1923-06-12

PETROLEUM AND NAPHTHA INSPECTION

[Stage Direction]
Hon. E. M. MACDONALD (Pictou) (for the Minister of Customs and Excise) moved that the House go into committee at the next sitting to consider the following proposed resolution:
That it is expedient to amend the Petroleum and Naphtha Inspection Act, chapter eighty-s:x of the Revised Statutes, 1906, by providing that the Governor in Council may make special regulations as to the sale of naphtha and its use for illuminating purposes, and that, subject to regulations made by the Governor in Council under authority of section three of the act, naphtha shall not be sold or offered for sale in Canada for illuminating purposes, except for the uses prescribed in section fourteen thereof.
He said: In the absence of the hon. Minister of Customs and Excise (Mr. Bureau) I desire to state that the subject matter of this resolution has been communicated to His Excellency the Governor General, who has been pleased to recommend it to the favourable consideration of the House.
Motion agreed to.

[Stage Direction]
R Hon. E. M. MACDONALD (Pictou) (for Spthe Minister of Customs and Excise) moved s&'that the House go into committee at the next * sitting to consider the following proposed ' resolution:
That it is expedient to amend the Inland Revenue Act, chapter fifty-one of the Revised Statutes, 1906, by providing for the inclusion of certain employees as departmental analysts; that the certificate of departmental or provincial analysts shall be accepted as evidence in all prosecutions under the Act; that a penalty be prescribed for deodorizing or clarifying denatured alcohol or specially denatured alcohol; and that a cultivator of tobacco for private use may sell the surplus tobacco grown by him after paying to the nearest officer of Inland Revenue the duty of twenty cents per pound.
He said; In the absence of the hon. Minister of Customs and Excise I desire to state that the subject matter of this resolution has been communicated to His Excellency the Governor General, who has been pleased to recommend it to the favourable consideration of the House.
Motion agreed to.

[Stage Direction]
Hon. E. M. MACDONALD (Pictou) (for the Minister of Marine and Fisheries) moved that the House go into committee at the next sitting to consider the following proposed
resolution:
That it is expedient to amend the Canada Shipping Act, chapter one hundred and thirteen of the Revised Statutes of Canada, 1906, by providing:-
1.	That no registrar shall register any ship purchased or otherwise acquired from a foreign subject or corporation where any bill of sale or other document under or by virtue of which the ship became vested in the applicant for registry contains any provision express, implied or constructive, restricting the use of the vessel or imputing any measure of continued control thereof by the government of a foreign country.
2.	That where in the opinion of the minister any person who applies to be registered as owner of a ship has not sufficient assets in Canada, other than the ship itself, to reimburse His Majesty for any expenses His Majesty may subsequently incur in connection with such ship, her master or a member of her crew, the minister may prohibit a registrar from registering such person as owner until security for such expenses, in such form and such amount as the minister may decide, shall have been furnished.	[DOT]
3.	That the Governor in Council may make regulations prescribing the manner in which grain cargoes shall be loaded at ports in Canada on ships bound to ports outside of Canada not within the limits of inland navigation, and for the imposition of penalties for breach of any such regulations.
4.	That the Governor in Council may make regulations prescribing the manner in which the Port Warden shall perform his duties, and giving him such additional duties as he may from time to time see fit.
5.	That annual returns shall be made by surveyors, and that provision be made for calculating tonnage.
He said: In the absence of the hon. Minister of Marine and Fisheries (Mr. Lapointe)
[Stage Direction]
Dismissal of Mile. Bovlay
[Stage Direction]
I desire to state that the subject matter of this resolution has been communicated to His Excellency the Governor General, who has been pleased to recommend it to the favourable consideration of the House.
Motion agreed to.

[Stage Direction]
On {he Orders of the Day:
Mr. SHAW:: I should like to ask the government what disposition has been made of the application of the Calgary Power Company for additional power privileges in Banff National Park?


Mr. MACKENZIE KING:: That is a question I think for the Minister of the Interior (Mr. Stewart). I will direct his attention to it when he comes into the House.



SUPPLY-BUSINESS OF THE HOUSE

[Stage Direction]
On the motion of Hon. W. S. Fielding for Committee of Supply.
Right Hon. ARTHUR MEIGHEN (Leader of the Opposition):: In the statement of business for to-day which was given last night but which I have not before me at the moment, I am pretty sure Supply was not mentioned.


Mr. BELAND:: I think it was mentioned.


Arthur Meighen: Just for one purpose, to enable the hon. member for St'. John City and Counties of St. John and Albert (Mr. Baxter) to bring up a certain subject.


Henri Sévérin Béland: I stated, Mr. Speaker, that opportunity would be afforded for the discussion referred to but that afterwards we would go into Committee of Supply. At any rate, that was my intention, when I announced the business that would be taken up to-day.


Arthur Meighen: That was not stated. I cannot dispute the hon. member's intention; all I can state is what he said. Hon. members must make their preparations in accordance with the government's statement. It is true that between twelve and one o'clock I was personally notified that the government intended to go into Committee of Supply on other matters, but even that notification to me is not sufficient. I did not get it myself until the time mentioned. But I am only one member; other members guide themselves by the notice of the government leader the night before, and would not be prepared, especially on important matters of Supply, because of the information given by the Minister of Soldiers' Civil Re-establishment. What the minister stated was that a motion would be made to go into Committee of Supply in order to afford the 
hon. member (Mr. Baxter) an opportunity of discussing certain matters in connection with the Post Office Department. Then he went
on to say:
If we have time we will take up the second readings of certain bills on, the order paper-
And he named a list of them occupying a space two inches long-


Henri Sévérin Béland: Three inches long.


Arthur Meighen: Three inches is it?-which would be quite sufficient to take up to-day, I think.


Henri Sévérin Béland: I take it for granted that at this stage of the session, when there is time we always go into Committee of Supply. There are very few estimates to be disposed of.


Mr. SPEAKER:: It may, perhaps, clarify matters if I remind the hon. leader of the Opposition-I do not know whether he was here yesterday at three o'clock-that the hon. member (Mr. Baxter) rose and spoke for a few minutes on the motion to go into Committee of Supply, and it was agreed between the Postmaster General (Mr. Murphy) and the hon. member (Mr. Baxter) that the question should be deferred and should come up to-day on the motion for Supply.


Arthur Meighen: I have no objection to (hat, that is quite proper. We expect a motion for Supply for that purpose but not for the other.



SUPPLY-DISMISSAL OF MLLE. BOULAY

[Stage Direction]
Hon. J. B. M. BAXTER '(St. John City and Counties of St. John and Albert):	Mr. Speaker, I shall try to bring the facts of this case before the House as briefly as I can. I regret that the documentation is rather large, and that it is necessary to refer to a good deal of it. I said yesterday that Mademoiselle Boulay, who was postmistress at Sayabec Station, had been dismissed from her pos'tion. As far as I can gather from the correspondence, her offence, and her sole offence, was the fact that she was a daughter of the previous member for Matane, Mr. Boulay. Of course, something else is alleged in the correspondence, and what that is and the way in which the removal of Mademoiselle Boulay was rather carefully led up to will be revealed by an inspection of the documents.
Now, the matter began as far back as the 4th January, 1922, when my hon. friend the Postmaster General received an offer, in perhaps rather unusual terms, from a gentleman named Eugene I.acroix who wrote from Sayabec under that date and said that he was just offering the minister a place to hold the post

Dismissal oj Mile. Boulay
office, that it was some place where the post office had been kept before but there was now another proprietor. It used to belong to Mr. Boulay, the deputy who had been beaten in the county of Matane and "we," whoever that may be, "had now acquired the property." He not only offers it but he says he desires to hold the post office, like so many other people who are desirous of holding some position under the government. He wants the Postmaster General to be good enough to give it to him and then he will make an arrangement with the Postmaster General. If the Postmaster General will give him the post office he will give him the building to hold it in for nothing and he thinks, and he says, "It will be difficult to do better than that.'* Evidently Mr. Lacroix was a very good supporter of our friend who now represents the county of Matane in this House (Mr. Pelletier). At any rate, he started the ball rolling. There were other gentlemen who also thought they had the support of the hon. member for Matane but perhaps they had not. I suppose they had no right to assume they had that support. The minister on the 12th January, very properly told Mr. Lacroix that this was a matter for the Civil Service Commission. Then Miss Boulay, who held the post office, had apparently heard that something was on foot. On the 17th January, she wrote the minister [DOT]saying that she had learned that Mr. Lacroix had caused to be sent a request under false [DOT]representations in respect to her; that he said to certain persons in order to get their signatures that she had resigned, and to others he said that he wanted the request signed in her favour so that the post office might remain in the building in which it was. Then (she says that she has not given her resignation to anybody, and asks if it is necessary lor her to sign a request for the purpose of annulling the request of Mr. Lacroix. Mr. Lacroix is told on the 17th January, that this statement has been put in and that the lady has no intention of getting out of the office-and the House will note that at that time the minister is finding no fault with her. On the 20th January, Mr. Lacroix presses his claim a little more. He now encloses a request signed by a number of people at Saya-bec, Station asking that the post office be left in the place where it was at the time, and in .case there should be any change of postmistress or postmaster to give the position to him. He says that he hopes to have a favourable response, that with a request as strong as this one he does not believe the minister can refuse him. He sends with that a document which is rather remarkable. Mr. 239i
Lacroix, the man who has apparently convinced the Civil Service Commission, sent a petition to the minister on the 20th January, signed by ratepayers of the village or .station of Sayabec, in which they say:
That they wish to put very respectfully before His Honour the Postmaster General that Mademoiselle Boulay, postmistress of the said village, having given her resignation ought to be replaced soon.
And they are made to ask that occasion should be taken to give Mr. Lacroix the appointment as the new postmaster, and they point out the advantage of having the post office in a central site which they understand he controls. This was certainly ingenious on the part of Mr. Lacroix. He does not get very much, perhaps, from the minister, who just simply acknowledges receipt of his letter, and tells him that he has not received the resignation of Miss Boulay, and that in consequence the position is not vacant. So that down to the 25th January the minister is finding no fault with Miss Boulay. On the 6th February we have a letter written by Mr. Pelletier, the present member for Matane, addressed to William Foran, Secretary of the Civil Service Commission, dated 6th February in which he says:-
A few days ago I wrote to the hon. Postmaster General in regard to a proposed transfer of the post office at Sayabec. My request has been referred to the deputy Postmaster General for inquiry and report. Thinking that this matter is under the control of the Civil Service Commission, I would, therefore, ask you to do nothing in this matter until I have the opportunity of conferring with said commission.
The previous letter, so far as I can find, is not on the files, and I do not know whether it refers to Mr. Lacroix, and I do not know what the contents were; it has not been returned. Then on the 28th February Miss Boulay writes to the minister and speaks of the lease of the building, the time of its expiration, and says that this building has. become the property of Mr. A. Lacroix since the 15th March, and that she has seen Mr. Lacroix and asked him if he would consent, after the expiration of the lease, to lease the building to her, but she has not been able to obtain any answer. On the 21st March the member for Matane again writes to the hon. Postmaster General and says:
In connection with the post office at Sayabec, I wish to state that, setting aside all political feedings, I must say in justice to all parties concerned, that Miss Boulay, the present postmistress at the above-named place is the daughter of my opponent Mr. Hermene-gidde Bouilay, and that the said Miss Boulay,
["I have the honour to inform the House that I have received the following letter:\nOttawa, 12th June, 1923.\nSir,-I have it in command from His Excellency the Governor General to transmit to you copy of a despatch from the Secretary of State for the Colonies enclosing copy of a note from the French Ministry for Foreign Affairs, conveying the thanks of the President of the Republic for the joint resolution of the Canadian Houses of Parliament regarding the gift of land on Vimy Ridge by the French government.\nI have the honour to be, Sir,\nYour obedient servant,\n(Signed) Joseph Pope. Under-Secretary of State for\nExternal Affairs.\nThe Hon. Speaker of the House of Commons,\nOttawa.\nDowning Street, 29 May, 1923. My Lord,-With reference to my despatch No. 193 of the 28th of April, I have the honour to transmit to Your Excellency, to be laid before your ministers, the accompanying copy of a note from the French Ministry for Foreign Affairs, conveying the thanks of the president of the Republic for the joint resolution of the Canadian Houses of parliament regarding the gift of land on Vimy Ridge by the French government.\nI have the honour to be, My Lord,\nYour Lordship's most obedient humble servant.\n(Signed) Devonshire.\nHis Excellency,\nThe Right Honourable Lord Byng op Vimy, G.C.B., G.C.M.G.,\nM.V.O., etc., etc., etc.\n(Translation)\nFrench Republic Ministry of Foreign Affairs\nAmerica.\nMonsieur l'Ambassadeur.\nI have the honour to acknowledge receipt of the letter dated the 28th April last, and in which Mr. Erio Phipps was kind enough to enclose two copies of a resolution adopted by the Canadian parliament, to accept the gift by France of a parcel of land, on Vimy ridge, where it is proposed to erect a monument recalling the achievements of the Canadian soldiers.\nMonsieur le President of the Republic, to whom these documents were presented in pursuance of the wish of the Canadian government, requests me to convey his thanks and wishes you to transmit to the government of Canada the expression of his gratitude.\nMr. Millerand has appreciated most highly the so cordial terms which the Canadian parliament made use of to express its gratefulness to the French government.\nKindly accept, Sir, the assurances of my highest esteem.\n(Signed) Poincare.\nParis, May 15, 1923.\nOn motion of Mr. Fielding the House adjourned at 12.20 a.m. (Wednesday).\nQuestions", 'Wednesday, June 13, 1923']
Mr. FOURNIER:: Hear, hear.


Mr. BAXTER:: I hope the hon. member
will be able to carry the "hear, hear" out-
Dismissal of Mile. Boulay

side of this chamber, and go upon any platform in the country and advocate the spoils system, the slightest reference to which is met by a "hear, hear" from him.


Charles Alphonse Fournier: Well, I can do it.


John Babington Macaulay Baxter: I have every faith in the
ability of the hon. member in performing that which he claims to be able to do, but I do not know that such a thing would be so distinctly complimentary to him. The letter continues:
And that the said Miss Boulay is the daughter of my opponent Mr. Hermenegilde Boulay, and that the said Miss Boulay during the campaign of 1921 allowed her father to hold political meetings in the post office. Therefore, knowing as I do, that the present postmistress has taken a very active part in politics, I feel the post office should be moved to a place where it will be exempt from all politicad influence.
And that is quite right. If Miss Boulay were guilty there should be only one rule to apply. No postmistress or postmaster has any business to meddle with elections. But I say Miss Boulay should be treated at least as a British subject and get some fair form of trial. She should have that undeniable right which has always been accorded by the laws of both the races represented here, that a person should be heard in his or her behalf before being condemned. And Miss Boulay was not heard.


An hon. MEMBER:: The hon. member
is being heard.


John Babington Macaulay Baxter: The letter continues:
I therefore would recommend that the postmistress be dismissed and that Mr. Georges Bouchard, of Sayabec, who has a building that would suit the government and the public in general in that district, should be named in her stead.
I sincerely trust that you will take this matter in serious consideration and that you may see your way clear to grant my request.
Thanking you in anticipation, I remain,
Yours truly,
F. J. Pelletier.
Ten days is rather a long time. On the 31st March we have another letter from the member addressed to the minister and it is marked "House of Commons" and reads:
With further reference to the postmaster at Sayabec.
I am herewith enclosing two affidavits, one from Mr. Cote, merchant, saying that Miss Boulay has allowed her father to hold political meetings in the post office during the recent campaign.


Some hon. MEMBERS:: Hear, hear.


John Babington Macaulay Baxter: How amusing it is to some hon. members. Is it really enough that a member of parliament shall write these things to make them incontrovertible? Would hon. members who laugh like to be tried in that way themselves if anyone launched an accusa-

tion against them? Would anyone be quite content to have the unsworn testimony of the prosecutor accepted as sufficient, and not be heard on their own behalf? I do not think so. And why should politics make a difference? Why should it obstruct the principles of fair play? I have also a letter from the member for Matane (Mr. Pelletier) which reads:
With further reference to the post office at Sayabec, I am herewith enclosing two affidavits, one from Mr. Cote, merchant, showing that Miss Boulay, the postmistress, has allowed her father to hold political meetings in the post office during the recent campaign; also one from Miss Aurelie Imbeault. showing that the postmistress was actively engaged in political affairs on voting day.
I therefore reiterate my request that she be dismissed and that the post office be placed in charge of Mr. Georges Bouchard who lives right close to where the post office is now, and I may state that he has very good quarters and the people of Sayabec are seemingily anxious to have Mr. Bouchard take charge of said office.
Hoping that this matter will not be delayed, I remain, Yours very truly,
F. J. Pelletier.
Now there was probably some conversation in the meantime, but we have no note of it in these records. I will turn for a moment to these returns. Here is a copy of an affidavit of Mr. Cote which says:
I, the undersigned, Louis Cot6, merchant of the village of Saindon, parish of Sayabec, having been duly sworn on the Holy Scriptures, deponeth and saith:
That on November 29 last, 1921, a political meeting was held by H. Boulay, candidate at the last general election, in the county of Matane, at the post office of Sayabec Station, of which Miss Adrienne Boulay is in charge.
And I have signed.
(Signed) Louis CotI.
Sworn before me at Sayabec, this 27th day of March, 1922.
(Signed) L. P. Joubert, S.C.C.,
District of Rimouski.
Now this affidavit is regularly sworn by some one who, of course, violated the law of Canada in swearing any one to an affidavit.


Mr. MERCIER:: Why?


John Babington Macaulay Baxter: That surprises my hon. friend. There is such a thing as the Canada Evidence Act. There is also an act for the suppression of extra-judicial oaths. The furthest anyone can go is merely to make a statutory declaration. I will tell my hon. friend- and I am glad always to dispense a little information-that it is an absolute crime against the laws of Canada to swear a person to an affidavit unless with lawful authority. This, however, was taken in the absence of Mademoiselle Boulay. She never saw it. She was never confronted with the man who made it. Some one accepts it. She gets no

Dismissal of Mile. Bovlay
trial. She gets no hearing. It is matter for the judgment of the House if that is fair dealing. The affidavit to which I refer was simply a declaration on. oath that on the 29th November, 1921, a political assembly was held by Mr. Boulay, candidate for the constituency of Matane at the last federal election, in the post office of Sayabec station kept by Mademoiselle Boulay.
The next affidavit is by Aurelie Imbeault, of the village of Saindon, who is also sworn and who states:
I, the undersigned, Aurelie Imbeault, of the village of Saindon, in the parish of Sayabec, being duly sworn on the Holy Scriptures, deponeth and saith:
That Miss Adrienne Boulay, postmistress at Sayabec Station, has taken an active part in politics on polling day, by going in quest of women voters at their homes and taking them to the polling booth during the Dominion election of December 6 last.
And I have signed.
(Signed) Aurelie Imbeault.
Sworn before me, at Sayabec, on March 25, 1922.
(Signed) L. P. Joubebt, S.C.C.,
Dist. of Rimouski,
A declaration that she busied herself actively in politics on voting day by going to bring female electors from their houses to the polls for the federal election, in which, of course, her father was interested. That is the first instance that we have of anything like a charge. Then we have the reply to that on the 6th April from the Postmaster General (Mr. Murphy). He says.:
Dear Mr. Pelletier,	[DOT]
I am duly in receipt of your letter of March 31st enclosing affidavits in connection with the post office at Sayabec Station.
I notice that one of the statements is to the effect that the postmistress allowed the post office to be used for purposes which are improper and of a nature absolutely foreign to its destination as such. As an irregularity of so grievous a character cannot be tolerated, I have given orders for the dismissal of Miss Boulay.
Hon. gentlemen will note that the Postmaster General wrote to the depute for Matane in French. He received the letter in English. I suppose that is the explanation why the Postmaster General is not anxious to have a French-writing deputy. He can do the work himself.


Mr. MURPHY:: If my hon. friend will permit me, he misstates the position of the Postmaster General in that regard. He is anxious to have a French-writing deputy.


John Babington Macaulay Baxter: I congratulate the Postmaster General upon his taste, but not upon his speed. The Postmaster General said:
I note that one of these declarations is to the effect that the postmistress has permitted the use of the post office for an improper purpose and one absolutely foreign to postal administration. As an irregularity so serious cannot be approved, I have ordered the dismissal of Mademoiselle Boulay.
Tried in her absence, condemned without a hearing, and executed without mercy. On the 7th April, Mr. Eugene Lacroix, who afterwards got the job, but who was not the protege of the member for the constituency after all, though, perhaps, he may have thought he was, wrote asking what had been the result of a requisition signed by 235 people that he had sent three months before. He states that every day his friends of Sayabec are asking themselves what has been the result of the request, and he cannot give them information for he does not know any more about the matter than they do. He hopes for a response very soon, and he remains the very humble and very obedient servant of the Postmaster General, from whom he does not get any particular consolation. The minister tells him on the 15th April that that is a matter for the Civil Service Commission, and he says: "In case there should be any change of postmistress at the place indicated"-that is on the 15th April, but on the 6th April the Postmaster General had given orders for her dismissal. One is not surprised; the whole thing is evidently a political affair. The depute for Matane had a candidate and that candidate was not Mr. Lacroix, it was Mr. Georges Bouchard; and naturally the minister is not going to assist Mr. Lacroix by giving him any unnecessary information. On the 19th April, Mr. Coolican of the Post Office Department writes for the General Superintendent to the Acting District Superintendent of Postal Service at Quebec:
It has been represented to the department that the postmistress at Sayabec station has allowed the post office at that point to be used for improper purposes, and in view of the fact that the post office is rented by the government a serious offence of this kind cannot be countenanced.
Under the circumstances the Postmaster General has authorized a change in the postmastership at Sayabec station.
Mr. Boulay, the father, writes to the Postmaster General saying that he wishes to ask a favour, namely to keep his daughter there as postmistress. He tells him that she has gained her living for six or seven years and that the department has nothing to reproach her with; that some instances are without doubt going to be brought before him for the purpose of having her dismissed, but he hopes he will grant her request. He says that the dismissal would not serve the Liberal party very much for about nine-tenths of the Liberals in the county are in her favour.
Dismissal of Mile. Boulay

Moreover she is a woman, and he says that if the minister will refer to the dismissals made in Rimouski at the time when he was a member, the minister will see that one woman only lost her office, all the others being kept on by him.
I know before we get through the discussion, that it will be alleged that Mr. Boulay caused numerous dismissals.


Charles Alphonse Fournier: My hon. friend refers to Mr. Boulay. Is he the same gentleman who, when the Parliament building burned down, put in a claim for $200 for a bad promissory note and a pair of mittens?


John Babington Macaulay Baxter: I would be more than
happy if I could give my hon. friend any information he desires, but I shall have to say to him that, so far as I know, he is not.


An hon. MEMBER:: He is the same one.


John Babington Macaulay Baxter: My hon. friend speaks of some instance of which I never heard. I brought the matter personally to the minister's attention on the 20th April, 1922, and this is the first that I had heard of it. I told the minister that it was rumoured that Miss Boulay was to be dismissed, although her father did not know for what reason. The minister then replied to me on the 26th April, stating:
This case has been before me for consideration, and in view of the fact that the postmistress allowed the building rented by the government for post office purposes, to be put to improper use, I have been obliged to follow the departmental procedure in such cases and accordingly gave instructions that her services be dispensed with.
In view of the courtesy of your letter, I may assure you that the circumstances of the case and the evidence submitted, amply warrant the action taken.
Now, so far as the record discloses, that is all I have; I have given hon. members every syllable of the testimony that was submitted to the minister. The minister continues:
From the terms of your letter, I judge that you are not acquainted with Mr. Boulay. At the first opportunity I will show you some illuminating exhibits from the official files.
I thought it was Miss Boulay that was on trial and not her unfortunate father. But as an excuse for the dismissal of the daughter there can be shown me some illuminating exhibits from the official files with reference to the father. Then we have a very large petition sent to the Postmaster General signed by numerous residents of this locality who say that Miss Boulay has for many years been postmistress in this place and has given general satisfaction, that the office has been
fMr. Baxter.]
kept in a perfect manner to the satisfaction of the public and the authorities of the postal department; and they insist strongly in their demand that she be allowed to continue in the exercise of her functions. They are strenuously opposed to any change in this relation. That petition was sent in in April, 1922, and, as I say, was numerously signed. On the 4th of May, Mr. Boulay, the father, writes to Mr. Tanner Green, inspector of post offices, that he is well enough informed to be able to deny swearing to the accusation in the name of Mile. Boulay and to demand an inquiry at which he desires to be called, if justice can be accorded. Mile. Boulay, he says, has never given any permission to make use of the post office for any improper purpose; and that such a suggestion is a black calumny.


Paul Mercier: Who signed that?


John Babington Macaulay Baxter: Mr. Boulay, the father; this is a letter to Mr. Tanner Green. Then we have Mr. Bouchard's application. There is a lot of correspondence leading up to that, and in answer to the civil service form, inquiring whether he has any defect of sight, hearing or speech, or any other infirmity, he says he has. That was the gentleman, however, who was being backed by the member for the time being. Some nine persons made oath again on May 8, 1922, that they were present in the post office at a political meeting held by Mr. Boulay and his friend Mr. Martineau at Sayabec. This is a solemn declaration, but they do not say that Miss Boulay knew anything about the matter, gave permission, opened the door or lent the key; it is alleged, only, that she was the holder of the office at the time. We also have a little sidelight on the way people were putting petitions around there when we find a lady making a declaration that she and others had been asked to put their names to a petition alleging that a request had been made that Miss Boulay might be paid her salary for the month of April. The lady who signs this says that the petition was supposed to be for the purpose of obtaining a pension for Miss Boulay, she having held the post office for more than ten years. But it was really a petition for the appointment of one of those who sought office.
On the 4th May, the Postmaster General apparently thought that it might not be quite fair to deal with the matter in the summary manner he had intended, and so he wrote to his friend the hon. member for Matane (Mr. Pelletier) enclosing some correspondence. He says:

Dismissal of Mile. Bovlay
In reading the enclosures, please note that Boulay denies, over his own handwriting, that any meeting was held in the post office.
After you have read the enclosures, I would like to see you about the whole matter, as it is evident that Boulay is in touch with his party friends with a view to having the matter ventilated as a grievance.
On May 6, the hon. member replies:
I shall read the enclosures very carefully and will be pleased to see you on Monday next and explain fully what the conditions are and have been at Sayabec.
I would not have asked the dismissal of the postmistress had I not been in a position to prove everything I have advanced against her.
That proof, however, has not yet been adduced. On the previous day, May 5, the same hon. gentleman writes Mr. Tanner Green, Inspector of Post Offices, and again recommends Mr. Bouchard as postmaster. He is persuaded that he is a sober man, is competent, and will know how to do justice to all the citizens of Sayabec. He recommends Mr. Bouchard to the Civil Service Commission and the Post Office Department. One would hardly have supposed that it would be necessary to have a Civil Service Commission if recommendations of this character were to go very far. Then the minister writes to Mr. Boulay stating:
In the course of the correspondence from you, I observe that you state that the Conservative party in 1911 did not dismiss anybody in your county without holding what you term a "reasonable inquiry". This statement led me to ask for the production of the files, and I regret to say that their contents are in direct contradiction of your statement. Without going into too many details, allow me to say that ^ in the case of the county you represented, I find, in your handwriting, one list demanding the dismissal of no fewer than 23 postmasters, on the sole ground that they had taken an active part in politics against you. I further find that in each of the 23 cases the postmasters were dismissed without any inquiry whatever, and without any other evidence than was furnished by the list in your handwriting, demanding the dismissals solely on political grounds. You must, therefore, admit that if the department were to follow the example furnished by the written proofs on file here, there would be wholesale dismissals in your county, as there were in 1911, on the mere demand of the sitting member.
But Mr. Boulay does not accept that view at all. On the 8th of May he says:
I have perhaps asked for the dismissal of these persons to put back the offices into the hands of those that the Liberal party had taken them from in 1896, and not otherwise. At the time I asked for the dismissal of these twenty-three postmasters this was refused, except in the cases above cited, without previous inquiry: and I defy you to prove to the contrary of that statement in any case in this county.
He alleges that political friends of his were brutally dismissed in 1896 without any other reason than politics. He asserts that he has not asked for the dismissal of anyone for political reasons. All that was asked generally in 1911 was simply the re-establishment in their original positions of those
people whom the Liberal party had thrown into the street in 1896 and very few were put back.
My friend from Matane (Mr. Pelletier), however, does not cease his efforts. On the 9th May he sends the minister an applicatior signed by Mr. Bouchard, who had succeeded in being placed temporarily in charge of the post office at Sayabec Station. The minister replies on the 13th May and says that the representations made on Mr. Bouchard's behalf will be referred to the Civil Service Commission, by whom, under present legislation, the regular appointment will be made. Then my friend from Matane comes back on the 2nd June with another letter to the Secretary of the Civil Service Commission, in which, after acknowledging receipt of a communication from the secretary stating that the position is now vacant, he says:
I thank you for having advised me of the fact, and in passing permit me to say to you that Mr. George Bouchard, who was chosen as postmaster a couple of months ago, is very competent and, besides, I learn that he has spent $250 to $275 to repair the office. No doubt Mr. Bouchard will make application and you will see by his work that he is very competent to fill this position.
He adds he cannot recommend Mr. Bouchard too highly. On the 8th June he again asks the Secretary of the Civil Service Commission to take Mr. Bouchard's application into his "serious consideration," and on the same day he sends, under separate cover, two more letters of recommendation on behalf of Mr. Bouchard. On the 4th July Mr. Tanner Green writes to Mr. Eugene Lacroix,-the man who eventually got the appointment-sending back his petition on the ground that it was not dated and that all he had was a typewritten copy. Then Mr. Lacroix writes to the Postmaster General that his petition was in the minister's office. He apparently could not get it there. It went back and forth and nobody knew where the 'missing petition was, but Mr. Lacroix writes Mr. Tanner Green on the 8th. July telling him that he has sent the original to Mr. Pelletier, who said that he had sent it to the Postmaster General. The writer also encloses a letter which he had received from the deputy for Matane and he wants to know where the original petition is. The Postmaster General even got a ruling from the Justice department, which states as a fact that the postmistress of Sayabec having allowed the post office to be used for a political meeting, she is guilty of improper conduct and subject to removal by the Postmaster General. One would still think the charge should be proved and the woman given a chance to defend herself. On the
Dismissal of Mile. Boulay

13th July Miss Boulay again denies that the meeting was held with her permission or with her knowledge. On the 3rd August the Postmaster General replies with the assurance that the proofs actually on file in the department are sufficient to show that no injustice has been done the postmistress.
On the 30th September Miss Boulay writes to the minister:
Having written you already many times asking you to be good enough to grant me an inquiry concerning my dismissal as postmistress of Sayabec Station, and never having had any response, I am again reiterating my request. I greatly desire to undergo an inquiry, and I hope you will accord it without further delay. You have no doubt received a copy of the petition from the public of Sayabec demanding that I be maintained in my office. The original was addressed to the Civil Service Commission.
In reply the Postmaster General tells her that he can add nothing to his previous communications upon the subject. On the 27th November Mr. Tanner Green writes the Civil Service Commission saying:
With reference to the commission's letter of the 24th instant, asking for further information regarding the comparative qualifications and premises offered by Messrs. Bouchard and Lacroix, applicants for the Sayabec Station postmastership, the undersigned advises that Mr. Bouchard, who has been in charge of the post office since the 8th April last and who previous to 1911 acted as assistant to his father, the then postmaster, is surely the better qualified of the two.
His quarters are sufficient, adequate and well located. Doubtless more central than Mr. Lacroix's, and therefore his selection would seem to be justified on these premises.
I do not propose to go into the competition between these two men or the attitude that has been taken either by the minister or his deputy in regard to the matter. I think I have referred to all the correspondence that is material, and I know it will be useless to take up the time of the House any longer.


Some hon. MEMBERS:: Hear, hear.


John Babington Macaulay Baxter: Well, it is a great pleasure to have the concurrence of hon. members opposite in some things. I know there will be no change made in this postmastership, but I want to put it on record as a regrettable fact that anyone should be dismissed on the written evidence of witnesses behind his or her back without being given an opportunity to cross-examine or challenge the witnesses.
I think her request for a full inquiry should have been granted. No matter what may have been done in the past, I say
4 p.m. it is still more unfortunate if we are to have a continued system of reprisals after every change of administration under which we are to be looked upon as enemy parties, each seeking to acquire some advantage over the other. When this House

decided in favour of a Civil Service Commission it was to get rid of such a discreditable system. If, however, the Civil Service Act is to be practically disregarded, if we are to have dismissals merely at the request of the member for any constituency, and if we are to have a minister complaisantly granting such requests, we need not wonder if the Civil Service Commission gradually lapses into a body without very much vitality and accepts the pretty direct suggestions that are made to it through the medium of correspondence such as I have quoted.


Charles Murphy: Mr. Speaker, before dealing with the issue raised by the hon. gentleman (Mr. Baxter) who has just taken his seat I desire to thank him and the other members for the cordiality of the welcome which they extended to me upon returning to resume my duties in this Chamber after a long period of enforced absence. I desire also, Sir, to thank the hon. member for St. John City (Mr. Baxter) for his courtesy in allowing the matter under discussion to stand over from yesterday so that I might have an opportunity to familiarize myself with the facts of the case which he has brought to the attention of the House.
To give these facts their proper setting allow me to furnish some features which were not included in the hon. gentleman's statement. My hon. friend began his very temperate and fair presentation of the case by saying that judging by the record the sole offence chargeable to the postmistress at Sayabec Station was that she was the daughter of the previous member of parliament for that county. That, Mr. Speaker, I need not say is not correct, but I might add that if my hon. friend had been a member of this House from 1911 to 1917 he would be more fully aware than he is at present of the seriousness of the charge that he himself has made against the late postmistress at Sayabec Station. I would like to point out for the information of the House and for a proper understanding of the matter under discussion just how firmly entrenched was the Boulay dynasty at Sayabec Station. In the first place it is not the postmistress, the daughter, at all who is the chief actor in this matter. The moving spirit and the directing mind is the father, Mr. Hermenegilde Boulay. Mr. Boulay was the member for that county fjom 1911 to 1917. During that period, referring only to his activity in connection with the Post Office Department, he induced the Public Works Department to lease a building for post office

Dismissal oj Mile. Boulay
purposes to Mrs. H. B. Boulay, his wife. Then he made a charge against the then postmaster, had him dismissed on political grounds, and induced the then Postmaster General to appoint his daughter, Miss Adrienne Boulay, as postmistress at Sayabec Station. Then, as a good provider, as the head of a family ought to be, in order to see that nothing would escape the Boulay family, he had his son made the contractor for the carriage of the mails at Sayabec Station. So that my hon. friend, who apparently was unaware of these facts, will appreciate how deeply incensed was the Boulay dynasty when their entrenchments were disturbed by the unfeeling member for Matane (Mr. Pelletier). So much for the situation at Sayabec Station.
In connection with the renting of the building Mr. Boulay was not only not satisfied with having the ordinary arrangements applied in the lease that was made between the Department of Public Works and his wife, but he succeeded in having the rule applicable to such cases set aside. I might explain, Mr. Speaker, not for your benefit, because as a former Postmaster General yell are quite familiar with it, but for the benefit of my hon. friends in the House, that the usual practice in the case of an office such as that at Sayabec Station is to grant a rent allowance based on the revenue of the office, and when that js done the postmaster takes that amount and rents the office and pays for it himself. But not so with Mr. Boulay in the case of Sayabec Station. He first of all saw to it that his daughter got the usual allowance of $75 based on the revenues of the office, and then he got the Public Works Department to enter into a lease with his wife and add $125 more, so that they got $200 for this office which Miss Boulay should have provided out of the $75 allowed her by the Post Office Department. These are some slight features that have a bearing on the case.
Now let us for a moment dwell on the statement which my hon. friend extracted, and quite properly from a letter of Mr. Boulay which appears on the record, that is, that Mr. Boulay resented the statement that he had dismissed people on the wholesale scale charged against him, after 1911. Well, the records show that in this county there has been but one dismissal at the instance of the present member, while Mr. Boulay in a shorter time dismissed thirty-five, and I hold in my hand a list in Mr. Boulay's handwriting demanding the dismissal of no less than twenty-three people on the sole ground that they had been guilty of active political partisanship. I observe that my hon. friend quoted a statement from Mr. Boulay's letter to the effect that he had only made this request in the case of people who had replaced Conservatives who had been removed from office by the Liberals, but unfortunately for Mr. Boulay the document itself does not bear that out, because in certain paragraphs he does distinguish by asking for the reinstatement of certain people, but in other paragraphs he makes just the plain request that Mr. So-and-So be removed and Mr. So-and-So put in his place.


John Babington Macaulay Baxter: They were not removed, were they?


Charles Murphy: Yes, they were. They were removed on the authority of a little tell-tale pencil interl'neation which I will read, and which is as follows: "O.K.-LP.P." in every case.


Paul Mercier: Whose initials are those?


Charles Murphy: L-P.P. are the initials of the former postmaster general, the Hon. Mr. Pelletier.


Paul Mercier: Does it say that an inquiry was made?


Charles Murphy: No there was no inquiry made in any case. Now what are the charges in the present case? The charges on which the action was taken are two. First, that the postmistress allowed the building to be used for the holding of a political meeting. As to that we were furnished with a written statement by the hon. member for Matane.


John Babington Macaulay Baxter: He was not at the meeting surely.


Charles Murphy: I do not know whether he was there or not but in any event he makes the statement as a matter of personal knowledge and on his responsibility as a member of the House-a ground that in previous days was deemed amply sufficient to grant the request of the Conservative member supporting the administration of the day. But we have much more than that. We had supporting the statement of the hon. member for Matane the affidavit of Louis Cote which my hon. friend read, and which I propose to read in turn in order to make comment upon it:
I, the undersigued, T.ouis Cote, merchant ,of the village of Saindon. parish of Sayabec, having been duly sworn on the Holy Scriptures, deponeth and saith:
That on November 29 last, 1921, a political meeting was held by H. Boulay, candidate at the last general

Dismissal of Mile. Bonlay
election in the county of Matane, at the post office of Sayabec Station, of which Miss Adrienne Boulay is in charge.
And I have signed.
(Signed) Louis Cote.
Sworn before me at Sayabec, this 27th day of March 1922.
(Signed) L. P. Joubert, S.C.C.,
District of Rimouski.
Now, my hon. friend (Mr. Baxter) in commenting upon that seemed somewhat to attack the validity of the document, on account of the manner in which it was drawn up and sworn to. I understand, however, that the form in which this document was drawn up is a customary one in the civil courts of the province of Quebec.


An hon. MEMBER:: In the superior
courts.


John Babington Macaulay Baxter: Part of my criticism is
that although a political meeting was held it does not appear that Mademoiselle Boulay had any knowledge of it or gave any consent to it.


Charles Murphy: It does not appear she
had any knowledge or gave any consent, but she must have given the key to her father because he said "It was I who opened the door."
My hon. friend also referred to another (affidavit supporting the charge of the hon. member for Matane. He read this in part: he did not read the whole of it. Had he read the whole of it I think the House would have been more impressed with its importance. I propose to read the whole of it. The affidavit in question is as follows:
We, the undersigned, of the parish of Ste. Marie of Sayabec, being sworn on the Holy Evangelists, respectively make oath and say, that on the 29th day of November last we assisted at a political meeting held in the post office of Sayabec Station, of which Miss Adrienne Boulay was the official at the time.
The aforesaid meeting was held by the candidate, H. Boulay, and his friend, Mr. Martineau of Quebec.
And we make this declaration solemnly, knowing that it is of the same force and effect as if made under oath, and in virtue of the Canada Evidence Act,
And we have signed,
This is the part my hon. friend omitted:
E. Banville,
Leopold Joubert, cult.
Francois Jean, cult.
Louis Cote, marchand,
VrcrowEN Smith, inspecteur, Octave Ouellet, cult.
L. P. Lepage, M. dentiste.
Romeo Ringuet,
J. Geo. Bouchard, H.C.S.
Now this is a formidable list of names, and my hon. friend passed them over in presenting his version of the affidavit to the House. The affidavit concludes:

Declared before me at Sayabec, the 8th day of May, 1922.
(Signed) L. P. Joubert, J.P.,
District of Rimouski.
I have mentioned that Mademoiselle Boulay was not present at this meeting, but in a letter dated the 8th May, 1922, Mr. Boulay writes in the course of this communication addressed to me as follows:
A speaker made a speech in the waiting-room of the office, but it was without the permission and knowledge of the postmistress, because it was I who opened the door.
The father says the daughter was not there and the meeting was held without her knowledge and without her permission, and he gives us proof of that. He says "It was I who opened the door." Well, it is impossible to shift responsibility in that way in view of the activity of the father throughout all these proceedings. The use of a building for other than post office purposes is specifically prohibited by a rule or regulation of the department. That rule or regulation is imparted to the incumbent of each office upon such incumbent assuming the duties of his or her office, and my information is that such rule or regulation was communicated to Miss Boulay in the case of the post office building at Sayabec Station. Hence she violated that rule with knowledge of the consequences.
The second charge was that she was engaged in active partisan work during the general election of 1921. As to that there is a statement in the letter from the hon. member for Matane, and there is a specific affidavit on the point from Miss Aurelie Im-beault which reads as follows:
I, the undersigned Aurelie Imbeault of the village of Saindon, parish of Sayabec, having been sworn on the Holy Evangelists, depose and say:
That Miss Adrienne Boulay, postmistress of Sayabec Station, was actively engaged in politics on election day, in bringing female voters from their homes to the poil, on the occasion of the federal election, December 6, last.
And I have signed.
Aurelie Imbeault.
Declared before me at Sayabec, the 8th day of Mav 1922.
(Signed) L. P. Joubert, J.P.,
District of Rimouski,
For the benefit of hon. gentlemen who may not understand French I may say that the person who makes this affidavit swears that to her knowledge Miss Boulay was engaged in bringing female voters to the poll on election day, and it would be too great a stretch of imagination-even at the request of an hon. gentleman whom I respect as much as I do my hon. friend (Mr. Baxter)-to think that

Dismissal of Mile. Boiday
Miss Boulay was bringing voters to the poll to vote for the present hon. member for Matane.


John Babington Macaulay Baxter: I would not ask you to
think that, but I ask you to try and prove the charge.


Charles Murphy: Miss Boulay has been
guilty of a violation of section 32 of the Civil Service Act which reads as follows:
32. 1. No deputy head, officer, clerk or employee in the Civil Service shall be debarred from voting at any Dominion or provincial election if, under the laws governing the said election, he has the right to vote; but no such deputy head, officer, clerk or employee shall engage in partisan work in connection with any such election, or contribute, receive or in any way deal with any money for any party funds. 1908 s. 43 amended.
2. Any person violating any of the provisions of this section shall be dismissed from the Civil Service.
Now, Mr. Speaker, I am not going to take up the time of the House unnecessarily. I would submit that an offence was committed under the law as it stands at present, and as it stood on the date of the last general election. The proof of the offence was furnished to the Post Office Department. The penalty provided by the law which was violated was then applied by the department. And I submit further, Sir, that the action taken on that occasion by the department, under my instructions, was amply justified by the circumstances and was entirely in the public interest.
Mr. FRANCOIS J. PELLETIER (Matane): The Postmaster General has so completely proven his case that there remains but little for me to say. However, I wish to offer a few observations. At the outset let me say that evidently my hon. friend (Mr. Baxter) cares very little for the people's money when he occupies the time of the House in discussing a question of this kind. By this waste of time he has caused quite a large expenditure. Who is responsible for it? An hour and a half of the time of the House has been wasted in the discussion of this case and this means the expenditure of a large sum. You know, Mr. Speaker, the amount that is involved. If my hon. friend (Mr. Baxter) wants to give Adrienne : position I am informed and believe that he is a bachelor. He can therefore offer her a better position than she would enjoy as postmistress.


John Babington Macaulay Baxter: May I ask the hon. member a question? Would he kindly recommend the young lady either to his leader (Mr. Mackenzie King) or to the Postmaster General (Mr. Murphy)?


Mr. ARCHAMBAULT:: She would never
marry a Grit.


Mr. PELLETIER:: As I have already explained, I wish to be brief; I do not want to spend the people's money for nothing. Now Miss Boulay was dismissed for cause, and my hon. friend the Postmaster General has proven it. May I add a little to the things she has done. She allowed her father to hold a political meeting in the post office. When the electoral list was posted in the post office, Miss Adrienne Boulay, my hon. friend's client, erased quite a number of names from the list, and why and how did she do it? Her father told her to do it, and she did it. On nomination day I met Mr. Boulay, and accused him of it in front of the returning officer at Matane, and he acknowledged that he had given her orders to do it. Is that satisfactory to my hon. friend for St. John? I believe he has a bad case. Furthermore, campaign circulars were sent to the Sayabec post office, and unfortunately they were for the Liberal candidates, but they were never distributed. That is another charge. I would not advance these things if they were not facts. Referring to Mr. Lacroix, Mrs. Boulay was the owner of the property and sold it to Mr. Lacroix with the understanding that he would have the postmastership. That is another charge, is it not? I hope my hon. friend will be satisfied, and if he needs more, I can give him plenty.


Mr. CANNON:: Let him off easy.


Joseph Archambault: Do not spoil his opinion about the girl.


François Jean Pelletier: In 1911 and 1912, as the Postmaster General (Mr. Murphy) has said, the member of that day asked for the dismissal of many employees, and if I may be permitted I shall read a letter that Mr. Boulay wrote at that time. This is addressed to Hon. L. P. Pelletier, and reads:
Ottawa, December 1, 1911.
Hon. L. P. Pelletier,
Postmaster General,
Ottawa,
Dear Sir,
The enclosed petition is signed by the political friends of Mr. Bouchard, with three or four exceptions and I have nothing to withdraw from my request. I take the position that there is only one thing to do, to change the post office. Besides, there has been an inquiry already which will prove po.tical partisanship on the part of the postmaster. The thing should be done without an inquiry because this man has been an open opponent of mine, not only all during the campaign but always.
I have the honour to be,
Your obedient servant,
H. Boulay.
Yet he claims that he has not asked the dismissal of any one. I have before me Sessional papers No. 88. I find here another letter December 10, 1911, to Honourable L. P. Pelletier, Ottawa, which I translate as follows:
Dismissal of Mile. Boulay

Hon. L. P. Pelletier,
Postmaster General!,
Ottawa.
Dear sir-I am of the opinion that I have overlooked giving you the names of those who should take charge of the post office at Sayabec; Miss Hedwidge Boulay-


An hon. MEMBER:: Another daughter. Mr. PELLETIER: The letter continues:
Kindly make those nominations at once in order that the changes be made while the employees of the post office department in Quebec are in the county doing that business.
Now, what were they doing there?


Joseph Archambault: Shopping.


François Jean Pelletier: Here is another letter dated Ottawa, and addressed to Mr. H. Boulay, s'gned, L. P. Pelletier. I translate as follows:
Ottawa, December 26, 1911. My dear sir,-I received your letter of the 10th instant recommending the nomination of Miss Hedwidge Boulay to the position of postmistress at Sayabec station to replace the postmaster who was dismissed. In answer I wish to say that I have given instructions to nominate Miss Boulay to that position according to your recommendation.
Yours very truly,
L. P. Pelletier.
And he is one of those, as I understood my hon. friend to say, who did not ask the dismissal of any one.


Mr. RINFRET:: Do I understand that Miss Hedwidge Boulay is another daughter of Mr. Boulay?


Charles Alphonse Fournier: Yes.


Louis Édouard Fernand Rinfret: He had the first one appointed and the other was appointed.


François Jean Pelletier: He did. Those who have known Mr. Boulay know that while he was a member of the House he had all the contracts, not only in his own riding, but he even went down as far as New Brunswick and elsewhere and would have contracts there. Mrs. Boulay would have one, Andre Boulay would have another, Adrienne Boulay would have another, and Hedwidge Boulay would have another.


Lucien Cannon: Not only family ties but railway ties.


Joseph Archambault: Did he have a contract in St. John?


François Jean Pelletier: I do not know. Probably my hon. friend knows that.


Mr. LOGAN:: He was having a bully time.


François Jean Pelletier: Here is another letter dated Ottawa. This is a good one.
Translated it would read:
Ottawa, March 4, 1912.
Hon. L. P. Pelletier,
Postmaster General,
Ottawa.
Dear Sir, I want to get through with Helene Joubert.


Hance James Logan: I see her finish.


François Jean Pelletier: You have refused to dismiss her without making an inquiry, promising that an inquiry would be ordered immediately, and it is not granted as yet. I want her to be dismissed immediately or that an inquiry be held immediately, one or the other, because I am too humiliated with that affair to stand it any longer.
I have the honour to be, Youds very truly,
H. Boulay.
It then happened that Miss Helene Joubert was dismissed and Miss Hedwidge Boulay, recommended by Mr. Boulay, took her place, the same as when Mr. Bouchard was dismissed, Miss Adrienne Boulay was placed in his stead without inquiry.
I said at the outset of my remarks that I am sorry to see the time of the House being taken up with such a case as this. I was under the impression that the hon. member for St. John City (Mr. Baxter) would not take up a question of this kind to kill the time of the House. Knowing his ability as I do, I am really surprised. At the same time, now that this has been done, if he wished to give Miss Boulay a position, he can do so.


[Stage Direction]
Motion agreed to, and the House went into Committee of Supply, Mr. Gordon in the chair.

[Stage Direction]
Railways and Canals-chargeable to capital-Welland ship canal construction, $11,800,000.
Mr. CHURCH:: How much money has
been spent on the Welland canal? How many sections have been completed and how many sections remain to be done? Fifty or sixty million dollars have been spent on this work, and an effort should be made to finish the canal as soon as possible. The matter was very carefully considered from many standpoints, and after many years spent in investigation and discussion, the work went on. Last year we were told that the canal would not be open until 1927. It is a matter of economic necessity that the construction of the canal should be brought to a conclusion as soon as possible, so that the people of Ontario and also of the West may derive the benefit from the work already done and the

Supply-Canals
money spent. The Erie canal was opened two or three years ago although the construction of it was commenced at a later date, and the people are getting the benefit of that very important work on the other side of the border. The minister is aware of the congestion on the Great Lakes. If the Welland canal were finished, boats would be able to come down from the upper lakes to lake Ontario and the St. Lawrence. I think the work should go on somewhat faster. I appreciate the work that was done last year and previously. Will the contractors be allowed to use their own plants by which they may effect economies, instead of having to use plants provided by the government and in many cases not up to date? Surely this canal could be opened in 1925 instead of 1927.
Hon. GEORGE P. GRAHAM (Minister of Railways and Canals):	As hon. gentlemen
know, this is a pretty large undertaking. During the period of the war, the work was in a large measure stopped, and to my mind rightly so. There are under contract five sections, no section of which is really completed. It was thought there would be four more-numbers six, seven, eight and nine; but I understand that eight and nine will probably be merged into one contract so that there will be three further sections to let. My hon. friend asked if hereafter contractors would be allowed to use their own plants. That question appears peculiar, but it is not. The department, under an arrangement with contractors, found themselves with about $2,000,000 worth of plant on hand, and in letting new contracts, they asked the contractors to take the plant over at a reasonable price. This was done. That was the only case in which contractors were not allowed to use their own plant. Of course it became their own after they purchased it from the government. This plant, I understand, has been absorbed, and they are at liberty to use their own plant now. About $34,000,000 has been expended, and the canal will cost altogether at least $80,000,000 and, perhaps a little more. It is an absolute physical impossibility, so I am informed, to complete the work in 1925. It is expected that the canal will be completed in 1927, that is, in about three years and a half. I think my hon. friend asked me the number of locks. There were 25 locks heretofore; there will be seven now. The size of the locks is 80 feet wide, 800 feet long with a 30-foot draught.


Sir HENRY DRAYTON:: We have five different sections, and my recollection is that all that work is under contract?


Mr. GRAHAM:: The first five sections are.


Henry Lumley Drayton: As matters stand at present the government are carrying on no work themselves at all. Their work has been entirely abandoned. I take it therefore that the government have no commitments whatever in connection with the Welland canal outside the existing contracts. For example, we are not buying supplies of any kind, are we?


George Perry Graham: The arrangement, I think, has always been for the department to supply the cement for the different contracts. That is the practice in connection with all canal work.
Sir HENRY DRAYTON; So that the government arc still purchasing the cement?


George Perry Graham: Yes.


Henry Lumley Drayton: Apart from that, they are not buying anything?


George Perry Graham: I am informed by the chief engineer that the government provides certain structural work. I presume the reason is that they want to be sure that they are getting the right material. This is all considered'in the contract.


Henry Lumley Drayton: But over and above that, do they buy anything, such as coal or sand?


George Perry Graham: No.


Henry Lumley Drayton: Neither coal nor sand. Well, how is the price of the cement arrived at?


George Perry Graham: Tenders are called for, the lowest of which is invariably accepted.


Henry Lumley Drayton: I had reference to these contracts. Do the contracts include (he cost of cement which is rebated by the contractor to the government?


George Perry Graham: The terms of the contract are that the department shall supply the cement.


Mr. LEWIS:: How much of this work is completed?


George Perry Graham: No section has been absolutely completed yet.


Arthur John Lewis: Are the government employing any men of their own on the work?


George Perry Graham: The department, of course, must have its engineering staff to see that the work is properly done, in addition to a certain number of staff inspectors, just the same as on any other contract.
Supply-Canals


Arthur John Lewis: I understood that this work was all under contract, but I see in to-day's paper that carpenters, plumbers and steam-fitters were making a protest under the nine-hour day advocated by the Minister of Labour (Mr. Murdock). I was wondering whether these men were in the employ of the government or whether they were working under the contractors.


George Perry Graham: What is known as the old Welland canal is still in operation with all its men, and the staff to which my hon friend refers has nothing to do with the construction of the new Welland canal. Those men are employed on the old canal.


Mr. GERMAN:: Is the minister giving any consideration, in connection with the construction of the Welland canal, to the report of the International Waterways Commission in regard to the proposal of the United States government to join with the Canadian government in studying the St. Lawrence waterway question? Under that scheme the United States government would pay such proportion of the cost of construction of the Welland canal as their use of that waterway would compare with the use of it by Canadian shipping. That report appears to indicate that if the St. Lawrence deep waterways construction is gone on with, the proportion which the United States government would pay of the cost of the Welland canal would be, at any rate, 75 per cent. The Welland canal is going to cost $100,000,000 or more, and its usefulness will be very much restricted unless the work is carried on to tidewater. That, I think, is admitted by everyone who has any knowledge at all of the circumstances. There is no question that it would be of some use in allowing upper lake freighters to come from the upper lakes into lake Ontario, thereby reaching such ports as Toronto, Hamilton and Kingston. It would also be of great advantage to United States shipping, because it would allow upper lake freighters to reach Oswego, thus relieving the congestion in the port of Buffalo in the fall- of the year when there is very great traffic during the shipping of grain in the western provinces.
Now, the United States government is quite willing to join with the Canadian government in discussing this problem of the construction of the St. Lawrence deep waterways, and as a matter of fact it sent an invitation to the Dominion government some time ago looking to a conference. Indeed, the idea contemplated more than a mere conference; it suggested not only the making of a treaty, but, independently of that, the alternative that the representatives of the two governments 
should sit down together and discuss the question solely from the point of view of the feasibility and the practicability of the St. Lawrence scheme. The answer to that proposal made by the Canadian government at that time, which answer I think was quite proper then, was that the time was not opportune to take the matter up. But that was nearly two years ago and it seems to me that the time is now opportune. I would therefore respectfully suggest to the government that they communicate with the United States government indicating their preparedness to sit down with the representatives of that government in order to discuss, not a treaty, but the feasibility of the project, to ascertain whether or not it is practicable, and to discover the correctness or otherwise, in the light of the facts as they exist to-day, of the figures that have been given by the engineers That, I think, is the least that the government can do. The Prime Minister (Mr. Mackenzie King) stated to a very large and influential delegation which waited upon him and other members of the government some time ago that this government would be prepared to discuss the matter with the United States government if a proposal again came from that source. I respectfully represent, however, to the Prime Minister and his government that, the United States authorities having already extended an invitation U.r a discussion of the subject, the next move ought to be on the part of the Canadian government. The Canadian government, I think, should in all fairness now suggest to the limited States government that they are willing, without committing themselves to any definite line of action, without committing themselves to the construction of this gigantic work, to sit down and discuss the whole subject with representatives of the neighbouring republic. If that is done, I believe that a situation will ensue which will bring about the construction of the St. Lawrence deep waterways project. It is a scheme which undoubtedly will be carried out in the future, for it is one that will prove of enormous benefit to the people of Canada, and particularly to the grain growers of the western provinces. It has been said, and I have no doubt it is true, that in the fall of the year the congestion in the transportation of grain brings about an enormous increase in the lake freights, but with the St. Lawrence deep waterway in operation we would have an effective check on rate manipulation for we would have ocean-going boats proceeding to the head of the lakes and loading cargo for direct transport to Liverpool. I believe that this proposition is susceptible of complete and

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positive demonstration, and, if so, it will be an enormous benefit to the people of Canada.
As I stated, the Welland canal improvements will cost at least $100,000,000. If the United States government in joining with us in the construction of the St. Lawrence deep waterway will contribute 75 per cent of this cost, it will mean a saving of $75,000,000 to the taxpayers of this country. Therefore I do hope the government will seriously consider this matter in connection with the construction of this great work of the Welland ship canal, and in the very near future will communicate with the United States government with a view to bringing about a conference looking to the construction of the St. Lawrence deep waterway.


Mr. MILLAR:: Mr. Chairman, I propose to discuss this matter at some length, partly because the undertaking itself is1 of considerable magnitude, and partly because it has a direct bearing on the opening of the St. Lawrence route. In order to do so intelligently I must deal with the freight that passes through the Great Lakes. The greater part of this freight is iron ore, next comes coal, and thirdly grain. I know little about the other two commodities, so I shall confine myself to grain. I think perhaps the committee can best appreciate what I say in regard to this feature if they will picture to themselves the carrying of grain from the prairies down the lakes to Liverpool as resembling an inverted tree. The gathering of the grain in the provinces resembles very much the roots, then the trunk is represented by the western grain reaching Fort
5 p.m. William, whence on its way to Liverpool, it branches out to Owen Sound, Collingwood, Port Edward, Goderich, Port Colbome, Buffalo and some other points, 65 per cent of it passing through American channels.
Dealing with the cost of transportation, in the past we have heard a good deal about the immense saving that would accrue to the western farmers by the opening of the St. Lawrence route. Turning to the report of the grain commission appointed by the provincial government of Saskatchewan in 1914, at page 125 I find particulars of the cost of transporting wheat from Fort William to Montreal. The whole page is devoted to these particulars, but instead of taking up the time of the committee by reading all the different items I shall condense the information and merely give the averages. These different items I find average 4 cents per bushel exactly. The other pages that follow show slightly higher averages, namely, 4? cents, 5 cents and 6 cents.


George Perry Graham: Is' that water-borne traffic?


John Millar: Yes, all water-borne. Hon. members will note that the rate from Fort William to Montreal, water-borne, averages exactly 4 cents. Let me back up that statement by two extracts from a letter which appeared in the January number of Canadian Finance. This is the first extract:
Some of the ardent advocates of the new scheme go to extremes and use the abnormal rates which are charged for limited periods by lake shippers. . . . Taking the years 1912, 1913, 1914 and 1915, we find that the average all-water rates from Fort William to Montreal were as follows:
1912, 5.77 cents per bushel; 1913, 5.35 cents; 1914, 4.58 cents; 1915, 4.99 cents.
This is the second extract:
Taking the lake-and-rail route we find that the average rate during the above-mentioned four years was 7.47 cents per bushel-this includes the heavy rates prevailing in November and December. Certain storage privileges and saving in insurance go with this rate and, as a result, the lake-and-rail route has competed with the all-water rate of around five cents and secured a good volume of traffic.
My third extract is very short and is taken from Canal Statistics for 1913, a government publication:
The combined water and rail rate from Port Arthur-Fort William to Buffalo-New York in November, was 8.796 cents per bushel, as compared with an average for that month between Port Arthur-Fort William and Montreal of 6.341 cents. With an advantage of 2.455 cents per bushel in favour of the St. Lawrence route, it is still true that more than ten times as many bushels of Canadian wheat went out by way of Buffalo-New York in November as came down to Montreal.
I give those rates to show that the contention of some people that 5 cents a bushel can be saved by opening this route is in fact preposterous. In the evidence given before the royal commission on Lake Grain Rates. ? believe the consensus of opinion of the witnesses was that a reasonable rate at the present time from Fort William to the end of Lake Erie-Buffalo or Port Colborne-was & cent a hundred miles. That distance is about nine hundred miles. In other words, that gives a rate of 44 cents per bushel. A reasonable rate from there to Montreal, passing through the canals and lake Ontario, would be 2 cents per hundred miles. This latter distance is about three hundred and fifty miles. So this would give a rate of 7 cents per bushel. In other words, a reasonable rate at the present time would be 114 cents.	"


Mr. MANION:: Lake and rail or straight
water?


John Millar: All water. Just here allow me to step aside to mention something that has a bearing on this and yet it deals with rail rates. It does seem remarkable that the
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*rail rate from Armstrong, a point on the National Transcontinental directly north of Fort William, to Quebec, a distance of 960 miles, is 21 cents, whereas the rate from Calgary to Fort William, a distance of 1,296 miles, is 15i cents. Hon. members will note the comparison-that although the distance from Armstrong to Quebec is no more than 960 miles the rate is as high as 21 cents, as against a rate about a third less for a much longer haul. Perhaps hon. members may have the idea that the low rates are all in the West, but this illustration does not bear them out. I have not carefully verified the figures but in a pamphlet I have been reading I notice it is stated that the rate from Goderich by rail to Halifax, a distance of 1,305 miles, is 12i cents.


Robert James Manion: On what commodity?


John Millar: I am speaking of wheat entirely-12J cents per bushel. I should have stated that. It would seem to me that a lower rate by rail from Armstrong to Quebec would have enabled us to utilize that railway to better advantage and perhaps have prevented a lot of the congestion of last year. Now let me go back. If a reasonable rate from Port Colborne to Montreal is 2 cents per 100 miles, then a reasonable rate through the canals must be very much more, and a reasonable rate through lake Ontario would be very much less. That means that the rate through lake Ontario would be- it is hard to say just what a reasonable rate would be, but I think it would readily appeal to your judgment that 1 cent per bushel per 100 miles of lake Ontario would be a reasonable rate. Now after the Welland canal is opened it is plain that all the advantage will be that the larger boats will be able to pass down to a point at the eastern end of lake Ontario, probably Prescott or Kingston. The carrying power I admit will be very much increased. In a pamphlet issued by the Department of Agriculture at Washington I notice that this calculation is made in respect of one large shipping company. In the case of a large boat loaded down so that it draws about 15 feet of water every inch of increased depth, means 80 tons of 2,240 pounds; that is, an increase of depth of one foot would mean 960 of such tons. The present depth of the Welland canal being about 14 feet, and of the new canal about 25 feet, if it could be utilized at once it would mean an enormous gain in the carrying power of the vessels, but I think it is safe to assume that for some time it will not be possible to use any greater depth than twenty or twenty-one feet for the rea-

son that the depth of nearly all the harbours in the upper lakes, both lake Michigan and lake Superior at such points as Duluth, Milwaukee and Fort William, is only 21 feet so that until such a time as these are deepened it is likely that 21 feet is about all that will be used, but this in itself will mean a very great saving.
Let me say a few words in regard to the 65 per cent that is going through United States channels. I suppose it may be expected by some that the opening of this canal and the opening of the St. Lawrence river will hold nearly all of our Canadian wheat in Canadian channels. There are other reasons why our Canadian wheat goes through American channels. The route from New York to Liverpool although 500 miles longer than from Quebec to Liverpool has an advantage of about 2-55 cents per bushel in favour of New York, largely because, and I think entirely because the insurance rate is a little better, and there is much more traffic between the Old Land and New York than there is between the Old Land and Quebec. That 2-55 cents is a great drawing card, and a great deal of our grain passes that way for that reason.


Mr. ROBB:: Does my hon. friend seriously desire to convey the impression that the difference in insurance as between Canadian ports and New York is 2 cents per bushel? Perhaps he would tell us what is the total rate of insurance per bushel.


John Millar: I think my hon. friend misunderstood me. The total rate of carriage across the ocean is 2-55 cents in favour of New York, and while I am not just positive, I think a, part of that may be due to insurance. Nearly all of it is due to the fact that there is greater space at New York. Lei me make a remark here in regard to a matter that was discussed in the House a short time ago. We find that our grain on arriving in the Old Land is not in as good a condition passing through American channels as it is when it passes through Canadian channels. The reason for this is partly because the American people have considered in the past that when grain leaves the shores of the United States it is out of bond and mixing has been done-I know this for a fact-beyond the shore. The British people on receiving this grain complain, and I know on many occasions they have asked why it is so. I think they will have to learn, and the quicker they learn the better it will be for us, that they must accept this condition if they are going to take the grain through American channels,

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Now will the Welland canal when opened keep a larger share of our grain in Canadian channels? I am not sure, because while it will allow the grain, both American and Canadian, to pass through the Welland canal and to the eastern end of lake Ontario, I b'elieve that Oswego will become as keen a competitor for our grain as is Buffalo at the present moment. The natural place for the Erie canal is between Oswego and New York rather than between Buffalo and New York. The Erie canal runs eastward almost parallel with lake Ontario until it reaches a point nearly south of Oswego. Whether it be true or not I notice some comments in the American papers in which they claim that the expenditure on the Erie canal between Buffalo and New York was largely a political expenditure, and that it will be quite natural and more logical to spend money on the Erie canal between Oswego and New York. However, the canal is not a strong competitor. A few years ago, and I am not sure that it is not true up to the present time only 14 per cent of the grain reaching New York reached it by water. The American railwas^s with their increased carrying capacity, better roadbed and larger cars have become very keen competitors, and have in fact put the Erie canal pretty well out of business, and the fact that Oswego is quite as close to New York as Buffalo is, in fact I believe it is a little closer, leads me to believe that Oswego will be at least as keen a competitor for our grain as Buffalo is at the present time.
A year or two ago I would have been very much in favour of delaying the building of this canal, but I will frankly admit that the congestion of last year has placed a very strong argument in the hands of those who would like to see the work hurried. In that connection I believe that with a veiy much less expenditure, in fact, with just a little more care and activity on the part of some of the government departments-and I am very pleased to see the Minister of Trade and Commerce in his seat because I have some little criticism to make of his department-much of that congestion could be avoided. The congestion last year was caused very largely by the fact that Montreal was not able to handle the grain as fast as it came. The output of Fort William and Port Arthur is many times the capacity of Montreal, and yet it would appear that the Harbour Commissioners of Montreal did not divert one single vessel of export grain to the port of Quebec. The capacity of 2,000,000 bushels at the port of Quebec was not fully occupied during this period of congestion. The grain
backed up to Port Colborne, backed up to the lake ports and afforded not only an opportunity for higher rates but an excuse as well. Hence we have a monopoly on the Great Lakes exacting exorbitant rates, taking, it is modest to say, $5,000,000 out of the western producers. Does it not seem reasonable for the western producers, especially in this time of distress, to expect action on the part of the Department of Trade and Commerce? At least I believe I am right in saying wo have reason to look to the Department of Trade and Commerce to control this route for grain. We have a Grain Commission in the West that looks after the western end, but I think, perhaps, I am right in saying that in practice they do not regard it as their duty to keep track of the eastern end I am not sure about that, but judging from what they do I infer that they do not view it seriously as their duty to look after the eastern end of the route. Does it not seem strange, therefore, that the Department of Trade and Commerce-knowing the capacity of Montreal, knowing the enormous crop in the western provinces-were not a little more active in trying to avert the catastrophe that really did occur? I believe the department have been active in seeking a market for our product and in many other lines; but I think I must, in fairness, criticize them for their negligence and indifference to the interest of the western growers in not trying to avert this catastrophe. I do not know whether they interceded with the Harbour Commissioners of Montreal to divert some of the grain to Quebec and thus relieve the pressure; I do not know whether they did anything in the way of getting floating elevators that would transfer grain from one boat to another; I do not know what they did. The fact remains, even if they are able to show that Ihey tried to do their best, that there was a catastrophe and it resulted in enormous loss.
Now here is a suggestion I have to make: In past years we have, at about every ten year period, appointed a commission to investigate the grain trade. That commission found irregularities in every case and have given the information to the public. Then, it appears to me, we have practically sat down and allowed the same irregularities or others very like them-equally disastrous, equally against the interest of the producers-to grow up and become so bad that there was another outcry, another commission was appointed, another clean up took place, and then there was another sitting down. Now, that should not be. I think we have reason, as producers of

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grain far removed from this channel of commerce, to expect that the government, through some of its departments-and I believe it should be through the Department of Trade and Commerce-should see to it that this route is kept clear, and that such abuses should not be allowed to grow up to the extent that it is possible to impose a rate that takes millions of dollars from those producing grain.
I will not say anything about what is taking place west of Fort William because it is now the subject of investigation, and because it is not closely connected with the Welland canal, but my point is that in the case of such an enormous expenditure, while it may or may not be wise to push the enterprise through as quickly as possible, a great deal more gain would accrue to the western producers if the government were active in seeing that the routes through which our grain passes were kept free from those who would prey upon us and take far more for their service than they were entitled to. This has been the case from time immemorial and I think that if we are ever going to get back to reconstruction, if we are ever going to place agriculture in a position in which it ought to be and where it may become prosperous, the government will have to display a little more activity. It will have to see that the route beyond our control is kept free from such practices as have been proven to exist by the report in connection with the Great Lakes rates which has been handed in recently.
I believe the contract for this Welland canal was let at about $55,000,000. It does seem to me that large contracts such as this have a queer way of doubling and trebling in cost after they get started. The Panama canal cost at least four times the first estimate, and there are many other cases that might be cited. In the present instance it is stated the cost will perhaps be $100,000,000 or about double the original estimate, and that possibly it may reach even three times that estimate. So that with capital expenditure and accrued interest the outlay will be enormous before we have received one dollar in benefit; and I think it is plain, from the figures I have given you there will only be a gain of one or two cents a bushel by the opening of the Welland canal until the St. Lawrence route is opened. Therefore, although I think, perhaps, we are the most interested, the benefit we will derive will be slow in coming. I find there is considerable activity on the part of some members of the House of pushing the construction of the Welland

canal as quickly as possible. I cannot see where they are going to get much benefit. If anyone is going to derive benefit it is those who are producing grain, or shipping ore, or some of the other freights that are passing down.
There is a matter here that I would like to ask the minister a question upon. It has been stated several times by the minister that the request for this enterprise first came from some western people. I do not doubt for one moment that that statement is true, having come from the minister; but many of us in this corner of the House are in close touch with the farmers' organizations, and have been for years, and we know of none of them that have made that request. I would therefore ask the minister to state plainly just who it was that made that request. I have no doubt that some private individual may have done so, and probably people located around Fort William. They have been looking forward to the time when Fort William will become practically an ocean port. On another occasion I would like to deal a little more fully with that hope. I am afraid, they are doomed to disappointment. There will always be a time after the St. Lawrence route is opened up, and I believe it ultimately will be, when a number of vessels will ply between Liverpool and London and Fort William, but they will be very few in number, very few indeed. There are several reasons why Fort William cannot become an ocean port. There is the length of time it takes a vessel to pass up through the forty-four miles of canal between Montreal and Prescott at the rate of four knots an hour, then through the Welland canal, and there is the higher insurance rate and the greater risk attached to navigation by this route. I think a little study along that line will convince the members of the committee and the people of Fort William that the time when that place will become an ocean port is far removed. I think it well, in the case of each of these products, that we should carefully study the matter. We should not plunge too hurriedly into the opening of the St. Lawrence route, and the deepening of the St. Lawrence river at a cost now estimated at $252,000,000 but which, with our past experience, we may well estimate at two or three times that amount. Unless we move cautiously we will, perhaps, find ourselves in the same position with regard to those enterprises as we are in the case of the Welland canal. There is no thought of stopping it so far as any member of this House is concerned. We all know that it should be completed. It is only a question of how fast we should hasten the work. It

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is going to involve an enormous outlay, and I do not think the returns will be sufficient to warrant hastening the work, as has been proposed. It seems to me it would be wise to expend our money, for the time beings where it is urgently needed, and rather delay this work, even though it may not be completed for four, five or six years.
I have one word to say in regard to another matter. If we are going to have a bumper crop in the West this year-and the government can judge of that in a month or two- or anything like the quantity we handled last year, it would be well for the government to increase their elevator capacity at Montreal, and provide also some floating elevators. They cost about $100,000 apiece, and with these elevators grain should be transferred from one boat to another at the rate of about 10,000 bushels per hour. If a few of these floating elevators had been available last season, I think much of the congestion causing such an enormous loss would not have occurred.


James Alexander Robb: There is a floating elevator
there.


John Millar: The Minister of Trade
and Commerce says there is a floating elevator there, but I believe that floating elevator at Montreal is not entirely satisfactory. I do not know whether the reason is that it is an old type of floating elevator. The elevators used at New York are entirely satisfactory. I believe such elevators would be of great service. W'hen there is congestion at Montreal, and the elevators at Quebec are not being used to any very great extent, and partly empty, while Montreal is filled to the roof, I think it would be well if the Department of Trade and Commerce would intercede with the Harbour Commission, I suppose they desire to make a record, but it is not in the interests of the country or of the western producer that they should make a record and cause congestion and block the grain. It would be better if they would divert some of the boats and send them to Quebec, so that they could utilize the facilities there. At another time I shall have something more to say in regard to Quebec as a grain handling port. The National Transcontinental cuts off two hundred miles by having a direct route. There is a great saving in distance, and the largest boats can come to Quebec. If the railways were charging the same rates from Calgary to Quebec as they are charging from Calgary to Fort William, nothing more or less, the rate between Armstrong and Quebec would be exactly the same as the present water rate between
240i
Fort William and Montreal. Even at the present time it would seem as though some grain could go all rail; but by bringing down^ the rate to what they are charging in some other places, I think we could utilize Quebec to a much larger extent than we have been doing in the past. That might tend to prevent a considerable quantity of our grain going through American channels. The natural route for grain is by the St. Lawrence, and if we as Canadians are going to be more alert and do what we can to make that route attractive, we ought to be able to retain more of our grain than we have retained in the past. Many things attract grain. The quickness of handling, the fees at the harbours, and a lot of other little things have a great influence on the shipper when he is deciding which route he shall adopt. I would be pleased if the minister would answer the two or three questions I have asked.


James Alexander Robb: Before the minister replies,
I desire to make a few observations regarding the congestion of last year. I have no exception to take to the observations of my hon. friend (Mr. Millar) regarding the rate of freight that prevailed prior to 1912 from the head of the lakes to the seaboard; nor have I any exception to take to his observations regarding ocean steamers going to the head of the lakes. I understood him to say that that proposition was very remote. I agree with him. But with the deepening of the Welland canal, the larger boats operating on the upper lakes will be able to come further down the river, and to that extent reduce the cost of carrying grain from the head of the lakes to the seaboard.
I rose more particularly to answer my hon. friend regarding the congestion which developed towards the close of the season last year at the eastern ports. There was discrimination in freight rates on the upper lakes long before the congestion developed at the eastern ports, and if any department, or if any government, ever tried to regulate that, it is the government in power to-day, and having failed by persuasion and representation to get the shippers to do what was fair, the government hopes that when it comes down with legislation to try and effect a cure, it will have the support of parliament. It is true that towards the end of the season congestion developed at Montreal, and it is also true that there was and is a considerable capacity at Quebec. Early in the summer, I think it was probably in August, I made a special trip to Quebec to try and work out the elevators at Montreal and Quebec together, some arrangement whereby they could operate. General Tremblay made a special trip
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up to Montreal to have a talk with the Harbour Commissioners and urged upon them the importance of making great use of the elevators in Quebec, and I am not sure but that the Harbour Commissioners of Montreal were quite willing to co-operate with the Harbour Commissioners of Quebec to divert grain to that port. But the shipper has something to say about where his grain is going to be transshipped, and the shipper had had an experience in the Quebec elevator that was not very profitable. He has not yet learned that there had been a change of management in that elevator and that it is safe to put grain through it. They are putting grain through now because the shippers are confident that the grain will not be mixed, as it was a few years ago; but my hon. friend, I believe, is associated with a large elevator equipment in western Canada, and if his agent refuses to ship grain to any particular port, neither the Department of Trade and Commerce nor any other department could compel him to put that grain through that port. He owns the grain and routes it the way he thinks best. I want to dispel the illusion in the mind of my hon. friend that it is the duty of the government to go and tell the shippers which way they should route their grain. That is not the work of a department of government.


John Millar: Did the Board of Grain Commissioners not make a similar adjustment on the Pacific coast during the congestion, by bringing pressure to bear on shippers and railways and those wrho were handling the elevators? I think they brought about an adjustment of a very similar difficulty.


James Alexander Robb: I am glad my hion. friend has mentioned that. I will come to it in a moment. I was not going to touch on that. The duty of the Department of Trade and Commerce is to find markets for the products of this country. We leave it to the people of the country who are doing business to contribute in some degree towards getting their stuff forward. As a result of the experience of last year, the elevator capacity in Montreal will be considerably increased. They have now with the Quebec house a working arrangement which will take care of much more grain, and which, I believe to that extent, will minimize the possibilities of congestion this season.


Arthur Meighen: What is the arrangement?


James Alexander Robb: It is just a friendly working arrangement that the Harbour Commissioners send along grain when their elevator gets filled up, and I think the shippers now have confidence that their grain is safe going

through the Quebec house; that it will not be mixed as it was mixed a few years ago. A few years ago some of the large shippers put some grain through the Quebec house, and No. 1 northern was mixed with No. 3 northern and No. 4 northern with No. 2 northern. This was not a very profitable proposition for the shipper, and he simply boycotted the Quebec house for the time being. It is only recently that he is satisfied it is safe to put grain through the Quebec house.


Arthur Meighen: That is another question. I shall have something to say about that. I asked what the arrangement was, and I was told that it was a friendly arrangement. I did not expect that it was a hostile one. I want to know the terms.


James Alexander Robb: In what regard?


Arthur Meighen: What are the terms of the arrangement between the two commissions?


James Alexander Robb: There is just a friendly understanding as my right hon. friend and I might have an understanding that when he has too much business, he will give me a share of it. Broadly speaking that is the arrangement.


Arthur Meighen: What was to hinder their doing that before, that is during this past season? Surely they did not need to meet in order to do that.


James Alexander Robb: They did do so towards the end of the season.


Arthur Meighen: Why did they not do it in time for it to be of some use?


James Alexander Robb: I was answering my hon.
friend's observation that the Department of Trade and Commerce had done nothing. I am trying to convince him that we did something to contribute towards that understanding.


Arthur Meighen: Too late.


John Millar: The minister just stated that they did this towards the end of the season. I believe it is correct that not one bushel of export wheat was diverted from Montreal to Quebec last season.


James Alexander Robb: My information from General Tremblay is that some grain was put in the Quebec house towards the end of last season. It may have remained there all winter.


John Millar: I have that statement from the commissioners.

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James Alexander Robb: Probably my hon. friend is right. I was away at the time, but that was my understanding from General Tremblay As regards the Pacific coast situation, I would not like to say this boastingly, but the records are there that we have put more grain through the Vancouver house than had been put through during all previous years from the time of the construction of that elevator.


Arthur Meighen: Why does the minister say "we"?


James Alexander Robb: The government of the day.


Arthur Meighen: I understood the minister to say a few minutes ago that the shipper had the routing. I did not know the government had it. How is it that they have the routing via the Pacific coast?


James Alexander Robb: Probably more ships were brought in there and attention w'as directed to the value of that route.


Arthur Meighen: Hear, hear. The mercantile marine.


James Alexander Robb: I have not the figures before
me, but my recollection is that this year they will have put through the Vancouver house almost double what was put through it last year. When I was in Vancouver last fall, shippers were complaining bitterly and finding fault and one of the newspapers was carrying on a campaign because the government had not built another elevator there during the summer to provide for the extra business. The shippers were complaining that they were not going to be able to route through that port as much grain as there was a market for. I sent for the superintendent of the elevator, and he told me that he was running his house to full capacity. I said: "Are you working it nights?" He said: "No, we are running it only fourteen hours a day." I said: "You must get busy and run this house nights." He complained that he did not have expert elevator men to operate it; that there was a danger of mixing the grades, and that would do more harm than good. I immediately communicated with Mr. Boyd, Chairman of the Grain Commission at Fort William, and instructed him to send to Vancouver one or two foremen who could take charge of the night shift, and also suggesting that they look into the question of operating the Vancouver house in connection with the Calgary house. Bear in mind the situation there is quite different from the situation on the east coast. The department have no control whatever, beyond inspection, over the management of the elevator system either in Montreal or Quebec; but
the department will have control of the Vancouver house until the end of July this year and they had control of the Calgary house. I suggested to Mr. Boyd that they work out a system whereby they could operate these two houses together:	that when ships were coming in and
they saw that the elevator at Vancouver was going to be lightened, they would telegraph to Calgary to send along the reserves. That is the reason why they have been putting so much more grain through the Vancouver house this year.


John Millar: Does that experience in the West as compared with the experience in the East last winter not convince the minister that the government should have some control?


James Alexander Robb: My friend, even if he were in
this office, might have some trouble in convincing the Harbour Commissioners of Montreal and Quebec. They exist under act of parliament, and I think they claim the right to operate their own houses. They have been doing so fairly well; they have been putting a good deal of grain through those houses.


Robert James Manion: When the hon. member for Qu'Appelle (Mr. Millar) arose, I was just going to rise in order, in a very few words, to support the proposal of the hon. member for Welland (Mr. German), asking the government to make a proposition to the United States government for a discussion of the question of the St. Lawrence-Great Lakes canal. It would appear to me to be a very reasonable request to ask the United States government to enter upon a discussion of this question. The hon. member for Welland made it perfectly clear that that was all he was asking for; he was not asking the government to bind itself. He pointed out the fact that the United States government had about a year ago made to the Canadian government a proposition to discuss this question, but the Canadian government then thought the time was not opportune for such a discussion.
Before I say a few more words regarding that, I wish to deal with a few of the statements made by the hon. member for Qu'Appelle (Mr. Millar). I will deal with them very briefly. In his closing remarks he seemed to draw the conclusion that the whole idea of the building of the St. Lawrence-Great Lakes canal was the outcome of some imaginative chap at Fort William; that Fort William, being anxious to be an ocean port, had come forward with this proposition and decided to belabour the rest of the country into building the St. Lawrence-Great Lakes canal. That, at least, was the conclusion I drew from his remarks. As a matter of fact, the original pro-
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position, so far as I remember-and I think I am correct-started in the north-western states of the Union amongst the grain growers, and the organization gradually became strong and large until the movement took hold of the Canadian people, and the first meeting was held at Windsor, the home of the late Minister of Railways.


John Millar: I certainly had no thought whatever that the idea had started at Fort William. I do not know what I said to give my hon. friend that impression.


Robert James Manion: The hon. member said that he did not know why the Welland canal was being built, but that Fort William seemed to be anxious to be an ocean port.


John Millar: Among others.


Robert James Manion: He did not say "among others"; he is saying that now. However, that does not matter. I wish to supplement what the Minister of Trade and Commerce (Mr. Robb) stated regarding ocean steamers. I believe that no one who has studied the question expects ocean steamers to any great extent ever to go to the Great Lakes even to Toronto or Windsor, or to the head of the lakes or Duluth. It is anticipated that if the canal system is ever built, as I have no doubt at all it ultimately will be, those ships taking grain from the head of the lakes and Duluth will be able to carry it to Montreal at a much less cost than is charged at the present time, and without transshipping at Port Colborne or the Georgian bay ports or at Buffalo and going down by the Erie canal to New York. There is not a thought, on the part of those who have given any study to the question, of great ocean steamers landing at the docks at the head of the lakes.
In regard to the building of the Welland canal, I have the same to say as I have said concerning the St. Lawrence system: certainly, Fort William has had no idea of asking for any particular consideration in this respect. There was no move on the part of the people at the head of the lakes in this matter. Naturally, Fort William and the head of the lakes are directly interested in the building of the canal and are supporting it in consequence; but they do so with the complete conviction that it is a good thing in the interests of the country. My hon. friend spoke about rates on grain and pointed out, what he has already indicated to me in private, namely the rates for which grain was carried from the head of the lakes to Montreal previous to the war; and I must confess that when he showed me the figures I was startled by the low charge that was made upon grain I Mr. Manion.]
over that distance. At the same time, we must not forget that twenty or fifteen years ago everything was very much lower than it is to-day, and I greatly doubt whether we shall ever get back to such rates as the hon. gentleman quoted, such as an average of 4 cents for grain from the head of the lakes to Montreal. Later on in his remarks he pointed out-at least I understood him to do so-that a water rate from the head of the lakes to Montreal of 11 cents was a reasonable one. I think I am quoting the hon. gentleman correctly in that regard. Well, I would consider that a very unreasonable rate if we had the St. Lawrence waterway built.


Mr. WARNER:: Would that be 11 cents a bushel?


Robert James Manion: Yes. I should think that if the large shell-like boats at the head of the lakes can transport grain clear through to Montreal, then certainly the rate ought ultimately, except under very special circumstances, to be nothing like 11 cents.


Henry Lumley Drayton: It should be more like 3 cents.


Robert James Manion: Yes; probably 3 or 4 cents would cover it, and my hon. friend would then get back to the rates which he quoted as prevailing before the war. The hon. gentleman made the statement, which is correct, that some time ago about 65 per cent of the grain grown in western Canada was shipped to the United Kingdom via New York, in this way: It would come from the head of the lakes to Buffalo, and thence by the Erie canal to New York. The charge from Buffalo to New York alone was 10 cents; and yet my hon. friend points out- what is the fact-that the shippers generally, at least two-thirds of them, chose the American route. They did this for various reasons, and in spite of the fact that they had to pay 10 cents for the carriage from Buffalo by the Erie canal to New York city alone. That is another reason, and an important one, why. if the canal is ultimately built, grain will be carried at a much lower rate than is the case at the present time. I believe my hon. friend stated that in the past year a large proportion of Canadian grain went via New York.
I do not think that last year such a large proportion did go by New York; I believe that at least two-thirds went via Montreal.


George Perry Graham: There went by Montreal
153,000,000 bushels.


Robert James Manion: Well, 153,000,000 is a very large proportion of our grain. That is what I understood-about 150,000,000

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John Millar: I think it is correct that
150.000.	000 went through American ports and about 147,000,000 via Canadian ports.


Robert James Manion: I do not think my hon. friend can be correct. What was the crop last year? I think it was about 399,000,000 bushels. The figures were given to me about a month ago by the Department of Trade and Commerce, that there was still in the West about 150,000,000 bushels.


James Alexander Robb: Do not give too much publicity to an inactive market.


Robert James Manion: It is all going out now; it is no longer inactive. But at that time there were about 150,000,000 bushels in the West, and if 150,000,000 also went by Montreal, that would make 300,000,000 bushels. So that
150.000.	000 could not possibly have gone by New York.


Mr. BROWN:: Is it not true that a great deal of American grain was shipped via Montreal?


Robert James Manion: Yes; my hon. friend, I think, is correct in that regard. However, that is beside the question. Now, I might observe here that one of the greatest authorities on the grain question in the world, as my hon. friends to my left will no doubt agree, is Julius Barnes. He is at all events one of the most reliable authorities, and he has made the statement again and again that the carrying out of this undertaking would save from five to ten cents a bushel on wheat being shipped to Europe. And Herbert Hoover, a man who is internationally known, has also expressed the same view. If we look at the report of the International Joint Commission we shall also find exactly the same thing stated. After two years of study, after a very thorough investigation, they come to precisely the same conclusion, that a great saving would be made to the western farmer by building the canal. In view of these facts, and in view of the statements mads by Julius Barnes, by Herbert Hoover and by this commission, I certainly think that the hon. member for Welland (Mr. German) makes a quite reasonable request when he asks the government to extend an invitation to the American government to discuss this question from the standpoint of the feasibility of the project. I would repeat and support what he said. Such a request would not bind the Canadian government to anything, and I certainly believe that the discussion would lead to practical results. It would undoubtedly be a thorough one, and before either government undertook to commit itself, it would no
doubt be convinced that the scheme was in the best interests of both countries.
I believe, from the report of the commission, and in view of the fact that we shall have spent $100,000,000 on the Welland canal, that the St. Lawrence-Great Lakes canal could be built for a very small sum of money so far as Canada's share is concerned. And if in raising the money the two governments united in guaranteeing bonds at 4 per cent or 4^ per cent, the necessary funds I have no doubt could be obtained. If the respective governments united in the undertaking, it would not necessarily entail the expenditure of one cent directly by the government of this country. I submit once more that the request that the government take steps to bring about a discussion of this question between representatives of the Canadian administration and of the United States government is undoubtedly a reasonable one, and I hope that in the near future the government now in power will extend an invitation to this end to the neighbouring republic and take up the matter.


George Perry Graham: My hon. friend from Qu'-Appelle (Mr. Millar) criticizes the cost of the Welland canal, now estimated at not less than $80,000,000 and perhaps more, and he points out that the original estimate was some $55,000,000. This seems to him to be proof that the estimates are now too high. But I would point out that these were pre-war estimates and the contracts of necessity had to be dropped on account of the war. Had there been no war the estimated cost, I imagine, would not have been exceeded to any great extent. But to-day everything costs twice as much as it did before the war, and I think I am safe in saying that an expenditure of ninety million dollars now is no more extravagant than fifty-five million dollars would have been at pre-war prices. So there is nothing strange or wrong about the increased expenditure.
Now, my hon. friend refers to the Oswego canal. I would suggest that he need not worry any more about that. Those who were opposed to the deepening of the Welland canal years ago-I refer now to Buffalo interests largely-always tried to frighten us with the bugaboo of what they were going to do to us on the Erie canal by way of Oswego. As a matter of fact a large appropriation was secured from the state of New York for the canal. I have read of the hopes they had of a 20 or 25-foot draft channel. But the best engineers reported that 12 feet was the best draft they could get, and that not in all places. But in addition to that there are
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hundreds of bridges over the Erie canal of only 15 feet clearance, and these would have to be raised. With a straight route now from the Welland canal through to-I must say both Kingston or Prescott, or perhaps as a compromise, Brockville-sufficient for vessels drawing 21 feet, my hon. friend can see the absolute impossibility of the Erie canal with its little 12-foot draft and its 15-foot overhead bridge clearance competing with such a route. Even we are complaining that the draft is small and we have to use barges, but our shallowest draft is two feet deeper than the Erie canal's maximum. So at the very best we can carry through our canal, even as at present constituted, much heavier loads than the Erie canal can ever accommodate.


John Millar: I think the minister has
overlooked one statement I made, that at the present time all but 14 per cent of the grain reaching New York comes by rail; that is, the Erie canal is not cutting very much of a figure in the competition now.


George Perry Graham: That is true, and it never will. But Buffalo, so far as the Oswego route is concerned, could compete via New York by rail and not use the canal at all. The object of the Welland canal deepening is to bring the traffic of the West as far east as possible before transshipping it into smaller boats. Sir William Van Horne on one occasion when discussing this very project stated that he believed it was as cheap to transship to shallower draft vessels at the foot of lake Ontario or farther east and take the cargoes to Montreal as it would be to have larger vessels for the whole route, but I am not going to discuss that subject at the present time. However if the Welland canal deepening will not decrease the cost of transportation of western grain, it will not do anything. I think it will. Some few years ago I had an opportunity of discussing the figures with those engaged in transportation, and, although those figures would not be applicable now,
I was informed by these people that they believed there would be an appreciable reduction in the cost of transportation of grain and other products eastward as far as Kingston and Prescott. My hon. friend refers to a saving of one cent a bushel. Does he realize that such a saving or even half of it, on Canada's grain crop would mean a saving of millions of dollars?
When I was speaking the other night I was mildly castigated for suggesting that the western people ever asked for the deepening of the Welland canal. Of course, a great many of the members from the West now are young men, and they perhaps do not re-

member what happened years ago, but I made several trips through to the coast with Sir Wilfrid Laurier in 1907 and 1910-shortly before the calamity befell this country-and one of the main things dwelt upon at every meeting in the West was:	When are you
going to start deepening the Welland canal? Deputations from one part of the West were urging the construction of the Hudson Bay railway, but from the time we struck Winnipeg until we reached Victoria the Welland canal deepening was mentioned by nearly every deputation that came to us. I asked my secretary to see if anything could be found in the way of representations from boards of trade and other associations that were sent to the department, because hundreds of representations were made orally to every minister of the then government who went West. At random I find the following representations were received: From AVinni-peg, Vancouver, Edmonton, Port Arthur, Kamloops, Virden, Victoria, Camrose, Regina, the Winnipeg Grain and Produce Exchange, the Selkirk Business Men's Association, and so forth. I dare say if I were to go to Brockville and open up several boxes of correspondence marked "private" I could dig up hundreds of these representations from the AVest. But the deepening of the canal is started, and it is for the purpose of making transportation cheaper in the Dominion both east and west. AA'e believe it will accomplish that object. It has cost more money than was anticipated. So has everything else in this country. Even a meal costs more to-day than it did in 1913. One of the difficulties of carrying on national affairs to-day is that everything is much more expensive than it was a few years ago.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


George Perry Graham: I was referring at six
o'clock to what my hon. friend from Welland and my hon. friend from Rainy River had said in urging this government to communicate with the United States government with a view to holding a conference to discuss the advisability of proceeding with the St. Lawrence deep waterway. Some time ago the Canadian government did receive a communication from the United States government suggesting a conference with a view to making a treaty, but the Canadian government at that time did not see its way clear to proceeding so rapidly in the matter. At a later date a large deputation

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waited on the Prime Minister and others, when the Prime Minister suggested if I remember correctly, that he would gladly consider it if the United States would make another proposition for a conference without going so far as to say that it was for the purpose of making a treaty. I think my hon. friend was mistaken in saying that the United States government offered to pay a substantial part of the construction cost of the Welland canal.


William Manley German: That was recommended by the International Joint Commission.


George Perry Graham: That recommendation was made by the International Joint Commission in a report containing certain references to each government. Of course, the matter of a great St. Lawrence waterway is very interesting to me. Having lived on the St. Lawrence most of my life perhaps I take a deeper interest in the matter than others not so situated. It is a very big problem and without consulting the other members of the government I would not like to say anything definite as to holding another conference between the United States government and the Dominion of Canada. There are other interests concerned in the proposition besides the Dominion of Canada and the United States. The federal authority, of course, takes cognizance of improvements to navigation, but the construction of the proposed St. Lawrence deep waterway would mean the development of a very substantial amount of power. I am free to admit that this part of Ontario at least is in need of power. In some sections we have the Hydro Electric power, but in most cases it has to be transmitted over such a distance that it is really not cheap power, particularly in places where the consumption does not extend to any great degree. The provincial authorities have also something to say in the water itself, and as hon. gentlemen will remember there have been some disagreements as to the legal rights as between the federal and the provincial authorities. However, I think it has been pretty clearly demonstrated that so far as the water itself is concerned the provincial authorities have at least some ground for making their claim. Then, of course, there is the state authority on the other side of the line. When last I mentioned this in the House some years ago I added another factor, the International Joint Commission, but the commission has since made certain propositions to each government particularly as to the Welland canal. The Welland canal construction was' started years ago before the suggestion for the St. Lawrence deep waterway had taken definite shape, I
imagine. But this one thing is assured, that the deepening of the Welland canal will form the beginning of that enterprise so far as the connection between the two lakes is concerned, and if the time comes for the proposal of the International Joint Commission to be put into effect Canada will be in a position to lay claim to the share which the United States ought to pay for the construction of the Welland canal.


Thomas Langton Church: I would like to say a word or two on this subject inasmuch as I come from a city that is spending twenty-six millions in rebuilding the port of Toronto and improving and enlarging its harbour anticipating that a contract had been made between the cities and towns on the St. Lawrence and on lakes Erie and Ontario and the upper lakes with the government regarding the deepening of this canal. A study of the canal situation in Canada does not disclose any definite and consistent plan such as the people of Canada had in 1829 when the Welland canal was first started. It is true also that water-borne traffic has not had the chance it should have had in competition with the railways of this country, and for that reason we have congestion every year not only in handling the wheat crop but coal and every other basic commodity in this country. Water-borne traffic got no subsidies, bonuses, land grants or hand-outs like railways did.
Money has been spent on some canals that never should have been constructed in the first place and left unspent on others, and three transcontinental railways have been built where probably one or two would have sufficed. The people of this country have spent $900,000,000 directly and indirectly upon the railways of this country, and still we have congestion half the time and the deplorable situation in which the railways are to-day. I repeat, Mr. Chairman, the canals have never had the chance they should have had, and if some of the money that has been spent on any one of these transcontinental railways had been spent on deepening the St. Lawrence waterway and the Welland canal, and in addition if money had not been spent on canals that can have no economic value, we would have had much better value for our money and should have taken a great step forward in solving the transportation problems of this country.
As shown by this deep waterways report the Welland canal is one of the most important links in the whole St. Lawrence waterway scheme. The history of the Welland canal goes back to 1829 when the government

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of Canada, assisted by the British government built the first canal. It was supposed to be a four foot canal, but its dimensions were subsequently changed to the following: a 40 foot lock, 110 feet long, 20 feet wide, with 8 feet of water over the sills. On the union of Upper and Lower Canada in 1840 the government took over the canal, and replaced the 40 wooden locks with 27 stone locks ranging in length from 150 to 230 feet with a width of from 26 to 45 feet and 10i feet of water on the sills.-In 1871 this canal was found inadequate and the Welland canal in use at present was begun on a 12 foot basis and then deepened to 14 feet on the sills.- What is known as the present canal was opened in 1887 with 14 feet of water in the sills but it became altogether too small and a more comprehensive scheme was entered upon which is known as the large ship canal. That is the project that is before the country to-day. This the International Joint Commission considers is absolutely necessary if we are to handle the volume of trade which is offering in the West as well as in the East.
As to this ship channel scheme, my hon. friend the member for Qu'Appelle (Mr. Millar), who made a very able speech this afternoon on the subject, and who has evidently been studying the canal problem very deeply, offered some criticism. I do not agree with him when he says there has been no demand for the Welland canal. I well remember the movement which led to its demand. I was president of the Union of Canadian Municipalities which embraces some four hundred and sixty municipalities, and we came down and asked the Borden government for the new Welland ship canal. The deputation was received in the old parliament buildings and we asked the government to go on with this work. At the time there was great congestion of grain on the lakes and congestion generally. The government were launching a second transcontinental railway, and a third was under way. Those that came down on that deputation pointed out the great importance of water-borne traffic in solving the transportation problem of Canada. I may say here that unlike the railways the waterborne traffic has never had a fair chance. The railways have had subsidies, land grants, and handouts of all kinds from governments- from the Dominion government and from the governments of the provinces. The province of Ontario and the old provinces of Upper and Lower Canada have paid a very large proportion of this assistance since confederation. In 1896, I think, there was a return brought down by the Minister of Finance 
which showed that 52 per cent of all the taxes of Canada up to that date had been paid by the old provinces of Ontario and Quebec. Therefore I say there should be no sectional feeling displayed on this question.
The St. Lawrence scheme is one of the most important economic problems we have on the North American continent to-day. We are dependent on the St. Lawrence and the development along the great chain of lakes for future transportation facilities. Therefore I say there was a demand for this particulai work. It was shown there was a great necessity for doing something along this particular line to bring down and regulate rates and give the farmers a chance not only in the West with respect to grain but in many other parts of the country where there was freight to be handled. The government decided to go on with the canal and a very exhaustive inquiry was made and reported on. As a result of that inquiry it was estimated that the cost of the new Welland canal would be about $50,000,000. The minister this afternoon stated it would take $80,000,000 to finish the work, and the hon. member for Qu'Appelle places the probable cost at $100,000,-
000.
I do not agree with that hon. gentleman that the work should have been suspended during the war. I think it was a great mistake that the government suspended the work because it is now going to cost about 50 per cent more than it otherwise would have done. If the contracts had been awarded at the prices for dredging, for concrete work and other classes of work of that description, the contracts being applicable to a period of years, the canal could have been constructed at a saving of twenty-five or thirty million dollars. That was illustrated by the Results which attended similar contracts carried out by the Harbour Commissioners of Toronto. At that time business men and others said "Do not go on with the Toronto harbour improvements, we cannot afford it." The harbour commissioners, however, of whom the late Lieutenant Governor Lionel Clarke, one of the best informed men we had in Canada on the grain situation, was chairman, decided to go ahead with the work. Contracts were awarded to the Canadian Stewart Company on a basis of 191 cents per cubic yard. That work was accomplished during the war and it helped very largely in connection with unemployment. The lands improved were also of a revenue producing character. If that work had not been started at that-time the price would have gone up to 38 or 40 cents a cubic yard, the average rate at present. The work on this Welland

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canal, undertaken at this time, is going to cost more money by reason of higher cost of labour, higher cost of materials, the difference in exchange, and everything else than if it had been entered into during the war. The Chippawa power canal planned to produce 100,000 horse-power cost $10,000,000. It was extended to develop 550,000 horse-power and the result is that that canal has cost $70,000,000. But that was not due to any errors or mistakes that were made in the plans or estimates. It was entirely due to the advance in the cost of materials, of money, of labour, and of everything else, as a result of the war.
Some of the arguments advanced this afternoon against the ship canal, in my opinion, have no proper basis. The hon. member for Fort William and Rainy River (Mr. Manion) quoted Mr. James H. Barnes, president of the Chamber of Commerce of the United States, and a member of one of the leading grain firms of Duluth, as saying that there would be a saving of ten cents per bushel in the carrying of grain when the Welland canal and the St. Lawrence route are finished. He also quoted Herbert Hoover, and many other authorities in the United States, on the subject. There is congestion at Buffalo and the United States government are willing to pay their share towards the deepening of the St. Lawrence canals. The International Joint Commission in their report recommend that the United States government should pay a large proportion of the cost of these improvements in the Welland canal, and that report sets out the opinions of many authorities in the United States along this line.
To show you the immediate necessity for the building of this canal, I want to refer for a few minutes to the great congestion of the grain elevators. In the West, in North Dakota, and in many other states, this is the case. On both sides of the border the elevators were filled with wheat and could not take in another bushel.


Arthur John Lewis: Would the hon. gentleman
tell us on what terms the United States will co-operate with us in carrying out this work? Have they stated the terms on which they will do it?


Thomas Langton Church: I cannot say on what
terms the United States will do it at the present time. I have a lot of material here in the report of the International Joint Commission which is too voluminous for me to read but I will be glad to give it to my hon. friend if he wants to peruse it and see the discussion on the matter. I also have here a statement of the National City bank
for December, 1922, referring to this Welland canal, the last month that I have any record of in regard to this particular question. It is a very able statement and it has been quoted by all the bankers on both sides of the border, in reference to this subject. It goes on to refer to the grain congestion at the railway stations in the West and all along the chain of great lakes to the seaboard. They quote Mr. Barnes, president of the United States Chamber of Commerce and a huge grain dealer at Duluth and New York who gives a very graphic description of the congestion from his own immediate knowledge. He goes on to refer to the congestion on the Erie barge canal which, as I said this afternoon, was started about the same time as the Welland canal but has now been open for two years. The work on it was not stopped during the war and as a result the people of that country are getting the benefit of that important transaction to-day. Mr. Barnes who, as the member for Rainy River said, is about the greatest expert upon this subject, goes on to speak about the importance of the present Welland route and the figures which Mr. Barnes gives for carrying grain from Buffalo to New York should be carefully noted. This is what he says:
From the first of September until the first of October in the very height of the crop-moving period of this country, the main channel of export outlet for grain in America, from Buffalo to New York, was practically cilosed The grain moved from the West until it had congested and exhausted the elevator facilities at Buffalo-18,000,000 bushels.
The same thing happens at Montreal.
As soon as the unloading facilities were thus exhausted the lake carriers, reflecting the apprehension of their owners that the boats would be tied up with undischarged cargoes instead of being returned, made an advance in the lake rates, in thirty days from 2 cents per bushel for the carrying of grain from Chicago and Duluth to Buffalo to 6 cents.
The rail rate from Buffalo to New York on the published tariff is 9 cents.
An hon. member this afternoon referred to the combined water and rail rate Port Arthur to Buffalo and New York as 8.274 cents per bushel, and he compared the rate Fort William to Montreal, 6f cents a bushel, showing a difference of 2.45 cents per bushel in favour of the St. Lawrence route, and he argued that the business did not go to Canada, but that to Buffalo and New York went 65 per cent of the grain. Those figures are shown to be wrong, according to this paragraph from the address of J. H. Barnes.
The member for Qu'Appelle says the rate is 6 cents, but Mr. Barnes says:
The rail rate from Buffalo to New York on the published tariff is 9 cents, but as I explained to you prac-
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tically no grain was moving. The route that was open -the Erie canal-with totally inadequate facilities advanced the rate to 13 cents per bushel, paralleling the railroad which was supposed to carry it for 9.
From Buffalo to Montreal is a water route. It is equipped with the facilities of forty years ago. It can handle a vessel of 250 feet in length when the lake carrier of to-day west of Buffalo is 600 feet in length. That means that the carriers that operate on this 40-year-old route are limited in number and limited more in carrying capacity. Thirty days ago those carriers were operating on a tariff from Buffalo to Montreal of 6 to 7 cents per bushel. Last Saturday 15J cents was paid for the carriage from Buffalo to Montreal. That is the pressure of grain west of Buffalo seeking an outlet to foreign markets.
The effect of the market rise in prices has been this. In thirty days the foreign price of wheat has advanced 25 cents per bushel, the foreign price of corn has advanced twenty cents per bushel, because these markets are inadequately supplied. The market price in America of wheat has advanced 10 cents per bushel and of corn 10 cents per bushel. That is, the spread between the ultimate foreign price which should be reflected back to our farms, has widened from 10 to 15 cents per bushel because of the lack of adequate facilities to move the crop pressing on the market in the West.
In other words, the lack of a deepened Wei-land canal and adequate rail and water facilities to properly take care of the crop produced the conditions described by Mr. Barnes. These statements I have read from the report of one of the leading experts on the transportation of grain on the North American continent show the necessity of at once deepening this canal, and until the canal is open, the $30,000,000 which has been spent so far has been wasted and will be of no benefit. I think the people of Canada for this reason should get the benefit of the canal as soon as possible. A good many matters have entered into this discussion that I think should not have been brought up, and I was sorry to hear them discussed. In the first place, there has been too much sectional discussion in this chamber regarding this canal. I do not wish to refer to other routes, because they are not relevant to the question before the House. At the same time many of these routes have a great many advantages and disadvantages, and I believe the route via the Welland canal and the river St. Lawrence which has been in existence since 1829 is the best route. The more we discuss it the more we are convinced that it is the logical route for the carriage of grain to the sea.
A question was raised in this debate about the use of the merchant marine and the boats that would be used with the improved Welland canal. I am sorry that these boats have been offered for sale, because I know that there is a good deal of transportation being carried on, not only in package freight, but in the carrying of grain, coal and iron ore that these ships could get.

I will give one concrete example. A company called the Kirkwood Company are now operating between the Maritime provinces and Toronto and Hamilton. Last year this company, with one ship, operated as far west as the cities I have named, and they cut six cents per 100 pounds off the carrying charge for package freight. That had such an effect on the transportation business that the Canada Steamships Company have reduced their rate per 100 pounds, and the Kirkwood Company, according to returns brought down to the House the other day, have written several letters to the government in regard to the purchase of the merchant marine ships. They find they can build up a good trade between the Mother Country and the Maritime provinces and the Great Lakes, through the Welland canal.
The hon. member for Qu'Appelle (Mr. Millar) has referred to various matters, but the figures which were presented in the report of the Saskatchewan Grain Commission, in 1914, are not correct, because the prices have been raised; there have been several increases in the rates. The Grain Commission in Saskatchewan sat before the war in 1914, and took evidence. Since that time the cost of transportation between Fort William and Montreal has been fluctuating. The hon. member referred to the average rate as stated in some of the government periodicals. These are not altogether correct in some respects because the quotations in some of the returns for the past two seasons show the rates the hon. member mentioned are not correct. The figures given by the Toronto Harbour Commissioners, and by the commissioners of some other ports on the Great Lakes are at variance with these figures, and I have shown the rates quoted in the report of J. H. Bames from which I have read. The prices to Montreal in the grain congestion last year went up to 13 and 19 cents a bushel. At Buffalo and New York the rates went up in the same ratio. I might say the more you study this particular question the more you will be convinced of the accuracy of my statements. If some hon. members for the West would go down to the banks of the Detroit river in the summertime and spend five or six minutes there, they would see the continual stream of lake freighters of large tonnage passing through. In effect these big freighters all go to Buffalo, because you have no deepened Welland canal to take care of them. The canal is unable to take care of the trade at present. The Erie barge canal cannot take care of the ships and they are delayed there for sixty-

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days. In effect the Welland canal and lake Ontario route is not able to get the business because of the present small canal. When you take the large freighter the Grant Morden, about 750 feet long, you see what they can do. The grain from that one large ship has to be transferred to seven or eight smaller ships at Port Colborne, in order to take it down lake Ontario and the St. Lawrence. The Wei land canal has never had a chance to show what it can do either in rates or anything else.
In conclusion, I agree with what the hon. member for Qu'Appelle has said about the desirability of having additional elevator accommodation all over the Great Lakes; we should have had it long ago. We used to have seven or eight of these elevators in the port from which I come, and there is not a single elevator there now. The farmers of Ontario sent a memorandum to the government some two or three years ago asking for a terminal elevator in central Ontario. We have never got it. When the Welland canal is finished in 1927 there will be a terrible scarcity of elevator accommodation, not only at Port Colborne but at Fort William, Toronto and other cities along the route. It will take several years to build these elevators. Money spent in that direction I think is wisely expended. The natural route for grain is the St. Lawrence and the sooner we get that route in proper shape the more money will be saved in transportation costs and charges.
I wish to read from the International Joint Commission's report one or two conclusions regarding the Welland canal. At page 178, the conclusion of the commission is as follows:
Another factor in the situation that should not bs lost sight of is the peculiar relationship to the proposed improvement of the new Welland ship canal, a portion of which is now under construction. As pointed out in an earlier part of this report, the completion of the Welland ship canal and the adoption and completion of the St. Lawrence improvement would remove the only barrier to the creation of a deepwater route from the head of the lakes to the sea. This would give at least 25-foot navigation from the sea up to the Detroit river, with a present minimum of about 20 feet above Lake Erie. Although entirely outside the strict terms of the reference submitted to it by the two governments, the commission has been impressed by the fact that the new Welland ship canal is such an integral part of the waterway, and is so inseparably interwoven with the project under immediate consideration, that it should properly be considered as a part of the whole scheme and the expense of its construction should be apportioned between the two governments upon the same basis as the works recommended for the upper St. Lawrence.
About a page or so further on they recommend :
That the new Welland ship canal be embodied in said scheme and treated as a part thereof.
That Canada proceed with the works necessary for the completion of said new Welland ship canal in accordance with the plans already decided upon by that country.
I want to say to hon. gentlemen from the West that I believe the people of Ontario are sympathetic to the desire that the West should receive increased transportation facilities, not only by rail, but by water, and they want to see the West grow and prosper. The hope of the country is in the West. They want to see the West receive a measure of relief from the transportation difficulties they have in that great country to-day. With the early completion of the Welland ship canal, all the great boats on the upper lakes will be able to go down to lake Ontario, and this will bring about, not only a cut in the rates, but a more important factor, namely relief from the congestion of the railways and assistance in getting the crop out. It will do a great deal to reduce costs and will assist the farmers as well.
The hon. member for Qu'Appelle (Mr. Millar) dwelt on the cost of this canal and many other phases of the problem. The figures fluctuate very much. The interests of the country would be best served by the immediate construction of this canal. In conclusion, I hope the work will be started this year, and that a vigorous effort will be made by the engineers in charge to push it along. The engineers who had charge of the Chippawa power canal had their own plant; they had an electrically driven shovel and other electrical devices of all kinds; the engineering was modem throughout, and they did a great deal of the work themselves, with the result that a great work like that was consummated with very considerable economy.


Arthur John Lewis: I do not know whether any serious objection can be taken to the expenditure on the Welland ship canal at the present time. I think the objection should have been taken some years ago. I do not know whether the last speaker (Mr. Church) spoke wisely and said the truth -when he said that 830,000,000 had already been wasted. But the question that I wish to ask at this period is this; What will be the value of the canal when it is completed, if it is looked upon as a unit? I have listened to the various arguments that have been presented in this House this afternoon, and all who have spoken in favour of the Welland canal did so in the light of the larger scheme, in conjunction, I might say, with the deepening of the St. Lawrence waterway. If the Welland canal has no virtue outside of the larger scheme.
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it seems to me that at the present time it would be opportune to object to the expenditure (hat is now being advocated. The argument in favour of both schemes is this, that grain and other commodities will be carried much more cheaply. As regards grain, we heard this afternoon that the grain would have to be handled at least five or six times before it reached Montreal for shipment to Great Britain. I can hardly understand how you are going to cheapen rates when you have to handle a commodity five or six times before it reaches the ultimate consumer.
The question that confronts us at the present time is this: In view of the larger scheme, can we seriously contemplate the deepening of the St. Lawrence waterway when we consider that we have only 9,000,000 people, those people already well over-burdened with taxation? Before that scheme can really be contemplated, we need a much larger population and a great deal more work for the canal to do. Are we really utilizing the resources that we now have? The Minister of Railways (Mr. Graham) said that when he was in the West in company with the late Sir Wilfrid Laurier, the West was advocating the deepening of the Welland canal. I was wondering at that particular time whether the West had three transcontinental railways that were not being fully utilized, or whether they were even completed. But the hon. member for Qu'Appelle (Mr. Millar) spoke rightly when he said that we had three great transcontinental railways and that we were not utilizing them to the fullest advantage. As a people we believe in economy. Why should we not utilize these railways to their greatest effect, and then if they prove inadequate, to stop the shortage or to meet any embarrassment we find in the fall season, it will be quite time for us to advocate some larger scheme? I should like the minister to say, after I am through, if there is any virtue in the Welland canal if it is taken by itself, whether it will be of any benefit to the West, or to any other part of the country if the St. Lawrence waterway scheme is never completed.
As regards the cost, the hon. member (Mr. Church) said that if we had continued the work during the war, the cost would have been SO per cent greater. The minister himself said that when the canal was started, it was expected to cost $55,000,000. He then went on to say that it may cost eighty or ninety million dollars, and the hon. member for Qu'Appelle says possibly $100,000,000, which figure, I think, is more nearly correct. In that case, although the war did stop the work, we find that the

work is costing 100 per cent more than it was originally expected to cost. How much of the work is completed? Last year the late Minister of Railways gave us a detailed statement regarding the expenditure, the contracts that were under way, and we would be glad to have that information now.
As regards the larger scheme, I understood from the hon. member (Mr. Church) that the United States were willing to build the canal, that is the canal from lake Ontario to Montreal. I have carefully read many of the statements that have appeared in our papers, and I have never heard or read of any public man, any official, stating that the United States were willing to pay for this great scheme. If that is so, I would be glad to be corrected in my statement; but I do mot believe such a statement has been made, and until we in this country have been able to pay some part of the principal of our war debt, until we as a people are willing to live within our own budget and taxation which we are able to impose upon the people, it is presumptuous for anyone to advocate a scheme that will involve this young country with a small population in an expenditure of possibly over $300,000,000. For that reason, before I can vote intelligently upon a scheme on which possibly some $35,000,000 has already been expended, I want the minister to inform me how much work has been completed, what contracts have been let for this year, and what the cost of the entire scheme completed will amount to.


George Perry Graham: My hon. friend intimated that it would have been better to go on with the work during the war-


Arthur John Lewis: No.


George Perry Graham: -because it would have been cheaper. Does he realize that this would have meant cutting down the wages of the men to 50 per cent of what they are getting now.


Arthur John Lewis: I do not think I said that. I said that at the present time the work is costing 100 per cent more than it would have amounted to under pre-war prices.


George Perry Graham: If my hon. friend did not mean what I said then I accept his explanation. But I understood him to argue that it would have been wiser to go on with the work at that time because we could have got it done more cheaply. It was impossible to go on with the contracts. They were made on the 1913 basis and the contractors accepted the fair wage clause under which the men would have to be paid the current rate of wages, and during the war the current rate of

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wages was more than double what it was before. The only thing that could have been . done during the war was to devote all the energies of the country to the prosecution of our part in the struggle, and these other things had to be dropped for the time being. I do not see how the late government could have done anything else.
As to the other question, of the United States offering to build their share of the canal, this matter was discussed by the hon. member for Welland (Mr. German) before six o'clock, when he said that it had been recommended by the International Joint Commission that the United States should pay a certain proportion of the cost. The United States, however, have not accepted that proposition, although it has been recommended. As regards the benefit to be derived from the Welland canal, as I said this afternoon, you cannot make any absolute statement. If the enlargement of the Welland canal, apart altogether from the larger scheme, is not going to be a factor in lowering transportation costs, then undoubtedly the expenditure on it would be a foolish one. But is it not reasonable to suppose that if the larger bulk of traffic can be carried 200 miles nearer to ocean-going vessels and then be transshipped, it must of necessity lessen the cost of the entire carriage? Let me illustrate the point. It is only a matter of hours, for instance, to transfer a cargo from Prescott or Kingston to Montreal for ocean transportation, while if these smaller vessels have to come all the way from Port Colborne, or 200 miles further away, the cost, as my hon. friend can well see, is bound to be increased. In other words, the closer you can get a cargo in large bulk to the point of final shipment the cheaper must be the freight rates. If there were never to be a further deepening of the St. Lawrence channel the enlargment of the Welland canal must be of benefit to the solution of the transportation problem in the way of reducing costs. As a matter of fact, the surveys for the enlargement of the Welland canal were undertaken and were partially complete before the larger scheme was seriously thought of; and it has been contended, and will be accepted as a truism by all men who have studied the question, that the deepening of the canal, allowing larger ships to come to the end of deep water above the rapids, must tend to reduce the cost of transportation.
No new contracts have been let this year. As I pointed out this afternoon, sections 1, 2, 3, 4 and 5 are under construction, while 6, 7, and 8 have not yet been let. The object is to have the contracts let so that the completion of the work on all the contracts will be accomplished approximately about the same time. As to the percentages of work done, earth excavation has been completed to the extent of 48 per cent; watertight embankments, 60 per cent; rock excavation, 31 per cent; concrete excavation, 31 per cent; and reinforcing walls, about 40 per cent. That is for the whole of the contracts.


Mr. KNOX:: I was struck with the minister's statement before six o'clock in regard to the strong representations made from the West for the Welland canal; and the same thing has been repeated by the hon. member (Mr. Church) to-night. I remember very well when the minister made his trip throughout the West along with the late Sir Wilfrid Laurier, but I cannot recall any concrete demand for the Welland canal at that time. I am probably speaking from the producers' standpoint rather than from the standpoint of a representative of some of the corporations or municipalities which the hon. gentleman has spoken of. However, it has occurred to me that if the minister wishes to satisfy the demand of the West in the matter of railway transportation he will be afforded a very good opportunity when he brings down that estimate he has promised for the Hudson Bay railway. I do not want to precipitate a discussion on that item just now, because no doubt we shall have occasion later to deal with it; and the liberal estimate which appears here for the Welland canal encourages me to look forward to equally generous provision for the completion of the Hudson Bay route. I question very much, though, whether we are justified in voting so much money for the Welland canal at the present time. I endorse most heartily what was said by the member for Qu'Appelle (Mr. Millar) this afternoon, in regard to some of the matters he discussed. He stated, I believe, that so far as he could figure out the completion of the Welland canal would make no more difference to the transportation of grain than possibly 2 cents per bushel. Personally I doubt whether it would make even that much difference. But I think the minister would be well advised to consider some of the other demands that have come forward.


George Perry Graham: Is my hon. friend in a position to tell us by how much the completion of the Hudson Bay railway would decrease the cost of freight? We must have definite information.


Andrew Knox: The information in this regard will be just as definite as it can be in connection with the other matter. We know from
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the report submitted by the Lake Freights commission that the rates last year from September to November varied all the way from 3 to 11 cents, and while we have such conditions we can form no idea of the cost of carrying grain from Fort William to Montreal. We know in regard to the Hudson Bay route, taking Saskatoon as a centre, that grain can be carried to Port Nelson for less than it can be carried to Fort William, and we also know that Port Nelson is approximately as near Liverpool as is Montreal. If we can eliminate the cost of lake transportation along with considerable rail transportation there is no doubt that the saving on that route would be very much more than the saving that would be gained by the deepening of the Welland canal. I shall not continue the discussion now because, as I said before, I am iooking forward to a very liberal estimate being brought down for this work shortly, and then we will have an opportunity to discuss it further.


Mr. HOCKEN:: Mr. Chairman, I am somewhat surprised to find hon. members from the West opposing the completion of the Welland canal, for I have the conviction that the development of the St. Lawrence route is the very best undertaking that can be carried out in the interests of the grain growers of the West. It will s-ecure for them a reduction in the cost of carrying their grain to the seaboard that is variously estimated at from 7 to 12 cents a bushel. My hon. friend from Swift Current (Mr. Lewis) seems to argue that before we think of improving our transportation routes we should congest all our railway routes with grain.


Mr. LUCAS:: How does my hon. friend
estimate the saving of from 7 to 12 cents a bushel on the transportation of grain by the improvement of the Welland canal and the deepening of the St. Lawrence?


Horatio Clarence Hocken: I am not putting that forward as my own estimate, but on the authority of men who have gone into the question very thoroughly, such as the engineers of the International Joint Commission. It is their estimate.


Andrew Knox: Does the hon. member refer
to the deepening of the Welland canal or of the St. Lawrence?


Horatio Clarence Hocken: I say that when you get
the water route from the head of the lakes to Montreal or Quebec available for the through transport of grain a saving on the cost of transportation will be effected which is estimated at from 7 to 12 cents per bushel.


John Millar: Considering that even last
season when there was a great deal of congestion and a monopoly was operating on the Great Lakes a considerable quantity of wheat was carried for less than 12 cents a bushel, how does my hon. friend arrive at his estimate that 12 cents a bushel could be saved between Fort William and Montreal?


Horatio Clarence Hocken: I think my hon. friend will find that that rate was secured for only two or three cargoes and that it is capable of explanation, but not being conversant with the circumstances I cannot explain such an exceptionally low rate. I do not think any one will attempt to argue that it is not cheaper to carry grain by water from the head of the lakes to Quebec than by lake and rail. It is notorious that the cost of carrying any merchandise by rail is greater than by water. My idea is that the work on the Welland canal should be proceeded with with all possible energy and that the other part of the great water system from the head of the lakes to Quebec should be completed.
In reply to my hon. friend from Swift Current who estimates the improvement of the St. Lawrence channel at $300,000,000, I would point out that he is about $50,000,000 higher than the estimate made by very competent authorities of the International Joint Commission. But there is this factor to be kept in mind, that by improving the St. Lawrence channel we would get a by-product which would pay for the whole cost of the work. That fact was brought out last session, I think, by my hon. friend from Welland (Mr. German) with some very definite and convincing figures. The electrical energy to be developed along with the improvement of the channel could be made to pay for the whole undertaking, and if we adopted Mr. Gardiner's plan of financing this enterprise, all that the Dominion would be committed to would be a guarantee of its share of the cost of the work. In a book written by him on the St. Lawrence deep waterways Mr. Gardiner, of Chicago, proposes that the government of Canada and the government of the United States should jointly appoint an international commission with authority to issue bonds. It was Mr. Gardiner's opinion that three times the amount of money required for the work could be raised at 4 per cent, it would be such an attractive investment. According to his idea the commission would operate the undertaking without profit. No doubt the commissioners would be properly remunerated for their work but there would be no dividends to pay, and what would usually be diverted for this purpose would go to amortize the debt. So that

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all the responsibility the Dominion would incur would be the guarantee of its share of the bonds. It follows that the financing of the undertaking would be a very easy proposition, and when the work was completed we would have a deep waterway from Fort William to the city of Quebec, or perhaps lower down, where great cargoes could be transshipped and we would reduce to a minimum the cost of handling the grain from the producer on the prairies to the consumer in Europe. We have vessels now carrying 500,000 bushels-


Robert James Manion: Six hundred thousand
bushels.


Horatio Clarence Hocken: Well, I was putting it well within the mark. One of these great freighters from Fort William could take 500,000 bushels of grain down to Quebec-not stopping at Montreal necessarily, except that this port has great elevator capacity

or even down to the gulf, and there transship its cargo to two or three tramp steamers which would take it across the ocean. I venture to say that the greatest relief for the agricultural industry in western Canada is to be obtained in that way. I voted for the Hudson Bay railway.
I do not believe that that route is going to give the farmers of the West so much relief as they expect, for I am afraid the navigation season will be too short. What I do pin my faith to is the Welland canal and the St. Lawrence deep waterway, and I think my hon. friends who live in the West, and whose interest lies in getting their produce to the world's markets at the lowest cost, should not oppose the spending of money on any link of that great waterway which will ultimately-and shortly, I venture to say-be completed. I do not think there is enough influence anywhere to prevent this project being undertaken and carried to completion, because it is one of nature's great waterways, and only requires to be developed to give its full service to this country. I believe that when Canada can join with the United States to carry out this great international work there will be such a flood of trade through our lakes and down the St. Lawrence that it will astonish the people of this country. If my memory is right, I have seen it stated somewhere that of the grain produced on our western prairies last year less than 40 per cent went by Montreal, the bulk of it, or 60 per cent, going out by Buffalo. There is no reason on earth why 60 per cent of our grain should go out by a foreign channel, especially when we have better means for its transportation, but the big barges on the Erie canal have been taking this large percentage of our wheat to


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New York and developing that port at the expense of our own ports. I think, Sir, that of all classes of our people those who stand to gain most by the development of our waterways from lake Erie to the gulf of St. Lawrence are the men who grow grain on the western prairies.
Mr. WHITE:: Nearly every hon. member who has spoken on this vote has coupled the deepening of the Welland canal with the completion of the St. Lawrence deep waterway.
Although the minister has given his 9 p.m. view as to the reason why the Welland canal should be finished, I believe that the full benefit of the new Wellard canal will not be available until the St. Lawrence route is completed. On May 29 last year the Prime Minister, in response to a question from the hon. member for West York, said that a reply had been sent to the United States government that this was not an opportune time to discuss this question, particularly as the report from the International Joint Commission had only been available for a short time. That objection is disposed of now, of course, by the lapse of time.
It seems to me that this discussion has revolved a great deal around the transportation of wheat and the problem of getting the wheat from the western prairies out to the seaboard. There are many routes proposed. The route by way of Vancouver has been dealt with previously this session, and a large amount was voted for the construction of an elevator at Vancouver harbour, which will no doubt take care of a great deal of the wheat at the western end of the prairies. The hon. member for Prince Albert is in hopes that the Hudson Bay railway will also transport a great deal of western wheat. It seems to me that the production of wheat in Canada is by no means limited. We have not yet reached the maximum production, and even with all these increased facilities for shipment we shall not be able to handle the crops which are to come any better than those we have handled in the past. The development of the St. Lawrence waterway is not entirely for the purpose of shipping grain. There is also involved in it the question of supplying fuel for Ontario particularly. Recently we have been making efforts to get a favourable freight rate on western coal, but the only rate available, $9 per ton, seems too high for us to be able to bring western coal to Ontario. There therefore remains the St. Lawrence route, which in time will possibly mean that Nova Scotia coal or coke can be delivered in Ontario at competitive prices with the American product, or it may be that


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Welsh coal, which found its way last winter as far as Brantford, Ontario, coming from Montreal by rail, will be enabled to come up the St. Lawrence river and into lake Ontario and perhaps lake Huron.
Another object which we have in view is the development of power. About twelve years ago the Hydro-Electric Power Commission of Ontario undertook to sell 10,000 horsepower in the municipalities adjoining the Niagara district. The chairman of that commission was told that he would never find a market for 10,000 horse-power, but in a few years the demand had so increased that it reached 275,000 horse-power, and the existing plants being worked to capacity it was necessary to provide further development, and the Chippawa creek scheme was launched with a plant first of all with a capacity of
100,000	horse-power. Ten million dollars was to have been spent on that development, but the demand for power increased by leaps and bounds, and in the end that development is to reach an estimated production of 600,000 horse-power and cost about $80,000,000. Now we are told that if the demand within the next three or four years increases in the same proportion, all the power that is being developed at the Chippawa plant will be taken and virtually all the power that can be developed in the Niagara district will then be utilized; and it will be available at prices ranging from one-half to one-third of the cost at which power can be developed by the use of coal. In my own city of London, which is about 120 miles from Niagara, we contracted about ten years ago for, I think it was, 4,000 horse-power. Some of those who were opposed to the scheme threw up their hands and asked: What will you do? You will never get rid of it. But the result is that the city is now using four times that amount and is calling for more. Niagara power is now being distributed throughout the rural districts. The farmers are beginning to use it, and that demand is going to increase very largely. So, Mr. Chairman, it will be necessary for Ontario to find more power somewhere.
The report of the United States and Canadian engineers on the St. Lawrence development goes to show that about 1,500,000 horsepower can be developed in connection with the construction of this deep waterway, and that probably 3,000,000 additional horse-power can be developed in time. I support most heartily the suggestion of the hon. member for Welland that the United States government be invited to a conference on this question. They came to us asking us to meet 
them in a conference to discuss the terms of a treaty, but there is no reason why Canada cannot counter with a different proposition. Terms may be discussed, and as the hon. member for Swift Current suggested, the ideas of the United States legislators could be secured on the proposition.
Many figures have been quoted as to what the scheme would mean in the saving of freight on wheat. I have a clipping here which I cut from the Toronto Globe of November 14, 1922. It gives the opinion of Governor J. A. Preus of Minnesota who was in Ottawa about that time. He estimated that there would be a saving of 7i cents per bushel on grain shipped from Duluth to Liverpool by the proposed St. Lawrence deep waterway. He said:
This amount was spread over the short railway haulage from Buffalo to New York. The total cost of shipping to Liverpool from Duluth was 15J cents a bushel. All the fanners of eighteen states bordering on the Great Lakes were anxious to have the St. Lawrence deep waterway constructed as soon as possible. Railway transportation in the United States was very inadequate. Potatoes were rotting in the ground in Minnesota and western states because farmers could not get enough cars to handle their crops.
The only opposition to the scheme in the United States came from the New England states and New York.
Recent newspaper reports would lead one to believe that many of the railroads in the central states are also favourable to this development. I would like to ask if the government has had any communication from the Ontario provincial government or the Ontario Hydro Electric Power Commission relative to this project being taken up as a provincial activity.
George Perry Graham: I cannot speak positively as to that. The chairman of the Hydro Electric Commission, Sir Adam Beck, had one or two conversations with me concerning it, but there were merely suggestions, no definite statement was made as to the province taking up the project on its own initiative altogether. I can scarcely see how the province itself could undertake the entire work because it is so interwoven with the federal situation both in the United States and Canada, but we did have a discussion as to the possibilities of the project. In fact, Sir Adam Beck suggested a partial development of the undertaking for the present, but as to the details of how this should be done I think there was nothing definite said.


Mr. ROSS (Kingston):: There seems to be some opposition among our friends from the West to the expenditure of money on deepening the Welland canal. I believe that there

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has always been a demand from the West for the deepening of the Welland canal right up to the present time, and I say so after a study of the subject. I have here an old copy of the Sessional Papers for the year 1871, which gives some very interesting facts regarding the canal system of Canada. The whole question came under discussion then and a commission, as usual, was appointed to look into the matter, and the facts brought out in the report published in 1871 are very interesting to any person who wishes to study this question. A series of questions had been submitted to various people all over the country interested in the matter, and among the questions asked was this:
What have been the relative rates, for three years, of freight from Chicago to Montreal; and Chicago to New York?
W. J. Patterson, of the Montreal Board of Trade gives a very interestin'g set of figures here. Starting with the year 1861 he quotes the rate of freight per bushel on wheat from Chicago to New York as follows:
Year	Via Buffalo Via Oswego
1861	
271	cents	27	cents1882	
261	"	261	"1863	
23	"	22f	"1869	
23	"	231	"
With freight rates of such a character as this a demand came from the west for the opening and deepening of the canals to reduce the charges, and if we have at the present time a rate of 12 or 13 cents it is largely due to the fact that these canals have been opened and deepened.


Mr. FORKE:: When you say "West" do
you have regard to the Canadian West?


Arthur Edward Ross: There was no Canadian West, at any rate not to amount to anything, in those days.


Robert Forke: That is what I meant.


Arthur Edward Ross: The demand came from the West for these improvements much in opposition to the opinion of the boards of trade in the East where it was considered the expense of these canal improvements was too great for the country to undertake. In this same year the question was asked:
What reduction per bushed in the rates of freight from Chicago to Kingston and Oswego would result from the enlargement of the Welland canal to the capacity of the largest class of vessels now carrying from Chicago or Milwaukee to Buffalo?
These same questions are being asked today, and there seems to be an almost unanimous opinion that the reduction, on account of the increased cargo carried in the larger boats, would amount to about 3 or 4 cents
241 i
a bushel. The question is asked why we in the East are interested in this matter? In reply we have to say that we regret that our trade is largely going through United States channels. What were the conditions prevailing at the time to which I refer? I find these figures given in the report from which I have already quoted:
Total receipts of grain at Kingston in season 1870, from United States ports amounted to a trifle over 6,000,000 busheds.
The proportion is computed to be-
In British vessels	 2,256,000 bushels
In United States vessels	 3,785,000	"
In other words over 6,000,000 bushels of grain were being received at the port of Kingston through both Canadian and United. States vessels. What is the result to-day?' To-day the trade amounts to very little. The large bulk of it, during the last few years, has been going to the United States-We believe that the deepening of the Welland canal, in addition to reducing the freight rate, will restore this traffic again to our Canadian ports, to our own Canadian steamship lines and to our own Canadian railways.


John Livingstone Brown: I would not have taken part in this debate at the present time were it not for the assumption contained in the speeches of some hon. gentlemen, an assumption which I am prepared to admit is warranted in some degree because of speeches made from this comer of the House, that the West is unanimously opposed to the project of the deepening of the St. Lawrence waterways. In spite of the fact that last year, in speaking on this matter, I indicated some doubt as to whether the time is opportune for engaging in the expenditure necessary in that great work, I did express the opinion that the time would come when that work would be a completed fact. Indeed, I feel satisfied that in the not very distant future it will be an accomplished fact. In regard to the Welland canal itself I confess that I had some doubts as to the wisdom of continuing expenditure on that work until the greater project itself was well under way. I may say, however, that in view of the discussion this afternoon, and some thought I had given it previously, I can see that while the full benefit of the Welland canal will not be available until the greater work is completed, there is reason to believe that even with the one link connecting lake Erie with lake Ontario, thus making it possible to bring the grain farther down in the larger vessels, there is reason to believe that there can be a considerable saving effected in the carriage of wheat.
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Some few years ago, going back to the larger project, I attended a conference in Winnipeg at which the hon. member for Welland was present together with a number of gentlemen from the United States. I was there representing our farmers' organization at that time. They placed the matter very fully before us, and from that time I have been very sympathetically disposed towards the larger enterprise. It is true we laid down two propositions at that time. We refused to accept it as an alternative to the Hudson Bay railway, nor do I think there is any disposition indicated here to offer it as an alternative. We take it that those members who have spoken from all sides of the House have spoken in good faith when they have said that the Hudson Bay railway will be completed. However, we did lay down that proposition, and we also laid down another: That we could not agree to the expenditure of a large sum of money on the part of Canada until there was some assurance that the benefits that would come, or that should come, to Canada by entering into that larger scheme would not be absorbed by some lake freight shippers combine. I think the fear we expressed on that occasion was well warranted, as was amply demonstrated during last fall which led to government action in the appointment of a royal commission, the report of which is now before the country. Undoubtedly the necessity has been made manifest of having the rates under some control. I will just say again that I have no desire to enter into a lengthy discussion at the present time. I for one would just like to make it known that the West is not absolutely opposed to this scheme as might seem to be implied by some of the things that have been said.


William Manley German: Before the vote carries
there are one or two observations I should like to make further in regard to this matter. In speaking of the construction of the St. Lawrence deep waterways, the estimated cost of which is $250,000,000, certain hon. gentlemen made the statement that that estimate will not nearly complete the work. They say it will cost double that and they instance the fact that the construction of the new Welland ship canal has cost, or will cost, nearly double the estimated amount of its construction, I should like to call attention of hon. gentlemen to this fact:	The estimated cost of the Welland ship canal was $55,000,000. That was in pre-war times. The canal is divided for construction purposes into eight sections. Four of those sections were advertised prior to the war, and three of

them are among the heaviest construction sections on the canal. Yet the tenders for these four sections were all within the estimate. The tenders on which the contracts were made, were within the engineer's estimates for construction. If the whole work had been tendered for as advertised and contracts entered into for its construction previous to the war, those contracts would have all been at prices within the engineer's estimates. The war came on and we all know what happened. I wish to call the attention of hon. members to the further fact that the engineer of the Department of Railways and Canals who made the estimate for the construction of the Welland canal is the same engineer, or one of the same engineers, who made the estimate for the construction of the St. Lawrence deep waterway, and instead of that estimate being made on pre-war prices, it was made during the continuance of the War and at prices which prevailed at that time, and consequently when he estimates a icost of $252,000,000 or thereabouts for the construction of the deep waterway from lake Ontario to Montreal it is based on the estimate of cost which is above what that cost would be at the present time. So that I will venture to say that the work can be done well within the engineer's estimate. But even at that, in view of the financial conditions of the country at the present time, I would not stand up and speak in favour of the construction of this channel if I did not feel absolutely convinced in my own mind that the work could be done and paid for by the disposal of the electric current which will be developed by reason of that construction. Now, $252,000,000 will not only construct the deep channel from lake Ontario to Montreal, but it will also pay for the construction of the hydraulic plant which will develop at the Long Sault rapids 1,500,000 electric horsepower, one half of which or 750,000 electrical horse-power will belong to Canada. That can be sold at the switch board of the power house retail at $14 per horse-power. Yes, and more than that; because at this very hour hydro-electric power developed at Niagara Falls is costing in the Niagara district $20 per horse-power. The price has gone up by reason of the extra cost of construction, and it is costing us in the city of Welland at this hour $20 per horse-power. So that when I say this horse-power can be sold at the switch board for $14 per horse-power it is well within the mark, and 750,000 horse-power at $14 per horse-power will in thirty-five or forty years pay every dollar of the cost of construction of that St. Lawrence deep waterway.

Supply-Canals


Horatio Clarence Hocken: It is not a million and a half horse-power?


Mr. GOULD:: I would like if the hon.
member could give the pro rata values, or what price is charged in urban districts and in rural districts for power?


William Manley German: The hon. member means in Ontario?


Oliver Robert Gould: Yes.


William Manley German: Exactly the same price -no difference. It is "service at cost" in Ontario, and what it costs to produce and transmit is what the consumer pays, no matter where it may be located. The hon. member for West Toronto (Mr. Hocken) says it is not a million and a half horse-power. It is a million and a half for the whole development, 750,000 of which would be for Canada.


Arthur Meighen: That is only on the international waterways.


William Manley German: That is only on the international section. Of course another 2,000,000 horse-power can be developed on the remaining sections of the river between the Long Sault rapids and Montreal.


George Perry Graham: All in Canada.


William Manley German: Yes, every bit of it. The minister has stated that there was a question as to the legal right to use the St. Lawrence river, as between the province of Ontario and the Dominion. I do not think it will serve any useful purpose at the present time to discuss the relative legal rights of the province and the Dominion regarding the use of the waters of the St. Lawrence. I will venture to make this statement and express this opinion-it is only an opinion, and I will be interested in knowing what the newspapers, at any rate in Ontario, think about it-that the people of the province of Ontario are so anxious that this St. Lawrence project should not only be begun, but prosecuted energetically and immediately, that they would be willing, even though they had the legal right to the whole of it, to allow the proceeds of the sale of the 750,000 horse-power which is to be developed to be applied first in payment of the cost of construction, and after that payment has been accomplished that the proceeds of the sale of that power should be handed over to the province, if it was found that the province was solely and wholly entitled to it.


Arthur Meighen: Does the hon. member mean the entire construction? He does not want us to understand that he is distinguishing between the cost that is attributable to the benefit of navigation and the cost that is attributable to power?


William Manley German: I was not distinguishing between them at all. I say that I believe that the people of Ontario would be willing that the proceeds of the sale of the 700,000 electrical horse-power which can be developed should be applied first to paying Canada's share of the whole cost of the construction of the deep water channel from lake Ontario to Montreal, which would be $125,000,000.


An hon. MEMBER:: Where would you sell it?


William Manley German: That question is being asked by many people, "Where would you sell it? There is no market." It is only a very few years ago, perhaps 20 years ago, that electric power was developed at Niagara Falls. I heard that same question asked at that time. "Where can you sell 100,000 horse-power "? I was told by the then Premier of Ontario that we could not sell
30.000	horse-power. I told him that in a very few years we would not only be selling 30,000 electric horse-power, but we would be selling
300.000	electric horse-power, and these words have not only come true, but more than come true, because at this hour, after 20 years of the use of the electric current developed at Niagara Falls, we are disposing in this province, from Niagara Falls only, of 500,000 electric horse-power, and the people are crying for more. That 700,000 electric horse-power would be sold, certainly inside of ten years, and I believe inside of five years. There is no question about disposing of this commodity. If you read the information which is given in the report of the International Joint Commission, you will find that, after a thorough investigation, they say that far and away more than that will be disposed of in a short time. Therefore, I say that there will be no difficulty about the sale and there should be no difficulty about the beginning and the continuance of the construction of that great enterprise.
Those of us who are members of the Canadian Deep Waterways and Power Association are not asking the government to pledge themselves to anything. We are asking them to do only what, in my opinion, is a gentlemanly thing to do. The United States government first communicated with the government of Canada asking them to a conference. The government of Canada said: "No, we cannot have a conference with you now; it is too early." We ask the government now, after nearly two years of office, to say: "Now, we will sit down and discuss this matter with
Supply-Canals

you." Ask them to a conference this time. They asked you a while ago for reciprocity. You ignored that request. You did not wait for them to ask you again; you are asking them now for reciprocity. Therefore I say: They asked you for a conference over this St. Lawrence waterways scheme. You refused it. Now sit down and ask them to join you in a conference- discuss the matter, and if you find that the estimates of the engineers are correct, and that there is a reasonable chance of disposing of the electric current which can be developed, then go ahead with this project which will be a benefit to the whole community.


Arthur Meighen: I quite understand the hon. member's state of mind when he says that nobody is asking this government to pledge itself to anything. That is a very general attitude. I feel that I should say something, and this time in support of the contention advanced by the minister, that is, in support of the appropriation, irrespective for the time being of the larger project. The history of the Welland canal development, that is, of this last improvement, dates to about the beginning or before the beginning of the war. The project was continued until war necessities compelled its suspension. It was resumed as soon as possible after, in order that we might, as quickly as we could, arrive at the day when the large amount of capital already invested would be making some return. We felt that we could not launch on a very large scale on the renewed prosecution; but we did put in what we thought were reasonable appropriations, considering the circumstances of the time. Following exactly the same policy, the minister puts in now a similar appropriation.
It cannot be argued successfully that the deepening of the Welland canal will have value only when the larger project is complete. If such were the case, then it would be just as cheap to carry grain from Fort William in the canal vessels that now pass through right to Montreal. What I mean is this: If it were as cheap to carry grain over that distance from the Welland canal to Prescott or Kingston in small vessels as in large, certainly there never would have been any deepening at all. We might just as well take the small vessels right on to Fort William. In a word, if it is possible to carry in large vessels the distance from Fort William through the Sault to the Welland canal, though that entails a transfer into small vessels there, how much more will it pay to carry in large vessels 210 miles more, say to 
Prescott, when no extra transfer at all is entailed? One cannot, if one simply stops there, argue the question any further. Undoubtedly the further you take the grain in the large vessels, the cheaper the transportation. How much cheaper it would be, it may be hard to estimate; but if it is only two cents or a cent and a half, then undoubtedly there is value, even though we do not contemplate that the canal is to be ultimately part of a larger scheme.
It is quite true that if, after we have the best means of transportation, the grip of an ocean syndicate is going to demand whatever figure it likes, we might as well go back and rely upon our railways. We have to have competition, or if we cannot have competition, we must have control. The business of government is to get the best method of transport. That is the basic necessity. After that the matter is one of government; the enterprise feature is over. You must first, though, get the best method of transport. We cannot argue that we should leave it to our railroads.
Water transportation has always had an immense advantage over land transportation, and the advantage, instead of diminishing in proportion, has really been increasing. It is now estimated, I think, and I think very accurately estimated, that the proportion of cost at present rates is about one to ten. What I mean to say is this: Taking the actual investment, cost of carriage, cost of upkeep and all the rest, it is just about one to ten; you can carry about ten miles by water what you can carry one mile by land. The advantage of the water over the land has increased with increased capital investment necessary for railways-of course we have that already- with increased cost of upkeep, increased wages, increased cost of material. Very well; it follows that with that tendency the value of our waterways right into the heart of this Dominion and this continent as a transportation asset multiplies with the years. It is a tremendous asset to this country. When we get it utilized as it can be, we bring the products of the East right into the very heart of the American continent by the largest vessels. Consequently we must first make the best transport lines we can, and having done that, of course government is necessary. There may be a change of government necessary before we reap the harvest, but those things can be attended to in due course.


George Perry Graham: We are not going to delay the work that long.

Supply-Canals


Arthur Meighen: The work necessary to a change will be undertaken even before the completion.


George Perry Graham: Naturally.


Arthur Meighen: Very naturally. The completion of the change will follow quickly upon the undertaking. I was going to refer, though, to opposition apparently developing, not unanimously, but in some degree, from western Canada to this route. I think that is a mistake; I think hon. members will live to regret that they have assumed this attitude.
I have never opposed, indeed I have urged, the completion of the Hudson Bay railway. I have urged it more as a matter of honest contractual obligation to western Canada than based on any certain assurance in my mind that it is bound to be a commercial success.
I say here and now that I would rather stake what little reputation I have upon the value of the investment in the Welland canal than upon the value of any investment in the Hudson Bay road. Twenty years, thirty years from now, those who support the water route right out through our Great Lakes and the St. Lawrence will, in my judgment, have more reason to be proud of their record than those who were very enthusiastic over the Hudson Bay road. Nevertheless, the latter road must as soon as we can complete it, be completed; it would be folly to desist. We had in our estimates of 1921, that is for 1921-22, $5,000,000 odd, perhaps $5,000,000 only, to carry on this Welland canal wark. We were pretty bitterly abused. The lovetaps now administered to the hon. minister in charge of the estimates are very mild compared with the flogging we had to take for daring to do our duty in regard to the same enterprise. Indeed, in the campaign of 1921,1 want to remind hon. members, when I challenged the leader of the Progressive party to make good by specific articles the charge of wild extravagance against the government of that time, the first thing he pointed to was $5,000,000 on the Welland canal. That was the most outstanding instance of folly he could think of. We have now $11,000,000 and though there is objection it is not very strong. I venture to say that the objection will get less and less, and that with the opening up of real prospects through our waterway navigation the country will grow in unanimity behind the scheme.


John Millar: Before the vote carries I
think it only well that I should make a few additional remarks since considerable reference has been made to what I said this afternoon. I agree with every word
the leader of the Opposition said until he came to the point where he referred to the comparison between water rates and rail rates. Looking over an American report I noticed that the comparison was nine to one Borne years ago in favour of water rates on the lakes. Since that time a great change has taken place. If it is ten to one now how is it that the railways from BuSalo to New York have put the Erie canal out of business?


Arthur Meighen: The Erie canal is not
a really practicable waterway at all. It is a 12-foot water route, and you cannot carry heavy traffic on such a canal.
Mr. GRAHAM. And it is not all of that depth.


Arthur Meighen: No; it is not much better than a ditch.


William Manley German: It is only a few years
since the Erie canal was deepened to 12 feet. It was only 8 feet until recently, and even now it is not 12 feet all the way.


John Millar: Well, let us take another
case. The Canadian Pacific Railway carries grain from Calgary' to Fort William, which distance I have heard variously stated at 1,280 and 1,290 miles, for 151 cents, whereas on the water route from Fort William to Montreal, a distance of about 1,200 miles, there have been as many as 22 different rates. The rates varied a great deal last season between these two points. I think that what would be considered a fair rate at present would be close to 10 or 11 cents. As a matter of fact I was slightly in error this afternoon when I stated that I thought 11 cents a fair rate. What I really intended to say was. that this was an estimate I had seen stated for purposes of argument. I consider 11 cents really too high, and yet the distance for which this charge is made is some 1,200 miles as against the other rate I have cited of 1,280 miles.


Robert James Manion: Just in order to clear the point, I might explain to my hon. friend that the rate from the head of the lakes to Montreal is largely consumed in trans'-shipments at the Georgian bay ports, or at Port Col-bome. I understood my right. hon. friend's estimate to refer to clear open-water transportation such as out in the lakes or on the ocean, but in a canal system the rate is naturally enhanced.


John Millar: I think the hon. member
(Mr. Manion) is putting the case too strongly when he says that a large part of the expense is taken up in the way he suggests. A little of it is consumed that way, but not a large per-
37S8
Supply-Canals

centage. Let me refer to another remark made by the leader of the Opposition and by the member for Lisgar (Mr. Brown). They both seem to infer from the discussion that some of the western members at least are opposed to the deepening of the Welland canal and of the St. Lawrence. I do not know of anyone who is opposed to the undertaking. The remarks I have made and those I have heard have been directed to the question as to when it would be wise to complete the work. That is all; and in order to arrive at a conclusion on that point we have been discussing the advantage that we might gain as shippers of grain, and how much we should save per bushel. I am quite confident the time will come when the St. Lawrence route will be deepened, and properly so; and it is quite well that the Welland canal should also be completed, especially in view of the fact that it has been started. I can agree with some hon. members, however, that it was started too soon, and it is now a question how quickly we ought to complete it.
Reference was made by some hon. members to the amount that would be saved, and the estimates vary from 7i cents from the governor of Minnesota to 12 cents. Dealing with the high estimate that was suggested of 11 cents from Fort William to Montreal, I divided the cost into two parts: one was 4J cents as far as Port Colbome and the other 7 cents from Port Colbome to Montreal. Now, it is readily seen that the only saving after the St. Lawrence route is opened up and the Welland canal is completed will be effected between Port Colborne and Montreal, I think that 7 cents is a very high estimate; it is far more than the grain will be carried for. But how will you save 12 cents when it is obvious that the total cost of carrying it is 7 cents as I have shown? That is what I want the committee to understand before this parliament commits the country to an expenditure of $252,000,000, which, as in a great many public undertakings, might probably be doubled in the long run. The member for Welland (Mr. German) suggested that it was probable we should not have to expend a dollar; he suggested that it would not cost the Canadian people one cent.


Mr. LANCTOT:: Where will they get
the money?


John Millar: We have often heard that story. When something is promoted it is suggested that we are going to get something for nothing, but I do not think anyone will be foolish enough to be caught by that sort of thing now. Who thinks that if we deepen the St. Lawrence at a cost of two or three hundred

million dollars the Canadian people will not have to shoulder any of that cost? It seems hardly worth serious consideration. Let us rest assured that when the St. Lawrence river is deepened Canada will pay for it and pay more than $252,000,000. The hon. member (Mr. Church) stated that my figures were not correct. That can be readily explained; as I said a moment ago, the rates are constantly varying. There were twenty-two different rates between various points last season, so I think hon. members will realize that by taking certain rates on specified dates one can prove almost anything. The rates I took were average rates, so I think my statement stands.


Oliver Robert Gould: I have been somewhat interested by remarks made by hon. gentlemen concerning this item. The Welland canal is getting to be quite a hardy annual and we look for its recurrence year after year, although it is pleasing to note that the appropriation is smaller this year and we hope that eventually it will disappear altogether. The statement I am about to make is not in opposition to the Welland canal and I am merely using this work as a key to the larger project which has entered into the discussion, namely, the deepening of the St. Lawrence route. I have taken the figures submitted by the hon. member for Welland (Mr. German) and made a few calculations. Taking a capitalization of approximately $250,000,000-and I might preface my remarks by referring to the prediction of certain hon. gentlemen that the power development and so on would pay for the whole undertaking-taking this capitalization, Canada's share is $125,000,000, which at 5 per cent-I have increased the interest rate- gives an interest charge of $6,250,000, which would have to come out of the revenue received from the sale of 750,000 horse power at $14 per horse power, or $10,500,000. Deducting from this revenue our bond interest charge of $6,250,000, we have a balance of $4,250,000. As business men, I do not think we would be prepared to deny that it would take the whole of this balance every year to meet the cost of maintenance. Consequently we would have nothing left to retire the bonds, and it seems to me these would have to be looked after by making a charge on the grain brought down by this route. That brings one to the statement made by the hon. member for Qu'Appelle (Mr. Millar), that he cannot see how the utilization of the route would enable us to save 10 cents a bushel on the transportation of western grain.
I do not wish to use this sis an argument in support of the Hudson Bay route, but,

Supply-Railways-C.N.R.
coming from the West, naturally I am in favour of this route, although probably only as an auxiliary to the St. Lawrence route. I do not think any members from the West have tried to make it appear that the Hudson Bay route would divert traffic which should rightly go down the St. Lawrence. I think the Hudson Bay route would look after a part of the country which at the present time is undeveloped, and even with this route in operation I believe that with the further development of the country which, one might say, is naturally tributary to the St. Lawrence route, a still greater traffic would result from the deepening of this waterway. Therefore the Hudson Bay route does not of necessity enter into this discussion.
It has been well brought out by one hon. gentleman that the activities of combines should be circumscribed to the fullest possible extent, because it appears that the longer our transportation route the more opportunities there are for these combines to get in and steal from the individual who produces the commodity which is being transported. When the confidence of the people is restored by the assurance that combines will not be allowed to intervene between the producer and the ultimate consumer, I think there will not be quite so much apparent opposition to expenditures of this character. And then I do not think parliament will hesitate to grant to the government of the day power to undertake all these projects which have been advocated from time to time.
I only rose to sound a note of warning, for if we take precedent as a guide we are justified in assuming that the cost of deepening the St. Lawrence channel, like every other great undertaking, will exceed the initial estimate by a very large figure indeed, and in this event the benefits which would accrue from
the development and sale of 750,000 horsepower would be more or less neutralized.


Mr. WARD:: Mr. Chairman, I rise to utter a word of protest against what seems to be taken for granted, namely, that the West is opposed to the Welland canal improvement. I am sure that this assumption is not well founded, and can only have arisen because of the fact that operations having been suspended on the Hudson Bay railway, we do not accept the Welland canal as an alternative for the non-completion of the former work. But I am sure that the West is not opposed to the construction of the Welland canal.


[Stage Direction]
Item agreed to.
Henry Lumley Drayton: I assume that everything has been said in connection with the preceding vote, Mr. Chairman. But under the arrangement with the Minister of Railways (Mr. Graham) we were to discuss under that item the figures which he was to bring down under vote 139 providing for an advance of $73,000,000 to the Canadian National Railway Company. I think my hon. friend has the figures and is ready to table them.


George Perry Graham: Yes. According to the arrangement, the other day, Mr. Chairman, I was to lay on the table a compilation of comparisons asked for by my hon. friend. I will lay it on the table now.


Henry Lumley Drayton: No. Why not take it as read and incorporate it in Hansard? We want to use it.


George Perry Graham: I am quite willing to put it in Hansard.


The CHAIRMAN:: Is it the pleasure of the committee that this statement shall be taken as read?


Some hon. MEMBERS:: VOTE NO. 139 MAIN ESTIMATES 1923-24-LOAN TO CANADIAN NATIONAL RAILWAYS	$73,000,000 00
Attached Statements Show Respectively:-
No. 1. Loan to Canadian National Railways as per Vote No. 139-1923-24, estimated requirements distributed as per items authorized by the Vote.
No. 2. Summary of 1922-23 Votes (Main Estimates) comparable with above and distributed similarly to statement No. 1.
As Estimated.
No. 3. Summary of 1922-23 Votes (Main Estimates) comparable with above and distributed similarly to statement No. 1.
As Utilized.
It should be noted that the items in Vote No. 139 do not correspond directly to railway accounting classifications.
Supply-Railways-C.N.R.


CANADIAN NATIONAL RAILWAYS
[Stage Direction]
Summary-Details of Estimates 1923-24
Item "B"-"Acquisition of Property, Material and Supplies"-
Canadian Government Railways	$	396,200 00
Canadian Northern Railway	 2,506,441 00

[Stage Direction]
Canadian Government Railways-
Rails and Accessories, including Stores and Inspection Charges	 112,900 0 0
Relaying track with heavier track rail: 84-0 miles	 126,400 00
Improvements to Rolling Stock-
Locomotives	 109,900 00
Passenger Cars	 47,000 00
$	396,200	00
Canadian Northern Railway-
Rails and Accessories, including Stores and Inspection Charges	
1,472,500	00Relaying track with heavier track rail:	364-6 miles	
566,600	00Purchase of Work Equipment	
203,091	00
Improvements to Rolling Stock-
Locomotives	
54,250	00Passenger Cars	
210,000	00$	2,506,441	00

[Stage Direction]
Item "C"-Interest and Sinking Funds on Notes, Securities and Obligations	$25,734,393 67
Canadian Northern Railway-
Interest	$16,349,360	98Taxes	
400,000	00Sinking Funds	
1,113,133	33
[Stage Direction]
Grand Trunk Pacific-
Interest	$ 3,059,243 36
Grand Trunk System-
Interest G.T.P. guarantees	$	579,323 00
4% Guaranteed Stock	 2,433,333 00
Sinking Funds	 1,800,000 00
[Stage Direction]
Recapitulation-
Canadian Northern	$17,862,494 31
Grand Trunk Pacific	'	 3,059,243 36
Grand Trunk System	 4,812,656 00
Total	$25,734,393 67
DETAILS OF STATEMENT No. 1 Estimates 1923-1924
Item "D"-Principal and Interest of maturing or matured loans secured or unsecured.$ 5,271,566 00
Canadian Northern Railway-*
Equipment Principal	$ 4,112,000 00
Grand Trunk Railway System-
Equipment Principal	$ 1,115,400 00
Bonds of Subsidiary Companies	 44,166 00
[Stage Direction]
Supply-Railways-C.N.R.

[Stage Direction]
Estimates 1923-1924
Item "E"-Construction and Betterments Canadian Government Railways Description
Eastern Lines	
Western Lines	
Hudson's Bay Railway	
Hotel Department	
Telegraph-Railway	
T elegraph-Re-Construction	
T elegraph-Commercial	
Stores Department	
Special Items	
Legal Department	
Requirements $ 1,080,000 00 638,931 00
40.000	00
75.000	00 23,785 00
13.800	00 62,500 00
67.800	00 355,455 00
4,000 00
[Stage Direction]
DETAILS OF STATEMENT No. 1 Estimates 1923-1924
Item "E"-Construction and Betterments Canadian Northern Railway System
Description	Requirements
Western Lines	$ 3,355,432 00
Eastern Lines	
1,650,000	00Halifax and South Western	Ry	
200,000	00
Legal Dept.-
Right of Way Surveys,	C.N.R	
67,400	00Right of Way Surveys,	H. & S.W	
8,100	00Hotel Department	
274,655	00
Telegraph Department-
Railway	
88,400	00Commercial	
41,000	00Re-Construction	
95,834	00Stores Department	
72,000	00Special Items	
766,262	33Great North Western Tel. Co.-	„New Facilities	
53,750	00Re-Construction	
36,000	00Electric Lines	
950,000	00Total	* 7,658,833 33
DETAILS OF STATEMENT No. 1 Estimates 1923-1924
Item "E"-Construction and Betterments Grand Trunk Pacific Railway
Description All Lines			 Legal Dept., Right of Way Surveys	 Hotel Department	 Telegraph Railway	 Stores Department				 Special Items	:		Requirements 	$ 1,734,532 00 	 12,000 00 			 312,607 00 	 5,800 00 	 29,000 00 	 137,000 00
Rails and Equipment- _ Purchase Steel Rails and Equipment			 96,000 00
	$ 2,326,939 00
Supply-R ailways-C .N.R.
[Stage Direction]
DETAILS OF STATEMENT No. 1 Item "E"-Construction and Betterments Grand Trunk Railway System Description
Building new lines, double tracking, grade reductions, etc	$ l, 012,000 00
Rail (heavier weight) also rail anchors, tie plates	and rock ballast	
8821726	00Bridges and culverts	
8071645	00Passing tracks, yard tracks and other Company's	track facilities	
4201614	00Engine house facilities	
1621693	00Passenger and freight handling facilities	
6551774	00Water service facilities	
1431197	00Fuel stations and appurtenances	
691850	00Locomotive and car shop buildings	
1891598	00Shop machinery and tools	
2931266	00Docks and wharves	
861621	00Eliminating grade crossings	
3881600	00Telegraph and telephone lines	
2251380	00Automatic block signals, interlocked crossings,	etc	
4321154	00New buildings, Company's employees and materials	
4671851	00Improvements to locomotives and cars	
5,079,880	00Sundry land purchases	
' 3401189 00
Works authorized for period April 1st, 1922 to March 31st, 1923, started but not completed,
unexpended balance to complete	 409,138 00
Estimated amount of expenditures which cannot be anticipated such as requirement of Railway Commission, local improvements required by law and other unforeseen contingencies	
741,746	00Electrification of lines in Ontario	
652,251	00Total	$ 13,461,163 00Amount required, say	$ 11,546,023 00
Central Vermont
Roadway-
Engine terminal facilities	$	312,700 00
Yard exchange and passing tracks	 46 480 00
Rail	,	
31!444 00Other track material	
26,300	00Bridges and culverts	
132'000	00Ballast	Water stations	
16,000	00Ice houses	
4o| 300 00Shop facilities	
28,500	00Freight and station facilities	
9,500	00Track scales	
19A00	00Docks and wharves	
2,000	00New pile driver	'	
35 j 000 00
Equipment-
Machine equipment and tools	
12,250	00Locomotives	
331.600	00Freight cars	
478,900	00Passenger cars	
240,000	00Air brake cars	
j 390 00Electric shop truck	
3'935	00Wrecking crane	[ [DOT] " "	25^000 00Turntable tractors	
3 000 00Miscellaneous unforeseen items	
100^000	00Total betterments	$	1,895,675 00Plus interest	
188,000 00Plus retirement of capital obligations	
323,000 00Total Central Vermont	$	2,406,675 00
Montreal and Southern Counties Railway
Description	Requirements
Buildings	
$	15,000 00Tracks	
5,080	00Equipment	
45,300	00Tools and machinery	
1,700	00Land	5,00000Contingencies	
3,000	00Total	$	75,080 00
[Stage Direction]
Supply-Railways-C.N.R.

[Stage Direction]
Grand Trunk	$ 11,546,023 00
Central Vermont	 2,406,675 00
Montreal and Southern Counties	 75,080 00
Total Item "E" Grand Trunk	$ 14,027,778 00
DETAILS OF STATEMENT Item "F"-Co-ordination, $2,716,578.00 Canadian Government Railways
Description	Requirements
Joffre	Connection 370' long between G.T.R. siding and C.P.R. siding,
north of ice house at west end of yard	$	1,470 00
Chaudiere	Install two additional signals and low voltage junction switch
operating machine in connection with existing automatic signals.	4,000 00
Unforeseen	To provide for expenditures that may be made necessary as
Co-Ordination of lines progress	 10,000 00
$	15,470 00
Canadian Northern Railway System-Eastern Lines
Quebec	Addition local freight facilities at Parent Square_
"		Enlarge yard and rearrange trackage at Limoilou...
"		Double track between Limoilou and Parent Square
St. Mars to Quebec	Six mile connection Dombourg to Donnacona	
Hawkesbury	Complete connection with G.T.R	
Toronto	Pave Team Roads at Cherry Street	
Howland	Install 75' Turntable	
Brockville	Connection Manitoba yard G.T.R	
Washago	Construct Storage Siding	
Napanee	Connections and track alterations	
"		Construct New Station	
North Bay	Baggage room and scales	
Unforeseen	Necessary to cover unforeseen items	
189.000	00 20,000 00 34,700 00
210.000	00 5,400 00
4.600	00 6,000 00
10,300 00
5.600	00 43,130 00 31,100 00
50.000	00
50.000	00
623,930 00
Canadian Northern Railway System-II estern Lines
Description
Requirements
Neebing Yard	Completion of initial development of yard and engine facilities... .$
Kashabowie Sub	Double track Port Arthur to Empire Ave., Fort William	
"		Double tracking M. P. 6 [DOT] 19 to 8 * 0 and to Twin City Jet. M.P. 13 2
Kakabeka Falls	Double Track Twin City Jet. to Kakabeka Falls	
Mokomin	Mokomin and Automatic Signals	
Kashabowie Sub	Second track M.P. 32 to 35-6	
"		Grade Revision and connection M.P. 35 65 to 38'59	
Portage la Prairie	Rearrangement of trackage and elimination of Interlocking
Plant	
Yorkton	Wye connections and eliminate interlocker	
Lampman	Connection with G.T.R. move tank	
Regina	Complete connection and co-ordinate engine facilities	
"		Improvements local freight yard	
Saskatoon	Connection with C.P.R. and automatic signals	
Ryley	Construct connection, eliminate interlocker	
Alix	Install automatic signals and construct two connections	
Camrose	Complete two connections, extend Stations, install interchange
with C.P.R	:....
North Edmonton	Alter grades, build connections, install interlocker	
Lucerne	Consolidate terminal facilities and abandon Jasper Division
point	
Magnolia	Credit account completion of connection C.N.R. to G.T.P	
Unallotted	Unforeseen expenditure for co-ordination	
260,000 00 16,000 00 126,750 00 240,280 00
70.000	00
291.000	00
188.000	00
72.500	00 8,000 00 9,275 00
30.000	00
10.000	00
5.000	00 2,100 00 2,823 00
52,800 00
5.000	00
256,100 00
52.500	00 50,000 00
Total Western Lines	$	1,643,128 00
Total Eastern Lines	 623,930 00
$	2,267,058 00
Total C.N.R.
Supply-R ailways-C.N.R.
[Stage Direction]
Portage la Prairie,
Yorkton	
Lampman	
Regina	
Saskatoon	
Ryley	
Alix	
Camrose	
North Edmonton.
Magnolia	
Various	
Grand Trunk Pacific Railway
Description	Requirements
. Rearrangement	$	72,500
. Construction of two wye connections, etc	 2,000
.Connection with C.N.R	 13,300
, Water supply	 160,000
, Completion of connection and co-ordination engine facilities.	35,000
Connection with C.P.R. and automatic signals	 45,000
, Construct connection and eliminate interlocking plant	 5,600
, Construct two connections and install automatic signals	 16,950
Complete two connections, extend station and install interchange
tracks	 3,700
Alter grades, build connections and install interlocker	 15,000
Automatic signals, Magnolia to Evansburg	 15,000
Unforeseen Expenditure for co-ordination	 50,000
$	434,050 00

8SS8 88888888
ESTIMATES;r1923-1924 Canadian National Railways
Statement No. 1
Classification as per Vote 139 1923-1924	Total	Canadian Government Railways	Canadian Northern Railway	Grand Trunk Pacific Railway	Grand Trunk Railway System(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	$ cts. 10,000,000 00 2,902,641 00 25,734,393 67 5,271,566 00 26,374,821 33 2,716,578 00	$ cts. 3,000,000 00 396,200 00	$ cts. 2.500.000	00 2,506,441 00 17,862,494 31 4.112.000	00 7,658,833 33 2,267,058 00	$ cts. 4,500,000 00 3,059,243 36	$ cts. 4,812,656 00 1,159,566 00 14,027,778 002,361,271 00 15,470 00	2,326,939 00 434,050 00	Total comparable with Can. National Railways Loan, 1923-24	
Add: Miscellaneous Votes under direct control of the Department Canadian Government Railways only. Vote No. 116	$93,625 00 117	
5,390 00 122 	
40,000 00 130	
50,000 00	73,000,000 00 189,015 00 73,189,015 00	5,772,941 00 189,015 00 5,961,956 00	36,906,826 64	10,320,232 36	20,000,000 00
Ottawa, Ont., June 11, 1923
Supply-Railways-C.NJI.

Statement No. 2

[Stage Direction]
Relative to Canadian National Railways Classified in Accordance with Vote No. 139-1923-24
Classification as per Vote No. 139 1923-1924
Total
Canadian
Government
Railways
Canadian National Railway System
Grand Trunk Pacific
Grand Trunk Railway System
(A)	Operating Deficits whenev er 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	
$ cts.
20,000,000 00
2,800,000 00
38,473,094 57
8,317,537 59 25,264,267 78 2,095,100 06
$ cts. Vote No.
7,000,000,00 (350) 284,125 00 (115)
2,700,000 00 (112)
$ cts. Vote No.
5,000,000 00 (136) 2,515,875 00 (115)
21,295,029 07 (136)
6,754,970 93 (136) 8,297,243 00 (136) 1,452,757 00 (136)
$ cts. Vote No.
8,000,000 00 (138)
[Stage Direction]
cts. Vote No.
3,159,243 36 (138)
4,098,413 58 (138) 642,343 06 (138)
14,018,822 14 (137)
1,562,566 66 (137) 10,168,611 20 (137)
Total comparable with Canadian National Railways Loan 1923-24	
96,950,000 00
9,984,125 00
45,315,875 00
15,900,000 00
25,750,000 00
ADD:-Miscellaneous Votes under direct control of Department. Canadian Government Railways
VOTE:-No. 113.
114.
116.
131.
.8 30,000 00 . 150,000 00 . 40,000 00 . 50,000 00
270,000 00
270,000 00
97,220,000 00
10,254,125 00
[Stage Direction]
o
[Stage Direction]


Ottawa, Ont, June 11,1923.
Supply-Railways-C.N.R.

Statement No. 3
Classification as per Vote 139 1923-1924	Totals	Canadian Government Railways	Canadian Northern Railway	Grand T runk Pacific	Grand Trunk Railway(A)	Operating Deficits whenever incurred or ascertained	
(B)	Acquisition of Property, Materials and Supplies	
(C)	Interest and Sinking Funds on Notes, Securities and Obli-	$ cts. 12,556,677 25 2,745,019 07 32,691,149 48 11,749,401 74 23,769,410 56 1,777,693 78	8 cts. Vote No. 5,695,669 05 (350) 429,213 28 (115)	$ cts. Vote No. 1,245,941 70 (136) 2,315,805 79 (115) 17,475,772 38 (136) 7,489,337 73 (136) 9,628,779 47 (136) 1,462,847 11 (136)	$ cts. Vote No. 5,615,066 50 (138) 2,205,816 52 (138)	$ cts. Vote No. 13,009,56058 (137) 4,260,064 01 (137) 7,921,659 09 (137)(D) Principal and Interest of maturing or matured loans secured	(E)	Construction and Betterments	
(F)	Co-ordination or Consolidation of railway lines and facilities	2,689,681 76 (112) 9,295 73 (112)	3,529,290 24 (138) 305,550 94 (138)	Total comparable with Canadian National Railways Loan 1923 24	
Add: Miscellaneous Votes under direct control of Department. Canadian Government Rlys., only. Vote No. 113	
$ 2,579 10 114	
59,950 00 116 	
27,802 06 131	
48,699 09	85,289,351 88 139,030 25	8,823,859 82 139,030 25	39,618,484 18	11,655,724 20	25,191,283 6885,428,382 13	8,962,890 07	
Note.-In the above statement there have been treated as cash advances certain amounts represented by certificates filed prior to May 31st and applicable to operations to March 31st, but for which the Department of Finance has not yet released the cash.
a
tz;
Supply-Railways-C.N.R.
Supply-Merchant Marine
Henry Lumley Drayton: The figures submitted by my hon. friend, Mr. Chairman, give a summary of the allocation of the vote. In addition to that he has the details of the estimates, and as those are fairly long perhaps he would table them so we could have the information and save time. For
10 p.m. example, these particulars show we are voting this year for the acquisition of property, materials and supplies $2,900,000. I think the House should have information as to what property we are buying for this sum. Then we have our interest and sinking funds on notes, securities or obligations amounting to over $25,000,000, and principal and interest of maturing or matured loans secured or unsecured amounting to $5,000,000. Then again we have construction and betterments amounting to $26,000,000, and co-ordination or consolidation of railway lines and facilities representing over $2,700,000. I would ask my hon. friend to table the details of the estimates of this year and of last year so we will have them for comparison and not consume the time of the committee.


George Perry Graham: I have not those details here but I will get them.


George Newcombe Gordon: That relates to the vote No. 139.


CANADIAN GOVERNMENT MERCHANT MARINE
[Stage Direction]
Loan to the Canadian Government Merchant Marine Limited, repayable on demand with interest at a rate t-o be fixed by the Governor in Council, upon such terms and conditions as the Governor in Council may determine, and to be applied in the payment of deficits in operation of the company and the vessels under the company's control during the year ending March 31, 1924, $1,500,000.	.
Henry Lumley Drayton: Before this matter goes on, it was pointed out by the leader of the Opposition that there was no notice given that this would be taken up to-day. He tells me that he has an understanding with the government, and I just want to see if I am right, that while the item will be called and the discussion proceeded with, it will not be closed to-night so that he will have an opportunity of preparing whatever may be necessary to be prepared.


George Perry Graham: What we had in mind was this: This discussion may be a bit lengthy, and we thought we might as well proceed with some of it, but there is no intention of bringing the discussion to a close to-night.
I might say briefly that the report of the Merchant Marine for the year ending December 31, 1922, is in the hands of hon. members. There is nothing much to add to wha* is in that report. It may be asked why the

figures in that report are given for the calendar year instead of for the fiscal year. It is convenient both for the railways and the Merchant Marine that their year should close with the calendar year, so any discrepancy between the figures of the appropriation and the amount given as expended will be accounted for by the fact that the appropriation runs from March 31st to March 31st, while the business year of the Merchant Marine runs from December 31st to December 31st. I do not know that I can add a single figure to what hon. gentlemen have in the report that is before them.


Mr. CAMPBELL:: Did I understand the minister to say that this item would not be passed to-night? There are several hon. gentlemen in this section of the House who desire to speak on this vote who are detained at some banquet.


George Perry Graham: The understanding was that some hon. gentlemen present wished to speak. We are open for speeches, of course. If they take the ground that they do not want either to speak or to put the item through it means a couple of hours wasted.


Robert Forke: Usually there is a great rush of hon. members to get on their feet to make a speech, but as no one has risen-


Mr. LAPOINTE:: It is a good sign.


Robert Forke: -this is an opportunity for me to take up a little time to-night. I rise largely for the purpose of seeking information regarding the Canadian Government Merchant Marine. The other night I used a phrase that perhaps I should not have used when I said that it might be necessary some day to take the ships of the Merchant Marine out into deep water and sink them. I prefaced that remark with something and followed it with something, so I hope it will never be quoted against me. It brought to my mind how dangerous it might be to use phrases of that kind in the House, because I sincerely hope it may never be necessary to do any such thing with the Canadian Merchant Marine.
I have heard a good many things said of the ships of the Canadian Government Merchant	Marine,	but	I	have	neveryet heard	anything	said	in	their	favour,and I would like some information in regard to the building of these ships: who designed them, what trade were they designed for, why is it that when any matter of shipping	comes up	in the House the firstthing you	hear is that	the	ships	of the
Merchant Marine are not suited for that sort of work?

Supply-Merchant Marine
I do not know whether the minister is going to be able to tell us just what sort of trade these ships were built for. I have read some of the past debates in connection with the building of these ships, and I do not intend to enter into that phase of the matter at this time. I realize that they were built at a very expensive time, that a good many of them cost from S160 to $195 per ton, while ships that were built in pre-war times could be built for about $50 per ton, and perhaps they can be built even cheaper to-day. I think a very reasonable thing to do at the outset in connection with the Merchant Marine-I know that this suggestion was made by the hon. member for Marquette (Mr. Crerar) with regard to the government railways, and I think it would be even more applicable to the Merchant Marine-would be to have these ships valued. I am aware that the minister is trying to sell some of them, and it might not be a good thing to value them too low; nevertheless I do not think it will ever be possible for these ships to pay interest and depreciation charges upon their valuation at the time they were built, but if they were valued at what they are actually worth to-day, and some attempt was made to make them pay interest on that amount, there might be reasonable hope that that could be done.
I notice in the report that the deficit after all charges, including depreciation and interest, amounts to $9,649,478.72-a vert large deficit for the people no doubt who pay taxes in this country to make up. I have no doubt that there is going to be a deficit for a long time if an attempt is made to pay interest on the valuation of these ships that were built at such a high cost. I hope we shall get some information during this debate as to what is the matter with the Merchant Marine. Why is it these ships cannot do business on the ocean or on the lakes? We had a discussion the other night about subsidizing a service to the West Indies, and were told that these boats were not suitable for that service. Looking over the debates of past sessions I noticed that the Hon. Mr. Ballantyne made the statement that these ships were suitable for carrying cattle across the Atlantic ocean, but now we are told that they are not suitable for that purpose. The statement was also made in past sessions that the smaller boats of the Merchant Marine were able to compete and would carry grain on the Great Lakes, but now we are told that they cannot compete with the large boats that carry grain that were built especially for that purpose.
242J
I said when I rose to my feet that I rose largely for the purpose of seeking information, because we really ought to know what is the matter. Why is it these boats are unable to compete with other boats? Perhaps I am correct in saying that at the present time there is sufficient shipping in Montreal and other seaports to do all the business that is being offered in the world to-day. I think that is correct. Nevertheless, it seems to me that our boats should be able to take their share of the business. I mentioned the other day that it might be a good idea for the Canadian National Railways to have boats running in connection with the railways that were able to carry cattle across the ocean and set a rate that would be a paying rate. These boats could demonstrate what was a reasonable rate for carrying cattle across the ocean. I have also seen it stated that while these boats are a losing proposition at the present time they bring a certain amount of trade to the Canadian National Railways, and although that results in a deficit so far as the Merchant Marine is concerned it helps to make the railways more paying than they otherwise would be. I believe the time is not far distant, or at all events I look forward to the time when the Canadian National Railways will have a line of ships running in connection with them just as the Canadian Pacific has to-day in connection with their railway. I hope that this Canadian Government Merchant Marine may be only the beginning of a line of ships that will bring trade and create ocean traffic that will help to make our railways pay a great deal better than they are doing to-day.
When I rose I knew that I could throw no light on this matter. I have, to use a nautical expression, been a good deal at sea in regard to these ships, and when I spoke the other day about sinking them in deep water it was only by way of passing a joke. We want to see some value got for these ships, and during this debate I am going to listen in the hope of finding out just what is the trouble, why we have this large deficit, and why we are told continually that these boats are not suitable for this, that and the other trade or any trade we can mention. Immediately we mention the Canadian Government Merchant Marine we are told its vessels are not suited for that kind of work. May I ask, what sort of work they are really suited for?


Mr. DUFF:: I do not know whether I will be able to supply the leader of the Progressive party with the information he desires. He is not the only person in Canada who, I
Supply-Merchant Marine

who was Minister of Marine and Fisheries, also made a speech on that occasion, and he told us that they were having two ships built by the Vickers Company at Montreal, one of 8,100 tons dead weight capacity, and another of 4,350 tons. He said that in addition to those vessels another ship of about 5,000 tons was being built by the Wallace Shipbuilding Company, of Vancouver, and another vessel of 3,550 tons by the Collingwood Shipbuilding Company, Collingwood. He said the Dominion government had those four vessels under construction. That was the reason, why, in my opinion, the hon. gentleman who now occupies the distinguished position of Speaker of this House approved of that policy. It was also the reason why the hon. gentleman who was lately Solicitor General in this government also approved of the scheme. Neither of these gentlemen, nor any other member in parliament at that time, thought the government of the day intended to spend $80,000,000 in the construction of these ships. Now, Sir, we have also been told that whilst certain gentlemen were in favour of that scheme, nobody opposed it. But if you will turn to Hansard of 1918 you will find that the then hon. member for Red Deer, Mr. Clark, did oppose the government's shipbuilding programme. He said frankly and freely that he did not believe it was a wise expenditure, or that the policy contemplated was wise. Therefore, while some gentlemen approved of that scheme, other gentlemen in the House at that time did not think it was a wise policy to embark upon even in war time. As far as I am personally concerned I did not object to the expenditure of that money in 1918, principally because I felt that while the war was on and ships were being sunk every day it was a fairly good policy for the government to build ships so long as the war lasted. However, as we all know, the war ceased in November 1918, and at that time the keels of four ships only were laid in the shipyards referred to. I contend, and I have done the same thing for a number of years whenever I spoke on this subject in parliament, that the right and proper thing for the government of the day to have done when the war was over and when every shipyard in Britain, in France, and in the United States was busy building ships, was to have stopped the construction of these vessels. They should have stopped building when ships were partly constructed, and perhaps others were under way, in these shipyards.
My own opinion is that it would have been far better, if this government wanted to
encourage a mercantile marine, to have gone out at that time and endeavoured to make some arrangement with the shipbuilders whereby shipbuilding would have been continued and a Canadian merchant marine, instead of the Canadian Government Merchant Marine, would have been built up in this country, as it has been built up in other countries. But instead of that the hon. member who occupied the position of Minister of Marine and Fisheries was determined to go on with his project, and without going into the matter very much further, the result was that $79,000,000 of this country's money was spent in the building of the ships, and these ships, instead of being sold, were operated by what was known a3 the Canadian Government Merchant Marine Limited. My own opinion is that if the government were determined to operate these ships that they never should have put it in this company form, or placed it under the management of a corporation. At the present time there is not one man who is managing these ships, or who is a director of the Canadian Government Merchant Marine, who has one dollar invested in the enterprise. I say that is not the right and proper way to run a business, and you can never get satisfaction out of it. It is purely a camouflage that this project which has cost the people of the country $80,000,000 is being run by men who have no financial interest in the matter.
After these ships were completed, in fact before they were all completed, the government commenced operating, and those who are familiar with ship operation will know that, during the first two years these ships were operated, conditions were abnormal in the shipping business, and that, instead of making 10 or 15 per cent on money invested in shipping, as high as 100, 200 and 300 per cent on the cost of ships was made yearly by different firms operating ships in different countries in the world. It would naturally be expected that the Canadian Government Merchant Marine would participate in the business the other people were getting, or in similar business, and would make large profits on the operation of the ships; but if hon. members will look at the statements that have been furnished by the government in connection with this project they will see that, instead of making a fair profit on the ventures, very little money was made in those years when other people were making large sums of money. Now we come to the present day.


Mr. McMASTER:: On the first year's operation of the Canadian Government Merchant

Supply-Merchant Marine
think, should have a great deal more information with regard to this project than has been given to them, especially in the last two or three years. Now, if the committee will bear with me, in order that the Progressive leade" and the country may know exactly how I look upon this project and how this project looks to me, I will endeavour in the shortest time possible to give all the information which I have at my command. Jn order to do that it will be necessary for me to go back and review the entire undertaking from the time of its inception. I do not pretend, however, to-night to criticize or condemn Union government or the Conservative government -the Union government for entering into T.he project, or the Conservative government for carrying it out after they came into power in 1921, or after Sir Robert Borden resigned ami the present leader of the Opposition became Prime Minister of Canada. It is useless, in my opinion, for members of parliament, in order to make a point, to go back and throw political mud-shall I call it?-on their opponents and say they were to blame for everything that happened in connectio l with this or that matter. We have arrived with regard to the Canadian Government Merchant Marine, at a time when it does not make very much difference whether the Union government are responsible for the building of those ships or not. The question we have to face to-day in this country and in this parliament is, as to whether these ships should continue to be operated or not. If it can be proved conclusively that these vessels are necessary and if-as some people have tried to make out in the past, and are trying to make out now -we must keep them going to help the Canadian National Railways-if that can be proved conclusively then I say this country should carry on the proposition. If, however, it can be shown that these ships are not necessary to carry on the trade of this country, that there are millions of tons of ships on every ocean in the world ready to transport the products of Canada and every other nation, then I say it is not necessary for this government or this country either to keep on paying year after year the deficits on the operation of these ships that we have been paying, or to run government-owned ships in competition with private enterprise.
Now, Sir, as I said, I do not intend to criticize the Union government for the commencement of this project, but in order that the leader of the Progressive party and the House may know exactly what occurred, I should like for a few moments to review exactly what happened in connection with this enterprise in parliament. I think it was in

April, 1918, that Sir Robert Borden, who was then leader of the government, came to this House and proposed that we should vote $25,000,000 for the building of ships in this country. The reason Sir Robert Borden gave at that time for the proposition was, that in view of the fact that hundreds of thousands of tons of shipping were being sunk daily by the German submarines, and in view of the fact that it was necessary in this country to build ships to carry supplies not only to the soldiers at the front but also to the various peoples in Europe, that it would be a good policy on the part of the Canadian people to build ships to help out that very serious situation. Sir Robert Borden, in reviewing the situation at that time, told us that the fourteen shipyards in Canada were busy building ships for the Imperial Munitions Board, which was really a branch of the Imperial government, but he said as soon as these ships were completed it was the intention of the Canadian government to start building ships in those yards with Canadian money and for the Canadian people. We heard it stated in this House a few days ago that not only were the supporters of the Union government favourable to that scheme at that particular time, but that certain hon. gentlemen who were supporters of the Liberal party also favoured it. Indeed it is now said in contradiction, whenever we criticize the Canadian Government Merchant Marine, that members of the Liberal party favoured the scheme. While that is quite true up to a certain degree, yet anybody who takes the trouble to read Hansard of that time will find that when Sir Robert Borden made that proposal there was absolutely no talk of operating ships. Sir Robert Borden only told us that in view of the prevailing conditions Canada was going into the j^hip building business, not into the ship operating business; and any Liberal members who spoke in approval of the scheme at that time never approved of operating the ships which the government intended to build. I do not know that it is necessary to read exactly what Sir Robert Borden then said. I think I have covered the ground very well, but on April 4th, of the same year Mr. Ballantyne, who was the Minister of Marine and Fisheries in the Union government, also spoke in regard to the matter.
Mr. FORKE What year was that?


William Duff: April 4th, 1918. The speech
will be found in Hansard of that date, page 346. Sir Robert Borden's speech appears at page 28 of Hansard of 1918. Mr. Ballantyne,
3So:
Supply-Merchant Marine

Marine, after deducting depreciation charges, was no money made at all?


William Duff: The hon. member will remember that in the speech I made in connection with this matter, I think in' 1921, I furnished a statement to the House in comparison with the statement given us by some of the Marine officials, and made up by the auditors who audited the books of the company. I think 1 proved to the satisfaction of most hon. members on both sides of this House that the statement as prepared by the auditors, or the people who did prepare it, was not in accordance with the facts, and instead of making a profit those years, after a sufficient amount was allowed for depreciation, without taking into consideration the large sum of interest which was due the Finance Minister, these ships went into debt. I do not need to give the House those figures, but if hon. members will look at Hansard of 1921 they will find all the figures.


Robert Forke: What page? If the hon. member will allow me, at page 903 of Hansard of 1920, I find the following statement by the then Minister of Marine and Fisheries:
The total net profit, as I stated before, is $1,406,000.


William Duff: I will give the page of Hansard in 1921. That was after two years' operation. The statement will be found in Hansard of 1921, on pages from 1692 to 1701. There are several statements there which I prepared at the time, and the statement of the operating accounts will show that there was no profit on the business, and in the statement of capital account the figures I gave showed a loss to the country of $58,669,906.22. I remember distinctly when I read that statement the hon. member who was defending the estimate practically tried to laugh me out of court. I am not a prophet, nor the son of a prophet, but if hon. members will look at the statement of this year and see what Sir Henry Thornton says, they will find my prophecy has come true, and that these ships to-day, after deducting the interest charges, have practically lost to the country every dollar that the country has invested. I intend to go more fully into that in a moment when I deal with the annual report for this year. The annual statement for this year has not yet been placed on record.
Before I deal with that, I will refer to the matter the hon. leader of the Progressive party (Mr. Forke) spoke of a moment ago, as to the profits for the first year. According to the statement submitted to the House at that time by the government the profit shown for the year ending December 31, 1919,

was $1,406,767.38, and the following year, December 31, 1920, the profit shown was $598,460.09. These are the two years in which r* was supposed that a profit had been made, but if hon. members will look at the statement of 1921, which gives the business to the 31st December, 1920, they will find on the last page what is known as surplus account, and taking the figures of the company, or the government of that day, they will find the statement that they had a surplus at that time of $1,004,-
233.01	Last year the Minister of Railways asked the House to vote $4,360,720 in the estimates to apply towards the deficits of this company. We find that the present Minister of Railways this year, in what are called the Supplementary Estimates, asked the House about ten days ago to vote an additional amount of $1,700,000. In addition to that we are asked to-night to vote $1,500,000. These three amounts total $7,560,720.
Now, Sir, I want to say, first, with regard to these items, that I did not oppose the vote last year of $4,360,720, because in conversation with the then minister he told me-and I quite understood it-that he had not had time to look into the business. He had only been sworn in as Minister of Railways a few weeks before, and consequently did not have time to go over the whole business and see what could be done; therefore I raised no objection to the voting of that item. As, however, I said a moment ago, in addition to the $4,360,000, we voted the other night $1,700,000. To my dismay, I find that that money, if my information is correct, was given over to the Canadian Government Merchant Marine some time last fall on a Governor General's warrant. Although I am a supporter of this government, I want to enter my protest right here and now against this government voting that money by a Governor General's warrant and passing it over to the Canadian Government Merchant Marine.


Mr. JACOBS:: What would the hon. member have done had he been in the government at the time?


William Duff: I intend to come to that in a moment. One does not need to have been in the government to say what a business man would have done in the circumstances. The total amount which we shall have voted if we pass this item to-night will be $7,560,720. As I read a moment ago, there was supposed to be a surplus on December 31, 1920, of $1,004,233.01. This makes a total of money voted by this House and a surplus profit which is supposed to be in the treasury of the Canadian Government Merchant Marine,

Supply-Merchant Marine
Limited, of $8,564,953.01. What has become of that money? If hon. members will look at the statement for 1921, they will find that that statement on page 16 shows an operating loss of $2,210,724.55. If they will look at the statement on page 16 for last year, they will find that there is an operating loss of $2,384,189.17. This makes a total of $4,594,913.72. Yet although all these statements show losses in two years of only $4,500,000 odd, the government of this country has voted and asked for $7,560,720 and a surplus of $1,004,233.01, making in all $8,564,953.01. Where has the difference gone? Why did the Canadian Government Merchant Marine want $8,564,953.01 when their deficit, according to their own statement, was $4,594,913.72? It seems to me that it is time a halt was called regarding this matter.
The hon. member for George Etienne Cartier (Mr. Jacobs) asked me a few minutes ago what I would have done instead of paying by Governor General's warrant $1,700,000 to this company. The proper thing to have done was to let the bank carry the overdraft, as they were doing, until such time as sufficient ships were sold to pay the deficit. I do not profess to have any legal knowledge; but I noticed the other day that we were discussing all day the question whether it was legal to pay or to lend $2,000,000 to some syndicate to buy or rent a property in Paris. I am not quite clear yet whether we were to buy or to rent this property. I am very doubtful whether this parliament has any legal right to vote to an incorporated company called the Canadian Government Merchant Marine any moneys of this country. This company should stand on its own bottom and pay its deficits out of its assets and not out of money voted by this parliament. As I said, I am not a lawyer, but I am very doubtful if there would be a legal right to pay this. If the money can be paid on a legal technicality, I say that this government had no moral right to pay this large sum of money for that purpose, but the deficit should have been paid out of the assets of the Canadian Government Merchant Marine.
Let us see how the matter stands this year. As the statement has not been placed upon Hansard, I am going to read it. The operating account for the year ended December 31, 1922, is as follows:
Operating Account ending December 31st, 1922
Revenue from vessels, closed voyages.. $9,672,413 31 Other revenue, profit on operation of government dock, Vancouver	 30,754 13
Commission on handling outside steamers. 2,619 53
Total revenue	$9,705,786 97
Expenses:
Operation of vessels, closed voyages. $11,438,157 21
Stevedoring and wharf expenses.. ..	38,862 14
Operation of agencies	 98,506 61
Interest and exchange	 15,937 25
General expenses-
This is something to make us sit up and
take notice.
Management and office salaries	
$311,629	83Rent, taxes and insurance	
13,153	33Travelling expenses	
25,713	14Printing and stationery	
18,336	54Advertising	
33,015	59Postage, cables and telegrams	
56,641	82Office expenses and supplies	
27,478	13Miscellaneous	
12,544	55Total expenses	$12,089,976 14
Or an operating loss for the year of $2,384,189.17. It will be noticed that, in addition to the operation of these vessels, that is for the payment of crews, supplies, coal, and so forth, office and management expenses in connection with the project amount to $600,000. That is an amount which is absolutely in excess of what it should take to run this business. Think of $600,000 for management and office expenses of this business! Yet you and I are asked to vote $1,500,000 to-night and we voted $4,500,000 last year and $1,700,000 ten days ago. Next year they will be back again for two or three millions more or, perhaps, more for the deficit on operation this year. It is time that we looked at this matter seriously and decided whether it is in the interest of this country to carry on this operation, or if the whole business should not be cleaned up. In addition to the $2,384,189.17 -this is not the darkest side of the picture -this country had to borrow money to build these ships, money which was subscribed by way of victory loans by the people of Canada and on which the government has to pay five and one-half per cent interest. Mr. Ballan-tyne told us, when he was trying to paint a rosy picture of the Canadian Government Merchant Marine, that the ships would pay not only operating expenses, and interest on money invested, but a profit over and above those two items. Instead of that, what do we find? We find that outside of $500,000 which was paid on interest account in 1920 not one cent has been paid since, with the result that there is an amount for interest accrued for a year on notes due to the government, $4,078,277.74; interest on government advances, $118,759.67; reserve for depreciation, $2,932,130.14; reserve for outstanding liabilities $40,000; reserve for doubtful debts and claims $96,122, making a total of $7,265,289.55, or a gross loss for the year of $9,649,478.72.


George Perry Graham: That is, including fixed charges.
Supply-Merchant Marine


William Duff: Yes, interest and so forth. On the next page, 17, there is a deficit account. This shows a deficit ever since the operation of the steamers. In 1921 there was a loss of $9,116,144.28. Deducting the subsidy received for 1921 for the West India passenger service, of $59,090, this leaves an amount of $9,057,054.28; to which is added deficiency on insurance recoverable for the ship Recruit of $84,751.90. The loss for the year ended 31st December, 1922, was, $9,649,478.72, making a total deficit for the two years 1921 and 1922 of $18,791,284.90. In other words, the Canadian Government Marine if run as any other business, taking their own statements, has shown a loss of over $18,000,000.
Let us look for a moment at profit and loss account on pages 14 and 15, where it is known as the consolidated balance sheet. The
statement reads as follows:
Assets
Fixed Assets:
Vessels as at 31st December, 1921.. ..$72,392,352 27 Add-Net Additions during Year.. ..	5,331,513 35

Less Reserve for Depreciation	 6,026,270 69

Plant and Equipment as at 31st December, 1921..	..$ 68,873 33
Add:-Net Additions during Year	 18,372 67

Less Reserve for Depreciation 10,973 81

 74,272 19
Office Furniture and fixtures as at 31st December, 1921. $ 38,979 57 Add:-Net Additions during Year	 2,979 14

Less Reserve for Depreciation 4,861 85

 37,096 86

Department of Marine and Fisheriessuspense	 148,343 71
(Disbursements on Vessels prior to being put in Commission.)
Current Assets:
Cash in Banks and on hand. $287,247 82 Accounts Receivable, less Reserve for Doubtful Accounts 840,063 91 Advances to Captains, Crews
and Agents	
82,784	57Adjusted Losses due by Underwriters	
125,898	68Insurance Claims, Estimated Amount Recoverable..	.. 957,326 89Inventories of Stores and Supplies	
90,936	40
2,384,258	27
Insurance	Unexpired	 25,037	88

Deficit	 18,791,284	90

Lliabilities
Capital! Stock:
Authorized 10,000 shares of
$100 each	$1,000,000 00
Issued 6,609 shares of $100 each	$	660,900 00
Less-Amount to be Cancelled relative to Two Vessels Lost	 20,000 00
$	640,900 00
Notes Payable due Dominion
Government	$79,511,660 59
(Secured by Mortgages on Vessels)
Less Payments on Account 1,985,256 87

Add Interest Accrued to 31st December, 1922.. ..	8,670,707	13

 86,197,110 85
Other Advances by the Dominion Government.. $4,755,104 17 Add Interest Accrued to 31st December, 1922.. ..	118,759	67

 4,873,863 84
Accounts Payable	 1,099,854 42
Balances of Uncompleted Voyages..	..	346,159 63
Contingent Liabilities-None.

This shows the assets as at December 31st, 1921, to be $72,392,352.27, with additions during the year of $5,331,513.35, or a total of $77,723,865.62; less reserve for depreciation of $6,026,270.69. This therefore discloses a net balance of $71,697,594.93.
Then there is plant and equipment amounting to $74,272.19 and office furniture and fixtures, $37,096.86. Then there is a Department of Marine and Fisheries Suspense, and there is a footnote in regard to disbursements on vessels prior to being put into commission, the total shown being $148,343.71.


Robert Forke: At what page is that?


William Duff: I am quoting from page 14 of the fourth annual report of the Canadian Government Merchant Marine for 1922, in reference to "Department of Marine and Fisheries, Disbursements on Vessels". I am very doubtful whether that amount should be there at all. I do not understand exactly what it can mean unless the Department of Marine and Fisheries did not pay some of the capital expenditures when the vessels were built. But what difference does it make whether the amount is paid on account of capital expenditure or paid by the Department of Marine and Fisheries? I say that it is very doubtful whether this amount should appear as an asset at all.
The current assets in cash in banks amount to $287,247.82; accounts receivable, less reserve, $840,063.91; advances to captains, crews and agents, $82,784.57; losses due by

Supply-Merchant Marine
underwriters, $125,898.68; insurance claims, estimated amount recoverable, $957,326.89; inventories of freights and supplies, $90,936.40; insurance unexpired, $25,037.88; making a total of $74,366,603.84.
On page 15, there appears a statement of liabilities showing the capital stock at $640,900. Then there are notes payable due to the Dominion government of $79,511,660.59. That is what the ships cost, and for that amount notes were given to the Department of Finance. Deducted from this is an amount for payments on account to the extent of $1,985,256.87. Added interest accrued to the 31st December, 1922, accounts for $8,670,787.13, and other advances by the government, $4,873,863.84. Accounts payable amount to $1,099,854.42, and balance of uncompleted vessels, $346,159.63. So that the total liabilities amount to $93,157,888.74.
Now, the assets, as I read a moment ago, amounted to $74,366,603.84, and in view of the other statements I have just quoted it is apparent that there is a deficit to the country or to the Canadian Government Marine, whichever way you like to put it, of $18,791,284.90. There are one or two amounts here in regard to which I should like to get some information after I am through. One of these amounts appears on page 14, amongst the assets; I refer to insurance claims, the estimated amount recoverable being $957,326.89. I presume this is to be recovered from the insurance companies for some ships lost. But if you will consult the other statement for previous years you will find that they have also made an estimate of insurance they expected to recover the previous year, and instead of collecting the full amount they estimated they fell very much short of it. I would certainly say that in this case instead of $957,000 odd being put down as an asset, this amount will be considerably reduced when the insurance companies pay, if they ever do pay.
There appears also amongst the assets an amount of $840,000 odd for accounts receivable, but I should not be very much surprised if that amount were materially reduced when the freights are collected and the expenses in connection with the voyages are paid. According to the statement of the Canadian Government Marine there is a deficit of over $18,000,000. But that is not a fair statement of the present condition of the company. It will be seen at page 14 that there is an amount credited for depreciation of $6,026,270.69. I do not regard this as a fair amount for depreciation considering the value of the ships to-day. According to Sir Henry Thornton's
statement, which appears in the front of this book, he admits to the shareholders that the vessels have greatly depreciated in value and instead of being worth $77,000,000 are in reality worth, in his opinion, only $50 a ton dead weight. That in my view is a very generous estimate, but I am willing to accept it for purposes of comparison; and taking Sir Henry Thornton's estimate, it can be readily calculated that the ships to-day are worth only $21,023,865.62. In other words, this country has lost in depreciation on the value of the ships some $56,700,000.
I have here a statement showing the actual financial condition of the company. It is as follows:
Assets
Total cost of ships	$77,723,865 62
Reserve for depreciated value	 56,700,000 00

Plant and equipment	
74,272	19Office furniture	
37,096	86Department of Marine	
148,343	71Current assets	
2,384,258	27Unexpired insurance	
25,037	88

Loss on operation and decrease in value.. 69,465,014 21

Total Liabilities as shown on page 15
of Fourth Annual Report	 93,157,888 74
You will find if you will add up these two sets of figures on the asset and the liability side that this country has suffered a loss of $69,465,014.21 on these ships since they were built and put in commission. In other words, whilst the ships cost $77,000,000 according to the books of the company, today they are only worth $8,000,000, the difference representing depreciation and loss on operation. That is the exact state of affairs of this Canadian Government Merchant Marine. Whether the country desires to go on paying these deficits year after year is for parliament to decide. As far as I am personally concerned, I do not think it is good business to vote any more money to make good these deficits.


Robert Forke: Of course, the figures given
by the hon. member do not represent the actual depreciation of these ships but are due to the cost of construction having dropped from $165 a ton to $50. Can he give us the actual depreciation in value assuming that the cost of construction had remained at $165 a ton? Does the hon. member understand my question?


William Duff: I do. The cost averaged
about $192 per dead weight ton. In answer, I would say that the company itself has
Supply-Merchant Marine

written off $6,026,270.69 for depreciation. My own opinion is, and it was admitted by Mr. Ballantyne, that there should be an allowance for depreciation of 5 per cent per year, but it will be noticed that the company has not made such an allowance, because 5 per cent on $77,000,000 for four years would amount to over $12,000,000. However, I think I am fair when I read this statement and show that we have lost over $69,000,000. In other words, if these ships were sold to-day at $50 per ton, which is more than the current value of ships of the same character in other countries, we would suffer a loss of $69,000,000 on their building and operation.
In view of these facts, as I said a moment ago, is it wise for us to continue making up these deficits year after year? Are these ships necessary to do the country's business? I claim they are not necessary, and in this opinion I am upheld by a number of eminent authorities in various parts of the Dominion. For instance, the Ottawa Journal, in an editorial which appeared shortly after this annual statement was issued by the Canadian Government Merchant Marnie, said:
The worst feature of the whole proposition is that this loss is sustained without any visible advantage. True, the statement shows that the vessels turned over certain freight and passengers to the Canadian National Railways but the figures cannot be considered as even the shadow of justification for a nine million dollar deficit. Moreover, the corporation operating the ships apparently made them part of an Atlantic combine for the heightening of freights; this, at a time when there was a surplus of shipping, making them of no value whatever to the Canadian exporter.
In addition to this criticism, the Montreal Gazette-which perhaps is one of the sanest papers in Canada-has published several editorials severely condemning the slowness of this government and its predecessors for allowing these vessels to be operated any longer, and in every one it has shown conclusively that their continued operation is not necessary in the interests of the country. Then another paper, the Journal of Commerce, had this to say:
Canada's state-owned merchant marine, according to reports published by the Department of Commerce, returned1 a deficit of over $9,000,000 on a gross income of a little better than $10,700,000 during 1921. According to the best information available this condition was not improved during the calendar year 1922. The latest complete financial statement available (1921) illustrates the possibilities of government ownership of merchant vessels.
It has been argued by the late Minister of Marine and Fisheries (Mr. Ballantyne) and one or two other hon. gentlemen that these ships were in a combine with a New York Canadian National Railways. I do not think that any shipping man will agree with such
[Mr. Duff.)
a statement, because if the Canadian National Railways have efficient freight agents there is absolutely no reason why they cannot arrange with shipping companies to take freight at the seaboard for transportation overseas at a cheaper rate than it is costing us to-day by the Canadian Government Merchant Marine. I would suggest that the company sell these ships and transfer the general manager and any other gentlemen who may be necessary to the Canadian National Railways staff so that they may look after the transshipment of freight when it reaches the seaboard. That is the business way. There would be no difficulty whatever for the Canadian National Railways to make contracts with ship owners to carry freight which originates on the system. After all, what percentage of the goods handled by the Canadian National Railways to Vancouver, Montreal, Quebec, Halifax, St. John or Portland, was taken overseas by the Canadian Government Merchant Marine? Why, a mere bagatelle. It is not worth talking about, because unless they have changed their
11	p.m. way of doing business within the last few months most of the cargoes carried in their bottoms were from foreign ports. They were compelled apparently to go all over the world looking for freight. So the percentage of goods handled by the Canadian Government Merchant Marine and originating on the Canadian National Railways is very small compared to the total amount of freight transported by our great railway system.
It may be argued also that so long as we have the Canadian Government Merchant Marine it will have a salutary effect on freight rates charged by other shipping lines. I cannot discuss what happened before a committee of this House which is still sitting, but I can go back to three years ago when I told this House that instead of the Canadian Government Merchant Marine helping our shippers and producers to secure lower shipping rates that the company belonged to what was known as the "New York Pool." If hon. gentlemen will look up Hansard of April 7th, 1921, they will find that statement in the speech which I then made. I referred to that fact and proved conclusively that these Canadian Government Merchant Marine ships were in a combine with a New York pool to keep up the freight rates. This will be found on page 1713 of Hansard of April 7, 1921, where I said this:
We find that somebody in an endeavour to promote business for the government boats entered into an arrangement with certain New York shipping interests

Supply-Merchant Marine
to come into what is known as the New York Shipping Pool. Now a gentleman who does not know anything about shipping, and who goes to New York among the shipping sharks to enter into an arrangement with them, well, all I can say is Heaven help him. Somebody entered into an arrangement on behalf of these 47 or 63 boats, whereby they agreed not to cut rates, that is to say, the Canadian boats were to take no lower rates from Canadian ports than the New York boats were getting from New York ports. The result was that thousands of barreds of apples from King's county and Annapolis county which were ready to be shipped to the London market and were offered to the Canadian Government Merchant Marine, had to be refused because they had entered into this agreement with the New York pool. Were these apples shi'pped on Canadian steamers, on British steamers, on United States steamers? No, on Norwegian steamers.
Then I gave a list of the ships that were chartered at Halifax to carry these apples because the shippers could not make an arrangement with the Merchant Marine to do this business because they could not cut the rates.


Mr. GARLAND (Bow River):: Does my hon. friend think that the Combines Bill of the present government will have any effect on this combine?


William Duff: I have not read it yet, and I do not know what it contains, but evidently the government has not done much so far to get the Merchant Marine out of the New York combine. Our steamers are still in this combine. That was admitted by the gentleman who is at the head of the freight department of'the Merchant Marine. He said that they still sat in when these rates were fixed. I want to say that is a pretty poor excuse for the freight manager of the Merchant Marine to give to the people of this country, that these ships were not in the combine and that all he did was to sit in when the agents of the other lines were discussing rates. I say that no business men in this country would allow any other man who was not in agreement with them to come into their office to a directors' meeting and listen to all that was going on unless they knew he was in hearty agreement with what was proposed at that meeting. So I say the Merchant Marine were in the pool, and I think it is likely they are still in that New York ring.


An hon. MEMBER:: They were not according to the last account.


William Duff: That is because your committee frightened them.


John Livingstone Brown: Does the hon. member think it is necessary that that condition should continue now that we know the facts?


William Duff: I say that in spite of the fact that the Canadian Merchant Marine were keeping up the rates to the same figure as the other lines they had a deficit in two years of 318,000,000, and does my hon. friend want to argue that we should have their rates reduced and bring about a deficit of say $25,000,000? I do not think he wants that.


John Livingstone Brown: They may get more business in that case.


William Duff: They cannot get more business because the other ships can get business ahead of them every time. All the Merchant Marine ships get is what is left and the little that the Canadian National Railways put their way. Just look over the ships of the Merchant Marine in the different ports. While they have cargoes when they leave this country, and most of them are cargoes of lumber which any old windjammer can carry, coming back they have practically no cargo at all.


Milton Neil Campbell: Why do they not get cargoes? Is it due to mismanagement or to the class of vessels?


William Duff: I do not think it is mismanagement at all. I think the gentleman in charge of the Merchant Marine had a pretty hard row to hoe. The government should never have thrown these sixty-three ships at him. No other shipping company in the world ever bought sixty-three ships inside of twelve months. They buy one, two, three or four ships and gradually build up their holdings. Consequently I say the gentleman in charge had a pretty hard row to hoe, and he has done remarkably well under the circumstances. There are other causes why these ships do not pay and one is that they are suitable only for carrying bulk cargoes. They can take lumber but everybody knows that for the last two years there has been no money in that. They can carry coal, and yet they have lost money in spite of the fact that the Canadian Government Railways paid the ships of the Merchant Marine I think it was $2.80 per ton to carry coal from Sydney to Montreal when other ships were carrying it for $1.10 a ton. These ships are not suitable for carrying bulk cargoes of coal. Their expenses are too great. I thought I had the figures with me. I think it was $3.80 or at all events $2.80 that the Merchant Marine boats were paid for carrying coal from Sydney to Montreal while other ships were carrying it for $1.10 a ton.


Mr. MACLEAN (York):: Why did these
other boats not regulate the New York pool if the\r were able to do it?
Supply-Merchant Marine


William Duff: Which boats?


William Findlay Maclean: You say that
these boats could beat out the Merchant Marine. Were they in the pool?


William Duff: Yes.


William Findlay Maclean: You say the
pool was charging excessive rates. The Merchant Marine were in the pool and these other boats were beating them out. Why did they not beat the pool?


William Duff: I do not think my hon. friend could have heard me. I said that this New York pool was broken when these apples were carried to England by Norwegian steamers.


Mr. MARTELL:: Steamers have to be
.constructed for special trade. Landlubbers do not understand it.


William Duff: Here are a few of the steamers which carried those apples from Halifax to the Mother Country because the Canadian government ships refused the shipments. The Caxambu carried 14,000 barrels at $1.50; the Angelica Maresk carried 12,000 barrels at $2; the Knut Hamsun carried 20,000 barrels at $1.75. There were about a dozen of these ships that carried the apples and they made prices outside the pool price, which was $2.50 a barrel. The average price that was charged by these Norwegian steamers was from $1.50 to $2.


John Millar: Were they tramp steamers?


William Duff: Yes, ordinary cargo steamers
carrying from fourteen to twenty thousand barrels.


John Livingstone Brown: Was the reason the Canadian ships did not get that trade because they were not fitted for carrying it or because they were in the pool?


William Duff: I think the reason they did
not get that business was because they were in the New York pool.


John Livingstone Brown: Granting that, could they
have handled that trade constructed as they are if they had not been in the pool? Were they fitted for that traffic?


William Duff: Most of them are not, and for two reasons. One is that if you put 20,000 barrels of apples in what is called a single hold where there are no 'tween decks, before they arrive at their destination four or five tiers of the apples will be smashed. Another reason is that they have no cold storage or at least only one or two of them have. They are ordinary bulk steamers. They are not suitable for carrying coal, grain or practically anything else at a profitable rate.


John Livingstone Brown: It is pretty hard for us
to understand that.


Milton Neil Campbell: Were these Norwegian
steamers that carried the coal from Sydney to Montreal?


William Duff: No. The Norwegian steamers carried the apples. What I said about coal was that the Canadian National Railways in order evidently to help the Merchant Marine, paid them over 100 per cent more for carrying coal from Sydney to Montreal than they could have had it carried for in other vessels, and in spite of that the Merchant Marine had a deficit of over $9,000,000 on its operations for the year. Now, if they cannot do business on a basis of a hundred per cent more payment than other ships how can they compete with other vessels in the carrying of lumber, grain, or any other commodity and so make enough to save themselves from a deficit on their operating expenses?


William Thomas Lucas: What class of commodities were these ships supposed to carry when they were built?


William Duff: I do not think anybody knows what they were built to carry. The contracts were awarded during the height of the war and my own opinion is that the hon. gentleman who was then in charge of the Marine department let the thing run away from him. There was no attempt at all to build any special line of ships, and that is the reason why the management of these vessels is making such a poor showing.


William Findlay Maclean: More blundering.


William Duff: They were war brides, yes.


William Findlay Maclean: I said more blundering.


William Duff: Yes, it was a blunder. However, that is the reason matters have reached the position in which they are to-day.


Samuel William Jacobs: Is it not a fact that these ships were built mostly for the West India trade?


William Duff: I am glad my hon. friend asked that question, because the other night when the Minister of Trade and Commerce was endeavouring to get his estimates through a discussion arose as to whether or not this subsidy should be paid, and whether the ships of the Canadian Government Merchant Marine could not be used in the West India business, instead of the ships of the Royal Mail Packet Company or some other vessels. The hon. member for Bow River twitted me with the speech I made in 1919 when I was sitting in opposition.

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Edward Joseph Garland: I may respectfully suggest to the hon. member that I had no intention of twitting him.


William Duff: You reminded me of it then.


Edward Joseph Garland: Yes.


William Duff: I will take my remark back and say the hon. gentleman reminded me of the speech I made-[DOT]


Edward Joseph Garland: Thank you.


William Duff: -in which I opposed the
granting of subsidies. I am still opposed to the granting of subsidies if it is possible to avoid it.


Edward Joseph Garland: Hear, hear.


William Duff: But we have a situation such as we have in the case of protection, and it is pretty hard to get clear of it.


An hon. MEMBER:: Let us try it.


William Duff: I am willing to try it but I am endeavouring to show my hon. friend how, in my opinion, we can get clear of paying this $338,000 subsidy to the Royal Mail Packet Company, or to any other company on the West India route. Here is my idea of how to do that: This subsidy has been paid for a number of years either to the Royal Mail Packet Company or to some other company. At the time this subsidy was paid freight rates were much lower than they are at the present time, and there was not as much freight offering for West India ports, with the result that, perhaps, it was necessary for previous governments, whether it was a Liberal government or a Conservative government, in order to keep up the traffic between the West India Islands to give a subsidy to a' line of steamships. But during the war years when the Royal Mail Packet Company was running on this route the business and the rates of freight were sufficient and they did not require a subsidy. That is the reason why I opposed the subsidy of $388,000 to the Royal Mail Packet Company in 1919. But what has happened since? Here is what the late government did and what the present government are now doing. Both governments are eqully to blame in my opinion and here is what they did. When the war was over, I think it was in 1919, the Canadian Government Merchant Marine management deliberately put four steamships, if I remember correctly, on the same route or practically the same route over which the Royal Mail Packet Company plies. The result was that immediately both these lines of ships were dividing the freight that was offering. Consequently there was not enough cargo offering for both ships to be filled. Both lines of ships were carrying half cargoes and their holds were half empty. Sometimes on the return trip the vessels of the Canadian Government Merchant Marine hardly had enough molasses for the crew to eat on the way home and the ships of the Royal Mail Packet Company were almost as bad.


Milton Neil Campbell: Did they feed the crews of the ships on molasses?


William Duff: Well, they needed a little
molasses to mix with their rum. After that when it was found that the Royal Mail Packet Company were losing business due to the fact that there was a competing line of government ships, or practically government ships, the manager of the former company came to Ottawa. He showed his statement of operations and demonstrated that there was a very large loss with the result that he got the government to increase the freight rates 50 per cent on goods going to the West Indies. Immediately the Royal Mail Packet Company increased their rates the Canadian Government Merchant Marine did the same. They had to. In spite of this fact however these ships, ever since they were operated by the Canadian Government Merchant Marine have been losing very large sums of money on the West India route.


Samuel William Jacobs: Do I understand we were
subsidizing the Royal Mail Packet Company and at the same time competing against them?


William Duff: Absolutely, that is the whole
thing in a nut shell. We were paying $338,000 out of one pocket, and then taking a large portion of $9,000,000 out of the other pocket and paying part of the deficit on the operations of vessels of the Canadian Government Merchant Marine competing on the same route. If you call it good business for any department of government to do that I do not. That is the crux of the whole situation.


Edward Joseph Garland: Surely the hon. gentleman does not contend that the whole deficit of $9,000,000 was incurred on that route?


William Duff: I did not say that, I said a
part of the $9,000,000 deficit was incurred on that route. Now, we have never seen a statement of the operations of the government vessels on any one route.


Lewis Herbert Martell: May I ask a question?


William Duff: Let me finish the sentence first. I say we should ask the minister, before we
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vote this large sum of money, to produce to this House and to the people statements showing the results of the operations of these steamships on the different routes, the profit or loss on the routes on which they run. Then we should get some information about this matter. But we have gone at it blindly. We did that last year, and I am as much to blame as anyone else. In half an hour we voted $4,500,000 for deficits on the operations of the Government Merchant Marine, and we voted this year $1,700,000 to cover expenditures under Governor General's warrant. Is that the way to handle the people money? I say it is not, and I for one am not going to do it again.


Lewis Herbert Martell: Does my hon. friend contend that we are subsidizing the Royal Mail Packet Company and at the same time running boats of the Canadian Government Merchant Marine in competition with them?


William Duff: Yes I think I answered that question before. That is quite true. Not only are we doing that but we are subsidizing lines to Australia and also running Canadian Government Merchant Marine boats in opposition to the Australian boats to which we are paying subsidies. Is that good business for the government to carry on? I think you will agree with me that it is not.
I was asked to explain the reason why these government boats could not run on the West India route. I think I got as far as to say that both lines were losing money and they came to Ottawa and got the Minister of Trade and Commerce to increase the freight rate 50 per cent. Now the way to stop the existing situation is this: The Minister of Trade and Commerce is to-day calling for tenders for a contract for a term of years. My candid opinion is that if the minister would say to the tenderers "We will take the boats of the Canadian Government Merchant Marine off those routes if you will do without a subsidy," if the steamship companies got that guarantee they would not want any of the existing subsidy or very little of it.


Robert Forke: Who would fix the rates if that were done?


William Duff: The law of supply and demand would regulate that every time. You cannot fix rates on the ocean. You may fix them for a little while but they are bound to break in the long run.


Robert Forke: You say that if the boars of the Canadian Government Merchant Marine were taken off that route the vessels of the other company would easily carry on the business without a subsidy?


William Duff: Yes.


Robert Forke: That is all right.


William Duff: I say that if the Minister of Trade and Commerce would say to the persons who are likely to tender for this new contract that the management of the Canadian Government Merchant Marine would take their steamers off that route so that these men will have sufficient business-because they have to compete with other steamers and other sailing vessels anyway-they woidd be able to make a profit on their investment and put money to rest without the government having to pay them any subsidy.


Milton Neil Campbell: Would you not suggest putting these government boats on the West India trade and paying them the subsidy?


William Duff: No. One reason is that the boats are not suitable for the West India business. They are single-decked boats.


William Findlay Maclean: Are they good for anything?


William Duff: I do not think they are good for very much. In answer to the question of the hon. member for Mackenzie (Mr. Campbell) I wish to say these boats are not suitable for that route. It is a well known fact on that route passengers and mails are carried in addition to cargoes. In order to pretend that they were doing something, the Canadian Government Merchant Marine fitted up accommodation on three or four of these boats for a few passengers; one, I think, could carry about 37 passengers. That is quite enough for my argument, that such a boat would not be suitable for this traffic. Boats on this route carry three classes, steerage, second-class, and first-class passengers. In addition to that, they are supposed to carry His Majesty's mail. Men who do business in the West Indies take passage on these boats, and go there. In addition, men go there as second-class passengers and as steerage passengers. They also come from different parts of the West Indies to Canada. Therefore, the Canadian Government Merchant Marine vessels are not suitable for passenger boats. In reply to my hon. friend, I say it is impossible, without the expenditure of a large sum of money, to make these boats suitable. I noticed in the newspaper the other day the statement that it is the intention of the merchant marine to spend money in fixing up some of these boats to carry cattle to England. I was rather amused when I read that item in the paper. I do not know whether it is true or not. Perhaps the minister can tell us. These boats, of course, are not suitable to carry cattle. They

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could only carry a small number of cattle, even if fitted up. It would be impossible for them to carry any large quantity of cattle. At $20 per head these boats could not carry enough cattle to pay for the coal used in crossing the Atlantic. Yet somebody states in the paper that they were going to fix up seven or eight steamers to carry cattle. The reason that information is given out is, I surmise, that Sir Henry Thornton wants to placate the people who have cattle in this country, and make them believe the Canadian Government Merchant Marine vessels are fit for something. Carrying cattle is the last thing under God's heaven that they are fit for, and I say the Canadian Government Merchant Marine have no business spending money fitting up these boats for that trade.
The other day we heard my hon. friend the ex-Minister of Finance (Sir Henry Drayton) and a number of other learned members on both sides of the House discussing a fine legal point as to whether Sir Henry Thornton had a right to take $2,000,000 from the treasury and use it in connection with the purchase of an hotel in Paris. The legal point raised was that the law was against Sir Henry in that proposition-that under the law he had no right to take that money for that purpose.


George Perry Graham: I never admitted it.


William Duff: The minister, like myself, is not a lawyer. I was talking about the question of law. It he had no right to take money out of the treasury for that purpose, and if the law in relation to the Canadian Government Merchant Marine says that before any moneys are spent on capital account they must be voted by this parliament, where is Sir Henry Thornton going to get the money to fit up those ships to carry cattle? This will be capital expenditure, and I say that somebody should tell Sir Henry Thornton that he has no right to spend any money fitting up ships to carry cattle. Even if these ships were fitted up for this purpose, they would not be much good, because they could only carry a few cattle. They cannot carry them on deck across the Atlantic, and how many cattle could they carry on vessels running from five tc eight thousand tons gross tonnage? They could only carry a few when they are fitted up. Are the directors of the Canadian Government Merchant Marine going to allow Sir Henry Thornton and the management of the steamship company to spend large sums of money putting in 'tween decks to carry cattle? If they are going to keep the cattle in the hold in bulk, they would not be in good condition when they reached the other side. They must have 'tween decks put in, if they carry cattle.


Robert Forke: I think I saw them loading one Canadian Government Merchant Marine ship with cattle last summer, along with the passengers. I was told it was one of the Canadian Government Merchant Marine on which they were loading cattle.


William Duff: Does the hon. member know how many they carried?


Robert Forke: No.


William Duff: I say they are not fitted to carry cattle. If they are fitted up to carry cattle and a large amount of money spent on them, they will only carry such a small number of cattle that it will not pay. I say the government should not allow any further expenditure on capital account by Sir Henry Thornton or anybody else. Hon. members understand that, in order to carry cattle, the ships must be properly constructed, so that they can carry cattle in one part of them.


Edward Joseph Garland: Does the hon. member argue that Sir Henry Thornton is deliberately deceiving the public in this matter?


William Duff: I am sorry the hon. member should suggest that I insinuated that Sir Henry Thornton was trying to deceive the public.


Edward Joseph Garland: I did not mean that at all. I thought I heard the hon. member state that apparently the press statement that these ships were to be fitted up was intended to placate certain western interests.


William Duff: I did not say western interests; I said the people with cattle to ship. That is a different thing from saying Sir Henry Thornton was trying to deceive the public. The trouble with Sir Henry Thornton-and let me say it in the best of spirit-is the same as the trouble of my hon. friend from Bow River (Mr. Garland); that Sir Henry Thornton knows very little if anything about operating ships of this class, and less about the trade they are engaged in.


An hon. MEMBER:: Nothing.


William Duff: Nothing. What does any director of the Canadian Government Merchant Marine know about operating ships? Nothing.
[DOT]-except John Sinclair. He is the only man on the directorate that knows anything about it. Not another man knows the first thing about it.


Lewis Herbert Martell: The hon. member is right there.


William Duff: I ask in all kindness, does the Minister of Railways know anything about operating ships?
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George Perry Graham: He does not know anything about the operating of railways either.


William Duff: Yes, he was Minister of Railways for many years, and had a chance to acquire some knowledge with regard to them.


Mr. PARENT:: And he was in charge of canals also.


William Duff: But the operation of ships is an entirely different matter. I say that, inasmuch as the directors are practically without any knowledge of ships, and the deputy minister has no knowledge of ships, it is not fair to the taxpayers of the country who have to be taxed for everything they get, that they should pay this $18,000,000 deficit.


Samuel William Jacobs: Do those men know as much about the running of ships as they do about the running of railways?


William Duff: Sir Henry Thornton knows
something about running railways.


Samuel William Jacobs: But the directors?


William Duff: I thought Sir Henry Thornton was a director of the National Railways. He is manager and director, without any shares in the company. I say that, in view of all the circumstances, in vew of the fact that these ships were built during wartime, in view of the fact that the right and proper thing to have done with the ships was to have sold them after they were built, when we could have realized something for them, in view of the fact that we have a deficit on operating expenses and interest to the amount of $18,000,000, and in view of the fact that these ships have depreciated to the extent of from sixty-five to sixty-nine million dollars, and nearly all the money which was used in construction is gone, it is time for the people of the country to say what they want done with these ships. I say these ships are not necessary to the business of the country.
The hon. member for North Toronto (Mr. Church) states they should be used on the Great Lakes for the carrying of grain. How are these little ships, which could carry only a few thousand bushels of grain, going to compete with ships which carry five and six hundred thousands of bushels of grain? It is ridiculous and there is no sense in it. It is useless for anybody to try to make out that these ships can make any money and pay their way or do the business of this country. I want to argue further that even if these ships were making money, even if they never lost a dollar and even if we could see into the future that these ships were going to earn money, it is not fair to this country that

this government should carry on a ship-operating business. There is no necessity for it. It is not fair for private enterprise; it is not fair for people who have invested money in ships throughout this country and in other countries, and the government has no right to carry on this ship-operating business any longer.


Robert Forke: Will the hon. member for
Lunenburg (Mr. Duff) allow me to read this sentence of Mr. Ballantyne's statement?
None have been placed on inland waters as yet, but now that we are getting from the yards a large number of ships which are of lake size I should think that a good many will be placed on the Great Lakes shortly.
That is from Mr. Ballantyne's speech in the session of 1920.


William Duff: That is quite true. Of course they did place ships on the Great Lakes.


Robert Forke: He says that they are of
big enough size.


William Duff: He only thought so. He was speaking, of course, in good faith at the time, and he thought he might be able to work them in. The trouble was that they gave those contracts; the ships were being built; they had to take delivery of them; Mr. Bal-lantyne or the manager had to do something with them, and some of them were put on the Great Lakes, some on the Atlantic and some on the Pacific. The very fact that a number of those ships on the Great Lakes are laid up and not operating, proves conclusively that they are not suitable for Great Lakes business. I think it is a fact that some of them are laid up. The same thing applies on the Atlantic. A number of these ships have been laid up, and an announcement was made three months ago that twenty-seven of these ships were going to be sold. Why would they be sold if they could be used for some purpose?


Robert Forke: In Great Britian a good
deal of coasting trade is done. Would they be suitable for coastal trade, say between Edinburgh and London,-for a short passage, what they call coasting trade, say between Leith and London?


William Duff: Of course I do not know
very much about shipping in the Old Country, but I think they would be suitable for short distances and small bulk cargoes like coal from Swansea or Newcastle or somewhere else.


Samuel William Jacobs: They could be used for
rum-runners.

Supply-Merchant Marine


William Duff: Yes they would be very
useful for that.


George Perry Graham: They could not run fast
enough.


William Duff: As I was saying, the fact that twenty-seven of these boats are according to announcement, going to be sold, proves conclusively that the company and the directors think that they are not suitable for the business of this country. In spite of the fact that this announcement came out three months ago, and in spite of the fact, that I think, it was the old directors who decided about a year ago to sell the boats, no attempt has been made to sell them. This money is all lying idle. If Sir Henry Thornton or anybody else knew anything about this business, they would try to sell these ships and get clear of them, at least the twenty-seven that they are supposed to sell. So far as I can see, no advertisements have appeared and nothing has been done to try to get rid of these twenty-seven ships. I believe it is in the best interest of the country that the full number of ships be sold at the earliest possible moment.


William Findlay Maclean: They would be
no good for anything, according to the hon. member's argument.


William Duff: But we would be clear of
them, whether they are good or not. This country should not be running them at a loss. The hon. member for York (Mr. Maclean) will agree with me that he is not favourable to this scheme of losing $9,000,000 every year in interest on the money.


William Findlay Maclean: I want to get
the hon. member's argument.


William Duff: My argument is that the
government has no right in the shipping business at all.


William Findlay Maclean: Have we a right
in the railway business?


William Duff: The government should sell these ships at the earliest possible moment, take what they can get for them and clean this thing up. The argument about these ships bringing business to the Canadian National Railways has nothing in it. If they get some business on both the Atlantic and the Pacific, there is no difficulty at all for the head of the government railways to arrange with other shipbuilding companies to *get business. If Sir Henry Thornton wants to do something for his railways, he could sell these ships and get, perhaps, ten to fifteen million dollars for them. Then if he thought
he had to buy some ships, he would have some money with which to buy passenger and freight ships to compete with the Canadian Pacific railway. You have heard in this House no doubt, Mr. Chairman, the argument we had about the Canadian Government Merchant Marine, that the Canadian Pacific has ships. Most of the ships of the Canadian Pacific are of a different class entirely from these ships. Either they are ocean liners, freight and passenger ships combined, or they have turned their old passenger ships into cargo boats and fitted them up properly for that purpose. They are a different class of boats altogether from the ships of the Canadian Government Merchant Marine, and consequently nobody can make any comparison between the ships of the Canadian Pacific Railway and these tramp steamers which are owned by this country at the present time.


Mr. WOODSWORTH:: Would the hon. member suggest or advocate or support the policy of selling these boats which he regards as unsuited, and investing in boats that would be suitable for the trade?


William Duff: I would not suggest that because I do not think it is necessary. But if Sir Henry Thornton wants to stay in the shipping business, it would be far better for him to sell these boats, realize ten or fifteen million dollars for them, and put that money into ocean steamships which would carry passengers to this country from Paris or where-ever he is going to have that big hotel. I do not think, however, that is necessary. The $15,000,000 that can be realized on these ships can be placed in the public treasury to reduce partly the $78,000,000 which this country has invested in this project. The reason why it is not necessary to have these ships is that Sir Hemy Thornton or the manager of the Canadian Government Merchant Marine can go to-morrow and make an arrangement with the White Star line or the Cunard line to run to Montreal, Quebec, Halifax or St. John and connect with the Canadian National Railways both going across the Atlantic and coming this way, delivering cargoes from St. John and other points to the Old Country and bringing passengers and cargoes to ports in Canada for our railways.


Andrew Knox: The hon. member said just
now that these vessels might be used for carrying coal from Swansea. Would it not necessarily follow, if they are suitable to do that, that they might be used in carrying coal from Sydney?


William Duff: I do not think the hon. gentleman was in when I said a moment ago, to

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prove that there is not much in that statement-


Mr. CARROLL:: Coasting trade.


William Duff: Let me answer the question
in my own way. A few moments ago, to prove my argument that there is not much in that, I said that the Canadian National Railways, that is the railway owned by you and me, allowed to the ships of the Canadian Government Merchant Marine, I think it was $3.80 but I will say $2.80 a ton, to carry coal from Sydney to Montreal when other ships were carrying it from Sydney to Montreal for $1.10 and later on for $1.25 a ton. Consequently, 1 think the hon. member for Prince Albert (Mr. Knox) will agree with me that Canadian Government Merchant Marine ships are not suitable to carry coal from Sydney to Montreal or anywhere else.


Andrew Knox: Would the same thing not
apply to Swansea?


William Duff: No, it would not apply to
Swansea at all. That is* a different trade, a different business, a shorter route, and the expenses are very much lighter over there. There are several reasons. I do not care what anybody did with the ships as long as they bought them and took them off our hands. I am not interested in what they do with them; but this government has no right to be in the ship-operating business. Our friends once in a while taunt us with the fact that a Liberal government built the Grand Trunk Pacific railway. Whether that was a mistake or not, the Grand Trunk is in a very different position from the ships of the Canadian Gev-ernment Merchant Marine. When that railway was built it invited people to go in and settle along the line, and from M _cton to Cochrane or Winnipeg, wherever it ends, people went in and settled after the railway was built. Consequently, we cannot abandon it, and so the railway proposition is entirely different from the shipping proposition. Nobody will be hurt if the ships of the Canadian Government Merchant Marine are tied up to-morrow and offered for sale. If I were selfish-I am likely to lose votes by the speech I am making to-night. Some of the best captains of the government ships are from my own county; I might say the very best captains belong to that part of the country, one of whom, Captain Sprague, was four years in a German prison.


Lewis Herbert Martell: Not better than the captains from Hants?


William Duff: So that if I were selfish I would not advocate the selling of these ships. 
But I say that in the interests of the country this is the only proper course for the government to take. Now, this government has had sixteen months in which to decide the question. It came into office in December, 1921, or in January, 1922, and while I can quite understand that the late Minister of Railways did not have time to look into the problem, nevertheless the government has now had ample opportunity to study the whole situation and to make up their minds on the matter. Instead of voting this $1,500,000, and supplying further amounts during the recess-because the Government Marine will need more money-the government should at the earliest possible moment suggest to the Merchant Marine that they sell some of these ships. No one would be injured by the transaction and it would be in the best interests of shipping in this country. The rates would not be increased on cattle or grain or coal or lumber, because there is no trouble for any man who has a cargo to get tonnage to carry it. For that reason therefore I urge upon the government again, instead of paying this $1,500,000 over to the Canadian Merchant Marine, to instruct that corporation to sell some of these ships and pay to the banks the money it owes them and later on try to sell the rest of the ships for whatever can be obtained in order to meet as far as possible the principal the government has advanced on this undertaking.


Henry Lumley Drayton: There is not much mystery about the position of affairs-in regard to these boats, or as to why they were built. The leader of the Progressive party (Mr. Forke) wants information. Well, the matter was started, as pointed out by my hon. friend (Mr. Duff), in 1918 when civilization had suffered losses amounting to some-fifteen millions of tonnage, and the insistency for boats was tremendous. So that we went into the boatbuilding business. In 1919, there was still a tremendous shortage of boats, Canadian commerce could not move, and there was great need for further shipping. We went into the business as other people did and we know what has happened. We have had a collapse in every direction in connection with the earnings of boats. But this is not only a matter of government experience; it is the experience of private companies and owners as well. I can pay the hon. member this compliment, that he is just recommending the course he and other vessel owners have had to follow themselves. I heard someone sympathizing very much the other day with the hon. member because of the difficulties he had experienced, having

Supply-Merchant Marine
gone into the boatbuilding business believing that there was a great necessity for more tonnage. He lost a great deal of money in consequence and therefore got out of the business. There are many others in a similar position. The International Marine, one of the largest corporations of the kind in the world, wound up their whole operations last year, if the newspapers are correct, with a rather uncomfortable deficit. But I do not know that the matter is really as bad as the hon. member would have us believe. I want to get a little information from the minister.


Robert Forke: I asked a question earlier
in the debate, but it has not yet been answered. Who was responsible for designing and building a type of ship that apparently is not useful for anything?


William Findlay Maclean: Horse marines.


Robert Forke: I do not wonder at there
being losses in depreciation and so forth, but surely there should have been built ships that would have been suitable for some kind of trade. Someone must be responsible in the matter.


Henry Lumley Drayton: The ships were built under the supervision of first class naval architects. They are staunch, strong, seaworthy general purpose boats, that have made rnoney in the general carrying business. I do not know how things are to-day, but I know it has been stated by boards of trade that general purpose ships are renumerative, and I know that some of the trips of these vessels were of that character. The boats are good; there is nothing the matter with them.


Samuel William Jacobs: Does the hon. member think they could carry raisins from Australia without danger?


Henry Lumley Drayton: No doubt the
hon. gentleman is looking forward to tremendous shipments in that particular trade and he may ask his question of the Minister of Trade and Commerce (Mr. Robb) in whom he has tremendous confidence. Looking over the report, it seems to me that while it is accurate as a matter of bookkeeping-


Lewis Herbert Martell: Will the hon. member
permit me a question?


Henry Lumley Drayton: Let us finish this question first. We will get to Hants later on.


Lewis Herbert Martell: The best seamen come
from there.
243*


Henry Lumley Drayton: We may discuss that later on. It seems to me that a good many of these losses are hardly worth debating on the issue as presented by the hon. member for Lunenburg (Mr. Duff). They are not operating losses. I find, according to the statement-and I wish the minister would check me as I go along-that the net loss on operating account to date is $3,559,711.75.


William Duff: For one year?


Henry Lumley Drayton: For the whole
time.


William Duff: Where does the hon. member get those figures?


Henry Lumley Drayton: The total deficit given by my hon. friend was $18,791,000 odd, and I am taking off the different interest items and depreciation. The whole total of these interest items and depreciation items is $15,231,573.15. I have just added it up roughly, lout. I think I am approximately right.


William Duff: No doubt the hon. member
heard me say that when the government pays over this vote it will have paid to the Government Marine some $7,500,000. In addition to that it will be observed that there is a surplus of $1,000,000, which makes a total of $8,500,000. If what the hon. member says is correct, that there is a loss of only $3,000,000, what have they done with the other $5,000,000?


Henry Lumley Drayton: That is what I want to find out. It seems to me that some of the other items were cross entries, and the government have been asking for something that has not to do with deficits in operations. The most I can make out of the real deficit of operation is $3,559,711. I think that is pretty nearly the conclusion reached by the hon. member for Lunenburg.


William Duff: Only I think I made the deficit something over $4,000,000. But there is still $4,000,000 gone somewhere.


Henry Lumley Drayton: Over and above that?


William Duff: Yes, there is no sign of it in the statement. Why do they want this money to-night?


Henry Lumley Drayton: It does seem to me, Mr. Chairman, that really all the money that need be voted to look after this service is sufficient to cover the actual out-of-pocket losses, just as we do with our railways. We do not vote depreciation and interest payments to the railways when we own the in-
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vestment ourselves. For example, we do not vote anything to cover our investment in the Intercolonial or in the Transcontinental. The only money we ever vote on interest account for the railways is something that the railways must pay, not what they owe us. So it does seem to me that nothing ought to be voted except the actual out-of-pocket loss in connection with the operation of this line. In other words, whatever the actual out-of-pocket payments are, those ought to be the full extent of our liability


George Perry Graham: That is exactly what it is.


Henry Lumley Drayton: No, I think my hon. friend will find he is wrong.


George Perry Graham: No.


Henry Lumley Drayton: Well, the hon. member for Lunenburg narrated a series of votes-I confess I did not have the figures before me. For last year he gave us $4,000,000, and for this year he said the vote would be in excess of $4,000,000, and I think he got it up to over $8,000,000.


William Duff: The money that has been voted and will be voted, if this item goes through, is over $7,500,000. In addition to that, the company showed a surplus in 1919 of $1,000,000, which added to the $7,500,000 makes $8,500,000. Now, the very most that can be shown as deficits is some $4,000,000 odd. In other words, they will have about $5,000,000 more than the deficits amount to. Why do they want all that money?


George Perry Graham: I am afraid my hon. friend has got mixed in his figures. In the first place, the surplus, if surplus there was, in the year he mentioned would I presume have to go to pay interest on loans.


William Duff: No, nothing was paid.


George Perry Graham: It does appear in this statement.


Henry Lumley Drayton: There was only half a million dollars paid.


William Duff: In 1920.


George Perry Graham: It is not $7,000,000, it is $6,000,000, and I am going to show how it is made up. The amount provided was as
follows:
Main Estimates 1922-23	34,360,720	00
Farther Supplementary Estimates 1922-23 (including Governor General's warrant,
31,000,000 of November 20, 1922).. ..	1,700,000	00Total	
36,060,720	00

Operating	deficit	for	the	year	ending
December 31st, 1921	 32,210,724 55
Operating	deficit	for	the	year	endingDecember 31st,	1922..	.. 32,384,189 17
Less amounts received for subsidy West Indies Service 59,090 00

 2,325,099 17
Here is something that I explained in the beginning, but my hon. friend has not taken it into consideration because it was not in the annual statement. The calendar year is the business year of the Merchant Marine, but the estimates of this House are made up to the 31st March. This explains the following :
Operating deficits for months January, February and March 1923, 3457,770.13.
That was in last year's vote and in this year's calendar expenses.


William Duff: You are still losing money this year.


George Perry Graham: Last year.
Amount advanced July 15, 1922, for working capital	$ 930,697 68
Capital expenditure to March 31, 1923..	55,564 55
Balance of appropriation not required. 80,865 92
Total	$6,060,720 00
The amount we are asking for is the estimated amount of what the deficit will be. The figures I have given are not for this year.


Henry Lumley Drayton: How can my friend make that out unless the returns given by the company are all wrong? The hon. member for Lunenburg starts out with this surplus of 31st December 1920. I assume that is an operating surplus.


William Duff: That is what the report says it is.	'


Henry Lumley Drayton: Very well. Then we have the two other years 1921 and 1922. Accepting these figures of loss just as given by the hon. minister we have got $4,594,913. If that be the operating surplus, as is shown-


George Perry Graham: Deficit.


William Duff: Operating loss.


Henry Lumley Drayton: But we ought to deduct the operating surplus of $1,056,767 from that loss before we get our net position.


William Duff: Absolutely.


Henry Lumley Drayton: I do not see any escape from that when the company bring down the result of the whole of their trading in their last annual report. The minister is quite right if he takes the last two years by themselves, but we have everything brought down in the last report signed by Sir Henry

Supply-Merchant Marine
Thornton. I think if the minister looks into that he will find I am correct.


George Perry Graham: In what are you correct?


Henry Lumley Drayton: I want to get at how much ought to be voted, and how much we are going behind. I was taking out of that statement items which, while they are very real to the investor, so far as we are concerned to-day, are book-keeping entries. I find the total of book-keeping entries 12 m. on this consolidated balance sheet of the report of 1923, $15,231,573.15, leaving real out-of-pocket charges of $3,559,711.75.


George Perry Graham: I cannot follow my hon. friend's calculation.


William Duff: I think my hon. friend is right, because if you deduct the $1,000,000 surplus from my amount the figures agree.


Henry Lumley Drayton: Yes, it is checking it another way.


William Duff: Absolutely.


Henry Lumley Drayton: I would ask the minister to look into that and see if we are not right.


George Perry Graham: I would suggest that when you pay half a million dollars into the Receiver General's receptive hands you cannot get it out without a vote.


William Duff: That was paid a long time before the surplus of $1,000,000 was shown on the books. It was paid two years before.


George Perry Graham: No.


William Duff: I beg your pardon, it was. It was paid before this $1,000,000 surplus was shown.


George Perry Graham: What year was the $1,000,000 surplus shown?


William Duff: December 31, 1920.


George Perry Graham: There was a deficit of over $2,000,000 in 1920.


William Duff: On December 31, 1920, the account shows a surplus of $1,000,000. Previous to that this $500,000 was deducted from the earnings of the company. It is useless for the minister to say that this $500,000 was paid out of the $1,000,000 surplus.


George Perry Graham: We will not argue about it, as we will get a full statement to-morrow. There would be no place to put it but in the Receiver-General's hands and there would be no way to pay it if there was not a surplus.


William Duff: The statement of 1919 shows a profit of $1,400,000; the 1920 statement shows a profit of $600,000; that is $2,000,000 altogether. The $500,000 was paid out of this $2,000,000 and after allowing for depreciation left a surplus of $1,000,000, the amount my hon. friend stated. The $500,000 was deducted a year before the $1,000,000 surplus was shown. What good is it for the minister to argue that the $500,000 came out of the $1,000,000 surplus? It came out of the $2,000,000 profits that the company was supposed to earn.


George Perry Graham: We will have a statement made up to date to-morrow concerning all the transactions.


Henry Lumley Drayton: The hon. member for Lunenburg asked a rhetorical question as to what Sir Henry Thornton would know about boats. Well, to be fair to Sir Henry Thornton I should think he operated in England just about as many miles of ocean traffic as he did land traffic. Certainly for fifty .per cent of his total mileage he would have water mileage to the same extent.


William Duff: That is coastal boats and passenger boats.


Henry Lumley Drayton: No, boats to the Continent and back, to Flushing and other points. I think Sir Henry Thornton has had a good deal of experience in regard to boats.


Lewis Herbert Martell: What was the extreme distance between the termini of the route of these ships?


Henry Lumley Drayton: If we were to follow up that question it would lead to other considerations concerning Sir Henry Thornton and I do not care to follow the subject. Certainly there is just as big a difference between the termini in this country, from the Pacific on the one side and the Atlantic on the other as there is on these water routes in connection with the railways in England. But I do not think that is a fair way of looking at it. I just wanted to point out that he knew something about this marine business.
I should say for the benefit of the leader of the Opposition who asked as to the cost, that the cost of construction was greater than he thinks. The original cost was $191.95 per ton on the average. With that can be compared the cost of the American Shipping Board for the work done at the same time, which was $215 per ton. Our work actually was $23.05 a ton cheaper than was the work done in the yards that are nearest to us and where the fairest comparison can be made. I wanted to ask a further question, and that is, is it true that the business of the Canadian National Railways is carried on in so far as
Supply-Merchant Marine

lake and water services are concerned at a charge 100 per cent greater than there is any justification for? The minister shakes his head. I think that was a very serious charge made by the hon. member for Lunenburg. If it be true that the practice of the railway is to subsidize these boats by paying them twice as much for their services as would be paid to other boats, it is rather an extraordinary situation. The hon. member has given the exact figures here to-night. It may be that he is entirely mistaken in his information, but I think the minister should go into that and let us have some information on that point. On the other hand, to be fair, Sir Henry Thornton, who knows about shipping because he has done almost as much shipping work in England as railway work, says that these boats have been a great feeder to his system. I would like to know what the minister thinks of that.


George Perry Graham: If hon. gentlemen will permit me, as we do not intend to pass this vote to-night I would like the item to stand. With regard to the figures given by the hon. member for Lunenburg I think if the hon. member looks at his figures as to charges made by these boats of the Merchant Marine he will find that he has made a mistake. This is my information. However, that can be looked into.
Would the committee allow me to put through item 358 for the running of the canals all over Canada? This item is some $33,000 less than last year. It is for the purpose of the working of our canals.


Lewis Herbert Martell: Before we leave the Merchant Marine, some time ago I asked a question of the ex-Minister of Finance in regard to shipping and he told me that he wanted to finish his sentence. He was a long time finishing it.
Speaking of shipping, I represent a county that built the largest sailing ships that were ever built in Canada. The W. D. Lawrence was built at Maitland in the county of Hants. I did not rise for the purpose of prolonging this discussion. I heard some very pertinent questions put to the minister and the hon. member for Lunenburg by the leader of the Progressive party, and I did not hear him get many, answers. I simply want to say that I absolutely agree with the hon. member for Lunenburg in the criticism which he has made of the Merchant Marine. The time has come in this country when the Merchant Marine should be disposed of. I believe that we are running riot as regards government ownership of all sorts nf things. My hon.
Jfcir Henrv Drayton.]
friend from Toronto in the course of his address asked if these ships were thoroughly equipped in every manner for the purpose of carrying on business. Now, any person who knows anything about ships or who has ever lived near the sea shore and has seen some of the ships of the Merchant Marine knows that they are absolutely unfit for ninety per cent of the trade which offers to-day. Any person who goes aboard them knows that the hatches are so situated that it is absolutely impossible to load or unload with quick despatch. Nor as my hon. friend from Lunenburg says, are they fit for the transportation of cattle. It is true they may be able to take over a few cattle, but they cannot take them over with profit to this country. I think the quicker we get clear of these boats the better. If we are going to have a shipping trade at all, let us get ships that are able to take the trade offering to the Old Country, ships of the proper type, not the ships of the Merchant Marine built not for the purposes of trade but for the purpose of supplying employment to people during the war and giving contracts to friends of the late government. The quicker we get rid of them the better it will be in the interests of Canadian industry.
I would suggest with all due deference to the Minister of Railways, who is an excellent man, that the quicker the administration of shipping in this country is put in the hands of men who are seamen-and if he wants me to find him seamen and will give me the patronage I will bring them up even from that historic county of Hants-the better it will be, but so long as the shipping interests of this country and its ships are to be run by a bunch of landlubbers so long will the people of Canada be compelled to pay an immense amount in deficits. It is not fair to the people of this Dominion that we should go on year after year voting money to pay deficits on these ships. It is all very well to vote the money. Then during the recess Governor General's warrants will be issued for the purpose of supplying money to a lot of landlubbers to carry on the foolish scheme, and if I or any other hon. member goes to the minister and asks for something in the way of improvement of port facilities or improvement in the trade facilities in his constituency he is told that he cannot get it because the Finance Minister has not got the money for it and could not make that particular grant. But in the meantime we are voting millions of money to the Canadian National Railways -and the quicker we get rid of that the better, though that opinion may not be received with joy by most people in the country but

Vimy Ridge
we have them upon us and we have to take care of them-and millions more for the Merchant Marine. Let us get rid of these ships of the Merchant Marine, this great octopus. If we cannot do anything better with it than we have done in the past I would ask that it be given to some son of Israel to be put on the dump pile. It is not fair to the people of this Dominion to go on voting money to make up deficits on the Merchant Marine year after year. I was hoping the hon. member for Lunenburg would move for the cutting out of the vote. Liberal as I am, I would vote against any government that persisted in continuing votes for the Canadian Merchant Marine.


Mr. MOTHERWELL:: I was not intending to speak on this question but when we have such great authorities as we have heard tonight differing so much about the utility of these boats it seems to me the only way to settle it is to give them a better trial than they have got yet. I have listened to the exMinister of Finance and he tells me that these vessels are of modern pattern and built like freighters, and are as good as could be put into the service. I want to believe that story because we are in need of boats. On the other hand the hon. member for Lunenburg and the hon. member for Hants tell us almost that they are not worth the powder to blow them up. Now which is true? I do not know. Coming from the West, as my hon. friend says, I am supposed to be classified among the landlubbers. Well I do not object to being that at all but I tell you what I want: I want to get some of these boats that will carry cattle overseas. We have been in correspondence with Sir Henry Thornton and he has finally decided to try out six of these boats for this purpose, and before they are blown to Kingdom come I want to give them a trial. We have been discussing this thing three or four times this winter and spring. Now we have got to it again and fitting them up temporarily it is probable that without very much expenditure they will probably be ready in ten days or so. After a trial we will know more about them. They will have served their purpose, for three months they will have had a fair trial and then we shall know definitely one way or the other. We shall probably then have some information as to what disposition ought to be made of these particular vessels, or some larger ones that may be put into service for this special purpose we have in view.
Item stands.
Progress reported.


VIMY RIDGE MEMORIAL
Hewitt Bostock: I have the honour to inform the House that I have received the following letter:
Ottawa, 12th June, 1923.
Sir,-I have it in command from His Excellency the Governor General to transmit to you copy of a despatch from the Secretary of State for the Colonies enclosing copy of a note from the French Ministry for Foreign Affairs, conveying the thanks of the President of the Republic for the joint resolution of the Canadian Houses of Parliament regarding the gift of land on Vimy Ridge by the French government.
I have the honour to be, Sir,
Your obedient servant,
(Signed) Joseph Pope. Under-Secretary of State for
External Affairs.
The Hon. Speaker of the House of Commons,
Ottawa.
Downing Street, 29 May, 1923. My Lord,-With reference to my despatch No. 193 of the 28th of April, I have the honour to transmit to Your Excellency, to be laid before your ministers, the accompanying copy of a note from the French Ministry for Foreign Affairs, conveying the thanks of the president of the Republic for the joint resolution of the Canadian Houses of parliament regarding the gift of land on Vimy Ridge by the French government.
I have the honour to be, My Lord,
Your Lordship's most obedient humble servant.
(Signed) Devonshire.
His Excellency,
The Right Honourable Lord Byng op Vimy, G.C.B., G.C.M.G.,
M.V.O., etc., etc., etc.
(Translation)
French Republic Ministry of Foreign Affairs
America.
Monsieur l'Ambassadeur.
I have the honour to acknowledge receipt of the letter dated the 28th April last, and in which Mr. Erio Phipps was kind enough to enclose two copies of a resolution adopted by the Canadian parliament, to accept the gift by France of a parcel of land, on Vimy ridge, where it is proposed to erect a monument recalling the achievements of the Canadian soldiers.
Monsieur le President of the Republic, to whom these documents were presented in pursuance of the wish of the Canadian government, requests me to convey his thanks and wishes you to transmit to the government of Canada the expression of his gratitude.
Mr. Millerand has appreciated most highly the so cordial terms which the Canadian parliament made use of to express its gratefulness to the French government.
Kindly accept, Sir, the assurances of my highest esteem.
(Signed) Poincare.
Paris, May 15, 1923.
On motion of Mr. Fielding the House adjourned at 12.20 a.m. (Wednesday).
Questions

Wednesday, June 13, 1923