1919-10-29

IMMIGRATION ACT AMENDMENT.


[Stage Direction]
Hon. J. A. CALDER (Minister of Immigration and Colonization) moved for leave to introduce Bill No. 38, to amend the Immigration Act.	'
Some hon. MEMBERS:: Explain.


Mr. CALDER:: The Bill is a very short one. It contains only one section,. providing that transportation companies shall furnish free to immigration officers such transportation as is necessary to enable them to carry on their duties. It will be remembered that last session a provision was inserted in the Railway 'Act doing away with passes. Now we have along the border from the Atlantic to the Pacific a large number of immigration officers whose duties require them to travel upon trains practically every day, and unless we make the necessary provision the Government will have to pay fox their transportation.

A sijnilar provision td the one now proposed is contained in the Customs Act with respect to customs officials.


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

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

Mr. DUFF:: 1.	What are the names and addresses of the members of the Repatriation Committee?
2.	Is the said committee still in existence, and if so. what work is it doing?
3.	Has any money been paid to any member of the said committee? If so. to whom, how much, and for what work or service?
4.	How much has the said committee cost the country to date?


James Alexander Calder: '
1.	The President of the Privy Council, and the Ministers of the Interior, Labour, Soldiers' Civil Re-Establishment, and Immigration and Colonization Departments.
2.	Yes. Maintains an Advisory Committee of the Great War Veterans' Association and a field secretary for each province. This Advisory Committee assists in the adjustment of the difficulties of individual soldiers, in co-operation with the various departments of the Government. '
3 No.
4. $194,309.08.


THE WAR BONUS.
Mr. PARENT:: 1.	Have the employees of the Dominion
Arsenal, Quebec city, been paid the war bonus? If not, why?	*
2.	Have the employees of the Marine Department, Quebec city, received the war bonus? If not. why?


Hon. Mr. GUTHRIE:: 1.	The employees of the Dominion Arsenal who are entitled to the Cost of Living bonus for 1919-20 have been paid.
2.	Yes, the staff at Agency have been paid their bonus monthly. 'The mechanics and labourers have been paid in part and balance will be paid in due course.


THRIFT STAMP SALES.
Mr. DUFF:: 1.	What amount has been derived from the sale of Thrift Stamps since the system was inaugurated ?
2.	What amounts have been paid for printing, advertising, salaries, and other expenses, respectively?
3.	What is the total surplus derived from the sale of said Thrift Stamps?


Hon. Mr. MACLEAN:: The figures taken from the books of the Department of Finance up to October 23, 1919, are:
1.	Amount received from the sale of War Saving and Thrift Stamps by the National War Savings Committee, $2,792,558.74; less redemption of War Savings and Thrift Stamps, $287,717.14; balance outstanding. October 23, 1919, $2,504,841.60.
2.	Amount expended by the National War Savings 'Committee, $459,422.71.
3.	To October 23, 1919, $2,045,418.89.


TREASURY RESTRICTIONS IN ENGLAND.
Mr. DEMERS:: 1.	Is it true that the treasury restrictions in England are such that it is impossible to invest British capital in Canada, but that such investments can be made in United States?
2.	If so, did the Canadian Government make representations to the Imperial Government, and with what results?


Alexander Kenneth Maclean: No information
that such treasury restrictions exist.


IMPORTATION RESTRICTIONS AGAINST GERMANY AND AUSTRIA.
Mr. PARENT:: 1.	Are there any restrictions actually in force to prevent the importation into Canada of goods and merchandises coming from Germany and from Austria? If so, what do they consist of?
2.	Does the Government propose to abolish them? If so. at what date?
3.	Are the trade relations between Canada and Germany, and Canada and Austria, actually the same as they were before the war? If not, why not?


Sir GEORGE FOSTER:: 1.	Import licenses are required for goods from any enemy country where such goods were restricted during the war, hut no licenses have been refused in respect of Germany and Austria.
2.	Upon and after the ratification of the Peace Treaties, there will be no restrictions upon import from or- export to these countries with whom these Treaties have been ratified, other than those imposed by the laws of Canada.
3.	Import trade is as stated in answer to No. 1. Exports to Germany are as unrestricted as to any other foreign country. Exports to Austria are under license but no export licenses have been refused. This import and export control arose out of enemy trading regulations made during the war, and is being removed as rapidly as is found practicable. The payment of pre-war debts will be subject to the stipulations of the Peace Treaty.


DEPARTMENT OF PUBLIC INFORMATION.
Mr. DUFF:: 1.	How much has the Department of Public Information cost the country to date?
2.	How many persons were employed in the
said department?	.
3.	Is the said department still in operation? If so, what public work does it do?


Hon. Mr. GUTHRIE:: 1.	From the inception of the department, December, 1917, to September 30, 1919, approximately $168,000, including the cost of all printing.
2.	The highest number employed at any time, 25; number now employed, 12.
3.	Yes. The facilities employed by the department during the war for disseminating information have since been largely devoted to the problems of reconstruction and repatriation. Booklets and pamphlets bearing on these questions have been prepared and distributed throughout Canada. Attention has been given to the work of placing before the people of Canada the achievements of the Canadian Expeditionary Army. The department has assisted in the distribution of a considerable quantity of this literature and publications dealing with the closing phases of the war are in course of preparation.
To assist in the work of enlarging markets for Canadian products and advertising Canadian resources generally the department is carrying on extensive publicity work in Great Britain in co-operation with Canadian Trade Mission, It is also cooperating with the Dominion Government Bureau of Information recently opened in New York.
The department supervises the production of a weekly news film designed to give Canadian activities a greater prominence in the motion picture houses of the country. It is the duty of the department to see that the objects aimed at in this motion picture enterprise are attained and that the terms of the contract are carried out.
The department is closely associated with the committee which has in hand the pul>
licity work of the Victory Loan Campaign. Its work embraces a number of important activities of a routine character.


MR. H. P. HILL, M.P.P.
[Stage Direction]
Mr. d'ANJOU:
1.	Of how many commissions was Mr. H. P. Hill, an Ottawa barrister, a member from 1914 to 1919?
2.	What salary did he receive from the Government for services rendered as a member of these divers commissions from 1914 to 1919?
[Stage Direction]
3.	What was the nature of such services in each case?
Hon. Mr. GUTHRIE:: Fro-m Labour Department:
1, 2, and 3. Mr. H. P. Hill was not a member of any commission issued through the Department of Labour from 1914 to 1919. He was, however, chairman of eight Boards of Conciliation and Investigation appointed to inquire into various industrial disputes under the Industrial Disputes Investigation Act, 1907. The total amount paid to Mr. Hill for salary and expenses during the sittings of the various boards was $945.11.	,
From the Public Works Department:
1.	Two commissions.	y
2.	$745.
3.	Investigating charges laid against Supt. J. L. Nelson re purchase of coal for dredging plant in British Columbia, and investigating work of piling at Pier No. 16, West St. John.


AIRCRAFT EQUIPMENT - IMPERIAL, MUNITIONS BOARD.
Mr. MACKIE (Edmonton):: 1.	Is it true that shortly following the signing of the Armistice between five and seven million dollars' worth of aircraft, spares and equipment in use by the R.A.F. in Canada was disposed of by the Imperial Munitions Board?
2.	If so, were tenders asked for and wero they published in the press of Canada prior to disposal of the said equipment? If not, why not?
3.	Was the said sale, amounting to between five and seven million dollars' worth of this equipment aforesaid sanctioned by the Canadian Government or by the Imperial Munitions Board? If so, by whom?
4.	What portion of the said equipment so valued was sold to Frithof G. Ericson or business associates of his at and for what amount?
5.	Is it not true that the said equipment valued at between five and seven million dollars was actually sold to the said Frithof G. Ericson for the sum' of approximately $75,000?
6.	If so, on what terms?
7.	Is the Government aware that the said sale of said equipment included: (a) Approximately four hundred new or practically new J.N. 4 Curtiss type aeroplanes valued at approximately $8,000 each; (b) Five and six hundred Curtiss motors valued at several thousand dollars each; (c) Thousands of spare wings valued at several hundred dollars each; (d) Spares in such quantities as would .assemble from certain parts so designated as spares, at least six hundred aeroplanes; (e) Wireless and photographic equipment worth thousands of dollars?
8.	Is not the said Frithof G. Ericson a foreigner of Swedish descent?
9.	Is the Government aware that the said Frithof G. Ericson and his business associates have resold to the Americans large quantities of said aircraft, spares and equipment so purchased at excessive profits?

10.	Why did not the Canadian Government take steps, if in fact they did not, to acquire from the Imperial Munitions Board, the said aircraft, spares and equipment for the benefit of the Canadian people?
11.	Is the Government aware that several Canadians (private individuals), made inquiries from the Imperial Munitions Board as to the sale and disposal of the said aircraft, spares and equipment with a view of purchasing same and that they were informed by the Imperial Munitions Board that they were not for sale?
12.	Did the Canadian Government or any minister of the Crown have any knowledge of the disposal to or the negotiation by the said Frithof G. Ericson for the purchase of the said aircraft, spares and equipment?
13.	Was the said Frithof G. Ericson or any of his business associates in the employ of the Imperial Munitions Board at the time the transaction was completed, or just prior thereto?
14.	At what price were the said aircraft, spares and equipment sold to Canadian airmen by the said Ericson?
15.	How many said machines and equipment have been disposed of by the said Ericson and his associates and for what price?
16.	What percentage of the sales have taken place in Canada and the United States and else-%vhere, respectively?
17.	How much of the said equipment still re, mains in his possession and control in Canada?
18.	Does the Canadian Government intend to inquire as to the whole transaction and what, if any, parties besides the said Frithof G. Ericson figure in the same, in order to relieve itself from the criticism which is levelled at the Government on account of the same?


Hon. Mr. DOHERTY:: I	to 9 inclusive. The Imperial Munitions Board was appointed by the Imperial Government and is not responsible to, nor does it report to, the Government of Canada. The Government therefore has no information as to the details mentioned.
10. The Imperial Munitions Board offered to sell the aircraft, spares and equipment held by them to the Canadian Government, but as the Government- was of the opinion that they could not be usefully employed by the Government in the public service, and as the Government is not engaged, nor desirous of engaging in, the business of purchase and re-sale, the Government intimated to the Imperial Munitions Board that they did not desire to purchase them.
II	and 12. The Imperial Munitions Board intimated that if the Government of Canada did not care to purchase aircraft and supplies oh hand they would sell to others. The Government had no knowledge of the proposed purchaser.
13. to 17 inclusive. The Government has no information.
18. No, the Government has no jurisdiction over, and is in no way responsible for the action of the Imperial Munitions Board,

which is solely responsible to the Imperial Government.


GRAND TRUNK PACIFIC AND SASKATCHEWAN GOVERNMENT.
[Stage Direction]
On the Orders of the Day:
Mr. E. T. W. MYERS (Kindersley):: I wish to draw the Government's attention to a press despatch appearing in this morm-ing's edition of the Ottawa Journal, as follows :
That the Government of the province of Saskatchewan will foreclose and take over the lines of the Grand Trunk Pacific railway unless Saskatchewan is refunded every dollar paid in interest on the bonded indebtedness secured under provincial guarantees, is the statement of Premier Martin. This in answer to press reports quoting Hon. Arthur Meighen and Hon. J. D. Reid as having said the province would still remain liable on its bonds despite the proposed federal legislation to take over the Grand Trunk and Grand Trunk Pacific.
I should like to know if it is possible to have these claims settled owing to the fact that the Grand Trunk Pacific is now in the hands of a receiver. When the Grand Trunk Pacific branch lines are taken over under the legislation now (before the House, is it not quite likely that the claims of the Saskatchewan Government will not be arranged for?


Hon. J. D. REID (Minister of Railways):: The Grand Trunk Pacific branch lines are now in the hands of a receiver. The receiver cannot pay the interest that is now overdue. Both the Dominion Government and the Provincial Governments are responsible for that interest, and it will have to be paid in the meantime. When the road is finally disposed of the claim of the bondholders will be dealt with.


COMMITTEE ON SOLDIERS' CIVIL RE-ESTABLISHMENT.
[Stage Direction]
On the Orders of the Day:
Mr. D. D. McKENZIE:: Mr. Speaker, may I direct the attention -of the Minister of Immigration and Colonization to some reports appearing in the press this morning in respect of the report of the committee of which he is chairman. I desire to ask him if his report has yet been tabled and, if not, when will it be brought down? Further, I would ask him how it is that very important sections of his supposed report have reached the public press before the report itself has been submitted to the House of Commons.


James Alexander Calder: The hon. gentleman has as much information as I have as to the manner in which the report which appeared in the press this morning got there. As a matter of fact, every member of the committee is very much disturbed by the fact that in some way or other some of the recommendations which we have been considering have reached the press. We are having a meeting of the committee this afternoon at half past three or four o'clock when doubtless the matter will be considered, and it is possible that some action may have to be taken in connection with the disclosure. The committee has not yet reached its final finding. We have one more meeting before our report will have been finally approved. That meeting will be held this afternoon, and any representations that are made to the press by any one until our report is finally reached are consequently without any accredited foundation. We have gone over all our work and have tentatively reached our finding. The whole matter is in the hands of the press, and if the printing can be finished we expect to have the report ready for presentation to the House probably this evening or at least to-morrow. It seems to me that the House should take cognizance of the fact that some of the committee's recommend,ations which were . under consideration have been obtained by some means and used by one of the papers in the city as practically intimating what our findings are before they have been absolutely settled by the committee.


Mr. MICHAEL CLARK:: Would the minister consider the advisability of calming public feeling by giving the House the assurance that if the nefarious pressman who did the "scoop" is discovered he will be brought before the bar of the House?
Mr. CALDEtR: I hardly feel called upon at the present time to give any such assurance, but I certainly think that the matter is worthy of consideration by the committee, and probably subsequently by the House itself.


THE NEW PAUL I AMENT BUILDINGS.
[Stage Direction]
On the Orders of the Day:
Daniel Duncan McKenzie: Before the Orders of the Day are called I should like to direct the serious attention-and I emphasize the word "serious"-of the Minister of Public Works to a question which I wish to put in regard to the progress towards the completion of the new Parliament Buildings, and to ask him what he thinks of the pros-

pect of our being housed there at the next session of Parliament. We all hope that the Minister of Public Works will do all that he can in that direction.


Hon. A. L. SIFTON (Minister of Public Works):: In order to obviate future questions of this kind, of which there have been a number, let me say that the building of the new Houses of Parliament was put by this Parliament into the hands of some one other than the Minister of Public Works, who is not responsible for the conduct of that work.


Hon. W. L. MACKENZIE KING (Prince) :: May I ask the minister who is leading the House if he can inform us who can speak in the name of the Government as to when it will be possible for Parliament to meet in the new buildings?


*Sir GEORGE FOSTER (Acting Prime Minister):: 
FRENCH AND BELGIAN IMMIGRANTS.
[Stage Direction]
On the Orders of the Day:
Mr. GEORGE PARENT (Quebec, W. Riding):: I have recently been informed
that immigrants coming to Canada from Belgium and France on taking train at New York en route to this country have been subjected to a questionnaire entirely in English. These people do not understand English, and' in coming to Canada they assume that both languages are official. Will the Minister of Immigration and Colonization make such arrangements as will remedy this state of affairs, so that questionnaires that are put to French and Belgian immigrants shall be printed in French?


James Alexander Calder: I could not quite hear the hon. gentleman's question. If I understood it correctly, it is that certain passengers landing from ' Belgium and France-


Georges Parent: Landing in New York.


James Alexander Calder: -are subjected to certain inquiries in English, which they do not

understand. I shall inquire into the matter and give the hon. gentleman a further answer as to what is. the practice of the department in that respect.


Georges Parent: So that I may toe perfectly understood, I shall repeat my question. Certain immigrants coming from France and Belgium, landing at New York, are subjected on the train, by Canadian immigration officials, to a certain questionnaire filled out entirely in English, although they are coming to a country where tooth English and French are supposed to toe official. I submit that these questionnaires should be printed in both languages, and I ask the minister to take steps to remedy the situation. Is that dear?


James Alexander Calder: I can assure the hon. gentleman that the matter will be taken into consideration with a view to seeing if it is possible to carry out his suggestion.


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.
The CHAIRMAN:: When the Committee rose last night the first four clauses of the Bill had been adopted.
On section 5-'Government may call in or redeem present guaranteed stock and new guaranteed stock:


William Lyon Mackenzie King: At whose instance are the words "thirty years" inserted? Is it at the request of the Grand Trunk railway?


John Dowsley Reid: That was the time agreed upon after the matter had been discussed.


William Lyon Mackenzie King: 
John Dowsley Reid: I cannot see very much in the argument of the hon. the leader of the Opposition (Mr. Mackenzie King). He takes issue with the Government as to really owning the Grand Trunk so long as we do not take over the guaranteed stock and pay for it. There is no doubt that the holders of the guaranteed stock would be very glad if we would pay them the money now and take the stock Over. I do not believe that this, or any future, Government will want to take over this stock within thirty years, or for years afterwards, so long as they can get the money at four per cent. If we were to purchase the stock now we would have to borrow.money at 5J or 6 per cent. But we have shorn this stock of some of its value to the shareholders by reason of having taken away the voting power, placing it merely as a liability and allowing them to hold the stock as security for the guarantee given by the Government. I do not think it would be at all serious if we leave it as it is. We thought it was in our interest to have a limit, but that the period should be an extended one when the money was invested at so low a rate of interest. I cannot see that it will be any advantage to the Government to take over the stock before that time. I do not see that it affects public ownership for the reason that all the other stock, the first, second and third preference and the common stock, is transferred to the Government. We have $180,000,000 worth of scrip handed over in the vault. Out of $240,000,000, we have $180,000,000 and they still hold $60,000,000 worth of scrip without any voting powers as security for the guarantee. I cannot see any advantage in the amendment of the hon. gentleman.


William Lyon Mackenzie King: 
John Dowsley Reid: I always understoood '
that you could only get rid of a liability and stop paying dividends when you paid the money for the stock you were getting. Therefore those who borrow the money in the future to pay for this stock will have to pay interest upon it. The statement was made last evening by the hon. member for Guysborough (Mr. Sinclair) that this stock was al( water. I made inquiries in refer-

ence to this stock. For the greater portion of it the public paid par and the money all went into the road.


Mr. J. H. SINCLAIR:: I admitted that in regard to the guaranteed stock. The common stock was the stock that I referred to as being nearly all water. It is not all water, because the minister has shown that $30,000,000 was paid on the common stock.


John Dowsley Reid: Perhaps it would not be any harm to tell the committee that for the larger portion of the $60,000,000 of guaranteed stock they paid par, for another portion ninety-eight, and for a small portion ninety-five, at the time it was issued. For all the stock that we are talking about now the people in England practically paid par.
Therefore, any person holding any idea different from that is wrong in his view. With reference to the purchasing of the stock at the present time we all know it would be absurd for the Government, or any person, to go on the market now and purchase the stock at whatever figure it is quoted at. There might be a little stock on the market that some person must sell, and it is owing to the high rate of interest that the stock is lower than it would be in normal times. But let me say to the hon. gentleman that prior to the war this stock was selling at from, I think, about 95 to 105. When times improve and money becomes cheaper, as the hon. gentleman suggests, up will go the price of this stock. I believe that when times again become normal this stock will likely go above par and that is the reason we wish to purchase at par. By doing so we will protect ourselves to that extent, and if interest rates drop the price of the stock will of course rise.


William Lyon Mackenzie King: Why fix a
time which prevents you from making the purchase within thirty years? Why not reserve to the Government the right to make the purchase at any time it is obviously apparent they should make it?


John Dowsley Reid: This is practically a
bond and there should be a time limit on it.


William Lyon Mackenzie King: Why?
Mr. J. D. REIDi We do not sell bonds on the understanding that we can take them up at any time. They must be held for a certain time and the period of 30 years is the period that was agreed upon.


Mr. FIELDING:: The question of watered stock is an interesting one in its place; the question of the market value of these stocks is also an interesting one in its place; but

neither of these questions is concerned in the present clause or in the amendment before the House. I entirely agree with the hon. gentleman that it would not be wise for us to buy this stock now at par, and I do not want to enter again into the question of its market value, but here is the situation: The minister is preceding on the assumption that we are asking that the stock shall be taken over by the Government at some particular early time, and that that is the motion of the hon. member from Prince. The Minister of Railways says that money just now is worth more than four per cent. Certainly, we have no inducement to buy the stock at the present moment; but money may be worth less than four per cent within a much shorter period than thirty years. If the war has depreciated the value of securities or enhanced the rate of interest on money, that is not a condition that is going' to be enduring. We have borrowed money before the war at three per cent and three and a quarter per cent; and in the happy days of another government we borrowed money at two and three-quarters per cent. I do not think we are going to have an immediate return to these rates, but it is not unreasonable to suppose that in much less than thirty years the Government of Canada will be able to borrow money at less than four per cent; and if at any time, no matter when it may occur, that happy condition of the market arises, why should we keep on paying four per cent to these people when money is only worth three or three and a half per cent? We are not, by this amendment, asking that the Government shall at any particular time be obliged to take this stock; we simply say the Government shall have the option to take it. If it does not suit them to take it to-day it may suit them to take it next year, or five or ten years hence. Then why in the world should we say, no matter what may be the improved condition of the money market, we are going to continue to pay four per cent on this stock for a period of thirty years? I think the argument of my hon. friend is based on a misconception, and he ought to support this amendment.


Mr. MEIGHEN:: The hon. gentleman
himself does not support it because the amendment itself does not say we shall redeem the stock in five, ten, or twenty years ; if it did it would be more reasonable. The hon. gentleman should remember that this stock is perpetual stock that never matures; it also has voting power. The shareholders are being asked, first, to give up the voting power-a point we have already discussed.
\

In the second place, they are being asked to give up the perpetual character of the stock and to give us the option of redeeming it. The reason thirty years was fixed was that it was felt to be highly improbable that we could look for a lower rate than four per cent money within that time owing to the state of the world to-day and the tremendous obligations that all countries and all money markets are under. Furthermore, a bond must be a bond; it is wholly unreasonable to ask people to put their bonds into such a position that they cease to be bonds at all. If a bond is to be redeemable at any time then, as the hon. member will see at a glance, that takes it out of the category of bonds altogether- it is something wholly unknown in the markets so far as I have any knowledge of it, and so far as the hon. gentleman has. It might be-I do not think I am very much of a judge; I do not think that anybody is just now-it might be possible that it would pay the Government to redeem inside of thirty years. It might he possible that there would come a period within that time that it would be fair to do so if the Government have an opportunity of redeeming, providing a fixed time were allowed so that the bond would still remain a bond, or a security, of the character it is intended it shall be, and not a mere fleeting document that could be taken-up at any time and consequently be unsaleable. It might be wise that the thirty years should be limited-I do not know whether there would be any difficulty in arranging that or not, I should not presume there would be; but I think the hon. gentleman, if he is apprehensive that money will be less than four per cent before thirty years, will agree that the right way to go about it is to reduce that thirty years to a shorter term. I think it would be wholly unreasonable to simply leave the matter in such a state that no one would know that he would have his bond or that he would have his money.


William Stevens Fielding: There is only one sense in which this can be called a bond-in the sense that we are taking a weak security and giving it the character of a government guarantee. In that way, you can call it a bond; however, I do not want to enlarge on that aspect of the question. There is nothing unusual in issuing bonds to run for thirty years with a right to call them in in less than that time. In that case you are engaging in a transaction, you are offering something to the public and inducing them to buy, and you have to make your
terms as attractive as you can. That is not the case here. We are not offering something to the public and trying to coax them to buy it. We are being coaxed to buy at par stock which is only worth 45 or 50. I cannot see any reason in the world why we should not have the absolute option of redeeming this stock at any time. Surely, if we are going to take stock which is worth a very low figure to-day and to take upon ourselves the obligation either to pay four per cent in perpetuity or redeem it, we [DOT] ought to have the right to redeem it at any time that it suits us. If five years hence we wish to pay off the stock, what harm will come to the holders? They had something which was worth 40 or 45 and we are paying them 100. To be told that we must keep on paying that four per cent interest for thirty years is not reasonable.
I think on reflection hon. gentlemen opposite will see the weakness of their own viewpoint. We ought to have the option of redeeming this stock, at any time or of buying it in any time it suits us to do it.
If it does not suit us to do that now it may suit us next year, or five, or ten years hence. Why should we have to pay four per cent- either in perpetuity or for the long period of thirty years?


Arthur Meighen: I think it is only fair and rational that a time period should be * fixed.


William Stevens Fielding: No.


Arthur Meighen: The hon. gentleman argues that this bond should be redeemable at any time at all. I do not think there is any advantage to the country in that; if there was any advantage, it might be accepted.
But what advantage is' it to us to have the privilege of redeeming a four per cent bond? No one, I think, could honestly say that there is any possibility of advantage, at all events inside of five, ten or fifteen years; if my opinion is worth anything there is no possibility of advantage inside of twenty or possibly thirty years. There is no use in demanding an exaction that can be of no possible advantage to us and that is a disadvantage to someone else. I am ready,, however, to let the clause stand and see if a shorter term than thirty years can be arranged.


William Stevens Fielding: We are not dealing with possibilities or probabilities; we do not need to deal with either. Here is a case where we are going to accept an obligation to assume these stocks. If we agree to do so we can pay the stock off to-day at par; beyond all

150G

question we would have a right to do it. Now, if we have that right to-day, why should we not keep that right for to-morrow, the next day or any other day. Would it be wrong for u's to-diay, -if we had the money and it suited our convenience to do so, to pay over to these lucky mortals one hundred cents for what is now worth only forty-five? If we have the right to pay it to them to-day, why should we not have the same right to-morrow? Why should we limit our right? Why should we not have the option instead of these lucky holders?
iMr. J. D. REID:	The hon. member
knows that at present the people of the country are purchasing bonds- at five and a half per cent for fifteen years.


William Stevens Fielding: What has that to do with it?


John Dowsley Reid: That shows that we believe that the interest rate will not come down for a good many years. 'Corporations are selling four per cent bonds at fifty years; so that the feeling of the people is that there is not much danger of the interest rate going down below four per cent within at least thirty years. However, as the Minister of the Interior said, it might be advisable, if there is any question about it, to shorten the time; for that reason, I suggest that the clause stand so that we may consider that matter. I do not think, however, that it would be fair to have no limit at all.


Georges Parent: The preamble of the Bill states-:
Whereas it is expedient that His Majesty should acquire the whole of the capital stock of the Grand Trunk Railway of Canada ex. cept the four per cent guaranteed stock above referred to.
The preamble, therefore, declares very clearly that the four per cent guaranteed stock is not to be acquired, but under the section which we are- now discussing we find that the Government is to acquire that stock. The preamble ought to be corrected so as to make it consistent with the clause that is now under discussion. There is another point: Am I correct in assuming that the new guaranteed stock is what is going to replace the present guaranteed stock?


John Dowsley Reid: No, it is going to replace the first, second and third preference stocks and the common stock. [DOT]
On motion of Hon. J. D. Reid, the consideration of section 5 and the proposed amendment thereto was postponed.

On section 6-Board of Arbitrators to be appointed to determine value of preference and common stock:


Mr. CAHILL:: If the shareholders do not agree as to the distribution of the award of the arbitrators, will they be bound to accept t-he award? Is there any arrangement on the part of the Government as to how the award is to be distributed?
Mr. MEIiGHEN: There is no agreement oi understanding as to how the award, if any, will be distributed. Of course, we are not concerned with how it is distributed. We are concerned with the devising of some method of distributing it; otherwise it is ineffective. What we take cure of is that some effective way shall be found so that we shall be rid of all responsibility. The representatives of the company thought that it might he very difficult for any definite agreement to be -arrived at among these classes of shareholders-. The common stockholders have got nothing at all, but they have their voting strength just the same and- they might be averse to signing off all possibility of ever getting anything, and getting nothing for the signing off. All these questions are, of course, anticipated, but it was thought they would agree that the arbitrators should decide how whatever award was made should be distributed. So far as we are concerned, we are safe, because, unless they do agree that that should be the case by the execution in legal and binding form of the agreement, then we are not bound at all. As soon as the agreement is executed in legal and binding form all shareholders are bound to take whatever distribution the Board of Arbitrators make.


Frank S. Cahill: In the event of a dispute between the shareholders after the award is made, are we bound to the guarantee of the $60,000,000?


Arthur Meighen: No.


Frank S. Cahill: 
Frank S. Cahill: In connection with the voting power of the holders of debenture stock, have they given up the right to vote in exchange-for the guarantee of the interest payment on these stocks?


Arthur Meighen: That is what we exact from them. They must give up that right entirely.


John Howard Sinclair: I should like to draw the minister's attention to the language of the latter part of this clause. I understand the clause provides that when the arbitration is completed, the guaranteed stock will be issued and will be exchanged for the common stock and the preferred stock. The latter part of the clause reads:
Upon the transfer to or vesting in the Government of such stock, in proportions which shall be determined by the arbitrators.
My point is in connection with the phrase " vesting in the Government." The minister has always told us that the title to this property is to be vested in the Grand Trunk corporation. I can understand vesting something in the Crown, but it is a new expression to say that the stock is to be vested in the Government. What is the Government? There is the Crown in which we can vest stock, or there is the corporate body of the Grand Trunk Railway Company. Either of those can hold the title to the stock, and I want the minister to say if he thinks that is the right language to use.


Arthur Meighen: 
John Howard Sinclair: I can understand that, but I would say that the stock should be vested in the Crown.


Arthur Meighen: So it is, because the Government is another name for His Majesty the King, represented by the Minister of Railways. The hon. member does not see the full effect of the definition which says: " His Majesty the King, represented by the Minister of Railways.' His Majesty the King is the Government, so when we use the word " Government " in the body of the Bill, we mean His Majesty the King. Therefore clause 6, which we are now discussing, would be just the same as if it read in this way:
Upon the transfer to or vesting in His Majesty the King of such stock.


Mr. JACOBS:: I should like to know if in the agreement anything will be inserted declaring how the arbitrators are to arrive at the value of these stocks. There are various ways, all more or less satisfactory, in which values may be arrived at. For instance, the future value of this line, the potential value when the country is further developed, may be taken into consider tion by the arbitrators, or they may take into consideration the value Which it would cost to duplicate the line. It may be well to have certain rules laid down to
4 p.m. guide the arbitrators in coming to a decision with respect to arbitrating as to the value. We know what happened when the arbitrators came to value the stock of the Canadian Northern. We did not expect that we would have to pay a penny, and eventually we rwere let in to the tune of $11,000,000.


Arthur Meighen: That is- exactly what we do not know, because that is not true. In the Canadian Northern agreement a maximum of $10,000,000 was fixed, and that is all that was paid. I have allowed similar statements to pass times without number because I thought hon. gentlemen really knew that such a statement was not correct, but probably my hon. friend did not know when he made that statement.


Mr. TRAHAN:: The award was $10,800,000.


Arthur Meighen: But that award was not paid because the agreement was that only $10,000,000 would be paid no matter what

the award might be. Is there any other hon. member who needs correction on that?


Samuel William Jacobs: The temper of the minister is not quite what it should be owing to what happened last 'Monday in Victoria and Carleton, hut we have to allow for that. What I wish to point out is that when we say the stock is worthless, we wish to say that it never cost the owners a single penny. It is all water.


Arthur Meighen: The hon. member is
wrong in that. It cost the owners very large sums of money which took the form of land. That, however, has nothing to do with the question under discussion; neither has the question of my temper, but I may inform the hon. member that my temper is quite sweet and clean.


Samuel William Jacobs: It may be clean, but it is not sweet.


Arthur Meighen: There may have been something unfortunate in that constituency just the same as there was in Assiniboia.


Samuel William Jacobs: There were no ministers there.


Arthur Meighen: There is this difference that in Carleton we were able to get to only a couple of towns, and while we succeeded in getting majorities there, we were too busy with this Bill to go any further. In Assiniboia I am told that there were not even towns that were favourable to the hon. gentleman who went out there. But referring to the real question brought up by the hon. member, first as to what can be taken to account, I may say that it was felt that the only way to hold the arbitration in the interests of ail concerned was not to dictate to the arbitrators what were the right considerations to take into account. I have seen in the press, and particularly in the western press, notices to the effect that provision was made that the potentialities of the system should be taken into consideration. There is no such provision made as1 that. If the arbitrators decide that potentialities should not be taken into consideration, they are quite free to eliminate them, and the same is true with regard to everything else. In a word the same principle is followed as is embodied in our law to-diay in connection with expropriation or the taking of any property by the Crown. That is to say, whatever elements, of value the arbitrators, or the Exchequer Court, as would ordinarily be the case, feel should be taken into account, may be taken into account. That is the 
way in which the matter is left. There is no dictation to the arbitrators at all.


Samuel William Jacobs: They have carte blanche.


Arthur Meighen: They have carte blanche to eliminate if they like.


Mr. VIEN:: Should there not be a date
fixed in the Bill on which date the value should be taken? There is, I understand, nothing to limit the arbitrators to value the assets of the company as of a certain fixed date.


Arthur Meighen: I think that is right to this extent, namely, that date must be fixed. This question was brought up at the very opening of the discussion, and at that time I said that necessarily a date would be fixed in the agreement. I would say now that in my judgment the date should be prior, possible some little time prior to the date of the agreement. I have not had time to discus's this subject in Council, but if there should be any necessity for making it later, then necessarily there must be a clause that any effect on values caused by this Bill or by the hope of this Bill should not foe taken into account.


Mr. CGCKSHUTT:: I have already, in a speech delivered by me the other day, offered a little criticism with regard to this clause, and I must say that I should like to hear the minister say that three judges will not be appointed on this board of arbitration. We should have either one practical railway man or one business man as one of the arbitrators. I have not heard the minister say what his view is with regard to that criticism. Another criticism is that I should have preferred if possible to see a limit set beyond which the arbitrators could not go, but I have not heard the minister say whether that has been suggested or tried or not, so that the country may know the extreme limits to which they are to be committed in the purchase of the stock, the same as was done in the case of the Canadian Northern, which limit, as he has already pointed out, was of considerable value to the people.
Another point which I do not think is covered by the clause is as to who is going to pay for the arbitration. It will undoubtedly entail considerable expense. Witnesses, I presume, will be brought from far and near to prove what the road and the stock is worth. I do not see any machinery provided covering that point.
Next, will the board of arbitrators sit in Canada or Great Britain, or both? Will

they have power to take evidence on both sides of the water-I do not mean the watered stock. I have heard some hon. gentlemen say there was some water in this stock, but I am not sure that there is. So, when I say water, I mean the Atlantic ocean. A great many of the shareholders are on the other side, and I think it is important to know where the arbitration will sit, because I can quite imagine that if it sits exclusively amongst the shareholders, and not amongst the purchasers, that may have some effect on the award, on account of the influence in the air. I would feel more reassured if I knew the board was going to sit in a Canadian town or city, or, perhaps, moving about in Canada. I suppose it will sit at some convenient centre.


Arthur Meighen: I was not in when my hon. friend spoke before, when he was evidently dicussing the personnel of the board of arbitration. He asks now for an assurance that it shall not be composed of three judges. I could not give that assurance for obvious reasons. . We have only complete control of one of the arbitrators, our own.
.Mr. COCKSHUTT: But if he was not a judge you could say the board would not consist of three judges.


Arthur Meighen: We could, of course, give an undertaking, if we thought it would be wise, that all three would not be judges, that is to say, that there would be one who was not a judge, but I would not care to bind the Government in that way, nor would I care to cast that reflection on the judiciary of Canada by especially eliminating them as unfit persons to decide on the value of stock. I have no idea at all that our own appointment will be a judge. 'So far, that matter has not been considered. However, I would not think it would be best that all three should be judges.
As to the location of the Board of Arbitration, it will, of course, sit in Canada. It will be observed that the letter of October 9 provides that the third arbitrator shall be a judge of a Superior Court of Canada, so virtually the deciding factor must be a judge of a Superior Court of Canada.


William Stevens Fielding: The Bill does not say that, does it?
'Mr. MEIGHEN: That provision is in the letter of October 9, and it will have to be embodied in the agreement. As to whether they could sit elsewhere or not, I do not think it would be wise to limit them and say they could not go anywhere else. They
may find it necessary to go to the United States, for instance, in connection with the valuation of some of the company's properties there; that may or may not be necessary. I can, see no reason why they should go to England.


William Foster Cockshutt: That is where the head office of the company is.


Arthur Meighen: That would not be of any assistance to the arbitrators.


Thomas Vien: It would unless we have power to compel the company to bring their books over to Canada.


Arthur Meighen: There is no possibility of the company refusing to do that, because they could not expect to get a verdict unless they disclosed everything that could be disclosed to the board of arbitration. There is, however, sufficient force in the point for me to say it would be unwise to tie the hands of the arbitrators in that regard.
As to fixing a maximum award, I need scarcely say that matter has received very serious consideration. A great deal can be said on each side of the question. The presence of a maximum is argued by some as being in the nature of an indication to the board of arbitration as to what the country would stand for, as to what might be awarded without serious complaint. On the other hand, the presence of a maximum is undoubtedly a safeguard and would be taken to be an assurance that we are not committing into the hands even of judges the determination of the liabilities of the country beyond a certain figure. It would tend, no dou'bt, to still unnecessary apprehensions. I was inclined myself to the view, and I cannot say I am very far from it yet, that on the whole we are better without the maximum. I know there is very considerable opinion the other way. I have no very strong opinion on the question myself, and I shall be glad to hear the views of hon. members. I would presume that if a maximum, were to be fixed the only fair amount to fix would be the minimum amount which the company offered to take during the course of the whole negotiations, and say to the arbitrators: You shall not in any event go beyond that minimum. I know that the representatives of the company would argue : We should not be confined to our minimum, as the maximum may be awarded. It would seem to me, however, that we could not very well fix any maximum beyond the minimum of the company.

As to the cost of the arbitration, the costs incurred by us we will pay, and the costs incurred by the company they will pay. We will pay counsel for the Government, for instance, and I presume we will also pay our own arbitrator. I do not know that any provision has been made for paying the third arbitrator. I have really not thought that out. I cannot say from memory what was done in that regard in the case of the Canadian Northern arbitration, but the Minister of Finance of that time will remember. Generally speaking, we will pay the costs we incur, and the company the costs they incur.


Mr. DENIS:: T quite appreciate the
reasons given by the minister why it would be difficult to fix the maximum now, because before you could arrive at a fair maximum it would be necessary for experts to examine the physical property of the company, its debts, and so on. So we cannot even attempt to fix now what would be a reasonable maximum. Could we not get around the difficulty by providing that as we cannot value the property at this stage, the award of the arbitrators shall not be final and valid until approved and ratified by the Parliament of Canada.
I make the suggestion with the utmost sincerity and not with a view to criticism, and I think my sincerity is evidenced by the fact that I stand with the minister when he says that we cannot now fix the maximum. Now, owing to that very fact that we cannot fix the maximum because of the magnitude of the transaction; owing to the many difficulties which the arbitrators will encounter; in view also of the fact that the real value of the property will be known to Parliament and the people of the country only after the experts have made their report,-in view of all these facts, and many others which I do not mention now, would it not be wise to provide in the Bill that the award should be submitted to Parliament? If this provision were made, I for one, with the feeble means at my disposal, would endeavour to make a thorough study of the whole transaction. I would try to ascertain as nearly as I could the real value of the property in order that I might approach the whole question from a well-informed and intelligent viewpoint. If we are here for anything at all we are here to safeguard the interests of the country, and we should know the exact value of this property, especially when it amounts to hundreds of millions. I would inform myself as well as I could on every

phase of the question, even if it took weeks to do so, and when I came to deal with the award in Parliament, if it were reasonable I would endorse it. I would vote for it because I am not opposed to public ownership, and there are a great many members on this side also who are not opposed to public ownership. Of course, I wish it to be understood that I am speaking only for myself and I commit no one else. So far as I can see the opposition to this measure is not opposition against public ownership. We are discussing the details and we want to have a square deal for the country, and in order that the people's interests may not be in the slightest degree hazarded I earnestly submit to the ministers that it cannot be contended that my suggestion is at all unreasonable that the award should be submitted to Parliament so that every member of the House, even every back bencher on both sides, might have a full opportunity to study it and come to a fair conclusion as to whether it was reasonable or not. I do think that every member should be able to express his opinion on the award, but as the matter now stands we have no real information before us. It is all very well to say that we can ask for what information we require, but so far as I at least am personally concerned, when this matter is concluded in Parliament I shall know very little indeed about it. No one can possibly know anything about the merits of the transaction until he has had an opportunity of studying the evidence of the expert witnesses. I submit this proposal to the consideration of the minister, and. in doing so I should like him to feel that I am actuated by nothing but a sincere desire to protect the interests of the people. I do not make this suggestion in any spirit of criticism, and I should like to have the opinion of the minister in regard to the advisability of submitting the award to Parliament.


Arthur Meighen: Before I reply to the hon. member, imay I ask him if he would also favour the submission of the award to the shareholders of the company before it became binding on them?


Jean-Joseph Denis: I understand that the shareholders will have to give their assent before it becomes binding on them.


Arthur Meighen: That is,' before they know what it is, just as we are doing. But if we are also to have the power to accept or refuse it after it has been given and we know what it is, is the hon. member in

favour of giving the shareholders the same power?


Jean-Joseph Denis: I do not think there should be .any objection to our considering the award before the shareholders are called upon to give their assent.


Arthur Meighen: The hon. gentleman misses my point. We are considering the agreement now, and the shareholders will also consider it afterwards, and the question will be submitted to arbitration. The arbitration will make its award, and the hon, member wants that award to come before Parliament so that Parliament can decide whether or not they will accept it. Is that the hon. member's position?


Jean-Joseph Denis: Yes.


Arthur Meighen: Then, is he also prepared to allow the award to go to the shareholders for them to decide whether they will take it or not?


Jean-Joseph Denis: I would have no objection.


Arthur Meighen: Very well. I shall now deal with the hon. gentleman's proposal. In the first place, let me correct him. I did not say in my previous remarks that it was impossible to fix a maximum now. I did not say that at all; in fact, I asked for a discussion as to the wisdom of fixing a maximum and suggested that if it were fixed it would seem to me proper that it should be the lowest figure that the shareholders had offered to take. But I do feel that if we are going to fix a maximum the time to do so is now. If we are going to control .ourselves as to what the limit shall be, now is the only time we can do it. Let us. examine the hon. gentleman's suggestion. He says that we should submit this question to arbitration but should not agree to be bound by it. He says it should come back to us afterwards and if we liked it we would take it and if we did not like it it should be rejected. He says further that the shareholders might be given the same privilege. Well, in the first place, why is not that done in the case of all our acquirements of property? By authority of Parliament we have appointed certain men who, in all cases of acquirement of property where the price is not agreed upon-, decide what that price shall be. These men-I refer to the Exchequer Court of Canada-decide questions of that kind year in and year out in connection with, amounts extending to millions. I myself took part on behalf of the country in an arbitration where the claim was $10,000,000, and the question was decided by a .man appointed under the authority of Parliament for that purpose. The Act appointing him-the whole principle of our jurisprudence-does not say that after he decides the question it shall come back to Parliament for Parliament to say whether it will accept the decision or not. But secondly: If it is to come back to Parliament afterwards and we are to decide whether we shall accept the finding or not, and the hon. gentleman is content to allow it to go to the shareholders too, where are we? What progress have we made? What are we going to do in the meantime? Is the Board of Management to take control, and is the process of unification to go on? In short, what is going to happen? It will not have been an arbitration at all, but a fatuous and futile proceeding.


Mr. CAMPBELL:: Would the situation then not be similar in a way to that which frequently arises undeT the Industrial Disputes Act in cases of labour disputes?


Arthur Meighen: The Industrial Disputes Act does provide 'that before a strike is legal there shall be an attempt at conciliation. But surely those proceedings bear no resemblance to this. There could not be a more inappropriate comparison. Now, my hon. friend (Mr. Denis) .says that we shall know later on what has been decided upon, which information we have not now. He says he will find out. in the meantime, and indicates the means-because he is a lot more logical than many hon. gentlemen who criticise this legislation. He says that he will look over the evidence and see what the expert witnesses say before the court. Then, he says, after we have studied the decision we shall see whether the court is right or not. Does not the absurdity of that suggestion appeal to the hon. gentleman, that if we appoint a judicial tribunal to hear witnesses, to observe their demeanour, and to study the whole problem, making it their business for months, we shall sit as a court of appeal over the evidence they received and determine whether they decided rightly or wrongly? Would that not be really a most absurd position to take? Would not that after all really be a most absurd position to be in? In fact, you cannot argue it. Would we be in a better position to decide as to what was the logical outcome of the evidence of the value of the stock than those who hear the evidence, who are appointed to hear it, whose business it is to do it, and who are trained in that work? Are they not better able to do

that than we who have nothing to do with it, who cannot give the time to it, and who wil' not give the time to it, as every hon. gentleman knows- For these three reasons, first, that it is contrary to the principle of arbitration altogether as proven by the law of this coiuntry as it stands in regard to that subject and the law of every other civilized country; second, because it gets us nowhere and we have no agreement when we are all through, because the arbitration would not accomplish anything and because when we were at the end of it and had incurred all the expense we would be just where we started; and, lastly, because we would *be in no position to review intelligently the judgment which an independent judicial tribunal after hearing the evidence and seeing the witnesses had rendered and whose s'pecial business is to determine rightly and justly.


William Foster Cockshutt: May I correct what may be a wrong inference in the remarks of the minister in connection with my asking that three judges be not appointed? I made it clear the other day that I was not averse to some judges being on, and I expressed my admiration for the courts of our country and for the administration of justice. What I said was that the whole of the arbitration board should not be judges. I believe in looking at the physical assets of this railway. There are other experts in the country besides judges whose ability to value these intrinsic assets ds, to my mind, more important than, the qualities that are required in any judge.


Samuel William Jacobs: They should be witnesses.


William Foster Cockshutt: The road should be inspected particularly by a competent man. The rolling stock and all that must be taken into consideration, and these assets should be looked over by somebody. I think a judge is not the best man for that particular work, but he is probably the best man for the head of the court of arbitration. I cast no reflection whatever upon any judges in any of our courts. As to the objections that are raised to fixing a maximum for the award, the minister, before I asked the question, had already stated that we had saved some $800,000 in connection with the Canadian Northern by reason of the fact that we had fixed the award at $10,000,000. The court found that it was worth $10,800,000, but as we had fixed the maximum for the award we saved $800,000; not a large amount surely, but worth while. In this larger matter, where the variation

will be greater, it appears that the fixing of a maximum would not be an unwise proceeding, and to say that the arbitrators will go up to the maximum simply because you fix it is to cast a doubt upon the wisdom of the arbitrators. It is not, an invitation to them to go to the top. It is simply saying you cannot go beyond that unless you come back to Parliament and get our consent. It is not an invitation to them to go up if we fix the award at $20,000,000, or $25,000,000, or $50,000,000. They are supposed to proceed only on the evidence that is before the court, and I claim that it is no invitation to them to go to the exact limit we have fixed. It is rather an intimation that they cannot go beyond that unless they get some further sanction from the people who have to pay the award. It might be argued that if there is a maximum there should be a minimum. I am not sure but that a minimum and a maximum should both be placed. If the shareholders feel that they should have a minimum possibly it might be a matter for consideration. In the case of the Canadian Northern, the fixing of a maximum worked out slightly to our advantage.
I commend these further considerations to the attention of the minister. I am not taking strong ground upon them, and I do not wish to obstruct the clause, but I think the crux of the whole situation, the valuation which is to be found, is largely bound up in this clause. The outcome will depend largely on the kind of arbitrators we will get. It is important that the interests of the country shall be safeguarded in every possible way, as there can be no doubt that a further blow will be struck at public ownership if we start off by paying far too high a price for the intrinsic assets of the Grand Trunk. I do not wish to cast any imputation upon the Board of Arbitration, but we are doing something that, is going to cost money and the interest of the country ought to be protected in every possible way. I only make these suggestions to the minister-lie was the physical assets of the Grand Trunk. I spoke-in the hope that he will give them his earnest consideration. If there is nothing in them I feel that I have at least discharged a duty which I felt it incumbent upon me to discharge in pointing out what I believe are necessary safeguards, and in the endeavour to ensure that this arbitration board, when appointed, will be the best that can be got for the work that it is intended to do.


William Lyon Mackenzie King: I think the minister dismissed rather too summarily

the suggestion made by the hon. member for Nelson (Mr. Campbell) as to the possible application of the principle of ihe Industrial Disputes Act to this measure. The Industrial Disputes Act applies to disputes between railway companies and their employees. As hon. members know, under that Act each of the parties has the right to name a member of the board, the two agree upon a third and when the/ give their award it is open to the public, and public opinion may express itself in reference to it. The theory underlying the Act is that public opinion in the last analysis will determine what is right and that will be the instrument whereby right will be enforced. Consequently the Act proceeds on the theory that if the award is a fair one it will be backed up by public opinion and the parties will in the long run accept it. On the other hand the Act takes it for granted that if the award is unfair to either party, or to both, before it is made binding upon them each shall have the opportunity of directing public attention to. the element of unfairness in it.
The situation here is almost identical. The Government has asked that a board of arbitrators shall pass upon some uncertain and unknown quantity because the value of the stock as it exist is unknown by either of the parties. If the arbitrators give an award which is justified by the evidence before them and' which seems reasonable, such award will receive the support of public opinion and as such it will certainly bind the two parties. The two parties will accept it with good will because it will be obviously an award which has public opinion back of it. As I understand the remarks of my hon. friend from Nelson, that is what he feels should be done in this case. He believes that the award o.f the arbitrators should be made public and that each of the parties should have an opportunity of saying whether or not they think the award fair under all the circumstances. If it is not fair they should have an opportunity of pointing out wherein the unfairness consists.
If we were proceeding in this kind of transaction for the first time we might perhaps be prepared to accept all that has been said about the absence of any necessity for fear as to the consequences of a measure of this kind. But I submit that if we study this transaction it will be found to be very much on all fours with that which took place some time ago when the Government acquired the properties of
the Canadian Northern. At that time there was a stock which was supposed to be practically of no value. It was referred to a board of arbitrators to put a valuation upon it and the country paid in Consequence, without any opportunity of accepting or rejecting the award, something like $10,009,000. Well, when the country has been stung once for a sum amounting to $10,000,000, through procedure of this kind, I think we are justified in asking the Government whether it is not wise to protect the country against being stung a second time-not for $10,000,000, perhaps, but for many times $10,000,000; -we have no idea at the moment what the amount will be.


Arthur Meighen: Does the hon. gentleman desire to intimate to the House that the judges who made that award were either dishonest or incompetent?


Some hon. MEMBERS:: Oh, oh.


William Lyon Mackenzie King: I have no intention whatever to reflect-


Arthur Meighen: Then will the hon. gentleman say whether he attacks their award?


William Lyon Mackenzie King: I have no intention, whatever, as the minister well knows, to reflect in any way on any judge. 1 will give the minister not my words but I will quote the words of one who I think has a right-


Arthur Meighen: I do not care for the
words of anybody. I want to know how you support the attack-


Some hon. MEMBERS:: Order.


Arthur Meighen: -support the attack
upon the award of the judges?


William Lyon Mackenzie King: I simply say to my hon. friend, as I have already remarked, that I will not ask him to accept my word; I will give him the view of one whose name, I believe, is more honoured than the name of any other man who has ever sat in the halls of this Parliament-I mean the late Sir Wilfrid I.aurier. The country will agree with the estimate which I have placed on Sir Wilfrid Laurier's character, and I will now give the hon. gentleman Sir Wilfrid's opinion in reference to the transaction to which he has referred. In the last public address which Sir Wilfrid Laurier gave to the people of Canada, he spoke thus of the acquisition of the Canadian Northern railway:
One feature of the Act of last session is that the Government -becomes the owner of the stock of the company, of the nominal value

of sixty million dollars. There never wae a dollar paid on that stock. The experts employed by the Government to appraise the value of the whole enterprise, men of acknowledged ability and experience, themselves have reported that the stock of the company has no value whatever.
Yet the Government have taken authority to appoint a board of arbitrators to give a value to that property, which their experts have declared absolutely without value.
The Opposition asked that the report of the arbitrators, whatever it might be, should be laid before Parliament for approval. Though this motion was rejected, it is the right of the people to declare that the case should not have been finally closed by the action of a moribund Parliament, but that the whole matter should be reported to, and adjudicated upon, by the new Parliament.
I would say to the minister that the only particular, it seems to me, in which what the Government is proposing at the present time in this measure differs from what I have already read in regard to the Canadian Northern railway transaction is, that instead of regard for the people's rights being precluded by the action of a moribund Parliament it is being precluded at this time by the action of a government which has already lost the confidence of the country- if public opinion as it is evidenced from every side is any indication at all-The rights of the people are being absolutely usurped at the instance of a ministry which has no justification in proceeding with a transaction of these proportions without giving opportunity for some expression by the people of Canada upon it. Now I want to make clear that this transaction is on all fours with the Canadian Northern, because I think the country understands pretty well what the latter transaction'amounted to. Speaking of the Canadian Northern transaction the quotation which I have just read has the following:
The experts employed by the Government to appraise the value of ' the whole enterprise,
. men of acknowledged ability and experience, themselves have reported that the stock of the company has no value whatever.
Here is an exact parallel. We have before us the report of the Drayton-Acwortb Commission, and the minister will hardly say that the members of that commission were not men of acknowledged ability and experience. Yet what does the Drayton-Acworth report say in reference to the value of this stock? At page 65 of the report this statement is to be found:
Even if the Government were to relieve them entirely,-
-that is the Grand Trunkas suggested by their president, of their unfortunate Grand Trunk Pacific venture-and

as we have already said, we cannot think that this request can be reasonably justified-it is evident that the Grand Trunk Company is not, and will not be for some time to come, in a position entitling it to pay out any money at all in dividends. We regard the entire share capital of the company as being intrinsically of but small value at the present time. On the basis of present value of maintainable income the fair compensation would be very small.
So that, in regard to this transaction, we have gentlemen of experience and ability informing Parliament that even if the Government were to relieve the Grand Trunk entirely of the Grand Trunk Pacific-which they say it should not do, but which the Government is doing by this measure-the entire share capital of the company is intrinsically but of small value. The parallel is therefore entirely an exact one with the case that I have already mentioned. Now, in what particular is there a further parallel? The further parallel is that the Opposition is asking the Government to do exactly what it .asked should be done in the case of the Canadian Northern transaction, with the view of avoiding the situation I have described. The Opposition asked that the report of the arbitrators, whatever it might be, should be laid before Parliament for approval. Had the Government, in the matter of the Canadian Northern deal, submitted the award of the arbitrators to Parliament for approval, then it would have been for Parliament to say whether this country should have given out $10,060,000 for stock in regard to which not a single dollar of value had been put in. So we on this side contend that inasmuch as we have before us, and the country has before it a transaction of the kind which I have just made reference to, there is the strongest reason why its appeal to the ministry to have the award of the Board of Arbitrators placed before Parliament should be heeded at the present time.


Arthur Meighen: If I can confine myself to any points attempted to be made by the hon. member'in connection with this clause, I need not speak very long. He goes over the old ground about the Canadian Northern arbitration and he manages to state over again-not very well or not very lucidly [DOT] what has been repeatedly said and what the hon. member for Temiscouata (Mr. Gau-vreau) said has been answered twenty times. The hon. gentleman is the chief offender, I think, against whom the hon. member for Temiscouata complained last night. In the first place, the Drayton-Ac-worth report did not recommend that nothing be paid for Canadian 'Northern stock -

in no portion of it is that done-but it recommended that there be arbitration as to what should be paid. In the next place, in the comparison of values with respect to that road, the commission find that there was little, if any, value, but they left out-on their own admission, on their own signed statement filed on the table of this House-many million dollars' worth of property and $30,000,000 in cash. Does the hon. gentleman hear me? The Drayton-Acworth Commission omitted about $30,000,000 of cash, and, by an error in regard to the right of way, many million dollars' worth of land. I hope the hon. gentleman gets that. The way it came to be done-there was certainly nothing deliberate in it-was this: The bonds of the company were sold and consequently became an Obligation against the company-they appeared on the liability side. But as the roads to be built with the proceeds of the bonds were only commenced, or perhaps not commenced, the money was not paid out. The money was lying in trust for the purpose of the construction of these roads. The money was not in the possession of the Canadian Northern; it was to be used for Canadian Northern purposes, handed out by the trust company to be so used as the roads were built. Now, I hope I have made that clear. On account of not being in the treasury, it was omitted in the report to the extent of about the sum I have *mentioned; I speak from memory and from information given to me by the experts at my side. But I know that the amount was very large and I know that the authors of the report themselves admitted Jhe error, and that the documents admitting the error are on the Table of the House.


Samuel William Jacobs: What became of that
money?


Arthur Meighen: The money is being
used in building the roads.


Samuel William Jacobs: By the Government?


Arthur Meighen: By the company. What else woulld become of it? It is there in trust and cannot be used for any other purpose; surely that is clear. Indeed, there was money that was omitted-the proceeds of bonds guaranteed by provincial governments with which we had nothing to do, and it was lying there in trust account, appropriable only to the building of the roads. Not being in the treasury, of course it is not counted, but the bonds themselves were counted and hon. gentlemen can easily see how the error arose.


Mr. TOBIN:: What are the names of those roads so constructed?


Arthur Meighen: I cannot give the names of the roads now; they appear in the statement filed. They all came out in the arbitration proceedings, which hon. gentlemen appear not to have read, although they entirely repudiate the arbitration. The [DOT]complaint was made the other day that the arbitration piuceedings had never been published, had never been laid on the Table. Why, they have been on the Table since a year ago last April. Hon. gentlemen seem to have made no reference to it. They get up and attack the award, but they take care to say: " We do not attack the judges who made it," they are thoroughly honourable men; they are thoroughly competent men; they made a dishonest award, but they are very competent men." That is the position behind which the leader of the Opposition hides this afternoon.


Samuel William Jacobs: We have cases in which the judgment of a judge of the High Court is reversed by the Court of Appeal; the judgment of the Court of Appeal is reversed by the Supreme Court of Canada, and the Judicial Committee of the Privy Council reverse the judgment of the Supreme Court of Canada. Does the hon. gentleman contend that the judges who gave these judgments before the case reached the Privy Council are dishonest and incompetent?


Arthur Meighen: Oh, no.


Samuel William Jacobs: That is the argument the hon. gentleman is making.


Arthur Meighen: Not at all; it is quite possible that the judges made an error. But will the hon. gentleman show where they made an error in estimating the evidence? Does the hon. gentleman seriously argue that a report which omitted these assets-an ex parte report, made without the duty being imposed upon the board of giving the holders of the stock an opportunity to show value, should be taken as final without an appeal at all?


Samuel William Jacobs: It is contended that the Canadian Northern Railway Company, that is, Mackenzie and Mann, never paid five cents for that stock.


Arthur Meighen: That is not the point at all. It is not true in any case; but that is not the point.


Samuel William Jacobs: Does the hon. gentleman say it is not true?


Arthur Meighen: I absolutely know that it is not true; I can show the hon. gentle-

man that he dees not know anything about this.


Samuel William Jacobs: Perhaps the minister will permit me to read-


Arthur Meighen: No, I am coming to that point, but I am answering the other point now. The question is, was the stock worth anything? lit might have been; even if nothing had been paid it might still have been worth something. Many stocks to-day are worth a lot of money that did not cost very much in the first place. Is stock never to appreciate? Buit the fact is that the Drayton-Acworth report, made without opportunity to the owners to give evidence as to1 value, could net in honour or decency or right, be taken as a basis for declaring: "There is absolutely no value there, and the owners will be given no opportunity to say that there is." The board was as honourable and as competent a board as ever sat upon the determination of honest rights. Is Parliament to sit as a Court of Appeal-over judicial judgments?


Samuel William Jacobs: Sometimes Parliament
does.


Arthur Meighen: I never heard of it.


Samuel William Jacobs: The Calgary case, in connection with the Military Service Act.


Arthur Meighen: Parliament did not sit
in Appeal over that.


Samuel William Jacobs: But the Governor in Council did. The Governor in Council notified a court in Alberta that they were not to follow the judgment of the Court of Appeal in Alberta.


Arthur Meighen: The Governor in Council notified them? Well, I am not aware of that.


Samuel William Jacobs: Or the instructions were
from the Minister of Justice, I am not sure which.
i Mr. MEIGHEN:	No instructions whatever; I know the Minister of Justice well enough to say, without having any particular knowledge of this case, that he would never give instructions to any court and never did. I invite the hon. gentleman to say that when the Minister of Justice is in the House.


Samuel William Jacobs: I am willing to say it; 1 will say it here and now. I ask the minister whether ariy instructions went out from the Government-I do not know from what department-to the Court of Appeal in Alberta or to certain courts in Alberta that a 
certain judgment-I think it was in the Lewis case-should not be followed?


Arthur Meighen: No; I was over in England at the time, hut I know the members of the Government well enough to say that they would not give instructions to any court.


Samuel William Jacobs: Does the hon. gentleman
know anything of the incident?


Arthur Meighen: My hon. friend can shift around the world about as fast as any one I have ever seen when he comes to a point that he does not know anything about. Will he say that if we did attempt to reverse the judgment of a court, we would he right? It would be wholly indefensible.


Samuel William Jacobs: That is not the question.


Arthur Meighen: It is the question. The hon. gentleman wants Parliament to say that we should have reversed the award of the Canadian Northern arbitration.


Samuel William Jacobs: I ask the hon. gentleman
whether he has any knowledge at all of instructions given by the Government in the Lewis case, the Military Service Act case.


Some hon. MEMBERS:: Order.


Georges Henri Boivin: I must remind the committee that we are discussing clause 6 of the Bill, which deals with the appointment of a board of arbitrators to determine the value of preference and common stock of the Grand Trunk Railway system. I thought it fair to allow the hon. minister to reply to certain comparisons which had been made with the Canadian Northern arbitration, but hon. members should not wander further from the clause under discussion.


Arthur Meighen: I will refer no longer then, to that case, save to add this: We cannot help but sit in admiration of the profundity of an argument which says, " I am right, because a witness on my side says so; I am right because I quote Sir Wilfrid Laurier to the effect that he agrees with me." I have heard in argument quotations made from the other side as admissions, but this is the first time I have listened to a contention that an hon. member is right beoause some one on his own side says so and desires his argument to be accepted. Of course, we all know the peril into which we step if we venture to impugn even the infinite wisdom of the late Sir Wilfrid Laurier; nevertheless, facts are facts. Perhaps I will be forgiven if I inform the hon. gentleman (Mr. Mackenzie King) who was out of the

House for a considerable number of years, that at a time when we sought to avoid the necessity of taking over the Canadian Northern system, at a time when we adopted the policy -that had been followed for years by every Government in Canada-that of assisting the company by way of guarantee -the party to which my hon. friend then belonged, and which no doubt he devotedly supported in his own way, moved in this House that we proceed to acquire this stock by arbitration, berated the Government because they would not accept that motion, desired that a board of -arbitration be appointed to value the whole of the stock, and fixed upon $30,000,000 as the maximum value of the stock.


Edmund William Tobin: After that resolution had been moved, how much money did this Government lend to Mackenzie and Mann?


Arthur Meighen: Not a dollar.


Edmund William Tobin: How many bonds did they guarantee?


Arthur Meighen: Not a dollar. This Government guaranteed the bonds of the Canadian Northern Railway system. Was that of assistance to Mackenzie and Mann, or was it a detriment to their stock? Did the fact of our giving the guarantee increase the value of the stock or depreciate it? Will the hon. gentleman answer that?


Edmund William Tobin: No doubt it helped Mackenzie and Mann's financing.
"Mr. MEIGHEN: Then if $30,000,000 was a fair maximum before it was helped, what would be a fair maximum after? After it was helped, the hon. gentleman felt that it was an outrage to fix a maximum of $10,000,000; but before it was helped in value, he thought a fair maximum was $30,000,000.


Edmund William Tobin: That was what your arbitrators in their report said was not worth a cent.


Arthur Meighen: No, the arbitrators fixed a value of $10,000,000. The honesty of these gentlemen is impugned not very manfully by the hon. member. They were not arbitrators at all.


Edmund William Tobin: I mean the commissioners. Would the minister mind if I read to him what the report said?


Arthur Meighen: We have had it read about two minutes ago, but if the hon. gentleman would like to entertain the committee by reading it again, I have no objection. I would ask him to read as well the advice given in the report to submit to arbitration the annual payment that they recommended that the owners of the stock should receive.


Samuel William Jacobs: After first stating that the stock was worthless.


Arthur Meighen: In a later report, they manfully said that they had omitted to consider many million dollars of cash to the extent of nearly $30,000,000 and land to the extent of many million dollars' worth, the exact figures of which I cannot give now.


Samuel William Jacobs: Where is that officially and manfully stated?


Arthur Meighen: In a letter laid on the table of the House. Why does the hon. member not study these papers?


Samuel William Jacobs: Is it not published in a supplementary report?


Arthur Meighen: No, it is in the form of a letter laid on the table of the House.


Samuel William Jacobs: When?


Arthur Meighen: Many months ago^ but when the hon. member was in the House, and it was read in the House.


Samuel William Jacobs: I beg your pardon.


Arthur Meighen: Read in the House and now embodied in Hansard. That is the fault I always find with hon. members. They get themselve-s into all these fixes before making I was almost going to say a childish attempt to learn the facts. This is -the first time apparently the hon. member ever heard of this letter.


Samuel William Jacobs: I read the report. I admit that I did not read the post mortem report.


Arthur Meighen: The hon. member did not read the -amending report.


Samuel William Jacobs: N-ot the post mortem.


Arthur Meighen: It is a dishonest one I suppose.


Samuel William Jacobs: Not at all.


Arthur Meighen: Then why did the hon-member not read it?


Samuel William Jacobs: I am not responsible for the -mistakes of the I)rayton~Aeworth Commission. I am merely reading the report as I find it.


Arthur Meighen: I quite admit the hon. member is not -responsible, but why does he want to hold the stockholders responsible?


Samuel William Jacobs: How does the receipt in the Treasury of certain, sums on account of debentures in any wa>
affect its value?


Arthur Meighen: Because it was the property of the stockholders. Is that sufficient answer?


Samuel William Jacobs: It was the property of the bondholders, not of the stockholders.


Arthur Meighen: No, it was not the property of the bondholders; the bonds were their property. Are those bondholders to own both the bonds and the money? The money was the property of the company to he used for the company's purposes. Does the hon. gentleman seriously suggest that it should not be taken into account in determining tbe assets of the company? The thing is foolish.


Some hon. MEMBERS:: Order.


Samuel William Jacobs: The minister is using some of the language that he used on the stump last Monday, I notice.


Arthur Meighen: It was -very effective as far as I went. I did not mean the remark in any offensive way at all. It is quite parliamentary, but I will change it to something-


Samuel William Jacobs: I will forgive the minister because that is his way.


Arthur Meighen: I will say that it is not fair nor right at all to say that the assets of the company should he finally and irrevocably determined, leaving out of consideration cash, the property of the company, to the extent of $30,000,000, and I say to the hon. gentleman that it is foolish to argue to that. I know something of his mind, and I wish I could free him from partisan restraint. If I could, I know he would admit this.


Samuel William Jacobs: Physician, cure thyself.


Arthur Meighen: I admit that now, so I am cured. As regards this arbitration, it is on all fours with the other in point of honour and in point of justice,
5 p.m. and if hon. gentlemen can find any way to improve it from either of those standpoints or in the light of either of those tests, let them advance their suggestion. As to referring the matter back to Parliament, that is simply making Parliament a Court of Appeal over a judicial decision. That would be subversive of all the principles of judicial decisions and would lead us at all events only into delay and likely into an endless morass. In other words, it is simply the process of liquidation over again.


William Lyon Mackenzie King: I would point out to the minister in reference to what he has said as to the proposal that this matter should be referred to Parliament being a reflection on the arbitrators-


Arthur Meighen: I did not say that. I will not allow the hon. member to put into my mouth anything I did not say. I did ,not say it was a reflection on the arbitrators; I said that when the hon. gentleman attacked the award as mulcting the people of this country of money they should not pay, that was a reflection on the arbitrators, and he cannot get out of the position.


Samuel William Jacobs: No, it is not.


William Lyon Mackenzie King: I may point out in that connection that, as the minister knows well, if that award had been submitted to Parliament, Parliament would never have agreed to $10,000,000 being paid out of the public treasury to the gentlemen who received it.


Arthur Meighen: Would Parliament a
year before have named $30,000,000 as a fair amount?


William Lyon Mackenzie King: That is not the question at all. I am dealing with what is precisely parallel in this case. What I was about to remark to the minister is this: That in connection with the Industrial Disputes Act, to which the hon. member for Nelson (Mr. Campbell) has referred, the gentlemen who sit as judges in cases that come under that Act are told that their decision will be subject to public opinion before it is accepted by either party; that it will not hind the parties until they have each had an opportunity of reviewing it. Therefore the judges do not regard their actions as being in any way unjustly attacked. They simply recognize that public opinion has its part _ to play, quite as much as any other factor in a big transaction. Just let roe draw the minister's attention to this one further thought. If there is any reflection at all the reflection is on the part of the minister against the members of this House, because all I am asking is that the members of this House shall have the right to say whether or not a particular award shall be accepted or whether it shall be further considered. When the minister takes the position that we cannot permit this House to have any say in regard to an award which is brought down, for fear that that will be a reflection upon the judges, he is reflecting upon every single member of the House in so doing.


Arthur Meighen: I do not hesitate to reflect on members if they consider it a reflection to say that without hearing the evidence they are in a better position to judge of it than judges of the land who do hear the evidence. If that is a reflection, for example, on the intelligence of the leader of the Opposition (Mr. Mackenzie King) I am afraid I shall have to abide by the charge. The hon. member says: Leave this to the determination of public opinion. It is certainly a new edition of Liberalism to leave judicial decisions to the determination of public opinion.


William Lyon Mackenzie King: I never said anything of the kind.


Arthur Meighen: The arbitrators who make the award go into the evidence judicially, examine the witnesses, witness their demeanour, come to a decision, and then let the play of public opinion operate and say whether the decision shall be enforced upon the shareholders or not. Is that what he means? Why not let the play of public opinion be the final factor in determining judicial decisions in the country, as to rights as between individuals? Supposing one man gets another person's property, and a dispute arises, the hon. gentleman says: Let the judge give his finding, and then let public opinion operate to say whether it shall be accepted as final or not. This is a determination of the value of property. Is it the hon. gentleman's Liberalism that the value of property shall be determined by the play of public opinion?


William Lyon Mackenzie King: My Liberalism is that in the last analysis public opinion should govern Parliament, 'that when there is no opportunity given to the public to express their opinion, which the minister does not permit them so to do, at least their representatives in Parliament should be permitted to express it for them. That is the whole point. The minister himself and the entire ministry should feel that responsibility to the representatives of the people. The representatives of the people in this Parliament feel their responsibility to public opinion, and the criticism we have against the Government in this matter is that they are altogether ignoring public opinion, altogether ignoring the representatives of the people in this House, and are proceeding in their haste in a manner that is altogether unconstitutional, having regard to the views of the public as expressed through their representatives in this Parliament,


Arthur Meighen: The hon. gentleman does not appreciate his own point. Certainly Parliament is governed by public opinion, and unless the Government felt it had public opinion behind this measure it naturally would not bring it forward.


William Lyon Mackenzie King: It certainly has not,


Arthur Meighen: Will the hon. gentleman wait till I get him right on his own ground? The Government may wrongly estimate public opinion.


William Lyon Mackenzie King: It certainly does.


Arthur Meighen: So may the hon. gentleman. He has done so before very frequently, and on all those occasions he was just as confident as he is to-day, but that is not the question. Parliament is governed by public opinion, but is that saying that the determination of the number of dollars that the Grand Trunk property is worth should be left to public opinion?


William Lyon Mackenzie King: To Parliament.


Arthur Meighen: He says, let public
opinion do its work and then we will come back to Parliament.


Samuel William Jacobs: A euphemistic term.


Arthur Meighen: The hon. gentleman says, let a judicial tribunal, after hearing sworn witnesses, decide what a certain property of a very complicated nature is worth, then let public opinion do its work throughout the country and be reflected in this House, and then we will see whether the judicial tribunal was right or wrong. Could a more definite and concrete example of what we might call parlour Bolshevism be given? Is not that Bolshevism itself?


Samuel William Jacobs: No, Parliament is the court of highest appeal in this country.


Arthur Meighen: Certainly, as to policy and principles of legislation.


Mr. CANNON:: As to everything.


Arthur Meighen: My hon. friend (Mr. Cannon), then, would have Parliament sit in review over the determination of courts as to the value of property of individuals.


Lucien Cannon: Under our constitution
the highest tribunal in the land is Parliament with respect to every matter, so much so that if a citizen is not satisfied with the judgment of any court in Canada he may appeal to Parliament by petition. That is

constitutional, and I do not think the minister will deny it.


Arthur Meighen: I know he could appeal, but I never saw the Parliament that would decide the case if the judicial tribunal had decided it before.


Lucien Cannon: Parliament can decide it it wishes to.


Arthur Meighen: That would mean that Parliament was acting on Bolshevistic principles. That is not constitutional pro-, cedure. Those are not British principles of parliamentary procedure. That is not British justice as we have always known it, and that is not the course this Government is going to follow.


William Lyon Mackenzie King: The essence ol this transaction is the amount of money the people of Canada will have to pay as a consequence of this arbitration.^ My hon. friend raises the question of judicial decisions to make it appear that we are in some way attacking the judiciary. As I pointed out to him yesterday, there is one obvious limitation to the legal mind; it is apt to run along legal lines so exclusively that it sometimes cannot appreciate just how the public, who are not wholly familiar with legal methods and legal technicalities, will view certain questions. This is a question that affects the taxpayers of this country, and is going to affect them for the next thirty years and more. It is a transaction that is going to impose enormous liabilities on this country at a time when, of all times, the country is least able to shoulder them. What we are suggesting is that before this terrific liability, unknown at the present time, and which may amount to anything, is put upon the shoulders of his country, bound and manacled there so that it cannot be removed for a generation, there should be some opportunity given to public opinion to express itself throughout the country and through its representatives in this House. I must thank the minister for making clear the distinction between us in our estimates of public opinion. My Liberalism leads me to believe that public opinion has a right to have its voice heard and its influence felt in this Parliament before this transaction is consummated. The minister's view is that public opinion should be ignored altogether. That we should proceed only alone the lines that he as a lawyer is prepared to recommend to this House is in accord, I think, with the oldest form of Toryism known to the world.


Arthur Meighen: The hon. gentleman's
learned comment on the limitations of the legal mind may he of very great value to my hon. friend (Mr. Cannon) and my hon. friend (Mr. Jacobs) and I commend it to their earnest consideration. His remarks about public opinion simply consisted, of course, in a rather clumsy mis-statement of what I had said., His remarks on public opinion, being stated before in even as clumsy a form, I replied to them fully. 1 never for a moment contended that public opinion should not influence this Parliament, and I cannot understand the hon. gentleman rising repeatedly and refusing to pay any attention to my words, but merely mis-stating them in such form as suits himself.


Mr. MANION:: If I might be permitted to revert to clause 6, can the minister give a rough estimate of the figure which the arbitrators would have to award to equal the offer which the Government made to the Grand Trunk for taking it over? I know that that offer was more or less on a sliding scale, but I was very much impressed, and have been for some time, with the opinion expressed by my hon. friend (Mr. Cock-shutt).


Arthur Meighen: The Government's offer was $2,500,000 [DOT] for the first three years, $3,000,000 for the next five years, and $3,600,000 annually there after for the balance of 999 years. I could not say just what that would amount to if distributed over the whole 999 years in equal annual amounts, although I did hear an actuarial calculation of it, and I think it was about $3,330,000 odd per annum; that is, the Government's offer was equivalent to saying they would pay $3,330,000 odd every year of the 999 years. The Government is going to pay $2,500,000 on the guaranteed stock; that would leave 830,000 odd dollars per year. So if the arbitrators' award is on that basis it will about equal our offer. The Government, of course, contends that nothing should be paid beyond $2,500,000, and that will be our contention before the board of arbitration. We made an offer which we thought was fair and right, and not as something from which we could proceed upwards.


Robert James Manion: What would that amount to if capitalized?


Arthur Meighen: Just twenty-five times
that amount.


Samuel William Jacobs: I was not in the House
during the past two days when the question came up as to how this stock was to be

valued, but I understand there was some discussion about fixing a day or date from which the arbitrators would proceed. That would indicate that the arbitrators will take into consideration the value of the stocks on the London market from time to time.
If that be so, I submit that it is not going to get us anywhere. For this reason the stocks on the London stock exchange, not only of the Grand Trunk but other stocks more or less speculative, are handled by manipulators and speculators, and it very rarely represents the actual value of the physical assets of the various companies. As I understand it, some of these stocks, particularly the guaranteed stock, for which we are going to guarantee four per cent, a few years ago dropped to about twenty cents in the dollar. Time and again this guaranteed stock passed its dividend.


Arthur Meighen: No. The guaranteed stock did not time and again pass dividends at all. It just passed two years.


Samuel William Jacobs: The junior securities had become only gambling counters on the stock exchange.
Where did the cause lie? There was not one; there were several. The first was in capitalization. The line had been hopelessly over-capitalized to begin with, and the new acquisitions doubled fixed charges, while net receipts increased only ten per cent; feeders had proved suckers.
This is an extract from chapter 11 on the expansion of the Grand Trunk in a book by Professor Skelton, who made an exhaustive study of ,the subject.
If we are to arrive at the proper value of these stocks it must be done by taking the physical assets and liabilities and valuing them in that way. In no other way can we arrive at any proper valuation of the stock. If we fall back upon the values of the London stock exchange we are in the hands of stock gamblers and thimble-riggers.


Frank S. Cahill: The minister has stated that $3,600,000 was offered by the Government as the maximum. Can he tell the committee what amount the Grand Trunk fixed as the minimum they would accept in settlement?


Arthur Meighen: That appears in the letters. It is given in pounds, but it amounts to $5,600,000.


Frank S. Cahill: That was in the days when they were more optimistic about what they would receive. This letter is written on August the 8th, 1918. After that time they were not quite so optimistic. Was there any other suggestion in the discussions as to what the minimum would be? *


Arthur Meighen: No; never the faintest intimation that they would go below that figure.


Frank S. Cahill: What would be the difference between what the Grand Trunk asked and what the Government were prepared to offer?


Arthur Meighen: The difference would be the difference between the $2,500,000 which the Government is paying by virtue of interest on guaranteed stock, and tfie $5,600,-000-or $3,100,000.


Frank S. Cahill: The Government offered $2,500,000 for the first three years, $3,000,000 for the next five years, and $3,600,000 annually thereafter. Multiplying the difference between the $3,600,000 and the $5,000,. 000 by 25 to find the total difference, we get $50,000,000. Is that the sum which the Government feels is subject to arbitration?


Arthur Meighen: The Government made an offer of $2,500,000, $3,000,000 and $3,600,000. It was not accepted. If it goes to arbitration the only minimum we could fix would be the $2,500,000 straight, that is, the interest on guaranteed stock. Theirs being $6,660,000, the difference would be $3,160,000-.


Frank S. Cahill: The Government, if they thought-


Georges Henri Boivin: I must draw the attention of the hon. member to the fact that clause 6 provides for the appointment of a



Board of Arbitration, but it does not provide that this committee shall fix the amount of the award. The hon. member's questions concerning the present value of the Grand Trunk Railway system, or the amount of award which may be granted by the arbitrators, are out of order.


Frank S. Cahill: I bow to your ruling, Mr. Chairman. But are we not to consider for a moment what we are appointing the arbitrators for?	.


Georges Henri Boivin: Hon. members would certainly be in order in considering what the arbitrators will be appointed for, but they would be out of order in attempting under this clause to consider what amount should be granted by the arbitrators.


Frank S. Cahill: I am not attempting to arrive at what the arbitrators might award; I am trying to find out what they will arbitrate. As I understand the situation, the company offered to take a sum capitalized that would amount to $50,000,000 more than what is being offered by the Government, and .if the arbitration fixes a sum greater than that, of course, it would be better for us to settle without recourse to arbitration.


Arthur Meighen: The hon. gentleman's figures are wrong, although I do not think they are intentionally so. The difference between the Government's minimum and their minimum is $3,160,000 capitalized at 4 per cent. Twenty-five times that sum would represent $77,000,000.


Frank S. Cahill: You should take the difference between the Government's maximum and the company's minimum; not the Government's minimum and the company's minimum.


Georges Henri Boivin: Until it has been decided that a clause is to be added to this Bill establishing a maximum award, hon. members must refrain from discussing under this clause what the award shall be.


Frank S. Cahill: I am not discussing what it shall be.


Arthur Meighen: Before the clause carries I desire to make a statement to the committee with regard thereto. I am glad to say, and I hope it will meet with the approval of the committee, that instead of leaving to any chance at all the appointment of the third arbitrator, which appointment, as hon. members know, is one of the most vital factors in the whole solution of the problem, the consent of Mr. Justice Cassels of the Exchequer Court has been obtained to act as third arbitrator. Sub-
[The Chairman.]
ject to the approval of Parliament in this regard, as in all others, we are prepared to insert a provision in the. clause that Chief Justice Cassels of the Exchequer Court shall be the third arbitrator.


Daniel Duncan McKenzie: Shall appoint the third arbitrator.


Arthur Meighen: No, shall be the third
arbitrator himself. I think it is peculiarly desirable that he should be selected for the reason that he is the head of the court that determine all values as between the country and individual citizens and his experience extending over many years, as well as his reputation for the highest integrity and ability, peculiarly fits him to be the custodian of the rights of all in this regard. I therefore propose to offer an amendment to the effect that the third arbitrator be Sir Walter Cassels, judge of the Exchequer Court of Canada and that in the event of the death or other inability of the Chief Justice of the Exchequer Court to act the two arbitrators so appointed shall select a third. I cannot give the exact wording of the amendment because the wording as submitted to me does not adjust itself to the wording of the clause, but I shall read what will be made to fit into the clause and submit the amendment later:
The board of arbitrators shall consist of three members, one to ;be appointed by the Government, one by the Grand Trunk and the third shall be Sir Walter Cassels, Judge of the Exchequer Court of Canada. Should Sir Walter Cassels be unable to act the said parties shall select a third arbitrator who shall be either a judge of the Exchequer Court of Canada or one of the judges of the Supreme Court of Canada.


Samuel William Jacobs: Was the position offered
to Chief Justice Meredith before the offer was made to Sir Walter Cassels?


Arthur Meighen: It was never offered to anybody.


Daniel Duncan McKenzie: The minister has given the history of the acquisition by the Government of property. I remember that the acquisition of rights of way of railways was entirely in the hands of a committee. In 1886, 1887 or 1888 the Intercolonial was extended through the island of Cape Breton. I was then a law student in Sydney and I remember meeting this committee which used to go all over Canada appraising rights of way. This was a committee appointed by the Government, but in time, as the matter wms one of importance, jurisdiction was taken from that committee and vested in the Exchequer Court. If an agreement cannot be reached between the Department

oi Railways and Canals and the owner of land, the Exchequer Court has jurisdiction as the court of first resort. There is no fault to be found with that procedure. I am not so strong on the point now since we have been told that the Chief Justice of the Exchequer Court is to have a prominent part in this arbitration, but I was going to suggest to the Government the feasibility of leaving this matter entirely to the Exchequer Court.
The Chief Justice of the Exchequer Court is to be the third man in this arbitration and everybody will admit that the third man is the important person in the arbitration. An arbitration court is after all a very poor court. Both sides start out with a representative in the court, each determined to uphold the case of his client. The Grand Trunk selects a man who will stand for it; we select a man we think will stand for us. This man is biased in our favour, and the other man is biased in favour of the Grand Trunk. The whole business seems to hinge on the impartiality and ability of the third man. No one will say that a court that must reach its decision by a compromise is the best kind of a court. If the Chief Justice of the Exchequer Court -is to be the third man, if he is to be the chief motive power, if he is to take the heavy oar in reaching a conclusion, why not leave the matter to the Exchequer Court entirely and do not embarrass the court with two other men who will be pulling in opposite directions, and each doing his utmost to find a way of getting a decision in favour of his own interest? We bought the Quebec and Saguenay and another railway in the province of Quebec not very long ago. We passed an Act conferring jurisdiction on the Exchequer Court to make a valuation of these properties. I think the way in which the judge of the Exchequer Court handled that case was highly satisfactory. It may not have been satisfactory to everybody, but the business way in which it was dealt with by the judge commends that method of procedure to me. We all recognize the ability and integrity of the Chief Justice of the Exchequer Court. He is a man who is particularly well fitted to deal with questions of this kind. I can see no good reason for not leaving this whole question to the Exchequer Court. It is the only court we have in Canada to deal with a matter of this kind. It has ample scope to call witnesses from all parts of the country. It can sit anywhere in Canada and then finally give its decision.
96 J
I do not see, Mr. Chairman, why, when we have such machinery expressly for the purpose of dealing with questions of this kind, we should be travelling outside and worrying ourselves about arbitration. This is an absolutely capable court of the highest possible reputation, and our friends in England, or any other part of the world, who have to deal with the value of these stocks should be satisfied to leave Judge Cassels try the case and file his decision. These are reasons which appeal to me. When we have once established the principle I do not see that there is very much difference in dealing with a small railroad as compared with a big one. The railroad in Quebec is not so very small and if we found this procedure most satisfactory in ascertaining its value, I do not see why we would not apply the same machinery and the same principle to a bigger road. If there is any good reason why we should not do so, I think the House and the country are entitled to know it.


Charles Joseph Doherty: The hon. gentleman in suggesting that we should have submitted this matter purely and simply to the judge of the Exchequer Court, pointed out that as he looked on this Arbitration Board it would he composed of one man urging the interests of the Grand Trunk, a second man urging the interests of the Government, and that the third arbitrator v ould be the important man and the deciding factor. If that view be correct we are substantially leaving this matter to the determination of the judge of the Exchequer Court and getting the same practical result that we would get, if that point of view be correct, as we would by submitting it to the judge of the Exchequer Court alone. On the other hand, I think there is this to be taken into consideration: Even though we suppose the two other arbitrators who would be associated with the judge may each, on his own side, approach the subject with a greater disposition to see greater strength on the part of the claims of those who have selected him, they will bring to that tribunal- at all events the providing for it makes possible that there should be brought to that tribunal-the aid and the assistance of experts with regard to these matters, and who may be of valuable assistance to the judge of the Exchequer Court in dealing with these questions. It is not an uncommon thing in courts-particularly where they are called upon to deal with matters of this kind, where the possession of great technical knowledge may be of considerable value- to call in skilled persons, described as as-

sessors. whose assistance is found to be valuable in practice. Now there is a third matter I would like to point out as distinguishing this case from cases where we proceed to expropriate property in connection with railways, or to acquire a railway by a process of expropriation. It is to be borne in mind that here we are proceeding to acquire the s-tdck of this company by an agreement with those interested, and we are not therefore in a position to impose upon them a particular Court; their views as to the composition of the board that should determine the difference that exists as to the value of the property to be acquired must be taken into consideration. So long as we are endeavouring to reach an agreement there would perhaps be something arbitrary in our undertaking to impose upon the other party to the agreement the obligation of submitting this difference between us to a particular court. I point out again that we are not proceeding by expropriation; we are endeavouring to provide a tribunal which will be accepted by both of the parties to the proposed agreement. Apart from that consideration-, I do think there are some possible advantages, as I have already -pointed out, by an association with the Exchequer Court judge of the men that it is possible at all events will be designated; and ultimately, in actual practical results, we get, as the hon. gentleman himself has pointed out, the determination of this question by the Judge of the Exchequer court.
-Mr. FIELDING: Would not the Judge of the Exchequer Court be in a better position to obtain that technical knowledge by calling in technical advisers-assessors, as they are sometimes called in other cases

rather than take the chance of getting technical men under this method? For example, the Government of Canada will appoint an arbitrator and there is nothing which says he must he a technical man. The Grand Trunk may appoint an -arbitrator, and there is nothing which says he must be a technical -man. In -both cases they are appointed as arbitrators, although it may or may not be thought that technical men are the best. If therefore technical knowledge is required it would strike me that the Judge of the Exchequer Court could better get it by calling in the aid of assessors than by the method proposed.


Charles Joseph Doherty: I would point out the fact that if it- should turn out that neither of the men who are to be associated with the judge have that requisite technical

knowledge, there is nothing to preclude the arbitrators from taking the necessary means to otherwise acquire that technical information.


Mr. McEENZIE:: I might s-ay to the Minister of Justice that we have the worldwide experience of trial courts consisting of one judge. If in its wisdom and experience Parliament, either in this country or elsewhere, had found that two or three judges would constitute a better trial court than one jud-ge, no doubt long ago we would- have had more than one judge constituted as a trial court. My own absolute belief is that one man tries a case better than two or three. For that reason I am in favour of the judge of the Exchequer Court sitting to try this case -alone, rather than having two men associated with him, one pulling against the other. Of course, if there are three men sitting down in a court-with a view to getting at the truth, that may be an advantage; but I submit- to the Minister of Justice that his experience of many years on the Supreme Court Bench would teach him that he would want to have absolutely his own free mind, and his own judgment, in trying this case, and not be interfered with by the opinion of somebody else. He will reach his own conclusions and follow his own decisions; but he would not like to be pulled and hauled by one on each side of him who was entirely of a different view and trying to reach a different conclusion. That is not the kind of men I would like to have sitting on the Bench with me, but that is the position in which we are going to put Mr. Justice Cassels, who is accustomed to trying cases alone, and to filing his own decisions without any interference. Here we place him as a buffer between two of the ablest men that perhaps can be got in this country, one of whom is pulling him one way and the other pulling him another way. I d-o not think we can get the best results from Judge Cassels under -conditions of that kind. I would like to see him with a free hand to deal with this matter, and I would like there to be an appeal from his decision to a higher court, just as in the case of any other decision that he -might make. Speaking for myself, I would prefer to leave this very big question in -that form rather than leave it to a conflict between two men, with Judge Cassels doing the best he can to keep them straight.


Mr. MURPHY:: The Minister of the Interior, the Minister of Railways an-d the

Minister of Justice have offered no objection to the request made by my hon. friend (Mr. McKenzie). If that request is not to be acquiesced in, there is a consideration which ought to be kept in mind before this amendment is adopted. Prior to ithe Minister of Justice coming into the Chamber, the member for Brantford (Mr. Cockshutt) repeated a suggestion that he made a few days ago that the members of this board of arbitrators should not all be judges. The Minister of the Interior discussed that with the member for Brantford, and my recollection is that while the minister made no promises on the subject he rather intimated that it would be advisable that the board should have among its members an expert railroad man or a business man. Now, the matter has been put on a different plane by the decision to name Judge Cassels as the third arbitrator. That being the fact, and the member for Brantford having been left with *the impression that his suggestion had been acquiesced in by the Minister of the Interior, it is more than ever necessary that there be a decision on that point now. I invite the Minister of Justice to consider the matter before pressing the amendment to a vote.


Arthur Meighen: The hon. member has correctly stated, I think, what I said to the committee in reply to the suggestion made by the member for Brantford. It is my opinion that the three members of the board .should not be all judges, for the reasons stated by the member for Brantford, and now that we have named a judge as one of the arbitrators it would appear to me not to be wise to restrict either side in the selection of their own representative. We certainly could not restrict the Grand Trunk, and I see no wisdom in our restricting ourselves. The wider the field that is open to us the better; undoubtedly our object should be to secure the very ablest men the country can lay hands on.
Mr. MURPHY; I was led to make the observations that I did by the fact that the Minister of Justice seemed to be discussing the composition of the board from the standpoint of selecting three judges as its members. That, at any rate, is the inference that I drew from his remarks.


Charles Joseph Doherty: I did not intend to convey that impression. Indeed, I think I did point out that it would be possible and might be desirable, in view of our having these two additional gentlemen, that one. or perhaps both of them, should
be men possessed of technical knowledge and specially qualified to deal with questions of this kind.


Mr.   MURHIPY@: I thought my hon. friend expressed a preference for the bringing in of these two men as assessors.


Charles Joseph Doherty: In speaking of the method followed by courts in calling in experts of this kind, I said that the men so called in were described as assessors, and that the provision that the board of arbitration be composed of three, as distinguished from the suggestion that a judge should act alone, created the possibility of providing expressly, in the nomination of one or both of the other two, the sort of aid which courts sometimes call to their assistance under the guise of calling in assessors.


Arthur Meighen: I move:
_ That section 6 be amended by striking out in the 8th and 9th lines thereof, the following words:	"by the two so appointed, or, failing
agreement, by judges to be designated in the said agreement " and by replacing them with the following:	"shall be Sir Walter Cassels,
Judge of the Exchequer Court of Canada. Should Sir Walter Cassels die or be unable to act, the said parties shall agree upon another third arbitrator who shall be either the then Judge of the Exchequer Court of Canada or one of the Judges of the Supreme Court of Canada."


William Stevens Fielding: And if the said parties fail to agree upon another third arbitrator, what next? .


Arthur Meighen: That, I think, is too remote a possibility.


William Stevens Fielding: I do not think so. In the Bill as it stands there is a provision to cover the.case of failing to agree as to the appointment of a third arbitrator. My hon. friend has overlooked that, I think.


Arthur Meighen: Now that we have definitely agreed upon this one member of the board, I thinik that the possibility is very remote, because that man has to die or become incapacitated in order to give any rise at all to the possibility. Well, that in itself is a rather remote event-.


William Stevens Fielding: Let us hope so.


Arthur Meighen: I earnestly hope so, indeed, as we all do. The next possibility, if that occurs, is that two of them will not be able to agree upon a choice from among the judges of the Supreme Court and the Exchequer Court. The second possibility is, I think, even more remote. Even in the plan as originally proposed there was still an event not covered; there was the possibility

of two judges failing to agree upon the selection of a third arbitrator. I do not think, however, that that possibility was any more remote than the one which we are now considering; so it would appear to me not to be necessary to go to the length of covering that possibility. Of. course, if it should occur it would simply mean that the agreement would fail and we would have to come back to Parliament and arrange another means of selection.


William Stevens Fielding: The hon. gentleman must not let that happen; he must not by any means let the agreement get back to us.


Arthur Meighen: It would be very unfortunate, I know, but I would1 not be at all afraid if it should happen; the verdict would likely be made with a good deal more confidence and with a greater degree of unanimity than is the case now. I do think, however, that Parliament is taking every reasonable precaution as it is.


[Stage Direction]
Amendment agreed to, and section as amended agreed to.
At six o'clock the committee took recess.
After Recess.
The committee resumed at eight o'clock, Mr. Boivin in the Chair.
Georges Henri Boivin: When the committee rose at six o'clock, we had adopted clauses 1, 2, 3, 4 and 6; clause 5 had been allowed to stand with the proposed amendment of the hon. member for Prince (Mr. Mackenzie King) thereto.
On clause 7-ratification by shareholders.


Daniel Duncan McKenzie: 
Georges Henri Boivin: I must draw the attention of the committee and of the hon. member to the iact that a discussion as to the advisability of taking over the Grand Trunk at the present time is certainly not in order on clause 7 of this Bill. The principle of the Bill has already been discussed and clause 7 provides merely that this road shall be put into the hands of a committee of management and also that the books, reports and records of the railway shall be open to inspection to any person appointed by the Minister of Railways. How the present value of the present condition of the road can have anything to do with that is a question which, the Chair must rule, is not relative to the clause under discussion.


Daniel Duncan McKenzie: I should like to ask
the minister what is meant by this proposition that he makes to us in paragraph (b). if it does not mean that there is to be an investigation into the condition of the road and a report to the House.


John Dowsley Reid: Paragraph (b) explains itself. The abject is this. We are to have an arbitration as to the value of the Grand Trunk railway system. The Grand Trunk employees will prepare their case as regards assets, liabilities and so forth from the books of the company.
They will bring their evidence before the board. The Government feel that as a protection to themselves they should have access to all the books so that they will be able not only to check up the statements that are submitted to the arbitrators, but also to form their own conclusions as to what evidence to submit to the arbitrators with respect to the assets and liabilities. If the books give us any information as to the physical condition of the road, that also will be of advantage. The Government feel that we should be in the same position as the Grand Trunk themselves in having access to the books for information of every kind. To ascertain the physical condition of the road it may be necessary to have it inspected, but the arbitrators will have power to appoint their own inspectors for that purpose, if it is necessary to go that
far. I think the language of the section hardly needs explanation.


John Howard Sinclair: Why does not the Government leave the management of the road to the company until the stock is acquired? Under this clause the Government is going to take charge of the road as soon as the agreement has been ratified by a majority of the stockholders, and a Committee of Management is going to operate the system until the stocks are turned over to the Government. What will happen then, we are not told, but I presume the road will become part of the Canadian National system. Why should not the company be allowed to take the responsibility of running the road until it changes hands? We are only getting ourselves into trouble and becoming responsible for deficits and advances by taking over the road in the interim, and I see no good reason for it. It would be cleaner business not to take over the road until the stocks are turned over.


John Dowsley Reid: We want to have the
advantage as soon as possible of operating the two systems together, because that will be more economical. The Committee of Management will be-able to make arrangements for the exchange of traffic, which also will be an advantage both to the Grand Trunk system and our own. The sooner we get the two systems working together the better it will be for both.


Daniel Duncan McKenzie: The minister speaks
of the exchange of traffic. I must admit I do not know very much about the operation of a railway, and I should be glad if the minister would explain to the committee what exchange of traffic he has in mind. What part of the traffic does he think will go to the Grand Trunk from the Government railways, and what part from the Government railways to the Grand Trunk by reason of the two roads being operated under one management? Where will this exchange of traffic take place, and of what will it largely consist?


John Dowsley Reid: The traffic that is gathered in the province of Ontario for the West, for instance, will be transferred to the Government railway perhaps at North Bay and will go through on our own system, and similarly with the traffic that is gathered at the Niagara frontier.


John Howard Sinclair: Is not that the case at present?


John Dowsley Reid: No.


John Howard Sinclair: Is there not a
working agreement for exchange of traffic between the Grand Trunk and the Government railways?


John Dowsley Reid: There is a working agreement, but as I explained the other night, when the Grand Trunk entered into that agreement they put in a 'clause that in cases where a shipper directed that his goods be sent over a certain road they could go over that road.


John Howard Sinclair: Do you intend to deprive the shipper of the right to say how his goods shall be routed?


John Dowsley Reid: No, but if the Grand Trunk was not working in harmony with our system they could route the traffic by some other railway. It is easy enough for them to arrange it with the shipper simply by a direction on the bill of lading. But when the two roads are operated together it will be to the advantage of both to see that the goods go over our own roads instead of being diverted to some other railway.


John Howard Sinclair: Is the minister suggesting that the Grand Trunk is not living up to its agreement to exchange traffic with the Government railways?


John Dowsley Reid: They claim to be, but we have been wrangling with them ever since the agreement was made years ago. We have never got the advantages that we expected when the agreement was' made. We never got the traffic we expected on the Intercolonial, for instance, to Halifax and St. John.


John Howard Sinclair: The minister told us the other day that the Grand Trunk did not divide the proceeds of the long haul fairly with the Intercolonial. Now I understand him to say that when this arrangement is carried out the Intercolonial will get a fair share of the long haul. But that would be simply taking money out of one pocket of the Government railways and putting it into another. It would not be adding one dollar to the revenues of the railway or of the country. When the two systems are operating together it does not seem, from a business standpoint that it would be of advantage to be strict as to the division of the proceeds of the long haul. My hon. friend seems to have something like that in his mind. I submit that he has complete authority to settle these questions relating to the exchange of traffic at the present time through the Board of Railway Commissioners. To my mind there is no necessity why we should take charge

of this railway and become responsible for its operation and the deficits that are bound to occur until we take over the stock and own the road.


John Dowsley Reid: My hon. friend is wrong when he says the Railway Board have power to say which way the traffic will go.


John Howard Sinclair: They have power to order that an exchange be made.


John Dowsley Reid: No, they only have power to make the roads agree to an exchange of traffic. Some roads refuse to exchange traffic at a certain point, but the Board of Railway Commissioners can make them enter into an agreement for the exchange of traffic at points, for instance, where the roads cross.


John Howard Sinclair: I do not mean that the Railway Board can direct traffic to the Canadian Pacific rather than the Grand Trunk system, but the board certainly has -power to deal with the exchange of traffic.


William Lyon Mackenzie King: This clause revives a question we were discussing earlier, and it is possible that the ministry, in considering the matter, may have come to a different conclusion. It provides that as soon as the agreement has been ratified by a majority of the holders of the stocks enumerated in the preamble, etc., certain rights and privileges are given. Is the ministry still determined not to permit the same rights to the representatives of the people in Parliament as they are granting to the stockholders of the Grand Trunk Railway?
If after the words " ratified by " the Government would agree to insert two little words, " Parliament and," it would put the people of the country on an equality with the stockholders of the Grand Trunk Company, and would recognize that they are entitled to as much consideration as those stockholders. Does the minister (Mr. Meighen) not feel to-day that he -.can undertake to assure Parliament that before the measure passes these two words will be inserted?


Arthur Meighen: Parliament, representing the people, is in the much better position of the two, in that it is virtually making the agreement and has powers of modification, whereas the shareholders, on the other hand, have nothing but the mere power to say "yes" or "no." We propose to keep Parliament in that position of supreme advantage.


William Lyon Mackenzie King: That does not answer the question. The minister has told

us on, different occasions in regard to certain clauses of the Bill that they are inserted because the Grand Trunk Company will not permit anything else to be done.


Arthur Meighen: I have not said that.


William Lyon Mackenzie King: I beg the minister's pardon if he has not said so, but he has acknowledged it.


Arthur Meighen: No, no.


William Lyon Mackenzie King: Then I may
ask my hon. friend this question: Why is the four per cent guaranteed stock not put along with the other stocks and made subject to arbitration? We were told the other day by the President of the Privy Council (Mr. Rowell) that it was because the Grand Trunk Railway Company would not consent to that being done,


Arthur Meighen: No doubt the President of the Privy Council said in effect just what I have said over and over again-because the application of the Government's minimum necessarily and legally is to the guaranteed stock.


William Lyon Mackenzie King: Do I understand, then, that the minister contradicts his colleagues and says it is not true that the Grand Trunk insisted on having this stock left in the form in which it is in the Bill?


Arthur Meighen: I say that the President of the Privy Council doubtless said in effect just what I have stated now. If that is contradicting him, then I contradict him.


William Lyon Mackenzie King: I still contend that as this clause stands it gives the right of ratification to the shareholders and does not permit an equal right to Parliament. When we were asking why it was that this Bill was being rushed it was stated that it was desirable to have the agreement drawn as soon as possible. There will be an opportunity to draw the agreement, but according to this section the agreement will not have any value one way or the other until a special general meeting of the stockholders has been duly called for the purpose of considering it. By the time the agreement is drawn and the special meeting of stockholders has passed upon it another couple of months shall have gone by and Parliament will be again in session. There could be no delay to either of the parties by permitting Parliament when it reassembles to have the same opportunity of passing on the agreement as the shareholders of the Grand Trunk will have. I would urge again on the Government, on
behalf of the people, that the people's representatives be accorded the same privileges and rights as will be given to the shareholders of the Grand Trunk.


Frank S. Cahill: Whom will the Committee of Management be ansrwerable to? The Minister of Railways a few nights ago made this statement:
Any agent who does not act on that principle will not, while I am Minister of Railways, be on the job very long.
The minister told us a year ago that the Government were not interfering with the management of the Canadian National railway, but on October 23, on page 1372-3 unrevised Hansard, he said that an^ agent who disobeyed his orders while he was Minister of Railways would " not he on the job very long." I would ask what is the position these commissioners will occupy. Will they be directly under the minister?


John Dowsley Reid: The management will be under the direction of the Grand Trunk Railway system.
, Mr. CAHILL: So that the two directors will have nothing to do hut draw the Cana- ' dian people's money. They will not be responsible to any one?


Arthur Meighen: The Committee of Management is just exactly as set out in the Bill. We have representation on the committee, and the Grand Trunk have representation on it equally. One commissioner is chosen by the four, and those five have the management of the Grand Trunk. Our representatives will be responsible to us for what they do, and their representatives will be responsible to them. It is an independent joint system of management. It was a plan thought out in order to cover the period between the making of the agreement and the final determination of the arbitration. It is a sort of joint management in the meantime in order that the owners of the propertyjnay not give it up until at least the arbitration award is made, and in order, on the other hand, that the advantage toward which we are all striving, namely, the unification of the roads, may be secured at once.


Frank S. Cahill: Two will be appointed
by the Government who will be answerable to the Government, and two will be appointed by the Grand Trunk answerable to the Grand Trunk. Is that right?


Arthur Meighen: Answerable in the sense that it is their duty to see from cur standpoint that the road is properly run. I do not suppose that they will be making daily

reports to us or anything of that sort. They are a joint independent management of the system.


Frank S. Cahill: To whom will the fifth
commissioner be answerable?


Arthur Meighen: He will be answerable, I presume, first to his own conscience, and then to both the country and the company.


Frank S. Cahill: If he has not more conscience than is displayed by some ministers it will be unfortunate for the country.


Georges Henri Boivin: Order. I must ask the hon. member to withdraw that remark; it certainly is unparliamentary.


Frank S. Cahill: I bow to your decision,
Mr. Chairman.. Will the commissioners be responsible to the Minister of Railways- that is, the commissioners the Government appoint?


Arthur Meighen: I have stated their responsibility.


John Howard Sinclair: The minister has . told us that this is to be a joint system of management, two men to be appointed by the Grand Trunk and two by the Government. Assuming that there is a loss in running the road for the first two or three months during'which they are acting will the Government, or will the company, find the money to make up the deficit?


Arthur Meighen: As I understand the point which my hon. friend raises it is this: Who bears the loss, and who receives the gains, if any, during the currency of the committee's management? The Grand Trunk stockholders are the owners of the stock until the determination of the award.


John Howard Sinclair: That is, when the stock is delivered to the Government?


Arthur Meighen: Yes.


John Howard Sinclair: Up to that the loss will be borne by the railway company?


Arthur Meighen: I do not think that is quite correct. Presuming that the valuation of the stock is fixed as of October 1, 1919, we would, immediately after the determination of the arbitration, issue our stock in payment for their stock and we would become the stockholders. The Grand Trunk is liable for all the obligations of the road then just as it is now. We are the owners of the stock of the Grand Trunk and we take the company, of course, subject to,the obligations. We do not stand the loss except in so far as our stock may be affected

in value by it. We become the owners of the stock at that time, and of course the stock is affected in value by the liabilities of the company on the one hand and by the value of the assets of the company on the other. If the assets are increased by the management that reflects itself in an increase in the stock; if the liabilities are increased, that has a deteriorating effect on the value of the stock. It is the Grand Trunk Company which then as now stands the loss; it is the Grand Trunk Company which then, as now, receives the gain if there should be any.


Daniel Duncan McKenzie: That does not seem to be quite clear. Who pays the money? Suppose we are operating the road in the name of the Grand Trunk Railway Company, in reality it is the Government of Canada. In reality the Grand Trunk is merely a sign, a name. If there is money made it belongs to the Government; if there is money lost it is lost to the Government, If we lose money in the interim while the road is under this management, if it is found that $100,000 or $500,000 is necessary to keep the machinery going, that money has to come out of some part of the revenues of Canada. It does not come out of any pocket of the company. It has no money at all but we .stand behind it and must furnish the money. Therefore it does not do any good to talk about this stock. Once we get the stock and put it in the safe it is a mere nominal thing; the question of what it is worth 'to the people does not cut any ice. They do not care a button about it; they only take it as a means of getting this property. Now that they have the property, they can run it in the name of the Minister oif Railways or in the name of the Grand Trunk, if they like. It is identically the *same property and if it makes a loss it is in the same position as the Intercolonial. What was asked of the minister was: Supposing that at the end of one, ot five months under the management of this commission of five there is a shortage of $1,000 or $10,000, who will make it good? My contention is that if the earnings of the road are not enough to meet the liabilities we must make up the shortage. If that is not so I would like to have an explanation.


Arthur Meighen: We are just in the same relation to the company as are the stockholders of any other company. The company has to pay it. We may run the company but the company is the one that suffers.


Daniel Duncan McKenzie: We .are the company.


Arthur Meighen: No, we are the stockholders. That is a different thing altogether. Of course, we are gainers by the success of the company and we are losers by the non success of the company simply because we are stockholders in the company. It is better for the company that there should be this joint management in order that the two systems may be run .as one as .soon as possible because that is the way to get the best results from the two systems. That being the position, it is better for the company, and consequently it is better for us as stockholders of the company, that that should take place.


John Howard Sinclair: It is not very clear to my mind and I cannot see it in the same way as the minister does. When do we become the owners of this .stock; when do we become the proprietors of the Grand .Trunk system? Is it not at the date of the delivery of the stock that we become the owners?


Arthur Meighen: Yes.


John Howard Sinclair: Well, then, it is apparent that any loss prior to that should not be borne by the Government; it should be borne by the company. They must deliver us the property before we begin to pay for the losses. The board of arbitrators should fix the date on which the property can be delivered to the .Government, and prior to that time any loss should fall upon the company.


Arthur Meighen: I say it falls on the company.


John Howard Sinclair: The shareholders should have the amount of the loss deducted from the .price of their stock.


Arthur Meighen: The shareholders "have not the management of the property during that loss. This is a sort of joint method of meeting the opposing views of the committee in this regard. It is true we do not become the legal owners of the stpck until the transfer to us takes place subsequent to the award, but I think I am using legal language strictly correctly when. I say that we become the equitable owners immediately the agreement is acted on.. We are bound to be the owners of the company then. We await the legal title pending the award but we are virtually the owners immediately the agreement takes effect; we abide legal possession until the stock is handed over. They get their stock valued as of a certain date, but immediately the agreement is
signed we become the virtual owners of the property and consequently the value of our stock will be, affected by the success or failure of the company.


William Stevens Fielding: The Grand Trunk should not appoint these managers at all if we are to become the equitable owners at that time. If the committee of management is appointed, why should the Grand Trunk have anything to do with the appointment? They cease to be the owners, we become the. equitable owners, and yet they have the right to appoint two of the members upon the committee.


Arthur Meighen: I admit there is something to (be said for that viewpoint. It appealed to me before this, but there is a lot to be said the other way and this is the method that has been devised for taking care of the difficulty. The Grand Trunk Company say: " It is true you are going to be the owners; as soon as the agreement is signed on a fixed date you will be the owners; but you should not have the right to take full possession, come in and man our property "


William Stevens Fielding: ''Even if you are the owners"?


Arthur Meighen: No-"until, at all
events, we know what- we are going to get for it." Now, in the case of the Canadian Northern something similar was done by the Government, although I think we went more fully into possession there than we do here. "Under that arrangement, we appointed directors on the board, who operated with the other directors pending the final award. Now the plan adopted here to meet the opposing views was that a general committee of management should operate in the meantime leaving the Grand Trunk organization there so that they could not say they were dispossessed of the property-thrown out bag and baggage, as they might if we took possession of the whole thing and had all the officers under our hands, making it unreasonably difficult for them to get the evidence that was necessary. There was considerable to be said for their point of view and there is considerable to be said the other way. All I can add is, this is what was deemed a fair arrangement between the two.


William Lyon Mackenzie King: Can the minister give any estimate as to the time when these stocks will be transferred?


Arthur Meighen: I think the Bill, or the letter says, nine months. I would not like to say they can be transferred in that time,

tut I earnestly hope that they can. The transfer of the stock is not so vital a matter because if it is not .transferred immediately after the award is made the Governor in Council has full power to declare it the property of the Crown 'and pay for it according to the award.


John Howard Sinclair: The committee is to be discharged on the date when the preferred and common stock is transferred?


Arthur Meighen: "Or vested," it says.


William Lyon Mackenzie King: The minister thinks that will be nine months?


Arthur Meighen: That is the time within which it has to be done. I would like to see it done sooner. If I were called upon to give my estimate I would not say it would take that time.


Frank S. Cahill: Is there any provisions for the appointment of a fifth member of the committee in the event of a dispute taking place between the others?


Arthur Meighen: There is no provision for that. We did not think it was probable that four business men could not agree on a fifth man.


Daniel Duncan McKenzie: There is, of course, a very large staff of managers in connection with the various companies now. Are they to be superseded by this committee of management, or will the present management be subordinate to the committee, and by what arrangement is that brought about?


Arthur Meighen: By virtue of the Bill the present management is Subordinated to the committee of management, not displaced, but subordinated to it.


Georges Parent: Will the minister be kind enough to tell me if the majority of the holders of the stock referred to in this particular clause mean a majority in value or in number of stockholders?


Arthur Meighen: A majority in voting power.


Georges Parent: The clause does not say so, and therefore it is probably better to make its meaning clearer.


Arthur Meighen: Possibly it would.


Georges Parent: Would the minister com-sent to an amendment to that effect?


Arthur Meighen: The opinion expressed from a legal standpoint is that that is what it means now. I would certainly be ready to accept an amendment if there was any 
doubt at all about it, but I understand that to be the legal effect now.


Charles Murphy: The hon. gentleman, in discussing not only this clause, but the preceding clauses, used the word " agreement." I am at times in doubt as to what agreement is meant. For instance, there is an agreement mentioned in section 2 .and that is the one by which the Government is given the power to acquire the entire capital, and so on. In the first line of section 7 the phrase used is " said agreement." I assume that refers to the submission to arbitration.


Arthur Meighen: That is a defined term, defined: in section 2, which says:
Subject to the provisions of this Act, His Majesty the King, represented by the Minister of Railways and Canals of Canada, acting under the authority of the Governor in Council, (hereinafter called " the Government '') may enter into an agreement (hereinafter called the " said agreement ") with the Grand Trunk Railway Company.
It is a defined term.


Charles Murphy: Then does the phrase in this section mean the agreement referred to in section 2?


Arthur Meighen: Yes.


Charles Murphy: And it is the submission to arbitration?


Arthur Meighen: The agreement referred to in the section is the submission to arbitration.


Charles Murphy: Not having the language of the amendment that was made to section 6 before me, T do not know whether the words " said agreement '' in line 9 have disappeared as a result of that amendment.


Arthur Meighen: Yes.


Charles Murphy: They have disappeared?


Arthur Meighen: Yes.


Charles Murphy: There is another observation called for with reference to that. In paragraph (a) of section 7 the language used is as follows:
A committee of management shall be formed consisting of five persons, two to be appointed by the Grand Trunk, two by the Government, and the fifth by the four so appointed, to insure the operation of the Grand Trunk system (in so far as it is possible so to do) in harmony with the Canadian National Railways, the two systems being treated in the public interest as nearly as possible as one system'.
Now in the blue-book containing the correspondence and other data relating to this transaction which was brought down, it is shown that there are 1,665 miles owned, controlled or leased by the Grand Trunk

system in the United States. My hon. friend for Shelburne and Queens (Mr Fielding) in the earlier stages of the discussion-perhaps it was on the second reading -asked the Minister of the Interior, or some other member of the Government, if any inquiry had been made as to whether or not there was any objection on the part of the United States Government to the operation by the Canadian Government of a railway system in United States territory. My recollection is that the answer was that no inquiry had been made and no objection was known-in other words, the Government had not any information on the subject. It occurred to me at the time as a very important matter, and I have taken the trouble to make inquiry at Washington. The subject, I may say, is brought up again by the concluding words of the clause which I have just read. Now, my information from official circles in Washington is that if the United States Government take over the operation of the railroads in that country the Canadian Government will have to obtain permission to operate that portion of the Grand Trunk railway within United States territory. On the other hand, if the United States Government do not take over the roads in the United States, there will in any event, be a new system inaugurated there called the " zoning ' system whereby certain groups of railroads will be restricted to operation within certain defined zones having some large centre of population as the pivotal point within the zone, and subject to other regulations. From that point of view the operation of that portion of the Grand Trunk railway within the territory of the United States will be subject to some regulation of the United States Government or of the controlling railway authority in that country. From either point of view, I submit, this Government should be in possession of information and such information as they may have the committee is entitled to receive. In any case, I bring the matter to the attention of the Government now so that if there is any information available they might give it now and if not we ought to receive it before the Bill- is put through its last stages.


Arthur Meighen: Assuming that the information which the hon. gentleman gives is right-and I see nothing in it to make it probable that it is wrong-no difficulty whatever is presented. If the United States continue operation of their roads, then it will deal with roads belonging to companies the stock of which is owned by the
Canadian Government just in the same way as they will deal with roads belonging to companies the stock of which is owned by somebody else. We expect that; we would never ask for anything beyond that. We expect to be treated the same as other people, at all events in relation to lines in American territory. Now, suppose the other alternative be adopted by the United States, of placing their roads under some new system on the zone principle; Then, too, all that we would expect would be the same treatment of companies owned by the Grand Trunk, whose stock we own, as of any other company in the United States. That is all we expect; that they will do with it just as they would have done if Sir Alfred Smithers and his associates and all the hundred thousand shareholders had remained owners of the Grand Trunk stock. In a word, there is no reason to apprehend any different treatment of the Grand Trunk or of any subsidiary company owned or leased by it after the Government becomes the owner of the stock of the parent company than was the case before. Consequently, there is no reason to apprehend any adverse attitude on the part of the United States authorities.


Charles Murphy: 
Arthur Meighen: If there is a probability that it would have an effect on the values, then that should certainly be taken into account by the board.


Daniel Duncan McKenzie: The member for Quebec West (Mr. Parent) raised a point about the meaning of "majority of the holders of the stocks". The rule of construction in

such cases as this is, that the natural meaning attaching to the language is to be accepted unless there is a clear legal understanding to the contrary, and the natural understanding of this language would be that it meant a majority of heads, so to speak, not a majority in value. Take the simple example of five men owning stock, one owning ten shares and the other four one share each. If the construction which the minister puts upon
9 p.m, this is correct,-and perhaps it is-the one man who has ten shares would control the other four, because they hold a total of only four shares as against the one man's ten. But unless we were forced to do so we would scarcely conclude that the one man was a majority of these stockholders. I have always found a distinction made by writers on companies between majority in numbers and majority in value.


Arthur Meighen: I will accept an amendment to cover the point raised by the hon. gentleman (Mr. Parent); I suggest that the words: "in voting power" be inserted after the word "majority" in the second line of section 7. I suggest these words instead of the words "in value," because the shareholders do not vote according to value. My information is that the section as at present worded has legal effect, although I do not remember any decision on the point. However, there will be no doubt about it if the words "in voting power" are put in.


[Stage Direction]
Amendment agreed to.
Frank S. Cahill: I notice that the four per cent guaranteed stock has a voting power of' 400,000 and the debenture stocks, which are also guaranteed by the Dominion Government under this arrangement, a voting power of 1,161,952, or a total of 1,561,952, representing more than half the total voting power of the combined shares, debenture, preference and common. The four per cent guaranteed stocks are being enhanced in value and become a paying stock instead of a stock which is not paying; and the debenture stocks, two of them at four per cent, are also enhanced in value by the guarantee of the Dominion Government. It is quite conceivable that the holders of these stocks and debentures would sanction this arrangement, and that the owners of the shares-really the minority of the shares-that are to be arbitrated would oppose the arbitration. Would the Government consider it advisable to go on with the arrangement if a majority of the

owners of the shares which are to be arbitrated opposed the arbitration?


Arthur Meighen: Yes, the Government would feel it its duty to do so if the Grand Trunk shareholders, with the voting -power to which each shareholder is legally entitled and always has been, carry the agreement. I have not figured out how this voting power stands. But they have among themselves agreed on this voting strength; that i= their business; it is really not ours.


Frank S. Cahill: When did they agree upon this voting strength with respect to the guaranteed stock?


Arthur Meighen: When they subscribed the money. That is the condition on which they subscribe it and take their shares. Consequently we can get their verdict only as they can legally give it. If the arrangement is net fair, it is not for us to make it fair.


Frank S. Cahill: Do the Government consider that they would be justified in going on if a certain set of stocks were taken care of and made virtually bonds as the minister states they will be? This $60,000,000 worth of stocks is virtually made into bonds by this transaction, and the other bonds are enhanced in value. Certain sets of these securities are selected and enhanced in value, perhaps to the detriment of the others. Would we not possibly be buying a lawsuit if we undertake the thing on that basis?


Arthur Meighen: The answer I gave fully covers the point. I presume those who put the bulk of the money in and who have the first claims would not care to put themselves into the power of the last mortgagees. If the last mortgagees are to have control, they might simply hold on and allow the first men to fall with them. Taking all those things into account, they have arranged this distribution of their voting strength, and by the exercise of their voting strength so distributed they can legally bind themselves. That is all their concern. When they legally bind themselves, then we accept their decision so expressed.


Charles Murphy: Did I understand the
minister to say in answer to the hon. member for Pontiac (Mr. Cahill) that the Government intended to proceed irrespective of what vote the stockholders might give at the meeting called to consider this agreement?


Arthur Meighen: If an adverse vote is
given, we cannot proceed. If an affirmative vote is given, we do.


Daniel Duncan McKenzie: The Minister of Railways (Mr. J. D. Reid) gave as a reason for appointing this committee that there was a necessity of immediate exchange of traffic at certain points. The .minister mentioned an exchange of traffic at North Bay. Is there any connection now between the main system of the Grand Trunk and North Bay, owned and controlled by the Grand Trunk? If not, what is the connection?


John Dowsley Reid: The Grand Trunk exchanges traffic at North Bay with our present Canadian Northern system.


Daniel Duncan McKenzie: How do we get to North Bay?


John Dowsley Reid: The main line of the Grand Trunk runs from Toronto to North Bay, and. we can also get to North Bay via the Canada Atlantic. -


Daniel Duncan McKenzie: I am told that in getting traffic to the main line of the Transcontinental from the Grand Trunk we have to make use of the Ontario Government-owned railway, the Timiskaming and Northern Ontario. Is that a fact? Have we any traffic arrangement with the Government of Ontario in connection with that road?


John Dowsley Reid: The Grand Trunk system have some kind of running rights. If they run a train over that road, they pay a certain mileage rate for so doing. That is the only way in which the Grand Trunk can get to the Transcontinental at present. When we take over the Grand Trunk and it becomes part of the Transcontinental, at North Bay we would connect with the Canadian Northern.


Daniel Duncan McKenzie: As regards routing of freight, when we own the road, we would have no purpose, would we, in changing any of the arrangements existing under the present status of the Grand Trunk-that is .in connection with all the traffic that they are carrying now to the best advantage of the road as they think?


John Dowsley Reid: Yes we would, for this reason. The Grand Trunk to-day when it gets to North Bay may hand its freight over to the Canadian Pacific, or it may want to get a longer haul and may send it via Sarnia and from there over some line of steamers to Port Arthur and there hand it to the Canadian Pacific to carry it through to Calgary or Edmonton or the coast. We have no control over that at present. For instance, the hon. member may want to ship a carload of merchandise from Montreal to Vancouver., The Grand Trunk Railway Company might say: We will take that as far as we can on our system, up to Sarnia; then we will ship it by a line of steamers to Port Arthur, and from Port Arthur by rail via the Canadian Pacific to Vancouver. Or they might ship it to Owen Sound or Midland and let the Canadian Pacific steamers take it from there to Port Arthur and from Port Arthur by rail to Vancouver. We lose all that haul under present conditions. If we have control of the Grand Trunk, we have the advantage, of which I was speaking a few minutes ago, of having all Ontario and Quebec traffic now controlled by the Grand Trunk being transferred to the Canadian National railway. We would be in this position, that if we wanted to send freight, say, to Vancouver, we could route it to North Bay and then over the Canadian Northern system right through to Vancouver. If we wanted to send it lake and rail, we could send it up to Goderich, hand it over there to the line of steamers that now plies on the lakes in connection with the Canadian Northern, and in that way the Canadian Northern would get the advantage of that additional freight of which they do not get one pound now. Then when the freight reached Port Arthur, it would go over the 'Canadian Northern system right through to Vancouver. The result would be that we would get all that long haul, and an immense quantity of freight that we do not receive now at all. In addition to that there is the traffic which the Grand Trunk Railway system gathers in Epgland, and on the continent of Europe that is brought across by the line of steamers connected with the Grand Trunk railway, namely the White Star Line. The Grand Trunk will take that and route it via Sarnia or Midland in the summer time. I do not know whether we have been getting any of that at all; it has probably been going via the Canadian Pacific to the coast. Therefore the hon. member will see that when we have control of the Grand Trunk and it is part of the system, if that traffic is all rail, we will send it to North Bay and when it gets to North Bay it will go over the Canadian National system, and when traffic that is gathered in the West by the Canadian National Railway system consigned to points in Ontario and Quebec arrives at North Bay, we can hand it over to the Grand Trunk which will be part of our system, whereas as it is now we are not interested because the Canadian National railway may hand it over to either the Canadian Pacific or the Grand Trunk.

Large portions of it may be handed over to the Canadian Pacific because it is immaterial to the Canadian National whether they hand it over to the Canadian Pacific or the Grand Trunk because the rates are the same, being fixed by the Railway Commission, only they will give it to the road that has the shortest haul. A railway always hauls freight as far as it can over its own system, because the rate is divided in proportion to the mileage hauled over each railway.


Daniel Duncan McKenzie: The difficulty I see is that the man who owns the goods will ship them by the cheapest and most expeditious route. Will not the shippers have entire control of how their goods shall be routed ? The Grand Trunk may have commended itself to them as the cheapest and most direct route, but the management cannot say to a man who is sending a few carloads of goods, say, from Montreal to Vancouver, and who starts those goods from Montreal on the Grand Trunk, " These goods must go all the way by our road." The shipper is at liberty to ship his goods by the most expeditious and cheapest route. Freight is an element that must enter into the price of his goods, and he will certainly take care to get the cheapest freight possible. It is not in the power of the Grand Trunk or any other railway to say by what route those goods shall go, unless the freight and transportation facilities are of such a nature as to commend themselves to the judgment of the shipper. So all the advantages which the minister contemplates may not accrue. It will depend entirely on the facilities which the road is capable of affording, its freight rate, and generally its capacity to overcome the competition of other lines.


John Dowsley Reid: Whether the goods are shipped by the Grand Trunk, the Canadian Northern or thfe Canadian Pacific, the freight rate is exactly the same. That is fixed by the Board of Railway Commissioners. A carload of goods from Montreal to Vancouver will cost the same in freight, if it goes by an all-rail route, no matter by what road it travels. Similarly, if it goes by lake-and-rail,-by rail, for instance, to Sarnia, Midland, Goderich or Owen Sound, Jfien by water to Port Arthur, then by rail again. The lake-and-rail route is a little cheaper than the all-rail, route. What I was trying to point out was this: The Grand Trunk's agent at Montreal, for instance, canvasses a shipper and gets a carload of freight for Vancouver. Now it is very seldom that a shipper says that the goods
[Mr. J. D. Reid.3
must be shipped by Grand Trunk and Canadian Northern, or by Grand Trunk and Canadian Pacific. All the shipper cares about is to get his freight to its destination as quickly as possible. The Grand Trunk would carry the freight as far as it could on its own line. The distance to Sarnia, for instance, would be longer than to North Bay, and it would be to the advantage of the Grand Trunk to send the freight as far as possible over its own line in order to get a larger proportion of the freight, which, of course, depends upon the mileage. The shipper is not very much interested in how his goods are routed, because the freight on all three roads is the same. When we get control of the Grand Trunk our railways will all work together, and it will be to our interest to see that the goods, go all the way to their destination by the Government system. I agree that if a shipper wanted to do it, he could direct that his goods he routed by the Grand Trunk to North Bay, and then by Canadian Pacific to Vancouver, and he would get the same freight rate, but it is very seldom a shipper wants that done. It is the railway company that generally advises the shipper, in order that it may get a long haul over its own system. When we take over this road we shall get a very much larger portion of the traffic than we get now.


Lucien Cannon: After the Grand Trunk comes under this Committee of Management what are the intentions of the Government as to the terminals in Quebec and Levis? I would point out to the minister that present day conditions in Levis are absolutely. intolerable.


Georges Henri Boivin: I must rule that any question concerning the railway terminals at Levis is not now in order. The hon. gentleman well knows that the railway terminals at Levis are the property of the Canadian National railway, and are not subject to the Committee of Management which has not yet been appointed.


Lucien Cannon: With all respect to the Chair, the Grand Trunk also have terminals at Levis.


Georges Henri Boivin: I do not rule that the Grand Trunk has no terminals at Levis. [DOT] My ruling is that this clause provides only for the appointment of a committee of management, and that the hon. member's question is not in order upon this clause.


Lucien Cannon: This .clause provides for the appointment of a committee of management "to insure the operation of the Grand Trunk system (in so far as it is possible so to do) in harmony with the Canadian National railways, the two systems being treated in the public interest as nearly as possible as one system." It is therefore the intention of the Government to run both the Canadian National railways and the Grand Trunk in the public interest, and I think it would be in the public interest, Mr. Chairman, if the minister would tell us on this clause what are the intentions of the Government in promoting the public interest as far a.s the terminals in the city of Quebec and the city of Levis are concerned. It is a matter of great importance, and one in which the public, in our district at all events, are very much interested.


Georges Henri Boivin: The ruling of the Chair is that although the question may be, and, indeed, is of great importance, it is absolutely irrelevant to the clause which is now before the committee, and that under the rules it cannot be answered at this time.


Mr. CASGRAIN:: With regard to the personnel of this committee of management, is it the intention of the Government to appoint technical men with a wide knowledge of railway matters? I think it would be in the interest of the public at large that we should secure the services of the best men possible in order that this tremendous undertaking may so be managed as to attain the ends the Government hope for.


Arthur Meighen: The hon. gentleman's ideas .are exactly ours on that subject.


Lucien Cannon: Will the minister say under what section he gave us information a few .moments ago in regard to what he would do in connection with freight between North Bay and Vancouver, and Montreal and Sarnia?


John Dowsley Reid: I was answering a question of the hon. member for Cape Breton North and Victoria (Mr. McKenzie).


Lucien Cannon: What will be the salary of the members of the Board of Management?


Arthur Meighen: I do not know that there will be any salary. It has not been decided yet what the remuneration will be.


Daniel Duncan McKenzie: Last session we passed an Act creating the Canadian National Railway Company. I am not sure that that is the correct name of the body, but the name makes no difference;, the minister knows what I mean. When this transaction is completed will the road we intend to acquire come under the control of the company we created last session to take charge of all Government railways?


Arthur Meighen: The intention is that the Committee of Management shall be discharged after the award is made and the stock becomes ours, and it will be for the Government then to determine just how the road is to be run. We might appoint stockholders as directors of the road, and the directors could be elected in the regular way. But it is contemplated to add the road to the Canadian National system and have it run under the same management.


Daniel Duncan McKenzie: Under the provisions of the company that we created by Act of Parliament last session?


Arthur Meighen: Yes.


Georges Parent: When the agreement has been consummated will the voting powers of the shareholders immediately cease? The agreement has evidently been already entered into between the Government and the Grand Trunk, because the word " ratified " implies that something which has already been done is to be endorsed. If there is only .one agreement, my view is that the voting powers would cease immediately upon ratification of that agreement by the shareholders. I would like the minister to clear that point up.


Arthur Meighen: It is cleared up by the proviso contained in clause 4:
Provided that concurrently with such guarantee of dividends and interest upon the present guaranteed stock and the present debenture stocks, respectively, the voting powers at meetings of shareholders of the Grand Trunk now vested in or exercisable by the holders of the said stocks respectively shall cease and determine absolutely.
That is to say, the voting power falls immediately the guarantee of the Government is given.


Georges Parent: Perhaps I was not quite clear. This Bill has reference to but one agreement, and when it is ratified everything provided in it should be binding in every respect. I would presume therefore that the voting power would cease immediately on ratification of the agreement.


Arthur Meighen: I do not think that logically follows.


Georges Parent: I do not know how you could divide the agreement.


Arthur Meighen: We do not divide the agreement at all. When both parties execute the agreement it becomes binding and they are bound by every term in it. But it is not a term of the agreement that they lose the voting powers until the final award is made and the guarantee is given in accordance with the award. That is to say, consistent with the terms of the Bill the stockholders may exercise their voting powers after the agreement is executed and pending the destruction of those powers by the giving of the guarantee.


Mr. ROBB:: There are a number of subsidiary companies that are to be taken over with the Grand Trunk system. What provision is made for the representation of this Board of Management at the meetings of directors of these different subsidiary companies, such as the Central Vermont, Southern New England, Detroit, Grand Haven and Milwaukee, and Grand Trunk Western? Certain officials of the Grand Trunk are vice-presidents; and as soon as the affairs of the company are handed over to the Board of Management it will b'e necessary to have representation on the .boards of these subsidiary companies. I do not see any provision for any such representation.


Arthur Meighen: The Board of Management is not in the nature of a representation on the Grand Trunk board at all. The operations of the Grand Trunk Railway are in accordance with the dictates of policy of the Board of Management, who are supreme. Every organization of the Grand Trunk system is wholly subordinate to the Board of Management, who can consequently dictate as to all the Grand Trunk system itself in the way of operation. They can dictate to the main directors as to what shall be done with subordinate companies. According to my own "way of looking at it, they can say to the Board of Directors what shall be the policy of subordinate companies.


Joseph Philippe Baby Casgrain: Have the Government any idea at present as to who their two representatives on the Board of Management will be?


Arthur Meighen: No. I have not even heard names mentioned yet that I can recall.


Joseph Philippe Baby Casgrain: Subsection (b) provides that the books, minutes, reports, documents and other records, and all the railways and

properties of the companies comprised in the Grand Trunk system shall at all times be accessible and open to inspection. Will that clause be applicable for all time or only during the office of the Board of Management?


Arthur Meighen: Until the arbitration
is complete and the inspection power lapses.


[Stage Direction]
Section agreed to.
On section 8-loans to committee of management upon notes or obligations of Grand Trunk:
William Lyon Mackenzie King: This is a particularly objectionable clause. The Bill seems to get worse and worse as we proceed. Let me read the clause:
The Government may lend to the said Committee of Management, upon the notes or other obligations of the Grand Trunk, such sums as the Government may from time to time deem necessary to the carrying on or operation of the Grand Trunk system.
See what this clause means. The Committee of Management, is to be composed of five gentlemen, two of whom are friends of the company, two of whom are friends of the Government-and the Minister of the Interior has assured us to-night that these four friends will be so much of one mind that it is not necessary to indicate any means whereby the fifth shall be chosen. This section proposes that the Government, without coming to Parliament for any right to do so, may lend this committee any sums they wish for any purpose that the committee think necessary for the improvement of the road or for the carrying on of its operations Who are "the Government"? Clause 2 throws a little light on vrho may be meant by "the Government" :
Subject to the provisions of this Act, His Majesty the King, represented by the Minister of Railways and Canals of Canada, acting under the authority of the Governor in Council (here-, inafter called the " Government '') ;
In other words the Government is the Minister of -Railways and Canals, to all intents and purposes. This clause says that the Minister of Railways and Canals may, out of the treasury, lend to these five gentlemen, any money that is needed for the purpose of carrying on the operation or improvement of the Grand Trunk system.	,


John Dowsley Reid: Under the authority of an Order in Council.


William Lyon Mackenzie King: Yes, if you -wish it so. That simply leaves it to Council, on the suggestion or recommendation of the minister himself. If Parliament *wishes to part -with the last vestige of the control that it has over the executive, we should pass this clause, but if Parliament wishes to retain any control it may have over expenditures this clause should not be permitted to stand. If money is needed for the carrying on or improvement of the Grand Trunk system, let the minister come to Parliament, just as the Government does in regard to other appropriations that may be necessary, state in Parliament what money he needs and have that money voted by Parliament. I do not think it is too strong a term to say that this section is thoroughly vicious in that it deprives Parliament altogether of its control over the supplies that may be necessary for this purpose. Under this term " the operation or improvement of the Grand Trunk system " the minister can spend public money for any conceivable purpose in connection with these roads, building hotels, branch lines and stations; he can go into any constituency in this Dominion where the railway is going to run and find that this particular town needs this improvement or that particular county needs that improvement and give the assurance that Parliament has given him the right to lend the company any money it pleases to spend for the purpose of carrying on those improvements. As my hon. friend (Mr. McKenzie) remarks, a few weeks ago there was a characteristic illustration of this. We saw a letter in one of the journals published in Kingston by a prospective candidate in the approaching election there stating that in view of what had been told him by friends of what was alleged to have been said by the Minister of Railways and Canals as to what /would be done in Kingston, it was useless for him to run as a candidate, that therefore he would withdraw, and as a result the hon. Minister of Finance (Sir Henry Drayton) was returned unopposed. That kind of thing.is possible under this clause. Nothing can be more subversive of the rights of Parliament and the interests of the people than that any such wholesale power should be given to the Government.


Mr. EDWARDS:: Is that the reason why the Grit candidate in Kingston withdrew too?


William Lyon Mackenzie King: I have not the slightest doubt that that may have been a reason in view of the fact that, accord-97*
ing to reports, representations were made on such an extensive scale.


William Cameron Edwards: My hon. friend was
there just a few hours before he withdrew and I thought he would have some information in reference to him.


William Lyon Mackenzie King: The hon. member was in Kingston for a different purpose entirely and had nothing to do one way or the other with the choice of a candidate for Kingston, but I have not the slightest doubt that inasmuch as the Unionist gentleman who had been named as a candidate for that constituency said that he felt that it was entirely useless to run as the Government had made so many promises to the electors as to what was going to be done in Kingston the other candidate may have thought that his ohances would be equally poor under the circumstances. I do not think one can use words too strong to describe the vicious possibility of a clause of this kind, and I therefore think that clause 8 should be struck out entirely.


Mr. J. E. ARMSTRONG:: Does the hon. gentleman think the remarks he has made are very complimentary to the people of Kingston?


William Lyon Mackenzie King: I have not done anything but quote 'the remarks of a citizen of Kingston, and I have nothing to take back in regard to anything I have said one way or the other.


Joseph Elijah Armstrong: The hon. gentleman seems to think that the Minister of Railways had made so many promises as a minister of the Crown to the people of Kingston. that one of the men in the running thought it useless to continue in the field,_ the assumption (being that the people of Kingston were easily influenced.


William Lyon Mackenzie King: My hon. friend neglects to read the papers. This Unionist gentleman, one of my hon. friend's friends, over his own signature, wrote a letter to the Kingston Standard in which he said that he had accepted the nomination of the citizens of Kingston to stand as the candidate but that he withdrew from the field entirely because it had been represented to him that the Minister of Railways had promised so much in the way of improvements for the city of Kingston that he felt that it would be useless for him to run.


Joseph Elijah Armstrong: That has been denied time and again.


William Lyon Mackenzie King: I will read the Kingston Standard of Friday, October 10.


Some hon. MEMBERS:: Order, order.


William Lyon Mackenzie King: Does the hon. gentleman not wish to have 'the facts stated?
This morning Mr. Hughes dratted a letter explaining precisely the reasons that led to his withdrawal. The letter is as follows:
Some lion. MEMBERS: Order.


William Lyon Mackenzie King: If the Chairman rules me out of order I shall not continue to read.


The CHAIRMAN (Mr. Fripp):: I think the hon. member is in order.


William Lyon Mackenzie King: To the Editor of The Standard:
Sir:-I wish to announce that I have retired from the contest for the seat in the House of Commons. My reason for doing so is that it is reported that the Hon. J. D. Reid made the statement to a number of representative citizens that if Sir Henry DTayton was given the seat Kingston would he well looked after and that the harbour improvements would be assumed. Being a loyal and true Kingstonian and as I have always worked for the interest of the city I felt that I could not take the responsibility of going on with the contest and in any way interfering with the material progress of the city. I sincerely hope that Sir Henry Drayton will see to it that work will be started in a very short time and Kingston will become the eastern terminal of the Great Lakes.
Do hon. gentlemen, see that?
Kingston will become the eastern terminal of the Great Lakes. I thank the many citizens who assured me of their support and ask them to put their shoulder to the wheel and work for a bigger, better and more prosperous Kingston.
(Sgd.) J. M. Hughes.
Now, Mr. Chairman, see how closely that letter links up with this clause in the Bill. This candidate retires from the field because he has been led to understand that Kingston would become the eastern terminal of the Great Lakes, and this clause asks Parliament to give to the Minister of Railways the right, if he thinks that such may be regarded as an improvement of the Grand Trunk System, to make Kingston the terminal of the Great Lakes.


John Dowsley Reid: Why cannot the leader of the Opposition (Mr. Mackenzie King) be fair in this matter? Why does he not give the whole story? What does the letter which has been read by that hon, gentleman say? " It is reported,"-or " it is a street rumour The leader of the Opposition has been perusing Hansard from day to day and must have read my reply to the statement in question which appears there. That reply is to this effect: The man that wrote that letter was not 'at any meet-
IMr. King. )
ing at which I was present, but a gentleman, a Unionist, who was there, denied the next day that there was any truth whatever in the statement. The leader of the Opposition knew that there had been a public statement made by a gentleman who was present at the meeting attended by me in which a denial of that letter was given, but nevertheless he read the letter this evening. Knowing that the letter in question had been denied by the party or parties who were present at the meeting in question, he nevertheless suggested that the statements contained in the letter are true. I denied it the other day, and in the presence of the leader of the Opposition I deny it once more; there is no truth whatever in the statements contained in that letter. I say I never made any such promises, and I ask t(he hon. gentleman when he again quotes that letter to couple with it my denial which he knew was already on Hansard.


Mr. McKENZIE KING:: Let me say at once to my hon. friend that I would be the last person not to accept the statement he had made at the present .moment. I certainly do accept it and I am very glad to do so. I had no other thought in reading the letter than to answer my hon. friend (Mr. Edwards) who raised a concrete question, and in regard to this very matter of the campaign in Kingston. I read the letter which speaks tor itself-it contains the reason which the candidate himself gave for withdrawing. The candidate himself may have been mistaken in the reason which actuated him to withdraw, and may have been mistaken in the information which was given to him. I am quite prepared to say that I am only too happy to believe what the minister has said and that he should not be held responsible for anything of the kind. I have not any intention to reflect on the minister, but I did want to make very clear the point that I think where rumours of the kind are afloat there is a double reason why we should be very careful with respect to the legislation we are putting through this Parliament not to give to the public even the slightest reason to believe that a possibility of that kind may exist.


John Dowsley Reid: Of course if you are
going to depend on newspaper rumours and reports and letters written by persons who do not- know the facts-
Mr.MACKENZIE KING: This man was the candidate.


John Dowsley Reid: - you might as well strike out that clause in the, Bill or any other clause which bears upon it. The leader of the Opposition is trying to lead the people of this country to believe that if we take over the Grand Trunk system the Minister of Railways for all time to come will have power under this clause to build hotels and to enter upon the spending of money in any way, shape or form.


William Lyon Mackenzie King: Oh, no.


John Dowsley Reid: This Bill provides that not the minister merely, but the Government must authorize any expenditures, and then only during the time this Committee of Management are in control.


William Lyon Mackenzie King: Certainly.


John Dowsley Reid: That is all.


William Lyon Mackenzie King: Not for all
time. I was trying to find out how long this Committee of Management will be in control. Will it be for nine months?


John Dowsley Reid: While the arbitration is going on. The leader of the Opposition wishes to lead the people to think that during that time the Minister of Railways is going to start out to build hotels on this great system. I can say to the hon. gentleman that so long as this prohibition wave continues there is not much danger of that.


William Cameron Edwards: I do not think the
leader of the Opposition should be permitted to get away with the little bit of side play he presented to the House a few minutes ago. After departing altogether from legitimate argument in connection with this Bill- he, and not I, introduced the question of the election in the city of Kingston. Finding himself entirely in the wrong in that matter he tried to get away with it by saying that he merely referred to the matter in answer to an interrogation of mine. What induced my interrogation if it was not the hon. gentleman's own reference to the city of Kingston and to the withdrawal of Mr. Hughes from the contest there. That was what led me to ask a question with regard to the withdrawal of the Liberal candidate in Kingston. The hon. gentleman's memory is exceedingly short if three minutes after he has spoken he cannot remember what he has said. It was the hon. gentleman himself who introduced the matter and he did so knowing perfectly well that he was not dealing with the merits of the case, nor with the merits of the clause; he was playing politics and playing it in a petty way at that. Not only was he playing politics in a petty way but he was deliberately
keeping back from the House facts which he had in relation to the matter, to which, he specifically referred-that is the election in Kingston. The hon. gentleman knew perfectly well when he brought up the matter of the withdrawal of Mrt Hughes from the contest in Kingston-


Some hon. MEMBERS:: Order.


Mr. L. A. LAPOINTE:: The hon. gentleman is out of order-


William Cameron Edwards: -he knew perfectly well that the minister had given his denial to the allegations made against him.


Louis Audet Lapointe: Has that anything to do with the Bill?


William Cameron Edwards: The constituency


Louis Audet Lapointe: The hon. gentleman is not in order.


Alfred Ernest Fripp: I must
ask the hon. gentleman to confine his remarks to the clause under discussion.


Louis Audet Lapointe: The chairman
should certainly call the hon. member to order.


Some hon. MEMBERS:: Order.


William Cameron Edwards: It certainly passes my comprehension that when I get up in the most perfect good humour to discuss some question my hon. friend opposite is attacked with an overflow of bile. It occurs very frequently with my hon. friend.


Louis Audet Lapointe: The hon. member is not in order. I again rise to a point of order.


Alfred Ernest Fripp: I must
ask the hon. gentleman to confine his remarks to the clause under discussion.


An hon. MEMBER:: What about the
leader of the Opposition?


William Cameron Edwards: I most assuredly will
endeavour to keep within the rules as you have indicated"' them, Mr. Chairman, but I know you will not keep me any closer to the line than you did the leader of the Opposition. Of course I do not occupy such an exalted position as he does. Still I am a member of the House and amenable to the rules only to the same extent as the hon. gentleman is. I can well understand-r-


Louis Audet Lapointe: Order.


William Cameron Edwards: -the reference by the leader of the Opposition-


Some hon. MEMBERS:: Order.


William Cameron Edwards: -to the question of the Kingston election. The matter of the withdrawal of the candidate from the contest-


Some hon. MEMBERS:: Order.


William Cameron Edwards: The leader of the Opposition himself has had considerable experience in withdrawing from contests.


Mr. PELLETIER:: Mr. Chairman, I rise to a point of order. We are now considering clause 8, but the member for Frontenac is speaking of the Kingston election, which has absolutely nothing to do with this clause. It seems to me that we should get down to business and deal with this question on its meiits.


Georges Henri Boivin: The hon. gentleman will understand that for obvious reasons I have been unable tj follow the hon. member who now has the floor. I feel sure that he will keep himself within the bounds of the clause under consideration. Before I call him to order T would like, cf course, to make suie that his remarks aie not relevant to the clausa.	.


William Cameron Edwards: Mr. Chairman-


Louis Audet Lapointe: What clause are we on now?


Mr.   CHAIRMAN@: Clause 8.


Louis Audet Lapointe: See that the hon. member speaks to that clause.


William Cameron Edwards: I wish to convey my sincere thanks to the hon. gentleman (Mr. L. A. Lapointe) for endeavouring to assist me. I may not be able to do this quite as well as he could do it., but I will do it in my imperfect way, if he will be kind enough to allow me. I have always taken it for granted that when certain matters are placed before the committee by one hon. member it is in order for another hon. member to discuss them. The leader of the Opposition read a letter from the Kingston Standard, and was permitted by the Chairman to do so. I am not saying whether the leadet of the Opposition was in order in going into that matter, but as he was allowed to do so it seems to me that I should be permitted to discuss what the leader of the Opposition discussed. The leader of the Opposition made certain reference to an election in Kingston and read a letter which he connected with the particular clause under discussion. In fact, with that astuteness and cleverness which some lawyers possess to a greater degree than others, and which some think they possess to a greater degree than they do, the leader of the Opposition declared-


Louis Audet Lapointe: Order. Mr. Chairman, I would like to know whether the hon. member is talking about the 'Government lending money to the Committee of Management? I have not heard him say a word about clause 8.


Georges Henri Boivin: The hon. member (Mr. L. A. Lapointe) has not yet given the Chair an opportunity of following the trend of the remarks of the member for Frontenac (Mr. Edwards). As I understood the member for Frontenac, he was explaining why he had digressed from the clause. I understood him to say that a letter had been read by the leader of the Opposition; that the reading of that letter had been permitted and that some discussion had arisen upon it. The leader of the Opposition having been permitted to read such a letter, I think it is only fair that an answer should be given from the Government side to any remarks which may have been made. But I must point out also to the hon.
10 p.m. member who is now addressing the Chair, and to the Committee, that the mere fact of reading a letter which is not relevant to the point at issue should not furnish an occasion to an interminable discussion on the point. I would therefore request the member for Frontenac to make his remarks as brief as possible in answer to any which have been made on the subject to which he refers,- and would respectfully ask the entire committee to then come back to the clause under discussion.


William Cameron Edwards: Mr. Chairman,


Louis Audet Lapointe: Mr. Chairman, the Minister of Railways has answered the leader of the Opposition.


Some hon. MEMBERS:: Order.


Louis Audet Lapointe: I rise to a point of order. The member for Frontenac has no right to speak on that letter; the Minister of Railways answered the point.


Georges Henri Boivin: Order. The ruling of the Chair may have been given in error, but it has been given and the member for Frontenac has the floor. I do not see how I can change my ruling; and I can only ask the member for Frontenac to make his remarks with regard to this incident as brief as possible.


William Cameron Edwards: I thank you, Mr. Chairman. I really think I ought to give place to my hon. friend (Mr. L. A. Lapointe); there was so much noise on the other side that I could not catch what he said.

The point raised by the leader of the Opposition was that an election had taken place in Kingston and that a candidate, had withdrawn from that election, and he connected that with this particular clause, saying that it had a bearing upon it. Now, Mr. Chairman, I am going to respect your ruling, because. I think this discussion is entirely out of order. I believe that the leader of the Opposition was entirely out. of order in the remarks that he made, and being an old parliamentarian and the leader of a party he should have known that he was out of order in going as far as he did. I think I was justified in replying to his remarks. However, Mr. Chairman, I shall take up no further time of the committee; I shall accede to your wish and drop the matter.


Louis Audet Lapointe: Thank you.


William Stevens Fielding: We have now disposed of the Kingston incident-a mere side show, which may have been entertaining, -let us now get back to the real question. If there is any principle which is recognized in British parliamentary institutions it is that the appropriation of public moneys is the function of the House of Commons. This section is a flagrant departure from the first principle of British parliamentary government. The Minister of Railways could not get a five-dollar bill to meet the current expenses of his department without bringing down an estimate to this House, and very properly so. Now, what does this clause propose? It reads:
The Government may lend to the said Committee of Management, upon the notes or other obligations of the Grand Trunk, such sums as the Government may from time to time deem necessary for the carrying on of the operation or improvement of the Grand Trunk system.
How long this committee is to remain at work is only an incidental question; it is not vital to us here. The Minister of the Interior practically says that the operations of the committee will extend over a period of at least nine months, and he will not be surprised if it is longer. We all know that operations of this kind move very slowly, and I should not be surprised if this committee remained in charge for a considerable time. We are all anxious to stand by the rights of the House of Commons. Surely it is not unreasonable to say to the Government: Strike out this clause, and if you want any money for the purposes suggested, come down with your estimates and let us vote it the same as
we do for anything else. What reason in the world can be given for giving the Government a blank cheque in regard to this work for the operation, management and improvement-"improvement," you will note-of the Grand Trunk system? My hon. friend says that, he would not start to build hotels; I suppose he wants to wait to know whether the hotels are to be "wet" or "dry." I hope that the Government will not seriously press this clause; I submit in all earnestness and in no party spirit that we ought to stand for the rights of the House of Commons. I ask the Government to reflect seriously before they attempt- to put-a clause like this before the House.


Arthur Meighen: Before the present leader of the Opposition rose to deliver once again a political speech, with which performance I think hon. members are very unkind to interfere, I had thought of making a statement with regard to this clause, because it had occurred to me and does occur to me even more forcibly now after the speech of the hon. member for Shelburne and Queen's (Mr. Fielding), that there is, in this clause, a departure in one feature at all events, from recognized procedure. I did not draw up the Bill; ithe Bill was prepared immediately after or about the same time as the letters were exchanged at the last. Undoubtedly the function of the House of Commons is to vote Supply. One feature of the 'clause that strikes me as not quite correct is the presence of the word "improvement." It would not be out of the way, at all events not much out of the way, to ask Parliament to enable the Government to see thad^the system is operated; but it would not occur to me to be proper that a vague power of improvement should be authorized even during the limit of time during which the committee of management is in control. If, of course, the limitation were fixed ,as to the amount that could be used for purposes of operation, then the effect of the clause would be merely the same as an Estimate passed by Parliament; there would be no difference at all. I am not in a position to say what could be fairly estimated; nor, indeed, am I in a position 'to say that, it is possible just at this time to make an- estimate; but I do not think it is unreasonable that the Government should be required to fix a limit beyond which the moneys of the country could not be used for the operation of the road. If that limit is fixed, then it amounts to an appropriation for the purpose. Consequently, I would suggest that

the clause stand until iwe endeavour to ascertain if it is not possible to fix the amount that will be required for that purpose, so that Parliament will know just what authority is given by that clause.


Daniel Duncan McKenzie: We were told that we were likely to have Estimates brought down this session. What would be the difficulty of putting in the Estimates whatever amount the minister will want and of voting it in the regular way.


Arthur Meighen: I am not sure what Estimates there would be.. There would not be much difference at all events. It may be possible that the clause can wait for the Estimates; I cannot say. For the .present I would suggest that the clause be allowed to stand.
Section stands.
On section 9-agreement to provide for arbitrators, oaths, evidence and award, etc.


Daniel Duncan McKenzie: How does clause 3 read as amended? As originally drafted it read that besides the terms set forth in the agreement, it "may contain such other terms and conditions as the parties may agree upon."	[DOT]


Georges Henri Boivin: The amendment was,to insert after the word "conditions" in the last line, the words "not inconsistent with the provisions of this Act."


Daniel Duncan McKenzie: Clause 9 reads:
The said agreement shall provide, among othei necessary and usual provisions-*
Clause 3 provides that nothing can be put in the agreement which is inconsistent with the Act, whereas this clause provides for "other necessary and usual provisions." What is meant by taking power to make "other necessary and usual provisions" except what are covered by section 9?


Arthur Meighen: What was contemplated by that were such details as the appointing of stenographers to take evidence, and so on. I would have no objection to any other wording which is more agreeable to the hon. gentleman. Clause 3 as it stands now gives all the authority that is necessary for the filling in of necessary details by way of terms and provisions in the agreement. There is no reason why the words "among othfer necessary and usual provisions" should not be stricken out.


Daniel Duncan McKenzie: The purpose of the amendment made by the minister to clause 3 was to restrict the Government's power of determining what should be contained in

the agreement, but this might be regarded as cancelling the restriction and opening the door again. Clause 9, being the later clause, would control clause 3, and it might be said that it renders of no effect the restrictions of clause 3.


Arthur Meighen: Possibly so. I move to amend clause 9 by striking out in the first and second lines the words "among other necessary and usual provisions."
i Mr. JACOBS:	Is it not possible for us
to have a draft copy of the agreement? It is usual to have a copy of the agreement incorporated in the Bill itself so that we can go over it.


Arthur Meighen: That is not possible because the agreement is not prepared. The preparation of an agreement is a long process. I have had some experience in that work, and I am sure the hon. gentleman has had more than I have, but in the case in which I was to a degree engaged it took many weeks to see that everything was covered and safeguarded in the agreement. Sometimes the legal representatives of the other side are not ready to act, and I rather think that is the case just now. What progress can be made is being made in this matter, but I cannot give any estimate as to when the agreement will be completed.


John Howard Sinclair: It would be very satisfactory to the committee to have the agreement before them if that were possible. I do not think it is such a difficult document to draw up as the minister suggests. We have, according to this little red book, the Canadian Parliamentary Guide, ten eminent lawyers in the Government. The Prime Minister is absent, and we all know that he is absent for a good reason. Two of the others are present to-night, and the Lord knows where the other seven are. But why should they not be put to work for a day to draw up this agreement and submit it to members of the House so that we might see what it contains. It looks to me as an unreasonable proposal that when we have so much legal talent in the Government, we should be asked to forego the pleasure of seeing this agreement before we give our consent.
There is another point. A question arose the other day as to whether the stocks should not be valued as of a certain date. I find in Hansard the following:
Mr. McKenzie:	Will the Government name
.a date upon which the value of those stocks should be fixed?
Mr. Meighen:	Yes.

Mr. McKenzie:	The Government is now
proposing to take over this road and these stocks may acquire a certain value greater than under old conditions when they were not paying any dividend and had practically no commercial value. When we begin to arbitrate some definite date should be fixed for the arbitrators to consider the value of these stocks at that time.
That is one matter that might be dealt with in the agreement. Has the minister considered the advisability of embodying it as one of the terms, and if so, will he place it in the statute?


Arthur Meighen: As to preparing the
agreement, of course everything is easy except what one sets himself to do. There are some lawyers in the Government, but the great difficulty is that their valuable time is frittered away and wasted, and their energies dissipated by the many repeated questions of the Opposition.


Samuel William Jacobs: And by attending by-elections.	\


Arthur Meighen: Not very much; just
two days. If we had had my hon. friend (Mr. McMaster) here for the last two weeks think of what he might have done.


Samuel William Jacobs: He would have been of
material assistance.


Arthur Meighen: He does not seem to
have been of very much assistance where he was.


Samuel William Jacobs: He set the minister a bad
example.


Arthur Meighen: He has set many bad examples. My hon. friend himself is a lawyer. I for one would be ready to excuse him from the House for a week, that he might bring back at least a draft of the agreement. He would then realize how difficult and lengthy a task it really is.
As* to a date, a date will have to be fixed. I have not had an opportunity of considering or discussing just what date would be, right, but I frankly say that what would appear to me to be about the right time would be the first of October of this year, or perhaps a little earlier.


John Howard Sinclair: Yes, earlier than that.


Arthur Meighen: So that there would be no possibility of any appreciation due to the agreement being taken into account. If it were not that date, and if such a date [DOT] were fixed that this agreement could be said by any possibility to have any effect on the matter, then that effect should be expressly eliminated from the consideration
of the arbitrators by the terms of the agreement.


James Alexander Robb: Not only is it important that we should have the agreement before us so that we may know the date fixed for the valuation of the stock, but we are also interested in over 2,000 miles of railway within the United States. We are also interested in obligations held by the different provinces of Canada. The Grand Trunk lias given certain guarantees for the Grand Trunk Pacific, and the Grand Trunk Pacific has given certain guarantees for branch lines, in which the provinces are concerned. We see by the press that there is a difference of opinion in regard to these obligations between this Government and the provinces.
Coming back to the United States, I have here some figures which I should like the Government to confirm. The capital of the Central Vermont railway is $2,984,600, of which the Grand Trunk railway owns $2,191,000. The outstanding funded debt is $11,750,000. The Grand Trunk guarantee interest on the bonds providing for deficiency up to 30 per cent of gross receipts on interchange of business. The Central Vermont railway also owns stocks and bonds of the Southern New England railway, which was projected and partly built from Palmer, Mass., to Providence, R.I., but the road has been abandoned. The Central Vermont railway have made advances on account of this line of about $10,000,000, which they are carrying on the asset side of their balance sheet under " Advances ", This money has been lost, and there are now pending suits for breach of contract and damages on account of the abandonment. I understand that a suit is now pending for $3,000,000, and it would be' well to know what responsibility we shall have in connection with that suit. We are embarking upon an undertaking that runs through different states. The state of Maine has issued an order compelling the subsidiary company of the Grand Trunk running through that state to put in a block signal system within a limited time. Only a small part of that work has been done. If we take over that line, that will be an obligation on the part of the Dominion. I think it would be well for us to have the agreement before us so that we shall know our exact relationship to all these undertakings in connection with which there are obligations under state legislation, but of which there is no record in the blue-book. Certain obligations have been laid on the

road which have not yet been carried out, and for which we shall become responsible when we take over the road.


Arthur Meighen: The hon. gentleman refers to some enterprise of the Central Vermont Railway, in respect of which he states there are some outstanding disputes, if not, indeed, definite obligations. If the hon. gentleman will refer to page 1023 of Hansard he will find there the letter of October 9, in which the following is set out:
We have hitherto referred generally to the " Grand Trunk System " but to prevent any misunderstanding as to the meaning of that term there will be inserted in the agreement of arbitration below referred to the necessary definition of the term and a statement of how the various companies and their undertakings are controlled by the parent company-whether by stock ownership and to what extent, leases, agreements or otherwise, distinguishing in these respects the direot ownership and control by the parent company and its indirect ownership or control through companies included in the system.
The agreement as contemplated by that clause must provide fully for a more detailed definition of all the various and intricate relationships between the component parts of the Grand Trunk system, including a clear statement of all the obligations in respect of each. I have no personal knowledge of the special obligation which appears to be in dispute with relation to the Southern New England Railway. It is because of the necessity of getting all these matters embodied in the agreement in clearly defined form that it takes some time to prepare the agreement. These matters must all be before the arbitrators and be taken into account by them. Suppose it should turn out that that obligation does exist, and that judgment is recovered against the Central Vermont Railway; that would mean just so much more liability for the Central Vermont Railway, and that much less value in its stock, which, of course, would be reflected in less value in the stock of the Grand Trunk itself.
Consequently the whole transaction as now proposed sees to it that if the stock is reduced .in value we do not pay for it, to that extent. I cannot give further information as to the rights or wrongs of the obligation to which the hon. gentleman refers.


James Alexander Robb: The minister will admit that we are embarking on an enterprise which involves a lawsuit covering $3,000,000 which we will have to defend.


Arthur Meighen: The lawsuit will just take its course as if we did not take over

the property. It will be defended by the defendants in the action. We are not the defendants; I presume, from what the hon. gentleman says that the Central Vermont railway are the defendants. Of course, we are interested in the success or non-success of the suit, but we do not interfere in the conduct of the action. We must trust the management in that regard as in any other. We shall be able to dictate the management but not dictate to the management.


Lucien Cannon: How can the minister pretend that the defendants will be the same persons under public ownership? If the Government owns the railway, in this lawsuit the Government will be substituted for the present defendants, and if they are not, the only inference can be that it is not a question of public ownership.


Arthur Meighen: I hardly know how to put the answer, because I do not like putting it exactly the same way every time, but still there is only one right answer. The ownership of the stock, even of the Grand Trunk, does not change the entity of the company, which is just the same as it was before. It can sue and be sued just the same. Much less-at all events a little less-would the ownership of the stock of the Grand Trunk, the parent company, affect the entity or identity of a subsidiary company. In the same way, we own the stock of the Canadian National railways, and among the subsidiary companies the component parts of that system are the Canadian Northern railway and the Canadian Northern Quebec railway. The Canadian Northern railway is frequently sued the same as any other railway, and so is the Canadian Northern Quebec. The Government does, not rush to the defence of the Canadian Northern; that concern takes care of its own defence. And it will" be just the same with the Central Vermont railway or any other of the component parts of this system.


William Stevens Fielding: If a judgment is given against the Canadian Northern, who pays?


Arthur Meighen: The Canadian Northern.


William Stevens Fielding: But the people of Canada are the Canadian Northern; they are the owners of the stock. Surely if this suit in the United States is pending, and at the time we take the road over an adverse judgment is given, it is plain enough, by whatever name you choose to call the company, the treasury of Canada will be responsible for the amount of the judgment.


Arthur Meighen: I said a moment ago that we were certainly interested in the success or non-success of the suit.


William Stevens Fielding: "Interested" is a mild word.


Arthur Meighen: We are interested as stockholders of the company. If my hon. friend owns stock in a company against which there is a lawsuit, does not the company take care of its own defence? The hon. gentleman does not employ separate counsel, because he is a stockholder, to help the company out. It is just the same here. We do not dictate to them in relation to that part of the management any more than in relation to any other question. We are certainly affected by the judgment the same as stockholders of any company are affected by a lawsuit in which the company is engaged.


William Stevens Fielding: The hon. gentleman says we would not dictate. All we would do is pay the bill.


Lucien Cannon: According to the minister, the only interest the Government will have in the railways is that of an ordinary shareholder to the extent of the stock held.


Arthur Meighen: Yes.


Lucien Cannon: Then what about public ownership?


Arthur Meighen: We own all the stock and are interested to that extent, but that does not prevent the company from taking care of itself.


Lucien Cannon: If I hold shares in a company for $200 or $1,000, I am certainly interested in the company, but I cannot contend that I own the company, and the Government to-day claim that the only interest they will have in the system, if this Bill goes through and the agreement is signed, will be the ordinary interest of a shareholder. How can they then contend that the question before Parliament is one of public as against private ownership?


Arthur Meighen: If the hon. gentleman had a little stock he would be a little interested, and if he had all the stock he would be very much interested in the company, but still he would be only a stockholder of the company. The same is true of the Government.


Frank S. Cahill: Does the minister say now that the New England road was built and abandoned?
Mr. MEIGKfEN: I have been informed that the Central Vermont did commence a
road which was not gone on with. That was doubtless an error of the Central Vermont. There was also another important component part of the Grand Trunk that was commenced and should have been abandoned but was not. But all these things we have to stand for.


Frank S. Cahill: I,s it the minister's information that $10,000,000 was spent on the New England railway?	.


Arthur Meighen: I have no information to that effect.


Frank S. Cahill: The minister had some definite information on Monday night, when he said in regard to 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.
Apparently this is not in accordance with the information the minister is giving now.


Arthur Meighen: I am not giving information now; that is the information given me then, and it is all the information I have yet.


Frank S. Cahill: The minister now says that all the information he has is that the New England road had been started.


Arthur Meighen: I am informed that it
got some right of way, but I said before that the road was not built. I do not know just what was done. No rails were ever laid.


James Alexander Robb: Has the minister any information as to this shit now pending in the courts of the United States?


Arthur Meighen: I am informed that there is a suit pending.
. Mr. ROBB:	Will the minister give us
some information as to what progress has been made with the automatic block system in the State of Maine, which it is estimated will cost $4,000 a mile?


Arthur Meighen: Really, I do not know
anything about that block system. Perhaps there is some very important feature of it in regard to which I can get information. If so, I will.
Mr. J-. H. SINCLAIR:	The Minister of
Railways promised that he would find out something about the $30,000,000 guarantee the Grand Trunk authorized the Central Vermont to give. I suspect it was out of that money that this defunct railway was started, although I do not know. I think

the minister said yesterday that he could give some information to the committee.


John Dowsley Reid: The Central Vermont
got authority to issue $30,000,000 of bonds but none of them were ever issued.


Frank S. Cahill: Will the superannuation
and pension fund be under the charge of the Committee of Management?


Arthur Meighen: The pensions are administered in accordance with the by-laws. I do not think the Committee of Management would have anything to do with that. The fixed rules upon which they are administered are set out-


Frank S. Cahill: Would the Committee of Management or the arbitrators have anything to do with the fund?


Arthur Meighen: The arbitrators would not have anything to do with the pension fund except to take into account any obligations connected with it or any assets appertaining to it. They would have nothing to do with the management of it. I would presume that the Committee of Management might, if they chose, exercise control. But if the hon. gentleman will refer to page 1024 of Hansard, October 10, he will see the letter of October 9, which clearly sets out the position we take in regard to the pension fund. That position will of course be a part of the agreement and must be abided by entirely in so far as concerns the pension fund, the superannuation fund and everything covered by the paragraph. I refer to the last paragraph of the letter of October 9 appearing on page 1024.


Frank S. Cahill: But if in the meantime anything should arise, who would be the authority in connection with the matter- the arbitrators, the Committee of Management or the old directors?


Arthur Meighen: Not the Committee of Management.


Frank S. Cahill: Well, then, the company, or the arbitrators?


Arthur Meighen: It will be the Grand Trunk management.


Frank S. Cahill: The Committee?


Arthur Meighen: No, I would not think that there would be any need whatever for the Committee of Management to interfere with it. They could not interfere with it in any way to violate the clause of the agreement or in any way to violate the last paragraph of the letter of October 9. These rights are established by the agreement and they are embodied in that letter, rMr. Sinclair.]


William Stevens Fielding: I would like to call the attention of the minister to subsection (a) of section 9. The agreement is to provide for:
(a) the appointment of the arbitrators, the control of the arbitration proceedings; the administration of oaths, etc.
Can we in that way confer the power to administer oaths? Is that the form it should take ?


Arthur Meighen: We certainly can if the statute authorizes it.


William Stevens Fielding: But does the statute authorize it?


Arthur Meighen: Yes, it says so here. The statute authorizes us to do that by agreement.


William Stevens Fielding: By section 9?


Arthur Meighen: Yes.


William Stevens Fielding: Is that all?


Arthur Meighen: Yes, the statute says:
The said agreement shall provide, among other necessary and usual provisions	 the administration of oaths.
I do not know what the draughtsman had in mind. I presume it would be that the agreement would provide that oaths could be administered by the arbitrators themselves, and would provide that oaths must be administered before any evidence is taken, or that possibly there should be exceptions to that rule. It is to enable the agreement to provide either for exceptions or no exceptions, and to enable the arbitrators to administer oaths.


William Stevens Fielding: I quite understand that it is necessary that the arbitrators should have that power, but the suggestion I offer is that I douibt if this creates on the part of the arbitrators the power to administer oaths-that an incidental reference to it in the agreement may not be sufficient for the purpose.


Arthur Meighen: Section 10 would meet the difficulty that the hon. gentleman sees.
The Government and the Grand Trunk, and each company comprised in the Grand Trunk system, and all persons interested therein, are hereby respectively authorized and empowered to enter into the said agreement upon and subject to the terms herein set forth, and to do and perform all such acts and things as may he deemed necessary to observe, perform and comply fully with the terms and conditions of said agreement.


William Stevens Fielding: Still, I would ask my hon. friend to consider this in face of the fact that the power to administer an oath

is usually given in a direct form. I must not undertake to teach law to my hon. friend, but I am only asking him to consider whether he thinks that subsection (a) of section 9 creates on the part of the arbitrators the power to administer an oath. I do not think it does.


Arthur Meighen: I would think myself
that it did. I will ask that that point be reviewed by the legal adviser of the Government. In the meantime the clause need not be postponed, because if it is found that there is the difficulty apprehended by my hon. friend we can revert to it later.


Daniel Duncan McKenzie: Any powers which the arbitrators can exercise in their judicial capacity should be found in the Act itself and not in the agreement.


William Stevens Fielding: Except as the act
points out.


Daniel Duncan McKenzie: That does not require to be in the agreement at all and it is contrary to the ordinary practice of administering oaths under the Act.


James Alexander Robb: This clause provides for the continuance of the superannuation, pension and the insurance schemes. There "are apparently three different insurance organizations in connection with the Grand Trunk. Is the minister able to tell us if these are mutual benefit associations, if they are governed by the laws of only one province or of different provinces and states, and if they are on an aetuarially solvent basis?


Arthur Meighen: This is a purely internal and domestic pension or superannuation scheme, or rather both, of the Grand Trunk. I do not think it is affected particularly by the law of any state or province. The administration is governed by the bylaws of the company. I do not know what the hon. member is afraid of in relation to the law of any state. Any way, whatever the effect of the law of any state may be, it is just the same after the agreement takes effect as it is now.


James Alexander Robb: All I wanted to know was if these schemes were on an aetuarially solvent basis and if not who is responsible for putting them on a solvent basis, the company or the employees who are insured?


Arthur Meighen: My information is that they are aetuarially solvent and that in reference to one or the other there should be a considerable sum after these obligations are squared up.


Frank S. Cahill: Is there anything shown in the statement of the Grand Trunk as to this amount?


Arthur Meighen: Yes, the statement oi
assets and liabilities discloses the position of the pension fund. I had occasion to direct the attention of the hon. member to it several times in connection with the balance sheet of the company. It appears in the blue-book.


Frank S. Cahill: Does the item of $302,-
871.54 "special compensation fund" cover the pension fund referred to in the Bill?


Arthur Meighen: I do not think that is it.


Frank S. Cahill: The minister is in doubt, surely.


Arthur Meighen: I need to look it up; 1 always do before I speak. If the hon. gentleman will look at the items comprised under the heads of reserves and liabilities as shown in the balance sheet on page 38


James Alexander Robb: That is fire insurance.


Arthur Meighen: There is fire insurance and there are also " special compensation fund" and " reserves for contingencies." These items appear on the other side of the balance sheet and show what is done with the money while it lies invested, pending its being used for this purpose. I would say the $302,871.54 was money for such a purpose.


Frank S. Cahill: That is not quite the answer that was given in the first place, but I am glad the minister has come to my way of thinking without giving an evasive reply.


Georges Henri Boivin: Amendment carried.


Daniel Duncan McKenzie: Just a moment. I wish to call the attention of the minister to paragraph (d) of section 9. We have been told a good many times that the receiver was under the control of the Exchequer Court. Now we are taking that control ou't of the power of the court and telling the receiver what he shall do. I do not think that is good practice. Under the prevailing practice the receiver is under the control of the court in which he is and he cannot move very much without the direction of the court. Now I suppose if the minister goes to the judge of the Exchequer Court and asks for an order telling him to do whatever is necessary under this Bill he will get that order and get that direction; but by this Bill we are taking the matter out of the judge's hands entirely and putting it back into the hands of the Governor iri Council. I submit, it is very irregular that part of their proceedings shall be subject to the decision of the Exchequer Court judge and that something

else shall be in the hands of the Governor in Council. We were told it was taken out of the hands of the Governor in Council and was under the control of the judge. I do not agree with this practice that part of the proceedings should be taken out and part of it left, when it is perfectly clear that the minister will get whatever order he may get from the judge himself.


Arthur Meighen: This clause provides
that the agreement shall contain the terms looking to the passing of the receivership from the Minister of Railways to the Committee of Management to the end that the Grand Trunk Pacific may be run as part of the Grand Trunk system. Now, of course the agreement can only do what the parties to the agreement are able to do, that is to say, what the Government can do on its part and the Grand Trunk on the part of the other side; they cannot override the Exchequer Court. I would say that the approval of the Exchequer Court judge would be necessary in order that the terms of the agreement in that regard should be effective. The receiver being empowered as between himself and the shareholders of the Grand Trunk and Grand Trunk Pacific to transfer the receivership to the Committee of Management he would also have to go to the Exchequer Court to get the approval of the judge. I think that would follow as a matter of law; it would not be required to be stated here.


Lucien Cannon: Would the minister state the meaning of the words in paragraph (a) "the control of the arbitration proceedings"?


Arthur Meighen: That means the control of the proceedings. It says " the control of the proceedings "-that is to say, they shall decide what proceedings shall go on and what proceedings shall not go on.


Lucien Cannon: Who will decide?


Arthur Meighen: The arbitration board.


Lucien Cannon: I know, but the paragraph reads now:
" the appointment of the arbitrators, the control of the arbitration proceedings "-
It does not say by the arbitrators.


Arthur Meighen: The agreement provides for that but the provision would be that the board would control its own proceedings.


Lucien Cannon: Naturally.


Arthur Meighen: Yes.


Lucien Cannon: But the way the paragraph reads now might- lead to a misunderstand-

ing. It talks about the control of the arbitration and does not say the control of the arbitration by the arbitrators.


Arthur Meighen: Of course it says that.


Lucien Cannon: It does not say by whom.


Arthur Meighen: Yes, but undoubtedly the terms of the agreement which is here authorized to be made would be so made as to make the board control its own proceedings. I rather think that the letter specifically says that as well, that the board shall control its own proceedings. Yes, I remember distinctly that it does.
Section as amended agreed to.
On section 10-Authority for Government, Grand Trunk companies, and all parties interested, to enter into agreement:


Daniel Duncan McKenzie: Does the minister think that the sections of the systems, or the companies, which now compose and will hereafter compose part of the sysitem, and which are within the limits of the United States, require parliamentary authority to enter into this agreement?


Arthur Meighen: Well, of course the effedt of this clause cannot go any further than it is within the jurisdiction of Parliament to legislate with regard to, say an American road. I do not know that we could legislate with regard to anything concerning it. All we say here is, that agreement is executed between, the Grand Trunk Company and .the Government. It may be there shall be some other companies made parties to the agreement. That may be found necessary. But so far as we have power to say to these companies, the parties to the agreement: " You shall be able to do what that agreement provides you shall do," we say it. If we have not power, then, of course, there is nothing added to it at all and there is no harm done. We can simply do this to the extent of our jurisdiction.


Daniel Duncan McKenzie: Well, I think it would be good drafting and good legislation to say that we are only legislating within our jurisdiction. But that was only within my mind as a secondary thought; I asked the minister if he thought that when these American companies-American in name and American in location-are joining in this agreement they require statutory or parliamentary authority to <lo so. If they do they would have to go to the legislatures of the respective states in which they are located for that authority; and I wish to ask the minister if he is providing for a con-

tingency of that kind, that those companies -for instance in the state of Massachusetts or the state of Maine-would go to their respective state legislatures for authority to enter into this agreement? Where it is perfectly clear that we cannot give them authority, they being beyond the zone of our jurisdiction, it would look better for us to say in this section that we are only legislating within the confines of Canada and within the jurisdiction of this Parliament.


Arthur Meighen: It is not expected at all that any of the companies except the Grand Trunk proper will have to join. This was simply put in as a matter of precaution. We do not think there is the slightest possibility that any American company would require any enlargement of their power for anything they would have to do.


Joseph Philippe Baby Casgrain: I would ask the Government to give us some explanation regarding the position of the Grand Trunk and the Pullman Car Company, an explanation that was promised last night in reply to a question from an hon. member on this side.


Georges Henri Boivin: The hon. member's question is certainly not in order under this clause. At the same time I understand that the minister promised a reply last night to the question, and I would solicit the unanimous consent of the committee that the reply may be given.


Joseph Philippe Baby Casgrain: I think I am right to ask this question, because the clause-


Georges Henri Boivin: The hon. member is certainly wrong in discussing the ruling of the Chair. The ruling is that the hon. gentleman's question may be answered.


Arthur Meighen: It i3 quite true that the hon. member was promised information as to the method by which the Grand Trunk conducts its operation of Pullman cars. I am told that that information has not been wholly secured as yet, but I think it would meet the hon. gentleman's object if I say that the company operates its Pullman cars under a long-term contract expiring in 1937, by the terms of which the Pullman Company get a certain proportion of
11 p.m. the revenue derived from the operation of these cars, commencing after the Grand Trunk gets a fixed proportion. That is the nature of the agreement; the exact details as to the amounts I am not able to give as yet.


Lucien Cannon: What is the meaning ot the words "and all persons interested therein " in section 10?


Arthur Meighen: What was in the mind of the draftsman was this: That it might be necessary, in addition to the companies as bodies corporate entering into the contract! for representatives of various classes of stockholders also to execute the contract in their respective capacities. That was a contingency which the draftsman had in mind; I'myself cannot see that it will likely eventuate.


[Stage Direction]
Section agreed to.
On section 11-Orders in Council authorized to vest in Government any preference or common stocks not transferred, or to vacate office of director, or otherwise to* carry out agreement.
Daniel Duncan McKenzie: This section professes to vest in the Governor in Council power to deal with the stock of this company wherever it may be. We are professing to pass an order cancelling the powers which a man who lives in Switzerland has by virtue of the terms of a stock certificate of this company which he holds-a certificate which is personal property and cannot be affected in any way, except as to the value of the stock, by what becomes of the rails and cars here. I submit that when a person who owns a property and the property itself is beyond the jurisdiction of this Parliament, we cannot legislate in regard to one or the other. I suppose it is no harm to pass the section as it is, but I do not think we are giving to the minister the power that- the language of the section would indicate.


William Stevens Fielding: Is not the drafting of this section peculiar? The first two lines read:
Any orders of the Governor in Council which the Government may deem requisite to vest in the Government.
The ordinary form would be that "the Governor in Council" -may do certain things. "The Government" is defined at an earlier stage as meaning the Minister of Railways, but the distinction between 'Government" and "Governor in Council" in this clause seems to be inconvenient.


Arthur Meighen: I really think that the hon. gentleman is right. I move that this clause be struck out and that the following be substituted therefor:
The Governor in Council may make such orders as are deemed requisite to vest in the

Government any of the preference or common stocks not transferred to the Government or its nominees under the terms of this Act, or to vacate any office of director, or otherwise to carry into effect the terms and provisions of the said agreement.


[Stage Direction]
Amendment agreed to.
Daniel Duncan McKenzie: What is the meaning of the words "its nominees"? Is it the intention that this stock, instead of being vested in the Minister of Eailways-that is, the Government-may be vested in somebody else nominated by the .minister,


Arthur Meighen: The idea, I think, is, to vest, it in the Minister of Finance instead of in His Majesty represented by the Minister of Railways, as the words "the Government" are, in effect, defined.
On section 12-discharge of receivership of Grand Trunk Pacific and termination of proceedings in Exchequer Court.


Daniel Duncan McKenzie: I really think we have made excellent progress to-day. There is some information that should be given in connection with this clause and that will take a little too long to give to-night. Speaking for myself, I have not been able to grasp exactly our relations to the Grand Trunk Pacific, what the Grand Trunk Pacific owes to the people of Canada and how that obligation is to be discharged^ in connection with this agreement. I think that would all come into play under this section. I would be glad if the minister would let this clause stand until to-morrow and be prepared then to give a full explanation of what our relations are. Although the matter has been referred to incidentally several times, I do not think a full explanation has "been given and it would not take ten minutes to give one. Speaking for myself, I should like to have that explanation before we leave this clause.


Arthur Meighen: As to what the Grand Trunk Pacific owes to the Government?


Daniel Duncan McKenzie: Yes, and how it is proposed to satisfy that obligation. The minister -told me long ago in connection with this discussion that the Grand Trunk would have to pay whatever the obligation was, but other ministers said that it would not be so. For instance, the President of the Council (Mr. Rowell) early in the discussion made a speech in which he said that we forced the Grand Trunk into this agreement and that we should deal sympathetically with them in connection with this obligation. But the Minister of the Interior (Mr. Meighen) said, as he will find 
by reference to his speech in the early stages of the discussion, that the money would have to be paid. We would like to know definitely what line of procedure is to be taken, how the amount, directly and indirectly owed, is to be definitely ascertained and how it is to be paid. Are any terms to be put into this agreement by which the arbitrators can deduct that amount from the final award that they may make, leaving us to pay only what will he due to the Grand Trunk after all their liabilities have been satisfied so far as the Dominion of Canada is concerned?


William Stevens Fielding: I do not wish to be
hypercritical, but again may I direct the minister's attention to the form of drafting of clause 12, which reads:
Upon the transfer to or vesting in the Government of the preference and common stock as herein provided for, the Government-
Which means according to my hon. friend, the Minister of Railways as representing His Majesty the King.
.-may, by order in council provide

That is to say, the Minister of Railways is the boss, and he may direct the Governor in Council to do things. I do not think this is good practice.	,


Arthur Meighen: The drafting is entirely wrong there. It should read:
The Governor in Council may provide-
Just as the hon. member has suggested in reference to clause 11.


Georges Henri Boivin: Mr. Meighen moves
to amend clause 12 by striking out the word " Government " in the third line thereof and the words " by Order in Council " in the same line and to replace the word " Government " by the words " Governor in Council" so that the clause will read:
Upon the transfer to or vesting in the Government of the preference and common stock as herein provided for, the Governor in Council may provide for the discharge of the receiver-snip of the Grand Trunk Pacific Railway System and the termination and withdrawal of the proceedings in the Exchequer Court of Canada relating thereto.


William Stevens Fielding: Had you not better
say " by Order in Council?"


Arthur Meighen: That is not necessary.
That is the only way in which they can provide it I have no objection to meeting the request of the hon. member for Cape Breton North and Victoria (Mr. McKenzie) as regards letting this clause stand. I can only add that the debts that the Grand Trunk Pacific owe to the Government and

the debts that the Grand Trunk owe to the Government are all set out in the agreement, and that all that I have ever said is that all those obligations must be taken into account by the arbitrators. What the President of the Council (Mr. Rowell) may have said when I did not have the pleasure of hearing him, I do not know, but he has had a full understanding and has made a careful study of this question, and I should be very much surprised if he has said anything different from what I have said.


Daniel Duncan McKenzie: Does the minister now say that this will be dealt with as a business transaction between two business concerns; that any money or obligations that the Grand Trunk Pacific owe or must discharge to the people of Canada will be fully considered and properly dealt with? But there is something else that I forgot. There are large claims against the Grand Trunk Pacific other than our claims. When we take over this road we are taking over not only the obligations to ourselves but the obligations to other people from whom the Grand Trunk Pacific borrowed money and who hold the stocks and bonds of that company; some of those guaranteed by us, some guaranteed by the Grand Trunk and some not guaranteed at all, but all of them claims against the road. I will expect the minister to explain to-morrow where we stand, when we take over this road as we are making provision under clause 12 to do, as to the different obligations, not only our own claims against the road but the various other claims that stand against it.


Arthur Meighen: I will promise to make to-morrow in that regard the same explanation as I have made repeatedly before, and, I hope, as clearly.


Daniel Duncan McKenzie: I do not remember that we ever dealt with the obligations and claims of other creditors of the road than ourselves; at least I was not here when they were dealt with. I have not heard any explanation in regard to that.


Arthur Meighen: They are given. There is, however, no objection to postponing the consideration of this clause. As to the hon. gentleman's request to be informed whether this matter will be dealt with in a business way, I have not distinctly said so because in relation to this Government, that always goes without saying.


[Stage Direction]
Amendment agreed to.
John Archibald Campbell: If I may be permitted, I would like to ask a question in regard to the property investment in road and equipment. The amount, as appears on page 38 of the blue-book, is $434,990,999.37. This question may have been answered before, and if so I might be referred to where it was answered, and that will be satisfactory to me. On what basis was that amount arrived at?


Arthur Meighen: Actual cost of road and equipment. I may say that in all probability the equipment is worth considerably more than cost. An estimate believed to be reasonable was given by the Minister of Railways about two days ago in which estimate the equipment end of this figure was estimated to stand now at about $180,000,000.


John Archibald Campbell: That is, it is not the physical valuation at the time this statement was made out?


Arthur Meighen: No, the actual cost.


Mr. HAROLD:: Has the depreciation been taken from the cost?


Arthur Meighen: No, I do not think depreciation is taken off. If you take off depreciation you would have to add appreciation, and if so, I think you would have a much larger amount than this.
Section as amended, stands.


Louis Audet Lapointe: Some time ago I drew the attention of the Minister of Railways to the position in which the cwities and other municipalities and school authorities receiving taxes from these roads would be when the roads become the property of the Government. I said that being government property they would be exempt from local taxation. Thus this measure will be an interference with the taxes now collected by these different bodies. I am in receipt for my information of a copy of the following letter from Mr. Harold Fisher, Mayor of the city of Ottawa:
The Honourable J. D. Reid, M.P.,
Minister of Railways and Canals,
Ottawa.
Dear Sir:-I am the president of the Union of Canadian Municipalities.
This Union has been instructed to request that the Grand Trunk Railway Bill shall contain a clause preserving the right of municipalities to tax the property of the railway and to protest against the passing of the Bill without a clause of this kind being inserted. The Union has been officially asked to take this stand 'by the following cities-Montreal, Vancouver, Winnipeg, Quebec, Galt, Chatham, and St. John's, P.Q. Unofficially this position has been approved by Toronto and many other places and will, no doubt, be followed by official action.



Herewith I am enclosing a clause drafted by the city of (Montreal. X am not sure that the wording of this clause is the best possible, but it will serve to give you the idea of the municipalities.
I am taking the liberty of sending a copy of this letter to some of your colleagues and to some other members of the House.
Tours truly,
(Sgd.) Harold Fisher.
To meet the wishes of the Union of Canadian Municipalities I now beg to move to add to the Bill as clause 13 the following:
Nothing in this Act or any amendments thereof shall diminish or prejudice the effect of any right of assessment or taxation now or hereafter appertaining to any municipality' or municipal institution over and upon the property or income of the railway or any of its subsidiaries, branches or accessories.
If this clause is not correctly worded I would a&k the minister to have it put in proper form, so that the municipal authorities will be satisfied. There is more than the ordinary municipal tax involved; the school tax may also be affected. I trust the minister will come to the conclusion that a clause to the above effect should be inserted in the Bill for the protection of the municipalities.


Arthur Meighen: I thoroughly approve of the result which the hon. gentleman thinks so much desirable, namely, that the right of any municipality to assess and tax now enjoyed should not be interfered with. I thoroughly approve of that, notwithstanding that some reflections were cast upon it by the leader of the Opposition yesterday, but there is no need of an amendment to bring that about. Manifestly that is brought about already. There is nothing in this Act that would in any way affect the right of any municipality to tax. This is an Act to acquire some stock. The position of a municipality in relation to the company is just the same after we get the stock as before we get it. So manifestly there is no need of the amendment. It would be mere surplusage and be rather indefensible, I think, to add it. You might just as well enact that nothing in this Act should result in the annexation of taxes or vary the transit of Venus. So why add the amendment? Apparently there has been some systematic attempt to convince municipalities that a raid was being made on their rights, and they have sent down petitions. Let the hon. gentlemen join with me in assuring the municipalities that as the Act stands their riglits are not affected in the slightest degree. That is all the assurance they need.
	,


Frank S. Cahill: What position will the
towns on the Transcontinental, for instance, be in with regard to taxation?


Arthur Meighen: Exactly the same position they are in now.


Frank S. Cahill: What is that position?


Arthur Meighen: The Government owns
the Transcontinental as a property. I might observe that when this transaction is consummated the Government will own just the same properties it owns to-day, no more and no less, except one thing: it will physically own the stock of ' the Grand Trunk railway. That stock, as stock, will not be taxable because we own it. It never has been taxable here anyway. The position of the municipalities will be exactly the same as it is to-day.


Frank S. Cahill: My hon. friend will see that the towns on the Transcontinental are in a different position from towns on the Grand Trunk, because they will have to pay their share of the deficits, if any, but will not be in a position to tax the portion of the system that is earning the dividends.


Arthur Meighen: They are in that position now. They will be in exactly the same position after this legislation passes.


Frank S. Cahill: When the Grand Trunk is added to the Government system municipalities in one portion of the country will have the right to tax what the Government is pleased to call the Government-owned railways, while municipalities in another portion of the country will not have that right. Is that fair? All the municipalities have to help make up any deficits by contributing as individuals to the treasury of the country, but some of the municipalities are not in a position to tax part of the Government system.


Arthur Meighen: We are not putting them in that position at all. That is the position they are in to-day.


Frank S. Cahill: My hon. friend will admit that he is putting them in the position of having to pay their portion of the deficit.


Arthur Meighen: When the Grand Trunk Pacific was built it was built by a company with Government assistance. The whole country had to contribute to the erection of the Grand Trunk Pacific, but the municipalities along the line could tax it. As regards the Transcontinental, the money of the whole country went into that, but the municipalities along the line could not tax it, although they had to contribute. So that

situation has existed. If there is any unfairness in that respect there has been just the same unfairness heretofore. The situation has not been altered in the slightest degree.


Frank S. Cahill: Except that the municipalities along the Transcontinental will have to contribute more to the deficits of the Canadian National railway. They will have to contribute their portion as individuals, and they will have no right as a municipality to tax the road because it happens to be public-owned instead of private-owned. My hon. friend at least will not argue that they are in a fair position when they have to contribute in taxation towards the deficits on the national undertaking, but have not the right to tax the railway.


Mr. ARCHAMBAULT:: Will the position of the municipalities be changed after thirty years if the Government decides to redeem the outstanding stock?


Arthur Meighen: Not at all.


Lucien Cannon: The minister has just explained that property owned to-day by the Grand Trunk will in the future, as in the past, be taxable by the municipalities and also by the school commissions. What about property acquired or built in the future? Suppose, for instance, the Grand Trunk builds a new station in Levis; would it be subject to taxation?


Arthur Meighen: It would be subject to taxation under the new conditions if it would have been subject to taxation under the old.
For example, suppose this transaction does not take place at all and two years from now the Grand Trunk railway build a station at Levis. If it is the law that that station is taxable it will be taxable just the same whether we own the stock or not.


John Howard Sinclair: The minister said he understood that the Grand Trunk Pacific was subject to taxation by the municipalities through which it passed. I got a return from the Government in answer to a question I asked on this matter in which I requested information as to the amount of municipal taxes paid by the Grand Tr.unk system, the Canadian Northern system, and the Grand Trunk Pacific. The minister was kind enough to send me a memorandum containing the following information :	.
Grand Trunk	$654,736.22
Canadian Northern	 206,627.20
Grand Trunk Pacific.. .. Nothing.
Will the minister reconcile this statement with what he said a moment ago?


Arthur Meighen: The explanation is this, and it applies to Manitoba and other provinces through which the Grand Trunk Pacific runs. These provinces abrogated the right of municipalities to tax and substituted in its place a tax to the province itself on a basis fixed in provincial legislation. Consequently there is no municipal tax but a tax paid to the province instead. Then,-although this does not really appertain very much to the question-numerous exemptions of taxation were granted.


Daniel Duncan McKenzie: I am astonished at the answer given by the Minister of the Interior in connection with the ownership of these different roads which will come under the Government's control. We are going to take over the Grand Trunk Pacific, and we are told that we own every inch of the Canadian Northern. When we take over the Grand Trunk system it is true we shall own it in the name of the company, but that does not mean anything at all in equity and fairness. We shall be holding the system under the name of a company that is to all intents and purposes defunct. In reality it will be owned by the people of Canada. The same thing applies to every other road which we say we own; it is exactly the position in regard to the Intercolonial railway and the Transcontinental railway. Our owning these concerns in the names of companies is absolutely a fiction of law. Some of these railroads which are owned by the people will pay taxes, but the Intercolonial and the Transcontinental will not. Where is the fairness in that? The farmer in Prince Edward Island will pay his share of the deficit on the entire sysitem, but he gets no taxes at all. He must pay his school rates the same as if these roads were not owned by the people. The farmer of Ontario pays his share of deficit, but he gets his school rates and municipal rates and every other assessable rate out of the railway. The same Government owns these different roads and it is not fair that such discrimination should be made. The people of the country will not be satisfied with such conditions.


John Howard Sinclair: Is not the Intercolonial Railway itself a corporation?


John Dowsley Reid: The title of the Intercolonial is in the Crown


John Howard Sinclair: Before it was transferred to the Government railways it was.


William Lyon Mackenzie King: The Intercolonial does not pay dividends?


John Dowsley Reid: Prior to the war it did.


William Lyon Mackenzie King: Under this Act the dividends will gb to the shareholders.


John Dowsley Reid: They will go to the people of Canada.


James Alexander Robb: Surely the minister is not serious in making the statement that the dividends go to the people of Canada?


Georges Henri Boivin: Order. This interruption by the leader of the Opposition (Mr. Mackenzie King) was irrelevant. It has nothing to do with the question now before the committee, and I hope the committee will not recommence a discussion concerning public ownership.


Frank S. Cahill: Will the Government seriously consider making some provision so that the people along the Intercolonial and Transcontinental lines may have the privilege of taxing the railway the same as people along other portions of government-owned roads? I do not think that there should be any discrimination to the detriment of certain towns.


Arthur Meighen: I am not very much impressed by the hon. gentleman's argument, but even if I were I do not see that there should be any discussion on the subject in relation to this Bill. If it were thought proper to do that later on, it could be done. I said I was not much impressed by the contention of the hon. member, but I do not see that my impression matters one way or the other.


Frank S. Cahill: Not to me.


Arthur Meighen: I know that; I know there are other considerations that matter much more to the hon. member. Getting down to the merits of the question, in the first place, there is nothing discriminatory in connection with present conditions as against the Maritime Provinces. The Transcontinental runs from east to west. It is not taxable because it is owned by the Crown. Now, I suppose hon. members contend that because we own the stock in companies that operate certain railways we must therefore go to the Intercolonial and make that government property taxable. I cannot see any connection in the reasoning at all. The same trend of reasoning would carry you on to post offices and you would have to make them taxable because the people that use post offices contribute

to the deficit on the Intercolonial or the Transcontinental or on the Grand Trunk Pacific, or wherever a railway happens to pass through.


Frank S. Cahill: Does the minister say that some post offices are taxable and others are not?


Arthur Meighen: No, but the same argument that would lead you to the conclusion that because we own the stock of the Grand Trunk we must remove exemption from taxation on the Intercolonial would lead you to the argument in respect to the post offices.
The same .argument applies in the one case as in the other except that one is called a railway and the other is called a post office. Then there is the further consideration that in relation to these companies their property is now taxable. Many municipalities have bonused these companies to come in, one reason being that they could tax their properties. Nobody bonuses a Government road to come in. The logic of the situation drives me to the conclusion that as there is no injustice in the present conditions a continuance of those conditions will be no injustice either.


Daniel Duncan McKenzie: The minister tells us
that we are in the position of ordinary stockholders in so far as the Grand Trunk is concerned when we come to own the stock. The worst thing that can happen the ordinary stockholder is that he gets no dividend on his stock. He owes no money to the company,, he has bought his stock and he has it in his possession. Our position is that if the Grand Trunk makes a loss we not only get no dividend on our stock but we must pay for that loss.


Arthur Meighen: No.


Daniel Duncan McKenzie: Certainly, the Government will have to pay the shortage or deficit, as it pays the deficit on the Grand Trunk Pacific, the Canadian Northern and the Intercolonial. Any shortage in connection with this company will come out of the revenues of the people. It is fallacious in the highest degree to say we are only in the position of stockholders.


Arthur Meighen: We are exactly in the same position as stockholders are in relation to any company. We are not responsible for the deficits on the Grand Trunk. It is true the Grand Trunk must borrow. If there are further deficits, the Government lends the road money and the company pays its own debts. But we are in hopes that there will be a surplus in time.


Mr. MORPHY:: I rise to a point of order. I would ask your ruling, Mr. Chairman, as to whether this discussion is relevant to anything before the Committee.


Georges Henri Boivin: There is a motion to add a clause to the Bill. It reads as follows:
Nothing in this Act or any amendments thereof shall diminish or prejudice the effect of any right of assessment or taxation now or hereafter appertaining to any municipality or municipal institution over and upon the property or income of the railway or any of its subsidiaries, branches or accessories.
r
It is on that motion that the discussion has taken place.


Samuel William Jacobs: For once I am in agreement with the Minister of the Interior which makes me believe that perhaps I may be wrong in my view. I agree with him that according to the strict legal interpretation we are merely stockholders in the Grand Trunk which is still a legal entity, and as such would be responsible in the same way as it has always been for municipal assessments and rates. This, of course, is merely a fiction of the law. We own the company and can do what we like with it, but it gives point, if anything more were needed, to the argument of my hon. friend from Prince (Mr. Mackenzie King) that this boast of the government ownership of this line is fallacious. The President of the Council (Mr. Rowell) has been heralding throughout the country that we are going to own and control this line and that in this, public ownership has been raised to the tenth power. Now, by this statement made by the Minister of the Interior (Mr. Meighen) to-night we agree we do not own the line at all. The Grand Trunk sells a portion of this stock to the Government, and the country, by the Government not taking over the line, while maintaining it, is going to lose at least $1,000,000 a year in assessments' and rates.
i Mr. L. A. LAPOINTE:	In view of the
different interpretations would it not be safe to adopt that motion of mine? Some say that we will never be the proprietors of the Grand Trunk while some others say that we will only hold the shares and that it will always be the Grand Trunk Company. I do not know; the future will tell. In view of the demand of the municipalities and of such cities as I mentioned a minute ago why would not the Minister of the Interior accept something that he might construe himself? I do not contend that the wording of my motion should be accepted
but something that woulcj satisfy the great cities that I mentioned a moment ago-even-Toronto-should be inserted in the Bill. I think it is wise to make this provision in; view of the different interpretations and the-difficulties as to whether we will be the owners or only the shareholders. My hon. friend (Mr. Jacobs) believes that the latter position is the right one. I am not going into that discussion at all. I am trying to save the position; I am asking the Government to do something on behalf of those cities, and I am doing so at the request of the President of the Union of Municipalities of this Dominion, Mayor Fisher of Ottawa. If the committee is not prepared to decide it to-night let it stand until tomorrow.	.
>
Mr. MEIGHEN: That the hon. gentleman may not be misled, let me say that there has been no difference of opinion expressed as to what I stated immediately in reply to him, namely, that if no clause is inserted even, these properties will be subject to taxation afterwards just the same as they were before. That is all the municipalities ask. There is no difference of opinion on that. There is some difference of opinion as to whether a clause should be inserted making the Intercolonial taxable. That is all the difference of opinion there is about it. We are all agreed that the law in this respect is just as it was before and in view of that I think he should be satisfied and not press this clause.


Lucien Cannon: 
Arthur Meighen: No. [DOT] Making it up for administration or operation purposes is not changing the ownership of the fee simple; the ownership of the fee simple would still be in the Crown.
Amendment, Mr. Lapointe, negatived.
Progress reported.
On the motion of Hon. Mr. Doherty the House adjourned at 11.50 p.m.

Thursday, October 30, 1919.
i The House met at Three o'clock.


MESSAGE FROM THE GOVERNOR GENERAL.
Mr. SPEAKER:: I have received a message from. His Excellency the Governor General which reads as follows:
Gentlemen of the House of Commons,-
I have received with great pleasure the Address that you have voted In reply to my speech at the Opening of Parliament and thank you for it sincerely.


PRIVATE BILL-FIRST READING.
[Stage Direction]
Bill No. 39 for the relief of John Robert Stephenson Carson.-Mr. Hocken.

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

Joseph Philippe Baby Casgrain: What is the amount the Government claims the Grand Trunk Railway system owes them?


John Dowsley Reid: 


GRAND TRUNK RAILWAY COMPANY.
[Stage Direction]
1.	Advance made to the Grand Trunk Railway Company prior to Confederation, $15,000,000.
2.	Due Department of Railways and Canals on rail account, $1,279,760.07.
3.	Balance owing Canadian Government railways from Grand Trunk, Grand 'Trunk Pacific amd subsidiaries and Grand Trunk Pacific receivership, September 30, 1919, $1,040,346.79.
4.	July 1,1918, advance to enable the company to meet interest payments on Grand Trunk Pacific securities, $593,733.
5.	September 1, 1919, advance to enable the company to meet interest payments on Grand Trunk Pacific securities, $554,800.

[Stage Direction]
6.	Securities purchased by the Government under the terms of the Grand Trunk Pacific Implementing Act, 1913, £6,800,000, and being part of the guaranteed securities issued under Chapter 98, of the Acts of 1903, $33,093,000. Loan of $6,000,000 made against deposit of $7,500,000. Government guaranteed securities issued under Chapter 34, Acts of 1914, $6,000,000. Cash advances to the company at various times as follows:

Under Grand Trunk Pacific Loan Act, 1909, $10,000,000; under Grand Trunk Pacific Loan Act, 1913, $15,000,000; under Appropriation Act of 1916, $7,081,783.45; under Appropriation Act of 1917, $5,038,053.72; under Appropriation Act of 1918, $7,471,399.93. Total cash advanced, $44,591,137.10.
7.	In addition to the above the Grand Trunk Pacific owes the Dominion Government for interest on the various advances as per statement rendered the company to October 1, 1919, the sum of $7,568,983.83.


[Stage Direction]
On the motion being called:
That on Saturday next, the first day of November, the House shall meet at three o'clock, p.m., and that on and after Monday next, the third day of November, the House shall meet at eleven o'clock in the morning of each day except Sundays, and that in addition to the usual intermission at six o'clock, p.m., there shall also be an intermission every day from one to three o'clock p.m., and that the Order of Business for Fridays shall be the Order of Business for Saturdays.-Sir George Foster.
George Green Foster: Mr. Speaker, since putting this motion on the Order Paper I have been informed that Saturday next is a holy day on which it has not been the custom for this House to sit. With the consent of the House, therefore, I beg to amend the motion by leaving but the words from the word " that " in the first line, to the word " that " in the second line, so that the motion which I now move will read:
On and after Monday next, the third day of November, the House shall meet at eleven o'clock in the morning of each day except Sundays, and that in addition to the usual intermission at six o'clock p.m., there shall also be an intermission every day from one to three o'clock, p.m., and that the Order of Business for Fridays shall be the Ordgr of Business for Saturdays.


William Stevens Fielding: There are several reasons which I desire to suggest to the Minister of Trade and Commerce, why I think this motion is not timely. In the first place, I think I am correct in stating that it is a kind of motion which, in the experience of Parliament, is never made except at the end of a long and laborious session. Under some circumstances, at the end of such a session there is justification for pressure of this kind. But we have not yet reached the end of a long and laborious session. We have not yet passed the second month of the session, and that is only about half the time

that a session. usually occupies. I have not looked up the records, but I am relying on my own experience and recollection when I say that I think my hon. friend will have difficulty in finding a case where a motion of this kind was made in the second month of the session. The second point I desire to make is this: When we made representations, or when it was alleged that a very important measure was being pressed through the House with what we thought was undue haste, the hon. the Minister of the Interior (Mr. Meighen) replied that there would be no undue haste, no undue hurry, no intention of departing from the regular order of business and that there would be abundant time allowed for the consideration of the measure. My hon. friend was perhaps not in the House when that assurance was given, but there was the promise and declaration of the Government that there would be no unusual proceeding, no hurry, no rush and that there would be an abundance of time. I claim that the motion that my hon. friend is making is a breach of the understanding that was come to at that time.
Third, the hon. gentleman is proposing that the House shall meet morning, noon and night. He is the oldest member of the House, but I am old enough to know -and we are both old enough to know- that when you attempt to hold meetings of this Parliament morning, noon and night you do not get any intelligent and deliberate judgment on the questions brought before the House. The pressure that is brought to bear on members sitting here morning, noon and night and attending to whatever duties they may have to perform surely unfits them for the effective discharge of their duties. That is something that should only be resorted to under the most urgent conditions. Such conditions have not yet been reached.
Last and more important than all is that I venture to say in the whole of our Canadian parliamentary history my hon. friend will not find that a motion of this kind has ever been made at a moment when the House has not had a single opportunity of discussing the general affairs of this country. We have been dealing with particular subjects. The Peace Treaty is one, the Grand Trunk Bill is another, and on each of these occasions if any member departed from the subject before the House he was very properly called to order and required to confine himself to that particular subject. That is a necessary, and proper rule of Parliament, but if it is a
necessary and proper rule it has to be accompanied by another, and that is that there shall be abundant opportunity for discussing the affairs of the country generally on the motion to go into Committee of Supply. We have now reached the end of the second month of this session and we have not yet had that opportunity by a motion being made to refer the Estimates to the Committee of Supply. Indeed, we have' not yet had any Estimates. I asked the hon. the Minister of Justice (Mr. Doherty) the other day if there would be any Estimates and he said: "Yes, there are going to be some Estimates; they will come along shortly." I say in all seriousness 'that the right to discuss public affairs generally on the motion for supply is one of the most valuable privileges we enjoy under the British parliamentary system. That is purposely designed to afford a wide opportunity of discussing' all questions relating to our public affairs and this is the first time in the history of this Parliament when a motion has been made before there has been any opportunity for such public discussion which is the essence of our parliamentary system. I think my hon. friend, who is an old and experienced parliamentarian, will, on reflection, regard these considerations as abundant reasons why he should not press this motion.


Sir GEORGE FOSTER:: Mr. Speaker, it seems to be pretty difficult to meet the views of my hon. friends on the other side of the House. They seem to have different views at different times with no very long time between their exceedingly different views. It is true that this motion is being made, compared with other sessions of Parliament, at a comparatively earlier period than is usual in the regular sessions but if the hon. gentleman (Mr. Fielding) will take into consideration that this is a special session and that no very considerable length of session was anticipated I think he will be disposed to take a different view of the matter. If he will make a comparison as to the time of the introduction of such a motion as this in connection with the circumstance I have alluded to, the short session for which we had been summoned, he will find that relatively the .motion is as well advanced in point of time as during normal sessions when it has been introduced at a later period; that is to say more days after the commencement of the session. That is in reference to my hon. friend's first reason.
The second reason, that he gives, is weakened by this consideration:	Parliament does not consider it to be a good

business to meet when committees are in session because a large proportion of the most important business of the House is done in committee. The committees have practically finished all their business at this time. The members therefore have no call upon their time to attend the sessions of these committees in the forenoon and the conditions are not the same as they were when they had that ca!l. We are simply asking the member of Parliament to come and deliberate upon or consider matters in this House when in a normal session he would be at work in committees. The committees have done their work and the time of the members is at their own disposal. It does not seem to me to be very much to ask them, being relieved of work in the committees, to come to the House of Commons and undertake the consideration of questions which are proper and necessary to be considered in the House itself. I think that these two suggestions I have made take away from the force of my hon. friend's objection. What we are here for, when you come down to basic principles, is to get through with the work of the session. We have not ipushed it by extraordinary methods; we have not used any compulsion at all; we have not hurried up the deliberations of the House, nor have we proposed to do it, but in consideration of the fact that the committees are not sitting, it does not seem to be unreasonable to ask the members to stay in the House and to devo'te all the time which they would otherwise, under normal conditions, give to the committees, to the work in the House.
Then, a word in reference to the programme which seems to have sprung up all at once in the mind of my hon. friend, and which opens up vistas of distance which we did not contemplate before. It seems that my hon. friend feels that at this special session it is incumbent upon him after two months of cogitation to open up the affairs of the country and go into a general discussion of conditions, financial and otherwise. This had not been contemplated at this special session. It is to my mind a question whether it is necessary or wise. I think there would have to be some very strong reasons given as to why a large amount of time should be spent after this in discussing general political conditions because that is about what it would mean, or whether we should finish the necessary business, get to our homes and be prepared to come back at the regular session of Parliament and discuss the affairs of the country. We would have had this purpose, and

this purpose alone, if it had not been for the intervention of a special session called for a special purpose. For that special purpose it has been called and along with it advantage has been taken of the presence of the members here to bring before them a little necessary and urgent legislation for their consideration and opinion.
I do not, as a member of the Government, w'ant to compel members of the House who, on broad principles, h&ve the disposal of their time in their own handsi, to sit in the mornings at this period, if they do not desire to do so; but under the present circumstances, there being no committee work to be performed, we might well add the mornings, which we would otherwise spend in committee work, to the sittings of the House and attend to the business of the country. My hon. friend (Mr. Fielding) is not much older than I am and he is quite as vigorous. I am quite willing to come morning, afternoon and evening, if it is necessary, in order, in an orderly way, to put the business through; and those young fellows opposite, some of whom have very lately entered Parliament, surely cannot plead physical fatigue against the duty of a member of Parliament.


Jean-Joseph Denis: Although I am very sorry to take up the time of the House I cannot let the opportunity pass without expressing my opinion upon this motion. I am not by any means satisfied that the leader of the Government has made out a good case, or in fact any case at all, in support of the motion. He began by telling us that while different views had been expressed

Mr. J. W. EDWARDS (Frontenac); I rise to a point of order. My point of order, Mr. Speaker, is this; The motion having been spoken to by the hon. member for Shelburne and Queen's (Mr. Fielding) and replied to by the leader of the Government, thus closing the debate, any hon. member so disposed should have spoken before that reply was made.


Edgar Nelson Rhodes: The point of order would be well taken if I had directed the attention of the House to the circumstances that the acting leader of the Government was closing the debate. But in cases of this kind, which are always more or less matters of arrangement, latitude has' always 'been shown the leader of the Government and the leader of the Opposition in order that a decision should be arrived at that will be convenient to the House. I therefore do not think the acting leader of the Government has replied

in the ordinary sense of the term, and the motion is still open for discussion.


William Cameron Edwards: May I ask if the acting leader of the Government [DOT]will have an opportunity to make a further reply?


Edgar Nelson Rhodes: Yes.


Jean-Joseph Denis: The leader of the Government seems to entertain the idea, or at least has tried to make us believe, that he is presenting the motion with a view of giving satisfaction to members on this side. We certainly are not accustomed to such treatment from the Government side and if true it will be the first time since I have been a member of Parliament that a motion was offered by the Government for the sole purpose of giving satisfaction to the Opposition. I am really surprised that our views should have such weight as to have made such an impression on the leader of the Government. Coming now to the merits of the question, let me say that we have been repeatedly promised by the Minister of the Interior, and other members of the Government, that the Bill for the acquisition of the Grand Trunk railway, which will be the chief issue before us until the session closes, would not be pressed with any haste whatever, but that all the time necessary should be given members to discuss the measure. We have been debating the Bill for several days and it is now proposed that the House will hold three sittings a day. In my opinion this is equivalent to chloroforming Parliament.


Some hon. MEMBERS:: Oh, oh.


Jean-Joseph Denis: Yes, I say' that and I mean it.


An hon. MEMBER:: Shame.


Jean-Joseph Denis: I mean what I say, and no one will deny the statement. No member who stays out of the House will be chloroformed, but not a single member can stand three sittings a day. I claim to have been just as assiduous in my attendance here as any other hon. gentleman and physically I am just as strong, but I cannot stand three sittings a day and I would like to hear from any hon. member who can endure that number of sittings and give reasonable and proper consideration to the legislation.'before us and arrive at a well-considered judgment. I do not think that could be said of any member on either side. It has been said, Sir, that this session, having regard to the object for which it was called, was a farce. If at the beginning it was a farce it has now developed
into a very serious matter. We have now been here for two months and the leader of the Government is satisfied that our object has been accomplished, that we have-earned our indemnity and that we should go home. Well, my understanding, to which I propose to adhere, is that full opportunity should be afforded to consider such legislation as is brought down and especially such important legislation as the acquisition of the Grand Trunk. Otherwise, we might as well go home, or remain out of the House, and simply come here to vote when a division takes place. It is an easy matter for hon. gentlemen who were interrupting me a minute ago to say "We are ready to vote and to go home." Let me recall one circumstance to illustrate how these hon. gentlemen regard their parliamentary duties. When the Grand Trunk Bill was introduced by the Minister of the Interior, I saw around him a galaxy of Government supporters who had gathered simply for the purpose of applauding the project. As everybody will acknowledge this measure contains one of the most important propositions that has ever been submitted to Parliament. It is one of the most difficult in its character that we have ever been called upon to consider, and yet these hon. gentlemen have already made up their minds in regard to it. They congregated around the Minister of the Interior and after he had submitted the Bill to the House applauded him. Well, for that kind of work, the House might sit three times a day and even for the whole twenty-four hours; it would not involve any great hardship to hon. gentlemen who had made up their minds in advance. But that is not true of those members who want to form a well-considered judgment with respect to this legislation. They must not only steadfastly attend the sittings -but carefully study the legislation. No man can sit at his desk in this House and do that unless he has had ample opportunity in advance to consider the subject and make up his mind on the provisions of the Bill. I could give many other reasons why this motion should not be entertained, but I know it would be useless. I will simply register my protest against this motion as I will protest against any motion of the same nature which may be submitted to the House in future.


Mr. R. L. RICHARDSON (Springfield):: As a western member I want to endorse very heartily the suggestion of the Government that we should get on with the busi-

-ness of the session. It is all very well for 'hon. gentlemen to protest who live in 'Ottawa or whose homes are so near that they can reach them during the "weekly recess to favour delaying the session, but we members who reside in the West and are obliged to remain here month after month, and I think I voice their sentiments, chafe very grievously when any unnecessary delay takes place. As a matter of fact, the commitees have finished their work and members are merely idling about the corridors and the smoking rooms restless because they have in the morning nothing to do. I see no hardship whatever In sitting three times a day and I am much older than my hon. friend who has just spoken. I do not find anything laborious about attending the sessions of Parliament; the trouble is that so many of us at certain hours have nothing at all to do; and if we intervene in a debate we are liable -to be frowned at and charged with speaking too long and unnecessarily taking up "time.
But this is a special session called for a special purpose, and if men who have businesses to look after are to be kept here month after month they will be obliged to retire altogether from politics. Surely the -session has already lasted almost a month longer than we expected.


Some hon. MEMBERS:: Hear, hear.


Robert Lorne Richardson: Certainly, because
very important business developed, and I [DOT]take it that members are perfectly willing to remain here until that business is finished. But why we should not occupy the entire day, or most of it, in sitting in the House is more than I can understand. As to. opening up the whole business of the country in connection with the Budget, if we do that we will not need to adjourn at all; there will be no need for an intermission between this and the regular session.
I feel that I express the sentiment of members from the West when I say that while every reasonable courtesy should be extended to the Opposition, no time should be lost in driving the business of the House through in a legitimate manner.


Daniel Duncan McKenzie: Mr. Speaker, the
leader of the Government (Sir George Foster), with his usual facility for finding suitable words, twitted us for changing our minds so very often. I think that is one of the things he should not have said, for if there have been any rapid changes about how long the session should last they sure-
lv have their origin with the hon. gentleman himself. It is not more than two or three weeks since he called me to task for suggesting anything but an immediate winding up of the business of the House. He said then, as he says now, that this was a special session called for a special purpose; he intimated that purpose had been fulfilled and the minds of members had been made up that their work was finished and that Parliament should prorogue. We accepted that as the opinion of the hon. gentlemen on that side of the House, ex pressed through their leader; now we find that the hon. gentleman has radically changed his mind. We cannot continue to call the session a special session,' because business far wide of the subject which the session was specially called to consider has been introduced; the session has become one of general import, dealing -generally with the business of the country. The business that is nowr before the House was not in the mind of any members when they came here on the first day of September. We were called here hurriedly for the purpose of dealing with the Peace Treaty. I need not go into the mental philosophy of the thing; my hon. friend knows that when a man makes up his mind to a certain line of action and thinks that a duty that he had in hand is-finished he is not so very ready to throw away that idea and the impression that is on his mind and entirely change his course of action. We have been told by the Minister of the Interior (Hon. Mr. Meighen) and others that there is plenty of time; that there is no need of chafing under continuous sittings. The leader of the Government knows that if he makes up his mind that he has to stay in a place for a certain number of days and is to go at the end of that time it is not pleasant if he has to stay longer, because, as I have said, he has made up his mind to a certain course of action. But we are now in the midst of this business ; our minds are fully charged with it. We realize the responsibility w'hieh attaches to it and I do not think vre should be hurried too much. The Minister of the Interior has said that there would be no need to hurry; that all possible convenience and time would be at the disposal of members.
Now, the wisdom of the ages has fixed the sittings of Parliament from three o'clock in the afternoon until such hour as we may adjourn. Those are the regular working hours; they have prevailed for the last fifty years in this country, as they have, I think, in the Old Country, and they should not be

departed from without good reason. The hours are so arranged that hon. members may have part of the day for reading and study and for seeking information in connection with the subjects under deliberation. I submit that to go home at ten or twelve o'clock at night and come here at eleven o'clock the next morning and enter upon the grind of sessional work leaves no time for anything of that kind. It is part -of the member's work to read the newspapers. If you see a member reading a newspaper you may think that he is enjoying himself. But that is not the idea; it is a duty; he must read the papers if he wishes to keep in touch with public opinion. The leader of the Government will admit that certain time must be given for that if for nothing else, but under the arrangement suggested there will be no time at all for any of these things.
The Treaty of Peace and the Grand Trunk proposal are very important subjects, but the most important business of the session has not yet been brought before the House. I submit that the question of the re-establishment of the soldier is the most important question-looked upon, at all events, from the humanitarian standpoint-with which we have to deal. The report of the committee is not yet brought down. I have no idea, except from what I have seen in the press, of what the report is going to be. I assume that legislation will be introduced, and that serious consideration is to be given to that question. That alone, I submit, is good reason why at least during the whole of next week we should proceed along the old lines.
The Minister of Railways twitted us rather sarcastically the other night about the desire to go home; he suggested that we were running from work and wanted to go home. It seems that the shoe is on the other foot now; the extreme desire for quitting is on the other side of the House.


John Dowsley Reid: Our desire is to work.


Daniel Duncan McKenzie: I trust that the leader of the Government will allow us ait least half of next week before he brings this new regulation into force.


Alexander Kenneth Maclean: Mr. Speaker, if there is any good ground for not accepting the resolution, it 'has certainly not been established by hon. gentlemen opposite. In presenting the resolution there is no intention or effort on the part of members of the Government to suit their own convenience, because individually they would much prefer a continuance of the usual
hours. The resolution is merely an honest and sincere effort on the part of the Government to meet what they thought wias the desire of the House. After all, this is a matter for Parliament to settle; if it is the desire of Parliament that we meet during the remainder of the session at three o'clock as usual, the Government will bow to the wishes of hon. members. It has never been officially intimated to the House by the Opposition that they desire an early termination of the session; nevertheless- and I hope I am not violating any principle of propriety when I say this-to me personally and to members on this side individual members opposite have expressed a desire that the 'business of this session he concluded at the earliest possible moment consistent with its being properly considered and dealt with.
After all, the question is: Is there any substantial reason why we should not hereafter meet in the .mornings at eleven o'clock? As has been pointed out by the leader of the House, there is no further committee work. I have never been partial to morning sittings, and I would not favour this resolution if committees were to meet during the balance of the session. I agree with the suggestion entirely; but inasmuch as there will be no further sittings of committees, might not hon. gentlemen as well assemble here at eleven o'clock in the morning, as at three o'clock in the afternoon? Would it not be wiser on our part to put in two hours' work between eleven and one o'clock and endeavour to close at a respectable hour in the evening, say at ten or eleven o'clock? I think that would safeguard the health and comfort of the hon. member for Joliette (Mr. Denis) better than if we met at three o'clock and sat until twelve or one o'clock at night, and it would afford the hon. member for Cape Breton North and Victoria (Mr. McKenzie) ample opportunity for reading the newspapers late in the evening, which is the time when all busy men read the newspapers. I do not think it is fair to suggest, as it has been suggested, that this represents an intention on the part of the Government to curtail or minimize debate on the Grand Trunk Bill. The Minister of the Interior (Mr. Meighen) has given his word to Parliament that every opportunity will he afforded to hon. members in this House to debate that measure, and the Government will adhere to the promise made by that minister. It does not mean that the session will perhaps close any earlier by our meeting at eleven o'clock in

the forenoon; but on the whole, considering the fact that there are no further committee meetings, I think it is for the comfort of members that we should meet at eleven o'clock and endeavour to close at an earlier hour than we have been doing lately. The motion is a fair one, and it is submitted with the sincere desire of meeting what was apparently the wishes of hon. gentlemen, and I am surprised that there is any opposition to it.


Frank S. Cahill: Apparently, it is not the intention of the Government to accede to the wishes of the hon. member for Shelburne and Queens (Mr. Fielding), and I should like to make the leader of the Government the suggestion that he change the date from Monday, November 3, at eleven o'clock to Tuesday, November 4, at 11 o'clock in order to give members who are away over Sunday an opportunity of being here ;n time for the opening of the House on Monday afternoon at three o'clock. That would make a difference of only two hours to the members who .spend their time lounging in the lobby, in going home in the evening.


George Eulas Foster: Mr. Speaker-


Edgar Nelson Rhodes: As the Minister of Trade and Commerce will close the debate, if any hon. member desires to speak, he should do so now.


Thomas Vien: The suggestion of the hon. member for Pontiac (Mr. Cahill) should he, accepted. The delay is not a very long one; it is a matter of only two hours. Hon. gentlemen opposite know that most of the members from Quebec and Ontario, just as much on that side of the House as on this, go home for Saturday and Sunday, and they cannot possibly be back until Monday noon. The suggestion that on Monday we should not sit in the morning is a fair one, and it should be accepted, unless it is the unavowed intention of the Government to press a vote on Monday morning when some of the members will certainly be absent. Might I ask the leader of the Government when he speaks again to tell us what legislation will foe brought down so that We may better understand what work will be left to the House for next week?
Sir GEORGE. FOSTER: I have nothing particular to add to what I stated before. The leader of the Opposition has commented upon a text given him in some utterances of mine at an earlier period, and I was interested while he was making the comments. He is a very facile commentator; but I

should be very chary about relying upon the comments that he made, because I am afraid that it would be found out that the summation of his comments would present such a radical difference from the original text that he would lose authority as soon as people compared the two. The whole object has been not to deprive members of an opportunity to express their opinions, but to give them all possible opportunity to do so ; and to ask members to come back at eleven o'clock in the morning now that committees have finished their work and members have no committee work to do seemed to me to be giving an opportunity for better and more extended consideration than could otherwise be given. If the leader of the Opposition makes it a point that he would like to have this order commence on Tuesday, I would like to .consider his request if he makes it; but I can undertake to quiet the anxiety of the hon. member for Lotfoiniere (Mr. Vien) by telling him that it is farthest # from the mind of the Government to force a catch vote on the Grand Trunk arrangement or anything else between eleven o'clock and twelve or one o'clock on Monday morning. My hon. friend knows that the Government would not do that, and if it wanted to, it could not, for with the quantity of steam-power or wind-power available on the other side, two hours could easily be taken up,in the morning so as to prevent a vote being taken. There is no; flank movement in that respect, I beg to assure my hon. friend. If the leader of the Opposition wishes to have this first Monday excepted, I would be glad to accede to that request, but I would like him to make the suggestion.


Daniel Duncan McKenzie: For anything that we may be about to receive, the Lord make us thankful.


Sir SAM HUGHES:: Does that include
Saturday?


George Eulas Foster: This first Saturday is>
excluded.


Edgar Nelson Rhodes: The technical rule is that the mover of a motion may not amend his own motion, but I take it that the House gives its unanimous consent to the amending of the motion. The motion now reads:
That on and after Tuesday next, the fourth day of November, the House shall meet at eleven o'clock In the morning of each day except Sundays, and that in addition to the usual intermission at six o'clock, p.m., there shall also be an intermission every day from one to three o'clock, p.m., and1 that the Order of

Business for Fridays shall be the Order )f Business for Saturdays.
Motion 'as amended agreed to.



TELEGRAPH RATES TO VLADIVOSTOK.

[Stage Direction]
On the Orders of the Day:
^ Sir SAM HUGHES (Victoria): I should like to ask the Government how it happens that the Government cable rate to Vladivostok is $1.60 a word and the rate on commercial lines only forty-five cents a word ? I mention that so that action may be taken to reduce the Government rate.
George Eulas Foster: I shall make inquiry.



CANADIAN TRADE COMMISSIONERS IN CHINA AND SIBERIA.

[Stage Direction]
On the Orders of the Day :
Mr. W. G. McQUARRIE (New Westminster) :: I wish to direct the attention of the Minister of Trade and Commerce to an article in the Vancouver Daily Sun of October 24, reading in part as follows:


Edgar Nelson Rhodes: Cannot the hon. gentleman summarize the article for the purpose of putting his question?


William Garland McQuarrie: I shall make only a short extract:
Lieut-Colonel J. W. Warden, who returned recently after an extended stay in Siberia and China, spoke before the domestic and foreign trade bureau of the Board of Trade yesterday upon the trade possibilities of China and Siberia. During- his remarks he declared that the Canadian trade commissioners in those countries were "a farce." He was sure-[DOT]


Edgar Nelson Rhodes: Order. It is not competent for the hon. member either in his remarks or in reading a document, to call in question the action either of the Government or of its servants. If he desires to direct a simple question on a matter of policy he may do so, but he may not proceed as he now purposes.


William Garland McQuarrie: My purpose was not to criticise the Government at all, but to direct the attention of the minister to this article, and to ask what action he is going to take with regard to it.


George Eulas Foster: The charge is such a sweeping one that I shall have to ask for a considerable time to take it into consideration before I can give my hon. friend an answer. Prima facie I should say that any man who makes a charge of that kind has probably nothing to back it up.


William Garland McQuarrie: Well then-


Edgar Nelson Rhodes: Order.


William Garland McQuarrie: I have not finished, Mr. Speaker.


Edgar Nelson Rhodes: Order. The hon. member's question is of such a sweeping and general character and would involve so long a debate if any useful purpose were to be served, that he must either be satisfied with the answer he has received, or else put his question on the Order Paper in the ordinary course.
THE GUELPH NOVITIATE INQUIRY. On the Orders of the Day:


Samuel Hughes: I see by the evening papers that the commission appointed to inquire into the Guelph Novitiate matter has presented its report to the Government. When will the report be laid on the Table, and will it then be immediately printed?


George Green Foster: The report has been received, and I was under the impression that it had been laid on the table of the. House. I will make inquiry, however.


William Stevens Fielding: Was that a report of a committee?


George Eulas Foster: No, of a Royal Commission.


Samuel Hughes: May I ask whether the Government would take into consideration having the report and the evidence, or the evidence at all events, printed immediately, so that it would be ready for this session if it continues?


George Eulas Foster: When the report comes down to the House, it will be for the House to say what shall be done with regard to the printing.



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 5-Government may call in or redeem present guaranteed stock and new guaranteed stock.
Arthur Meighen: With reference to the proposed amendment to this clause of my hon. friend (Mr. Mackenzie King), I promised to ascertain if the Government

could see its way to reduce the numiber of years, just to cover the possibility, the rather remote possibility, I fear, of the rate of interest going lower than 4 per cent, so that the Government might redeem the stock in that event before the thirty years were up. It has been found possible to reduce the thirty years, if the House feels it would be of any advantage at all. Personally, I . see very little possibility of advantage in reducing the thirty years to five. It will still leave the bond a bond, although bearing only slightly the properties of a bond. Of course, it will obviously cover every possible contingency of it being of advantage to the country to redeem the bond. I therefore move in amendment to the amendment that the word " thirty " in line 45, on page 2 of the Bill, be changed to the word " five."


William Lyon Mackenzie King: In view of what the minister has just said, I would ask leave of the House to withdraw my amendment, as I think his fully covers what I had in mind.
Amendment (Mr. Mackenzie King) withdrawn.
Amendment (Air. Meighen) agreed to.
Section as amended agreed to.
On section 8-Loans to Committee of Management upon notes or obligations of Grand Trunk:


Arthur Meighen: After listening to the comment on this clause of my hon. friend (Mr. Fielding), I made the statement yesterday, after going more fully into it, that the clause seemed of too wide and sweeping a character. I may say once more that I did not draft this Bill, and I remember no specific instructions at all on this point. I have considered the clause further, and I do not think it is necessary at all. If any money is needed in regard to operation-it is hoped it will not be-an appropriation will be asked for in the Estimates. I move to withdraw this section from the Bill.


William Stevens Fielding: I think the conclusion of the hon. gentleman is entirely satisfactory.
Section withdrawn.
On section 12-Discharge of receivership of Grand Trunk Pacific and termination of proceedings in Exchequer Court.


Daniel Duncan McKenzie: This seems to be incomplete; it does not say what is to become of the road. Before the receivership the road belonged to a private and independent company, the Grand Trunk Pacific.

Now we propose by this section to put an end to the receivership, but there is nothing to show what becomes of the road. Will the Grand Trunk Pacific Railway Company have absolute control of the property as before the receivership, or is it the intention of the Government to continue it as part of the Government-owned system?


Arthur Meighen: On the discharge of the receivership the road would go back into the legal position it occupied before the receivership. That is to say, it would be administered by the stockholders of the road.


William Stevens Fielding: The Grand Trunk?


Arthur Meighen: The stockholders of the Grand Trunk Pacific Railway Company, who are the Grand Trunk Railway Company. Of course, the Government being owners of the stock of the Grand Trunk would necessarily have full supervision and be in absolute control. Thait is all that is wanted.


William Stevens Fielding: Is it clear from the Bill that provision is made foT then merging it with the Canadian National roads? We all know what the intention is, but I am inclined to think that the point taken by the hon. member (Mr. McKenzie) is correct, that there is no provision as to what is to become of the road. When the receivership ends it goes into the hands of the Grand Trunk Company, and we are the Grand Trunk Company. Is it intended to be continued that way and not merged with the Canadian National even after the committee of management is at an end?


Arthur Meighen: It is intended that the Grand Trunk system, which includes the Grand Trunk Pacific, be merged in the Canadian National system under one control.


William Stevens Fielding: Is it so stated in this Bill?


Arthur Meighen: I do not think there is any specific provision in the Bill, but the moment the Government gets into the shoes of the shareholders of the Grand Trunk then it may exercise any powers that those shareholders previously exercised. The Government will then be in a position to appoint a manager of the Grand Trunk system, and I presume they will do just what they did in appointing a manager of the Intercolonial to succeed the previous manager. The Government would appoint the Canadian National Board of Directors to administer the Grand Trunk under its

authority as owner of the Grand Trunk stock.


William Stevens Fielding: Did we not by legislation specifically transfer the management of the Intercolonial to the Canadian National? I think we did, and I do not think we are doing it in this case.


Arthur Meighen: I do not think we did. I do not speak with absolute certainty in answer to the hon. member on that point. It may be possible that we did later on in the Canadian National Railway Bill, but previously to that the management of that road was transferred by Order in Council simply as an Act of the Government which owned the road. It was placed under the management of the Canadian National railway just under'the same authority as the Government would exercise in appointing Mr. Gutelius or Mr. Brady or any one else to manage the road.


Mr. JOHNSTON:: After the receivership is at an end what will be the position of the branch lines companies and what will he the responsibility of a province in respect of its guarantee on their bonds?


Arthur Meighen: That matter was specially called to my attention by the member for Kindersley yesterday. The answer is that they are just in the same legal position precisely after as before. We are simply stockholders of the parent company. The branch lines bear the same relation to that company, to their own bondholders and the guarantors, he they a province or private persons, afterwards as before.


John Frederick Johnston: The province of Saskatchewan has made a payment of interest oh some of these bonds. When this matter is concluded will this Government make good that payment?


Arthur Meighen: My information is that the provinces made some payments in answer to their responsibility as guarantors on some of the bonds. When the Government becomes owner of The road it does not pay the debts of the road; the road pays its own- debts. It has happened in the past, and it may happen in the future, that if the road is not able to secure capital or money with which to take care of its obligations the money may be loaned by the Government under the authority of Parliament. It is expected that the Grand Trunk Company will take care of its obligations afterwards, including the obligation to which the hon. gentleman refers, even though it may be necessary to borrow
money from the Government for the purpose.


Edward Thomas Wordon Myers: 
Arthur Meighen: I do recall something of the incident to which the hon. gentjeman refers, but I think it was the Grand Trunk Pacific that held this stock in the Edmonton Bulletin, either directly or through the medium of a third party. Of course, if that stock is still in the same position it will be the property of the Grand Trunk Pacific, and the Government being the owners of the stock of the Grand Trunk, of which the Grand Trunk Pacific is a subsidiary, I suppose it would be in the highly desirable position of being the equitable owners of that asset.


Frank S. Cahill: At the present moment, if the Grand Trunk desired to amalgamate with the Canadian National railways, would it be in a position to do so without the authority of Parliament?


Arthur Meighen: No.


Frank S. Cahill: The Government is not in any way changing the standing of the company, which is still the Grand Trunk Company. The Canadian National railways have power to acquire any other railway in Canada, but that would not give the Grand Trunk Company the right to sell out to the Canadian National or amalgamate with them without some authority from Parliament. If the authority is not given in this Bill, where will it lie?


Arthur Meighen: 
Frank S. Cahill: But suppose they pooled' all their receipts?


Arthur Meighen: I presume they could put their receipts where they liked, but the supposition is monstrous. They would not put their receipts, if they were a

private company, into a separate company but into their own treasury. They could divert them from their own treasury if they were mad enough to do so. We are simply, as stockholders of the Grand Trunk, in control of the company. Exercising that control, we appoint the *Canadian National railway director and manager of the Grand Trunk business.


Frank S. Cahill: Will the receipts of each of these companies be kept separately?


Arthur Meighen: I do not feel that I can answer that question finally. I would presume that there would be separate accounting for the Grand Trunk and the other roads. There is separate accounting now on the Intercolonial, the Transcontinental and the Canadian Northern. When the Grand Trunk comes in even though there is a merger, separate accounting, I think, will continue.


Daniel Duncan McKenzie: The minister tells us
that when the receivership of the Grand Trunk Pacific is over the company will be back where it was before the order putting into the hands of the receiver wras made. The financial ability of the company will be no better after the receivership is cancelled than before. The obligations of the company are still outstanding and it is *open to any of the creditors to put it in the hands of a receiver again. What steps do the Government intend to take to secure the road and the physical assets of the company? No doubt they propose to take over the road and operate it. What means are they going to take to prevent an occurrence of that kind? If we do not pay the obligations against the road we cannot stand in the way of any person who seeks to enforce his. rights against the physical assets -of the company. There are bondholders and, I suppose these bonds are secured by a mortgage. They can foreclose their mortgage and to prevent that we will have to pay the bonds. Those who have claims can apply to a judge to have the company put into liquidation. I presume the Government have considered all these matters and have devised means of dealing with eventualities of that kind. Will the minister explain to the committee what course they propose to take in order to hold the company and at the same time pay off, or arrange the claims against the road.


Arthur Meighen: When the Canadian
National railways are called upon by appointment to administer the Grand Trunk in unison and harmony with the Canadian National system, any portion of that system

has to be protected in its obligations to bondholders or others. It would be protected by the Canadian National management and no doubt when it undertakes the Grand Trunk Pacific it will be done in just the same way as all the component parts of the Canadian National system are protected. We will inquire for a moment how this is done to-day. On the Canadian Northern Ontario, or the Canadian Northern Quebec whose stock is owned by the Canadian Northern, and which in turn is operated by the Canadian National railways, an obligation falls due. If there is no money in the treasury of the Canadian Northern Ontario to discharge that obligation it is lent by the Canadian Northern. A similar process would, I presume, go on in connection with an obligation of the Grand Trunk Pacific. If the money were not there it would be loaned by the parent concern. It is hoped that by means of the advantages of the merger, we may not be far from the day when the revenues will take care of these obligations. It may be that one would fall behind but another would go ahead and as the receipts of all are finally pooled, although separate accounting takes place, there will be money enough, it is hoped, in the treasury, to take care of these separate and individual obligations. But in the meantime a loan will be made out of the common pool to an individual concern to take care of the obligations. If the common pool does not contain sufficient money for that purpose it will then be for the Canadian National railways to secure the funds. They may secure that by a loan from outside in the same way that any other railway does or they may come to the Government for a loan. The Government could not make it, of cou'rse, except under the authority of Parliament. I understand that the Canadian National railways have made loans outside. They have borrowed money outside and the new road may do the same. It will be managed just the same as any other road. If necessary and if Parliament grants it, a government guarantee can be given to the bonds of-the system. I hope I have made it clear to the hon. gentleman.


Daniel Duncan McKenzie: It is clear enough to me but I am not satisfied that the Grand Trunk Pacific is good value for the Canadian people to take with its present obligations. I am afraid we are taking too many obligations in connection with this property and that the property is not worth it. The other day we heard from the hon. member for West Algoma (Mr. Nicholson) who is a

railway expert that the $280,000,000 which is said to have gone into the Grand Trunk Pacific never went into that road. He takes the responsibility of saying that. I do not know; I am simply quoting his words. We are taking over the road subject to all these liabilities and the minister hopes that the operation of the road will provide for them. If not the main reservoir, which is the treasury of Canada, will have to be called upon to pay the shortage. If the road itself will not pay we will have to pay the obligations out of the revenues of Canada, because we own it. It does not make any difference what the minister says about companies and owning it under different names; when it comes down to the last analysis and money is wanted, it has to come from the treasury of Canada. It is of the highest importance that the people of Canada should know whether they are paying too much for the road and whether they are assuming too gTeat a liability in connection with it. It has had to go to the hands of a receiver because its obligations are too high and its income is too small. I cannot see any good reason to think that the sledding is going to be any better after the receivership is closed out than it was before. I would think that to allow the receivership to take its course would be the safer proposition for the people of Canada. Then it would be stripped of everything about it, the claims could not be satisfied out of the treasury itself and we could certainly afford to buy it better than anybody else.
It would not pay anybody else to buy-at least we would have the advantage over everybody else in buying-and as a business proposition, to a person like myself who has no feeling or sentiment in the matter at all, and perhaps no great responsibility, it would appear that we should get the property for what it is worth-stripped of all the obligations that are against it-which I regard as superfluous obligations, and obligations that are greater than the intrinsic value of that property. If the minister satisfies us, or satisfies the country, he is getting good value and that taking over this property and assuming the liabilities is a good business transaction we have nothing to find fault with; but our experience in connection with this road is that it was not built to weather the storm -it went under because it'was top heavy, it was laden with liabilities, and its earnings were not sufficient to meet the necessary demands. Now if we are going to take over that road would it not be good business
to strip it of those superfluous liabilities, get it down to real running weight, and have nothing to pay but what the road would ordinarily have to pay and what would be a fair liability upon its true and proper capital value.	'


Arthur Meighen: 

Trunk is not liable at all. If we start the stripping process, who loses first? Who are we stripping in order that we may protect the people of Canada? We are stripping ourselves. The first things to topple over are the loans that we ourselves made. We are the losers; naturally we lose the whole amount that we have been advancing year after year for that line.


Daniel Duncan McKenzie: If we do, under our first mortgage do we not have the property?


Arthur Meighen: Now the hon. gentleman says: "Let it go to wreck and 'buy in under the first mortgage." Well, of course, the second mortgagees would have something to say about that, and I do not think anybody would suggest that it is not worth-if we can get the Grand Trunk and have a railway system-a good deal more than the first mortgage anyway. But suppose it is not worth the amount of the second mortgage? Suppose it is not worth the total amount of the mortgages-that is the total of the first and second mortgages and the total of the mortgage in .respect of which we and the Grand Trunk are liable? Are we going to be the losers by the policy of the Government now embodied in this Bill? No. All we have to do is to show that to the board of arbitrators and to the extent to which that road is not worth the sum of the first and second mortgages-the Government's mortgages and the Grand Trunk's mortgages-and the joint mortgages, to that extent the Grand Trunk's obligations to the Grand Trunk Pacific are a liability, and the amount of that liability comes off the value of the Grand Trunk's stock. In a word, we are saving ourselves.


Daniel Duncan McKenzie: That is a very indirect way of doing it.


Arthur Meighen: I know it is an indirect way, but it is the only way in the world to do it. Now let me repeat my statement, because this is really very important, and I am anxious that hon. members should fully understand it-that is, if they agree that I am right. If we were to adopt the stripping process by means of liquidation, first of all we would have all the disadvantages of liquidation, all the destruction and impairment of credit -everything that is entailed thereby, perhaps for a generation. Secondly, the mortgages that would be swept away into a complete loss would be first our own mortgages.


Daniel Duncan McKenzie: But we would have the property.


Arthur Meighen: I know, but what is the good of wiping out our own security; we do not gain anything by it anyway. It is true we are not losing if the property is not worth it, but we certainly are not gaining anything.


Daniel Duncan McKenzie: But we get the property.


Arthur Meighen: True, but does not the hon. gentleman see we are getting it now? Now, his method is to throw overboard our own securities until we get down to weight, throw over all these mortgages .that we have been taking year after year, throw over these $7,500,000 loans and so forth. Take the $16,000,000 guarantee that we gave in the year 1914-all that would be gone. I do not know what they all amount to, but it must run up to thirty or forty millions. That would all be lost and then we would have the road and it might not be worth what would be against it. But the way we are doing it, if the road is not worth the amount of the first mortgage to which our guarantee applies, the second mortgage to which the Grand Trunk guarantee applies, and the mortgage guaranteed by both the Grand Trunk and the Government, then the arbitrators are bound to say that to the extent of the excess of those obligations over the value of the road the Grand Trunk Company have a liability in the Grand Trunk Pacific, and that excess would be the amount to be taken off the value of the Grand Trunk stocks by virtue of their Grand Trunk Pacific obligations. Now, I think I have made that clear.	^


Mr. MAHARG:: Might I ask how that excess would be arrived at at the present time? Would the arbitrators take the valuation of the property at the present time and then set that over against the liabilities?


Arthur Meighen: I. would say certainly not, because if you assume it would cost that much to replace the road that does not say the road ought to be replaced at all-I would think it would be perfectly absurd for the arbitrators to do that. Anyway, we are not dictating to the arbitrators at all, any more than we do in all our expropriation legislation; it is for the arbitrators to say what is the business value of the Grand Trunk Pacific road.
Taking everything into account, what is its business value? Do not tell us that its business value is what it cost or what it would take to replace it to-day, because perhaps it should not have been built at all. Take everything into account; determine what its fair value is as a going con-

cern. Having done that, add the total responsibilities until you get to the end of the Grand Trunk responsibilities; then take the difference between the two. That difference represents the net liability of the Grand Trunk and should come out of the value of their stocks. So that we are saving ourselves in relation (to the Grand Trunk Pacific by a charge against the inherent value of the parent company's stocks. That is the very essence of this policy: first of all, a desire to have a real Government system that ought to pay if it does not pay; second, a desire to save to the greatest extent that we can whatever asset the country may have in the Grand Trunk Pacific by charging our loss against the value of the stocks of the parent company, the Grand Trunk.


Robert James Manion: Am I right in supposing that the arbitrators, in arriving at the value of the road, will take the value of the rolling stock, the road-bed, or other part of the road, at pre-war prices; that is, that they will not take the cost of a locomotive, for instance, at what it would cost to replace it to-day?


Arthur Meighen: I would not say that the hon. gentleman is not right in that. First of all, let me repeat: we make no rules for the arbitrators; if we started to do that we would certainly get into trouble. The arbitrators must use their common (sense, business judgment. But it would seem to me not unfair that the present value of the rolling stock might well be taken into account. The road itself may not be worth anything like what it cost, much less what it would cost to replace it now, due to the fact that the road should not have been built. The arbitrators might so decide, and, I think, ought so to decide. But as to rolling stock, that is different. The rolling stock is of value to-day and I do not think the arbitrators would go far wrong if they said: these people are entitled to at least something approaching the present cash value of that rolling stock.


Edward Thomas Wordon Myers: It is well known that the Government of the province of Saskatchewan have guaranteed many million dollars' worth of bonds respecting the branch lines of the Grand Trunk Pacific in that province. Am I to understand that this interest is in the nature of a first mortgage on the branch lines?


Arthur Meighen: Speaking from memory,
I think it is.


Edward Thomas Wordon Myers: Any interest on these
bonds, then, or arrears of interest, will
99j	*
simply be charged up to the mortgage which the Provincial Government have, and they will be amply secured in that way?


Arthur Meighen: Well, I cannot say as to the security, because I am not a practical railway man, but presumably they are. We, the owners of the company which owns the stock, would certainly have to take the road subject to any claim of present Governments in that regard. We would have to take care of that claim if we were going to continue in that position.


John Dowsley Reid: The member for Brantford (Mr. Cockshutt) asked me the other evening for some information with regard to the operation of Pullman cars on the Grand Trunk system. I have the following memorandum from the Grand Trunk officials :
Re Pullman Company.
Contract dated July 1, 1916, for a term of 20 years between the Pullman Company amt the Grand Trunk Railway of Canada including subsidiary companies except the Grand Trunk Pacific Railway Company. Under the terms of trie agreement the Pullman Company are obligated to pay over to the Grand Trunk 50 per cent of its gross earnings in excess of $7,500 per car per annum. Grand Trunk proportion of such excess for the year ending June 30, 1919, was $31,000. The Grand Trunk are obligated to pay the Pullman Company three-tenths of a cent per car mile for installation and operation of electric lighting- of Pullman cars equal to about $1,000 per month. The agreement provides that should the earnings per car per annum fall below $6,0-0'0 for two years or more the Pullman Company may cancel contract on six months' notice and the Grand Trunk in such event has the option to purchase the equipment at a price to be agTeed upon.
Pullman Company pays all cost of repairs and renewals except those caused by railway accidents ; they also pay all inside cleaning of cars, all wages of conductors, porters, and generally all operating expenses except outside cleaning, furnishing water and lubricating oil. Pullman Company must also supply all cars necessary to meet the requirements of traffic.
The contract is deemed by the Grand Trunk to be an advantageous one.


William Foster Cockshutt: Do I understand that the employees on the Pullman cars are appointed by the Pullman Company?


John Dowsley Reid: They are appointed by the Pullman Company, whose head office,
I understand, is in Chicago.


Frank S. Cahill: The Minister of the Interior, in speaking of the position of the Grand Trunk in respect to the Grand Trunk Pacific, tries to lay the blame for the present difficulty on the Liberal party. The answer given to questions

put by the member for Temiscouata (Mr. Gauvreau) and my hon. friend (Mr. Cas-grain) shows that of $109,721,000 advanced to the Grand Trunk and Grand Trunk Pacific, only $10,000,000 was advanced through the Liberal Administration.


Georges Henri Boivin: Before the hon. member proceeds further, may I ask him whether he intends now to discuss the responsibility of the respective parties concerning the construction of the Grand Trunk Pacific?


Frank S. Cahill: Not at all. The minister stated that the Government of Canada had guaranteed the bonds of the Grand Trunk Pacific and held a first mortgage, and that the Grand Trunk guaranteed the second mortgage bonds. The minister proceeded to argue that under this arrangement the Government is being protected. I do not see how he reasons that out. How does he hope to get anything from the Grand Trunk on account of its guarantee of Grand Trunk Pacific bonds? He said the other night that he would not take $30,000,000 in settlement. But the stock exchange value of these stocks on the 11th of September, as published in the London Daily Chronicle, was only $28,677,000, and against that there is an advance of $15,000,000 and the guarantees of these bonds which the minister says we are going to hold the Grand Trunk responsible for. According to the London stock exchange quotations $56,000,000 would have bought all these stocks, first, second and third preference and common stocks, including the guaranteed stock which we are now practically making a $60,833,000 bond issue. AVe are starting out by paying that money for what could not have cost us more than $56,000,000 for all of the stock. The minister will argue that money is -worth more than 4 per cent. We will grant that, so that a 4 per cent Canadian Government bond would be worth only 80. If you sold $70,000,000 worth of these bonds and acquired all of the stocks, you -would get $56,000,000 for the bonds. Therefore, the total possible cost to the country for acquiring those stocks would have been $70,000,000, without any recourse to arbitration. But we are guaranteeing $60,000,000 worth, and then we are attempting to arbitrate the balance, and the minister states in his letter that the assets and the liabilities of the Grand Trunk, including the Grand Trunk Pacific, will be taken over. There is no way in which the Grand Trunk can be held responsible for the Grand Trunk Pacific ob-
ligations. The arbitrators will value the worth of the whole system; they will find out what the assets and the liabilities of the whole proposition are, and the difference will be the amount that the property is worth. Therefore, the Grand Trunk Pacific bond guarantee will have absolutely no bearing on the matter at all, since the *bonds that are guaranteed by the Grand Trunk are a second mortgage, and the Dominion of Canada has a third mortgage, over and above that, and that means, as the .minister says, if we were to take our losses on that, the road might be worth the first and second mortgages, so that we would lose the $90,000,000 in any event


Georges Henri Boivin: Will the hon. member inform the committee whether his judgment is in favour of the discharge of the receivership or against it? I cannot see how his argument has anything to do with the clause under discussion.


Frank S. Cahill: It shows for one thing
that the Administration of which the minister is a member has advanced $100,000,000 to the Grand Trunk-


Georges Henri Boivin: The hon. member must not forget that we are in committee and that we are discussing the provisions of clause 12 of the Bill. He certainly cannot take advantage of this clause to bring forward and discuss all the real and pretended faults of the present Administration.


Arthur Meighen: The hon. member referred to two things. The first was an explanation that I gave of the previous question-


Frank S. Cahill: If my question was out of order, is the minister in order in answering it?


Arthur Meighen: I assure my hon. friend .1 was not going to do so. I was merely going to say that in his reference to the two subjects, the explanation that I made, and the other a point of his cwn, he asserts that he did not understand my explanation and I, with equal confidence; state that I cannot understand his point, so I would suggest that we call it square.


Mr. MOWAT:: As regards the termination of receivership, I think it is proper to point out that there is amongst some per sons in the country a misunderstanding regarding the meaning of the words " receivership '' and "liquidation." This agreement being of such great importance must go, not only before lawyers and businessmen accus-

tomed to transactions like this, but before all the people of the country who must be satisfied in regard to it. I find that some people, especially those who are timid about entering upon a policy of government ownership, do not understand the meaning of these words " receivership " and liquidation." They are pleasant, sibilant words, and people not having been accustomed to them before and these words being suddenly thrust into this debate, there is being attached to them by some people an importance which should not be. The leader of the Opposition said in one of his speeches during the course of this debate: Why not liquidate? or words to that effect. Why not continue the receivership? It seems to m.e important that the country should understand that a receivership must be only a temporary holding. When a man has a debt against another man, he has ways of collecting it; or if he has a mortgage securing bonds, he has ways of collecting it. One of those is to get a judgment against the debtor and then issue execution to the sheriff and sell the property. But if it is not advisable to bring a property to auction by public auction, then it is proper that a receiver should be appointed to collect the revenues and prudently to make expenditures and so on. That, however, is only a temporary expedient; you cannot continue a receivership except for a very ordinary length of time. Therefore, a receivership which sounds so pleasant and easy, ig really only something that can be contemplated to last for a time. As regards the word "liquidation," I find some people say: Let us liquidate. That sounds well. They do not seem to understand that the word " liquidation " has a very serious meaning, different from the way in which it sounds. I am speaking now, not for the expert, but for the ordinary everyday citizen who is not accustomed to these transactions. Liquidation means; as the Minister of the Interior (Mr. Meighen) has said, that you strip off all the debts; but liquidation in the law means only one thing, that you bring the property to sale by public auction, and in that case you have free competition by rivals for this system and a sale which cannot be brought about by any private arrangement whatever. Therefore, it seems to me that the only possible way to make a good bargain here is by the arrangement which it is attempted by this Bill to carry out, instead of bringing the matter to an auction which must be fair, open, and above board by the courts, which would allow American companies or the Canadian Pacific or any other large
concern to come in and bid, and which would then force the Government to come to the auction with millions of money in its hand which would necessitate another loan. It should be well understood that liquidation means public auction under the hammer, with no secret arrangement whatever. Unless the country is prepared to put up millions of money to equip the Government to go to that auction and buy, the only possible solution is to enter into this arrangement by which they will not have to put up a dollar, but only by good business methods, linking this road up with the present system, will have to endeavour to meet the interest on these bonds and earn the balance for the public treasury.


Daniel Duncan McKenzie: I have been anxious
to know what kind of a bargain the Canadian people are making in connection with this road, and that is why I am inquiring as to the liabilitites of this road and what we are paying for it. The hon. member for Parkdale (Mr. Mowat) seems to think that liquidation is a frightful thing, an awful thing. Has the hon. gentleman ever heard of a man making an assignment? I am sure in the great metropolis in which -he lives he has heard of men being obliged to make an assignment. After they made an assignment, the assignee would have to sell the property whatever it was, get the most money he could and divide that amongst the creditors. A receiver does the same thing if he does his duty. That is all that this means. A receiver and an assignee are as close together as any two could be. The duty of both would be to get the best possible value for the goods which they hold in trust for the benefit of the creditors and divide that money between them. That is the only way that is known to the commercial world of dealing with a man who goes into insolvency, and to all intents and purposes a single person with a .mortal body and a living soul- is, so far as money is concerned, put into the same category as a corporation. When a corporation gets into deep water, it gets into the hands of a receiver; or it could make an assignment just like an individual, and then the assignee could deal with the goods. Why should we be frightened into paying ten times its value for a piece of property on which we have a mortgage? That is something I cannot understand and which I believe the Canadian' people cannot understand. We are told that the liquidator can hold the property only for a certain time. That is true, but after thatjime he should sell it and get the money for it. Why

should we huy another road when we are told we already have too many railroads? We are told we have two roads now through to the coast where one is enough. Why should we be afraid to sell one of them? Why should this House jump headlong into paying ten prices for a road when we have one too many already and when we could sell this road to-morrow and still leave us with transportation facilities adequate for the needs of the country? I do not think it is good reasoning, good law, or good logic that my hon. friend (Mr. Mowat) gives us when he says we must hang on to this road and pay any price for it lest it may go under the hammer. If a man has two horses and has use for only one, he is not going to be frightened to sell the other one. That is the case with these railroads. We have been told repeatedly that one of our roads, together with the Canadian Pacific, would be sufficient, for our needs. Then why should we not sell the other and get the money for it, instead of dragging it along in this way and taking millions upon millions of dollars every year out of the pockets of the Canadian people to look after it? We are paying for a toy that does not pay and will not pay for many years to come.
Mr. MORPHY;: Which road would the hon. member sell?


Daniel Duncan McKenzie: The one that is now in the hands of a receiver.


Hugh Boulton Morphy: Which one is that?


Daniel Duncan McKenzie: The Grand Trunk
Pacific. We should get it for something like what it is worth. It is idle to say that we should go to these 'arbitrators and get them to put a value upon the equity of redemption under these mortgages. Any lawyer or business man knows that- the only way you can get at the value of the equity of redemption is to put up the property for sale and let the public say what it is woTth. The obligations are paid out of the purchase price, and the balance goes as the equity of redemption to the man who mortgaged this property. The position we are getting ourselves into is that of a mortgagee in possession. I do not know whether the Minister of Railways is sufficient of a lawyer to know what is the position of a mortgagee in possession. It means that he is in possession of a property which ^ he has taken as security, but the title is not altogether in him because the equity of redemption is still outstanding. He must strictly account to the owner of the property for every cent the property earns and for 
every advantage he has derived from it. The only thing for a mortgagee in possession to do is to foreclose and let the property be sold for what it will bring. If he wants the title himself he must pay what the public thinks the property is worth, but if somebody else bids higher and gets the property, the mortgagee gets back the interest he had in the property. I say it is not good business to take over this property or any other property and assume liabilities which are possibly twice its value.
I protest on behalf of the people of this country against this transaction for the reason that we are assuming altogether too much liability, and undertaking to pay too much money for the property when we could get it for wihat it is worth stripped of all these bonds and mortgages and stocks. We could buy the property for what the public says it is worth at public auction. That is the position I take, straight and clear, and if it is not understood the fault is not mine. If the Government makes a bad bargain they make it in the face of the warning I am giving them that they are paying too much for this property. The Minister of the Interior said 'himself, not half an hour ago, that he knew the property was not worth the claims against it. He would not undertake to say what proportion of the claims it was worth, but takes this property holus bolus and assumes all responsibility in regard to it. There should be some remedy by which we could get clear of assuming obligations that are altogether too great in connection with a piece of property that we could very well do without.


John Dowsley Reid: I am really surprised at the argument of the hon. member if he has considered the statement I gave to the House on OctobeT 8, which appears on page 1514 of Hansard. The hon. member states in the first place that the receiver should sell the road for what it is worth. ^ Now I cannot find any person or corporation, private or public, or any railway company that will come to me and offer to take the Grand Trunk Pacific off our hands at any price. The hon. member asks why we should be afraid to sell the road. As receiver I am not afraid to sell the road, but I cannot get anybody to buy it.


James Alexander Robb: Then that disposes of the bogey that the Canadian Pacific want the road.


John Dowsley Reid: No. The Canadian Pacific are anxious to take over the Grand Trunk sys-

tem, but I am not receiver for that system. I was speaking of the Grand Trunk Pacific.


James Alexander Robb: If the Canadian Pacific took over the Grand Trunk they must assume all its obligations and take over the Grand Trunk Pacific with it, because that is one of the Grand Trunk's obligations.


John Dowsley Reid: If it was foreclosed. Supposing it was foreclosed, what would be the position? The Dominion Government has given guarantees, cash advances and loans to the Grand Trunk Pacific since the road was organized, as follows:
Cash loans, &c	$ 64,010,608
Guarantees	 76,574,181
Still outstanding as a liability against G. T. Pacific. $140,584,789
Mr. MeCREA: The minister says the Canadian Pacific do not want the Grand Trunk Pacific. Was the Canadian Northern at the time it was taken over by the Government any more attractive than the Grand Trunk Pacific? We were told then morning, noon and night the same old bogey story about the Canadian Pacific wanting the road. I do not think the Grand Trunk Pacific is any less attractive to the Canadian'Pacific than the Canadian Northern was.


John Dowsley Reid: We did say the Canadian Pacific wanted the Canadian Northern. The Canadian Northern has a splendid system in the four western provinces and would be a great asset to the Canadian Pacific, which has connections in the East. But the Grand Trunk Pacific has no branch lines.
Mr. MeCREA: I think the truth is that the Canadian Pacific does not want either of the roads.


John Dowsley Reid: In addition to the $140,584,789 which the Dominion Government have advanced to the Grand Trunk Pacific the road has borrowed on its branch lines by way of bonds guaranteed by the provinces of Alberta and Saskatchewan $16786,440.
Then the Grand Trunk Railway have advanced by way of cash and guarantees the following amounts:
Cash advanced to branch lines.. $11,019,686
Cash to hotels, steamships &
lands	 11,820,668
Cash to Saskatchewan railway..	214,500
Bonds guaranteed by G.T.R... 72.30R253

The Dominion Government are first guarantors on bonds that were issued on the Grand Trunk Pacific to the extent of
$76,574,181. Then the Grand Trunk come in as second guarantors to the extent of $72,301,253. The Dominion Government is a third mortgagee to the extent of $64,010,608, and if the concern were put up for sale and we did not bid enough to cover our third mortgage, of course the public would lose that amount.


William Stevens Fielding: Who would buy it?


John Dowsley Reid: Well, no one would buy it, as a matter of fact.


William Stevens Fielding: Then you could not sell it.


Daniel Duncan McKenzie: The hon. member could buy it for $100, and he would have the title.


John Dowsley Reid: We cannot sell the Grand Trunk Pacific. No one would bid for it alone. We really own it now, and there is no trouble about getting the title at any time.


Daniel Duncan McKenzie: How does the minister propose to get the title?


John Dowsley Reid: The Grand Trunk
Pacific is a subsidiary of the Grand Trunk, and when we take over that system, as we own its stock, we shall get the title of the Grand Trunk Pacific. We must assume the liabilities that we have already guaranteed. There is no way of avoiding the guarantees I have already mentioned.


Daniel Duncan McKenzie: If a man has a first and third mortgage on a house and he wants to get title, his proper course would be to foreclose the first mortgage and put the house up for sale. It may not sell for enough to pay the first mortgage. If so, he has the house, and having the house, what is the use of his bothering about the third mortgage? The only good there was in that mortgage lay in the fact that it was binding on the house, but as the house is his property on the foreclosure of the first mortgage the third mortgage represents nothing to him. We could get title to the road on our first mortgage, and the arbitrators need not be befogged by considerations of the second mortgage.


John Dowsley Reid: Suppose we put the road up for sale and some one did purchase it for $50,000,000. That would not wipe out our liabilities because we have guaranteed the bonds and we would have no security of any kind. Although our security is not considered of much value just at present, is it not better to keep it alive against the road? Perhaps in later years they may be

of value. I cannot see any object in foreclosing in order to get title, because we virtually have it now. The stock of the Grand Trunk Railway Company belongs to us and we have title by virtue of that ownership.
iMr. McKENZIE [DOT]. We could buy the road, get possession of it and have the title under the foreclosure of the first mortgage. If we thought it proper to follow it beyond that in our bidding we could do so and whatever it sold at over the first mortgage would go to the second. I am satisfied that we could buy the road'under the first mortgage. Why should we worry because we had a third mortgage to ourselves on our own road? If a man buys1 a house under his first mortgage he does not care very much what becomes of a third mortgage which he himself has against that house. It is immaterial to him because he owns the house.


Mr. BURNHAM:: What about the merger?


Daniel Duncan McKenzie: The question of merger does not come in.


Hugh Boulton Morphy: How would you deal with the Grand Trunk's guarantee in that way?


Daniel Duncan McKenzie: That is what I want to get clear of. We have nothing to do with the Grand Trunk's guarantee. We are not assuming it in buying this road. If we were that would be another thing. But that is the very thing I want to get clear of.


Hugh Boulton Morphy: You want to relieve them of their guarantee?


Daniel Duncan McKenzie: No, we want to relieve ourselves.


Hugh Boulton Morphy: That would be the effect of the hon. member's proposition.


Daniel Duncan McKenzie: No, whoever holds- the guarantee of the Grand Trunk would have to look to the Grand Trunk. But we are taking over the property and will have to pay all its obligations.


[Stage Direction]
Section agreed to.
On the Preamble:
John Archibald Campbell: I deire to ask a question or two regarding the liabilities of the system. On page 1447 of Hansard the Minister of Railways said that the total liabilities of the Grand Trunk Railway system are $266,023,750.03, to which should be added an amount guaranteed by the Grand Trunk Railway system of $18,936,377.29, making the total liabilities of the Grand Trunk system $284,960,127.32.
[Mr. J. D. Reid. I
A little further on the minister said: " Of course, there are other amounts that there are not guarantees for." I take it that the system is responsible for these other amounts, as much as it is for the amounts which are guaranteed. I would like to know what these other amounts are so that we may get the grand total of the liabilities for which the Government will eventually be responsible. In this connection I now refer to the blue-book, pages 38-39. In making up the amount which the minister gave us, and which appears in Hansard, he has taken into consideration the bonded indebtedness as set out and the liabilities that I have just mentioned. There are certain other items in the statement regarding which I am not clear. They are .as follows:
Notes payable-unsecured. . .$ 3,916,362.18 Equipment trust notes		5,344,207.54
Advance toy Canadian Government	,	 15,142,633.13
I wish to know if these items are not
part of the liabilities of the system just the same as the others are, the responsibility for which the Government will have to assume,, ,


John Dowsley Reid: The statement on pages 38 and 39 is a statement of all liabilities of the Grand Trunk. The hon. member (Mr. Campbell) asks if the amount advanced by the Canadian Government of $15,000,000 should not be considered a liability. It is considered a liability and it i,s shown in that statement as, a liability. This amount was advanced to the Grand Trunk before Confederation, it is still on the books of the Government and is considered a liability. It was advanced on certain conditions, and of course the arbitrators will have to take it into consideration. The equipment notes constitute a liability against the equipment of the road. I gave a statement a few days ago which appears in Hansard with regard to the equipment and its obligations. The question was asked as to the value of the equipment and what was against it, The value of the equipment was something like $180,000,000 and .against that there are equipment bonds which form a charge against the equipment.


John Archibald Campbell: The value of the equipment, I presume, is included in the^ item of assets amounting to $434,990,999.37.


John Dowsley Reid: Yes.


John Archibald Campbell: The $5,000,000 odd, regarding which we are now speaking, should

be taken into consideration as a liability of the whole system just the same as any other liability. Is that right?


John Dowsley Reid: Of course it is a liability of the Grand Trunk against its equipment.


John Archibald Campbell: Then, regarding the item of unsecured notes amounting to $3,916,362.18?


John Dowsley Reid: These are the notes that are given in connection with the operation. I asked the officials about that and I understand that in the operation of such a great system there are bills payable which do noit come due for a certain time and some notes are given in connection with materials or supplies that have been bought.


John Archibald Campbell: The shareholders are just as much responsible: for these notes as for the other liabilities?


John Dowsley Reid: Yes, that is one of the liabilities.


John Archibald Campbell: There are certain items in 'this statement which .are simply cross entries; for instance, "fire insurance" which appears on both sides of the statement. But there is another item which I am not clear on. That is:
Current liabilities	$22,801,474.35
The system is responsible for these liabilities and in the final analysis the Government will be responsible when it takes over the stock. On the other side of the balance sheet there is an amount of $51,827,879.16 under the heading current assets. In a sense you set. off current liabilities against current assets but the question is: Does the Government have current assets enough, after allowing for all deductions, to pay the current liabilities? The current liabilities will have to. be paid. In a statement which the minister gave a few days ago a large part of the first item under current assets was made up of items owing by subsidiary companies which should not be taken into consideration and which we will not be .able to collect. I was wondering if, taking all the current assets into consideration, there would be really enough, not only under that particular head, but under the heading "Galls in Arrears on Capital Stock and Traders' Sidings," to satisfy the Government that there would be sufficient value to dispose of the current liabilities on the other side of the statement.


John Dowsley Reid: These are matters that the arbitrators would have to take into
consideration. I did not go into this question myself; I simply took the statement. But, there being such a large margin of difference between the assets and liabilities,. I would consider that the position was pretty safe. I based my judgment as to the whole situation principally on the report of the Drayton-Acworth commission. They took all these matters into consideration. After inquiring into the assets and liabilities of the -whole system they recommended the payment of a larger amount than that which we are guaranteeing. Taking that, as well as the statement submitted, from the examination I have made of it and from that which has been made by my officials, my conclusion is that we can consider the current liabilities to be reasonably safe.


John Archibald Campbell: I recognize that some of these items will have to be taken into consideration in connection with the arbitration hut that does not release us from the responsibility of trying to figure out approximately what this thing is going to cost. What I want to get at is whether, after eliminating the preference and common stocks which are to be subjects for arbitration and looking upon them as really worth nothing, there is sufficient substance in the balance to warrant the action which the Government is taking. Taking the minister's statement in regard to the bonded indebtedness of $284,000,000 odd, then adding the three items mentioned amounting to $24,000,000 odd, you have a total indebtedness of $309,000,000 odd in so far as the Grand Trunk itself is concerned, say, in round figures, $310,000,000. That is the total amount for which the shareholders or the Government would be liable providing the item known as current liabilities can be disposed of by the current assets. That is what I have been trying to figure out and it is my wish to know if the figuring is in accord with the understanding of the minister.


John Dowsley Reid: I think the hon. member is pretty nearly right, but if the arbitrators should wipe out the stocks that he men-tioned^-the first, second and third preference stocks-and give no value for them they would wipe out $63,841,291 of stock for which cash was put into the road and on which the shareholders have received a very large dividend during many years-in fact, the amount reported by the commission was an average of $1,100,000 per annum. *


John Archibald Campbell: The shareholders took their chances when they put money into the stock.


John Dowsley Reid: I admit that, but if the arbitrators should decide to wipe out the $180,000,000 of stock-that is, the $116,000,000 of common stock and the $64,000,000 of other stock-there is no doubt at all we would get the system at a price much lower than what the Grand Trunk system could be sold for outside of the Government altogether.


John Archibald Campbell: That is the point I am arriving at. I have figured out that our liabilities in connection with the Grand Trunk system total approximately $310,000,000, leaving out the items I have already indicated. The assets-" property investment in road and equipment "-this would be taken as a valuation of the road)-are placed at nearly $435,000,000. That means a nice margin to come and go on, as a business concern, if the valuation is a fair one. But in connection with this we have got to take into consideration the fact that there is going to be a very considerable shortage on the Grand Trunk Pacific end of the deal and the question arises whether that shortage is not going to eat up the margin. That is the way it strikes me, and I have done some pretty close figuring on the basis of the figures which have been submitted 'to us.


John Dowsley Reid: One point my hon. friend does not take into consideration is that the property investment is charged up at the actual cost many years ago when it was very low. The amount of money invested in the terminals and in the road so many years ago would toe very small compared with a similar investment at the present time. The roadbed is in very much better condition than it was at first; the company have kept it up and improved it. This is a far better system all through than it was originally when this amount was first charged up.
Mr. 'CAMPBELL:	Then the minister
thinks that this amount of nearly $435,000,000 with respect to property investment in road equipment is really an under-estima-non of the actual value of the road?


John Dowsley Reid: I do.


James Alexander Robb: Before the motion carries I would ask the minister if in the arbitration proceedings consideration will be given to the position Canada will be in at tjie maturity of any of the bonds of these roads -bonds of the parent company and bonds of the subsidiary companies? Some of the money was borrowed at three per cent, some at three and a half per cent, some at four per cent, some at four and a half per
IMr. Campbell.]
cent, and some at five per cent. Now, these bonds will mature in a very short time, and money to-day is up to five and a half and six per cent, which will make a material difference in the cost of carrying the proposition. Therefore, I would like to know what position Canada will be in in that regard.


John Dowsley Reid: I could hardly say how the arbitrators will consider that matter; they will have to use their best judgment. The Government will put up as strong a case as they can and obtain the best advice obtainable as to what we consider the value of the road taking every thing into consideration at the present time.


James Alexander Robb: What does the minister think himself?


John Dowsley Reid: I do not wish to express any opinion. I hardly think it would be fair for me to express any opinion as to what the arbitrators should do, or what I think about it. The arbitrators will have to do the best they can and come to their own conclusion.


William Foster Cockshutt: 
Mt. DAVIS:: Before the question is answered, and to illustrate very briefly the point which has been raised, I would like to relate an incident that occurred yesterday. A business man was playing golf with a Canadian Pacific official near where an old line of the Grand Trunk runs, and for months a number of old cars have been standing on that line. The business man said to the Canadian Pacific official, " Why do these cars stand here?" The Canadian Pacific official laughed and said, " Oh that is just a problem in railway accounting." The other gentleman said, " Read me the riddle, I do not understand it?" The Canadian Pacific official replied, " If they repaired those cars, or if they had to scrap them, it would have to appear in the operating account. But if they are left standing there, they appear as assets."


John Dowsley Reid: With reference to the question put by my hon. friend (Mr. Cock-shutt), as explained by the Minister of the Interior the other evening, that is a matter
which did give us some concern'. But we felt that if we did name a maximum it might be taken as an indication that we were willing to pay that amount. When the hon. member for Brantford brought the matter up the other evening, there did not seem to be any great support of the suggestion from hon. members; therefore, we still believe that it will be much better to leave the provision as it stands and trust to the arbitrators to arrive at what they believe to be a fair award. Having regard also to the reputation for fairness and good judgment in matters of this kind of Sir Walter Cassels, who will be one of the arbitrators, I think we should adhere to the decision that we arrived at prior to the presentation of the Bill.


James Alexander Robb: I wish again to draw the attention of the minister to the question of interest, which, it seems to me, is a very important one in a case where the capitalization is so large. Here are millions of dollars' worth of issues, some already matured, others maturing in a short time, the rates of interest varying from three and one-half to five per cent. We cannot get money at those rates now; money is worth five and one-half and six per cent to-day. Surely if we are going to take over these obligations and guarantee the dividends to the English stockholder, the minister ought to see that the country gets some consideration for the increased cost of carrying this property.


John Dowsley Reid: The arbitrators will have to give consideration to all these matters. The majority of these securities are in perpetuity; the debenture stock is in perpetuity, as also is the 'guaranteed stock, if the Government so desires. Then the award, whatever the amount decided on may be, will be in perpetuity-all these at four per cent. But I repeat that the arbitrators must take these things into consideration.


James Alexander Robb: The arbitrators, then, will take this matter into consideration?


John Dowsley Reid: Oh, yes.


Thomas Vien: Some time ago the Board of Railway Commissioners ordered some changes in the Toronto terminal, and 1 understand that a statement has been .prepared by the officials of the Grand Trunk as to the amount involved in those changes so far as they are concerned', as well as the amount involved in the proposed change of terminals in Montreal. Can the minister

give the committee any information on that point?


John Dowsley Reid: So far as the Toronto terminals are concerned I have no information. As the hon. mem'ber knows, the terminals there are pretty well advanced. Of course, the Canadian Pacific and the Grand Trunk, who are the parties chiefly interested in this terminal, will have to pay their respective shares of the cost of whatever the Board of Railway Commissioners order to be done. But where we will save money on terminals, in my opinion, is in the uniting of these systems.


Thomas Vien: The minister will not contend that the transaction now under consideration will save anything to the country in the matter of terminals, because whether we buy or do not buy, the Toronto Terminal Company will make whatever arrangements it thinks proper with all the railways that have entrance to Toronto through that terminal. Has the minister no information as to the amount which will be involved so far as the Grand Trunk is concerned in those works ordered by the Railway Commission?


John Dowsley Reid: I have not gone into all these matters of detail; of course'the arbitrators will have to take them into consideration. So far as the Montreal terminal situation is concerned, the Board of Railway Commissioners made a similar order, I believe, some years ago, prior to the submission of the Drayton-Acworth report. The Drayton-Acworth report also made a recommendation in that regard. However, the taking over of the Grand Trunk system and its amalgamation with the Canadian Northern may change the whole situation in Montreal as to terminal facilities; we may save in operation there. I can only say again that the Government will place before the Board of Arbitrators every argument they can possibly make in connection with matters of this kind and that the arbitrators will have to make their award upon the evidence submitted to them.


Thomas Vien: It is well to direct the attention of the committee and the country to the fact that the Minister of Railways, when he brings down this important piece of legislation, is not aware of the expenditure he will have to meet in connection with the terminal facilities in Toronto and Montreal.
My information is that the Grand Trunk itself will have to pay some $30,000,000 for terminal facilities in Toronto, and that the changes in the Grand Trunk terminal
[Mr. Vien.J
facilities in Montreal will involve another expenditure of over $50,000,000. This, added to the amount which will be involved in bringing the physical condition of the road up to normal, as suggested by the Drayton-Acworth report, will mean a necessary expenditure of over $150,000,000.	$51,000,000
necessary according to the Drayton-Acworth report three years ago; $50,000,000 necessary for the elevation of the Grand Trunk from Point St. Charles to Bonaventure station and the erection of a new station there, and $30,000,000 for terminal facilities. The Minister of Railways comes to this House and gives all the information that he has in his possession, but he has to admit that, before entering into such an agreement, before asking Parliament to enact such legislation as this; he is not aware of the amount which will be involved in those terminal facilities. The House and the country have a right to be better informed before they are asked to pass such legislation. When .a man buys a house or an ordinary business plant, such as a shop, or shares in an industrial company, what is he going to do before he takes any steps towards entering N into an agreement? He will inquire first as ,to the physical condition of the plant, the financial standing of the company, the debenture indebtedness of the company p and only when he is in full possession of those facts, will he draw up the agreement or will he discuss the various terms of it. In the present instance nothing of that kind has been done. The minister, with candour, maybe to his credit, but with an ignorance which is hardly creditable, tells us that he does not know the amount involved in those terminal facilities. Yet he is willing to assume the responsibility of taking over the road. If the information that I have is accurate, to the $501,000,000 of a liability that the country will be saddled with according to the statement of the minister, we shall also find ourselves saddled with $150,000,000 of additional expenditure just for these terminal facilities. The minister says: But this will be saved; we must have terminal facilities in Toronto; we must have terminal facilities in Montreal; we are combining all the railways, and this is one additional reason why the Government should take over the Grand Trunk railway. His argument is absolutely wrong. The terminals in Montreal will be put under a union plan, all the railways now using Bonaventure station will have to use the new terminals. Whether we buy the Grand Trunk or not, the Intercolonial and the Canadian Govern-

ment railways will have an opportunity of using the terminals in Montreal. In Toronto the same thing is true. There is already a terminal company organized to build terminals in Toronto, so that it will afford no advantage whatever to the Government or to the Government railways to take over the Grand Trunk. But the House, before it is called upon to sanction such legislation, should know the full extent of the liability that the country is being asked to assume. It is putting the country under a false impression when we say that the physical condition of the road is good and satisfactory, when, as a matter of fact, over $150,000,000 must be expended before the road will be in a normal condition. Yet the Minister of Railways tells us that he is satisfied with the physical condition of the road. He tells us that he has the information; that he has travelled over the road, and that he has a personal knowledge that the road is in a good condition. Notwithstanding that, he is obliged to make the admission that he does not know the amount of expenditure that the Government will have to make for these terminal facilities. How can the minister reconcile the statement that he does not know the amount of expenditure involved in the terminal facilities with his statement of a few moments ago that he is satisfied with the physical condition of the road? I hardly see how the minister can reconcile these two statements, and he should put before the House all the facts, so that the country may know that in buying this railway, it will have to make an expenditure of $150,000,000 for terminal facilities in Montreal and Toronto and for betterments of the road which have been neglected for a few years.


William Stevens Fielding: While the preamble may be of less importance than the enacting clauses, I would direct the attention of the Minister of the Interior to that portion of it which reads:
And whereas it is expedient that His Majesty should acquire the whole of the capital stock of the Grand Trunk Railway Company of Canada except the 4 per cent guaranteed stock above referred to.
As a matter of fact, provision is being made later on for acquiring the whole of it, and there is one method for acquiring the 4 per cent and a different method for the other. Nevertheless, it seems to me that the preamble is making the exception; it virtually says that we are not acquiring the 4 per cent guaranteed stock. I merely call
the minister's attention to this. It is a matter of drafting.


Arthur Meighen: 
Mr FIELDING:: Something of that sort would serve the purpose.


Arthur Meighen: I move to amend the preamble by adding at the end of the twenty-seventh line the following words:
And should have power to acquire the said four per cent (4 per cent) guaranteed stock.


William Stevens Fielding: That will do.


Mr. McCREA:: The Minister of Railways the other day gave us the number of freight, passenger and work cars, locomotives and equipment generally of the system, and gave the value of that rolling stock as $180,000,000. I should like to know from what source he got that estimate of the value. I am inclined to think that if all the assets of ithe Grand Trunk are valued on the same basis we shall have a very handsome bill to pay when the award is made.
Mr. ,J. D. REID: I gave the number of cars and said that if you estimated the rolling stock at so much per car it would amount to so many dollars. I only gave a rough estimate. The Grand Trunk officials tell me it was far too low.


Thomas Vien: If the minister can obtain the information from the Grand Trunk officials, and I am informed they have it prepared already, would he give the House the company's estimate of the cost of the terminals in Montreal and Toronto?


John Dowsley Reid: It would make no difference so far as the award is concerned. That information will be submitted to the arbitrators


Thomas Vien: But the House is interested in knowing the Grand Trunk's estimate of its requirements in Montreal and Toronto. The minister could obtain that information in no time, if I have been correctly informed.


Arthur Meighen: It might be obtainable, and if so, it will be got, but certainly it would make bo difference, for the reason that the terminals are ordered by the Railway Commission to he constructed. That means that the Railway Commission has found that the building of these terminals is in the public interest. Consequently there is value to the public that should satisfy us for every dollar anyway. The information is really immaterial to the discussion, but we have no objection to getting it.


Thomas Vien: If we buy a railroad that is face to face with an expenditure of $50,000,000 in Montreal alone, it changes the situation somewhat, to my mind, at all events. The Grand Trunk will have to spend $50,000,000 on changing its terminals in Montreal alone. I think that would have some effect on the amount of the award.


Francis N. McCrea: Would the Minister of Railways obtain the exact number of freight and passenger cars and other rolling stock of the road, with the actual value of the equipment? To my mind $180,000,000 is pretty close to twice the real value of the equipment, if the number of cars was given correctly.


John Dowsley Reid: I have already put a statement on Hansard showing the number of cars the road has.


James Alexander Robb: Let us carry a little further the point raised by my hon. friend (Mr. Vien) with regard to the terminals in Montreal and Toronto. The Minister of the Interior has told us that these improvements have been ordered for the protection of the public. Now, when we take over the Grand Trunk we shall own 2,000 miles of railway in the different states of the union, and the Railway Commissioners of these different states may say: If it is necessary for you to construct high level crossings in Canada for the protection of the people there, that is pretty good protection for the people of the United States, and we may be ordered to make the improvements. What position shall we be in when all these different states compel us to make improvements to our railways there?


Arthur Meighen: We would be in just this position: We would expect that the road of which we are the stockholders would be treated just the same as the others. Now, it must be presumed that if extraordinary obligations are placed by the United States on their railways the United States will permit charges to meet those obligations, and if that is to be presumed as respects railways there generally it is to be presumed with respect to our railway there. Consequently we have nothing specially to fear.


Daniel Duncan McKenzie: Would the Minister of Railways say whether all the obligations and liabilities of every kind of the Grand Trunk Pacific are given on page 42 of the blue-book. If not, what should be added?


John Dowsley Reid: Since that statement was made as of December 31, 1918, there have been advances made to the Grand Trunk Pacific by the Receiver. The receivership begin on March 1, 1919, I believe. I submitted the liabilities in connection with that in the statement I put on Hansard.


Daniel Duncan McKenzie: Is everything else on page 42 of the blue-book, except what the minister put on Hansard this afternoon?


John Dowsley Reid: I think so.


[Stage Direction]
Amendment agreed to.
Preamble as amended .agreed to.
Bill as amended reported.
Daniel Duncan McKenzie: I should like to have some agreement with the Government as to when the third reading of this Bill will be taken.


Arthur Meighen: We will let it stand until the next sitting of the House. That makes it subject to agreement.
On the motion of Hon. Mr. Doherty the House adjourned at 6 p.m.
Friday, October 31, 1919.