1923-02-05

PARLIAMENTARY LIBRARY, PRINTING AND RESTAURANT

Mr. SPEAKER:: I have the honour to inform the House that a message has been received from the Senate informing this House:-
That His Honour the Speaker, the Honourable Messieurs Bennett, Bolduc, Chapais, David, Gillis, God-bout, Gordon, Griesbach, Hardy, Laird, McHugh, McLennan, Poirier, Taylor, Turriff, and Webster (Brock -ville), have been appointed a committee to assist His Honour the Speaker in the direction of the Library of Parliament, so far as the interests of the Senate are concerned, and to act on behalf of the Senate as members' of a joint committee of both Houses on the said Library.
Also,-A message acquainting this House that the Honourable Messieurs Chapais, Dessaulles, DeVeber, Donnelly, Farrell, Forget, Green, Legris, McCall, McDonald, McLean, McLennan, Pardee, Pope, Ratz, Robertson, Sharpe, Thibaudeau, Todd, White (Inker-man) and White (Pembroke), have been appointed a committee to superintend the printing of the Senate during the present Session, and to act on behalf of the Senate as members of a joint committee of both Houses on the subject of Printing of parliament.
The Address-Mr. Graham

And, also,-A message acquainting this House that His Honour the Speaker, the Honourable Messieurs Blain, Green, Hardy, Lougheed (Sir James), Sharpe, and Watson, have been appointed a committee to assist His Honour the Speaker in the direction of the Restaurant of parliament, so far as the interests of the Senate are concerned, and to act on behalf of the Senate as members of a joint committee of both Houses on the said Restaurant.



FRANCE-CANADA CONVENTION

[Stage Direction]
Hon. W. S. FIELDING (Minister of Finance) presented a message from His Excellency the Governor General, which was read by Mr. Speaker, as follows:
Government House,
Ottawa, February, 1st, 1923.
The Governor General transmits to the House of Commons a copy of a Convention of Commerce between France and Canada, entered into at Paris on the 15th day of December in the year 1922 between His Majesty the King and the President of the French Republic.

[Stage Direction]
Annual Report of the Department of Health, and copy of Regulations under the Proprietary and Patent Medicines Act.-Hon. Mr. Beland.
Report of the Department of the Secretary of State for the fiscal year ended March 31, 1922.-Hon. Mr. Copp.
Ordinances of the Yukon Territory, passed by the Yukon Council, second session 1921, and in the year 1922.-Hon. Mr. Copp.
Report of the Public Archives for the year 1921.-Hon. Mr. Copp.
Order in Council dated June 29, 1922, under the Soldier Settlement Act.-Hon.	Mr. Stewart.

[Stage Direction]
Hon. H. H. STEVENS (Vancouver Centre) moved for leave to introduce Bill No. 2, to amend the Railway Act.
Mr. GRAHAM:: Will the hon. member please explain the bill?


Mr. STEVENS:: Briefly, the purpose of the bill is to correct what appears to be rather an awkward and anomalous situation that exists by virtue of certain words in the Railway Act. The Railway Act provides that the Board of Railway Commissioners shall determine the question of freight rates and contains certain clauses against discrimination. But in every case in which the word "discrimination" appears, it is preceded by some qualifying word such as "unfavourable," "undue," "unjust." This bill proposes to remove these qualifying words, so that the effect will be an absolute provision against discrimination in the matter of freight rates.

Motion agreed to and bill read the first time.



LAUSANNE CONFERENCE

[Stage Direction]
On the Orders of the Day:
Mr. J. S. WOODSWORTH (Centre Winnipeg) :: Has the government any information regarding the failure of negotiations at Lausanne?


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Such information as the government has in respect of the proceedings at Lausanne is to all intents and purposes the same as what has appeared in the press.



THE GOVERNOR GENERAL'S SPEECH ADDRESS IN REPLY

[Stage Direction]
Consideration of the motion of Mr. Putnam for an Address to His Excellency the Governor General, in reply to his Speech at the opening of the session, resumed from Friday, February 2.
Hon. GEORGE P. GRAHAM (Acting Minister of Railways and Canals):	Mr. Speaker, in addressing myself to the motion before the House I cannot but feel that in dealing with the question which will form the greater part of my remarks I am speaking for another who is not now with us. The words I am about to utter will be in confirmation of his businesslike management of the department over which he so ably presided. I would not for one moment, Sir, mar the effect of the eloquent tributes to the departed, delivered by the three leaders, by any commonplace words of my own. Never in all my life have I heard more eloquent tributes more thoroughly deserved, and I concur in everything that was said in recognition of the personal worth and ability of our former comrade.
To those young members who have just entered the House of Commons I, with other speakers, tender my hearty congratulations and welcome. Young men can enter no better school for the development of their sum of knowledge and their intellect than this House; and, Sir, notwithstanding criticisms that we often hear of the calibre of the men in the Canadian parliament, as a man who has been in public life for some years, I believe that the membership of our two Houses will compare favourably with the membership of any other legislative body in the world. The two members who moved and seconded the Address in this House, as is usual, brought to their task both eloquence and information, and we look to them to be in the future a great strength not only by their debating ability, but for the quota of

The Address-Mr. Graham
information which they will impart to this House and to the country.
I would not for a moment, Sir, forget to congratulate my good friend from Brandon (Mr. Forke), who is not the leader of the "peculiar angle," but the leader of the second largest group in this House. His speech, to my mind, was fair in every respect, well reasoned and temperate. We all join with him in believing that the legislation enactef by Parliament ought to be for the welfare of all classes, and that the nearer we can arrive at one viewpoint on matters of controversy by each giving and taking a little, the closer we shall be passing legislation that will beneficially affect the whole nation.
Now, Sir, I want to direct the attention of the House to the railway problem that confronts this country. I do not hope to add anything to the information of the older members of the House who have been here since 1911, and I do not flatter myself that I can add much to the information of the younger members, but I think it not unwise that the sequence of events leading up to the present situation should be placed before the House and the country, not by way of argument, but as a statement of fact, so that those of us who were not here throughout the earlier sessions, and have not had an opportunity of becoming conversant with the conditions then existing and which eventually resulted in the problem that now confronts us, will be in a position hereafter to grasp that problem in a comparatively succinct form.
Let me first try to impress the House with the magnitude of the problem that our people are undertaking to solve. The National Railway System, as it will be in a few months, is the most extensive railway system in the world, and Canada in entering upon the experiment of public ownership is undertaking the solution of the greatest rail transportation problem that has ever been attempted by any company or by any country. The effort is worthy of a young country like Canada, and we will be judged, to a certain extent, as to our ability to grapple with great undertakings by the way we work out this problem.
The Canadian National Railway System comprises a total of 22,646 miles, made up as follows: Canadian Northern Railway, 9,900; Canadian Government Railways, 4,682; Grand Trunk Railway, with owned and controlled lines, 5,308 (this includes 1,164 miles in the United States); Grand Trunk Pacific Railway, 2,756. The Government lines of which I have spoken are: The Intercolonial, 1,670 miles; the National Transcontinental
2,006; the Prince Edward Island, 2,076; Branch lines, 730; and the Hudson Bay Railway.	[DOT]
The value of this property as appearing on the books of the various companies is: Canadian Northern Railway, 8681,822,115; Canadian Government Railways, 8415,438,153; Grand Trunk Pacific, 8256,768,407; Grand Trunk Railway and subsidiaries, 8512,687,252; Central Vermont Railway, $25,861,823. The consolidated system owns 3,476 locomotives, 3,583 passenger service cars, 122,362 freight cars, and 7,719 work and company service cars. The total earnings in 1921 were $235,789,000, and the working expenses $247,509,000; the operating deficit, therefore, was $11,720,000. The magnitude of this system and its possibilities may be judged from a comparison of its working expenses with the total revenues of the Dominion of Canada. The working expenses of the system in 1921- it included then, of course, the Grand Trunk- were $247,509,000, while the entire Dominion revenue was $381,271,000. So that in the working out of this great railway problem we are facing a task which is second only to the task of administering the affairs of the Dominion of Canada.
The number of employees in 1921 was 102,454, the operating pay-roll for that year amounting to $149,426,849.59. I place these figures on record in order to give an idea of the great task involved in the administration of this system, and to impress on all the people- because the system is theirs-the necessity of giving it, without political preference or political prejudice, a fair chance under government ownership. Government ownership is on trial in respect of the largest scheme that man has ever devised for the purposes of transportation, and it rests with the people, the government and the parliament of Canada to allow the Canadian National Board to try this experiment untrammelled.
I wish to direct the attention of the House to the transactions which led up to the acquisition by the country of the various units that go to make up this system. We will take first the acquisition of the Canadian Northern Railway, which, as we all know, is made up of many subsidiary companies. Aid was given to that system by the federal authority as well as by the provinces. I may point out in passing, as it is a live question, that that part of the Canadian Northern which lies within the province of British Columbia was constructed with the assistance of and under a charter granted by the government of that province. Under the agreement entered into in respect to that road-
The Address-Mr. Graham
[Stage Direction]
which connected with the Canadian Northern main line at the British Columbia boundary- the province had control of the rates. Later, when aid was given by the federal authority, that portion of the Canadian Northern system in British Columbia was declared by parliament, on the recommendation of the government of that day-the head of which wa£ Sir Robert Borden, I believe-to be a work for the general advantage of Canada. The whole line of the Canadian Northern was thus made one complete system. There has been a good deal of discussion about the propriety of that action, but I want just to deal with the facts so that we may know exactly how we came into possession of all these roads.
Many advances had been made, much aid had been given to the Canadian Northern by the federal as well as by the provincial au. thorities, and as a result the government of Canada recommended to parliament in 1917 that the stock of the Canadian Northern should be acquired by the people. An act incorporating this recommendation was assented to on September 20, 1917. Prior to that date the majority of the stock of the Canadian Northern system had passed into the hands of the government on acount of aid having been given, and this act provided for the acquisition of the balance of that stock.
Mr. MEIGHEN:: Not the majority-forty per cent.


George Perry Graham: A large portion of the stock, anyway, passed into the hands of the government on account of the aid given to the Canadian Northern. A board of arbitrators was appointed to determine what the balance of the stock was worth. When aid had been given to the Canadian Northern on a former occasion an act was passed by the House and approved by the Senate under which, in the event of default, the property of the Canadian Northern should come into possession of the government without process of law and without further remuneration. But the parliament of that day thought it better to provide that the value of that stock should be determined by arbitration. The board met, and on May 31, 1918, they made an award of $10,800,000. Then, under authority of an order in council, dated November 20, 1918, the Canadian Northem board was appointed a board of management of the Canadian Government Railways, which would include the Transcontinental, the Intercolonial, the Prince Edward Island Railway, and, I think, the Hudson Bay Railway. On December 20,* 1918, an order in council authorized and

directed the board of directors of the Canadian Northern Railway to use a collective and descriptive designation- "Canadian National Railways" - for the lines of railway and railway properties controlled or operated by the board. But up to last October the Canadian National Railways as such had had no legal existence. As I say, the system which included all the lines I have mentioned-not then the Grand Trunk -was designated by order in council as the "Canadian National Railways," but there was no Canadian National board; this group of lines was under the management of the Canadian Northern board.	[DOT]
My right hon. friend the leader of the opposition has asked the question why these railways, all these lines, were not amalgamated sooner, and I think he had particular reference to the Grand Trunk. Well, up to last October there was no board under which to amalgamate them, because the Canadian National board was only appointed on the 4th of October last. The name "Canadian National " previous to that time was really only a sort of advertising nomenclature, a billboard, so to speak, for the Canadian National had no existence until the order in council of October 4 was passed. I imagine the ex-Minister of Finance, Sir Henry Drayton, knows exactly why the Canadian Northern with all its ramifications was not brought in. Why, the act to amalgamate all these lines was passed in 1919, and the government of which he and my right hon. friend were members was in power until December, 1921, and up till that time there was not a foot of any of these lines amalgamated with the Canadian National system.


Sir HENRY DRAYTON:: There was no difficulty whatever, no reason for delay at all, in connection with the Canadian Northern. There was only one reason for the delay in our case and that was that we could not very well act until the Grand Trunk arbitration was over. That was the reason we delayed. I know of no reason for delay after that was concluded.


George Perry Graham: You will bear in mind,
Mr. Speaker, the reason given by my hon. friend why this entire amalgamation, which refers more to the Grand Trunk than it does to the Canadian Northern did not take place;
I shall deal with that when I am dealing with the Grand Trunk.
As I said before, the Canadian Northern system is made up of a great many entities. There was stock outstanding on the Canadian Northern system which it was thought

. The Address-.-Mr. Graham
not wise to have as stock of the Canadian National system-some five or six shares which have since been brought under the control of the government. In addition to that, there are certain Canadian Northern securities in the hands of the British Columbia government as collateral-I use that word for lack of a better term. We think we shall be able to get control of this stock. I would point out that no attempt was ever made to get control of this stock until a year ago.


Arthur Meighen: Is that Canadian Northern stock? I think it is, from memory.


George Perry Graham: I am so informed.


Arthur Meighen: The act of 1919 provides for the acquiring of that and paying for it in exactly the same way as the other stock was to be acquired.


George Perry Graham: It was not acquired, at all events, and we are trying to acquire it now, and hope to have the matter in shape in a little while. I would point out that if there were no reason why it could not be acquired in two months by the present government-


Arthur Meighen: If they are in no hurry, I do not see why we should be.


George Perry Graham: The amalgamation cannot take place until that stock is acquired. The stock may possibly be replaced by other securities and will not have to be paid for.
There is another question that has arisen concerning the amalgamation of the Canadian Northern which I am afraid my right hon. friend did not investigate. When the $45,000,000 guarantee was given to the Canadian Northern, there was a trust deed drawn up which is now in the hands of the National Trust Company of Toronto. Accompanying that is the stock of a great many of the smaller companies of the Canadian Northern system. Now when that agreement was drawn, it was thought that there was nothing ia it that would interfere with the amalgamation, but the National Trust Company think that there is, and, as that company will have to vote the stock of these smaller companies in order to carry out the amalgamation, every impediment in the way of voting that stock by the trustees must be removed while at the same time protecting the bond holders of the Canadian Northern. There is a clause in that trust deed-I shall give it verbatim in a few moments-which provides that the Canadian Northern may amalgamate with any companies that belong to the Canadian Northern system; but it does not provide that the Canadian Northern may amalgamate with the Canadian National, for the very
good reason that there was no Canadian National at that time. The National Trust Company takes the ground, that that point must be cleared up to the satisfaction of the bond holders. That cannot take place until a meeting of the bond holders is called and they agree, which they will, to the amalgamation of the Canadian Northern with the Canadian National, and then the agreement will be changed accordingly. Lest owing to my lack of legal knowledge I may have misstated the case, I shall read, if the House will permit me the advice given to me by the solicitor for the Canadian National Railways, who was also for many years the solicitor for the Canadian Northern and had much to do, I believe,, with the drawing up of the various agreements, trust deeds, am statutes. Mr. Ruel, speaking of the nonamalgamation of the Canadian Northern company and subsidiary companies with the Canadian National, says:
"The reason was because of objection raised by the trustees of what we call the $45,000,000 mortgage. That was the mortgage executed by the Canadian Northern Railway Company to the National Trust and British Empire Trust on the 15th July, 1914, pursuant to the parliamentary enactment of 1914, chapter 20. Under that mortgage it is the duty of the Canadian Northern to carry on not only its own enterprise but the enterprise of its various subsidiary companies, and failure to do so would be an event of default under the mortgage. However, permission is given in the mortgage to amalgamate under certain terms, as follows :
"Article II
"9. Notwithstanding the mortgages and charges hereby created or anything contained in this Indenture, any Railway Company comprised in the Canadian Northern system (including the company which is now or may hereafter be subject to the legislative authority of the Parliament of Canada, may with the approval of the Governor in Council, enter into arrangements and agreements with any other railway company comprised in said system, which is now or may hereafter be subject to said legislative authority, or which has now or may hereafter have power to enter into the same, respecting the operation by or the leasing to or the sale and transfer to such other railway company of its undertakings, assets, rights, franchises and powers or any of them; and any railway company (including the company) comprised in the Canadian Northern system which is now or may hereafter be subject to the legislative authority of the Parliament of Canada may under the provisions of the Railway Act amalgamate with any other or others of the railway companies comprised in said system which is now or may hereafter be subject to such legislative authority, or which if not so subject has now or may hereafter have power to enter into such amalgamation."
The important part of this section 9 is the sentence at the end of the section:
"and any railway company (including the company) comprised in the Canadian Northern system...may... amalgamate with any other or others of the railway companies comprised in said system."
The statement made by the trustees is simply that the Canadian National Railway Company is not a company comprised in the Canadian Northern railway sys-
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tem and cannot be so declared. The point is highly technical, and personally I do not agree with it at all. Power was given in the 1914 act to the Governor in Council to declare any companies to be companies comprised in the Canadian Northern railway system, and this same power was echoed in the Canadian National Railways Act, Stats. Can. 1918, chapter 13. We proposed to pass an order in council declaring the Canadian National Railway Company to be a company comprised in the Canadian Northern railway system within the provisions of the trust deed. The trustees say that we cannot do this because of the wording of Section 21 of the Canadian National Railway Company Act of 1919, which says that the company (the Canadian National Railway Company) may amalgamate with any company comprised in the Canadian Northern railway system. They say that indicates that the company is not comprised in the Canadian Northern railway system, and that the wording excludes any idea that it is so comprised. This seems to me to be splitting hairs with a vengeance. My reply, of course, is that there is nothing in the two enactments restricting the power of the Governor in Council to declare any company to be a company comprised in the Canadian Northern railway system, and unless you find an express restriction you cannot imply a restriction.
However, the trustees have the voting power on the stock of the subsidiary companies which is deposited with them, and the trustees will, of course, act only on the advice of their counsel. Under these circumstances, we have nothing to do but to accept the ruling of the counsel for the trustees and to take immediate steps for the amendment of the clause in the trust deed by the bondholders. This means that a bondholders' meeting will be called in London, England, as soon as we can get the notice published, and we will submit to the bondholders that the clause in question be extended so as to include authority to amalgamate with the Canadian National Railway Company or any other railway company approved by the Governor in Council."
I think, Mr. Speaker, that covers the ground. The statement is in legal phraseology and can now be referred to by any members of the House. That is the reason I have placed it on Hansard.
Now I come to the Grand Trunk Pacific. I think I have made it clear to the House that the amalgamation of the Canadian Northern is not such an easy task and must be approached-not approached because we have approached it, but must be carried on- with all regard to the securities held against the Canadian Northern system, and the government of Canada accepts all the liabilities as well as the assets.


Arthur Meighen: Will the hon. gentleman permit me? I merely want to get at what he is driving at. I am not clear myself and I do not think other hon. members are, as to what amalgamation he looks forward to, of the Canadian Northern with the Canadian National Railway system, other than what now exists. That is to say, what other amalgamation does he think is legally possible? I realize what he says is true, that the entity must be preserved because of the legal securities that are outstanding. I have never

complained of the lack of amalgamation of the Canadian Northern; I do not know what other amalgamation of the Canadian Northern with the Canadian National system my hon. friend looks forward to. I understand the order in council of January 30, 1922, provides what can be done further in the way of amalgamation of the Grand Trunk.


George Perry Graham: Well, as I understand it the government of Canada have become the shareholders of the Canadian Northern as they now are the shareholders of the Grand Trunk.


Arthur Meighen: We are shareholders now.


George Perry Graham: We have not all the stock, as I pointed out.


Arthur Meighen: That is all provided for by law. We do not want any further vote of the National Trust for that; there must be something in the way of physical amalgamation that the counsel has in mind.


George Perry Graham: Well, at the present time the Canadian Northern railway is being operated by the Canadian National Railway board-in fact, although not legally speaking, the Canadian National Railway board to-day is also the Canadian Northern board. By this amalgamation there will be operation by a Canadian National Railway board. Under the act of 1919 the Canadian Northern system will be brought in as an entity of the Canadian National Railway system, and not operated separately as the Canadian Northern system is operated separately now, even though that operation is by the same board of directors.
Now let me take up the Grand Trunk Pacific as one of the entities that make up this system. The Grand Trunk Pacific was an integral part of the great transcontinental system inaugurated a few years ago. From Moncton to Winnipeg, some 1,800 miles, it was called the Transcontinental Railway, and was constructed by the people of Canada. From Winnipeg to Prince Rupert the line was called the Grand Trunk Pacific Railway, and was made up of two sections-the prairie section, and the mountain section. Guarantees were given by the Canadian government to the Grand Trunk Pacific. In addition the old Grand Trunk Railway Company of Canada gave a guarantee of bonds. That company did not meet the interest on these bonds under the guarantee, and aid was given year after year, both for operating deficits and to meet liabilities on securities which the government had guaranteed. A question arose with the government of that day concerning

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a certain amount of money, I think it was something like $900,000, which the company wished to apply to the payment of interest on the bonds; but the government insisted, and I think rightly so, that that amount should be applied to operating deficit. As a consequence the company ceased operating the road. The government of Canada then took it over, and the Minister of Railways of that day became receiver of the company. That line is still under a receivership, although operated by the Canadian National board. Now, in regard to the guarantee of the Grand Trunk Company, the government's guarantee of course, on the bonds of the Grand Trunk Pacific was absolute. The guarantee given by the Grand Trunk Company on the bonds of the Grand Trunk Pacific was somewhat restricted, and provided that the interest on those bonds should be met out of the net earnings of the Grand Trunk. The purchasers of those bonds bought them on the understanding that the interest would be paid out of the net, earnings of the Grand Trunk. When the Grand Trunk came to the point where it had no net earnings, no interest was paid, and none, I believe, has been paid since. In reference to the receivership of the Grand Trunk Pacific, the act of 1919 provides, that when the amalgamation would take place and the Grand Trunk was brought into the Canadian National system it would be possible to dissolve the receivership of the Grand Trunk Pacific. That has not yet been done, and there are many obstacles in the way of doing it. I believe the Grand Trunk Pacific will form an integral part of a road which will be a paying proposition in the future development of Canada, even though it is not paying now. It never was intended, in the construction of the transcontinental system, of which the Grand Trunk Pacific forms a part, that it should run from the Atlantic to the Pacific and stop there. As in the case of the Canadian Pacific Railway, it was hoped and believed that it would be connected with the Orient; that it would be possible to carry traffic from Europe to the Orient by a route several hundred miles shorter than by any other line. I look forward to the time when the system will give such a service, making connection at Prince Rupert with a privately or publicly-owned line of steamships. When that time comes the project will be an asset and not a loss to the people of Canada.
Now, Sir, I come to the acquisition of the Grand Trunk, but first I want to deal for a moment with the objection of the ex-Minister of Finance (Sir Henry Drayton). Referring to the Grand Trunk, rather than the
Canadian Northern, he gave as a reason for the former government being without proper energy for two years, the fact that the Board of Arbitrators appointed to determine the value, if any, of the preference and common stock of the Grand Trunk had not yet reported, and consequently it was difficult to make the amalgamation without this report.
I submit that the report, no matter what it contained, would not stand in the way of amalgamation. When the Board of Arbitrators wished to extend the time, it was made a condition by the government that the operation of the road should be handed over to the government. That was done. Then the award of the arbitrators was made. I submit that whether the award was made or not, no matter what it meant as to the value of the preference or common stock, if it had been decided, as it in fact had, to amalgamate the Grand Trunk with the Canadian National system, there was nothing that has come to my knowledge to prevent the government of that day, from the year 1919 until 1921, making that amalgamation.
Now my hon. friend says that the fact that the award had not been made really prevented them from proceeding with the amalgamation. Perhaps there may be something in it of which I am not cognizant, but. speaking from my own knowledge, that should not have interfered with it, because the government of Canada was committed to take over the Grand Trunk, the terms had been agreed upon, and the only question was what Canada should pay for it in addition, if anything. But, take the other viewpoint. Suppose that were the case; the award of the arbitrators was not given until after the appeal was decided. There was an appeal made to the Judicial Committee of the Privy Council and if the non-appearance, or the nonhanding out of that award, made by the arbitrators, prevented my hon. friend from making the amalgamation for two years, then that time was extended automatically after the appeal was entered until such time as the appeal was decided by the Privy Council. Let me give a few dates to clear up this point. Notice of the appeal by the Grand Trunk to the Privy Council was served October 1st, 1921, but the case was not heard until July 10th, 11th and 13th, 1922, and judgment was pronounced on July 28th, 1922. We might call that August 1st. Two months after that decision was rendered the Canadian National Board of Directors was appointed by the present government.


Arthur Meighen: That was not amalgamation.
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George Perry Graham: It was much nearer amalgamation than anything my hon. friend ever attempted.


Arthur Meighen: Not a particle.


George Perry Graham: The first step towards amalgamation was to form a board under which amalgamation should take place, and for two years the hon. gentleman did not make an attempt to even appoint a board. They gave the one system the name Canadian National, but it was operated by the Canadian Northern and the Grand Trunk as separate entities. Two months after the Privy Council had rejected the appeal this government named a board of directors under the act passed in 1919, and that board set the wheels in motion for the amalgamation of the Grand Trunk with the Canadian National system. The award was handed out on July 28th. On October 4th the new board was appointed,-the House will understand the difficulties surrounding this matter, insurmountable for two years,-and the new board set to work with their counsel to see just how rapidly this amalgamation could be brought about. Even bringing in the Grand Trunk was not so easy, and I am not blaming the hon. gentlemen for not getting it. through in two years, but I think they should not blame us for not getting it through in two or three months.


Arthur Meighen: The hon. gentleman cannot be really serious in what he says, if he understands the agreement with the Grand Trunk. Under that agreement the Grand Trunk board remained in control, pending the decision of the arbitrators. In the spring of 1921-only a few months before the award -when they delayed the arbitration as we believed we came to parliament and got authority to put our board in, but it would have been rude injustice to the shareholders of the Grand Trunk to have amalgamated and done away with the Grand Trunk altogether, when there was a possibility that they would require access to data for the purposes of the arbitration.


George Perry Graham: I suppose these were all necessary for the purpose of the appeal?


Arthur Meighen: No. The evidence was in.


George Perry Graham: Consequently my hon. friend's argument applies to us just 4 p.m. as much as to him, and I am not blaming him, as I said before, for going so slowly for two years. There are many difficulties in the way. But I do blame him for saying to the House that in two

months we could clear up all those difficulties and amalgamate the Grand Trunk, and I make the further assertion that, in two months we did take the first step towards amalgamation and appointed a Canadian National board, and on January 30, the Grand Trunk became a part of the Canadian National system.


Mr. HANSON:: Was there not a Canadian National board then? Were not Mr. Barnhill, Mr. E. R. Wood and Mr. E. T. Riley on that board?


George Perry Graham: There was never any
Canadian National board until October 4 1922.


Richard Burpee Hanson: That was when you promulgated the appointment?


George Perry Graham: There was not any before that. By order in council the systems were called the Canadian National system prior to that, but the board was the Canadian Northern Railway board.
I want now to give the dates, so that we will have them in proper sequence. When the late government took control of the Grand Trunk they appointed a separate board for the Grand Trunk, not an amalgamated board, with Sir Joseph Flavelle as chairman. It became the duty of the present government when we wished to bring abou the amalgamation, first, to retire the directorate of the Grand Trunk and the Canadian Northern, for these were the only directors in existence, to make way for whoever we might propose as the new Canadian National board The new Canadian National board when named was only a board, it had no railway to run except as an operator, and there was not one single mile of railway otherwise under that board; consequently it was necessary to appoint that same board as the board of directors for the Grand Trunk, the board of directors for the Canadian Northern and practically the board for all the subsidiary companies of the Canadian Northern. This continued until the Grand Trunk board was brought in a few days ago by order in council under the act of 1919 and the Canadian Government Railways were brought in. At the present time the Canadian National is operating the Canadian Northern and its lines until such times as they can be brought in, but it is in control, and practically the owner oi the Grand Trunk and the Canadian Government Railways, the latter for operation only. I will give the dates now, so that wr will have them in sequence:
The formal transfer of control of the Grand Trunk was effected at the initial meeting of

The Address-Mr. Graham
the new board in Toronto on October 10. By order in council dated January 19, 1923, preference and common stock of the Grand Trunk Railway of Canada was declared the property of the government of Canada in accordance with the judgment of the Judicial Committee of the Privy Council.
I might say that was under the act passed in 1919, and that was the process by which the stock of the Grand Trunk became the pioperty of the people of Canada. Under the agreement to which my hon. friend has referred the government of Canada guaranteed 4 per cent on what is known as Grand Trunk guaranteed stock. I think the amount is something like $8,000,000 anually in round figures on the preference and common stock-


Arthur Meighen: Two and a half millions on the guaranteed stock I think.


George Perry Graham: Perhaps my figures are
wrong.


Arthur Meighen: Two and a half millions is right.


George Perry Graham: The agreement under which the government became responsible for interest charges on the debentures and guaranteed stock ($8,984,034.58 annually) left the value if any, of the preference and common stock to be decided by arbitration.


Arthur Meighen: Certainly, if you include the debentures, but you said only the guaranteed stock.


George Perry Graham: I should have included
the debentures.


Arthur Meighen: There is a big difference.


George Perry Graham: It was a slip of the tongue. In addition to this $8,000,000 I mentioned there was the preference and common stock the value of which was left to arbitration. The arbitrators declared that of no value but that is the voting stock. That is the only stock, I think, that has any voting power. They had to transfer it to the government of Canada. One can readily understand it having no value as declared by the arbitrators, the identical certificates could not be obtained, but the act provided that a transfer could be made in the books of the company, which was done, and the Grand Trunk stock passed into the possession of the Finance Minister, in trust for the people of Canada. Before the shareholders of the Grand Trunk could agree to the amalgamation with the Canadian National a meeting was necessary. The Minister of Finance of Canada being the only shareholder of the Grand Trunk with any voting power, he alone had the exercise
of that power. But he gave a proxy to Mr. Cope, Controller of the Railway department, who, acting for the shareholders of the Grand Trunk, in Ottawa a few days ago, agreed to the amalgamation of the Grand Trunk with the Canadian National system. This having been done, an agreement of amalgamation was necessary. This agreement was drawn up and acquiesced in by the two boards. Further, it had to be approved by order in Council, and that has been done; so that to-day the Grand Trunk and the Canadian Government Railways are part of the Canadian National system; and the Canadian Northern will shortly also form a part of that system, as soon as the legal technicalities can be disposed of. I have tried to give in sequence the steps that wrere taken to bring about this amalgamation. As I remarked before, we are entering upon an experiment which calls for the best that is in us all if we are to succeed. I believe that government ownership in Canada, even starting under the handicap of a deficit such as this great system has to face, can in time be made a success. If it is, we shall have given a lesson to the entire world in the matter of transportation.
My right hon. friend (Mr. Meighen) referred, I think, to the fact that certain rolling stock has been purchased without a vote of parliament. Well, as we know, that is not an uncommon practice in this parliament. But rolling stock cannot be ordered to-day and be ready for use to-morrow. The wants of next year-at least, that has been my experience ever since my first connection with railways-have invariably been anticipated, and rolling stock required a year ahead must be ordered now if it is to be available. I think I could produce some orders in council, passed under the late government and, as well, some passed by the government of which I was formerly a member, in connection with matters analogous to this. Now, the necessity must exist for rolling stock before such a procedure can be justified. Did that necessity exist in this case? My right hon. friend stated that it did not, because, under the old board, my good friend Mr. Hanna, who was at its head, was able to move crops and fill the requirements of the commercial interests of Canada without ordering rolling stock in advance. My right hon. friend is entirely mistaken. The greatest trouble I have known to exist through the lack of rolling stock, particularly in eastern Canada, to meet the needs of the lumbermen of Quebec and New Brunswick, and to keep up with the pulpwood business and all the other trade east of here, prevailed before the new board was formed
The Address-Mr. Graham

at all. Mr. Hanna and myself were communicating day by day on the question as to how the demand should be met, because there was such a shortage of rolling stock. The United States is also short of rolling stock. There was a balance of 20,000 cars of the Canadian National Railways in the United States, and consequently we were very short of rolling stock. To show how a shortage in cars can come about, I might mention a recent incident. A few days ago, at the urgent request of some coal interests, the Canadian Pacific Railway sent over, into the United States, fifty cars with the express understanding that they were all to come back loaded with coal for the Canadian people. Only fifteen came back; thirty-five were diverted. Early last autumn the people of eastern and western Canada were very much in need of additional rolling stock, but there was none bought last year. Now, we cannot hone to carry on the business of this country and have our National Railway system compete with other lines and, what is of greater importance, transport the commodities which the people produce or require, unless we are able and ready to provide the necessary rolling stock and motive power that are required for these movements. We hope to finance the purchasing of this rolling stock as far as possible without appealing to parliament for assistance. I am not speaking positively, but for the most part we expect to finance the purchase of necessary rolling stock through the sale of equipment bonds.


Arthur Meighen: Guaranteed by the government?


George Perry Graham: They will not have to be guaranteed by the government; that is my information. The company will purchase it, just as any other incorporated company would do, and the government will not be called upon to finance these purchases. The transactions will be carried on as in the case of the Canadian Pacific Railway or any other incorporated company. For the most part, the Canadian National Railway Company will provide its own securities for the purchase of stock.
I have endeavoured in sequence to put on the records of the House the method by which this amalgamation was brought about, and I have outlined the difficulties that have attended it. The sky is not cloudless, either in regard to the railways or any other business. There are difficulties that have to be overcome, and an attempt will be made to meet them. I believe that the board is entering upon this work with an earnest desire

to make the railways a success, and it is my conviction that with the help of the Canadian people this can be done. Now, Montreal has been selected as headquarters of the Canadian National system.


Arthur Meighen: That is where the pull was.


George Perry Graham: Transportation is based on pull of freight and passengers.


Henry Lumley Drayton: Sometimes.


George Perry Graham: I may point out that under the act of 1919 only the government has the right to name the headquarters. That duty is reserved to the government; all else comes within the purview of the board, such, for example, as divisions of districts and all that sort of thing. The board was asked to advise the government in regard to the question of headquarters, but that advice need not necessarily have been taken. I am not trying to crawl under the coat of the board at all. Personally, it would have been a great pleasure for me, as an Ontario man, to see the headquarters established in Ontario. But I have always advised that the headquarters should be in Montreal, and this from purely business reasons. What the people of Ontario, and the people of all Canada besides, need is efficient transportation at reasonable rates, and the fact that the expert who has been engaged to advise on such matters recommended Montreal as headquarters is, to my mind, evidence that that city should have been chosen. More than that-and I am not speaking in any way derogatorily of the Canadian Pacific Railway-when you have to compete in business with another you want to be as near your competitor as you possibly can. The Canadian Pacific Railway headquarters are in Montreal, and there, I think, is where the Canadian National Railway system should have its headquarters. Some of my friends say that the Canadian National headquarters have been taken from Toronto. Toronto never had the Canadian National headquarters any more than Montreal had. There were certain railways which were christened the "Canadian National" by order in council, but there was no Canadian National company until October 4th. Toronto was headquarters of the Canadian Northern, and not the Canadian National; and Montreal was the headquarters of the Grand Trunk and not of the Canadian National Railways. I fully concur with the chairman of the board, that the headquarters of the Canadian National system ought to be in the

The Address-Mr. Hoey
same place as the headquarters of the Canadian Pacific Railway. Further than that, at the present time Montreal, during the summer months, is the great distributing centre, inward and outward; and where trade originates oceanward, either in or out, is where the headquarters of the Canadian National system should be, if that system is to get its share of that traffic. Many reasons perhaps could be adduced why some other place should have been selected as the headquarters of the system, but from purely a business standpoint I believe Montreal is the right place.
As to the divisional headquarters, that is a matter for the board to decide. Let me point out that the president will be glad to have any views or opinions from members of this House; indeed, he is anxious to listen to such views or opinions because the people whom we represent own this railway system, and their representatives have a right to advise, but not to order.
Now, as to this Canadian National railway system being removed from politics. In the smaller sense of politics, the operation of the system ought not to be interfered with by any outsider; that is a matter that only those in charge are in a position to judge and decide. But in the higher sense of politics, the management of the affairs of the nation, such a property as I have attempted to describe to you this afternoon, a property owned by the people who sent you here, may be expected to engage your attention, and our shareholders-the people-will naturally require their views to be presented to this House as would the views of the shareholders of any incorporated company be brought before a general meeting of shareholders. We hold the proxies for the shareholders, and it is the inherent right of parliament to discuss the affairs of the Canadian National railway system. The government is in a way a committee of this House which has by statute been given authority to name for you a board of directors. It is therefore the privilege of this House at any time, if the shareholders believe that the gentlemen to whom they have confided this duty have not properly discharged it, to put other gentlemen in their place-but they will not do so for a while.
I want to make it clear, Mr. Speaker, that in the smaller things, the operation of the line, the men whom we have hired for the purpose must not be interfered with; but in the larger things we do not forget that the people whom we represent-every man, woman and child in the Dominion-are shareholders of this great national transportation
system. Its success is their success, and if we allow it to become a failure, it will be a failure for the entire people. I believe that it will not be a failure, and I trust that as the months go by and the machinery gets working more smoothly as all these different entities are consolidated into one, that success will be achieved. And I ask parliament and the people of Canada to be patient, to give the board of directors and its president an opportunity to put the system on a sound basis, and a year from now begin to judge by actual results-not by promises, but rather by accomplishment.


Mr. R. A. HOEY (Springfield):: Mr. Speaker, we have listened to a very informative address, an address dealing with a subject of the most vital importance to the Canadian people, but a subject to which I have no desire to refer at the moment.
I cannot persuade myself, Mr. Speaker, nor can I be easily persuaded, that the Address of His Excellency the Governor General, which is ostensibly the programme of the government for this session, and which forms the basis of our discussion at this time, will on the whole awaken hope or kindle inspiration in the hearts of the Canadian people. It is defective in that it fails, seemingly, to come to close grips with the economic conditions confronting us. It must suggest to many hon. members, at any rate it suggests irresistibly to me, a lack of faith on the part of the government itself-that is, a lack of faith to deal successfully and effectively with the tasks confronting it; a lack of faith that is no doubt due to lack of unity within the government ranks. Without faith we cannot have those deep-seated, deep-rooted convictions upon which a true and adequate legislative programme must be based, and without conviction there cannot be that enthusiasm generated, the warmth and glow of which is so essential to national progress.
The programme, to me, is sectional, not so much because of what is stated, but rather because of what is carefully and guardedly omitted-notably all reference to a revision of the customs tariff. Evidently that policy last year of attrition is now to be displaced by a spiritual state of contrition on the part of the government itself. The programme is to me an eerie programme, and I am convinced that, had the government which adopted that attitude of austere aloofness to the Near Eastern crisis abroad-and with some measure of justification I am convinced-adopted the same attitude of austere aloofness to the near-eastern interests at
The Address-Mr. Hoey

home, a different programme would have been submitted at this session. The programme, I am convinced, was framed during the absence of the hon. Minister of Marine and Fisheries (Mr. Lapointe), at a time when the hon. Minister of the Interior (Mr. Stewart) was sleeplessly engaged in his celebrated immigration policy, and prior to the departure of the hon. Minister of Justice (Sir Lomer Gouin) to take part in that little family misunderstanding in the province of Quebec.
That the people of Canada to-day are vitally and-shall I say?-intelligently interested in social and economic conditions, none will deny. The producers of Canada in general, and the western agriculturalists in particular, are interested in a rapid deflation of the price of foodstuffs which has not been accompanied by any corresponding reduction in the price of manufactured commodities. I have no desire to weary the House with lengthy quotations or to irritate hon. members with statistics, but in order that the House may grasp what that deflation means, let me quote just one short paragraph:
The farmer who on November 1st, 1919, went to pay a one hundred dollar obligation, required 38 bushels of 1 Northern wheat. On November 1st, 1922, he would require 95 bushels to pay $100.00. If he paid it with oats he required 117 bushels 2 C. W. in 1919 and 218 bushels in 1922, 67 bushels of barley in 1919 and 190 bushels in 1922. If he was a mixed farmer he could meet his one hundred dollar obligation by selling a 952 lb. best butcher steer, four years ago. This last November his steer would have to weigh 1,818 lbs. If he sold hogs, 654 lbs. of selects would pay the bill in 1919, but it would take 1,025 lbs. to do the trick in 1922. In other words, one dollar's worth of the various farm products on Nov. 1st, 1922 were worth four years previous as followswheat, $2.50; oats, $1.94; barley, $2,85; cattle, 1.90 and hogs, $1.56.
The western agriculturists, then, are vitally interested not only in the deflation of the value of farm products, but in a problem that is closely associated with that deflation, namely, the problem of the cost of production. Let me say here that if we ever turn seriously to consider the payment of our national debt-and I am not persuaded that we shall do so during the life of the present administration-we shall be forced to the conclusion that the national debt can be paid only by the disposal of our .surplus farm products in the markets of the world-there is no. other way, so far as I can determine. And when we reach that conclusion we shall realize that we can profitably dispose of our surplus farm products in the markets of the world only when agriculture is detached and divorced from every handicap now associated with that industry.

The right hon. leader of the Opposition (Mr. Meighen) discovered a relationship between sixty-five- and seventy-five-cent wheat on the western plains and the impoverished if not chaotic conditions prevailing in Europe. But in what was an admirable address, no words fell from his lips that would lead me to believe that he grasped the real relationship. Hon. members will recall the three major struggles in which Great Britain was engaged during the nineteenth century-that struggle in the second decade of the century; the Crimea, just about the middle of the century; and later the war in South Africa. After the earlier struggle there were bread riots in Great Britain; the conditions were indescribable. After the second, in the middle of the century, squalor, poverty and penury were in evidence everywhere; men paraded the streets crying aloud for bread. After the South African war the conditions were not quite so acute, owing to Britain's free trade policy. It was conditions such as these that led Norman Angell, the author, to prophesy that if modern nations engaged in war on any large, any colossal, scale in the early years of the twentieth century, such a struggle would be followed by the complete collapse of modern civilization itself. Well, we engaged in the struggle; we have reached the post-war period, and there are no bread riots in Europe. There were one or two features that these prophets-shall I call them prophets of despair?-overlooked.	The first
thing that they overlooked was the efficiency and responsiveness of the agricultural machine, particularly on the American continent. They overlooked also the combination of circumstances-they had of necessity to overlook those circumstances, being unable to visualize them-that has forced the producer on the American continent onto a treadmill, a treadmill the revolutions of which	he	is forced to
make prompted by the instinct of selfpreservation. And when we discern that relationship we discern the only redeeming feature in the public life of the country in this post-war crisis. I see the Canadian agriculturist a depressed and discouraged but nevertheless heroic figure, toiling, toiling, toiling, that the world may be fed and that civilization itself may be saved. The Canadian agriculturist to-day is feeding Europe at a price considerably less than cost.
So much for the redeeming feature; what about the tragedy? Well, when the people who receive our foodstuffs say, in substance, though perhaps not in so many words, "The

The Address-Mr. Hoey
cheap foodstuffs that we are obtaining at a price less than cost, coupled with our industrial efficiency enable us to produce manufactured commodities at a price considerably less than the price prevailing in your country for similar articles"-when they say that to us, what do we say? We put up both hands, and we say, "No; these goods can only be admitted at a price that will guarantee a dividend to the home manufacturer." You cannot with impunity treat natural laws with contempt; the nation that seeks to thwart these fundamental laws will be ground ultimately by their very force. That is the vital relationship existing to-day between the agricultural conditions in this country and the state of Europe. When men prate of Canada's selfishness and aloofness, they are simply overlooking the fundamental facts of the case.
Physical conditions will not permit me, Mr. Speaker, to speak at length, but I do want to make one or two suggestions. I want to suggest to the government, first of all, that in my humble judgment the time has arrived for the appointment of a Canadian ambassador to the United States. I am convinced that that appointment is inseparably bound up with the problem of wider markets. I am convinced that if the right man were secured,-and he ought to be secured; a man of tact, good judgment, and familiar, to some extent at least, with conditions on the North American continent at this time, a man who could become responsible for negotiations and take the initiative in starting negotiations that could be followed up by the administration here-I believe that if such a man were secured and ultimately appointed he could make a contribution of the first magnitude to the cause of a better understanding between the two nations at this time. Furthermore, it is my opinion that our foreign policy is going to be more and more bound up with the foreign policy of the United States, whether we desire it or not. For Canada to embark on an European struggle at this time with the United States remaining neutral, would mean, in view of our present financial obligations, bankruptcy to this young nation. If some people contend that no other nation of the British Commonwealth has ever taken this step, I reply that no other nation in the British Commonwealth is inseparably associated with the United States in the sense that this Canadian nation is.
The second practical suggestion I should like to make is one to the government, and it is that they should seriously consider at the earliest possible moment, or as soon as
circumstances will permit, the advisability of calling a conference of representatives of the provinces who will meet with the federal representatives and clearly define, if they can, the respective sources to which each body may go in search of the revenue that is necessary to meet its needs. Nothing could be more irritating than to receive a notice from the Dominion government that your income tax is overdue, or at least due, and then to receive a similar notice from a provincial government. I think this is a conference the holding of which is long overdue.
Before I take my seat I should like to refer to the address delivered during this debate by the right hon. leader of the Conservative party (Mr. Meighen). I was surprised, I was amazed, at its toleration. We had from him at least a speech worthy of his mind. But there was one pronouncement in his address that seems to have remained with me in a peculiar sense. Referring to the hon. leader of the Progressive party (Mr. Forke), he said that he was a man who was not only truly Canadian, but also truly British. I could not help but think as the right hon. gentleman concluded his remarks that he himself was rapidly becoming Canadianized. But what of his immediate followers? I trust the Canadianization of my right hon. friend will not lead to the fossilization of his immediate followers. Why this ominous silence? The country did not expect much from them we know, but surely the country expects something. Well might an angel exclaim "Why seek ye the living amongst the dead?"
Believing, Mr. Speaker, that there is an aspect of our economic conditions that has not been emphasized in this debate, believing also that that aspect of our economic conditions is of the most vital importance to the Canadian people in this crisis, I beg to move, seconded by the hon. member for Victoria and Carleton (Mr. Caldwell):
That in view of the increased burden of taxation and of the hardship which many of the people suffer from this burden, and the unrest and dissatisfaction arising therefrom, and in view of the desirability of adopting measures to reduce the cost of production, and effect such relief to consumers and producers as may be within the power of parliament, the House is of the opinion that substantial reductions of the burdens of customs taxation should be made with a view to the accomplishing of two purposes of the highest im-[DOT] portance.
(1)	Diminishing the very high cost of production, which presses so severely on the primary producers of the country at this time;
(2)	Reducing the cost of living to the great masses of the common people, many of whom are being forced out of the country by the prevailing economic conditions.


Mr. DEPUTY SPEAKER:: The question is on the amendment. I would point out that
fiEVISED EDITION
The Address-Mr. Shaw

the form is not in accordance with Beau-chesne's Rules, but I suppose that can be changed without altering the spirit of the matter that has been submitted by the hon. member. His Honour, the Speaker, will deal with the question of the form of the amendment.
Mr. JOS. T. SHAW (Calgary West): Mr. Speaker, I join with those who have preceded me in congratulating the mover and seconder of the resolution for the adoption of the Address in reply to the Speech from the Throne upon their efforts. They have worthily acquitted themselves of the task entrusted to them. May I be permitted also, Mr. Speaker, to tender my humble congratulations to yourself upon the conclusion of your successful and delicate mission overseas. Those of us who are familiar with the manner in which you fulfil your high office in this House had every reason to expect that in those delicate negotiations you would conduct yourself with becoming dignity, and with honour to yourself and credit to this country. May I also say that I am sure you have amply, realized our highest expectations in that regard. It was a very fitting thing indeed that the government of France should donate to Canada as a gift to this country, 250 acres of land on the historic Vimy Ridge. It is a very fitting thing indeed that this government should not hesitate to erect upon that historic ridge a monument which I am convinced will be a thing of beauty and a joy forever, a monument which, through all the ages, will constitute a challenge and an inspiration to the growing manhood and womanhood of this country,-a challenge to greater service, and an inspiration to a fuller duty. May I also venture to say that it seems to me that through the coming centuries the children of France will have before them a constant reminder and a fitting memorial of the service which was rendered by the sons of Canada in the days when the liberty, the equality and the fraternity of the citizenship of the republic was threatened.
It appears to me, Mr. Speaker, that the challenge of the country to this parliament at the present time lies in two directions. I am convinced that first of all the challenge is to economy-to economy not only in expenditure, but economy also in the administration of the government. We must of necessity view with considerable alarm, as the responsible representatives of the people of Canada, the rapid and substantial increase in the public debt. We cannot fail but be impressed with the increasing and over-whelming cost of government. What can we do, what

answer can this parliament make, to that challenge? Is there any way out of this increasing cost, which ultimately must necessarily if continued bring us to the very abyss of bankruptcy? I think there are several things we may do. In the first place I think we should make an effort to decentralize government. There seems to have been, through the passing years, a tendency towards centralization of government, and especially a centralization of government in this particular city. Let me give one illustration, because I think we should not continue the policy of bringing the people to the government-* we should take the government to the people. The federal national parks of this country constitute an area, I think, of approximately 8,000 square miles. In the provinces of Alberta and British Columbia considerably over 7,000 square miles of the total area is found. In eastern Canada-and I mean by that practically the territory east of Manitoba -the national parks of Canada represent an area of only 160 acres. Yet we have established in Ottawa a large Parks Department, admittedly with a very efficient and able gentleman in charge. Now why should not that particular department, if we need such a department, be located at the very centre, where the activities of that department must necessarily be? If that were done, if that department were located at Banff, or some other convenient point, its work could be more satisfactorily and efficiently carried on than under present conditions. That is one thing, I think, that we must do; we must make a substantial effort towards decentralization of government. With that will come not only considerable economy but increased efficiency.
Co-related to the subject of economy in Canada, in both its expenditure and its administration, it seems to me the second challenge of our people to this parliament comes in the matter of taxation. If one were to examine in detail the various methods of taxation in force not only under our municipal governments, but also under our provincial and federal governments, I think he would be driven to the conclusion that governments first of all decide that a certain amount of money must be raised in order to meet their expenditures. Then they seek to impose a sufficient levy to secure, in the most rapid way, the required amount, without much reference to the accepted principles of taxation, without much reference to those accepted canons of taxation which have been undisputed for at least one hundred years. It seems to me that we should pay much greater

The A'ddress-Mr. Shaw
attention to this matter, and I propose, although the subject must be familiar to many of the members of this house, to suggest for consideration four cardinal principles or canons of taxation laid down by Adam Smith. I think that in the light of these canons we should examine the various methods of taxation applied, and endeavour to make them harmonize with these particular principles or else wipe them out altogether. The first principle I would cite is the following:
1.	The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state. The expense of government to the individuals of a great nation, is like the expense of management to the joint tenants of a great estate, who are all obliged to contribute in proportion to their respective interests in the estate. In the observation or neglect of this maxim consists, what is called the equality or inequality of taxation.
2.	The tax which each individual is bound to pay ought to be certain and not arbitrary.
3.	Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it.
4.	Every tax ought to be so contrived as both to take out and keep out of the pockets of the people as little as possible over and above what it brings into the public treasury of the state.
These have been the accepted principles of taxation for over a hundred years, as I suggested, and yet in all our departments of government we virtually obscure the fundamental principles. I think there is much in the suggestion made by the hon. gentleman from Springfield (Mr. Hoey). We require some sort of a tax conference. We require a delimitation of the fields of taxation as between the existing tax levying bodies. That may require, and probably does necessitate in the ultimate analysis a change in our British North America Act, but nevertheless, some steps should be taken in this, which seems to be a vital and essential matter. We should delimit the field, as far as possible as between the various tax collecting organizations, and then see that the taxes imposed comply with the accepted canons of taxation.
The debate on the Address, Mr. Speaker, is a splendid opportunity for members from various parts of the country to become acquainted with the actual conditions which exist in other parts. Spread out, as we are, for hundreds of miles along the northern fringe of this continent, it is, doubtless, true that there must be many diverse and divergent interests. It is difficult, indeed, for an individual in one part of the country to come to any conclusion with regard to the economic conditions in any other parts, and so it is desirable that, in this initial debate, the
Si
conditions from all parts of the country should be brought to the attention of the House, in order that the House may be duly informed and may be able to act accordingly. And, therefore, I propose, for a few moments, to survey the existing conditions in that part of the country from which I come, and-: more particularly in the province of Alberta. It is actual practical facts that we desire. Principles are splendid, but we must first of all know the facts before we are in a position to apply the appropriate principles.
It is a platitude, indeed, that the agricultural industry, in its many ramifications, is the vital and the basic industry, so far as western Canada is concerned. In fact, I doubt not that I might go further and say that it is the essential and vital industry of all Canada, but looking at the conditions in this particular industry, as many hon. members are aware, nature has perhaps in the past year been unkind to large sections. The affliction of drought, hail, and other climatic conditions has left in its wake a considerable hardship, but nevertheless, so far as the western provinces are concerned, we find the largest crop in our history, and yet we find agriculture in a deplorable financial and economic condition. We find in Alberta that a large number of farms are being sacrificed and many are being abandoned, leaving as a heritage a weed menace for those to combat * who are content to remain upon adjoining land. We find a large number of these farmers are emigrating to the western and northwestern states. In some portions of Alberta, afflicted to a considerable extent with drought, depopulation, as I am informed.by one of the hon. members, varies in the district, extending south of the town of Hanna to north of the village of Tabor, from about thirty to fifty per cent. The beneficent effects of prosperous conditions in the agricultural industry are rapidly reflected in every other industry and business, not only in western Canada, but in eastern Canada, but as a result of the condition which now 5 p.m. exists in that industry we find very considerable urban depopulation. As an illustration we find, for instance, in the city from which I come, in the end of the month of December, there were something like five hundred vacant houses. An examination of the railway figures indicating the emigration, through the port of Kingsgat.e, which is one only of the avenues of exit from the province of Alberta to the States, shows that in the three months ending December 31st last, there has been an excess of emigration over immigration of approximately 5,000 paying passengers.
The Address-Mr. Shaw

Now these are actual facts and these are conditions which must be faced. I am not one of those who might properly be called a calamity howler, and I am not a pessimist. In fact, I think I would be a pessimist indeed if I failed to reveal to this House on this occasion these facts as I have found them. I personally have great faith in western Canada, I have great faith in all of Canada, and I trust these conditions may be but temporary and that they may shortly be removed.
What are the reasons for this condition in the agricultural industry? Because if we want to know the condition of western Canada we must ascertain the condition in the agricultural industry. None will deny-certainly I will not for a moment attempt to deny- that the chaotic political conditions in Europe have resulted in a chaotic economic and financial condition which is necessarily reflected in Canada to the detriment of our grain growers. But while it is true that these external factors are of great significance, it is also true that there are many internal handicaps to which I think this government might properly turn its attention. Before the war-there was a relativity, if you like, existing between the cost of production and the price which the farmer received for his product, which normal relativity is disturbed to-day. We find expensive production costs, we find expensive marketing costs, and we find only pre-war prices for the product raised.
I have endeavoured to make some little examination into the cost of production. It is a very difficult matter I admit but, many people have given it much consideration, endeavouring to take into consideration all the factors involved. I am informed that in the province of Saskatchewan in the year 1920 it cost approximately 72 cents to raise one bushel of wheat. I understand that in the province of Alberta it would necessarily cost a few cents more than that sum per bushel. The cost of production, as you will readily admit, is excessive. May I add to that sum the cost of preparation for market and the cost of transportation. Take the transportation costs from Calgary to Montreal. During the year 1922 examination revealed that the cost of transportation on % bushel of wheat varied from something like 40 cents a bushel to approximately 60 cents a bushel. Let me give the details of this figure. Threshing cost from 10 to 14 cents a bushel in Alberta this year. Haulage and elevator charges may be placed at the very modest sum of 2J cents a bushel. Then railway charges to Fort William 15-6 cents per bushel: elevator and cleaning and inspection

charges, 1J cents a bushel. From Fort William to Bay ports, according to the best information I have been able to get, the transporting cost would run from 3J to 10 cents a bushel. Then railway or canal transportation up to Montreal would not be less than 5 cents a bushel; elevator charges at bay ports, J cent per bushel; expenses at Montreal, 1J cents per bushel; insurance charges varying from -33, or approximately one-third cent per bushel, upwards. That makes a total cost in transportation charges alone, varying according to the particular part of the country, of from forty to something like sixty cents per bushel.
Hon. members can readily see that, with these excessive production costs and high transportation charges, it was impossible for the farmers of western Canada to raise grain at a profit during the past year. It is all very well to indicate these conditions. But what can, or what should the government do to reduce production costs? They should, it seems to me, make some definite effort to reduce or, preferably, to eliminate entirely the customs tariff from the implements of production and from the necessaries of life, including food and clothing and the other articles that are so essential to comfortable living, at least on the western plains. In the Speech from the Throne there is not one ray of hope in this connection; the Governor General's lips have been sealed in this matter. I think it is unfortunate that the government have not given some indication of their desire to live up to the pledges upon which they secured a mandate from the people of Canada. Further I am glad to see that the government does not hesitate now to have an investigation into the grain business. That investigation has long since been overdue. I think that probably the government have been altogether too solicitous of the views of certain members on this side of the House. I The investigation is necessary, and it should ft be conducted in the most thorough and the l-most complete manner.
Now, what can, or what should, the government do to lessen marketing costs? Last session we secured the restoration of the Crowsnest pass agreement through an act of parliament, or rather, perhaps, by the effluxion of time. The restoration of that agreement meant, I understand, a saving of approximately $30,000,000 to the farmers of western Canada. But what is the use of effecting a saving in that regard, when, at the same time, conditions exist upon the lakes which largely nullify the action taken by parliament? I notice that the government pro-

The Address-Mr. Shaw
pose3 to inquire, by royal commission, into the alleged combine which exists on the Great Lakes; and I am glad to observe, also, that they are going to investigate the matter of insurance charges in connection with the shipping of grain. It has been a matter of common knowledge for many months past-in fact, I doubt not that it has been commonly known for years now-that some sort of effort is being and has been made to mulct the producers of western Canada in the matter of transportation rates and insurance charges upon cargoes carried on the Great Lakes. It has always occurred to me as a peculiar thing and one which, I admit, I cannot understand, why it is that season after season, this season like the rest, there is a constant discrimination against Georgian bay ports. I find that uniformly through the past pea3on the rate per bushel on grain from Duluth on lake Superior to Buffalo varied between about two cents and, at the close of the season, five cents. But you take grain rates from Fort William to bay p.orts, competing points at both ends with American ports and you find that the rate during this season, and in prior seasons too, has varied from 3i cents to as high, I understand, as ten cents per bushel. I cannot understand the reason for this discrimination, and I hope that in this connection the inquiry by the royal commission ; will be as thorough as possible. I trust that no effort will be spared to bring to bay any j combine which may exist in regard to these matters.
I hope that the government, in their zeal to discover whether there is a combine on the lakes in the matter of transportation rates, will not fail to carry their investigation to the point where they can be assured whether or not there is any combine in connection with ocean rates; because, after all, these combines, if they do exist, are usually hydraheaded. You may cut off one head, but the others remain; and the government should see to it that the investigation shall be such that it may not be said afterwards that, while a combine has been robbed of its power in one section, nevertheless it can rise up in might in another. In connection with this inquiry I regret that the government did not long ago take some drastic action in dealing with the situation. I cannot see why the coastal laws of the country were suspended, practically at the close of navigation, when such suspension could do little good so far as grain transportation costs were concerned. The government might well have acted far more diligently in that regard.
There is another way in which the government can be of some service: I refer to an investigation of the possibilities of the westward movement of grain through the port of Vancouver. If that investigation justifies it, their support should be given in connection with the so-called western grain route. I know there are problems involved in connection with the shipping of grain from the provinces of Alberta and Saskatchewan westward through the port of Vancouver. Some of these problems should be mastered by this government; others should be taken up and solved by the people of Vancouver and of British Columbia generally. This is the more necessary in view of the fact, as revealed upon examination, that this westward movement of grain is becoming a far more popular movement than heretofore. I understand that the amount of grain shipped this year through this route is considerably in excess of that shipped last year, despite inadequate terminal and elevator facilities. Account must also be taken of the fact that uniformly through the past season there has been a premium on the Vancouver price over the Fort William price of grain, extending from approximately three cents to between seven and eight cents per bushel. These are matters that should be carefully investigated by the government. I see no reason why the Board_ of Grain Commissioners should not long~ago have been charged with the duty of investigating this matter with a view to ascertaining the feasibility of developing this western movement of grain. Is there anything the people of British Columbia can do to make it more feasible? That an investigation should disclose. In the years to come, in my opinion, this matter will be of increasing importance to this country, and I trust that the government will not neglect any opportunity to give, at least, what counsel and support they can to the western movement of grain.
Now, I have dealt to some extent with the matter of grain growing in western Canada. I propose to turn my attention for a moment to the cattle industry of western Canada. This industry, as everyone must realize, is one for which the province of Alberta particularly is naturally adapted. In past years it has been a very profitable and a very large industry. But unfortunately the high American tariff has excluded our cattle from the Chicago market, and the result has been a disastrous fall in prices, the sacrifice of cattle at very low rates that are utterly unprofitable and, most unfortunate of all, the sale of a large
The Address-Mr. Shaw

statement made by General Smuts at the Imperial Conference in 1921, where Canada was represented by the present right hon. leader of the Opposition (Mr. Meighen. I commend this statement to the consideration of the House as Canada's policy. He said:
In shaping our course for the future, we must bear in mind that the whole world position has radically altered as a result of the war. Europe is no longer what she was, and the power and the position which she once occupied in the world has been largely lost. The great empires have disappeared. Austria will never rise again. Russia and Germany will no doubt revive, but not in this generation nor in the next; and when they do, they may be very different countries in a world which may be a very different world. The position, therefore, has completely altered. The old viewpoint from which we considered Europe has completely altered. She suffers from an exhaustion, which is the most appalling fact of history; and the victorious countries of Europe are not much better off than the vanquished. No, the scene has shifted on the great stage. To my mind that is the most important fact in the world situation to-day, and the fact to which our foreign policy should have special regard.
Then, discussing the possibilities of the future, he asks the question, What will be the next chapter in human history? and says:
What will be the character of that history? Will it be along the old lines? Will it be the old spirit of national and Imperial domination which has been the undoing of Europe? Or shall we have learned our lesson ? Shall we have purged our souls in the fires through which we have passed? Will it be a future of peaceful co-operation, of friendly co-ordination of all the vast interests at stake?
In the latter part of that statement of Premier Smuts lies, I think, the course for this country to follow-a non-partisan course as between the nations, holding the balance of justice with an equal poise, seeking to extend our friendly help and co-operation to all nations in distress.
I say further that if we are obligated by any warlike commitments, we should seek release from them. We should not engage in any further war-provoking entanglements. If we do that much we shall at least have made some efforts to usher in, or perhaps to bring somewhat closer to realization, that day when-
The common sense of most shall hold a fretful realm in awe.
And the kindly earth shall slumber, lapt in universal law.
Now, there is one other matter to which I wish to refer, and that is my position before this House. There has been some misunderstanding. There has been, perhaps, to some extent some slight misrepresentation. Let me say at the outset that my position before this House has not changed in the slightest. I was elected as an Independent for the Calgary West federal riding. I was supported most generously by the United Farmers of Alberta within that constituency, and supported most 
generously indeed by the labour unions in that constituency. It was my duty, and it has been my effort to fulfil it, to co-operate not only with the Progressive group but with any group which was interested in the securing of democratic legislation. That is my obligation to my constituents; that is the course which I intend to pursue-that and none other. I am not fettered by any party' consideration; I am not embarrassed by any partisan affiliations; and so I say I am prepared to co-operate not only with the government, not only with my friends of the opposition, but with the Progressive group in any legislation which appears to me deserving of favourable consideration by this parliament.
I have listened with considerable interest to the belated-shall I say?-amendment proposed by the hon. member for Springfield (Mr. Hoey). That amendment is worthy of some consideration. I think the challenge, however, of the country to-day to this parliament is the challenge to economy, not only in administration but also in the expenditure of government-the challenge to keep our expenditure within our income. I think the challenge to parliament to-day is to reduce and lessen the burdens of taxation which so grievously bear upon the people, and so in that spirit I desire to move an amendment to the amendment proposed by the hon. member for Springfield. The amendment which I propose reads as follows:
That the following words be added to the amendment
before the House:
That this House views with alarm the substantial increase in the national debt, and urges Your Excellency's advisers to exert every possible effort to economize in the expenditure and administration of government, and to lessen the burden of federal taxation which bears so heavily on the people of Canada.
I offer that amendment, not for the purpose of embarrassing the government, for I believe the government is under no obligation to consider it as necessarily indicating a want of confidence, but because its adoption will indicate that the challenge of the country to this parliament has been answered to some extent at least.


Mr. E. W. ROBINSON (Kings, N.S.):: Mr. Speaker, it is not my intention to speak at any length on the question before the House. I might assure the House right now that it is not my intention to move an amendment to the amendment or anything of that kind. I shall be as brief as possible.
I believe that it is first of all my duty to express the pleasure that I had in listening to the eloquent address of my colleague the hon. member for Colchester (Mr. Putnam).

The Address-Air. Robinson
I have heard kind words spoken of his address from various parts of the House, and the only note of criticism that I heard was an implication perhaps that he had spoken from a sectional viewpoint, from the standpoint of the Maritime provinces principally. I wish to say, Mr. Speaker, that we are sectional by nature. In this Canada of ours there is a maritime section, there is also a western section, and I claim that it is only by hearing the opinions of various members from the different sections that we can ever come to any concerted action that will mean anything. Therefore, I shall make no excuses for the hon. member for Colchester having spoken from a maritime standpoint. It seems to me that we are expected to listen with patience while the members from the West tell of their grievances and while the members from British Columbia, for instance, speak of the peculiar questions confronting them; but if a member from the Maritime provinces tells of the needs and aspirations of that section we are at once accused of sectionalism.
There are one or two points in the Speech from the Throne to which I particularly wish to call attention. The first is redistribution. It is well-understood, of course, that after every decennial census it is necessary to have a redistribution of the representation. Redistribution will affect Nova Scotia perhaps more than any other province at this time, because we stand to lose two members. It might interest the House to know that our loss of two members is not due to the fact that we have exhausted our natural resources; it is not that our population is fading away because we have exhausted the country entirely; nothing of the kind. Our population has increased to a certain extent, but has not kept pace with the increase in the population of the province of Quebec. We have at the present time about 535,000 people in the province of Nova Scotia. We produced products in the year 1922 valued at $163,000,000, and I think all will agree that that is no mean total for a population of that size. I do not believe any other part of this Dominion, I was going to say the world, possesses as many and as varied resources as does the province of Nova Scotia. We raised coal last year to the value of $30,000,000; our farm products were valued at $34,000,000, and our fisheries at $12,000,000. No other part of the Dominion, I believe, has such a variety of resources as we possess.
The question may be asked: In view of these considerations, why is our population diminishing, or apparently diminishing? In
answer to that I would say that we have, apparently, been side-tracked. In the Maritime provinces we possess advantages that are not enjoyed by any of the other provinces. We have communications with all parts of the globe, and we have the best harbours in the world. What we lack is communication with the rest of the Dominion, because of the fact that we are discriminated against as far as railway rates are concerned.
In the Speech from the Throne there was a reference to immigration. I do not suppose that it would be wise for the provinces of Canada to compete with one another in attempting to secure immigrants. If the West requires farm labourers I am sure that we in the East would wish them to have all they need. In the Maritime provinces we require money as well as men in order to develop our resources. The speech from the Throne refers to the necessity of advertising the Dominion in those European countries from which we desire to attract immigrants. I would ask, in all fairness, that when that advertising takes place the Maritime provinces shall not be overlooked. I am afraid that the advertising of Canada in the past has been almost entirely confined to extolling the resources and capabilities of the West rather than of the East. In this matter the Maritime provinces only ask for a fair show.
I am not one of those who expect the government to realize prosperity for this country while the rest of the world is suffering. It seems to me that we have only to look at the conditions in Europe to realize that those conditions cannot be removed by a simple wave of the hand. No magic formula exists by which a statutory enactment will bring prosperity to any country in Europe or elsewhere. I am sure that if we pause and consider the markets of Europe, where the prices of the world's produce are fixed to a great extent, we shall understand why the price of wheat, and other commodities, has been so low in the Canadian West. In this connection let me refer to conditions in the county I represent. There in a small valley, some sixty miles long and four miles wide, we raised 2,000,000 barrels of apples for export last season. To-day the price of apples is not nearly as high as it was a year ago. Where does the fault lie? We export our apples to Great Britain-to London, to Liverpool, to Glasgow. Yet when the markets became depressed we did not look for any government action to maintain prices.
I have no wish to occupy the attention of the House unduly, and will therefore close
Immigration Act Amendment

with an expression of my appreciation of the excellent speech made by the mover of the resolution for the adoption of the Address.


Mr. W. T. LUCAS (Victoria, Alta.):: In view of the hour, it being nearly six o'clock, I think I may be permitted to move the adjournment of the debate.


[Stage Direction]
Motion agreed to.

William Lyon Mackenzie King: It is probable that a large number of members will be absent this evening, and I therefore move that the House do now adjourn.


Arthur Meighen: I do not rise particularly to object to the motion but to sever myself and those I represent from acquiescence in it. It is no desire of ours that these early adjournments shall take place. The government must assume the responsibility for them.


William Lyon Mackenzie King: I have nothing to say except that I understood that the whips had agreed to have an early adjournment, but my right lion, friend takes exception to their action.


Mr. BOYS:: There was no agreement made.
Motion agreed to and the House adjourned at 5.55 p.m.
Tuesday, February 6, 1923.