1919-10-22

SOLDIERS' CIVIL RE-ESTABLISHMENT.

[Stage Direction]
Hon. J. A. CALDER (Minister of Immigration and Colonization) presented the third report of the special committee on Bill No. 10, an Act to amend the Soldiers' Civil Re-Establishment Act, as follows:
Tour committee, in accordance with a resolution adopted at their morning: .session, on Tuesday, 21st of October, recommend that 3,000 extra copies in English, and 1,000 copies in French, of their final report, be printed for distribution, and that Rule 74 relating thereto be suspended.
On the motion that the report be concurred in:
Mr. CALDER:: Mr. Speaker, in connection with this motion I think I should state that the committee working on this Bill had previously arranged for the printing of some 300 copies of our proceedings from day to day. That, of course, will cover our report, but undoubtedly there will be a fairly large demand for copies of this report just as soon as it is ready for distribution and for this reason the committee thought it advisable to ask the House for authority, when the report is being printed, to have 3,000 copies printed in English and French for distribution. That number will undoubtedly be necessary.


Mr. SPEAKER:: This motion can only be entertained by leave of the House.


Mr. McKENZIE:: Might I ask the minister when he will be able to present his final report on this inquiry?


James Alexander Calder: It is somewhat difficult to state exactly when we will have finished our work. The committee has 'been meeting three times a day almost since it was appointed. Personally, I am inclined to the view that within the course of, say, a few days we will have completed our work. There would then be some work in connection with getting our report -into final shape, but towards the end of this week I think our work will be completed.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Report of Census of Industry for 1917, part iv, section 3

Sir George Foster.

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

Mr. McKENZIE:: 1.	What was the gross ind ebtedness of Canada on- the 1st day of April, A.D., 1919?
2.	What was the gross indetedness of Canada on the 1st day of April, A.D., 1914?
3.	What was the total expenditure of the Canadian Government for the fiscal year ending April 1, 1911?
4.	What was the total expenditure of the Canadian Government for the fiscal year ending April 1, 1914?
5.	What were the total revenues of Canada for each financial year from and including, A.D. 1896. to and including A.D. 1919, and the total expenditure in said financial years?
6.	What was the total gross indetedness of Canada on the 1st day of September, AD. 1919?
7.	When was the Canadian Northern Railway system taken over by the Government?
8.	What was the total indebtedness of the said system at said date?
9.	What was the total Income or earnings of the said system during the last business year of its operations?
10.	What were the expenditures of all kinds in connection with the said system during the last business year of its operations?
11.	What was the total sum expended on Government owned or controlled railways during the last railway business year?
12.	What was the total income or earnings from said roads during the last railway business year, giving the earnings and expenditure of each system separately?


Hon. Mr. REID:: 1.	$2,676,635,724.77 (1919).
2.	$544,391,368.86.
3.	$122,861,250.46.
4.	$186,241,047.63.
5.
Year ended
1896		
1897		
1898		
1899		
1900		
1901		
1902		
1903		
1904		
1905		
1906		
1907, 9 mos
1908		
1909		
1910		
1911		
1912		
1913		
1914		
1915		
1916		
1917		
1918		
1919		
March 31st.
Expenditure chargeable to Consolidated Fund.
Expenditure chargeable to Capital.
War
Expenditure.
Total
Expenditure.
$ cts. 36,949,142 03 38,349,759 84 38,832,525 70 41,903,500 54 42,975,279 51 46,866,367 84 50,759,391 97 51,691,902 76 55,612,832 70 63,319,682 86 67,240,640 95 51,542,161 09 76,741,451 59 84,064,232 38 79,411,747 12 87,774,198 32 98,161,440 77 112,059,537 41 127,384,472 99 135,523,206 54 130,350,726 90 148,599,343 23 178,284,312 83 232,731,282 38
$ cts. 3,781,311 21 3,523,160 23 4,143,503 39 5,936,242 94 7,468,843 24 7,695,488 34 10,078,638 06 7,052,724 58 7,881,718 54 11,933,491 91 11,913,871 11 11,329,143 82 30,429,906 86 42,593,166 97 29,756,353 38 30,852,963 38 30,939,575 95 27,206,046 13 37,180,175 93 41,447,320 03 38,566,950 50 26,880,031 51 43,111,903 63 25,031,266 30
$ cts.
60,750,476 01 166,197,755 47 306,488,814 63 343,836,801 98 446,519,439 48
S cts. 40,730,453 24 41,862,920 07
42.976.029	09 47,839,843 48 50,444,122 75 54,561,856 18
60.838.030	03 58,744,627 34 53,494,541 24 75,253,173 77 79,154,512 06 62,872,304 91
107,071,358 45 126,657,399 25 109,168,101 50 118,627,161 70 129,100,016 72 139,265,583 5V 164,564,648 92 237,721,002 58 235,115,432 87 481,968,189 36 565,233,018 44 698,281,988 16
2,077,029,140 85
496,733,897 04
3,897,556,326 36

Year.	Total Receipts.
1895-96		
1896-97		
1897-98 		
1898-99.. 		
1899-00		
19 00-01		.. 52,514,701.13
1901-02		.. 58,050,790.03
1902-03		.. 66,037,068.93
1903-04 		.. 70,669,872.72
1904-05		.. 71,182,738.60'
1905-06		
1906-07 9 mos.. . .	, .. 67,969,328.29
1907-08		.. 96,054,505.81
1908-09		.. 85,093,404.35
1909-10 		.. 101,503,710.93
1910-11		
1911-12		.. 136,108,217.36
1912-13		.. 168,689,903.45
1913-14		
1914-15			.. 133,073,481.73
1915-16		.. 172,147,838.27
12. -
Tear.	Total Receipts.
1916-	17	
232,701,294.001917-	18	
260,778,952.5'51918-	19	
312,946,747.18

6.	$3,080,391,478.25.
7.	The Government received the controlling interest in the stock of the Canadian Northern railway on October 1, 1917.
8.	$434,312,747.34.
9.	$49,062,712.50. Year 1918.
10.	$85,821,628.78. Year 1918, which includes fixed charges, capital betterments and new equipment.
11.	Canadian Northern Railway system, year 1918, $85,821,628.78. Canadian Government railways, ending March 31, 1919, $68,747,919.10.
				Year 1918.	Year ending March 31,1919.
	Can. Nor. Ry.	Can. Govt. Railways.
	$ cts. 49,062,712 50 45,662,275 26	$ cts. 37,905,973 88 43,696,936 02
Oper. expenses			
Net earnings			
	3,400,437 24 Def.	5,791,138 14


CANADIAN NATIONAL RAILWAY BRIDGES.
Mr. DESLAURIERS:: 1.	Is the Government aware that the two bridges of the C.N.R. railway which unite Montreal to Charlemagne are very dangerous and that every day automobiles and vehicles are breaking through the pavement?
2.	Is it the intention of the Government to repair the said pavement as soon as possible?


Hon. Mr. REID:: 1.	The roadways of these bridges have been inspected and temporary repairs made, and sufficient material has been ordered to redeck bridges mentioned.
2.	Answered by No. 1.


BAMFIELD LIFE SAVING STATION.
Mr. STEVENS:: Having reference to an answer to a question by the Minister of Marine given on the 18th September last, and appearing on page 442 of the Hansard and reading as follows:-
" It is not the intention of the Government
to close the Bamfield Life-Saving Station."
1.	Is the Government aware that the said Life-Saving Station has been closed?
2.	If so, when were instructions issued to this effect and on whose authority?


Hon. Mr. MACLEAN (for Hon. Mr. Ballantyne) :: 1 and 2. The operation of this station was temporarily suspended on August 15, 1919.
Applications have been invited to fill the positions of crew at the station with a view to put it in operation for the coming winter.


EXPORT OF NICKEL DURING WAR.
Mr. PEDLOW:: 
Hon. Mr. REID:: 1.	Was not appointed a commissioner, but was requested by the Prime Minister to investigate the export of nickel during the war -and went to New York on October 23, 1914, and again from time to time as was necessary.
2.	Financial Comptroller of Department of Railways and Canals.

3.	Department of Railways and Canals.
4.	The Imperial and Canadian authorities were working together in, connection with the export of nickel during the war. The correspondence was handled through the Prime Minister's office.
5.	On October 30, 1914, made report of trip of October 23.
6.	The Prime Minister and the Solicitor General, confidential.
7.	(a) No additional remuneration during
investigation;	(b) Actual travelling expenses.


ASSISTANT DIRECTOR OF PAT SERVICES.
Mr. PROULX:: 
Mr. PROULX:: 1.	Is Captain Lawson employed at Militia Headquarters as Assistant Director of Pay Services, Mobilization?
2.	When was he appointed to this position?
3.	Has he been overseas?
4.	What are his duties?
5.	What total pay and allowances does he draw, including separation allowance?

Hon. Mr. MACLEAN for Major General Mewburn:
1.	Yes, temporarily.
2.	1st January, 1919.
3.	No.
4.	Supervision of pay procedure of all mobile units in the Dominion.
5.	$2,925.50 per annum.


PAYMASTER GENERAL'S BRANCH.
Mr. PROULX:: 1.	How many officers are employed in the Paymaster General's Branch, Militia Headquarters, who have not been overseas?
2.	Is it the intention of the Government to replace these officers by officers who have seen overseas service?
3.	(a) Is it the intention of the Government to make the appointment of the present Paymaster General (General Langton), permanent, (b) or to replace him by an officer who has been overseas?
Hon. Mr. MACLEAN (for Major General Mewburn:
1.	Five.
2.	Two of the five officers are permanent force officers, whose services will be retained.
3.	(a) Yes. (b) Answered by (a).'


Mr. PROULX:: 1.	Is Major Macdonald employed in the Paymaster General's Branch?
2.	If so, what pay and allowances or salary does he draw?
3.	Does he draw more than the pay and allowances of a major in the C.E.F. ? If so, why?


Hon. Mr. MAOLEAN (for Major General Mewburn):: 1.	Yes, temporarily.
2.	$4,200 per annum.
3.	Yes. He is paid according to appointment by Order in Council P.C. 2837, dated 20th November, 1918. The services of this officer were requisitioned from France, to assist during the period of reorganization of the Separation Allowance and Assigned Pay Directorate of the Paymaster General's Branch, the requirements of this directorate calling for trained officers with financial experience.


MURRAY BAY-TADOUSSAC STEAMSHIP SERVICE.
[Stage Direction]
* Mr. OASGRAIN:
1.	Is it the Intention of the Government to establish a new line of -boats in conjunction with the Quebec and Saguenay railway between Murray Bay, Cap & l'Aigle, St. Fidele, Simeon Bay, Ste. Catherine and Tadoussac on the north shore of the river St. Lawrence?
2.	If so, when?
3.	If not, why?
Hon. Mr. MACLEAN (for Hon. Mr. Bal-lantyne):: 1.	It is the present intention of the Marine Department, if conditions will permit, to operate the C. G. S. Champlain on this route, giving a tri-weekly service.
2.	Expected to become effective 1st November.
3.	Answered by 1 and 2.


BREAKWATER AT ISLE AUX OOUDRES.
[Stage Direction]
*	Mr. CAS GRAIN:
1.	Has the Government received a petition from the inhabitants of Isle aux Coudres, in the county of Charlevoix, demanding the construction of a breakwater on the southwest side of that island?
2.	Is it the intention of the Government to grant this request?
3.	If so, when?
4.	If not, why?
Hon. Mr. SIFTON:: 1.	Yes.
2,	3 and 4. Under consideration.


POST OFFICE AT POINTE A PIC.
[Stage Direction]
*	Mr. CASGRAIN:
1.	Has the Government received a petition from the inhabitants of Pointe k Pic, near Murray Bay, in the county of Charlevoix, demanding the erection of a post office building at that place?
2.	Is it the intention of the Government to grant this request?
3.	If so, when?
4.	If not, why?
Hon. Mr. SIFTON:: 1. Yes.
2 and 3. Not at present.
4.	Parliament has not made any provision.


WHARF AT STE. ANNE DE BEAUPRE.
[Stage Direction]
*	Mr. CASGRAIN:
1.	Is the Government aware of the fact that a contract was given to one PoUquin of Port-neuf, Que., to build a wharf at Ste. Anne de BeauprS, in the county of Montmorency, in the month of July last, 1919?
2.	If so, is the Government aware of the fact that the work to be done under this contract has not yet been started?
3.	Is it the intention of the Government to see that this work is carried on immediately?
4.	If so, when?
5.	If not, why?
Hon. Mr. SIFTON:: 1.	Yes.
2.	No work done, contractor is procuring materials.
3.	4 and 5. The contract with Mr. Poli-quin provides that the work will be fully and satisfactorily completed on or before March 6, 1920; instructions have been issued to the district engineer to have the work expedited.


QUEBEC AND SAGUENAY RAILWAY.
Mr. CASGRAIN:: 1.	Has the Government bought the Quebec and Saguenay railway?
2.	If so, what price was paid for same? When was it paid and to whom?
3.	Has the Canadian National railways taken possession of the road?
4.	If so, on what date?
5.	If not, when is the Canadian National railways to take possession or charge of same?
6.	Who is in charge of the road now?
7.	By whom is it operated?
8.	Is the construction of the said road all completed?
9.	If not, why?
10.	When is it expected to be completed?
11.	Is it the intention of the Government to continue the line of the Quebec and Saguenay railway as far north as Ha Ha Bay?
12.	If so, when? If not, why?
13.	Is it the intention of the Government to build a branch line from the main line of said railway at Baie St. Paul to St. Urbain?
14.	If so, when? If not, why?
15.	Have all the claims of right of way, ballast, pit, etc., been settled?
16.	If not, why?
17.	Does the Government intend to settle
ie. and when?


Hon. Mr. REID:: 1.	Yes.
2.	(a) $3,489,313.53.	(b) First instalment
$697,862.70 on February 27, 1919. Second instalment $2,791,450.83 on April 12, 1919.
3.	On September 24 an Order in Council was passed placing the Quebec and Saguenay railway under the jurisdiction of the board of directors of the Canadian National railways for the operation of same.
4 and 5. Answered by No. 3.
6.	The road has been completed under the supervision of Mr. Gordon Grant, C.E., of the Department of Railways and Canals, and who is now engaged in transferring it to the Canadian National Railways Board.
7.	The line has heretofore been operated by the contractors, Messrs. Hugh Doheny & Co.
8.	The road is completed for operation, with the exception of some minor items, such as telegraph instruments, train order boards, road crossing signs, etc., etc.
9	and 10. Answered by No. 8.
11.	No decision arrived at.
12.	Answered by No. 11.
13.	No.
14.	Answered by No. 13.
15.	No, all claims for right of way, etc., are not settled, as in some cases the amount demanded by the land owners is considered exorbitant, and they may have to be referred to the Exchequer Court.
16 and 17. Answered by No. 15.
I see that question No. 2 asks:
If so, what price was paid for same? When was it paid and to whom?

The answer gives a price but it does not say to whom it was paid. The answer was just handed to me before I came in. If the hon. gentleman wishes that information he can put that question on the Order Paper, or I will hand the answer to him privately.


FINANCES OF CANADIAN NORTHERN RAILWAY.
Mr. CASGRAIN:: 1.	What were, up to the 31st of August, 1919, the total receipts from all sources whatever, of the Canadian Northern system since it has been operated by the Government or the company acting for the Government?
2.	What were the total disbursements during the same period for operating, purchase of equipment, betterments, maintenance, obsolescence, capital, coupons, notes, and for all other items?
3.	Was there a surplus or deficit?
4.	What was the amount in either case?
5.	What is the estimated surplus or deficit for the current year?


Hon. Mr. REID:: 1.	Gross earnings, October 1, 1917 to August 31, 1919, $93,502,669.27. Proceeds of notes sold to public, $52,871,608. Advances from Dominion Government for repayment of notes and loans, construction, betterments and new equipment, also interest on securities, $71,606,463.58.
2.	Operating expenses, $93,188,470.58; expenditure on construction and betterments, also purchase of equipment, $56,346,558.85; repayment of coupon notes and loans, also interest charges, $71,356,256.50.
3.	Deficit.
4.	The net earnings from operation to December 31, 1918, was $4,846,103.24, but after paying bond interest and all other charges the deficit was, October 1, 1917, to December 31, 1917, $2,368,122.40; January 1, 1918, to December 31, 1918, $14,643,753.30; total, $17,011,875.70.
5.	Estimated operating deficit, $5,587,028.


SUBSIDIES TO RAILWAYS.
Mr. CASGRAIN:: 1.	What is the amount paid in subsidies to the Grand Trunk Railway system during the last sixty-five years?
2.	What is the amount of subsidies paid to the Canadian Pacific Railway during the last thirty-seven years?
3.	What is the amount of subsidies paid to the Canadian Northern Railway during the last twenty-five years?
4.	What is the amount of subsidies paid to the Grand Trunk Pacific Railway from Winnipeg to Wolfe Creek or a point 120 miles west of Edmonton?


Hon. Mr. REID:: 1.-
Grand Trunk Railway system	$15,142,633.34
Grand Trunk Railway system, Victoria bridge	 500,000.00

2.	Canadian Pacific Railway Company:
Original construction	$25,000,000.00
Canadian Pacific extension
(North Shore)	 1,500,000.00
Branch lines	 5,369,374.70

3.	Canadian Northern Railway Company: Canadian Northern Railway
Company	$ 1,909,132.00
Canadian Northern Railway Company (formerly Great Northern Railway, Quebec) 1,265,357.14 Canadian Northern Quebec Railway Company (formerly Chateauguay & Northern)	  391,819.75
Canadian Northern Alberta
Railway Company	 3,120,000.00
Canadian Northern Ontario
Railway Company	 14,485,635.20
Canadian Northern Pacific Railway Company	 5,987,520.00

4.	Grand Trunk Pacific Railway Company:
No subsidy paid on line between Winnipeg and Wolfe Creek; in so far as the Department of Railways and Canals is concerned.
The following additional information is necessary to make the answers complete:
1.	The Grand Trunk system has received no land subsidy.
2.	The Canadian Pacific railway received:
Main line-18,206,986 acres, of which 18,198,592.81 acres have been patented.
Souris branch-1,408,704 acres, of which 1,406,932.02 have been patented.
Pipestone extension-200,320 acres, of which 200,094.45 acres have been patented.
3.	The Canadian Northern railway has received 3,422,528 acres, of which 3,104,436.18 acres have been patented. It also received as a subsidy for the Manitoba and South Eastern railway 680,320 acres, of which 679,746.03 acres have been patented.
4.	No land subsidy has been given to the Grand Trunk Pacific railway.


QUESTION PASSED AS ORDER FOR RETURN.
Mr. ARCHAMBAULT:: What were the incomes of the different regiments' canteens:	(a) in England; Ob) in
France?
2.	Was there any money left over from that income?
3.	If so, will that money be returned to different regiments?
On the motion of Sir George Foster (Acting Prime Minister) the House took up the consideration of Public Bills and Orders.


ADULTERATION ACT AMENDMENT (BRAN AND SHORTS).
[Stage Direction]
On the Order, House in committee on Bill No. 7, to amend the Adulteration Act (respecting bran and shorts or middlings):
Mr. Sutherland moved that the Order be discharged and the Bill referred to the Select Standing Committee on Agriculture and Colonization.
Daniel Duncan McKenzie: May I ask the hon.
member who is in charge of this Bill if it is his intention to drop it altogether?


Mr. D. SUTHERLAND (Oxford South):: Mr. Speaker, in answer to the question submitted by the leader of the Opposition, there is nothing further from my intention than to drop this Bill, for I think it is a matter of extreme urgency and should be dealt with this session. I am particularly glad that a measure of this importance should be referred to the Committee on Agriculture, because an opportunity will thus be afforded all parties to appear and state their case. I have no doubt of a favourable result.


[Stage Direction]
Motion agreed to.
On motion of Sir George Foster, the House returned to the Orders of the Day.

[Stage Direction]
On the Orders of the Day:
Mr. W. F. KAY (Missisiquoi):: Mr. Speaker, with your permission, I would ask the Minister of Public Works (Mr. Sifton) if he can give the House any information as to the progress being made with the new Parliament buildings; can he hold out any hope of our getting into them for next session.


Hon. A. L. SIFTON (Minister of Public Works):: I can hold out a wonderful amount of hope, Mr. Speaker, but I can give no promises.


NATIONAL TRANSCONTINENTAL AND INTERCOLONIAL RAILWAYS.
[Stage Direction]
On the Orders of the Day:
Mr. JACQUES BUREAU (Three Rivers):: May I ask the President of the Privy Council (Mr. Rowell) if it will be possible for him to telephone or send a messenger to the Clerk of the Privy Council for a copy of the Order in Council bringing the National Transcontinental and the Intercolonial Railways under the provisions of the Canadian National Railway Act?


Hon. Mr. ROWELL (President of the Privy Council):: Mr. Speaker, I shall be
glad to accommodate my hon. friend, and I will endeavour to get a copy of the Order in Council here as soon as possible.


CIVIL SERVICE ACT, 1918 - AMENDMENT.
[Stage Direction]
Hon. A. K. MACLEAN moved the second reading of Bill No. 31, to amend the Civil Service Act, 1918, with respect to the salaries of certain postmasters .and assistant postmasters.
Mr. W. G. McQUARRIE (New Westminster) :: Before this motion is put, Mr. Speaker, 1 would like to ask the minister if he can give me certain information as to the postmasters who will be affected by this Bill, giving their offices and salaries.


Edgar Nelson Rhodes: The hon. member cannot properly submit a question as to the details of the Bill until it is in committee. Under the rules only the principle of the Bill can be debated on the motion for second reading.


William Garland McQuarrie: Mr. Speaker, I am
opposed to this Bill for the reason that I think it is very unfair to the postmasters and assistant postmasters who will be affected by it. As I understand it, only nine such officials will be affected, namely, the assistant postmaster at Vancouver and the postmaster and assistant postmaster at New Westminster, Victoria, Moosejaw and Edmonton. I believe that the effect of this Bill will be to continue in force an Order in Council which should never have been passed.


Mr. GAUVREAU:: There are lots like
that.


William Garland McQuarrie: As I understand it,
the result of the Order in Council was to reduce the salaries of the postmasters affected to a figure below that which was

paid to them prior to the commencement of the war; and, further, that it had the effect of making these postmasters and assistant 'postmasters refund moneys which had actually been paid to them extending over a period of some two and a half years. I have certain correspondence which sets out the facts more concisely than I could state them, and, with the permission of the House, I intend to read certain of that correspondence. The first letter is dated September 21, 1918, from the Deputy Postmaster General to the Hon. Martin Burrell, Secretary of State:
With further referenoe to the salaries ot postmasters and assistants in certain city offices and especially those at New Westminster and Vancouver, who had been called upon to refund amounts overpaid them during the period of 2J years from 1st April. 1914, I ibeg to say that there appears a misapprehension among these officers and others concerned in the matter in regard to the connection of the War Tax with a reduction in their salaries which called for the refund.
I may explain that the postmasters and assistant postmasters of city offices are paid according to a scale provided in Schedule "B" of the Civil Service Act which fixes the' amount to be paid on certain revenues as follows,

With postage collections of from $40,000 to $60,000-Postmasters $2,200 ; assistant postmasters $1,600.
On postage collections from $500,000 to $800,000-Assistant Postmasters $2,600.
It is only necessary to give these items out of the schedule in dealing with the salaries of the postmasters at New Westminster and Vancouver so that I need not trouble you with quoting all the rest of the figures that belong to the schedule.
For the fiscal year ended 31st March, 1914, the revenue of New Westminster was $43,985, which, according to the scale above quoted, allowed the postmaster $2,200 and the assistant $1,600 and they were paid at that rate. During the year ended 31st March, 1915, however, there was a falling off in, the revenue to $37,419 on which the postmaster and assistant were entitled to only $2,000 and $1,400 a year, respectively.
In the case of Vancouver, the revenue fell from $530,632 during the year ended1 31st March, 1914, to $452,211 during the year ending 31st March, 1915, with a consequent reduction in the amount the assistant postmaster was entitled to, from $2,600 to $2,400.
The War Tax on letters and post cards was hot put into force until the 8th April, 1915. so that it will be observed that the sale of, War Tax stamps did not, in any way, affect the revenue for the year ended 31st March, 1915, during which the falling off in revenue referred to occurred. The revenue collected during these years was all derived from legitimate post office business, and showed that the business at these offices had fallen off to a considerable extent, and the same may be said of all other offices in Western Canada.
There is no doubt whatever that post office business has not regained its former magnitude, but is still far below what it was in 1914. The revenue for the year ended 31st March, 1915, could not be obtained' until July of that year, [Mr, Mc.Ouarrie.1
and it was then found that the falling off of the revenue for the year ended 31st March, 1915, would necessitate a reduction in the salaries of some of the postmasters and assistant postmasters, for the previous year, that is, commencing on the 1st April, 1914. A report to Council was at once prepared for the Postmaster General's signature, recommending that the said reductions be made at once, and if there had been no delay, the officers concerned would only have been called upon to refund over-payments, for one year and1 one-third. There was delay, however, as the then Postmaster General, the late Hon. T. C. Casgrain was reluctant to sign the said recommendation and it was only in October 1916 when he finally concluded that it was not a question of choice, but of statute, that he decided to sign the report to council. If, therefore, the postmasters in these offices are not asked to refund, it would not only be a contravention of the statute, but an injustice to all other postmasters who were compelled to make the refund. Moreover, in view of this being statutory, there is no way the department can relieve them' except by repealing the statute. If the revenue had increased, we would be compelled by statute to give them an increase, and no power could prevent its being given to them. The question of right, therefore, works both ways and the department is compelled to enforce the statute impartially. In consequence of this delay, the salaries of the said officers were not reduced to the amount which the revenue of their respective offices, for the year ended 31st March,
1915,	entitled them to, until the 1st October,
1916,	and the over-payment in each case amounted to $500, that is, at the rate of $200 for 2J years. I wish to emphasize here the fact that the falling off in revenue and subsequent reduction in salaries was in no way effected by the war tax stamps, which were not being sold during the year in which the falling off occurred. The question of excluding the war tax from the revenue begins with the year 1915-16 as it was in April, 1915, that the war tax was imposed. When the revenue for the year ended 31st March, 1916, was made up it was found as it was naturally expected, that, on account of the sale of war tax stamps it had increased enormously. In the case of New Westminster and Vancouver the gross revenues went up to $48,227 and $565,746, respectively. These figures would restore the salaries of the postmaster and assistants to the amount they were receiving in 1914 if the war tax stamps were to be counted as part of the postal revenue. In view of the fact, however, that the Government was taking this means of raising money to carry on the war it was claimed that it would not be fair to the people to impose a tax and then give a percentage to postmasters for simply selling the stamps. This view was expressed to the department both by members and Conservative Associations and as it was obvious that the imposition of the war tax would not entail any additional work in the handling of mail matter it being just as easy to handle a letter with a 3-cent stamp as one with a 2-cent stamp, the department decided that the salaries of the postmasters would continue to be based on the legitimate postal revenue only. The late Mr. Casgrain, who was then Postmaster General, issued instructions that postmasters and assistant postmasters of city offices were not to be allowed salaries on the revenue derived from

the sale of these war tax stamps and from statistics in the department it was calculated that 2S% of the total revenue was derived from the sale of war tax stamps.
The postmasters and assistants had expected to be paid from the gross revenue including war tax stamps sales and it was claimed by them that the department had no legal right to do otherwise. In view of this contention the question of legality was submitted to the Hon. Mr. Doherty in October, 1917, who was then acting Postmaster General for his decision and he referred the matter on to the Department of Justice. The reply of Mr. Newcombe dealing with the question as to whether postmasters are entitled to have their collections from war stamps computed for the purpose of ascertaining their salaries, is as follows:
" I observe that your department has proceeded upon the view that this is not permissible, and possibly that view may be sustained, but I am very doubtful about it upon the construction of the statute. It certainly seems to be a very selfish and unpatriotic procedure on the part of the city postmasters to insist upon taking a share of . this special revenue which is raised not for post office purposes, but in order to defray the expenses of the war; and therefore I suggest that instead of leaving the question to legal opinion you should procure an Order in Council under the War Measures Act declaratory of the intention of the Act of 1915 to exclude the claim of the city postmasters." On receipt of this advice the Deputy Minister of Justice was asked to draw up a recommendation of Council along the lines he suggested and the recommendation as drawn up by him was submitted to council and passed on 8th January, 1918. The order stated " that the Postmaster General considered that it would be incompatible with the spirit intent and purpose of the Special War Revenue Act to permit the diversion of any portion of the special revenue derived from the sale of War tax stamps to any object other than the special one for which such revenue was authorized, viz.: to defray the extraordinary expenses which are incident to Canada's undertakings in connection with the war, and the above recommendation is made in order to remove and to set at rest any doubt upon this subject which might arise upon construction of the statutes."
The question was only submitted to the Acting Postmaster General because of the contention of the officials concerned that the department could not legally withhold from them the percentage based on the revenue derived from the war tax and as the declared policy of the Government was made by the Hon. Mr. Casgrain, Postmaster General, following discussion in the House and representations made by Parliament that none of this money so raised should go into the pockets of postmasters throughout the country, it was decided to refer it to the Acting Postmaster General for a definite decision as to what should be done. It was referred by him to the Deputy Minister of Justice who stated that in order that it might be legal it would be necessary that an Order in Council should be passed under the War Measures Act. It was, therefore, to ascertain whether we could legally do what we had been doing upon the instruction of the Postmaster General rather than to prevent any portion of the money, so far as the officials were concerned, from going to the postmasters, that induced the reference.
I think the above will explain my position and the position of the department in the matter and the Order in Council referred to leaves no doubt as to the policy of the Government in connection with the claim of the postmasters for a percentage of the war tax in fixing their salaries.

I have already, in correspondence with the department, taken exception to the statement of the Deputy Minister of Justice that these postmasters and assistant postmasters were unpatriotic and selfish in endeavouring to get a portion of the revenue derived from this tax. What they were really doing was trying to get from the department the same salary that they had been receiving prior to the war.
We all know that owing to the increase in the cost of living it has been the policy of the Government since the war to increase the salaries of employees in the Civil Service, It seems to me that these men were not asking anything out of the way when they requested, not that their salaries be increased, but that their salaries be allowed to remain the same as they were prior to the war. The Deputy Minister of Justice himself did not attempt to contribute any part of his salary to the purpose of carrying on the war. As I understand it, he received a present of some $10,000 from the Government, and also a very substantial increase in his salary. Had he been desirous of carrying out the principles of patriotism and unselfishness he would have contributed some of his own salary towards carrying on the war, instead of trying to reduce the salaries of postmasters who were receiving $2,200 and assistant postmasters who were receiving only $1,600 a year.
As a matter of fact, although the Order in Council was passed on the principle that none of the money collected from the sale of war tax stamps should go to anything but for the purpose of carrying on the war, the only ones affected by this Order were the postmasters and assistant postmasters whom I mentioned, and the tax did not go to the Government free from any commissions, because the postmasters throughout the country, that is, country postmasters, city sub-postmasters, stamp vendors in the city offices and everybody else who handled these postage stamps were allowed their regular commissions in connection with them. I cannot speak positively as to other offices, but I know that in the case of New Westminster the effect of this Order in Council was to cut down the salary of the postmaster to less than the amounts which were received by two of the clerks in his office. The salary which

was allowed to him under the Order in Council was $2,000, less a repayment of $300, retirement fund payment of $100, and Canadian Patriotic Fund payment of $50, leaving him a net salary of $1,550 a year as compared with the salary of $2,200 which he was receiving before the war. In this office, J. S. Cameron, a 2-A clerk, received after deductions were provided for, a salary of $1,750 a year, and W. H. Bracher also a 2-A clerk, received $1,627 a year. As a matter of fact, the postmaster received very little more than the letter carriers, although he had charge of some forty-five or forty-seven men. That Order in Council was wrong; it should never have been passed. It has been objected to by every member of Parliament in whose constituency any of these officers happen to be and it should not be continued. Instead, this legislation which is now before the House should provide for a return to these postmasters of amounts which were illegally taken away from them. They were illegally taken away from -them, or otherwise there would have been no necessity for the Order in Council. I am certainly opposed to this kind of *thing being continued. I might mention that during last session provision was made for returning one year's deductions to the postmasters, and it seems to me, where the department admitted the principle that a return of one year's deductions was justified, there is absolutely no reason in the world why the Government should not have put through an order for the return of the whole amount, namely, the deductions for two and-a-half years. The postmasters who have been affected by this Order in Council have been unfairly treated, and it is not right and proper for this House, after it has been seized of the facts, to continue in force an unfair Order in Council such as that. I apologize for having taken up so much time, but I feel that I owe it to these men to lay their cases before the House. As a matter of fact, all the members for British Columbia, although they are not all present, would back up everything that I say here to-day. I am not speaking only for myself; they have all written letters to the department, and they are just as much opposed to this Order in Council and its continuance as I am.


Charles Arthur Gauvreau: The hon. member ought to be opposed to the other Orders in Council also.


William Findlay Maclean: Mr. Speaker


Edgar Nelson Rhodes: If the hon. member exercises his right to reply the debate will be 
closed. Therefore, if any hon. member desires to speak he should do so now.


William Findlay Maclean: I have just a few words to say in explanation of the Bill. Hon. gentlemen will remember that in the early days of the war a war stamp tax was levied for the purpose of adding to the revenues of the country. Letters then requiring a two-cent stamp were in future required to bear a three-cent stamp, and many articles were required to bear a stamp of one cent for the purpose of adding to- the revenues of the country, particularly for war purposes, and these taxes were specially designated as war taxes. Later on, under the War Measures Act, an Order in Council was passed declaring that postmasters who were paid a salary on the basis of revenue should not, in calculating their salaries, take into account any of the receipts from the war stamp tax. I do not appreciate the argument of my hon. friend when he says that the salaries of these postmasters were reduced by reason of the Order in Council. Their salaries had beep fixed by statute long before the war, and perhaps I might indicate to the House the principle on whicn they were based. This refers entirely to city post offices. When postage collections exceeded $250,000 the salary was $4,000; when they exceeded $150,000 and did not exceed $200,000, the salary was $3,500; when they exceeded $100,000 and did not exceed $150,000, the salary was $3,250; when the collections were between $60,000 and $80,000, the salary was $2,400; when they were between $20,000 and $40,000, the salary was $2,000, and these salaries were voted annually in the estimates, although when payment was made to such postmasters the exact amount was determined by the actual revenue of the particular post office. Later on the Government was of the opinion that any revenues received by postmasters on account of the sale of war tax stamps should not be considered in calculating what their salaries should be. By reason of the enactment of the War Stamp Tax Act, the salaries of postmasters were not cut down at all; their salaries fell by reason of the diminution of the postal revenue.


William Garland McQuarrie: In i-ne, days of the war?


William Findlay Maclean: Yes. That was the reason why their salaries fell, and not because the Order in Council had passed. It strikes me that the policy involved in the Order in Council was absolutely sound. This was a war tax imposed for a special pur-

pose; it did not incur any additional labour on the part of the postmasters, and I think the Government were quite right in expecting that these officers should he tax collectors of this special tax, without any cost to the country. The position of my hon. friend with respect to these postmasters whose salaries have diminished by reason of a declining postal revenue may be all right, and perhaps they are entitled to some consideration, but that does not affect the principle involved in the Bill.


Mr. ROBB:: Has it been the experience of the country that the increased postage rate has resulted in a diminution of post office business?


William Findlay Maclean: No, I did not say that, but in certain parts of Canada during certain periods of the war, there was a diminution in business generally, which would naturally affect the postal revenue. I am not in a position to say just how matters stand in that respect to-day. This Order in Council will remain operative until peace is declared, which will be shortly, and we are now seeking legislation for making its provisions effective after peace is declared and until the Civil Service classification becomes effective at the beginning of the next fiscal year. I think this is fair legislation and should be accepted by the House.


Daniel Duncan McKenzie: What machinery is
there for distinguishing between the ordinary revenue and the special war revenue of the post office?


William Findlay Maclean: The rule adopted under the Order in Council was to calculate 72 per cent of the revenue as being purely postal revenue. The Bill gives power to the Postmaster General to determine what percentage of the postal collections at any post office shall be attributed to the sale of war tax stamps, and the balance will be the amount upon which the salary of the postmaster will be computed. My hon. friend will understand that this must be settled in an arbitrary fashion. To arrive at mathematically correct figures would require a large staff and involve a great deal of work, so power is given to the Postmaster General to settle the matter in the best way he can.


[Stage Direction]
Motion agreed to, and the House went into Committee on the Bill.
Progress reported.

[Stage Direction]
The House resumed the adjourned debate on the motion of Hon. Mr. Reid for the second reading of Bill No. 33, respecting the acquisition by His Majesty of the Grand Trunk railway system, and the amendment thereto of Mr. D. D. McKenzie.
Mr. R. L. RICHARDSON (Springfield):: Mr. Speaker, before entering upon a brief discussion of the Bill on its merits I should like to answer one or two objections that were raised to this legislation yesterday afternoon and evening by speakers on the other side of the House. The hon. member for Sherbrooke (Mr. McCrea) positively announced himself as unalterably opposed to public ownership and challenged anybody to give an instance where public ownership had been a success. If he will remain in the House for a short while, I shall give cases where public ownership has been a very pronounced success indeed. He also took the ground that no set of employees would serve a government railway system as efficiently as they would serve a private owned railway. If the employees of the national system of railways were directly under the Government, there might toe some force in his argument, but it is -well to remember that the railways that are now controlled by the Canadian people, and this of course applies to the Grand Trunk if it is taken over, are managed by an able board appointed by Parliament and with powers independent of the Government. The Government has divested itself of power to control, so there is no reason why employees should not serve just as efficiently and just as faithfully under that board as if it were a board managing a private owned railway.
My hon. friend from Wright (Mr. Devlin) made a point yesterday afternoon about the press being opposed to the acquisition of the Grand Trunk. I think he is under a misapprehension. As I read the press, most of the great papers of Canada are supporting the acquisition of the Grand Trunk. I need only mention Toronto, where the three leading newspapers are supporting the proposition regardless of their political predilections, The same thing is practically true of the West, where the great papers are supporting this public ownership idea. My hon. friend also spoke of the Government squandering money, as if we were simply shovel-

ling out money to the Grand Trunk. Surely he has not followed the history of railways in this country or he would know that the country has shovelled out tens of millions almost yearly into the maw of the railway exploiter and got nothing for it. We purpose now to end that practice and to own the Grand Trunk system so that any further money we spend on the road we shall be spending on our own railway. He also referred to the Canadian Pacific, pointing out how magnificently it was paying, and asked why the government-owned railways did not pay. He implied they would never pay. I think I shall be able to give abundant reason before sitting down why the Canadian Pacific railway pays, and pays well. I want to refer briefly to a point or two made by the leader of the Opposition (Mr. McKenzie), who announced that for his part he was unalterably opposed to public ownership. He also twitted the Government with rushing this legislation through. I cannot help thinking he was ill advised in taking that position. The Administration is not rushing this legislation through. The legislation has been pending for nearly two years, as every hon. member who has read the correspondence in the blueJbook distributed recently must know. If the Government had not pressed this legislation through it would have been absolutely remiss in its duty to this country. The public owned system at the present time is confined largely to the West and to the East, and unless we are able to secure branches and terminals in Central Canada, it is absolutely impossible to make a success of railways under public ownership. Instead of the Government being to blame for introducing and pressing this legislation forward, the Government is to be commended for doing so. We cannot make our present system pay until we get these connections. I do not apprehend, and I am sure hon. gentlemen will agree with md, that there is any rush about this thing at all. Abundance of time is being given and every hon. gentleman who wishes to speak will have an opportunity of doing so. In my judgment the Government would have been remiss in its duty if it had failed to press forward this very important legislation at this moment.
I was struck with an expression of the hon. the leader of the Opposition when he said that the party with which he is associated has nothing to take back or apologize for in regard ito its railway policy. I do not wish to blame one party more than
[Mr. Richardson 1
another in regard to the railway policy pursued in this country for, in my judgment, the country has been on an awful debauch for the last twenty-five or thirty years in regard to its railway policy. But let us examine the railway policy as pursued by the party to which my hon. friend belongs. Surely it must be generally recognized that no greater, no more colossal blunder was ever perpetrated in this or any other country than the building of the Transcontinental railway and the Grand Trunk Pacific at the time they were pressed to conclusion by the party to which my hon. friend belongs. Instead of costing $13,000,000, as was promised, the Transcontinental railway cost, I think, in round figures $150,000,000. It is little or no good to the country at the present- time. I am told that grass and trees are growing up in much of its roadbed. It is away ahead of time. The policy advocated by the right hon. the Prime Minister (Sir Eobert Borden) at that time was in my judgment the correct policy. It was his view, and it was backed by a great .many people throughout the country and by a great many members cf this House, that two or three roads around the north shore of lake Superior were entirely superfluous, that one road was all the country could stand and that (what should be done was to doubletrack the Canadian Pacific around the north shore and let every other railway corporation have running powers over it upon proper terms. That in my judgment would have, been the ideal policy. In addition to the Transcontinental being built, we had the spectacle of the Canadian Northern building around the north shore of lake Superior, and it was this transaction that practically swamped the whole railway situation and brought upon us this crisis.
Let me remind the leader of the Opposition that he surely has nothing particularly to be proud about in regard to the Transcontinental railway, because an independent commission was appointed to inquire into certain matters connected with its construction and they found that $40,000,000 was sjoent either in extravagance or graft on that one road alone. I do not think the hon. gentleman has much reason to be proud of the railway policy of the Liberal party. I am not saying that it is very much worse than the policy which has been pursued by the other party during the last twenty-five or thirty years, because both were thoroughly bad, and now it is out duty as responsible members of the House to apply the only remedy that offers itself

The leader of the Opposition announces himself, I see, as being absolutely opposed to public ownership. He says: "We have not got the money, and if we have not got the money how are we going to buy this Grand Trunk railway?" I do not think the hon. gentleman has a correct appreciation of the situation. It is true that Canada has not got the money to buy the Grand Trunk at the present time, but we do not have to pay for it. We merely assume the bonded and debenture liabilities of the Grand Trunk and pay out of the earnings of the road the interest which they bear. I am in hopes that the course of the arbitration and the terms of submission will be such that we shall not be called upon to pay one cent of the common stock obliga-. tions of the line. If we do not take over the Grand Trunk and assume its debenture and bonded liabilities we are up against the absolute proposition of being obliged to pour tens of millions into this particular corporation in order to maintain it as a running concern. I am told that $90,000,000 is the amount of the obligation of the Grand Trunk to the Grand Trunk Pacific under the contract. The time came when the Grand Trunk reached the end of its tether, they said: "We cannot run this Grand Trunk Pacific any longer," and they threw it up -fell down on the proposition absolutely. Would the leader of the Opposition suggest -and I shall pause for a reply-that the Administration should have stood quietly by, refused to do anything and allowed the thousands and tens of thousands of people who have been induced to go into that country and settle along that line of railway, to remain without any railway accommodation or connection? What would the hon. gentleman suggest?


Daniel Duncan McKenzie: The hon. gentleman is asking a question of me. He says that this company had reached the end of its tether and had been obliged to go into the hands of a receiver. It has gone into the hands of a receiver, who is the Minister of Railways and Canals. I do not anticipate that there would be any difference if it went into the hands of any other receiver; the business of the road would be carried on in the same way.


Robert Lorne Richardson: The Grand Trunk
refused to further operate the Grand Trunk Pacific. The expression that the Grand Trunk was at the end of its tether appears I think in its own correspondence in the Drayton-Acworth report. The Government was obliged to operate the road and if there are deficits on the road it is not due to any
maladministration on the part of the Government which has been obliged to carry this baby, to take care of this child, of the so-called Liberal party. It was forced upon this Government years ago. Surely there is no blame coming to the present Administration on that account. It was simply put up to them and they had to do something with the Grand Trunk because the Grand Trunk announced that they were at the end of their tether and that they could not raise money not only to pay their obligations in connection with the Grand Trunk Pacific but even possibly to take care of some of their other obligations.
The Government is faced with the necessity of dealing with the Grand Trunk. My hon. friend says that we cannot afford to take over the Grand Trunk at this time; the fact is we cannot afford not to take it over. In view of the railway situation that Canada is faced with we must take it over in order to save ourselves. I thought the leader of the Opposition was peculiarly unfortunate in the two illustrations which he gave. He said that the position of the Canadian people was like this: They have embarked on the enterprise of public ownership and purchased one cow-I think he said a Jersey cow. Why not, he asked, let us see whether we can make a success out of this cow before we buy another? Well, Mr. Speaker, it seemed to me that my hon. friend utterly failed to grasp the idea that the cow we had bought or rather that was forced upon us was a dry cow-it does not yield any milk. In order to make that cow productive, he inquired, would you go on and buy another cow. I say yes; we want to get a mate for the cow we have bought and see if we cannot put the pair in the way of producing for ourselves milk, butter and cheese. We will never get these products until we have another cow associated with the one we have bought and make the two productive. I think that is clear. My hon. friend also used another parallel which I thought was most unfortunate when he said the country is in the position of purchasing a horse-the hon. gentleman seems to have a peculiar affection for domestic animals-and when we come to make the purchase, he says, we find a bill of sale, or liens, on the horse. Now that is perfectly true. The horse is there, we have got to purchase it, and if we do not make the purchase we have got to pay the liens and the bill of sale, anyway. That is the position with regard to the railroads of this country; I want to make that point as clear as I can. Now

I would like to give a few figures, and I will endeavour to be as brief as possible, in order to show what this country has done for the railroads of the Dominion. I prefaced my remarks by stating, and I challenge contradiction, that the people of Canada during the last forty or fifty years have given sufficient-and I want this to sink into the mind of every hon. gentleman here-have given sufficient in cash, and lands, and the equivalent, to build every mile of railroad that we have in the Dominion at the present time. That is true; the people of Canada have given sufficient in cash, land, completed roads, exemptions, and largesse of one kind and another, to build every mile of railroad that now exists in Canada. And we do not own the railroads-in fact, for the last twenty, thirty, or forty years they have practically owned us. Now let us see where we would have been had we started on the right line? We have paid this money, we have given these exemptions, we have given this land, and yet, had we built and owned the railroads ourselves, we would have had them all paid for and there would be no capital to provide interest on. But because we have dealt with the buccaneers, manipulators, and railroad exploiters for the last thirty or forty years, we have this enormous railroad mileage in existence at the present time. It has all been loaded with stocks and bonds to the value of every dollar they cost and more, and the country has got to pay in freight rates sufficient to provide for the interest on this vast amount of capitalization. Had we done the thing ourselves we would never have been called upon to pay anything like the rates that we are now paying. I remember reading, when I was rather a young lad, and the Canadian Pacific Railway charter was before Parliament, that Sir John Macdonald, the man who was the father of that railway, made the statement that owing to the vast subsidies which the people of Canada were giving to the Canadian Pacific they would be able to carry freight at about one-half what they would be obliged to charge if they built the road with their own money. Now, notwithstanding the fact that we have *poured this enormous sum of money, much exceeding a billion, into the construction of all these railroads we are obliged to pay the very highest freight rates at the present time; and the carnival will continue unless a halt is called. I admit it is late in the day, very late. This carnival has not existed with my aequiesence, because I began twenty-five years ago to denounce it, 
and use my influence to turn, the people away from the idea of pouring subsidies into railway corporations. But it has gone on and we are face to face with this difficulty; and I ask hon. gentlemen opposite who expect to vote against this arrangement to pause and consider what the alternative is: you must either take over the Grand Trunk or continue to pour tens of millions of dollars into the maw of these corporations. That is the alternative, and the only alternative, because w'e are told this railway company are at the end of their tether.


Mr. CANNON:: Would it not be possible for the Government to simply let the Grand Trunk go info liquidation?


Robert Lorne Richardson: Well, that could be done, but one of the great difficulties about the Grand Trunk, I may tell my hon. friend, is that it is a vast system and a great portion of it is in the United States and there are complications-so I am informed in discussing the matter with experts-that make it almost impossible to resort to that expedient. The view is held by the men who are in a position to know, the men who have studied questions of this kind, that the only possible way, the only satisfactory way, by which this road can be acquired is in the manner that, the Government has adopted. For a long time I held the view suggested by my hon. friend (Mr. Cannon). If there is one thing that I feel, and feel strongly, it is that this country owes nothing, absolutely nothing, to any railroad corporation,. All these corporations have held the people by the throat for many years and have shaken the last dollar out of them. Talk of generosity! I would not extend one atom of generosity to railway exploiters. They have exercised a malign influence in this Dominion for the last thirty or forty years. Their course and their machinations for decades have resulted in debauching the people of Canada and I feel no generosity towards them. I would exact the last dollar, and I am hopeful-it is my view in supporting this arbitration-that the terms of the arbitration will be such that the idea of generosity will not even be thought of. The manipulators of the stock of the Grand Trunk have been making money all these years out of these manipulations. Is it not time we came to the end of this flim-flam game? Is it not time we heard the last of the talk we have heard with respect to the credit of Canada that has been dealt out to us during the last fifteen or twenty years? Whenever a crisis arose in this country and there was

any idea of the people doing justice to themselves-doing justice to themselves and even no injustice to the party of the second part-you always heard the view expressed: " Oh, the credit of Canada will be interfered with." What do we care about that? Let us interfere with the credit of Canada. If that credit is to buttress up all these crawling creatures and has got to suffer because of their machinations, as jt has suffered for decades, it is time we'said: " To Hades with the credit of Canada." The time has come when we are not looking to British capital as the source from which to derive our money in this country. Because we have found that we must rely upon ourselves. We have to pay the piper, and the commitments of this country are appalling-appalling is the word-and we should see to it that not one farthing beyond a just award is paid for this Grand Trunk system. I would like to see .provision made that the award be reviewed by Parliament.


Daniel Duncan McKenzie: Hear, hear.


Robert Lorne Richardson: I appreciate that view as expressed by an hon. member of the Opposition. I do not know whether or not it is feasible, but I have the assurance not perhaps on behalf of the Government, but from a Government source, that in this arbitration the selling value of the stock in the old land will not be considered or allowed to influence the award and I have the further assurance that the obligations of the Grand Trunk to the Government under the Grand Trunk Pacific contract will be provided for. Naturally I felt considerable uneasiness, coupled with some indignation, when I saw in the newspapers that stock jobbers were manipulating the Grand Trunk stock in the Old Land, and that it would influence the price we must pay. The report went out broadcast that this was a stock jobbers' deal, and that perhaps men who if they got their desserts should be in the penitentiary, would make big profits out of this transaction. I carried my fears to a Government source, and I was assured that not one farthing would be added to any award because of any supposed selling value of the stock in London.


Daniel Duncan McKenzie: Will my hon. friend
permit me a question? Can he tell this House any method by which the arbitrators can be prevented from giving value to the stock by recognizing what it is selling for in London? How can that be prevented, and how would the award stand if the arbitrators refused to recognize such value?


Robert Lorne Richardson: I could not tell my hon. friend off-hand just how it could be prevented. But if I were an arbitrator- and I hope to see an able layman on that arbitration and not a technical judge-I certainly would not award a single cent because of any manipulation of the stock in London. I do not know exactly how that can be done, but I give my hon. friend the opinion that I have obtained.
I have no quarrel with the leader of the Opposition because of the opinions he holds. Yesterday he frankly stated that he was opposed to public ownership. He appealed to his long public record, and if he is honestly convinced that public ownership is an improper thing for this country, he has an absolute right to that view, and I duly respect it and him for stating it frankly. I take the other view, however, and I advocate public ownership as strongly as I know how. I am extremely anxious that this great transaction should be closed up. I believe its consummation will mean a great deal for Canada, and therefore I am not in favour of delay. But I agree with hon. members on the Opposition side who suggest that every possible safeguard should be thrown around this transaction in order that the country shall not be bled to the extent of even one farthing beyond what is the just and proper amount to be paid for the acquisition of this railway.
Mr. JEAN J. DENIS (Joliette): Will my hon. friend allow me a friendly question? I may say that he is making many friends on this side of the House, at least as far as I and many members to whom I have spoken are concerned, when he says that the country owes nothing to the railroads, that we have no generosity to extend to them, and no presents to give them. But our great apprehension on this side of the House is that the award to be made by the arbitrators may constitute a most magnificent present to the Grand Trunk Company by reason of the fact that these arbitrators are liable to make mistakes on a large scale in the valuation of such an immense transaction as this, and that if the award is final there will be no appeal from it either to the Supreme Court of Canada, to the Privy Council, to the Parliament of Canada, or to any other tribunal in the world. If the arbitrators should place a value of, say, $50,000,000 in excess of the real value of the stock, then we would have to pay the excess. Therefore my question is this: Would not the hon. gentleman agree with us on this side of the House

when we say that the award should be submitted to Parliament before it becomes final and valid?


Robert Lorne Richardson: I might say in reply to my hon. friend, that I greatly ap-, preciate the position which some members on the Opposition side appear to desire to take on this question. I do think, however, that they are seriously misled, but I am not impugning their motives. If at were feasible that the award should be submitted to Parliament, I would certainly like to see it presented to us for ratification; but there might be difficulties in taking such a course, and I would not like to answer off-hand the question put by my hon. friend. We shall probably hear from the Government on that point.
I want to see the arbitration agreement, for I think it should receive the attention of the House, and I would like to see it submitted to the House when we go into committee on the Bill, because this is a very important matter. All classes of politicians in this House are equally to blame for our present railway situation, and the time has come when we might very well say: Let us look at this question on its merits, and on its merits alone. Let us see whether it is desirable that this railway should be taken over, and let us not be influenced by partisan considerations in reaching a conclusion. Partisan considerations have been the great curse of this country for the last thirty or forty years, and we now see the handwriting on the wall. The people themselves have begun to realize that partisanship is a curse, and 'they are taking the game into their own hands. I am not prepared to say that it might not be a good thing, if we, the people's representatives, will not apply the reform that the people themselves, should speak and act. What difference will it make if the Union Government and the so-called Liberal party be set aside, so long as the people are truly served ? That should be the only issue to be considered in the Dominion at the present time.


Mr. McCRBA:: Would it not be a good idea to let them speak on this question through a general election?


Robert Lorne Richardson: I promised to present a very brief summary of what the Dominion has given to the railroads, and when I refer first to the Canadian Pacific railway my hon. friend from Wright (Mr. Devlin) will see the answer to his question: Why cannot the Government-owned railway pay

as well as the Canadian Pacific railway? First, let me give a brief historical reference 1 have in mind, and in this connection I would like to appeal to my hon. friends on the Opposition side. In the year 1872 the Mackenzie Government came into office, led by as grand a man and Liberal as ever appeared in this country. He was the man who helped to create the great Liberal party, and he believed in public ownership. That grand old Scotchman had made a study of the question, and he realized Canada's needs and necessities, and he advocated that the railway system to bind the East to the West, which was a condition of Confederation, should be built under public ownership.
It would have been a great thing for this Dominion had the hon. Alexander Mackenzie been continued in power long enough to carry out that policy. It would have saved hundreds of millions of dollars to the people of this country, it would have meant decent freight rates, and we would not have had the bedevilment and corruption of our politics and public life that we have witnessed during the last thirty or forty years. I -want to appeal especially to my hon. friend the leader of the Opposition (Mr. McKenzie). His honoured leader, the man who helped to create his party, believed in public ownership and undertook the construction of the Canadian Pacific railway to connect the Pacific with the Atlantic as a publicly-owned line.
His party continued in office, as is well known, from 1872 until 1878, when it was defeated on the trade question-an improper issue at that time, as history will attest. But he was defeated, and Sir John A. Macdonald, the great apostle of private ownership, came into office. And what did he do? He brought into existence the Canadian Pacific Railway Company and handed over to it at once $38,000,000 worth of road that had been completed under Mackenzie and
25,000,000 acres of land. Let us see what the Canadian Pacific Railway Company actually received. They got $71,000,000 in cash. They got $38,000,000 worth of completed road. They got a land grant running up to some thirty or thirty-five million acres. Now, they have realized over $125,000,000 from the land which they have sold, and, according to their own statement, the land which still remains, untaxed, in their hands they value at another $125,000,000. So that the people gave them directly-it was just the same as cash-$359,000,000. And the original cost of the road, according to their own figures, was $143,000,000.

Let us examine what further aid they received. They got exemption from duty on all their supplies. They got exemption from taxation until Gabriel blows his trumpet on every penny's worth of property that they own in this country. Do you know what that means? If you figure it out according to recognized authorities you will find that that means $500,000,000 to the Canadian Pacific Railway Company every thirty years. As the company have been in existence over thirty years, the people, therefore, have contributed to the Canadian Pacific Company about $850,000,000 in cash, lands and tax exemptions. No wonder they can earn splendid dividends; no wonder they can set aside a handsome reserve of from one hundred to twp hundred millions.
I commend the figures to my hon. friend the member for Wright (Mr. Devlin). It is in order to combat the strength of that great railway company that we want to have the [DOT] Canadian-owned system strengthened; because I believe our system will be able to compete satisfactorily with the Canadian Pacific (when the time comes if we get it properly organized and co-ordinated.
Now, let us see what we gave to the Canadian Northern. I want my hon. friend (Mr. Denis) to listen to this, because it is important; he has a receptive mind and I am satisfied that his vote on this question will be an honest one.
Mark you, we gave $850,000,000 to the Canadian Pacific, and into the maw of the Canadian Northern the people of Canada poured $300,000,000. Is it any wonder that there has been a bedevilment of our politics in this country? Is it any wonder that the great railway interests became arrogant and overbearing and practically attempted to own the country as they gained in affluence and wealth?
According to the information given by the Minister of Railways this afternoon, we gave to the Grand Trunk $15,000,000. Mark you, the people gave $674,000,000 in cash or its equivalent to the three railroads of this country; and if you add $500,000,000 by way of tax exemption and duty exemption you will get the enormous total of $1,540,000,000 that the people of Canada have contributed to the railroads of this country.
If that is not sufficient to appal members of Parliament, to say nothing of the citizens ot Canada-well, I do not know what would appal them. If that is not " going it strong"; if that is not being on a colossal railway debauch for thirty years, I do not know what is. It seemed to make no difference during the last ten or fifteen years
how often you tried to call a halt; the carnival went on, and it was participated in just as boisterously by the party to which my hon. friend belongs and to which I myself once belonged. I opposed them on the Grand Trunk Pacific-Transcontinental policy however; I ran against the member of the Government in Western Canada who was pushing the thing through there; I have at least that to my credit.
I say that notwithstanding all that we have given, unless we stop now, we shall have to continue the carnival. Is it not about time that this condition came to an end? The Grand Trunk so say the company's officials themselves is at the end of its tether. Any one who studies the financial position of Canada knows that this country also will be practically at the end of its tether if it does not put a stop to this kind of thing. Here is the alternative: If you do not take over the Grand Trunk you will have to nurse the baby; you will have to continue pouring millions into the lap of that corporation to enable it to support the Grand Trunk Pacific and, probably, itself.
If we do not take the Grand Trunk, in order to make a success of the Grand Trunk Pacific and the Intercolonial, we shall,have to build branch lines and terminals in Ontario, and that would involve a cost to the people of probably two hundred millions. And then what have we got? We have the Canadian Pacific, the Grand Trunk and our own system, all in competition. We cannot make a success of the state-owned system without the Grand Trunk. If we wipe it out, we wipe out its competition, and with a splendidly equipped System from the Atlantic to the Pacific we shall be able to effectively compete with the great Canadian Pacific Railway system. In no other way under the sun can we make a success of our national system of railways. That is the position which confronts the Government at the present time.
Hon. members argue strongly that the road should not be taken over, but they do not stop to think that if we do not take it over we shall have to support it. We have been supporting the railways, lame and otherwise, for the last thirty or forty years. Surely to Heaven we ought to have reached the end of the lane. It is such a reflection upon the judgment and the intelligence, not only of members of this House but of the people of the country as well, that I marvel that any sane person should continue this foolish policy an hour longer. It was inevitable that the time



should come when we would have to end it; and that time is the present.
I have made some reference to the policy of the so-called Liberal party in the old days when they launched this Transcontinental and Grand Trunk Pacific system. The then Minister of Finance, the present member for Shelburne and Queens (Mr. Fielding) who opposes this Bill, was the exponent and mouth-piece of the Government of that day. It was he who told us that the Transcontinental would cost the country only $13,000,000, whereas it 'has cost us over $200,000,000. I was looking over his speeches the. other day; it seemed to me that they were models of solemn absurdity and financial incompetence. I marvel that he takes the position that he now takes on this question, having regard to the vast blunder with which he was associated and which he helped drive through this Parliament and fasten upon the country. The only way in which the country can recoup itself for some of these losses is by taking over the Grand Trunk, co-ordinating it with our other publicly-owned lines and making it a thorough, competent, well-equipped system. When we do that we shall be able to make money out of it and probably get back some of the hundreds of millions that we have already spent.
Now, in what I am about to refer I should like to have the attention of the member for Sherbrooke (Mr. McCrea). I hope that he will wake up and follow me closely, because I am coming to the declaration that he made last night-in which, no doubt, he was perfectly, sincere. I do not suppose the hon. gentleman knows that there is any country under the sun which has made a success of public ownership. I want to appeal especially to him because he is a hard-headed-shall I say hard-fisted'-business man. He knows how many beans make five; and, if I size him up correctly, I take it that if he thought that failure to acquire the Grand Trunk would add ten dollars to his taxes he would be in favour of taking it over and saving the ten dollars. I hope the hon. gentleman will appreciate the compliment.
In discussing the question of public versus private ownership, I want to make a prefatory remark, that the only thing to consider is not dollars and cents. It is not dividends that we must look at, especially, but service to the people. Does the hon. member for Sherbrooke (Mr. McCrea) appreciate that? It is not so much just whether we make five per cent or six per cent; we might make a little less, but if

we serve the people, that is the idea of public ownership-the subordination of dollars and cents to public service.
Mr. MoCREA:	It is on forty years of
experience as a shipper that I base my argument.


Robert Lorne Richardson: All these public
utilities that are in their nature natural monopolies, such as gas, water, light, telephones, telegraphs and railways, that enter into the service of the people, should belong to the people. Just let me tell the hon. member for Sherbrooke that people throughout the world have the idea of public ownership. Water, gas, light, telephones and telegraphs belong in the old land, as well as on this continent, very largely to the people themselves. It just occurs to me now that in Glasgow we have the greatest example of the success of public ownership that the world has ever witnessed. For the last twentydive years or more the whole street railway system and every other municipal service of that great city have been owned by the corporation of Glasgow. If my hon. friend has ever visited Glasgow, he will find that he can ride on a street car there for a penny and sometimes for a cent, and the revenue from that system is so vast that it has been almost entirely wiping out the taxes of the people of Glasgow for the last twenty or twenty-five years. That is one case. The conviction is being steadily forced upon the people, not only of Canada but of the world, that public ownership is in the general interest of the people, because it supplies them 'with service in preference to dividends, though it generally does return dividends. Let me suggest this to my hon. friend. He says that no success has ever been made of public ownership, and he challenges anybody in this House or out of it to produce any instance of its having proved a success. All the postal services, I presume, throughout the world, are under public ownership. Could a service be much better managed than even our own postal service which usually produces a revenue, notwithstanding the enormous disability, the 'Civil Service disability? In my judgment, the Civil Service should be taken by the heels and smashed against the wall; we are paying just double what we should pay for Civil Service at the present time, it could be cut in halves^ and its efficiency increased, arid yet we are going on and apouinting hundreds more to positions, mostly at big salaries.


James Alexander Robb: My hon. friend might tell us something about the grain elevators of his own province of Manitoba.


Robert Lorne Richardson: I promised not to be too long, my good friend. I have so much to tell you about that perhaps you will be glad when I finish.


John Dowsley Reid: They are operated successfully.


James Alexander Robb: The hon. member for Springfield will not say that they are well managed.


John Dowsley Reid: They are owned by the Dominion Government, and they are operated successfully.


Robert Lorne Richardson: The Minister of Railways has suggested that they are a success, and I have no doubt that as he is a truthful man, the Opposition Chief Whip (Mr. Robb) can rely on his words. The postal service, telephones and telegraphs in the old land from which we derive our precedents, all belong to the people; they are all magnificently managed, and I believe they pay well.


Lucien Cannon: What about telephones in Manitoba?


Robert Lorne Richardson: Just possess your soul in patience, my good and eloquent friend; you will have an opportunity after I am through.


Lucien Cannon: I should like to know.


Robert Lorne Richardson: Just let us come down to railways. Does the hon. member for Sherbrooke (Mr. MoCrea) know-if he does not know I will tell him-that the railways of that great German Republic, as we must call it now-it used to be an Empire; I dislike to instance Germany, even to mention its name in the House, but it will do all right as an illustration-has owned all its railroads for the last thirty or forty years? The best testimony that I can secure proves that those railroads have been efficiently managed and that they have paid. What are the rates on those railways? Three-quarters of the people of Germany have been travelling for the last twenty-five or thirty years-mark that-at a rate of one-quarter of a cent per mile. How does that compare with three and four cents per mile in this country, and yet those railways pay a dividend and are efficiently managed.


Mr. TOBIN:: What wages are paid there?


Robert Lorne Richardson: Never mind-I do not know what wages are paid. It is very easy to crack in questions. Although one should rise from the dead, I do not believe that my hon. friend
7Si
would be convinced. I am not appealing to him as I expect him to vote wit!', his party. That is the kind of men who are a curse to the country; they follow party instead of following logic. Let me tell the hon. member for Chateauguay-Huntingaon that Germany is not the only instance. Austria-Hungary has owned most of their railways for years; those railways pay well, and the rates are very low. Italy owns *most of its own railways and makes a handsome profit.


Some hon. MEMBERS:: Oh, oh.


Robert Lorne Richardson: You must not smile when I am presenting you the truth, because I expect you to vote aright.


Mr. DEPUTY SPEAKER:: I must remind the hon. gentleman that he must address the Chair.


Robert Lorne Richardson: All right, Sir, I will endeavour to do so.


Francis N. McCrea: Would the hon. member allow me a question?


Robert Lorne Richardson: own account. Naturally, just as the President of the Privy Council said last night, the interests immediately got busy and told us that the city was plunging into an enormous liability, just as the leader of the Opposition said last night with regard to this Grand Trunk business. The interests did their best to scare the people of Winnipeg from embarking upon this enterprise, but the people believed in public ownership; they thought they had a good thing in this Winnipeg River power and they appropriated sufficient money to develop it. Mark you they developed on the Winnipeg river up to 100,000 horse-power, and transmitted that power to the city. They spent $7,500,000, and at what rate do you suppose light has been distributed to the thousands of citizens of Winnipeg during. the last seven or eight years? Ten cents per kilowatt hour? No, three and-a-half cents per kilowatt hour. They cut the rate by more than two-thirds. The city of Winnipeg is supplied with light at the lowest rate,. I believe, on this continent, because of public ownership. The prices charged for power were reduced in the same proportion. Has public ownership in this case meant disaster for the city of Winnipeg? Not at all. During the last few years, in addition to paying interest on this $7,500,000 and providing a sinking fund, the city has been able to set aside $400,000 in profits, and the citizens have saved from one to two millions annually in the price of their light and power, because the competing privately-owmed company had to meet the new rate. There you have a magnificent example of the success of public ownership, and it will be that way all along the line wherever the principle is properly carried out.
I see it publicly stated that Sir Adam Beck's hydro-electric system has saved the people of Ontario fifty millions of dollars. The danger is in dishonest administration, and you cannot always safeguard yourself from the manipulations of scoundrels. But if you have public ownership and honest efficient administration it is bound to be a success. There is no reason why there should not be honest administration, and that brings me back again to the position of my hon. friend the leader of the Opposition. He says that we cannot get men who would serve the people as they would serve a corporation. I don't believe that is so. I give him credit for expressing what he believes to be true, but what reason under the sun is there why servants should not serve under a board of manage-

ment appointed by the Government just as faithfully and efficiently as under a board of management appointed by directors in old London? His position does not hold water.
While some friends on the other side of the House may vote against this proposal under the belief that they are doing a good turn to the country in striking at public ownership, I want to tell them in all solemnity that actually they are attempting to deal our national railways a deadly blow. Thank God, it will not be fatal to the principle of public ownership, which means so much for the interest of this country. Let them appeal to their old leader, Hon. Alexander Mackenzie, the man who created the Liberal party. Was he a private ownership man? No, he stood for public ownership. How the party has degenerated since his day! We have the remnant of the party here pleading for private ownership in a case where public ownership is the only possible remedy for the situation.
Opponents of public ownership very naturally point to failures and say: "Look at the Intercolonial." I have heard that said on every platform on which I have spoken on public ownership during the last twenty years. Let us examine the Intercolonial for a few minutes. As you especially know, Mr. Speaker, for you come from the Maritime Provinces, the Intercolonial was not built as a commercial enterprise. It was not expected1-and I want my hon. friends to mark this-that the country would make money out of it, but it was one of the terms of Confederation that the East should be connected by rail with the West. The Intercolonial was not built on a direct route, as a railway built for commercial purposes would have been, but followed a circuitous course around the coast line in order to serve this, that and the other community. Therefore, it could not be expected that it would be a commercial success. What has happened to the Intercolonial? As everybody knows, and especially the leader of the Opposition and hon. members from the Maritime Provinces, the road has been bled white for the last thirty or forty years. The cars used on the Intercolonial carry probably ten tons, but they would be set down as carrying only three or four tons, and while injury was done to the track the man who shipped freight over the Intercolonial got off with a very small payment. The curse of the Intercolonial has been political management and the foisting upon the line of thousands of incompetent political heelers and dependents, to the awful prejudice of the

enterprise. No wonder the ex-Minister oi Public Works (Mr. Carvell) and other hon. members from the Maritime Provinces look askance at public ownership, for they have seen what has happened. But the trouble has been with the management. The road has been a political railway to help out this, that, and the other politician. I venture to say that nothing of that sort will happen under the board that is administering the National Railways of Canada. We had an ebullition in connection with the Intercolonial from a politician not very long ago, when the then chief whip of the Conservative party threatened to resign because he w.as not given as great consideration from the Government in the matter of the Intercolonial railway patronage as he expected. The point I want to emphasize is this, and mark it, because it is worth while: The Intercolonial for thirty or forty years and until quite recently carried freight for less than one-third the amount charged by private-owned railways. Let that sink deep into the heart of my hon. friend, who I expect will vote for us before he is through. The country lost heavily, but Maritime Province residents got the benefit. I am satisfied that when the Intercolonial is amalgamated with the Grand Trunk system, which is required to link up the East with the West, we shall have a railway system that will pay.
Let me add that thousands and thousands of miles .of railway have been built in this country that never should have been built, much of it being simply >duplication. That is the result of this colossal railway blunder policy that has been carried on by both parties during the last twenty-five or thirty years. When we get the Grand Trunk incorporated into the public owned railway system, and have eliminated all waste mileage, swid let me add, all waste capital, we shall have a system that will pay interest on a reasonable capitalization, pay operating expenses, and give a valuable return to the people, if not in large dividends .at least in reduced rates. We have got the National Transcontinental, the Grand Trunk Pacific, the Intercolonial, and the Canadian Northern now, but they are no good to us without the Grand Trunk system. They are like the cow of the leader of the Opposition that is not giving any milk.' We have to acquire the road that will complete our system, and when that is done my judgment is that we shall be able to give an excellent service to the people and make a profit into the bargain. But one thing will have to be done. Owing to the absurd system that has been followed by both parties in this country, and both parties are equally responsible, we have allowed railroad exploiters to persuade us to pour immense sums of money intq their maws in order that they might construct railway mileage, useless or otherwise, to enable them to make off with vast amounts in construction guarantees, etc. Because of that foolish policy-and both parties are equally to blame-we have hum dreds, if not thousands, of miles of unnecessary railway mileage in this country at the present time. That has to be eliminated. The capital cost has to be erased from the public ledger and the country has to. take the loss. If we acquire the Grand Trunk and co-ordinate it with our already publicly-owned system we shall have a complete system with which the country can compete efficiently with the Canadian Pacific and without which we cannot compete with that great corporation.
It is all very well for the leader of the Opposition to say: "Well, we already have one cow, let us see what that cow does before we buy another." Surely the hon. member knows that the cow is dry-dry as a whistle. It has never given a pint of milk ever since we had it and until we get another member of the bovine species and link them up we shall never have a productive and successful system. We might go on until the crack of doom with a big railway mileage in the West and a big railway mileage in the East, but without connections in the centre we cannot operate through trains, or make a success of the system. WTe can never make a success of this without this connection and unless we take over the Grand Trunk at the present time in order to make any success whatever of the thousands and thousands of miles we have, we shall have to build a system in central Canada to connect up with. We have either to take the Grand Trunk or build a connecting system in Ontario or Quebec. That would cost us from $100,000,000 to $200,000,000. That is the only way. You can not make a success of this cow unless you give her a companion. When we have acquired the Grand Trunk, and it is the only logical thing to do, we shall have a system in this country which I believe will be a paying institution and will be capable of effectively competing with the Canadian Pacific.
I -think it was the leader of the Opposition who spoke of the failure of public ownership in the United States; if it were not he it was some other member of the Opposition. In the United States, since the outbreak of the war, the railways have been
i

taken over and operated by the people. It is true they have not returned dividends to the people, but I will tell you what they did do; they helped to win the war. And if it had not been for the taking over of the railway system by the Government of the United States the United States could not have been as effective in France and Belgium as that country was at the period when its troops were there. The idea of profits was absolutely subordinated to winning the war. Before the Government of the United States undertook to control the railways there were 23,000 miles of American roads in the hands of receivers. That was under private ownership. It is not surprising that under public ownership during the war, when the service was subordinated to the carrying of troops they *did not make a very great success of the *operation. In addition, however, there is far too much- water in the stocks of the American roads to make a success. Great Britain took over and operated its railways. I read recently in a white-book issued by the Government that during the operation of the roads by the Government they earned a profit of $81,000,000.
With regard to the Bill under consideration and which provides for the taking over of the Grand Trunk, I may say that the Grand Trunk owes the Government $90,000,000 under the Grand Trunk Pacific contract. I a,m informed, as I said at the outset, that when the agreement for arbitration comes to be made the interest of the people will be guarded. I am informed that no appreciation of Grand Trunk stock in the old land since it was known that the Government was negotiating for its purchase will be recognized. I am informed that the arbitrators will perfectly guard the interest of the public. If that is true I do not see that there is going to be any very great danger in taking over the road. Of the $115,000,000 of common stock of the Grand Trunk, I am told that no more than $15,000,000 actually represents money put into the railway. A lot of this money has been wasted. Of course, the stock sold very much below par and the money has been wasted. I do not think we have very much to fear in connection with taking over the line. The hon. member for Shelburne and Queens (Mr. Fielding) says that he is not opposed to public ownership but that the greatest and best public men of Canada are. I think those are his words.


Mr. FIELDING:: Not the "greatest" but the "gravest"-I do not want to exclude my hon. friend.


Robert Lorne Richardson: 
Mr. DENIS:: Does my hon. friend realize that after this Bill has been passed, the people, and especially this Parliament, will have absolutely nothing to do with the terms? I am putting this interrogation in answer to what the hon. gentleman has just said, " Let us buy the road on proper terms." If the road .was to be bought on proper terms, with sufficient guarantee, I am not going to say I would vote against the Bill.


Robert Lorne Richardson: I am delighted to
hear my hon. friend take that stand because it is precisely my own position. I propose to scrutinize the terms when they are brought down. I am assured that the enhancement of stock in the Old Country will not add one dollar to the price we have to pay, and that Grand Trunk obligations to Canada will be taken care of in the arbitration.


Jean-Joseph Denis: But we will have nothing
to do with it. After this Bill has been passed the matter goes into the hands of the arbi>
trators, and then all we have to do is to pay the amount of the award. That is why I say we will have no possible means of ascertaining whether the terms are proper, we will have no way of controlling proper terms or making recommendations to the arbitrators.


Edgar Nelson Rhodes: Order. The hon. member has spoken, and the member for Springfield has the floor.


Jean-Joseph Denis: I was merely asking the
hon. member a question. I was asking the hon. gentleman if he realizes that in this instance Parliament will be absolutely handicapped and powerless, after this Bill has been passed, in so far as the proper terms are concerned? That is my question.


Robert Lorne Richardson: I rather appreciate, Mr. Speaker, the kindly interruptions of my hon. friend. I can tell hy his voice and by his eye that be wants to do absolutely the right thing with regard to this Bill. I believe he will vote right when it comes to the issue. He wants to do right, and when a man wants to do right the greatest patience and the greatest kindness must be exercised in regard to him. Now, I cannot really tell my hon. friend-I cannot give him the guarantees he asks for. I may say that I was informed by a man-I would not like to say how close he is to the Government because I do not want to give away secrets-that all these questions will be provided for, and that under this arbitration not one dollar more, will be paid for the stock because of any enhancement or alleged enhancement of that stock on the money market at the present time. I was pleased when I heard that because I want to tell my hon. friend-


William Stevens Fielding: The hon. gentleman says he proposes to scan carefully the terms when they are brought down. Are we to have any other terms than those set forth in this Bill? The hon. gentleman intimates that some other terms are to be brought down and that we are to scan them. I have no intimation that there are such terms to be brought down.


Robert Lorne Richardson: Will there not be an arrangement with regard to the appropriation of the road? Will there not be some arbitration agreement?


William Stevens Fielding: To be brought down here?


Robert Lorne Richardson: Yes, I fancy so.


William Stevens Fielding: I do not know, I am asking the hon. gentleman for information.


Robert Lorne Richardson: I merely tell my hon. friend that I have been assured that the enhancement, or the alleged enhancement, of the price of the stock on the London market will not be allowed to affect the finding of the arbitration here. I may have been deceived.


William Stevens Fielding: That is not quite the point. My hon. friend says he proposes, for his own protection, to scan carefully the terms when they are brought down'. I have no intimation that we are to have any terms brought down, and therefore my hon. friend will not have an opportunity of scanning them.


Robert Lorne Richardson: I am under the impression that there is to be an arbitration agreement.


William Stevens Fielding: To be brought here?


Robert Lorne Richardson: I cannot say that it will be brought here, but I shall hope so.


William Stevens Fielding: All right,


Robert Lorne Richardson: I may be speaking in ignorance, but I was under the impression that the question would be more fully elucidated by the Government before the Bill finally went through Parliament, and I was hoping for further information on it. I take the position that I am just as sincere in my views iri this matter, and just as anxious to guard the public interest as any member opposite; and 1/ trust the agreement under which the arbitration will be submitted will be such as to absolutely safeguard the interests of the country.


William Stevens Fielding: And that it will be submitted to the House at this session?


Robert Lorne Richardson: Well, I have not got the ear of the Government. I have not got that assurance from them, and I am unable to give my hon. friend that assurance.
I want to say, Mr. Speaker, and I have taken up much longer time than I had intended, a word or two in conclusion. We are faced in this matter with the alternative of pouring millions and millions of dollars into the hands of the corporation unless we take a radical step, such as is proposed at this time, and take over this railway. Then we shall have a publicly-owned railway system which, will serve the whole country, and, I believe, serve it efficiently.
I am not of the view that the Canadian Pacific railway should be taken over. It is a magnificent railway system efficiently managed and pays well and every body wishes it well. No wonder it pays well in view, as I have shown the House, of the vast amount of money the country has given to it. I would have the Canadian Pacific railway continue as a competing road, and I think that if it remains so the public will be better served than if it becomes incorporated in our national railway system.
When we get this Grand Trunk Railway system incorporated in our own national system, as I believe we shall in a very short time, the next thing to do will be for this Parliament to eliminate all waste mileage from the public owned system, and write the cost off the ledger. Then we ought to charge rates sufficient to pay in-

terest on the reasonable cost, and only the reasonable cost, of the road, and maintenance and upkeep. If we start off with a fair capitalization we ought soon to be in a position to make the system pay as an enormous saving can he at once effected in the elimination of hundreds if not thousands of officials and offices which are now duplicated. But without a fair capitalization it is impossible, in my judgment, to make a success of our venture. The point is very important. Take the Grand Trunk road, its capitalization although constructed when material and labour were absurdly cheap has climbed to the enormous figure of $127,000 a mile. The capitalization of the Canadian Pacific, which was built under pretty favourable auspices, is $69,000 a mile, the Canadian Northern still lower $54,000 a mile, and the Grand Trunk Pacific which was built under very bad auspices, as indicated by the report showing $40,000,000 of extravagance and graft, cost $98,000 a mile. $127,000 a mile is an enormous capitalization, for it must be remembered that the Grand Trunk was built in the early days, and I do not see how it could have cost that large sum. But I suppose there were railway exploiters and manipulators, and they probably sold railroads on political bases to the Grand Trunk just as readily in those days as in more modern times, which probably largely accounts for the enormous capitalization. The Manitoba Railway system which the Northern Pacific built some twenty years ago only cost $9,000 a mile. Compare with that the capitalization of the Grand Trunk at $127,000 a mile! Of course, that includes equipment. But the difference is out of all proportion. And the Canadian Pacific even at $68,000 a mile is much too high. However, the Canadian Pacific Railway Company added to their capital. They issued tens of thousands of dollars worth of capital stock. They distributed the original first issue of stock among themselves at 25 cents on tlhe dollar, set the proceeds aside and paid themselves interest at 6 per cent, and in four years recouped themselves every farthing they paid for it, and they owned the stock into the bargain. That is the way these transactions have been carried out. The city of Winnipeg built a railroad 100 miles in length out to Shoal lake, along the waterworks aqueduct, on the Lake of the Woods, and from the figures I have obtained the cost of construction and equipment - of course, the equipment is not great- was but $12,000 a mile-all constructed within the last five years. If we are to make a
success of our publicly owned system, it is very important that we reduce the capitalization to the figure it would take to reproduce the system, and then let us pay interest on that reasonable capitalization, which will enable us to give the people rates very much less than are being charged at the present time.
I think that politics can be kept out of the management of this publicly owned system, Mr. Speaker. I have yet to learn of any political interference since the Intercolonial railway and the Canadian Northern railway and the Grand Trunk Pacific passed into the hands of the board at present managing them-at least no complaints have reached me-and I believe it is the duty, as I am advised it is the resolute intention, of this Government to keep the system absolutely free from politics. If it does, I have no doubt that we can operate it successfully.
Last session I took the view that it would be unfortunate if we had to take over this Grand Trunk system under arbitration owing to our distressing ten million experience with the wretched Canadian Northern railway stock, but there seems no help for it. I am told that the difficulties of allowing the system to pass into the hands of a receiver and then acquiring it would be insurmountable, because so much of the system is in the United States. I am told that event the plan of purchasing or guaranteeing to pay a certain return on the bonds and stocks would not do because we cannot acquire control. I hope when the time comes to appoint arbitrators we shall get a good business board. God protect us from too many legal quibblers on the board. I do not think we ought to have lawyers-we might have one legal gentleman. But if we have a business arbitration, and the arbitration agreement which I rely upon is of the right character, I cannot help thinking that the country does not take much risk even in going into arbitration. The difficulty, however, is that for two years the Government has been endeavouring to acquire the road by purchase. We said that we would guarantee so much interest on the bonds and debentures, but the Grand Trunk people would not accept our offer, and nearly two years ago the Government proposed arbitration. Arbitration seems to be the reasonable thing under the circumstances. If you and I, Mr. Speaker, cannot agree upon a certain point, I would think you would have a right to feel very much offended if I declined to agree to submit our difference to

a third, party. Surely we can get justice from arbitration, providing it is of the right character. If we have business arbitrators I should think they would at least do justice to the people of Canada. I would not like to see three judges appointed. I think the arbitration board should be composed of two business men, with perhaps a judge as a third man to look into the legal aspect of the case.
Now, Mr. Speaker, I must apologize for having taken up so much of the time of the House, but this is a great subject and perhaps none of greater economic importance has come before this House in the last twenty-five years. The issue means a great deal to this country. I do not know whether the arbitration agreement will foe submitted to the House, but when we are in Committee on the resolution I suppose we shall have every opportunity for further discussion. I want to say in conclusion that 1 find difficulty in understanding the Liberal party-or the remains of the Liberal party- offering opposition to public ownership in view of the position which the Hon. Alexander Mackenzie, practically the creator of the party, took on this very question. It must be a compelling spectacle to the interested historian and to every reflective citizen to see the descendants of the old Conservative guard allied with the progressive elements of the old Liberal party in carrying out the most progressive legislation which this country has ever witnessed, whilst the apparently all too willing, even if unconscious, remnants of the once proud and virile party created by Brown and MacKenzie appear in this House as the agents or servants of arrogant and malign interests to try to block this important legislation.


Mr. H. H. McLEAN (Royal):: 
John Dowsley Reid: I might say to the hon. member that I intend answering that statement as soon as I have an opportunity, but the statement is not correct.


Hugh Havelock McLean: In what particular is it not correct?


John Dowsley Reid: As to the annual charges of $20,000,000 that it is claimed the Government will be liable for.


Hugh Havelock McLean: Is the statement in detail of the different companies, the bonded indebtedness and the rental to be paid, correct?


John Dowsley Reid: I do not agree with the statement at all.


Hugh Havelock McLean: I would like to ask the Minister of Railways to point out in that statement one detail that is not correct.


John Dowsley Reid: I will give the matter in detail when I address the House, or if the hon. member has any particular point on which he wishes information now, I shall be glad to furnish it.


Hugh Havelock McLean: Supposing I read to the Minister of Railways these particular items; or still better, the Minister of Railways, I am sure, is willing to give us all the information possible; I am sure he is very anxious that we shall have correct information, and I am sure he will during recess look carefully over the statement to which I refer-that will take him only a few minutes-and point out to me before I go on wherein that statement is not correct and wherein the figures made up from the statement are in error, because that will be a fair thing to do, as I am relying on the correctness of this statement which was made a number of days ago by an hon. member and to the correctness of which no objection was taken.


John Dowsley Reid: Who made the statement?


Hugh Havelock McLean: The hon. member for Bellechasse (Mr. Fournier). It will be found on Hansard, page 1145, of October
16.	I should be glad if the minister would during recess look carefully over this statement, so that he will be able, when the House resumes after recess, to tell me wherein there is any error in the statement, in the amounts, or in the total figures, and I can then continue my speech.


Edgar Nelson Rhodes: The hon. member will hardly desire the Minister of Railways to make what will be in effect a reply before the hon. member continues his speech. It is somewhat unusual for an hon. member who has the floor to interrogate either a minister or other hon. member in his seat. The Minister of Railways siays that he is going to make a speech during the course of the debate, as he is entitled to do under the rules. It would be better that the rules of the House should be adhered to.
At six o'clock, the House took recess.
After Recess.
The House resumed at eight o'clock.


Hugh Havelock McLean: It seems to me that every one who knows Sir Henry Drayton, who made this report, knows what a careful man he is in making statements, knqws also the advantages that he has had from having presided over the Board of Railway Commissioners, and when he and Mr. Acworth, the great English authority who was associated with him, made that statement, we have a right to assume it is correct.
I wish now to draw the attention of hon. members to a statement made by Mr. A. H. Smith, President of the New York Central Railway Company and Chairman of this Royal Commission. He stated, concerning what we call the Drayton-Acworth report, that the plan proposed by Sir Henry Drayton and Mr. Acworth of taking over the railway would add about $1,000,000,000 to the debt of Canada. The interest on this, he says, would be about $40,000,000. He also points out that the fundamental defect of their plan is in placing the Government in the railroad business in which they would be operating railways not only in Canada but in the United States where they would be subject to both Federal and State regulations. That will be found at page ci. Mr. iSmith as we know is a man of great experience. He is the head of one of the greatest railway systems of the United States. He and Sir Henry Drayton went over every part of this system and made a careful personal examination. Mr. Acworth came later and did not go over the system.
There you have the opinion of a railway expert with a thorough knowledge of United States conditions, and in his opinion the amount required would be $1,000,000,000. He further points out the fundamental defect of a plan under which the Government of Canada would endeavour to operate a system of railways with such a large mileage in the United States where they would be subject to Federal and State legislation. Mr. Smith proposes, at page cii, a plan or scheme by which this operation could be carried on. As I remember it, without troubling the House by reading the report, briefly it was that the Government should get the Canadian Northern and Grand Trunk Pacific in the West, that they should make a traffic arrangement with the Grand Trunk in the East and that with the Grand Trunk they should operate these systems. Then we have an alternative plan proposed at page civ. It is to form a private company and to give the company an opeiating lease to induce private enterprise to undertake the management with a profit sharing plan which would give the public a share in the profits. You will of course under-
stand that Mr. Smith was against government ownership. His alternative scheme was to get a private company to take over the properties. They would be under the control and subject to the regulations and orders of the Railway Commission; they would be induced, of course, by the agreement that would be made, to embark capital in this enterprise, and any profits made would be shared with the Government. That seemed to me to be a practical scheme, a good scheme, and one that I think it would have been wise for Canada to adopt -it would have been wise for this country to take Mr. Smith's advice on that point.
I will not detain the House with any further figures in connection with these enormous obligations, and interest obligations, that we will have to assume on taking over this road. The figures are so big that a person can hardly grasp them. We are accustomed now to speaking about millions, and then we get up to billions, and we toss these figures about as if they were merely dollars. Really, Mr. Speaker, it is difficult for a man to grasp or to take account of the enormous sums of money which we have expended, and which we will have to raise in the future to meet further obligations.


William Findlay Maclean: If we are committed to these great expenditures what do we get in return therefor?


Hugh Havelock McLean: We get the Grand Trunk Pacific which is bankrupt, and the Canadian Northern which is in the same position. . We also get the Grand Trunk which, the hon. gentleman (Mr. Richardson) told us this afternoon is also about bankrupt.


William Findlay Maclean: Do we get no
income?


Hugh Havelock McLean: According to the Drayton-Acworth report the Grand Trunk paid dividends-a great many million dollars, I forget the exact amount-which they should not have paid, which money should have been put into the road. That means that -for a great number of years past the Grand Trunk Railway Company have practically been bankrupt. If that company is not bankrupt, if they can go on as they have been going on without assistance or help, what is the necessity for our stepping in and grabbing that road from the shareholders'-paying them back part of their stock investments and carrying on the railway as a government concern? Further than that, we know that the reason

the Canadian Northern was not successful was its unlawful ambition, so to speak, to parallel other lines of railway in order to get a terminus on the Pacific coast. And it is the same with the Grand Trunk Pacific; they have made enormous expenditures in order to be able to say that they went to the Pacific coast. That is also the reason why we are assuming these great obligations at the present time-simply to say that we have got a road from the Atlantic to the Pacific owned by the Government of Canada. I will speak a little later as regards one aspect of the case, the Grand Trunk terminus at Portland, Maine, but now let me resume where I left off when my hon. friend (Mr. W. F. Maclean) interrupted me to ask a question.


William Findlay Maclean: I did not intend to interrupt the hon. gentleman.


Hugh Havelock McLean: Very well, go on and ask your question.


Georges Henri Boivin: Order.


Hugh Havelock McLean: What I am endeavouring to show now is Canada's financial position-the position in which we stand at the present time. I am satisfied, Mr. Speaker, and I want to satisfy the House, that our financial position is not such as will permit us at the present time to undertake these great obligations. For the purpose of illustrating my point, let me endeavour to strike a trial balance. Canada started business in 1867 with a gross debt of ninety-three millions and an interest liability of $4,500,000. In 1914 our debt had grown to $544,000,000; and our present debt, I believe, to be about $2,000,000,000 in round figures. There is another matter we require to look at. We have become a borrowing country. Canada must borrow money, enormous sums of money, to carry on. We have already borrowed great amounts, but we have to borrow more. We shall have to negotiate another loan after the present one -perhaps one or two more after that.
What is our financial position? Besides the great debt of about $2,000,000,000 that we owe at the present time our various provinces owe very large sums of money. I have here a statement showing the indebtedness of all the different provinces, and without giving the details I may state that the gross amount is $264,706,000. And you must remember that some of these are short-term obligations. You must likewise bear in mind that the provinces must also go into the market to borrow money. You must further recollect that we have got to raise in Canada
the money that requires to be borrowed now, because we have been told by the late Minister of Finance that we practically cannot borrow it outside; the only amount that we could borrow in the United States would be about $75,000,000, and on the last loan of that amount we had to pay a very stiff rate of interest. We cannot assume that we can borrow in the United States more than $100,000,000, therefore, we must take a survey of the financial position of this Dominion and the financial position of the several provinces. Let me go a step further and give you a statement of the municipal indebtedness, because that is a matter that must be taken into consideration. You have to go to our great cities and to our prosperous counties in order to get money from our own people. The municipalities will have to borrow money in the future; they have to pay interest on the money they have already borrowed; and they must renew these loans, which means more money to be borrowed. It is difficult to arrive at the municipal indebtedness, but I find that taking 62 cities and towns in Canada the total bonded indebtedness amounts to $456,000,000. The population of these cities and towns amounts to 2,598,000, making an indebtedness per head of $210.17. Now if these cities and towns are fairly representative of the whole of Canada, the latter figure would yield a key 'to the situation. The total population of Canada residing in urban communities of over 500 inhabitants is 3,281,000, and therefore the total municipal indebtedness for the Dominion, based on the figures I have already given, $210.17 per head, would amount to $689,500,000. That, of course, is an estimate. If any gentleman would like to have my authority for these figures I shall be very glad to furnish it, but I am quite positive the statement is absolutely correct. Now then, let us sum up: Canada's net debt at the present time is about two billions. The debts of the provinces amount to $264,500,000; and the municipal indebtedness $689,500,000; or a total for Canada of $2,954,000,000, almost $3,000,000,000.
But in addition to this we have to look after our other liabilities. Here is a statement made by Mr. Fred. Field of the Monetary Times, in regard to our external liabilities:
British capital invested' in Canada $1,878,900,000; United States capital invested in Canada $1,272,850,000 ; estimated Canadian flotations in London upon to 1918, over $937,000,000 ; or total liabilities of about $4,089,750,000.

Then there is our indebtedness to investors in France and Holland, which he estimates at about $5,000,000. These figures, of course, it may be said, have no bearing on the matter. But they have this bearing, and a very important one, too, that financial people when lending money to a country naturally want to know what are the liabilities of that country, and they would look not only at our national, but also at our provincial and municipal debts, because they know that in order to redeem these loans we have to go to our own people to raise the money.	.
In his Budget speech of June last Sir Thomas White gave us the financial condition of the Dominion. He stated:
This is a war year and it was necessary also to add the estimated expenditure which has been and will be incurred on account of demobilization. This will aggregate the large sum of $300,000,000, including $92,000,000 for war gratuity. The entire estimated expenditure, therefore, of the year on ordinary account, capital account and for demobilization will reach the large total of $620,000,000.
And he gives the items making up our revenue for the year, which he fixes at $280,000,000. Then he proceeds:
While from the statement which I have just made it will appear from our total estimated expenditure, ordinary and capital accounts, and for demobilization, will amount to $620,000,000, our estimated revenue on the present basis will reach only $280,000,000. Putting it another way, our revenue would enable us to pay only our ordinary expenditure and leave a small amount to be applied to other purposes.
Sir Thomas White also stated that:
This year the I>ominion Government mU3t find not only its ordinary expenditure of $270,000,000, for which its revenue will barely suffice (in fact I doubt if it will meet the ordinary expenditure) but also the capital expenditure of $50,000,000. In addition to that, large expenditures in government railway systems, ship building programme and expensive credits which we have been obliged to give to Great Britain and other countries. The amounts involved are exceedingly large. Outside of England, about $106,.(HM),000>
of credits have been issued, viz.: to Belgium Prance, Italy, Rou-mania and Greece.
Then he takes up the question of how we are to raise this money. He stated that our ordinary revenue is not quite sufficient to meet our ordinary expenditure. As to additional revenue from taxation, he states that the main source of our revenue is our customs, our inland revenue, our income tax and our business profits war tax. As regards our income tax, in his opinion, it cannot be made any higher. It is now as high as the United States' income tax. Then he points out the fact

that as regards income tax there is a provincial income tax in some of the provinces, a municipal income tax, and the federal income tax, and he gives as an example the province of British Columbia, where they have three sets of taxes imposed on income; and in Nova Scotia they have two. He also stated that our business profits war tax would be renewed. In view of the circumstances Sir Thomas White said he did not see any escape from our floating another loan. Out of the loan we were then making, he stated, $300,000,000 was due to the banks, and that they might agree to $72,000,000 of that amount standing over for another year, but that that would mean we would have to make another loan at least next fall.
If we are taxed to the limit now, what is left to us? Mr. R. W. Breadner, Commissioner of Taxation, and Sir Thomas White are of the opinion that practically the only further tax that can be levied is a tax upon land-and the farmers of this country may as well know the position we are coming to. Such a tax will mean that every farm will have to pay taxation according to a valuation. As pointed out by Mr. Breadner, it is a difficult tax to collect, because, it requires such a large number of people to make the valuation and collection. I have here also the statement of the Prime Minister (Sir Robert Borden) with regard to the financial condition of the country, but I shall not read it; it is in line with that which was made by the ex-Minister [DOT]of Finance (Sir Thomas White).
Now, to sum up, this is the way the case presents itself to me. We have great resources, and in order to develop those resources, we want capital. If we impose taxes which are too severe we shall prevent the investment here of the capital which is necessary to the development of our resources. Moreover, we have to raise large sums of money by way of loans, without taking into consideration at all any liability imposed upon us in respect to the Grand Trunk. There may be another large loan next year; shall we he able to raise that money in Canada? In view of these circumstances, this country ought to go slowly; in the words of the railway watchword, we must "stop, look, listen." There is no necessity for our rushing in and taking over the Grand Trunk at this time. The bugaboo is put before us :hat if we do not take it over the Canadian Pacific will take it. But in order to take over the Grand Trunk the Canadian Pacific must come to this Parliament for the

necessary legislative authority, and in that legislative authority we can impose whatever -restrictions we think proper. But it is idle to -think that the matter will be considered at all by the Canadian Pacific at this time. Besides, look at the obligations of the Grand Trunk in respect of the Grand Trunk Pacific. Do you think that any private company would take over the Grand Trunk with all those enormous obligations standing against it? The Government, as mortgagee, have the most absolute control over the Grand Trunk. They need not take it over; they can take it over two or three years hence just a-s well as they can do it now, and in the meantime they can go ahead and attend to the business that is in hand-that of developing and managing the Canadian Northern and the Grand Trunk Pacific, the latter being in the hands of the Government as receiver.
The Minister of Railways (Mr. J. D. Reid) says that the management of this road, should it be taken over, will be kept entirely out of politics; that no political influence	will be exerted	in connection with it in any shape or form. Well, who appoints the manager and directors?	The	Governor in Council.
Who fixes their salaries? The Governor in Council, I suppose. Who has to supply the money -for the deficits? The country, through the Government; we must supply the money. Do you mean to say that the Government are not going to exercise any control over the expenditure or the management of that road? If the Government wanted anything done, would the manager dare to refuse to carry out instructions? That reminds me of an old s-to-ry. Commodore Vanderbilt had bought some new cars for the New York Central. He called in his head painter -and said: " Now, Tom, you are absolute in your own department;
I would not think of interfering in any way. 1 want these -cars painted; I don't care a darn What colour you paint -them as long as you paint them red." It will be -something the same with the instructions that will go out -from the minister to the manager of the Government railway system: " You can do as you please-if you do so-and-so and so-and-so.''
I may add that throughout the country a spirit of distrust prevails with respect to the -management of the Government railway system. I have nothing to say against Mr. Hanna, the general manager; he seems to be a very capable man. But for ye-ars be a-cted for the Canadian Northern as the servant of Mackenzie and Mann, and nat-79
ur-ally one would think -that Sir William Mackenzie could exercise a great deal of influence over our general manager if he wanted to. Mr. Hanna and Mr. Mitchell will be practically in control of our great rail-way system. Of course, if they do not carry -out their work efficiently the Government can, and (probably will, make a change. But it is a fact that the country has not absolute confidence in t'he men who are managing our national railways, and this attitude is due to the -manner in which these men were educated in railway work by Mackenzie and Mann and to the fact that certain men- interested in railway matters are now their bosom friends. To these men they would naturally go f-or advice, and as I say these men could, if they wished, exercise some influence over them.
My other objection to the taking over of this road is based on my opposition to government ownership. For many years I have been opposed to public ownership. In 1891 when my partner and I bought the Daily Telegraph we published a number of articles against government ownership. In 1903-04 when the matter of the Grand Trunk Pacific was put before the country I came out on the hustings against government ownership and in favour of private control. I believe in government control through the Railway Commission,-and if that body did not have sufficient powers, I was in favour of giving full and ample power to them. I have always been strong and consistent in my opposition to government ownership.
Just in that connection, some one said to me during the recess for dinner: " It is all very well for you to oppose this thing; you are solicitor for the Canadian Pacific." Well, I am like a great many other professional gentlemen in this House who have taken retainers from the Canadian Pacific Railway Company. I am glad to say that never at any time during which I have acted for the Canadian Pacific have they attempted in any way to influence my action on the occasion of an election. I will give you an example. On the occasion of the reciprocity campaign I was a candidate. I had then some heavy retainers from the Canadian Pacific in connection with large matters of business. Sir William Van Horne came to my county and spoke against me. But he did not attempt to influence me, and his attitude made no difference whatever so far as their having further dealings with me was concerned. Hon. members know whether the Canadian Pacific have been sympathetic with the Liberals or with the Conservatives during the



last number of years. Until the last election I had been a strong) fighting Liberal, but during all the time that I was active and aggressive as a Liberal the Canadian Pacific Railway Company did not attempt to influence my vote in any way or to do anything which would affect my position in politics.
I do not believe that the Canadian Pacific would in any way interfere with the solicitors who act in their interests. There are /horn, members sitting on your right, Sir, who can back -me up in that statement. From time to time, statements have been made that the Canadian Pacific conducts lobbies. I am not in the secrets of the Canadian Pacific, but I do not know personally of any such lobby having been conducted in this House, and I think I can fairly make the statement that no hon. member can say that he has ever been approached by any Canadian Pacific official endeavouring to influence him in this matter. As regards public ownership, the Canadian Pacific may have a different opinion from the one I hold; I do not think they hold such strong views in the matter as I do. For example, this is a statement given out to the press a short time ago by Mr. Beatty, President of the Canadian Pacific Railway Company:
The desire of every one is that Canada to-day should have a railway system, or systems, so administered that the hest service to the public will he obtained at the lowest rates consistent with fair wages, both for labour and capital. 1 say fair wages because without them efficiency, loyalty and enterprise cannot be obtained, and without these things the quality of work which ensures efficient operation and low rates cannot be secured..
I am sure that every one will agree with that statement.
The question therefore is: Will government ownership bring about this result? the question sounds simple but is in reality complex. Theoretically much may be said in favour of government ownership. Will those theories stand the test of practice? If those theories prove a failure initially but correct themselves, in course of time, as their exponents may urge, how long a time can the Canadian people afford to pay the losses on a demoralised railway service?
That seems a fair and common sense statement. He does not come out in favour of government ownership, but he says: There is what is required; will government ownership bring about this result? If it does not, it means on the other hand that tbe service will be demoralized. Then he says:
Do they wish to launch out on the experiment now. or wait until our near neighbours, the United States, have worked out their ex-

perlment a little more satisfactorily? The cost of our own experiment could not fail to he great, a cost certain to be collected, directly or indirectly, from the pockets of the Canadian people. Railway men have an admirable slogan which I feel inclined to commend to the attention of the people of Canada at this moment, namely, "Stop, look, listen."
That seems to be a fair, strong and able statement. Mr. Beatty goes on to give his own views:
X have my own views on public ownership of railways, but they are not unalterable. I am undoubtedly prejudiced by association with one company. That company has slowly developed to a point of efficiency and successful operation. Looking back over that history one is amazed at the importance of the part played by men whose enterprise, resourcefulness and tenacity of purpose could not, I think, have been stimulated and given rein in any civil service. It has taken more than thirty odd years to make the Canadian Pacific railway as efficient as it is to-day. It was not easy. The consciousness that it is so easily shattered is largely responsible for the constant and intense ambition on the part of officers and men to maintain, and even improve on, the tradition.
This much may, it seems to me, be said with confidence now, namely, that we do not know enough that is encouraging about government operation of large railway systems to justify any furl her excursions into that field at this time.
This man of great experience, head of one of the great railway systems, without giving a statement in favour of government ownership, but stating the facts as he' has done fairly and fully, says that we do not know enough yet about the operation of large railway systems to justify any further excursions into that field now, that is, the field of government ownership.
To argue from the experience of old countries where civil service obtains a much better share of the ambitious young men than in Canada, or to argue from the alleged success of comparatively local affairs, or government organizations dominated by exceptional personalities, is unfair-not to the railways, but to the country which has so much at stake in this issue. We can well afford to wait, to study dispassionately our own situation, and the experiment of the United States, before committing our country to serious changes in policy. The solution finally adopted in the United States will be of inestimable value to Canada, meantime too, the experience which Canada will now have of the present newly organized government system will demonstrate many things. It will indicate very largely the general nature of thfe results we may hope to secure from an extension of the system. . . .
I invite hon. members to consider carefully this statement made by the President of the Canadian Pacific Railway Company.


William Findlay Maclean: I would like to
ask the hon. and gallant member whether Mr. Beatty of the Canadian Pacific is or is not disposed to give more for the Or^,nd

Trunk than the Canadian Government is now willing to give for it?
Mr. H. H. MoLEAN:	The hon. gentleman had better go and ask him.


Mr. CROTHERS:: I have a great respect for my hon. friend's judgment, and I would, therefore, like to ask him a question. Assuming that the Grand Trunk is unable to carry on without further assistance from this Government, and the other fact that this Government owns and controls the Intercolonial, the Canadian Northern, the Grand Trunk Pacific and the Transcontinental, what alternative would the hon. member suggest to the Government's proposition?
Mr. H. H. MoLEAN:	It would be very
difficult for me, with no knowledge of railway operations, with the very limited experience that I have had, to outline, just on the call of the minute, a general scheme for the management of a great
9 p.m. railway system. That is for the Government themselves to consider, but I brought before the House the opinion of the President of the New York Central, the Chairman of this Railway Commission, a man of vast experience and knowledge, and he condemns utterly government operation of Canadian railway systems for the reasons that he gives in his report, and he proposes a private company to be formed under such restrictions and in such a manner as will safeguard the interest of the country and ensure such efficient operation as will induce capital to go into that company. You would have all the safeguards of a Railway Commission and other safeguards surrounding it and, as he says, the profits are to be divided. Thus we would have private operation, private ambition, and the country would get the service and would have the profits divided. That is one proposal made by Mr. Smith.
I am very glad to say that I shall be through very soon. When I got up to make an address, -T thought it would take me only a few minutes. I felt I had to give the reasons why I was voting against the Rill, and I endeavoured to boil down my reasons and make them as short as possible.
To sum up. I am against Government ownership. I have been for a number of years in favour of private ownership and Government control. This we have through the Railway Commission. Their control has been efficient and effectual, and their decisions have commanded the respect of all railway men. It is impossible for me in the limited time at any disposal to go 79*
fully into the arguments against public ownership. Books and pamphlets by the hundred have been issued on public ownership, pro and con. My principal grounds of objection are: First, the inability of state-owned roads to earn sufficient money to pay interest on the capital invested. Second, the interjection of politics into the service to the detriment of discipline, and at heavy cost to the Government. Third, the failure of the Government to operate the railways strictly as a business proposition. Fourth, the service, both passenger and freight, becomes worse. Fifth, it is a step towards socialism.
I do not want to argue these grounds in detail. As I have said, authorities pro and con have issued pamphlets on the subject by the hundreds. The authorities I have are Mr. Acworth, one of the members of the Drayton-Acworth Commission, who in his book makes a strong statement against Government ownership, and Ralgrave, the great authority on political economy, who also makes a strong statement against it. I will not take up the time of the House to read extracts, but will only say that these*are two great authorities. Of course, I know authorities sometimes differ, just as in law cases; one side will bring forward what seems conclusive authority, to he followed by equally conclusive authority from the other side, and it is for the judge to decide. In this case it is for the House of Commons to decide, and on their decision we must rely.
The hon. memlber for Springfield (Mr. Richardson) said this afternoon that the operation of railways in Great Britain under Government ownership had been a great success. My hon. friend must have been misinformed. I have a statement here showing that the railways of Great Britain before being taken over by the Government were on a 4 per cent earning basis, and the Government guaranteed these earnings when they took over the roads. Under Government management the estimated annual deficit is about $440,000,000, or as Sir Eric Geddeis said, about $1,250,000 a day. The British Government must continue to operate these railways for two years more and pay rental to the owners. In the United States the roads were taken over by the Government after the war had been on for a long time, during which time all the great trunk systems there had been showing a fair profit. When the Government took over the roads they guaranteed to the shareholders the average net earnings for the three years prior to the war, and if

no profit was made the shareholders ,re-ceived no dividends. What was the result? Mr. A. B. Cummings, Chairman of the Committee of Interstate 'Commerce of the United Slates Senate, on August 5, 1919, said fpage 3W0, Congressional Record):
We lost 240 million last year, and we lost ri the four or five months of this year 260 million; and we are now losing at the rate of 39 million per month.	[DOT]
That has 'been the experience of Great Britain and the United States. True it may be said that these are war times, when the cost of labour and materials is abnormally high, Then why does not the Government stop, look, and listen, and wait for two or three years until conditions become more normal? Why rush in at this time and incur the enormous charges that will have to be borne?
Now let us see what has been done under private ownership. The Canadian Pacific railway under private ownership and private control has also had to pass through the war period, and was subject to the same conditions in regard to high cost of material and everything else as the government-controlled roads, but the Canadian Pacific has been able to pay full dividends to their shareholders and put by a handsome surplus, besides contributing large sums for war purposes. They were able to assist Great Britain's financing in the United States by putting up their valuable securities. Contrast that with the results obtained under Government ownership.
I regret I have taken up so much time. Not being a speaker, I thought it would not take long to make my statement, but it takes a very much longer time than an inexperienced speaker would expect. I wish to draw the attention of the Minister of Railways to a matter in which the people of St. John are vitally interested. The St. John Board of Trade a few days ago passed the following resolution:
Resolved, that this council views with grave apprehension the acquirement by the Government of Canada of the Grand Trunk Railway, including that feature which would involve the owning and operating of a railway in a foreign country, and in the absence of fuller information would oppose the plan. The council would, however, welcome any person that the Government might feel disposed to depute to explain to the hoard the advantages to the country of the action proposed, and in the meantime would maintain an open mind on the subject.
The people of St. John are also much concerned over a statement made by the Minister of Railways on October 15, in answer to a question by the hon. member for 
Antigonish and Guyslborough (Mr. Sinclair), as follows!:	.	-
Mr. J. H. Sinclair:	The policy of the Grand
Trunk, as I understand it, has always been to make Portland, Me., the Atlantic terminus for their traffic. What is the view of the Minister of Railways with regard to that? Does he intend to continue that policy?
Mr. J. D. Reid:	So far as I am concerned,
as I stated a few minutes ago, when we took over the Grand Trunk Railway system we would have one great national system of railways, and we must get the very best men available to manage this system and they must of course adopt whatever policy they think is best to ensure successful operation. I could not express an opinion on the question put hy my hon. friend. The manager to he appointed will be the only person in a position to answer such a question.
The hoot', member for Antig-onish and Guysborough says:
I presume from his answer that the minister does not intend to continue the policy that the Grand Trunk management has always pursued and maintain Portland the Atlantic terminus.
Mr. J. D. Reid:	I can only say that whatever is the best course in the interests of the railroad will he adopted. I could not give any opinion as to what particular policy will be pursued.
That is a matter which our people in St. John are very much agitated over. They are afraid, as the people of Halifax are, that taking over the Grand Trunk and putting it under a business manager will mean a continuance of the policy adopted by the Grand Trunk. For example, we have in the evidence before the royal commission' the following statement made by Mr. Chamberlin, general manager of the Grand Trunk, at page 76 of the report:
Commissioner Acworth:	Therefore if the
Grand Trunk, as it does at present, were to send traffic through Portland instead of through Halifax it would be a fraud on the agreement?
He is referring to the Transcontinental railway agreement by which freight originating in Canada had to be shipped through Halifax or St. John.
Mr. Chamberlin:	Yes. We are bound to go
on with all that tremendous outlay and to carry that load and yet not get one dollar benefit from it. The Grand Trunk simply cannot carry it.
Mr. Biggar:	It is provided for in the agreement dated the 29th of July, 1903, chapter 71, statutes of Canada, 1903.
Under the agreememt freight from points in Canada had to be carried entirely through Canadian ports, and so on. At page 79 Mr. Chamberlin says again:
How are we to go on carrying the burden if we are forced to carry all that stuff all the way down there at Boston and Portland rates?

All the way down there meaning to St. John and Halifax.
Sir Henry Drayton:	Your second point is
that of impossibility.
Mr. Chamberlin:	It is an impossibility. It
was always impossible.
Now, Mr. Speaker, it is a serious matter to our port at St. John. The port of St. John itself has expended a large sum of money and the Government propose to spend a further large sum of money on that port. At Halifax a large sum has been expended. The distance to Portland is much shorter than the distance to St. John or Halifax. We have the statement made by Mr. Chamberlin that it is impossible, practically and on a paying basis, to carry out that condition of the agreement. When it is put up to the Minister of Railways by the hon. member for Antigonish and Guys-borough, when the minister is asked: " How are you going to carry out that agreement? -the minister answers that it will be left entirely to the manager. We are told that they will get the best man as manager. What will a practical railway manager do? He may be influenced by Mr. Chamberlin's opinion; he may be influenced by the opinion of the traffic men on the Grand Trunk. If he is influenced by their opinion he will use these very valuable terminals at Portland. Instead of shipping the long distance to Halifax and St. John, and being guided by the principle that Canadian freight should be shipped to Canadian ports, he may be influenced by the policy of the Grand Trunk in that respect.


Mr. MEIGHEN:: I understand the hon. gentleman to favour the turning over of all these railways, including the Grand Trunk, to a private company. What does he think the private company would do in relation to these shipments?


Hugh Havelock McLean: What did we do when we made the contract with the Grand Trunk Railway Company and the Grand Trunk Pacific? We put a clause in the agreement and in the statutes and made it the law of the land that all freight received in Canada from Canadians should be shipped through Canadian ports. There is the law, and if you made a binding agreement with a private company you could put that clause in again.


Arthur Meighen: The hon. gentleman does not quite 'State it correctly. Really it was " unless otherwise routed by the shipper." That is very important. That being the law of Canada in relation to the Grand Trunk Railway Company now when the
stock is owned by individuals, will it not still be the law of Canada in relation to the same company when the stock is owned by the Government? What is the difference?


Hugh Havelock McLean: I do not think it will. Here is a new company. This stock which is being taken over is to be destroyed. The other stock is to be transferred to and acquired by a new company, the Canadian National Railway company. Now it depends on whether all laws that would bind the Grand Trunk and Grand Trunk Pacific would bind that new company I do not know about that. It will depend upon what legislation is passed or what agreement may be made because it is very easy to wipe out a clause of that kind and it may be difficult to put such an obligation on the new company. If my hon. friend will undertake as a lawyer to say that St. John and Halifax will be left in the same position, that the law as it now stands will be reenacted and carried out absolutely by the Canadian National railways; in other words that no matter what the manager wants to do freight received in Canada will be shipped through Canada, I will be perfectly satisfied. That is all we want. In view of what the Minister of Railways has said we are beginning to be a little afraid as to what may happen.


Mr. J. E. ARMSTRONG (East Lambton):: Mr. Speaker, it is not my intention to follow the argument of the hon. member from Royal (Mr. McLean) at any great length, but I would direct the attention of the House to the fact that he has just now stated that he is opposed to Government ownership. He has been opposed to Government ownership since 1891. He was opposed to it in 1903 and 1904, and he assisted the Government of that day in bringing about the legislation whereby the Grand Trunk Pacific was brought into being, which is now saddled on this Government and upon the bonds of which they are now compelled to pay the interest. The hon. gentleman was a supporter of the Government that carried out that proposition.
He talks about the financial affairs of this country. Had it not been for the enormous sums of money that were spent on the building of the Grand Trunk Pacific and the Transcontinental, it would be an easy matter for us to finance the affairs of Canada at the present time. The hon. member for Royal calls attention to the fact that the Grand Trunk agreement of

1904 had a clause in it by which the company were compelled to route certain freight to St. John and Halifax. If the shipper in Canada wished to have his freight routed to St. John and Halifax they were compelled to ship it that way. But there was no other arrangement whereby they were compelled to ship it in that way if not so directed toy the shipper.
He calls attention to the fact that the Government of this country are likely to ship a great deal of freight to Portland. Let me inform him that the Grand Trunk Railway Company, with their double track from Niagara Falls to Chicago, handle on that line enormous quantities of freight gathered in the latter city, brought on through Toronto down to Montreal and shipped to Portland. Why? Because the shipper in the United States definitely and distinctly asks that these goods he shipped through Canada to Portland. The Grand xrumk Railway Company have been able to acquire hundreds of thousands of dollars every year on the freight that is shipped in that way, and it would be folly for this Government, or any other body of men who migni, take over this railway, to attempt to say to the people of the United States: " We will not carry your freight through Canada and on to Portland for shipment to Europe." Let me tell the hon. gentleman- and I feel confident the Minister of Railways will concur in the statement-that it is not the intention of the Government to ship any freight by way of Portland, unless a shipper in Canada asks that it shall be so shipped, and I will give him the reason for this statement. The hon. gentleman knows full well that within the last year we have undertaken a shipping policy, we have undertaken to construct fifty-two vessels in Canada. To w'hat use are these vessels- to be put? They are to be placed at our ports, Halifax, St. John, Quebec and Montreal for the purpose of carrying the products- of thif country to the markets of the world. But does not the hon. gentleman realize that, especially when the winter months come, the Canadian Government will see to it that every pound of freight they can get is shipped over the National railway to the ports of -St. John and Halifax? It would be folly to expect that this Government, or any commission appointed by them, would dare to route their freight or passengers, if they possibly could do otherwise, via Portland instead of via St. John, Halifax, and our other ports. The hon. gentleman has not offered any alternative for the proposition

which he condemns; he says he has no alternative to propose. In that -case, why argue this question? The Government has got to deal with the situation. We cannot possibly wait for one or two years, as the hon. gentleman has suggested. We have a disorganized, disconnected and disjointed government railway system, and the sooner we get that system rounded up, organized and put in -proper condition the better it will be for the public. Instead *of waiting for months and years we cannot, in my opinion, act too quickly in this matter. I take that position believing and knowing that is is in the best interests of our people to take over the Grand Trunk, round up our great national system, and place it in a position where it will he able to compete with the Canadian Pacific. I have heard men say within the last few days that this bargain is going to interfere with the Government loan which is now being asked for. Some men have even gone so far as to make this statement-I heard of one man that went to another who was likely to subscribe for a bond and said to him: Why the money you are going to put into that bond will be taken and put into this Grand Trunk Railway .system. It is not the intention of the Government to use one dollar, that they collect from the people in connection with this loan, or to use it in any way towards the development of this railway system. All the Government are seeking is to have this enabling Act passed whereby they will be able to bring about a definite agreement with the .stockholders of the Grand Trunk in England.
Now let us look at another point or two which the hon-. gentleman has raised. It is not altogether a question of public ownership. The present legislation is rendered necessary by reason of the failure of private ownership. The hon. gentleman knows right well that in the year 1903-4 the Grand Trunk entered into a definite arrangement to build the Grand Trunk Pacific. It is true that an enormous sum of money has been put into the latter railway and taken from the public treasury for that purpose, and it is also true that the Grand Trunk have advanced a considerable sum towards its construction. But we are to-day in this position: Ther Grand Trunk threw up their responsibilities as regards the Grand Trunk Pacific and practically forced this Government to take over that portion of their system. Does the hon. gentleman want us -simply to take

over the Grand Trunk Pacific and not the Grand Trunk? Does he want us to take over the lean end of the proposition, the end that cannot pay for many years to come, and allow the Grand Trunk which is the profitable end, that has always paid the interest on Its bonds, to continue in opposition to the government-owned railway? If the hon. gentleman will go to Western Ontario to-day, he will find that freight is being routed by way of Chicago to the western provinces of Canada instead of being routed by North Bay and on through to Winnipeg over the National Transcontinental. Why? Because this Government has been compelled to take over the Grand Trunk Pacific and the thousand miles of line between North Bay and Winnipeg is in the hands of the receiver. The Grand Trunk Railway Company can therefore make more money out of the long haul through Chicago, and over their own line In the United States to Winnipeg, than they would make if they were compelled to bring that freight round by North Bay. But when the Canadian Government system is re-organized and rounded up, you can depend upon it the passengers and freight from the western portion of the province of Ontario will foe sent by North Bay, and will help to develop this National Transcontinental system and help to make it a paying proposition. My reason for taking an active interest in this - debate is because I feel particularly anxious about the interest of the western Ontario peninsula. If you run a line through the centre of the city of Toronto from lake Ontario north to the Georgian bay, west of that line, there are 1,500,000 Canadians, represented by 45 members in this House, this is the most thickly peopled area in any portion of Canada. More factories are located in this district than in all the rest of Canada put together. This district has an assessed value of $1,-
100,000,000, yet not one mile of the Canadian Northern, of the Transcontinental, of the Grand Trunk Pacific, of the Intercolonial-not one mile of the government-owned railways to-day enters this great district. These people have as good a right to be served by our national system of railways as the people of any 'other district. Do you want to build lines to parallel the Grand Trunk and make it worthless? For in that district you find the Grand Trunk running into every city, town and village; their double track running through to Chicago and with connections from Niagara Falls on to New York, a double track runs from the city of London to the city of Windsor; another double track runs from the city of Hamilton to the city of Toronto; you find a single track runs along the northern shore of lake Erie; another single track runs from Toronto through St. Mary's and Stratford to Sarnia, other tracks run north and south. The whole country is served and served well by the Grand Trunk; when that system is connected up with our national railways it will become a mighty power in assisting the management of our national railway system in bringing about a successful operation of all lines.
This system is largely located in western Ontario and in the province of Quebec and in the eastern provinces. The Canadian Northern runs from Quebec to Montreal through our north country to Winnipeg, and there they commence a splendid transportation system of 6,500 miles covering the very best territory in the Northwest. But this end of the line is practically without branches or feeders. The Grand Trunk Pacific and the Transcontinental are in worse position, because the Transcontinental starts at Moncton, and runs through Quebec and our north country to Winnipeg, where it connects with the Grand Trunk Pacific, running to Edmonton and on to Prince Rupert-one long band of steel practically across the continent, with very few feeders. How can we expect, unless we link up this other system with it, that we can poSsibly make our national system a. paying proposition? Look at the position the Intercolonial railway has been in for many years, coming up from the Atlantic coast to Quebec and Montreal, without a terminal in Montreal and with very few feeders. Even the leader of the Opposition (Mr. McKenzie) within the last few weeks has been urging the Minister of Railways to build branches in the eastern provinces connecting them with the Intercolonial railway. The Intercolonial railway would be a power in this country today if in 1903 and 1904 hon. gentlemen opposite supported the proposition of Government ownership of a railroad connecting with the Intercolonial and running through to the West. We would then have had a railway system that would have been a paying proposition, instead of this enormous debt which we have to-day.
The leader of the Opposition says: "You already have 14,000 miles of Government

owned railways, why do you not experiment with that system?" I have tried to show, Mr. Speaker, how impossible it is to go on with this disorganized and disconnected system without the Grand Trunk to . back it up. The Canadian Pacific has a splendid organization in the eastern provinces; in the West there is a well rounded out s'ystem, thoroughly organized. We are all glad and proud to know that it is so successful, but we also must realize and appreciate this fact, that in the early days enormous sums of money and extensive land grants were made in order to place the Canadian Pacific railway upon a safe and sound footing.
Hon. members argue that the Grand Trunk should not be responsible for the Grand Trunk Pacific. I can hardly believe that any hon. member could support that contention, because I have under my hand the statement of the ex-Minister of Finance (Mr. Fielding) and the statement of member after member on the other side in 1903 and 1904, showing what a splendid proposition they had'put before the people of Canada in the carrying out of the Grand Trunk Pacific scheme.
Other hon. members say: Wait until next session. This question was up in 1916, 1917 and 1918, and was thoroughly discussed from time to time, and the very proposition that we are voting on to-night or to-morrow has been before the country for the last sixteen months at least.


Jacques Bureau: Why was it not mentioned in the speech from the Throne, then?


Joseph Elijah Armstrong: that are being constructed to carry our products to foreign ports-a total of seventy steamships. There are fifteen Government owned elevators, with a capacity of thirty-four,million bushels, all located along these railways, as well as the Canadian Northern elevators on their right of way, nine hundred and eighty-four in number, with a capacity of sixty-three million bushels- over a thousand elevators located along the right of way of these Government-owned roads. It is certainly the greatest Government ownership proposition in the world.
When this undertaking is consummated, the Intercolonial, the Grand Trunk, the Grand Trunk Pacific and the Canadian Northern will be united in one system, and this system must remain entirely separate from the Canadian Pacific. The Canadian National railway must be under Canadian control and management, free from political interference. These roads will start out with fixed charges of about $2,000 per mile or $45,000,000 per annum, and they must be operated as a commercial concern in competition with a well-established and well-equipped rival. The management must remember that the people of Canada are paying interest on this investment, and if the roads do not earn enough to pay this interest, then it must come out of the people by way of taxes.
Let us give the trustees in charge of this great national undertaking the widest possible powers, and I have every confidence in the successful outcome of the proposition. The Government have presented the best possible solution of this problem. It is a safe, sound, sane, businesslike proposition, and I intend to give it my hearty support.


Lucien Cannon: Mr. Speaker, I have listened with very great attention to the hon. member for Lambton East (Mr. Armstrong), and I wish to call your attention to two points made by him in the course of his remarks. First, the hon. gentleman is under the impression that the taking over of the Grand Trunk railway will cost this country absolutely nothing. That, if I understood his speech properly, has been one of his main contentions. In the course of this debate, hon. gentlemen on the other side have given the Opposition and the people of this country an altogether different idea. For instance, I recall a speech from the other side in which it was declared that it would cost at least $51,000,000 simply to put the Grand Trunk into proper working condition. In
[Mr. J. E. Armstrong.!
my estimation-and I am not a financier; I am an ordinary poor barrister who is trying to do the best he can to earn a living for his family, and I do not claim to know too much about figures


Jacques Bureau: Do not get too humble.


Lucien Cannon: $51,000,000 is quite a
sum even for the hon. member for Lambton East to forget when he is speaking about purchasing the Grand Trunk for nothing at all. Moreover, I call the attention of the hon. member to the Bill which is before the House, and I will ask him to read, for instance, clause 8, which gives to the Government power to give to the directors of the Grand Trunk immediate financial aid. That means disbursements; that means that some money is going to be spent; that means that this purchase calls for the outlay of public moneys.


Joseph Elijah Armstrong: I do not think for a moment that the hon. member wishes to put into my mouth any words that I did not use. The statement that I made in regard to the Grand Trunk is a very different [statement from what I made in regard to the Grand Trunk Pacific and the Transcontinental. I pointed out that we would, year after year, be compelled to pour millions of dollars into the National Transcontinental and the Grand Trunk Pacific in order to keep them running, if we did not have the Grand Trunk; but if we have the Grand Trunk proper, that is the old Grand Trunk, then we shall not have to assume a very great deal of expense in that connection.


Lucien Cannon: After having listened to
the hon. gentleman's explanation, I can only say that his explanation is preferable to his speech. My memory is generally good, and I remember perfectly that the hon. gentleman said-he may have said it by mistake-that the taking over of the Gjrand Trunk-not the Grand Trunk Pacific-would not cost this country any money. When the hon. member rose, I was speaking of clause 8 of the Bill whereby the Government is empowered to give to the directors of the Grand Trunk immediate financial aid-and we know what that means, especially if the declarations made by the members of the Government and the members sitting to your right, Sir, are accurate. The Grand Trunk Railway Company are badly in need of money, and if we are now to supply them with all the money they need, I repeat, the public moneys of this country are going to be taken by the Grand Trunk to a very great extent. More-

over, if the hon. member for Lambton East refeirs to clause 4 of the Bill, he will find that by virtue of that clause the Government,or to speak more accurately and properly, the people of this country, guarantee the payment of interest on certain stocks and bonds of the Grand Trunk. Where is that -money to come from

and, it is only part of the consideration?


Joseph Elijah Armstrong: The hon. gentleman knows full well that the earnings of the Grand Trunk have always paid the interest on those bonds.


Lucien Cannon: The hon. gentleman knows perfectly that one of the reasons given by the Minister of the Interior (Mr. Meighen) and one of the reason given by the Minister of Railways (Mr. J. D. Reid) last year and this year for the present transaction is that the Grand Trunk is not in a position to pay the interest on its bonds.


Joseph Elijah Armstrong: It has been
doing so.


Mr.   GANNON@: If the hon. gentleman refers to the blue-book that has been distributed amongst hon. members, he will find that one of the first letters we find in that book, a letter written by the Minister of the Interior while he was in London, states that the Government will not help the Grand Trunk to pay the interest due in July of that year. I think that question will not require any further discussion. It will cost this country some money to take over the Grand Trunk line. Personally, I am not a railway man. I am against this Bill for three reasons. First, the time is most inopportune to bring in this Bill; second, the reasons advanced by the Governmeent in support of this measure are not reasons that shodld convince this House; and, third, the methods provided for in this Bill for the purchase of the Grand Trunk are methods that should not be approved by
10	p.m. the majority of this House. This is not a proper time, first of all, because the Prime Minister of this country is not in the House. The people of Canada have a right to ask for the presence of the Prime Minister when a Bill of this nature is being discussed. I have an admiration for the Minister of Railways (Mr. J. D. Reid); I have a certain amount of admiration for the Minister of the Interior (Mr. Meighen); I even have a certain amount of admiration for the President of the Council (Mr. Rowell); but even those three lights of the Cabinet do not replace the Prime Minister of this country, and that right hon. gentleman ought to' be in his seat, Hon.
gentlemen opposite will say:	The Prime
Minister is at present ill; he is not in a position to be in the House. I sympathize with the Prime Minister; I regret his illness, and I hope that very soon he will be back in his seat.
Legislation of this momentous importance should not be brought down when the Prime Minister is away. Moreover, up to yesterday, the Minister of Finance (Sir Henry Drayton) had not been in the House this session. What is the use of having a Minister of Finance elected for the constituency of Kingston who appeared in this House for only twenty minutes yesterday afternoon and has not been -seen in its *since?


Joseph Elijah Armstrong: He is here now.


Lucien Cannon: 
Arthur Meighen: Does, the hon. gentleman say that the Canadian Pacific received that amount in subsidies?


Lucien Cannon: In money subsidies and land subsidies.


Arthur Meighen: The question asked for the subsidies granted the Canadian Pacific. The answer given shows the subsidies and the land grants as well.


Lucien Cannon: Even so-


Arthur Meighen: Why didn't you say so?


Lucien Cannon: I will make my speech the way I want to, and the minister can make his the way he wants to.


Arthur Meighen: I should not like to
make mine that way.


Lucien Cannon: I will stand no interruptions from the minister. If he is in a bad corner let him get out in the right way. No small tricks with me. I am not afraid of the minister at all, and never vims. The Canadian Pacific according to this blue-book received in cash subsidies the sum of $66,000,000. Does the minister hear that? But to-day we were told that it was $31,000,000.


Mr. CAHILL:: That is pretty close, for the Government.


Lucien Cannon: Then the Grand Trunk, according to the answer given to members of the Opposition to-day seeking information so that they could discuss this question intelligently, received in round figures $15,000,000 whereas according to this same blue-book the total aid given to the Grand Trunk was $28,000,000.


Robert Lorne Richardson: Are there details
there showing how that is made up?_ I was under the impression that it was only $15,000,000.


Lucien Cannon: Not this afternoon, because I listened to the hon. member speaking and he vims away up in the several hundred millions of dollars so far as the Canadian Pacific was concerned. If I was-the hon. member I would stick to my figures of this afternoon.


Robert Lorne Richardson: I was not seeking to question the hon. member's figures at all. I took my figures from the Drayton-Acworth report, which showed the aid given to the Grand Trunk as $15,000,000. I had no knowledge of any other amount, and I asked the hon. gentleman courteously to tell me how his figures were made up.

I was not criticising his statement; I was simply surprised.


Lucien Cannon: What I say is this: The Government this afternoon gave us figures which are absolutely false when compared with the figures that appear in this Sessional Paper. The hon. member for Springfield (Mr. Richardson) in his speech this afternoon said that the aid to the Canadian Pacific amounted to $750,000,000.


Robert Lorne Richardson: Hear, hear, including the exemption from taxation of land and all appurtenances.


Lucien Cannon: The Government said
they had given $31,000,000.


Arthur Meighen: That is in subsidies.


Lucien Cannon: There is a wide margin.
The Government say they have given the Canadian Northern in round figures $27,000,000. The figure given in the Sessional Papers is $298,000,000, or roughly speaking, $300,000,000. I say that the Government has no right to mislead the Opposition and the people of this country in that way, and now that the Minister of Finance is in the House, and seeing that he signed this report, I hope he will tell us whether the figures he gave when he was commissioner are the ones he gives now when he is Minister of Finance.


Sir HENRY DRAYTON:: There is no
mystery at all about these figures, they are perfectly plain. The answers, as I understand,-I did not hear them read-referred to subsidies. I absolutely stand by the whole of the totals set out in that report. They do not deal merely with subsidies. Subsidies are indeed a very small part of them. The subsidies to the Canadian Northern are shown, and I think correctly shown, at some $38,000,000. The lands which the ' railway got in connection with the Manitoba charter and subsequently are shown at the amount that the company received for them, some $34,000,000. The loans outstanding on investment are also correctly shown, and the guarantees given by the Government are also correctly shown. Subsidies are one thing, proceeds of land sold are another thing, loans on outstanding investment are another thing, and guarantees outstanding are something else, entirely different. The total is correct. It is exactly the same in connection with the Canadian Pacific. The Canadian Pacific, under the head of subsidies are shown_ to have received $104,000,000, but you will see from the side note on the report that that

amount includes the value of the railways which had been previously constructed by the Government, and which under the contract was turned over to the company. Those values were arrived at as nearly as we could. Then, again, you have the proceeds of the lands sold. These were lands actually sold at that time and as a result the total, as the hon. member has correctly stated, is $228,000,000. The Grand Trunk was built before subsidies were paid as they have been in later years. They got subsidies from different sources, but so far as this Government is concerned the Government made loans to them many years ago. On those loans they never collected interest and as far as the Grand Trunk is concerned it is fair to say that the Dominion aid to the Grand Trunk amounted to $15,000,000.


Lucien Cannon: I do not want to enter into a long discussion with the Minister of Finance, but if the 'hon. gentleman refers to the book again he will see that according to Government reports the roads now comprised in the Grand Trunk Railway company's undertaking have received aid as follows: Subsidies, Dominion Government, $3,423,690; provinces, $4,077,233; loans by the Dominion Government made to the Grand Trunk Railway company many years ago, $15,000,000.


Henry Lumley Drayton: Apparently the hon. gentleman' is agreeing with me.


Lucien Cannon: If the minister adds these figures together, $15,000,000 and $3,000,000, he will find that they make $18,000,000.


Henry Lumley Drayton: Yes, that is all true. But there is more than that.


Lucien Cannon: And the answer given this afternoon was $15,000,000.


Henry Lumley Drayton: The hon. gentleman must remember that the question referred to subsidies granted by this House. It did not refer to' provincial subsidies or municipal grants. The only money which the Grand Trunk, as I understand it, 'has ever received from this Parliament is the sum of $15,000,000. That is shown in the r.eport as $15,142,633 and the amount of $142,633 is the interest that has been charged on the investment.


Lucien Cannon: If the minister refers to the book he will see that it says Dominion Government $3,000,000 subsidy and further down loan by Dominion Government $15,000,000 odd; and $15,000,000 and $3,000,000 make $18,000,000.


Henry Lumley Drayton: The total should be $28,000,000. There is something beyond til at.


Lucien Cannon: The answer given this
afternoon shows only $15,000,000.


Henry Lumley Drayton: I think the hon. member will find that these subsidies were not subsidies of this House but that they were granted prior to Confederation.


Lucien Cannon: Of course. The report
made by the hon. gentleman says the "Dominion Government". There is only one Dominion Government. I know that the Minister of Finance and many other hon. gentlemen think that this is the first Dominion Government we have had, but before this Government there were other governments called "Dominion Government". The Dominion Government granted a subsidy of $3,000,000 and then there ,vas loan of $15,000,000. Now, $15,000,000 plus $3,000,000 makes $18,000,000; yet this afternoon we are told not $18,000,000 but $15,000,000.
' Sir HENRY DRAYTON: I think if the hon. member will look up the statutes he will find that that extra $3,000,000 was a grant made to one of the subsidiaries which afterwards came into the company, and not a direct Grand Trunk grant at all. Bnt the fact remains that the total is shown to be a much larger sum than the hon. gentleman is now making. The hon. gentleman is taking off $13,000,000 because the total shown in the report is $28,145,000.


Mr CANNON:: Well, the book reads:
According to Government report the roads now comprised in the Grand Trunk railway undertaking have received aid as follows:
"Grand Trunk railway undertaking".


Henry Lumley Drayton: "Roads now
comprised".


Lucien Cannon: It was not $15,000,000
but $18,000,000. The question asked in the House was:
What is the amount paid in subsidies to the Grand Trunk railway system during the last sixty-five years?
The answer was $15,542,655.34. In the book containing the report made by the *hon. gentleman who is now Minister of Finance the amount is given as $3,000,000 and $15,000,000, making $18,000,000. I hope the hon. gentleman will explain more fully to the House at a later occasion how this $3,000,000 has disappeared so suddenly.


Henry Lumley Drayton: In the report it says $13,000,000 and $15,000,000 malting a total of $28,000,000.


Georges Henri Boivin: I hope hon.
.members will refrain from any further discussion of these figures. The hon. member for Dorchester (Mr. Cannon) has the floor and should be given the opportunity to interpret the figures as he reads them. Any explanation which may be given on behalf of the Government must be given at some later time, because these interruptions are absolutely out of order when the House is not in committee.


Lucien Cannon: I was saying, Mr. Speaker, that the Government should not bring in this legislation because the Prime Minister was away, because we did not have complete information, and also because the famous reconstruction of the Cabinet is not completed. We have ministers vanishing from this House. We have seen, for instance, Hon. Mr. Carvell demobilized and sent to the railway board. We have heard also that an hon. member for British Columbia is waiting to renounce the arduous duties of a cabinet minister for a life of ease, the life of a civil servant, with a comfortable salary. We were told that other ministers would disappear and that the weak timber would be replaced by something more substantial and .more solid. I think the House and the country have a right to ask that the cabinet be reconstructed before we deal with problems of this vast magnitude. There is another reason why we should not consider this Bill to-day. Is this the proper time to assume huge liabilities and responsibilities when the hon. the ex-Minister of Finance (Sir Thomas White) goes before a parliamentary committee of this House and declares that it is a time to have strict economy, that not a cent should be spent unless the circumstances demanded it? He also told us what our national debt was. It is appalling. Last year, while the Budget discussion was on, we asked different members of the Government: "Where are you going to find the money necessary to carry on the business of the country?"
Hon. gentlemen opposite could not answer -the only thing they could tell us was that they trusted in Providence. There is no doubt, Mr. Speaker, that Providence is sometimes very generous and charitable but we must not abuse the kindness of Providence. The advice I give to these gentlemen is: Do not abuse the kindness and goodness of Providence and do not

expect too much from Providence. If hon, gentlemlen opposite were to read a certain old Latin poet they would see a verse which they should ponder over because it is full of food for reflection:	Quern Deus vult
perdere, dementat prius.


An hon. MEMBER:: Explain.


Lucien Cannon: 
Some hon. MEMBERS:: Oh, oh.


Lucien Cannon: Some gentlemen opposite laugh. It is their usual answer-to laugh. I have seen people in a court room who were accused of murder laugh when declared guilty.
Mr. Speaker, another question: Is this the proper time to press this measure when the Finance Minister is calling upon the people of the country to lend money to the Government. This Government is like an ordinary man who wants money. If he desires to obtain money he has got to inspire confidence in the man from whom he demands it. Last year I went throughout my county and spoke in favour of the Victory Loan, and the contribution from Dorchester very largely exceeded the amount allotted to it by the Victory Loan Committee. This year I went again. Will I go back? I might go back providing the Minister of Finance shows us that this money will be properly spent, and not squandered and wasted in the scheme before the House at the present time. But what I can do is of no importance. I am a private member and do not claim to have much influence. But other people have. I would refer the Finance Minister to a letter which appeared in the Quebec papers; a letter not signed by a politician, not signed by an opponent of this Government, but signed by one of the most influential men in Canada, a former president of the Manufacturers' Association, a man who has built up in the city of Quebec one of the largest industries that we have-I am speaking of Hon. Mr. Amyot. Mr. Amyot subscribed to the last Victory Loan and subscribed generously, and this is the letter he writes:
To the Editor of Le Soleil,
Quebec.
Dear Sir,-
In this morning's Chronicle we are advised that the Ottawa Government has laid before the House the proposition for the purchase of the Grand Trunk railway, and that Mr. Smithers, the president, is prepared to accept conditions laid down by the Government. That is to say, that a pre-arranged scheme is being submitted to the House at the very moment when Sir Robert Borden is absent and when
the leader of the Opposition has no seat in the House, and at a time when the House was called for the unique purpose of ratifying the Peace Treaty, as well as to obtain for itself a second indemnity.
At this time, advantage is taken to rush through in a hurry a law for the purpose of taking over a fourth or a fifth railway system, to purchase the control of shares at a time when the country is staggering under the load of an excessive debt and burdened with all kinds of other troubles.
These gentlemen have the temerity to carry on this purchase at the time when they are endeavouring to float a national loan called a "Victory Loan." Vain words, no doubt, but in any case they call it a Victory Loan. I am of opinion that the country should refuse to subscribe anything whatsoever to this loan if the Government persists in its view that the Grand Trunk railway must *be acquired, and, in so far as I am concerned, I intend to give the example and will not subscribe one single cent. 1 have subscribed to loans made during the war and have done so generously. To the first loan $50,000, to the second $250,000, and to the third $500,000. Consequently I think that I have in the past done my bit, but I refuse to subscribe anything whatsoever to this last loan if it is the intention to administer the country's affairs in this reckless fashion; and if I have any advice to give it is, that my example should be generally followed throughout the country.
Thanking you, Sir, for the publication of this letter, I remain,
Tours very sincerely, George E. Amyot.
This letter cannot be ignored by the Government. As I said before, it is written by one of the most prominent men in Canada; and I think that the sentiments expressed are also shared by a great many business men throughout the country.
There is another reason, Mr. Speaker, why this measure should not be pressed. This Government has not the confidence of the peoplq. I say so, and I support my utterance with proofs that cannot be contradicted. A few months ago there was an election in Prince Edward Island. What was the result? The Provincial Government was defeated. Why? Because it was supported by the Union Government at Ottawa, But what is the use of speaking of Prince Edward Island, Mr. Speaker? I will refer to a province which is far more interesting to the hon. gentlman on the other side- the province of Ontario. The Hearst Government had been in power for many years; it had been supported in one general election; but the moment the President of the Privy Council (Mr. Rowell) lent his support to that Administration it was wiped out altogether. And the night the results came in I thought that my hon, friend the Minister of Railways (Mr. Reid), who always had directed the old Tory machine in Ontario-this gentleman who knew where

to place some oil, for instance, when he went to Kingston to show to the people of that good town the ibenetfits of electing the Minister of Finance (Sir Henry Drayton) by acclamation, as the papers have told us-this old political warrior of many battles would have carried the Tory machine to victory if it had not been for the reckless interference of his colleague, the President of the Council. But the moment the hon. gentleman interfered, like a misguided saint, he ruined the chances of the Hearst party altogether. If the electors of Prince Edward Island and Ontario receive in this fashion any party which is endorsed by the Union Government, can you imagine, Mr, Speaker, the disastrous results of a direct appeal from these gentlemen themselves?	If this
* Government had the confidence of the people why did they not put up a candidate in Quebec East, where there is an election this week, to explain to the people of my good province the benefits of their administration? I have not seen in this House for the last tfwo weeks the friendly face of the Minister of Immigration (Mr. Calder). I am sorry he is not here. But I would like to know, Mr. Speaker, if the Union Government has the confidence of the people, as was claimed yesterday by the President of the Council, why did not the Minister of Immigration put up a candidate of his own in the Province of Saskatchewan? They say they have the confidence of the people, Mr. Speaker. Well, the leader of our party was chosen by convention last summer, he offered himself to the electors of the County of Prince, and this Government, which has the confidence of the people, did not dare fight his election.
Mr.-P. McGIBBON: Might I ask the hon. gentleman a .question?


Lucien Cannon: Certainly.


Mr. P. McGIBBON:: Why did not his
leader take a seat in his own province?


Some hon. MEMBERS:: Oh, oh ! Cheap!
Mr. 'CANNON:	I think it would have
been a very good.thing, because it would have improved in many ways the representation from that Province. Mr. Speaker, I say that the Government has not the confidence of the people. I say, further, that the Government has no mandate on the question of public ownership. I was listening today to my good friend, the member for Springfield (Mr. Richardson)

talking about public ownership. He might have been in favour of public ownership this afternoon, but I understand from rumours which come from Winnipeg that very often he used to be also in favour of the Canadian Pacific railway, which is private ownership.


Robert Lorne Richardson: May I contradict
that? I never in my life was in favour of the Canadian Pacific Railway. I never gave utterance to anything in favour of the Canadian Pacific railway other than what my hon. friend would do, namely, that it is a well managed institution, and the Canadian people may well admire its management; but he will search in vain through any papers I can show him for any speech I ever made endorsing the Canadian Pacific railway.


Jacques Bureau: Were you in favour of
the Red River Valley?


Georges Henri Boivin: Order. These questions and 'answers from one side of the House to the other are absolutely out of order in a debate on the second reading of a Bill.


Lucien Cannon: 
Some hon. MEMBERS:: Hear, hear.


Some hon. MEMBERS:: Go on.


Lucien Cannon: The member for South Toronto (Mr. Sheard) says "hear, hear." I
know that he voices his feelings. The question whether or not this party is against private ownership is not at issue. I am a Liberal; I am a progressive; I am in favour of anything that means progress in this country. Public ownership has been the policy of every . Liberal organization throughout the world. But, Mr. Speaker, different countries have tried public ownership in recent years; we have had examples that we did not have before, and in the face of those examples and of those results, are we not justified, as sensible and reasonable men, in suggesting that it would be better to wait and see before we decide this question?
The member for Springfield (Mr. Richardson) said that the public ownership of railways was a success in Italy. Has the hon. member ever travelled in Italy?


Robert Lorne Richardson: Yes.


Lucien Cannon: He must have been glad to get away from those railways.


Robert Lorne Richardson: Not at all.


Lucien Cannon: The hon. member told
us that public ownership of railways in England was a success. But the British Government to-day is altogether undecided what to do with the railways. They have on their hands a number of white elephants that they would like to be rid of-somuch so, Mr. Speaker, that the question of nationalization is coming up again in that country, not only as regards the railways, but also as regards the mines. The Prime Minister, Mr. Lloyd George-and the member for Springfield will admit that he is a Liberal-has declared that the matter of the advisability of nationalization is of such grave importance that it will have to be decided by the people themselves. Hon. gentlemen opposite usually imitate what happens in England; why should they not make the same wise decision which the Prime Minister of England has made on this question?
They have had public ownership of railways in the United States. I challenge any member of this House to deny that the deficit on the railway in the United Stales under Government administration has not been a million and a half dollars , a day. Wliat, is it going to be here, judging from our experience in the past in connection with the Intercolonial?
Hon. gentlemen tell us that the administration of the national railways will be altogether outside of political patronage, "we have pledged ourselves to that." But this Government have made pledges in the



past which were never fulfilled-; the farming sections of Ontario remembered one pledge two days ago. This Government, Mr. Speaker, should bo serious. The President of the Council said yesterday:	"We have
to buy the Grand Trunk not on account of the failure of public ownership, but on account of the failure of private ownership." That was one of the main arguments put forwards by the Minister. The Canadian Northern failed as a private enterprise, and that is why the Government took it over. But what I cannot understand is why the Government, if they wish public ownership to be a success, leave in the hands of the same old gang who mal-admjnistered the Canadian Northern the administration of our national railways. If the man who was working for Mackenzie and Mann was not competent to administer a railway under private ownership where did he acquire new competency, additional talent, new administrative capacity, now that he works for the Government? If gentlemen go to the head office of the Canadian Northern in Toronto they will find there the same old faces of these political and railway buccaneers who robbed every Government in Canada; and they are still at. the same game. The President of the Council may wax eloquent, but these are cold facts that cannot be contradicted.
Who runs the Government railways? Whenever there is any trouble or any difficulty in this country we have only to go down to the Central Station to see on one of the sidings the private car of Mackenzie and Mann in which a Government official is receiving advice from these gentlemen. Everybody in Ottawa and throughout the country knows that. Yet these people talk about public ownership as being a public duty-"a patriotic duty", to use the expression of the President of the Council. Is it patriotic to ruin your country? If so, this is the first intimation I have had of it.
It is a new doctrine; it is a very modern theory. Mackenzie and Mann robbed and bled every Government in Canada. If this Government are sincere, they have one duty to perform, namely, to rid their system not only of Mackenzie and Mann who are the figurehead, but of the puppets who hide behind them. Giants in railroading have failed throughout the world in recent years; in the administration of railroads will this Government contend seriously that pygmies will succeed where giants have failed? Patronage is abolished! These railroads are going to be run in such a way that the administration of Canadian railways will

be cited throughout the world as a new wonder. Was it patronage or not, to give to the Hon. Mr. Carvell his reward and a $12,000 salary? Patronage abolished! In [DOT] my county, I have the example of a station .agent who was replaced after having been dismissed, because Hon. Mr. -Sevigny was running as a candidate, and he wired the general manager that, it was important that that station agent should still run the station because he had many relatives having votes in that constituency, and accordingly he was reinstated. But these gentlemen must be serious with the House of Commons and the country. Every Senator who is appointed is a political appoiptee and nothing else, and to remove that impression from my mind I would ask any minister of the Crown to explain to me why the appointment to the Senate concerning the county of Erontenac was not made before the elections were over. 'That is a very pertinent question.
The Government tell us that the main reason for this deal is necessity, it has to be done. Since when has it to be done? On the first September, when we met here, we were called upon only to put an end to the awful state of war which existed between us and Germany. I remember the President of the Council (Mr. Rowell) making one of the most eloquent speeches ever delivered in this House when he called upon us as patriotic citizens of this country to put an end to the state of war. We were called upon for that purpose only, to give peace to the good men, women and children of Canada. We did that. The ministry was not satisfied. On September 20 this deal was not yet necessary; we did not hear anything about, it. Even on October 1, even on the 3rd, when the Acting Prime Minister	of	this country	(Sir GeorgeFoster) spoke in this House, he did	not disturb the	Government's
supporters who were packing their satchels and trunks in order to go home. It was not necessary then. But all of a sudden the atmosphere becomes loaded with clouds; the credit of this country is in danger! Again the Government proposes to the House of Commons a patriotic duty; we have to save the credit of Canada, says the President of the Council, all of a sudden. Save the credit of Canada! There is one way of saving the credit of Canada, and that is to prevent highway robbers and thieves from influencing the decisions of the Government


Edgar Nelson Rhodes: Order. The hon. gentleman is exceeding the rules of debate in

the imputation implied in his remarks. They are entirely unparliamentary.


Lucien Cannon: I had not concluded my sentence. I was going to say-to influence the decisions of the Government in the minds of evidently wrongly-informed people in this country.


Edgar Nelson Rhodes: I do not know that the hon. gentleman helps his remark any by so concluding it. That is the judgment of the House.


Lucien Cannon: I bow to your decision, Sir. I say that it is the impression which wrongly exists in the minds of several people in Canada. The credit of this country has in no way been enhanced by the Canadian Northern deal; it was in no way enhanced by what we did last year; and I do not think it will be enhanced by the present proposal. It is necessary, say the Government, to help these railway companies. Since when has a company which is bankrupt, or on the way to bankruptcy, a claim on the generosity of this country? Other institutions in Canada have failed, have become bankrupt; have the Government interfered to give them financial help, to prevent them from failing? I will take a very recent example, the example of the Farmers' Bank in Ontario. That
11	p.m. institution failed, and hon. gentlemen on the other side of the House had promised their constituents relief. The Bill was thrown out by the Senate and the Government never introduced that Bill. Why? Because it is an altogether unsound principle to claim for any company a right to financial relief from the Government. LeP hon. gentlemen look at * what happened in the United States. Practically every important railway in the United States failed in the course of its existence. The American Government never interfered. When a railway failed, the same thing happened as when any other corporation failed. Since when have we, the people of Canada, become dealers in scrap and rags? This is a new role for a Government.
I am opposed to this Bill, not only because the time is not opportune and because the reasons given for the Bill do not justify its introduction or adoption, but because the method indicated by the Government is wrong. Why should we have arbitration? We had an example of what arbitration meant to the people of Canada. The Minister of Finance (Sir Henry Drayton) when he was chairman of the Railway Board, declared that the Canadian Northern stock was absolutely worthless.
80}	I
Nevertheless, the arbitrators who were named by the Government decided that a stock which was worth absolutely nothing, not one cent, was to cost the people of Canada the enormous sum of $10,800,000. We, the representatives of the people, have no right to constitute a tribunal on the same basis as that, which meant'such a tremendous loss to the country in connection with taking over the Canadian Northern. Are we going to have the same experts to determine the value of this stock? I have nothing to say against these gentlemen, but if my memory serves me right, one of those who sat on the Canadian Northern arbitration board was the Chief Justice of the province of Ontario, and he again is named in this Bill to choose one of the arbitrators, together with the Chief Justice of the Supreme Court and the senior judge of the Exchequer Court of Canada.


Arthur Meighen: You are about a year
behind the times.


Lucien Cannon: I am not.


Arthur Meighen: Well, go ahead the way you are then.


Lucien Cannon: If I go ahead the way I am it will be going ahead differently from the minister because my course will be straight. I say we have no right to put in the hands of these, gentlemen the decision of suah an important question after the way the Canadian people were treated at their hands a year or so ago. That tribunal gave over $10,000,000 to Mackenzie and Mann and their friends for a stock which was absolutely valueless, and the present Minister of Finance declared so himself. What is going to happen so far as the Grand Trunk is concerned we do not know. The sinister influences which were exercised in connection with the Canadian Northern still prevail. We know those men. Unfortunately for Canada they are still alive. They are watching these proceedings. The papers in Canada which have supported the present Administration for years, papers which put the present Administration into power, are protesting against this Bill and against the methods employed to take over the Grand Trunk. I hope that when we are in committee on the Bill, if it is not withdrawn altogether, it will be decided by the Government that no arbitration award shall be binding on the people of this country until ratified by the Parliament of Canada. Why should we divest ourselves of our responsibility? Why should three gentlemen, no matter who they are, impose on this

country an expenditure of millions of dollars? The constitutional theory on this point is very simple-no taxation without representation. I need not recall the long struggle in England and in Canada for the adoption and sanction of this .constitutional principle. We have it. The members of the House of Commons, the sole representatives of the people, have no right to give to three judges, no matter who they are, the right of taxing the Canadian people, especially when that taxation amounts to millions and millions of dollars.
I will conclude these remarks by saying that the responsibility of the Government in a constitutional .country is very heavy The role played by a minister is very noble and very high. The trust that the people put in the ministers is a trust that should be respected. The. Canadian people have entrusted these gentlemen with the protection and the safeguarding of their interests, financial, national and otherwise. These gentlemen are simply the stewards of the people. If they read the Gospel, as I have no doubt the President of the Council does every day, they will see tint our Lord speaks in very stern words of the responsibility of stewardship. He painted the duties of stewardship as the most binding that a man can have imposed upon him. Stewards of the people, you have no right to squander one cent of the public moneys. Not the smallest fraction of money should be squandered or wasted. The Canadian people are watching, and I hope that some time the sun will rise on the day of reckoning for these gentlemen. I have no doubt that when that day comes, not the Canadian Northern, not the Grand Trunk, not the Grand Trunk Pacific, or any of their railways will prevent them from being removed from their seats to your right, Mr. Speaker, to the seats on your left in this House.


Arthur Meighen: If the debate from this on is to be a serious discussion of the resolution before the Chair, it is imperative that very little time or attention he paid to the speech of the hon. member for Dorchester (Mr. Cannon). The speech he has just delivered was characteristic of him. in that it was replete With what might be called clever turns of language, and also characteristic of him in that it was absolutely barren of everything else. There may be some success in controversy in this House if there is substance, relevant substance, to an address, even in the absence of candour, and candour in a speech in the absence of material facts or substance is always aocept-

able and welcome; but a speech that is lacking in both is not likely to live very long in the memory of hon. members.
I noted as time went on, two or three references the hon. member made which had some remote bearing on the resolution we are now discussing. I was interested as well without noting any relevance to the subject, in the appeal he made, a very touching appeal, on behalf of the returned soldiers of this country and their families, and I could not help but reflect on the sweet and enduring gratification it will bring to all the soldiers arid heroes of our country when they learn that their champion in this House is now the hon. member for Dorchester. He had all the resources of his mind marshalled to attack the arbitration that took place on the subject of the Canadian Northern railway shares. I do not know whether his language in that regard was any more extravagant than his language relative to the Bill before Parliament. There is this however about the effect of the hon. member's opinion, that if there were any serious minded members of this House who had any honest doubts as to the wisdom of his course in supporting this legislation, these doubts would be set at rest when he finds that the measure meets with the envenomed hostility of the hon. member for Dorchester.
As to the arbitration that took place two years ago words failed the hon. member to properly characterize that policy. He thinks that any course on the part of the Government in regard to large railway systems that does not permit the onward, or downward, march of liquidation is reprehensible in every respect. There is in ^ such a course, he, sayls, a violation of responsibility and an utter ignoring of our duties to the people. Let railway systems, like everything else, go into liquidation and all is well! That is the way it has been and the way it ought to be! I was in this House when the gentleman whose memory the hon. member for Dorchester affects to revere was leading the Liberal party. If the hon. gentleman refers to the recordri of this House at the time when this Parliament was faced with the alternative of the Canadian Northern going into liquidation, a system less in magnitude than the Grand Trunk, he will see that that leader stood up in Parliament and warned us that it was our duty not to allow liquidation to take place. He warned this House that the duty before it was to arrest the progress of liquidation in the name of and

for the sake of the credit of this country and for the dearest interests of Canada. Not only did the leader of that day use such words and warn the Government accordingly, but his ex-Minieter of Railways, Hon. G. P. Graham, now not in Par-liaament, was even more emphatic than the then leader of the Opposition in chiding Parliament for ever thinking of liquidation as to the Canadian Northern system because it meant more in loss than this country could hope to gain thereby. If liquidation was a thing unthinkable for the Canadian Northern railway is the argument not equally applicable to the Grand Trunk? All the arguments used by Sir Wilfrid Laurier relative to the Canadian Northern railway apply equally, identically and with redoubled force to the subject now before this House. But logic is lost on an intellect under the sway of passion such as that possessed by the hon. member for Dorchester. Liquidation is right; public ownership is wrong. With the Canadian Northern liquidation was wrong but public ownership was right.
When the subject was before Parliament the Opposition of that time, within whose ranks were many hon. members opposite, moved a resolution calling for the public ownership of the Canadian Northern system, calling for arbitration as to the value of the stock in the Canadian Northern with a maximum of $30,000,000, the very course that we afterwards pursued except that we reduced the maximum to $10,000,000. I heard this subject referred to by the present temporary leader of the Opposition (Mr. McKenzie) the other day. " Yes," he said, " we did in 1914 support a resolution moved by Dr. T'ugsley, calling for the taking over of the CanadianNorthern Railway system by means of the ownership of the stock at a value to be defined by arbitration and calling for the fixing of a maximum of $30,000,000 as the value of that stock. But, "he said," that was before we loaned them $35,000,000; as soon as we loaned them $35,000,000, they had $5,000,000 more than our maximum and therefore the maximum could not stand." I hardly know how to attack a position of that sort. As if the value of the stock of the system was depreciated by the fact that we loaned them $35,000,000. The $35,000,000 was a loan to the company. It was opposed because it would help the stockholders. How would it help the stockholders if it ruined the stock? If it had any effect on the stock it
would raise the value of the stock. Though the stock which, without that raise, was to have under their plan a maximum value in arbitration of $30,000,000, still in the opinion of hon. gentlemen opposite there is robbery of Canada if the stock having this raise is arbitrated at a maximum of $10,000,000. I do not hear the mutterings of the hon. member for Pontiac (Mr. Cahill) for which I should be grateful.
We have had abundant and repeated witness of the truism that there is no use whatever in taking the advice in any respect of hon. gentlemen opposite because the moment we take that advice they deny its parenthood and assail their own ideas. Liquidation, let me repeat, was the agreed upon and recorded policy of hon. gentlemen opposite in relation to the Canadian Northern Railway system. Arbitration of the value of the shares was right and public ownership was right. Will any hon, gentleman tell me why liquidation was wrong in connection with the Canadian Northern and public ownership and arbitration right, and liquidation right and public ownership and arbitration wrong in respect to the Grand Trunk? The exigencies of political position are very great and drive public men into strange paths; and in proportion as the leadership is vacillating these exigencies become more repeated and more difficult.
I did not rise to refer particularly to the remarks of the hon. member for Dorchester. I was not able to be in the House when the ^hon. leader of the Opposition (Mr. McKenzie) was making his speech the other day, but I took occasion as I sat in my seat to-night to read it, and I thought I would be lacking somewhat in my duty- I had almost said to posterity-if I did not put on record a gem that I found in this speech. It is full of them, all of them just about, although not quite approaching in ludicrousness the specimen I am now going to treat. There is indeed scarcely a paragraph in the speech but against which the same attack could be made that I am going to make against this, but time prevents me from going over the other paragraphs with a like purpose. The hon. gentleman was endeavouring to show the burden that was going to fall upon Canada by way of annual charges as a result of taking over the Grand Trunk system and incorporating it with the Canadian National railways. He said first that the outstanding indebtedness of the system was $552,556,019. I find here in the blfip-book he was relying on, a figure


Daniel Duncan McKenzie: Before I presented those figures to Parliament I submitted them to the minister who has charge of this Bill. I told him wlhat I was going to say and he made no objection to it.


Some hon. MEMBERS:: Oh, oh.


Arthur Meighen: It would take the Minister of Railways half a day to discover what the hon. member was driving at and to trace up the origin of his figures.


Daniel Duncan McKenzie: The minister cam* take his course now; I have made imy explanation.


Arthur Meighen: I propose to take it. Indeed, I have to acknowledge my own despair as regards part of his speech. There is a portion here, on page 1253 of Hansard, where he has selected a lot of figures. I do not know whether he got them from the statistics of Brazil or the population records

of 'China, or where he got them, or what on earth he was driving at in presenting
them,	or what he was trying to argue. I have tried my limited ability at them for an hour and a half and I can hot make head or tail, or beginning or end of the conglomeration I consulted ithe Minister of Railways and he agreed with me that he did not know what the hon. gentleman meant or intended to mean.
Now let us go on. Included in that statement, the balance sheet, are also current liabilities against which there are current assets of about double the amount necessary to answer those liabilities. Included as well are the three classes of preference stock and common stock, all included and figured out at the whole face value. Now
then,	besides what I have named are the actual liabilities which I gave out the other day, $60,833,000, $173,558,000, $5,344,000-advances by the Canadian Government, equipment trust notes, and so on-and the $35,548,000 of short term notes. Those are the liabilities of the system but the hon. gentleman takes the side of the balance sheet which is $504,000,000 and he adds to that $50,000,000 which he finds in the back of his head'-at any rate no one knows where- and makes the amount $552,000,000, and then he says-and this is really beautiful-we have to pay interest on that $552,000,000 at six per cent. He says1 that interest amounts to $33,153,000, notwithstanding the fact that the statement itself showed the rates in every case; nowdthstanding the fact that all these things at the bottom had nothing in the world to do with the interest; notwithstanding the fact that the interest runs three, four, four and a half, anid five per cent, and includes $100,000,000 of common stock, and all these other things that do not bear interest at all. It is difficult to find where the hon. gentleman's absurd process leads to. I do not know what he means by talking in that way in this House. But that is not the worst. He has got the annual charge at $33,153,000 by the indescribable process to which I have referred, and then he goes on and says that is not all. He remarks that on this page 39 is another item of $50,126,665.98 of four per cent debenture stock that we have got to add. Now will the House believe me when I say that there is this foot-note at the bottom of the statement:
$50,126,6'6l5 of Grand Trunk four per cent debenture stock further than above has been deposited as collateral security for notes (indicated by an asterisk).
That is to say they make short-term loans; they owe on these loans this amount of

money 535,548,000, which I quoted, and they deposit the debenture stock as security, and the hon. gentleman adds the collateral to the debt. Now I give the hon. gentleman credit for distinguishing between the debit and the credit sides, at least as to position, but I will ask him in dealing with balance sheets after this not to add both sides .together and confuse them. How can the debenture stock be a liability, when it is not out of the company's possession but placed merely as a collateral against their debt. Why did the hon. gentleman add it?


Daniel Duncan McKenzie: Is it not an outstanding stock of the company.


Arthur Meighen: No, how is it outstanding?	l i ,i


Daniel Duncan McKenzie: lit is deposited in the banks as collateral, that is where it is.


Arthur Meighen: Yes, certainly.


Daniel Duncan McKenzie: And it must be paid.


Arthur Meighen: What?


Some hon. MEMBERS:: Oh, oh.


Arthur Meighen: How can it be a liability?


Daniel Duncan McKenzie: Because the company does not have it.


Arthur Meighen: How can they deposit it as collateral?


Daniel Duncan McKenzie: How can a man give as collateral something he has not got?


Arthur Meighen: That is what I say. I say they have it and lodge it as a collateral.


Daniel Duncan McKenzie: Once they have deposited the collateral? Hon. gentleman opposite seem to be great financiers and very clever, but once a man gives his watch as a collateral is not that watch out of his possession, and if he does not pay the money the watch goes.


Arthur Meighen: If he gives his watch as collateral security for the sum of $10, he does not owe the $10 and the watch too.


Daniel Duncan McKenzie: If he fails to pay the $10 the watch goes.


Arthur Meighen: Why of course but he does not owe both. I am obliged to the hon. gentleman for. the illustration. Well, he says now, you have to add interest of $2,000,000 on that $50,126,665. You add that, he says, to the $33,153,000 that he has made out to be worth six per cent in the way I have tried to describe and'by so adding he
gets-now listen:-a total of $47,864,367.
Well, I would be interested to know just what this new scheme of addition is;-* 533,153,361, add to that 52,005,066, and then in the next sentence he says:
The total annual interest upon all the Grand Trunk liabilities which we assume is $47,864,3 6T.
In the mere process of putting the figures down the hon. gentleman adds calmly and apparently deliberately and with the utmost self-satisfaction the sum of $12,000,000 odd. He gives no explanation whatever. Has the hon. gentleman no sense of his responsibility? How does 52,000,000 andi $33,000,000,-even if both were right, but both are ludicrously wrong,-added together make $47,000,000. Well, we will take the $47,000,000. What does the hon. gentleman say about that? There is $47,000,000 of annual charge. But he says, "I will admit that after payment of operation cost they have $9,400,000 left. So he just took that $9,000,000 off the $47,000,000, and he says in the peroration of this phase of his speech that there is left a deficit of 538,457,169, which deficit "must he paid annually by the people." Could arithmetical monstrosity go farther?


Daniel Duncan McKenzie: Those figures are absolutely right, no matter how the hon. gentleman tries t-o muddle them.


Arthur Meighen: I must in generosity to the hon. gentleman, admit this, that they are just as correct as his whole position, they are just as correct as the whole idea and spirit behind the opposition to this Bill, they are just as near truth, they are just as near reason, they are just as near common sense.


Daniel Duncan McKenzie: Does my hon. friend argue what constitutes common sense?


Arthur Meighen: There is this difference between me and the hon. gentleman. When I argue what common sense is I precede it by some reason, I do not simply pronounce it as from high Heaven and say, "This is final, let it go."
The hon. gentleman then moves his resolution which says: We cannot go on and decide this question in the closing days of the session. Well, what makes the session close? Is it not when we get through? How is it that we could decide this subject better if .something else followed? If we have only this to consider, and this is the last business, have we not more time for its consideration than if we had some other things to consider? What particular

advantage would it be to us in our deliberations on this Bill to know there were some other Bills to follow? The hon. gentleman's resolution in effect says, there would be great advantage ! We are not asking him to go home,

we are not asking any one to go home. From the moment we had reason to believe that we were likely to secure the culmination of the negotiations we invited every one to stay. That was our plain duty, and that is our invitation today. No effort has been spared on the part of the Government to urge that hon. members both of this House and the Senate remain at their posts, and without hurry, without agitation, without being driven in any way quietly, calmly, and deliberately to think this thing out and decide what is best to be done on behalf of the people of Canada.
I was very much interested indeed in the speech of the hon. member from New Brunswick (Mr. H. H. McLean). There is no member in this House for whose motives and patriotic principles I have more regard. I see that he is apprehensive that the taking over of the Grand Trunk system will, first of all,, add to our responsibilities and debts, and, second, that it may possibly result in a diminution of traffic through the port of St. John. Well, naturally the taking over of a large railway system adds to our obligations and to our responsibilities; there is no doubt about that. It does not add, as hon. gentlemen opposite would like to confuse the country into believing. Apropos of that-here is another marvel that I am glad I did not forget. The. leader of the Opposition says that the Drayton-Acworth report did state that $3,600,000 was the average earning of the stock for ten years, and did recommend that a reasonable1 or substantial proportion of that amount be paid to the shareholders from the first, to be increased later by 40 or 50 per cent. But he said that was to be after all the debenture stock was paid off, after the whole road was clear of encumbrances. Did the hon. gentleman really mean that? May I ask him now?


Daniel Duncan McKenzie: I have read the report.


Arthur Meighen: No; that is just what he never does on the point really in question.


Daniel Duncan McKenzie: I read the report, and it is on Hansard.


Arthur Meighen: I am sorry to flatly contradict the hon. gentleman. But I will read it for him now; that probably will do just as well. The Drayton-Acworth report, at

page lxiv, gives the dividends paid by the company from 1906 to 1915. On what stocks? On the guaranteed, on the 5 per cent first preference, on the 5 per cent second preference, and on the 4 per cent third preference. It adds that nothing was paid on the common. It gives those dividends year by year, then it deduces that thte average over the ten years was $3,600,000 on those stocks1. Does that include money paid in dividends on the debenture stock or bonds? Nothing could be more absurd. Why, it says in so many words, and there is the page-let the hon. gentleman turn to it again. He is turning up his own speech-I have that here, too, and I will read, to him what he says. At page 1250 the hon. gentleman quoted from the report as follows:
But we do not think that this is the only basis on which the people of Canada should proceed. We think this is a case for generosity rather than strict justice. Canada is under obligations to the Grand Trunk shareholders, who, in the early days, with but small government assistance, and in competition with the railways of the United States with their vastly greater resources, built up the first Canadian railway system. In later times the company has had further to meet the competition of heavily subsidized Canadian rivals. And it cannot be said that at any stage of its history the shareholders have obtained excessive profits on their enterprise. On the whole we recommend that, on condition of the surrender by the Grand Trunk Company of their entire share capital, guaranteed, preferred, and ordinary, the trustees grant a certain annuity, charged as a working expense on the whole undertaking of the Dominion Railway Company, for the first seven years, increasing at the termination of that period by something like 40 or 50 per cent.
We have left the figures blank as there will be questions. of cash in hand, value of stores, etc., .which- must make the precise figures subject to negotiation.
But our meaning is that the first figure should be a moderate but substantial percentage of $3,600,000'-
Now, during the. course of the reading of that the Minister of Railways interjected: "That is what we are doing," and the hon. gentleman went on to explain:
"A moderate percentage of $3,600,000." I would like to know from the Minister of Railways where under this bargain he makes an annual payment of a moderate percentage of $3,600,000.
Mr. J. D. Reid:	There is the $2,500,000.
Mr. McKenzie:	Evidently the hon. gentleman refers to something in the bargain that I could not come across. The hon. gentleman says " $2,500,000." That is the payment on the preferred stock but he has immediately alongside of that to pay nearly $8,000,000 on the debenture stock.
Mr. J. D. Reid:	This was to be in addition
to that.
Mr. McKenzie:	This report does not say so.
This report says that the company have to deliver up everything they have.

Mr. J. D. Reid:	No, it does not.
Mr. McKenzie:	That is the suggestion here.
They have to deliver, holus bolus, everything they have from common stock up and then the Government comes in and makes an allowance upon the basis of $3,600,000, not the whole but a moderate or substantial percentage of the amount. That is the suggestion of the Drayton-Acworth commission and that is the only authority which the Government have to-day.
The hon.1 gentleman was telling this House that the suggestion of the Drayton-Acworth Commission was that there should be paid a moderate but substantial percentage of $3,600,000, against not the preference stock, the guaranteed stock and the common stock, but against all the bonds on which the interest is from seven to eight millions, and against -the guaranteed preference stocks and common stocks as well. One reading of the Drayton-Acworth report by anybody at all will make it clear that the report not only intended to say but said distinctly: "Take it subject to these bonds and pay to the stockholders a moderate but substantial percentage of $3,600,000, and add to whatever you pay during the first few years by forty or fifty per cent later on." Surely, that is clear.


Daniel Duncan McKenzie: This is what is in the report; I understood that I was perfectly within what the report suggested:
On the whole we recommend that on condition of the surrender by the Grand Trunk Company of their entire share capital, guaranteed, preferred and ordinary. . . .


Arthur Meighen: That is what I said.


Daniel Duncan McKenzie: It does not mention
anything else.


Arthur Meighen: Of course it does not.


Daniel Duncan McKenzie: That is all that this
learned Commission mentioned; the whole thing had to be given up.


Arthur Meighen: Of course that is all
they mention; that is what I am arguing -the surrender of its share capital that is the guaranteed, preferred and common stock; but the hon. gentleman added in the bonds.


Daniel Duncan McKenzie: I did not say a word
about bonds.


Arthur Meighen: But the hon. gentleman did; here it is:
Evidently the hon. gentleman refers to something in the bargain/ that I could not come across. The hon. gentleman says: "$2,500,000." That is the payment on the preferred stock but he has immediately alongside of that to pay nearly $8,000,000 on the debenture stock.
That is, the bonds. Now, does the hon. gentleman still say that he is right?


Daniel Duncan McKenzie: I say that I was talking about stock, not bonds. You may call it debenture stock, but it is stock.


Arthur Meighen: But does not the report say that the proportion as recommended of the $3,600,000 . is to supply to the guaranteed stock, the preference stock and the common stock, which is share capital? The debenture stock is not share capital at all. It is an other name for bonds and the report makes that clear.


Daniel Duncan McKenzie: It says nothing about
debenture stock at all. I had reason to suppose that they were dealing with the property of the company; that we were going to get it when we paid for it.


Arthur Meighen: Certainly, the property of the shareholders of the company.


Daniel Duncan McKenzie: If the report did not
deal with the whole property, that is not my fault.


Arthur Meighen: The report did, but the hon. gentleman mis-stated the report.


Daniel Duncan McKenzie: I did nothing of the
kind.


Arthur Meighen: There is not a member of the House who does not see it.
Mr. Mc-KENZIE:	I quoted the report
word for word, and there it is. Do not let any minister say that I mis-quoted the report, for I did not.


Edgar Nelson Rhodes: It is perfectly within
the' rules for the minister to say that the hon. gentleman misquoted the report.


Arthur Meighen: I do not wish to take shelter behind the rule; it is absolutely clear that the hon. member did misquote it, and he sticks to it because he says that this money was to discharge the whole [DOT]thing-debenture stock, preference stock, guaranteed stock and common stock. That was not the report.


Daniel Duncan McKenzie: It may be that I was wrong to that extent, but the bargain is absolutely bad enough for my purposes.


Arthur Meighen: Certainly, because the hon. gentleman's purposes are purely political. The member for Dorchester (Mr. Cannon) favoured us with some quotations from Horace or Virgil, I know not which, but as I thought of the blind and confused gyrations through which the hon. gentleman is leading His Majesty's Opposition on this and on other great questions of policy. I was reminded of the famous apostrophe-of our own bard:

Man, proud man,
Brest in a little brief authority,
Most ignorant of what he's most assur'd,- Plays such fantastic tricks before high Heaven, As make the angels weep.


Daniel Duncan McKenzie: It is the privilege of the hon. gentleman to say these things, but I have nothing to be ashamed of in the coarse which I have followed.


Edgar Nelson Rhodes: I must asik the hon.
gentleman to remember that the minister has the floor.


Arthur Meighen: In regard to this case the hon. gentleman's mistakes were real errors and might be forgiven. I am not so sure that having regard to his whole course as leader in the conduct of other debates there has not been something to be ashamed of.
Referring again to the apprehensions of the hon. member for Royal (Mr. H. H. McLean) the obligations which we assume are set out distinctly in the now historic report which has been before this Parliament for over two years, to which our policy is securely anchored, on which it is built and by which it is justified. We are now negotiating, as the report recommends, as to just the proportion of that $3,600,000 we shall pay. We are compelled to negotiate by way of arbitration for the simple reason that we cannot agree. We take the company's properties, subject to their obligations which the company has in normal times, and up until the last year or so, always discharged out- of its earnings; and we assume a proportion of what they have regularly paid to their shareholders. That is the situation. We do that not because we want to, not because we are running out into the highways and by-ways to see what railways we can gather into our system,

that is not the spirit behind the Government's * policy,-we do that because we find ourselves in this position:	We
find ourselves with a system of railways truncated and divided East from West, a system of railways that by its very composition cannot be a complete or successful system. But more than that we do it because we find' ourselves saddled with the burden of operating at tremendous loss two great railways which private companies found themselves unable to operate-the Grand Trunk Pacific and the Transcontinental. The Grand Trunk Pacific operated last year at a Joss of $10,300,000 odd and the Transcontinental at a loss of something I think, between five and six millions. These are two roads which were built in
[Mr. Meighen. J
my judgment, without any justification. They were badly founded in business sense from the commencement. But if they had any justification, however meagre, however inadequate, it was this:	that they were
extensions of, .and part of, and to be operated with, the Grand Trunk- system. Those two railways operated not in conjunction with .and as part of .the Grand Trunk system could scarcely be said to be railways at all, operation of them I repeat, disjointed from that system, is unjustified on any principle of business or on .any principle of national common-sense.
They must be operated in the very body-commercial of that system if they are to serve the purposes for which railways are built. How are we going to do that if we do not acquire this railway? How are we going to do that if we do not stretch but and make the system what it was intended to be? How can we get any even moderately adequate value out of the Grand Trunk Pacific or the Transcontinental? We must unite it up with the great system, of which it was built to be a portion, an auxiliary, an extension and integral part. The hon. member refers to the possibility -I have heard of it more than once-of some traffic agreement that we might make with the Grand Trunk that would make that system serve the purposes intended to be served toward the Grand Trunk Pacific and the Transcontinental. If such an agreement were in the interest of the Grand Trunk, the Grand Trunk would have been before us to make the agreement long before this; indeed, it would have been in existence long ago. Ah, we are told, you can force it on them. So, perhaps we could, by holding them to their Grand Trunk Pacific obligations; strictly, we might. But here is -a company that as it is to-day cannot stand up, cannot at all events continue long under present conditions. How then is it to continue, after we have forced upon it an agreement that binds it against its interest to serve the Tanscontinental and the Grand Trunk Pacific?


James Alexander Robb: At the last annual meeting of the Grand Trunk shareholders held in London, England, in March, Mr. Smithers is reported to have stated to the shareholders that he made an offer to the Government for an absolute interchange of traffic as between the National Transcontinental and the Grand Trunk system and to operate that .system at cost. Will the minister enlighten the House as to the correctness of that?


Arthur Meighen: Yes, they to operate one end /and we to operate the other. A moment's consideration of the proposal would convince the hon. member-I do not know whether he has read it or not-that such an idea would manifestly not be in the interest of Canada. They were to get the good and we take the bad. But that is not the traffic agreement I have in mind. A traffic agreement that we forced upon the Grand Trunk railway would make us answerable to the Grand Trunk railway for the penalties which that railway might suffer as a result. Could we answer them by saying: We will not assist you, although we forced upon you a traffic agreement which makes your road subservient to ours and help to make our road pay. Before I leave that, let me repeat that we are asked to do that with a road that is now at the door of the Government for assistance; that now under present conditions is meeting with all manner of difficulties in traversing its path. But we have had traffic agreements with the Grand Trunk; we have had an agreement for interchange at Montreal with the Intercolonial, [DOT]and what has been the result? Any man in this House who understands railway business will know that, unless there is a definite selfish purpose to be served by a road in living up to traffic agreement, that traffic agreement will never serve the other road. There are a thousand evasions ooen, all manner of them, and you cannot follow them up. Have we ever been able to do so with the traffic agreement we had? It has been one continual process of dispute and arbitration ever since it was entered into and with no satisfactory results, and that was a traffic agreement only as to a small specific matter of local interchange. But a traffic agreement that is intended practically to make one big system operate in unison with another, especially a traffic agreement in any way contracted under duress, is wholly impracticable and ineffectual. That is our position.
It is worth while to add that if such an arrangement were in practice by any means made effective, it would have the practical result of bringing this system in any event under the wing of the Government subject to Government dictation and entailing Government responsibility. It would have all the disadvantages and none of the merits of complete government ownership, operation and control. Therefore, the fact is not that we are eagerly seeking after new responsibilities; we are not; we are not in a financial position to seek new responsibilities that we can legitimately avoid; the
fact is that we find ourselves in
12	p.m. a position at once onerous and grave-a position that can be relieved and improved only by the acquisition of a system that makes our own system real; that makes our present system an operating possibility and at probable success. That is why we take the course that we do. I have heard many objections and I know there are many hon. members who, if they were given a choice between assuming these responsibilities and simply *standing aside without any responsibilities at all, would gladly take the second alternative

many an hon. member on both sides would, I believe, gladly do that-but we are not in that position. We cannot get out of responsibilities, it is only a case of choosing which class of responsibility we shall assume, and .any criticism of these proposals that is not accompanied by an alternative proposal that will meet the stern necessities binding on us at this time is of no value by way of criticism. It is a waste of words and should pass by us as the idle wind. We have been addressed by prominent business men, as prominent indeed, as tire very respectable gentleman (Mr. Amyot) quoted by the honourable member for Dorchester (Mr. Cannon). We have been addressed from many quarters, I feel, by big business even which seems on this subject to be allied with honourable gentlemen opposite. We have been addressed with objections to government ownership in theory, principle and practice and all the rest of it. But we have never been addressed from big business or little business, from politician or stateman or newspaper or any pne else with any workable alternative that we could put in place of the proposals which we now venture to advance. Standing _ squarely and facing these facts, is it not the duty of Parliament to support the Government in the course we are pursuing? Is it not the duty of honourable members of this House to make clear to the people of this country our real position, not an enviable position, it is true, but a very real position that we are now in-and show them what is undoubtedly the truth, namely, that we are making the best of a bad situation, seeking to the best of our capacity as representatives of the people to take a course in the best and final interest of all?
On the motion of Mr. Robb, the debate was adjourned.
On the motion of Honourable Mr. Doherty
the House adjourned at. 12.05 a.m. Thursday.

Thursday, October 23, 1919.