1923-04-11

MINES AND MINERALS

[Stage Direction]
Mr. MACDONALD (Pictou), for Mr. Carroll, presented the second report of the select standing committee on Mines and Minerals as follows:
Your committee recommend that they be given leave to sit while the House is in session.

Questions
Mr. MACDONALD (Pictou) moved that the first and second reports of the select standing committee on Mines and Minerals be concurred in.
Mr. SPEAKER:: By unanimous consent. Motion agreed to.



TORONTO PENNY BANK

[Stage Direction]
Hon. W. S. FIELDING (Minister of Finance) moved for leave to introduce Bill No. 104, to change the name of the Penny Bank of Toronto.
Motion agreed to and bill read the first time.

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

Hon. Mr. MANION:: 1.	Have there been any complaints since 1915 regarding the purchase of unscalped or uncleaned screenings from the government elevators to the Board of Grain Commissioners ?
2.	If so, was any action taken by the board?
3.	Is the minister willing to lay on the table of the House all correspondence and papers connected with such complaints if there were any?


Hon. Mr. ROBB:: 1.	According to the records of the board, it would appear only one complaint was made to the Board of Grain Commissioners with regard to screenings shipped from the Canadian government elevators since 1915.
2.	It would appear from the file that this complaint was allowed to lapse, owing to the complainants in this case failing to prove by evidence they did hot get delivery of the product as called for by the document surrendered.
3.	Yes, if moved for, but at the same time there is nothing particularly in the correspondence beyond the information given above.
Mr. C. T. YOUNG


Mr. CARRUTHERS:: 1.	Is Mr. C. T. Young an employee of the government?
2.	If so, what is his official position?
3.	When was he appointed, and what are his duties, and salary?
4.	What industrial operation does the government carry on at Poleyet, Ontario?
5.	What was the net profit or loss of such operation during the past three years?


Hon. Mr. GRAHAM:: Dropped.


DOMINION NOTES
Mr. KELLNER:: In ' regard to Dominion notes issued in 1914 under P.C. 2325, P.C. 2450, P.C. 2670. P.C. 2921, P.C. 3170. to the amount of $10,000,000 P.C. 2326, P.C. 2451, P.C.
2671, P.C. 2922, to the amount of $6,000,000; P.C. 2750 to the amount of $10,000,000; total $26,000,000.
1.	How were the above issues put into circulation?
2.	Were these issues withdrawn? If so, how?
3.	Has the amount of Dominion notes in circulation last year been reduced? If so, why and how?
4.	What is the total amount of Dominion notes known as "bank legals" in the hands of the banks, and what is the nature of the transaction giving the banks possession of these notes?
5.	What is the amount on deposit in the Central Gold Reserve by banks, what portion is gold and of what is the balance composed?


Hon. Mr. FIELDING:: 1.	By deposit for credit of the Minister of Finance and Receiver General.
2.	No.
3.	No. Dominion note circulation at Mar. 31, 1922, $241,461,420.42; at Mar. 31, 1923, $242,657,765.42.
4.	Notes known as "bank specials," legal tender between banks only, outstanding at March 31, 1923, amounted to $202,337,000. These notes are issued in exchange for ordinary Dominion notes, or upon deposit of the equivalent in gold or as advances under the provisions of .the Finance Act.
5.	At March 31, 1923, deposits in the central gold reserves amounted to $55,252,533.33, of which $9,502,533.33 was gold and $45,750,000 Dominion notes.


MARA, B.C., POST OFFICE
Mr. MacKELVIE:: 1.	What is the salary paid Cyril E. Rosoman, Postmaster at Mara, British Columbia?
2.	Who represents the estate of the late Mary E. Rosoman with whom the Post Office department has contracted for the carriage of mails between the railway station and the Mara post office?


Hon. Mr. GRAHAM:: 1.	Salary and allowances, $315.69.
2.	The legal representative is C. Rosoman.


UNOPPOSED MOTIONS FOR PAPERS
[Stage Direction]
PURCHASES OR SALES OF RAILWAY LANDS OR PROPERTY	.
Mr. BOYS:: For a copy of all orders in council passed since January 1, 1922, authoriing or ratifying purchases or sales of lands or property either by the Canadian Northern Railway Company, or any of its subsidiaries, or by the Canadian National Railways, or by the Grand Trunk Railway Company, or any of its subsidiaries.


STIPENDIARY MAGISTRATE IN ROCKY MOUNTAINS PARK
Mr. SHAW:: For a copy of all letters, papers, telegrams, orders in council and other documents dealing with and relating to the abolition of the office or position of police or stipendiary magistrate in the Rocky Mountains Park of Canada and dealing with and relating to the dismissal of B. W. Collison, Esq., of Banff, Alberta, from said office or position.

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MILITIA PENSION ACT AMENDMENT
[Stage Direction]
Hon. GEORGE P. GRAHAM Minister of National Defence) moved that the House go into committee to-morrow to consider the following proposed resolution:
Resolved, that it is expedient to amend the Militia Pension Act, chapter forty-two of the Revised Statutes of Canada, 1906, and to provide that pensions of retired officers, who served in the war and are employed in public service, be continued, and that the annual emolument of any such officer shall not exceed the annual rate of pay and allowances upon which the pension was computed; also to provide that pensions which "have been paid to such officers shall not be recoverable from them.
He said: His Excellency, the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the House.
Motion agreed to.

[Stage Direction]
On the Orders of the Day.
Sir HENRY DRAYTON:: I would like to ask the Minister of Finance (Mr. Fielding) whether during the adjournment he has been able to make up his mind when the budget shall come down.


Mr. FIELDING:: Not as to the precise date, and I like to be precise in such a matter.


Henry Lumley Drayton: Later on this week?


William Stevens Fielding: If my hon. friend will bring up the question later on, I will try to be more definite.


Henry Lumley Drayton: This week?


William Stevens Fielding: Not this week.


Henry Lumley Drayton: Next week?


William Stevens Fielding: Wait and see.



THE FRENCH TREATY

[Stage Direction]
On the Orders of the Day.
Mr. MEIGHEN:: Does the Minister of Finance propose to go on with the French Treaty prior to the budget?


William Stevens Fielding: Yes, I think so.


Arthur Meighen: This week?


William Stevens Fielding: If not this week, then during the first days of next week we will go on with the French Treaty.



NATIONAL DEFENCE

[Stage Direction]
The House in Committee of Supply, Mr. Gordon in the chair.
Dominion Arsenal, Quebec, $390,000.
Hon. GEORGE P. GRAHAM (Minister of National Defence): Some hon. members warded this item, to stand when we were discussing the estimates on the last occasion.
William Alves Boys: The minister will recall, no doubt, that when this item was under discussion some weeks ago certain information was asked for and promised, and I am pleased to say that privately I received most of the information asked for when the item was under discussion. I would ask that the minister give me that information now, so that it may be placed on Hansard. I wanted to know, (1) the quantity of ammunition received from England; (2) the value of the ammunition received from England; (3) the quantities of that ammunition still on hand, and (4) the portion of ammunition which would not be useful to the militia of Canada.


George Perry Graham: I might say, Mr. Chairman, as to the last question that, as far as I have been able to ascertain, there is no portion of it that would not be useful, if it is expended before the expiration of the life of the ammunition. The quantities of ammunition received from England, asked for by my hon. friend, are as fallows:
Q.F. 18-pounder shrapnel, rounds	 98,980
Q.F. 18-pounder high explosives, rounds 

 4,000
Q.F. 13-pounder 9 cwt. shrapnel, rounds .. 2.500 Q.F. 12-pounder 9 cwt. high-explosives, rounds 2,500
Q.F. 4.5 in. Howitzer, rounds, H.E	 33.000
B.L. 60-pounder shrapnel,	rounds	
5,400B.L. 60-pounder high explosives,	rounds	
600Q.F. 4.7 in. shrapnel, rounds	
5,400Q.F. 4.7 in. high explosives, rounds	
600
B.L. 6 in. 26 cwt. Howitzer, high explosives,
rounds	   8,000
B.L. 8 in. Howitzer, high explosives, rounds 2,000 Bombs, high explosives, M.L. 6 in. trench
mortar, complete	 6,000
That makes a total of approximately 169,000 rounds.
An estimated value of $3,000,000 was placed on this ammunition. My hon. friend asks how much of that ammunition has been expended. I could give that to the House, but this situation arises; the chief of staff of the Department of National Defence takes strong objection to making public the quantity of ammunition in Canada. He said it was not done by the war office of any country and was contrary to the practice of military heads. Of course, the House is supreme and if the House thinks I should give that information I will

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do so. If I give the amount' expended, of course hon. members will have the amount on hand, to which my chief of staff objects.


William Alves Boys: That would be assuming we would be making no ammunition here in Canada. I do not ask as to the exact amount of ammunition on hand all told, but it would seem to me that we might, in view of what has transpired in the past, have some information as to what portion of the ammunition that came from England since the war is still on hand, and I certainly did want to know, with as much certainty as possible, what portion, if any, will not be useful. The minister said it would all be useful, except any portion that may not be used up to the time at which it is not supposed to be useful, which I think is 1925. Could the minister not tell us, assuming the consumption continues at the existing rate, whether or not all that munition will be used before it becomes useless in July 1925?


George Perry Graham: At the present rate of consumption of ammunition, it will not all be used before 1925.


William Alves Boys: Will the minister g6 just a little further and give us some idea of the quantity? Is the quantity to be on hand trifling?


George Perry Graham: It will be trifling.


William Alves Boys: That is satisfactory.


Mr. CHAPLIN:: The minister says that the heads of his department do not want him to tell how much ammunition there is in stock. I would remind the minister that last year he gave us that information. He evidently did not at that time follow the advice of his military advisers. This year, when we require similar information, we cannot get it because his military advisers tell him that he should not give it.


George Perry Graham: I know quite well I gave figures last year, and that is the reason why I was warned by my Chief of Staff that I did a wrong thing. last year. I was asked on the floor of the House to give certain figures and I gave them as nearly as possible. When this year I asked my Chief of Staff what I should do, he said that I should, if possible, refrain in the meantime from giving the quantity of ammunition on hand.


James Dew Chaplin: As a consequence, the minister is not prepared to state how much small arms ammunition was used at the camps this year. The last time these estimates were up I asked whether it was necessary to continue manufacturing these goods. That can be determined only by knowing how much we have
on hand. We are running an ammunition factory at considerable expense, and if we have on hand enough ammunition for a period of years with a reduced military camp, the best thing to do is to give the ammunition factory a rest for a while.


George Perry Graham: The approximate quantity of small arms ammunition used last year was
4,000,000 rounds. As regards the other question, there is a limit of reserve under which Canada has gone. I will go that far. She will be manufacturing for some little time before she arrives at the place at which she ought to arrive and make provision for the annual expenditure.


James Dew Chaplin: I am glad to know that we used about 4,000,000 rounds of small arm3 ammunition. Last year, the minister told us that assuming that we were using about nine or ten million rounds a year we required of small arms ammunition enough for about a five years' supply. That would be about 45,000,000 rounds. Now, he tells us that the amount we used last year was 4,000,000 rounds. According to those statements, we have enough small arms ammunition to do us for ten years, assuming that we shall not use it at a higher rate than we did last year, and from the militia estimates that we are passing, we cannot use more because we are reducing the camps. This ammunition will spoil if we keep it without using it for ten years, and as far as I can see we have enough on hand now to last us for ten years. What is the use of making more?


George Perry Graham: I tried to explain to my hon. friend a point that has some delicacy to it. We are supposed to have on hand in Canada at all times a certain number of rounds of ammunition for safety. We have not that nor anything approaching it, and if what my hon. friend said were true, that would not help the situation in the least degree, because if we are to approximate the number of rounds we ought to have in the Dominion of Canada, we must manufacture all we use and a great deal more.


Mr. KNOX:: What is the life of small arms ammunition? How many years is it supposed to be good for?


George Perry Graham: About ten years.


Andrew Knox: After that, provided there is any of it on hand, what is done with it?


George Perry Graham: It is tested at certain times. Of course, one can understand that ammunition that was dangerous could not be used for any remanufacturing purposes. It is generally destroyed.
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Andrew Knox: Would there be any reason why it should not be given out at a much reduced rate to some of the civilian rifle associations?


George Perry Graham: If it were no good, it would be of no use to them except for junk.


Andrew Knox: For practise purposes?


George Perry Graham: As long as it was good for practise purposes, I imagine we would use it. The moment it became useless for practise purposes, because in the long run in peace times, it is used mostly for practise purposes, it would be of no use to civilian corps either.


Arthur Meighen: Is it a fact that of heavy arms ammunition, the officers have advised that we have only one day's supply, that is to say, one day's reserve, assuming that it would be expended at the rate at which it was expended in the late war in case of difficulty?


George Perry Graham: No such suggestion as that has been made to me. I am inclined, however, to think if we were thrown immediately into the midst of war with a high or peak expenditure of explosives, we would not have enough to last very long.


Arthur Meighen: Did General MacBrien
not advise that we had just one day's supply in such an emergency as that?


George Perry Graham: He never advised me to that effect.


Arthur Meighen: I may inform the minister that that is in his evidence, and I thought likely he had so advised the minister. Has there during the minister's charge of this office been any of this ammunition brought over from the Old Country out of the reserve there from the war?


George Perry Graham: Yes, I am sure there has.


Arthur Meighen: How many shipments?


George Perry Graham: In August, 1922, the Challenger brought out a certain shipment. What I have in my hand is just the amount of the freight.


Arthur Meighen: Can the minister give the nature of the material?


George Perry Graham: I have not that here. I imagine it would be heavy ammunition.


Arthur Meighen: The same material as had been brought out before?


George Perry Graham: Of the same character,
yes.


Arthur Meighen: How many shipments
altogether since the minister took charge?
FMr. Graham.]


George Perry Graham: One, I think.


Arthur Meighen: I should like the minister to make more careful inquiry. My information is that there have been four.


George Perry Graham: There may have been. I have only one in my figures. There has been at least one.


Arthur Meighen: I should like to get this right, if I can. Surely the deputy knows.


George Perry Graham: I will look it up. I find
only one here.


Arthur Meighen: I appreciate to the full the minister's desire, to reserve as much information as possible as to thd quantities of ammunition we have. This is all the more imperative, because undoubtedly our quantities are below the mark rather than above. Does not caution in that regard apply just as much to divulging information of ammunition received as of ammunition on hand?


George Perry Graham: It might not be in the
same category. Ammunition received might be in addition to a full reserve on hand. It is the quantity that we have on hand that makes for the safety of the country, and not the amount we receive.


Arthur Meighen: Was the heavy ammunition which we had on hand a full reserve in 1921?


George Perry Graham: I have not been given the figures in regard to the amount of heavy ammunition necessary as reserve, but speaking offhand I should say that Canada has had at no time anything over the amount necessary for reserve, of either heavy or light ammunition.


Arthur Meighen: Would the minister say
that all the kinds of ammunition brought over, some of which has come under his own ministerial control, are being actually used in rifle practice in this country?


George Perry Graham: I would not say in rifle
practice-


Arthur Meighen: No, I mean in training.


George Perry Graham: -because there was no
small ammunition brought over. As I informed my hon. friend (Mr. Boys), I have every reason to believe that all the ammunition brought over is useful for the purposes of the Canadian militia if it be used before the expiration of its life.


Arthur Meighen: What I want to know is vdiether, for the training that we give, all the ammunition of that kind is not necessary.

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My point is this: If we do not get it from one source we must get it from another, because it is necessary for training purposes. Is this any class of ammunition,-and if there is I want to know what it is,-which is brought over that is not necessary for the kind of military training we give in this country?


George Perry Graham: I know well what my
hon. friend wants me to say.


Arthur Meighen: Oh no, I want just the facts. I know the facts myself, and I want them brought out in this House. I think I have a right to ask for them.


George Perry Graham: I am not saying that my
hon. friend has not that right, and I accept the compliment of being cross-questioned in order that he may elicit the evidence in the shape in which he wants it. As a matter of fact the Canadian militia had the right to choose its own ammunition and would not choose anything that was not useful.


Arthur Meighen: And it did not?


George Perry Graham: No, not as far as I know.


William Alves Boys: If we did not have this
ammunition from overseas and we wanted to give the training that was regarded as necessary, we should have to pay for that ammunition, whether it was made in Canada or elsewhere. Is not that so?


George Perry Graham: This is not evidence in
rebuttal now, is it? Certainly we could not have used ammunition if we did not have it, and if training with the same guns had taken place, ammunition of this kind would have to be used.


Arthur Meighen: That is not the point at all.


George Perry Graham: Of course it is.


Arthur Meighen: Not at all, and the minister knows it. Is there any other kind of training given? Are we training our men properly or are we not? Is it hot the regular training we are giving, and should we not have to have this ammunition for the purpose? ^ If that is not the fact I should In;, the minister to say what is.


George Perry Graham: My hon. friend is getting
unreasonable, but I do not mind that.


Arthur Meighen: Not at all, and I do
not want to be unreasonable.


George Perry Graham: Evidently he is not a
soldier any more than I am.


Arthur Meighen: Hear, hear.


George Perry Graham: There is training and
training. There can be training without this artillery at all; for instance, the infantry could be trained. I say again, however, that if there is to be artillery training of this kind we must have this ammunition or ammunition of a similar kind. I am not a judge as to whether the training is proper or not, as my hon. friend evidently wants me to appear to be, and I do not think he is.


James Dew Chaplin: Coming back to the item of small arms ammunition, last year the minister had an item in his estimates of nine million rounds for .22 rifles. I presume that this was for the purposes of boys' training. How much approximately of this was used last year?


George Perry Graham: The -22 ammunition would be for the cadet service. The total estimate for the Dominion arsenal in 1923 was $425,000, but it was reduced by $50,000. My hon. friend will remember when the reduction was made. The re-adjustment then took place, and all the figures we had given before were consequently out of proportion to the reduced estimates. It became necessary to adjust expenditures and we were forced to reduce the production of -22 ammunition to
500,000	rounds, which is all we have manufactured this year.
Mr., GUTHRIE: I want some information with regard to the subject of medals. It was at one time thought possible to produce in the arsenals of Canada, a service medal for Canadian troops. As the minister knows, the medals which have already been issued for service in the Great War are the Allied medal and the British war medal. There has been so far no distinctively Canadian medal issued and those troops who served in Canada but who did not go overseas or get to the actual theatre of vTar have not received, so far as I am aware, any medals for their services. A letter was handed me yesterday which I brought to the attention of the minister, to the effect that the British war medal, which was granted, in the first instance, only to those who had seen actual service in France, was being furnished to the troops in South Africa. I know that while I was Minister of Militia the British war medal was withheld from Canadian troops as well as fiom British troops who had not actually served in Prance, and I should like the minister to say whether there has been any change in regard to the conditions upon which the British war medal has heretofore been awarded. Further, I would ask, is it the intention of the government to issue a Cana-

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dian medal for those who served in Canada, and if so will it be made at the arsenals of Canada?


George Perry Graham: The question my hon.
friend raised regarding the British war medal I submitted to my department this morning, but I have not been able to get the information so far. X will submit it to him privately ;
I could not obtain it before coming here. The question of medals for those who served in Canada is one that has been before the department, as my hon. friend knows, for years, and it has always struck me that it would be a good thing if the men who served only in Canada could be given some distinctive medal. But the cost is pretty heavy, and up to the present time no minister has seen fit to recommend that the expenditure be made just yet. If I remember rightly, the cost would be about $1,000,000 or a little more, and owing to the financial condition of the country we have thought it best to postpone the matter for a while. That is a plain statement of the situation.


Mr. MANION:: Apart from the possibility of providing a Canadian medal, have all the medals that are to be distributed been disposed of to the soldiers?


George Perry Graham: They have not all been distributed yet. They have been purchased but have not yet all arrived; but we are distributing them as fast as they come in.


Robert James Manion: What percentage of them has been distributed and what percentage remains?


George Perry Graham: I have not the figures, but I fancy that the distribution has largely taken place. We have been sending them out every day.


James Dew Chaplin: How much of the appropriation under the item we are discussing was actually spent last year?
Mr. GRAHAM' My hon. friend is referring to the Quebec arsenal?


James Dew Chaplin: Yes.


George Perry Graham: The expenditure to date is $358,704; $375,000 was voted.


James Dew Chaplin: I understood the minister to say a moment ago that because of a general reduction in his militia estimates it was necessary for him to go over all these other estimates and rearrange them. I cannot comprehend that. Does he mean that he could go over these other estimates that we have passed and change them?


George Perry Graham: The estimates as they
went through the committee were the estimates for the year, not as they were brought down before the reduction was made. When we had the item of $425,000 it was for the Quebec arsenal in the first place-


James Dew Chaplin: Oh no. I have before me the item for the Quebec arsenal. As brought down it was $425,000.	*


George Perry Graham: That is what I have just said.


James Dew Chaplin: Last year?


George Perry Graham: Yes. I gave certain figures on the basis of $425,000, but afterwards that was cut down to $375,000, and thereupon we changed the detail, as we were compelled to, the amount having been reduced.


James Dew Chaplin: The vote for the Quebec arsenal last year was reduced $50,000?


George Perry Graham: Yes.


James Dew Chaplin: And because of that the minister had to rearrange this particular esti mate?


George Perry Graham: Yes.


Henry Lumley Drayton: Has the minister not made a mistake in saying that wc purchased the English war medals? My recollection is that these medals were given by the British government.


George Perry Graham: I am sine we are paying a large amount for medals.


Henry Lumley Drayton: For these British war medals?


George Perry Graham: Yes; for silver and bronze war medals and stars we have paid in Canadian currency altogether $893,945.


Henry Lumley Drayton: Is that Allied or British medals?


George Perry Graham: All the war decorations I have any note of here are-British silver war medals, Victory bronze medals, stars, war service badges.


Mr. SUTHERLAND:: I have been endeavouring to gather from the minister's statements what is the government's policy with regard to national defence. I understand from the minister that the supply of ammunition on hand is very much below the estimated reserve necessary to ensure the safety of the country. The arsenal at Lindsay has been closed, but there is an increase in the vote for the Quebec arsenal. The naval service has been sent on a fishing expedition. The colleges for training cadets for the naval eer-

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vice at Esquimalt and Halifax have been closed. Does the minister consider that any useful purpose is being served by the vote now under consideration for national defence or for the training of what is left of our militia? I must say that. I am unable to understand from the explanations which have been given what the ultimate object of the government is. Some time ago the people were led to believe that certain hon. gentlemen opposite were horrified to think that large quantities of ammunition were being brought to Quebec from Great Britain. Now we are told by the minister that the supply is largely below the quantity required for the national safety in the event of any trouble arising. Is it prudent or advisable to get below the safety line in connection with national defence? Surely the dignity of the country and our national selfrespect must be maintained, and these can only be maintained by keeping our reserve of ammunition at a point which will enable us to take care of ourselves in the event of any emergency.


George Perry Graham: It is hard work to divide my affections in this matter. An hon. gentleman (Mr. Chaplin) near my friend from Oxford (Mr. Sutherland) chastised me a moment ago for making more ammunition while we have some on hand; my friend from Oxford says that we are not going fast enough in building up a reserve. The purpose of this vote is the manufacture of ammunition. I agree with him that as rapidly as possible we ought to approximate at least to what our officers in charge of national defence think is the proper reserve.


Donald Sutherland: It is quite evident
from the minister's reply that the officers of the department did not report that the ammunition which was unloaded at Quebec a couple of years ago was any menace to this country as then intimated by hon. gentlemen opposite.


Arthur Meighen: I want to correct the
minister. The hon. member for Lincoln (Mr. Chaplin) was only urging that on the scale of training now going on he felt there was abundance of small arms ammunition on hand. He did not for a moment say that he considered the scale of training to be sufficient or that the minister was carrying out his own self-expressed obligation of keeping the defences of the country at least at the minimum of safety.


[Stage Direction]
Item agreed to.
Adjustment of War Claims-National Defence-Militia Services, $4,000,000; Naval Services, $274,000.
George Perry Graham: 
Mr. GUTHRIE:: Were they paid out of the vote of last year?


George Perry Graham: Yes.


Hugh Guthrie: What does the minister propose to do with the $4,349,000 for which he now asks?


George Perry Graham: 
Hugh Guthrie: 
George Perry Graham: That is not in the correspondence.


Hugh Guthrie: 
William Stevens Fielding: I did not hear the first part of my hon. friend's remarks about the

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Vickers case. Will he tell me what he refers to as the basis of the Vickers case? What is the ground of their claim?


Hugh Guthrie: The basis was damages for the cancellation of a contract.


William Stevens Fielding: That is the crux of the whole matter. The whole matter hinges on that word " cancellation There was no cancellation; that is the vital point of the whole thing. In the discussion which took place a year ago my hon. friend made a similar remark; he understood there had been a cancellation of a contract, and therefore there would have to be compensation paid in soma form under it. It may be that there are facts in this matter which did not come before me. The settlement of the claim was not part of my mission to England, but while there I had an opportunity of making some inquiries into the matter and had the privilege of hearing the views of Sir Trevor Dawson, managing director of the Vickers Company. As I found the case there was no cancellation at all. The Vickers Company made a contract with the government of Canada. The government of Canada were ready to honour the contract; they were ready to take the goods and pay for them. But the Vickers Company did not deliver the goods; they could not deliver them. The war came on, the British government took possession of the Vickers concern, and the Vickers people were busy from that time forward in fulfilling contracts with the British government. There was no cancellation on the part of the Dominion of Canada. That is the vital thing. If I am right in that then the Vickers Company have no claim. I have to emphasize that fact as matters all depend on that. It was said the claim was admitted later on. Even if that were so it would not be fatal at all; much would depend on the party who had admitted it and his authority to make the admission. But there was no such admission. An officer representing my hon. friend, who was then Minister of Militia, stated to the Vickers that if there were to be any further orders given, all things feeing equal, a preference would be given to the Vickers over other parties. But no further orders were given about that time, and there came no opportunity for the granting of the preference which was indicated. But if I am right in my statement the whole thing turns upon the question: Was there a cancellation of the contract? My information is that there was not. The government made a contract, the government were ready to receive the goods, the government were ready to pay for them, but the Vickers never could deliver the goods. The contract contained a clause respecting penalty and technically speak-111
ing there might be a claim for damages. But that would not be urged under the circumstances. The Vickers Company were not able to deliver the goods because the British government took possession of their works. I think there would be great difficulty in saying that the Vickers Company made any large expenditure bearing on the contract. If they made any expenditure it would be a very small one. If they did incur any expenditure designed to serve the contract, I suppose we might say technically there was a claim against the British government, because it was something the British govermnent did, and not anything the Canadian government did, that prevented the carrying out of the contract. If the claim were made that the Vickers Company had expended some money in preparing for the contract, to that small extent there might be a fair claim; but any claim based on the contention that there was a cancellation of the contract is, if my own information is correct, entirely unfounded.	[DOT]


Arthur Meighen: Before the item carries will the minister give us all the items making up the $7,833,800, the aggregate of the naval and military ingredients of this vote?


George Perry Graham: The following is a statement of the expenditure for militia services from 1st April, 1922, to 8th March, 1923:
Pay and allowances	 $ 111,411 93
Separation allowances	
76,884	10War service gratuities	
227,982	14Printing and stationery	
2,835	21Postage on medals, records, etc	
35,883	76Ordnance	services-repairs	to rifles,machine guns, etc., from overseas.. ..	19,666	22Engineer services and works	
9,781	13Civilian employees	
309,115	81Transport and travelling	
2,299,276	50Historical section	
9,017	45Pay and allowance board	
1,670	00Camp Borden site	
Nil.Medals	
475,177	00Difference in exchange	
9,094	01Miscellaneous and unforeseen expenditure	
326,411	79

Battlefields memorials	 172,361 69


Arthur Meighen: Would the minister tell us what really makes up the item "Transport and travelling"?


George Perry Graham: The amount we are just speaking about, for the settlement made in connection with the Llandovery Castle was included in that item.


Arthur Meighen: Then "Transport and travelling" includes the loss?


George Perry Graham: The ship was transporting troops when this loss took place.

Supply-Defence


Arthur Meighen: The vote is' really the same as the old demobilization vote.


George Perry Graham: Under the same heading.


[Stage Direction]
Item agreed to.
Canadian Air Force-operation, maintenance, repairs, etc., $1,000,000.
George Perry Graham: I want to say that in this vote for the air force $250,000 is for the purchase of equipment, flying machines, etc. This service is going to be more useful year by year, as hon. gentlemen will see if they look into what has been done during the past year. I may as well tell the committee that this service is not going to be an inexpensive one. Machines last but a very short time and wear out quickly; the spare parts that have to be carried are expensive; the whole service is quite a costly one. But in one year it more than repays what it will cost in ten in the preservation of our forests and other preventive measures. This $250,000 will include the purchase of nine amphibious machines; in other words, flying boats. They will cost in the vicinity of $175,000. Tenders were accepted-they have not been delivered yet-from the Vickers people, seven of these to be manufactured in the Dominion of Canada and two to be manufactured in Great Britain and sent over. The wireless, for. which an appropriation is asked in the $250,000, is one of the branches of aerial service. Without the ability to communicate with their headquarters on the ground, flying over the forest is somewhat precarious and not practicable. In addition to that, in the city of Winnipeg, for the purchase of some land, on which an amount has been spent this year in the erection of hangars, I think in the vicinity of about $1,000 will be expended, and the balance of this is for operation and maintenance, etc. I might say that last year some difficulty was found, I think particularly in the province of Quebec, with some of the large machines. When they got into difficulty and alighted on some of the small lakes, it was almost impossible to get them out. They were unsuitable for that work. These machines were practically all given to us by the Royal Air Force of the British government, and of necessity a good many of them have got to the point where they are unsafe for use and others are of a nature and construction not quite practicable in this country. In another year we will have to buy more machines for two reasons, first, because the machines are constantly wearing out, and, second, because men must not be sent in the air in machines that are considered unsafe. Furthermore, the de-
[Mr. Graham.3
mands being made on the air force are doubled every year. Last year the Attorney General of British Columbia came in to see me, and asked if we could not extend the service in British Columbia. He pointed out two or three instances in connection with the work out there that would impress one with the value of the service being rendered by the air force. He is Minister of Lands, and in one instance there was a point which he, with those in his department wished to reach. He told me it would have taken him several days, I forget how many, by pack train to get to this point. He went in with one of our machines and made the inspection, and only three hours were occupied in getting there. In expense, feed and practicability the air service has overcome time and distance.
Last year we received from the province of Quebec $20,000, and the same amount from the province of Ontario. Ontario has paid us $38,000 this year, having increased its service. British Columbia paid us a certain amount but the attorney general told me they were prepared to pay $20,000 this year and were prepared to extend and enlarge this service.


Mr. MILLAR:: Has this service been extended to Saskatchewan? If so how much was spent there last year?


George Perry Graham: The province of Saskatchewan is looked after largely from the Winnipeg depot. There has not been any work done, except some observation work, as far as I can recollect, in the province of Saskatchewan. We cannot very well locate these provincial activities, and distance does not mean much, if anything, to a flying machine, and for the present at least the officers of the department are confident that with the improvements they intend to make at Winnipeg, all the needs of Saskatchewan can be amply taken care of for some years to come.


Mr. MacLAREN:: Has provision been
made for the province of New Brunswick and the province of Quebec?


George Perry Graham: I think we have not been successful in entering into any arrangement with the province of New Brunswick as yet, although we have a station in Nova Scotia from which they can do work in the province of New Brunswick and Quebec.


Mr. CLARK:: Some weeks ago we had a debate in this House with regard to the building of the Hudson Bay railway. Has the minister given any consideration to the feasibility of using the air force for the purpose of investigating the Hudson bay route and

Supply-Defence
of determining the exact time in each year that that route Would be open to navigation?


George Perry Graham: I think it has been decided already by the department that a portion of the air force shall visit Nelson and Churchill during the summer. An attempt is being made now to have an excursion trip by boat up to Nelson. A member of the air force proposes to accompany that party, if it materializes.


John Arthur Clark: That only applies to a certain season of the year. What I meant was a prolonged investigation over the whole period of one year, say, so that we could ascertain the nature of the channels and the route during the fall and winter months, and spring as well.


George Perry Graham: Up to date we have not had sufficient money to enlarge to that extent. I might say that the Northwest branch has been urging us to establish a post much further north, but we have no money in this estimate for that purpose.


John Arthur Clark: Does the minister not consider that it would be advisable to postpone further expenditure on the Hudson Bay railway until such an investigation could be carried out, it being about the only means we have in our power of carrying out a thorough investigation as to the feasibility of that loute?


George Perry Graham: My hon. friend from the other angle here would not agree to take that as a reason for postponing any work on the Hudson Bay railway.


Arthur Meighen: Not after the promise of the Minister of Agriculture (Mr. Motherwell).


George Perry Graham: Which seems to have been ineffective. Consequently I do not feel like making any more promises. A good many miles of the Hudson Bay railway, of course, have been constructed and investigations have been made. Everyone who has a library has volumes replete with investigations of the Hudson Bay railway, and I think we have got beyond the point when we can say that the Hudson Bay railway cannot be constructed unless we can further convince ourselves of its necessity.


William Alves Boys: In connection with .this item, is any provision made for the improvement of the approaches to this camp? The camp is in my riding, I am very familiar with it, and I certainly approve of this item. I think that in the interest of heavy trucks which
llli
operate there something should be done. The camp is reached from Angus on the Grand Trunk, and on the south from Alliston. There is about a mile of road within the camp from the Angus end which is simply a disgrace. It is not a road at all. It is a sand trail winding all over, the trucks get . stuck, and I have no doubt considerable damage is done to the trucks from time to time. Within the camp itself, I do not know how many miles, but from 6 to 10 miles of cement pavement have been constructed during the activities of the camp in the years 1915	and 1916.
Tt seems a pity that those stationed at. the camp and many citizens of Canada who have occasion, from time to time, to visit the camp, should have to use the bit of road to which I refer. The work would not cost very much. I think the matter has been brought to the attention of the minister by some of the residents of Angus, and I feel satisfied that the municipalities interested would take care of the very small portion leading from Angus to the entrance to the camp, if the department would devote simply a reasonable amount of money to improve the road from the entrance to the camp to connect with the cement pavement now there. I am sure if the minister saw the place, nothing further would be necessary to convince him that the work should be undertaken mainly in connection with the heavy loads that go in and out of that camp. If there is nothing in the item now for this work, I would express the hope that the minister might economize on some of the other items making up the total and take this work in hand. If any other evidence is necessary respecting the need of this road improvement, I would be glad to busy myself and to supply the minister with it. I remember a gentleman coming down from Angus and interviewing the minister. He presented the matter very forcibly; but so far as I know, nothing has been done since. 1 hope the minister will give this matter his consideration.


George Perry Graham: We will certainly give it consideration. It has been brought to my attention by the hon. gentleman before and by a gentleman in that vicinity. I had hoped to be at Camp Borden last summer with my hon. friend, and if we could not travel over the road any other way, we would fly over it.


Mr. LUCAS:: I understood the minister to say that several of the provinces had contributed S20,000 to the military air force, is that right?


George Perry Graham: Yes.
Supply-Defence


William Thomas Lucas: Does the air force do any flying for private concerns?


George Perry Graham: We have a receipt for $733 for urgent work done during a fire. I imagine that if there was any commercial work to be done, the air force would not be above handling it, if it did not interfere with their other, work. At the present time we have not a' sufficiently large vote to go into that; but I think it has been the general consensus of opinion that commercial flying for purposes of gain should be left largely to private enterprise rather than that it should be undertaken by the government.	.


John Arthur Clark: I would like to revert to a matter I brought to the attention of the minister a few moments ago. I have been advised by people who, I consider, are experts in this service, that it would be possible, to carry on such an investigation as I suggested. In the debate on the Hudson Bay railway, considerable doubt seems to exist as to the exact period of time that the Hudson bay is open to navigation. I have also been informed by an authority that appears to be fairly good that there is a possibility that Hudson bay is open for navigation for a much longer period of time than was suggested by the mover of the resolution the other day; that furthermore, we could prove or disprove that by an investigation carried out by the air force, and that if such an investigation was properly planned over a full period of one year, we could determine almost to a final degree the exact period of time that that bay would be open to navigation during a year. I seriously commend this to the attention of the minister in the hope that in the very near future our air force can be used for the purpose of carrying out such an investigation. It seems to be perfectly futile to send an expedition up there in the summer time to gather such information.


Andrew Knox: I might say, as the mover of the resolution, that I took the reports of a number of investigations which had been made covering a number of years, because conditions in Hudson bay and in the strait are not always the same, and it is necessary to take a number of years before one can reach a proper conclusion. I really believe an investigation such as has been suggested might do a great deal of good. It has been suggested that investigations should be made by the air force up in the Fox channel to discover the sources of the field ice which comes down in the spring and fall. It is possible we might learn a great deal regarding that by

an expedition of that kind. I do not think, however, an expedition into Hudson bay or strait for one season would determine anything more than what we know at the present time. I took it as conclusive that the investigation which had been made by the Senate committee at that time and which was brought down in their report, covered the matter as far as we could get at it just now.


William Thomas Lucas: Is it the policy of the government at the present time in the air force to have the machines all shipped to one central point to be repaired? If so, does the minister think that is the best way of handling repairs to these machines?


George Perry Graham: We have now three central shops in which they could be repaired, and it is questionable whether it would pay to establish shops with all their equipment at any more points for the limited number of machines we have. This is not like anything else. When a machine needs some repairs, but is not altogether out of repair, it can go in a very few minutes quite a long distance to a shop, and it can return at the same speed.


William Thomas Lucas: Where are those three central repair shops?


George Perry Graham: High River, Ottawa and
Camp Borden. There is a small shop at Vancouver. There are two or three other small shops besides the one I mentioned.


William Thomas Lucas: When I was coming down
to this session of parliament, there were five airmen on the train who were being shipped from Vancouver to Camp Borden to engage in repair work. Very shortly after the session opened, I received a letter from those men. I think it is in the interest of this House that we should know these facts, and if there is any truth in them, I feel sure the minister Whuld be glad to look into the matter. This letter is dated Camp Borden, February 5, and it goes on to say:
I learn that militia estimates are now before the House, so am taking this privilege of offering more facts to bear out our claims as to the waste of public funds under military control.
The letter refers to the Air Board. That has now been changed to the air force. It continues :
There are men here sent from every Air Board station, including High River, Winnipeg, Roberval and Quebec, to do work on engines and wings that are shipped from above stations and which will be reshipped on completion. Outside of this waste in men's time, travelling, fares and freight on engines and wings, we can truthfully say after being here ten days, that the amount of work done here is about 30 per cent of what we do at our own stations.

Supply-Defence
One instance of waste came before us to-day in so much that a man examined by a military doctor in Vancouver was shipped to this camp, examined by the military doctor here and proclaimed medically unlit.
At Vancouver air station men are being drilled three hours a day and three days a week. At the above station we have one serviceable machine, yet with seven men away doing duty here, the remainder are forced to waste their time forming fours and saluting, stuff that we all got during the war and quite unnecessary.
The men that have been relied upon this last three years are Air Board men, men that got their knowledge during the war and have trades behind them and which are an asset to Canada and aviation. These men are now wasting their time here, owing to a poor organization and military red tape.
I have gone amongst these men and in fact working with them right now and can safely say that not more than two per cent would join a permanent force. It's quite evident as to the class of men that would go to make up Canada's air force, should one be formed, just men that are out for an easy time and men unable to do so well outside.
Another instance of military inefficiency, a man here was made sergeant who has to get a second-class mechanic to do his work, being quite incapable to handle tools himself at all. I could go on relating instances of waste and inefficiency and am confident that any money voted to the military cause will be an absolute waste of public funds.
The men that know this business and are behind this letter, and have made a name in commercial aviation will have nothing to do with such a cause, so where the military party have an argument at all I fail to see.
I hope the minister will look into this matter and ascertain whether or not these charges of militar}' inefficiency are substantiated by the facts.


George Perry Graham: I do not know who signs
that letter, but whoever he is, he is a first-class grouch. I will not ask for his name.


William Thomas Lucas: I do not care to give his
name.


George Perry Graham: No, I do not want it,
but I shall have the contents of the letter looked into. I feel confident that they are not borne out by the facts. At all events I shall have the matter investigated.


William Thomas Lucas: I thank the minister.


Arthur Meighen: Could the minister go
on with some other items instead of this? We should like to have this stand over for a day, and we could proceed with others. We have no intention of holding up the estimates at all.


George Perry Graham: This winds up my Defence estimates, except for the supplementaries.


Arthur Meighen: Is this the only item?


George Perry Graham: There are two items which we are discussing together.


Arthur Meighen: So far as I am concerned I have no objection to one of the items going through, but I would ask that this one be allowed to stand.


George Perry Graham: Very well.


Andrew Knox: At what distance can these machines operate from the base of supply?


George Perry Graham: It depends on the size of the machine I should say, 200 or 250 miles.


Andrew Knox: In that case I would point out that, an air force with a base at lake Winnipeg could not operate in northern Saskatchewan. We have immense areas of forest there that should be protected and an up-to-date system is absolutely necessary. Seeing that the forests in Saskatchewan are the property of the federal government, I think it is only fair that a station should be established in some part of northern Saskatchewan where the work could be looked after better.


George Perry Graham: There has been an urgent appeal for the establishment of a station at Cowan lake, but we shall have to ask for a larger estimate if we are to set up more flying station establishments. At present there are orders from the various provinces for more work than the department can supply machines or men to cover, and it is a question whether we shall not have to enlarge the scope of the air force both as to men and machines.


The CHAIRMAN:: Shall item 114 carry? Item agreed to.


George Newcombe Gordon: Item 115 stands.
National Defence-amount required to pay cost of living bonus to employees of the Dominion arsenal and others at Quebec, discharged without receiving bonus for certain periods for which it was later granted to those similarly employed and not discharged, $26,000.


George Perry Graham: In 1920 the Quebec arsenal was closed for a short period, and at that time it had not yet been decided whether these men were entitled to the bonus. In the interval, however, it was held by the Civil Service Commission that the bonus was due. Those men who were taken on again and who returned to work were given the bonus, but those who did not resume work did not get it, although the bonus was earned before the closing of the arsenal. It is maintained, I think in perfect honesty, that the men were all equally entitled to the bonus once the commission had held that it was properly payable.


Hugh Guthrie: If I remember the facts rightly, during the year 1921 both the arsenal at Lindsay and the arsenal at Quebec were closed for two or three months and the staffs were also considerably reduced. I was not aware that a bonus was at all payable to these men. Has it been subsequently decided that

Supply-RaUimys
those who were retained were entitled to it? As I understand, they were men working for wages at so much per day; they were mechanics and the like who were laid off. Was there any bonus applicable to them?


George Perry Graham: I would not express an opinion on that. In 1920-it was not 1921- the bonus was paid to the men who were taken back after the arsenal was re-opened. It was paid on the decision of the department and the Civil Service Commission. The men who were not taken on did not get it although they had earned the bonus equally with the others. They now claim it and the commission' decides that they are entitled to it.


Arthur Meighen: I do not understand it yet. Were the men wage-earners or salaried, and if they were wage-earners, did they not follow the regular scale of advance given at that time in lieu of bonus? I do not claim to have a distinct recollection of the matter at all, but it would occur to me that this means two bonuses. Does it apply to both arsenals?


George Perry Graham: I am informed that although the men were working by the day it was decided they were entitled to the bonus and they got it in 1920. The Deparment of Labour, I believe, took a hand in the matter, and it was finally decided and approved by the Civil Service Commission that these men were entitled to the bonus. The men who were taken on again got the cash. The men who. were not taken on again were entitled under the decision just the same as the men who did come on after the reopening of the arsenal.


Arthur Meighen: These men were not taken back?


George Perry Graham: Yes; but the bonus was earned before the arsenal was closed, and it was paid to the men for the period prior to the closing.


Arthur Meighen: I do not remember the matter ever coming up in the time of the late government.


George Perry Graham: It was in 1920.


Arthur Meighen: It may have been advanced, but I do not think it was. Were there not advances made in lieu of bonus to the same men? And would there not be quite a number of these men now dead? I do not know how you are going to pay the bonuses three years afterwards.


George Perry Graham: I am not familiar with the situation but I do know it was in 1920. After the arsenal reopened the men that
[Mr. Guthrie.)
were taken on were paid the bonus for a time prior to the closing of the arsenal. This vote is to pay the men who were not taken back.


Arthur Meighen: I would not have the least sympathy with any neglect to pay extra wages to wage-earners commensurate, or even more than commensurate, with the bonus as extra remuneration to salaried employees. The minister says that this is merely the pro rata allowance based on time of service of the men who had to be laid off commensurate with that secured by those who did not have to be laid off, or who being laid off were taken back. Does it apply to the men employed in both arsenals?


George Perry Graham: I am told it did not apply to the Lindsay arsenal. For what reason I do not know.


Arthur Meighen: It is just possible, of course, that none were released until just lately. But I think we should have the reasor before we pass the vote..


George Perry Graham: I have no objection to letting the item stand. The situation I believe is quite clear. Certain men who claimed the bonus were working at the Quebec arsenal. Before the arsenal closed it had not been decided that they were entitled to the bonus. After the reopening it was decided and approved by the Civil Service Commission that these men who had claimed .the bonus prior to the closing were entitled to it. Those who came back got it under the decision: those who did not come back, did not get it.


Arthur Meighen: Before the item comes up again perhaps the minister will bring down the report of the Civil Service Commission on the subject so we will see the argument by which they arrived at their decision.


Mr. THURSTON:: For what period was this bonus paid?


George Perry Graham: From the 1st April to the 1st August 1920.
Item stands.



RAILWAYS AND CANALS

[Stage Direction]
Railways and Canals-Chargeable to income-To increase t lie amount of loan authorized by Vote No. 136 Main Estimates, 1922-23-Additional amount required, $13,099,493.34.
William Stevens Fielding: The explanation of this item is that when the estimates were voted for the railway service it was contemplated that these sums, amounting to about $13,000,000, in the form of obligations coming due might be renewed, in which case it would not be necessary to provide for them in this way. When the obliga-

Supply-Railways
tions became due it was found convenient for the moment to pay them out of the general treasury, and it became necessary to vote this amount to cover the payment. It is still possible they may be consolidated, but in the meantime it is necessary to make the appropriation because the payment that was made was not contemplated when the estimate was voted.


Arthur Meighen: In connection with the
general subject, it would seem to me that in case of a renewal of this sort the item shoul '* be in the estimates anyway so that each year we could easily see just how much of the money and of the credit of the country was advanced for deficits or for capital expenditure to the railways. Supposing it were a fact that this was a maturing obligation, and it was expected to renew the obligation, in that event, as the Minister of Finance (Mr. Fielding) has stated there would be no need of making the amount of the renewal appear in the estimates at all. On the other hand, suppose it had been intended that that obligation would be paid off by the issue of a new security guaranteed by the government. Then, as I understand the system that has always been followed, that new undertaking of the government would appear included in the estimates voted for the year. Well, had there been an intended renewal it would be a renewal with a government obligation. Consequently it seems to me it should have been included anyway.
I think I have a correct idea as to the facts and I hope I have made myself clear. I would like to have the minister's version of the situation. Is it not a fact that the estimates are supposed to include all the moneys advanced and as well all the obligations to be incurred direct or indirect by,the country for the fiscal year in respect of the railways? If so, would it not have been right to have had this included anyway if it was the intention of the government to guarantee the obligation?


William Stevens Fielding: There is something to be said for my right hon. friend's contention that these maturing obligations might be shown in the estimates. I think, however, that that has not been the practice. Where an appropriation is made it is an appropriation in anticipation to meet a deficiency and not to include renewals. I think there is something to be said in favour of showing renewals but I am quite safe in saying that it has not been the practice in the past. New securities have been issued to make way for old ones, but I do not think they are shown in the estimates. I am not sure that there is not something in the contention of my right hon. friend, and that matter may be considered when preparing the estimates in the future.


Arthur Meighen: I have been somewhat bothered by that complication of the entire railway financial situation. I do not know whether it has been conducted in exactly the right way in the past or not, but I do urge that we ought to have a system by which the estimates will include all obligations, whether by way of cash advances or guarantees for the ensuing year by the country with respect to the railways. I am sure I am right. If I had the former Minister of Finance (Sir Henry Drayton) I might get along by asking him instead of bringing it up in this way. Is it not a fact that the minister's estimates for the year include not only cash that is *going to be required from the Treasury by way of loan-for everything is by way of loan as I understand it-whether for capital investment, extensions of lines or for deficit? All the money that is advanced is included in the estimate for the roads, and as well, all the obligations intended to be entered into by way of guarantee-for I know the estimate reads in such a way as to enable the minister to do it by way of guarantee. Is it not a fact that the minister's estimates for this year include all those obligations to be incurred in respect of the railways, whether by cash advance or by guarantee?


William Stevens Fielding: I think the estimates are for what I may call the current expenditures of the year. The wording of the estimate very properly allows the government to make payment either by way of cash or by bonds or by guarantees-in any form it pleases. But I do not think it covers renewals-that is my impression. I am inclined to the view, however, that we might well show the nature of these maturing obligations from time to time; and that thought may well engage our consideration hereafter.


Arthur Meighen: I think I have the point now: The intention of the estimates, as the minister understands it, has been to include all moneys to be advanced to the roads, and, as well, all obligations, whether by guarantee or otherwise-


William Stevens Fielding: No, not renewals.


Arthur Meighen: -whether by guarantee or otherwise that go to increase the debt of the railway.


William Stevens Fielding: To meet the obligations of the railway for the current year.


Arthur Meighen: and the government decided that that should be done by the issue of a bond of the railway company which would have to be guaranteed by the government, then the estimates would include that; but if it were merely for renewal of a past obligation, in no way extending the debt of the system, the estimates would not include it.


William Stevens Fielding: No.


Arthur Meighen: I quite agree that it would be better for the estimates only to provide, as in the past, for all moneys to be advanced and all guarantees to be included that go to increase the railway's obligations. Those should be separate, but I think the others should appear, in a different place-all that increases the government's obligations, even for renewals. I am afraid I am not making myself very clear. I think it is right-and I am pretty sure this is what has been found in the past by both governments-that the estimates should show distinctly the entire commitments intended by the country for the railways in so far as those commitments increase the obligations of the system; all the others should be separate in the future as in the past. But I think the estimates
5 p.m. should include as well any further obligations the country enters into on behalf of the railways for renewals, because those increase the country's obligations. It would never do, though, to have these included in the estimates in the same body as the rest; if we did that it would present the obligations of the country in too big a form, because while we are increasing the national obligations we are diminishing the obligations of the company that we own. It would never do to include the one with the other; I think they both should be there, but separate.


William Stevens Fielding: My understanding is that the appropriation each year involves what I may again describe as the current expenditure of the year-not, however, on what might be called capital account. If, for example, a branch line is constructed, I think it would be necessary for the minister to bring in a special appropriation act for the purpose; I do not think we would have an appropriation to cover that. I may say, for example, certain appro- [DOT] priations will be needed in the way of equipment bonds. The railway legislation gives the railway company the power to issue these bonds; no appropriation here will be required. As a matter of convenience it might be well to show in the estimate of each year the maturing obligations. But it is necessary to draw a line between what I might call the current expenditure of the year and obliga-
TMr. Meighen.]
tions which are represented by outstanding securities which can be renewed, as was the case in this matter. This may later be converted into securities, but in the meantime, as it was paid out of the. current appropriation, we have to have this supplementary estimate to make it good. The suggestion that these maturing obligations, even in the way of renewals, should be shown in the estimate, is worthy of consideration, and without making any absolute engagement in the matter, I would like to see it considered hereafter.


Mr. BAXTER:: May I ask the Minister of Railways whether there is to be any revision of the boundaries of the eastern region?


George Perry Graham: That is a matter that
rests with the Canadian National Railways Board. It is not part of the government's duty to dictate to the board as to how they shall operate and what areas shall constitute the different regions. That is purely an operative question.


John Babington Macaulay Baxter: I appreciate the difficulty
of the position in which the minister finds himself and in which any minister dealing with this department must find himself in regard to a question of this kind. It is put forward very definitely that this railroad is to be kept out of politics. One might hope that that may be so. I have heard gentlemen in the presence of Sir Henry Thornton declare, however, that it is impossible to keep the railroad out of politics. I do not know just what particular political interference they had in mind, though I have my suspicions. But there is a certain class of politics out of which no government can keep a state-owned railway. The government must lay down a policy for the railroad, which is a very different thing from allowing henchmen to dictate who shall be appointees to particular minor positions. As to the latter, I think we all concur that the railroad should be kept out of politics, but as to necessary action to ensure that all parts of the country through which the railroad runs shall have fair and just treatment and shall receive the co-operation of the national road in the matter of realizing their aspirations as well as meeting their needs *-so far as that is concerned, the railroad neither should be nor will be kept out of politics.
We, in the Maritime provinces do not, I trust, complain unduly, but we do come here with a desire to let our needs be known, and if we feel that we are not getting in any respect the treatment that we ought to have, this parliament is the place in which we



II, 1923

[Stage Direction]
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should express our views in that respect. It is quite proper that boards of trade in the Maritime provinces- should confer with Sir Henry Thornton and his board of directors.
I trust that at the conference which is to be held, I believe, on the nineteenth of this month, there will be no directors absent, and I trust there will be no occasion for any director who may be absent to say that a policy has been determined upon at one meeting of the board and reversed at another. Such a thing was said and said openly by one of the directors, and when I ask a question in the House about it I am. told that it is not wise in the public interest to give information as to the private transactions of the board. The government in that respect is adoring idols that it burned, because it is not so long since prominent members of the party were declaiming against the previous government because it refused to bring before the House matters of -what might be called an internal nature. But I trust the government is going to stand by its policy in that regard. I do not ask them to reveal the details of every contract, but we do say that when an important resolution is taken which affects three provinces, the people of those provinces through their representatives in this House have a right to the information and have a right to get it here instead of going to some meeting place in Montreal or elsewhere, hat in hand, and asking Sir Henry Thornton to be good enough to lay aside his jests for a time and tell them of the inner working of the railway organization. Members should ask in the House and members should ght the information here.
Speaking from a New Brunswick standpoint-and I think I can include the Maritime provinces-I may say that there is dissatisfaction to-day. The people who voted there in the last election voted against my right hon. friend and leader because his declaration as to region apparently did not go far enough to please them; and they voted on the basis of what was being said on public platforms by representatives of the party that is now dominant. They trusted to those promises-that if the Liberal party were to come into power there would be a very decisive revolution in railway circles in the Maritime provinces. Prosperity would go on, employment would be ample, freight rates would be reduced and, above all, the management of an important section of the road was to be centralized at Moncton. The people unfortunately believed this. To-day the people see whether those statements were quite worthy of belief or not.
The absolutely sound, the absolutely sincere promises which were made by my right hon. leader were rejected by the people, and they took the illusory hallucinations projected from platform after platform by gentlemen who do not seem disposed to carry out one single particle of the obligations which they took during the campaign. What is the result today? That we have a railway and we have no national railway policy. Now, you cannot make a success out of an aggregation of rails, and fishplates and sleepers combined with rolling stock.
What I want to know-I am going to ask this House and I am not going to Sir Henry Thornton to ask it-is whether it is the policy of the government that this National road is to serve Canada or whether it is to serve a foreign country? I have asked in this House what the intention of this Railway Board is with regard to some proposed buildings in the vicinity of Providence, Rhode Island. I have not been able to get an answer, my question remains on the order paper. I had an intimation, through a fellow member, the other day that it was considered the answer might be embarrassing. That is not enough for me. I am entitled to know the whole of the details, and if there is a matter that is embarrassing I have a right to be told in confidence why it is embarrassing and to be allowed to use my judgment as to whether the explanation is sufficient or not.
In the Maritime provinces we are confronted, and have been confronted in the past, with a very distinct menace and that is the short route from Montreal to Portland, Maine, and the centralization of the activities of the Grand Trunk railway at that port. I want to know, the people of New Brunswick want to know, the people of the Maritime provinces want to know whether this road- the deficit on which is absolutely draining this country-is to be maintained by Canada, and by taxation upon the Dominion, in order to serve not only Portland, Maine, but Providence, Rhode Island, as well, and it is just about time that we had a clear and categorical answer to the question. We have not so far got it from the Board of Management, we have not got it in this House; all that we know is that there are newspaper items indicating a further expenditure of what is really the money of the people of Canada to carry this road a little farther into a foreign state. Is that a national policy? I cannot say the thing is going to be done because I cannot get an answer, the people of the Maritime provinces cannot get an answer, and the people of Canada are not getting an answer.
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I ask hon. members if that is a reasonable attitude for the government to assume in the transaction of public business?
I said that we want a national railway policy. I desire to emphasize that or rather to illustrate it. I can go back to confederation. I can refer to the building of the Intercolonial as a part of the contract of confederation-a road that most unfortunately was weighted down by what I would almost characterize as the stupidity of Downing street where, in their great fear of American invasion, they placed the road in a most difficult position from the standpoint of earning capacity. But placed as it was we got it. It has been of service to the Maritime provinces. For what purpose was it built? Surely to promote traffic between the Upper provinces, as they were then called, and the Maritime provinces. Now, I am not one of those who seeks to read into the bargain of confederation something that is not even plainly expressed in the contract. I do not say that the bargain of confederation contained any special provision by which the Maritime provinces were to have some wonderful rebate in rates, or some wonderful privileges that you cannot find in the written document. No doubt things of that character were said upon the public platform. On the other hand, I find in the compact of confederation. I find in the spirit of confederation, the idea of national unity-the idea that each part of the country would help each other part to bear the mutual burdens and to develop the interests of all as sympathetically and as fully as possible. Can we expect that from the Canadian National under the present policy or want of policy? If that policy is national all right. If that policy is international, then, in my judgment, it is all wrong.
I spoke of the attitude of the Maritime provinces towards Portland, Maine, with the possible addition of Providence, Rhode Island. What is the purpose of this road, considering the Intercolonial as part of it? Why, it simply reaches two points, Halifax and St. John, for the water borne commerce of the country during the period of the year when all the other Atlantic ports of Canada are sealed. If this road is national all the endeavours of its management will be directed towards carrying Canadian trade over that railway and through those ports. And I do not ask for supremacy for either one or the other; let them take their fair chance for the trade they can handle. But we do not find that being done. We get a hint of development-further development-in a foreign country. We have the actual proof by an answer to a question that I put in this House. We have the actual proof that where not one bushel of grain was shipped from 
Halifax, last year there were, I think, 17,000,000 bushels shipped to Portland, Maine. The system had been united then. Was there no possibility of any divergence of traffic to the Maritime provinces? Are we going to bs eternally told that the shippers routed that grain via that particular route? If I wen told that I would not believe it. If I were told that I would say " Has the Canadian National no agencies, no canvassers, no ability to see that traffic is diverted to our own ports in our own provinces?" Why, the traffic in grain of the Canadian Pacific Railway, which is not under national control, from St. John practically equalled what the nation was doing through Portland, Maine. It is a nice admission to have to make that the uncontrolled private corporation was doing more for Canada than the incubus which is draining us year by year in taxation and through, I think, misdirection. We got about 2,000,000 bushels of grain through the government road in St. John, none in Halifax, while the bulk was going through the United States. That does not suit me, it does not suit the people of the Maritime provinces, and if the people of the Maritime provinces could drop their politics for five minutes this House would be electrified on that subject.
Now, can we have a national policy which will regard this road as tributary to the ocean ports, which will equip the ports as they need to be equipped, which will, if necessary, put on a differential rate against Portland, Maine, and against Providence, Rhode Island, so that the dream which was so beautifully voiced by that great Canadian, Sir Wilfrid Laurier, may at last be realized, that every pound of Canadian freight shall be carried on Canadian railways and exported through Canadian channels? I am broad enough in my politics to realize a good policy when I hear it enunciated, and the doctrine of Sir Wilfrid Laurier is good enough for me and for every man, woman and child in the Maritime provinces. What we want is action to carry it out, but I am not cheered, and the people of the Maritime provinces are not heartened, when we see items in the press that some other port in the United States is to be developed, and when we are confronted with ministerial silence if we ask a question about it.
There has been spme agitation in what I might call the local railway point in the Maritime provinces, the city of Moncton. This agitation has had regard to two things. One of them is what I referred to some time ago as the second deportation of the Acadians. It is not forgotten yet in that locality. I do not think-and I believe the Secretary of State (Mr. Copp) will agree with me-that it will be forgotten for a considerable

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time: that is the moving some of the people from one part of the road to another in connection with the audit business. It may have been necessary. I am not familiar enough with the railway business to know whether it was necessary or not. Naturally Moncton, like any other centre striving for population as it is, ambitious and rightly proud of its growing position in the Maritime provinces, does not like to see any lessening of its prestige or of its population. There may be a reason for that movement, but I fail to see it. I would think that the work could be done at Moncton, but I am not going to condemn the action in this regard in unmeasured terms, because I think there might possibly be an explanation. I will say, however, that the people of that locality are yet waiting for an explanation which has never yet been given by anybody, and until they get it they have a right to be dissatisfied.
Then we come to the major question-the question of control. The people have been given nominally the local control at Moncton of the road as it is being run to Montreal. We are told that at another meeting of the board that arrangement was changed, and now it is to be Riviere du Loup, or it may be some other way station on the road, but it makes very little difference where it is. I am not concerned with the particular amount of mileage within that region. It is not the trackage, it is not the number of locomotives, it is not anything of that kind that' counts. What we are concerned about in the Maritime provinces is where this board is placing the directing mind. Put a man at Moncton and tell him to take charge of that region, and while one railway man may not be quite as good as another, I have no doubt we can get a very capable man, whose orders will be obeyed by the subordinates, under whose direction trains will be moved regularly, freight will be moved promptly and public convenience will be met.
When we have got all that we have not touched the fringe of the real vital question of interest to the Maritime provinces. You have to put somebody in charge of that road, and you have to put him where he will be in direct contact with those in charge of the different regions, so that, instead of getting his information days too late to act upon it, he will be able to walk across the corridor and say to a man in charge af another region "What about such a class of freight? Why do you not arrange to send that freight through the ports of the Maritime provinces?" That is the vital thing. That is what we want, what we need and what we have a right to
if the policy is national instead of international.
I suppose someone will say I have made a plea for moving the headquarters to Montreal. I have done nothing of the kind, but I want to see some one in high authority in charge of operations. The ordinary business of the division or region, or whatever you may call it, can be managed from Moncton, but I want to know that there is somebody high in authority over that region, who will be sitting right at the nerve centre of the railway system, right in the city of Montreal or wherever it is to be, because upon the ability of the manager of that region to impress upon the managers of other regions that they should use all their activities to direct the freight originating in other parts of Canada down to the Maritime provinces, depends the success or the failure of the old Intercolonial railway, and upon that depends whether confederation is a mere dream or whether it shall be a vivid reality to the people of the present day living in those provinces.
I am not a secessionist. I do not think anything could make me a secessionist, but I say there are people and they are largely in the province from which the. Finance Minister (Mr. Fielding) comes, as there are some in my own province, who are beginning to talk of getting out of confederation. We are coming to rather an unfortunate pass when, during this session, I hear from one part of the House an argument put forward that to get grain or goods out of the country by the shortest and cheapest route is the desideratum of a particular district, and that the rest of the country must be ignored, but I find, on going home and looking over the situation, that there is a very real, though I hope not very extensive, movement as yet, for getting out of the union which some people in the Maritime provinces feel is only a delusion to them. I think we come here to make conditions better instead of worse. I think we can help materially to make them better, if we can get a railway policy which the people will realize is intended to help them, to serve them, to develop and stimulate Canadian trade through Canadian territories, and which will, as quickly as possible, get rid of every avenue through the United States which diverts from Canada traffic that ought to be handled in Canada and handled by Canadian roads.
I will go a step further. There is on the statute book to-day, and there has been for many years a provision by which the British preference can be limited to goods arriving directly at a Canadian port. My sympathy is entirely with the British preference. I
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think the sympathy of the Minister of Finance (Mr. Fielding) has been with it for years;" he has expressed and has carried out that view. But I maintain that it is no harm to anyone who wants to import goods from England to be told: "You shall be allowed to import those goods under the terms of the British preference if you will just put them in a British bottom and bring them into a Canadian port. But if you want to tranship them through a foreign country, then you will have to pay the same rate of duty as you do on goods that do not have British origin." An order in council is all that is required to bring this state of affairs about. What would the benefit be? Just this, that where in the winter time we can send out from St. John or Halifax steamships well filled with cargoes, there is always a rather slender cargo coming in, and while I do not say that this would be great enough to revolutionize traffic entirely, it would be a very big and welcome step in the right direction. There would come through Halifax or St. John in the winter time thousands of tons of merchandise that do not come in through them now. The coming in of those hundreds of thousands of tons through ports of a foreign country is enabling freight rates on those steamships on other merchandise to be kept down in that foreign country for the benefit of the foreign ports. Whatever differences we may have on any possible political subject, there is one thing that I believe we agree upon in this chamber. I believe we are national in our aspirations; I do not believe there is anyone who wants to do anything that is not distinctly along the national line. I say therefore, believing that as I do, that this is an opportunity for a national policy which will reconcile the Maritime provinces, which have undoubtedly lost much through confederation, to the difficulties under which they have laboured, to the difficulties of present-day conditions, by feeling that they have, at least, the sympathy of the rest of Canada and that that sympathy is being translated into real action for the purpose of conferring upon them a real benefit. .
William Stevens Fielding: I do not rise for the purpose of answering my hon. friend, for I confess as a Maritime man I find myself so largely in sympathy with what he has been saying that I have no desire to break the force of it. But I think, in fairness, I ought to say that he has overlooked a very important point. Wq had for years two winter ports in Canada, Halifax and St. John. My hon. friend has very fairly said that they have fMr. Baxter.]
rivalries, and that they must be left to work those out as best they can. I concur in that. But my hon. friend has forgotten that by the action of the government of Canada in acquiring the Grand Trunk railway, we have acquired another Maritime port at Portland, Maine. The question is an ugly one, and this complicates it. We own the Grand Trunk railway, and Portland is the Grand Trunk railway terminus. This is the problem we are giving to Sir Henry Thornton. We are asking him to make these roads reasonably profitable, remunerative, self-sustaining. We give him this road to Portland. Is he to let that road be idle, to let the rails get rusty, or to try to send some traffic over the Portland road in order that it may contribute something towards the cost of the system- I am not discussing the merits of the Grand Trunk system ; but I am pointing to the fact that when we acquired the Grand Trunk railway system and opened a line to Portland, we were creating a rival to Halifax and St. John, and there is no use in ignoring the situation that confronts us to-day.
With nearly all that my hon. friend said historically and otherwise, I am entirely in sympathy. I know much of the feeling in Nova Scotia and New Brunswick. Many of the things I hear to-day are but an echo of the things I heard sixty years ago. The story is an old one to many of us whose hair is growing gray. I do not want to revive these matters "to-day. I sympathize with the desire of my hon. friend that we should look at all these things from the purely national viewpoint. I know that is his desire; I appreciate that, and I would like to co-operate with him. But let us not wink at the fact that since we have acquired the Grand Trunk with the road to Portland, we want that road to make some money, and we must, face the fact that we have deliberately set up a rival to St. John and Halifax.


John Babington Macaulay Baxter: If we have to let go practically the Grand Trunk from Montreal to Portland, if it does not pay, do- we not get the same traffic over our own road to our own ports? May I point this out to my hon. friend? To-day, the Intercolonial, everything from Montreal east, is losing money for want of traffic, so that the Grand Trunk may show a profit from Montreal to Portland. Let the latter be the losing end and let ours be the profitable end. The result will be that-and I say this with all pleasantness-instead of Yankee workmen and trainmen handling our products in the United States, good Canadians shall be handling them at Canadian ports

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and through Canadian territory. If the loss must be on either one part of the system or the other, let the loss be to Portland.


William Stevens Fielding: Would it not have been wise if we had considered that before we acquired that Yankee connection down at Portland?


John Babington Macaulay Baxter: I did not acquire it, and if it had to be acquired through any effort of mine, it would never have been acquired.


William Stevens Fielding: All right.


Henry Lumley Drayton: It is really refreshing to see how many twists and turns such an adept politician as the Minister u. Finance (Mr. Fielding) is, can give to any and every question. One minute we are told that this is an old, old story, sixty years old; it is getting hoary; it is getting gray with everybody who is gray-headed in the Maritime provinces, and they are feeling very sad about it. It is the same thing, the same chicken, the same trouble. There is no difference. We get that one minute, and the next we are told that the whole reason of this is because the late government bought the Grand Trunk railway.


William Stevens Fielding: I did not say that.


Henry Lumley Drayton: Perhaps my hon. friend would tell me what he said.


William Stevens Fielding: The hon. member for St. John (Mr. Baxter) was referring generally to the discontent in Nova Scotia as regards confederation, and I said that that was an old story we had heard all these sixty years ago. The reference to the railway is quite recent. His particular grievance is that we are sending business to Portland. My point was that the government of Canada made Portland one of our terminal points, and we have to face and recognize that fact.


Henry Lumley Drayton: Yes, we stand
just where we were. The talk was on this railway question; the talk was that this railway question to-day was inflaming the people who had troubles regarding confederation, and my hon. friend knows very well that for many years the Grand Trunk has been operating to Portland. Why, the trouble was just the same before. There is just this real difference that before the government owned the Grand Trunk, the government could not do anything: but through the Grand Trunk the government are now in a position to feed, if they want to feed. That is the only difference. My hon. friend says that the late government created Portland. We did not add one cent to Portland's facilities or anything else. I do not know whether my hon. friend i3 anticipating doing so. I see from the papers apparently his board is considering adding to the American facilities. It is quite true that if this question of ownership is to be made a reason by my hon. friend for multiplying American facilities and increasing American trade at the expense of Canadian trade, there is something in the suggestion of the Minister of Finance (Mr. Fielding). These are aids they could not give if they did not own the line. But they are not compelled to do it; the action was their action. Certainly the acquisition of the Grand Trunk, instead of making it hard for the government to see that the Maritime provinces get their share of the business, makes it easy. Why, before they had no control whatever over that business; it was going Grand Trunk via Portland, to as great an extent as it is now going. They shipped everything down that way. This is no new story; it is something which did not commence with the acquisition of the Grand Trunk, and my hon. friends know that. They know that the Portland cry as against Halifax and St. John is an old cry, and yet my hoh. friend says that we created this situation when we bought the Grand Trunk. I think my hon. friend on further consideration will really do himself the justice in this House of acknowledging that the Grand Trunk sent all its business to Portland; he will acknowledge that all their grain was sent that way and that he himself in this very chamber in opposition, if my recollection is correct, pointed out the evils of that situation. If he did not, at any rate he vociferously applauded that position taken by gentlemen- from his own province when in opposition at that time. I do not see why it should be necessary to try to drag a political issue into a matter of this kind, particularly when it is so perfectly obvious that the business was sent through Portland before and when the only change made is that the government, if they so desire, are put just in a little better position than they ever were before to see to it that the Maritime provinces get whatever measure of justice they are entitled to. Before, they had not the power to do it; they have now.


William Stevens Fielding: Let the rails rust.


Henry Lumley Drayton: My hon. friend says, let the rails rust. Well, perhaps he will distribute the rust a little bit. Let the rails rust! I am not asking to let any rails rust. But does my hon. friend object more to letting the rails rust on the Grand Trunk Portland line than he objects to their rusting on the line to St. John? Why, to-day the Min-
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ister of Railways is in a position in which he can control the traffic; he is in a position in which he can work up the traffic and see that it goes in this direction or that direction, through the large organization that is now right at his hand. Yet he says, let the rails rust. Well, I ask, is all the rust to be allowed to occur op the Canadian rails and none on the American? Or does not my hon. friend think that a little reciprocity there might be a good thing and that St. John might be allowed to have some of the business?


George Perry Graham: If I did not know something about this matter I might be impressed. But this is like a comedy.


Henry Lumley Drayton: I think it is.


George Perry Graham: Really it is a comedy. My hon. friend the ex-Minister of Finance was running the Grand Trunk for quite a long time.


Henry Lumley Drayton: No.


George Perry Graham: Yes, it came under a board, with which he was connected, like the Canadian National Board. But that is not the question at all. The government bought a property, part of which is in the United States. Now, I was not a member of the House at the time but I did take occasion in two or three articles I had the privilege of writing to point out that difficulties might arise when the Canadian government became the owner of railway lines in the United States. Here is one of them presented to-day. It must not be forgotten that what is good at one end of the line is good at the other and the road to Portland is just as much the property of the people of Canada as is the road to Halifax. We have our money invested in it. But there is another feature of the matter, we must consider. Cut off the traffic going to the Grand Trunk from Chicago and vicinity, and there will be a lot that goes to Portland which will not go over the Grand Trunk at all. We cannot take the position of wanting to keep one end of the Grand Trunk in the United States and run it for our own benefit bringing traffic to Canadian ports, unless we are prepared to make a somewhat fair division and give some of the traffic that we get in Canada to the United States portion of the railway. The Grand Trank owned by the people of Canada runs for a portion of its length under the control of the various states of the United States and of the federal authority as well.


John Babington Macaulay Baxter: In the statistics that I referred to, it is Canadian wheat that is handled down there now.


George Perry Graham: Well, my hon. friend must remember that in the statistics given this year at the port of Montreal the charge was made that we were handling United States wheat to the detriment of facilities for handling Canadian wheat. We are living beside a great nation, and when we have launched into the experiment of owning railways, a portion of which is in the country beside us, we must be a little bit reciprocal in our arrangements or we shall find that they can ruin us more quickly that we can ruin them. Now, my hon. friend (Sir Henry Drayton) in so far as his Canadian citizenship is concerned, is the owner of every foot of the line in the United States just as much as he is the owner of the system in Canada; and while it is better in so far as we can to have Canadian traffic handled at Canadian ports, we must bear in mind that the Canadian ports if they are to be made successful, must reciprocate and handle traffic from the United States and in order to do that we must be somewhat careful. I agree with my hon. friend that in so far as it is possible at all we ought to develop our own Canadian ports, but we must go about it in a manner that will not absolutely ruin our investment or reduce the efficiency of the railways to any great extent as a result of retaliatory measures from the United States. It makes no difference, particularly now, who bought the Grand Trunk. The fact is that we have it. The situation to which my hon. friend referred as to further development at Portland is one which I thought he thoroughly understood. But if it had been fully explained to him I think perhaps he would not ask the question he has asked. On some other occasion I shall be at liberty to discuss the matter fully; but when I tell him, who has been a member of a government, that certain conditions sometimes arise in which it is not in the public interest to answer certain questions, I think he will fully understand that the government cannot at all times give a " yes " or a " no " in reply to some direct questions when they believe that the answer might be detrimental to the whole interests of the country.
Now, the Canadian National system is not the system it was a few years ago. It was a difficult task that Mr. Hanna had when he had control of the Canadian Northern and its ramifications and when he was managing for years the Intercolonial railway. It is no new story that the Intercolonial Railway is being managed by the Canadian National Railways. What was called the Canadian National Railway Board has managed the Intercolonial for years past, and it is nothing new. The hon. gentleman's friends were cognizant of that, and

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if we are to have the whole Canadian National system it cannot be otherwise.
But great as the problem was at that time it is much greater at present, and my hon. friend has clearly pointed out the reason. Heretofore the Canadian people owned the Canadian Northern and the ramifications of that company as well as the Intercolonial, Transcontinental and the Grand Trunk Pacific. These railways were for the most part in the Dominion and the difficulty of handling them was not nearly so great as it is at the present time. We have added now all the lines of that great company, the Grand Trunk, which has its best feeder from the west and its chief port on the Atlantic in United States territory. This cannot be changed all in a moment, but I can assure my hon. friend that while the difficulty which confronts Sir Henry Thornton and his board is very great -greater than almost can be imagined from the outside-yet he has in mind to give the Canadian ports the advantage in every case wherever it is possible to do so. I cannot go any further than that. The time will come when I shall be able to make a few remarks to my hon. friend with reference to some of the things he has referred to which I know will be eminently satisfactory to him. But at the present time I must say again that it would not be in the interests of the Canadian people, it would not be in the interests of Canadian ports, if I were to undertake to answer in the manner that they are asked several questions concerning the extension of the line in the United States.


Mr. CHURCH:: I think everybody will
sympathize with the minister in his desire to put the National Railways on a business basis. Notwithstanding the pessimism which was voiced in the House during the immigration debates-I think the minister deserves some credit for the fine statement which he delivered to the House the other night as to the year's showing of the Canadian National Railways.
Now, the case of the Maritime provinces was considered last session by the special committee of which the hon. member for Halifax (Mr. Maclean) was chairman. It was contended that by agreement at confederation the Maritime provinces were promised special treatment in railway rates and service. If such a policy of fixing rates by localities is to be followed we might as well wind up the National Railways, because the question of rates is a question of operating costs, it is not a question of east and west, or north and south. Rates and service are determined by operating costs, and thdt is the only economic
factor which fixes railway rates. Last session we had the western representatives asking for preferential rates to the head of the lakes for their basic products, grain and so on. If the principle of preferential rates were once recognized, we might as well abolish the Railway Commission.


John Babington Macaulay Baxter: No one is discussing rates
to-day.


Thomas Langton Church: Parliament has interfered
every session with the question of rates until to-day the Railway Commission is not fulfilling its functions as a rate controlling board. The question of rates is an economic, a business, a commercial question that affects every business man in the country, and if the Railway Commission was left to fix railway rates it would be far better for all concerned.
In 1917 a royal commission was appointed to go into the question of railways and transportation in this country. That commission was composed of Mr. A. H. Smith, President of the New York Central Railway, Sir Henry Drayton, then Chairman of the Railway Commission, and Mr. W. M. Acworth, an eminent British railway engineer. What did Mr. Smith say about advancing loans and making extensions promiscuously without the consent of the Railway Commission? He said:
Amend the regulating policy so that the Railway Commission may have jurisdiction over all railroads in the matter of maximum and minimum rates, the issuance of securities, the building of new railways, or the extension of lines, and other matters properly within the scope of governmental supervision.
Has that recommendation been carried out? No. Neither has any of the recommendations made by the other members of that commission. Parliament has gone over the head of the Railway Commission, and only recently this House decided to continue construction of the Hudson Bay railway, although that undertaking has been condemned by this royal commission on the ground that it is impracticable and will never pay interest on the capital outlay. All this will be found set out at page 62 of the report. Now other extensions are coming up. The whole question of rates has been interfered with by the duplication of our railways. We have three transcontinental systems where one would have been sufficient for many years to come. The proper regulation of railways by the Railway Commission is ignored to-day. For all the use the commission now is or for all it has to do its members might as well go over to Luxor and accidentally enter the tomb and become embalmed with King Tutankhamen.
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Mr. GOULD:: In reference to the Railway Commission having control of rates, would this affect the proposed importation of Alberta coal into Ontario?


Thomas Langton Church: If this parliament is going to interfere in the way it did last session with the rates on grain to the head of the lakes it might just as well go into the coal business too, because coal is a necessity as well as grain. What I contend is that parliament should not interfere with the functions of the Railway Commission in regulating freight rates, passing on loans, extensions and so on. The question of this loan should first be submitted to the Railway Commission to see if they recommend it. If you are going to give the National Railways a chance, do so, but to say that certain localities shall have preferential treatment is wrong in principle. You cannot have efficient administration of our national lines except under the Railway Act and by the Railway Commission.


Murray MacLaren: I had proposed, Mr. Chairman, to speak on this subject, but I did not anticipate that the particular phase of it to which I wish to address myself would be introduced this afternoon. I presume this vote will not be passed to-day, and that I shall have an opportunity of speaking when the subject is again taken up?


George Perry Graham: This is merely an item for refunding. We have yet to take up the whole railway estimates. The discussion today is really a little premature.


Murray MacLaren: That is quite true, but now that the House has the matter before it I submit it is a more favourable time to continue this phase of it rather than bring it up in a detached form in a week's time.


Henry Lumley Drayton: I entirely agree with the manner in which my hon. friend, the Minister of Railways-or the Minister of National Defence and Acting Minister of Railways-(Mr. Graham) approached the question. He is mot throwing the blame for the Grand Trunk business on the late government. I appreciate that there are difficulties in connection with the matter. I appreciate also that he says he is going to do the best he can, and I hope he will, in connection with Canadian business. Of course, he is in a position now to do it, but he would not have been if the Grand Trunk had not been taken over. The proposed extensions at Providence, Rhode Island, have been under consideration for some time. I remember looking

into the subject some years ago, and in what I am about to say my hon. friend will correct me if my recollection is wrong. My recollection is that the Grand Trunk spent some	$6,000,000 or $7,000,000 in
connection with that branch and the question was whether we could save that six or seven millions by making further commitments-some $5,000,000 more, I think. But the result of the information I then got was that having regard to traffic, having regard to business and general railway conditions, we would be simply losing another $5,000,000 if we spent it on that work. My hon. friend may have more up-to-date information on the subject. The state authorities were very anxious that the work should go on; they were going to extend the time for its completion in order that it might proceed. There was also some suggestion as to what they were prepared to do, if we went ahead with this thing, with a view to helping out what looked like an impossible situation from the investor's standpoint. I would like, the minister to inform the committee as to how matters stand now with respect to the Providence situation. If the work is to go on, how much will it cost, and what changes have taken place in the matter of traffic?


George Perry Graham: The situation is about as my hon. friend has described it. The Grand Trunk Railway, under the late Mr. Hays, expended some $7,000,000 over there, under a charter from two states. Hon. members will recall that there was some legal difficulty over the construction or the want of construction of that road. That expenditure has remained ever since without any effort to carry out the original idea of constructing a line to the port. Before this line can be constructed the two states in question have to renew the charters. One of these has already been renewed ; in the case of the other the matter is now before the legislature and it is expected that the renewal will be granted in a few days, when the government will be able to announce its policy. My hon. friend will understand that I prefer not to disftuss the matter at great length until we get the information on which we can base our opinion.


Murray MacLaren: I suggest that this item be allowed to stand.
Item stands.
Progress reported. [DOT]
At six o'clock the House adjourned, without question being put, pursuant to rule.

Questions
Thursday, April 12, 1923