1919-10-17

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Bill No. 32 (from the Senate) for the relief of Arthur LeRoy Eastcott.-Mr. Green.

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On motion of Hon. Newton W. Rowell (President of the Council), the House went into Committee to consider the following proposed resolution,-Mr. Boivin in the Chair.
Resolved, That it is expedient to provide that every person who imports into or exports from Canada any coca leaves, cocaine or any of their salts or preparations, or any opium or its preparations or any opium alkaloids or their salts or preparations, without first obtaining a license therefor from the minister who is presiding over the Department of Health, shall be guilty of an offence, and shall be liable upon summary conviction to a fine not exceeding one thousand dollars and costs, or to imprisonment for a term not exceeding one year, or to both fine and imprisonment, and that these provisions shall be read as one with the

Opium and Drug Act, chapter seventeen of the statutes of 1911, and anything in the said Act which is inconsistent with this resolution be repealed.
Mr. McKENZIE:: Perhaps the President of the Council will explain if any material departure is suggested by this resolution from what the law now is, and if any particular thing gave rise to this new legislation.


Mr. ROWELL:: As hon. members will recall, we now have an Act which was passed in 1911, which prohibits the importation of opium and drugs of the character mentioned in this resolution, except for scientific or medicinal purposes, and which provides certain penalties if they are imported without reasonable excuse. That Act has been very beneficial in its operation, but conditions have arisen which require further legislation. The United States have adopted very stringent regulations with reference to the importation of these drugs, and they are administering their Acts very strictly. Great Britain has done the same, and Japan and China have also taken strong action in connection with these matters.
It has appeared that the quantities imported into Canada have shown a very marked increase in recent years as the figures given to the House the other day indicate. In view of the situation and in order to exercise greater control over the importation and export of these drugs, in consultation with the Imperial Government, this Government in the month of May last passed Orders in Council prohibiting either the importation or the export of these drugs except under license granted by the Department of Trade and Commerce. By reason of the licenses which were thus provided for, a measure of control over the importation of these drugs has been secured which has proven highly beneficial, and it is the intention when this resolution is adopted, to found a Bill upon it to amend the existing Acts so as to provide that there shall be no importation or export of these drugs except under license to be granted by the proper Governmental authorities. The committee will be interested to leam the effect of requiring a license on the importation of these noxious drugs. The conclusion which the officers of the department have reached is that large quantities of these drugs which have been imported in recent years have not (been imported for consumption in Canada, and that these large quantities do not indicate a corresponding increase in consumption, although there may be some increase in consumption. It is suggested that the object of importing through Canada is to get easy access into the United States, because o.f the strict regulations against importation into that country, and because it is easy to smuggle these drugs across the international boundary line.
I will give the House the figures showing the effects o,f the control exercised under license. As regards cocaine, for the fiscal year ending 31st of March 1919, 12,333 ounces were imported, whereas for the first three months under license, July August and September of this year, the quantity was only 1,544 ounces. The committee will see what a great reduction that means. As regards morphine, the quantity imported for the fiscal year ended the 31st March, 1919, was 30,087 ounces, whereas during the three months of license the quantity was reduced to 2,695 ounces, or approximately 10,000 ounces per year as compared with over 30,000 ounces. As regards crude opium, the quantity imported for the fiscal year ended the 31st March, 1919, was 34,263 pounds, and for the three months under license, 1,110 pounds, or approximately 4,440 pounds for the year as compared with 34,263 pounds. As regards opium powder, there is not so much of a change because only a small quantity was imported. For the fiscal year ended the 31st March, 1919, the quantity imported was 123 pounds, and for the three months under license, 23 pounds. Not only has the quantity of these drugs imported been, by the requiring of a license, remarkably reduced as the figures disclose; but the measure of control which the license gives over the druggist who imports the drug enables the department to follow the matter up and to require the druggist to show how he has disposed of the drugs imported. Moreover, even with this greatly reduced importation some druggists have not been able to show how their purchases have been disposed of.' These cases will be followed up in order-to see that any who are violating the law are punished in accordance with the provisions of the law.
At the Dominion Council of Health last week, representing the health departments of all the provinces of Canada, a strong resolution was passed urging the Government to take action in this matter. They went to the extent of urging absolute Governmental control, but that involves a great many considerations which would require careful thought. All we are asking for at the present time is legislation which will continue in effect the existing Orders in Council which were passed under the War Measures

Act and which require a license either to import or'to export these particular drugs.


Mr. J. H. SINCLAIR:: The Government
is. not in favour of public ownership of drugs?


Newton Wesley Rowell: If a proper system of handling can be worked out that would not be expensive, there may be a great deal to be said in favour of the Government's absolutely controlling the importation and export of these drugs.


John Howard Sinclair: Is it true that the use of these drugs has largely increased in Ontario during the past year?


Newton Wesley Rowell: We have no evidence of that, and my advice from the officers of the Health Department is that there is no ground for concluding that the increased importation is due to any laws recently enacted in Ontario.
Resolution concurred in.
Hon. Newton W. Rowell thereupon moved for leave to introduce Bill No. 34, to amend the Opium and Drug Act.


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Motion agreed to, and Bill read the first time.

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On motion of Hon. Mr. Maclean the House went into Committee on the following proposed resolution, Mr. Boivin in the Chair:
Resolved, That it is expedient to amend The Meat and Canned Foods Act, Chapter twenty-seven of the statutes of 1907, as amended hy chapter thirty-three of the statutes of 1917, by providing (a) for the more exact definition of dry lobster meat and dry meat; (b) for a true and correct description of the contents of cans of fish or shell fish including the vernacular name and the minimum weight, to be plainly printed thereon and the name of the place where the same was packed; (c) for the size of cane for canning lobsters, the weight of content thereof, and that no other size is to be used without written permission first obtained; (d) for the correct labelling of all cans of fish or shellfish imported into Canada so as to indicate the kind and quality of their contents, the minimum weight of the contents, the place of origin, and the name and address of the person, firm or corporation by whom they are packed or toy whom they are imported, provided that canned fish or canned shell-fish imported into Canada to be exported again need not be so labelled.
Mr. DUFF:: Explain.


Mr. A. K. MACLEAN:: It will be remembered that a resolution in practically the same form as this was before the committee last session. The purpose of the reso-

lution is to amend two sections of chapter 33 of the Acts of 1917 which prescribe the weight of lobster which can be packed in certain cans. One of the sections as it stands reads as follows:
A one-pound can, fourteen ounces, avoirdupois ;
A three-quarter pound can, ten and one-half ounces, avoirdupois;
A half-pound can, seven ounces, avoirdupois;
A quarter-pound can, three and one-half ounces, avoirdupois.
The terms of the section I have just read were the result of a compromise on a Bill introduced in the House in the session of 1917. They did not represent the departmental view, nor the views of those engaged in the canning of lobsters, and it has been demonstrated, to the satisfaction of the department at least, that it is inadvisable to continue this section in its present form. It is stated in the Bill that a pound can shall contain fourteen ounces. The packers object to that, because they feel it gives a wrong impression to the public, and in many instances it has been charged that it permits fraudulent practice upon consumers. The Bill founded on this resolution will provide that lobsters must he packed in (bona fide sized cans, 3, 6, 9, 12, or 16 ounces, and that the label on the can shall indicate the net minimum weight of the lobster meat contained- in the can.
My investigations lead me to the conclusion that the amendments are desirable, and give only justice to those engaged in the industry. The canning of lobsters is much different from the canning of other fish. For instance, the packer always endeavours to put one or more whole lobsters in the can, with claws and tail, whereas in the case of tinned salmon or herring the contents may represent the meat of any number of fish. About 25 per cent of the cans of lobster packed in Canada represent three ounces of dry meat, and 60 per cent, 6 ounces of meat. The packers' experience extending over a great number of years is that cans containing 3 and 6 ounces best suit the public's needs, and any departure from that will work an injury to the industry, and be of no particular benefit to the public. The Bill before the House last year was referred to a committee, but for some reason which I do not know the committee never reported to the House. I hope the legislation will be accepted this session, and that we shall not be obliged to send the Bill to a committee. I might add that the legislation of 1917 required the adoption of a new size of lobster can. Now, lobster cans are standardized, and are made for that par-

ticular business. A lobster can is not made of the same material as a vegetable can, for instance. For the present season it has been impossible for the packers to get cans of the size required by the statute of 1917, and in any event leave will have to be given them for this season to continue to use the same sized cans as they used prior to 1917.


Mr. FIELDING:: I think the existing law of 1917, mentioned by my hon. friend was . found so embarrassing to the trade that the Government were obliged to make what practically amounted to amendments, by way of regulation, to conform to the custom of the trade. Then last session the matter was brought before the House with the view of enacting practically what is now proposed, or substantially the same thing. A committee had the matter under consideration. There was some difficulty about it, and they had not reached a conclusion when prorogation took place. One of the difficulties has been that under the existing law you use the expression " pound," " half-pound," and so on, and when you say a pound can shall contain only fourteen ounces you are practically saying something which it is not possible to carry out. It was alleged in some cases that you were deceiving the public. I think the general feeling of the committee and of the House will be that we are not so much concerned in the weight of the can, as that it shall be correctly stamped. Here we are getting away from the words "poqnd " and " halfpound " and adopting the present standards of packing without describing the tins as pound, half-pound, or anything else. The bulk of the trade is export, the market is well established, and the weight of the can is pretty well known. I think this legislation will meet the conditions of the trade, and is in the right direction.


William Duff: This resolution evidently
does not refer to canned lobsters alone. I see it calls "for the correct labelling of all cans of fish or shellfish imported into - Canada."


Alexander Kenneth Maclean: The Bill will
also provide that all cans of fish imported into Canada shall comply with the requirements as regards the description of the contents. That is only right. Another provision will be that the contents of the can shall be -stated on the label in respect of fish that is not shellfish.	.
Mr. J. -H. SINCLAIR: What is the legal weight of a can of -salmon?


Alexander Kenneth Maclean: I do not think I can give my hon. friend that information
just now. I -shall endeavour to obtain it for him on the second reading of the Bill.


John Howard Sinclair: We should have that information. This relates to all fish, and if we are going to change the usual weights of salmon-


Alexander Kenneth Maclean: Oh, no; we are not changing the usual weights. This Bill does not propose any change in the weight of the contents of cans containing fish other than shellfish.


Mr. CAHILL:: Will the present size of the can be altered? Will you use the can which in more honest days was reputed to contain a pound of lobster, and stamp on it "12 ounces," or will you alter the size of the can, so that a 12-ounce can shall be smaller -than the 16-ounce can?


Alexander Kenneth Maclean: The purpose is that lobsters shall be put up in five different sizes of cans-,-three, -six, nine, twelve and sixteen ounces,-and they -shall not be packed in cans of other sizes. The Bill also provides that the label must disclose -the net weight of lobster meat contained in the cans.


Frank S. Cahill: Is the can now to be
used for twelve ounces of lobster to be the same size as -the can which has always been used to contain sixteen ounces of meat?


Alexander Kenneth Maclean: The twelve-ounce canmustcontaintwelve ounces of meat-. That must be the net weight of the meat, and if the can is not at present large enough it must be made larger.


William Stevens Fielding: The object, I take it, is to prevent any change in the sizes of cans, because the cans are standardized, and that is not merely a matter of convenience. These cans are of an established standard in the foreign markets. The essence of the Bill, I understand, is that the weight of the contents of the can shall be stamped on the can itself and not merely on the label, because in the trade the foreign dealer likes to put his own label on the cans. Lobsters are usually shipped in cans without labels. The intention is that the dry weight of the meat shall be stamped on the can, and if that is done, I do not see that there can be any injustice. The same standard of cans is retained for convenience, but there can be no attempt to deceive the public if the weight of the meat is correctly stamped on the can.


Frank S. Cahill: But you are using what was always regarded as a pound can. At least that was' the case until 1917 when it



was reduced to fourteen ounces, and now twelve, and probably next year ten ounces, according to the extent to which we may be able to deceive the buying public. We are going to use a pound can for twelve ounces and, as I understand the Bill, somewhere on the can " twelve ounces " will be stamped. But people who have been for years buying lobster in cans supposed to contain sixteen ounces, will now get the same sized can containing only twelve ounces.


William Duff: In the past, although people thought they were buying a pound of lobster they were really buying anything from fifteen to eleven ounces. That amount was contained in the same size of can which is now proposed, if I understand the lobster packers correctly. They do not intend to change the size of cans which have been used for forty years in the trade -three, six, nine and twelve ounces-but they intend to make a larger can to contain sixteen ounces.
Resolution reported and concurred in.
Mr. A. K. MACLEAN thereupon moved for leave to introduce Bill No. 35, to amend the Meat and Canned Foods Act.


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Motion agreed to, and Bill read the first time.


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Hon. .1. D. REID (Minister of Railways) moved the second reading of Bill No. 33, respecting the acquisition by His Majesty of the Grand Trunk Railway system.
Mr. MeKENZIE: Will the minister explain, please.
Mr. J. D. REID:: I promised the leader of the Opposition last evening that I would procure certain information for him, I sent it to him this morning, and so far as I know it is satisfactory. Any further information that may be required I will endeavour to obtain at the earliest possible moment. When I introduced the resolution on which this Bill is founded I made a statement regarding the entire situation, and I do not think that I can add anything now to what I said on that occasion. Any further remarks I may have to make I shall reserve until we are in committee on the Bill, which is practically word for word the same as the resolution. The House is therefore possessed of all the facts.


John Howard Sinclair: This is a proposal to pur-
- chase and operate another great railway system consisting of 8,173 miles of railway, of which 1,665 are in United States territory. The total capitalization, according to the blueJbook which has been distributed to hon. members, is, on paper, $707,929,817. The Government purpose to guarantee the existing bonds of the Grand Trunk Railway to the amount of over $200,000,000. , Whether the system is worth that amount of money or not it is difficult at this stage of the discussion for us to decide. The whole question is a very complicated one. The arbitrators are supposed to settle the value of the stock and to protect the country in this transaction. But the House has very meagre information in regard to the value of the property. When we get the stock it is weighted down with guarantees, liens, mortgages, equipment notes and all kinds of liabilities. In order to show you the difficulty of dealing with this matter, I would like to select just one case out of this blue-book as a sample. If you have the book before you, and if you will turn to page 51, you will find a large number of subsidiary railways listed, the stock of which is guaranteed by the Grand Trunk Railway Company. Let me read:
Besides the guarantees to the Grand Trunk Pacific, the Grand Trunk Railway Company have guaranteed the following:
Atlantic and St. Lawrence railroad-5% on capital stock of $5,484,000 as rental.
We are not told in this book whether the guarantee lasts for one year or for more than one year. It may be for years and it may be forever, but -there is nothing in the blue-book to indicate how long that guarantee is to last. It is very difficult for me to form an opinion with this information as to the liability in regard to that guarantee. If you turn -to page 54 of the blue-book, you find how this railway is losing money. I am -speaking of the branch line* that I have mentioned, namely, the Atlantic and St. Lawrence railway. On page 54 you will find that in the last seven and a half years this railway has been meeting a large deficit:
Atlantic and St. Lawrence railway.
1910-	11 June	$ 646,5001911- 12	"	
653,3941912- 13	"	
610,6881913-	14	"	
432,5541914-	15	"	
421,1361915-	16	"	
179,0671916	June	to December	
266,5651917	December	1,27'2,496
, Showing that for the last seven and a half years this railway, the Atlantic and St. Lawrence, whose bonds the Grand Trunk Railway Company have guaranteed perpetually, as appears from this book, has been losing money at the rate of over half a million a year. If is difficult for me to estimate what that railway should be valued at as an asset when we purchase if. That is only a sample of a large number of other railways the stocks and bonds of which are guaranteed by the Grand Trunk Company.
I submit that the House should not be asked during the dying hours of the present session, and in the present disturbed financial condition of the country, to deal with such an enormous proposition as that involved in this transaction. Another session is to be called, we are told, within about three months and the whole of the time would be required by members of this' House to acquaint themselves with this proposition and to consult the people in regard to it. No interest would suffer by the delay. We want to know whether we are purchasing a solvent or an insolvent concern. The Minister of Railways says that if we enforced the Grand Trunk Pacific guarantees against the Grand Trunk, the Grand Trunk would have to go into liquidation. That is not a good reason for pushing this forward so rapidly because this is all in our own hands. We can take the other course; we can decide not to enforce the guarantee against the Grand Trunk at the present time and allow the Grand Trunk to go ahead and carry on the business until the country recovers from its present financial difficulties and decides the best course to be taken.
We should also have information in regard to the physical condition of the road. We are told in the report known as the Drayton-Acworth report, made in 1917, that the road was run down at that date; and that it would require the large sum of $51,000,000 to put it in a state of repair. In order that there may be no question about this, I will read from the Drayton-Acworth report, or the " Report of the Royal Commission to Inquire into Railways and Transportation," dated 1917. It says at page 34:
The $21,000,000 dealt with above represent the money in which the responsible officers of the company estimate to be required to put the existing: plant into good normal condition. This is a revenue liability. But the existing plant is quite Inadequate for existing traffic and requires large additions, for which new capital must be raised. The estimates of necessary capital expenditure submitted to us are as follows:
71 i
Requirements for rolling stock,
shops	and machinery	 $26,150,000
Requirements for automatic block signals (main line in Canada
only)	 3,533,000
Requirements for installing rock
ballast	crushing plant	 467,500
Total	 $30,150,500
Putting together revenue and capital expenditure, we find that the Grand Trunk railway, in the opinion of its own officers requires over $51,000,000 spent upon it to put it in a position to meet the requirements of its today's business. We see no reason to expect that under existing conditions this necessary money will be provided.
That was the opinion of the present Finance Minister of this country two years ago and we have no reason to believe that the Grand Trunk system is in any better position physically to-day than it was at the time that report was written; in fact, we have reason to believe that it is not in as good a condition as it was three years ago. Mr. Speaker, the Minister of Railways himself has admitted that he has not made any inspection of the road. He tells us he has travelled over the road-I suppose in his private car, smoking his cigar.


John Dowsley Reid: No, I do not smoke,


John Howard Sinclair: Well, then he was not smoking but found that the road was very comfortable and he tells us that it is all right but he did not think it worth while to secure the opinion of his own engineer, or of any other engineer in regard to the physical condition of the road before pledging the country to purchase it.
Now, Mr. Speaker, I submit that the reckless and haphazard way in which the Government is dealing with these big questions is to say the least of it, alarming. On July Jll, the Minister of the Interior made a written offer to the Grand Trunk Company that apparently he did not understand himself; he admits now that the offer was impracticable and had to 'be withdrawn. One would expect, to say the least, that in a proposition involving $400,000,000 every detail would have been thoroughly studied before a written offer was made to the company. I submit also that some consideration should be given to the financial condition of this country. The people of Canada, at the present time, are doing a good deal of thinking in regard to the future of our financial affairs, and the time has arrived when the Government should also give this question some thought. In 1911 the Consolidated Revenue Fund was turned over to the present administration in very good shape. If you look at the accounts

of that year you will find that all commitments were provided for and that a surplus of some thirty millions was in the treasury. In less than two. years the present administration had reached and were scraping the bottom of the strong box, and ever since that date they have been piling up huge deficits, very large deficits indeed.


Mr. MEIGHEN:: In the second year of the period to which the hon. gentleman refers we paid off $25,000,000 of the national debt.


John Howard Sinclair: Yes, but you did not have a surplus.


Arthur Meighen: We paid the debt instead.


John Howard Sinclair: At the close of the second year, as I understand it, the deficits began to accumulate-


Arthur Meighen: Oh, no.


John Howard Sinclair: -and they have been accumulating ever since.


Arthur Meighen: Not until the war broke out.


John Howard Sinclair: The Canadian Northern Railway expenditure was not for war. Now, Mr. Speaker, the ex-Minister of Finance (Sir Thomas White) himself admits that we have a net debt at the present time of two billions of dollars, or six times as much as it was in 1911. I admit that a very great portion of it is due to the war, but a large part is also due to the reckless extravagance, or something even worse than that. We now have on our hands four great railway systems into which money is being sunk day by day. From the nearest estimate that I can make, we are losing money at the rate of about $100,000 per day on the four existing railway systems. Since the Government took over the Canadian Northern, the Grand Trunk Pacific and the Transcontinental, the railway rates have increased and the deficits have become larger. I submit, Sir, that we will have the same experience when we acquire the Grand Trunk system. Speaking for myself, while I have an open mind on this question, 3 am in favour of private ownership and public control. That question was solved, and I think rightly solved, by the Government of Sir Wilfrid 'Laurier when they provided for a Railway Board. That board have full power to deal with rates, with theexchangeof traffic, with duplications of routes, and with all those questions that arise in connection with our railway management. In this con-

nection I would like to cite the opinion of Mr. A. H. Smith, one of the royal commissioners, who failed, as you remember, to sign the Drayton-iAcworth report; he held a different view from his colleagues in regard to that matter, and I am strongly inclined to think that he was right. Mr. Smith is a well-known authority, one of the very highest in America, and this is what he says on this question:
I am unable to join my colleagues in their recommendations. They propose that practically all of the railways in Canada, except the Canadian Pacific and the American lines, shall be turned over to a corporation to be managed by a board of trustees appointed by Government. They insist that this board is to be permanent and self-perpetuating. I do not know by what means one Parliament can bind its successors to a given policy, especially in so simple a matter as changing the organization of a government board. My friends seem to avoid government ownership and operation, in fact condemn it as inadvisable, but propose ' a plan which contains so many elements of danger in the direction which is sought to be avoided, that I am unable to join them.
Their plan would add about a billion dollars to the direct debt of Canada. The interest on this is about forty millions, adding very largely to government expenses. Judging from the experience Canada has had with its government railways, it is fair to assume that this would remain a permanent burden. Operated by private companies, this interest would ultimately be borne by the companies without recourse to the government funds, and at the same cost of service to railway patrons as would obtain under government operation.
Then he goes on to say:
The recommendation creates a Dominion Railways Company, owned by the Dominion Government, to take over those roads. There are about 7,000 miles in the United States controlled by Canadian companies. The Canadian railways depend for no inconsiderable portion of their revenue on United States traffic. A fundamental defect of the plan, therefore, is in plaolng the Government in the railroad business, not only in Canada, but also in operating railroads in the United States, subject to both federal and state regulation.
Through private railway management Canada has obtained about one mile of railroad for each $30,000 of Government aid of guarantees, which is but a fraction of the cost of government railroad undertakings. In some instances, a large proportion of the aid was in land, the value of which produced by the building of the railroad and the settlement thereby made possible. Compared with the total outlay involved in producing railroads by the Government itself, as, for instance, the case of the Intercolonial or the Transcontinental, from three to six times that amount have been used to realize equal results. This shows distinctly the value of enlisting and retaining private enterprise.
That is the opinion of Mr. Smith on this important question. Noyr as to public ownership, while, as I said before, I am not saying that it is not possible of solution,

my objection to it is that as a business proposition our experience is that it does not work out well and that it does not pay. We have our own experience so far in the Intercolonial. We also have the experience of Great Britain and of the United States, and they all point one way, namely, that the operation of railways by the Government means higher rates and larger deficits. The best example that we have is that of the Intercolonial which has now been in operation for some forty years.
The explanation that has been given is that the failure of the Intercolonial railway was due to patronage. But patronage, we are told has been abolished for about eight years, yet the Intercolonial does not seem to be making any more progress than it did * before patronage was abolished. With such an able and energetic Minister of Railways as we have at the present time, one would have expected that if it was at all possible to do so, the Administration would have made a financial success of the operation of this railway system. I have held the opinion for some time that the Intercolonial railway has retarded the progress of the country through which it runs, especially the Maritime Provinces. There has been a constant refusal to construct branch lines for the purpose of directing traffic to the main line. When the Canadian Pacific was built the promoters of that system projected branch lines all over the country wherever they were required, in order to feed the main line. But that was never done in the case of the Intercolonial; and in the policy which was followed in that respect both parties were alike. In the old days when Sir John A. Macdonald was in power, his view was that the Government could not afford to project one branch line, because if it did, it would be swamped with applications for the construction
4 p.m. of other branch lines. The same policy prevailed undeT the late Liberal administration until about 1910, or about the time they were driven out of power, and up to 'this time the Intercolonial has not embarked to any considerable extent upon the construction of branch lines. But branch lines had to be constructed, and the people in the different localities in New Brunswick and elsewhere where such lines were needed themselves embarked upon the construction of these branches. The consequence is that these lines have been unprofitable. Overhead expenses were large; repair shops had to be provided for each little branch line-and all this could have been avoided had the work been undertaken by the Intercolonial; but it was not
done, and now the Government have to take over those lame ducks at a very heavy cost to the country.
I say that for political reasons the Intercolonial failed to build branch lines. The pressure was not sufficient from the Maritime Provinces, and Parliament did not vote the money. Moreover, vessels were not provided on the Atlantic coast to collect traffic. Early in its history the Canadian Pacific embarked upon ship-owning and provided vessels at various places on both coasts for the purpose of collecting traffic for their line. The Intercolonial, on the other hand', could scarcely be induced to furnish the necessary ferryboats. For fifteen or twenty years traffic was carried- across the strait of Canso on a scow; and it took the lifetime of a generation to give to Prince Edward Island a decent ferryboat -for service between that province and the mainland. Even to-day the Intercolonial has not a single boat on the Atlantic coast, so far as I know, to collect traffic for its main line.
During the forty years of its operation the Intercolonial Railway has not done anything to establish an express company. The Canadian Pacific Railway Company very soon built up an express business-, which was carried on with such energy that the fresh fish of the Pacific soon began to compete with the fresh fish of the Atlantic in the Boston market, carried across the country by the Dominion Express 'Company. During all these forty years we have been paying money to private express companies simply because we have not had the enterprise to establish an express company of our own.
The Canadian Pacific Railway Company built a fine of hotels all the way from Quebec to Victoria. There is no more attractive tourist country in Canada than is found in the Maritime Provinces, but although the Intercolonial Railway has been in operation for forty years, it has not been thought worth while to attract tourists by building a hotel.
In addition to this lack of enterprise, we still have the old party system. Patronage, the purchase of constituencies with public money, is known to be as rampant as ever. This Government has been making -loud professions in regard to the abolition of patronage and the abolition of all kinds of government favours. But we on this side of the House do not admit that the Government has made very much progress in that direction. We had the case of Kingston a few days ago; but if you want better proof you may consult the Estimates of the last ses-

Finance (Sir Thomas White) addressed the Presbyterian Synod in this city a few days ago, hut he did not use the same slogan as the Minister of Immigration. He knew it was no use to ask this Government - to save, so he changed the language and sent out the motto: " Hard work and the Ten Commandments." I think if the ordinary taxpayer were to visit Ottawa and thoroughly understood how his money is being squandered, he would take an apoplectic fit. Let me call a witness on financial conditions at the present moment, no less a person than the ex-Minister of Finance, the man who knows more about these questions than any other man in Canada. In giving evidence before a committee of this House a few days ago he said:
Just look at it from several standpoints. The national debt of this country before the war was something over $300,000,000-I think $335,000,000. I estimated in the Budget speech of this year-and X do not think there is any room for doubt about the matter-that by the end of this year our net national debt will reach nearly $2,000,000,000.


Mr. SPEAKER:: If the hon. member is referring, as I think, to the evidence taken before a special committee of this House which has not yet reported, he is not in order in quoting from that speech.


John Howard Sinclair: Perhaps I may summarize it. The net debt of Canada is placed at the enormous sum of $2,000,000,000. We are told that the interest prior to 1914 amounted to only $13,000,000 a year, but that now it will likely reach the sum of $115,000,000 a year. That is a very heavy liability for the people of this country to meet. The ex-Minister of Finance has practically told us that we have not the money, he does not know where we are going to get it, but yet we are asked to embark on this very large expenditure without any explanation where the money is coming from. The ex-Minister of Finance made an eloquent speech in the House yesterday in favour of this legislation, and dealt with every phase of it except the financial one. He did not say a word to the House as where we were to get the large sums of money that will be required to carry out this undertaking. It comes down to this: We have not a dollar for the returned soldiers but we have millions for the financial magnates over in London.
While the Government is refusing to take advice from members on this side of the House and insists on embarking on this very large expenditure, what is being done
fMr. Sinclair.]
elsewhere? Mr. Lloyd-George a few days ago absolutely refused to listen to the claims of the Socialists and Radicals-and some of the labour party in England for the nationalization of the coal mines, although they made out just as strong a case, and a much stronger one in my opinion, than has been made for the nationalization of the Grand Trunk railway system. In the United States President Wilson has decided to restore the railways to their former owners, and a Bill was introduced in Congress a few days ago providing for the gradual turning over of the ships built by the United States to private ownership. The result will be that Government will in the end discontinue the management and ownership of tramp vessels.


Arthur Meighen: When did President
Wilson announce that his policy was to restore the railways to their owners?


John Howard Sinclair: I have not the date, but the announcement was made in the press.


Arthur Meighen: I do not think it was ever made.


John Howard Sinclair: I think my hon. friend will find in the Congressional Record that the Government of the United States have decided on that policy.


Arthur Meighen: There has been no definite statement.


John Howard Sinclair: The step has not-yet been taken, but I think the announcement has been made that it will be done shortly. Let me asik what public interest can be served by pushing this Bill through at the present time? Will it reduce passenger rates? Will the farmer get his produce carried to the seaboard more cheaply than at present? Our experience teaches us that he stands to pay a higher rate, and that later on the country will have to meet another large deficit. I take no stock in the visions that are seen by my hon. friend the Minister of Railways with regard to the Canadian Pacific. He seems to see ghosts in that quarter, and to be afraid that if we do not take over the Grand Trunk at the present time it will go into liquidation and be purchased by the Canadian Pacific. Now, there is no evidence that any such a thing will take place. If the Grand Trunk should go into liquidation, and I hope that will not be necessary, but if it should happen, why should the Canadian Pacific get it instead of the people of Canada? Will the Government of Canada be asleep when the railway is put under the hammer, or would they be

on deck looking after the interests of the people? If they were on deck they would be pretty strong competitors with all their debts and deficits against even the Canadian Pacific. But we are asked to take it for granted that if anything should happen to the Grand Trunk system it would necessarily fall into the hands of the Canadian Pacific instead of into the hands of the Government. My judgment is that consideration of this matter should be postponed at least until next session, so that members may he allowed to study the proposals and consult their constituents before any further step is taken. In the meantime we should devote our attention to the maintenance of our own credit, and the care for our returned soldiers, and, as I said before, we should consult the people before embarking on such a stupendous venture as this.


Mr. H. H. STEVENS (Vancouver Centre):: Mr. Speaker, the hon. member for Guys-borough (Mr. Sinclair) has indulged in very considerable criticism of the Government, which is something that we can naturally expect from him upon any occasion on which he cares to contribute to the debates of this House. He has, however, offered very little, either in the form of argument against this proposal or in the submission to the House of any reasons for the adoption of any other course. He spent a great deal of time in a description of the furniture in the office of the Minister of Colonization (Mr. Calder). Indeed, he carefully examined every item of equipment, the only novelty which I observed to escape his attention being the cost of the rubber heels on the boots of that minister. He also told us something about the Ten Commandments and the Presbyterian Synod, but he proffered very little in the way of concrete and practical criticism of the measure now before the House. He made one observation which I think is worthy of attention and which I shall use as a strong argument in support of this measure. He said that the former Minister of Finance ('Sir Thomas White) knew more about this problem than any other man in Canada. I quote his own words, Mr. Speaker, in order that I may make my argument the more effective: " The ex-Minister of Finance knows more about this problem than any other man in Canada." Having said that, he proceeded to quote the ex-minister in regard to ' thd financial obligations of the country. Now,
I wish to read to him what the ex-Minister of Finance had to say in regard to this project, and I ask him to accept the opinion of the man who "knows more about this
problem that any other man in Canada." The ex-Minister of Finance, knowing better than any other man what the problem is, has this to say regarding the burden which will be placed upon the country by the acquisition of the Grand Trunk system:
The country will be able to bear whatever marginal loss there may be in the operation of these roads until such time as they are placed on a paying basis.
In other words, if there is a loss the exMinister of Finance's expert opinion is that the country will be well able to bear it. Not only did he say that, but he gave his unqualified support to the whole proposal. The hon. member (Mr. Sinclair) I noticed, came out squarely for private ownership and directly in opposition to public ownership, and in support of his position he said that he was in favour of the policy of the late (Laurier Government, which he told us had a railway policy of "private ownership and public control." I wonder if the hon. member has forgotten entirely the huge expenditure of the Canadian people's funds in the National Transcontinental. Nearly $200,000,000 was invested in that enterprise, and not only was there not a cent of return from it, but it has been a gigantic loss to the country. That was an investment by the Laurier .Government which my hon. friend supported for so many years.


John Howard Sinclair: It was to be operated by the Grand Trunk Company.


Henry Herbert Stevens: My hon. friend must remember he said " private ownership and public control," and this was the exact reverse,-public ownership and private control. Now, before I proceed to submit my views to the House I desire to refer for a moment to the Drayton-Acworth report. This report recommends that control both of the Grand Trunk Pacific and of the Grand Trunk be assumed by the people of Canada, and my hon. friend advances this report as an argument against this proposal. There is the clear recommendation from that commission that the people of Canada should assume control of the Grand Trunk as well as the Grand Trunk Pacific, and the Government is acting upon the advice of that report, the value of which has never been challenged by hon. gentlemen opposite, and which has been repeatedly quoted by them in the debates on this subject. My hon. friend cited the Intercolonial as a hideous example of the failure of public ownership, and I shall have a little to say in connection with that point later on. He chided the Government for encouraging the construction of railways in

ation, should be forced into a receiver's hands, that we should say to the Grand Trunk Railway Company: "You have debts that you say you cannot pay and which we know you cannot pay; therefore, we are going to force collection toy driving you into the hands of a receiver." Am I unfair in this? I anight quote the -hon. member who leads the Opposition, at this time. He said in his remarks the other day that he was not afraid of liquidation, that we should pare down this system to, as he called it, running weight. He had in view, I sup- j. pose, some Olympic sports and he wanted to pare it down to running weight and let it go into the hands of a receiver.
He assured the Minister of Railways that he would not get a black eye from the country or from the financial world if he did so. Then in the same speech he also made the statement that to allow the Grand Trunk Pacific to go into the hands of a receiver, as we did some months ago, was "a disgraceful and unbusinesslike act." Now, what are we to think from an argument of that kind?


Daniel Duncan McKenzie: The hon. member is misquoting me. I said that the method by which that road was put into the hands of a receiver was a disgraceful and unauthorized method. It is not putting the road into the hands of a receiver of which I complain, but the way it was done.


Henry Herbert Stevens: I accept the hon. gentleman's explanation, but I am quoting from Hansard. The hon. gentleman is reported in Hansard to have said:
The President of the Council as a member of the Government put It in the hands of a receiver and we say that was a disgraceful and unbusinesslike thing to do.
Then a little later on, in the same speech, he made this statement:
I am not afraid of liquidation. The Grand Trunk would not be the first railway company that has gone Into liquidation.
and so on. Further he says:
Let them be shaved down to proper running weight; then we will know where they are at.
There are railroads in Canada that have gone through the same experience because they got into trouble; and I assure the Minister of Railways that he will not get a black eye from our people by allowing any concern that is not able to carry on to go into the hands of a receiver.	.
My hon. friend can question that if he wishes-there are his 'own statements.


Daniel Duncan McKenzie: I do not question it at all. ' I accept the full responsibility of what I said.


Henry Herbert Stevens: The point I am making is this: The suggestion is that this concern shall be allowed to go into the hands of a receiver. Now let us examine that briefly for a moment. A receivership pre-supposes one of two actions on the part of the receiver-he will either- operate the system, carry it on on behalf of the owners of the company and the creditors, or else he will realize upon the system-one or the other. Now it is urged by hon. gentlemen opposite that a receiver should be put ki and that the receiver should realize upon the Grand Trunk system and the Government should in some manner come in and try and purchase under this system. Let us examine the method which (must be followed in connection with the realizing on this concern. To realize, the receiyer must do one of two things: He must sell it as a running concern, or else sell it piecemeal. If he sells it as a running concern the Government is likely to be about the only bidder, because it is not conceivable that any other company would be large enough to make a bid at this time for the Grand Trunk system. Indeed, it is questionable whether even hon. gentlemen opposite would stand by and allow it to he sold to any other private concern under such circumstances. But the Government would likely be a bidder, and in selling it it is unlikely that the receiver, or the courts, would disregard the value of the ownership; and now I am coming to one c.f the main arguments of hon. gentlemen opposite. They say that this stock is valueless, and they make the statement without having any particular argument to base it upon. They say the stock is valueless. They are trying to lead the country to believe that there is some intention on the part of the Government to make a large fortune for certain of the owners of this road. I say, then, that the receiver, in disposing of this road as a running concern, would have to place a value upon the ownership of the road, which is represented in the stock of the road. Now, then, how would he value this concern? He would take into consideration, first, the physical assets -roadbed, rolling stock, and such things as that. He would next take into consideration the liquid assets-bills receivable, and so-forth. In the third place, he would take into consideration leaseholds. The understanding is that there are a number of leases in connection with this transaction, all of which have value. He would take into consideration, in the fourth place, the contracts that hive been entered into, and which are

in existence at this time, allso show the franchise and the good will of the railway. There may be no good will, but it is a factor which a receiver must take into consideration; and in valuing these, or in ascertaining their value, the receiver, or the courts, would be called upon to hear most exhaustive evidence. So that I point out here that in the proposition before us the Government is simply taking cognizance of the usual method of carrying out a business transaction of this kind. They say: We will purchase this road for a certain sum down, represented in security of the original bonds or debenture stock. For the balance, that is, for the so-called capital stock of the company, preference and common, we propose to arbitrate, to ascertain whether there is any value in it. And I submit, Mr. Speaker, that no matter how certain one might be that there was no value in these stocks, we are still bound to give the owners of those stocks, under ordinary procedure of law, under ordinary business procedure, under the ordinary procedure of assignment and receivership-we are bound to give those owners an opportunity to demonstrate that there is the value in the stocks which they claim.


Daniel Duncan McKenzie: I am always willing
to learn, and my hon. friend is dealing with a very nice business proposition. Can he tell me of any process by which a receiver is bound to get a fixed amount of money for goods, or chattels, or property that comes into his hands as a receiver, or is there any process by which a court of this country can fix an upset price upon property in the hands of a receiver, or does he know of any case of the kind?
'Mr. STEVENS: My hon. friend advances an argument which if it were applicable to this case in ordinary common sense would be very sound. He is quite right to this extent: No receiver is called upon to place a fixed value upon any of the assets which come under his control other than secured assets, and even then, of course, if there is no value there for the secured assets they suffer to that extent, but that is not the point at issue at all. My hon. friend suggests in his question a new ground which has not hitherto been placed before the House, and that new ground is that there is no value in the Grand Trunk Railway system represented in the debenture stocks. Hitherto they have limited their criticism to the contention that there was no value or supposed value in the common and preference stocks. My hon. friend is now carrying the matter back one stage further, and
advancing something which hitherto none of the other speakers have advanced, namely, thatithereis no value or there is not the value represented in the debenture stocks or the guaranteed stocks. Now the Government on the advice of the Drayton-Acworth Commission, on the strength of the valuation made for the Drayton-Acworth Commission by experts in a most exhaustive and detailed manner, is declaring to the Grand Trunk simply that it recognizes what I choose to call, the bonded indebtedness of the company-that is, the debenture stocks and the guaranteed stocks; the Government offers to recognize that, and say, that further than that it will not go. Let me answer my hon. friend further, though, with regard to his observation; the Drayton-Acworth report proposed to offer a sum of $3,600,000-1 speak subject to correction if any one can correct me, but I think I am absolutely right,- to be distributed among the holders of the guaranteed stock, the preference stock and the common stock. We do not offer that; we are not authorizing the Government to carry out that at all. We simply go to the extent of two and a half million dollars and we say: Arbitrate for the balance beyond that. Not only is that the case but the Drayton-Acworth report, so commonly relied upon by my hon. friend's opposite for arguments in this case, states this: That after seven years this may be increased by unstated amounts. We are not doing that; we are restricting the terms of this , transaction well within the Drayton-Acworth report which has been before the House for so long.	...
My next point is this: Suppose the road went into the hands of a receiver, and the receiver, finding it impossible to sell the road as a going concern- and I think that would be the condition confronting him-sold the road piece-meal. Would it not he a lamentable thing for Canada that this great railway system-the oldest railway system in Canada, acknowledged to be an excellent system in every respect-should be split up and sold? First to be disposed of would be the paying lines adjacent to other railways. The Canadian National would probably have an opportunity to buy a few of these lines, as would the Canadian Pacific; the American lines would also have their opportunity in respect of that part of the system which is south of the boundary line. Mr. Speaker, that alternative is inconceivable and could not possibly de entertained for a moment.
Again, suppose the road were divided up by the receiver and realized upon in that

manner, and the Canadian National Railway Company desired to get some lines under that arrangement. According to my hon. friends opposite, they could not do so. Not only would they have to come to Parliament for authority to buy, but they would not be allowed to purchase until they had subsequently submitted the terms of purchase to the ratification of Parliament-an utterly impracticable method.
I want to turn for a moment to some of the arguments advanced by the hon. member for Shelburne and Queen's (Mr. Fielding). The hon. member was careful not to come out clearly against public ownership; I might be permitted, Sir, to describe his attitude as veiled opposition to the principle of public ownership. He said that the Intercolonial was not a shining light; that that line would have been far better developed under private ownership, indeed, all through his remarks, he left the impression upon the House that he himself was opposed to the principle of public ownership. But he went further and advanced a specific argument which I desire to examine into, because it is worthy of examination. The hon. member urged that we limit Canadian public ownership or to use his own words, " the experiment in Canadian public ownership"-to the Grand Trunk Pacific, the Canadian National and the Intercolonial. 'Two of these roads are acknowledged to be the lame ducks of the railway systems of Canada. The other has a prospect of being something. But the Grand Trunk Pacific, separated from the Grand Trunk, is acknowledged to be one of the most expensive systems that any company or any government could attempt to take hold of and administer. The adoption of the suggestion of the hon. member would positively ensure the utter failure of government ownership of railways in Canada. Sir, if I were to indulge in a few innuendos; if I were permitted to follow the lead given by hon. gentlemen opposite a few days ago, should I not be justified in suggesting that one might be suspicious that behind the hon. members' advocacy of this particular scheme was the hope and the wish that there should be a complete failure of government ownership in Canada, a complete collapse of the railway systems of Canada which are under Government control? He says that the Grand Trunk Pacific and the Canadian National and the Intercolonial should represent the limit of our public ownership of railways. I can hardly conceive that the hon. member was serious and honest in his 
suggestion in that , regard. Why, these systems are known to be incomplete without this other system, the Grand Trunk.


Daniel Duncan McKenzie: I have great regard for the business ability of my hon. friend, but may I put this to him: He says that these systems which are under Government ownership are not a proper test of the principle of public ownership of railways. Where would he go in Canada, outside of the Canadian Pacific, to find a railroad which he would guarantee to be a success under government ownership?


Henry Herbert Stevens: I would go to the very thing that we are proposing, the acquisition of the Grand Trunk-not alone, but connected up with and rounding off the other system.
It has been stated that this question was never properly before the House prior to this occasion; that we have never had an opportunity of considering it. I purpose reading to the House, with the indulgence of hon. members, extracts from a statement officially prepared and submitted to the House by the Prime Minister (Sir Robert Borden) on May 16, 1918. In one paragraph of this statement the Prime Minister gives a resume of the history of the railway problem, including certain guarantees, and so on; I shall not weary the House by reading that part of it. Then .he goes on to say:
I come now to the Grand Trunk Pacific. I regard it as inevitable that, for many reasons, that road should he taken over by the Federal Government. It is a national enterprise to which the credit of the Canadian people has been committed, and, in my judgment, it is expedient to sustain it and not permit it to go into liquidation. It is intimately connected with the Grand Trunk Railway system in the East,
He proceeds:
The House and the country will be glad to know that the prospects of its traffic seem to be improving, and I very sincerely hope that they will improve still more in the early future. That railway cannot toe successfully operated without suitable arrangements with the Canadian Northern Railway and with the Grand Trunk Railway in the East. It cannot pay its interest charges, and it is utterly impossible for the Grand Trunk to meet the obligations which it has undertaken in respect of the Grand Trunk Pacific.
I pause simply to emphasize the fact that it was represented officially to the House in May, 1918, that the Grand Trunk Pacific should be taken over and that it could not be operated successfully without having connection with the Grand Trunk. Then the Prime Minister went on to say:
I think, therefore, it is absolutely inevitable that the Grand Trunk Pacific must be acquired.

He makes a few observations as to the terms of acquisition, and so on, and then continues:
I can only say that the Grand Trunk would no doulbt he willing' to hand it over to us today if we would relieve the Grand Trunk of all its obligations in respect to the Grand Trunk Pacific; it would hand over to us the capital stock and be glad to get out of its own obligations in respect to the Grand Trunk Pacific. But there are several conditions to be taken into account before any such proposal can be entertained, and so we are at the present time discussing the whole situation with the Grand Trunk management.
Now it seems if we take over the Grand Trunk Pacific, that practically involves the taking over of the Grand Trunk Railway as well. Further than that, while the present condition of the Grand Trunk is not prosperous for many reasons, some of which doubtless it could not control, I believe that it would have reasonable prospects for the future if amalgamated into one system with the Canadian Northern and the Grand Trunk Pacific.
I may say that we have negotiations outstanding with the Grand Trunk Railway.
Then the Prime Minister makes reference to the appointment of a sub-committee of the Council to go into this matter, and to diseuss it with the Grand Trunk officials in London. He proceeds:
They have given attentive study to the questions which are involved, and I have some reasonable hope that when Parliament is again summoned, the Government may be in a position to place before it proposals which will in-[DOT] volve the constitution into one State-owned system, the chief railways of Canada, except the Canadian Pacific.
That was the official statement submitted to the House by the Prime Minister. Now let us observe what the leader of the Opposition of that day had to say.


Daniel Duncan McKenzie: Does not the hon. member recall that the key-note of that speech made by the Prime Minister was the cooperation of railways and the elimination of railways that did not pay?


Henry Herbert Stevens: The hon. member is in error. The speech was made on the railway situation ,in Canada, and it presented the whole question of talking over and amalgamating these roads into one system. My hon. friend gives his view of the matter, but I read the speech myself within the last day, and the first step in the transaction was the faking over of the Canadian Northern railway. In reply to that speech by the Prime Minister, the Rt. Hon. Sir Wilfrid Laurier, late leader of the Opposition, had some observations to make, among which were these. I invite my hon. friend to listen to this, because he has questioned the accuracy of my remarks.


Daniel Duncan McKenzie: Not at all. I did not.


Henry Herbert Stevens: 
Arthur Meighen: The legislation was foreshadowed last session.


Henry Herbert Stevens: I am reminded that the legislation was foreshadowed last session as likely to come before the House. Opposition has been raised to this on a further ground that hon. gentlemen opposite are opposed to arbitration. I do not think that an hon. gentleman opposite who has spoken has not referred to the Canadian Northern arbitration, and they advanced as an argument against the method of procedure proposed1 in this Bill, the fact that the arbitrators in the Canadian Northern case made an award at all. They say that arbitration should not be resorted to because of that.

The strange and inconsistent part of their argument is that every hon. member who has spoken in that tone has at the same time declared that he does not wish to impugn the honesty, integrity and probity of the arbitration court. If that court were properly formed; if the members of that court were honourable, honest and able men-and no one will question that-what right have we to squeal-perhaps tihat word is not dignified, but there is no other appropriate term-over the finding of that board of arbitrators?


John Howard Sinclair: If the hon. gentleman will permit me, my contention was that the case was not properly presented before the court.


Henry Herbert Stevens: Will my hon. friend say that Mr. Tilley, K.C., known to every lawyer end to every business concern in Canada as the most eminent railway counsel in Canada, was dishonest in his presentation of the case? I will ask the leader of the Opposition this-and he is strictly honest in his good old stubborn, Scotch manner when he chooses to be so, decidedly so- will he say that Mr. Tilley would accept a retainer from a bootblack, or the Government, or any body else, and be false to that retainer and not present the case rightly and fairly so as to bring out the facts? Mr. Tilley would throw out his retainer, in five minutes if he thought for one moment that the Government were in any sense going behind his back, or influencing the arbitration board, or in any way evading the bringing out of the proper evidence in that case.


Daniel Duncan McKenzie: Mr. Tilley is, I believe, a good lawyer. I have not the honour of *his acquaintance, but I believe he is a fair sample of the noble profession to which he belongs. It is not, however, for a lawyer to furnish the facts; it is for the lawyer to present the facts that are given to him, and our accusation is that he was not given the facts.	.
Mr. STEVEN'S:	I will take my hon.
friend on his own ground. He says that it is not the business of the lawyeT to furnish the facts; that it is the business of the lawyer to present his case in the strongest possible light on the basis of the facts that are given to him. Mr. Tilley was given all the facts that were available; he was offered any information that he wanted; anything he was not clear on, he could receive, and I will guarantee this, and I will stake my position in this House on this question, that Mr. Tilley will not say to the hon. gen-
tleman that he was not supplied with the fullest possible information. The hon. gentleman knows-


Daniel Duncan McKenzie: Oh, yes, we know my learned friend is giving evidence himself.


Henry Herbert Stevens: I am not giving evidence,
I am making an argument.
:Mr. McKENZIE:	No, the hon. member
is giving evidence.


Mr. DEPUTY SPEAKER:: Order. Only
one hon. member should have the floor at a time.


Henry Herbert Stevens: If the hon. gentleman desires to ask a question, that is all right.


Arthur Meighen: He is not very good at relinquishing the floor himself at times.


Daniel Duncan McKenzie: I am not going to put any question.


Henry Herbert Stevens: The point I wish to
reiterate is this. It has been insinuated that the arbitration of the Canadian Northern transaction was not a fair and square arbitration, and we are told, that for that reason we should not pass this Bill. I think I have cited the case fairly and squarely. I submit to the House and to hon. gentlemen who have made that argument, this point: that Mr. Tilley, the lawyer in charge, is known' throughout the business world and has the highest possible reputation; that Mr. Tilley was placed in possession of all the facts; that he was invited to ask for anything that the did not know or that he was not supplied with, and that he presented those facts with all the force of his ability and experience as an eminent counsel in railway matters. I claim that there is not one scintilla of ground for 'the argument that that was not a fair and square arbitration.


John Howard Sinclair: I was going to say that if my hon. friend has influence enough with the Government to have this evidence printed, we would then be in a better position bo discuss this question).
Mr. .STEVENS:	The evidence has been
printed for the last year and a half. It is an immense volume; it has 'been printed and laid on the Table. My hon. friend, I was going to say, is asleep, but he will pardon me; I do not want to be impertinent to him, so I will put it in this way. My hon. friend is not awake. All the evidence is available.


John Howard Sinclair: When was it laid upon the Table?


Henry Herbert Stevens: I could not tell the hon. member the date.


John Howard Sinclair: Does the hon. gentleman make the statement that it has been laid on the Table?


Arthur Meighen: I made inquiry to-day of the minister, and he informed me that it was laid on the Table. It is available at any time, and I will guarantee to procure it for any hon. member who desires it.


Henry Herbert Stevens: The hon, member knows that it is impossible to recall the exact date on which a document was laid on the Table, say a year or a year and a half ago. Every particle of the evidence is available, there is no doubt of that. To state that we should not proceed by arbitration; that we should discard that method, upon such flimsy arguments as that, is an inconceivable position for any intelligent person to take.
In what other way, I ask, than by arbitration could we possibly ascertain the value of this stock? What other method is there? It may be said that we should submit it to the courts, but I do not think there is any modus operandi by which it could be submitted to the courts in a direct way. The judge of a competent court, sitting as the chairman of a board of arbitration can hear all the evidence pro and con; all the facts can be submitted to the board.
I should like to refer to another objection which has been raised. It has been suggested that we should buy up the stock in the open market, and that suggestion was made by the hon. member for Shelburne and Queen's (Mr. Fielding) who for fifteen years, or at all events a great many years, was Minister of Finance in Canada and who earned quite a reputation for himself in that capacity. He seriously proposes to the House that we should buy up the control of the stock in the open market. Could a more utterly impracticable and impossible way of dealing with this question be suggested? My hon. friend has already complained that there has been an increase in the market value of the stock as the result of an announcement made in the public press. What would be the upward trend of that stock if the Government put itself voluntarily in the position of buying up the stock, and having bought 10 or 20 per cent of it, was then forced to buy the balance at any figure the holders might demand? I cannot conceive of a more impracticable proposal.
I wish to refer briefly to one of the chief arguments that has been advanced, namely,
that there has been some stock profiteering in London. Now we are not in possession of the facts. No facts have been submitted to the House. It is simply stated that there has been an increase in the value of this stock in London, and the conclusion is drawn that some one is making money out of it. I am informed by one of the very highest authorities that 85 per cent of the Grand Trunk stock remains in the hands of the original holders, that only a very small amount got on the market, and that there has always been only a very small amount on the market. It was, I think, the most flimsy argument that could be put forward, that we should abandon this whole business because somebody is trafficking or attempting to traffic in the stock on the London market.
It has also been stated that the Government should supply the House with a list of the shareholders. These are not my arguments, Mr. 'Speaker; I am simply referring to those that have been made by hon. gentlemen opposite. I say it has been seriously stated that until a list of shareholders was submitted to the House we should not go on with this legislation. Now there are over 100,000 shareholders and it is stated, and I believe it, knowing something about the matter myself, that it would take at least five weeks to make a list of these shareholders from the share books. The list would contain thousands of names of estates and companies who are holders of stock, which would mean the writing out of lengthy names and addresses. You can see, Sir, the utter impossibility and futility of this suggestion. The information would not only be perfectly useless, but to cable it across would cost over $6,000, and would detain Parliament for five *Seeks.
It has also been stated that the shares representing ownership of this system are valueless because interest has not been paid on some of the shares. Is it not logical for me to advance this as an argument-that if that is the case, then the Intercolonial is valueless for the reason that it has never paid any interest on its capital? Is not that a logical argument? But the Intercolonial is not valueless, supposing it to be capitalized, simply because it has not paid interest on its capital. The Intercolonial would not be worth par, that is certain, not having paid any interest or dividend, and the same is true of this stock. The value of the stock does not depend on whether it pays dividends or not. That is a guide to investors in buying stocks'on the market, it is true, hut it is not a fair estimate of the



intrinsic value of the stock. The intrinsic value of a stock consists in the net assets behind the stock. If it is found that there are no assets, that the bonded indebtedness and the liabilities are greater than the assets, then there is no value to the stock; that is clear. I said a moment ago that in estimating the value of a stock representing ownership of a concern you take into consideration not only the physical assets but all the liquid assets as well.
I do not wish to speak at any length on the Intercolonial, but it has been mentioned in this discussion a good deal, and I should like to submit a few facts in connection with it to illustrate a point I desire to make. There has been invested in the Intercolonial $126,000,000 of the people's money, to use a common parliamentary phrase; in other words this line has cost about $75,000 per mile. The Intercolonial has a total deficit from 1876 to 1919 of $9,000,000. Now, in face of that, I do not think the argument can be advanced that the Intercolonial railway is a valueless thing and should be discarded. The wise thing to do is to ascertain why the Intercolonial is not a paying concern. That is exactly what we are doing in connection with the Grand Trunk, in which the Government and the people of Canada are interested to a considerable extent at the present time. We are asking for an inquiry that we may know why these concerns are not paying and whether there is any possible way of putting them on a sound basis.
The inevitable conclusion which I think we must all reach is that we have overbuilt in railway systems in Canada, and the roads have not been properly co-ordinated. That is the reason why different sections have not paid. We on this side of the House believe that we can solve the problem by placing the Grand Trunk system in the East, with all its congested traffic, in connection with those lines which at present enjoy the long haul but have a paucity of traffic.
The Government have been somewhat upbraided in connection with guaranteeing these securities-the Government has guaranteed them, so has the Grand Trunk, and so on. The whole railway problem as presented by hon. gentlemen opposite is complicated by the system of financing. I quite agree, but it behooves hon. gentlemen opposite, and especially the hon. member for Shelburne and Queen's (Mr. Fielding) to ask themselves who are responsible for that system of financing. Who was it that introduced into the Parliament of Canada the system of guaranteeing the bonds of rail-

ways? It was the hon. gentleman who sits beside the leader of the Opposition, the hon. member for Shelburne and Queen's. He is the man who, when in office, introduced a system of financing railways in Canada by which the Canadian Government guaranteed their bonds. And if we are to-day faced with a perplexing problem-I do not say this with any desire to recriminate-the gentlemen responsible [DOT] for it are the predecessors of hon. gentlemen opposite, and some of those hon. gentlemen themselves. It was the Government supported by them and the party to whom they still owe allegiance that introduced the system of three transcontinental railways for Canada.
It was the Finance Minister of that government, who held that office for so many years, that introduced into Canada the system of guaranteeing the bonds of these railways; and now, faced with this problem, I think it is only fair and reasonable to ask those hon. gentlemen to join with us in an endeavour to solve this problem, and not simply to offer to the Government captious criticism in connection with the subject. I urge that we face the problem and make every possible effort to solve it, and in my opinion the only way in which we can at all effect a proper solution is, as proposed in the Bill, by the acquisition and control, by the National Railway system of Canada, of the Grand Trunk railway.


Mr. O. TURGEON (Gloucester):: It is with diffidence, Mr. Speaker, that I rise to contribute to the discussion of the question now before the House, a question which is seriously engaging the minds of the thinking people of Canada. The principle of government ownership and control of railways has been exhaustively discussed and its merits or demerits fully demonstrated in this debate by members who have spoken on both sides of the House. As I have frequently in the past advocated government ownership as>
far as practicable and to the extent that circumstances warranted, I may be permitted on this occasion to reiterate my views on this principle before I proceed to deal with the subject generally. We have been informed, more particularly by the President of the Privy Council (Mr. Rowell), that there is a strong current of opinion in Ontario and in the West in favour of public ownership and control of the railroads in Canada. Well, Sir, if that is the case, I regret to say that this -sentiment is evincing ,itself rather late in the day; for I remember that thirty-five or forty years ago, when we in the Maritime Provinces were endeavouring in

every way possible to secure a satisfactory operation of the one small road which we had at the time, the position was vastly different. At that time, in my more vigorous days, I was in favour of public ownership and worked strenuously ifor many years to influence public opinion,-and particularly public opinion of the West,-in the direction of public ownership of the Intercolonial in the Maritime Provinces, with its prospects of future extension; and our ambition was to see an extension of the road, under government control, from one coast to the other, in order to obviate private ownership with its natural greed, resulting in the imposition of exorbitant rates upon the people. We did our best, but I must say that the difficulty always came from Western Canada and Ontario. Every one in the House, even Liberals from Ontario, opposed every possible attempt to secure an improvement of conditions and every proposal which might give an impetus to the operation of the government roads in the Maritime Provinces. The ministers in charge of railway affairs for some time after Confederation were not heartily in sympathy with the administration of the roads in the Maritime Provinces because they did not believe in government control, and after many years, in 1896, when there was a change of Government, we find that the Intercolonial railway was in a decrepit condition due to wanton neglect. When the late Mr. Blair became Minister of Railways, however, he introduced a new and vigorous policy to provide necessary equipment and a proper roadbed, at whatever cost, in order to make the road a paying proposition in the future. The traffic of the road since that time has consequently increased in volume, but we have always been obliged to resist the opinions, emanating from Ontario, where every newspaper, except the one controlled by my hon. friend the member for South York (Mr. Maclean), who, I am sorry to say, is not in his seat, opposed the principle of public ownership of railways. It was due to the splendid administration of the late Alexander Mackenzie, then Prime Minister of Canada, that there was undertaken the construction of the great railroad which was to connect the east with the west, to unite British Columbia with Ontario and Eastern Canada. He began the construction of that road under government ownership, and when the Conservative Administration assumed the reins of office in 1878 that project was abandoned; and later the government of the day, supported chiefly by the province 724
of Ontario, surrendered what had been built by Alexander Mackenzie as a present to the new Canadian Pacific Company, who were then constructing for their own benefit the railroad of which we hear so much to-day. Had Mackenzie's policy been pursued we would not have handed over to that company millions of acres of land in the West which should have been conserved for the welfare of the people. During all that time, and even since the successors of Mr. Blair were administering the road, public opinion in Western Canada supported attempts to end the public ownership of the Intercolonial. It influenced such men as Mackenzie and Mann to attempt to influence the people to transfer the Intercolonial railway to the *Canadian Northern for a certain sum; and it is due to the good judgment of Mr. Graham, the then Minister of Railways, that the proposal was rejected and the Intercolonial has consequently remained the property of the Government. If an extension of public ownership be desirable under the peculiar circumstances of to-day there is but one railroad that would' justify its acquisition, and that is the Canadian Pacific railway. The surpluses of the system would be adequate to cover the deficits of the National Railway system which have been occurring year after year. If you seriously consider the principle of public ownership let us see what can be done with the Canadian Pacific railway.
When we talk of public ownership in connection with this Bill I have to say that question should not now be introduced because we are not in a position to accept public ownership of railways in Canada at the present time. The time has slipped away, unfortunately, when public ownership could be considered in Canada. In the early years of the twentieth century, in 1903 and 1904, the right hon. Sir Wilfrid Laurier, then Prime Minister o.f Canada, conceived the idea of constructing a great transcontinental railway uniting the Pacific with the Atlantic, as a Government-owned property from Winnipeg to Moncton, benefiting alike 'the open winter ports at St. John and Halifax, the Maritime Provinces of Nova Scotia and New Brunswick and the whole of Western Canada. Our hon. friends on. the other side of the House have .found pleasure in- trying to throw cold water upon the construction of the Transcontinental railway linking together the Maritime Provinces with Winnipeg and the Great West. All I have to say to them is that in the future it will prove to be a more productive

enterprise than it is at -the present time and that we owe this project to the vision of the great Canadian statesman who conceived the idea of linking together the open winter ports of Canada, making Canada independent in her trade and commerce- independent of the ports of Portland, Boston and New York- and (bringing by the shortest possible route the immense products of the West to the harbours of the East. Unfortunately, conditions have not exactly responded to the ambition of -that great statesman and of the Canadian people at that time. Whose fault is it? If in 1911 the administration of that day had been sustained by -the people of Canada reciprocity would have been given very shortly to the people of the West and Canada would have enjoyed the flourishing conditions which ' that policy would have brought about. I see uny hon. -friend the Minister of tlhe Interior (Mr. Meighen) joking and laughing. I admire my hon. friend perhaps as much as does any hon. member in the House; I admire his talent and ability; I have previously given him credit for all of that; but let the hon. gentleman understand that there is such a thing as public opinion in Canada and that his habit of giving so liberally and so heartily to his friends when he rescues him from trouble may turn against him in the future. We must always consider subjects by themselves.


Arthur Meighen: I was wondering with some amusement, I must admit, how the hon. gentleman figured -that reciprocity with the United States would increase the traffic on Canadian railways such as the Grand Trunk Pacific.


Onésiphore Turgeon: Reciprocity was destined to bring great development to the country. The prospect of reciprocity was the cause of bringing thousands of settlers to the western territory and to the province represented by my hon. friend, but with the rejection of reciprocity they went back to the United States, and- it stopped the current of immigration of farmers from the American States to Canada.


Arthur Meighen: On the contrary, they increased every year up to the war.


Onésiphore Turgeon: Not the farming element from the United States.


Arthur Meighen: Yes, from the United States.


Onésiphore Turgeon: Not the farming element coming specially from the northern States,

the element that was most needed at that time.


Arthur Meighen: They came faster than ever.


Onésiphore Turgeon: I am convinced as much as the hon. gentleman is that I am' right, and he will find that my statement is correct if he refers to the figures of 1911-12. Our hon. friends introduce the question of public or private ownership and they say we are against nationalization. I wish that in the early days of Confederation we had secured the construction of our railroads without sacrificing our money and our land. If the Intercolonial -has not yet produced the revenues that were anticipated, we have to consider the conditions under which it was constructed and the condition of the country at that time. They were well known. It was stated in a report by the late 'Sir Sanford Fleming, the most celebrated engineer that Canada has ever produced, that the railway was not expected to make running expenses for many years to co-me; that it was designed more particularly to unite the provinces of the East and the West, and especially to promote the prosperity of Ontario, which, although it has been very much against this road, has always had the advantage of sending its manufactured products to the Maritime Provinces and capturing the -markets which, prior to Confederation, were controlled by the American trade. If the Intercolonial railway had been given the national support that it should have had from day to day and year to year, we would have better conditions in the Maritime Provinces than we have now. The attitude towards that road was such that when, fifteen or twenty years ago, members from the Maritime Provinces asked to have more branches built in different sections for the development of those districts which were awaiting development and for the benefit of the long haul on the Intercolonial railway, the only line then traversing those provinces, they were blocked, and the Liberal party dared not go forward because they were afraid of public opinion in the West. If the public opinion of the West to-day is -so strong for public ownership I am sorry it did not come sooner so that in the first years of Confederation we could have saved our lands and our finances; instead of subsidizing companies with lands and money we could have built our own railways and kept our lands for our settlers.
In connection with this question we have not only to look into the financial condition

of the country to-day but we have only to look into the financial condition of the road which we are asked to take over. When two years ago the Government took over the Canadian Northern an attempt was made to brand the Opposition as being opposed to the nationalization of railways. To my mind the enunciation of the principle of nationalization by Government supporters came rather late and was not at all concerned with the taking over of the Canadian Northern then and with the taking over to-day of the Grand Trunk Pacific from Winnipeg to the coast.
It has been said to-day in this debate that it is due mpre particularly to the construction of the Grand Trunk Pacific from Winnipeg to the West that this critical condition of things exists, and that this railway should not have been built. When the Government of Sir Wilfrid Laur-ier provided for the construction of a transcontinental railway giving western connections to the Grand Trunk and affording the Prairie Provinces another route to the Pacific coast, there was but one transcontinental traversing Canada. The construction of the Grand Trunk Pacific gave a second transcontinental line from coast to coast, and some development was needed before a great return could be expected by that line. What was the chief reason for the Grand Trunk Pacific getting into a financial condition which led to its falling' into the hands of a receiver? The President of the Privy Council (Mr. Rowell) has declared with great eloquence that it was due to the duplication of that railroad from Edmonton to the coast. But the late Government refused the request of the Canadian Northern to extend their line from Edmonton to the coast on the ground that sufficient trade had not developed to justify a third line from the West to the Pacific. It was not until 1912, after the present administration came into office, that the money was voted to enable the Canadian Northern to carry out this extension, thereby greatly injuring itself and resulting in the Grand Trunk Pacific going into the hands of a receiver. By this policy the existing railway lines in the mountains in the West were duplicated for a distance of eight hundred miles and more, and this duplication took place in country most difficult and most expensive for railway construction, where the traffic was altogether insufficient to justify such expenditure. The result was to injure both the Canadian Northern and the Grand Trunk Pacific. Possibly this deplorable condition
might not have taken place but for the fact that public opinion in Canada was not awake to the conditions of railway financing and railway operation. Had public opinion been more alert to the probable results of railroad construction at that time the outcome would not have been so serious. Moreover it would possibly have averted what has been a calamity for the Maritime Provinces, in that owing to the situation which developed the Government refused to build and operate branches in the Maritime Provinces under government ownership, leaving small private companies to provide these facilities. These companies,however, were unable to raise the necessary capital to construct and main tain these branch lines, and later on they had to be taken over by the Government. The lack of additional railway accommodation in the Maritime Provinces is still keenly felt, and when the leader of the Opposition and the hon. member for Anti-gonish and Guysborough (Mr. J. H. Sinclair) a few days ago urged upon the Government the extension of branches into their respective districts, no satisfactory answer was forthcoming. So we have still to guess what the future may hold for us in that regard.	.
The figures have been disclosed and we now know that the acquisition of the Grand Trunk means an addition to our debt of $200,000,000, with an interest charge of over $20,000,000 a year. What is the financial condition of the country to-day? I hold in my hand the answers to questions' presented to the Government by the hon. member for Chateauguay-Huntingdon (Mr. Robb). There were two sets of questions placed by that hon. gentleman on the Order Paper. The first of these had reference to the result of the operations of the Canadian National railway for the first seven months of the present year. Let me give these questions and the answers thereto:
Finances of Canadian National Railway.
Mr. Robb:
1.	What were the gross earnings of the Canadian National Railway from Jaanuary 1, to *August 1, 1919?
2.	What were the net earnings for the same period?
3.	What is the total interest paying debt of the Canadian National Railway?
4.	What is the amount of interest on debt of said railway annually payable?
Hon. Mr. Reid:
1.	$'50,730,974.94.
2.	$9,041,464.62. (Deficit.)
3.	$460,22.5,148.93.
4.	$19,073,337.08.

It will be readily seen what a serious financial situation these figures disclose. Now, let me take the other set of questions which my hon. friend (Mr. Robb) put and which were answered as follows:
Financial Obligation of Canada.


Mr. ROBB:: 1.	What are the amounts which go to make
up the difference between $2,907,669,041.50 and $1,670,2-63.52, stated to be the gross debt and net debt of Canada respectively as stated in answer to question given in Hansard September 2>5, IMS'?	'
2.	What are the amounts of bonded debt due by Canada payable respectively in Canada, United States and Great Britain, on August 31, 1919?
3.	What is the amount of interest payable per year on the indebtedness referred to in question two?
4.	What is the total amount of the indebtedness of the Canadian National Railway Company on which interest was payable on August 1, 1919?
5.	What is the amount of interest payable annually on the indebtedness referred to in question four?
6.	What is the amount of floating indebtedness for which the loan of $300,000,000 is now being asked for?
7.	What are purposes for which said loan of three hundred million are to be devoted in settlement of?
8.	Is the indebtedness of the Canadian National Railway Company included in the statement of gross debt given in answer to question on September 25, 1919?
Sir George Foster:
1.	Investments:
Sinking funds	$	18,667,513 13Other investments	
343,662,592	52Province accounts	
2,296,327	90Miscellaneous and banking accounts	
872,776,916	43Total assets	$1,237,403,349 98
2.
Canada	$1,513,516,567	76London	
362,703,312	40New York	
135,873,000	003. Estimates 1919-20 provide	for interest	on
public debt $102,767.625.94.
4 and 5 relate to the Department of Railways and Canals.
6.	$265,000,000.
7.	Payment of floating indebtedness as above and to meet expenditures to be made in connection with demobilization (including the authorized war service gratuity to our soldiers, land settlement loans, and other purposes connected with their re-establishment into civil life), for capital outlay upon shipbuilding and other national undertakings forming part of Canada's industrial reconstruction programme, and for the establishment of any necessary credits for the purchase of grain, foodstuffs, timber, and other products, and will be spent wholly in Canada.
8.	No.
That shows that to-day the national debt of Canada is over two billion dollars.


Georges Henri Boivin: It is six
o'clock, and I understand that there are

other matters which the Government desire to bring forward. To preserve the hon. member's rights, I would suggest that he move the adjournment of the debate.


Onésiphore Turgeon: I move the adjournment of the debate, Mr. Speaker.


[Stage Direction]
Motion agreed to, and debate adjourned.
On motion of Hon. O. J. Doherty, the House returned to the order of Motions.

[Stage Direction]
Hon. C. J. DOHERTY (Minister of Justice) laid on the table of the House copy of a convention between His Majesty the King and The United States of America for the protection, preservation and propagation of the salmon fisheries of the Fraser River system.
He said: I move:
That five hundred copies in the English language and two hundred in the French language of the Convention just laid on the Table be printed forthwith, and that Rule 74 in relation thereto be suspended.
Motion agreed to.
Mr. DOHERTY:: I understand that it is the desire of a number of members that .the House should not sit this evening. In accordance with that request, I move that the House do now adijourn.


Charles Joseph Doherty: We will proceed with this; we may proceed with some small Bills that are on the Order Paper.


Daniel Duncan McKenzie: Temperance Act ?
iMr. DOHERTY: We may even proceed with the Temperance Act. I am glad to see that the hon. member's zeal still persists.


[Stage Direction]
Motion agreed to, and the House adjourned at 6.04 p.m.
Monday, October 20, 1919.