1919-10-21

SIR HENRY DRAYTON INTRODUCED.

Air. SPEAKER:: I have the honour to inform the House that the Clerk of the House has received from the Clerk1 of the Crown in Chancery a Certificate of the Election and Return of Sir Henry Lumley Drayton, for the Electoral District of Kingston.


The Right Hon.   S@: ' (Translation.) Air. Speaker, I beg to introduce to you, Sir Henry Lumley Drayton, who has been returned for the electoral district of Kingston. Sir Henry has signed the roll and has been sworn in; he now wishes to take his seat.


Edgar Nelson Rhodes: Let the hon. member take his seat.



LOAN OF $25,000,000 TO ROUAIANIA.

[Stage Direction]
On the Orders of the day:
Air. JOSEPH ARCHAMBAULT (Chambly and Vercheres):: I should like to know
from the Minister of Finance, whom I welcome to his seat in the House, if he is in a position to inform the House what amount of the loan of $25,000,000 to Rou-mania has already been advanced. I ask this question because I regard it as one of great importance and urgency in view of the fact that I was informed yesterday by a prominent gentleman who has just returned from Roumania that the "lei" the monetary unit of Roumania,, which in normal times is worth 20 cents, is now fluctuating between half a cent and three cents.

In view of this, does the Government intend to advance any more money to Roumania, if there is any balance of the $25,000,000 not yet advanced?


The Right Hon.   S@: I shall be very happy to look into the question the hon. gentleman raises, and give him an answer later.



INTERNATIONAL TRADE CONGRESS.

[Stage Direction]
On the Orders of the Day:
Mr. J. A. ROBB (Chateauguay and Huntingdon) (Translation):: Mr. Speaker, before the orders of the day are called. I wish to enquire from the minister of Trade and Commerce, whether Canada is represented at the International Trade Congress now in session at Atlantic City?


The Right Hon.   S@: Would the hon. member be good ' enough to repeat his question?


James Alexander Robb: Air. Speaker, I desire to ask the Minister of Trade and Commerce if Canada is represented at the International Trade Congress now in session at Atlantic City.


The Right Hon.   S@: No, Canada is not represented at that Congress.


Mr. JACQUES BUREAU (Translation):: As the hon. minister of Trade and Commerce seems so willing to speak French, may I enquire why Canada is not represented at that Congress?


The Right Hon.   S@: Canada has not been invited to attend.



GRAND TRUNK LEGISLATION-HALIFAX BOARD OF TRADE.

[Stage Direction]
Mr. WILLIAA1 DUFF (Lunenburg): I should like to know from the Government-
Sir GEORGE FOSTER:: In what language is my hon. friend now speaking?


Mr. DUFF:: If my hon. friend's English is no better than his French I can understand why he cannot understand me.


Jacques Bureau: The minister is qualifying his language.


William Duff: Has the Government received a telegraphic communication from the Board of Trade of Halifax, Nova Scotia, with regard to the Grand Trunk legislation? If so, what is the nature of the communication?


George Green Foster: I am not aware that any communication has been received

from the Halifax Board of Trade in respect of this matter.


Mr. P. F. MARTIN (Halifax):: I may say, Mr. Speaker, that I received a telegram from that Board of Trade, and the hon. member for Lunenburg would not have asked the question if he had not got the information from me.


Mr. COPP:: I beg to differ from the hon. member for Halifax (Mr.1 Martin); I received a communication myself this morning in regard to this matter.


George Green Foster: In answering the question I answered for the Government. As far as I am concerned as Acting Prime Minister, I have not received it. Some of my colleagues may have received a telegram. I think that the hon. the Minister of Railways (Mr. Reid) has received one.


Mr. McKENZIE:: I would like to ask the Government further, if they have had nothing direct from the Board of Trade in Halifax, did the representatives who are representing the city and county of Halifax here make any representations to the Government?


Mr. J. D. REID:: There is a message in my office-I noticed it this morning-from the Board of Trade, I think, signed by Mr. Saunders, secretary of the Board of Trade, Halifax.


Joseph Archambault: In English,
please.


John Dowsley Reid: I think the telegram contained a resolution as passed by the Board of Trade. I have no objection to laying it on the Table, but I suppose the hon. member himself (Mr. Copp) received a copy of the same telegram.



SALMON FISHERIES IN BRITISH COLUMBIA.


[Stage Direction]
On the motion of Hon. Newton W. Rowell (President of the Privy Council) the House went into committee, on the following proposed resolution, Mr. Boivin in the Chair:
That it is expedient that Parliament do approve of the Convention between His Majesty and the United States of America providing effective measures for the protection, preservation and propagation of the salmon fisheries of the Fraser River system, which was signed at Washington on the second day of September, one thousand nine hundred and nineteen, a copy of which has been laid before Parliament, and which was signed on behalf of His Majesty, acting for Canada, by the plenipotentiaries
therein named, and that this House do approve of the same.
Some hon. MEMBERS:: Explain.


Hon. Mr. ROWELL:: The convention
which has been concluded between His Majesty and the United: States referred to in this resolution relates to the sockeye salmon industry in the province of British Columbia. Hon. members of the House are no doubt aware of the fact that of recent years the number of cases of salmon which it has been possible to secure from the salmon fisheries has undergone a very serious diminution. In one year, with the past ten years, the total number of cases of sockeye salmon packed in British Columbia and Washington exceeded 2,300,000. That was the largest on record. For a number of years, usually the fourth year, the pack ran from 500,000 to 600,000 cases, and up to, as I have said, 2,300,000. In recent years the number has been rapidly declining. Last year Was the smallest for a long period, the total number of cases both in the United States and Canada being approximately
67,000,	and the estimate for this year is still lower. The estimate on the Canadian side is 10,000 and the American 20,000, coming down to a total of 30,000 from a maxiipum of 2,300,000 some years ago. The position at present is that the industry is in process of extinction unless action is taken by international agreement between the two governments for its preservation. The object of this convention is to secure the adoption of regulations governing the salmon industry in both countries which will make possible the preservation of this great industry. It is estimated that the industry may provide a catch worth $30,000,000 a year if properly cared for, whereas at the present time it is reduced to a very limited amount indeed.
The first Article of the convention provides for the enactment of regulations which will govern salmon fishing on both sides of the international boundary. These regulations are to determine the times, seasons, and methods of sockeye salmon fishing in the waters specified and also the nets, engines, gear, apparatus, and appliances which may be used therein, the object of the regulations being to ensure the preservation and perpetuation of the industry.
Article No. 2 provides the manner in which the regulations shall be brought into operation and makes provision for the trial and punishment of those who may violate the convention and regulations. Article No. 3 defines the waters -which are to be covered by the treaty, namely, the waters in which

the sockeye salmon are now being caught. Article No. 4 provides for the appointment of an international fishery commission to study this industry with a view to suggesting further regulations for its protection and preservation. Article No. 5 defines the jurisdiction of .this commission, the investigations they shall carry on and the work they shall do. Article No. 6 defines the period during which the regulations shall remain in force. It provides for a period of eight years, and thereafter until terminated by notice as in the Article provided. The object of the eight-year period is that the salmon is what is called a four-year fish. The salmon returns to the spawning beds when it is four years old. It goes out the first year, and returns on the fourth year. It is therefore to cover two periods of four years each that the regulation provides for an eight-year period. Provision is also made by Article 6 for a change in the regulations in case changes are considered desirable by the international commission which may be appointed under Article 4. Article 7 provides the period during which the convention shall remain in force, namely fifteen years, and thereafter until two years from the date on which either of the high contracting parties shall give notice to the other of its desire to terminate this convention. Article No. 8 provides for the ratification Of the treaty.
Hon. members will see that the object of the convention is to secure the promulgation and enforcement of regulations drawn up and approved by both countries. The regulations already prepared and approved are printed as an appendix to the convention. One of the most important of these regulations makes provision for a close season when the salmon run is at the peak, so to speak, in order to ensure the arrival on the spawning beds of large numbers of the salmon which would he caught if there were not this close season.
At present there is a close season of some thirty-six hours each week. It is estimated that if we add to the weekly close season this special close season when the run is at its height, approximately fifty per cent of the salmon which are now caught and used in the canneries would be able to [DOT]ascend to the spawning grounds in the Fraser river. By this means they expect year after year to increase the supply of salmon at the spawning grounds and reestablish the industry on a sound basis. The close season every year is one of the most important provisions of the regulations.
Another very important provision limits

the area in which purse seines may be used. In the past, fishing- with purse seines lias been carried right up in the narrow channels between the island between Vancouver island and the state of Washington and has seriously depleted the supply of salmon; purse seines are now restricted to deep water and cannot be used out of deep water.
The third important provision is a more effective method of opening trap nets during weekly close time so as to assure fish passing through them.
It is considered by the Department of Marine and Fisheries that if these regulations are faithfully lived up to they should be sufficient to ensure-the re-establishment of this very important industry on the Pacific coast. If, as a result of the investigations of the international commission which is to be appointed under this treaty, further regulations are necessary, it is to be hoped that the two countries will agree in adopting such regulations so that this most valuable industry may be saved to both countries. It is not possible to preserve the industry unless there is agreement between the United States and Canada so that similar measures may be adopted on both sides of the boundary line to protect the salmon-fishing industry from extinction. That is the object of the convention.


James Alexander Robb: Before the resolution passes, could the minister tell us w'hat number of licenses have been issued in the salmon fisheries of Canada for the present season and if, in the issuance of those licenses, preference is given to returned soldiers? We have been told that some of these licenses are controlled by aliens. I think it would be interesting to have a statement from the minister as to the proportion of licenses controlled by British subjects, and the proportion controlled by men of foreign birth who are subjects of foreign nations.


Mr. A. K. MACLEAN:: It would hardly be possible to answer my hon. friend's question without some notice. If he desires an answer I shall endeavour to have the information for him to-morrow. I think, however, I can say to him that all fishery licenses are held by British subjects. During the present year, and last year, whenever possible, salmon-fishing licenses were given to returned men.


William Duff: We
have listened with a great deal of interest to the remarks of the President of the Privy

Council with reference to this great industry on the Pacific coast, and I am sure we will all agree with him that it is necessary that this industry be protected in the future. After reading the Convention between His Majesty King George and the United States Government we realize that this is a step in the right direction for the perpetuation of this important industry. I presume, Mr. Chairman, that this is one of the results of a conference which took place, either in the fall of 1917 or early in the winter of 1918, between commissioners, or plenipotentiaries, appointed by the Government of Canada and also by the Government of the United States. The commissioners for Canada, if I remember correctly, were Sir Douglas Hazen, now Chief Justice of the Supreme Court of New Brunswick; Mr. Desbarats, Deputy Minister of Fisheries; rand Mr. W. A. Found, another official of the Fisheries Department. The commissioners for the United States were Mr. Redfield, Secretary of Commerce; Mr. Sweet, assistant Secretary of Commerce, and Dr. Smith, United States Commissioner ot tisheries. I notice, Mr. Chairman, that the commissioners have filed a repots with their governments, and this is what they say about the rehabilitation and protection, of the salmon of the Fraser river system:
In the light of all the existing conditions, your Commissioners are of the opinion that a Treaty of Convention for the proper regulation and protection of this fishery should forthwith be entered into by the two countries; that commissioners should be appointed, under this Treaty, to thoroughly study the situation and that they should have to assist them two experts, one appointed by the Government of each country, who should conduct continuous investigations into the life history of the sock-eyes, hatchery methods, eradication of natural enemies on the spawning grounds and in salt water, and other related subjects; and also that the sockeyes hatchery operations on the Fraser should be inspected by the commissioners so appointed.
Your Commissioners also recommend that the Commission to be appointed cause an examination by competent engineers to be made of the sides of the Fraser river, at Hell's Gate, and at other places where slides into the river that might bar the ascent of salmon are probable, such examination being for the purpose of ascertaining what may be feasible to avert such danger.
It is the judgment of your Commissioners that the hatchery work on the Fraser river system should be extended as rapidly as available supplies of eggs will warrant by the establishing of new hatcheries on spawning areas now being sparsely seeded and that to this end eggs of sockeyes and possibly other species of salmon be made available from water of the United States, as' well as from other Canadian waters, for the Fraser river hatcheries to as large an extent as practicable.
It is also important that the two governments arrange to ascertain accurately how long it takes sockeye salmon from the time they enter Juan de Fuca Strait to reach and enter the Fraser river, and as far as possible to pass from point to point along the said strait and the Gulf of Georgia.
And also that the two governments arrange to carry on investigations and experiments with a view to finding some feasible means of overcoming the seal and sea-lion menace to the salmon fisheries in the treaty waters, and if such means be found to put them into operation.
Now, Mr. Chairman, several of the recommendations are covered in this convention, *and I presume the other matters suggested will likely be dealt with tyhen these gentlemen are appointed to carry out this 'agreement. The commissioners made other recommendations to their governments, one being with reference to the removal of the Canadian duty on fresh and fresh frozen fish, not including shellfish. That recommendation is as follows:
In the light of these facts your Commissioners feel constrained to recommend that the Canadian duty on fresh and fresh frozen fish, not including shellfish, be removed and with a view to assuring stability in the industry that the two countries enter into an agreement by which such fish will be admitted customs duty free from either country into the other, and that such arrangement remain in force for fifteen years, and thereafter until two years after the date, when either part hereto shall give notice to the other of the wish to terminate the same
The commissioners also, Mr. Chairman, made some recommendation with regard to the removal of all barriers to the production and movement of fish in Canada and the United States and that recommendation is as follows:
They, therefore, recommend that Article 1 of the Treaty of the 20th October, ISIS, be amended so as to make available in either country, to the fishing vessels of the other, the privileges covered by the instructions of the United States Secretary of Commerce to collectors of customs of that country, dated February 2'lst, 1918, and by the Canadian Order in Council dated March Sth, 1918, in substance as follows:
1. That the fishing vessels of either country may enter, from the high seas, any port of the other and clear from such port back to the high seas and the fishing grounds.
" 2. That the fishing vessels of either country may dispose of their catches and purchase bait, ice, nets, lines, coal, oil, provisions and all other supplies and outfits in the ports of either country.
3. That the repairing of fishing implements in the ports of either country be allowed to the vessels of the other country.
5.	That the fishing vessels of either country may ship their crews and tranship their catches in the ports of the other country.
6.	That the fishermen of either country may sell their catches in the ports of the other country, subject to loool tariff, if any.

If these recommendations meet with the approval of the two Governments, your Commissioners suggest the propriety of arranging that the amending treaty is signed on the 20th October next (1918). Such would be a most appropriate method of marking the one hundredth anniversary of the original treaty.
It seems to me that something should have been done with regard to the removal of the duty on fresh and frozen fish, and also with regard to the removal of all barriers to the production and improvement of fish both in Canada and the United States. I am therefore rather surprised that the recommendations made to the Government have not been acted upon, and that these matters were not taken in-to account and the necessary steps taken to deal with them.
I notice that the Pacific halibut fisheries were also reported on-


Newton Wesley Rowell: If my hon. friend
will permit me? I speak subject to correction-I have just had a telephone message sent to the department to make sure-but I think my hon. friend is putting on the record a portion of the report which has not yet been made public. By agreement between the two Governments the portion relating to the salmon fisheries in British Columbia has been made public. I may say to my hon. friend that the other matters of the report are now under negotiation with the Government of the United States. Therefore it would not be proper, as a matter of international courtesy, to put on record matters that have not so far been made public by consent of the two Governments.


William Duff: Of course, I am willing to
agree to almost anything. I would like to know why the other matters were no-t dealt with at the same time as the salmon fisheries of British Columbia were. It is almost two years since those commissioners met, and something should have been done before now, as this matter of fresh and frozen fish and the other matter I referred to are very important to the fishermen on the Atlantic coast, and it seems to me they should have been discussed at this convention as well as the matter of salmon in the Fraser river. Of course, I will not go any further in view' of what the minister (Mr. Row'ell) says. There is also another very important matter-the halibut fisheries of the Pacific coast. I believe the commissioners made a favourable report thereon, and it should have 'been dealt with at the same time as the matter now under discussion.


Mr. FIELDING:: Mr. Chairman, I wrant to offer my congratulations to the Government on the return to sane proceedings in relation to treaties wdth foreign nations. This is a Canadian treaty dealing with Canadian business, which is very properly submitted for the consideration of this House. It does not give us any knowledge of the affairs of the Czecho-Slovakia, it takes no account of the skull of the Prophet or of the missing Koran. It deals with Canadian affairs and does not contain any manifestation of national swellheadedness; it does not assert any new statues; it does not make any claim to new nationhood-it is just-an ordinary common sense treaty of the old-fashioned or common garden variety of treaties such as we have engaged in from time to time. There is not a word in this treaty that it is between Canada as a new nation and the United States; there is not a word asserting our right to make treaties as an independent nation. This is just a treaty between His Majesty the King and the President of the United States-the King representing not Canada alone but the whole British Empire, and inasmuch as the treaty does relate to Canada a gentleman representing Canada- named by the Canadian Government, I presume-has been chosen as one of the parties to it. I take it for granted that Mr. Justice Hazen was chosen not only because of his eminent ability but also because he was Minister of Marine and Fisheries when these negotiations were begun, but I merely want to congratulate the Government on getting back to the sensible, common, old-fashioned way of making our treaties.


George Green Foster: I think it is too bad that such a compliment should not be acknowledged. I therefore beg as Acting Prime Minister for the time being to thank my hon. friend for the compliment that he has paid to this Government. It has been an exceedingly reciprocal arrangement as between my hon. friend and ourselves. The occasion has enabled him to pay us a great compliment. It has also given him an opportunity to pile another criticism upon the criticisms which he w'as so very profuse with during the earlier periods of this session. One would have thought that he had said sufficient on that ground. But if it pleases him, it does not hurt us, and as long as it is accompanied with a compliment we thank him for both.


William Stevens Fielding: It is a case where wre can agree on reciprocity.
Resolution reported.


Newton Wesley Rowell: I beg to move that a*
message be sent to the Senate informing their Honours that this House has passed this resolution, and requesting their Honours to unite with this House by filling up the blank therein with the words " Senate and."


[Stage Direction]
Motion agreed to.	,


[Stage Direction]
The House resumed the adjourned debate . on the motion of Hon. Mr. Reid for the second reading of Bill No. 33, respecting the acquisition by His Majesty of the Grand Trunk Railway system.
Mr. E. B. DEVLIN (Wright):: (resuming from yesterday) Mr. Speaker, when the House adjourned last night I was stating that I was opposed to this Bill for several reasons, one, because under the circumstances I am opposed to public ownership. Another reason was that owing to the maladministration of our national affairs for the last few years I was at a loss to find where we were going to get the money to pay for these added obligations. I said that I was not alone in that opinion, but that it was the opinion of Boards of Trade throughout Canada and of the press and of the people of Canada. Since the House adjourned certain events have occurred

I do not wish to transgress any rule by referring to them-tout certain events have occurred at our very door which should lead the Government to stop, look, and listen, before entering into any further large expenditures which are not for the direct or even the indirect welfare of the people. I have said that the press and the people of this country are opposed to this transaction, and I think in view also of the events to which I have alluded it would be well for the Government to consider whether the handwriting is not already upon the wall which should warn them to go very, very slowly in embarking on further gigantic expenditures which will fall upon the people in the way of taxation and will not confer any benefit upon them.
Sir, this is the people's day, be they farmers, labourers, merchants, traders, or members of any other class. This is essentially the people's day, and the people intend to carry on in this country a government for the people and by the people, and before this Government increases taxation they should consider whether the expenditure proposed is in the interests of the people. I want to call attention especially to the fact that it has been pointed out by the financial editor of the London Times that this transaction is viewed with favour by the citizens of London because they are the investors in the Grand Trunk railway, and they are looking to Canada to help them in their investments and are not in any way considering the taxes that this obligation will place upon the people of Canada. To the Government then, I repeat, consider not the investors in England at the present moment, but consider the investors in Canada, who are the taxpayers of this country and who must meet the obligations which the Government is incurring at every step.
I do not want to refer to any past extravagance on the part of the Government. Their history since they took over the reins of power in 1911 is a record of the most extravagant expenditure that this country has ever witnessed. Nor do I wish to go into the details of that expenditure. I do not want to recriminate, but I would urge this upon the Government: Before you impose upon the people of Canada this gigantic obligation, especially at this juncture, when the Acting Prime Minister has said to the returned soldiers in writing that this Government is unable to help them further because Canada is passing through a most serious financial time, when the ex-Minister of Finance (Sir Thomas White) has publicly stated that the financial position of this country, whilst not critical, is serious. I appeal to you to consider the words of advice given to the people of Canada through the Prime Minister of this country and not take advantage of the Prime Minister's absence to commit the country to this gigantic undertaking which will not be for the benefit of Canada. I repeat, it would be solely for the benefit of the investors in England.
How much is this going to cost? There has not yet been a clear statement from the Government of what we are called upon to sanction in the way of dollars. We had a report tabled a few days ago entitled "A Memorandum in regard to the Grand Trunk Railway System" showing that the Grand Trunk and the Grand Trunk Pacific have a total mileage in the United States and Canada of 8,138; and 'total securities with the public amounting to $707,929,817. The financial statement for 1918 shows that the Grand Trunk had a surplus available in that year for dividends of $8,760,

and the Grand Trunk Pacific a deficit of $875,640, or with fixed charges and loss on branches, amounting to $9,442,739, a gross deficit of $10,316,379. For the first six months of the present year, the gross revenue of the Grand Trunk was $29,601,321; the expenses were $28,058,018, and the net $1,543,303, an increase of $691,053 over last year. The operating percentage for the six months was 94.78. On the other hand, the statement which has been brought down to the House shows that the interest which this country will have to pay annually will amount to about $16,000,000, or between $15,000,000 and $20,000,000, and current liabilities coming due within three years amount to $75,000,000. Then according to the Drayton-Acworth report (page 36) $30,000,000 is required for immediate repairs. As to indirect liabilities, the exMinister of Finance stated in the House the other day that they would amount to $145,000,000. Without wearying the House with any more figures, I want to ask this question: whatever may be the amount of the arbitration award on the preference and common stock-and it may be a *terrifically large amount; it certainly will be in the hundreds of millions of dollars-where is the money going to come from to pay for it?
At the present moment the Government are issuing a call to the people of Canada for a loan of $300,000,000 to endeavour to meet current liabilities. This loan is called a Victory Loan, and it is essential and absolutely needed by the Government if the government of this country is to be carried on. But at the very same moment the Government are telling the people: We are going to impose further obligations upon you, and if the current revenue be not sufficient to meet those obligations we must appeal to you again next year for a further loan. I said yesterday; let me repeat it today: Where is the money coming from, and where are we going to? I appeal to the judgment and intelligence of hon. gentlemen in this House, who are independent in character, who are not swayed by party affiliations, but who claim to possess some degree of independence: Are you going to allow the people's money to be squandered as it is being squandered, in face of the verdict which we have had throughout Canada, a verdict which has been pronounced by the most important boards of trade, by every class of the community, by the people themselves, and which has been asked for simply by two parties-should I say three parties? I will if I include the Minister of the In-fMr. Devlin. 1
terior (Mr. Meighen)-the parties asking for it being the Grand Trunk investors in England and the Canadian Northern railway, which wants to get this road. The Minister of the Interior said in this House within the last few days that one of the reasons which prompted him into deciding upon the acquisition of the Grand Trunk railway and the Grand Trunk Pacific railway was that they should not fall into the hands of the Canadian Pacific Railway Company. Whether or not the Grand Trunk railway falls into the hands of the Canadian Pacific is a matter of total indifference to me; but if the Canadian Pacific, a privately-owned railway, can carry on their business through the stress of the circumstances of the war and show dividends at the end of the war, then the quicker our other railways are carried on by the Canadian Pacific or similar corporations the better for Canada and for the taxpayers of Canada. If Canada must help her railways let her help them, but do not add to the obligations of the people at a time when Canada is groaning under her heavy indebtedness'. Be fair to foreign investors, but do not cripple Canada's credit out of sentiment for foreign investors. Our duty to-day-and it is one preached by the Government and by all economists in the country-is to retrench and to economize. If we are to retrench and to economize let us not get into any further wild railway schemes. Do not cripple the Canadian people because of fear lest the Canadian Pacific acquire the road. While it is true that Canada is rich in resources, as we are told by the Government from time to time, and that she will be able to pay all present indebtedness, if the Government continue emptying our mines, cutting down our timber to the last tree, getting rid of our fisheries, which form the capital of this country, imposing upon our farmers obligations which render life practically impossible for them, imposing upon our labouring classes obligations which are making for them a tremendous problem of how to meet the cost of living, then the Government are getting rid of the wealth of Canada.
My concluding words to the Government are these. If the Government for some purpose, unknown to me or unknown to a great part of financial interests of this country, are bound that they shall expend still more of the money of the Canadian 4 p.m. people instead of economizing and retrenching, stop class legislation, stop helping solely manufacturers and railway corporations and railway promotors and railway stockholders, and

bonus farmers and labourers who are the taxpayers of this country and who are entitled to cent for cent of their holdings in this country. Let us get rid of class legislation; let us legislate for the people of Canada, that the Government of this country may essentially become a people's government for the benefit of the people.


Mr. JAMES McISAAC (Kings, P.E.I.):: Mr. Speaker, 1 desire to say a few words on this question which is of paramount importance to the people of Canada, which is indeed one of the most important matters that has come up for discussion in this Parliament for some time. The debate has taken a very wide range and many things have been said. Some things have been said that have had direct bearing on the question under review, and quite a number of things have been said that seem to have very little connection therewith. I will endeavour, in my brief remarks, to confine myself as nearly as may be to the subject matter of the Bill before the House. I believe that I shall be able to understand the subject better myself and to present my thoughts clearer regarding the question if, with your permission, Sir, I briefly review the history of this railway matter and inquire what are the steps and what are the different changes which have brought about the conditions in which the Grand Trunk Railway Company now finds itself. It is proper too that we should inquire why this legislation is before us; why this company comes to this Parliament seeking aid, and why the Government of Canada are now negotiating with the Grand Trunk Railway Company and are putting this legislation through Parliament in order to meet the request that has been made in this connection.
At. the risk of repeating words that have been said probably more than once in this debate, I shall endeavour to give the House a resume of the history of this question. The original intention of the Grand Trunk Railway Company evidently was to build a western line commencing at Winnipeg and extending through the western provinces in order to compete for the increasing trade in that section of Canada, a trade that was looked after very successfully by the Canadian Pacific Railway Company. It seemed quite reasonable that the company should desire to extend their lines to secure as large a proportion of trade as possible in the western provinces. But for some reason or other when they approached the Government in 1903 to obtain their charter they were persuaded to consider a more comprehensive scheme than they at first entertained, and instead of simply building a branch westward to the Pacific Coast from Winnipeg they conceived the idea of building eastward as well, from Winnipeg to Quebec and Moncton, thus committing themselves to the construction of a transcontinental line. When this matter was presented to Parliament by the then leader of the Government, Sir Wilfrid Laurier, that gentleman certainly painted a most roseate picture of the wonderful things that were to come about as a result of this new undertaking, and the enormous benefit it was to prove to Canada. It was to cost Canada very little to complete another railway from ocean to ocean. In the debates of that time, tho Prime Minister on the first reading of the Bill on the 30th July, 1903, is thus recorded in Hansard:
The sum total of money to toe paid by the Government for the construction of that line of railway from Moncton to the Pacific Ocean will be in the neighbourhood of $12,000,000 or $13,000,000 and not a cent more.
Further on he says:
The surplus of this year will pay for the construction of this line.
On the same date, at page 7695 of Hansard, he made use of these words:
The cash subsidy which is promised and which is to be given under this contract to the Grand Trunk Pacific Company will not exceed $13,000,000 or thereabout.
That certainly looked exceedingly promising. Canada was to have a complete transcontinental line from coast to coast for practically nothing, but this entrancing picture proved to be not quite in accordance with the facts. It was agreed that the road should be built in two divisions, one from Winnipeg to the Pacific coast and the other from Winnipeg to Moncton, that portion of the line from Winnipeg to Moncton to be known as the National Transcontinental railway and the other portion, extending to the Pacific ocean, as the Grand Trunk Pacific railway. The Government were to build the portion from Winnipeg to Moncton, and the company the other section. The National Transcontinental line, having been built by the Government, was intended to be operated by the company after a few years, and a nominal rental was to be paid. To dispose of this branch of the road which does not enter into the question to any great extent at the moment, it is sufficient to say that it cost this country, according to the Drayton-Acworth report, about $160,000,000; and, further, that the company completely failed to carry out their

part of the agreement. They never operated the road, the Government having had to do so from the beginning. It will be interesting to see just how the branch extending from Winnipeg to the Pacific coast fared, whether or not it was a success, and what assistance the company were obliged to seek from the Government. Parenthetically, I may say that another road was subsidized by the Government running west-the Canadian Northern railway. This was a handicap to the Grand Trunk Pacific Company, and it would almost seem that the Grand Trunk Railway Company deserve some sympathy in view of the difficulties and handicaps with which they had to contend in any endeavour they might make to carry out their contract and build the road from Winnipeg to the Pacific. The proposition that was submitted to them apparently mesmerized them, but it was a Utopian scheme that did not stand the test of practical investigation. It was a railway mirage and the Grand Trunk Railway 'Company seem to have been lost in a maze of ramifications which completely confused and discomfited them. The Grand Trunk Company were not long engaged in their construction work before they were compelled to come to the Government for assistance.
They continued seeking aid again and again, until, to use the words of the ex-Finance,Minister-and I am sure I cain refer to no better authority-the Government of Canada were under obligation, in the connection with this Grand Trunk Pacific, to the extent of $145,000,000 directly and indirectly. In addition to that, the parent company, the Grand Trunk railway, are under obligation to the Grand Trunk Pacific to the extent of $100,000,000. That is the history in brief of the financing of this great road. We are not saying that it may not bd great, but it has cost Canada a very large sum of money. We are disappointed "because it was emphasized when the road was about to be built that it would make practically no demand upon the finances of Canada beyond $13,000,000.
Then, reverting for a moment to the Canadian Northern, it, too, got into financial difficulties and was obliged to come from year to year knocking at the doors of Parliament in order to secure financial aid to carry on its business. There were poured out or loaned from year to year millions and millions of money, till at last the Government of our day decided that no more money should be given to them unless the road should belong to the Government. The time Rad come when no more risks should be
IMr. M.-Isaac.]
taken by loaning and giving millions of money to a corporation which did not seem to have any near prospect of being able to pay any portion of the money back. The Government had taken over or assumed $40,000,000 of the stock of the road, while the proprietors, or those responsible for the company, had $60,000,000. In 1917 it was decided that no more money should be given to the road unless it became the property of the Government. Legislation to that effect was introduced and passed in 1917. In order that the Government might find out what was the reasonable value of the property or of the $60,000,000 of stock that remained in the Company, a hoard of arbitrators was appointed. While on that I just wish to dwell for a moment on something that took place then. In connection with the legislation of 1917 on this question, the Government had agreed, as I have said, that they would appoint arbitrators to determine the value of the remaining stock. I find that the then leader of the Opposition, the late Right Hon. Sir Wilfrid Laurier, in discussing this question, placed himself on record, as will be found in Hansard, August 13, 1917, to the effect that he had no objection to arbitrating, but he raised the point that
" No assistance should 'be given to the Canadian Northern railway unless at the same time It is provided that the Government have power within a reasonable time to acquire the ownership of the entire stock of the company at a price to be fixed by arbitration, not to exceed $30,000,00-0.
What I wish to establish is that the Opposition, through their leader, made the statement in Parliament on the 13th August, 1917, that they would not object to the award of the arbitrators provided it did not exceed $30,000,000. I wish to mention this because I may take occasion a little later in the course of my remarks to refer to this particular part of the question again.
In connection with the legislation of 1918, reference to which will be found in Hansard of May 15, 1918, page 1996, the right hon. the Prime Minister (Sir Robert Borden), discussing the question and alluding to the matter of the arrangement with the Canadian Northern, stated that:
By the arbitration agreement subsequently made it was provided that the price should not exceed $10,000,000.
You wrill observe that this is one-third of the amount of money that the Opposition had stated, through their leader, they would be satisfied the arbitrators should fix. They were willing to go as high as $30,000,000, while here we find that one-third of that

amount, or $10,000,000 is the amount awarded by the arbitration. I wish to make that statement at this particular stage because I may have occasion to make some reference to that particular point a little later on.
We know that subsequently to the session of 1918 the Canadian Northern railway became a part of the Canadian National railway system. We will leave that aside for a moment and consider what has happened to the Grand Trunk Pacific.
They went on borrowing money from the Government until, to quote the statement of the ex-Finance Minister who dealt with this question in an excellent manner a few evenings ago, the borrowings from, or the obligations to, the Government, direct and indirect, in connection with the road, amounted to $145,000,000. A11 will remember that early in the first Parliamentary session of the present year it was m/ade known to the Government that the Grand Trunk Railway Company, who were and are the owners of the stock of the Grand Trunk Pacific Railway, would be unable, after the 10th day of March to meet their financial obligations, and that they would be obliged to cease operating that railway. We all know what happened. The Government took immediate action and placed the Grand Trunk Pacific in the hands of a receiver. It must be said that the Grand Trunk Pacific and the Canadian Northern railways, which encountered these financial difficulties, were really not, correctly speaking, transcontinental lines; they were only parts or wings of a great transcontinental railway. It does not appear that the time had come when Canada should have practically three transcontinental railways. The development of trade, and the growth of the country's population had not arrived at the state when Canada could sustain any such plethora of railway mileage. How has it happened that we have come to the stage that the Grand' Trunk railway is to be taken over by the Government? Hon. gentlemen opposite have expressed surprise, indeed indignation, that this great and paramount question, this question of such very great importance to Canada, should, as they say, have 'been sprung upon Parliament without any previous intimation that the Government had any intention of taking over the Grand Trunk. But, Sir, it is a matter of fact that negotiations in this direction had been going on between the Government and the Grand Trunk Railway Company for a year and a half or thereabouts. As early as the 15th May, 75
1918, when the Prime Minister, Sir Robert Borden, was making a survey of the general railway situation, he intimated quite positively the existence of the possibility that having taken over the Canadian Northern, and as we have seen the Grand Trunk Pacific, the Grand Trunk itself might also be taken over. While the discussion was going on the position of the Grand Trunk came up in the course of the debate, and no serious objection to that possible consummation was taken by the then leader of the Opposition, the late Sir Wilfrid Laurier, because he said on that occasion:
I think that the Grand Trunk Railway system should be productive of good results. For the present I do not condemn the idea of taking this railway over.
The two competing railways in the West- the Canadian Northern and the Grand Trunk Pacific, finding it impossible to successfully continue operations, had to succumb and the Government had no option in the matter hut to take them over. These railways have absorbed millions and millions of the people's money, and in ordei that they might be preserved and utilized for the benefit of Canada there was only one thing to do-the Government were faced, as a matter of necessity, to take these railways over. Now let ns see what the facts are with regard to the parent company of the Grand Trunk Pacific, the Grand Trunk. As I have already said, negotiations had been going on with the Grand Trunk. Intimations had been given in the House with respect to the matter from time to time, and numerous questions on the subject had been asked by the Opposition. I remember very well that not only during the present session but last session, hon. gentlemen opposite inquired whether any progress had been made in the Government's negotiations with the Grand Trunk, dr whether or not the Government had any announcement to make with regard to the project. Any hon, gentleman who was present on those occasions cannot fail to have a distinct recollection that questions of that kind were asked and from time to time the Government answered, and could only answer that no definite conclusion had been reached and that there was no information to make public. Eventually a stage was reached in the negotiations when, the Government practically gained their ultimatum, although the company made various overtures in order to learn whether it was not possible to obtain better terms. The Government, however, considered that the terms they had offered were


Daniel Duncan McKenzie: I have closely followed the discourse of the hon. member for Kings (Mr. Mclsaac), and while I have never stood in awe of his great ability I always used to give him credit for a desire to place the facts before this Parliament. Now I am sorry to say I have to change my mind and hold not only my old opinion that my hon. friend does not possess an overwhelming amount of ability, but also that he is not scrupulously particular as to his facts. His account of the railway history of this country reminded me of a gentleman who was compiling a dictionary on fish. His definition of a lobster was A lobster is a fish, red in colour, and it walks or crawls backward." He showed this definition to a friend who was a better authority on fish than himself, and his friend said "That definition is all right except that this creature is not a fish, is not red in colour, and does not walk backward." I think that the history of the railways of this country as given by my hon. friend from Kings is about as true as that definition of a lobster. It was abso-

Tutely wrong from start to finish, and set forth not one scintilla of fact on which you [DOT]could rely. He made the extraordinary statement that we on this side of the House, and, indeed, the late leader of the Opposition, had said that we were willing to submit the value of the stock of the Canadian Northern to arbitration provided it did not exceed $30,000,000. It is most extraordinary that any hon. member who professes to understand his duties in this House and to represent an intelligent people should stand up here and undertake to say that we made such a proposition. As a matter of fact, the whole opposition was bent upon seeing that the matter should not go to arbitration at all. We relied on the Drayton-Acworth report which said that the stock was not worth one cent, and we contended that it was therefore ridiculous to submit the value of the stock to arbitration. The argument was:	What is to be arbitrated? This Government and this country have found a court of capable commissioners whom the Government have appointed to ascertain the value of the different roads in this country, and that competent board have brought down a report in [DOT]which they say that this stock is not worth one dollar. The hon. member for Kings (Mr. Mclsaac), in the face of that report and in the face of the discussion that took place upon it, puts himself on record as saying that my late distinguished leader, the Right Hon. Sir Wilfrid Laurier, said that lie was willing to submit this matter of straw, old straw at that, to arbitration, provided that the result would not net any more than $30,000,000. That is absolutely absurd, absolutely wrong and absolutely without the slightest foundation in the parliamentary history of this country or of this House. What has happened?


James McIsaac: Will the hon. member
permit me a question?


Daniel Duncan McKenzie: I have the floor. What has happened and what is the history of this matter? Hon. gentlemen in this House will remember that in the early stages of that discussion, the Hon. Dr. Pugsley, then member for St. John, who spoke in the House on this question before the hon. member for Kings had a seat in the House, moved a resolution that the matter as it stood then should be submitted to arbitration, and that a proviso should be embodied in the Act that the result of the arbitration was not to exceed $30,000,000. What has happened since then? Millions upon

millions of dollars have been lent by the Government to this company. The proposition of the Hon. Mr. Pugsley was made on a discussion on the question before the House of lending $45,000,000 to the Canadian Northern. That proposition of arbitration was not accepted, and the $45,000,000 was lent, all at one slap, or $15,000,000 more than the award of which we were speaking. Millions of dollars were lent after that discussion in regard to the $30,000,000. Yet the hon. member comes here to-day, and he forgets the loan of $45,000,000, the loan of $10,000,000, and the loan of $7,500,000 which were made to that company after that proposition of arbitration was made, and he squares himself with the truth by saying that we said that, upon the same basis as the stock was worth when the last arbitration was made, we were willing to give $30,000,000. Those are the circumstances, and the hon. member forgets entirely to take the slightest notice of the millions and millions of dollars that we lent after that proposition was made. If the hon. gentleman wants to be fair about this thing, he will take an account of tne $45,000,000, the $10,000,000 and the $7,500,000 that were paid over to the company after the arbitration proposition was made. If he does that, he will he correct in his history and in the figures that he might submit to the House.
Leaving the speech of the hon. member at that, I do not know that I shall pay any further attention to it just now. The hon. member says that we knew all about this legislation; that we knew that this business was coming up, and that there was nothing of surprise about it. Why should there be, he says, I venture to think that the right hon. gentleman who leads this House (Sir George Foster) understands Parliamentary procedure equally as well as the hon. member for King's (Mr. Molsaac). His education and Parliamentary experience are at least equal to that of the hon. memlber, and as the leader of the Govern- , ment and as the Acting Prime Minister just now, I think that he knew more about the business before the House and the purpose for which this session was called better than the hon. member. If the hon. member for King's, who is fond of history and fond of reading, I will say parts of the reports of the proceedings of the House, will look at page 858 of Hansard of the present session, he will find that the leader of the Government said:
This session of Parliament was called, not for private business, hut for one special purpose, and it has been confined largely to that, and

I think the general sense of the House has been that it should be confined to that.
And the right hon. gentleman went on to say that we should close; that we had conne here for a special purpose; that we had finished that special purpose; that the country expected us to con-5 p.m. fine ourselves to that purpose and then to go home. That was the view of the Acting Prime Minister expressed in this House on the 3rd October and appearing on page 858 of Hansard, and on the strength of that statement many hon. members left Ottawa; some of them are today on their way to the Old Country, some of them are in the West, and some of them are in other places, believing that the right hon. gentleman believed what he was speaking about, and I have no doubt that was his judgment at the time. But, of course, the hon. member for King's wipes that aside and says: Why should we take any notice of the statement of the leader of the Government? Why should we take his opinion? Did he not at that time know that there was something up the sleeve of the Government which was going to come down, and that we were not going to get away when we expected? We had, however, a right to believe the leader of the Government; we did believe him, and I am not accusing him at all, because I think he told us what he believed at the time. But somebody could not wait; some big interest thought it was well to strike the iron while it was hot; that it was well to rush this thing through, possibly while the Prime Minister was away or for some other reason. The Government no doubt consulted the hon. member for King's, and he told them that it was all right, and here it is.
I do not wish to take up very much time of the House at this stage; but occupying -the position that I do and realizing the very grave importance of the business that is before the House, I wish to state as concisely as possible the views which I hold upon this question. There is no wiping aside of the great question of transportation in this new and large country of ours; it must be attended to properly and well. No party, no Government, no Opposition, can afford to treat lightly dealing with the question of railways in this country, and hitherto both parties, Liberal and Conservative, have been giving their attention to this question to the very best of their ability. Mistakes may have been made; but if so, they were possibly mistakes of the head rather than of the heart and intention of public men of this country. The party to which I belong have nothing to take back
and nothting to -apologize for on the question of railways.
When the railway policy of the Liberal party was formulated in 1903 by Right Hon. Sir Wilfrid Laurier, Prime Minister of Canada, the scheme was fully discussed in Parliament and thereafter submitted to the people. An election was held in 1904, in which this question was comprehensively discussed and its minutiae were presented to the people from coast to coast. The people enjoyed the benefit of the discussions on the question in Parliament the winter before. The newspapers had opportunity to deal with the subject from every standpoint and to publish everything in regard to it they deemed desirable. The railway question was also discussed on the hustings, and the Opposition of that day, led by the present Prime Minister (Sir Robert Borden) dealt with it in every part of the country. Every candidate, whether for the Government or for the Opposition, discussed it as completely as he desired. Altogether the people were in an ideal position to understand the subject in all its bearings. Fully comprehending it, they went to the balftt box and voted upon the question, giving their well considered judgment. You, Sir; I believe, were a candidate at that time, and I submit to you that the only question that was before the people in that election -at least, the only question worth talking about-was whether or not the Government should undertake Jhe building of the Transcontinental railway and the further extension of it under the name of the Grand Trunk Pacific. The people of Canada passed judgment decisively upon the question. They sustained the Government, virtually saying to Sir Wilfrid and his Government: " We have considered your scheme and are satisfied with it. Go ahead and carry out the policy which you have submitted to us." Weil, astart was made and in 1908, four years afterwards, the Government was again on its trial. An opportunity was given, both in and out of Parliament, for ample discussion of'this question. The general election came on, but very little was said about it. In any event, the Government was again sustained. In 1911-and the building of the road was progressing rapidly between 1904 and 1911-an opportunity was afforded the people of learning how things were getting along and what the Government was doing. Another question, an entirely new one, was before the people in 1911, knd not a word was said by the Opposition of that day criticising the building of the road. .Nothing was said adversely in regard to enter-

The hon. member for Kings (Mr. Mclsaac) -'and he will pardon one for referring to him again-spoke of this as a very slight affair. It was a very small thing and he thought that it was ridiculous that hon. members on this side should discuss it at all. The matter was so plain, so simple, so palpable, and what we were offered was such a bargain that we should all rush at it, wait not for one word of criticism or inquiry as to what the price was going to be, what it consisted of or anything else about it, but just grasp at this wonderful pearl of great price .that the Grand Trunk are laying on .the bosom of the Canadian people. That is the idea that we get from the hon. member and hon. gentlemen on this side of the House who undertake to criticise are told that they are really wasting the time of the people and of the country and that they should not discuss such matters at all.
I myself, Mr. Speaker, am not of that view. My own position is that the Canadian people should get possession of every facility in this country that they possibly can get, provided they can do so at a proper price and provided they are able to operate that utility as much to the advantage of themselves and the country as it would be worked if it were in the hands of a corporation or private owners. There is no disguising, and I am not trying to disguise, where I am on this question-I am on record a hundred times in this House on the question of a man's individual ability and results when he is working for himself compared to his ability and results When he is working for a government. There is no question whatever about that. I always look for the best results when a man is working for himself, as compared with the results obtained when he is. working for a government. When a man is working for himself he is ambitious, he is keen, he has got all his wits about him, he knows that the prize is for himself, *and he wants to use his brain and his ability to the very best advantage. On the other hand, we find that a man is sluggish, indifferent, and careless when working for a government; he is only a cog in a wheel, there is not very much notice taken of him. He knows he is a cog and he will remain in that wheel-he will do the work of the wheel and that is all he will do. That is what is happening in this country and that is where the vast difference comes in between the results of the operation of concerns publicly owned and operated and the results of concerns privately owned and privately operated. In the great majority of

cases, I am happy to say, we find privately-operated concerns making money, but that is not the case with public utilities. Of course, there are towns and Cities who supply their own water and light, and some of them are making money-some of them are making ends meet and some making a profit-but that is entirely different from the working or exercising of the right of running a railway some eight or nine thousand miles long or dealing with such almost incomprehensible things as the operation of such systems. I suppose that, as in the past, a great deal of fault will be found with me because I express these views. I care not about that at all; I hate now, and will always continue to hate, Pharisaical hypocrisy; and if hon. gentlemen opposite wish to take shelter in the camp of a Pharisaical hypocrite, they can stay there-I will not.
Now, I am a single individual. I might on this question 'be absolutely wrong. I am not speaking as the leader of a great party, I am speaking for myself. That is my view, although I may he wrong. Before I sit down I hope to be able to prove to the House and to the Canadian people that I am right in saying that we get the best results from people handling their own. business as corporations rather than from the loose way of government ownership and government operation. Mr. Speaker, we are told to be very much afraid and to pass by on the other side for fear we may touch the institution known as the Canadian Pacific railway. We are told to avoid it as far as we can; and indeed it is dangerous for a public man to express an opinion with regard to it because he is at once branded as being in sympathy with that concern and in their service, and as not being honest. Why that great public organ, the Globe, is calling myself to task for being in the service of, and in improper sympathy with, the Canadian Pacific. I have been in public life, Mr. Speaker, for thirty years. Fourteen years of that time have been spent largely in the service of the town and municipality to which I belong. Twenty years-five of them in Halifax and fifteen of them here- have been absolutely in the public service. I have been elected four times to this House, twice to the legislature of Nova, Scotia, and fourteen times in municipal elections. That is a fairly .good test, Mr. Speaker, d invite the Globe to look over those years, to look over that history, and if they find one single blemish, or anything that looks aught but what a public

man's public -service should exhibit of public honesty, they will have some license to attack me as being in favour of private ownership. That 1 is ray position, Mr. Speaker, and with that history, Sir, I think I have a right to say to hon. gentlemen in this House that whatever my views are they are honest, and there is nothing behind them except what I deem to 'be regard for the best interests of the Canadian people.
Now, supposing the taking of the Grand Trunk system is a good bargain. There is many a poor boy who walks along Sparks street on -a cold day and sees nice boots in the shop windows and nice coats hanging up inside. He is very cold; he would like to get boots; he would like to get clothes; he would like to be well clothed to stand the severity of the weather. But he has no money to "buy boots or clothes; the condition of things forces him to go without. Now, supposing this railroad bargain is all right, have we got the necessary money to carry it out? I submit, Sir, that we have not. I give no evidence of my own on that point except to s-ay this: That while we talk about two billions of money as being the public debt of Canada I am informed on very good authority that it amounts to $2,270,000,000

that is the aggregate public debt of this country. We also have a railway debt of '$400,000,000 which we now pass over in the name of the Canadian Northern; that is ljot added to our public debt although to all intents and purposes it forms a part of it, for we have taken over the road, we have assumed the obligation, and we might as well be honest with ourselves, add it. to the general debt of Canada -and reckon it in that way. On the authority of good financiers in this country who -have gone into this matter, I received the . figures just as I have given them to the House, and they constitute the main block of our indebtedness. Before coming down to details I appeal to the people of Canada and I appeal to hon. gentlemen if it is not a time when we should pause and examine the situation and determine whether we are in a position to impose such burdens upon the country. We are but a small group here representing about 8,000,000 of people, and commissioned to look after national affairs, and our friends at home rest at ease, believing that we will not enter into any contract or obligation but what is in the best national interest. Our constituents are busy about other matters, and when we take upon ourselves the responsibility of representing them they leave to us the duty of seeing
that nothing shall be done here except what is in the best interests of the country. For that reason, Sir, I submit that it is the duty of every hon. member to ascertain -the financial obligations of the country, and to consider carefully whether it is proper, that we shall force on the people anything which they can do without. I contend, Sir, that we can do without this Grand Trunk for the present, and that the financial condition of the country is such that we should not attempt to take over the railway.
I was isaying -that the financial state of Canada was -such as not to justify the position the Government is taking. Up till to-day who is there that we should look to as the best authority on the financial condition of the country? I submit that for the last seven or eight years the lion. ex-Minister of Finance (Sir Thomas White) has known more about the finances of the Dominion than any other Canadian. What is his advice? When he was talking upon a subject which involved the assumption of some further financial responsibility by the people, his advice was: "You cannot do it. If you take my advice you will not add another dollar to the obligations of Canada." And, Mr. Speaker, I have here a summary of what was put forward in support of that advice:
$30,000,000 is required this year for pensions ;
$25,000,000 for soldiers' land settlement;
$10,000,000 for soldiers' civil re-establishment;
$102,762,000 for interest on the public debt;
$350,000,000 for war expenditure for 1920
A total of $517,762,000.
And the same authority -tells us that that is only a portion of what we have to provide, for -in the session which closed on ,the 7th of July w-e passed estimates totalling $550,000,000. That immense sum of money has to be provided for, and the items mentioned here are but a very few of those aggregating the $550,000,000 which we -then threw upon the shoulders of the people. But taking it as it is here, we find the items which I mention aggregate $517,762,000; and we are told by the very excellent authority that the aggregate revenue expected from every source this year will be $224,000,000. That, hon. members will observe, leaves a deficit of $273,762,000. Now, supposing that one-half of the "$550,000,000 estimates we passed are yet- to be provided for-I will not take half, I will say that we have $250,000,000 not yet provided for. Add that sum to the $273,762,000 and we have a deficit of $523,762,000. That means that this country during the current year must find

$523,7623000 for which we have not one cent
of revenue, because our revenue was exhausted long ago-and it must be remembered that our actual revenue often falls short of the estimate made by the Finance Department. But at the very best we are now confronting a situation where $523,762,000 must be borrowed, not so much for public works, but for the ordinary expenses of the country. There is no camouflage about that, these are figures given by the best authorities that the Government can put forward, they are the records of the Department of Finance given to us without question on the authority of officials of that department,	including the ex-Finance
Minister himself.
In the light of that situation would not sane, wise men say: Well, anything that Canada can do without for the present should not be acquired, but should be left over to be dealt with later under better circumstances; unless it can be shown that it is a very good proposition and something which will bring money to the coffers of Canada instead of placing us under new obligations. I submit, Sir, that if there is any fact in the present life of Canada which should receive our sympathetic support and careful consideration it is this fact of the returned soldier and his wife and children; tl^ey. should receive as much consideration as anything else that could possibly come before this Parliament. We have been advised by the Government, and it is a matter of record, that there is nothing they can do for our returned men. We have been told on the floor of this House by the hon. Minister of Justice (Mr. Doherty), who was then leading the Government, that it had already been decided that nothing could be done. Of course, there is something going on now-I do not know what it will amount to-but the record of the Government and the letter of the Prime Minister to the secretary of the Great War Veterans' Association, which was read here yesterday, are to the effect that the financial situation of the country is such that not a dollar can be raised to relieve those worthy sons of Canada who have done so much for the Empire and for this Dominion. If we have no money for the soldier-if his baby must cry for bread and we have no bread to appease its hunger-have we money to buy old railway stock? That, Sir, is the situation. We have been told by the Prime Minister, no doubt on his honour and what he thought was the fact, that much as he would like to help the soldiers he had not the means and dared not undertake to do 
anything which the financial situation of the country would not justify. But to-day there seems to be plenty of money to buy old stock that is worth nothing, to buy a railroad that is hopelessly insolvent and has not paid a cent of dividends for years.


John Dowsley Reid: That is not so. How can the hon. gentleman say that?


Daniel Duncan McKenzie: If it has paid a dividend, Sir, it has paid it out of the life blood of the road, out of money that should have gone into the upkeep of that road, according to the Drayton-Acworth report which is the Tory gospel.
That report says that $.36,000,000 was taken out of the earnings of the road and paid in dividends, whereas it should have been put into the road. I am not responsible for the truth of that statement; it is in the Drayton-Acworth report. The report has been public now for nearly two years, and we have not heard that statement called in question by any Grand Trunk official. They admit that they have allowed the road to run down, taken money to pay dividends, and played the market-I say that advisedly

with the road, hoping when it has gone to rack and ruin to pile it on the shoulders of the Canadian people. A copy of the Drayton-Acworth report has just been put in my hands, and I find this (page lxxxvi, section 10):
The Gra'nd Trunk Company proper has made unjustifiable charges to capital. Its lines have not been adequately maintained. More than $31,000,000, which ought to have been spent on maintenance in past years, has not been spent. New capital expenditure of over $30,000,000 is immediately required. The country is suffering from the company's inability to give adequate service. The Grand Trunk railway ought to be managed in Canada, and not from' London.
That, I think, is sufficient justification for what I said, but in another part of the report it is actually stated that the sum of $36,000,000 which should have been put into the road to keep it in proper shape was paid out in dividends.


John Dowsley Reid: That has been denied by the Grand Trunk officials.


Daniel Duncan McKenzie: It may have been, but woe betide any man on this side of the House who says that the Drayton-Acworth report is not literally and actually correct as to every word and every figure. Well, I have found those figures in that report, and I take them as being correct and shall stand by them until the Drayton-Acworth Commission tells this House and the country that they were mistaken and that that

money was not used in the way they stated.
1 was dealing with the question whether tins was a good bargain or not. Whether oi not it is a good bargain, I submit that we are not in a position now to launch into an expenditure of this kind, but we should get along as cheaply as we can consistent with present circumstances and the times in which we live. We have been told over and over again by the ex-Minister of Finance (Sir Thomas White) that this is just as much a war year as any of the five years during which the war was on. If this is a war year, if it is necessary for the purposes of the war to borrow $350,000,000 this year and another $350,000,000 next year to square the account, is it not reasonable that we ought, if Canada can raise the money and we have money to spare, to look after our soldiers in the most sympathetic and generous manner? But out of that $350,000,000 we have not got a dollar for the soldier. We cannot give the soldier any because there are other demands. We are asked in some quarters to be generous with the shareholders of the Grand Trunk. I say that we have been generous with them for over sixty years in this country. If there is any generosity in the hearts of members of this House or the people of this country those who have the first claim upon it are the soldiers of Canada and not the shareholders in the Old Land. If we cannot be generous with our own flesh and blood I do not think there is any room for argument for generosity for wealthy men and women in the Old Country. We are anxious, of course, to give a fair deal to every man and every woman in the Old Land who chooses to put money in any of our enterprises; that should be our desire, and we should do it for the sake of our reputation. But the Drayton-Acworth report says that there was bad management in connection with this company. It declares that the road was badly managed both at the operating and the financing ends, that the management were, practically speaking, playing the market and neglecting the requirements ot the road. Now that they have let the road go to rack and ruin, is that the time for the people of Canada to step in and pay for all the blunders and mistakes and shortcomings of the management of this road during the last sixty years? I submit that we have stronger calls upon our generosity and upon our finances. There is a greater need elsewhere for any generosity and energy that we possess. The proper thing now is to see how public ownership of railways is going to
work out before we take over' this system. Then, if public ownership of the railways is found to be good business, and if our finances will permit of it we can take the road over when public ownership has been made a success. To take an illustration, if one of my farmer friends in this House or outside buys a Jersey cow from a man to-day and is asked to buy another Jersey cow from the same man to-morrow, would not a sensible farmer say, ''Let me see how the cow I bought from you yesterday is going to turn out, how much milk and 'butter she gives? Then, when I know what sort of a cow she is, I can talk to you about buying another one." That is business. Why not apply the same principle to the public ownership and operation of railways? We have from 14,000 to 16,000 miles of railway on our hands now. Surely we should be permitted to see how the operation of this mileage works out before we are asked to take over another 8,000 miles without knowing whether public ownership and operation of railways is good business or not. I submit that in view of these considerations and the facts I shall ' give later on, it is not a fair proposition to ask us to take over this road at this stage.
At six o'clock the House took recess.
After Recess.
The House resumed at eight o'clock.


Daniel Duncan McKenzie: (Resuming) Mr. Speaker, just at six o'clock, I was making some reference to the bargain with which we are dealing as not being a good one, and also to the financial condition of Canada, and I was drawing the inference that the purchase proposed was not a wise one nor a good bargain, and that the Canadian exchequer was not in a prosperous condition that would warrant entering into a speculation of this kind. A good deal of credit is claimed by the Government in connection with public ownership, and they have been trying to make out that they are pioneers in this matter and that they are doing it as a ma/tter of policy and in the best interest of the country. I wish to quote from a cablegram which appears in this blue book which is endorsed "Grand Trunk Railway Company Acquisition and Memoranda respecting the same," published by the Government and placed in the hands of hon. members a few days ago. The very first cablegram 'which appears on page 3 is one from the Rt. Hon. Sir Robert Borden to the Dominion High Commissioner at London. It is marked "confidential," and reads:

Following for Smithers, President Qrand Trunk. Begins. Most Confidential. Public opinion greatly exercised by proposed increase of railway rates. We are hearing appeal to-day from Railway Board's decision. Having regard to all conditions which confront the Government it seems highly probable that circumstances will compel us to take active steps toward nationalization of Canadian railways in immediate future.
I quote that, Sir, to show that the view of the Government at that time was not that they were entering upon a promising business or upon something that was inviting, but that they were confronted with a condition which would compel them in the near future 'to take over the railways. It is hardly necessary for me to point out that a business man does not enter upon a business venture in a spirit of that kind if he believes it to be a good one. He enters upon that business because he believes it is going to he profitable and that it will be a good investment for his money, or if he is investing somebody else's money, because he thinks it is a profitable venture for the person whose money he is handling, and he will not make use of such language as the Prime Minister uses here, namely, that he finds himself in a condition where, .in the immediate future, he must deal with those railways as a national-owned railway.
I find a little further on in this book, at page 7, a reference in a letter which the hon. Minister of the Interior (Mr. Meighen) wrote on the 11th July to Sir Alfred Smithers. I am quoting that letter only to show that the Government regarded [he Grand Trunk railway and the Grand Trunk Pacific railway at that time as one and the same company and one and the same property. The hon. gentleman (Mr. Meighen) in this letter says:
This latter company-
That is the Grand Trunk Pacific.
-is in every sense subsidiary to, and its stock is wholly owned by the Grand Trunk Company.
A little further on, he says:
Throughout the negotiation and indeed prior thereto, it has been made clear to your company that the obligations of the 'Grand Trunk company to the Grand Trunk Pacific company could not be ignored and that the Government could not undertake to assume the indebtedness of and to operate the Grand Trunk Pacific and branch lines thereof, and to relieve the Grand Trunk of responsibility therefor, while the Grand Trunk itself, as a subsidiary of which and indeed as an extension of which the Grand Trunk Pacific was built, r emained in independent hands. .
This clearly shows that the Government and the Minister of 'the Interior at that 
date regarded the Grand Trank and the Grand Trunk Pacific as mutually responsible for the obligations of the one and the other, and that the Grand Trunk was not going to get out from ,the responsibility which devolved upon it by reason of extending its road, as the minister said at that time, and building a branch to the West, and the Grand Trunk Pacific was at that time regarded as an extension of the Grand Trank railway. I am mentioning that in connection with the horror with which the Government now view the idea of putting any railway into the hands of a receiver. The Grand Trunk Pacific is a road which the Government regard as part of the Grand Trunk. They .say it is to all intents and purposes an extension of the Grand Trank, and they immediately, without the slightest hesitation, put that branch, that part of the road, of the same company, into the hands of a receiver.


John Dowsley Reid: Might I suggest to my hon. friend that they put themselves in that position because they refused to operate?


Daniel Duncan McKenzie: I am talking about the question of receivership.


John Dowsley Reid: That is what I am talking about.


Daniel Duncan McKenzie: based on the Drayton-Acworth report which affords a sufficient foundation for Government's proposal.
If we go beyond the bounds of that report we have no certain guide as to what we should propose. Council will not accept either of the offers which Smithers put forward and unless they receive further offer before end of month they will consider negotiations at an end.
I have read that part of the Prime Minister's cablegram because it bears out the attitude which we take in this House. It has i been said-perhaps it was said by myself while the resolution was before the House- that we.should not consider the purchase of this railway until a proper report was made as to the actual condition of the company. We are borne out in that attitude by the Prime Minister, who says in this cablegram that the Government have nothing before them but the Drayton-Acworth report, and that that report would not justify them in accepting the proposal made by the company. I propose to show that there is nothing before .Parliament or the Government except the Drayton-Acworth report and that there is nothing in the Drayton-Acworth report that would justify the attitude of Parliament or the Government in reference to this proposition to-day. When the Prime Minister refers to the Drayton-Acworth report, what does that report say? While I have not read the whole of the report and there may be some things in it which I do not know, I find reference to this question at pages lxiv and lxv. It says:
It will be seen that the average amount paid in dividends has been $3,600,000 per annum. So the Stock Exchange valuation practically capitalize the dividends on 6 Per cent basis. And this, in a rapidly developing country, might be reasonable, if the dividends had been earned and could be maintained. But in view of the statement of the company's own officers that $211,000,000, which ought to have been spent out of revenue for maintenance has not been so spent, it cannot be contended that the dividends have been earned. In view of the further fact that the company has to face immediate liabilities of over $5,000,000 per annum in connection with the Grand Trunk Pacific, and of the statement of its own officers that a capital expenditure of $30,000,000 is immediately required on its own lines to put the company in proper condition to do its existing business, it can still less be contended that the dividends are maintainable. It cannot therefore be expected that the trustees should acquire the stock from the shareholders on the basis of past dividends. Even if the Government were to relieve them entirely, as 'suggested by their president, of their unfortunate Grand Trunk Pacific venture -and as we have already said, we cannot think that this request can be reasonably justified - it is evident that the Grand Trunk Company is not and will not be for some time to come, in a position entitling it to pay out any money at all in dividends. We regard the entire share 
capital of the company as being intrinsically of but small value at the present time. On the basis of present value of maintainable income the fair compensation would he very small.
According to this report the stock of the company is practically valueless.


John Dowsley Reid: Read on to the next clause.


Daniel Duncan McKenzie: I am going to read; my hon. friend need not be afraid. I will give him the sweet with the bitter if he thinks that it is sweet:
But we do not think that this is the only basis on which the people of Canada should proceed.
I would like to tell my hon. friends that the authors of the report are now getting into a charitable frame of mind. It is likely after dinner when they are writing this part of the report the austerity of the other paragraphs has disappeared and they are becoming charitable.
But we do not think that this is the only basis on which the people of Canada should proceed. We think this is a case for generosity rather than strict justice. Canada is under obligations to the Grand Trunk shareholders, who, in the early days, with hut small Government assistance, and in competition with the railways of the United States with their vastly greater resources, built up the first Canadian railway system. In later times the company has had further to meet the competition of heavily subsidized Canadian rivals. And it cannot be said that at any stage of its history the shareholders have obtained excessive profits on their enterprise. On the whole we recommend that, on condition of the surrender by the Grand Trunk Company of their entire share capital, guaranteed, preferred, and ordinary, the trustees grant a certain annuity, charged as a working expense on the whole undertaking of the Dominion Railway Company, for the first seven years, increasing at the termination of that period by something like 40 or 50 per cent.


John Dowsley Reid: That is just what we are doing.


Daniel Duncan McKenzie: I will satisfy my hon. friend to his heart's content that this is not what he is doing:
We have left the figures blank as there will be questions of cash in hand, value of stores, etc., which must make the precise figures subject to negotiation.


John Dowsley Reid: That is what we are doing here.


Daniel Duncan McKenzie: But our meaning is that the first figure should he a moderate but substantial .percentage of $3,600,000-
"A moderate percentage of $3,600,090." I would like to know from the Minister of Railways where under this bargain he

makes an annual payment of a moderate percentage of $3,600,000.


John Dowsley Reid: There is the $2,500,000.


Daniel Duncan McKenzie: Evidently the hon.
gentleman refers to something in the bargain that I could not come tacross. The hon. gentleman says "$2,500,000." That is the payment on the preferred stock but he has immediately alongside of that to pay nearly $8,000,000 on the debenture stock.


John Dowsley Reid: This was to be in addition to that.


Daniel Duncan McKenzie: This report does not say so. This report says that the company have to deliver up everything they *have.


John Dowsley Reid: No, it does not.


Daniel Duncan McKenzie: That is the suggestion here. They have to deliver, bolus bolus, everything they have from common stock up and then the Government comes in and makes an allowance upon the basis of $3,600,000. not- the whole but a moderate or substantial percentage of the amount. That is the suggestion of the Drayton-Acworth commission and that is the only authority which the Government have to-day. They have had no further investigation, no inquiry, no report, no arbitration. The Prime Minister, in his cable to the commissioner of the 10th September, 1918, says that there must be some substantial basis for the figures in the offer before anything of this kind should be done and that it should not be done except after investigation, inquiry and report to the Government. There is no such inquiry, no such report, no justification for the bargain to-day which is ^ infinitely, .away and beyond anything that could by the most lively stretch of the imagination be justified under the Drayton-Acworth report.
They were travelling in the dark and without a shadow of authority at all except what negotiations may have gone on heie, as to which we have no report and nothing upon which this House can base any decision. Now, Mr. Speaker, those were the preliminaries and those were the matters which passed back and forth between the Government and the president of the road, and also the reference that was made to the Drayton-Acworth Commission report by the Prime Minister and making it a basis for further negotiations. I wish to point out, and I am using the Drayton-Acworth report for that purpose, that this company has not been for the last ten years in anything like a good business condition; that
it is not in good business condition to-day; and that when the Government is taking the road over they are taking it over with that knowledge and with this report before them which w.as made by the select commission appointed and known as the Drayton-Acworth Commission. I said before- and many of the members of this House have said the same-that 'before we depart from the basis of that report, before we depart from the attitude which 'we took at that time and which .the Prime Minister took, there should be something substantial and something reliable upon which the people of this country can base any different decision at which they will arrive.
I propose to show that the bargain we are making is going away and beyond what was proposed at that time, and away and beyond the value of this undertaking. I hold in my hand a copy of the report made to his company by Sir Alfred Smithers on the 21st March, 1919, in which he states:
I have had most heartrending appeals from the many thousands of British investors who have invested their money in the securities of the Grand Trunk Railway.
Is that the institution which the Canadian people want to take over? Have we not enough appeals, and just appeals, now with respect to the moneys that this country can produce and pay out? Have we not enough of that without going to take over the heritage which this gentleman who was president of this board has howling around him and which he is anxious to pass over to the Minister of Railways?


John Dowsley Reid: Might I suggest to the hon. member, they could not pay the dividends, although they were earned, as long as the Grand Trunk Pacific was in default.


Daniel Duncan McKenzie: They have never paid one farthing on those bonds, and they are not paid yet. We have to pay them or they must be done without. That is the position of the Grand Trunk Pacific and the Drayton-Acworth report went fully into the matter. They say nothing about money being pa'd to the Grand Trunk Pacific. They say that this company has been badly managed, badly financed, and badly operated; and that they have taken the life blood out of it,	and	for the sake of
appearances, passed money around in the shape of a small dividend to keep the thing going, which money should have gone into the operations of the company. Those are the facts, Sir, and it was under those circumstances that this distressing statement of Sir Alfred Smithers


Daniel Duncan McKenzie: That is the interest for one year; I do not know how long it may he continued. If the bonds and securities are taken over and the Government only pay the interest, that is the annual charge they will have to pay to keep that going.


John Dowsley Reid: I was looking at page 39 of the blue-book. There I notice that under Notes Payable, which I take it are equipment bonds, the amount is $35,548,235. The figures are not quite the same, but I mean there would be interest on that $35,000,000. I understand the hon. gentleman to say that there will be that amount of interest instead of that being the amount on which the interest will be computed.


Daniel Duncan McKenzie: That is the position I
take, and I have obtained my figures from the bjue-book which the hon. gentleman holds in his hand. There is also a stock issue of $50,126,655, shown on page 39 of the same blue-book recently issued by the Government in connection with the financial and business standing of the Grand Trunk. That stock, which we also assume, bears interest at four per cent, which will amount to a further claim against the country of $2,005,066. The total annual interest upon all the Grand Trunk liabilities which we assume is $47,864,367. The earnings of the Grand Trunk for the railway year ending 31st December, 1918, were $64,482,316; the operating expenses were $53,435,801; leaving a balance, of $11,046,515, from which must be deducted the loss on the roads operated in the United States amounting to $1,639,317. This leaves a net balance, without deducting the fixed charges, of $9,407,198; but subtracting the fixed charges, which were $9,398,438, there is left only $8,760. Taking the very best situation in which the road can be placed for that year and giving credit for a clean earning of $9,407,198, and deducting that amount from the annual interest charge of $47,864,367, there is left a deficit of $38,457,169 on the year's operations of the Grand Trunk, which deficit must be paid annually by the people.


John Dowsley Reid: I think the hon. gentleman has made a mistake in regard to the equipment bonds.


Daniel Duncan McKenzie: The mistake is very
slight, if any. I mean that my figuring was rather in favour of the company-not intentionally, but some of the debenture stock is at five per cent and some at four per cent, and by mistake I figured the whole of it at four per cent, thus giving the company the advantage of that difference.


John Dowsley Reid: I do not say that the hon. member is intentionally wrong, but I understood him to state that there was. $35,000,000 interest on equipment bonds, or rolling stock. -


Daniel Duncan McKenzie: 

December, 1918, of 116,831,862, which the Government had to provide for, and on-which the country had to pay interest to the extent of $841,000, making a total deficit of $17,672,862 for that year.
I have already referred to the result of operations on the Grand Trunk for that same year, and will not say anything further for the present.
For the same year, the Grand Trunk Pacific had a revenue of $11,888,808; the operating expenses were $13,687,681; fixed charges $9,398,438, leaving a deficit on that year's business of $10,263,281. On that deficit the interest amounted to $513,164, making a total1 deficit for that year of $10,777,445. In connection with the Grand Trunk Pacific, I have received further figures from the Minister of Railways and Canals. Up to August 31, 1919, the sum of $5,407,522.26 had been advanced to the road, and the net operating deficits are given as follows:
March 10 to 31,	1919	$185,447.66
April	 458,286.61
May	 586,434.45
June	 518,816.56
July (estimated)	 446,515.00
August (estimated)	 505,247.00
A total deficit for March, April, May, June, July and August of $2,700,746.68. Those figures are for what may be regarded as the best part of the year, and are by no means encouraging.
The Transcontinental railway for the year ending 31st March, 1919, had total earnings of $10,412,407; operating expenses were $13,028,381; deficit $2,615,974. The capital invested in the Transcontinental railway is $173,000,000, interest on which amounts to $8,650,000 and interest on the deficit for one year $130,798, leaving a net deficit for the year's operations of $11,396,772.
The Intercolonial railway for the year ending 31st March, 1919, had total earnings of $26,435,343; operating expenses were $28,236,506, leaving a deficit of $1,801,163 for that year's operations. The capital invested in the Intercolonial is $125,000,000, interest on which amounts to $6,250,000; interest on deficit $90,058; total deficit, $8,141,221.
The total deficit for the last railway year of the three roads operated by the Government amounts to $47,988,300. If we add to this amount the deficit of the Grand Trunk $38,457,167, there is in prospect for government operation of railways an annual deficit of $86,445,467.


John Dowsley Reid: What did my 'hon. friend make the total deficit of the three roads?


Daniel Duncan McKenzie: I said $47,988,300.


John Dowsley Reid: The statement I submitted to the hon. member showed the deficits as follows: Canadian Northern $16,831,862, Grand Trunk Pacific i$10,263,28I, Transcontinental $2,615,974, Intercolonial $1,801,163, or a total of $31,512,280. Has the hon. gentleman added the interest on capitalization to those figures?


Daniel Duncan McKenzie: That Is true. Those
figures bear incomes and disbursements but do not include interest on the capital investment. The figures the minister handed me were $43,423,500, which included some interest. We are paying 5J per cent for money now and I have figured the interest only at 5 per cent. I did not make it 5J, but I am sure it would be no exaggeration to figure interest at that rate on any moneys the Government have to borrow to-day. I have calculated the interest on the capital investment, which in the case of the Transcontinental is $173,000,000. I have also calculated interest on the investment of $125,000,000 in the Intercolonial, because we are paying interest on that money. Of course, these moneys when not earned constitute a deficit and an 'obligation which must be paid out of other revenues.
The minister and the House know that the Grand Trunk has obligated itself to a certain amount of bonds and other obligations which we will have to assume when we take over the road with its assets. These obligations, which appear on pages 51 and 52 of the blue-book, amount roughly speaking, to $198,389,720. Some of these we may not be called upon to pay; I do not know. All that I say is this, that those roads in connection with which we gave those guarantees went Pearly $2,000,000 behind last year. The Grand Trunk iwas called upon out of its Canadian earnings to send nearly $2,000,000 into the United States to pay for the operations of those roads. In connection with those roads, the Grand Trunk has given guarantees to the amount which I have mentioned, and when a man puts his name on the back of a note, he should always be prepared to pay it if called upon, and he must regard it as an obligation. He may not have to pay it, but he may; and when we find conditions of this kind confronting us, namely, that those railways do not pay-and that they do not pay their obligations, the strong probabilities are that we shall have to meet.

those obligations and to make good those guarantees. For those reasons we must take into account the guarantees of the Grand Trunk to the extent of $198,389,720 which appear on pages 51 and 52 of the Blue Book. That is the condition of affairs of public-owned railways of this country, and I submit to businessmen that that is not a very inviting proposition. We must suppose that the operations are carried on as reasonably and as cautiously as the operations of a Government road can be carried on, and yet we are confronted this 1 year with a deficit of something like $50,000,000. This House is deciding upon the question whether or not it is advisable to continue the undertaking and to continue adding to -a property which does not seem to promise anything better than, if as good as, the roads with which we have been already dealing.
I have here some authorities on the working of the road and on the policy of Government ownership. Having spoken now longer than I expected, I will not trouble the House with quoting these authorities, and indeed the House is familiar with them. I was going to quote the Montreal Daily Star of October 27, which speaks very strongly against Government-owned roads and the operation of railroads by a government. I was also, on the financial question, going to quote a paper friendly to the Government, the Ottawa Journal, of October 14, 1919, which strongly warns the Government to undertake no further obligations along the lines suggested by this legislation. I was going to make reference to an authority which has already been quoted, Lord Shaughnessy who is, of course, running a railroad that might be regarded as in opposition to Government railways. But when we have to deal with authorities and men who know business, we must not refuse to give credence to their judgment because they happen to be opponents in business. We have in this opinion expressed by Lord Shaughnessy the word and experience of a man who has made a -success of a great railway -system in this country, and we should not lightly throw aside any suggestions that he may make about public ownership. He asks us to be cautious on this subject and not to plunge headlong into undertakings that may prove fatal to the country. I have *also the authority of a certain Mr. Mitchell, president of the National City Company of New York, who, speaking before the Canadian Club in Montreal, gave that club the experience of the American people in con-
76i
nection with government-owned railways. He explains in his statement that the freights on the roads have been increased to the tune of something like $885,000,000 in the last year-that is, that much more money has been taken out of the American people than under private ownership of roads-and after paying this $885,000,000, they find that they have to put their hands into their pockets to the extent of $210,000,000 to square up the year's operation of the roads. The experience in England is not at all inviting, and I have given the House as carefully as I can the figures so far as I can get them in connection with the operation of our roads in Canada. With this evidence before the House, I think I have done all that can be expected of me, not all, perhaps, but at least a portion of what may be regarded as my duty as a representative of some of the Canadian people.
When the facts, the experience of operations of this road, are put before Parliament and the Government, it is then for the Government to decide, and df they make a mistake in the light of proper information and of the truth, the responsibility is entirely theirs. I trust that the Government will not plunge headlong into this undertaking without at least getting some more information about it, and at all events getting the information of which the Prime Minister speaks in his cablegram to the High Commisfcioner bearing date 10th September, 1918, and appearing on pages 14 and 15 of this Blue Book. In that cablegram he emphasizes the fact that there should be full information before the House before they would depart from their original undertaking or from the first offer that they made. I pointed out to the House that the offer we are making, the undertaking we are now willing to legislate upon and to pass into a bargain and obligation on the part of the Canadian people, is away and beyond and above the amount which was *first spoken of and which the Government, in the early days of negotiation, were willing to pay. *
As a last word, let me say to the Government that some days ago I pointed out that if this proposition must go through Parliament and we have to deal with it, we should take some precaution to protect the Canadian people against speculation regarding this stock. The negotiations commenced as far back as 24th -January, 1918, that-being the date when the Prime Minister (Sir Robert Borden) sent his cablegram to Sir George Perley asking him to open nego-

tiations for taking over this road. That became public at once on that date, and the whole world had an opportunity of speculating in that stock from that date forward. The value of that stock should be governed, not by any impetus which it might have received by the negotiations, but entirely by its value on the 23rd January, 1918, 'before the negotiations became known at all, because that is the real genuine value of that stock, and not the value that it might have obtained after the negotiations became known. We know that after the negotiations got abroad the stock increased in value, and any value that was given to it was given to it not because the property is any better, but because it was hoped that the Government would take it and render it more valuable, but we have no business to pay for that stock any more than it was worth when we commenced the negotiations.
That is the date at which we should consider what this stock was worth.
Now, Mr. Speaker, I would move this amendment:
That the Bill be not read a second time but that the House do come to the following resolution :
That the Bill proposes an uncertain but very large addition to the debt of the Dominion at a time when existing obligations, arising out of the War and from other causes, are so vastly in excess of all previous obligations as to give much cause for anxiety on the part of all who are concerned in the financial position of Canada and the maintenance of the public credit.
That a measure of such wide-reaching character and large importance requires a study by the House and the people that cannot possibly be given in the-closing days of the session.
That the present session of Parliament was called for a special purpose which has already been accomplished.
That on Wednesday October 8th the Honourable the Minister of Trade and Commerce, acting as leader of the House in the absence of the Prime Minister; stated that the Government's expectation was that the session would close within the then current week.
That under such circumstances the introduction by the Government of a measure of such great importance as the acquisition of the railway and property of the Grand Trunk Company of Canada is improvident and inexpedient.
That for these reasons the further consideration of the Bill be deferred until a future session of this Parliament.
I move this amendment, seconded by the hon. member for Shelburne and Queens (Mr. Fielding).


John Dowsley Reid: Mr. Speaker


Newton Wesley Rowell: Mr. Speaker


Some hon. MEMBERS:: Who has the
floor?


Some hon. MEMBERS:: Order.


Edgar Nelson Rhodes: Order.


Newton Wesley Rowell: My hon. friends will
have ample opportunity to cast their vote against public ownership when the time comes.


An hon. MEMBER:: How soon?


Edgar Nelson Rhodes: Order.


Newton Wesley Rowell: The argument advanced
by the leader of the Opposition (Mr. McKenzie) against the second reading of the Bill and in support of the amendment for the six months' hoist was based principally on four grounds. First, my hon. friend clearly stated his position as being opposed to public ownership of railways or utilities of this kind under any' conditions which he conceived possible in Canada. Secondly, he took the ground that this proposal was not in the public interest, so far as the merits of the proposal itself were concerned; thirdly, if 1 understood him aright, he thought that the financial position of Canada was not such that the country should undertake the purchase at the present time; and lastly, my hon. friend expressed the view that it was inopportune at this session to bring forward the present Bill. I think I have fairly summarized the grounds upon which my hon. friend is opposed to the second reading of the Bill and moves the amendment for the six months' hoist.
Mr. Speaker, I desire to deal with these questions briefly and in the order mentioned. The hon. gentleman states his opposition to the principle of public ownership. Suppose we concede, for the sake of argument, that it is a debatable proposition. Then I submit my hon. friend has not made out a case, because in Canada we have public ownership of railways on a very large scale and must continue to have it for many years to come.


Mr. JACOBS:: Has it been a success?


Newton Wesley Rowell: That depends entirely on the standpoint from which you view it. The Intercolonial was built as a political railway to serve political considerations of very great national moment. It was not built originally as a paying transportation proposition ; it was intended to serve great national ends. During the long period of the existence of that road it was operated as a political railway, in the sense that business and transportation considerations were not the dominating motive in its management, and every hon. member on both

sides of the House knows that to be the *case. Under these conditions, you cannot test the question of public ownership of railways by the Intercolonial, and there is not an hon. member in this House who will say that the experience with the Intercolonial is a fair criterion as to the success or failure of the public ownership of a great system of railway transportation. We now have that added to by many thousands of miles of railway,-added to not primarily because the Government of Canada wanted to embark on the purchase of railways but because of the colossal failure of the private ownership and operation of railways in this country. The whole railway situation, which is calling for the most earnest consideration of the members <jf this House, and of the business men and the people generally of Canada, arises, not out of the public ownership of railways but out of the bedevilled condition created by private ownership of railways in Canada. If our railways are in trouble to-day it is not because of public ownership but because of private ownership.


An hon. MEMBER:: What about the Canadian Pacific railway?
Mr. ROW'ELL: My hon. friend asks what about the Canadian Pacific railway. Well, it is a magnificently operated railway and has been a great success. But it has been subsidized by public moneys and lands as few railways in existence have been subsidized, and I doubt very much if it could have been the success it is had it not been for the great assistance which it received at the hands of the Government of Canada. But to come back to the other railways. They are in the hands of the Government not because of ai^y failure of Government ownership hut because of the failure of private ownership and operation of railways in Canada. Tens of millions of dollars have been invested in railways in Canada for which the public will receive no adequate return, because of the duplication of lines over stretches of territory where that duplication is wholly unnecessary, and the people of Canada for a generation must bear the burden. The transportation of the people must suffer by reason of this enormous and wasteful expenditure of public money under private ownership, and as a result of the action of both political parties in handling the railway problem in Canada. We are faced with a railway situation to-day where millions of money have been invested in sections of railways which are not needed in the pub-

lie interest and for which the investors will never get an adequate return, for the traffic along these lines will not provide sufficient freight to enable them to earn a return. This condition of things is due not to public ownership but to private ownership of railways in this country.
Although public ownership and operation may not be as great a success as some of us hoped and believed it might be, or as some of my hon. friends feared, I venture to think it could not very well be worse than the experience we have had' in Canada in connection with the private ownership of railways. I mention that because my hon. friend asked a question.
We have public ownership of railways in Canada whether we wish it or not, and the taking over of the Grand Trunk is not embarking upon a new venture. It is the endeavour to make more safe and secure our existing investment in these railways. Do hon. members say that this is not a wise and prudent thing in the national interest? Concede all my hon. friend says about the cost of operating our present railways, concede all my hon. friend says about the shortage, the difference between revenue and expenditure in operating these railways, concede all that my hon. friend has claimed about the deficits-although I was quite'unable to follow his figures on many points-what does it mean? It means that we have this liability on our shoulders and unless we adopt some such expedient as securing this additional piece of railway, Canada will have to continue to bear that burden, will have to continue to meet these deficits, will have to continue to carry that huge liability without any immediate prospect of being relieved of the burden or of its being substantially reduced.
My hon. friend's whole argument absolutely lacks any business or common sense basis. We have got these railways, they are not paying at the present time and one reason why they are not paying is because we have not got a system which is complete in itself, we have not got the connections in the East for the important lines operated in the West. We want feeders in the East as we have them in the West, and one way to save the country from this annual expenditure which it must make in connection with its transportation system is to link up with this great system of railways in the East, the Grand Trunk railway with all its lines through the provinces of Ontario and Quebec, its great opportunities for gathering up freight to send out over our transcontinental railway and its great opportunities for

distributing freight from the West throughout the provinces of Ontario and Quebec. With such connections it should be possible to reduce these great annual deficits which we must continue to pay if we do not link up with this system in the East. Without that, as my hon. friend the Minister of Railways and Canals (iMr. Reid) in introducing the resolution pointed out, we must pay out millions of dollars to establish connections in the East. I appeal to my hon. friends opposite, I appeal, to any man of business common sense, looking at the _ matter quite apart from any question of public or private ownership, what would a business man do if he 'had a system of transportation such as the Government of Canada has, which could never be made to pay under existing conditions, and in which not millions but hundreds of millions of dollars are invested? What I ask would a common sense business man do? .


Mr. CANNON:: Throw some more good money after bad.


Newton Wesley Rowell: My hon. friend would be forced to do one of two things; he would be forced to endeavour to make it a good and complete transportation system in itself-that is one possibility-or he must be prepared to sacrifice the investment he has already made. I venture to think that a common sense business man, in his own interest, would choose to protect the investment he has by making the additions which would ensure a complete and successful system of transportation. That is what the Government is now proposing. While the merits of this proposal are. not depend

ent on the question of public or private ownership, in so far as I am concerned and speaking for myself, I believe that a national system of transportation under *efficient management can be made <a success.


Mr. McCREA:: Has it been made a success anywhere else?


Newton Wesley Rowell: It has been made a success I believe in many countries in Europe. It has not been tried in Great Britain or the United States except under the stress of war conditions when there can be no fair trial from the standpoint of earning dividends. My hon. friend knows that under war conditions the earning of dividends is not the primary consideration in operating these railways. The question during the war period was to get the largest amount of freight to its destination in the 
shortest space of time, no matter what the expense might be. Financial considerations or the earning of dividends did not enter into the problem. Therefore, the experience of Great Britain or the United States is not a test of public ownership under nomal conditions.
An hon. friend near me says "Give a case." I say that we have in the Hydro Electric of Ontario the case of a great public utility efficiently managed which has saved millions of dollars to the people of Ontario.


Lucien Cannon: What happened in London yesterday?


Newton Wesley Rowell: My hon. friend may speak, of London or any other place; the people of Ontario are behind a publicly-owned and operated hydro-electric system, and they would vote in favour of it if they had the opportunity just as decisively as they did on the question of prohibition yesterday. My hon. friend asked for an illustration and I have given one.


Lucien Cannon: Give us another one.


Newton Wesley Rowell: Until my hon., friend can dispose of the one I have already given I think that will do for him. There is no reason why such a system should not be efficiently managed if given business management. It cannot be managed efficiently and successfully if it is made part of a political machine, every hon. member of the House knows that. One of the reasons why public ownership has not been successful in the case of the Intercolonial is that because, as my hon. friend knows, for a long time political party considerations did determine the question of appointments in connection with that road. But my hon. friend knows, and the Government is pledged to the policy, that in so far as the operation of this great transportation system is concerned, political considerations will not interfere with appointments or promotions to any branch of the railway service.


Mr.   GANNON@: Will the minister give the House the promise that that pledge will be better respected than that which was given to the Ontario farmers in 1917 by himself?


Newton Wesley Rowell: My hon. friend's question will give just about as much comfort to the opponents of public ownership as his speeches in the Dorchester by-election gave to the German people when they were published in the German press. Coming back to the question I was discussing-the question of the operation of this system under public ownership-it can be operated if it is operated as a business proposition.

My hon. friend from Shelburne and Queens (Mr. Fielding) says that you cannot take the operation of this railway out of political control. I hope my hon. friend does not mean all that may be drawn from such a statement. I hope he does not mean that it is necessary that political appointments should.be made on the staff or among the employees of the government railways.


William Stevens Fielding: There is no limit to
political control.


Newton Wesley Rowell: If my hon. friend means that, then I emphatically dissent from his view. I should hope it would be possible for the people of this country to put in power in Canada a Government that would have sufficient backbone and sufficient force to refuse-


Joseph Archambault: Well, resign then.


Newton Wesley Rowell: When we think of the horrible thing that would follow if we did resign, it is enough to deter any Government from>
resigning.


Francis N. McCrea: Resign or reform, one or the other.


Newton Wesley Rowell: I should hope, Mr. Speaker, it is possible for the people of Canada, and for the Government of this country, to put national interests before political and party considerations in the management of our great national railways.


William Stevens Fielding: I did not mention "party control." I used the expression "political control" on the part of the Canadian people through their representatives. I did not speak of party interests at all.


Newton Wesley Rowell: I put the question to my hon. friend and he said there were no limits to political control,


William Stevens Fielding: Surely.


Newton Wesley Rowell: Therefore, I inferred my hon. friend meant all that I said in my subsequent statement. I do not wish to carry my hon. friend one step further than he desires to go in that respect. I go back to my statement again, and I say it is a sad reflection upon the public men of Canada and upon the intelligence and patriotism of the 'Canadian people if they are not prepared to put a great system of railway transportation on such a basis that it can be managed solely from the standpoint of the public interest on a sound business basis and free entirely from party considerations and from political appointments.


Mr. CAHILL:: Does the minister believe that the management of our railroads is in that position now?


Newton Wesley Rowell: I believe our national system of railways is in that position now. I know there has been no political interference with appointments since the Canadian National Railway system was turned over to the board of management. I know that so far as I am concerned I have never been consulted with reference to a single appointment, and I am quite satisfied that is equally true so far as my colleagues are concerned.


Jacques Bureau: Does the minister include the Intercolonial and the Transcontinental railways in the Canadian National Railway
system?


Newton Wesley Rowell: I include all those now managed by the board of directors that is managing our railroads.


Jacques Bureau: That is not an answer to my question.


Newton Wesley Rowell: I believe they are all under one board of management.


Jacques Bureau: Is the Transcontinental undeT the Canadian National Railway
system?


Newton Wesley Rowell: The Transcontinental is, but the Grand Trunk Pacific is under the receiver.


Jacques Bureau: I am talking about the Intercolonial and the Transcontinental; I did not mention the Grand Trunk Pacific.


Newton Wesley Rowell: The Intercolonial and the Transcontinental are both under the board of management. '


Jacques Bureau: When was the Order in Council passed?


Newton Wesley Rowell: I cannot give my hon. friend the date, but he knows these railways have been under the management of that board for months. I submit, Mr. Speaker, that not only has there been no interference on the part of the Government, but I do not think the board of directors would permit any interference-


Some hon. MEMBERS:: Oh, oh.


An hon. MEMBER:: That is too strong.


Newton Wesley Rowell: -because they have been appointed on the understanding that they are to manage that system solely from the standpoint of the public interest.


Jacques Bureau: Some system !


Newton Wesley Rowell: My hon. friends opposite cannot understand that.


Some hon. MEMBERS:: Hear, hear.


Newton Wesley Rowell: The difficulty is, some men judge others by themselves.


Some hon. MEMBERS:: Hear, (hear.


Newton Wesley Rowell: My hon. friends cannot believe but that if they were in power they would be exercising this political and party control. Therefore, they cannot give others the credit for not exercising it. This Government has deliberately divested itself of patronage by the Civil Service Act.


Some hon. MEMBERS:: Oh, oh.


Newton Wesley Rowell: My hon. friend again is incredulous. My hon. friend knows he would not divest himself of patronage but would use it to the best of his ability. Therefore,'he does not credit anything that is done by anybody else.


William Duff: It is a question of patronage.


Joseph Archambault: Would the minister permit me to ask him a question?


Newton Wesley Rowell: Certainly.


Joseph Archambault: Will he tell the House whether the railways are under the Civil Service Commission?


Newton Wesley Rowell: No, they are not; they are under the direction of the board that manages them, and I say that any appointments or promotions in connection with that railway system are absolutely free from political interference, just as free as appointments or promotions under the Civil Service Commission are-both are absolutely free. One of the biggest things this Government, or any government in Canada, has ever done has been to divest itself of political patronage in the public interest in order that the public life may be freed from it and the public service thus benefited by it. Therefore, I say I believe this national system of railways can be managed in the public interest under public ownership in a way that will prove a success.
Then, Mr. Speaker, I wish to go a step further -and to say that so far a-s I am concerned, I am prepared to have them a little less efficiently managed, than they would be managed by private owners, if such is necessary under public ownership and still belive in public ownership. If there is one thing that has bedevilled the public life of this country it has been the influence of railway corporations.


Some hon. MEMBERS:: Hear, hear.


An hon. MEMBER:: Mackenzie & Mann.


Newton Wesley Rowell: I venture to think, Mr. Speaker, that Canada will be much better off, even if it costs her some millions to operate her railways, than to have the influence, political influence, of great railway corporations in its public life. '


An hon. MEMBER:: Where would my
hon. friend be but for Mackenzie & Mann?


Newton Wesley Rowell: I would be here, but I am not quite -sure where my hon. friend would be but for the same influence.


Some hon. MEMBERS:: Oh, oh.


Edgar Nelson Rhodes: Order.


Newton Wesley Rowell: My hon. friends should not get uneasy. They do not like the truth, it seems to be worrying them quite a little.


Lucien Cannon: Not from you.


Newton Wesley Rowell: My hon. friend does not like it from me. Well, he sometimes has to take the truth even from unpalatable sources. I am sure a little truth will do him good.
Mr. Speaker, not only do I believe the National railway system can be operated and made a success from the business- standpoint, and that it is in the national interest to continue to do so, but I believe we will educate our people to the higher responsibilities of citizenship and to disinterested public service only as we trust them with these important responsibilities. The refusal to admit that a public utility can be operated fairly in the public interest i-s an absolute distrust of the people. It is a distrust of public -men; it is virtually to say that they are not prepared to give honest and efficient administration to the country. I do not so under-rate my fellow-citizens. I believe the -people of Canada are prepared to- support public men of both parties in giving an honest business administration of business affairs and eliminating political considerations entirely from them.
Mr. 'L. A. LAPOINTE: Give them a chance to say; go to the people on that question.


Newton Wesley Rowell: Go to the people? If we went to the people my hon. friends would not have a look in in the province of Ontario on the question of public ownership.


Some hon. MEMBERS:: Oh, oh.


Edgar Nelson Rhodes: Order. If hon. gentlemen desire to interrupt the speaker they might do the House the courtesy of rising and- submitting their questions.


Newton Wesley Rowell: 'Not only do these considerations which I have mentioned support the proposition of public ownership and justify the country in enlarging its railway holdings, but I share the view expressed by the ex-Minister of Agriculture (Mr. Crerar) with reference to the general principle of public ownership as applied to our railway system. Therefore I cordially support this proposition on that ground.
But coming back for a moment to the other aspect of the question, even if I did not believe in public ownership, even if I were opposed to public ownership, I would support this proposition on the plain business ground of national necessity. I support it on this ground, Mr. Speaker, for two reasons: First, as an operating proposition. The only way in which we can fairly carry out the obligations we have assumed is by adding this railway-to our present system, thus making, in a measure, a complete transportation system, and thus be in a position to enter into competition on fair terms with the other great railway transportation system, the Canadian Pacific Railway Company. My second reason is that even if my hon. friend's view be correct, that we cannot successfully operate a system of railways in the public interest by public ownership, if we wished ultimately to dispose of these railways we would have a vastly more valuable asset with the Grand Trunk added than if we endeavoured to dispose of them without such addition. Test it on any ground, Mr. Speaker, and the acquisition of the Grand Trunk is an advantage to the country. I know it is the view of some business men in the East who are opposed to this proposition that as an asset our national railway system is vastly more valuable with the Grand Trunk added than it is in its present severed condition. And that the additional value of the whole system will be vastly more than the amount we have to pay to acquire the Grand Trunk.
I wish to make that point clear, Mr. Speaker. The combined system is worth vastly more than the separate portions of the system added together, and we only get the real value by combining. It does not need any argument to establish that contention. The reason the Grand Trunk Pacific was built was to give an outlet to the West to the Grand Trunk system in the East. . And if you have the Grand Trunk Pacific, with all the burdens and obligations incidental to it, without the Grand Trunk system in the East, you have the burden without the compensation-you have the liability without the asset to make it good. I can quite
understand men opposed to public ownership, if they wish to see public ownership fail in Canada, would be bitterly hostile to the acquirement of this Grand Trunk road, because they know that without its acquirement public ownership is bound to result in a heavy financial loss to the country; but with this Grand Trunk railway acquired, with our national railway system in a measure complete, it may be possible to make public ownership of railways a success in this country. I know that many people do not want to see it a success; hon' estly and sincerely they are opposed to the principle. They believe that in the long run it would be a mistake. They say it leads to Socialism. We have heard that argument during this debate, that public ownership of railways is only leading on to other public ownership of all other kinds of business and to Socialism. Therefore they are opposed to the whole business and want to see it fail. I think I'see the hon. gentleman (Mr. Pelletier) who referred to the danger of socialism approving. I see my hon. friend confesses that he is responsible for that statement. Some hon. members think public ownership is going to lead to these dire consequences, and therefore they would like to see it fail. For that reason they are opposed to our taking proper measures to make public ownership a success. Well, that is not the view of the people of Canada. They have got this great undertaking on their hands, they want to see it made a success, and they want the Government to take the necessary means to that end.
Now I come' to another point. My hon. friend (Mr. McKenzie) said that this bargain was not a good bargain in itself. Well, I am not going to add much to what I said the other evening in Committee, neither am I going to add to what the Minister of Railways (Mr. Reid) and the Minister of the Interior (Mr. Meighen) have said, except to point out that we have as the basis of this proposal the Drayton-Acworth report to which my hon. friend referred. iBased on this report we proposed a cash payment of $2,500,000 for the first three or five years-[DOT] I have forgotten which it was-a higher sum for the next few years, and then $3,600,000 for the balance of the term. These figures have been before the House and the country for months, I have come back to it again, because no hon. member has up to this time ever challenged those figures, has ever said that our offer was too high, has ever suggested that our proposition was unfair to the people of Canada. And hon. members must bear in mind that

there is only one way of acquiring this road, and that is by negotiation. We cannot get it by expropriation for we cannot expropriate the lines in the United States, the Grand Trunk refused that offer but they are willing to arbitrate. Having regard to those facts, the question is have the Government negotiated a fair deal in this present agreement:


Frank S. Cahill: No.


Newton Wesley Rowell: Well, if my hon. friend wishes to know the view put forward by the Grand Trunk Company as to their rights and position, he can find it in the statements from time to time issued by them. They not only challenge the proposal, they said it vras confiscation to endeavour to force them to agree to it. My hon. friend knows that our proposal means tens of millions of dollars less for the Grand Trunk, so far as their shareholders are concerned, in our actual outlay to acquire this stock, than we have already given to the Canadian Pacific railway and to the Canadian Northern Tailway by way of bonus and subsidy, speaking of the subsidies granted both by the Federal and Provincial Governments. My hon. friend will see all those subsidies set out in the Drayton-Acworth report, showing the amount which the Canadian Pacific railway, the Canadian Northern railway and the Grand Trunk Pacific railway have received from the Federal Government. And I submit that in view of the position of this road, in view of its earnings, its possibilities, and its relation to our national railway system, it is well worth the offer which the Government has made for it. The people of Canada are getting a bargain on a fair and sound business basis and on reasonable business terms in the agreement which has been negotiated and is now before the House and covered by the Bill now introduced.
Then my hon. friend said that we had not the money wherewith to pay the purchase price, and he drew a touching picture of the condition of the soldier's wife and child. My hon. friend need not appeal to members on this side of the House to give attention to the soldier's wife and child. They have been giving that consideration and attention ever since this Government was formed. They are giving it to-day. A committee of this House is at present giving that consideration and that attention to the soldier and his dependents. And my hon. friend wholly misinterpreted and	misquoted-not	intentionally-the
statement of the Prime Minister in con-
nection with that matter. The Prime Minister's statement was that the country could not afford an additional cash gratuity such as had been asked, and therefore it could not be granted; but he never said and never suggested that the widow and orphans of the soldier in need of care and protection would not receive attention from this Government and from this country. A committee of the House, composed of members on both sides, on the motion of the Government-and I had the honour myself to make that motion-are now considering that whole problem with a view to making such recommendations as they may consider wise to meet the situation in so far as it is not at present adequately met. My hon. friend knows that the widow of the soldier and his orphan child will receive at the hands of this Government, will receive at the hands of this Parliament,-for I am sure members on both sides are desirous they should-all that is necessary for their care and protection.
But my hon. friend says that we have heavy liabilities. So we have. And he says that we should not spend a dollar that will not bring us a dollar or more in return. We should not spend a dollar that we do not need to spend. I concur in everything my hon. friend has said about the duty of economy. I agree that it is necessary. We have a heavy financial obligation; we have a great burden of debt; we have a serious annual charge to meet, which will be a burden upon us for years to come, and we can only meet it by economy on the part of the Government and by thrift and increased production on the part of the people. We must devote our energies to these tasks. But my hon friend wholly misapplied the argument he advanced in speaking of this proposition as it exists. I take the argument he advanced in favour of economy and conservation of the resources of the country, and 1 say that under existing conditions we must pay out millions of dollars every year to maintain the railways which we are responsible for maintaining without any adequate return. We are taking over the Grand Trunk, not to add to our liabilities, but to contribute to the relief of our liabilities, to reduce our interest charges, to put our transportation system on a basis where we can see daylight-and we cannot see daylight at the present time. It is because of the necessity of getting relief, because of the magnitude of the burdens we have to bear, that we should complete this undertaking in order to have a trans-

portation system which can pay its own way when normal conditions are restored after the war, and which, as the country develops and as population increases, and the extent of the services it renders to the country increases from year to year, will cease to be a liability and will become an asset of the people of Canada. I believe that is possible if we go ahead with this contract and place the system under efficient management and operate it solely in the public interest.
My hon. friend has said this is not an opportune time, that an intimation was given the House that, we expected to adjourn a week ago, and that therefore we should not take this matter up now. It is difficult for me to understand the point of view of my hon. friend. I frankly confess I cannot understand it at all. At the time that intimation was made, as has already been pointed out, it was not anticipated that this agreement would be concluded. But it is concluded. How will we be in a better position to deal with it in February next than we are to-day? My hon. friend has not given us a single suggestion on this point.
We have now all the data we will have next February, and all the information, we need to reach a conclusion on the whole proposition. Then what is the object of delay? There can be only one object gained by delay, and that is to give .those who are opposed to the country acquiring this road an opportunity to organize their opposition more _ effectively, and to defeat what we believe to be' in the public interests, which require the Government to acquire the road.


Mr. L. A. LAPOINTE:: I say that you had this all prepared before the end of the session and were simply holding it by strings. That was the protest of the Montreal Board of Trade.


Newton Wesley Rowell: I had the pleasure ol
being present when a deputation from Montreal Board of Trade waited upon the Government, and not a member of the deputation made any such suggestion or anything that bears any relation to it.


Louis Audet Lapointe: I can show you an item in the Citizen where they represented that you were all along prepared to bring down this measure.


Newton Wesley Rowell: All I have to say is that no deputation that waited on the Government suggested it, and if any man does suggest it he suggests that about which he
has no knowledge and which is absolutely untrue.


Mr. L. A LAPOINTE:: May I ask why the deputation from the Montreal Board of Trade was received in a dark room, with nobody there except the ministers and five or six of the delegates? Nobody knows what passed at the meeting.


Newton Wesley Rowell: All I can say to my hon. friend is this.: It may be that the deputation from the Montreal Board of Trade made a very great mistake when they did not include my hon. friend in the deputation, and that it was an oversight on their part. We are not responsible for that; my hon. friend will have to settle that with the members of the Montreal Board of Trade. I am quite sure had they included my hon. friend in the deputation and had he heard the discussion, that took place he would 'be less satisfied with his opposition to this Bill, and would be more tempted to back up the Government in support of it when he had heard the good reasons advanced why the Government should go on with this legislation.


Louis Audet Lapointe: Did the Government satisfy the delegation?


Newton Wesley Rowell: I do not think we did.


Joseph Archambault: Like the farmers' delegation last year.


Newton Wesley Rowell: They frankly stated their hostility to public ownership under any conditions. There is no policy this Government could take consistent with serving the public interest at this critical time that would meet the views of the Montreal men opposed to public ownership. Therefore, although these are men for whom we have great respect and whose business judgment commands consideration; and although nearly all of them were supporters of the Government-


Louis Audet Lapointe: Yes.


Newton Wesley Rowell: -the Government could not at the same time serve the public interest as they see it, and meet the views of their friends in Montreal. So the Government decided to support the public interest as they see it at this time.
I come back to the question, what is the object of delay? There can be no gain by delay except to permit the interests that are opposed to the consummation of this bargain to organize more effectively to defeat it, and if the Government believes that this bargain is in the public interest,


Francis N. McCrea: I have not a great deal to say on this question, Mr. Speaker, and as the hour is late I may as well express my views now, for I shall not take up very much time. In the first place, so that there may he no misunderstanding as to where I stand in this matter, I desire to say that I am absolutely opposed to the principle of government ownership of railways or any other utility that can be better managed privately, and I shall give my reasons. I asked the President of the Privy Council if he could mention any country that had made a success of government ownership but he did net answer. He said that English-speaking nations probably could or would, or had done so. but I asked him to name any single nation that had made a success of government ownership and to this definite question I received no reply. Now, I am opposed to government ownership for -the reason that other countries have tried it and in every instance it has proved a failure, and I cannot see that it could be other than a failure. I

think that the President of ithe Council will admit that government ownership and management of railways under the political system is bound to be a failure. Patronage will creep in and render it impossible for a government-owned railway to be successful. How, do hon. gentlemen opposite propose to manage a public utility of any kind? Imagine an aggregation of men subscribing a large amount of money for the development of any enterprise-be it a railway or any other concern-and, having completed the preliminaries, handing it over to a few private persons, saying: " This is your property, and you can do as you please with it. Take no notice of us; you are under no obligation to accept any advice we may offer. The people who put their money into it and own it will have absolutely nothing to say about its management: you are virtually the owners." Could any undertaking conducted under such circumstances be at all successful? The best way in which the Civil Service or any other business naturally within the purview of the Government can be conducted is undoubtedly by the direct control of the Government itself. But a railway is a different proposition and must be handled on business lines, and it is unthinkable that any combination of men subscribing a large amount of capital for any business would surrender all interest in its operation. I cannot conceive how a railway can be conducted successfully under public ownership. We represent the people and are supposed to know something about what the Government is interested in, whether in the matter of railways or anything else. The experience of every country that has tried government ownership has been decidedly that of failure and not success.
Taking these two things together, I maintain that it is unthinkable that the Government of Canada or of any other country can handle a railway proposition, give the service and give the attention to it.that can be given by the men who actually own the railway. It cannot be carried on as successfully as the Canadian Pacific and other well managed corporations are. The people who have their money in it are the people who direct it and carry on its management. It must be done in that way if it is to be successful and it cannot be done in any other way.
There are a good many reasons put forth why this road should be taken over. We are told that one is that some years ago, when the Grand Trunk Pacific was organized and became one of the lines of transportation, the Grand Trunk Railway Company

entered into an agreement to take over and operate the road. They became financially responsible for some $125,000,000, and it is said now that the Grand Trunk, who guaranteed this loan, are not in a position to respect and take care of that guarantee. Therefore, that is advanced as a reason -why wre should take over the Grand Trunk. Yet, in taking over the Grand Trunk as proposed now, what are we going to get? What assistance are we going to get to pay the prinr cipal or interest of the road that has been guaranteed by the Grand Trunk? If I understand this agreement properly, and I think I do, we are proposing to assume a very heavy obligation. According to the Montreal Star of last Thursday, the interest at 4 per cent on the first mortgage bonds which the Government undertake to guarantee will amount to a little over $G,000,000 a year. On the second mortgage bonds the interest will be $2,500,000, while the third set of bonds or securities are supposed to be arbitrated upon, and that is as yet an unknown quantity. The arbitrators will fix the value of the third class security, but putting them all together, the first mortgage bonds at 4 per cent and the second mortgage bonds at 4 per cent, the total which the Government will have to pay will be $8,500,000, which, with the other obligation that will rest upon the sholders of the Government, will make an amount of $10,000,000. That is more than the Grand Trunk has been able to earn. In what way are we going to get any relmburse-pient of the loan or guarantee made by the Grand Trunk to the Grand Trunk Pacific? I cannot see any advantage in the proposition.
We have heard from both sides of the House that the Grand Trunk proper was in a deplorable condition, that the chairman of the Grand Trunk was appealing to the Government to take care of and protect his shareholders. As I understand it, the first duty of this Government is to protect the taxpayers of Canada; their sympathies should go out to the taxpayers of this country. If the Grand Trunk have operated this road for sixty years under the best management they could put forth, if they have not been able to make any dividends or revenue for their stockholders, if they now come to the Government of Canada and say: "Come to our rescue; take care of our stockholders," if they have been crying for mercy, if they have been saying that they have been receiving no remuneration or revenue in the way of dividends or interest on their stock in this road, I think that is one of the greatest

reasons that could be put forth why this Government should be careful. If the stock is worth nothing and brings no revenue to the people who, own it, why do we want it? We have trouble and obligations enough on our hands without undertaking to carry the burdens of the stockholders of the Grand Trunk.
It is said that the Grand Trunk put up the argument that they were misled when they were induced to go into the construction and operation of the Grand Trunk Pacific. I think this House and the people of the country are aware that Mr. C. M. Hays, who was the manager of the Grand Trunk at that time, was one of the ablest men on the continent, and if he made a bad bargain for his people is that a reason why the taxpayers of this country should be called upon to relieve them of that burden? Not in my judgment. If the Grand Trunk as it now exists is not able to meet its obligations and pay dividends to its stockholders, why should Canada take it over and why should we pledge the credit of Canada to pay that interest whether the road earns it or not?
One of the arguments put forth is the same as the argument which was put forth in connection with the Canadian Northern when it was a question of taking over that road, It was said that it ought to be done, and done quickly, because if it were not done and done quickly the apple would fall into the mouth of the Canadian Pacific. The Canadian Pacific were standing ready, we were told in this House, to take it over. I want to tell the House that the Canadian Pacific never had any intention of taking over the Canadian Northern or the Grand Trunk under any such conditions as we are taking over the latter road now. It may be true that the Canadian Pacific had entered into some negotiations, but you will find that the proposition about negotiations came from the seller, not from the buyer, the reason being that they wanted to get a bugaboo to bring before the House and to make the House believe that the Canadian Pacific wanted to get these roads. I can tell the House that the Canadian Pacific never wanted to buy the Grand Trunk or the Canadian Northern for any such money as this country is paying or proposes to pay.
But, suppose that either one or both should fail into the hands of the Canadian Pacific! The hon. the ex-Minister of Finance (Sir Thomas White) told us, speaking on this question from his place in the House last week, that the Canadian Pacific was one of the best managed institutions
on this continent, that it was one of the best manned and operated roads, and that it gave a good service. Would it have been a calamity if the Canadian Northern had fallen, or if the Grand Trunk should fall, into its hands? You have the record of the Canadian Pacific as one of the best-managed institutions on this continent. If it had become the owner of either one or both of these roads and had given us the service that it is giving to the country to-day would any harm have come to the country? Suppose this road falls into the hands of the Government which has not the record of the Canadian Pacific as one of the best managed institutions on the continent? I am not throwing any stones at this Government, but I say that no matter what party is in power it is impossible for the Government to operate and handle the affairs of a railway as economically or as wisely as they can be operated and handled by any well managed railway company.
Now that is the difference. They tell us: "Oh, that would be a monopoly ; one corporation controlling the whole railway system of this country would be ruinous." It might have been in years gone by, but now we have a Board of Railway Commissioners whose duty it is to see that no injustice is done to any person and that we get a proper service. How are we to get that proper service, or that cheap service, if we have two transcontinentals doing the same business? The more freight and the more business there is on a railway, or any other institution, the cheaper it can operate-the less its overhead charges, and its charges for maintenance of road-bed and everything else. Hon. gentlemen opposite told us that the Grand Trunk was in an excellent condition. I want to state that -whatever the rest of their equipment may be the Grand Trunk have put in less than fifty per cent of the ties they should have put in-ties that they wanted to put in and did not have. Not having put those ties in, the road is consequently in that much poorer state, and I think that practically every part of the whole system is about in the same condition.
As I said, I am opposed to government ownership first, last and all the time; not from mere theoretical considerations; I am guided by the experience that all other countries had. I am opposed to arbitration because of our own experience in that regard in the past. We had an experience of arbitration with respect to the value of the Canadian Northern Railway stock. The

report of the commission which examined into the railway situation pronounced the Canadian Northern stock to be absolutely of no value; it had never contributed a dollar to the construction of that railway. Not only that, but the same report says that the Canadian Northern had received from this country in the way of assistance from all sources more money than the road was worth. That means that the money granted by the people of this country was not put into the construction of the Canadian Northern. And in the face of that, and regardless of the fact that the owners, and operators of the Canadian Northern had received more assistance from the people of Canada than they had ever put into the road, the arbitrators agreed upon $10,800,000 as being the value of the stock. With that experience in arbitration I do not want any more of it. But this Government evidently do not profit by the experience of the past, they do not see the handwriting on the wall. I was in hopes that they had seen that handwriting as denoted by yesterday's elections in Ontario, and that they would take a little notice of what was happening and begin to reflect whether they represented the people of Canada or; not. I do not believe this Government have the Confidence of the Canadian people either in railway matters or in anything else. It would be well, therefore, for them to move slowly until they have found out whom they represent. "C'ox can't wait," I believe, at all events somebody can't wait.
Now we are told the 'Grand Trunk are not asking for any mercy. I notice they are asking to be relieved of their obligations with respect to the guarantee which ^they gave in the matter of the construction of the Grand Trunk Pacific; but they are n'ot asking this country to take over the Grand Trunk proper. What are we getting out of this transaction? Are we getting anything towards the reduction of the guarantees given to the Grand Trunk Pacific? As I understand it, not a dollar. The Grand Trunk are getting, or are going to get, from the taxpayers of this country actually more money than their own operations show the road has been capable of earning for the last ten years. Where, or in what respect, are the people of this country being helped out in regard to the guarantees that the Grand Trunk entered into on account of the construction of the Grand Trunk Pacific? If we were going to be relieved of part of those guarantees then there might be some reason for this bargain. But, as I understand it, we are not.

We know that the earnings of the road will not amount to the sum] that we are binding ourselves to pay. If the earnings do not reach that sum the taxpayers of this country will be called upon to make good the deficiency.


John Dowsley Reid: Might I inform the hon. gentleman that the statements contained in the blue-book presented to the House do not show that at all. They show that the Grand Trunk has earned, since it was incorporated, interest on its debenture stock and on its guaranteed stock. It is true that it is not shown that during the 1st two years of the war the Grand Trunk Company have paid any dividend. That does not say they did not earn dividends. I want to say to the hon. member, interest was earned on the guaranteed stock although it was not paid.


Samuel William Jacobs: Not in the 90's.


John Dowsley Reid: Yes.


Samuel William Jacobs: Excuse me.


John Dowsley Reid: I say that the blue-book to which I have referred shows that in the years right along they did pay the interests. ,
McCREA: Will the minister tell me why it is the last proposition of the. Government to pay about $10,000,000 when the Grand Trunk Company, through their chairman, Six Alfred Smithers, offered to accept about $5,000,000 a year as the yearly rental of the road on a 999 year lease?


John Dowsley Reid: The hon. gentleman
asks me, as I understand him, to explain why we propose to pay $10,000,000 when the chairman of the Grand Trunk, Sir Alfred Smithers, asks only $5,000,000. No such proposition has ever been submitted to this House. What was submitted is this: We offered to'Joay a total of $3,600,000 and Sir Alfred Smithers offered to accept $5,100,000 in round figures. We refused to agree to his proposition and now the matter is going to arbitration. Sir Alfred Smithers would not accept $3,600,000, and we would not give $5,100,000. There has been no mention of any such sum as $10,000,000 at all in the whole discussion.


Francis N. McCrea: The Montreal Star, which supports the Government, and is generally right behind it-at all events it was in the last election-in its issue of last Thursday stated the first mortgage bonds would cost this country $6,000,000 and a little over; that the second mortgage bonds would cost

$2,500,000; and that the third mortgage bonds would be the .subject of arbitration. The Montreal Star estimated the total cost would be over $10,000,000 a year.


Daniel Duncan McKenzie: That is right.


Francis N. McCrea: We have got to go to the press for information because hon. gentlemen on this side spent almost an entire evening last week trying to ascertain from the Government what the estimated cost of this transaction would be, and could not get any answer. And where are we going to get information if we do not get it from the Government?
Mr. J. D. REID.: In the letter'contained in this blue-book; that gives the offer in detail.


Francis N. McCrea: It is the fact that last week two or three hon. members on this side, and I was one of them, tried to get from the Government what the award would be, what the yearly cost in the shape of interest, rental, or whatever you like to-call it, would be, but we could not get that information. So I am taking my information from the Government organ, the Montreal Star, which they pin their faith to very strongly,-at election times, anyway.


Samuel William Jacobs: The Government organ is a broken reed just now.


John Dowsley Reid: No; it is stronger than ever.


Francis N. McCrea: The Grand Trunk Company, as I understand it, and I think I am right, have not asked the Government to take over the Grand Trunk railway proper. They are simply asking to be-relieved of the obligations which they entered into in *connection with the construction of the Grand Trunk Pacific, and they argue that that contract was violated by the Government, and, consequently, they are not responsible, anyway. As I see it, we are not going to get anything out of that guaranteed stock. We are taking over the Grand Trunk and paying all it can earn, whether it earns it or not; and therefore I believe it will be wise on the part of the Government to go slow.


Lucien Cannon: They cannot.


Francis N. McCrea: Some hon. members have been advocating that we should leave this matter over until next session. My way of dealing with it would be to give it a *six or twelve months' hoist. I have had some business experience, and my judg-77
ment leads me to the belief that it is not possible for a Government, no matter whether it be Conservative, Union or Liberal, to operate a railway successfully, for the reasons I have already given, namely, that if you leave the railway in the hands of the Government under the old system of patronage it cannot be successfully operated; and it is impossible to put it in the hands of a committee and say to them: You have carte blanche to do what you like. They must be responsible to some one, and who is that some one going to be? It must be the representatives of the people, the House of Commons, and there you cannot avoid politics.


Mr. R. L. RICHARDSON:: I beg to move the adjournment of the debate.
Motion agreed to and the debate adjourned.
On the motion of Hon. Mr. Doherty the House adjourned at 10.50 p.m.
Wednesday, October 22, 1919.