1923-06-08

[Stage Direction]
On the Orders of the Day:
Miss AGNES C. MACPHAIL (Southeast Grey): Mr. Speaker, I should like to as-k the government if two women have been appointed to the Dominion Council of Health to replace Mrs. Tood, of Orillia, and Miss H. Reid, bf Montreal; and, if not, why?
Hon. Mr. BELAND:: Did the hon. lady
ask whether two women had been appointed?


Miss MACPHAIL:: Two women.


Henri Sévérin Béland: I understand that only one has been appointed.
PRIVILEGE-Mr. IRVINE
On the Orders of the Day:


Mr. WILLIAM IRVINE (Calgary East):: Mr. Speaker, I rise to a point of privilege. Yesterday afternoon, when we were discussing the situation of certain Hebridean immigrants, the hon. Minister of the Interior (Mr. Stewart) challenged the facts which I then presented. I have here a telegram from Mr. W. McD. Davidson, who is editor of the Calgary Albertan-


Mr. SPEAKER:: Order. On a question of privilege or any other question of a similar nature no writing or communication from the outside can be read to contradict statements made by members of the House in the course of a debate.


William Irvine: Then, Mr. Speaker, may I refer to this communication without quoting it?	r


Hewitt Bostock: What cannot be done directly cannot be done indirectly. On any day, except Friday of course-because to-day the Speaker leaves the chair without any
motion being put-when the House goes into Committee of Supply the hon. member has his remedy.



ADULTERATION OF CANADIAN GRAIN

[Stage Direction]
On the Orders of the Day:
Mr. E. J. GARLAND (Bow River):: Mr. Speaker, I wish to ask the Minister of Trade and Commerce (Mr. Robb) if it is correct that last summer he held a quiet inquiry into the operations of an organization, or alleged organization, engaged at American ports in the business of adulterating Canadian grain for export. If so, what were the results of the inquiry, and when may we expect a report thereon to be tabled?


Hon. J. A. ROBB (Minister of Trade and Commerce):: I never heard of such an organization until to-day.


Edward Joseph Garland: No inquiries, then were held last summer by the minister or by his department as to such adulteration?


James Alexander Robb: I am not sure what my hon. friend refers to. If he would be more specific I might be able to give him the information he desires.


Edward Joseph Garland: Perhaps I can put my question directly. Were any inquiries made by the minister or his department last summer into the adulteration of Canadian grain at American ports?


James Alexander Robb: Mr. Speaker, last year we had a complaint from the London Com Exchange that Canadian grain reaching London was not up to standard. I met the members in their exchange hall, London, and the chairman made it clear that they had no complaints against Canadian grain reaching England from Canadian ports; their complaints were against Canadian grain reaching England through certain United States ports. We instructed the Board of Grain Commissioners -one of the inspectors went along with them -to make an actual survey of the conditions there affecting the receiving and the loading of grain going out to those ports. The chairman of the board and the chief grain inspector have gone over with the idea that they will reach there about the time the first ships arrive from Canada and from the United States. They will make inquiries and observations with a view to giving the government information regarding the condition of the grain that reaches the other side.
Supply-Railways-C.N.R.

Mr. GARDINER.: I understood the minister to say that they had asked the Board of Grain Commissioners to make inquiry in United States ports. What we desire to know is what was the result of that inquiry.


James Alexander Robb: Well, offhand, the information that was brought back to us confirmed our own view, namely, that we have no control in the United States over grain, once it is cleared from Buffalo. It is true -the grain goes through the United States in bond, but that is for the protection of the people of the United States themselves, So it comes down to this-if grain is shipped to Liverpool direct from Canada and then from Liverpool to France and the complaint comes to us from France that it is not up to standard, we have no control over it because it had reached the Liverpool .port-beyond our country.


Mr. GARDINER:: I quite understand we have no control-


Hewitt Bostock: Order.


Robert Gardiner: All right, Mr. Speaker; I will put the question directly. Will the minister tell us just exactly what they found with regard to the adulteration of Canadian grain in American ports? That is the point we want to get at; we want to know just exactly-


Hewitt Bostock: Order; I did not stop the hon. member at first because I thought he was putting another question. But assuredly no debate can arise on a question put to a minister of the Crown before the Orders of the Day are called.


Robert Gardiner: If I have transgressed the rules of the House, Sir, I desire to apologize. I was putting a question to the minister and 1 wanted to get the reply.


Hewitt Bostock: I know the hon. gentleman was proceeding in good faith, 'but I must see that the rules of the House are observed.



RAILWAYS AND CANALS

[Stage Direction]
The House in Committee of Supply, Mr. Gordon in the chair.
Railways and Canals-chargeable to income:
Amount not exceeding $73,000,000 to meet expenditures made or indebtedness incurred (where amounts available from net operating earnings may be insufficient) by or on behalf of the Canadian National Railway Company, hereinafter called "the company", or any company specified in the First Schedule to the act incorporating the Canadian National Railway Company, being chapter 13 of the Statutes of Canada, 1919, or by the company in respect of any railways, properties or works entrusted to the company from time to time under the provisions of section 11 of the

said chapter 13 of the Statutes of Canada, 1919, or bv or on behalf of any company specified or referred to in chapter 13 of the Statutes of Canada, 1920; or any one or more of them, on any of the following accounts :-
(a)	Operating deficits whenever incurred or ascertained.
(b)	Acquisition of property, materials and supplies.
(c)	Interest and sinking funds on notes, securities or obligations.
(d)	Principal and interest of maturing or matured loans secured or unsecured.
(e)	Construction and betterments.
(f)	Co-ordination or consolidation of railway lines and facilities.
(g)	Guarantees of securities.
The amount herein authorized may be applied from time to time, in the discretion of the Governor in Council:-
(a)	To meet expenditures made or indebtedness incurred by the Company in respect of railways, properties and works entrusted to the company as aforesaid.
(b)	By way of loans in cash, or by way of guarantee, or partly one way and partly the other, subject, however, as follows:-
If by way of loans, the amount or amounts advanced shall be repayable on demand, with interest at the rate fixed by the Governor in Council, from time to time, payable half-yearly, secured if and when directed by the Governor in Council by mortgage or mortgages upon such properties in such form and containing such terms and conditions, not inconsistent herewith, as the Governor in Council may approve.
If by way of guarantee, any such guarantee may be of the principal and interest of the notes and obligations or securities of one or more of the said companies specified by the Governor in Council, and may be signed by the Minister of Finance, on behalf of His Majesty, in such form and on such terms and conditions as the Governor in Council may determine to be appropriate and applicable thereto, $73,000,000.
Mr. SHAW:: In connection with the matter under discussion last night, the purchase of the two-million-dollar hotel in Paris, I would like to ask the minister whether or not the board of directors of the Canadian National Railway Company have approved of the purchase as made.	[DOT]
Hon. GEORGE P. GRAHAM (Minister of Railways and Canals): Some two months ago the question of getting proper quarters in Paris, I am informed, was discussed at a meeting of the board, and approved. I do not think this special transaction has yet been brought before the board for approval.


William Irvine: Will the minister give the
committee an idea of the service to be rendered to the Canadian National, or to the Canadian nation for that matter, by this purchase?


Mr. GRAHAM:: The only answer I can
give* to my hon. friend is that the Canadian National has had no headquarters in Paris and it is the judgment of the Canadian National Company that such headquarters are greatly needed for the good of the Canadian National system.

Supply-Railways-C.N.R.


William Irvine: Has the Canadian National
similar headquarters in the other European headquarters-Rome, Berlin, Stockholm? If not, why purchase one in Paris and not in the others?


George Perry Graham: The Canadian Pacific
Railway have headquarters in Paris. I do not know about the others. Paris is considered a very central point of European trade. It is, in a way, the hub of the wheel.


William Irvine: There is this great difference between the Canadian Pacific and the Canadian National: the Canadian Pacific has steamship lines across the ocean and I understand also has railroad systems on the Continent. I could understand that they would require headquarters of this character. But I cannot see how the Canadian National would require them.


George Perry Graham: I have never heard of
the Canadian Pacific having railway lines on the Continent. They have their own steamship lines; and the Canadian National has connection with the Cunard and White Star lines.


William Irvine: Then, do I understand
that this purchase in Paris is merely "Keeping up with the Joneses," so to speak? Is that. the service that is expected by it?


Mr. CAMPBELL:: How is this figure of
$73,000,000 made up? I understand that about $58,000,000 is required to cover the deficit. Is this for the deficit on last year's operating?


George Perry Graham: I regret I was unable to
hear the last part of my hon. friend's remark, but I understand that he is asking how the $73,000,000 is made up. I will give the totals: For the Canadian Government Railways, $5,772,941; Canadian Northern, $36,906,826.64; Grand Trunk, $20,000,000; Grand Trunk Pacific, $10,320,232.36; operating deficit, estimate for next year-which we think is very liberal, but provision must be made-$10,000,000; interest and other sundry charges, $22,821,260.34; refunding and sinking funds, $8,184,699.33; capital betterment and equipment, $31,994,-040.33;-making a total of $73,000,000.


Milton Neil Campbell: Have the department taken into consideration the matter of adjusting the capitalization of these railways? The Canadian Government railways, of course, have no capitalization, but the others have. Has the idea of writing off or readjusting the value to bring it down to the actual value been considered at all?


George Perry Graham: That suggestion has been made in several quarters. I think the former
leader of the Progressive party urged it very strongly. It would not in any way reduce the liability of the country. If you owe so much money you would still owe it whether you write down the capitalization or not. But it is a matter for investigation. This has to be borne in mind, however,-as my hon. friend has pointed out, there is quite a proportion of the Canadian National system now known as the Government Railways, the capitalization of which is not considered in the indebtedness of the railway, so if the Canadian National system outside of the Government Railways is over-capitalized as some contend, you have to offset that in making your calculations. The amount of capital invested in the Government Railways is about $440,000,000, if I remember correctly.


Milton Neil Campbell: I have compiled some figures that are rather illuminating. The Canadian National-and when I say the Canadian National in this case I am including the Grand Trunk but excluding the Canadian Government railways-had net earnings last year of $193,171,000, and against that interest or fixed charges of $62,454,000; while the Canadian Pacific, with earnings nearly as high, $186,665,000, has fixed charges of only $13,348,000. Taking our roads separately I find that the Canadian Northern for 1922 had gross earnings of only $1.85 for every dollar of fixed charges; the Grand Trunk Pacific had $2.17 earnings for every dollar of fixed charges; the Canadian Government railways had $1.79 of earnings for every dollar of capitalization; and the Grand Trunk had $6.95 of earnings for every dollar of fixed charges. And the Canadian Pacific had a revenue of $13.98 for every dollar of fixed charges. I might say in connection with the Canadian Government Railways that I arrived at the fixed charges by computing 51 per cent interest on the investment of $414,000,000. I should like to quote at this point from an editorial in the Manitoba Free Press regarding the capitalization of the railways. It says:
The time has now come to consider seriously the proposition which has been frequently advanced during the past two or three years, to cut down the capitalization of the system to a point where it will represent the actual value of the road. . . It will not be denied that the capitalization of the Canadian National railway is far in excess of the physical value of the road. In this huge mountain of debt are embedded all the railway blunders of Canada sinoe the first railway was built.
Further on it makes this reference to the effect on the operations of the road:
Supply-Railways-C Jf.R.

Of the operators of the Canadian National railway miracles should not be demanded. They cannot be expected to make surpluses sufficient to pay interest charges upon the present combined capitalization of the system. Faced with the certainty that every year there will be a huge deficit the directors of the system will inevitably get into the frame of mind which finds expression in the phrase: "What's the use?'' If there's bound to be a deficit anyway, why worry whether it is ten or twenty million dollars.
But, given a just valuation of the road, the directors can be told that they must meet the fixed charges or make way for others who can. They will have a target to aim at and they will be expected to hit it. This will be much more exhilarating and inspiring than shooting arrows into a box.
We have plenty of precedent for such action. The whole capitalization of the Canadian Government railways-that is, what are called in the statement the Canadian Government railways, the Intercolonial, the Transcontinental and the Prince Edward Island railway-'has been wiped off and charged up to the public debt. I notice also that an item of $2,394,000 spent on the Canadian Pacific between Ottawa and Quebec was transferred to the public debt in 1898. I think the minister would do well to give this matter serious consideration.


George Perry Graham: It is a large question, of course. I imagine that the government, if it thought wise, could perhaps deal with the securities held by itself, although that would not relieve the financial obligation of the country at all, but the securities in the hands of the public would have to remain and the liability be held sacred.


Joseph Tweed Shaw: After listening to the minister last night and to the discussion which then took place I have been trying to ascertain the situation in connection with this Paris transaction. I presume the minister will not deny that there must be somewhere in the statutes authority conferred upon the president or the board of directors of the Canadian National Railways to enter into a transaction of this character? I should like him, in the first place, to refer me to the section in the act which confers authority upon the president of the railway or upon the board of directors; secondly, I would like to know exactly what the position is in regard to that $2,000,000 transaction. Is it out of the control now of the National Railways and out of the control of Sir Henry Thornton? Has the money been paid over? What is the situation?


George Perry Graham: I explained that fully last night, but I will explain it again. The building was required, so the president of the board cons:dered. In his judgment the transaction would have to take place very quickly or the opportunity would be lost. The Canadian

National Railways financed this gentleman in Paris to get possession of the building. The money was deposited in the Bank of Toronto, just as money in like cases has been deposited by other governments for other purposes; and that deposit in the Bank of Toronto allowed the man in Paris to finance the building. In other words, the Canadian National for the time being financed the transaction in order to get control of this building. And they took a mortgage, I am told, in the London office, to protect themselves.


Joseph Tweed Shaw: A mortgage from whom?


George Perry Graham: I have mentioned that three or four times already. I do not think my hon. friend can pronounce the name when I say it-Aronovici.


Joseph Tweed Shaw: I confess that I find difficulty in understanding the situation. Why take a mortgage? Why should not the title have been taken in the name of the Canadian National Railways? Why take a mortgage in favour of the Canadian National Railways?


George Perry Graham: I see what my hon. friend is at now. As I understand it, the board did not intend to retain possession of this building. However, I see what my hon. friend is after. He will pardon me, I hope, if I cannot grasp these legal niceties as quickly as legal gentlemen can. But if that had been done I know he would probably have risen immediately and said there had been a violation of the act of 1919 in that the Canadan National is not empowered .to build or extend lines or to make any extended capital expenditure without an order in council. The property was not bought in the name of the Canadian National Railways, but in the name of this gentleman whose name I have tried to pronounce, who was financed, temporarily only, by the Governor in Council.


Joseph Tweed Shaw: Then I take it, from what the minister says, that the title to the property does stand in the name of Aronovici, and the mortgage is with the Canadian National Railways?


George Perry Graham: That is as I understand it.


Joseph Tweed Shaw: For the full amount of the sum advanced?


George Perry Graham: Yes.


Joseph Tweed Shaw: I would like to ask the minister if he can point to the section of the act which authorizes a transaction of this character?

Supply-Railways-C.N.R.


George Perry Graham: The act is negative and positive in different places.


Some hon. MEMBERS:: Oh, no.


George Perry Graham: That is absolutely right. My hon. friends know that the act gives .certain powers and declines to give other powers. Will my hon. friend tell me of any section in the act which enjoins the president from doing anything of this kind?


Some hon. MEMBERS:: Oh, oh.


Mr. MEIGHEN:: I had not the advantage of being here last night, but I have read Hansard since and I must commence by saying that there was revealed last night the most extraordinary transaction, I think, ever disclosed in this parliament. I have difficulty in finding words to describe the conduct of the board. In so far as the minister is concerned his responsibility apparently arose after the transaction was complete, and his error [DOT]consists in condoning the transaction and expressing approval of it in this House. A knowledge of-I had almost said of law-but a knowledge of the plain, simple facts connected with, or rather which constituted, the basis adopted by this parliament for the control of our National railways is necessary to comprehend the seriousness of what has been done. When this countiy found itself compelled to take over large railways-railways which could not stand up unless they were taken over-we had to find some way, some system, whereby we could at once get [DOT]operation on business lines unaffected and uninterfered with by political considerations, and at the same time keep in the hands of the representatives of the people that fundamental control of general policy and of expenditure that necessarily the people of Canada would insist on where their own money is involved. Now the method adopted was this-and it is the very kernel, it is the very essence of the whole National Railway Act -that is so far as operation, ordinary operation, is concerned the board of directors elected by the Governor in Council should be in exactly the same position as any other board of directors elected by their shareholders, but there the control of the board of directors ended. In so far as policy and in so far as capital investment were concerned the board of directors could recommend and could do no more. The line was drawn between capital investment and operation. It is not a legal nieety; no one can escape the issue by merely hiding behind a lack of "knowledge of law; it is as plain and naked a principle as anybody has ever seen. Let
me repeat. As read in part by the member for West York (Sir Henry Drayton) last night the National Railway Act provides that neither the board of directors nor the manager has any power to expend or pledge the money of this country for capital investment, save with the antecedent authorization of the Governor in Council. And the Governor in Council had its powers only when the money for the express purpose had been voted by this House.
What has happened? The manager of the Canadian National Railways desired to buy with the money of our railways, which means the money of this country, an hotel in Paris -to be converted I presume into some immense structure there-in order that Canada may get "on the main street" of Paris, to use the graphic language of the Minister of Railways. I do not know at what stage the device was adopted, but I have a suspicion that the circuitous plan finally used was not the original intent of Sir Henry Thornton and the management. I fancy it was when the fundamental legal position came before their eyes in its fuH strength that this device was adopted; to call it a subterfuge is to honour it. They buy the property in the name of one Aronovici who is their own servant in Paris. The minister says they could not buy it as a capital expenditure and take the title to the company; to do so is against the law. The right to do so has been denied by this parliament. But the minister thinks it is all right for them to buy it with the company's money in the name of Aronovici, and the minister passes his blessing on the conduct of Sir Henry Thornton adopting a subterfuge of that sort. I do not admit for a moment they had a right to buy this property in the name of Aronovici or of anyone else, and I question very much if they had the legal opinion of any lawyer of repute that such a thing could without a previous vote of parliament be done. But with or without a lawyer's opinion the people of this country will not stand for subterfuge of that sort to get round the provisions of an act of parliament. The parties go to the Bank of Toronto, they take the money of the people of this country and lodge it in the bank; and then the bank sends that money over to Aronovici to buy an hotel in Paris. What have they for it? They have not anything save the Paris hotel. They buy the property and then they set to work to get some syndicate to take it over-I mean the board, I mean Sir Henry Thornton-and so far as we are informed we do not know up to this hour in parliament whether there

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is any syndicate bound to take it over or not. If there is we do not know who compose the syndicate.
Now, what is the position? We have $2,000,000 of capital expenditure invested in a Paris hotel, not only against the intent but against the plainest wording of an act of parliament, an act as plain as this or any other parliament ever enacted-money taken from the purposes to which it was applied by a statute of parliament, misappropriated from these purposes and invested in a Paris hotel: Or; without the knowledge of the government we have money loaned on the credit of a syndicate we do not know, money of the Canadian people loaned to a syndicate whose names we are denied. Which is the better of the two horns of the dilemma? This thing is a scandal, this is an outrage, and when this became known to the minister Sir Henry Thornton should have been called to book at once. When the minister comes to this House and says that the thing is all right because the property is bought in the name of Aronovici instead of in the name of the Canadian National Railways I do not think he does justice to himself. I venture to say, because I have a profound respect for the Minister of 'Railways, that when Sir Henry Thornton first disclosed to him what he had done his language to that gentleman was not like what it has been in this House. But he had not the courage to do to Sir Henry Thornton what he should have done, and to reprimand his conduct now before this House. What right, I want to know, has he to put his hand into the treasury of Canada and apply $2,000,000 to get the National Railways "on the main street" of Paris? No one can argue for a moment that it is in accordance with the intent of that act. It is diametrically opposed to the law, and everybody knows it, to invest capital money without the consent of the government and without previous appropriation by this House. But first, had we not better get on the main street of Canada before we get on the main street of Paris? Where are we to-day? We have the property. We have it in our own name in this shape: Mr. Aronovici has the title and has mortgaged the property to us. As everybody knows, this course is merely a substitute for having it in the name of the Canadian National Railways. We hold the property to-day, a property that is a capital investment in Paris; and all we have is a hope, annexed to which there is not a line, so far as this House has been informed, that some time some people over in New York will take it off our hands. Who the people in New York are we do not know, and I think the

minister said last night he did not know himself. That is the position Canada is in. And the minister thinks it is all right.
Is Sir Henry Thornton to have power to repeat this performance? If he has power to go into the treasury to the extent of $2,000,000, he has power to go into the treasury to the extent of $20,000,000. He can pledge this country in Paris, Berlin, South America, or anywhere he pleases, for the whole of the moneys at the disposal of the Canadian National Railways in capital account, as long as he does it by the circuitous sinuosity he adopted in this case, and the minister will think it is all right. The minister should have denounced it and he should have dealt with Sir Henry Thornton on the spot. No board of directors, no matter who they are, has power to do any such thing, nor should be given such power, nor should be condoned for doing it. The country has not very much confidence in the board of directors, if they have any. The proportion of them who should have been appointed is small. The country has welcomed and has given a fair opportunity to Sir Henry Thornton. But the confidence of the country in Sir Henry Thornton will not last much longer after they know of this transaction; and furthermore the country's confidence in the minister will be seriously shattered when it finds he condoned a transaction of this kind on the floor of this House.


George Perry Graham: I do not know that I can add anything to what I have said. I think I said last night that if I had been doing it, probably I would not have done it that way. However, the question turns largely on the legality of the transaction, and I gave as an authority the adviser of the president, Mr. Ruel. We all have a high opinion of him. And his reply to me, when asked if this was a legal transaction, was that it certainly was. As to the advisability of it, I said before that I would not have done it that way. But I am convinced that the necessity of getting headquarters in Paris is very essential, in order that we may get our share of the traffic. My right hon. friend (Mr. Meighen) says we are not on the main street in Canada. Well, there was quite a criticism because we insisted on staying on the main street in Toronto. But the way to get on the main street in Canada is not altogether through our own people or their products. One way is to get more people, and the other way is to get the traffic of other lines as much as possible. My own view is, disregarding for the moment the discussion of how this property was obtained, that it is absolutely essential that, in the

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centres where traffic is to be obtained, the Canadian National must have a prominent place. It must have a place in the centre of the business district where the people will recognize not only Canada but the Canadian National Railways. I can refer my hon. friend to a case, not on all fours with this, because the government did it. I refer to the letting of the contract of the new Halifax harbour works, which to my mind was all wrong-but that is only a matter of opinion. If the right hon. gentleman will look up the facts in that case he will find that there was no appropriation by parliament and no money. The government borrowed and placed in the bank $300,000, and sent agents to buy up certain properties, to establish the value. Well, it was the government that was doing it. They had no order in council authorizing it to be done, so I am informed. It was done, as to the details, just as this transaction was done. However, that is not important. That is the way they raised the money. I want to point out something my right hon. friend has said himself. I want parliament to thoroughly understand that I do not approve, or would not approve, of any transaction about which there was the least shade of dishonesty or departure from rectitude, I would not care with whom I might have to disagree. But in this case there is no evidence of such a thing. There was the desire on the part of the Canadian National to obtain a certain property which other people were endeavouring to obtain. Perhaps my right hon. friend knows who they are. Sir Henry Thornton might have been impetuous in his anxiety to get this property on which he had his eye for something else. But outside of that, there is nothing in the transaction at all to point, to anything in the least wrong. The Canadian National Railways Act of 1919 gave the Canadian National board pretty wide powers. My right hon. friend rightly says that the Board of Directors of the Canadian National, including its president, was given the same, powers as are given to the directorate and president of a private company.


Arthur Meighen: Over operation.


George Perry Graham: He did not say that.


Arthur Meighen: Yes, that is what I said distinctly.


George Perry Graham: Well, I will leave it,that way, but I think it goes further. I am going to put him on the same plane. It was argued last night-and I think rightly so-that the president of a private company ought to have the approval of the shareholders for a trans-
233i
action of this kind. That was argued by two or three of my hon. friends on the other side of the House. The practice is, as everybody knows, that the president of a large private corporation or some person acting for and with him, exercises very extensive powers, and while he proceeds in a case of this kind, to purchase property, he would purchase it first, and ask for the approval afterwards, because if he did not do that, the price would be greatly enhanced when he came to purchase the building in the name of a big company, and I imagine the same thing would happen in this case. I admit frankly to my mind capital expenditure, if this were held to be a purchase by the Canadian National, could not be made except by the consent of the shareholders, the shareholders being the Governor in Council in this case. The practice-and I suppose Sir Henry Thornton followed the practice that he followed when he was with the great English company-is for the executive in such cases as this to make their arrangements first, depending on the approval of the shareholders. But I want to quote my right hon. friend, the leader of the Opposition, with reference to a position he took a few days ago, not on this question, but on the powers of the board. I know my hon. friend will say that that applied to operation only. That may technically be correct.


Arthur Meighen: Absolutely.


George Perry Graham: I would rather say "technically."


Arthur Meighen: Read section 11.


George Perry Graham: I am going to read thespeech of my right hon. friend-it overrides^ section 11, maybe-to point out to the members of this committee that I would take it from his words uttered there and, I think, correctly that even in this transaction Sir Henry Thornton was not going very far afield from the principle laid down,-with the fact that the minister was not in a position to give details, being advised by the president that this would not be in the interest of the Canadian National at the present time. I think this was confirmed by my right hon. friend's words uttered the other day, although he will still insist that they meant only matters of operation.


Arthur Meighen: What date was that?


George Perry Graham: Page 2473 of revised
Hansard, May 4. I think I was engaged in the discussion myself and my right hon. friend as well. In reply to something that I had remarked, my right hon. friend said.
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Nothing could be a greater contrast than the position of the minister to that of his friends when they were on this side of the House. I wish to take exactly the same position that I took then: I do not believe in details of management being revealable every day or discussable in the House of Commons, and never did. At the same time I realize, as I realized when in power, that there are some matters in connection with which the details might be brought before the House at the proper time-when that might be done without interfering with the actual day to day management, and when all the doings of the company could be scrutinized by hon. members.
The question arises:	Was this a part of
the management of the Canadian National system open for discussion? I submit, taking the broad meaning of my right hon. friend's words, it would come within that category.


Arthur Meighen: Is the hon. member
seriously intimating that this is ordinary everyday, day to day management of a railway?


George Perry Graham: My right hon. friend went further.


Arthur Meighen: That is what my hon.
friend read.


George Perry Graham: I am going to read more.


Arthur Meighen: It will be just as good.


George Perry Graham: If everything is done legally, nothing out of the ordinary, everything within the four corners of the act, then I think anything that would enhance the value of the line as regards earning power might be considered as part of the management of the railway. My right hon. friend continued:
While management is on and while they are hiring this man and firing that man-
I think he is using my words there.
-buying coal here and refusing to buy it there, we admitted and argued strenuously that it was impossible to have these things subjected to daily scrutiny, but we always said that the time came when the House had a right to inquire into everything in management, and we asked that committee to ascertain when that time came and how these matters could be brought before the House.
That has reference to the argument under the late government for a committee to which these things might be referred. The committee would have to be very small if all the information would not get out. I have great faith in human nature, but I never knew a committee of any proportions that did not have on it someone who had a friend to tell the information to quietly, and one might almost as well have the information on the records of this House. My right hon. friend said further:	[DOT]
But we went this far ourselves: That this was the place where railway expenditures should be made
IMr. Graham.]
known, but made known at a time when they would not harass the management of the system. Consequently the committee was appointed.
I read these things just to point out to my right hon. friend that less than a week ago he took the ground that as regards details- he did not say details, but as regards the management of a railway, and information concerning it, there was a time to give out the information, and that was when this would not embarrass the management of the road. I do not think I can add anything further to what I have said. My right hon. friend asked me a question, and I think I can go this far with him. I shall be perfectly frank with him. If Sir Henry Thornton or the board could exercise this authority in large degree whenever he saw fit to do so, I think, without saying any more, I should be accurate in the remark that it is not likely to be exercised again.


Arthur Meighen: I feel a measure of satisfaction in that there is a note of repentance evident now in the speech of the minister. I must congratulate him on the selection he made of an extract from my own speech made on the 4th May.


George Perry Graham: I beg pardon; I thought it was the 4th June.


Arthur Meighen: The 4th May. It would be just the same as if it were the 4th May, 1919; he would not find an iota of difference. I could not, if I had it to do again, express my meaning a particle more clearly and in a way more applicable to this case
4 p.m. than I expressed it in the extract read by the minister. Certainly! In matters of management! under section 11, the term "management" is defined in the clearest possible way and the board has authority as regards matters affected by section II, matters of day to day management and operation. I used the term specifically- why, I even went further in what the minister quoted-I described what day to day management implied; I gave instances: the buying of coal, hiring of men, firing of men. All those things I did not think should come before parliament-things of that character as they were going on. But I added later on there would come time even for that.
How does that kind of thing affect a transaction of this sort? They are as remote from it .as the stars are from this earth; they have nothing in common with it. Section 23 provides that the directors shall have nothing to do in the way of final authority save by direction of the Governor in Council and after a vote of this House with new invest-

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ment or const,ruction and manifestly one such thing, is to buy a hotel in Paris. You could not imagine a more outstanding instance. What I find fault with the minister for is that he approved in this House what was done and gave carte blanche to Sir Henry Thornton. No general manager is entitled to confidence who would be guilty of an action of this sort. I do not say yet that he is guilty of wrongful intent.	The route he pursued showed that he was not acting in accordance with the law. Think of Sir Henry Thornton taking upon himself the duty of manager of this system and not knowing the simple truth that as regards capital investment he had to come to the Governor in Council for authority and that the money for the purpose must previously have been voted by parliament. Nothing will convince any hon. member who is sincere that Sir Henry Thornton does not know as well as any living man that he has to have that prior authority, and that the Governor in Council has to have the prior vote of Parliament. But he goes to work and he takes the money of the Canadian National railway, which money was put there by the Minister of Finance for purposes voted by this parliament last session, and he sends $2,000,000 of it through the agent of the Bank of Toronto to Paris to buy a hotel. This is what he has done, and this is what he is accountable for to this country. We are going to have to pay for this transaction. The prospect of escape looks very dark to me; but escape or no escape, the thing is wrong and should have been denounced by the government.
But how are we going to escape? By taking enough space in this building and paying enough rental to make it worth while for an unknown syndicate in New York to take it off our hands. We have an option. We have financed-the word is hardly appropriate- we have bought it and we hope to sell it. We hope to get rid of it to some people, we do not know to whom, but we have got to pay the $2,000,000. The money is already gone. Still we are told we have an option from this unknown syndicate giving us the right to use as much space as we like on fair terms. What a gallant option: You can depend upon it that the syndicate will take this Paris property off our hands only when we take up enough space and pay enough rental to make it a good investment for the syndicate. To do so is equivalent to keeping the property. There is where we have been landed by Sir Henry Thornton. I think the minister should go further and state to this House that the opinion of this House regarding the transaction shall be made known to Sir Henry Thornton by himself. And, further, if as we are told it is the opinion of any legal adviser of the Canadian National
Railway board that this transaction was right I want to assert that, no legal adviser can say it was right, no man with a conscience can say so; he may possibly say it was technically lawful, but it passes my ingenuity to see how he can say even that; but if he or anyone does say it was right-let the government come to this House this session with an amendment that will make such a thing unlawful for all time to come. Do not understand me to suggest that it is necessary, I do not believe it is necessary; the intent and letter of the law is to me as plain as the sun in the heavens. If any general manager who in the responsible position that Sir Henry Thornton is ,'n has no more conception of his duty than to enter into a transaction like that, well, for my part the measure of confidence I have had in him is destroyed.


Mr. LEWIS:: Will the minister tell us whether headquarters could have been secured in this Paris building without purchasing it, or whether any effort was made to this end?


George Perry Graham: That is a detail with
which I am not conversant.


Mr. MOTHERWELL:: Mr. Chairman, if we are to go through this four-hour stunt again for the purpose of giving the right hon. leader of the Opposition (Mr. Meighen) a chance to express himself, I presume there is no harm in the rest of us who do not pretend to know very much about railway management expressing our opinion on the question. The leader of the Opposition pretends that he is desirous of being fair to Sir Henry Thornton, that he wants to maintain the confidence of the country in the integrity of the Canadian National Railways board. I would remind my hon. friend that the first reception he gave Sir Henry Thornton, before Sir Henry had had an opportunity to get his shoulder in the collar on the job at all, was an attack upon the newly-appointed president of the Canadian National Railways during a by-election in Lanark last fall. So pronounced was this attack that the hon. gentleman's own party press found it necessary to remind him that it was a very unwise proceeding on his part. My right hon. friend will remember what appeared in his own journals.


Arthur Meighen: There was some misinformation given the Journal. I would not
Supply-Railways-C.N.R.

wonder if it was given by the minister himself. I was suspicious at the time that such was the fact. What I stated in Lanark was a perfectly correct statement of the truth, and apparently the electors of Lanark thought so.


William Richard Motherwell: I am recalling the incident merely to refresh the hon. gentleman's memory, to remind him that he was not fair to Sir Henry Thornton on that date and has never been fair to him since.


Arthur Meighen: What did I say?


William Richard Motherwell: What is he saying now? What is the purpose of his attacks on Sir Henry Thornton? Is it not to destroy the confidence that Sir Henry Thornton himself has won during the time he has been with us? Is it not an attempt to create suspicion in the minds of the public with regard to the administration of this road? In a word, the hon. gentleman is fearful that Sir Henry Thornton is going to make a better job of the management of our National Railways than did his predecessor. That is what is the matter with my right hon. friend.


An hon. MEMBER:: That is true.


William Richard Motherwell: Of couse it is true, [DOT]everybody knows it. I have been watching my right hon. friend's antics in respect to our National Railway system, his solicitous regard for its success; but every time there is any evidence of the system doing better than formerly, well, he is pretty nearly prepared to take some kind of a cat-fit over it. Oh, we know the game of politics, some of us. We do not pretend to be able to play the game very low-down; no, but we can see the kind of people who are playing it.
Let us have a word or two about the propriety of this transaction. We are discussing this expenditure, it is said, after it has been made. Does not that occur constantly in parliamentary practice? Is not every Governor General's warrant expended before it is discussed in this House? Certainly that is so. Unless we can give a certain latitude to the president of this railway system so as to put him on a parity with the president of any other railway system dealing with similar transactions, then we are not going to make a success of our national railways. The president must have some discretionary power or he will not be able to make the system go. If we are going to knock or pull down every day what our president does in the exercise of his discretion, how long are we going to keep a good man in this job? No competent man is going to remain there if he has not the right to use his discretion. The head of every great *organization is given a free hand. He must
{Mr. Meighen.]
be able to exercise his judgment and close out a transaction when it is to the interest of his organization to do so, and afterwards discuss it with his board of directors or his shareholders. In this case the people of Canada are the shareholders. It has not been shown that the accommodation was not required in Paris. The whole discussion has revolved around the question as to whether Sir Henry Thornton had a right to do this thing or not. Well, if he has no right to use his discretion, if he must wait for all the red tape to be cut before he can close out a pi oposition of this kind, then we are not going to make a success of our National Railways, because that principle will be earned all down the line and you will not be able to keep competent and resourceful men in the employ of the National Railway system. I know the technical argument is on the side of my hon. friend, but I take the ground that everybody exercising authority in any position, from Sir Henry Thornton down to the most humble employee, unless he has freedom of action at critical times is going to miss many an opportunity of serving the interests of his organization. This principle applies to government just exactly the same. The man who has to go through all the rigmarole of the red tape, without being allowed to exercise any initiative of his own, would not, it seems to me, be living up to the requirements of a young country like this, which desires, especially at critical times, quick action on the part of its servants.


Mr. SUTHERLAND:: Would the minister inform the House whether parliament was in session at the time this transaction was under consideration?


William Richard Motherwell: I am not discussing whether parliament was in session when the transaction was put through. The Minister of Railways is more familiar with these details than I am.


George Perry Graham: Parliament was in session.


William Richard Motherwell: After getting what we believe to be the best available man on this or any other continent for the management of our National Railway system, are we going to shackle him so that he cannot exercise any initiative, judgment or discretion in matters of this kind? If that is so, we may as well all throw up our hands, because you. cannot run our National Railways in competition with the other big railway system under such an administration.	.
Then the question naturally arises, How much latitude are you going to give the president of your railway system? You will have to depend on his judgment. Why did we

Supply-Railways-C.N.R.
search the four corners of the earth for Sir Henry Thornton if it was not that we could secure a man whose judgment, we could be confident, would be exercised in the best interests of our railway system in just such cases as the one under discussion. I am not entering into the merits or the demerits of this case, I do not know the situation in Paris, and I do not know the requirements of our railway in that respect. Therefore I cannot discuss the merits. I am discussing the wisdom and propriety of giving the head of our National Railway system discretionary power, and I say that unless you give him such power you might as well despair of trying to operate the system successfully.
I have had some experience in handling departments-in a small way, of course, compared with a matter of this kind; and I say that the man who cannot be given discretionary power and who cannot be relied upon as having good judgment should not be left on the job. It is a mighty small piece of business to take the technical attitude that my hon. friend takes, to advertise it all over the country, to try to destroy the confidence of the country in the National Railway system itself and in Sir Henry Thornton. And all this is done under the pretence that it is for the good of the National Railways! No, Mr. Chairman, the first thought of my hon. friend is to make political capital. . Perhaps the Minister of Railways is not without some fault in this matter because of the attitude of the Liberals on a former occasion toward the National Railways. You will remember. Mr. Chairman-you were in the House too -that in 1921 and prior to that, when the question of bringing down information not dissimilar to this was before the House, the Liberals were not sparing of the government of that day, headed by my right hon. friend, in regard to the failure to bring down certain information connected with the National Railways, and in their criticism of Mr. Hanna. But they had this justification, that was a railway board, that was a government, whose passing was long overdue. The Opposition of that day were justified in making the exposures they did in that connection, as subsequent events demonstrated. It is perfectly natural for my hon. friends opposite to retaliate now; I am not objecting to that. I was not here at the time, but I can understand the desire to take advantage of a technical situation like this. I do not ask for quarter on behalf of my colleague at all; let them go to it. But do not imagine that we do not understand the situation. We do understand it, and we will have to see to it that
the country understands it. Hon. gentlemen opposite are trying to square accounts, that is all. Now, we are all desirous of making a success of the Canadian National Railways, are we not? I think we are; I think my right hon. friend, when he forgets politics, if he ever does, is desirous that it should be a success. Why, he is at least the godfather of it himself, if nothing more. And I am sure that most of our Progressive friends are in principle desirous that the National Railways should succeed. Long before the national system was inaugurated they went on record as being friendly to and believing in national railways, and I take it for granted, without discussing it with them at all, that that is their present attitude. I have no doubt that they are ready to forgive much, to overlook much if necessary, in order to give the National Railways a fair trial. Are we not all committed to that idea of giving the system a fair trial? Now, here we have a stranger within our borders. It is true that in Great Britain the railways were operated as a national enterprise, but he has had long experience in connection with the private operation of railways. He has only recently got on the job here-last December-and naturally he will be desirous of using the same discretionary powers that he exercised in the administration of other lines. He recognizes that he has a big competitor; he has to measure up to a high standard, and it is the most natural thing in the world that he should endeavour to make good. All I can say is that if this discretionary power is not to be exercised we cannot keep in our employ the kind of men that we believe Sir Henry Thornton to be; they will not stay with us. As long as I am convinced that he is rightly using this discretionary power and that he is justified in what he does in that connection I am going to stand behind him. because I want to see the national system made the success that I believe it can be made. The development of the next ten years in Canada will be wrapped up with the progress of the Canadian National lines; are we going to jeopardize the success of that development over a matter of this kind? The transaction is not yet completed; it will be time enough to denounce the government or to 'denounce Sir Henry Thornton when we know how this thing ultimately turns out. We believe it will turn out exactly as the Minister of Railways has predicted. If it does, then what difference does it make whether the transaction is done this or that or the other way? The other day we were discussing some question that did not in-
Supply-Railways-C.N.R.

volve anything more serious than whether a member should come in at one door or at the other door; as long as he got in, what was the difference? Time will demonstrate whether or not the exercise of this discretionary power has been overdone; what position are we in to say whether or not it has now been exercised wrongly? If the attitude of the right horn, leader of the Opposition is to be adopted; if, as he says, the head of the railways should have no discretionary authority-all right; good-bye National Railways.


Mr. BOYS:: Nobody says it.


Arthur Meighen: Whatever may be said for the advocate that Sir Henry Thornton has on the legality of this transaction, the minister is certainly to be congratulated on the advocate that he has in parliament. The illuminating address of the Minister of Agriculture (Mr. Motherwell) had at least this merit: It was not so long as the last one; also it was equally pregnant. His argument is that unless we allow the manager of the National Railways to dig into the treasury without the knowledge of the government or the authority of parliament, you cannot get a manager worth while. I venture to suggest to the Prime Minister, if he is here, that he keep a close watch on the Minister of Agriculture; a minister who pronounces these sentiments and apparently believes them is a very dangerous man to have in charge of funds. There is a measure of discretion, of course, given to all the directors, but it is given in the law, not by ministers on the floor of the House. Apologies do not create an authority. The measure of discretion is fixed there, and it is a very wide discretion; it is a discretion against which we heard bitter complaints in this House two and three years ago. The manager of the National Railways has no more right to flout the law than a clerk in a bank or anybody else-or the Minister of Agriculture.


William Richard Motherwell: Where has he flouted the law?


Arthur Meighen: Where has he flouted the law? It is only about two minutes since the minister admitted it.


William Richard Motherwell: I did not admit anything of the kind.


Arthur Meighen: The discretion, let me impress on the minister, is fixed in the law, fixed so clearly that no one in the world could honestly evade it or transgress it. It is argued that a manager of a railroad, with a statute which compels him to get the authority of this government for capital investments, can nevertheless go four thousand miles to Paris and plant $2,000,000 of the money of the
fMr. Motherwell.]
people of this country-and that is an exercise of discretion! That is only a technical offence! Similarly, a customs officer who believed there should be a good building in his town for customs purposes would be quite right to take the money in his possession and go out and buy a building; he would only be technically wrong; whether or not he should be censured would depend on how the matter turned out later; and it would be quite proper and worthy of the commendation of the minister in the House provided only that the building had been bought in the name of somebody else. Such is the argument that the government has presented; I do not know how it could be plainer to hon. members. Now, it is the duty of the government to deal with the man who is guilty.


The CHAIRMAN (Mr. Marcil, Bonaven-ture):: Shall the item carry?


Some hon. MEMBERS:: Carried.


Sir HENRY DRAYTON:: It does seem
ridiculous to hear hon. gentlemen say "Carried." I want to say one word to the hon. Minister of Agriculture. If he thinks that by idle threats he is going to prevent proper and legitimate criticism of the board he is wrong. He is not, by what he says, nor is the Minister of Railways (Mr. Graham) by mysterious statements as to a hidden propaganda going to gag anybody over here. We have always taken the same positional ways. No party is more interested in getting a proper result in connection with the administration of these railways than we are. We believe that that success can only be got if we are able to hold in the management the confidence of parliament and of the people of this country, and we believe that the ordinary citizen of this country, and the ordinary member of parliament, does not like a law breaker. We believe that the ordinary man in the street believes that the sections of the acts of this parliament are not made to be played with or evaded even by the Minister of Agriculture or with his benediction. That is what we think; and we think that if there is one way of ruining this whole undertaking it is by irregularities and illegalities, it is by removing public moneys from the public treasury, it is by making investments which cannot for some time at least-and, I think, for a long time,-be revenue producing while at the same time we have our own people and our own lands without proper railroad facilities. I would have thought that the minister (Mr. Motherwell), if he were actuated by anything except his political bias, would have been just a little anxious for some branch lines that are required

Supply-Railways-C.N.R.
to-day in Saskatchewan and that could have been built with that $2,000,000. But apparently he is quite content that the moneys should be misappropriated and misapplied. The' hon. gentleman has already managed to make one split in his party. I admit he is an authority on the smoke screen. His devious actions in connection with the oleomargarine question, the substitution of bills and the like show what a past master he is. He managed to make a split in his party there, and he is going to make another one here in a minute or two. Why, he gets up, and against the law and against the statutes and against all principles of company administration, he takes a stand diametrically opposed to the stand taken by his colleague the Minister of Railways (Mr. Graham). He shakes his head. Did he or did he not commend this action of Sir Henry Thornton? He knows he did. And did not the Minister of Railways just a short few minutes ago apologize for it and suggest that he did not think this transaction or anything of this kind would ever be repeated? Why, the Minister of Railways knows it is all wrong. He has told Sir Henry Thornton that it cannot be done again. He has already dealt with it to the extent of telling Sir Henry Thornton that his action was wrong and that it cannot be repeated. But, of course, my hon. friend the Minister of Agriculture takes the opposite view,-it is quite all right that statutes can be broken; it is quite all right that current funds of the country can be switched. Well, I do not know. I hope that the cabinet split will not go any further and that my hon. friend the Minister of Railways will be able to get a little bit of reason across to my hon. friend the Minister of Agriculture after the House adjourns. I take it that the law is of consequence notwithstanding anything the Minister of Agriculture has said.
Now my hon. friend the Minister of Railways says there is no suggestion of dishonesty. How can we make any suggestion of dishonesty? Why ought we to make any suggestion of dishonesty? If we were actuated by the motives ascribed to us by the hon. Minister of Agriculture we would say the whole of this is a crooked deal, that is what we would do.


William Richard Motherwell: My hon. friend's leader said it was a scandal.


Henry Lumley Drayton: So it is a scandal to break the law. Is it not a scandal for people in high places to pay no regard to statutory obligations of this country? What does my hon. friend say to that?


William Richard Motherwell: I say my hon. friend' is making a scandal of it, that is all.


Henry Lumley Drayton: There is nothing that can be made out of this by anybody except what is in it now. But I say that if we were here for the purpose of injuring Sir Henry Thornton we would to-day be saying that there was dishonesty, but we are not. It is an easy thing to say there is dishonesty where you cannot get facts, where you cannot get explanations, where you cannot get figures except one blanket amount, and where you cannot get even the names of the people you are dealing with. The government invited all these charges. We are not making them. We want a success made of the system. We are not making these charges and I ask my friend the Minister of Railways in all seriousness why he would expect us to make a charge of dishonesty? Why did he say that we are not suggesting dishonesty?


George Perry Graham: The reason I did so-my hon. friend did not make the remark, but one hon. gentleman behind him shouted "Rake-off!"-which would mean dishonesty.


Henry Lumley Drayton: I did not hear it, I did not know anything about that. But I just want to point out this to my hon. friend, that if anyone is injured in connection with the whole of this matter-and I am going to assume the greatest amount of good faith on the part of Sir Henry Thornton until I am shown the contrary-if anybody is injured, if there are charges of rake-offs or that sort of thing made, if the people believe there are secret commissions, that there is something wrong behind all this, who is to blame? My hon. friend and nobody else. He will not give us the information. It well may be that in the absence of information some people will draw certain conclusions. I say, Mr. Chairman, we are unable to get anything that would lead us to any logical conclusion in this matter. We cannot find out, for example, if the syndicate goes through-and my hon. friend hopes it will- how much we are to pay in rent, how big will be the rent guarantee, for what term or anything else. When you do not know any of these things you cannot say one way or the other whether there is indeed a rake-off or not. But I want to point out to my hon. friend that if that impression goes abroad there is no one as much responsible for it as Sir Henry Thornton himself and the government for not giving us the facts.
My hon. friend the Minister of Railways said that other people were trying to get the
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property, people we would know about. Now I want to say at once that I do not know anything about anybody else wanting this property or anything about the property. I have not the faintest idea of anybody wanting to get it. I did not know that there was any wild rush at present for real estate in Paris. I did not know that values were advancing by leaps and bounds. I did not know of any wild rush or of any desire on the part of anybody to acquire this property, so, if my friend has any idea of that kind he has it; I have not. I do not suppose, though my hon. friend really knows very much about it. I do not suppose he knows how old the hotel is or whether it is a first-, second- or third-class place. I have been told that once upon a time it was a good place, forty years ago, but that now it is a third-rate place. I do not know anything about it, not in the slightest. I do not know of anyone who was trying to get possession of this property in opposition to and in competition with the Canadian National Railways.
Now, Mr. Chairman, we might just as well be frank about the whole thing. Just see where this matter now stands. We have now got the frank admission of the Minister of Railways-it was a reluctant admission, and it took a long time to get it-that the Canadian National Railways, as a matter of law, could not buy this property. They were not content to stand in a legal position, not content to take the chance of going to the minister-I do not know whether they thought that would be dangerous, that he would turn the proposition down absolutely-they were not content to take the chance of going to the Governor in Council, but devised a scheme whereby the law could be evaded. We have got that admitted. There is no question about it. The Minister of Railways frankly and properly admitted that the Canadian National Railways could not buy that property as a matter of law-there is the admission. And in order to get round the statute, in order to get round the legal position, the name of a clerk is used and the obligation of that clerk is taken. But the money is paid just the same. There is no difference in the real, essential elements of the transaction, not the slightest. The law is broken, public funds are applied in a way in which they cannot be legally applied. And the only man to justify the transaction is the Minister of Agriculture, and I do not think he will, long. My hon. friend who knows about the matter instead of justifying the transaction has reprobated it, and has told the president that this thing cannot happen again. Well, Mr. Chairman, I do not think the matter should rest 
here. The government now know that by a process of manipulation, which has been condemned by the responsible minister, two million dollars of the money of this country has been applied in an illegal investment. What do they propose to do- about it? Are they going to content themselves with just simply warning the president that the law of the country must be observed, or are they going to take steps to see that that money is recovered at the earliest possible date? Are they going to take steps to see that the property is unloaded and the money got back? What do they intend to do? Are they going to do what I have suggested? Or are they going to be parties to rendering it absolutely possible that the whole of this scheme shall be carried out to an easy fulfilment? Are they going to see that such leases are given and such covenants made that anybody will be very glad to take the property off their hands and accept those leases and covenants? They can get rid of the property easily enough if they are willing to pay enough rent, if they are willing to make heavy enough commitments. But what position is to be taken, and what guarantee will the government give that this thing shall not happen again? What is the policy of the government having regard to the rights of the board of directors to denude itself of money on one hand and of property on the other? I repeat, what is their policy? What are they going to do to see that in the future this sort of thing is made entirely impossible? What check will they enforce and what control are they going to take?


William Irvine: I want to take a very few minutes of the committee's time to enter what you might call a protest against the passing of this item, on two grounds. First, I do not believe that we have had sufficient assurance that the service which may be expected from this investment is commensurate with the investment itself; and second, I am quite convinced that there has been a serious irregularity in the purchase. I want to say, first of all, Mr. Chairman, that I do not entertain even the hint of a suspicion as regards the Minister of Railways. I am taking the precaution of saying this because of the outburst of the Minister of Agriculture who-in a long speech, as unconvincing as usual, may I say?-declared that those who are opposing this item are doing it for political reasons. The minister himself was the first, in my opinion, to introduce that phase into the discussion. He made a political attack in which, of course, I am not interested at all. I have no means of entering into the mind of the leader of the Opposition

Supply-R ailways-C .N.R.
(Mr. Meighen) so as to know what prompts him in making his protest, but I imagine if he had any idea to hinder the operations of the National Railways under the present government the best thing he could have done would have been to sit quiet and allow this thing to go unchallenged. Because, if such transactions are allowed as a general principle, I think the downfall of the National Railways is absolutely sure. So that I should say the leader of the Opposition was doing the very best service he could both to this administration and to the National Railways by pointing out the principle that has been violated in this particular regard.
Now, first I say that it has not been shown that sufficient service will be given for the investment made. Two million dollars is quite a lot of money to be invested in a hotel in Paris. It has been advanced by the Minister of Railways that the Canadian Pacific Railway Company have a head office there, and since that is the case he thinks it imperative that the Canadian National Railways should also have a head office in Paris.


George Perry Graham: My hon. friend asked the question. Did he expect me to say, "No," when I ought to say, "Yes?"


William Irvine: I certainly would not have expected anything of the kind.


George Perry Graham: I did not refer to the Canadian Pacific Company, it was my hon. friend who did so.


William Irvine: I am quite satisfied with my hon. friend's answer so far as that is concerned. I am trying to get at the justification for this investment and I asked the minister a question. In giving his answer-which is the only answer that has been given to that phase of the question-he stated that the reason for the purchase of this hotel, which is to be used partly as headquarters for the Canadian National Railways, is that the Canadian Pacific Railway Company have headquarters in Paris. But the Canadian Pacific Railway Company are in an entirely different position from the Canadian National Railways. They have steamship lines crossing all oceans, and therefore' it is necessary for that company to have such headquarters in Paris. Let me put the point this way. I cannot conceive of the Canadian Pacific Railway, as it is managed, getting headquarters in some capital in Europe on the same grounds that the Canadian National Railways are seeking to get headquarters in the capital of Continental Europe. I imagine the former company would require much more solid business reasons for purchasing headquarters at a cost of $2,000,000 than have been advanced by the minister in this instance. So I want to register my humble protest. I do not think the investment is a good one. My ideas of an investment, of course, are not worth very much, nevertheless I would expect the minister to give us some more substantial reasons than he has yet given, demonstrating that the investment is worth while from the point of view of service in connection with the Canadian National Railways.
The irregularity of the transaction has been very ably and convincingly set forth. While I am not a lawyer, yet I certainly was able to follow the reasoning, and I am able to say that it has not been answered, nor has any attempt been made to answer it. The best answer that was given, in my opinion, was presented by the Minister of Railways, when he said that the time element entered into it, that it was justified on that ground and that somebody might have "got wise" that the Canadian National was thinking of making this purchase and transfer, and that, therefore, it was necessary to do it speedily. Suppose we look at it from that point of view, I submit that it were better for the Canadian National to even miss what might be a good deal than to break a principle, the breaking of which might spoil it ultimately. It has not been shown that the enterprise itself is a good one. It has not been shown that the investment is sound, nor that the service would come to the national railways by this purchase. Therefore, with all these things in doubt, I think it were better that the legal principle involved should not have been violated. The right hon. leader of the Opposition has made a suggestion-at least I took it as a suggestion-that, since the hon. Minister of Railways has admitted so far that there was some slight error or irregularity, and has stated, that he does not think the like will ever occur again, the opinion of parliament on this matter should be conveyed quietly to Sir Henry. I think that is one suggestion of value.
I should like to ask if it is absolutely impossible for us to get away from this thing in any other way? Must it go on? Must this money be voted? Must the deal be made? Can it not be arrested? If it cannot, will the minister admit that a mistake has been made? There is an honour in admitting a mistake. I would rather vote $2,000,000 to the care of a minister who has the courage to admit that a mistake has been .made, and that he will safeguard the country against the possibility of a recurrence of the mistake, than simply to blindly vote the $2,000,000, without the assurance that this thing will
Sup-ply-Railways-C.N.R.

not recur. I suggest that the minister would frankly admit to us that this was a mistake, a violation of principle, with which he does not concur, and that, the deal having been made, we have to vote the money and it must be paid, but that he will guarantee that, in so far as he is concerned, it will never recur.


Mr. STEVENS:: My hon. friend the Minister of Agriculture (Mr. Motherwell) a moment ago mentioned the fact that we were sitting now in the same position as shareholders at an annual meeting, considering the action of its executive. I think it was rather a happy thought, and perhaps one of the most intelligent observations made by him during the course of his remarks. We are in the position of shareholders. I was quite at a loss as a matter of fact, to understand why, however, it was so wholly wrong for shareholders to even question the action of the executive, as my hon. friend upbraided my right hon. leader and others for doing.
In reply to what the minister said a few moments ago when he repeatedly cited the Canadian Pacific and other large corporations in defence of the action of Sir Henry Thornton, namely that the directorate and president have wide latitude in matters of this kind, I said last night, and I repeat now, that the Canadian Pacific shareholders, if they were called upon to put up an additional $73,000,000, and if there were no dividends at all being paid, would very carefully scrutinize an expenditure of $2,000,000 in France on the part of its executive, and I think *would condemn the executive very harshly for making such an expenditure without previously consulting with them. There is no parallel between a corporation operating in a successful manner and paying a dividend, and an institution that is calling upon its shareholders to supplement its losses with votes of new capital. That is on the question of principle or of practice, and altogether aside from the legality of the question. My hon. friend for Calgary East (Mr. Irvine), and other hon. members have asked, can we retire from this proposition? The minister told us the money has been paid and the property purchased, therefore there is no retiring from it. The only recourse we have, or hope to have in the future, is from this mythical syndicate in New York, or supposed to be in New York, whose personnel the minister does not know, unless he has learned it since last week-and I think he should have ascertained the personnel of this syndicate, whose financial standing he does not. know. That is the only possible hope we have. But then we are told

that there is another part of this whole matter that has not been discussed at all. This merely buys the old building which is an hotel. We are told that it is going to be transformed into an office establishment in the centre of Paris, and it is going to be rigged up with a picture theatre, or something of that character, for the purpose of showing views of Canadian life, which is perhaps all right. But that is going to cost the minister some money. I have heard-and again the minister will tell us nothing-that it is going to cost over $600,000, in addition to the $2,000,000, to equip the building. Who is ging to put up that money? Is the national railway going to do it? Is Sir Henry Thornton going to do it? Or is this government going to do it? Who is going to put up the additional sum of money? The worst feature of this whole business is this, that we enter into a discussion with this mythical syndicate as to a rental space in that building, and that our hands are absolutely tied, without any hope at all of having that syndicate complete its deal, unless we gave them a fixed rental for a long period of years-a rental that will ensure them absolutely a profitable return on their investment. The minister said last night that there were no documents and no definite agreement,-nothing in writing. He said that no discussion of the amount of rental had been entered into yet, and not even a verbal understanding. Yet $2,000,000 has been paid over and is in the hands of the purchasers of this property. It is paid out absolutely, and it is our money. Having done all that, we go to the alleged syndicate to fix a bargain for the rental we are to pay for, Heaven knows how long in the future. If I know New York financiers-that is the type that are able to finance-I rather imagine they will be sharp enough to say to this government or to Sir Henry Thornton, "You pay us a rental that will give us about 10 per cent for a great many years-20 years, say-before we will enter into this contract to return you the money." They have not got the money now. That is clear, because Sir Henry Thornton had to put it up. Sir Henry Thornton dipped into the treasury of the country illegally and put it up. Of that there is no question. I move an amendment, seconded by Mr. Boys, as follows:
That item 139 stand until the president of the National Railways submit to the House full information regarding the purchase of certain property in Paris:
(a)	The names and financial standing of alleged syndicate.
(b)	The rate of the rental to be paid.

Supply-Railways-C.N.R.
(c)	The commission, if any, and to whom paid.
(d)	The reasons why the property was bought indirectly and not directly by the railway company and without any written agreement of any kind whatsoever.
That is information, that, ordinary common sense demands, should be submitted to this committee before it grants $73,000,000 for the president of the National Railways to play with for the next year. What does this item say? Has the committee taken the trouble to note it particularly? This item is virtually granting a blank cheque for $73,000,000, subject to certain conditions. It outlines the manner in which the money is to be paid, and then on the second page this will be noted:
The amount herein authorized may be applied from time to time, in the discretion of the Governor in Council.
And I want the Minister of Agriculture (Mr. Motherwell) to listen to this. He said that this should be spent in the discretion of Sir Henry Thornton; that Sir Henry Thornton should have the discretion to spend this how he liked, and that he was to be brought to book only at some future date and only if he made a mess of the matter. But the law says and the appropriation says this year, as they said last year, that this money is granted, the Governor in Council saddled with the authority or the discretionary power of seeing that it is properly applied. In this case-and I would cite this to support my resolution-the Minister of Railways told us last night that Sir Henry Thornton did not report this transaction to him until after it was done. The Governor in Council had thus no opportunity to exercise discretionary power; the hands of the Governor in Council were tied. I will venture to say that if one could look into the mind of the Prime Minister (Mr. Mackenzie King) at this moment, one would see reflected there the rather heated discussions which occurred in the council chamber within the last few weeks when this transaction became known to the cabinet. Not one of them outside of the burlesque by the Minister of Agriculture, not even the Minister of Railways himself, has attempted to support this transaction this afternoon. The Minister of Railways told us last night that he would have done this in a different way. He told us to-day that he had to apologize to the committee for the transaction, and I do not blame him. I feel that if the minister would be perfectly frank with the committee, he would tell us that he was surprised and mortified when he learned in the first place that this transaction was made; that he had called Sir Henry Thornton into his office and severely reprimanded him for taking this course. I have no doubt that he did so. Why not publicly discipline this gentleman by frankly admitting this before parliament? That will probably do him a great deal of good. Let me put this to the government, and particularly to the Prime Minister. If this transaction had been allowed to pass without comment last night or through this parliament, I venture to say that next year Sir Henry Thornton would not have stopped at $2,000,000 in Paris. The one thing that will prevent this gentleman from repeating this practice is just what has gone on last night and to-day. If a private corporation were concerned, what would prevent him would be the criticism of the shareholders. I want to say to the Minister of Agriculture who lectured us here pretty severely, who charged us with trying to discredit the National Railways, that he cannot discredit the National Railways more effectively than by giving a free hand for transactions of this sort. I want to say to him further that he stands to-day before this country a minister of the Crown knowing this transaction, condoning the move and the steps taken by Sir Henry Thornton; he stands approving the paying over of $2,000,000 of the money of the Canadian people for a mythical and undisclosed syndicate. And he cannot escape that. He has approved it and condoned on the floor of this House. He has approved it and has condemned those who dare to question it. The Minister of Agriculture cannot get away with that sort of thing.- I know his colleagues at least feel and feel keenly-one has only to look at their faces-that this is a transaction that is not to the credit of any government. I have watched each minister yesterday evening and this afternoon, and not one of them is comfortable under this matter. It is to their credit that they are not comfortable. The one thing, however, that is not to their credit is the extent to which they condone this transaction.
An attempt was made yesterday by one of them, the Acting Minister of National Defence (Mr. Macdonald) to take responsibility and defend this action. To that extent I think he is culpable together with 5 p.m. the president of the National Railways. This is not a trivial matter; this is not a matter of a small purchase; this is a heavy investment. And we in Canada are striving under a load of debt. One of the difficulties we are faced with is the cost of transportation. What is the problem in the prairie provinces to-day? To get the products of the soil out to the seaboard. What is the chief part of that problem? The cost
Supply-Railways-C.N.R.

of moving that stuff. What makes the cost of moving goods to the seaboard? The cost of operating the railways. Here we have as an exhibition of what we are to hope for in the future in the way of economy in transportation, the president of the National Railways, lightly, flippantly and in a most frivolous manner, flinging $2,000,000 into the heart of Paris, as if that were nothing. What hope is there in this country for economy in operation with an extravagant person like that at the head of the National Railways? Just as soon as possible the president of the National Railways must be brought to understand that that form of extravagance will not be tolerated in this country.
I move this resolution for this purpose, that the members of this House, as shareholders of this great undertaking, mgy receive the information to which we are entitled. The minister has not even been entrusted with the names of the syndicate. Is that appalling fact clear to the House? Think of it! He said at the commencement of the argument last night-and it was an argument-that it was not in the interest of the National Railways to disclose the syndicate. Later on, in reply to a question by myself, he admitted that he did not know the syndicate, and that is the real reason why he cannot disclose it.


George Perry Graham: Not at all.


Henry Herbert Stevens: He certainly cannot disclose that which he does not himself know. Does the minister know the names of the members of this syndicate? Will the minister answer me that question before I proceed further?


George Perry Graham: My hon. friend is making an argument and giving a reason why I did not give the names. That is the thing to which I object.


Henry Herbert Stevens: Will my hon. friend be good enough to answer my question: Does he know the names of the syndicate?


George Perry Graham: I am not in the witness box. My hon. friend has taken the opportunity to ask me a question. I will answer it in my own way and not be dictated to at all.


Henry Herbert Stevens: I am not desirous of dictating.


George Perry Graham: I have the floor and I am trying to answer the question.


Henry Herbert Stevens: My hon. friend cannot accuse me of being discourteous to him.


George Perry Graham: I am not doing so. My hon. friend had better let me answer the question. He gave as a reason why I did not give him the names of the syndicate that I

did not know. It is true I do not know; but if I did know, I would be in the same position.
On the advice of the president of the board and with the concurrence, I think, of the solicitor, it is not in the interests of the Canadian National Railways that the details of this unfinished transaction should be made public at the present time.


Henry Herbert Stevens: Very good. Then we
have the minister coming before parliament advising that he, or the government, or the National Railways, has parted with $2,000,000 in the interests of a syndicate whose names not even the minister knows in confidence. This is an appalling situation.


George Perry Graham: It would be if it were
true.


Henry Herbert Stevens: My hon. friend told us
last night that he did not know the names of the syndicate, and he says he does not know them now. I say it is an appalling situation.


George Perry Graham: That is not what my
hon. friend said was an appalling situation.


Henry Herbert Stevens: I say that is an appalling situation.


George Perry Graham: That is his opinion.


Henry Herbert Stevens: Certainly, it is my opinion. The minister does not know the names of this syndicate, that, I think, is the most extraordinary feature about this whole transaction. And yet we are really asked to approve the turning over of $2,000,000 to undisclosed, unnamed and unknown Americans in New York. That is what it amounts to. That is the situation which we cannot excuse, it is a situation that the government cannot defend, and my resolution asks that the names of these gentlemen and their financial standing and ability to carry through this deal be disclosed to the House, so we may know something about who they are, the terms of the rental and the rates to be paid for the space, the lease for which will have to be signed before this House meets again probably tying us up for ten or twenty years, for certainly we ought to have a long-term lease on the main street of Paris-and furthermore, that the reasons why this property to the value of $2,000,000 was bought through an official of the railway company in Paris and not directly by the railway company itself, and why the title should be in the name of this official. This information and these reasons we are entitled to have and they should be given to the committee. My

Supply-R ailways-C .N.R.
resolution asks that the committee order that the item stand until this information is brought before us.


Charles Marcil: I am of opinion that this motion is out of order, for the reasons set forth in Beauchesne at paragraph 169:
A proposed resolution may be allowed to stand over *with general consent until another occasion, but if it has been regularly proposed from the Chair and discussed, no motion for its postponement is regular because there is no period to which it can be postponed.
There is a reference to Bourinot, page 426, which is a repetition of the words contained here, and also to May, page 479, which also stipulates to the same effect, namely:
No amendment can be moved which is not relevant to the grant under consideration, nor can a motion for postponing a proposed resolution be entertained.
Therefore I have to declare this motion to be out of order.


Arthur Meighen: Before you declare it out of order, Mr. Chairman, I shall have something to say about it. I have the greatest admiration for the Deputy Clerk and for his book, but if it says what the Chair states is the law I shall be surprised. The Chair has ruled that a motion to pass an estimate cannot be postponed. Why, such motions have been postponed dozens of times.


Charles Marcil: By consent.


Arthur Meighen: No, not by consent. You cannot enforce the closure, Rule 17B, without postponing the item under discussion at the time. Under this rule, in order that the closure may apply on the second day, on the first day there must be a motion in committee to postpone consideration of the item. We have moved it over and over again; if I remember rightly before there was any closure rule. The rule that there cannot be a postponement of an item under consideration of the committee is, I think, with all deference to the Chair, preposterous. Certainly there can be a postponement, and we can surely give reasons for the postponement in the body of the motion.	*


Charles Marcil: The rule I have cited applies only to Committee of Supply according to Bourinot.


Arthur Meighen: Bourinot was written before this rule 17B was passed.


Charles Marcil: There is another point, that the committee has'no authority to impose a condition upon the House.


Arthur Meighen: We are not imposing a condition upon the House, but upon the committee.


Charles Marcil: The words of the resolution are, "until the president of the National Railways submit to the House."


Arthur Meighen: That may be. That is not a condition imposed on the House, but a condition that must be fulfilled before this estimate is proceeded with. We cannot restrict the prerogative of parliament, everyone admits that, but to suggest that in Committee of Supply we cannot move postponement of an item does not admit of argument. Let me read section 17B:
Immediately before the Order of the Day for resuming an adjourned debate is called, or if the House be in Committee of the Whole, or of Supply, or of Ways and Means, any Minister of the Crown, who, standing in his place, shall have given notice at a previous sitting of his intention so to do, may move that the debate shall not be further adjourned, or that the further consideration of any resolution or resolutions, clause or clauses, section or sections, preamble or preambles, title or titles, shall be the first business of the committee, and shall not further be postponed; -


Mr. CANNON:: "Shall not be postponed."


Arthur Meighen: Certainly, but he has to give notice before. The procedure is this: In Committee of Supply a motion is made that the consideration of the items one by one be deferred, then at the close another motion is made after a day's notice that those deferred items be at the next sitting of the committee the first business 'and that their consideration be not any further postponed. I think I should know the rule pretty well.


Lucien Cannon: I understand my hon.
friend had something to do with the drafting of it,


Arthur Meighen: I did, I had everything to do with it, and I have never had reason to believe it was faulty. I notice that hon. gentlemen opposite who criticized it do not repeal it; they are careful to preserve it. I say that under the closure rule a motion to postpone must be made.


Charles Marcil: After notice.


Arthur Meighen: No, no.


Charles Marcil: Read the rule.


Arthur Meighen: The notice is in this form: A motion to postpone is made; there is nothing prior to that; but after that is done, then notice, is given, effective the next day,
Supply-Railways-C.N.R.

that these items, consideration of which has been postponed, be the first business of the *committee and be not further postponed. That is the notice. But the notice is given after. There is a preliminary motion to postpone consideration. There is no question about it at all, and I am sure if the Deputy Clerk has a moment to look it up he will immediately concur with me. The first thing done is a motion to postpone, subsequently there is a notice that at the next sitting of the committee there will be a motion made that all the postponed items be the first business of the committee and be not further postponed. Then, this notice being given, next day the motion accordingly is made that these items be not further postponed. Consequently a motion to postpone is in order. I think, as well, reasons can be given, but I do not speak so definitely on that point. I do not know why reasons should not be given, so long as those reasons are applicable only to the committee. But as to the first there is no doubt whatever.


Charles Marcil: Does the right hon. gentleman desire to appeal from the ruling?


Arthur Meighen: I do not wish to appeal. I ask that the Chair reconsider the decision, because there cannot be any question about it It is a very serious ruling.


Charles Marcil: I am occupying the Chair only temporarily, but Rule 169 is very plain to me. It says:
A proposed resolution may be allowed to stand over with general consent until another occasion, but if it has been regularly proposed from the Chair and discussed, no motion for its postponement is regular because there is no period to which it can be postponed.
That is based on Bourinot, and it has been the invariable procedure in Committee of Supply.


Arthur Meighen: That was long before Rule 17B was passed; consequently it must merge into 17B so far as it prevents a motion being postponed.


Charles Marcil: Closure cannot apply here, because no notice has been given.


Arthur Meighen: I am not asking that it apply. But after that rule is passed there must be eligibility for a motion to postpone. A ruling that it cannot be done means that 17B never can be applied again.


Lucien Cannon: The closure rule, 17B, is in the nature of an exception; it does not

do away with the general rules of the House as they stood before. Now, let us read 17B. It does not state that there must have been a previous motion to postpone; it simplj' says:
Immediately before the Order of 'the Day for resuming an adjourned debate is called, or if the House be in Committee of the Whole, or of Supply, or of Ways and Means, any minister of the Crown who, standing in his place, shall have given notice at a previous sitting of his intention so to do, may move that the debate shall not be further adjourned.
A minister of the Crown gives notice that at the next sitting he will move that a debate be not further adjourned, but there is no previous motion to postpone. The rule does not mention any such motion.


Arthur Meighen: In that case there must have been a previous motion to adjourn, because you could not move that it be not further adjourned unless it has been adjourned once. Similarly, when it is in committee there must have been a previous motion to postpone, otherwise you could not move that it be not further postponed.


Lucien Cannon: For instance, last night this item was discussed and then it was allowed to stand. But if it had not been allowed to stand, the committee would have reported progress; we would sit again to-day and the committee would make the same report. Closure would mean that on a subsequent day the minister would rise and say that when this item would be discussed there would be no further postponement. That is what closure means.


Arthur Meighen: Certainly, that is what closure means. Closure proceeds on the assumption that when a minister says "stand," that is a motion for postponement. When a minister brings in an item he is supposed to move a resolution for the passing of that item. He does not in so many words do so, but as a matter of fact in all application of the closure, in so many words he does so. The closure rule cannot be operated unless on the assumption that there has been a previous motion to postpone, whether in committee or in the House. I am sure the hon. member will come to that conclusion.


Lucien Cannon: Even assuming the right hon. gentleman is right, which I do not admit, I say again that 17B is in the nature of an exception. Secondly it is a rule which applies only in favour of a minister, and the hon. member for Vancouver Centre (Mr. Stevens') is not a minister. Therefore the old rule, the general rule of the House which has been quoted by the Chairman, should prevail.

Supply-Railways-C.N.R.


Arthur Meighen: It assumes that the motion in the closure case is made by a minister, <of course. But any motion that a minister can make, anyone can make. I have not lad time-


George Perry Graham: The rule does not say so.


Arthur Meighen: The rule does not touch the matter at all.


Lucien Cannon: The right hon. gentleman does not seriously contend that a private member could impose closure?


Arthur Meighen: No, I know that he could not. A private member could move postponement but he could not give notice afterwards that the postponed item be considered the next day, because the rule says that a minister only may do so. What I am trying to draw attention to is this: That rule 17B necessarily and inescapably implies that a motion to adjourn is in order-to adjourn consideration of anything. Why should it not be in order? What is wrong about a motion to adjourn consideration? I have not looked into what has Been referred to as rule 169, but whatever it may be it is undoubtedly modified by rule 17B, which came later. As a matter of fact, there :is no rule 169 of this House anyway. I certainly think it would not be applicable to prevent a motion to .postpone consideration of anything in committee.


Mr. MACDONALD (Pictou):: It is very
*clear that unless something to the contrary can be found in 17B, which is the rule relating to *closure, a motion to pos-tpone a resolution in Supply is not in order. The rule read by the Chairman of the committee and the references ~to Beauchesne and Bourinot clearly show that that principle should prevail. Now, is there anything in this rule about closure which could be accepted as changing or modifying that old-established principle? The rule provides that a minister of the Crown can give notice *of certain things, can move that the debate shall not be further adjourned or that the further consideration of any resolution or resolutions shall be the first business of the committee and shall not further be postponed. My right hon. friend does not say that he can find any rule that expressly reverses the old principle to which I have referred, but he suggests that the inference is that rule 17B does reverse it. I submit there is no such irresistible inference; if it had been intended to change the old rule, parliament would have said so. There is nothing to compel a minister of the Crown to give notice. The rule does not say that the consideration of the resolution shall be postponed; the motion is that it shall not
further be postponed. It is therefore not open to my right hon. friend to draw the inference that he suggests, and clearly the long-standing rule which is cited by all the recognized authorities is in line with the ruling of the Chairman of the committee.


Mr. GOOD:: I am not a lawyer, but it
seems to me that the rules ought to conform to common sense, and if it is irregular to move that an item stand until we get certain information, I think we are in a queer position. How do we know whether or not this item should pass? We want certain information. We may not be disposed to cut the item down or to refuse it; it may be simply a matter of waiting until we get certain information. It seems to me to be entirely in accord with common sense that this motion should be allowed; if the rules forbid it, then I think the rules ought to be changed.


Arthur Meighen: I simply call attention
to the fact that 169 mentioned here is not a rule; it is a quotation from Bourinot.


Charles Marcil: Yes.


Arthur Meighen: Very well. It is not the first time that errors have been found there. These boks are compiled mainly from British authorities and certainly would not prevail over our own specific rule, which admits that we may move to postpone. Let me read 169:
A proposed resolution may be allowed to stand over with general consent until another occasion,-
I ask that the committee remember that. -but if it has been regularly proposed from the Chair and discussed no motion for its postponement is regular because there is no period to which it can be postponed.
Well, if there is not, what happens when it is allowed to stand by general consent? The reason is just as applicable against the standing by general consent as standing on a motion. In a word it is absurd as applied to our practice. A motion that is postponed in committee can be taken up at any time. We do it repeatedly when it stands at the instance of the Chair, so there is no reason whatever against this motion.


Edward Mortimer Macdonald: My hon. friend overlooks the statement of May who
says:
,No amendment can be moved which is not relevant to the grant under consideration, nor can a motion for postponing a proposed resolution be entertained.
That is May, the authority on parliamentary procedure.


Arthur Meighen: That is not applicable here in the face of a definite rule.



Supply-R ailways-C .N.R.
definite rule. My right hon. friend says there is a definite rule, but there is not. He says that a rule has been made in regard to closure, which he drew up himself, which provides that a minister of the Crown by giving notice can stop debate and force a vote. But there is nothing in that rule which says that a motion can be postponed, and my right hon. friend knows that. He says there is an inference to be drawn, but you cannot override the well-settled parliamentary rule which every parliamentary authority including Bourinot and May has laid down, and which has been followed for ages, and by inference say that that shall be disregarded or overruled.


Lucien Cannon: I do not think the normal rules of parliament can be altered by a freak or exceptional rule. Rule 17B is an exception, as I said before, and the general rules must prevail. My right hon. friend says there is a rule of parliament in support of his contention. Where is it?


Arthur Meighen: Rule 17B.


Lucien Cannon: No. Rule 17B provides for closure. Where is the rule of parliament that gives a private member the right to postpone a resolution in committee of supply?


Arthur Meighen: It is the constant practice as well.


Lucien Cannon: Just the contrary.


Henry Herbert Stevens: Has your ruling been
given, Mr. Chairman?


Charles Marcil: Yes. I base myself on the invariable practice as found in Bourinot and May.


Henry Herbert Stevens: I have no intention of appealing against your ruling, Mr. Chairman, not that I wish to agree with it because I think it is perhaps not quite in accord with the rule. However I have a great regard for you, Sir, and I have no desire. to appeal against your ruling. I would ask the minister, in view of the ruling of the Chair, if he will accept the spirit of the resolution and let this item stand until the president of the railway has had the opportunity of furnishing him with the full information asked for in this resolution.


George Perry Graham: The object of this resolution may as well be understood. The object is to have parliament express a vote of want of confidence in Sir Henry Thornton. That is the object of it, no matter how it is brought in or how it is worked out, and the result can only be, if Sir Henry Thornton is

a red-blooded man as I believe him to be, injury which we cannot perhaps estimate to-day to the Canadian National system. I am not going to say that that is the object, because I have no right to say so. I am saying that that may be the result, and every man in this House who votes to haul Sir Henry Thornton, the head of the Canadian National Railways, before us to give certain information which through me he has said to this House will be detrimental to the Canadian National System, votes want of confidence in the head of that system. Sir Henry Thornton has made a success of the system up to date and is making a success of it to-day, and if everything hon. gentlemen said were true the members of this House must understand that they are taking the responsibility of leaving the Canadian National railway probably without a head in the midst of a busy traffic. What the object is I do not know, but the result may be that, and the men who pretend to be in favour of making a success of the national railways cannot well vote, even if what my hon. friend has said is true, want of confidence in a man who up to date is making a success of that great undertaking, which is the greatest experiment in government ownership and operation that we have had in the Dominion of Canada.
I knew something would come up to give an opportunity to divide this House. The Liberal party, even those who do not believe in public ownership, are obliged to give it a fair trial. Not that every one of us believes in it. I know many do not, but we are pledged to give it a fair trial. Hon. gentlemen over there are pledged to government ownership, and now we have a distinct cleavage between the men who are trying to destroy public ownership and the men who are in favour of it. My hon. friend can disguise it anyway he likes. I have given the opinion of Sir Henry Thornton as head of the railway, an opinion that will be shared by every business man, that an uncompleted transaction of a great corporation should not be divulged to the shareholders even though the shareholders be the Parliament of Canada. My hon. friend took the same ground in his term of office, that to divulge an uncompleted transaction might be detrimental to the transaction. He asks for the name of a syndicate in New York. To give that would be to give him half the information that Sir Henry Thornton thinks would be detrimental to the system. What would happen when the representative of this syndicate in New York landed in Paris later on to make ar-

Supply-R ailways-C .N.R.
rangements as to the rentals? The Old Country system of rentals is different from ours; they have leases that run for years and are very valuable, and whoever takes over this property has to take over these leases and make some settlement with the leaseholders. And we are asked to announce to every person in the world that we are taking over this property and let the leaseholders be prepared to make the biggest bargain they can possibly make. If it was a private concern such information would not be asked for. They would take the word of those responsible. Acting as the go-between between the government and the president of the Canadian National Railways I have been advised by Sir Henry Thornton that in the interests of the Canadian National system it would not be well, for obvious reasons, to give the particulars of this arrangement about to be completed. That being the case I want to warn hon. gentlemen about the specious argument of getting Sir Henry Thornton here. That argument, no matter how specious it is, if backed up could only have the result of injuring the system and making public ownership possibly a failure in the Dominion of Canada.


Henry Herbert Stevens: My hon. friend has made a very gallant effort to divert the attention of the committee and of the country from this transaction, which he does not attempt now to defend, to the great question of dividing the country and the House upon government ownership of the railways. He does not need to reach very far in any direction from where he is sitting to touch those who attack the government ownership of railways. As far as I am concerned, and I think I can speak for many others here, we are anxious to see this government ownership of railways succeed. But we are not prepared to give unrestrained liberty to any individual who apparently is inclined at least, if not to abuse that liberty, to treat it in a very trivial manner. My hon. friend asks what is going to happen if the name of this syndicate is disclosed. When they go to Paris it will be known that some syndicate representing the Canadian National Railways is going to do some business there. Why, Mr. Chairman, it was placed before this country in the press two weeks ago that Sir Henry Thornton had bought a hotel in the heart of Paris, and that he was going to transform the whole building into offices for the Canadian National Railways and to house the High Commissioner and other departments. All these details were disclosed two weeks ago, and
234 i
everybody in Paris that is interested, everybody in the world that is interested, knows all that the minister says this resolution of mine is going to disclose to the world. Such an argument is not worthy of the long parliamentary experience and intelligence of the minister.


George Perry Graham: My hon. friend will not fool anybody with that.


Henry Herbert Stevens: Possibly, but the minister will never fool anybody with the argument he made about interfering with the business of closing out certain leases.


Mr. McBRIDE:: Might I ask the hon. member a question? When he was trying to get a lease of Point Grey sand heads out at Vancouver, why did he not come out and tell the people who were behind the transaction and give the public the name of the company?


Henry Herbert Stevens: That is pretty nearly as good a herring drawn across the trail as the minister attempted to draw. Sand was being taken from what was alleged to be government property at the time, and the Public Works department at Ottawa imposed a restriction upon it. However, that has nothing to do with this matter.


Some hon. MEMBERS:: Oh, oh.


Henry Herbert Stevens: No it has not.


Edward Mortimer Macdonald: It is a good illustration.


Henry Herbert Stevens: Inasmuch as the committee seem to desire the facts I can give them and very quickly. The facts of the case are these: There are certain sand heads off what is known as Point Grey just at the mouth or entrance to Vancouver harbour. These sand heads were claimed by the Public Works department of Canada for the right of the Dominion, they were also claimed by the provincial authorities. Certain persons dealing in sand, lime and gravel were taking the sand off these sand heads. Other persons made application for what is known as a license or a lease, which is a common form. granted by the Public Works department to take sand from these banks. This application was entertained by the Public Works department and granted. The provincial authorities disputed it. The matter was carried to the Privy Council, and it was decided that the title to the property rested in the province, and the parties who got the license from the Dominion authorities were out of pocket whatever investment they had
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made. That is all there is to it. Now, Mr. Chairman, I do not wish to digress into matters of this kind.


An hon. MEMBER:: Another smoke screen.


Henry Herbert Stevens: Yes, another smoke screen. I want to say to the minister that the information we are asking for is reasonable information. It is not unreasonable, it is not information calculated to interfere with the National Railways. We are not asking that Sir Henry Thornton be brought to the bar of the House, or before any committee. We are simply asking, in view of the admitted ignorance of the minister of the facts, that this item should stand until these facts, which are facts I think the committee are entitled to, are disclosed.


Mr. FORKE:: I think a good many members in this House, more especially members in this quarter of the chamber, have listened to this long and protracted debate that lasted all yesterday afternoon and evening, and apparently it is going to last all this afternoon-


Henry Lumley Drayton: Only last night, not yesterday afternoon.


Robert Forke: Very well, it does not make
very much difference. I do not like to act in the role of a critic but really it surprises me to hear the nature of speech after speech made here. It is simply a case of member after member getting up and repeating what previous members have said. I have been really anxious for information in order to know just how to form an opinion on this matter, and I was quite prepared to listen, I think without prejudice, to either side in order to get at the foundation of this whole affair. At the very commencement it did strike me that it was rather a serious thing. We are very anxious for the success of the National Railways. I think, perhaps, all of us are, with probably a few exceptions. We have a man at the head of affairs and apparently accusations are being cast at him from the House here of having been injudicious, of having overstepped the bounds of prudence-in fact doing what was really illegal. The accusations may or may not be true. Perhaps I have not a legal mind, a judicial mind. I am not just prepared yet to express an opinion as to *exactly how far the president over-stepped what it was his right to do. Nevertheless, I cannot help but think, Mr. Chairman, that the desire to manufacture a certain amount of political ammunition is entering into this debate, and there has not been an earnest desire, perhaps, to give that information to the
j
House that it is in the power of some members to give. I have not a bit of hesitation in saying that I believe the right hon. the leader of the Opposition probably knows just as1 much about all these matters as do some hon. gentlemen on the front government benches. I may be wrong or I may be right but I have the suspicion that certain hon. members know a great deal more than they are telling, that they are not taking the House into their confidence, that they think they have got the government in a very embarrassing position, and they are going to make the very most of it from a political point of view. That is the inference I have drawn and I am drawing it without being influenced by any prejudice whatever.


An hon. MEMBER:: It is good drawing.


William Irvine: Yes, for you.


Robert Forke: I beg your pardon. If you
would keep in your own seat it would be better.


Mr. ARCHAMBAULT:: He is in a bad corner there.


Robert Forke: I cannot say that I am entirely satisfied. There is perhaps a little more mystery about the whole of the circumstances than I would like to see in this House.


Donald Sutherland: Why not try to
get at the bottom of it then?


Robert Forke: Excuse me. Perhaps you
will be able to enlighten us when you get up; we have not heard from you yet. I take this point of view-I may be right or I may be wrong-there is some mystery here that I would rather not see in connection with this matter. But the consequences are so great, the issues are so tremendous, in regard to the management of these railways, that I am willing to let the matter go at the present time. But if subsequently when information comes to this House it can be shown that the government has acted in any underhand or improper way, that the proper handling of the country's money has been prejudiced in any shape or form, then no man in this House will be more ready to condemn them than I am. But taking all the circumstances into consideration at the present time I do not believe it is in the public interest that this matter should be debated at any further length. I believe that incalculable harm has already been done by this debate...


Mr. GAUVREAU:: Purposely.


Robert Forke: 
Mr. MACKENZIE KING:: I think this
is, perhaps, an opportune moment to say a word as to the relations between the government and the Canadian National Railways, and particularly as to the relationship between Sir Henry Thornton, as the head of the railways, and myself in the position which I occupy at the moment. When the government asked Sir Henry Thornton to take control of the railroad we gave him- and I in the name of the government gave him-a distinct pledge that he would be entrusted with the management, that he would have a board of directors with whom he would be associated, and that the board and he as president would be given a free hand, and that there would be no interference on the part of the government with the action which they were taking. We told him, however, that we would hold him responsible for the manner in which he conducted the affairs of the system, but that while we held him responsible we would give him a free hand and would not interfere with him.
That was one possible attitude. The other attitude would have been that as a government we would wish to know everything that he was doing, and the responsibility then would be ours. Sir Henry Thornton in his first interview with me made it perfectly clear that unless he and the board of directors were to have a free hand in the management of that road he would not. for one minute consider accepting the position of president. From the moment Sir Henry Thornton took over the control of the railroads to this hour there has been no attempt on the part of the government, in any particular, to influence his judgment or his course of action in any matter. Whether there will be reason in the future to alter the attitude that we have assumed towards him and the board of directors will depend very largely upon how different transactions of the road turn out in the course of affairs.
So far as this particular transaction is concerned, the position, as I understand it, that Sir Henry Thornton takes, is that to-day there is known throughout Europe one great railway system in Canada, the Canadian Pacific Railway; that the people of Europe know nothing whatever about the Canadian National Railways; that if Canada is to get her share of business from Europe for her
system of railways she must be as much on the map in the heart of that continent as the Canadian Pacific Railway is and have as wide a connection not only with the railroads on this continent but with the railroads in Europe so as to get the benefit of any business in the way of traffic originating there. Sir Henry Thornton, in his judgment felt it desirable for the Canadian National Railways to obtain a site in the heart of Paris which would be conspicuous, and where the affairs of the railway might be so put before the European public that they would soon become conscious that there was a competitor to the other great transcontinental railway system in Canada, namely the Canadian National Railways.
Sir Henry Thornton, like every other railway president, in endeavouring to carry out a move of the kind, naturally surrounded his actions with a certain degree of secrecy. He took this action without any knowledge on the part of the government. Nothing was said to the government with respect to what he or the board of directors proposed to do. Why? Because we told him we expected him and not the government to manage the railway. Does the House wish us to change that policy? Does the House ask us to go to Sir Henry Thornton and say "From now on you shall not enter into any business transaction without placing it before the government and having us approve of it?" If that is the attitude hon. members want us to take, we shall have to change our whole policy with respect to giving a free hand to the Canadian National and giving the board of directors a chance to manage it as in their judgment they think best.
Sir Henry Thornton felt it necessary there should be a building in a conspicuous part of Paris which would be known as the Canadian National headquarters. I have no doubt that, in his endeavour to get the best building, he was anxious to make it in every way the centre or home of Canadian business, and possibly he has had in his mind the moving of our Canadian offices into that building, and perhaps getting other business interests in Canada to rent premises as well. It is a business matter. As a man of wide business experience, he probably knows what is best to do in a transaction of this kind. If Sir Henry has seen fit. to conduct that transaction as all business houses transact their business, with a certain amount of secrecy, I think we all owe it to him to wait and see how his experiment works out before we pronounce judgment upon it; and so far as
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the government is concerned I wish to say that we stand here prepared to support Sir Henry Thornton in the transaction which he has made and the step which he has taken. We will judge him as the head of the railway by the manner in which that particular transaction, as well as all other transactions while he is president of the road, turn out. But while he is president of the Canadian National, and we are representing the people of Canada in this House we propose to give Sir Henry Thornton in this and every other transaction precisely the same degree of latitude and freedom as the shareholders of the Canadian Pacific would give to Mr. Beatty.


Joseph Tweed Shaw: I shall not adopt the pose of sitting in judgment upon any individual or any part in this House. I listened with a great deal of care to the discussion last night, and I read the debate in this morning's Hansard, with a view of ascertaining the facts in connection with this particular matter. At the outset I may say that I yield to no man in the House in my desire to see the Canadian National Railway experiment prove a splendid success. I say further that I have every confidence in Sir Henry Thornton as an experienced railway man. While I know little about it, I am prepared to give him the heartiest possible support that it is possible for one in my humble position to give. I think the government, in assuming the attitude which was assumed towards Sir Henry, acted properly. They gave him a free hand to administer and manage that particular railway. I think it was desirable to do that, because, of course, it was a matter of tremendous moment to the country, a matter fraught with a great deal of significance to the people of Canada. But I suggest to the Prime Minister that the free hand was given to Sir Henry subject to the laws of this country. Even the Prime Minister of the country is not in a position to override the law. That is a matter for parliament.


William Lyon Mackenzie King: Where has the law been overridden?


Joseph Tweed Shaw: I think perhaps the fact that the Prime Minister was not in attendance in the House earlier, and did not hear the frank admission of the Minister of Railways, would justify him in asking the question.


William Richard Motherwell: The question I asked has not been answered.


Joseph Tweed Shaw: I will deal with the Minister of Agriculture in a moment.


Mr. MACLEAN (Halifax):: I should like to hear from the hon. member wherein the transaction was unlawful.


Joseph Tweed Shaw: Perhaps the hon. senior member for Halifax has not been in the House either. I am not going to say anything further except that I commend the Minister of Railways for coming before the House and saying that in his judgment it was improperly done.


George Perry Graham: I wish I had had a legal training. I could then express things much better than I do express them. Our legal friends, when they get up, kind of put you "in wrong" with their language and not your own. I distinctly said if I had been doing it that I would probably not have done it in the way it has been done. I also said that the solicitor for Sir Henry Thornton informed Sir Henry that the transaction was perfectly legal, and that I stood by his opinion rather than by the opinion of others.


Joseph Tweed Shaw: It is not my purpose in view of the discussion that has taken place to argue as to the legality or illegality of the transaction. Suffice it to say that I simply expressed my opinion, after a fairly close examination of the statutes in this regard, that the transaction so far as it has gone is illegal. I do not say it is improper. I impute no motive of impropriety to Sir Henry Thornton at all.


Lucien Cannon: Under what clause of the act does the hon. member undertake to say that the transaction is unlawful or illegal?


Joseph Tweed Shaw: If the hon. member will look at the Canadian National Railway Act, and refer to sections 11 and 23, he will find that the powers given to the officers, the president and the board of directors, are there enunciated. That is the limit of their power. I have sought in my own mind some justification for the expenditure in Paris, and so far as I can observe, about the only justification so far urged has been that apparently the Canadian Pacific Railway has a very ambitious office in that city. They, too, are on the front street of Paris. But I am not so sure that it should always be the ambition of the Canadian National Railways to live in the atmosphere of the Canadian Pacific Railway.


George Perry Graham: That is where they are today.


Joseph Tweed Shaw: Then I think it is unfortunate. If the minister suggests that the Canadian National is living in the atmosphere of the

Supply-Rail ways-C.N.R.
Canadian Pacific I am sure a lot of people will view that statement with a good deal of regret.


George Perry Graham: We are compelled to admit the fact, not in any theoretical sense that the Canadian Pacific is here. We are confronted with a healthy rivalry and we have to do the things a business firm would do, in order to get our share of the business, if we are going to make a success of the road.


Joseph Tweed Shaw: My suggestion was that, so far as I was able to observe, the substantial reason given was to put it in this sense, that the Canadian National must live in the atmosphere of the Canadian Pacific. In this particular transaction, it appears to me that the moneys belonging to the people of Canada, have been taken for the purpose of financing a New York syndicate, in order that they may subsequently at some time purchase this particular property. That I think is an undesirable thing for the Canadian National Railway board to do. I do not think it is a commendable thing that the money should be taken from the coffers of this country in the method indicated and used for the purpose of allowing a New York syndicate to subsequently acquire control of this particular property.
The Minister of Agriculture interrupted just a few moments ago and I want to compare his words in this matter with those of the Minister of Railways. The Minister of Railways says frankly that if he were carrying out this particular transaction, he would not carry it out in this particular manner at all. On the other hand, the Minister of Agriculture, in the light of that fact and with the knowledge imparted to him by the Minister of Railways, seeks to give this transaction his special benediction. I want to dissociate myself from the attitude assumed by the Minister of Agriculture. That I do not believe to be a commendable code of morals whatsoever, and all I can say is that he made a most illogical apology for an illegal act.
The question is: What can be done under the circumstances? The transaction may be and, perhaps, is perfectly legitimate, and I have little doubt that upon investigation, it wall be found that the transaction is in the best interest of this country and of the Canadian National Railways. Why is it not possible for us to get these facts? A few material facts are required, and it seems to me that we have a right to ask for the facts, in view of the expenditure, particularly outside of this country, of something over $2,000,000. I do
not see how anybody could be prejudiced, despite the statement of the Minister of Railways with regard to the leaseholders. The facts are already known; they have been within the knowledge of members for some time, and they must be within the knowledge of the leaseholders of that particular hotel building in Paris. Therefore, I would suggest that, perhaps, the minister would be willing to allow the matter to stand in order that he can get the facts that are required and place them before the House. I am sure neither he nor Sir Henry Thornton will ever regret having stated to the House all the facts.


George Perry Graham: The difficulty with that is that my hon. friend must not forget, as some hon. members seem to be trying to forget, that Sir Henry Thornton is the head of the Canadian National Railways, and responsible for its success to the people of Canada. He knows the situation, and he has told me that to divulge the details of this transaction at the present time would be detrimental to the interest of the Canadian National Railways. If I approached him again, he would tell me the same thing. Under those circumstances, if we have any faith in Sir Henry Thornton, we ought to do with him exactly what would be done by the shareholders with the head of any great company-accept his word and act accordingly.
Progress reported.
The House resumed.


Arthur Meighen: Will the minister obtain, before we meet at eight o'clock, information as to where the transaction is? How fat has it proceeded? Have we, or has the Canadian National Railways, any contractual relationship yet with this syndicate in New York? How far has the syndicate proceeded? When we know that, we shall know a little better just how to estimate the advice which Sir Henry Thornton gave.
While I am on my feet, I am going to enter a protest against the too oft repeated assumption of the leader of the Progressive party (Mr. Forke) that he is sitting in final arbitrament over the moral quality of all other people in this House; nor do I thank him for the suggestion that I have certain information of my own about this transaction which I am concealing from parliament. I should like to know his authority for this suggestion. I tell him I know nothing about this, not one word, not a tittle of information, that he does not know if he has sat through the discussion in this House. I ask h'm. before he attributes to me concealment of facts known to myself for partisan
Supply-Railways-C.N.R.

purposes, that he have some authority for his words. He goes on and he states with an air of sanctimonious complacency, that we of the opposition have no right to proceed with our criticism because we are seeking party advantage. I do not pretend not to be seeking party advantage provided that it is legitimate and right, and I do not expect the leader of the Progressive party to pretend to parliament not to be seeking party advantage provided it is legitimate and right. Am I to be deterred from criticism of a transaction which I believe to be wrong and which I believe I can demonstrate to be wrong, because if we succeed in bringing wrongdoing home to the government, it would be detrimental to an opposing party? Are we continually to be taunted, when we make criticism or censure that we are acting merely in a partisan spirit and not doing our duty as members of parliament? What does he conceive to be our duty?


Robert Forke: If my right hon. friend would ask only one question at a time, I would have some chance to remember it.


Arthur Meighen: I proceeded on the
assumption that the hon. member's mind can carry more than he thinks it can. I will put my questions one by one in future.


Mr. DEPUTY SPEAKER:: I would like to remind the right hon. gentleman that the Mace is on the Table. We are not in committee.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
Bill No. 107 (from the Senate), to incorporate Montreal Finance Trust (As Amended, and recommending that the title be changed to "An Act to incorporate Family Trust").- Mr. Papineau.
Bill No. 176 (from the Senate), respecting The Northern Trusts Company.-Mr. Hudson.
Bill No. 177 (from the Senate),.respecting The Subsidiary High Court of the Ancient Order of Foresters in the Dominion of Canada.-Mr. Euler.

[Stage Direction]
Bill No. 193 (from the Senate), for the relief of Lillian Beryl Brayman.-Mr. Ryck-man.

Bill No. 194 (from the Senate), for the' relief of Roland Bergeron.-Mr. Carruthers.
Bill No. 195 (from the Senate)., for the-relief of Florence Cohn.

Mr. Church.
Bill No. 196 (from the Senate), for the relief of Cecelia Maria Taylor.-Mr. Guthrie.
Bill No. 197 (from the Senate), for the-relief of William August Kruger.-Mr. Garland (Carleton).
Bill No. 198 (from the Senate), for the relief of Thomas Benjamin Brown.-Mr. Carruthers.
Bill No. 199 (from the Senate), for the relief of Elva Burnside.-Mr. McKay.
Bill No. 200 (from the Senate), for the relief of Alfred Thomas Candy.-Mr. Duff.
[Stage Direction]
The House again in Committee of Supplyr Mr. Gordon in the chair.
Railways and Canals-chargeable to income, $73,000.000.
Arthur Meighen: I had made some references to comments on the motives of members of this House in attacking the transaction in question. I want to refer for a moment to the appeal made by the Prime Minister (Mr. Mackenzie King). The Prime Minister seems to think that the question whether we know where we are at in connection with this deal or do not is really a question between political management of the Canadian National Railway and business management. Could a more preposterous suggestion be made? He says, "We told Sir Henry Thornton to go ahead and we would give him a free hand; we would not interfere with him at all." Sir Henry Thornton did as he was told; consequently it cannot be wrong. If the government told Sir Henry Thornton to go ahead beyond what Sir Henry Thornton and his board's powers were under the act, then the government is accountable to this House and should receive just what Sir Henry Thornton is receiving. Sir Henry Thornton is properly told to go ahead with the management and operation of the railway, and I would that the government were carrying out to the full the whole spirit and intent of the injunction they gave him so far as management and operation go. But the government has no right to tell Sir Henry Thornton to go ahead and invest moneys of this country in capital ventures unless parliament has previously voted the money to do it. The Minister of Railways definitely told us they did not tell him to go and do that; that they gave him no authority at all; that he never consulted them in any way. Consequently he is clearly subject to reprimand, and no one would be doing his duty in par-

Supply-R ail ways-C .N.R.
liament if be did not make that perfectly manifest.
Now, the question is this: Should we vote the $73,000,000 that is before us, which is the main railway vote to the National Railway board, until we know what position the country is in? I come in this connection to say a few words as to the minister's argument. The minister's argument is: Here is an attack on the railway; if we submit to this motion and do not pass this $73,000,000 item without the information demanded, it simply means that the opponents of the National Railway must definitely sever themselves from its supporters and the issue be joined throughout the country. I do not know what the minister means. Is the House not entitled to know where we are at with respect to two million dollars of our money that has gone from our possession? We do not know about it; the minister himself does not know, and all we ore asking is that he find out.
We may be in one of two or three positions. We may be the definite owners of the property, of course, in the name of the National Railways or rather of Aronovici. We may be the final owners of it, and so far as the legal position is concerned, my thought is that that is where we are. So far as I have been able to find from the minister, we have no undertaking of anybody to take it off our hands, we are tied there by the act of Sir Henry Thornton in defiance of the law of Canada. Well, if we are in that position the hour has struck now for a reprimand. We may be in another position: we may be in a position of temporary ownership, legal ownership, with the undertaking of others to take it off our hands at what we paid for it, subject to some understanding on our part that we will help them out by a leasehold interest. If we are in the latter position, which the minister intimates we are in, surely we are entitled to know the facts about it. Surely we are entitled to know the value of the covenant we have, if we have such a covenant, with this syndicate in New York, and if we vote this money, when are we going to know? When we vote this $73,000,000 we place it or authorize the minister to place it month by month where Sir Henry Thornton can do with it again just what he has done now. Should we do that till we know the real position we are in as to the first $2,000,000? Oh, the Prime Minister says, we ought to give him full authority to buy hotels in Paris or buy hotels in Hong Kong, and not only should he have the authority, but if he does it parliament should not know the facts about it.


William Lyon Mackenzie King: When did I
say that?


Arthur Meighen: This afternoon.


William Lyon Mackenzie King: I beg the hon. gentleman's pardon. I made no such statement.


Arthur Meighen: If parliament is entitled to know the facts, then let us have them. That is all we ask; that is all the motion asks. It is a fact that we have a covenant with a syndicate to take this off our hands or we have not.


William Lyon Mackenzie King: Please keep to the facts when you are speaking of facts.


Mr. MARTELL:: Hear, hear.


Arthur Meighen: That is precisely what
I am doing and I am getting, "hear, hear," from hon gentlemen opposite.


Lewis Herbert Martell: It was not intended for
you.


Arthur Meighen: As it comes from the
hon. member for Hants I am still more confirmed in my position.


Edward Mortimer Macdonald: You were
a little doubtful before.


Arthur Meighen: I am more confirmed.
The Prime Minister did not state to this House that this vote should go through before we know the f&cts as to the late transaction. His Minister of Railways has told us over and over again that we do not know the facts, that he does not know them himself. He does not know who the syndicate are whose credit we are asked to take for this $2,000,000 that has gone. Are those facts to be known or are they not? They are not known. We are told we are not to know them until the $73,000,000 is placed in the position where it may go in exactly the same direction and by the same plan. Now is it an unfair thing to ask of the minister that before he asks parliament to vote $73,000,000 more to be in a position to be used just as Sir Henry Thornton used this, he should be in a position to tell this House what really has happened to the last $2,000,000? He is not to-night.. The reason he gives I must say I do not appreciate. I do not^know what harm it is going to do that syndicate for this parliament and for the government to know who they are. The minister says there are tenants in that building and if they know who own it it wiil be hard, for those owners to make terms with the tenants. How can they make * terms with the tenants until the tenants do know who owns it? I do not see what difference it makes to the
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tenants whether it is owned by Aron-ovici in Paris or Moses-ovici in New York. What is the difference to them? If there is any reason for secrecy the minister has not suggested any circumstance that would justify his claim for secrecy, none at all. Certainly the tenants of the building know it has been sold. The minister has told the House that, he has volunteered it himself; it has been in the papers for two weeks. They know it has been sold and that arrangements have to be made, and how is it going to hurt the owner that the owner should be known? But even if it is going to, are not we entitled to know? Why should we vote money without knowing to whom the last money we voted has gone or at whose credit it rests at this hour? That is the position the Opposition takes. There are hon. members of this House who say it is all right-all right that $2,000,000 of the money of Canada, $2,000,000 added to the deficit of Canada on the National Railways should lie somewhere in Paris subject to redemption at the hands of men we do not know anything about, and whose names even the Minister of Railways has no knowledge of. Now if other hon. members are satisfied with that condition I am not, and I do not propose to take the responsibility of voting-further money until we do know. If the House wishes to do it, then my vote will be the measure of the responsibility I take.
The minister says:	Do not attack Sir
Henry Thornton. Look at the success he has made of the National Railways. Well, that question is not up for discussion now. But I venture to say to the minister that the National Railways were succeeding just as well when Sir Henry Thornton took charge as they are to-day, that they were succeeding just as well at the hands of the manager whom he and his government dethroned and cast out of office, certainly as well as they are to-day. I venture to say more, if you will search the whole history of Mr. Hanna's tenure of office you will find nothing to compare with a transaction like this. No, it was never even alleged that he went beyond the limits of his power, never alleged that he broke the confidence of the Commons of this coqntry or went beyond the limits fixed by statute as the limits within which he ought to restrain himself. No, no breach of confidence was ever even suggested of Mr. Hanna. But the question of Sir Henry Thornton as general manager is not the question before this House, and the minister cannot make it so. The question is this, whether in a case where admittedly money has been wrongfully taken from the treasury of the

Canadian National Railway we are not entitled to know just exactly the position that money is in before we vote more money into the same position. That is the only question before us.
The Prime Minister says the money has not illegally gone, and the Minister of Railways says it has not illegally gone. The Minister of Railways admitted that if they had bought the property in their own name it would have been illegal, that they had not the power to do so and we are supposed to be satisified because they went through the formality of putting it in the name of Mr. Aronoviei. The matter is not changed in the slightest by the property being in the name of Mr. Aronoviei. The essential facts are these, that plainly in defiance of the word of parliament and the statute of Canada, $2,000,000 has gone out of the treasury of the Canadian National Railway, and we are supposed to vote more money where it may be similarly dealt with without knowing the position the last $2,000,000 is in.


Robert Forke: Mr. Chairman, I might be
permitted to say a few words in reply to the lecture I received from the right hon. leader of the Opposition. Let me say at the outset that I have in no way freed the government from responsibility in this matter. I stated my opinions then. I also ventured to assert that probably the right hon. leader of the Opposition knew just about as much about this transaction as the government. At this statement he was very indignant, and that surprised me very much because I listened to speeches last night and this afternoon by members in that part of the House twitting the government with knowing nothing about this transaction, so I do not see why he should have been so indignant when I insinuated that he probably knew as much as they did. But I am quite *willing to take it back if I am wrong. I onljr made a guess.
The right hon. leader of the Opposition also told me that I had no right to lecture the members of this House. Well, I do not know that he has the keeping of all this House in his pocket. Is he the particular guardian of their rights and privileges? I can hardly see why he should take what I said to himself so very quickly if I was not hitting a sore spot. I have a great deal of respect for the right hon. gentleman, and I think he knows it. I respect his ability, his industry, and his many good qualities, but I want just to tell him right here and now that if he thinks that any special or peculiar sanctity surrounds the personality of the leader of the Opposition

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he is entirely mistaken. Now, I think, perhaps I have said enough; but I do not intend to be lectured by the leader of the Opposition, or any other member in this House, when I am occupying a position that I have a perfect right to occupy. I think, Mr. Chairman, you will all acknowledge that since my election to this House I have not indulged in any long speeches; I have never wasted the time of the House. Perhaps in that respect I have made a mistake and allowed opportunities to pass that I ought to have taken advantage of. However I am going io promise hon. members that from this time forward I am going to utilize my due share cf the time which is available for discussion.


Mr. GOULD:: I do not wish to keep the House very long, but I am more or less in sympathy with the sentiments that have been expressed concerning the 82,000,000 which is under discussion. It seems to me that the attitude of the government, or of the Minister of Railways, is that we should sign a blank cheque and allow moneys to be spent without asking for details. That is the only interpretation to be placed upon the attitude of the government or of the minister. As to the purpose for which this money is taken we have had no specific details. Am I not therefore justified in saying that we are practically asked to sign a blank cheque? We have a total contemplated expenditure under the vote before the committee of $73,000,000 which may be spent for this, that or the other purpose, and I think we would be establishing a wrong precedent if we voted this money without any question or without criticism. To my mind in this case there is justification for more or less criticism. In private life I could not for a moment think of taking such an attitude as is assumed here in respect of matters of business. I want to say that I have all respect for the Minister of Railways, and if he had been duly advised of all the details concerning this arrangement, or this understanding, and had come to the House and given his word of honour as a gentleman and as a bus'ness man that the arrangement was all right, and also had advised Sir Henry Thornton that such a method of doing business did not meet with his approval, I would be prepared to accept the hon. gentleman's word in that regard. But when no real information is supplied to the committee concerning the matter I am disposed to be more critical than I otherwise would be.
Now, I do not know whether the amendment proposed by the hon. member for Vancouver Centre (Mr. Stevens) has been disposed of or not but I wish to call the attention of the committee to this circumstance; that some few weeks ago when a very interesting debate took place here on the question of immigration we asked that the item be deferred. I do not think there was a formal resolution but it was asked that the appropriation be deferred and brought down in a more itemized form. That was done and the total was divided into, I think, at least sixteen different items. The request in question was very7 readily apceded to at that time and it seems to me that this demand of the hon. member (Mr. Stevens) is no departure from the principle then admitted. I think that by adopting such a precedent to-day we may reasonably infer that in other cases, let us say for example the Canada Colonization Company, if they are granted an appropriation next year, there will be a repetition of making expenditures in advance of parliamentary authority. That is a wrong precedent to establish, and we have a right to insist that such things should not continue.
The Minister of Agriculture claijned that the West is in favour of government ownership, and he pointed to the fact that that principle had been carried out in the matter of these railways. I think, however, that statement needs a little qualification. As the matter stands in the West we are in favour of the principle of government ownership, and I wish to remind the minister that we predicted fifteen years ago that government ownership would come. However, if the minister will cast his mind back and take the case of the Saskatchewan Co-operative Elevator Company he will realize that the sentiment of the people of the West runs more along the line of co-operation rather than government ownership. Yet we give our hearty support to the principle of government ownership, or more properly speaking public ownership, of railways. That condition has been forced upon us. I have no desire to harass the minds of hon. gentlemen opposite but I would remind them that some years ago we gave a blank cheque to a Liberal government with respect to the Grand Trunk Pacific, the construction of which line they said would not cost the country one cent. That is one reason why vre hesitate to grant any more blank cheques in the case of other arrangements or agreements. The country has not forgotten the experience of the past. Our past experience renders us very cautious in regard to agreements of this kind. Possibly this discussion will serve a very useful purpose if it teaches these men who talk of money in millions and wdio do not have to
36S0
Supply-Railways-C.N.R.

dig down into their pockets for money, the value of a dollar, and render them a little more cautious in the expenditure of the people's money. The people themselves are very much concerned about expenditures of this kind and this debate will have served a really good purpose if those who are responsible for this expenditure are induced to act with greater prudence and circumspection hereafter.


Mr. RYCKMAN:: *1 am opposed to this vote unless further information is given as to its necessity. The ground of my opposition is that with the information in my possession I think $2,000,000 is an excessive price to pay for this property, if it is the one indicated "in the public press. I saw the Hotel Scribe m 1911, I saw it again in September, 1921, and while I cannot for a moment set myself up as a valuer of property in Paris yet I feel that I can say, with all confidence, that $2,000,000 for that property is a price that has something behind it. It is not even on "the main street," and I appeal to the Minister of Marine and Fisheries and to the Minister of Finance, who were in Paris very recently, to confirm that statement. If you take 82,000,000 at 5 per cent that means $100,000, and no one can tell me that the American Express Company, which occupies a corner of the Rue de la Paix near the Place de l'Opera, pays 1,400,000 francs for its yearly tenancy of that building. It does seem to me that before a matter of this kind, coming up in the way in which it does', should be accepted by this House we ought to know that $2,000,000 is a fair price, or anything like a fair price, for the Hotel Scribe. The public prints also tell us that the de facto Minister of Agriculture, Mr. Duncan Marshall, was in Paris recently. I want to say, Mr. Chairman, and I know the responsibility I take in doing so, that I am perfectly satisfied that if any member of this parliament had gone to Paris to bargain for what was known as the Hotel Scribe-I do not know whether it is still occupied as the Hotel Scribe, but it was formerly known by that name-and had $2,000,000 in his pocket the property could have been bought for much less money. Therefore, Mr. Chairman, I think there ought to be some means of testing whether an excessive price, a price with a meaning behind it, has not been agreed to be paid for this property.


Milton Neil Campbell: Before this vote carries I would like to ask the minister if the government have in view any purpose in regard to the Transcontinental railway to Quebec. That road is practically out of commission at
fMr. Gould.]
the present time. I think that in 1919 there were no less than 7,000,000 ties put on it, ties that had not worn out but had rotted from lack of use. I presume that by this time they will have rotted also, and it seems to me that some use ought to be made of that section of the line. Recently a number of us from the west visited the city of Quebec and saw a shipment of cattle from western Canada loaded on board a steamship there. There are a great many advantages in shipping those cattle through the port of Quebec. They arrive there in very much better condition than they arrive at Montreal. The facilities for handling them at that port are so much more superior to the facilities at Montreal that the United Grain Growers, I understand, paid a vessel $600 to stop there. Hon. members can see the situation. The full freight from Montreal to Liverpool was charged, although the cattle were loaded at Quebec. The Grain Growers paid a bonus of $600 to the steamship company for taking these cattle on board at Quebec, and yet they figured that, in the saving of shrinkage and the saving of time, they were money ahead by bringing the cattle over the Transcontinental to the latter port. It appears to me that if a proper grain rate were put into, effect on the Transcontinental a great deal of the overflow, which at present goes down through the United States and which is used to create business for American ports, would go to Quebec.
It seems rather remarkable, and it is discriminatory in fact, that to-day the rates on grain from Port Arthur, or an equivalent point on the Transcontinental, say Armstrong, to Quebec, is just double the rate charged for handling grain for a similar distance in the West, and one might be almost pardoned for supposing that those in charge of the operations of the railway were discriminating against that port, in favour of either the American route or the lake route. I know that some hon. members in this House are of the opinion that under the prevailing grain rates in the West, the Crowsnest pass rates, the railways are losing money in handling our grain. If any hon. member will look over the statements of the Canadian Pacific Railway and the Canadian National Railway for the past few years, and compare them with the information given before the special rate committee last year by President Beatty and President Hanna, he will be quite convinced that grain was handled at a very large profit by the railways, even under the prevailing rates. If it can be handled at a profit on the prairies, there is no reason in the world

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why the Transcontinental cannot be used from Winnipeg east to take the overflow of grain.
I am not suggesting any discrimination against the port of Montreal, where they have the finest facilities probably of any port in the world, but with the amount of money the government has spent on the port at Quebec, with the excellent railway we have there-and the Transcontinental is a road which has been excellently built-and with the equipment they have, there is no reason in the world, to my mind, why a large part of the overflow grain cannot be carried by way of that port.
I think in all sections of the House there is a great deal of sympathy for the western farmer, particularly in the marketing of cattle. We have just recently secured an opening for our cattle in the British market, which means a great deal to us. It will mean all the difference between profit and loss in raising these cattle, if we can ship them from the port of Quebec. It is very, very important, but if we have to pay a bonus of $600 to a steamship company to stop there for every shipment, it is no use to us. It would amount to $1.25 a head if we had to pay that sum, and that much extra deducted from the small profit, or added to the loss, means a great deal to the western farmer. I think the government can do us a very great service in this matter by approaching the managing officials of the Canadian National Railways and trying to see if it is not possible to get the usual rate-I do not suggest any lower rate-prevailing on the prairies, for the transportation of grain from Winnipeg to the port of Quebec. If there is a sufficient amount of grain to be handled vessels can call at that port, and in this way we can get our cattle shipped without any extra bonus. In addition to the saving of the bonus there will be a saving in the freight paid on cattle from Montreal to Quebec, because in the shipment I mentioned they had to pay, in addition to the bonus, the,full freight from Montreal to Liverpool. I trust the government will try to do something in this connection.	,


Henry Herbert Stevens: I moved this afternoon that this item should stand, pending the presentation to the committee of certain information which many of us believe the committee has the right to demand. That motion was ruled out of order. I then appealed to the minister to allow the item to stand until he was in possession of this information and submitted it to the House. This he refused to do. The minister then endeavoured to divert the attention of the committee from the immediate subject under discussion, and to introduce the question of an attack on the Canadian National Railways as a whole. In order to avoid that, and to make it clear that we do not attack the Canadian National Railways as a whole, I purpose moving, seconded by Mr. Boys, in protest against the manner in which the minister has endeavoured to put this item through, that item 139 be reduced by the sum of $2,000,000. That is the only way in which we feel we can formally and properly bring our protest before the committee, inasmuch as the other motion which reflected our views more accurately was ruled out of order.


George Perry Graham: I wish to reply to my hon. friend from Mackenzie (Mr. Campbell). No man in this House is any more delighted to hear what he said about the port of Quebec than myself. The development of that port when I happened to be Minister of Railways before was a hobby of mine. It was a little mutilated by the successors of the then government, and the plan as outlined by the government of which I had the honour of being a member, headed by Sir Wilfrid Laurier, who represented Quebec, was changed, I think not for the benefit of the port of Quebec. But it has been .changed and certain advantages given to other railways that were not at all intended. However, the Transcontinental, I think I am safe in saying, is in good physical condition-at least I am so informed-and anything that can be done to increase the traffic over the Transcontinental to the port of Quebec will receive my hearty support. The fact that cattle can be landed there quickly by the Transcontinental and shipped has been proven, I think, very recently. As a matter of fact, I do not pose as a farmer.


Mr. BANCROFT:: The only man in the House that does not.


George Perry Graham: Now do not misunderstand me. Of course, I mean that everybody else does. Why not I?


Leland Payson Bancroft: I said that the minister was the only man in the House that did not pose as a farmer.


George Perry Graham: Then I will not say what I was going to say, but I think I am safe in saying that speed on the rails is a factor in the proper delivery of live stock, because the longer they are on the hoof in the car the greater their deterioration-I mean in regard to shrinkage in weight and so on. Anything I can do to improve conditions along that line I can assure my hon. friend I will be delighted to undertake, because I believe in the port of Quebec, and I believe in the
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Transcontinental as the line to reach that port. My hon. friend (Mr. Stevens) has moved that this vote be reduced by $2,000,000. I want to tell hon. gentlemen that they are not interfering with the $2,000,000 but that they are crippling the management of the Canadian National Railways to the extent of $2,000,000. Some of the things that they probably want to do, it will be impossible to do, but that is beside the question. The situation is just as it was before. I cannot say anything more than I have said. My right hon. friend would do exactly the same thing if he were in my place; he could not do anything else.


Arthur Meighen: I would do a great deal more.


George Perry Graham: Along the same line,
I think he would do a great deal less, because that is his history-give no information.


Mr. LAPOINTE:: Rule 17B.


George Perry Graham: I can go back two or
three years in Hansard, and that is the principle laid down by my right hon. friend.


Arthur Meighen: As regards day-to-day
operation, my hon. friend can read Hansard for five years back and he will find nothing different.


George Perry Graham: That would be a waste
of time.


Arthur Meighen: It would be if he were trying to find anything different.


George Perry Graham: I say that the principle
that would be adopted by any great company in regard to the president of it, the position that Sir Henry Thornton is in, and the principle my right hon. friend would have to take were he in my place, would be that this being an uncompleted transaction and the president and the solicitor assuring me that, in their belief, to give these details at the present moment until the transaction was completed, would be detrimental to the Canadian National Railways, no other stand is possible than to abide by that advice. Who is to give me advice in regard to the Canadian National? My right hon. friend? No. I would not think it was good. The man whom the country has engaged to run the Canadian National Railways? If his advice is not good legally, then he has an adviser in the person of Mr. Ruel, I think one of the best-I will leave it at that-railway lawyers, at least, and business lawyers in the Dominion of Canada. His advice is the same as that of Sir. Henry Thornton: Knowing the inside of the transaction, he considers that

it would be injurious to the Canadian National Railways if the details which are asked for were made public. They are not merely for this House; they are intended for publication the world over as they would be published, and the opinion of these gentlemen is that that would be injurious to the Canadian National Railways. These men have advised me so. If you were in my place, what would you do? The responsibility is on the man whom we have hired to accept the responsibility, and I am not going to allow it to be put on my shoulders. I am taking the advice of these gentlemen. To reduce the estimate by $2,000,000 will not affect the transaction in any degree; it will only reduce the amount of money we can expend on betterments, buying of stock or anything of that kind for the Canadian National system. We have discussed this matter thoroughly; the committee has expressed its views; there is no portion of this committee that has not had full opportunity to place its protest on record; but as a principle of business that will be followed by any company, I say that the details should not be given out at the present moment, and I say that on the advice of the president of the company and his solicitor.


Edmond Baird Ryckman: Did the minister, as head of the department of government purchasing this property, ask for a valuation of it?


George Perry Graham: I did not purchase the
property.


Edmond Baird Ryckman: The government advanced $2,000,000 in connection with or in relation to the purchase. That is broad enough. The security that the country has, if there be any failure to complete this transaction, is this property. We have heard that over and over again. Has the government had any valuation made of this property?


George Perry Graham: The government did not buy the property.


Edmond Baird Ryckman: I quite understand that.


George Perry Graham: The Canadian National Railway Company through their agent bought it-I should not say that.


Henry Lumley Drayton: It very nearly slipped out.


George Perry Graham: My hon. friend has said it so often; when you hear a story often you sometimes believe it. The Canadian National advanced the money for an agent to buy the property. Their judgment, the judgment of the president-and he has been in the pro-

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perty very recently and knows the location -although my hon. friend says it is not on the main street-is that there are so many main streets in Paris that one cannot select one. Without fear of successful contradiction, I say that it is possibly in the best situation in Paris. I must assume that the president of the Canadian National Railways before he advanced the money, knew what he was doing, and I intend to leave the responsibility on his shoulders.


Mr. HANSON:: Had the Canadian National Railways any independent appraisal of the property made?


George Perry Graham: I do not know.


Richard Burpee Hanson: Does the minister not think the committee ought to know that? With all his great qualifications, Sir Henry Thornton cannot possibly be a judge of values of real estate in Paris.


Henry Lumley Drayton: I am rising for the purpose of asking my hon. friend, as he refuses to give the other informa-
9	p.m. tion, whether there will be any possible objection to producing the opinion of the solicitor to which reference had been made more than once? If the Commons have any rights at all under this new government that in opposition prided itself so much in connection with the rights of parliament, surely we have a right to the production of the solicitor's opinion.


George Perry Graham: I think I have stated it several times, but I will do it again. Verbally, the solicitor assured me that this transaction was perfectly legal, because I asked him that question.


Arthur Meighen: Did the minister put it in this way to him, because I venture to say that if he did, he could not get an affirmative answer-that it was legal to do so without the authority of council and prior vote of parliament? I would be most interested if the minister could produce Mr. Ruel's opinion that it was. I venture to say now that he cannot.


George Perry Graham: I cannot produce it in writing because it was not produced to me in writing.


Arthur Meighen: He can put it in writing if that is his opinion.


George Perry Graham: Surely my right hon. friend will accept a statement made on my responsibility.


Arthur Meighen: Mr. Ruel did not understand what the minister said if he made any
such statement. There would be no difficulty for the minister to get the opinion if Mr. Ruel is of that view. I ask him to get it.


George Perry Graham: I have that opinion, not in writing; but my right hon. friend surely sees his peculiar position. He says that this was bought without an order in council.


Arthur Meighen: Without authority.


George Perry Graham: Put it in any way you like. but in the face of that, I assure the committee that Mr. Ruel, as legal adviser of the Canadian National Railways, assured me that this was perfectly legal.


Arthur Meighen: Let me put it in this way, if I canot get the minister to get the opinion: Does the minister think it ought to be legal-


Some hon. MEMBERS:: Oh, oh.


Arthur Meighen: Hon. gentlemen have a strange idea of a joke and just as strange an idea of the law. Does the minister think it ought to be legal that the management or the directorate of the Canadian National Railways should be allowed to buy a $2,000,000 property in Paris without the knowledge of the government and prior vote of parliament?


George Perry Graham: All I am saying is what it is, and I did not frame the law.


Arthur Meighen: I am asking the question: Does the minister think it ought to be?


George Perry Graham: My own view quite frankly would be that it would be better for such transactions as that to be made after consultation with the government, even to the extent of an order in council. I have no hesitation in saying that.


Arthur Meighen: If the minister thinks it should not be the law, supposing it is, is he prepared to bring down legislation to amend the present act so as to ensure that it does not remain the law?


George Perry Graham: I certainly will make inquiries as to the law; but my right hon. friend has so befuddled me during the last two days with insisting that 'the law has been broken, that this would require some consideration. If, however, I am advised by the Minister of Justice that it is legal for the board or the president or any of the officials to purchase property without the consent of the government, I would suggest that the act should be amended so that this would not be legal.


Arthur Meighen: I would like to see anything devised that is plainer than the present act.


Mr. BLACK (Yukon):: Mr. Chairman, the minister tells the committee that he does not
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36.84
know the facts of the case,, he does not know whether the Canadian National Railway has bought this property or has an option on it.


George Perry Graham: My hon. friend has not been here surely.


George Black: But he says he is advised by counsel for the railway that the transaction is perfectly legal. Therefore the railway counsel must have the information, and it would be quite simple for the minister to become seized of the facts. He could then make up his mind whether it is in the public interest to disclose the information to the committee.
The minister has just asked hon. members what they would do if in his position. For my part I would suggest to him that there is no crying necessity for the passing of this main item to-night. In the course of a few weeks undoubtedly the information asked for will be available, the transaction will have reached such a stage that it will be advisable to let the committee and the public have all the particulars. In the meantime there is lots of other business to engage our attention, and this item can stand until the minister and the government are in possession of all the facts, when they can decide whether or not it is in the public interest to disclose these facts to the committee before asking a blank cheque for $73,000,000. I think in view of the disastrous consequences which have resulted to this country in the past through the giving of blank cheques, to be filled out at the will of government officials and governments, that we would do well to hesitate in this instance. I do not think that that is an unreasonable answer to make to the minister's question. I would say, for the time being let the item stand. Such postponement will not cost the country a cent, and I submit it is the proper way in which to deal with a public transaction of this magnitude, for it will satisfy the public better, and undoubtedly it will satisfy the committee better if I am any judge of the feeling of hon. members to-night.


Lucien Cannon: If there is one man in this House, Mr. Chairman, who ought to know everything about the Canadian National Railway legislation it is the right hon. leader of the Opposition. He framed that law, he brought it before the House, and if I remember rightly he defended it.


Arthur Meighen: The National Railway Act?


Lucien Cannon: 



Of 1919.

[Stage Direction]

Arthur Meighen: No, the hon. gentleman's memory is rather wrong there. I did not introduce the bill, I did not frame it, and I had no particular connection with it except as a member of the government.


Lucien Cannon: If I remember correctly, the right hon. gentleman took part in the debate on the bill and defended it.


Arthur Meighen: I think so. I am proud
of that.


Lucien Cannon: Anyway, the right hon.
gentleman was a member of the government at that time, therefore he knew of the bill before it was introduced, and according to the rules of our constitution he was responsible for the legislation in common with his colleagues. The main argument put forward by the right hon. leader and his friends is that this is an illegal transaction. I have the act before me. I do not claim to be a great lawyer, but I should like the right hon. leader of the Opposition to point out once for all anything in this law upon which he can base his assertion that the transaction in question is illegal. I do not see anything in the law to warrant his statement. The hon. member for West York (Sir Henry Drayton) last night argued that the board of directors of the Canadian National Railways had exactly the same powers and privileges as the directorate of an ordinary company. Is there anything in the Railway Act which says that the board of directors of a railway company cannot purchase a property without being authorized beforehand by their shareholders? I do not think that any such provision is to be found there. I say, therefore, that according to the Canadian National Railway law, introduced by the friends of the right hon. leader of the Opposition, there is absolutely nothing to prevent the Canadian National Railway board from doing what it has done.
I do not wish to repeat the argument which I made yesterday, but I think it would be a good thing for the members of this committee to bear in mind that the government to-day is simply putting into application the law which was framed, the law which was defended and the law which was first put into force by my right hon. friend and his associates. Why should the opposition today come before this committee and denounce this transaction as scandalous, when it has been put through in accordance with the law passed by the government of which the right hon. gentleman was a shining member? A minute ago the leader of the Opposition was asking my hon. friend, the Minister

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*of Railways (Mr. Graham) to amend .the law. Why was the law framed as it stands to-day if it is so bad? Why did my right hon. friend give to Mr. Hanna and the former directors of the Canadian National Railway board the powers which are contained in the law of 1919, and seek to deny those powers to Sir Henry Thornton and his board of directors to-day?
I shall not go into the merits of this transaction, I do not claim that it is good or bad, but I say that the government cannot be held responsible for such a transaction, and I can only conclude that the opposition in the attitude it has taken is simply playing a political game. I am a politician myself, I do not claim to be a statesman, but when I play politics I play it openly and I say so. Why should our friends on the other side claim that they wish to save the country from a tremendous catastrophe when they are simply playing the ordinary game of politics?
I have in my hand, Mr. Chairman, the Journals of the House of Commons of 1921. On the 22nd of March, 1921, the Liberal opposition, of which I was a member, was desirous of securing certain information with respect to how the Canadian National railways were being run. We thought that parliament should be furnished with certain particulars and certain details as to the management. My right hon. friend was a minister at that time, and the hon. member for West York (Sir Henry Drayton) was also a minister. The hon. member for Vancouver Centre (Mr. Stevens) was a member of the House, as was the hon. member for Fort William (Mr. Manion). All these gentlemen whom we have heard since last night asking for information, asking for particulars, saying that this vote should not go through unless all the documents connected with the transaction were laid on the Table-what did all these gentlemen say when we asked for information? At that time Sir George Foster moved that we go into Committee of Supply, and the then leader of the Opposition, now Prime Minister, moved:
Subject to the reservation that in exceptional cases there may be documents of a confidential character which, in the public interest, may properly be withheld from publication, the House deolares that it is the undoubted right of parliament to demand and receive copies of all reports, accounts, correspondence and papers in relation to the management of every department of the public service including the affairs of the Canadian National Railways, whether operating directly under the control of the department, *or under corporate form.
We voted-


Edmond Baird Ryckman: Did you vote for that?


Lucien Cannon: Certainly I voted for it, and I have not since changed my opinion. My opinion is very simply stated: I say that this parliament should be given every information that is not of a confidential character or the disclosing of which would not be detrimental to the public interest. The stand I took then is the stand I take to-day, and that is what the resolution meant. We were simply asking that any information that was not confidential or the furnishing of which would not be detrimental to the public interest should be made available to parliament, and these gentlemen not only denied us the right to have information that was not of a confidential character, but said that we were entitled to no information whatsoever.


Arthur Meighen: Oh, no.


Lucien Cannon: The resolution is right here; my right hon. friend can read it. Now, Mr. Chairm^, to show how sincere these gentlemen are to-day in their attitude in this fight they are putting up, I would ask you to read the list of those who voted on the division which followed the presentation [DOT] of the resolution to which I have referred. Where was the right hon. leader of the Opposition on this question? Was he then, as he is to-day, in favour of information being given to representatives of the people? Where was the member for West York (Sir Henry Drayton)? Where was my eloquent friend from Vancouver Centre (Mr. Stevens) and my also eloquent friend from Fort William (Mr. Manion)? They were on the side of those who denied the representatives of the people the least information.
Now, if this is going to be a fight as a party question, let us fight it out. We are not afraid; this is not our first battle. But the right hon. leader of the Opposition reminds me of a god whose name I have forgotten but of whom I read in my Greek mythology. It was a god who used to eat his own children so as to preserve their father. Who, Mr. Chairman, is the father of this Canadian National system? The right hon. gentleman. In 1912 in this House, in the words of the then member for Calgary, he was the "gramaphone of Mackenzie and Mann;" he carried through the legislation which was afterwards denounced all over Canada. He is' the gentleman who, in the House of Commons, burdened the people of Canada with every debt, every obligation incurred by the Canadian Northern and by Mackenzie and Mann. Who is the man who forced on the people of Canada the Grand Trunk Pacific and the Grand Trunk system? The right hon. gentleman. Who brought these

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children into the world? He was their father; but to-day, in order to preserve himself politically, he wishes to swallow them. The Tory party is evidently playing the old game of leaning on the Canadian Pacific Railway so as to kill the Canadian National Railway and preserve its own existence. If the right hon. gentleman wishes to be in this House, having been the father of the Canadian National Railway, the representative of the Canadian Pacific Railway, it is his own business. But I do not think the people of Canada are ready to follow the right'hon. gentleman in his political game.
One last word: Not only did these gentlemen refuse us any information when they were in power-information of any nature,-but to-day they say a great principle is at stake, the principle whether public moneys are to be expended by the directorate of the Canadian National Railway without previous consultation with the government or with parliament. Well, if that principle is so sacred, i# it is of such importance, how is it that when these gentlemen were in power they expended $72,000,000 in building up a merchant marine without even calling for tenders? Was parliament consulted when the Hon. Mr. Ballantyne, then Minister of Marine, expended $72,000,000 to build up a merchant marine? We were told about it afterwards, when the ships had been built-and painted. Mr. Chairman, when this amendment is put to the vote I am confident that we shall have the support of every member who wishes to give the Canadian National Railway system a fair trial. We from Quebec are not very enthusiastic supporters of public ownership. This system has been imposed on us; we are willing to give it a fair trial, but the debate that has taken place here to-day is not of such a nature as to increase our confidence in public ownership. If public ownership is to be denounced by representatives of the western provinces, if it is to be denounced by its own fathers, pretty soon the people of the province of Quebec will firmly believe they were right in not being very enthusiastic about it.


Milton Neil Campbell: Will the hon. gentleman tell us who were the members from western Canada who attacked public ownership in the House?


Lucien Cannon: I understand that my hon. friend was in the House; he must have heard the speeches the same as I did.


Milton Neil Campbell: I heard some speeches,
but I heard no attack on public ownership from this section of the House.
fMr. Cannon.!


Lucien Cannon: Well, evidently my hon.
friend is more indulgent than I am in interpreting the speeches that he hears. I heard an hon. gentleman who represents the West saying that if the administration of our railways meant that considerable sums of money were to be spent the way this money had been spent the sooner we put a stop to the system the better. How can our railways be administered in a practical, businesslike way if the directorate is to come to parliament and ask the previous permission of parliament before they do anything? I heard with considerable astonishment my good friend from Vancouver Centre, who generally speaks in a very moderate way, suggest that we bring Sir Henry Thornton before this House to give him a spanking.
Mr, STEVENS: My hon. friend, whom I am delighted to have provoked into making this speech because we are always so glad to hear him, will permit me to say that I made no such statement. The Minister of Railways repeated some such statement as that as coming from me, and I immediately took occasion to correct him.


Lucien Cannon: I think my hon. friend in a flight of oratory suggested that Sir Henry Thornton be severely castigated.


Henry Herbert Stevens: No, but I am inclined to agree with my hon. friend on that point.


Lucien Cannon: Can you picture, Mr. Chairman, the supposed advocates of public ownership proposing on the one hand that not a cent be expended before the previous approval of parliament has been obtained, and then on the other hand suggesting that the chairman be brought here whenever we want him to receive a castigation? As far as I am concerned I have never been a very strong advocate of public ownership. In my province we are not very enthusiastic over it. But if the system is to be subjected by parliament to the very severe restrictions suggested today I do not think it will last very long.
In summing up, I say that if we are to have public ownership we cannot have it in any other way than we have it now. If we want to revert to private ownership, and we can devise a way of going back to private ownership, it is for parliament to decide. This debate is a debate which has been brought on by my hon. friends simply for the purpose of making some political headway. I do not blame them. The political horizon is rather cloudy for my hon. friends. I saw that the right hon. gentleman who leads the opposition piously undertook last night a pilgrim-

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age to Montreal. Was it yesterday in the city of Montreal that he received his inspiration for to-day's conduct in parliament? I do not know, but really if the Canadian National Railways, the children of my right hon. friend, are to be forsaken by their father and left on the hands of us miserable Liberals who can only be considered hs stepfathers, then unless the Progressives step in pretty soon they may be orphans. "


Arthur Meighen: My hon. friend from Dorchester is a very interesting political libertine. He can stray from the facts with the most delightful abandon and always, notwithstanding the utter destitution of truth, say something interesting. One hon. member dared to contradict him when he asserted that public ownership had been attacked by hon. members from the West. Well, there was utterly no basis in fact, of course, for the assertion of the hon. member for Dorchester, and there was just as little for every single sentence he uttered from beginning to end. When the House possesses an oratorical ornament who can refer to me as the father of the Grand Trunk Pacific and still keep his face in utter and demure sobriety we ought really to rejoice in the possession.


Lucien Cannon: I think my right hon. friend is following my example and diverging from the truth.


Arthur Meighen: Now that I have the admission of the hon. member for Dorchester as to his own conduct, I come to mine. He described me as the parent of the Grand Trunk Pacific, of the Canadian Northern, of the Grand Trunk itself, and it seems to me I have some other progeny in the railway line the name of which for the moment I cannot recall-the Transcontinental, I presume. Has the hon. member so soon forgotten his great leader as to ascribe to me the exceeding honour of being the parent of these political ventures in the early part of this century?


Lucien Cannon: I never said that. I said that Sir Wilfrid Laurier created these railways and that they were perverted by my right hon. friend.


Arthur Meighen: They were perverted into their present position from the position of bankruptcy into which they had drifted. It is true he was the creator. It is true that my hon. friend and those around him were those who fastened those liabilities on this country. They signed the credit of the country to the whole ghastly responsibility. When we came into power the notes fell due.
235J
That is quite correct. But this is quite apart from tlie subject. No one could draw us so far apart save the hon. member for Dorchester with his romantic and picturesque eloquence.
Coming to the question of liability the hon. member says, and wisely he predicated it upon the modest assumption that he was Dot a good lawyer, unless you could show him something in the act that denies Sir Henry Thornton the right to buy a hotel in Paris, he had it, and he ought to exercise it. Everyone knows, lawyers and near-lawyers, that Sir Henry Thornton and his board have the authority given them by the National Railway Act and not one whit more by any act on earth, and unless they are given authority to make capital expenditure without the consent of the Governor in Council in that act, they have not the authority. But is argument necessary? Section 23 sets down clearly that for capital investment or for construction they must have the previous authority of the Governor in Council, and the Governor in Council cannot appropriate a dollar without the previous vote of this House. No argument is necessary. The . government has admitted the position. Why is the hon. member for Dorchester coming along to argue that the Minister of Railways is wrong? The Minister of Railways is perfectly right. They have no authority to make capital investment, but by some contrivance they fancy they have got around it. They put $2,000,000 into the Bank of Toronto. The Bank of Toronto does not take up the exact bills that are put there but sends $2,000,000 of its own to Paris and it is handed to Aronovici who buys the hotel. The Bank of Toronto takes the undertaking of the National Railways, backed by the security of a $2,000,000 deposit, that it will get this money back. This is the device adopted. I must congratulate the Bank of Toronto on the sufficiency of the security. They have the government's cash and they have the pledge of the National Railway Board. Legality I There never was anything more flagrant, more brazenly opposed to the whole act than to buy property in another land, four thousand miles away, out of the money of the people of Canada. This is exactly what is done, this is exactly what the hon, member defends.


Lucien Cannon: Is my right hon. friend basing himself on clause 23?


Arthur Meighen: Clause 23? I am basing myself on the fact that in the whole of the act there is no parliamentary authority to make capital investments without the authority of the Governor in Council.
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Lucien Cannon: There is absolutely no mention of that in clause 23.


Arthur Meighen: What is " property " but this hotel in Paris? Let us read the section.


Lucien Cannon: You are talking of capital investment.


Arthur Meighen: Buying property is capital investment. The Acting Minister of National Defence made a remark. Does he tell us that the National Railway board has the power to make capital investments without the authority of the Governor in Council?


Edward Mortimer Macdonald: I will tell my right hon. friend when he gets through. I will say this, however. He knows very well he is making an argument which he cannot substantiate as to section 23.


Arthur Meighen: I do not rely wholly on clause 23. I said I did not.


Edward Mortimer Macdonald: Oh, yes.


Arthur Meighen: No, I told the hon. member that unless there was specific power given . to the board to make a capital investment they have not got it.


Edward Mortimer Macdonald: You said it was all in section 23.


Arthur Meighen: I did not say it was all in 23. As to that I put myself in the judgment of the House. I never found an interruption of the Acting Minister of National Defence to be well based yet, in fact the more prolific his interruptions the more hopeless his case.


Edward Mortimer Macdonald: Do not get mad about it.


Arthur Meighen: Unless there is power given within the four comers of the act to make a capital investment it cannot be made. I venture to say there is no honourable member of this House who for a moment believes that the National Railway board has power to make capital investments without the authority of parliament. That being so what are we to think of the repeated statements of . the Minister of Railways, the head of the department?


Edward Mortimer Macdonald: Is there any other section upon which my right hon. friend relies?


Arthur Meighen: The hon. member (Mr. Macdonald) may perhaps think he is deceiving somebody by his smile, but he does not deceive even himself. He knows as well as I know-


Edward Mortimer Macdonald: You are shifting ground every moment.


Arthur Meighen: I am not shifting my ground. I am in the judgment of the House if I have not said from the beginning that unless there is authority given in the act to the board there is no authority.


Edward Mortimer Macdonald: You cannot put your finge* on it.


Arthur Meighen: I know I cannot. That is what I am complaining of, it is not there. How can I put my finger on the authority when it is not there.


Edward Mortimer Macdonald: I thought my right hon. friend said it was in section 23.


Arthur Meighen: No, I told the hon. member it was not there nor anywhere else. Clause 23 is a prohibition, that is all.


Ernest Lapointe: We have enough of that now.


Arthur Meighen: Who is the latest joker and what is his joke? Someone says we have enough prohibiton now. Well, that may be a fact. Sometimes I think we need more.


Ernest Lapointe: Hear, hear.


Arthur Meighen: Now what does clause 23 say?
With the approval of the Governor in Council and upon any location sanctioned by the Minister of Railways and Canals the company may from time to time construct and operate railway lines-
Railway lines that they can construct-
'-branches and extensions, or railway facilities or properties of any description in respect to the construction whereof respectively, parliament may hereafter authorize the necessary expenditure, or the guarantee of an issue of the company's securities. A copy of any plan or profile made in respect of any completed railway shall be desposited with the Board of Railway Commissioners of Canada.
Where is the authority there to make a capital investment without the sanction of the Governor in Council? But why waste time arguing this? Hon. members only want to waste time arguing it to. keep , the attention of parliament off the actual transaction. If there was authority to do it why did they take this circuitous way to get it done? Why did the Minister of Railways tell us they could not take it in the name of the company? The matter is abundantly plain.
Now, I want to come to the resolution referred to by the hon. member for Dorchester. There was a resolution moved that, subject to the reservation of information that might be confidential, all the affairs of the National Railways should be made known at once to the people's representatives in par-

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liament. I opposed it, and rightly opposed it, and I would oppose it now. Hon. members opposite, I suppose, had they been in office then might have supported it and then when the time came when information was wanted they would do as they are doing now, tell us it is "confidential". I did not want to support the resolution and then merely play with it afterwards. Information is not "confidential" merely because a government or a board do not want to disclose it. Information, for example, touching the price paid for coal in one mine and the price being paid at a similar time in another, or information connected with a dismissal of an employee-that kind of information is not confidential and yet it should not be made a subject of discussion in parliament while these operation transactions are occurring. That #kind of information, being a matter of the operation of the road day by day, should not be a subject for discussion in parliament. Consequently I was perfectly right to give a negative to that resolution. I thought it was better to do so frankly than to let the resolution pass and then at another time when anything came up to say that the information was "confidential." Such course would be unworthy of parliament. But here are hori. members who supported that resolution coming to this House to-day, not in respect of a matter of operation at all but in respect of a matter of .capital investment and in respect of a matter where the money is gone, irrevocably gone, withholding the facts. Is the case not wholly different? Yes, obviously different, and no one knows this more clearly than the hon. member for Dorchester, yet he cannot even turn his own mind from the right and direct line of thinking, judging by the specious reasoning he sought to advance. I opposed the passage of a resolution such as he quoted and in opposing it I would be entirely consistent with the stand I have taken to-day.


Edward Mortimer Macdonald: I must say
that I have heard my right hon. friend on many occasions speaking in the positive way in which he always addresses the House and making assertions with that bold manner which he always summons to his aid no matter whether the subject may be a serious one or comparatively unimportant. But we have heard it explicitly declared, respecting this act in connection with the Canadian National Railways that expenditures such as were proposed by Sir Henry Thornton to be made in Paris could not be made, because of their character without the direct sanction of the government. My hon. friend from Dorchester very properly said to-night to my right hon. friend that he could not find any such declaration within the four comers of that statute. The right hon. gentleman then proceeded to declare that that declaration was made and was to be found in section 23 of the act. When I ventured to interrupt my right hon. friend and to state that that declaration could not be found in section 23 of the act, he intimated that my interruptions were of no value whatever. Then I asked him if there were any other sections in which he could find legal justification for this position that he and his desk mates have been taking for the last two days, and then he admitted it was not in the act at all. And when he declared that it was not in the act at all. It is not in the act. My right hon. friend cannot find within the four corners of this act any statement, or any provision in the statute, which made it obligatory upon Sir Henry Thornton, as the president of this railway, to come to the governor in council for absolute authority before he proceeded to negotiate for the purchase of this property in Paris. So that we have that much in the way of clearing the air of all this mist, innuendo and suspicion which is being engendered by hon. members on the other side of the House for the last two days. What next? We had repeated demands that my hon. friend the Minister of Railways would explain clearly to the committee the attitude of the government in reference to the management of the Canadian National; but we have committed the task to Sir Henry Thornton, we are holding him responsible for the results and we are not interfering with him in regard to the plans he may make or the ideas he may conceive, in order that the end and aim of the Canadian people as a whole might be attained in regard to the successful operation of the railway.
My hon. friend does not think to-day as he thought a few years ago. There is nothing that my hon. friend resents so much as a charge of inconsistency and yet upon this very question, when we come to consider the point as to what information the Minister of Railways should give this House and the country with reference to the operation of the .Canadian National by Sir Henry Thornton, we find that my hon. friend laid down two years ago a totally different doctrine from that which he lays down to-day and I will prove that statement. My right hon. friend speaking on a motion proposed at that time by my right hon. leader went on to speak as to the nature of the information that
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the public ought to have with reference to the operation of the railway system, and first he spoke of the Canadian Pacific Railway, and as to how much information the public should have as to the movements of their directors, the movements of their president, and their method of dealing with the operation of the road.


Arthur Meighen: Operation.


Edward Mortimer Macdonald: And other things. He said:
The Canadian Pacific Railway Company would refuse to any man or to any parliament the disclosure of business that is its own; it knows that it cannot conduct the administration of that great enterprise and at the same time disclose to everybody just what it is doing from time to time.


Arthur Meighen: Hear, hear.


Edward Mortimer Macdonald: The right
hon. member said further:
Not that what it is doing is wrong, but every business enterprise knows that it is impossible successfully to conduct a business, impossible to get the advantages which every business must get if it is to succeed, if everybody doing business with that enterprise and the public generally is to know all its moves on all parts of the chess board from morning till night and from day to day.


Arthur Meighen: Hear, hear.


Edward Mortimer Macdonald: It is very clear. Does my hon. friend agree with that to-day?


Arthur Meighen: Certainly, precisely.


Edward Mortimer Macdonald: My hon.
friend went further. He was speaking of the Canadian Pacific at that time, and proceeded to lay down the doctrine as to what should happen in connection with the Canadian National Railway, and as to that he was very clear. He said:
I think it will be obvious that if the Canadian National directorate are to be compelled to answer to resolutions which by the dozen may be put upon the order paper of this House every day, calling for copies of correspondence, for the disclosure of every fact and of every deed connected with the operation of the road-


Arthur Meighen: Hear, hear.


Edward Mortimer Macdonald: Do not "hear, hear" till we get through. Then the hon. member will find-that it was not merely the operation. He continues:
-they will be put under a disability that their great competitor is not under at all. Should we do that they might well say: you shackle us in the management of the road; you refuse to give us that latitude and freedom of management that every successful business must have; you therefore will have to take the responsibility of failure-we do not. That would be the position they would 'logically assume. I venture to say that no board of dr fetors, no president and

general manager who would be big enough for the tremendous task of operating that system to-day would undertake to assume such responsibility under conditions that would be brought about were this amendment adopted.


Arthur Meighen: Hear, hear-operation
only.


Edward Mortimer Macdonald: My hon. friend may not be in such a hilarious mood when I get through. He says:
I know there must be 6uch information at that time as will enable parliament properly to judge as to the general management of the system and to say whether or not the Board of Directors that we have put in charge have in the main properly discharged the responsibility placed upon them. That information must be given; but if this resolution passes, it is certain that much that is unfortunate will happen, but very improbable that what is most desirable will actually result. This resolution means simply a return to the old system of political control; it stops nowhere short of that end.


Arthur Meighen: Hear, hear.


Edward Mortimer Macdonald: What is the situation here? This government committed the control and the operation of the Canadian National Railways to Sir Henry Thornton and his board of directors. Now, I think Sir Henry Thornton enjoys the confidence of the people of this country since he has assumed the management of that road. I think the care with which he has approached the solution of all the internal problems which face this country in regard to this railway, and the evident interest which he has taken in regard to all these matters indicates that we are justified, as members of this government, in believing that Sir Henry Thornton, to-day has the confidence of the Canadian people. Sir Henry Thornton, coming from the other side, knows that Canada cannot be a hermit nation, and that the great success of the Canadian Pacific Railway has been due to the fact that, on account of their ocean steamships, they are the great highway of the world between the eastern and western hemispheres, and that the ramifications of that system on the Continent, as any hon. member who has ever been over there will realize, furnish the very life blood of the Canadian Pacific Railway. If under Sir Henry Thornton's management we are to attain that success in government ownership which every man in this country, if he is a true patriot ought to hope for, is it not natural for Sir Henr>
Thornton to say "As a means to that end, on the continent of Europe, I must obtain some business connections which will enable me to be, at least, a competitor with the Canadian Pacific Railway on that continent?" I venture to say that the doctrines laid

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down by the right hon. member which I quote to-night, expressed to this House so definitely two years ago on this very question as to what ought to be the policy in dealing with the matter of operation, are in direct conflict with his statements to-night, because he declared at that time that these matters should not be the subject of communication to parliament before they were consummated.
And what more? Let me submit, Mr. Chairman, the lines upon which the right hon. gentleman laid down the importance of maintaining the secrecy of business connections in the business management of a great enterprise. These are the lines which he laid down. My right hon. friend says to the Minister of ""Railways, by a succession of innuendoes, that Sir Henry Thornton had no business to consider the question of purchasing an hotel in Paris. It has been stated by the right hon. member and reiterated for two days that the law declared that that was so, and he had no such power, and now he cannot put his finger upon the law. Hon. gentlemen on the other side and, in particular, my right hon. friend have stressed the name of Mr. Aronovici, as if some virtue was to be obtained by reiterating the name of a man who had been the purchasing agent of one of the greatest English railways, as negotiating this matter on behalf of the president of the National Railways. My hon. friend says, as regards this general appropriation which the Minister of Railways is asking from ;parliament this year for the operation of railways in Canada: "Oh, we want to have that reduced until we get that information," information similar to that which two years ago he declared, if it were given, would have meant putting the railways under political control. Information of this character he now wants to have. I think the Minister of Railways was quite right when he pointed out to the committee shortly before dinner what was at the bottom of this whole question. Either my right hon. friend was right or half right in 1921 when he laid down the simple business rule that, in the management of a great enterprise, it was only right and proper that a certain amount of secrecy should attach to negotiations until they were concluded, or he is wrong now. Sir Henry Thornton enjoys the confidence of the Canadian people. He has started upon this proposition in connection with obtaining continental business. Either we are to trust his judgment in that regard or we are not. If it is not a good thing for him to look abroad across the channel and endeavour to find avenues by which men and women of the
Continent who want to travel across the ocean' to Canada, or beyond Canada to cross the Pacific also, can do so; if it is not sound business for him to do that, then the position is a very singular one. This must be sound business, and if in the carrying out of that idea of sound business, he is to be asked, in the course of negotiations, to satisfy the curiosity of my right hon. friend and his desk-mate as regards everyone to whom he has talked, everything he has talked about and all these things that have taken place during the consideration of the proposition, surely that is not wise. We on this side of the House trust and believe in Sir Henry Thornton. We think it is in the interest of the Canadian people that he should be given an opportunity to make good. He has been in Canada for a matter of only some four, five or six months, and already there is evidence of renewed impulse to the railways and renewed confidence amongst the Canadian people. As regards this matter we say to this committee that we think it should trust to Sir Henry Thornton's judgment. We believe results will justify his action, and we think the motion of the hon. gentleman in regard to the reduction of this item and the attitude of the right hon. gentleman are, as they were declared to be by the hon. member for Dorchester (Mr. Cannon), purely a matter of playing politics.


Donald Sutherland: Will the minister inform the committee whether, in his opinion, this is a capital expenditure or not?


Edward Mortimer Macdonald: I say this
to my hon. friend that there has been no expenditure in regard to this matter.


Some hon. MEMBERS:: Oh, oh.


Edward Mortimer Macdonald: I say further that my hon. friend probably did not catch my point. Notwithstanding the hilariousness of those leaders of his, I challenge them to show where in the act there is any authority for what they have been stating. They are absolutely unable to do so.


Mr. BROWN:: It is with some hesitation that I enter intd a discussion of this subject. As to whether the expenditure in question was a wise one or not, I shall not with the present information I have at hand, presume to pronounce an opinion. Certainly I should not presume to pronounce an opinion 10 p.m. upon the legal aspect of the question; neither will I, in the course of my few remarks, impute to any person motives such as the playing of politics or any other motive than the welfare of the country. I have no desire to play politics regarding this
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matter if I ever was inclined to such a course. I have, however, been intensely anxious to come to a proper conclusion regarding this question, andtf called upon to cast a vote, to east a vote that will be justified in my own mind, and that I can justify to my constituents and the people of Canada generally. It has been urged upon us that if we vote against this expenditure which has been made, we are casting a vote against the interest of the Canadian National Railways. Whether that statement be true or not, it would not be fair to say to any persons that they are deliberately doing so. I would like to take it for granted that all hon. members in this House are desirous of seeing the Canadian National Railways a success. Yet it is quite possible that injury may be done to that system even if we do not do so by deliberate intent.
This question has brought to us one of the most difficult problems connected with our National Railways; that is the question as to how far we can give to those to whom we have entrusted the management of our railways similar powers to those possessed by Mr. Beatty and his associates in the management of the great Canadian Pacific railway, and at the same time secure for the shareholders represented by their representatives here in parliament, those rights which naturally reside in the shareholders of a great company. I think I am right in saying that that is the most difficult problem which we have to face, to know just at what point to draw the line between giving a free hand to those managing our railway system, and at the same time reserving our rights as representatives of the owners of the system.
Perhaps even to define this by statute would be one of our most difficult problems, and I am quite willing to say this that, perhaps, the present statute, if it is interpreted by the leader of the Opposition (Mr. Meighen), that there is a distinction between capital expenditure and operating charges, gives the wisest distinction that can be made. Whether that distinction is made in the law as it stands, I am not, as I said before, going to pronounce an opinion. Granting, however, that that is a correct interpretation of $he law, I think I can imagine that an occasion might arise where even the letter of the law might need to be violated. I think I can imagine that a situation might arise that would necessitate a violation of the strict letter of the law. The extent to which we might condone such a violation would of course have to be determined by the circumstances of the case as they arose.
When the government made the announcement to the country that they were going to LMr. Brown.]
give Sir Henry Thornton a free hand in the management of the railways, I think the whole country from the Atlantic to the Pacific gave their approval to such a declaration. To me there is in the whole situation in Canada to-day nothing that I look upon as more necessary to our ultimate well-being than that our government railways should be made a success. We desire the success of the Canadian National Railways; but success will depend on many different factors; it will depend on the loyalty with which the people of Canada support those roads, and I believe there is in the country an increasing feeling of loyalty towards that institution.
I believe it is quite correct to say that if we go among the people we shall find a growing sentiment that they feel "This is something that belongs to us." And I think there is a growing feeling of optimism, a feeling that success can ultimately be achieved. But while a number of factors enter into the success of the road, it seems to me the outstanding factor will be the capacity and the capability of the man we put at the head of the system. In other words, we have to rely upon Sir Henry Thornton. Now, the question that must necessarily come up in our minds is, to what extent are we willing to trust the man that we have placed at the head of the system. As I look upon the situation to-day I think I am willing to take this position, that if Sir Henry Thornton does not make a success of this system, then it is inevitably doomed to failure. I believe we are now just at that critical stage, that it is a case of succeed or fail, and if Sir Henry Thornton does not make a success of our Canadian National Railways I doubt the possibility of getting any other man to do so. That is, if I correctly estimate Sir Henry Thornton, he is a man that would not very long put up with too much nagging. And the man who would put up with much nagging would not likely be the type of man that would make a success of this system.
I believe there is danger in a man becoming unduly autocratic, there is dagger in his going too far in the reckless expenditure of the people's money. I realize that danger, and I do not need any person in this House or outside to impress upon me the danger that confronts us in that direction. But to my mind the greatest danger that faces our National Railway system to-day is undue political interference. That, to my mind is infinitely a more imminent danger than any other that can possibly arise. With that thought in my mind, and holding the views I have expressed, I am disposed, with our present limited knowledge of this transaction,

Supply-Railways-C.NJl.
to give Sir Henry Thornton a fairly free hand. The time will come when fuller information will no doubt be disclosed to us. At the moment I am not disposed to condone this particular transaction, I think it is quite evident that in some aspects it merits our disapprobation, but at the same time, holding as I do that the greatest danger confronting our National Railways is undue political interference, I feel disposed to give Sir Henry Thornton the benefit of every reasonable doubt. I think if Sir Henry Thornton is the man that we take him to be he is capable of rising to his great opportunities. I do not know if he is likely to hear what I say or take any notice of it if he does, but I think he has the greatest opportunity that any man ever had in the commercial or industrial world. He has to take hold of this National Railway system, handicapped it is true by tremendous over-capitalization, and to make it a success. We pay him a salary, and properly so, that gives him the pos-sibilitj^ of enjoying everything in life that any man needs to enjoy, and we offer him, as I say, an opportunity of doing the biggest thing that any man has ever dona in the commercial or industrial world-an opportunity of doing something, not for himself but for the good of the Canadian people. If Sir Henry Thornton rises to the opportunity that is given to him, as I believe he is a big enough man to do, he can estab'ish for himself a name before which the names of Ford, Rockefeller and other men who have accumulated great fortunes for themselves will look small indeed.


Donald Sutherland: Can the hon. member tell me how much Sir Henry Thornton has at stake in the Canadian National Rail-vray system compared with the people of Canada?


John Livingstone Brown: His reputation. The opportunity has been given to him not only to sustain his reputation but to make a still greater reputation for himself, a reputation that will be the greatest that any man has ever achieved in the commercial and industrial world. That is what I think he has at stake. While it may be possible-I do not know at present-that he has been led into a transaction which is in violation of the strict letter of the law, for myself I propose to withhold judgment on the merits of this particular case until full information is given to us.
In regard to the amendment itself, the minister has stated that its acceptance would not affect the transaction in any way at all, but would simply mean curtailing th6 expenditure of the board for the coming year and crippling their work to the extent of $2,000,000. If that be the correct statement of the case, holding as we from the West do, the necessity for the immediate construction of many branch lines-there are many sections out there in need of railway facilities-for my part, even if I were disposed to support the amendment on other grounds, I could not consent to do so now and in any way cripple the management of the Canadian National Railways for the coming year.


Mr. GUTHRIE:: I only rise to remark that I think my hon. friend, the Acting Minister of National Defence (Mr. Macdonald) has overlooked one important point in his argument as to whether this expenditure was or was not authorized under the act as an expenditure which might be made by Sir Henry Thornton and his board of directors, irrespective altogether of the Governor in Council or of the Minister of Railways and Canals (Mr. Graham). Let me point out that when parliament sees fit to make grants for railways or for anything else it usually does so in specific, definite language, surrounded by certain conditions. I note that in the estimate now before the committee out of which this particular $2,000,000 must come, as well as in the similar estimate last year, the language is very definite and very express.
Last year the vote was under three separate headings:	136 for the Canadian National
Railways, 137 for the Grand Trunk Railway Company and 138 for the Grand Trunk Pacific Railway Company. This year the amounts are consolidated under a single item owing to the consolidation of the three railways. But I find that in the three votes last year the limitations, restrictions and conditions were identical with those which accompany this vote to-day. What are they? Under vote 136 last year an amount of $42,000,000 was granted:
(a)	To pay operating deficits;
(b)	Acquisition of property, materials and supplies;
(c)	Interest and sinking funds on notes;
(d)	Principal and interest of maturing or matured loans;
(e)	Construction and betterments;
(f)	Co-ordination or consolidation of railway lines and facilities.
Now, if the section had stopped there, there might have been some force in the argument of the Minister of Railways. But it did not stop there. The next clause is:
The amount herein authorized may be applied from time to time, in the discretion of the Governor in Countcil by way of bonus, in cash or by way of guarantee, or partly one way partly the other.
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Money voted by this parliament to this road for the acquisition of property may be expended how? By Sir Henry Thornton? No; at the discretion of the Governor in Council. That is the act passed by the House last year-it is the statute I am reading from; and I find almost identical language in the vote this year. Turn to page 31, vote 139, the one we are now discussing. The language is a little different; in this case the restriction and the limitation are in the first clause. It says:
The amount herein authorized may be applied from time to time, in the discretion of the Governor in Council.
Not in the discretion of the minister; not in the discretion of Sir Henry Thornton. And what is that money for?


Edward Mortimer Macdonald: That is not the act.


Hugh Guthrie: It is the estimate I am reading from, which becomes an act when it is passed by parliament. I read a moment ago from the statute, not from the estimates of last year; the latter are in the Appropriation Act. It is chapter 53 of the acts of last session to which I referred.


Edward Mortimer Macdonald: It is not in the Canadian National Railway Act.


Hugh Guthrie: No, in the Appropriation Act, in which the limitation is expressly defined. Now, I take the vote of this year and I find not identically the same language, but language that is similar and of the same . effect. I read from item 139, at the top of page 32 of the Estimates. The language is:
The amount herein authorized may be applied from time to time, in the discretion of the Governor in Council.
And what was that amount for? How may that money be used? Turn to page 31: "(a) Operating deficits; (b) acquisition of property." That would cover the present case; it is the same express limitation of last year. Now, such a limitation upon the expenditure of that money, can it be argued for a moment that Sir Henry Thornton can take that amount out of the treasury without the authority of an order in council or the consent of the minister? It passes my comprehension how that can be done. Let me just touch upon the other question. The powers of the Canadian National Railway Board as it exists are set forth in the Act of 1919. Only such powers as are set forth in that act can be exercised by that company; it gets them all there; it has no existence whatever apart from that statute. What did we give
[Mr. Guthrie. 1
to the company? I shall not read the sections, but we gave them the management and the operation of the lines of railway; that is the meaning of section 11. Then follow the restrictions: They cannot acquire new lines of railway without going to the Governor in Council for authority. They cannot amalgamate with other companies, they cannot issue securities, without going to the Governor in Council for authority. All they can do is to look after the management and operation of the road. I quite agree with the Minister of Railways in his interpretation of the. act; I heard him on two occasions plainly give it as his opinion this was a capital expenditure and that capital expenditure could not regularly be made without the matter having first come before the minister and the Governor in Council. Well, apart from the National Railway Act, what about the vote of this parliament? Are the express terms and conditions under which parliament voted that money to be absolutely disregarded by the head of this railway board? Is he to be supreme? Is he to be above parliament or the votes of parliament? Is the limitation which we impose by act of parliament when we vote the money to be of no effect? I do not know whether the purchase was wise or was unwise; it is beyond me. I know I heard with a great deal of satisfaction the minister say to-day that the thing would not occur again. It is easy to see from the attitude of the minister that had he been consulted in the matter the transaction would never have gone through in the manner in which it did. But what I maintain is that there has been a breach of the letter and of the spirit of the National Railway Act; there has been a breach of the limitations imposed by this parliament when we voted the money. It was a wrong thing for Sir Henry Thornton to do. If in the opinion of the committee he should be excused, that is another question, but I do not think the offence should be condoned. I believe some reprimand should be offered under all these circumstances. For my part I am willing to leave the reprimand entirely in the hands of the Minister of Railways. I think he both feels and sees the real situation and realizes that there is something very wrong in the whole transaction.


Alexander Kenneth Maclean: Mr. Chairman, I do not know that anybody could contribute much that is new or informative to this debate. The remarks of the Prime Minister this afternoon and those of the hon. member for Lisgar (Mr. Brown) just a little while ago represent my views upon this matter, and I

Supply-Railways-C.N.R.
think each of them has plotted out the course that parliament should follow in this particular case. The leader of the Opposition (Mr Meighen) and the hon. gentleman who has just taken his seat (Mr. Guthrie) asserted on several occasions this evening that there was no legal warrant for the purchase made by Sir Henry Thornton, president of the National Railways. Even if there were not legal authority for the course pursued, I doubt if the country generally would be much exercised over that fact; if the expenditure itself was sound, parliament and the country would condone the transaction But I wish to say with the same amount of confidence that was shown by the leader of the Opposition and by the hon. member for South Wellington (Mr. Guthrie) that the action taken is well within the statute. Whether it is wise to incur expenditures of this magnitude without direct contact with the government may be, of course, a question for debate. Now, section 23 has been referred to several times. Clearly that clause is not relevant to the issue; it merely gives the company power to construct and operate railways- under the authority of the Governor in Council. That is not the case we are discussing. There is another section, 29, which authorizes the company to purchase the securities or shares of going businesses which are incidental to the work of a railway, such as hotel businesses or electric power businesses. That is not this case, and that section is not applicable. Section 11 is perhaps the most important section, and it has been referred to by the hon. member for South Wellington. May I read that again:
The Governor in Council may from time to time by order in council entrust to the company the management and operation of any lines of railway or parts thereof.
That section entrusts to the company the power of operating and managing the Canadian National Railways. That company therefore has the same powers that the Canadian Pacific Railway Company has in the operation of its property. It has all the powers that any other railway company in Canada has, and I ask hon. gentlemen if it is not well within the legal and statutory powers of boards of directors of railway companies to rent offices, to build offices for the company's purposes. The directors of this company have exactly the same powers that the directors of any other railway company in Canada has, and I submit with confidence there can be no question as to the powers of the directors of a company to purchase buildings for the company's own purposes. I do not think that is open to question.
Then there is another section, section 16 which provides:
Notwithstanding anything in the Government Railways Act or the Consolidated Revenue and Audit Act, all expenses incurred in connection with the operation or management of the Canadian Government Railways, under the provisions of this act, shall be paid out of the receipts and revenues of the Canadian Government Railways.
Now the question is if the acquisition of a building in Paris for the purposes of the company's offices is necessary to the prudent and aggressive management of the company. Surely such expenditure would come within that section, and a deficit would require to be liquidated by a vote of this parliament. The hon. gentleman who has just taken his seat has referred to the estimates to be voted in connection with the Canadian National Railways this session. I submit that whether this transaction is lawful or not is to be determined by the statute of 1919 in reference to the Canadian National Railways, and not by the verbiage accompanying a proposed vote in parliament. It is true that when it comes into the Appropriation Act it has the effect of a statute, but even in that instance it provides for the payment of the deficit, and if the purchase of this property is responsible for incurring a portion of that deficit then I think the vote which the hon. member read supports the contention which I have made.
Now just a few words as to the transaction itself. The purchase of this building may indicate a great deal of courage, excellent judgment and prevision on the part of Sir Henry Thornton. It may be a bold and splendid conception and one that will ultimately prove of value to the country and to our railway system. The transaction may conform with the usual and best business practices known to us to-day, and yet it is one that is liable to misinterpretation and misrepresentation, and that, Mr. Chairman, is one of the difficulties of government ownership and government operation. It will always be difficult for the Canadian National Railways to do the right thing in connection with the big things in a proper way because a critical public and a critical parliament will not accord to them the same freedom of action and of judgment that is usually accorded to business men and to the directors and managers of a big concern.
Now what are the facts? So far as I can gather them by a reading of Hansard chiefly, I would suppose the facts to be somewhat as follows: Sir Henry Thornton, the president of the Canadian National Railways, believed it was in the interests of the company
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to have an office well located in the city of Paris, to be the centre possibly of their European operations. I gather also that it was their intention to lease from somebody else this particular building, and that at a certain stage negotiations were on for the purchase of this property by a syndicate. It transpired that another purchaser was in the field whom they feared might purchase the property and prevent the Canadian National Railways from obtaining it for rental purposes. In consequence of that Sir Henry Thornton had to act quickly, and from the current funds of the Canadian National Railways he advanced $2,000,000 to purchase this property, not to hold the property, but to give him temporary ownership while he undertook the organization of a syndicate outside to take over the property and lease to the company such portion of it as they desired for the purposes of the company. I see my friend angularly opposite to me smiling.


Henry Lumley Drayton: It is a great joke.


Alexander Kenneth Maclean: But these things are done every day by reputable business men, by the ablest business men in the world.


Mr. YOODSWORTH:: With public money?


Alexander Kenneth Maclean: I will come to that in a minute. They do it every day, and if it is sound in their case why is it unsound in this particular instance? Let me proceed a little further. I stated that when Sir Henry Thornton secured possession of the property he contemplated the organization of a purchasing syndicate to take it over and to lease from them a portion of the building for the purposes of the company. That is done every day, and I say that there is nothing objectionable in it, and if he did not do it, who else would do it? I admit that the whole circumstances permit the suspicious mind to create a false picture of this whole transaction. Hon. gentlemen want some more information. What further information do they want? What further information would be of any good to them?


Henry Lumley Drayton: We have not any yet.


Alexander Kenneth Maclean: Am I not right in saying that they are praying they will not receive any because it might spoil the whole purpose of their argument of yesterday and to-day? If the facts disclosed that this proposed purchasing syndicate belonged to the city of New York they would say, why not have organized a Canadian syndicate? The 
fact probably is that you could not organize a syndicate in Canada at the present time to engage in such a transaction. You probably would require to go to a large city where very large sums of money for investment purposes were available. If the syndicate was a Canadian syndicate, what would happen? Somebody in it would be found to be the thirty-second cousin of someone connected with the railway or the forty-second cousin of some member on this side of the House or of a member of the government. Already the leader of the Opposition is playing upon the name of the man in whose name the property is now held, and I fancy one could make an interesting and destructive political speech on that fact alone. If the leader of the New York syndicate had the Hebraic name of Moses as my right hon. friend has suggested, that might afford ample ground for political pamphlets and many political speeches.
I submit, Mr. Chairman, that if Sir Henry Thornton believed it was in the interests of the company to own a property in Paris he pursued the only course open to him. I am not sure whether it is advisable to have an office in Paris at the present time. Perhaps it is. I am not to be judge of that. Sir Henry Thornton is the adviser of this country in this particular matter, and I submit that we must accept his judgment. And probably the idea is a sound one. It may be a very big idea and worthy of being carried out. If the Canadian National Railways have an active organization in Paris it may be worth 100 or 500 commercial agents in Europe. It may not only be the representative there of the railway system itself, but it will be the agent of the men of business in this country, and will be an active propagandist for the development of our trade in European countries. I would urge upon hon. gentlemen not to disparage, and damage and destroy a transaction that seems a perfectly natural one and one that is engaged in almost every day by large railway or industrial companies. I assume-I am bound to assume, and I think every hon. member in the House should assume-that Sir Henry Thornton has acted in good faith in this matter and really has at heart the interest of the National Railways and nothing else. He does not anticipate a permanent capital investment; evidently he will shortly be recouped the temporary advance which he secured through the bank on behalf of the railways, and the railway treasury will then be repaid the advance. I assume again that Sir Henry Thornton will be in a position bn that it is carried through.

Supply-Railways-C.N Jl.
Now it may be, Mr. Chairman, as I said before, and as I think the Minister of Railways said, that in transactions of this size it would be better that before the transaction is launched or completed, full negotiation and discussion should take place with the government, or at least with the Minister of Railways. I feel, however, that Sir Henry Thornton deemed it to be an expenditure which should be made. In his judgment it is one that will enure to the advantage of the railways and to the country, and as it was only a temporary expenditure I think he should be supported. It would be very unfortunate if every transaction of the Canadian National Railways became the matter of a discussion in parliament. I do not deny the right of the opposition to engage in the criticism they have indulged in yesterday and to-day. They, perhaps, have only done their duty. They may have rendered a public service. They have, however, already said all they can say upon the question, and I do not think they are performing their duty in any better way than they have already done by moving an amendment and asking for a vote upon this particular item.


Mr. BAXTER:: Having spoken before I almost regret to address the committee again upon this subject. I assure them that I would not do so if it were not for the very peculiar positions, taken by my hon. friend the Acting Minister of National Defence, and by my very good and hon. friend the member for Halifax who has just spoken. With reference to the latter, permit me to express the hope that when he shall be called to that eminent position to which the newspapers are at present appointing him, he will display perhaps not a more judicial attitude, but that at least the law administered by him will be of a much better brand than that which he has propounded to the committee tonight. I know that neither the Acting Minister of National Defence nor , the member for Halifax are at all oblivious of the decision of the court of Exchequer Chamber in the very well known law case of the Ashbury Company vs. Riche. What was that? An incorporation, under a British statute of a company to carry on railway operations, and when they undertook to buy a railway in Switzerland it was held beyond their powers. And yet had the court of Exchequer Chamber had the benefit of the eloquence of the Acting Minister of National Defence they would have been told in thunder tones that you could not find a line in the statute forbidding it. And no man of any standing as a practising barrister would expect to find a line in the statute forbidding
it. That is only what I must characterize as simply a bit of bluff put forward to help the government out of a difficult position. It is not law, it is bluff. That is what we got from the Acting Minister of National Defence to-night. Now, the case that I have spoken of stands. It is law. It is not a matter of politics, it is a rule to which all people in the British Empire must submit in the construction of a matter of this kind; and that rule applies just as much to the construction of the act relating to the Canadian National Railways as it does to anything else. In this case there is a company incorporated, and what is it incorporated for? I know that other hon. and learned gentlemen have addressed the committee on the subject, and at a good deal of length, and I do not propose to take up very much time, but I am going to point out something that I think has not been pointed out yet. We use a preamble in the statutes for the purpose of explaining, and circumscribing, and interpreting the rest of the statute, and in that very preamble-the preface, the reason that is given to this legislation-we are told that :
-it is expedient to provide for the incorporation of a company under which-
What now?
-the railways, works and undertakings of the companies comprised in the Canadian Northern system may be consolidated-
Now, that is present or past. It is something that has existed and still existsand together with the Canadian Government Railways operated as a National Railway system.
Does that indicate anything other than Canada? Does that suggest the carrying on of a railway in France? Could you have built a railway from Calais to Paris under that legislation? Did anybody ever think' of such a thing? The court of Exchequer Chamber burst that soap bubble fifty years ago. It has been blown again to-night to serve a very obvious purpose. Now then we have a company formed, and I am not going into the details of that except to say that it is not a one man company such as we sometimes hear spoken of. It is a railway board of directors, or is supposed to be so, and the gentle' man who is chairman is only one member of it; but the astonishing thing-leaving all other legal considerations out of the question- is that the Minister of Railways has not been able to point out to this House that the purchase, or transaction, or agreement, or whatever I may call this nebulous thing that has taken place, whatever it is, is not the act of the board of directors itself, not the act of the company; it is the act of one individual
369S
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unsupported by a resolution, unsupported by even the shadow of the company, and not reported to the minister. That is clear beyond the necessity of any further demonstration. It cannot be denied that if the minister could have had a resolution of the board of directors and brought it here he would have had some footing. But he has got nothing but the solitary personal act-however good the intention may have been, and I am not going to discuss that-nothing but the solitary personal act of Sir Henry Thornton uncommunicated to the minister and, as far as the evidence before this committee is concerned, uncommunicated to any one of his colleagues. That is what this House is asked to ratify and endorse as the usual, the ordinary and proper mode of conducting the business of the National Railways.
Is the committee prepared to accept that? Is the government prepared to stand back of it? I sympathize with and admire that attitude of the Minister of Railways, who clothing his statement in such language as is necessary to soften the blow, has practically told Sir Henry Thornton that this thing is not to occur again, and has assured the House that it will not occur again with his sanction. What am I to say of the group of apologists on the other side of the House, who have quoted everything from discussions in connection with matters pertaining to the National Railway, have quoted from my right hon. friend's remarks, and have almost given to a speech of his in the House a few years ago the solemnity of an act of parliament, and that from the same gentleman who denied that the act of 1921, because it dealt with finance, was an act of parliament, and treated it as only a resolution-a strange case of* mental confusion or moral obliquity, I do not know which. When we turn to section 11, to which the hon. senior member for Halifax has referred, we find the following:
The Governor in Council may from time to time by order in council entrust to the company the management and operation of any lines of railway or parts thereof, and any property or works of whatsoever description.
And so forth. We find nothing there about new construction. Hon. members will find a section that has not been referred to, that * permits the powers of expropriation to be exercised.


Alexander Kenneth Maclean: May I ask the bon. member a question?


John Babington Macaulay Baxter: Certainly.


Alexander Kenneth Maclean: If the cost of this building in Paris were $10,000 and not $2,000,000, would my hon. friend think that

the Canadian National Railway would not have legal authority to buy that for its own purposes?


John Babington Macaulay Baxter: What purposes?


Alexander Kenneth Maclean: The company's purposes.	.


John Babington Macaulay Baxter: Well I hope, when justice is administered in the Exchequer Court, that it will not be regulated by the number of dollars involved in the transaction, and that one matter will not be considered legal because only $10,000 is involved, and another matter considered illegal because $1,000,000 is involved. It would not be legal on account of the small amount involved. I cannot draw such a distinction.


Alexander Kenneth Maclean: The hon. member does not get my point. I wanted to test the soundness of his argument, and I think he might admit that it is not a sound argument. Does he seriously mean to say that the Canadian National Railway, without the authority of the Governor in Council, could not go to the city of Paris or to London and buy a building for $5,000 or $10,000 for its own purposes?


John Babington Macaulay Baxter: Leave the amount out of the question altogether. I thought the hon. member was drawing a distinction as to the amount. I say they have no legal authority to buy one square foot of land in Paris or anywhere else under this act.


Alexander Kenneth Maclean: Could they
lease an office, buy furniture and put it in?


John Babington Macaulay Baxter: No, they cannot carry on business.


Alexander Kenneth Maclean: I think my hon. friend, at the close of the sitting of the House this evening, should sit down and reason out the matter.


John Babington Macaulay Baxter: I will take the words of the Acting Minister of National Defence (Mr. Macdonald), and I will employ them to better reasoning than he employed them. When considering the charter of the company, I will take what T find within the four comers of the act constituting the company, in order to find some provision authorizing a particular thing to be done. If it is not there, it follows that the thing is not authorized. I have not read every line of the act, but I have seen nothing that instances foreign countries as places where business may be carried on. I find in the act provision for expropriation, and I thought they might be referred to, because I find the plan may be signed by the minister or the

Supply-Railways-C.A'J?.
president or vice-president of the company. But if members were reading the act, and thought that it followed from the language that they could acquire property by expropriation-but of course that would be within Canada-without the consent of the Governor in Council, they would still be wrong, because the Railway Act permiting expropriation for railway purposes requires the preliminary consent of the minister before even the plan can be filed. If you read this act from end to end you will find it does not contain a single provision looking to the making of capital expenditure by this board, or the acquisition of property or anything of that kind, without the consent of the Governor in Council. Section 23 has been referred to and I need hardly repeat it, but it says:
With the approval of the Governor in Council and upon any location sanctioned by the Minister of Railways and Canals-
Will any hon. member say that that means in England, Scotland, Ireland or France?
-the company may from time to time construct and operate railway lines, branches and extensions or railway facilities or property of any description in respect to the construction whereof respectively, parliament may hereafter authorize the necessary expenditure or the guarantee of an issue of the company's securities.
When has parliament authorized the expenditure, assuming the company could lawfully expend money in France or in England? And when has the approval of the Governor General in Council been given?
As to the particular transaction, I do not know whether it is a building or not. The thing has become so absolutely nebulous that it may be a sort of dirigible balloon that is floating over Paris. I cannot get much accurate information. The need of this country is the handling of freight, passenger traffic is carried ordinarily at a loss by the railways, and the freight sustains the passenger traffic. All that I can see of this nebulous proposition is that somebody wants to advertise for passenger business. I cannot conceive what freight is going to be brought to the National Railways by this expenditure.	We cannot,
however, get any information. We are not even told the particular purpose. We are noc told how many rooms the railway is expected to occupy, or whether it is for freight or passenger business. That sort of thing cannot be a secret. If it were to be a secret it would have to be equally a secret that this is an hotel. Perhaps it is not. I sympathize with the position the minister is placed in when he can tell us so little about it, but I must make a protest against the misinterpretation of the statutes by the Acting Minister of National Defence and against the attempt
to influence members who do not profess to make law their vocation in life, to misrepresent the application of legal principles to the whole subject, particularly for the purpose of political excuse or political advantage.


James Shaver Woodsworth: In view of the fact that an amendment has been introduced, I wish to state my position with regard to that amendment. Last night I endeavoured to state my position on the general question. I have no desire whatever to cover .that ground again. As I listened a few minutes ago to the rather laboured defence put forward by the senior member for Halifax (Mr. Maclean) it seemed that there was full justification for a protest against the action that has been taken by Sir Henry Thornton. The senior member for Halifax suggested that the expenditure was but a temporary one, and on that ground no exception should be taken. It seems to me his argument might be used to carry him a great deal further than this particular case If, for example, in encouraging this tourist traffic from Paris, it might be considered advisable that some sort of a race track should be started or an amusement park or a seaside resort be opened, in that case it would seem to be quite justifiable that Sir Henry Thornton should take one or two million dollars to organize a syndicate to start some such enterprise as that. In carrying on the work of the railway or providing freight traffic for the railways from, we will say, Prince Rupert eastward, it would be quite justifiable, according to the same line of argument, that Sir Henry Thornton should organize a fish company up in Prince Rupert; at least he might take one or two million dollars temporarily with the idea of organizing some syndicate with the understanding that if it were successful, he would put the money back again. The argument is no defence for an action of this kind and makes it all the more necessary that some protest should be made by the House to check such a practice as this. The hon. member for Dorchester (Mr. Cannon) suggested that anyone who would vote in favour of the amendment was simply playing politics. Some of us here fortunately have a short parliamentary record, and we do not need to worry very much about what we did in previous years. I should like to suggest that we have a right, a duty to act on the merits of this question irrespective of who introduced the amendment or any motive that may lie behind it. It was also suggested by the hon. member for Dorchester that anyone who supported the amendment proposed, would be
Supply-Railways-C.N.R.

going back on the principle of public ownership.


Lucien Cannon: My hon. friend might
have understood that, but I do not think I said so.


James Shaver Woodsworth: That is what I
understood. I may have misunderstood. I should, however, like to say that in supporting the amendment proposed, I believe I am doing my best to uphold the principle of public ownership. I believe most firmly in public ownership; but I am not going to be deceived by mere words. I do not want to see set up in this country a public ownership that means very little more than an irresponsible dictatorship. That, it seems to me, is what very readily we may see grow up if we allow this kind of practice to continue.
So far as we have had evidence, produced this evening or at previous sessions of the House, there has been no consent by the minister or by the government, and as the hon. member for St. John City (Mr. Baxter) points out, we have not even had evidence to show that the board itself gave its en-dorsation to the action taken by Sir Henry Thornton. Under these circumstances, I do not see that we have any other course than to vote in favour of the proposed amendment. A previous resolution was turned down on the ground of being out of order; if there were some other way in which we could show our disapproval, possibly we might feel that we like to take that course; but under the circumstances it seems that the only way of doing so is to vote for the amendment, and that I propose to do.


Mr. McCONICA:: I had not intended to discuss this question, but it seems to me that we might review the situation as has developed. Sir Henry Thornton and the board of directors apparently decided that they wanted a home in Paris. Was that a wise decision? I do not know. I do not think the hon. gentleman (Mr. Woodsworth) who has just taken his seat, knows. I do not think any man in this House knows. I believe the judgment of the board of directors and of Sir Henry Thornton on that question is entitled to greater weight than my judgment. I can conceive that such a thing would be desirable, and I think it would be in the interest of the railroad system. But I do not know much about it. What did he do? He took the advice of an eminent barrister how to go about this matter, the advice of a gentleman whose name has been given us in this House to-day, a gentleman who knew the law, and who knew the facts. He was advised by this gentleman that a certain course 
of procedure was entirely regular and legal, and he adopted that course. Hon. gentlemen have been complaining that they do not know what has taken place; but without knowing the facts, they are giving us their knowledge of what the law is. The gentleman under whose advice this action was taken knew the facts, and when the matter is one of legal opinion, it is very well to apply the law to the facts if you want to get a sound opinion.


Ernest Lapointe: That sounds sound.


Thomas Henry McConica: Then what did he do?
He arranged to guarantee a loan in Paris and hypothecated, as it were, $2,000,000 of the money of the railway company. If the amount had been $2,000, there would not have been any question that he had a right to do this. If he had made an arrangement by which he might rent'an office in Paris or in Luseland, Saskatchewan, the village from which I hail, it would have been within his right and power to do so. The size of the transaction does not make any difference as regards the principle involved if parliament votes money and puts it in the bank. What is the situation? As regards this parliament, or as regards this $2,000,000, no action which we men take can undo what has been done in this case. The performance is over. Shall we interfere when we cannot possibly do any good? Shall we compel the minister to disclose all the transaction and the situation of the parties, and possibly jeopardize the whole performance in order that hon. gentlemen may know some things which they do not know? This thing will keep. We are going to have another session of parliament one of these days. If it is found that an irregular transaction has been made or a losing game has been played, then we can haul Sir Henry Thornton over the coals.
I do not see why we should break right into the midst of this transaction and perhaps jeopardize negotiations, when we have already incurred our part of the responsibility, when our money has been put up and when, if we spill the beans, we shall be the only losers, so far as I qan understand the matter. Why not let events take their course in connection with this transaction in the sincere hope that it will be all right, as I believe it will be? Sir Henry Thornton has been put in charge of this great railway system. He is spending millions upon millions of dollars. We are trusting him to buy locomotives, coal, cars, rails, and to carry on the greatest business transaction on earth to-day. Have we confidence enough in him to believe he can make a deal to rent offices in Paris? If he is not competent to carry this transaction through in what he has

Supply-Railways-C.N.R.
been advised is a perfectly legal and proper manner, then he has no business to be in the place he occupies and we should get rid of him. If he cannot carry through this transaction he cannot run the railroad. I for one have implicit confidence in his ability as a railroad man, and in his integrity as a gentleman, and I believe that the acquisition of this property will in the end prove to be a benefit to the railroad and to the country. .


Henry Lumley Drayton: What is the
system of audit at present applied to the Canadian Government Railways?


George Perry Graham: It is the same system
that we have always had.


Henry Lumley Drayton: As I recollect,
there used to be a pre-audit in connection with large matters. Is my memory wrong?


George Perry Graham: I am informed that that
system has not been changed since my hon. friend was Minister of Finance.


Henry Lumley Drayton: I want to find
out if you have to get the auditor's O.K. on your cheque in connection with large expenditures.


George Perry Graham: I am informed that that
is only in connection with matters where the money is advanced by the government. The same system was in vogue under my hon. friend.


Henry Lumley Drayton: Do I understand that the pre-audit only applies to actual government payments?


George Perry Graham: By the Auditor General,
yes.


Sir HENRI:: DRAYTON:	What protection is there, who can get a cheque?


George Perry Graham: The railway has its own
auditors, also an outside firm of very competent auditors.


Henry Lumley Drayton: But I think my hon. friend knows perfectly well that the usual railway operation is that while payments in the discharge of ordinary business can be made-and I am forgetting all abou,t the legal question-when you have an extraordinary paj'ment it can only be made by the board of directors. That being so, how was this money got out without vote or justification?


George Perry Graham: I am told by the deputy minister that we have the exact system used by the Canadian Pacific Railway Company and as required by the Interstate Commerce Commission. All 'the railways are operated under that system.


Henry Lumley Drayton: Does one man
get out a cheque under this system?


George Perry Graham: It is approved by the proper officer in the department, then it is checked by the comptroller and the treasurer There is no change in the system.
Amendment (Mr. Stevens) negatived: Yeas, 19; Nays, 78.


Charles Marcil: The
amendment is lost. Shall the resolution carry?


Henry Lumley Drayton: Then, Mr. Chairman, in connection with the resolution, I want the minister to give me the details under (a), the operating deficits for each of the four companies for last year, and the amount spent.


George Perry Graham: I presume my hon. friend wants the figures for last year?


Henry Lumley Drayton: I am asking for the vote this year and then last year.


George Perry Graham: I gave him this year's.


Henry Lumley Drayton: May I have it again, please.


George Perry Graham: Yes.
Operating deficits on Canadian Government Railways, as estimated, $3,000,000.
Canadian Northern Railway, $2,500,000.
Grand Trunk Railway, (nothing).
Grand Trunk Pacific Railway, $4,500,000.


Henry Lumley Drayton: Now, the vote of last year.


George Perry Graham: This is all in Hansard of some weeks ago.
Canadian Government Railways, $2,496,721.91.
Canadian Northern Railway, $2,946,729.72.
Grand Trunk Pacific Railway, $4,292,866.41.


Henry Lumley Drayton: That is the actual deficit. Will my friend give me the vote last year?


George Perry Graham: I have not got that.


Henry Lumley Drayton: I asked specially for that information and it was sent over by the deputy, but I was told I had to return it again for use here.


George Perry Graham: The estimate for last year was:
Canadian Government Railways, $7,000,000.
Canadian Northern Railway, $5,000,000.
Grand Trunk Pacific Railway, $8,000,000.


Henry Lumley Drayton: Then the next, acquisition of property.


George Perry Graham: I do not seem to have it in that form.

Supply-Railways-C.N.R.


Henry Lumley Drayton: I am trying to keep it just as simple as possible. I am referring to his own vote.


George Perry Graham: The amount for acquisition of property this year is $2,902,641.


Henry Lumley Drayton: That would be for all the systems?


George Perry Graham: Yes. We do not seem to have it in the same form for last year.


Henry Lumley Drayton: I think so. The deputy will know whether the form has been changed.


George Perry Graham: I am informed that the form is not quite what it was last year.


Henry Lumley Drayton: If my memory is not wrong, my hon. friend is incorrect in that. The statute reads exactly the same, and the vote was practically the same. These figures are no good at all unless we can have them as they ought to be-comparative figures.


George Perry Graham: I am told that the amount was $2,800,000 for last year. Owing to the amalgamation we have one item this year where we had four before, and by adding the four together we get the amount I have mentioned.


Henry Lumley Drayton: May I have the figures of the four votes for last year, please?


George Perry Graham: I am told that it was under vote 115 of last year.


Henry Lumley Drayton: I think we had better clear that up, because I do not want either to get wrong myself or to start the minister wrong. Now, I have before me item 115 of last year, and as I read it, it is not the item I was referring to. If the minister looks at item 136 of last year he will find that parliament was asked to vote-whether there is anything in it or not I do not know, but I propose to find out-for "acquisition of property, materials and supplies" exactly as we have it this year in the main vote, The item that is now pointed out to me, 115, has to do with miscellaneous railway equipment. Of course, it may be an overlapping. I notice the wording is as follows:
The assistance herein provided may be by way of advances to the Canadian National Rolling Stock Limited or to any company comprised in the Canadian Northern Railway system, or the Grand Trunk Pacific Railway system, or by way of equipment or materials acquired by the minister.
What I want is the amount of the appropriation last year under item (b) of vote 136 of last year. It is exactly the same wording as in the item of this year.


George Perry Graham: Does my hon. friend want the details of last year?


Henry Lumley Drayton: I am not asking for the details. I am merely asking for the amounts that parliament was asked to give last year according to the various details of last year's vote. There ought to be no mystery about this.


George Perry Graham: What my hon. friend
wants, then, is a comparison between the amounts appropriated in 1922 and in 1923 for the different purposes set out in the item. I have not the details here, but I will get them for my hon. friend. The difficulty is that last year the amounts were in different votes, while this year they are in one.


Henry Lumley Drayton: To a certain extent that is quite true, but there cannot be a great deal of difficulty, because the wording in each case is the same and all that has to be done is to keep to the same designations of these different details right through.


George Perry Graham: We will work it out for my hon. friend and let him have it.


Henry Lumley Drayton: I also want to know what was spent on each one of these items under last year's vote. That muse be there too.


George Perry Graham: There is a little difficulty owing to the two systems but we can work it out. I will see that my hon. friend gets it.


Henry Lumley Drayton: When shall I get it?


George Perry Graham: We will have it for the first of the week.


Henry Lumley Drayton: What does my hon. friend want to do? We have not the information now. What does he suggest? Is there any other item he wants to pass so that the matter could be discussed on that item. This is the last item I believe, and I am afraid the item cannot carry till I get the figures. I shall very likely want to discuss the figures, and this is the only item on which I could discuss the matter.


George Perry Graham: We have several items for Railways and Canals on any one of which my hon. friend could have this discussion.


Henry Lumley Drayton: Which one? I thought we had put them all through.


George Perry Graham: There are several items I know of for Railways and Canals and my hon. friend will be at perfect liberty to discuss

Supply-Rnilwa ys- C.N.R.
this on any one of those. We have spent two days on this item and I should like to get it through.


Henri Sévérin Béland: Items 139 and 140 have not
passed.


George Perry Graham: WTe are on item 139 now.


Henry Lumley Drayton: Item 140 relates
to the merchant marine. That is a different thing.


George Perry Graham: We will not maintain that. We have several votes that have not passed yet.


Henry Lumley Drayton: I think they are all passed. We put through several last night for my hon. friend.


George Perry Graham: There are two votes for Canals that are not passed yet, the vote for maintenance and the Welland ship canal vote. I will keep that for my hon. friend.


Henry Lumley Drayton: How can this matter be discussed on an item for canals?


George Perry Graham: By consent it could be discussed, of course.


Henry Lumley Drayton: As to that I would say that at an earlier date this session we had a minister who was absolutely anxious, at least so he said, that a certain matter should be discussed, but when the time came he was ruled out of order.


George Perry Graham: I think it would not be done again in this case, if we have a distinct understanding.


Henry Lumley Drayton: Then we have a distinct understanding that letting this item pass will not preclude the fullest discussion upon the item that my hon. friend picks out, No. 118.


George Perry Graham: Which item is that?


Henry Lumley Drayton: Item 118. My hon. friend tells me that is open. Then notwithstanding the rules of the House the fullest discussion can take place in connection with these items which my hon. friend now wants to put through, and which I for the purpose of expediting business will not object to passing so long as we have that distinct understanding.


William Lyon Mackenzie King: The government would ask the House to give its consent to have that done.


Henry Lumley Drayton: I do not know that that is enough.


William Lyon Mackenzie King: We cannot do more.


Henry Lumley Drayton: We have had the government asking for consent before, and I remember the position in whieh the hon. member for Burrard (Mr. Clark) found himself. A similar pledge was given in that case but it could not be carried out. Someone objected. It is quite easy for someone to object to this understanding being carried out. It could easily be blocked. It has been done before.


George Perry Graham: Further than that I might say that there will be Supplementary Estimates on which it would be fully open for my hon. friend to discuss anything in connection with this item. There can be no question about that.


Henry Lumley Drayton: Perhaps the best thing I can do is to rely on my hon. friend the Minister of Railways and Canals. The understanding is that we let this item go through with the full right to reserve discussion.


[Stage Direction]
Item agreed to.
Progress reported.
On motion of Mr. Mackenzie King the House adjourned at 11.29 p.m.
Monday, June 11, 1923