making that proposal, why did the Government depart from that report in this matter? The President of the Council wished to impute motives to the Opposition, to try to imply that the Opposition were opposing this for motives that were not, perhaps, honourable. Instead of that it looks very much to me as if there were a nigger on the fence in this proposition. There is absolutely no reason why this $60,000,000 worth of stock should be set aside until we have valued the assets of the Grand Trunk undertaking, and until the arbitrators make a valuation. Why is this stock set aside? The Government tell us that the Grand Trunk would not agree on any other terms. The Grand Trunk Railway Company have never admitted their liabilities to the Government on account of the Grand Trunk Pacific guarantee.
They did not want to accept this $3,600,000 until that matter was straightened out. The Government made a counter-proposal to submit the whole thing to arbitration, and it is just possible that if it were submitted to arbitration, instead of $2,500,000, $3,000,000 or $3,600,000 there would have been nothing to pay on account of this stock purchase. I cannot understand why the Government and honourable gentlemen opposite are so anxious to spend $60,000,000 at this time when there is absolutely no ground for the transaction and when they have absolutely no authority for it. The Government tell us that the Grand Trunk people owe us $97,000,000 and .also have owed us $15,000,000 for 50 years, and in the face of that they say: Before we undertake to collect our debts from the Grand Trunk, before we undertake to look after the interest of the people of Canada, we will guarantee the interest of the Grand Trunk stock to the amount of $60,000,000. In other words, their means of collecting the bill is first to give the Grand Trunk more money. There is absolutely no sound business in that and absolutely no reason for it, and I am satisfied that it will not stand the light of day in the country. I therefore shall vote for the amendment.
Amendment, Mr Denis, negatived; yeas 25, nays, 49.
(Mr. Cahill.1


Frank S. Cahill: The minister stated a few minutes ago that the total liabilities amounted to $501,000,000 plus $26,000,000 of current liabilities. Has he taken into account the current liabilities of the Grand Trunk Pacific Company and the branch lines?


John Dowsley Reid: I have taken into account the liabilities of all the subsidiary companies. The statement on pages 38 and 39 includes all the liabilities of the Grand Trunk. There are also $216,000,000 of liabilities in connection with the Grand Trunk Pacific shown on the page I mentioned before. Everything is taken in there.


Frank S. Cahill: I would refer the Minister to page 43 of the blue-book, and again ask him if the current liabilities are included in the total liabilities, as given to the committee in his new statement?


John Dowsley Reid: The Grand Trunk Pacific Branch Lines Company set out on page 43 is a subsidiary company. That stands by itsdlf and was not included in the original statement I made.


Frank S. Cahill: The minister gave this evening an item $501,000,000 of funded liabilities, including note obligations; that was on the whole undertaking. Then he gave us an item of $26,000,000, which is found on page 39, made up of $22,000,000 of current liabilities and $3,916,362.18 of notes payable, unsecured.


John Dowsley Reid: The hon. gentleman will see the liabilities against the Branch Lines Company, but against the funded debt and the current liabilities is the property investment in the road and equipment.


Frank S. Cahill: I am not asking about the assets, but about the liabilities.


John Dowsley Reid: These are branch 'linos guaranteed by the local governments. These securities have been guaranteed by the governments of the western provinces and are worth the money.


Frank S. Cahill: How do you know?


John Dowsley Reid: They are guaranteed by the Provincial Governments and I am sure they are worth the money.


Frank S. Cahill: The guarantees the minister speaks of amount to $16,600,000.


John Dowsley Reid: And $12,000,000.


Frank S. Cahill: , Where do you find the $12,000,000? Under the head of current liabilities we have:

Loans and,'bills payable	$ 11,019,687
Audited accounts-wages.. ..	143,035
Matured interest coupons unpaid	25,768
Miscellaneous accounts payable	807,063
Unmatured interest unpaid. . ..	113,477
'	$12,109,030
Where does the minister find the guarantee on that $12,000,000?


John Dowsley Reid: There is no guarantee on that, but there is a property investment in the road and equipment of $29,186,593. The sum of $16,786,440. was guaranteed by the Saskatchewan and Alberta Governments and the other $12,109,030 has been expended on the roads, which are worth the amount. There is no doubt about that. This Government is not assuming those liabilities. They are not guaranteed by the Grand Trunk Railway or the Grand Trunk Pacifie. Those roads are separate branch lines the same as other subsidiary companies in connection with the Grand Trunk Railway, and this Government is not responsible for any of the liabilities mentioned.


Frank S. Cahill: I am sure the minister's followers will be delighted with his explanation and will again say "carried". If they will look at the statement they will see that the capital stock of the Grand Trunk Pacific Branch Lines Company is $1,002,000. The property investment in road and equipment amounts to $29,186,593. The bonds guaranteed amount to $16,000,000, odd, and the outstanding liabilities against the undertaking total $12,000,000, of which there is no guarantee. This amount is standing as liability to the public, according to this statement. Regardless of what the assets may be, this money must be paid out, and I want to know if I ,am correct in adding that $12,000,000. to the $501,000,000 and the $26,000,000.
Mr. -I. D. REID:	You are not.


Frank S. Cahill: When you jcome into
possession of the Grand Trunk Pacific Branch Lines Company and find liabilities against it amounting to $12,000,000, will the Government pay those liabilities or allow the claimants to take possession?


Some hon. MEMBERS:: Carried.


Some hon. MEMBERS:: No, no.


Frank S. Cahill: The minister will surely
not refuse to answer that question. If he is attempting to put this legislation through without some semblance of an intention to give information, the matter looks worse than it did before, and I am not surprised that hon. gentlemen did not vote for the
amendment. It is most extraordinary that a minister should present a statement to a committee of the. House and refuse to explain its contents.


John Dowsley Reid: I have already explained it. The Grand Trunk Pacific Branch Lines Company spent $29,186,593 on road and equipment. They issued bonds to the extent of $16,786,440 that were guaranteed by the local governments. Other amounts have been expended on that construction for which bonds have not been issued. They simply carried the amounts as a liability instead of issuing bonds. It is a liability against the Branch Lines Company, which is a. subsidiary of the Grand Trunk Pacific.


Frank S. Cahill: Does the minister say that these branch lines will not be taken over?


John Dowsley Reid: Yes.


Frank S. Cahill: You assume the liability?


John Dowsley Reid: Yes, of course.


Frank S. Cahill: Then, am I to add that to the $501,000,000 and the $26,000,000 to arrive at the total liabilities?


Mr. MEIGHEN:: The hon. member can add anything he likes, but it will be like adding broomsticks and oranges. They are in different classes altogether. I do not know whether another statement to the same effect will be of any assistance to the hon. gentleman or not. This is the Grand Trunk Pacific Branch Lines Company. It is a child of the Grand Trunk Pacific and the Grand Trunk Pacific is the child of hon. gentlemen opposite, and those hon. gentlemen may get considerable satisfaction now by deriding the child of their child. I do not know that the Grand Trunk Pacific Branch Lines Company is something that we should avoid simply because that company has liabilities. Every com' pany in the world that does any business has liabilities.


Samuel Hughes: Have they not assets?


Arthur Meighen: Yes, of course. The
assets are set out on the other side of the ledger. A child can see them, and he who runs may read. What more explanation the wit of man can give -than is there I am at a loss to know. Every statement of every company is given in the same form. Yrou cannot add the liabilities of the Branch Lines Company, owned by the Grand Trunk Pacific, to the liabilities of the Grand Trunk Pacific,

owned by the Grand Trunk, and make all a part of the liabilities of the Grand Trunk. That is what my hon. friend would like to do, and I presume that in his mind it is all right. But in the mind of any one who wants to address this question honestly it is not all right. What we assume are the liabilities of the parent company that we take. When you have stated the full liabilities of the parent company you have stated the limit of our obligations, and so far as the direct obligation goes we are liable only for the debenture stock and guaranteed stock. Certainly these companies have liabilities, but they have assets against them.


Frank S. Cahill: The minister may take a certain degree of delight in entertaining himself and his friends behind him, hut I may tell him that to-day we got very much further than his statement. The question was put and answered in a way as to what the total liabilities of the undertaking amount to.	_


Arthur Meighen: Then, what more does the hon. gentleman want?


Frank S. Cahill: 
John Dowsley Reid: They are not included because they should not be. That is the answer.


Frank S. Cahill: I find also in this government publication the following:
Southern New England Railway.
Under construction. Information at hand is very incomplete. In May, 1916, the Central Vermont Railway got authority to issue $30,000,000 of bonds, bearing guarantee of Grand Trunk Railway Company, but what portion, if any, of- this issue was made, it cannot he said.


John Dowsley Reid: Where is the hon. member reading from?


Frank S. Cahill: I am more generous than the hon. gentleman's friend to his right, and I will give him the page. It is 51.


John Dowsley Reid: There is no information other than that which is contained in the report.


Frank S. Cahill: My hon. friend is coming to this Parliament on that kind of a statement when we are guaranteeing the bonds of a company in the United States to the extent of $30,000,000 and he does not know any more about it than that it was stated that some three years ago these bonds were guaranteed. His official report says that he does not know what amount has been sold. He does not know anything more about it than that they guaranteed $30,000,000 for a road in the United States, and he asks this House to pass this legislation. Some hon. members on the Government side have insisted that there must be some other motive behind the opposition to this measure than a desire to get this information for the Canadian people. It looks as if there was some other motive behind hon. gentlemen opposite than a desire to protect the people's interest.


Emmanuel Berchmans Devlin: The Minister of Railways made the statement to-night that we were going to take over the branch lines. Is that correct?


John Dowsley Reid: Yes.


Emmanuel Berchmans Devlin: What did the President of the Council mean by making the statement a short time before that we would only take over such branch lines as would be profitable to the Government?
Mr. J, D. REID:	I am sorry that the
President of the Council had to leave to take a train and that he is not here to answer for himself. I did not understand the President of the Council to make that statement, but I understood him to say that we would take over the branch lines which

the Grand Trunk owned, controlled or operated.


Emmanuel Berchmans Devlin: The President of the Council said that the taking over of the Grand Trunk and- Grand Trunk Pacific did not imply that we had to take over the branch lines. I recognized the argument of the Minister of the Interior about the parent company as being sound. Then I marvelled at the statement of the President of the Privy Council that we were only responsible for the branch lines that we took over and that the Government was not bound by this legislation or by any agreement to take over the subsidiary lines of the Grand Trunk or the Grand Trunk Pacific.


Arthur Meighen: I am glad the hon. gentleman realizes the soundness of my position on the main point. As to what the President of the Council may have said, while I was not here, it would be strictly correct. The Government in becoming the owners of the Grand Trunk do not assume any obligations except such as the contract calls for. The Grand Trunk would be under certain obligations and would be the owner of certain companies. If the Grand Trunk, for example, hold the stock of a company and it were found that the liabilities of that company were greater than its assets and it did not serve the public, say, in Canada, so as to make it our duty to run the company, we would not be compellable to run it, because no such obligation is embodied in our contract. There might be a branch line in the United States; if we found that its liabilities exceeded its assets we would be under no obligation whatever to take over the road or to have anything to do with it. The Grand Trunk Pacific branch lines are owned by the Grand Trunk Pacific Branch Lines Company. These are in Canada and they are valuable branch lines. They are lines running through the Canadian West where communities have been built up and necessarily these lines must be operated. There is no reason to doubt that these roads are well worth what is against them, and in taking over this stock there is not very much liability on our part. We assume everything when we take the stock of the parent company. When you state the obligations that we assume that is the end of it. I hope that is clear to my hon. friend.


Emmanuel Berchmans Devlin: It is perfectly clear to me, and I have no doubt that if I made the statement that the President of the Council had said the very reverse my hon. friend would have argued that the President of
the Council was right with the same ability that he has just displayed in arguing that if the President of the Council did make the statement he was perfectly right.


Arthur Meighen: He is.


Emmanuel Berchmans Devlin: The Minister of the Interior will not say, as the President of the Council said this afternoon, that in taking over the parent company we are not taking over the subsidiary companies.


Arthur Meighen: We take the right to take them all, but it does not entail the obligation to do so.


Emmanuel Berchmans Devlin: Then if we are taking the right to take them what is the statement of the present liabilities which we can tell the people, or which we can tell our own electors, we are assuming?


Arthur Meighen: If the hon. gentleman were to tell his people that, would not his people say:	How are we liable unless we
assume the liability?-we have the right to do so but if it does not pay us to do so we will not do it. The people are not going to be seriously affected when they do know what we-guarantee here and they have a right to know what it is. We have told the hon. gentleman that over and over and over again.


Emmanuel Berchmans Devlin: But we have a different
statement to-night.


Arthur Meighen: You never got anything different. If the hon. gentleman will show me any two statements that will conflict I will be very glad to-


Emmanuel Berchmans Devlin: If the hon. gentleman
reads Hansard to-morrow he will see that the Minister of Railways brought down a brand new statement to-day.


Arthur Meighen: The statement may be new but the facts will be old.


Emmanuel Berchmans Devlin: There were certain brand new facts and I am sure the Minister of the Interior did not see them because the Minister of Railways told us that he got them direct from his deputy minister as being brand new and up to date.


Arthur Meighen: If he got them there
they will he right.


Emmanuel Berchmans Devlin: They want to tell the
people of Canada that these are the facts; brand new facts, correct facts. Therefore I ask the Minister of Railways to say now, in view of the fact that there is a difference of opinion between the Minister of the Interior and the President of the Council what

the situation is. I would not say that the ministers would differ from each other when they were both here because they would get their statements to coincide very quickly. But whilst one was absent there was a direct difference of opinion, a direct difference of statement, putting a totally different aspect upon the liabilities that we are going to assume. Now I ask the Minister of Railways does that change the brand-new statement that he gave the House to-day?
Mr. J. D. REID; No, it does not.


Mr. TURGEON:: Before this clause, which I regard as the fundamental clause of the Bill, is adopted I wish to say a few words in the performance of my duty to my constituents. Speaking upon the Bill a few days ago I cited a resolution passed by the Board of Trade of St. John protesting against the acquisition of the Grand Trunk Railway under present conditions. We have been assured by hon. gentlemen opposite that we are opposing the passage of this Bill in defiance to public opinion. Well, public opinion-, as far as has been expressed in any quarter at all,.has been in opposition to the acquisition of the Grand Trunk unde^- present conditions. My hon. friend from Royal (Mr. H. H. McLean) who spoke forcibly on this question a few days ago, pointed out, as I did, the nature of the resolution which the Board of Trade at -St. John, N.B., had passed. That resolution is still in effect; it has not been rescinded. Late on Saturday I received from the secretary of the Board of Trade of Bathurst, in the county of Gloucester, a copy of -a resolution- which I deem it to he my duty to read in order that it may appear in Hansard. That resolution, which is signed by Mr. Joseph B. Storer, secretary of the Board, reads as follows:
Bathurst, N.B., October 24,1919. A special meeting of the Bathurst Board of Trade was held here last night when the following resolution was passed unanimously :
" Resolved that the Bathurst Board of Trade has heard with regret that the Federal Government has now under consideration a Bill for the purchase by the Dominion of the Grand Trunk Railway system. That the deficits of government railways last year amounted to over thirty-one million dollars. That the opinion of the Board is that so soon after the war the time is not opportune to add a very large sum to the national debt by the purchase of a railway system having Portland, Maine, as a port and thereby discriminating against Maritime Province ports. That the United States and Great Britain furnished positive proof that the government operation of railway systems entails greater 
expenditure than without. The Bathurst Board of Trade respectfully submits that the said Bill be deferred until the question is submitted to the people with the facts."
Mr. -Storer adds the following comments:
I	may- say that this was a very representative meeting of the business men of Bathurst, was attended by adherents of all political parties, and is considered to be representative of the opinion of a large majority of the people of the constituency of Gloucester.
This resolution, I may say, expresses the opinion not only of the people of Bathurst but also of the population of the northern part of the province of New Brunswick.
The House has already had an
II	p.m. expression from the people of
St. John and southern New Brunswick; and to-day there has been another expression of opinion from the constituency of Victoria and- Carleton, New Brunswick. I believe the resolution from the Bathurst Board of Trade to be a correct expression of the feelings of the business men of that town. They wish the Government to wait before passing this legislation, the present time, when the financial conditions* of the country, after the war, are almost in a dangerous state, to use the language of the ex-Minister of Finance, not being opportune. Therefore there should be a postponement of this legislation until the question has- been submitted to the people.
I't- has been claimed by hon. gentlemen opposite that the present railway situation is a result of the construction of the Grand Trunk Pacific. May I toe permitted to remind those hon. gentlemen that when the Liberal party left office the Grand Trunk Pacific and National Transcontinental railways were in a perfectly healthy condition and would have played a successful part in the development of the country had it not been for their successors who, when they entered office, adopted a policy calculated to divert all possible traffic from those lines, and not only that -but placed every possible obstacle in the way of finishing their construction, and by degrading the Grand-Trunk Pacific made it fail in successful operation. What was planned was to bring to our Maritime Provinces' ports the whole of the trade of the Prairie Provinces, by giving that traffic a shorter haul than any other line could offer and at the least expense possible. That these plans were wise and sagacious is shown by the fact that notwithstanding the obstacles pla-ced in the way of the successful operation of the road, grain -was carried from Winnipeg to the Maritime Province ports for a rate

four cents a bushel lower than any other line was alble to carry that traffic. Had the policy introduced by Sir Wilfrid Laurier and his colleagues for the development and successful operation of that route been as vigorously pressed as it should have been the railway situation in the country would not be what it is to-day. In this connection, the Gutelius investigation and the Gutelius report-a mass of stupid contradictions which no Canadian engineer of any eminence would have signed-will be remembered. Mr. Gutelius contradicted himself the following year when, in the enjoyment of his "mess of po'ttage," he asked with respedt to the Intercolonial railway from Moncton to Halifax and Sydney, for an appropriation of millions in order to take care of the traffic which existed between those points, and so as to make it possible to emjploy much larger trains for the hauling of that traffic: This is the reply I make when I hear it stated by hon. gentlemen opposite that the present railway situation is due to the maladministration of the Laurier Government. The Borden Government not only did all they could to delay the proper construction and operation of the Transcontinental from Winnipeg to Quebec and the Maritime Provinces, but did all in their power to divert traffic from Cochrane to Toronto. The Liberal party of that time had passed a resolution in favour of granting the British preference to imports passing through Maritime Province ports-, and that resolution was to be effective as regards the terminus of the Grand Trunk Pacific.
The Grand Trunk Pacific project was completed three or four years ago; yet the Government has not put into effect the terms of that resolution. Will they do it now? The resolution expresses the fear that Canadian trade will go through a port in Maine instead of through iSt. John and Halifax. I trust that the Government will take into consideration public opinion as it is ex-pressed from day to day. Public opinion indicates clearly that the conditions generally are unfavourable to the carrying out of this proposal at this time. The fact that this railway goes to a port on the American coast is detrimental to the maritime ports of Canada. I trust, therefore, that this matter will at least be deferred until next session in order that the people may give it more consideration; and, if this Government does not do so, that this House and the Senate will see to it that public opinion is respected. I do not fear the influence of any corporation-I am expressing my
opinions as I have expressed them consistently during the last fifteen years in regard to this matter of railways. Moreover, I have placed before the Committee the opinion of the Board of Trade of the town of Bathurst, in Gloucester county-a board composed chiefly, I may say, of leading Conservatives of that town.


John Howard Sinclair: A question was raised by the member for Pontiac (Mr. Cahill) a short time ago which deserves, I think, more attention than the Minister of Railways gave it. I refer to the guarantee of $30,000,000 mentioned on page 51 of the blue-book. I quote:
Besides the guarantees to the Grand Trunk
Pacific, the Grand Trunk railway have guaranteed the following.
A number of railways are mentioned, and we come down to the Southern New England railway:
Under construction. Information at hand is very incomplete. In May, 1916, the Central Vermont railway got authority to issue $30,000,000 of bonds, bearing guarantee of Grand Trunk Railway Company, but what portion, If any, of this issue was made, it cannot he said.
That is an extraordinary statement to make an connection with a business venture of this kind-ihat three and a half years ago the Central Vermont was authorized by the Grand Trunk Railway Company to issue bonds to the extent of $30,000,000 and to sell them to the public, and that at this day the Government is not able to ascertain whether those bonds were all issued or not or how many were issued. There must be something wrong with This statement. We know that whatever the number of bonds issued to the public, the Grand Trunk Railway system is bound to meet that obligation. I would like the minister to explain this paragraph; to tell us how many of these bonds were issued and why the Government is not able to tell whether the whole amount was issued or not.


Arthur Meighen: If the hon. gentleman will look at page 35 of the blue-book he will ascertain just the relationship between the Central Vermont and the Grand Trunk. The statement says:
Grand Trunk Railway Company of Canada controls Central Vermont Railway Company by majority stock ownership (72%). This com- ' pany owns 246.3 miles in U.S.A.
From the statement on page 51 it would appear that the Central Vermont received authority for an issue of $30,000,000 of bonds. It is only proper that information



as to whatever indirect liability there may be on that account upon the Grand Trunk be made known as dearly as possible. That information will he secured for the hon. gentleman. But if, say, half of those bonds were issued, the proceeds would be in the Central Vermont property in addition to the value of that property. If nothing at all was issued there would be no addition; if the whole thing was issued there would be that much addition. It cannot he said that it means just that much less value in the Grand Trunk. Presumably it means nothing less or nothing more, because the proceeds of whatever was issued would he there in the road, which is owned to the extent of seventy-two per cent by the Grand Trunk Eailway Company.


John Howard Sinclair: Everything depends on what the railway to he built with the proceeds of this issue is worth. If it is not worth the amount of the bonds, then the Grand Trunk would have to implement that liability. But we ought to know what the liability of the Grand Trunk in this respect is. The minister has not told us why it is difficult to get that information.


John Dowsley Reid: There is no difficulty at ail.


John Howard Sinclair: Why is it not a matter of record?
Mr. J. I). EEID: We have given all the records that we have in the department. This statement was made from the official records in the department; if there is any further information that I can give I shall certainly get it. I shall take this matter up with the Grand Trunk officials in the morning and probably by to-morrow give the hon. gentleman in detail the information that he asks for. There is no desire at all to withhold it.


Arthur Meighen: Is the information not already of record in the statement that has been put on Hansard? The obligations in respect of the guarantees of the Grand Trunk Eailway system are all stated, and included in it is the Central Vermont railway. The interest rate is given as four per cent; outstanding bonds, $11,750,000; annual interest, $470,000. The par value of the stock owned by the company is given next. From that statement it appears that' the hon. gentleman's question is fully answered. The outstanding obligation in respect of which there is a Grand Trunk guarantee is, therefore, $11,750,000.


John Howard Sinclair: I understand that to be in addition to the $30,000,000.


Arthur Meighen: No this is given as obligations in respect of guarantees of controlled or subsidiary companies. This *would be the total obligation in respect of which there is guarantee.


John Howard Sinclair: Then why is it stated in the blue book that it is impossible to obtain the information?


Arthur Meighen: That statement was prepared earlier; the one that was put on record to-day is a more recent one.


John Dowsley Reid: At the top of page 51 the hon. member will see the words "guarantees as at December 31st, 1917." That was almost two years ago; this other statement is up to date. '


William Stevens Fielding: The statement means a little more than the Minister of the Interior has indicated. I think it is a full confirmation of the view we have taken on this side of the House that this transaction of enormous magnitude, of most complicated character, affecting the accounts of many companies, is being thrust upon the House with absolutely inadequate information. In newspaperdom they have a fashion of giving prominence to a thing by setting it up, as they say, "in a box," where you can see it separate and apart from everything else.
I think the point to which the hon. member for Pontiac (Mr. Cahill) and the hon. member for Guysborough (Mr. J. H. Sinclair) have been referring ought to be set up in Hansard "in a box". This is the statement which appears upon page 51 and upon which we have been voting. The minister, it is true, brought down something extra to-day, but in the meantime we have been voting on this blue-book, and on the faith of it some hon. gentlemen have been supporting this measure. On page 51, we find an official statement giving guarantees as of December 31, 1917, or nearly two years ago. That is, all the information which the [DOT]Government could bring down to us is two years old. We read:
Besides the guarantees to the Grand Trunk Pacific, the Grand Trunk Railway Company have guaranteed the following:
Then follow several railways. Then comes:
Southern New England railway. Under construction. Information at hand is very incomplete. In May, 1916, the Central Vermont railway got authority to issue $30,000,000 of bonds, hearing guarantee of Grand Trunk Railway Company, hut what portion, if any, of this issue was made, it cannot be said.
The Central Vermont is a subsidiary of the Grand Trunk. That statement should be set up "in a box"-a $30,000,000 transaction

concerning which the official information is simply that it is very incomplete. We cannot add anything.


Arthur Meighen: But it is added.


William Stevens Fielding: Does my hon. friend's statement which has been brought down today, but which has not been printed, refer to the Southern New England railway? I think what he read a moment ago referred to guarantees by the Grand Trunk of the Central Vermont.


Arthur Meighen: Yes, the Central Vermont.


William Stevens Fielding: But in this case the bonds would be issued by the Southern New England railway which would be a subsidiary of the Central Vermont, and the Central Vermont would be a subsidiary of the Grand Trunk.


Arthur Meighen: Is it not the other way about? The bonds would not be issued by the Southern New England railway because the statement says that the Central Vermont railway got authority to issue these bonds, bearing guarantee of the Grand Trunk Railway Company. Then the statement following that shows the whole issue in respect of the Central Vermont railway, in respect of which there is a Grand Trunk guarantee. It is true the figures are not given here in respect of that one subsidiary line, but they are given in respect of the others. The information as of that date is pretty complete as regards the other roads. But all the information is not on page 51; the whole book is full of it, and in so far as it is incomplete in that one particular, it is made complete by this subsequent statement.


Mr. TRAHAN:: Is it the intention of the Government to have this new statement printed?


Arthur Meighen: The statement is on
Hansard and, of course, it will be printed in Hansard to-morrow.


John Howard Sinclair: The whole business in connection with branch lines is very unsatisfactory. It appears that we are purchasing a very heavy liability in the United States, according to this blue-book. None of these railways is,, so far as we can learn, paying its way. If you look at page 27, you find the following:
United States affiliations-by book figures ol December 31, 1917, these roads show a deficit of $1,302,154. To this must be added deficit of Central Vermont of $154,729 not shown in Grand Trunk Railway Company's statement. This, however, does not show the deficit for the Atlantic and St. Lawrence which for 1917 was 90}
about $1,200,000. Thus making over $2,600,000 as the income cost to the Grand Trunk railway in 1917, for the American railways.
That is tc say, this group of railways, all in a foreign country, which railways we are going to place under our control and pay for, are losing money to the tune of $2,600,000 a year. That is what it looks like. That is public ownership with a vengeance. The people of Canada might be in favour of public ownership, but they are certainly not in favour of public ownership in a foreign country by which the taxpayers of this country have to pay $2,600,000 a year to keep those railways going.


Arthur Meighen: The hon. member
knows, if he will consider a moment, that that is not the right way to state the matter at all. It is true that the Grand Trunk is in a foreign country. If the Grand Trunk were a system that were severable, it stands to reason that we would not be anxious to get the portion in a foreign country; we would be glad not to. But it is not severable; we cannot sever it and make it a system at all. Consequently, this has to be secured. While that might be the loss in respect of those American lines, that is made up again on the other side, and the whole is reflected in the final statement of the Grand Trunk Railway system, which final statement is really the matter in which the people of Canada and the members of this House are interested. That is the aggregate. In making up that aggregate, these deficits are taken into account and surpluses on other roads on the other side are taken into account, and the net result is there shown, so that it is wholly wrong to say that we are taking some sections there and that the people of Canada will be taxed in order to pay deficits upon them. The people of Canada get something against that, and one is set off against the other. The total shows a surplus, and it is the value of the stock on which the surplus arises that we are having arbitrated.


William Stevens Fielding: While I understand the difficulty of separating these roads, it seems that we are going to take over these roads in the United States for the benefit of Americans at a cost of upwards of $2,000,000 a year. That may be unavoidable, but it may be just as well to know that we are acting in that benevolent way and that that action is being taken by periple who formerly did not want to "have any truck or trade with the Yankees." It seems that we are very generous to pay $2,000,000 a year in ordei to give them cheap rates.


Arthur Meighen: The hon. member has quite outdone his competitor from Guys-borough (Mr. Sinclair) in unfairness. There is nothing generous in this matter at all, nothing in the way of paying something for Americans; we are paying it wholly for ourselves. If this were not there, we would be paying just that much less; but this being there, there may be other roads here in respect of which we get a benefit for which we pay nothing as a consequence of this being there. I am not explaining this for the benefit of the hon. member for iShel-burne and Queens (Mr. Fielding) because his appreciation of anything of that sort is just as clear as inline, but why does he say that we are ashing the people of Canada to pay out between two and three million dollars in order that Americans may have railroad service? We are not doing anything of the sort nor anything that could with any approach to fairness be so *described.	(


William Stevens Fielding: I quite appreciate what the hon. member has said in regard to the difficulty of severing the undertaking, but there is no getting away from the fact that it is the people of Canada who are going to operate this road with a gain or a loss. It is debatable whether or not we are going to have a gain on the whole transaction, but it is the clearest thing in the world that there is a loss of over $2,000,000 on the American end of the Grand Trunk, and the people of Canada will have to pay that loss. There is no esoape from that.


Arthur Meighen: But does it not follow
that against that we get $2,000,000 for which we pay nothing at all?


William Stevens Fielding: Not from the United
States; we get it out of the ratepayers of Canada.


Arthur Meighen: But we get it instead
of the company, so that the thing is as broad as it is long.


James Alexander Robb: I suppose the Government
are taking over not only the trackage of the Grand Trunk system, but the engines and the cars, the equipment. Has the minister any data as to what proportion of .the engines, the motive power of the Grand Trunk, is owned by Blair & Co. and what proportion of the trucks are owned by the Columbia Trust Company?


Arthur Meighen: I presume Blair &
Co., is a company associated with the Grand Trunk in equipment trusts. Is that the case? I have never heard the name before,
[Hr. Fielding.]
but I presume they issue equipment trusts, for that is the method by which the Grand Trunk, as any other company, owns its equipment subject to these equipment trusts, which are virtually mortgages against the equipment. I do not know just how much interest Blair & Co. have in the amount set out on page 39.


James Alexander Robb: I concluded that inasmuch
as the minister was taking over on behalf of the people of Canada a large railway as a going concern, well equipped with engines and freight and passenger cars, he would be able to tell the people of Canada what proportion of those engines was owned by Blair & Co. and what proportion of the trucks was owned by the Columbia Trust Company.


Arthur Meighen: They own none of them.


John Dowsley Reid: Blair & Co. may hold the bonds against the equipment. Equipment trusts notes are shown on page 39, amounting to $6,092,999.91. The hon. member wants to know how much of those bonds are owned by Blair & Co, and how much by the Columbia Trust Company. That does not appear in this statement, but I have no doubt I can get it from the Grand Trunk people.


Frank S. Cahill: It is possible that these
two companies absolutely own part of the rolling stock?


Arthur Meighen: They do not.


Frank S. Cahill: I am quite willing to take the minister's word, but when my hon. friend iMr. Robb asked him the question he did not know. It is a practice in the United States to lease engines, and we would like to know whether this rolling stock of the Grand Trunk is leased or purchased, what amount of rolling stock there is, and the liabilities against it. It is just possible that a large percentage of the rolling stock of the Grand Trunk is only leased. We should have all this information.


John Dowsley Reid: The company owns a large proportion of the equipment outright. It appears in the list of assets as Property invested in road and equipment, $434,990,999.37." The equipment is not shown separately, but I could get that information. The other amount representing equipment notes outstanding is for new equipment that has not been paid for, and against which there will be bonds. Some of these may be owned by Blair & Co. and some by the Columbia Trust Company. If the hon, gentleman will turn to page 38 he -will find

the amount invested in the road and equipment under the head of " Assets."


Frank S. Cahill: How can we tell how much was invested in equipment and how muon in the road?


John Dowsley Reid: I will get the hon. gentleman a statement in more detail.


James Alexander Robb: I think this is a matter of importance to the people of Canada The minister must have seen a great number of the engines on the Grand Trunk railway with a plate bolted on them labelled " Owned !by Blair & Co." It does not say "Bonded" or "Mortgaged," but "Owned by Blair & Co."


John Dowsley Reid: That is what they call equipment bonds.


James Alexander Robb: A number of the trucks also have a plate, " Owned by the Columbia Trust Company." Imagine the condition the Government would be in, if they took over the road and then Blair & Co. and the Columbia Trust Company said: "We own those trucks and we want them immediately," and then took possession of them. The minister should tell us under what conditions we are operating this equipment, and if it is leased, for how long?


John Dowsley Reid: Blair & Co. could not possibly take the engines in the way my hon. friend suggests. The engines are the property of the company and the bonds are simply a mortgage on the engines. They could never be taken so long as the interest and the agreed amount of principal is paid annually. The same applies to the Columbia Trust Company. Nearly all the railway companies, the Canadian Pacific, for instance, the Canadian Northern', and the Grand Trunk issue equipment bonds against their equipment at the time of purchase. You will see quoted on the market Canadian Pacific equipment bonds, Canadian Northern equipment bonds, etc. The cost of the equipment and the interest on it is a charge in connection with operation, and is not put in the list of liabilities against the road.


John Howard Sinclair: The clause we are discussing involves the taking over of the entire capital stock of the Grand Trunk with the exception of $12,500,000 of guaranteed stock. Have the Grand Trunk directors given the Government any assurance that the Grand Trunk has control of the entire capital stock of the company? I have frequently seen it stated in the newspapers that this stock is floating around in different countries, in Europe and elsewhere, and I have not heard the minister say anything on that question.
Have the directors of the Grand Trunk Company all the stock under their control in such a way that when the arbitration is completed they can turn it over to the Government, none of it being in the hands of private owners?


Arthur Meighen: That is, the stock we are arbitrating on?


John Howard Sinclair: I am referring to, all the stock. The guaranteed stock may be in the same position, but the common stock and the preference stock. That is the stock that is most likely to be scattered around. What will be the position if the directors of the Grand Trunk are not able to deliver the whole of that stock when the transaction is completed? Have they given an assurance to the Government that they will be able to deliver it?


Arthur Meighen: I have not heard of any assurance from the Grand Trunk that they have their hands on the stock and can at any fixed date deliver it. But a study of the Bill will disclose this situation: The Bill contemplates an agreement which must be ratified by the shareholders of the Grand Trunk; that is, by the holders of these very stocks in question.


John Howard Sinclair: A majority.


Arthur Meighen: I should think that for a transaction of this kind it would require a two-thirds majority, but that is a question of law. Assume for the sake of argument that it is just a majority; it would mean that the company bound itself to deliver the stock. The Bill goes on to say that the agreement shall provide that any undelivered stock may be declared by the Governor in Council to be the property of the Government, and until it is delivered they have no rights at all. The rights of the company cease immediately on the declaration of the Governor in Council. We have jurisdiction to do that because it is a Canadian incorporated company, and in any event they accede to the exercise of that power. Consequently the country takes no chances in that regard at all. It may be some time before all the stock will have been searched out and returned, but until it is, no rights rest in them and no obligation rests on us.


John Howard Sinclair: I do not think
that that transaction would be sustained by any court of law in the world. I do not believe it would be held that the Grand Trunk directors or a majority of the shareholders
1430 '

could legally take any action by which the stock of the minority might be confiscated. The people who hold that stock have certain rights. The stock may not be worth anything, but it belongs to theim. In some cases it is in the hands of shareholders in countries in Europe. Will this Government confiscate it without paying anything for it? I can well understand that the Grand Trunk Company can control the guaranteed stock, because the people who hold it expect to get bonds of the Dominion of Canada in exchange for it. But I am referring to the stock for which the holders will get nothing. They may expect something and, when the arbitration is over, may find their stock is not worth five cents. They may not ibe willing to surrender it to the company or the Government, tout the minister wishes ns to understand that the Government is going to confiscate stocks in the hands of Dutch holders, for instance, and annihilate their rights. Is that the, position? .


Arthur Meighen: I am very glad to hear the sentiments in general that animate the hon. gentleman. I thoroughly agree with him that it would toe entirely wrong on the part of this Parliament to pass a law which would confiscate the property of any person simply because we, or, indeed, some institution or commission appointed toy us, declared that the stock was of no value. Such a course would toe arbitrary, highhanded and wholly indefensible. I commend that sentiment to the hon. gentleman's consideration, particularly in reference to the Canadian Northern stock, and I am sorry that it did not occur to him at the time of the discussion in connection with that subject. In relation to this we do not presume to do anything of the sort. We first of all ask that the Grand Trunk Company, toy its shareholders, take such action as legally binds all the shareholders in this regard. Until the company takes that action we can neither assert nor enjoy any rights under the agreement. They must so ratify the agreement that it will have a legal effect, binding their shareholders to comply therewith. That done, then there can be no confiscation on our part.


John Howard Sinclair: Can legal authority be given for such action?


Arthur Meighen: They must have legal authority to take that action. We must be advised on the highest legal authority that the action is, competent on their part.


John Howard Sinclair: 
Arthur Meighen: I am sure the Grand Trunk people would not undertake to do it unless they knew there was legal authority.


William Lyon Mackenzie King: The minister says that the agreement will provide for ratification of it by the shareholders. Why should the agreement not also provide that this Parliament should ratify it?


Arthur Meighen: That is what this Parliament is engaged on now.


William Lyon Mackenzie King: Parliament
does not know the terms o-f the agreement.


Arthur Meighen: We authorize the entering into of the agreement on the terms set out in the Bill. Parliament is now engaged in doing what the shareholders will afterwards be asked to do.


William Lyon Mackenzie King: The shareholders of the Grand Trunk will be given the privilege of knowing the terms they are called upon to ratify, but this Parliament is being asked to authorize an agreement, the terms of which it does not know. I would ask the minister if at is fair to the people of Canada, that their own representatives should be asked to give their consent to an agreement the terms of which they do not know, and which will not become binding until the shareholders of the Grand Trunk Railway Company, who are the other party to the agreement, ratify. It is putting Parliament in a most extraordinary position. The people have absolutely no rights in this Parliament in accordance with the procedure the minister is adopting. I cannot emphasize too forcibly what I believe every member on this side feels strongly, and what I am sure many members on the other side feel equally strongly, that the Government has no right to ask this Parliament to assent to a transaction involving the expenditure of millions of dollars, not only in one year but for many years, and give Parliament no opportunity to ratify the terms of that agreement, while on the other hand they reserve to the shareholders of the Grand Trunk Company the right of ratification before the agreement goes into effect.


Arthur Meighen: The hon. gentleman would have the right to become quite in-

dignant if his facts were anything approaching accuracy. But they are not. The terms of the agreement are set out in the Bill.


William Lyon Mackenzie King: Where are they?


Arthur Meighen: In the Bill, tlie clauses of which hon. members will not let us get to the consideration of. We are only at Clause 2. The Bill is an embodiment of the terms of the agreement to be entered into. Nothing can be in the agreement that is in the slightest degree inconsistent with the definite terms set out in the Bill. If there is any term which the hon. member thinks should be in the agreement, or any which he is of opinion should be struck out, he is at liberty to move an amendment to that effect. We cannot do anything that the Bill does not authorize.


William Lyon Mackenzie King: Will the minister say what is meant by the following:
/
The said agreement shall contain provisions for the defining of the companies, properties and interests, comprised in the Grand Trunk system, and, including the terms and provisions hereinafter set forth, may contain such other terms and conditions as the parties may agree upon.
What is meant by the words, " such other terms and conditions as the parties may agree upon?" These are the terms and conditions of which nothing whatever is said in this Parliament and of which this Parliament knows nothing.


Arthur Meighen: These terms and conditions cannot in any way conflict with the terms and conditions, " hereinafter set forth."


William Lyon Mackenzie King: What is the meaning of the words I have quoted ?


Arthur Meighen: There must be details. It would take a very long time to work out all the details of an agreement of that sort.
We will have a reasonable time to work out all the details of the agreement with the Grand Trunk. The Bill establishes the principle. There is nothing in the world to bind Parliament in that. Parliament is free and untrammelled. There will be details of organization and it is the part of wisdom to allow freedom that these may be taken care of in order that the public interest may be protected. The hon. gentleman talks about this being an invasion of parliamentary rights. I do not doubt for a moment that you could go back to the days of Confederation and trace Bills almost yearly that authorized the Governor in Council to enter
into agreements or to make law by regulation. The principle of our legislation is that the' main lines are laid down in the Bill and the details are worked out by the Governor in Council under the authority of the Bill. Parliament has been doing this not only every year, but almost every week since ^Confederation. Everything in the way of authority such as is here sought is sought in almost all legislation that comes before this House.


William Lyon Mackenzie King: If the minister Would be agreeable, when we come to the section, to strike out the words " pr upon such other terms and conditions as the parties may agree upon," meaning terms and conditions other than those contained in the Bill, it would meet the objection.


Arthur Meighen: I would be agreeable to insert the words " not inconsistent with the terms of this Bill."


William Lyon Mackenzie King: That would be a slight concession.


Mr.   DBOHENE@: I would like the minister to tell us what he means by the words " and with such other companies and interests as the Government may think necessary." If we are dealing with the Grand Trunk, what necessity have we to deal with other companies and interests? There seems to be a nigger in the wood-pile. Let the minister tell us the name of these companies and parties interested.


Arthur Meighen: That, I understand, has been fully explained. I have not given any study to it and I may not have it exactly right. Subject to correction-because I am sure the explanation given about it would be correct-I would say that it may be found necessary that the Government should get the assent of certain subsidiary companies to certain provisions of the Bill. It might be, for example, that the Grand Trunk might not have the right to the assignment of certain rights in respect to a subsidiary company. They might have a lease of a railway, but they might have no right to assign that lease. I do not see what restraint there might be, upon them. The illustration I have suggested would seem to me to be a very unlikely one. I would presume that if, as a matter of extra precaution, we found it necessary to take some action in respect to some concession or subsidiary company we could do so.


Mr. DECHENE:: It would be interesting to find cut all about these leases. If we are going to~ deal with the Grand Trunk

let us deal with the Grand Trunk, and let us not bay, or deal on the side with, subsidiary companies of any kind.


Arthur Meighen: I do not think it is
at all probable that there is any lease; in fact, I do not think that what I suggested is very likely to occur for the reason that the Grand Trunk Company will be the Grand Trunk Company after we get the Stock just the same as it was before and any rights it had will be just the same and not one whit less. But it may be that in the public interest some further concession should be secured from one of the subsidiary companies, possibly from the Grand Trunk Pacific. This will enable us to do it if it is considered necessary. 1 presume the draughtsman of the legislation thought it wise to put that in. I did not make a special inquiry on that point myself, but in view of the fact that the explanation is already on Hansard, given at a previous time. I think it should satisfy the hon. gentleman.	.


Joseph Bruno Aimé Miville Déchêne: Are we to understand
' that the companies and interests mentioned are companies and interests which may be created for the purpose of dealing with the Government in acquiring these rights of subsidiary companies? Or are they actually existing companies holding these rights at the present time?


Arthur Meighen: They actually hold them now.
Mr. DECHENE. Will the minister give the names of these companies?


Arthur Meighen: They are all here on
pages 39 and 40.


William Lyon Mackenzie King: Does the
company own any property in Europe or Asia?	"


Arthur Meighen: Not that I know of.


William Stevens Fielding: They have very fine
offices in London which will go to the Government, I presume.


Arthur Meighen: If England is considered as being in Europe I would presume that they would. But they have no property on the mainland of Europe or Asia that I am aware of.


Emmanuel Berchmans Devlin: At what does the minister place the total liabilities of the lines to be taken over which now operate on American soil?


Arthur Meighen: That is given on page 40.


Emmanuel Berchmans Devlin: Do I understand that
these roads, a last of which is given in this blue-book, are to he taken over when - we take over the Grand Trunk and Grand Trunk -Pacific?	,


Arthur Meighen: We had the right to
take them over because we will have a controlling interest in them.
M,r. DEVLIN:	The minister could not
tell me what are the real lines to be taken over? The (Minister of Railways said before the minister (Mr. Meighen) came in this evening that we would take over the branch -lines.
Mr. M1EIGHEN: It is incorrect, strictly speaking, to -talk about our taking over -the branch lines. We take over the s-tock of the Grand Trunk; that is ail we take over. In taking over that, we take over all the rights of the company. One of the rights of the company is to abandon any property in respect to which it has no obligation except -the .ownership of its -stock.


Emmanuel Berchmans Devlin: The -minister knows perfectly well -that I am not asking for a -repetition of the statement on that aspect of the matter. The statement was made before -the minister came in by the Minister of Railways that we were going to take over subsidiary lines. He -said- there is no doubt about it. I am -simply -asking if these lines are some of the subsidiary lines the -Government has already got or means to take over?


Arthur Meighen: The (Minister of Railways, not being -a lawyer, does not see the full significance of the 'hon. gen-tle-m-an's words. The Minister of Railways does not mean that we are to take over the roads in the sense the hon. gentleman has in mind at all. He simply means we -take over the main company with all the rights of the .main company. One of the rights that we secure is to take over such subsidiary companies as the parent company h.as the right to operate. It is our intention, in so far as they are assets to take them a,11 over, but I assure the hon. gentleman if there is any American company for example, in which, in so far - as operation i-s concerned, only the people over there are interested and which is more of a liability than an asset, we will not be bothered with it.


Emmanuel Berchmans Devlin: I do not exactly gather the meaning of the minister's statement, but I assume that in the case of some of those
[Mr. Dech&ne.l

roads which are on American soil, notwithstanding their heavy liabilities, if the Government finds them profitable to take over they will do so.


Arthur Meighen: We have no taking over to do. We will operate them. If the roads are profitable we will operate them just the same as they are operated now.


Emmanuel Berchmans Devlin: Then they will be operated, not for the benefit of the people of this country but for the benefit of the people over there?


Arthur Meighen: No, they will be operated for our benefit in the event of their being profitable. That was the condition expressed by the hon. gentleman.


Emmanuel Berchmans Devlin: If they are profitable?


Arthur Meighen: If they are profitable, do we not get the profit? Why then should we throw that profit away?


Emmanuel Berchmans Devlin: I am not speaking about their being profitable at the present moment. History tells us, and best information we get shows that they have not been profitable. The minister now reasons that if these railways are profitable they have a right to take them over.


Arthur Meighen: Operate them.


Emmanuel Berchmans Devlin: If I understand correctly, one of the reasons that might make them profitable for the people of this country is to get the advantage of the ports of Portland, Boston and New London. Is that right or is it wrong?


Arthur Meighen: I do not think it is very right, but the hon. gentleman knows just as much about it as any one knows. It may be profitable to operate a road in the United States; if it is not profitable, if it is not of advantage in this country to operate the road, we are not going to do it, the hon. gentleman can be sure of that. We are not concerned in building up American ports for American roads, we have tried to let the hon. gentleman understand that for many years gone by. But it might be of value to run a road as a feeder. It might be such an integral part of the system that though there might be a deficit in respect to the books of that company itself, still its resultant benefit to the system might be such that it would be to our advantage as a Canadian people that the Grand Trunk should operate that road. That is the principle that we will be guided by.


Emmanuel Berchmans Devlin: I presume that is the only information in a concrete form that we can
get. I will therefore have to declare myself satisfied.


William Lyon Mackenzie King: One clause in this Bill provides that three arbitrators are to be appointed, and according to the wording of that clause the agreement would contain the name of the arbitrators. Is that correct?


Arthur Meighen: We are not at that clause yet.


William Lyon Mackenzie King: I am simply asking for information.


Arthur Meighen: To which clause does the hon. gentleman refer?


William Lyon Mackenzie King: I think clause
6 is the one that refers to the appointment of arbitrators. The point I wish 'to ask the minister about is this: As I read the Bill referring to the question we were speaking of a moment ago as to the knowledge the respective parties would have, the shareholders would know the names of the arbitrators before they are asked to ratify this measure.


Arthur Meighen: The agreement will not contain the names of the arbitrators. The appointment of arbitrators, is covered in a letter of October 9th addressed by myself to Sir Alfred Smithers; the point is more fully stated there than it is in the Bill The terms of that letter 12 midnight, will be strictly followed. It says the agreement shall provide that each side shall name an arbitrator and that the two so appointed shall name a third, or, failing an agreement on the part of these two, the third arbitrator shall be named by Sir Walter Cassels and Sir Louis Davies, acting together. That is what the agreement provides.


James Alexander Robb: Before the clause passes, we want some more information from the minister as to the correctness of the statements in the blue book. At page 45 the capital stock of the Atlantic and St. Lawrence railway, guaranteed or preferred, is given as $5,483,800 at six per cent; on .page 51 speaking of the same company reference is made to "five per cent on capital stock of $5,484,000 as rental". The minister will notice that makes considerable difference on the annual contribution of this 200 odd miles of railway. Perhaps he can explain which of these statements is right.


Arthur Meighen: The capital stock of the Atlantic and St. Lawrence railroad is shown
1434.

on page 40 as $5,484,800 and noted at six per cent.


James Alexander Robb: Now if the minister will
turn to page 51 he will notice the capitalization given somewhat differently, and at five per cent.


Arthur Meighen: The statement put on Hansard to-day gives the figures exactly the same as at page 40, at six per cent.


James Alexander Robb: So the statement given at page 51 is not a correct statement?


Arthur Meighen: That does not necessarily follow, because the statement at page 51 shows the condition as at December 31, 1917. It may be-I have not looked into it -that the stock matured and that the interest rate was raised. That is possible, but it does not follow that there is any error.


James Alexander Robb: The minister cannot get
away with that explanation, because on page 40 the date is exactly the same, December 31, 1917.


Some hon. MEMBERS:: Carried.


James Alexander Robb: No, it is not carried. This involves $60,000 a year and we want to know something about it.


Arthur Meighen: Well, six per cent is
evidently right. On page 40 the capitalization is of December 31, 1917. It may be that the capitalization figures are as of that date and the interest was put in as it stands now. It may possibly be a misprint, it may possiby be an error, but the correct information is given in the statement placed in Hansard to-day which agrees with the statement on page 40 that it is six per cent interest. It is by way of rental.


James Alexander Robb: Your information on page
51 is not right. It may or may not be a misprint, but that it is not right, the minister will admit.


Arthur Meighen: I would not like to say it is not right, although it is possible it is not right.


John Howard Sinclair: There is discrepancy in the mileage that I would like to get an explanation of. At page 26 the mileage of the Grand Trunk in the United States is placed at 1,665, and on page 33 the mileage in operation in the United States is given as 1,367.5 miles. V/hich of these is correct, because it makes a difference of 297 miles?


Arthur Meighen: If the hon. gentleman
will look at the top it says that the total

mileage operated in United States owned or controlled by the Grand Trunk is 1,367.5 miles. In the next column the mileage operated in the United States under the heading of "Leased or Rights'' is given, 298.0, and the total is 1,665.5, exactly as set out on page 26.


Frank S. Cahill: The Minister of the Interior made reference to a statement giving the guarantees in connection with the Central Vermont Railway Company. I find on page 40 of the blue book in the funded debt an item of $9,521,000 in respect of the Central Vermont Railway Company; this is in the statement of December 31, 1917. With regard to the $30,'000,000 bond issue in respect of the Southern New England railway, has any part of that been issued, and at what rate of interest?


Arthur Meighen: That is a four per cent bond issue of the Central Vermont railway. The amount issued is $11,750,000 as set out in the statement which was put on Hansard to-day.


Frank S. Cahill: Is the $9,000,000 that is shown on page 40 part of the $11,000,000 referred to in the statement which was put on record to-day?


Arthur Meighen: That $9,000,000 on page 40 is under the heading, "Funded Debt, Bonds and Debentures, Notes-Loans." Then, in the next column, under the heading "To public, equipment, etc.," there is an item of $441,000, and there is a further item of $808,000 under "Held by public, common," making a total held by the public of $10,770,900. That would be a portion of the amount set out in the statement filed to-day.	-


Frank S. Cahill: When was that bond issue?


Arthur Meighen: I do not know the date, but the authorization was on May 4, 1916. Of course, the issue must have been since that. But we are not concerned about the exact date, because there are no arrears of interest.


Frank S. Cahill: The minister says that $11,000,000 of bonds have been issued. How much mileage has been constructed with the proceeds of this issue of bonds?


Arthur Meighen: Central Vermont, 246.3 miles.


Frank S. Cahill: What part of the Southern New England railway has been constructed with the proceeds of this $11,000,000 worth of bonds?


Arthur Meighen: None of it.


Frank S. Cahill: Although this money has been spent since 1917, there is absolutely no added mileage shown?


Arthur Meighen: Apparently this was
only a charter; none of the bonds were used for the Southern New England road.


Frank S. Cahill: What was the nature of the agreement that gave the Central Vermont the right to issue bonds guaranteed by the Grand Trunk Railway Company for the purpose of constructing the Southern New England railway?


Arthur Meighen: The Central Vermont was authorized to issue $30,000,000 worth of bonds, and out of that, I gather, they had power to build part of the Southern New England railway. As a matter of fact, they did not do it, so it does not matter what the power was. What they have issued of bonds, they have used for their own road. The indebtedness, as has already been given and as embodied in Hansard, is $11,750,000.


Frank S. Cahill: All bonds.


Arthur Meighen: Yes.


Frank S. Cahill: I have said that there is an item of $9,521,000 in the statement as of 31st December, 1917. When was the extra million dollars issued?


Arthur Meighen: I cannot give the date of the issue of the bonds. The interest is paid on them up to date, so what is the difference?


Frank S. Cahill: The minister says that if the interest is paid it does not matter how much we spend?


Arthur Meighen: The interest is paid
up to date. We are not concerned in the date of the bond issue; we are concerned with the obligation in respect of the subsidiary companies-that is, so far as we are concerned at all. What difference does it make when the bonds of a subsidiary company were issued? What we want to know is what is against it now, and that we know.


Frank S. Cahill: Who paid the interest on these bonds?


Arthur Meighen: The Company.


Frank S. Cahill: We were told to-day that the Central Vermont Railway Company were indebted to the Grand Trunk for something like $8,000,000, so that the interest could not have been paid by the Central Vermont; if they paid it, they must have borrowed it from the Grand
Trunk. If this company was in a position to pay interest, why did it not pay the Grand Trunk?


Arthur Meighen: It has paid its interest. The Grand Trunk responsibility is set out just above on page 51 as follows:
The Grand Trunk railway guarantee the interest on the bonds by traffic contract up to an amount equal to thirty per cent of the gross receipts from interchange business.


Frank S. Cahill: Apparently the Central Vermont owe the Grand Trunk over $8,000,000. What control has the Grand Trunk over the Central Vermont now?


Arthur Meighen: The hon, gentleman will see exactly the control they have if he refers to page 35-72 per cent of the stock.


Frank S. Cahill: How are we to collect this $8,000,000 from them?


Arthur Meighen: Draw on them, I suppose.


Frank S. Cahill: And they will borrow more from the Grand Trunk to pay it with, is that the idea?


Arthur Meighen: I do not know where they will borrow it.


Frank S. Cahill: Where may the statement be found of the assets of the Central Vermont?


Arthur Meighen: On page 40, as well as pages 34 and 35.


Frank S. Cahill: What is there on page 40 about the assets of this company?


Arthur Meighen: Well, they own 246-3 miles of railway in the United States.


Frank S. Cahill: Anything else? Are those all the assets they have? Is there no rolling stock?


Arthur Meighen: Yes, there is rolling stock.


Frank S. Cahill: What are the liabilities?


Arthur Meighen: It is only three minutes since I gave that. They amount to $11,750,000 as appearing on the statement laid on the Table to-day and put on Hansard.


Frank S. Cahill: Does that $11,000,000 include the $8,000,000 which is owing to the Grand Trunk by the Central Vermont, or is that a bond issue as the minister said a few minutes ago?


Arthur Meighen: The blue-book on page 40 shows it as of December 31, 1917.


Frank S. Cahill: The minister stated that there were $11,000,000 worth of bonds issued



M86 COMMONS

[Stage Direction]
and outstanding against the Central Vermont. Another minister of the Crown told us to-day that the Central Vermont owed the Grand Trunk Railway system) some $8,000,000. I am asking now what are the liabilities of the Central Vermont. Where is the statement of the Central Vermont showing the assets and liabilities?
Arthur Meighen: The Central Vermont have a deficit, as shown on page 54.


Frank S. Cahill: That is an operating deficit?


Arthur Meighen: Unless i)t appears that we are under an obligation to operate it or that it pays to operate it as a feeder to the .Grand Trunk system, then it may be abandoned. But as I pointed out a while ago to the satisfaction of those who listened, although there may be a deficit on that, that must be made up by a surplus somewhere else before there can be any final surplus in the whole system. The final surplus is shown, and that is what we are interested in. We do not pay the deficit because we get something else.


Frank S. Cahill: Where is that shown?


Arthur Meighen: On the first page of the blue-book after the correspondence.


John Howard Sinclair: I question whether the minister will be able to abandon the road, because the Grand Trunk has guaranteed 30 per cent of the gross receipts from interchange of business. I do not think he can say now that he will not operate it at all when he is bound to run it and to pay to the shareholders 30 per cent of the gross receipts.


Arthur Meighen: I do not think that is right. What the blue-book says is this that (the Grand Trunk guarantees them up to 30 per cent of the gross receipts. That is to say, if the Grand Trunk operates the road, it guarantees up to 30 per cent of the gross receipts from interchange of business. That is apparently an obligation, but it is only to the extent of receipts. Supposing the whole thing is a liability, it must be set off by a corresponding asset which we would gelt for nothing as a result.


John Howard Sinclair: The whole thing is a liability so far as the Grand Trunk is concerned.


Arthur Meighen: That may be, but the aggregate shows a surplus to the stockholders of the Grand Trunk, and consequently there must be other assets bringing in revenue which have been set off against this liability.


Frank S. Cahill: Is there a surplus of earnings?


Arthur Meighen: That is what is shown by the Drayton-Acworth report which the hon. member admires so much.


Frank S. Cahill: What does this book
show?


Arthur Meighen: The same thing.


Frank S. Cahill: Where are the surplus
assets sufficient ito pay the $2,433,000 that the hon. member is so anxious to vote to some parties unknown?


Arthur Meighen: Page 56.


Frank S. Cahill: On page 56 it~appears that no dividends were paid in 1918, nor in 1917 upon this stock. Why does the minister deliberately attempt to mislead the members of this House? I am asking the minister where he finds his revenue to pay interest on this appropriation which he is in such haste to get through this House?


Arthur Meighen: We are in no hurry.


Frank S. Cahill: Why does the. minister not furnish the information if he is in no hurry and let us debate it intelligently?


Some hon. MEMBERS:: Oh, oh.


Frank S. Cahill: I know that will be too much to expect from hon. members opposite. I believe that not one in ten of them have read this statement and that not one in twenty-five would understand it if they read it. Not only are members sitting behind the minister unable to give the information, but the members of the Government themselves are unable to give it.


Arthur Meighen: There are some people that some information will never sink into.


Frank S. Cahill: On page 45 is shown a surplus of $8,760. Where does the minister get the surplus to set off against the deficit?


Arthur Meighen: I think the hon. gentleman is getting sleepy.


Frank S. Cahill: That is no answer at all. The minister says that he is willing to give us the information. If he wants to sit here all night, provided that he will furnish us with information, I am perfectly willing to slay with him. The Minister of Railways furnished some information today. He got the liabilities up to $527,000,000 and finally up to $539,000,000, and surely we are entitled to whatever information the Government may have. There is no reason in the world why they should hide it unless they have some reason which they

have not given to the committee. They are proposing to guarantee $60,000,000 worth of bonds, and on the operation as it stands to-day and for the last two years, a deficit has been shown. There is no possible chance of earning sufficient to pay the interest on these bonds. The question was asked why the Government were in such haste to guarantee them, and no satisfactory answer was given. When the minister says that the information is all in this blue-book, and then turns to page 56 as he did and finds that there was no interest paid on those bonds for the last two years, and when he turns to the [DOT] Drayton-Acworth report which says that no interest should have been paid for the last ten years, I do not see how he can possibly hope to justify his case with any person but his very docile and gentle following who take absolutely no interest in this or other matters before the House since they have found that they are afraid to go home in the dark. There is no use their going home any more. The country will expect this information and the Opposition will expect it, and if my hon. friend is honest with the House he will give it to us. I do not see why he should not at least make an attempt at it.


Mr. MANION:: I have noticed many times that the hon. member (Mr. Cahill) is very much worried about hon. members on this side of the House not taking part in this discussion. I should just like to enlighten him why. The reason they do not, if my conclusion is correct, is that most of the members on this side of the House do not like to get up and take part in this discussion unless they have something to say. My hon. friend does not seem to have any such scruples.


William Lyon Mackenzie King: I should like to draw the minister's attention to what seems a little incomplete in the answer he gave a moment ago. Adverting to the right reserved to the shareholders of the Grand Trunk to ratify the agreement entered into, I asked the minister if a similar right was not to be reserved to Parliament. He replied that that right was to a certain extent being reserved in view of the fact that the terms and provisions of the agreement would be made known once this Bill had passed Parliament.


Arthur Meighen: I did not say that at all.


William Lyon Mackenzie King: What did my hon. friend say?


Arthur Meighen: I said the terms and provisions were set out here, and only details that are ordinarily left to the Governor in Council are authorized by the Bill. Not only are the terms of the Bill set out here but even the details can be provided by Parliament to any extent hon. gentlemen desire. I did not say that publication of the Bill was of any assistance to Parliament.


William Lyon Mackenzie King: What the minister has just said does not affect the point one way or the other. What I wish to point out is that all the knowledge this Parliament will have after this Bill is passed will be common knowledge. It will be known to the shareholders of the Grand Trunk just exactly to the same extent as it will be known to the* representatives of the people here, but notwithstanding that fact the shareholders of the Grand Trunk Railway Company aro to have the additional privilege of ratifying the agreement that has been made after this Act has been passed. The Government is not permitting the representatives of the people in Parliament to have a similar privilege. I wish to ask the minister how he can justify giving a right to the shareholders of the Grand Trunk Railway Company which he is withholding from the people of this country through their representatives in this Parliament.


Arthur Meighen: Because he is not
doing it.


William Lyon Mackenzie King: He is doing it.


Arthur Meighen: Parliament has. the first opportunity. It deals with the matter first by this Bill fully, and in the way Parliament invariably deals with such matters. Everything is here that Parliament requires. If there is anything Parliament desires to put in the Bill it can put it in.


William Lyon Mackenzie King: Is it not true that if this Bill passes Parliament and becomes an Act, the Government then draws an agreement between the Grand Trunk and itself?


Arthur Meighen: In accordance with the terms of the Bill.


William Lyon Mackenzie King: That is correct. The terms of the Bill, once it becomes an Act, will be known equally well to the Grand Trunk shareholders as to the people's representatives in this Parliament., That is true?


Arthur Meighen: Yes.


William Lyon Mackenzie King: Then is it not true that after this has been done and before the agreement becomes binding, it has
I
1438	COMMONS
to 'be ratified by the shareholders of the Grand Trunk Railway Company?


Arthur Meighen: The agreement is the same as the Bill.


William Lyon Mackenzie King: Will the minister answer my question? Is it not true?


Arthur Meighen: Yes.


William Lyon Mackenzie King: Then is it not true also that the ministry is withholding from this Parliament a similar right of ratification?


Arthur Meighen: No.


William Lyon Mackenzie King: But we haven't it now.


Arthur Meighen: If there are any details the hon. gentleman wants to be embodied in the Bill, let him move accordingly.


William Lyon Mackenzie King: I must ask
the minister, if possible, to give me a direct answer to a direct question. The agreement which is to be drawn is something which is unknown to this Parliament and will be unknown when this Parliament prorogues. In view of that fact the shareholders of the Grand Trunk Railway 'Company are going to be preserved in their right of ratifying the agreement before they become bound by it.


Arthur Meighen: The agreement, I repeat, is embodied in the Bill.


William Lyon Mackenzie King: That is true.


Arthur Meighen: Then what more does the hon. gentleman want? If it is embodied in the Bill, is he not considering the agreement when he is considering the Bill?


William Lyon Mackenzie King: The essence
of the agreement may be embodied in the Bill, but we have had enough experience with some measures the Government has had to do with to know that the terms that may come out of an agreement which the Government may draft will not perhaps adhere as closely to some of the provisions of the 'Bill as the representatives of the people in Parliament might wish.


Arthur Meighen: Will the hon. gentleman just give me one instance, and the term of the agreement that was not consistent with the Bill?


William Lyon Mackenzie King: I shall 'be very glad to give the hon. gentleman numerous instances later on.


Arthur Meighen: Now is the best time.


William Lyon Mackenzie King: Now is the
time I want to get an answer to the question I am asking.


Arthur Meighen: The hon. gentleman
made an allegation that we had departed from the authority of an Act and embodied something in an agreement that was not in accordance with the Act. Now is the hon. gentleman's time to make good his allegation.


William Lyon Mackenzie King: Not on this
Bill.


Arthur Meighen: Just give us an example in connection with any Bill.


William Lyon Mackenzie King: When the hon. gentleman has given me a satisfactory answer to my question. '


Arthur Meighen: I will guarantee the
hon. gentleman will never be satisfied with my answer.


William Lyon Mackenzie King: That is'quite correct.


Arthur Meighen: He cannot make good his allegation.


William Lyon Mackenzie King: I do not think the country will be satisfied with the minister's answer. At this time, of all times, the ministry has reason to have some little regard for public opinion. A good deal has been said in the House to-day about the battle of the rights of the people. The President of the Privy Council, just before he went out, spoke of the Government looking after the interests of the people in connection with this measure. The people have a chance to express their views on certain questions on different occasions; they have had a chance to-day. Five by-elections have been held and four of them have gone against the ministry.


Arthur Meighen: How many went against the hon. gentleman?


William Lyon Mackenzie King: - I have said four have gone against the ministry, which I think ought to be a sufficient index of public feeling.


Arthur Meighen: How many went against the hon. gentleman?


William Lyon Mackenzie King: I am not aware that any have. What I wish further to point out is this: That when public opinion is asserting itself against a ministry, as it is against this Government throughout the whole country, it is perfectly evident that the public are aroused against the executive usurping the power of Parliament at every turn. It is time the ministry reconsider their practice of ignoring Parliament altogether. I think the minister would be well advised to let this clause

stand for a time and confer with his colleagues, and see if it is not possible to give the House the assurance that at least the same privileges will be reserved for the people of this country as are being reserved by the Government's legislation to the shareholders of the Grand Trunk.


Arthur Meighen: The same privilege are reserved, as the hon. gentleman well knows, and has been told a dozen times. The agreement is embodied here in the Bill, as he has admitted himself. Being embodied here, we are now considering it.


William Lyon Mackenzie King: It is not embodied here.


Arthur Meighen: The hon. gentleman
said so himself.


William Lyon Mackenzie King: If the minister understood that he misunderstood me. I had no intention of indicating in any shape or form that the agreement was embodied in the Bill. My remarks to him were distinctly addressed with a view to having the terms embodied in the Bill, because otherwise I had no feeling of confidence in the possibility of their being embodied in the agreement.


Arthur Meighen: If they are not embodied here, we cannot make the agreement, because it is only to the extent they are embodied here that we can make it. If we depart in any way from anything set out here, the agreement is invalid. The hon. gentleman did say the agreement was embodied here, but if he wishes to depart from that, all right. He went so far as to allege we had exceeded the authority, granted us by Parliament and had made an agreement not authorized by Parliament. I challenged him to make good his allegation, and I repeat the challenge now. We cannot depart from this Bill. If we do depart from it the agreement is invalid. This is the way universally adopted in almost every piece of legislation. The power of making an agreement in accordance with the terms embodied in a Bill is exercised universally by governments.
It was exercised by the Government he was in every three years he was in it. There is nothing at all inconsistent in that exercise with the principle of the rights of the people, and such an assertion is merely playing to the gallery-if you can dignify it by that description. Let the hon. gentleman make good his allegation that this Government at any time departed from the authority of Parliament in regard to any provision in any Bill.,


William Lyon Mackenzie King: I desire the minister to answer my questions.


Some hon. MEMBERS:: Oh, oh.


William Lyon Mackenzie King: It is a question that he will have-to answer out of the House if not in it, and it is in the interest of every hon. member as well as of the people that it should be answered satisfactorily. I would ask the minister again: On what ground does he withhold from the people, exercising their rights through representatives in Parliament, the right to ratify this agreement when he gives that same right to the shareholders of the Grand Trunk Railway Company?


Arthur Meighen: He does not do so. Parliament is exercising the same right now as the shareholders will exercise later on. If the hon. gentleman feels that there is any evidence on the part of the country that it is opposed to the Bill I would like to intimate to him that virtually all the candidates, except himself, elected in the byelections would favour this measure. I must congratulate the hon. gentleman for his optimism if he sees any great encouragement for himself in any recent contest.


William Stevens Fielding: The member for Prince has claimed that the procedure of the Government will give the Grand Trunk shareholders a privilege which is not to be given Parliament. Does the Minister of the Interior deny that?


Arthur Meighen: Yes, I deny that.


William Stevens Fielding: Then let us follow it point by point. When this Bill passes it will be as well known to the shareholders of the Grand Trunk as it is to us and the public. We stand on even terms to that extent; the Grand Trunk shareholders have certain knowledge, and we have the same. Then an agreement will be drawn up and submitted to the Grand Trunk shareholders, but not to the Parliament of Canada.


Arthur Meighen: That will be true if there is anything in the agreement which would be of assistance to Parliament now and which is not in the Bill. There cannot be, and if the hon. gentleman thinks that something should be in the agreement he is at liberty to bring it before Parliament.


William Stevens Fielding: The contention of my hon. friend from Prince is that the shareholders of the Grand Trunk will have a privilege in this matter which Parliament will not have, and he is absolutely correct in that contention. The Grand Trunk

shareholders will not be content with this Bill; they will demand the details of the agreement. The minister says that the agreement is not of importance to us but it is all-important to them. If it is true that the agreement must be in the terms of the Bill, that is true for the Grand Trunk as well as for us. But that statement will not satisfy the Grand Trunk shareholders. My hon. friend knows it will not, and therefore he will produce a written agreement in all its details. The Grand Trunk shareholders will insist on seeing the details of the agree-meift and will not be content with any mere statement of the principles of the contract. My hon. friend will give them a detailed agreement and that privilege will be denied Parliament.


Arthur Meighen: The hon. member must know that time and again shareholders authorize their directors to proceed exactly in this way. This is the common practice with companies and Parliaments. If it is possible to prepare the details in which, as every one knows, Parliament is not interested but which, if it is interested, it can embody in the Bill, it will be all right. But certainly no advantage is being taken of Parliament. The procedure is regular, and nothing is being withheld. If the hon. gentleman has something he would like to see included in the Bill by way of .minutiaj it can come before Parliament. We have everything that we need in the Bill.


William Stevens Fielding: .My hon. friend cannot get away from the fact that we shall not have the agreement before us. whereas the Grand Trunk shareholders will. It. does not meet the case of my hon. friend to say that what we have before us involves everything of importance. That will not be enough for the Grand Trunk shareholders, and my hon. friend himself does not ask them to be content with that. This agreement has to be made subject to the approval of the Grand Trunk.


Arthur Meighen: They may approve just as we are approving, by authorization to their directors along these lines.


William Stevens Fielding: That will not he the method of procedure. There will be a meeting of the Grand Trunk shareholders and they Will have the agreement before them. I have no fear that they will reject the agreement because it is too good a thing.


Frank S. Cahill: Will the agreement hold the Grand Trunk Company liable for their guarantees on the Grand Trunk Pacific?


Arthur Meighen: If they are not liable how will the agreement make them liable?


Frank S. Cahill: That is not the question.


Arthur Meighen: Really, the hon. gentleman does not understand the point; that is absolutely proved. Talk about hairsplitting; it is skull-splitting that is necessary 'in this case. The Grand Trunk is under certain obligations. This agreement does not relieve them of those obligations.
I will not add another word for fear of \ confusing the subject in the hon. gentleman's mind.


Frank S. Cahill: Or in your own mind. Now, in regard to the $15,000,000, the members on this side asked the Minister of Railways if the Government intended to hold the Grand Trunk liable for that amount and he said they would. What is the answer to that question? Will the agreement provide that the $15,000,000 shall be taken into account by the arbitrators?


Arthur Meighen: The hon. gentleman has given the answer himself and he wants to know what the answer is.' He said he was answered that they would be held liable.


Frank S. Cahill: My hon. friend can make himself appear sillier than any one else.


Some hon. MEMBERS:: Oh, oh.


An hon. MEMBER :: Burlesque.


Frank S. Cahill: Will you provide that the arbitrators shall hold the Grand Trunk Company for the guarantee on the Grand Trunk Pacific, and liable for the $15,000,000 loaned from the Dominion of Canada. That is a plain question, and the minister can surely understand it.


John Dowsley Reid: The $15,000,000 is a
liability against the Grand Trunk, and the arbitrators, when considering the award, must take it, as well as any other liability, into consideration.
Mr. .T. H. SINCLAIR: We are proposing to submit the value of the common stock and preference stock to arbitration, and nothing more. The question was raised a few days ago as to why we should not make it more definite and submit other questions such as guarantees and debts owing in respect to the Grand Trunk Pacific. The minister said at that time that it would all be provided for in the agreement. Now, we are told that the agreement is exactly the same as the Bill. But if the agreement is to be definite and to provide for these things should not Parliament see it so as to judge whether or not everything is included in it?

Mr.- MEIGHEN:	By Ihe provisions of
the agreement, as embodied in the Bill, all these things must be taken into consideration. How can you value stock until you take into account the liabilities of the company that issued it? The provisions embodied in the Bill we are now considering provide that all these things must be taken into consideration.


William Stevens Fielding: I do not wish to delay the committee, but I must return for a moment to the contention of the Leader of the Opposition, that the Grand Trunk shareholders will be given a privilege and right which will not be given to the people of Canada through their representatives. The minister said that we are now exercising that right, because all the things essential to the agreement are set forth in this Bill. My answer was that the Grand Trunk people would not be satisfied with a general statement but would demand the details of the agreement. My hon. friend brings in the argument- he had to do it-that the Grand Trunk people may do just the same as we are doing now; they may not have a meeting at all. But if my hon. friend will turn to section 7 he will read as follows:
As soon as said agreement has been ratified by a majority of the holders of the stocks enumerated in the preamble to this Act, present in person or by proxy and voting at a special general meeting of such stockholders duly called for the purpose of considering such agreement.
You propose that they are to have all the details of the agreement and that the representatives of the people of Canada are not to have them.


Arthur Meighen: But they can authorize them to enter into an agreement without specifying the terms.


William Stevens Fielding: Not under this Bill.


Arthur Meighen: The Bill provides that the agreement shall be entered into before it is submitted to them. But even then they can do it by authorizing the directors to act.


William Stevens Fielding: But they have to meet for this purpose.


Arthur Meighen: I see.


William Stevens Fielding: But our Parliament will not -meet for this purpose.


Arthur Meighen: The agreement will be known to the shareholders just a,s soon as they have dealt with the matter. But the hon. gentleman knows that there is nothing
in the whole thing because we have every opportunity to do anything and everything that they can do themselves. There is nothing in the world that Parliament need not consider to the minutest detail. If the hon. gentleman desires to keep on discussing until the agreement can be prepared, we are doing the -best we can.


William Lyon Mackenzie King: We will wait.


Arthur Meighen: The agreement is 'being worked out. I do not know how long it is going to take.


William Lyon Mackenzie King: I think hon. gentlemen on this side of the House would all prefer to wait. We would like the Government to bring the agreement down before this House prorogues.
Mr. ROBiB: In view of the statement made by the minister who is the legal sponsor for this Bill in the House, would it not be better for the' Minister of Railways or his representatives to sit down with the officials of the Grand Trunk and put a valuation om this property? They could do it much better than three arbitrators whom we do not know. Then, let them come before Parliament with the whole proposition and let the people know what it will cost. Let us put through whatever temperance legislation or prohibition measures are required, and which the minister has brought before Parliament, and then adjourn-not prorogue-for a month so that the Government may come before the House with a clear cut pro-position.


Arthur Meighen: There will be no adjournment for a month. We are getting along as fast as we can with the agreement. We have offered hon. gentlemen all the time they wanted. If they want to keep on discussing this until the agreement is ready, we are just as ready as they are. It is simply a burlesque, simply a waste of the time and money of this country. Hon. gentlemen know it and the people know it. They know the agreement is embodied in this Bill. I think they all know that and if they do not know it let them put it in. All this talk is mere humbug.


Frank S. Cahill: The minister first stated that he would give us all the time necessary for debate but some of his followers seem to be getting excited and nervous. The Minister of Railways stated that the Grand Trunk's liabilities to the Grand Trunk Pacific would he taken into account. I would like to ask him what is meant by the statement on page 8, clause 1 :



The Government to take over the Grand Trunk Pacific Railway and branch lines and the Grand Trunk Railway Company; to acquire all assets, and to assume all obligations of both companies.


Arthur Meighen: It means take them over subject to their obligations.


Frank S. Cahill: Taking over one subject to the obligation of the other? You are taking them over subject to the Grand Trunk's obligations?


John Dowsley Reid: The Grand Trunk and the Grand Trunk Pacific obligations. I gave the hon. gentleman a statement this afternoon of the obligations of the Grand Trunk to the Grand Trunk Pacific.


Frank S. Cahill: When the Minister of the Interior first introduced this Bill before the House he stated that the Government were going to hold the Grand Trunk to the Grand Trunk Pacific guarantee. I asked him how much he considered that guarantee to involve, if he would consider $30,000,000 and settle the obligations of the Grand Trunk in that undertaking. He said " no," that	he would not	accept
$30,000,000 and settle it. In this statement he claims that it will relieve the Grand Trunk of their obligation to the Grand Trunk Pacific. I would like to know if we are to take the minister's statement as accurate when he says we are going to hold them to the Grand Trunk Pacific obligation, or his statement accurate when he says we are not going to hold them to their Grand Trunk Pacific obligation?


John Dowsley Reid: I have answered that question a dozen times and I have said that the Grand Trunk obligations should be taken into consideration by the arbitrators. There has never been any member of the Government who has said they would not be taken into consideration and it is hardly fair-


Frank S. Cahill: Turn to page 8. .


John Dowsley Reid: I want to settle that question.


Frank S. Cahill: Settle it by reading your official report.


John Dowsley Reid: (reading)
The Government to take over the Grand Trunk Pacific railway and branch lines and the Grand Trunk Railway Company; to acquire all assets, and to ^assume all obligations of both companies.
That is all right. That is what I have stated. The arbitrators will value the

stock. All that, will be taken into consideration. The Government has assumed all these liabilities and when they assume them they are to value the stock of the Grand Trunk. The Drayton-Acworth report explained that. After considering all these liabilities and Grand Trunk Pacific guarantees, the authors of the Drayton-Acworth report recommend giving a certain amount up to $3,600,000, the Government to assume the liabilities. It is stated in the letter written to Mr. Smithers that the arbitrators must consider the Grand Trunk Pacific liability as a liability against the Grand Trunk when they are valuing the assets.


Frank S. Cahill: Will it be embodied in the agreement that they must consider these liabilities?


John Dowsley Reid: Of course the agreement will embody the fact that they must consider all the liabilities not only of the Grand Trunk Pacific, which is a subsidiary of the Grand Trunk, but all the liabilities of any other subsidiary company. The Grand Trunk Pacific is a subsidiary company of the Grand Trunk because the Grand Trunk owns the stock of the Grand Trunk Pacific, the Central Vermont and of the long list of other companies that I have named. We must consider the liabilities and assets of every one of these subsidiary companies.


William Lyon Mackenzie King: I shall answer the minister's question, although he did not give to my question the answer, in point of directness, which he should have done. He asked me whether, in not submitting this agreement to Parliament, we had reason to feel lack of confidence in the Government's action. I wish to say that Parliament at the time it passed the Act providing for the acquisition by His Majesty of the capital stock of the Canadian Northern, which was assented to on the 20th September, 1917, left the matter of the agreement in the hands of the Government. With what result? With the result that Parliament, having no opportunity to pass upon the terms provided for in the agreement, had no say as to the manner in which the arbitrators should arrive at the valuation, and as a consequence the country lost some $10,000,000 which might have been saved if Parliament had had the opportunity of passing upon that agreement.


Arthur Meighen: The hon. gentleman has alleged, without attempting to make good the allegation, that Parliament authorized the Government to do something which they departed from in the performance of. The

authority given the Government by the Canadian Northern Railway Act was abided by to the letter in every detail. The hon. gentleman goes over the old harangue that the Government did this, that and the other thing in order, I suppose, to draw a herring across the trail. Let him show wherein, in the body of the agreement with the Canadian Northern shareholders, there is a single clause or a single sentence that in any way departed from the authority granted by Parliament. Then, and not until then, he may make his allegation.


William Lyon Mackenzie King: I still maintain the hon. gentleman knows very well that unless Parliament has an opportunity of passing upon that agreement


Arthur Meighen: That is not the point at all.


William Lyon Mackenzie King: It is the point, and the only point I am raising at the moment: That by this Government denying Parliament this right to pass upon this agreement we have no guarantee whatever that something of the same nature may not occur again.


Frank S. Cahill: I find on page 51 a number of issues of stock and bonds and referring to the Grand Trunk Western Railway, the statement is made, " which leaves $922,800 worth in the hands of the public." Now, the amount in the hands of the public, according to a statement at page 40 is $11,972,000.
Sbme hon. MEMBERS: Carried.


Frank S. Cahill: Are we to drop this
$11,000,000 or will hon. members know what has become of it and where it is? How does this discrepancy occur? What is the explanation of it?


John Dowsley Reid: One of the items may have reference to a later date. The statement on page 40 is a detailed statement furnished by the railway company and sworn to. On page 40 the'Grand Trunk Railway Company gives in its
1 a.m. annual statement a detailed list with respect to the Grand Trunk parent company and all its subsidiary companies. To-day, I have placed on Hansard another statement which is right up to date:
Grand Trunk Western, first mortgage bonds four per cent, par value outstanding, $14,999,720. Annual interest, $599,988. Par value owned by the Grand Trunk Railway, $4,035,304. Annual interest on par value owned by Grand Trunk Railway, $161,412.
91}	'
General consolidated mortgage, four per cent,
' $11,541,000. Annual interest $461,640. Par value owned by Grand Trunk Railway, $11,541,000. Annual interest, $461,465.
I submit to hon. gentlemen that we have endeavoured to give all the information possible, and have succeeded in that effort very welll. If they will let this clause pass and allow us to go home we will try to furnish any further information which may be desired.


William Lyon Mackenzie King: With reference to what the .minister has just said about passing this clause, the Minister of the Interior intimated that there was a possibility of the agreement being brought down to Parliament before we are through with this measure. If we can get >an .assurance from the Government at the present time-that the agreement will come down in the-course of this debate, I see no reason why this clause should, not pass; but if we have no assurance as to the possibility of the' agreement being brought down, I think we ought to seek all the details we can possibly get.


Arthur Meighen: The hon. gentleman can get no assurance from me as to when it will be possible to get that agreement down. We are not delaying it; our instructions are to get on with it. We desire the legislation to pass, otherwise the agreement is not of very much advantage. We will get along with the agreement just as fast as possible. If the agreement can be got ready before we are through with this debate, well and good; then it can be made known. We will certainly not withhold it, but we are certainly not going to delay this debate. We are going to get on with it, giving hon. gentlemen all the time that is necessary for discussion. We promised that from the beginning, and we promised to give all the information desired. Beyond that, no commitment can be made.


William Lyon Mackenzie King: Will it be a day or two days, a week or two weeks, a month or two months, before the agreement is brought down?


Arthur Meighen: I cannot give any idea.


William Lyon Mackenzie King: The minister cannot give us that information?


Frank S. Cahill: The minister said the instructions to the Government were to get on with the agreement. Of whom was the minister speaking when he said that?


Arthur Meighen: I said the Government's instructions were to get on with the agreement as rapidly as possible.


William Lyon Mackenzie King: Will the minister consider going on with other legislation in the meantime pending the submission of the agreement?


Arthur Meighen: Not at all.


William Lyon Mackenzie King: Then the minister has no intention whatever to bring the agreement down?


Arthur Meighen: Not until it is ready.


William Lyon Mackenzie King: Has the minister any expectation when the agreement will be ready? Will it be in the course of another fortnight?


Arthur Meighen: I cannot give any estimate at all.


Joseph Bruno Aimé Miville Déchêne: Will the minister tell us what this Grand Trunk junction road is? Where is this road situated?


John Dowsley Reid: It is a subsidiary company of the Grand Trunk Railway system; whether it is in Quebec or Ontario is immaterial. The question is simply asked for the purpose of delay.	.
Some lion. MEMBERS: Hear, hear.


Some hon. MEMBERS:: No.
-Mr. J. D. REID: The hon. member knows that it makes no difference where this railway is. The system comprises so many miles of railway, and this line is part of the system. I am prepared to give all the information that is required and that is necessary, but if the hon. gentlemen wish to stay here and ask absurd questions why, I suppose we must stay.


Joseph Bruno Aimé Miville Déchêne: I do not think I have
bothered the minister very much with questions. Here is a road which he states is a subsidiary of the Grand Trunk; yet it does not appear ' in the list of subsidiary companies given in the blue-book. I think it is fair to ask who owns that road, where it is situated, and what is its capitalization?


Arthur Meighen: The information may
be found in the French edition at page 34, No. 6-sixty miles of railway, between West Detroit and Fort Gratiot, Michigan. I am sure that it is worth the time of the country when we can save the hon. gentleman the trouble of looking the information up himself.


William Lyon Mackenzie King: Mr. Chairman, I suggest to the hon. gentleman that it is now after one o'clock and that the committee has been sitting continuously all day.


John Dowsley Reid: There are twelve clauses in the Bill. There is no reason whatever why we should not at least make progress on one clause. But if the leader of the
[Mr. Meiehen.l
Opposition now says that he does not intend to let this clause go through, I will move that the committee rise.


William Lyon Mackenzie King: I did not say that.


John Dowsley Reid: I leave it entirely to
the leader of the Opposition; if he wishes, not to let the clause go through, I will move that the committee rise.


William Lyon Mackenzie King: We have no
such desire on this side; we are quite sincere when we say that all we are after is information.	^


John Dowsley Reid: I shall not ask that this Bill go through without giving my hon. friend all the information that I can. I say, too, that the hour is late and I do not want to hold the Committee; nor do I wish to force through any clause of the Bill. I repeat that we should allow at least one of the twelve clauses of the Bill to pass, but if the leader of the Opposition will not let this clause go through or does not wish it to pass we will report progress. '


William Lyon Mackenzie King: Far from any desire not to make progress, my whole purpose in rising was to get from the minister the assurance that if this clause is permitted to pass we shall not be prejudiced in the matter of getting such information as we may desire to obtain when subsequent clauses are under consideration.


John Dowsley Reid: The leader of the Opposition and ahy hon. members on that side will get all the information they want and get it as fast as I can give it to them-that is, if it is at- all possible for me to give it.


William Lyon Mackenzie King: In view of that assurance, I have no hesitation in saying that we on this side are quite prepared to let this clause pass.
Section 2 agreed to.
Progress reported.
On motion of Hon. Mr. Doherty the House adjourned at 1.15 a.m. (Tuesday).
Tuesday, October 28, 1919.