1924-06-02

PRIVATE BILLS FIRST READINGS

[Stage Direction]
Bill No. 145 (from the Senate), respecting The Interprovincial and James Bay Railway Company.-Mr. Parent.
Bill No. 146 (from the Senate), for the relief of Angus Martin-Mr. Sheard.
Bill No. 147 (from the Senate), for the relief of Lester Ernest Greenwood.-Mr. Ryckman.
Bill No. 148 (from the Senate), for the relief of Charles Lawson.

Mr. Arthurs.
Bill No. 149 (from the Senate), for the relief of Margaret Hickey.-Mr. Anderson.
Bill No. 150 (from the Senate), for the relief of William John Chenery.-Mr. Martell.
Bill No. 151 (from the Senate), for the relief of Florence Roberts.-Mr. Hocken.
Bill No. 152 (from the Senate), for the relief of Hugh Allan Macdonald.-Mr. Hocken.
Bill No. 153 (from the Senate), for the relief of Wilhelmine Christina Slater.-Mr. Hocken.
Bill No. 154 (from the Senate), for the relief of Emma Doris Perley.-Mr. Martell.
Bill No. 155 (from the Senate), for the relief of Arthur Hill.-Mr. Jacobs.
170i
Bill No. 156 (from the Senate), for the relief of Louis White.-Mr. Lovett.
Bill No. 157 (from the Senate), for the relief of Emily Elizabeth Reeder-Mr. Clifford.

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Bill No. 144, for the relief of Evelyn Eira Awrey.-Mr. Stewart (Hamilton).

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Bill No. 106, respecting The General Animals Insurance Company of Canada.-Mr. Ryckman.

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On the Orders of the Day:
Mr. BEAUBIEN:: Will the Prime Minister say when we may expect the House to sit on Saturdays?


Mr. MACKENZIE KING:: I cannot give an answer yet; it will be another fortnight at least.



FREIGHT RATES ON THE GREAT LAKES

[Stage Direction]
On the Orders of the Day:
Mr. H. E. SPENCER (Battle River):: Has the attention of the government been called to an editorial in The Grain Growers' Guide of Wednesday, May 28, criticising the freight rates on the Great Lakes? This editorial reads in part:
The patriotic Canadian lake shippers, who enjoy a monopoly under the coasting laws, are soaking the shipper who exports wheat through Canadian channels. Where they have a monopoly they charge 2$ cents; where they face American competition they charge If cents. They charge 42 per cent higher rates on wheat by the all-Canadian route.
If this is true, what action does the government intend to take in the matter?


William Lyon Mackenzie King: I am afraid I shall have to have an opportunity of carefully reading the article in question before I can undertake to reply to my hon. friend's question. However, I shall see that the subject is taken into consideration.



HALIBUT FISHERIES TREATY

[Stage Direction]
On the Orders of the Day:
Mr. FRED STORK (Skeena):: Is there
any possibility of the Halibut treaty being dealt with this year? The treaty relates to a closed season in halibut fishing.


William Lyon Mackenzie King: The hon. member, I have no doubt, is aware that this parliament has approved of the Halibut treaty at the pres-
Questions

ent session., and I am informed that the United States senate has just ratified it.


Hon. ERNEST LAPOINTE (Minister of Justice):: Will the leader of the Opposition
make a speech now?


Right Hon. ARTHUR MEIGHEN (Leader of the Opposition):: The only speech I will make is to recall one more inaccuracy on the part of the Minister of Justice (Mr. Lapointe); I have never on any occasion made any predi :tion as to what the United States senate would do, although my hon. friend has attributed such a prediction to me.


Ernest Lapointe: My right hon. friend made a hundred speeches throughout the country to the effect that there was no treaty.


Arthur Meighen: The hon. gentleman will not accept my correction but I cannot help that. I said that there was none, nor was there any, up to this time-although there be one now. But I made no prediction at any time as to what the United States senate would do.


Ernest Lapointe: It is a queer notion of international law for my hon. friend to suggest that there was no treaty until it was ratified. The treaty was signed and approved by the Parliament of Canada and only needed the ratification of the United States senate. My right hon. friend talked about the matter throughout the country and now it is all settled.


Hon. H. H. STEVENS (Vancouver Centre) :: Might I ask the Minister of Justice
why the hon. member for Skeena (Mr. Stork) was called upon to inquire when the treaty was to be ratified? And why did the hon. minister add such vociferous cheers?


Ernest Lapointe: The question answers
itself.


Henry Herbert Stevens: It certainly does.



QUESTIONS

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(Questions answered orally are indicated by an asterisk).

Mr. BLACK (Yukon):: 1.	What was the total cost of installing each of the government wireless stations at Dawson and at Mayo, Yukon Territory, in 1923?
2.	What has been the cost of operating and maintaining each of said stations since its installation?
3.	How many employees are engaged at each of said stations and in what capacities?
4.	What has the revenue been from each of said stations since its installation?


Hon. Mr. COPP:: 1.	Cost of equipment and installation at Dawson City, $11,438.64; cost of equipment and installation at Mayo, $8,621.57.
2.	Cost of operating and maintaining station at Dawson City, $4,669.63; cost of operating and maintaining station at Mayo, $3,327.78.
3.	Dawson, 4: Superintendent, 2 operators, engineer. Mayo, 3: 2 operators, engineer.
4.	Dawson, $363.65; Mayo, $576.82.


CANADIAN NATIONAL RAILWAYS-MONCTON OFFICE
Mr. DOUCET:: 1.	What is the amount paid to the officials and clerks in connection with the office of comptroller and treasurer of the Canadian National Railways at Moncton, N.B., for the years ending January 31st, 1922, 1923 and 1924?
2.	What is the passenger and freight mileage handled by the above named office during the same periods?
3.	Is it true that whilst the passenger and freight mileage managed at Moncton, N.B., is very much less than in 1922 (this division extending only to Riviere du Loup and Monk instead of to Montreal and Winnipeg as under the Hanna management), the cost of the office of comptroller and treasurer at Moncton, has increased from approximately $13,000 in 1922 to $30,000 in 1923?


Hon. Mr. GRAHAM:: In. view of question No. 3, the management feel that question No. 1 was intended to read "for the months ending January 31st, 1922, 1923, and 1924," and have answered, the question accordingly.
1.	Amount paid comptroller and treasurer, and staffs, is as follows:
January 1922, $20,290.20; January, 1923, $21,572.17; January, 1924, $19,558.01.
2.
Train Mileage	Track Mileage
January 1922-804,749	January 1922-4,468
January 1923-947,758	January 1923-4,435
January 1924-550,143	January 1924-2,760
3. New system of regional accounting was inaugurated May 1, 1923. The decrease shown at Moncton is not large, as compared with mileage. Such difference in mileage does not to any great .extent affect general accounting, outside of revenue accounting. On the entire system, owing to the new system of regional accounting, there has been a large decrease in staff, and a saving of expense in the entire accounting department of the system amounting to about $200,000 per year. The staff at Moncton is still handling all old accounts, and adjustments of accounts, prior to 1st May, 1923, for the entire Canadian Government Railways, 4,435 miles.


CANADIAN NATIONAL RAILWAYS-ATLANTIC DIVISION
Hon. Mr. BAXTER:: 1.	Have standard mileage rates recently been increased on Canadian National Railways, Atlantic division?
2.	If so to what mileage does such increase apply?

Questions


Hon. Mr. GRAHAM:: 1.	Revision effective May 10th, 1923, for the purpose of providing a uniform standard mileage scale throughout eastern Canada east of Capreol and Cochrane, Ontario. At the same time the use of the special class tariff to and from town tariff points was authorized between intermediate stations which are not town tariff points.
2.	For distances over 250 miles. Very little traffic moved over 250 miles under standard mileage rates, and the application of town tariff rates as maximum now takes care of such as will move on a basis substantially lower than the standard mileage rates.


CANADIAN NATIONAL RAILWAYS-DIRECTOR JAMES STEWART
*Hon. Mr. STEVENS:: 1.	When was James Stewart appointed Canadian National Railway director?
2.	How many meetings of such directors has he attended since? When and at what places?


George Perry Graham: Mr. Speaker, the
president of the Canadian National Railway Board feels that he should not be called upon to answer this question-at least, he does not think it would be fair to do so until he has consulted the board.


Mr. SPEAKER:: Dropped?


Henry Herbert Stevens: No, stands.


CANADIAN NATIONAL RAILWAYS BOARD MEETINGS
Mr. ROSS (Kingston):: 1.	How many meetings of full Board of Directors of the Canadian National Railways have been held since July, 1922?
2.	What Directors were at each meeting?


George Perry Graham: This question is in the same class as the one before it.
Questions stand.


QUEBEC IMMIGRATION CANTEEN
Mr. DOUCET:: 1.	What are the actual prices charged immigrants arriving at or passing through Quebec by the immigration restaurant and canteen keeper, on the following articles: (a) Milk, per quart; (b) Bananas, per dozen; (c) Apples, per dozen; (d) Bread, per loaf; (e) Large buns, per dozen, and (f) medium buns, per dozen?
2.	Are such prices, charged for items in question, the current prices obtaining in other stores of Quebec city?


Hon. Mr. ROBB:: 1.	Milk is sold by the pint in glasses in the canteen for five cents and by the pint in bottles at twelve cents, seven cents being refunded on the return of the bottle. Bananas, fifty cents per dozen; apples, forty cents per dozen; bread, ten cents per loaf; buns, one
size only handled, extra large and baked on the premises; retailed at five cents each or fifty cents per dozen.
2.	Milk is sold at less than current prices. Prices of bananas and bread are the same as charged in local stores, the only difference being that bread sold at the immigration canteen is wrapped in oiled, grease-proof paper.
Apples are sold below the prices charged by some retailers. Buns such as are sold at the canteen are not made by local bakers, the latter's product being smaller in size.


COLONEL J. CARLETON BROWN
Mr. CHAPLIN:: 1.	Is Colonel J. Carleton Brown an employee of the Canadian Government Merchant Marine? If not, is he employed in any capacity in the government service?
2.	Has the said Colonel J. Carleton Brown been recently sent on a mission to South America by the Canadian Government Merchant Marine, or the Canadian National Railways, or by any department of the government?
3.	If so, what is the purpose of his mission, what is his salary or remuneration?
4.	What special qualifications has the said J. Carleton Brown for such mission?
5.	Is the government aware that the said J. Carleton Brown is a civil engineer by profession?


Hon. Mr. GRAHAM:: 1.	No.
2.	Col. Carleton Brown has been sent to West Indies by the Canadian Government Merchant Marine.
3.	To investigate the possibilities of developing business between the West Indies and Canada and the service necessary therefor. It is not considered by the management to be in the public interest of the Canadian Government Merchant Marine to answer question regarding salary or remuneration.
4.	In the opinion of the management Colonel Brown has the necessary qualifications to carry out such mission.
5.	The management state that Colonel Brown is a civil engineer by profession.


ORIENTAL IMMIGRATION
Hon. Mr. STEVENS:: 1.	How many immigrants from China were admitted into Canada for residence during the past fiscal year?
2.	How many residents of Japan were admitted into Canada for residence during the past fiscal year?
3.	Has the government entered into a new agreement covering Japanese immigration with the Japanese government? If so, has a quota of 150 been fixed upon?
4.	If a quota has been fixed, does the said quota include all classes of immigrants, such as merchants, students, etc., or are such admitted in excess of the said quota?
5.	Has the government agreed with the government of Japan not to pass any legislation restricting Japanese immigration into Canada ?
6.	Has the government received any communication from the Retail Merchants' Association of Vancouver, or of British Columbia, asking for legislation restrict-
Questions

ing Japanese immigration similar to the legislation passed last year restricting Chinese immigration? If so, is it the intention of the government to introduce such legislation ?


Hon. Mr. ROBB:: 1.	Admitted under the provisions of the Chinese Immigration Act (repealed), 659; admitted under the provisions of the Chinese Immigration Act, 1923, 6; total 665.
2.	448.
3.	As a consequence of negotiations between representatives of the governments of Japan and Canada last year, the Japanese government undertook to restrict to 150 annually the number of Japanese emigrants going to Canada as household servants and agricultural labourers.
4.	Answered by the answer to No. 3 above.
5.	No.
6.	Yes. The question of the advisability of further restriction of Japanese immigration is under consideration.
MR. D. STANLEY MacNEIL


Mr. McDONALD (Timiskaming):: Is the government considering the claims of Mr. D. Stanley MacNeil, in regard to loss sustained by him through the disallowance of chapter 177, Acts of Nova Scotia, 1921?


Ernest Lapointe: Mr. MacNeil's
claim was fully heard and considered upon the application for disallowance and the government has no authority to review its action.


RATES ON COAL FROM ALBERTA EASTWARD
Mr. CHURCH:: 1.	Is it the intention of the government, under the powers it has by the general Railway Act, to arrange with the Board of Railway Commissioners for Canada for a hearing to fix a rate that is just, equitable and reasonable, for the carrying of coal from Alberta and Nova Scotia to central Canada? If not, why?
2.	What is being done by the government to carry out terms of resolution adopted in March last by the House to ensure an all British coal supply?


George Perry Graham: The province of
Ontario has made an application to the Board of Railway Commissioners concerning the rate on coal from Drumheller to Ontario points. Legal representatives of the province have been in conference with the railways, and when certain information to be filed by the applicants has been received, a date for a hearing will be fixed.


MR. LUDOVIC GERMAIN
Mr. DOUCET:: 1.	Did the Postal department hold an inquiry on Mr. Ludovic Germain, chief of the city delivery in the Montreal post office?
2.	If so, what was the result of such inquiry?
3.	What action does the department intend to take in the matter?


Hon. Mr. STEWART (for the Postmaster General):: 1.	Yes.
2.	Charges not founded on fact.
3.	None.
TORONTO POST OFFICE Mr. CHURCH:
1.	What are the receipts from the Toronto post office for the last three years of record?
2.	How many sub-stations are there in Toronto?
3.	Is it the intention of the government to open any new branch post offices, or to effect any co-ordinations of sub-stations in Toronto, or to buy or rent or build any additional sub-stations? If so, where?
4.	Is it the intention of the government, in view of the very large revenues from Toronto, to reduce the rate of drop letters in the city limits?


Hon. Mr. STEWART (for the Postmaster General):: 1.
Fiscal year ending
March 31	Receipts
1921		$4,947,776.64
1922		 5,223,978.58
1923		 5,798,015.40
2.	124, that is, 11 postal stations and 113 sub-post offices.
3.	Branch post offices will be opened up within the metropolitan area at Toronto or closed as the exigencies of the service may require.
4.	No. Toronto could not be treated differently from other cities.


QUESTION PASSED AS ORDER FOR RETURN
Mr. HANSON:: 1.	How many persons other than medical men are employed in and about the unit of the Department of Soldiers' Civil Re-establishment located at St. John, New Brunswick?
2.	What are their names and rank, and what is the pay and allowances of each?
3.	What is the gross cost of such salaries and allowances ?
4.	What was the total cost for all services and expenses of such unit during the last fiscal year?
UNOPPOSED MOTIONS FOR PAPERS DALY BUILDING, OTTAWA Mr. PARENT:
For a copy of all letters, telegrams, memorandum, agreement and all other documents relative to the purchase of the Daly building in the city of Ottawa from the H. J. Daly Company in the year 1921, together with copies of the order in council dated the 31st of August, 1921, and the deed dated September, 1921.

C.N.R.-Ministers Statement


BUILDING OF GOVERNMENT SHIPS AT PRINCE RUPERT
Mr. COOTE:: For a copy of all correspondence, telegrams or other documents passing between the London Guarantee and Accident Company, Limited, or any other parties, and the government, in connection with the bond for $321,000 covering the completion of two ships at Prince Rupert by the Prince Rupert Dry Dock and Engineering Company, Limited.


MILITIA ACT AMENDMENT
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Hon. E. M. MACDONALD (Minister of National Defence) moved that the House go into committee at the next sitting to consider a proposed resolution to amend the provisions of the Militia Act, chapter 41 of the revised statutes, 1906, relating to calling out the active militia in aid of the civil power.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the House.

[Stage Direction]
The House resumed, from Wednesday, May 28, consideration of the proposed motion of Hon. Mr. Robb for committee of Supply.
Sir HENRY DRAYTON (West York):: I do not intend to take up much of the time of the House in considering the statement presented by the Minister of Railways and Canals (Mr. Graham). There is one thing however, I would like to point out in the first instance. I was interested in what the hon. gentleman said with regard to increased earnings on the Grand Trunk Pacific line. There were added earnings in that section which were to be expected, and the like applies also to the Transcontinental. There is no mystery as to why we have a larger percentage of earnings in connection with these lines than we have in connection with other lines in the system. Those lines were built without business feeders and in territories already largely occupied by railways, or, if not so occupied, of such a character that they did not produce freight. They now enjoy the traffic coming from the old Canadian Northern branch lines, particularly the prairie system of the Canadian Northern, where the loadings are good and the traffic heavy. Of course these increases are taking place. I point out to my hon. friend in this connection
that it is merely a matter of accounting, but that as a matter of fairness to the government system itself the earnings on that traffic ought not to be prorated in the ordinary way; the originating carrier, i.e. the prairie lines of the old Northern ought to have credit for business originated on their line and a weightier prorate, as in the case of ordinary railway business between different companies.
We had a question in the House the other day which my hon. friend took exception to, and I said at the time that I had some sympathy for the stand he took. That question had to do with the matter of details of some railway operation-the exact point I forget. I propose to draw to your attention, Mr. Speaker, the present unsatisfactory position in which not only the House but the system find themselves, with a view of ascertaining whether or not there is some sensible way in which the activities of parliament can be so co-ordinated with the operation of the National line that on the one hand parliamentary rights can still exist and on the other the railway system be allowed to carry on irrespective of political interference.
Let me say at the outset that if we are to make a success of the National Railways-and every decent Canadian is interested in seeing that this is done-we cannot look upon them as a mere controversial issue. I take peculiar interest in this matter. It was back in 1916 that I was a party to the report under which largely these lines were acquired, and, although that was some years ago I have not been able to change the conclusions I then came to. In the first place, Mr. Speaker, it is perfectly clear there is nothing immoral in public ownership as such. There is no difficulty in connection with the ownership of property. On the other hand, it is also perfectly clear that in every country outside of Prussia that has tried the experiment, political interference to a greater or less degree has militated against the success of the experiment, has resulted in either higher freight rates or poorer service. The fault did not lie by reason of the fact that instead of there being perhaps a couple of thousand private shareholders in the country, the whole people of the country were shareholders; the fault lay in the improper interference on political grounds, on local grounds, with the proper running of the system. We have had different kinds of public undertakings run, and successfully run, when we got away from direct parliamentary control. We have commissions run-

C.N.R.-Minister's Statement
ning, and running successfully, the Ontario Hydro Electric, for instance; I could mention others, but it is not necessary. If we can once get away from making, as a matter of party politics on the floor of this House, a football of a great national asset, and see that it is properly run, we are making a long step in advance.
There are two schools of thought in connection with this matter, but I think that both schools-everybody-will agree that the first thing necessary is that there shall be no dispute, no mystery, no concealment as to what the actual performance of the country's property is. Now, as we have it to-day, we have not yet been able to take that first initial step. Why, there is dispute to-day even as to the meaning of that report which was tabled by my hon. friend last week, and the dispute still continues. Surely it is perfectly clear we ought to have certainty, that there should be no doubt as to what the truth is, that every one should know where we are going. Just to show the state of bewilderment the public are in, and to prove that these errors are not confined to the less intelligent members of the community, but are to be found even with the most intelligent, I am going to refer to the public press. The Montreal Gazette of the 29th of May makes the declaration that the Canadian National Railways had made a net improvement of $5,917,561 as a result of the year's operation; and on the same date, with information collected from the same report, by gentlemen sitting in the same gallery, the Ottawa Citizen says that the Canadian National made an improved showing of $12,000,000 as compared with the previous year. We must try and find out what the truth is; we can never make progress without it. Doubt still remains. Why, in this morning's Montreal Gazette, Sir Henry Thornton, in a rather lengthy newspaper interview which he gave in effect, says that both these gentlemen do him grave injustice, because, he says, there was an increase in his net income, if I remember rightly, of $20,000, 000 or $21,000,000; at least $20,000,000. Obviously we ought to get such a report, such information, for the House that there ought to be no room for argument as to what the truth is.
Now then, let us go back to what the two different schools of thought are. I am going to an authority that my hon. friends on the government benches will immediately accept. I am going to take the considered utterances of my right hon. friend the Prime Minister (Mr. Mackenzie King) as showing what one school thinks in connection with this question of railway administration, an administration than 
which, according to them, must of necessity be a matter of controversy in the House, and a matter of party politics. I first read from Hansard of 1920, page 1669. The right hon. the present Prime Minister then said:
Mr. Speaker, I do not wish to take up the time of the House, but I think it is important that the country should clearly understand the amazing doctrine that the government has put forward this evening as regards public ownership, especially as the government prides itself somewhat on having gone in for public ownership on a scale that no country has attempted or even thought of. Unless I am completely mistaken, the significance of all that has been said by the Minister of Railways, the Minister of Marine and the Minister of the Interior, has been to the effect that with the extension of government ownership, there is to be, not an increase of publicity, but a diminution of publicity in regard to matters pertaining to operation.
On the next page, the right hon. gentleman is reported as saying:
Again, I must say to the House that if any hon. member will take the trouble to look at Hansard tomorrow, I thir.k he will find that the expression the Minister of the Interior used was "enterprises of limited scope," and in that connection he referred particularly to the Intercolonial railway; he said that it was all right as regards enterprises of limited scope for a minister to come down and give to parliament a detailed account, but when we got beyond these "enterprises of limited scope," in other words, when we got into these vast undertakings in which this government has landed the country then we were to have something different; we were to have corporate management as private business enterprises were conducted.
Again he says:
The point to which I wish to direct the attention of the House is that it should be a matter of principle that there is nothing connected with the properties that the people of Canada own that the people's representatives in this parliament should not have a right to inquire into, not at one particular time, but at all times. That is a principle which the people of this country will expect to see respected in this parliament.
Now I stop just at that point. I do not adopt the principles laid down by the right hon. gentleman. I do want to see, if possible, some method by which the people's representatives, charged as they are with the safekeeping of the people's money, may satisfy themselves that substantially all is well, and at the same time maintain such a position as will enable this business-just as was said by my right hon. friend we were then trying to do-to be carried on as by a private corporation, without political interference. My hon. friend went on to say-and I wish to point this out because it has unmistakable significance; I want to dissociate myself from the proposition at once-that parliament should have a right to make inquiry not only at one particular time but at all times, that it was a matter of very great moment.
I point out to the House that if what was then sought to be done could be done, if to-day's current business was to be made pub-

C.N.R.-Minister's Statement
lie, the National system, competitive as it is with the Canadian Pacific, could not be carried on-it simply could not be done. What we want to do, then, was to see that information was given the House, but at such a time that it could not place the system in a position of disadvantage in connection with its current business:	In other words current
operations and current business were to be regarded as a sealed book. My right hon. friend could not agree with us at that time and went entirely too far, I think, in the opposite direction. He goes on to say:
That is a principle which the people of this country will expect to see respected in this parliament. If government ownership is to mean that there is to be less and less in the way of publicity, a good many who have been advocating government ownership will think twice before they continue their advocacy. I ask the ministry what is there that can be done, if it is done in an honest and straightforward way, that will suffer from publicity? What is there to be feared from publicity ?
Well, I have no doubt those were the honest convictions of my right hon. friend at that time, but I am sure they are not his convictions to-day. Everything he says there is absolutely and entirely at variance with any idea of allowing the present directors free and unfettered management. I would also point this out: No matter how honest and straightforward Sir Henry Thornton may be it is possible that he would suffer from publicity, and it is possible he would have something to fear from it. Let me illustrate. When running a tremendous business in competition, as I have already said the railway president is interested in obtaining the very best quotations for supplies he can get, also in the strategic work that has to be undertaken-such a planning of lines, such a planning of private sidings, as will enable him to get as big a share as possible of competitive business. But every move on his part in connection with private sidings and the proper laying out of the system would be negatived if the publicity which the right hon. gentleman has urged should be adopted. My right hon. friend's question was answered by the late Mr. Richardson, formerly member for Springfield who said "nothing." My right hon. friend then becomes more positive, the interpolation encourages him. He goes on to say:
The more extensive a business becomes the greater is the need for publicity.
Again he says:
The vaster an organization the greater the need of publicity. I say that the ministry is heading in the wrong direction when they seek to stifle the giving of information. Their aim should be to encourage wider and wider publicity in regard to public affairs.
That was the considered stand taken by the right hon. gentleman in the year 1920. After thinking the matter over for a year he becomes a little more emphatic, if it is possible to be more emphatic, because on March 22, 1921, he moved the following substantive resolution:
Subject to the reservation that in exceptional cases there may be documents of a confidential character which, in the public interest, may properly be withheld from publication, the House declares that it is the undoubted right of parliament to demand and receive copies of all reports, accounts, correspondence and papers, in relation to the management of every department of the public service including the affairs of the Canadian National railways, whether operating directly under the control of the department or under corporate form.
Hon. gentlemen will see that the resolution could not be more wide or more positive. In a word it puts the current business of the government railways exactly in the same position as the business of any other department, because so far as any other department of the government is concerned the minister can refuse at all times to bring down confidential papers and there have been such refusals. So that the whole idea and effect of the considered resolution introduced by my right hon. friend in the year 1921 was to put the operation of the Canadian National railways in exactly the same position as the operations of any department of the government. In speaking to the motion my right hon. friend said:
But when it comes to the public, who are the owners of the system, and who are to meet the liabilities for any shortages occasioned by its management, we are told that the representatives of the people in parliament shall not have the right to obtain information respecting essential matters of management and detail.
The hand is not to be taken off the management; direct management is to be interfered with. He goes on to say-[DOT]
We recognize that Canada has not been faced, except during the period of the war, with a situation that was ever quite as grave as that which is produced by the railway problem to-day. It is certainly the first question pressing for solution, it is in every way the most baffling problem with which the country has been confronted. But the only way in which a problem of such magnitude can be solved, if it is to be solved at all, is through the people's representatives in parliament having the fullest information in regard to all its aspects.
I am afraid I will have to take direct issue with my right hon. friend there. I think that is going entirely too far. No useful purpose could be served by having every member given a whole lot of details in connection with railway management that he could not possibly understand-no one can unless he is a railroader. Furthermore if these details were given the railways could

C.N.R.-Minister's Statement
not be earned on properly. My right hon. friend goes on to say:
Now, Sir, the reasonableness of the demand in this resolution, will, I think, be wholly apparent. All that the resolution requests, is, that as respects the Canadian National Railways, which are a branch of the government public service, this House shall have the same right as it has in respect to all other branches of the public service, vizthe right to the fullest information with respect to matters of great public concern. May I point out that the government's attitude in refusing to give this House any information, is really placing a premium, so far as the management of these railways are concerned, on inefficiency and on incapacity, if not also on absolute dishonesty.
Again I take sharp issue with my right hon. friend. He is going much further than the public interest requires; in fact if these ideas were to be applied we might as well give up all hope of doing anything with the National system. The present government are leaving matters very very largely as the late government did, but I wonder what the newspapers in the country would say if any member having a knowledge of the subject would get up and state that by reason of the fact that full details of the railway management cannot be obtained the government were really placing a premium on inefficiency so far as that management was concerned, and on incapacity, if not also on absolute dishonesty. My right hon. friend was wrong. I am referring now to Hansard for the year 1921, page 1179. He goes on to say:
I should also like to say that it is unfair to that large body of the public who are advocating a system of government ownership, that facts respecting the operation of these roads should be withheld from parliament. This is not the time to argue the merits or demerits of public or private ownership: but it is just to all persons, whether they are advocates of private ownership or advocates of public ownership, that the fullest amount of information should be placed before parliament, so that an intelligent publio opinion way be formed as to which of the two methods is likely to prove more in the public interest.
The only argument the government has urged against giving information is the specious one that for it to do so would lead to the affairs of the National Kail-ways being brought into party politics, that it would lead to a political control of these roads. Let me say, Mr. Speaker, that I think the direct opposite is the truth. The danger of the railway system of Canada being used for political ends lies in the fact that their operation is being surrounded by the secrecy with which the government is surrounding it at the present time. The one and only safeguard against political interference and control is the frankest, freest, and fullest publicity in regard to all the affairs of these railways.
Just let me paraphrase for a minute. In other words; the only way that the operations of the Department of Public Works shall be run by its political management, free from all its political control is that the frankest and freest and fullest publicity in regard to all the affairs under the Department of Public Works

should be given. I wonder if any one will get up and say, without the risk of cracking his lips, that there is any government that is free from political influence. And yet we have the full information in connection with these departments-at least we ought to have it; we do not always get it I admit, but I do not think the hon. member will quarrel with me if I say that at least he is going to change his view as there expressed. Now my right hon. friend was not alone in those opinions.


William Lyon Mackenzie King: Is all that
my hon. friend has read not in the nature of a reply to an attitude on the part of the government of refusing any information?


Henry Lumley Drayton: Oh no, my right hon. friend is quite wrong. He is here speaking in advocacy of his own motion, to see to it that there is no privacy, that there is a right of public information, and that the smallest act of anybody in connection with the railways, even if done yesterday, should be made the subject of a debate in the House to-day, if thought desirable. He must remember that the issue is very very plain.
I am going a bit further. I think the wisest thing my right hon. friend can do is to adopt the stand taken by the previous government, to prevent the doing of just what he then wanted to do. He did not want it stopped; then he is in the position of responsibility and he wants to stop it now.


William Lyon Mackenzie King: I cannot
admit what the hon. member is saying at all. I do not wish to stop it.


Henry Lumley Drayton: The Minister of Railways certainly does want to stop it. He stopped answers, and I think properly so. But if it be the policy of the government to throw down all the fences, so far as the Canadian National is concerned, they certainly have not shown any evidence of that during the last two or three years. Oh, no. What has been done is, in effect, precisely what has been done before, but without any clear principles or understanding. In order that there may be no misunderstanding in regard to where I stand, the position of the late government was, that, so far as matters of management and operation were concerned, the fullest possible freedom was to be '	4. p.m. given to the directors; that the
House was not to have the right to get details from day to day of current matters of operation and management, current contract prices and the like; that they were not as of right to be in the position to say that some little thing is done wrong at this particular siding, or that the station at another

CJSl.R.-Minister's Statement
point should be better than it is, and that sort of thing; but that so far as matters of capital were concerned, new work, extensions in the field of operation, and the like, this House had to give its consent and approbation before the new work could be started or new capital expended. But we went further than that, Mr. Speaker. Our position was that the only thing we wanted to do was to leave things in such a way that the management was to carry on without interference with the current business; but that so soon as the current business was over and became a matter of the past, and there could be no possible injury done to the management, then parliament had a right to the information. That is one of the things my right hon. friend was referring to in his speech when he said that they were not entitled to information, at some particular time, but were entitled to it at all times. I really think he would be well advised to lay down clear and decisive lines on which information should or should not be given in connection with the railway. With a good deal of deference, Mr. Speaker, I venture to suggest that he will not be able to go further in the interests of the public than, his predecessors did; he is certainly not doing it to-day. He is certainly protecting Sir Henry Thornton and his directorate today.
But my hon. friend's views, as I have quoted them, are not peculiar to himself and his party. The right hon. Minister of Finance {Mr. Fielding) went, if anything, further- well I do not know that he could go further, but if he could he would have done so. I think it would be hard to find any member of my hon. friend's party who did not take exactly the same view. When the resolution was pressed to a vote he got the whole of his party to vote for it and if I am not mistaken he captured one or two Progressives in that particular vote. The whole strength of my hon. friend's party was represented either in that vote or in those commitments, and one interesting statement was made by the hon. member for Brome (Mr. McMaster), who at that time supported my right hon. friend with all his well known force and vehemence in this demand for publicity. He went a step further in the matter to which reference was made by the Minister of Railways (Mr. Graham) in his speech the other day-information given to shareholders. The hon. member for Brome took the position that the people of Canada, who had to bear the loss or were to profit by the gain, were in a somewhat different position from ordinary shareholders inasmuch as, so to speak, they
were constrained to be such; and in view of that fact they had infinitely more right to information than had the ordinary shareholder. That is one view of this question. I think I am right in saying that whatever my right hon. friend may think as a matter of principle, he does not to-day adhere in practice to the views he then held. And, certainly, if he did adhere to them it would be much better for him, in the public interest, to refrain from giving effect to them but rather to support his colleague the Minister of Railways, who from time to time has objected to information being given out. Why, Sir, only to-day we have had two cases of this kind in connection with a matter far more open to inquiry than was any one of the questions to which we when in office offered objection. And what were these two cases? The first was as to whether Mr. Stewart was attending as a director, and how often he had been present; and the second one was a broader question which would include all the directors, information being sought regarding their diligence in attendance. A matter of this kind has absolutely nothing to do with the details of the company's business, and the answers to these questions could not help any one interested in the Canadian Pacific Railway or any one who might want to know, for purposes of competition, what the company was doing. Nevertheless the minister refuses the information. I think my hon. friend went a bit too far in this connection.
Mr .GRAHAM: I did not refuse. The president took exception to the question, and at all events he would not care to give information until he had consulted the board.


Arthur Meighen: May I point out that this is the way in which the minister has refused all information? A return comes down conveying the intimation that the president or the directors think the information should not be given.


Henry Lumley Drayton: My hon. friend had a right to adopt this general attitude. The former president took his stand openly, giving his reasons; and the late government absolutely supported him in that position, having regard, as I have said before, to all matters relating to current management and operation. Now, I think that the position the minister takes in regard to the two cases I have given is a mistaken one; and I also think it is a mistaken position which some others take, that simply because a man is made a director of the Canadian National Railways, or possibly president, therefore whatever he does is sacrosanct, and that any one who desires any information-yes, any

CJV.if.-Mmister's Statement
one who wants to do anything to better the system-commits a grave offence unless he acts upon their ipse dixit. Surely there is room for a common sense stand in connection with this matter; surely it must be right that the activities of these gentlemen should be open to investigation like those of any one else who some day has to be checked up and to give an account; surely it is right that parliament, representing the people who have to supply the money for operating the system, should be able some time to make an inquiry, without doing any injury to current business, for the purpose of securing information to show where the money has gone and to find out whether things are as they ought to be. Why, to use the language of my right hon. friend when in opposition, if we did not disclose things from day to day in regard to current business we were courting inefficiency and inviting dishonesty. Well, I do not know what he would have said, and vei-y justifiably have said, if we had promulgated the present doctrine ourselves; I cannot attempt to describe the language my right hon. friend would use to designate such an attitude, because my vocabulary is entirely inadequate for the purpose.
Now, Mr. Speaker, I am very genuinely interested in this question, and I say that obviously political management will never do; sooner or later parliament has to assume some responsibility, and it does so every time it votes money. My own original view was that while parliament should be given the information to which it was entitled, at the same time the trustees, as they were then called,-I make no distinction between trustees and directors, the difference being merely a matter of names-should be surrounded with all the safeguards that relate to a judge, as to removal. This question, Mr. Speaker, is not solved at all; my right hon. friend has not solved it. I certainly do not desire to speak in 'reference to the right hon. gentleman in any way that might possibly be regarded as offensive; and indeed this should not be a matter of party politics; but, I ask: What has my right hon. friend done? lie has got rid of a railway board on which there were Liberals and Conservatives and he has replaced it with a solid board of Iris supporters. There is no dispute about that; I am dealing with the new directorate which my right hon. friend has appointed.


William Lyon Mackenzie King: Was there any member of that board, to which my hon. friend has referred, who was not a supporter of the Union government?


Henry Lumley Drayton: Yes.


William Lyon Mackenzie King: Tell us who
he was.


Arthur Meighen: Perhaps my right hon. friend will remember Mr. Hamilton who resigned from the board to take a position in the Martin government of Saskatchewan.


William Lyon Mackenzie King: Mention some member who did not resign.


Arthur Meighen: The ones you got rid of.


Henry Lumley Drayton: I do not think we shall experience much difficulty in disposing of this question. Take Mr. Barnhill, of New Brunswick. There was a gentleman of whom, I venture to suggest no man either in this House or outside, who knew him, could say anything derogatory. He was a gentleman who was a lifelong supporter of Sir Wilfrid Laurier; in fact, they were great personal friends. Mr. Barnhill enjoyed the confidence of Sir Wilfrid Laurier to such an extent that he acted as Sir Wilfrid's nominee, if I remember rightly, in connection with two international commissions or arbitrations, one being the inquiry as to the St. John river boundary. I do not think any one in the world can truthfully say anything against that gentleman. He was not appointed because he was a Tory; he was not. If my right hon. friend wishes to state the contrary, I will sit down at once.


William Lyon Mackenzie King: I hope my
hon. friend will not interpret my remarks as being directed against the hon. gentleman. He made the statement that members of the present board happen to be Liberals, and I asked him to please name some of the members of the board which my right hon. friend appointed who were not supporters of the Union government.


Henry Lumley Drayton: I have already
done that.


William Lyon Mackenzie King: I do not think so.


Henry Lumley Drayton: Supposing, for
example, we had appointed to the board my right hon. friend's colleague, the Right Hon. Mr. Fielding, would he look upon that gentleman as a supporter of the Union government?


William Lyon Mackenzie King: Why did you not put him on the board?


Henry Lumley Drayton: In the fullest
sense my right hon. friend knows that not one of those gentlemen were any more supporters of the Union government than was his desk-mate.

CJV.R.-Minister's Statement


William Lyon Mackenzie King: Might I just
add, since my hon. friend mentions the name of Mr. Hamilton, that he was a supporter of the Union government.


Henry Lumley Drayton: ' I do not know whether he was or not.


William Lyon Mackenzie King: He was, as
a matter of fact.


Henry Lumley Drayton: I will go a
step further:	We did, at any rate appoint
gentlemen whom my right hon. friend does not desire to say anything against. I respect his truth and caution. They were dismissed without any cause being assigned. I have not yet heard any attack upon Mr. Barnhill, or upon Mr. Wood, or upon Mr. Hobson, or upon Mr. Riley. But, never mind what distinctions may be drawn as to whether any of these gentlemen was supporting the Union government or not, I desire to point this out to my right hon. friend, that not one of those directors was a machine politician, not one of them ever took part in the conduct of an election, not one of them was ever a member of this House. In a word, they were not partisans.


Mr. JOHNSTON:: Mr. Speaker, if I may
correct my hon. friend-he is wrong with respect to Mr. Hamilton. That gentleman is a politician and took part in the Unionist campaign of 1921.


Henry Lumley Drayton: A lot of Liberals did that too. '


John Frederick Johnston: But he was a director
of the Canadian National Board.
Sir HENRY" DRAYTON: Before he could do that he had to resign from the directorate. But I am talking about party hacks, about politicians of the stripe of Mr. Dawson from British Columbia, Mr. Talbot, and men of that ilk; I am talking about gentlemen who, everybody knows, had absolutely no qualification whatever, except a political qualification, for appointment on that board. I regret being drawn into this discussion by my right hon. friend, but it is a thing which, once started, can be gone into with considerable detail, if the House wants details; but I think it is a mistake; I wonder if we cannot get away from party politics for a few minutes; I wonder if this system is not big enough for -us to try to look at it on its merits. I think it is. The only solution so far offered by the government has been to get rid of the old board, men who certainly were not machine politicians, and to substitute for them another board that certainly cannot be looked upon in quite the same light. I have paused to see if I could not carry my right hon. friend a little apart from politics in the hope of trying to get something done in a constructive way in connection with this railway system.
Now, I take it that every one of my hon. friends, looking at this matter fairly, will not think it a desirable policy for the sort of charges which my right hon. friend made throughout the whole session while he was in opposition to be continued and the National system made a football of politics. That is not to be desired. Nor, on the other hand, is it to be desired that the country shall be met with a plain refusal, apart from matters of principle and the like, to do this or to do that. My hon. friend must see that he is not solving the question by appointing a board in which he has peculiar confidence, because he is always going to be where he is at present. The Canadian National Railways are going to be very much longer lived than my hon. friend's premiership; they are going to continue. Does my hon. friend think that if this doctrine is to be followed, namely, the appointment of a new board by the incoming premier-and that is all-sufficient-there is any hope for the success of the system? When in the ordinary course of events my hon. friend goes out of office, does he think it would be a good thing for the incoming premier to do just what he did-throw out practically everybody who knows anything about railroading and take chances with a new board? Does he think it is possible to take that course and make the system a success? Why, it would kill any private company. Only a company with treasury backing could survive such treatment. Surely my hon. friend will agree with me that that is not a good thing? Surely he will agree with me that we ought to get at some basis which will make for stability and security in the administration of the National Railways?
As I was saying in connection with the original report, my view was that the trustees to be there appointed ought to have the security of office of judges. I still think they ought to have that security of tenure. And the trustees so appointed should be gentlemen possessing a peculiar knowledge of railway administration and eminently fitted for the work. I went further in that report, and with a view of cutting out political interference 1 recommended that the board should be a self-perpetuating board. To-day all that, has been ignored by the government.


Mr. CAHILL:: Was that plan adopted
by the late government?
C.N.R.-Minister's Statement


Henry Lumley Drayton: I pointed out
that I did not make very much distinction in wording between "trustee" on the one hand . and "director" on the other. After all, it is the man you have under the hat that counts. They were pretty good men on the old board.
Now, Mr. Speaker, I still think that something can be done, and I beg to move the following amendment, a copy of which I have supplied to my hon. friend:
That all the words after "that" be struck out and the followng inserted in lieu thereof:
"A select standing committee on National Railways and shipping is hereby appointed to consider the estimates for the Canadian National Railw'ay system and the mercantile marine, and all questions involving new capital commitments and the disposition of properties and assets,-
Suppose we stop there for a minute. Does anyone think that our present enormous capital commitments ought to be increased without a vote of parliament? Ought we not to know about them? That is one thing. The next is this:	The directors have the
property only to administer; they have not the property to sell. But it is not so long ago-it was during this session-that the Minister of Railways told the House-yes, a return was brought down-that the directors to-day could sell the property, could get rid of the property which they had in their hands. Does anjmne think that would be the right thing to do?


George Perry Graham: That is, just like any
other railway company.


Henry Lumley Drayton: There are distinctions there again in connection with railway companies. I think the answer my hon. friend gave was rather broad. It is perfectly true that the directors may sell odds and ends, things that are no longer of use. But my hon. friend went further; he seemed to think they could sell shares in the system. There are a whole lot of companies included in the National; these sub-companies are looked after directly by these gentlemen. The whole stock of the National itself is in our hands, and they could get rid of the properties of these subsidiary companies. There should not be any dispute on either of these two items. Certainly they give effect to what the Minister of Railways himself said in this House, that that power of sale ought to be taken away. The resolution continues:
-and that as well to said committee be referred during each session the annual report of the said system and mercantile marine for such inquiry as may be exercised by and with such powers of inquiry as are possessed by, the select standing committee on Public Accounts with relation to the Auditor Generals' report. 
Now, that is in connection with wound-up business, the business of a past year. The country will be able to see that its representatives carry out their statutory duties; that is all it means. It does not mean that any matter of current business can be gone into, and it ought not to be gone into. None of these powers should be used for the purpose of hampering the system; rather they should be used to aid and counsel it. Had there been a check like this there would have been no Scribe hotel transaction,, and is there any well wisher of the National Railways who is not sorry he ever heard the name "Scribe hotel"? So this provision is merely for the purpose of protecting, for the purpose of helping. Then:
And further, that said committee be entrusted to make recommendations to this House as to what further, if any, details or improvement of method should appear in said annual reports.
Is that necessary? Is it a good thing to have something definite? As I said at the outset, a thing of supreme importance is that there shall be no mystery about the results of public business, there should be no room for argument as to what the real income of the system is. A repetition of the spectacle to which I have already referred, that of two intelligent gentlemen representing two important papers disagreeing, would be impossible. Can we not do something useful in that way? Would it not be a first-rate thing for Sir Henry Thornton himself if everything was put so clearly that there would be no necessity for explanation, no necessity for radio talks and the like, no necessity for that kind of argument, because everybody would know exactly what the result of his work was? Personally, Mr. Speaker, I think that under that amendment no harm could be done. But, so anxious am I that all possibility of harm be removed that I add the following proviso:
Provided, however, that the whole of such powers shall be so limited that no matter of operation the inquiry into which would in the opinion of the management be prejudicial to the system shall, if the reasons for such opinion are deemed sufficient by the committee, be made a subject of inquiry; and that rule 10 be amended accordingly.
Let us pause and see how effectively the system is protected under that provision. The government always have a majority of the members in committee. In fact, it is about the only place the government ever have a majority.


George Perry Graham: The divisions do not show that.

C.N.R.-Minister's Statement


Henry Lumley Drayton: I am not looking at my friends to the left, Mr. Speaker; I am referring to the government-hon. gentlemen to your right; I will put it that way, I do not want to mix them up with the gentlemen who ought to be to your right. The government name the committees and they always have a majority there, and I say it is the only place they ever have a majority. Now, the hand of the committee is immediately stopped under that proviso if the management come forward and say:	" Do not
look into that; it is going to hurt us for such and such a reason." If the majority of members of the committee who support, or ought to be supporting, their administration agree with that view, there is an end to it.
I am not saying for one minute, Mr. Speaker, that this amendment does everything I would like to do; it does not. I would like to see it carried so much further that we could ensure real co-operation between the parties in connection with this big enterprise. That is what I would like to see; that is what I looked forward to in connection with my report. I would like to see a complete change made in this respect;
I would like to see, as a result of a conference between all the parties, the selection of non-partisan directors who would have the confidence not only of people of one particular shade or religious stripe, but of the country as a whole. We thought we had them on the old board. Well, I still think it is the right idea. Perhaps we could try again. Certainly, the country's interest is such that no stone ought to be left unturned, on the one hand to secure the maximun of protection to the Canadian ratepayer, and on the other hand to preserve to the management that full and free power of control and operation so necessary to the success of the system. If we ever had1 anything which justifies a most honest effort on our part, Mr. Speaker, tc try and do something for the biggest question that confronts the country, we have it now. I would like my hon. friends to think over what the issue really is, and tell us frankly on what ground they do not adopt any of these principles I am now advancing, and tell us frankly what principles ought to be adopted so that we can try some time at any rate to get our feet on ground that will be solid and understood in connection with this great undertaking. It is idle to say that the matter is settled, it is not; and it never can be settled by simply substituting the political friends of any party for the outgoing
set of directors. I do not care what the party may be, it cannot be done that way.
There is another reason why this committee ought to be appointed. I now refer to the Scribe hotel. I have had the opportunity of going through the file in connection with that. It is a very meagre file, Mr. Speaker, for so large a subject. It is perfectly wonderful how much intricate business can be carried in the heads of some gentlemen-perfectly marvellous, for this business is very intricate. I am going to give just a short review of the Scribe hotel transaction, showing how from time to time matters come up that not only justify but absolutely require the appointment of the committee I am now moving.
The first is a letter from Sir Henry Thornton to Mr. Roy, who is the representative of the government in Paris, in which he says:
I am anxious to provide the Canadian National Railways with adequate office accommodation and a proper representation in Paris, apart from purely traffic matters. We are already well represented there from that point of view.
I would pause there, Mr. Speaker, to point out that one would have thought that the assets and the moneys of the Canadian National Railways ought not to be charged with anything except railway traffic matters. That was the justification which was urged by my hon. friend the minister when this subject came up on the 7th of June last year. However, the whole of this starts in a letter from the president which contains the paragraph I have just read'.
Next, passing over an unimportant cable just acknowledging the letter and saying that Mr. Roy is writing, for the first time, in Mr. Roy's letter, we hear about Mr. Aronovici. In the first instance, Mr. Roy recommends the premises occupied by the Grande Cafe with the Jockey Club, and the Hotel Scribe, as a splendid place for headquarters. Then he goes on, and it seems to be quite clear whom he got his information from:
Mr. Aronovi?! tells me that you have asked him to take charge of your office in Paris. I know that he is a man of large experience and unbounded activity.
That is Mr. Roy's letter of March 9, 1923. He tells us in that letter that the whole of that building was announced for sale, and so on. The next I can find is a cable from Sir Henry Thornton to Mr. Roy in which he says:
Thanks for your letter, with your views.
Will proceed in accordance Thornton.
That is March 25. Nothing happens, and then on April 9 we have another cable from Sir Henry Thornton to Mr. Phillips;-his agent in London, England, as I recollect it; I do
C.N.R.-Minister's Statement

not know his initials; the cable only gives the surname. Sir Henry Thornton asks him to repeat to Mr. Roy in confidential cipher the following. Then he goes on to set out about this property: Purchase price, 30,000,000 francs; government tax of 3,600,000 francs; additional amount of 3,600,000 francs; total 37,200,000 francs; and 3,500,000 francs to adapt offices. He goes on:
Please say first whether you endorse proposition in principle, second whether you consider purchase price reasonable as I have no personal knowledge of Parisian property values. It will be necessary to move fairly quickly, as there is an option on property expiring April 20th.
Hon. gentlemen will be interested to know who the fortunate owner of that option was. It was Aronovici, the only gentleman, apparently, whose advice was taken as to the whole of this large transaction.
Here is an appeal from Sir Henry Thornton from Montreal to Mr. Phillips in London, to be passed on to Mr. Roy in Paris, so that Sir Henry Thornton, who knows nothing whatever about Parisian values, and is apparently in the hands of Aronovici, may find out what he ought to do. Well, Mr. Roy is fairly canny. He loves that building all right; he wants to get a first-rate site for his offices, bue he does not venture an opinion upon Parisian real estate values. He is a very wise gentleman. He cables on April 12, 1923:
Re Scribe property. Would be ideal one for our work. Would recommend it strongly if it could be bought on reasonable conditions.
He gives no advice to Sir Henry Thornton as to Parisian real estate values. By his own cable, Sir Henry himself knows nothing whatever about that, and he is left with Mr. Aronovici, and Mr. Aronovici apparently thought it was important enough to get to Montreal about. This holder of the option gets over to Montreal, has his talk apparently with Sir Henry Thornton, and then goes back to Paris. The next thing we know is that there is a cable from Sir Henry Thornton to Mr. Aronovici who had got home again:
Bank sending money to Morgan's with instructions to pay to you on receipt of deed to you and mortgage to us satisfactory to Phillips, London, who will come to see you. Bank will also require a demand note from you for whole amount as evidence of their advance which note this company guarantees you against.
Now, I pause to point out that there is nothing whatever on the file to show the value of this property in the slightest degree, or to show that Sir Henry Thornton ever got any information apart from Mr. Aronovici. I am not saying that he did not get it, I do not know, but it is extraordinary how much business some people can carry in their heads all the time. One would have thought

that if the slightest effort had 'been made to ascertain the real value of that property- apart from Mr. Aronovici, the owner of the option, the man making the deal, the man who was getting the profits-we would see some evidence of it on the file. Some time ago when I asked the question whether it was true or not that this property had been offered to the Canadian Pacific for $1,400,000, and refused by that company, the government's answer was that they "had not paid any attention to the rumour." I venture to say the government should have made inquiry if they were alive to their duty, in connection with this matter which is surrounded by suspicious circumstances everywhere as I shall point out. At any rate the minister did send his representative across to try and save something out of the mess. Did he not send over his deputy minister to try and make some deal with Aronovici and get the property out of his name? I venture to say the government did make inquiries about the statement that this property had been offered to the Canadian Pacific for $1,400,000.


George Perry Graham: I never heard of it.


Henry Lumley Drayton: All I can say is that it was in the Montreal newspapers. The statement was made more than once without contradiction, and we want to have the opportunity of bringing someone from that railway before the committee and find out what the truth is. Because we are paying a vast amount more than that $1,400,000. Further, Mr. Speaker, the press of Paris has not been quiet about this matter. It was not the real owner of the property that was interested in the price got out of that option if the press of Paris are correct. If they are right there were some fifty-one shares, and I do not know how the option was fixed having regard to the number of shares. It may have been one hundred parts, it may have been more-I would have expected there would have been one hundred parts-but those fifty-one shares never got back to the persons that really owned the property. Well, here we have it. No advice to Sir Henry Thornton as to what that property is worth. The next thing we have on file is a cable from Sir Henry to Mr. Phillips:
Go to Paris immediately and see my letter of April 30 in hands of Arnold Aronovici of 2 Edouard VII street and get lawyer to approve title and deed to Aronovici and mortgage to this company. Matter to be closed Saturday.
There is another thing in connection with this matter that the House ought to inquire into. It is a serious thing to mislead the House. It is a serious thing to knowingly

C.N.R.-Minister's Statement
make a misstatement to the House. Nevertheless the House was deceived last June. Misstatements were then made in parliament, and I want at the very inception to say that these misstatements were not the fault of the Minister of Railways. He was giving the facts as he was instructed. So far as I can see he was not responsible for the misstatement of the amount of the deposit; he was not responsible for the misstatement as to the syndicate. These are two material misstatements that he was not in any way responsible for. On the other hand he was fairly giving the House, according to his instructions, the fullest information that he had to give.
The next matter on the file that I wish to refer to is the letter of Sir Henry Thornton to Mr. Carson, the manager of the Bank of Toronto at Montreal. It is dated May 25, 1923, and reads as follows:
In connection with the advance made by your bank of 38,232,161 French francs-
Hon. gentlemen will remember this figure- -($2,608,330) to Arnold Aronovici, for which his note has been issued payable on demand at 6 per cent, funds have been deposited by the Canadian National Railways in a special account in the Montreal branch of the Bank of Toronto in the sum of $2,608,330.
We have the word of a minister on the 7th of last June, and on another occasion, that every cent of the deposit was this two millions. We were not told the truth, we were not told the facts, but the minister simply gave them to us as he understood them.


George Perry Graham: If I remember correctly I was asked the purchase price and gave the amount as approximately two millions. I had not the information concerning the additional amounts which went for taxes, transfers and the buying out of the rights of the tenants in this building. It must be remembered that in Europe a system of long term leases is in vogue, and when a property is purchased the leaseholders are asked to give their leaseholds, and they have to be paid large amounts as a consequence. This represents the extra amount over the $2,000,000. It was a little under two millions if I remember correctly, and did not include these last items which I have mentioned.


Henry Lumley Drayton: The minister is wrong. AVhat I am referring to is the information he gave as to how this deal was financed. The fact is, we were told there was a deposit of $2,000,000. That is how it was done. It was an awful job getting it and we were all evening at it, but there was $2,000,000 deposited in that bank-that was the information the House got, and there is the letter. There is no use talking about tenants' rights and all 171
the rest of it, there was the deposit and the minister's statement, and there is the fact. This is how this deal is financed. This money is not to be withdrawn from the Bank of Toronto till the note and interest thereon is paid. This says:
You are authorized at any time to call for the payment of the said advance with interest after giving the General Treasurer of the Canadian National Railways five days' notice of your purpose so to do, and if the principal of the said note is defaulted you are empowered to apply the deposit to the liquidation of the defaulted principal.
Hon. gentlemen will note that; that money could be taken for the purpose of that note.
Any failure to pay the interest on the note is to be brought to our attention, but no part of the deposit is to be used for the discharge of this indebtedness.
There was just enough for the principal, but not enough for the interest. I pass on to the firkt information, as far as I can find, that the hon. minister ever got. I think his first information is contained in a letter dated May 31. Really, after all, what I am doing is showing very largely that he is not well treated in this letter in connection with this matter. I think that was his first information. I do not believe he was a party to this thing at all. I do not propose to read the whole letter. This letter is addressed from Sir Henry Thornton to the hon. minister, and reads in part:
Early in this month an opportunity developed to secure a property at the corner of Rue Scribe and Boulevard des Capucines, close to the Place de l'Opera, and in the centre of the banking and transportation district; briefly, it may be said that this location is in the very heart of the city.
I want to point out what a mistake it is to do business in that irregular way, without proper files, or if you have a file never to refer to it. Here on the 31st of May Sir Henry Thornton says:
An opportunity developed to secure a property- early in this month.
His own file shows he had it on the 9th of April. Why was the minister not taken into his confidence? Why was nothing said about it? Was Mr. Aronovici still here then? What was the trouble? But there is the excuse to the minister. He says:
Early in this month an opportunity developed to secure a property-
And I turn to the 9th April, and I find Sir Henry Thornton's own wire to Mr. Phillips of that date mentions the property and gives the price and asks Roy as to that. Well, there is just a month's delay. He says immediate action was necessary. Well it was not, with that month running on.
Immediate action was necessary as I had information from authentic sources that other interests were considering the property.



C.N.R.-Minister's Statement
We would like to learn what the date of the Canadian Pacific refusal was.
Accordingly I immediately arranged that an agent should purchase the property, and employed the support of the Canadian National Railway system in arranging suitable temporary financial credit.
He says:	"Suitable temporary financial
credit". You might well underline all those words.
The deal was immediately consummated.
Well, it was not. It was not consummated immediately after the 9th April, when it came up. The money was only paid up on the 25th May, as shown by his own letter. Nevertheless he says to the minister that the deal was immediately consummated.
And simultaneously negotiations were entered into with a responsible syndicate,-
There is where my hon. friend got this present information, or misinformation, in regard to the syndicate.
-not connected with the Canadian National Railway system, for the purpose of taking over the property and with a view to our becoming tenants. These arrangements have now been completed-
And there never was a syndicate or anybody outside of Mr. Aronovici, so far as the file shows, and I think my hon. friend knows that there was nobody but Aronovici, and no syndicate.
-and the syndicate has agreed to take over the property subject to certain details.
This is not the whole of the letter but simply portions. The letter continues:
I regard it as fortunate that the Canadian National Railway system has been able to secure such advantageous quarters at a reasonable rental without capital expenditure.
I do not know that I should go through the tortuous twistings of everything that they have tried to do in connection with this matter. The minister found such a mess that he had to send his deputy over. There is no dispute about these facts. I am reading from this very' incomplete file. Something is said every here and there which lets the thing out. Take for example the order in council, which says:
A property on the corner of the Rue Scribe and Boulevard des Capucines was proposed to the Canadian National Railway Company by Mr. Arnold Aronovici of Paris, who held an option over such property.
Is there any dispute as to who was making the money, and as to who had got the option, when the government's own order in council shows it was Mr. Aronovici?


George Perry Graham: That is subsequent, is it?


Henry Lumley Drayton: Yes my hon.
friend is quite right. This is a summation of what Mr Graham Bell, the deputy, was able to find out and do. This appears in his report.

He had to be sent over twice, if not three times. It is hard to gather everything from this skimpy file, but my hon. friend knows the facts very well. Why, he made a settlement with Mr. Aronovici. He made a settlement with Mr. Aronovici in October, 1923- it does not seem to be complete yet. It has to be borne in mind that the Canadian National thought so much of Mr. Aronovici that, so far as the files show, not only did they buy from him the property he held under option without knowing anything about it, and without any advice as to what it was worth, but they left it in his name subject to a mortgage; and then of course found out apparently that he was not a man of the kind they could safely leave their property with, and they took it from him. They had to pay a great big sum of money in taxes when they took it from him, as the return shows. But a settlement was made with him about the time they took the property over, and this is about as much as I could get out of it. By the settlement of October, 1922, Mr. Aronovici receives, in order to liberate himself from all contracts he may have made up to the present time with any parties whatsoever with regard to the Palais Canadien, the sum of 650,000 francs.
For architectural work, plans, estimates and expenses-to be justified-in view of transforming the basements, ground floor, and first floor of the "Palais Canadien,'' 169,000 francs.
Article 3-The sum of 700,000 francs will be held at the disposal of Mr. Aronovici at the bank.
This makes a total of 36,751,161.75 francs To this must be added the claims of the Societe du Jockey Club, and of the Societe Francaise la Rente Fonciere.
And then we have all sorts of companies which I shall not weary the House by referring to. It seems to me that my hon. friend in the long run will simply have to submit a vote for the purpose of clearing up the whole mess. I do not believe he will be able to finance the thing; if he undertakes to do so he will only do it at a ruinous rate, and I should not be at all surprised to find something in the estimates to cover these expenditures.


George Perry Graham: There is nothing hidden or tucked away in the estimates; there is a conspicuous item covering the matter.


Henry Lumley Drayton: How much?


George Perry Graham: Three millions, if I remember correctly. The item, I say, is in the estimates, and that is the only proper way of dealing with the situation.

C.N.R.-Minister's Statement


Henry Lumley Drayton: That is quite
right; and it is the conclusion I have come to myself. Attempts are made to bring in this and the other company; we are to have a French company, the Canadian Realty Company, the British Prudential Assurance Company, and the government guarantees all these concerns. My hon. friend is right in scrapping the whole mess; and none of these undertakings should be made the subject of order in council.


George Perry Graham: The order in council should have been rescinded, and I may observe that as a matter of fact we are not carrying on any operations by that method.


Henry Lumley Drayton: I was about to point out that this should have been done before the estimates were submitted. But if the minister could abrogate the purchase it would be a good thing for the Canadian people. Is there no way by which that can be done? Have any inquiries been made regarding the solvency of Mr. Aronovici, and what possibility of success there would be in the event of action being brought against him? In short, has anything been done with a view to endeavouring to get our money back? That is the thing the purchase that ought to be rescinded. Now, Mr. Speaker, it is not necessary that I should go further in pointing out the absolute urgency of a committee to investigate this matter. This is an example of the things that must occur from time to time. I hope we shall never experience anything as bad again, but we must be on guard against its recurrence; and there should be some committee such as I propose to deal with matters of this kind. How much better it would have been for my hon. friend if there had been such a committee to which the House could have had recourse; for we could have obviated the inconvenience and annoyance that were caused last session when hon. members tried to get information which was not available. How much better it would have been had there been no necessity to crowd the order paper with questions, ever since parliament convened, in an endeavour to obtain the full facts regarding the Scribe hotel, which information we have not yet completely received, and to which parliament is entitled. How much better, I say, it would have been if there had been a committee to which the whole matter could have been referred. I think my hon. friend admitted in his speech that he would offer no objection to the question of the Scribe hotel being submitted to 1714
a committee. I may have misunderstood him, although I think he made that statement. But if he did not, at any rate I do not think he will now oppose the motion I am making. Without detaining the House further, Mr. Speaker, I move the motion which I have already read:
That a select standing committee on National Railways and Shipping is hereby appointed, to consider the estimates for the Canadian National Railway system and the Mercantile Marine, and all questions involving new capital commitments and the disposition of properties and assets, and that as well to said committee be referred during each session the annual reports of the said system and Mercantile Marine for such inquiry as may be exercised by, and with such powers of inquiry as are possessed by, the select standing committee on Public Accounts with relation to the Auditor General's report; and further, that said committee be entrusted to make recommendations to this House as to what further, if any, details or improvement of method should appear in said annual reports; provided, however, the whole of such powers shall be so limited that no matter of operation the inquiry into which would in the opinion of the management be prejudicial to the system shall, if the reasons for such opinion are deemed sufficient by the committee, be made a subject of inquiry; and that rule No. 10 be amended accordingly.


Mr. ROBERT FORKE (Brandon):: Every one was interested in the report submitted by the Minister of Railways (Mr. Graham) the other day. We have now a vast system of railways, the property of the Canadian people, which is capable of rendering great and important service to the country. Transportation and the Canadian National Railways together constitute what one may call one of the major problems that are now before the people of Canada. Every one recognizes the tremendous importance of transportation in this country, a country covering half a continent, a country of vast distances, a country of great agricultural and other communities situated perhaps almost in the centre of the continent. These facts indicate quite clearly the transcending importance of transportation to the prosperity of the Canadian people. We have a small population and without doubt our burden in connection with the National Railways is a heavy one to-day. We have 22,000 miles of steam-operated railways stretching from sea to sea, and there are naturally many things in connection with that great extent of railway that appeal to the popular imagination. The Canadian National Railway system is a vast experiment; it is something new in the history of the nations that a country with a population of less than 9,000,000 should have come into possession of a system of railways so widespread as the Canadian National Railways. I say, these railways are an experiment; but they are an experiment which the people of Canada are determined shall not fail. What

C.N.R.-Minister's Statement
is the alternative? What faces us to-day? Shall that experiment prove a failure? I can hardly imagine what the situation would be if our Canadian National Railways should turn out to be a decided failure.	Those who
oppose public ownership of the railways surely have in mind some scheme which they could bring forward in the event of the Canadian National Railways not being successful. But for my part I cannot conceive of any private plan whereby this great national corporation could be successfully operated. What were the circumstances in which we found ourselves with respect to these railways? We did not wish public ownership upon ourselves; national ownership came as the result of the failure of private control. Now we cannot allow failure in the management of this system, and I am one of those who believe that the day is not far distant when we shall find the Canadian National Railways no longer a liability but a valuable asset.
With regard to the report submitted by the Minister of Railways, there seems to be some difference of opinion as to just what is the exact financial situation for the past year. I have prepared a summary of the statement, which I did not intend to place upon Hansard, but it seems to me to show quite clearly the financial result of the past year's operation. We were told that the gross revenue was $263,554,436, and the operating expenses were given at $242,366,973. This left a net revenue of $21,187,463. These figures represent all the lines operated by the Canadian National board. Against this net revenue we have charges for rent, taxes, and so forth, amounting to $7,822,585, leaving a net revenue of $13,364,875. The fixed charges were $66,144,226. If we subtract the net operating profits of $13,364,875, we have still a deficit of $52,779,351. Now, the deficit for 1922 was $58,691,911. So the betterment this year is $5,922,560, or in round figures, $6,000,000. That is the position, as far as I understand it, disclosed by the statement made by the Minister of Railways in his annual report of the system. We are not over the hill; a considerable difficulty still remains in front of us. A deficit of $52,000,000 is a large amount of money, but there is this encouragement that we are moving in the right direction, that each year the net operating profit is becoming larger, and we hope that in the not far distant future improvements will come so rapidly that we shall have a balanced budget meeting all the fixed charges.
I want to say a word or two here in connection with the Canadian Pacific Railway. There seems to be an impression in the minds of some people that there must necessarily be a spirit of anr^r. Forke.]
tagonism towards the Canadian Pacific when we look so anxiously for the success of the Canadian National Railways. Now, Mr. Speaker, I should like to register a protest, as far as I am concerned, of harbouring any feeling of hostility towards the Canadian Pacific Railway. That railway is a great national institution, owned and operated by a private corporation, it is true; nevertheless it is, I repeat, a great national institution. And I want to be fair: Although Canada has done a good deal for the Canadian Pacific in the way of large land and other grants, still the Canadian Pacific has done something for Canada in return, and all of us I believe are proud of its achievements. Therefore I state emphatically that whatever I have to say in favour of the Canadian National Railways is prompted by no spirit of hostility towards the Canadian Pacific Railway. It would be a national calamity were the Canadian Pacific Railway to become a failure, just as it would be a national calamity should the Canadian National Railways not become prosperous in the not very far distant future. There is room in this vast country for these two magnificent railway systems. To me it is an ideal situation that we should have the public owning one great railway and a private corporation owning the other. There ought to be a healthy rivalry between these two great organizations, a rivalry which will be to their benefit and to the benefit of the country.
I think everyone will recognize the fact that during the last year or two there has been a vast improvement in the operation of the Canadian National Railways. Everyone will admit that to-day the service is much improved in every way. I do not think I can pay a better compliment to the publicly-owned railway than to say that I think the service is fully equal to that on the Canadian Pacific Railway; indeed I think that is a compliment to both railways. Service, it seems to me, has been the motto of the president of the Canadian National Railways and of his officers and employees. I am confident that everyone who has travelled on the Canadian National system during the last year or two will agree with me that the service is of the best. Even in the carriage of freight, good service has been rendered. I am not going to discuss freight rates at the present time; that is a question which can be discussed from a different angle. Last year the prairies raised the largest crop in their history, and I think that never before was such a crop handled more efficiently or with less friction-. So far as I

C.N.R.-Minister's Statement
know there have been no serious complaints of shortage of cars and lack of transportation facilities with regard to the movement of that immense crop.


Arthur Meighen: Will the speaker say that the service of 1921 was not the same as that of last year?-1921 was the first crop year the system had adequate facilities for handling the crop.


Robert Forke: I am not inclined to make any very definite statement in that regard. The crop in 1921 was not as large anyway, and consequently the demand upon transportation facilities was not as severe as during last year.


Arthur Meighen: The service was good.


Robert Forke: It might have been-I am not finding any fault with the past management. But still I think any one without prejudice will admit that the service on the Canadian National Railways has improved tremendously during the last two years. Dealing with passenger traffic, I am sure there is no comparison to-day with what it was in 1921.


Arthur Meighen: Passenger traffic?


Robert Forke: Yes. There is no comparison between the service rendered to-day on the Canadian National Railways and that of two years ago. It is not so many years ago that I had to wake up the conductor to let me off at a flag station. No such thing happens to-day?


Arthur Meighen: How long ago?


Robert Forke: Perhaps two or three years ago. I can assure my hon. friend that in going from Brandon to Scarth I had to shake the man by the shoulder and tell him to stop the train in order to let me get off. I do not think you could get worse service than that on any railway.


George Perry Graham: That was not in 1923,
though.


Robert Forke: No, it was further back than that. It might have been the old Canadian Northern, but the facts are exactly as I have stated them. It was in the early morning, before daylight. All hands seemed to be asleep, and there was no chance, of getting off at the flag station unless you wakened some one up. That sort of thing does not occur to-day. Iam not making any complaint against the old board of management, but I think every one will recognize that the service is improved. The carriages are
clean; the trains are running pretty well on time; the dining and sleeping car services are good. In fact, I do not know that any complaint can be offered in regard to the service now being rendered.
It seemc-d to me that the annual report was a frank statement of affairs and that it gave us a very good idea of what the financial condition, of the railway is. I am not speaking from the point of view of a comparison of the present board with the previous board. The present board has been in office only a little over a year and a half and I would not claim that all the improvements that have taken place can be credited to them. Perhaps the board that went out did their part; perhaps they were doing the best they could to make the operations successful. But so far as I can see the people have reason to be proud of the present management and of the way the system is being operated. So far as the property is concerned, the ordinary layman is not in a position to criticise or to say whether or not it has been kept up to the highest mark-that is, in the way of engines, cars and all the equipment necessary to carry on a railway. But when we find good service, when we find the trains running on time, when we find all the requirements of the public being met, it is pretty good evidence that the property is being kept up in a fairly efficient manner. So far as the maintenance of the road is concerned, one can get a pretty good idea of what the road-bed is like by travelling over the railway from the prairie provinces to Ottawa. I am perfectly certain that that roadbed is in pretty good shape, judging from the smoothness with which the cars run over the rails. It is true, however, that a layman in criticising these matters is pretty much at sea and cannot speak with any definiteness.
As I have already said, we have a vast system of railways, comprising 22,000 miles and employing 100,000 persons; we have a telegraph system comprising 100,000 miles of wires; we have an express company reaching all over Canada; we have 60 vessels carrying the Canadian flag. Does any hon. member believe it is humanly possible that that vast system can be operated without some mistakes being made? It is perfectly evident that there will be mistakes, and those mistakes can be magnified and used in such a way as to be detrimental to the prosperity and the advancement of the railway. I do not think there should be any carping criticism in connection with the management. It is quite possible that if you begin to particularize or investigate very closely, in connection with a

C.N.R.-Minister's Statement
system covering such a vast extent of territory, you can make a very good case in favour of a claim of mismanagement. But we have to judge the thing by and large; we have to judge by the results in the main, and I am sure we have good reason to be satisfied that things are being carried on very well. We can come to that conclusion when we see the improvement from the financial side and when we see the service that is being rendered in the matter of both freight and passenger traffic.
I noticed an article in the Montreal Star the other day with the heading "Two Speeches Against Government Ownership," referring to speeches made by the Minister of Railways and by the right hon. leader of the opposition (Mr. Meighen). Well, you can draw almost any inference you like when you make up your mind to take a certain meaning from what an hon. member may say in the House. I am not prepared to agree with the Montreal Star that either the Minister of Railways or the leader of the opposition made a speech that was against national ownership of the railways. I would like to appeal to the right hon. leader of the opposition, who I think, is quite in earnest when he says he is in favour of government ownership, that he use his best endeavours to see that the railways have a fair opportunity, that the management has a fair chance, and that at no time it may be said that any one in this House did anything that was not in the interests of all the people. It is absolutely necessary that these railways should prosper if Canada is to advance, as we hope it will, in the not far distant future.
Now, I want to speak very carefully. I listened attentively to the speech of the exMinister of Finance (Sir Henry Drayton). With some of the remarks he made I am entirely in agreement. I have not yet had an opportunity to look carefully over the amendment he moved, but I agree with some of the ideas he expressed. Parliament cannot abdicate its authority or its responsibility in connection with these railways. The country has to make up the deficit of $50,000,000. Parliament is responsible to the people for the management of the railway, consequently I am not prepared to say that you can hand the whole thing over to a president and board of managers and say, "We are through with it; our responsibility is ended." The people of Canada will expect parliament to do its duty in this matter and to see that the operation of the railways is carried on efficiently. The people are the shareholders; they own the railway, and the elected members of this House are their representatives. How are we going to improve the existing
EMr. Forke.]
conditions? We have not yet solved the whole problem. The question we must face is, how shall the management be freed from galling and irritating interference by undue exposure of details of operation, and parliament still retain its authority? The House will understand what I mean when I ask the question:	How shall we keep the National
Railways out of partisan politics? That is the question we have before us to-day, and it is a question the country expects us to solve. The question is a difficult one. I do not wish to reflect upon any party in the House when I ask that question.
Some remarks have been made in connection with what occurred in 1920. I do not think we can compare conditions in 1920 with those that exist to-day. There was some trouble about management at that time; there had been no real consolidation of the different lines comprising what is now the Canadian National system. The old Canadian Northern was still on the boards to some extent, and the management of that day had not the opportunity, perhaps, of doing what can be done to-day with a consolidated system of railways and a board of management in complete control. I have read over the debates of 1921 and I think perhaps the then leader of the opposition, the present Prime Minister (Mr. Mackenzie King) made some remark at that time which he might well have left unsaid.
Words sometimes rise up as silent witnesses against us in the days to come, and consequently it behooves us at all times to be very careful what statements we make, more especially, I think, in the House of Commons, where our words are taken down and are always ready to bear silent witness to what our sentiments were in days gone by. However, I am not going to enter into that at the present time. I think that an attempt was made then to get information and particulars that it might not have been in the very best interests of the railway to give to the House at that time. I am not perfectly sure, Mr. Speaker, that political considerations did not enter into some of the work of this government at its inception, when it created. the board of directors for the Canadian National Railways. I am not making any charge, but I would not exactly put it past the government that they might do such a thing under certain circumstances. However, I believe that the appointment of Sir Henry Thornton and of the two Ministers of Railways who have been in charge under this government have saved the situation. I think every one of us who remembers the late Minister of Railways knows, that he was an upright and

C.N.R.-Minister's Statement
able man, and that he gave the railways every chance that it was possible to give them. I would like also to pay this tribute to the present Minister of Railways:	I think he is
absolutely doing his best to see that the railways are a success, and that the board of management is allowed to carry on under the very best of conditions. But I would like to ask him, what of the future? I am not very sure whether the amendment that has been -moved in the House this afternoon will solve the problem or not. I am going to quote a few words that Sir George Foster used in 1921:
Members of parliament of both sides should get together and try and find a solution for the situation lying immediately in front of us. Let bygones be bygones for the time being, and let us approach at least this one question with a desire to get at the roots of the question, better still to find some sensible method of solving the problem.
We should get together. The ex-Minister of Finance (Sir Henry Drayton) has gone out of the House, but I would like to make this proposition to him, that one member representing this party in the House, one member representing -his party, and another member representing the government, should get together and try to draw up this amendment so that it will be possible for all parties in the House to subscribe to it. That is what I call getting together, and that is not playing politics either. A committee of parliament, with the same powers as a committee of this House in connection with public accounts, it seems to me, might go just a little too far. On the other hand, a standing committee of the House, or a committee of the House, appointed to sit in consultation with the president and the board of the Canadian National Railways and discuss the whole problem, and advise and consult, X think may be the very best thing we could possibly have-something of that kind. I do believe, Mr. Speaker, that a committee that would be of an inquisitorial character, that would summon witnesses and put the president and members of the board on oath and take evidence, would not be in the interests of the country or of tfhe Canadian National Railways. Consequently, while I am in favour of parliament taking its responsibility and trying to solve this problem, of retaining to some extent its control of Canadian National affairs, and of being in a position to get information upon which it can form an intelligent opinion as to how the business of the railways is being carried on, I want to be very careful to see just what sort of a committee that may be. So I am not prepared at the present time to state without reservation that I would be in favour of appointing a select committee to go into all matters of detail in connection with the management of the railway.
This -is the position we find ourselves in at the present time. I repeat, I do not believe we have solved the problem when we simply say:	We will appoint a board of directors,
and hand over the management of the railways to them, leaving them entirely in their charge; because parliament must have control, must be responsible, and must in some way come in contact with that board. On the other hand, I am not prepared to see a committee appointed with full powers to call up the members of the board and investigate, and sit as a court of inquiry. I can see perfectly well how such a committee could work great damage by bringing to light and exposing a great many things that had better be left out of sight. I would like to have been able to suggest something helpful. Possibly a 'body of men or a committee could be found that would have an entirely different aspect from just a straight committee of the House. I make this suggestion quite respectfully. I know very well that I am not solving the question, but I realize the difficulties, and I want to go at -this thing very carefully, because I do believe that some such remedy may be found. I noticed an article in the Manitoba Free Press the other day, in which it made plain the difficulties, but it ended up very lamely by stating that it was up to parliament to find some solution of the problem. I do not know, Mr. Speaker, if I am doing any better. I am only stating the difficulties of the situation. But I am not sure that the ex-Minister of Finance, either, has solved the situation. I want time.


Arthur Meighen: I really would like to
know what the hon. member's suggestion is. He refers to a suggestion of a committee. Does he mean a committee of the House, and if so, with what powers?


Robert Forke: Well, the amendment calls
for a committee of the House. It will be a standing committee, exactly the same as the standing committee on public accounts, as I understand it. It seems to me a committee of that sort would have too much power.


Arthur Meighen: What powers should it
not have?


Robert Forke: Where could you stop it?


Arthur Meighen: I would stop where the
resolution does, but I am just asking -the hon. member what powers it should not have, and what it should have, in his opinion, speaking broadly.

C.N.R.-Minister's Statement


Robert Forke: Well, I think large capital
expenditures and the broad questions of the management of the railway might be discussed. A committee that was acting in the way of consultation with the president of the road and the board of management, discussing the affairs of the road with a view to its betterment, with a regard for its welfare and the prosperity of the whole institution, would be a good thing, a thing we would all want; but if that committee sat down with a sole purpose of hunting out something that would be detrimental to the best interests of the road- and I am sorry we are all so constituted that such a thing is possible-such a committee would not be a good thing, and there is the difficult position in which I find myself. On the one hand it might be good, and on the other hand it might be bad. It seems to me there might be a possible way out of it.


Arthur Meighen: I cannot understand where the hon. member stands. Does he mean the committee should only look into something it favours, and not look into something it disfavours?


Robert Forke: I think the leader of the
opposition understands exactly what I mean.


Frank S. Cahill: The rest of us do.


Arthur Meighen: I am sorry I do not. I
do not think the hon. member for Brandon does himself.


Robert Forke: We will have to leave it
at that for I am afraid we cannot get any nearer to it. If human nature was all it ought to be, and all members of this House were patriotic and everyone was doing his duty as he ought to do it, there would be no such trouble about such a committee.


Arthur Meighen: We would not need a
committee at all, then. If we were all perfect, the railway would be, too.


Robert Forke: Excuse me, I did not Bay
"perfect"; there is no such thing as perfection in this world. I should not like to see any such committee hampered in any way by partisan control. If we had a committee of that kind to-day the majority would probably be in the hands of the government, they would have to have a majority there. Well, I am not prepared to give the government a majority on such a committee to proceed simply as they saw fit. I think, perhaps, an intermediary body can be organized to act between parliament and the management of the Canadian National Railways. I believe in the patriotism of hon. members. I do not for one moment believe that any

party here would openly-and shall I say with malice aforethought?-do anything that would endanger the best interests of the Canadian National Railways. It seems to me that we know what our weaknesses are and we know what would happen in the event of action being taken along the lines proposed. I am not prepared-at this time anyway- to place power in the hands of any committee to go to any length it desires in investigating the affairs of the National system. This is a tremendous question and we should ponder carefully every step we take. What proposition did Sir George Foster have in his mind when he asked that the three parties in this House should get together and formulate some plan? He did not mean a standing committee, and he did not outline any simple plan which would be free from the difficulties of which I have spoken. However, it is possible that something may be done by mutual co-operation to help in the solution of this problem.
There is one matter in connection with the railways that I should like to mention- in fact it has been mentioned almost every time the Canadian National Railways have been spoken of-and that is the writing down of the capitalization of these railways. There is no doubt that vast sums of money have been spent on them, and spent not in the best ways, and it is equally true that the system is tremendously over-capitalized at the present time. It seems to me that it would be greatly to the advantage of all concerned if the capitalization was written down to something like the actual value of the railways at the present time. It would be an encouragement to the president of the system and1 to the board of management, it would also be something that the people at large would be proud of, if we were able to show, a surplus in operating revenue over expenses based on the actual value of the system. The people to-day are meeting large deficits. It is certain the deficit to-day is approximately fifty million, and the people have to make that good. Hence it would be to the advantage of all concerned if these railways were capitalized at something like their actual value.
I should also like to say a few words as to the character of the management. The esprit de corps of the railway employees, as I view it at the present time,-is of the very best. I think Sir Henry Thornton ought to be congratulated upon the excellent management, and upon the spirit of good will and service which seems to prevail among all the employees of the National system. I think

C.N.R.-Ministers Statement
every one must be struck with the courtesy, attention, and service one gets when travelling on the Canadian National Railways at the present time. This is equally true of the Canadian Pacific Railway. We get good service from our railroads but it must be remembered that we pay sweetly for it.
I shall not take up any time in dealing with the Scribe hotel. I am willing to leave in the hands of the government the issue which has been raised by the ex-Minister of Finance. It is a difficult question, one that I am not capable of discussing with any closeness of detail. It is possible that in the distant future it may turn out to be a very good investment, but it seems to me, from the information we have been able to obtain, that if the management had hastened a little more slowly in connection with the acquisition of this property it would have been better in the long run.
I do not think there is anything more to add. I am afraid I have not done very much towards solving the problem of getting into closer connection with the management of the Canadian National Railways but I would repeat this statement:	It would be unfortunate if any committee of this House were to be made an inquisitional body with power to examine into all the details of the management of the railway system. At the same time I should like to see a committee that would be a sort of advisory council, a committee with whom the managers of the railway could discuss the affairs of the National system.


Mr. J. S. WOODSWORTH (Centre Winnipeg) :: There are a few observations I
should like to make in regard to the statement of the Minister of Railways. I think it is hardly necessary to say that all sections of this House seem to be in favour of the principle of public ownership. But when it comes to our own National Railways system I always feel that we should keep clearly in mind that after all, to a considerable extent, the bondholders are the real owners of these railways. Holding the mortgages as they do they benefit more largely than the people generally have hitherto done.
Further, I think, we should not forget that whilst we advocate the principle of public ownership the effort must be to make public all the utilities and not a part of them. We must remember that side by side with our National lines we have the great rival system of the Canadian Pacific; and it is an open question whether or not operating our own National railways we can hope for success when there is another and rival system, both
companies operating in a comparatively limited field. I never go from here to Winnipeg, or from here to Montreal or Toronto, without recognizing the absurdity of having two lines paralleling one another so closely, and both pretty much on a parity as to their physical equipment and their service, without recognizing that we are facing a very serious question and one that must ultimately be decided by the people of Canada. However, I know that it is of no use talking about adding more burdens at the present time. We must ultimately however devise some plan to relieve ourselves of the burdens which we have assumed under the existing wasteful system.
Further than that, I would emphasize that while labour stands up for public ownership it also stands very decidedly for democratic control. The Minister of Railways in closing his statement made an appeal for fair dealing for the Canadian National Railways. He asked that the same freedom should be guaranteed to the officials as is accorded to those of private corporations. This would rather take for granted that the system of private corporations is an ideal one, and that I could not admit. Private corporations are organized from the top down, they are autocratic in their form of management; and anyone who has given any attention whatever to great industrial problems must recognize very clearly that the present system is not one which lends itself to the expression of the very best there is in the employees. It is quite true that autocracy in industry may mean a certain measure of efficiency, that claim is often made; and yet without co-operative effort it surely is impossible to have the very highest degree of efficiency.
I should like to pay the tribute to Sir Henry Thornton that he has done much to improve the morale, of the system. I have talked to many employees and I think they are honestly trying to do their very best under the circumstances to make the system efficient. They are proud of our Canadian National Railways. It appeals to an ideal that they have had for many years, and they hope that it is only in the process of a still further development. However, they are not altogether satisfied with existing arrangements. As you all know, the railway men's organizations on this continent have tried for some years to introduce a more democratic management into the conduct of the railroads. In the United States they have put forward the Plumb plan by which the management would represent the various interests that had to do with the railways, the officials, the employees on the road and in the shops, and the general public.

C.N.R.-Minister's Statement
That plan has never been actually put into operation, and yet it represents an ideal towards which we are bound to strive. In Great Britain there was put forward a few years ago a plan somewhat similar, known as the Whitley plan. The present government a few years ago said a good deal wtih regard to the adoption of some such plan as that in Canada, and in fact we have the Labour department setting aside a certain estimate for the promotion of co-operative management between employer and employee. Why should we not begin that scheme in connection with our National Railways?
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.


James Shaver Woodsworth: When the House
rose at six o'clock I was calling attention to the necessity of having not only public ownership but also, in order to ensure the success of that policy, some form of democracy in the management of our public institutions. I mentioned the Plumb plan which has been advocated by some railway men's organizations in the United States and also the scheme of Whitley councils which has been put forward in Great Britain. It is not my intention to-night to discuss these schemes or their merits but rather to urge the general principle that labour should be represented in industry, and more especially that this principle should be adopted in the public domain. In this I am advocating nothing new. I have in my hand a copy of a very well known document, Liberals and Labour issued in 1921. It was at that time resolved, and put forth as indicating the position of the Liberal party:
That the introduction into the government of industry of principles of repres&itation whereby labour and the community as well as capital may be represented in industrial control and their interests safeguarded and promoted in the shaping of industrial policies...
I take it that the idea behind this resolution distinctly was that even in private concerns labour should have its part in the control of industry. And if that was true of private concerns how much more important is it that the principle should be carried out in connection with our governmental institutions. I know it may be said that there is a labour man on the board of the Canadian National Railways. I have no objection to offer with regard to that particular individual;
I would point out however that he is not the chosen representative of labour; he is not in a direct sense the representative of the railway [Mr. Woodsworth.J
employees, and the whole idea behind the Whitley councils and other schemes of this character is that the employees should have their own representatives chosen by themselves. This same principle applies not merely in the railway service but in the Civil Service as well; for I may point out that it has been very frankly recognized in the Malcolm report of the committee which sat last year to investigate the Civil Service. I quote:
In the rapid growth of industry, great efficiency has
developed, but those charged with the problems of organization and management have found that this could only be accomplished by securing the greatest co-operation of their employees. The war emphasized this essential factor. As a result there have been established in private enterprises many forms of industrial councils which give representation to the employee on questions affecting his welfare. The need in private enterprise for some plan of employee representation finds its counterpart in a similar demand from those engaged in the public service.
Your committee has heard much valuable evidence on this subject; such plans as the Whitley councils have been presented as giving to the civil servant a voice in the settlement of problems affecting his welfare. Your committee, however, is unable, by reason of the diversity of evidence submitted, to recommend the acceptance of any definite plan now in existence as being adaptable to the conditions existing in this country under the present Oivil Service Act.
After reviewing the evidence and considering the problem from its various angles, your committee is impressed, however, with the necessity for the creation of some type of board on which the civil servant shall be represented so that the causes of complaint may be given fair consideration by those familiar with conditions in the service.
Your committee therefore recommends that the Civil Service Commissioners be given power to establish without delay departmental personnel boards to be made up of an equal representation of the Civil Service Commission, the department, and departmental employees. These boards are to act in an advisory capacity in matters of classification, promotion, dismissal, salary revision, leave of absence, and other kindred problems affecting the welfare and efficiency of the departmental service.
There the principle is very frankly recognized by the committee. I do not know why the government has not yet adopted that recommendation. I would urge that the same principle ought to find a place in the railway administration. We heard from the report the other day that Sir Henry Thornton had arranged radio stations so that he might address the employees all over the system.
I have not heard that any provision has been made for the establishment of a receiving station that he might hear what the employees have to say about the system. This might perhaps be considered as necessary as that he should speak to the employees.
The leader of the opposition in his criticism of the bookkeeping part of the report called attention to the fact that the freight

C.N.R.-Mmister's Statement
car repairs were less than in the previous year, that, however, there were heavy expenditures in new equipment, and that in this way charges of operation might possibly be cut, but on the other hand capital expenditure had been increased. This criticism I have had corroborated by some of those who are working very closely in connection with the repair operations on the railway.
I would suggest-


George Perry Graham: If I may interrupt my
hon. friend? The management say that that suggestion is absolutely without foundation.
I asked the management very closely on that point, hinted at by the right hon. gentleman, but not really stated as a fact. Another point raised by him was that the percentage of freight cars out of commission might be referred only to the percentage that had been reported for repairs. I am informed by the management that that too is altogether incorrect, that every two weeks an inventory of all the crippled rolling stock is taken, and that this percentage covers cars that are reported for repairs as well as those that are not so reported*


James Shaver Woodsworth: I know nothing
whatever in regard to the latter statement. With respect to the former, as I said, I have had statements from some of those very closely connected with the repair work, and I can merely pass on what they have said to me in this matter.
I was going to call attention to some of the social effects of the closing down of the Canadian National and of the Canadian Pacific shops for considerable periods. This has meant an immense amount of unemployment and also a decrease in the purchasing power of the men, which has helped to further aggravate the business depression which has taken place at least in some parts of the country. In this connection I should like to call attention for a moment to some of the low wages paid on the Canadian National Railways. We have adopted in most of our public works the. principle of a fair wage. Certain classes of employees on the Canadian National Railways have been paid as low as 25 cents an hour. It has been stated that these are temporary employees. I should think that if men have to be employed for only short periods, that is all the more reason why the wage should be a fair wage; indeed it would seem a good reason why the wage should be higher than for men employed the year around. Here is a communication that will illustrate the feeling of some of the men in regard to this matter: The secretary of
the International Association of Machinists
writes me:
Track men and labourers reported to be receiving only $2 per day. If our information is correct, we ask if in your opinion it is possible for a man to exist on such wages, particularly as there has been no corresponding reduction in the cost of living and as the amount previously received by these men is so much lower than the cost of living figures as set out in the Labour Gazette, and which are understood to be the least that a man can live on. We think the management of the Canadian National Railways are very much ill-advised and are not working to the best interests of the country in reducing the standard of so many of their employees. It is such actions as these that have caused so many Canadians to migrate to the United States to secure employment at a decent living wage, and it is owing to the continuation of 6uch a policy on the part of the business interests of the country that Canada is so far behind the United States.
Surely the time has eome when we all recognize that a fair wage is decidedly in the interests of efficiency. More than that, looked at from the standpoint of society at large, about the only way by which we can hope to have the wheels of industry revolve more rapidly than at present is that there be an access of buying power. This is possible only as men receive more in the way of wages or services. Surely the business men of this country must have got away from some of the fallacies of economics and must recognize that it is only as the labouring men have money in their pockets that business men will prosper. Let me give one other example of the low wages paid in some departments of the National Railways. My correspondent, writing from a railway centre in Ontario, makes this statement:
I am forwarding jrou the time worked and the rate of pay paid by government railways to their employees in station restaurants. Time worked is twelve hours, 365 days per year, and in the event of taking a holiday, which you would think you would be entitled to after a year or two of service, they deduct pay for same. A manager and his wife are pa/id at the rate of $62.50 each per month; night help at the rate of $55 per month; kitchen help, $40 per month, all including board and room. For this large sum the manager has to secure a bond, to take all responsibility, and as you see, by working it out, hours worked for salary received amount to a very few cents per hour-


Hewitt Bostock: I do not wish to interrupt the hon. member, but it seems to me he should come closer to the subject matter of the amendment before the House. This amendment asks for the appointment of "a select standing committee on National Railways and Shipping to consider the estimates for the Canadian National Railway system and all questions involving new capital commitments and the disposition of properties and assets.''' Although the question which he raises is in some respects germane to the administration of the Canadian National Railway system, I do not think this is the proper

C.N.R.-Minister's Statement
time for him to dwell on it. However, if he is coming closer to the amendment I have nothing further to say. I have merely interrupted him because I wish to recall not only to the hon. member himself but to all others who may speak on the amendment the following principle which will be found in Bourinot at page 421:
When an amendment has been moved to the question for the Speaker to leave the chair, discussion should be properly confined to its subject matter.
It is quite possible that the hon. gentleman is taking a roundabout way to come to the amendment. If so, very well; but so far I do not detect his intention to do that.


James Shaver Woodsworth: I think I am travelling as fast as I can in the direction, Mr. Speaker, which you indicate. Since we are going into committee of Supply, and also since the amendment deals with the management of the railway and urges the appointment of a committee, I think I am quite in order in suggesting some of the things that would come before such a committee. However, I am through with that phase of the question and should like to come to a point that I think is clearly recognized in this House as being parliamentary in character.
We have been urged to keep the road out of partisan politics. I should like to ask how the road can be kept out of partisan politics so long as partisan politics are interwoven into the very structure of our parliamentary system. For example, in the appointment of the board of directors of the Canadian National, parliament as such has no voice; the appointment is made by the government. In other words it is made by a committee of the Liberal party, because after all the cabinet as it is now constituted is more or less a committee of the Liberal party. Parliament itself has no voice in the matter. Any amendment which we may offer from this side, under the present rules of the House, is regarded as a vote of want of confidence and the government's supporters are bound to try to defeat it. This arrangement, I submit, reduces the supporters of the government to silence and reduces us on this side to impotence. How can we bring about any change that is deemed desirable in the public interest in the management of the Canadian National? About the only thing we can do is to insist on the dismissal of the president. We do not want to do that. We can insist that the board be changed. We do not want to do that, and even if we did want to do it, the only way we could accomplish our purpose would be to turn out the government.

Surely we have to find some better machinery for carrying on this work if we hope that it will be kept out of partisan politics.
The fact is that the old party system of government grew up in an altogether different age, an age when the government was concerned largely in defence of the state and in managing the few concerns that were necessary, keeping up the roads, and that kind of thing. At that time there was no thought that a government would have to manage an enormous enterprise such as the Canadian National Railways, involving an expenditure of hundreds of millions of dollars. Under these circumstances it would seem as if the only way. we can possibly keep the road out of partisan politics is by rejecting some of the partisan machinery that exists and that impedes our progress.
Our problem essentially is how to maintain control over the expenditure and policy of the road-that we owe to our constituents- and at the same time how we may avoid partisan and non-technical interference in a highly technical business enterprise. We have attempted to do this by the rather awkward expedient of a commission. Those who insist on our doing things always in accordance with the old British constitutional practice will, I think, have to recognize fundamental changes when they consider these commissions that are being established. We have a number of them, the oustanding ones, of course, being the Railway Commission and the Civil Service Commission. The attempt has undoubtedly been to take these important branches of the service out of politics, but in effect the danger is that we set up in each case an independent body over which parliament has little if any control. Such a commission might very easily become absolutely autocratic in its policy. We have had mention to-day of the Scribe affair, an incident, I think, that no one can very well justify. We want not to embarrass the railways, not to embarrass the government in carrying on that enterprise, but rather to work out some sort of arrangement that will prevent such unfortunate incidents in the days to come.
I might mention another little incident that occurred last year. We spent several weeks in this House debating our immigration policy. The item directly under discussion related to the granting of a sum of money to the Canada Colonization Company. After we had spent weeks in debate we found that the Canadian National, without any debate in the House whatever, was also making a grant to the Canada Colonization Company. It did not make any difference whether we voted in favour or against; the fact was that we had

C.N.R.-Minister's Statement
established another body that could absolutely undo the work of parliament-an independent body, the Canadian National Railway Board, that might carry out a certain immigration policy despite all that could be said in this House. A policy which grants such power to a few is intolerable.
Take the question of freight rates: With all the machinery we have-with the board of management, the Railway Commission and our Railway department-I wonder whether we have effective control over freight rates to-day? If I understand the matter rightly, freight rates are, at least in part, determined by a board upon considerations that affect directly our great rival in the railway business, the Canadian Pacific. Ho-w can we hope to do successful business through our Canadian National when one of the considerations that deterniine the rates charged is the effect of those rates upon a rival railroad? I have in mind, of course, certain freight rates through the mountains, over which our own road, built with easy grades, finds it difficult to ship the goods it might because of the probable effect upon the rival road, which has a much more difficult grade-so at least, it is stated. Some of these rates and arrangements, as we had illustrated to us last year, are decided by a board that is even international in its scope.
I do not know that our representative is actually a member of that board, but I believe he still sits in and listens to its deliberations, and the policy is undoubtedly affected. There is all along the line the danger that a board of this kind may become so independent as to be out of the control of the representatives of the people.
I would like to mention just in passing one or two matters of policy. We are carrying on an extensive business outside of the railway business-the maintenance of hotels, in connection with our tourist traffic. These hotels, we are told, are being run at a loss. It is a question how far we should subsidize great commercial institutions of this kind that minister to only one class in the community. The leader of the Progressives (Mr. Forke) this afternoon, mentioned the splendid dining and sleeping car service on the Canadian National, and I quite agree with him. But I should like to suggest that this service is maintained very largely for one class of the community. Last autumn I happened to come down from Winnipeg to Toronto on a train on which there were a large number of returning harvest hands. I noticed that all the way from Winnipeg to Toronto there were only [DOT] two restaurants at which these men
could obtain any sort of lunch. Two days on the road, and yet only two possible places at which they could purchase refreshments!
It was all very well for those who had the money to go into the dining car, but here we were maintaining an elaborate system designed for tourist traffic, and at the same time we were not supplying the needs of the men who were carrying on the productive industry of this country. It is all very well to have new inventions like the radio exploited, and we are very glad to think we are in the fore-front of that work, and yet while we have been supplying the needs of tourists patronizing sleeping cars and big hotels, I sometimes wonder whether it has not been done at the expense of some of those who must travel over the lines in less expensive cars or who, because they have to pay high freight rates, must put up at much less elaborate hostels.
With regard to the amendment itself, it would seem to me to look in the right direction. I have not had the opportunity of studying it clause by clause. The leader of the Progressives seems to fear something that, as I heard it read, was not in the text. He suggested a third intermediary body, but did not divulge to the House just exactly the character or powers of this third body.
I should say that the present board of management more or less fills the place which the leader of the Progressives had in mind. We need however a committee that really represents the rank and file of the people. As I listened to the member who proposed the amendment (Sir Henry Drayton) there occurred to me an idea that has come very frequently to my mind as I have sat here during the estimates. Why should not many of these estimates be discussed in small committees? We cannot possibly, in this large committee of the Whole understand all the details of all the different departments. The result is that a good many of us must seek refuge outside while these estimates concerning which we have no knowledge are being discussed. If we had half a dozen different committees working concurrently, it would seem to me we would save an immense amount of the time of this House and do much more effective work. In the committees we might have the deputy ministers or the various officials of the departments present, and then we would not need to have the immense strain of listening to the snappy sentences the minister gets from his deputy and then presents to the House. It would seem. then. too. as if we might dis'

C.N.R.-Minister's Statement
pense with the Hansard for committee work, and we would not be induced to make speeches then as we are at the present time.


Some hon. MEMBERS:: Hear, hear.


James Shaver Woodsworth: I am very glad
that the House appreciates that position, and I for one would be very glad to accommodate myself to the changed condition. Under such an arrangement the increasing business of this country could be carried on much more effectively.


Mr. GAUVREAU:: It would shorten the session too.


James Shaver Woodsworth: Yes, it would shorten the session very decidedly. Mention was made of the safeguard the government has in having a majority on all committees. I would point out, in passing, that it is stated that in Great Britain the practice is to have the committees arranged so that the government does not have proportionately more representation in the committees than it has in the House. I do not know why that principle should not be adopted here. But let me ask, why should we constantly take it for granted that a committee, charged with the discussion of the conduct of our railway affairs, would try to block the progress or the development of our Canadian National Railways? Somebody says, as long as you have human nature you cannot do very much. Well I am sure most of us, if we think a little more deeply, will recognize that human nature is pretty good after all, if it only has a decent evironment and decent machinery with which to work. I feel confident that public sentiment is so much behind the Canadian National Railway system to-day that no section of the community would dare to do anything to break that system or to impair its efficiency.
Perhaps I should alter that statement a little because, as a matter of fact there are some sections of the community, certain interested sections, that appear to be trying to do that very thing, but I think that considering the Canadian people as a whole there is no section of the community that will effectively defy public opinion along this line. So it would seem as if we ought to have some such committee as has been suggested by the amendment. But, speaking for the group which I represent and, I think, for a very large number of the Canadian people across this country, I would say that there must be nothing done whatsoever that will jeopardize 
or impair the welfare of the Canadian National system; there must be no sabotaging of the railways or the marine. Given that as a starting point, as something we must all keep in mind, it would seem to be the wise thing to devise the machinery now by which we can more adequately administer the affairs of this great corporation.


Mr. W. F. MACLEAN (South York):: Mr. Speaker, I wish to refer to one thing that the hon. member (Mr. Woodsworth) brought up, and that was he thought there ought to be an improvement in the way this House conducts its business. I would like to see the old committee that we had a year or two ago, called the Speaker's committee, revived, and the House in a very careful and well-thought out manner try to reorganize the conduct of its business so as to save time, expedite business, cut out a lot of speeches, and shorten the session.
To-night I want for a few minutes to discuss the Canadian National Railways, brought up by the Minister of Railways when he presented his report, and to discuss also the amendment. To begin with, to justify my position, and my position is to be a justification of public ownership of railways in this country, some years ago I favoured that position and I was laughed at, -but whether I was laughed at or not I lived to see public ownership of railways arrive in this country, and the people are satisfied with it; they are proud they own this railway, that it is theirs. Yet somebody wants to take it away from them. To show what the criticism is of the Canadian National Railways I am going to read just a line or two from a Montreal newspaper that reviewed the report as presented by the Minister of Railways a few days ago. The Montreal Gazette on last Friday said:
Our National Railway did fairly well last year. It made headway financially, but it cost the country $51,697,000. That is not quite as much as the sum derived from the income tax, but it more than suffices.
It has cost the people of Canada $290,000,000 to adventure upon public ownership, over and above a liability of $2,000,000,000. That is the plain fact. Was the experiment worth while? Results do not support an affirmative answer, nor yet does an analysis of the balance sheet.
And it says this is the test of public ownership. Where did we get this test of public ownership? It came from years of adventuring in railroad construction in this country, adventures in which an enormous amount of profiteering was done in connection with contracts. Unnecessary roads were built, unnecessary headquarters were started all over. We had three or four experiments.

C.N.R.-Ministers Statement
and they all lost money; not only these three or four experiments, but there were dozens of other lines established in this country, and they all had to be taken care of and were a burden on the people. Included in them is a railway which is probably the most expensively constructed of all, the Grand Trunk Pacific although its construction, in a way, has something to justify it. The Grand Trunk Pacific was built as an offset to the Canadian Pacific, and the latter was not constructed for nothing by the people of this country. It cost them twenty millions of money and twenty-five million acres of land, and there have been many other obligations since that time. Public ownership is derided, but what we are doing now is cleaning up the mess created by preceding administrations in parliament. An enormous amount of money has been put into these railroads but the Conservative administration had the courage to consolidate the Grand Trunk and all the lines the Grand Trunk had acquired in its early days; the Grand Trunk Pacific, the Canadian Northern, and all the other lines, into one system and take them over. The people took over these different roads, consolidated them into one system and put it under public ownership. That was done to clean up the mess that had been created in this country by private ownership. That was the cure that was adopted. And yet we see the taunt in the Montreal Gazette "Look at the mess you have got into from public ownership." Why, we are trying to remedy a condition which has prevailed in this country for forty years. Because we are trying to clean up that mess we are being denounced in the way I have indicated. The Liberal administration is also trying to clean up this mess, following the same lines as its predecessor. The opponents of public ownership do not say anything about that system where it was established on its merits.
If you want to talk to me about public ownership, if you want to throw stones at it, go to the province of Ontario and see what has been accomplished there in the way of hydro-electric distribution. That system is owned by the people. There has been no waste of money on it. There may have been a little money lost, and some mistakes may have been made, but it is the finest instance of public ownership in the world to-day. It is owned by the people of Ontario and they have an unlimited supply now of electrical energy for industry, for lighting and, to a limited extent, for heating their houses. They also have a fine system of electrical railways in connection with it. If the Montreal Gazette
would take that as an instance of public ownership it would be on fairer ground. What that paper is denouncing, as I have said before, is the horrible mess created by various parties, and by various adventurers in railway construction in this country.
Let me give you another instance of successful public ownership. The Toronto street railway is owned by the people and it is the finest system of its kind in America to-day. The fares of that system are going to come down, and the whole debt is being amortized. In about thirty years the debt will be all paid off. There are radial lines in connection with it, and they are proving a great success. The city of Detroit has acquired its street railway, and is going to give it the same treatment which has been bestowed by the people of Toronto on their railway.
These are only a few instances of the success of public ownership. There are others. What is the great feature in the report of the Dawes commission in connection with repatriation in Germany? The first condition laid down in that report for the recovery of Germany is that the national lines which did so much in the past for the development of that country, must be maintained. That is where Germany showed its strength years ago when she took over the railroad system and developed the country by means of national railways. Talking about the nationalization of railways, if I can read the signs of the times, the present government in England to-day-the Ramsay MacDonald government, a labour government-after dealing with the housing problem will undertake a nationalization of the railways there. As a result of the nationalization of the railways power will be distributed to all the industries in the country. They propose to establish great plants, equipped with batteries of steam boilers, which will develop enough energy to electrify their industries. They have not got water-power there but they have an abundance of coal.
Now, as to the United States. I am only a prophet, and perhaps a poor prophet, but I am convinced that it will not be long before a movement will be started to nationalize the railroads in that country. At present there is great dissatisfaction with the operation of the railways, and with other things. It will cost billions of dollars to take over the railways in the United States, but there is no other solution of existing difficulties but to do that. The railway brotherhoods may do something in that direction. There may possibly be an objection to the railway brotherhoods dictating too much in that connection, but I am not afraid of that. It may result in their

C.N.R.-Minister's Statement
getting a better system of railroads than they ever had before, and I think they are prepared to try the experiment there. Then the United States government has practically given national leadership and national capital in connection with the banking system of that country. That is the kind of public ownership we are talking about here. You may abuse it, you may make fun of it and say it will never come about, but it has arrived. It has arrived in connection with the public affairs in the United States and in connection with the real leadership of banking over there. The capital behind this banking system is national money, and public money will go into the nationalization of railways over there. The province of Quebec has gone into banking to the extent of investing fifteen millions of public money.
The principle of public ownership is being asserted all over the world and is winning out, and yet we read in papers like the Montreal Gazette that public ownership is an abuse. I say it is not. I say that what we are engaged in is cleaning up the mess in connection with our railways, as a result of adventuring and of profiteering, and perhaps politicians were more or less involved in it. The Montreal Gazette is carrying on this campaign and for what purpose? I understand what is going on in the city of Montreal to-day, and I see it in other places not so very far away. I see the effort being made to compel the people of Canada to surrender the Canadian National Railways and to give them to the Canadian Pacific. That is the object of the attack that is being made in all quarters. Remember the National Railways are owned by the people and they are going to make the proposition a success. That is the object of the attack which is being made.
The Canadian National is owned by the people of Canada, but the Canadian Pacific Railway is owned outside of Canada, and the proposal of the Montreal Gazette is to give the traffic to the Canadian Pacific. A large portion of the stock of the Canadian Pacific Railway is held in the States, in England, and in Germany. We do not know where it is owned. We have a road of our own, which is beginning to pay and it runs from ocean to ocean. When I talk about abuses in regard to Canadian roads in the past, I do not say it was an abuse to build the Intercolonial road, but it cost a lot of money and is not paying its way to-day. But we have that road now. There was a political reason for building that road, and there was a more or less political reason for the building of the Grand Trunk Pacific and perhaps in connection with the construction of all the roads in the coun-
try. Our road is beginning to promise to pay; this government has followed the policy of the previous government fairly well, is voting money freely enough for the railways and does not seem to be interfering with the administration. There was no interference under the administration of the previous government. We have a great road costing two billion dollars, running from Halifax to Vancouver, with all the strategy of the continent compared with the Canadian Pacific Railway. The greatest road of them all is the Grand Trunk Pacific. All the strategy of Ontario, from a railway point of view, is owned by the National Railways, the old Grand Trunk. It is, to a large extent the same in Quebec and the Maritime provinces. This road connects all the ports of Canada, Vancouver, Prince Rupert and Victoria on the Pacific coast, with all the ports in the East. Its business is growing in every direction, and it will soon be selfsupporting.
When the board is appointed I think the first thing for parliament to do would be to fix a fair amount as the cost of the Canadian National Railways and say to those in charge of the road, "You must earn the interest on that amount and pay it." I believe that, under such a policy, we would be able to pay the national debt in a short time. But I will come to that later when we deal with the reconstruction of the Finance department. If we adopt that course the road will soon begin to pay.
The motive actuating Montreal in the attack on the National Railways is fear that the publicly owned roads, notwithstanding the burden handed down to them from the past, are going to win out, and Montreal does not like it. I am not saying one word against the Canadian Pacific Railway. They may not be at the bottom of it. It is the big English speaking interests who do not want to see the Canadian National Railways owned by the country. They do not want the hydro power in Ontario, but they would like to develop power on the St. Lawrence and I hope that some day the St. Lawrence will be consecrated to the electrification of the National Railways adjacent to them, and that when that electrification goes to the West and is developed there will be enough surplus power to take care of the household needs of the farmers of the West. Electrical development will help the Maritime provinces. If you want to see power developed in those provinces, take up the proposal to use the Bay of Fundy tide for electrical energy. It will work out all right, and is a good proposition. In that way we w^ould improve our country and build

C.N.R.-Minister's Statement
up the National Railways. First of all, create a great system of power for the electrification of railways and share it with the people, as Ontario has shared its power with the people, and build up the National Railways and they will be a great success.
In regard to the management of the railways, my suggestion would be that you should appoint a commission of five of the highest class of railway men you could get, men like Sir Henry Thornton, Sir Henry Drayton, Mr. Beatty, Mr. Ruel and another man who has had some experience. Those five men could run the road and make it the greatest national road in the world, and it could be done better by five men than in any other way. I would not like to take the control of the railway away from parliament; but I would leave it to five men to run the road from ocean to ocean, give them big pay as commissioners to manage the affairs of the road, and prohibit them from bringing politics into it. Pick out the best men, and the result would be that we would have the greatest example to the world of public ownership of railways. We can adopt this scheme in this country, as we have the men to do it. For a while, I did think that progress would result if we had a consolidation of the Canadian Pacific with the Canadian National; but possibly the people of the West favour opposition in connection with railways; they want the two systems. I cannot make the suggestion just now that the Canadian Pacific should come in; but if the management of that road adopt the tactics which have been adopted in the past, to destroy the Canadian National, the management had better think twice before going much further with that programme. That is what they are doing at Montreaband at other places, and you can see the slimy trail wherever you go.
It may not be in the public interest to consolidate; but if the Canadian Pacific Railway is wise, the management will approach the government and the people of Canada and say "We have enormous resources yet, but we think they belong to the shareholders and we propose to distribute them". I do not know that they belong to the shareholders altogether. When Sir John A. Macdonald created the Canadian Pacific Railway he inserted a clause in the charter that nobody was quite able to understand, to the effect that the road was to be maintained forever. For what? That requires interpretation. I say the road was built for the benefit of the people of Canada in connection with transportation. The Canadian Pacific directors have successfully administered their road, and 172


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I give them credit for it; but Sir John A. Macdonald, when he started that road, and Sir Wilfrid Laurier when he projected the Grand Trunk Pacific, did not say that union was not strength. The day may come when union will be strength in the case of the railways. If the Canadian Pacific comes in they can get a fair division of profits on their investment, and they may have certain assets they can distribute; but if they want to do something to help public ownership in this country, let them first come to the country and make a proposition. They might say, "We do not see why we should maintain the railway end of it, but we are willing to maintain the steamship end of it". There would be a chance then for the Canadian Pacific if they wanted to handle the transportation of the country. Let them go into the steamship business and the settlement of the country, on some understanding with the people of Canada and in that way they will go ahead. I say that there is a conspiracy and that the head of it is in the Mount Royal Club in Montreal.
An hon. MEMBER:: Order, order.


William Findlay Maclean: I do not say the club proper, but there is a bloc in Montreal which would like to destroy the National Railways, and destroy Ontario as far as the distribution of power is concerned. They would also like to smash Toronto because that city owns the street railway. But other cities are going the same way. I am not an enemy of the Canadian Pacific Railway, and. I give them every credit; but there is room for the Canadian National Railways as well as the Canadian Pacific. The 9 p.m. Canadian National Railways in the estimation of the people is their own road and the people are proud that they own the system, notwithstanding the debt which they owe in connection with it. I come in contact with the public frequently and I know that the people are patronizing the National Railways more than they have ever done before. It is not wise I say for the Canadian Pacific, through the medium of its directors, the newspapers and its friends, to insinuate that the Canadian people cannot manage their own railways and therefore ought to turn them over to that company. There are very few public men in Canada who venture to take that position, although there are some who apparently would like to have the Canadian National Railways handed over to the Canadian Pacific. That is not my idea, and I am sure that my constituents are stoutly in support of public ownership.


EDITION
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C.N.R.-Minister's Statement
I have been in public life for thirty years and have always believed in and advocated the principle of public ownership, and thank God I am alive to-day to see that principle vindicated. I repeat, the people of Canada are proud of the railways they own; and I challenge those men who try to detract from the success of the system to come out into the open and attack it. I invite any opponent of the National Railways to come into my riding and discuss the question freely; and I on my part am prepared to go into any province in the Dominion, either in the East or in western Canada, and meet squarely on any platform any one who is attacking the railways in an unfair or an irresponsible way. It is high time that these people were warned, and I believe that if proper steps were taken to put the matter fairly before the country, those who are trying to subvert public ownership would cease from their attacks on the National Railways. At any rate, let the opponents of the system come out in the open and fight. I know very little about the West, but I am ready to risk my chances of success on any platform there in defence of public ownership. It is time that the Canadian Pacific Railway abandoned their scheming and their insinuating that the Canadian National system cannot be properly managed by the people. The Canadian Pacific Railway simply wants to get hold of the system, and if it did it would be master of the country. What hope would there be for politics in this country if a privately owned company, controlled in the United States, in Great Britain and in Germany, should take over the National Railways? Why, the men in Montreal have no more power over the Canadian Pacific Railway to-day than they can derive from their shareholders; and the majority of the shareholders of the company live outside of Canada.
I have been watching events in the United States and I know that the greatest company ever formed anywhere in the world is being floated to-day in New York to monopolise public utilities; in this enterprise there are associated the Bell Telephone Company and the American Telegraph & Telephone together with cable concerns and the Marconi people. They are capitalising at one billion or two billion dollars and they will simply control all communications both at home and in Europe. Now, I think it would be much -better for us in this country if we went in for some enterprise that would extend our own activities; we have a good telegraph system and can connect up with the world. And there are many other ways in which we could develop our utilities.

Some people of the United States look with dread upon what is going on in Canada in connection with our National Railways, because the American roads are unable to make any headway themselves, having been overcapitalized. Some two years before his death President Harding was approached by prominent railway men in the United States in connection with the railway situation there, and at that time he expressed the view that if they would partition the railway systems of the United States into ten regional divisions they would be able to secure enough money from the government to electrify the roads and consolidate them. That would have made their railways stronger than ever; but they have not succeeded. There is the greatest jealousy on the part of the railway concerns over there of public ownership in Canada; and notwithstanding the difficulties with which the system here has had to contend, I think I may say that we have lower traffic rates here than there are in any other country. And this because parliament has kept control of the rates. Apart from a return of 3 or 4 per cent on investments, all other earnings will go towards a reduction in railway rates; and the secret of public ownership is to give service at the lowest cost and not merely to put money into the pockets of shareholders. I think the people of Canada, as time goes on, will find the Canadian National Railway system the greatest boon. At present the people of the West have a good deal to worry about; they have had a hard time on their farms and have had many grievances. I hope therefore that the government will find some way to extend the farm credit system in the West. But the one thing that would do most for western Canada would be a reduction in railway rates, and the only way in which railway rates can be reduced is for the Canadian National Railway system, through proper management, to take the initiative in this direction and to make the Canadian Pacific march at the same pace.
In the past forty years we have had a good deal of profiteering and political adventuring in this country in connection with the railways; but that is not public ownership. I have no doubt whatever that public ownership can be and will be successful in this country, and I want to see it given a fair show. If this is to be brought about politics must be eliminated. Of course, I want parliament to be ultimately responsible for the administration of the railways; parliament must see to it that proper men are put in charge of them and are given adequate assistance by means

C.N.R.-Minister s Statement
of the necessary legislation. But apart from that the railways should be left to the administration of the men whose services are devoted to their management, men who are not in politics. It is true that charges of extravagant expenditures may be brought; but these things have happened in connection with other concerns. And the Canadian Pacific Railway has not such an unenviable record itself. It did not cost an awful lot, and it has been handled well. But I should like to see the Canadian Pacific Railway subject to an inquisition in this parliament; they would then be just as eager to protect their reputation as anybody else. I want to give a warning to the Mount Royal Club, as I call them, and the big interests who are associated with them, who hate public ownership and power distribution, and who want to grab the St. Lawrence and the Ottawa water-power. I hope that we shall develop the water-power of the St. Lawrence, because we can levy an export duty on that power going out of the country. But the Montreal men want to export it to the United States; they want to smash the Canadian National Railways and then get control of them.
Mr. BUREAU:: Will my hon. friend allow
me a question?


William Findlay Maclean: Yes, two.


Jacques Bureau: Will he be more explicit?
He says that Montreal wants to export power to the United States. Who is "Montreal"?


William Findlay Maclean: They have two
propositions now. You will see them come before us this session.


Jacques Bureau: Who are "they"?


William Findlay Maclean: They are developing the Lachine-


Jacques Bureau: Will the hon. member explain who "they" are?


William Findlay Maclean: I will rise in my
place and name some of the parties. I thought all our friends outside of Montreal, our Quebec friends, were very much in favour of public ownership of railways and waterpower.


Jacques Bureau: You know I never was.


William Findlay Maclean: Not in favour
of National Railways?


Jacques Bureau: I was never in favour of
public ownership.


William Findlay Maclean: But you have
got to do with it to-day. Are you ashamed of it? After the mess that we are trying to
172$
clean up, that awful mess which nobody can clean up to-day but the people of Canada- that is what I am saying-is my hon. friend ashamed of that mess?


Jacques Bureau: My hon. friend asked me
if I was in favour of public ownership. I told him, no. I always said so in this House.


William Findlay Maclean: Then you are
not in sympathy with your party?


An hon. MEMBER:: You are from Montreal.


Jacques Bureau: I am not from Montreal.
I can think for myself; I am not following the band wagon with the crowd.


William Findlay Maclean: I hope the government will stand up and justify public ownership. If so, surely all the members of the government must Stand for it.


Jacques Bureau: I will stand for it and help it, but I do not believe in it.


William Findlay Maclean: Perhaps my hon. friend the Minister of Justice (Mr. Lapointe) may not agree with his colleague. If I could gather anything from the most excellent speech which the Minister of Justice delivered the other day it was this-he was telling the people of Canada and this House that the mantle of Sir Wilfrid had fallen on him. I hope he is not ashamed of having made that statement. It is to his credit that he said so. Sir Wilfrid Laurier at great risk undertook the building of the Grand Trunk Pacific, which is the greatest railway in the world, and I give him credit for its construction. It carries the majority of the passengers in the West, it carries the grain of most of the wheat fields of the West, and the development of water-power in connection with it will help to electrify all the western provinces.
I am not objecting to the motion very much, but I take this opportunity-and I am only a weak voice in this House-to serve notice on the Canadian Pacific that if it is their object to wipe out the National Railways, they had' better come before the people of Canada and openly declare that to be their intention. Let them go on the platform in the province of Ontario or in any other of the provinces and tell the people: "We want you to give us these National Railways. We will run them and make a success of them." Let them say that openly to the people, and they will find that neither the people nor the newspapers of this country will justify them in that declaration. I can see some queer aids, from the newspaper point of view, coming to the Montreal Gazette

C.N.R.-Minister's Statement
these, days. Those aids are coming not from the usual quarters but from the province of Ontario in an attempt to smash the National Railways. Let them come out in the open and say that that is their object, and they will get the worst smashing that any party ever got in this country Let any party, I do not care which it may be, try surreptitiously to destroy the National Railways, and in this House or in any part of Ontario I shall be willing to meet any such friends of the Canadian Pacific, and they will find themselves smashed instead of their smashing the National Railways.
Mr. FRANK S. CAHILL (Pontiac):	Mr. Speaker, I feel that the government is to be congratulated on their good fortune in being able to present such a satisfactory report of the Canadian National Railway system for the past year. The report shows that the net earnings are better by $17,000,000 than they were last year. The gross earnings increased by $20,000,000, while those of the Canadian Pacific Railway increased by only $9,000,000. The net earnings of the Canadian Pacific increased by only $1,170,000, while the net earnings of the Canadian National increased by $17,349,000. It has been suggested that a part of this increase is due to the skimping of expenditures on maintenance of way and maintenance of equipment, but I find on looking over the Canadian Pacific report for 1922 that the Canadian National spent more per mile of railway than the Canadian Pacific did. So if the Canadian National spent a little less last year for maintenance of way and maintenance of equipment they are still spending more, than the Canadian Pacific in this respect. Therefore the showing is really very satisfactory from the standpoint of the government. Apparently the government were very fortunate in securing the services of Sir Henry Thornton as president of the system. He came here only a little over a year ago, but I think before he had landed he was attacked by the leader of the opposition. I do not remember on what ground, but I think that in a by-election which was then being held the right hon. gentleman was reported as having attacked Sir Henry Thornton. Apparently it was his intention to give the National Railways a chance by trying to condemn the president before he had taken over the job!
The mover of the amendment, my hon. friend from West York (Sir Henry Drayton), started out by saying that he was in favour of the Canadian National Railway system and wanted to do everything he could to assist in its development and betterment,

but he wound up by calling the present board of directors political hacks or political heelers. I do not know just how much of this a member is supposed to believe. I know a member's word must be accepted, but I hope we do not have to believe the whole of his statement. By describing the directorate as political hacks, in what way could he help the Canadian National Railways or the government? He must have had one of two objects in view, either to condemn the government or to condemn the railway management. If he is in favour of the Canadian National Railways-and he himself states that he is in favour of public ownership, which is going further than many members in this House would care to go- how can he hope to assist the Canadian National management by condemning the directorate? With some of his opening statements I agree, but with most of those which he uttered during the last hour and a half of his speech I must disagree. He indicated at the outset that it might be possible to have a commission or a board of management appointed which would be more continuous in office than under the present system. He attempted to condemn the government for changing the old directorate, but he intimated1 that if he were a member of the next administration he would take the same course and dismiss the present directorate. If this be the case, then there might be something in his suggestion that a commission should be appointed which would continue in office even after a change of government. It might bring about more continuity of management and be more satisfactory to the officials of the road. But he did not propose that to the House; he wound up by moving an amendment asking for a committee of the House to go into the details of the expenditures and the management of the system. A committee was appointed during the last parliament with powers somewhat similar, perhaps a little more restricted. We of the opposition contended for the committee and the government contended against it. We finally got a committee with restricted powers, and for myself I think the committee was of very little service.
I do not know what the government's intention is with regard to this amendment, but it does not seem to me that it is going to solve the whole problem of Canadian National Railway management. The hon. member for West York (Sir Henry Drayton), in arguing in favour of his amendment, intimated that he was anxious to get to the bottom of certain things. He proposed practically to have an inquisition of the Canadian National manage-

C.N.R.-Minister's Statement
ment and to have the officials of the Canadian Pacific Railway Company conduct that inquisition; that is about what his amendment means. I do not know that any good purpose can be served by such a committee or by such an inquisition. I do feel, as I have always felt, that everything pertaining to the management and operation of the National Railways should be public property. After all, the people are responsible for the obligation; they are responsible for the expenditures.
It has been suggested by the Manitoba Free Press and by some hon. members that some kind of committee or body should be organized for the purpose of taking the management of the road out of politics, but I think the argument will not bear close analysis. Under our system of government, under any system of government, the government business must be conducted by the government, call it political or partisan or whatever you will. If you try to eliminate government influence then you have to establish another body which will have control of the railway system. They in turn would have to find the money to provide for the deficit. Where would they get that money? Either by the power being conferred upon them to impose taxation on the people, or by their coming to parliament; so that it gets back eventually to the same thing.
The government of the day argued, on the occasion to which I referred a moment ago, that the railways were to be kept out of politics, that the directorate was to be a nonpolitical body; but we of the opposition contended, as my hon. friends opposite are contending now, that that would be impossible. So the thing got into the position it is in today without very much thought on the part of the government of the day or on the part of the advocates of public ownership of that day. The government now have to deal with it.
They have been fortunate in securing a manager who has been able to show a very great betterment in the condition of the road. It may not be Sir Henry Thornton, I do not know. He may not be a railroad man, but if he is not he was very fortunate in coming in at a time when the improvement was as great as it has been in the last year. The Canadian people will be inclined to believe that he is responsible for a great part of that betterment, if not all of it; they will be inclined to believe that there must be some influence that has brought about a betterment greater than that achieved by the Canadian Pacific. I think it is not altogether due to the change in government, although that m"st have quite a lot to do with it.
The hon. member for West York also proposed in his amendment that all questions involving new capital commitments and the disposition of properties and assets should be dealt with by this committee. I did not like to interrupt him while he was speaking, but I felt like asking him, and hoped he would be in his seat now that I might ask him, just what he meant by that. Did he mean that the Canadian National management would not be permitted to sell lands, for instance, townsites, timber, or any of the properties that they must sell from time to time? Or did he mean that they were not to be allowed to sell a portion of the railway? Just what did he mean, if he meant anything? Or did that portion of his amendment mean about as much as the rest of it-that he merely wants to be able to bring in the Canadian Pacific management to hold an inquisition and to show up the weaknesses, if any, of the Canadian National Railways, and to let the Canadian Pacific go away scot free?
If the Canadian Pacific officials consent to come before a committee of parliament to give information against the Canadian National Railways, I may say to my hon. friend who moved the amendment that the Canadian Pacific is badly advised. If the members of the opposition who are apparently championing the Canadian Pacific wish to make a contest between the people of Canada and the Canadian Pacific Railway Company or between the Canadian National Railways and the Canadian Pacific Railway Company, I have no hesitation in saying that the Canadian Pacific is likely to get the worst of it. I do not believe the Canadian Pacific wants to enter into a contest of that kind. I would be glad to see the Canadian National Rail-mays managed as well as the Canadian Pacific has been managed in the past. I would like to see them have an equal chance. But from some indications appearing in the Railway committee it would seem that a number of the advocates of the Canadian Pacific are inclined to favour that railroad as against the Canadian National The number is small, but apparently there are those who wish to do that. Legislation was held up last year in regard to branch lines, and we saw instances in the Railway committee where the Canadian Pacific had practically gone over the same territory, had constructed lines of railway that the Canadian National had intended to construct. A remark was made in the press a few days ago to the effect that one of the members of the committee had suggested a change in the destination of one of the Canadian National branch lines. Yes, he suggested that, but the Canadian National management

C.N.R.-Minister's Statement
had asked for identically the same line the year before and it had been refused by parliament. The Canadian Pacific in the meantime went in and built the line, so, that the change of destination did not mean very much because the Canadian National could not build on top of the Canadian Pacific. So I want to say to my hon. friend from West York that his advocacy of the Canadian National Railways will not only be detrimental to the Canadian National but will also be very detrimental to the Canadian Pacific.


Henry Lumley Drayton: Mr. Speaker, I do not like to interrupt the hon. member, but he has absolutely not the slightest justification for his statement.


Frank S. Cahill: Did my hon. friend not say this afternoon that he wished to have a committee to investigate the affairs of the Canadian National? Did he not also say that he wished to have a committee before which he could bring the Canadian Pacific officials?


Henry Lumley Drayton: What I said was very clear. I said that from the file brought down and from the information I had, it would appear that a fraud was being perpetrated on the Canadian people, and that if that property had been offered to the Canadian Pacific for $1,400,000, then we should know it. I said nothing whatever as to aiding the Canadian Pacific, one way or the other. The hon. gentleman, I think, was not in the House.


Frank S. Cahill: Yes, Mr. Speaker, I was
in the House and heard the hon. member distinctly-


Henry Lumley Drayton: That makes it worse.


Frank S. Cahill: *-make the statement that he hoped to bring the Canadian Pacific officials here to prove his allegations, that and nothing else. He let the cat out of the bag with regard to this committee that he is proposing; he is going to bring the Canadian Pacific officials here to hold an inquisition on the Canadian National Railway management; it was either that or nothing at all.


Henry Lumley Drayton: To find out the truth, whether the property was in the market.


Frank S. Cahill: Where did my hon. friend get his information?


Henry Lumley Drayton: I have not got it; I want to get it.


Frank S. Cahill: Then in making his statements he is just guessing, to the detriment of the Canadian National Railways. Does he think he is enhancing the reputation of Sir Henry Thornton by coming here and insinuating that he has paid very much more for the Hotel Scribe than the Canadian Pacific could have bought it for? Does he think that is helping the management? Does he think he is helping the management of the Canadian National Railways when he says the directors are political hacks? Is that helping to promote the welfare of the Canadian National Railways?


Henry Lumley Drayton: That is known, unfortunately.


Frank S. Cahill: My hon. friend says that is known. The only purpose my hon. friend can have in mind must be the making of political capital, and if he is attempting to make political capital he cannot be helping the Canadian National Railways. If he will come into my province and make that statement about an ex-member of this House from my province, I can tell him that he will not gain any votes in the province of Quebec, and I think the same will apply to the other directors throughout the country.
I would like to ask what my hon. friend means by one portion of his amendment. The amendment reads:
That a select standing committee on National Railways and Shipping is hereby appointed, to consider the estimates for the Canadian National Railway system and the Mercantile Marine, and all questions involving new capital commitments and the disposition of properties and assets.
Just what does he mean by properties and assets? Does he mean, for instance, the lands of the subsidiary companies, meals in the hotels, the Chateau Laurier, 'and so forth?


Henry Lumley Drayton: I should have
thought it would be quite clear. What is referred to is the sale of property which is entrusted to the board for management, not for sale; in other words, capital assets ought not to be disposed of without the consent of parliament or the government.


Frank S. Cahill: What capital assets have
been disposed of?


Henry Lumley Drayton: There is a list
>f them. Although my hon. friend is chairman of the Railway committee, he has not been following the work of the House, or he would have known that a return was tabled by the Minister of Railways showing considerable sales of railway properties.


Frank S. Cahill: Properties that are required for railway purposes?

C.N.R.-Minister's Statement


Henry Lumley Drayton: I do not know.


Frank S. Cahill: Did the Canadian Pacific
ever dispose of any property of that nature?


Henry Lumley Drayton: I am not talking of the Canadian Pacific, but of the sale of our own property.


Frank S. Cahill: My hon. friend has been
talking very liberally of the Canadian Pacific lately. No, Mr. Speaker, if we are to get the Canadian National Railways out of politics,
I am 'afraid my hon. friend's amendment is not heading in the right direction. He is heading them into politics, rather than out of it. As I said before, I do not know what the government's intention is in regard to the amendment, but for myself I would not feel at all grieved if they refused to accept the amendment as it is proposed.


Mr. JOHN EVANS (Saskatoon):: Mr. Speaker, I would like to discuss this question from one or two angles. In the report presented by the Minister of Railways there is a reference, at page 2624 of Hansard, to wages and labour. Various demands I know have been made by the employees for an increase in wages. However, there have been no strikes, and a general good feeling prevails among all classes on the Canadian National Railways. This is as it should be. Since Sir Henry Thornton has assumed the management of this system a great improvement has been achieved in this respect. While 58.4 per cent of all operating expenses seems high, entailing the sum of 8136,463,470, still I want to urge upon this House that the matter of wages as well as other matters of management and operation Should be left to the good judgment of the president and his board.
The hon. member for Sherbrooke (Mr. Mc-Crea), speaking in the budget debate a few days ago, said that an honest day's work was not given for an honest day's pay, and he quoted some figures which would lead the people of this country to believe that we were in the grip of a railway workers' union. I have made some inquiries regarding the statements of the hon. member, and I find the conditions he cites as to overtime are almost an impossibility. I have had sent me by the Telegraphers' Union, in the city of Saskatoon, a copy of a letter challenging the hon. member to prove his statements. I will read a part of it, sufficient to show that the hon. member has been misinformed by someone. It says:	.
Eighty two representatives of the eight thousand telegraphers employed on Canadian railroads, who are now in convention at Cleveland, instruct that vigorous
protest be filed in parliament against the serious misrepresentation made by Mr. McCrea, member for Sherbrooke, Quebec, on May thirteenth, respecting station agents' salaries. Telegraphers have had their compensation reduced by two and a half million dollars a year since January, nineteen twenty-one, the period he quotes. No agent receives free dwelling. All pay rentals through deductions on payroll. We Challenge the member to name the stations and details of earnings as stated in his speech, knowing his information to be incorrect. There are ninety six working hours in two weeks' pay period. No man could work one hundred and sixty one hours overtime in two weeks without serious results to himself and grave danger to the safe handling of trains. If done, the responsibility rests solely upon the company requiring the service for overworking the employee and piling up cost because the employment of a second man would have been much cheaper.
I know wages are high, but while our manufacturing and distributing combines are protected and hedged about by tariffs, dumping acts and so on, Which places all these concerns beyond the pale of competition, the cost of living must necessarily be high, and we cannot blame any collective body of labour men for at least organizing to maintain a decent standard of living. If we want to lower the wages on our railroads, and bring down as well the cost of freight, we have to lower the cost of living, and it is in the power of the legislators of this country to do that. But that is another tale.
What I want to protest against are these pinpricks by politicians in this House who have no other end in view than to worry Sir Henry Thornton and his board into giving up the job of managing the finest system of railways in the whole world. They would like to see this great Canadian National system again fall into private hands, but I think the people of Canada, and I think I am right in saying the people of all Canada, are proud of their own railway. I do know that in the West we are proud of it, and since Sir Henry Thornton has assumed the presidency there has been a noticeable improvement in the attitude of every employee, and1 a service is given that cannot be equalled in this continent by any railway under like conditions.
This pinpricking campaign that is now carried on by those who, in. past times were short sighted enough to keep up a howl, under the guise of patriotism, that all the trade of this country should go east and west, must stop. That policy was a mistake. To it is due the fact that we have a superfluity of transcontinental lines. Rather than take the backward step of reverting to private ownership this country must now meet the losses occasioned by those very same advocates of private ownership. What the people have



Minister's Statement
they will hold no matter what the cost may be. It will only be a matter of a few short years, I think, when the annual dteficit will be a thing of the past. Rather than go back to private ownership of railways we should be looking forward to the time when transportation will be a great public utility and will be publicly owned. Then, and then only will it be possible to eliminate the great duplication of service which now exists, and render lighter the cost of transportation which bears so heavily upon the people at the present time.
What we want in. this House is a few patriots who can look at things from a national standpoint, from the standpoint of the people, rather than allow themselves to be actuated by narrow motives of selfish interest. It is not very fair to the Canadian National Railways that matters are being discussed here over and over again from the standpoint of the Cauadian Pacific Railway. Let us see whether we owe anything to . that company. I he Canadian Pacific has already been given in land grants and subsidies by the Dominion, provincial and municipal governments enough to capitalize their entire stretch of steel at something like $40,000 per mile. I can give some particulars of the aid which the Canadian Pacific has received. It has received in land grants from the Dominion and provinces 28,816,000 acres. In subsidies it has received $41,544,272; and in lines handed over completed by the Dominion government $37,785,000, or altogether, in addition to land, nearly $80,000,000. Now the land given to the Canadian Pacific amounts to 28,816,000 acres and if we price this land at the very moderate sum of $21.50 we shall have a total of nearly $620,000,000. That added to the subsidized lines completed, and other forms of assistance, amounts to nearly $700,000,000 which up to the year 1920 would have capitalized the whole stretch of steel of the Canadian Pacific at $40,000 per mile.
I think it is 'time we altered our policy and built our public utilities for the public instead of for private concerns who, in times past, have exploited rather than served those who made the concessions. The mistakes of the past are every day becoming more apparent. During the last season of grain transportation -1923-24-very little grain came east after the close of navigation on the lakes. Now, the two natural outlets for western Canada are certainly Vancouver and Hudson bay. But the selfish policy in the past of concentrating our financial and industrial concerns in Montreal and other eastern cities has brought on this country a railway problem of the first magnitude.

I say the Hudson Bay railway must be finished, and it will be completed. In western Canada the farmers have got to find the easiest access possible to the markets of the world, and this country cannot hope any longer to saddle the deficit caused by a superfluity of railway transcontinental lines upon the prairie farmers. In the future they cannot be expected to bear the mistakes that have been made. Indeed, I should like to serve notice right now that the prairie provinces are not to be expected any longer to pay freight charges over an extra mileage equal to the distance between Port Arthur and Montreal, on their products destined for the markets of Europe, even for the purpose -imperative in the eyes of some eastern interests-of making the transcontinental line; pay dividends. There is a problem here which w7e have got to solve. We must face it now and parliament would be better employed in the solution of this question than in jabbing Sir Henry Thornton below the belt. The desire of the people is for co-operation with the management of the Canadian National Railways and they intend to keep that system as their own.


Mr. A. M. CARMICHAEL (Kindersley):: I have been an interested listener to the debate which has so far taken place because the theme is a very important one. In fact,
I doubt if there is any subject before parliament of greater importance than the one we are now discussing. Its importance is due to the tremendous amount of money which parliament is handling as trustees of the people, an amount, I believe, which runs into hundreds of millions. As a previous speaker has stated we are directors of the greatest railway business in the world. I have an idea that at least the important countries of the world have their eyes directed towards Canada, to see whether we are going to make good or not. We are operating under our Canadian National Railway system almost 22,000 miles of railway. We are employing in the neighbourhood of 100,000 men. We have a telegraph mileage in the neighbourhood of 100,000 miles of wire, and we have control of an express company reaching almost all -over Canada, and to some parts of Europe. Not only that but we have a merchant marine totalling 60 vessels in all. We have a chain of hotels in strategical places throughout the Dominion of Canada. All these activities come under the management of our Canadian National Railways.
We might think of this management as being focused in the one individual, the president. His name has been mentioned some-

C.N.R.-Minister's Statement
times in a commendable way, and sometimes in a critical way. But Sir Henry Thornton is a big man. I think those of us who have seen him are agreed that he is big physically, and it is my opinion, Mr. Speaker, that his mentality is also very large. It is true he has nine other directors to assist him in the management of this system; but their location stretches from New Glasgow, Nova Scotia, on the east to Prince Rupert, British Columbia, on the west, and it is very hard for them to get together in one place to advise the president. Bj'' the way, I notice in looking over the list of directors that there does not happen to be one with a residence in the province of Saskatchewan. I rather think that is a mistake. Iam convinced in my own mind that if we had a real snappy farmer from Saskatchewan on that board of directors there would not have been the necessity for asking so many questions about the Scribe hotel. I am quite sure a real practical farmer would have weighed the matter so carefully and advised so wisely that the deal would have been delayed. But, we have this board of directors, and their duties are to operate the trains and to see that freight is carried expeditiously, that passengers are moved about, express handled, and so on. They are naturally obliged to retain the good will of the men who are working, so that they may decrease expenditure, increase revenues and continue to secure more business for the system.
We might ask ourselves, why are we in this big railway business? I think the answer has been given very well by the hon. member for South York (Mr. Maclean). He stated in effect that we were in it because we could not help it. The system of private ownership broke down. . If a mortgage company had a mortgage on a parcel of land, and the farmer decamped and did not make good naturally the mortgage company would take over the land. That is just what happened with our railway systems. The private owners fell down. They were not able to make good, and of course the systems came to the government for operation. When the systems were taken over under the presidency of D. B. Hanna there wras considerable improvement in the service. I happen to live in a town that is touched by a part of the Canadian National system, and the improvement in the service under the presidency of D. B. Hanna was very noticeable, but there was still room for improvement. There were too many officials and sub-officials flying around, who were not earning their salaries. There was too much extravagance. There was also room for improvement in a good many lines. Under the present president conditions have
improved considerably. We had the good fortune in the winter of 1923, shortly after Sir Henry Thornton assumed office, to have him visit the town where I live in western Canada. The impression made by him in that town was a very favourable one. He impressed us, of course, as being just as human as most people. He impressed us as being a man who was liable to make a mistake; in fact there are not very many men who try to do things who are not liable to make a mistake. But in spite of those impressions he also impressed us as being the type of man who was likely to make good.
I need not deal with the financial condition; that has been discussed by the hon. member for Pontiac (Mr. Cahill). He has given figures to show our expenditures are gradually decreasing, and that our revenues at the same time are increasing, and let us bear in mind that the present management has only been holding office for about one and a half years. Let us remember that the president has asked us to give him three year's' time- I believe three years was the time limit he put-and has said that at the end of that time the road would be pulled out of the hole and that instead of being a debt producing asset it would be a revenue producing concern. This condition will be brought about largely through the calibre of the man who is president. The hon. member for Pontiac wished to give some of the credit to the government, but it is only a shadow of the credit that goes to the government. I believe the real credit goes to the president of the National Railways for the success that has been made of the system during the past year and a half.
What should be the attitude, Mr. Speaker, of this parliament towards the system that has been forced upon us? I was rather disconcerted, to say the least of it, to find, during the first session of parliament that I attended, that so many members rose in their places and spoke disparagingly of the Canadian National system. I could not understand why they should do so. It was our own system and was on our hands. It was our own money that was invested in it. It was up to us to make good or to lose and I could not understand during that session why so many hon. members spoke as they did. Last session I noticed quite a difference in the tone of hon. members in this House. There seemed to be a different feeling towards our Canadian National system, and I believe that that good feeling in favour of our system is growing, not only in this House but throughout the country. There are
C.N.R.-Minister's Statement

eight and three-quarter million people throughout Canada who are anxious that this system should succeed, and we, the representatives of the people of Canada, should all be anxious to see it succeed. It is right enough that constructive criticism should be offered, but such criticism as the suggestion that we should sell our entire system for a dollar or even- less is not going to help promote the welfare of the system now in our possession.
Referring to the amendment proposed by the hon. member for West York (Sir Henry Drayton), it was intimated, I believe, by the hon. member for Centre Winnipeg (Mr. Woodsworth) that he felt the amendment was going in the right direction. Well, Mr. Speaker, to my mind it seems to be a sort of Jacob-Esau amendment. It feels something like Esau to the blind Isaac, but the
10 p.m. voice, the tenor, or, the intent of it, is more like Jacob. The amendment calls for a select standing committee to consider the estimates. There may not be anything wrong with that, but it asks further that the committee consider all questions involving new capital commitments. Let us consider what that means. All questions involving new capital commitments would have to come before the select standing committee for their approval. That would mean, I take it, that such a simple matter as the purchase of a railway coach would have to be referred to the committee; such a matter as the purchase of steel for our much needed extensions would have to come before the committee; in other words, any and every matter appertaining to new capital commitments would first have to be passed upon by the committee. That would seem absurd. This House is not always in session; there are some six or seven months of the year when we are not here and the committee would not be available. If, therefore, the management desired to place an order for some equipment that was found to be necessary in September or October they would be tied up until parliament convened and this committee got together.
Further the amendment asks that the committee consider the disposition of properties and assets and that too would be a dangerous duty devolving upon a parliamentary committee. As regards the suggestion with reference to annual reports, there would not seem to be much to find fault with in that connection. But it seems to me, Mr. Speaker, that this committee would have altogether too much power. If I understand the intent of the amendment, the committee would have

power to send for papers and records and to consider all business deals, calling for witnesses as it might deem proper. It seems to me that this committee would so circumscribe the president of the Canadian National Railways that he would be left inactive and unable to carry on his business; in fact, he would be just a figure head. And what would the result be? From my knowledge of the president of our railways, I think he would not be very long in the president's chair before he would be looking for a position in which he would have room to move and to act.
The mover of the amendment may not intend such drastic results but it would appear to me that what I have suggested would be the outcome. I fail to see the need of having a committee of investigation. I can remember that for several days our order paper was almost filled with questions and answers in regard to Hotel Scribe and a certain Aronovici, besides questions relating to the Canadian National Railway business generally. So far as I can see there is a ready source and there are ample means of obtaining information, and to appoint a special committee to sit as a sort of trial judge over the president and the directors of the Canadian National Railways would be taking a step in the wrong direction. For my part I do not feel that I can support the amendment.


Mr. M. N. CAMPBELL (Mackenzie):: The excellent showing made by the Canadian National Railways during the last few years is a matter for mutual congratulation, and it is to be hoped that Sir Henry Thornton's prediction of an operating surplus of $30,000,000 for the year 1924 will be fulfilled. There are still, however, many difficulties to be overcome before the people of Canada can view the whole railway situation with equanimity and complacency. The railways have also made a creditable showing during the first two months of 1924. I have here a statement issued by the Bureau of Statistics for January, 1924, which reads:
Canadian National Railways (Canadian lines) turned an operating deficit of $963,137 for January 1923, into a net operating revenue of $16,989 which was a betterment of $980,126.
I have also a similar statement in regard to February 1924 from which I quote the following:
Whereas in February 1923 the lines had an operating deficit of $2,986,197 this year the deficit was only $768,681 and the operating ratio nvas reduced from 122.27 per cent to 105.22 per cent. Freight train loading was heavier by 69.6 net tons and 2.3 care.
The entire system including the lines in the United States showed an increase in revenues of $1,728,191, a decrease in operating expenses of $774,694 and a reduction in the operating deficit of $2,502,885.

C.N.R.-Minister's Statement
It may be said that January and February are months during which the railways usually anticipate losses owing to severe weather and a limited amount of traffic. I was interested in the suggestion which the minister made in presenting his report, that a small quorum of directors be appointed, presumably from Montreal or the adjacent country, who might be called together upon short notice by the president. This might be necessary; but I would point out that there are certain dangers in such a policy. I know of nothing that would lessen the confidence of the people of Canada, at least of the larger part of the country, in the Canadian National Railways, than to have more centralized control in the city of Montreal. I believe Sir Henry Thornton has caught the popular imagination of the Canadian people, and I think he deserves their esteem; I would therefore rather increase his powers than hamper him by the addition of further directors to his board. I would suggest to the minister, however, that if it be necessary to appoint more directors, the agricultural industry should not be overlooked in the selection of these officers. In going over the figures for 1923 I note that grain was the largest single commodity handled by the railways last year; it furnished the largest tonnage of any single item handled. Further, it was carried the longest distance of any commodity handled by the railway. It seems to me, therefore, that if further additions are to be made to the directorate the industry of agriculture ought to be represented on the board.
The question of capitalization has been brought up so often in the House that I hesitate to introduce it again. However, it is a very important question and I was glad to hear the minister announce that it was being considered by the directors. Against Canadian National gross earnings of $254,926,000 in 1923 we had interest or fixed charges amounting to $65,199,000; while the Canadian Pacific Railway with a revenue of $195,837,000 has fixed charges of only $13,470,000. Taking our roads separately for 1923, that is, as they were classified in the statement for 1922, we find that the Canadian Northern had gross earnings of only $1.85 for every dollar of fixed charges; the Grand Trunk Pacific $2.19; the Canadian Government Railways, $1.79 and the Grand Trunk Railway $6.95; while- the Canadian Pacific Railway had $13.98 for every dollar of fixed charges and in 1923 $14.60. In the case of Canadian Government Railways, the investment has been charged up to public debt; and in dealing with these figures I have not taken into account interest or deficit; there has been no pyramiding of interest or
deficit as in the case of the Canadian Northern.
I wish to quote an editorial from the Manitoba Free Press dealing with this subject of capitalization :
The time has now come to consider seriously the proposition, which has been frequently advanced during the past two or three years to cut down the capitalization of the system to a point where it will represent the actual value of the road.
It will not be denied that the capitalization of the Canadian National Railway is far in excess of the physical value of the road. In this huge mountain of debt are embedded all the railway blunders of Canada since the first railway was built.
Of the operators of the Canadian National Railway miracles should not be demanded. They cannot be expected to make surpluses sufficient to pay interest charges upon the present combined capitalization of the system. Faced w-ith the certainty that every year there will be a huge deficit, the directors of the system will inevitably get into the frame of mind which finds expression in the phrase: "What's the use?" If there s bound to be a deficit anyway, why worry whether it is ten or twenty million dollars?
But given a just valuation of the road, the directors can be told that they must meet the fixed charges or make way for others who can. They will have a target to aim at and they will be expected to hit it. This w'ill be much more exhilarating and inspiring than shooting arrows into a bog.
Many hon. members have from time to time put forward claims on behalf of the people of the Maritime provinces for special rate consideration, on the ground that the Intercolonial railway was not built as a purely commercial concern but for military and political purposes. And we must admit the justice of that claim. But, Sir, to a certain extent western Canada is entitled to the same consideration. Our natural channels of trade run north and south, and had there been no interference with that trade by way of tariffs we would have been amply supplied with railways from the United States without a dollar of subsidy from the Dominion treasury, and there would have been no railway problem to-day. But the Dominion parliament decreed otherwise; it decreed that trade should be forced east and west, and railways were built for this purpose, and not primarily with the object of earning dividends. The moment you subsidized a railway you admitted this principle. I submit that as conditions are to-day, and as our railways have been built up, trade between the Maritime provinces and central Canada, trade between central Canada and the prairie provinces, trade between the prairie provinces and British Columbia, is entitled to a reasonable rate, a rate at which business can be carried on, a rate that will permit of an exchange of the basic commodities of these various sections of the country, and that the deficit, if any, must in the last analysis be absorbed by the Dominion treasury.
C.N.R- Minister's Statement

ings running over many weeks and the employment of a staff of clerks specially qualified to deal with these questions, to secure information that very often, only the railway companies possess. I would strongly impress upon the government the necessity of dealing with this by legislation. When this element of the population must stand these increases it seems to me that they should be represented on the classification committees that frame these freight classifications in the first place.
I have here exhibits numbers 1 and 2, being figures placed before the Board of Railway Commissioners by the Canadian Pacific Railway Company and the Canadian National Railways in connection with the application of the Express Association for an increase of rates in 1922. These figures show that in 1922 the Canadian Pacific Railway passenger earnings were $283,749 less than the operating expenditures chargeable to that branch of the service-that is, not taking into consideration the fixed charges or dividends. When we come to the Canadian National the difference is very much greater: the figures show an operating loss of $8,416,000 on the passenger service alone, Canadian lines only. This reveals a very serious condition of affairs. The total operating surplus of the Canadian National, Canadian lines, is $11,656,000, so that an operating loss of $8,416,000 in the passenger service would show that the freight traffic taken separately registered on operating surplus of $20,072,000. This means that the people engaged in the basic industries, lumbering, fishing, mining, agriculture, and so on, were made to pay this $8,416,000, in addition to their share of the overhead of our railway, to provide a passenger service for those who are able to travel. Luxurious, palatial trains, five of which cross the continent every day, are provided largely for a privileged class, those who are able to travel, and provided for out of earnings of those engaged in these great basic industries.
We are getting an exceptionally good service on the Canadian National Railway today, a service we are proud of. I say that the Canadian National Railway, in the service it is giving to-day, both freight and passenger, takes second place to no railway on the continent. We are proud of it, and we appreciate what Sir Henry Thornton has done in giving us this service. In my own constituency, and I say this without fear of successful contradiction, in the territory served by the Canadian Pacific there are considerably more complaints of the freight and passenger service than there are in the districts served by the
[Mr. Campbell.!
Canadian National Railways. But when we analyze these figures, it seems to me we are getting a little too much service. If we come down locally to the territory between Montreal and Ottawa, have we not more trains than are required to give the necessary service? Is not the same true of our transcontinental trains? Between here and Toronto it seems to me there are more trains provided than are required to maintain that service. When I was coming to Ottawa recently on the Canadian National train, on leaving Winnipeg I went through the coaches and checked up the passengers in order to arrive at some idea as to the service, and I found only three persons in the first-class coach, leaving Winnipeg, only eight in the colonist car, and only about one-third of the sleeping accommodation taken up. I know that people will complain, and complain bitterly, of any curtailment of the passenger service, but if these figures are placed fairly and squarely before the people of Canada, if they are shown that their grain, their cattle, groceries, lumber, food, the necessaries of life, and the products of their basic industries, are made to pay this $8,500,000 operating loss on passenger service, it seems to me they will get loyally behind the administration of the railways in a reasonable curtailment of service. I would strongly impress upon the minister the necessity of going into this with Sir Henry Thornton and seeing if some arrangement cannot be arrived at, possibly in conjunction with the Canadian Pacific, to curtail some of this service and save the people a great deal of money.
In considering the whole railway situation, it appears to me that we are largely straining at a gnat and swallowing a camel. This House was engaged for over a month in an academic discussion of the tariff. The tariff is very important; we are all interested in it, bu't it is not nearly so important to the people of Canada as transportation. We are vitally interested in the tariff in western Canada; but put the two issues squarely before us and ask us which is the more important, and without a moment's hesitation we will answer transportation, and yet we consider here that a few hours' discussion is all that is necessary for the consideration of this all-important question. It may be only the hand of fate, but it seems to me that we spend a great deal of our time trying to find how many things we can disagree on. We centralize on the tariff, the most contentious issue that comes before the House, and when a great question like transportation is up we pass it by with hardly a moment's notice. I hope in the days to come we will take the matter a little more seriously than we are taking it at the present time.

C.N.R.-Minister's Statement


Mr. T. G. McBRIDE (Cariboo):: Mr. Speaker, at this late hour I do not intend to take up the time of the House very long. I just want to mate a few remarks in connection with some suggestions that have been made by the right hon. leader of the opposition (Mr. Meighen) when this debate on the Canadian National Railways was taken up in this House in the first place. He seemed to think the railway was not doing its duty when it did not spend another $5,000,000 for repairs to rolling stock. To me one of the indisputable proofs of the great improvement that has taken place in our railway system, is that it had not to spend this $5,000,000. I can remember in 1921 going along the Grand Trunk Pacific from Lucerne to Fort Fraser. At that time it was not safe to walk along the aisles of the cars unless you were accustomed to railway travelling. I remember asking the divisional superintendent what effect such a condition of the roadbed had on the rolling stock, and I remember his answer that it was costing the Canadian National Railways millions of dollars each year for repairs to their rolling stock, in not having the roadbed in proper shape. I passed along the same roadbed, over the same railway, about a month before I came to Ottawa, and the roadbed was in entirely different shape. You could walk through the train any place you wanted in comfort. The result of that improvement of the roadbed is that the Canadian National Railways do not have to spend this extra money on repairing their cars. They have put the roadbed in such shape that there is not the tear and wear on the rolling stock that there was when the roadbed was not in shape.
In connection with the amendment how many boards are the Canadian National Railways going to have? First, they will have their president and his board, then they will have to come to a board of this House, then go to the Senate, then if this amendment goes through, come back from the Senate to another board of this House. Where will all that land the Canadian National Railways? In my opinion it will land us, in the first place, without a president and I think we have at the present time a president that Canada has just reason to be proud of, and one whom I hope to see at the head of the railways for many years to come and I think it is up to this House to see that he gets a free hand.
There has been a good deal said in this House about the Hudson Bay railway. Now I do not think it is right that that should ever be loaded on to our Canadian National Railways. If this government has made mistakes, and I think both the old governments have committed themselves to this railway, and it is the dlesire of the government to complete that road, it is up to the government to complete it and then hand it over to the Canadian National Railways and give them a bonus to operate it. But do not let us load on to the man who is trying to make our roads a success, another burden in a railroad of that kind.
I would like to take up some of the time of the House on the Canadian Government Merchant Marine, but as the hour is getting late I do not know that I will. I am pleased to note that the government has disposed of four of these boats under 5,000 tons. I would like to see them dispose of more of them. They have some 28 still on their hands, under 5,000 tons. It would occur to me that those boats could be made use of if new hulls were built for them, and the present machinery put in, and put on the lakes to carry grain. In this way the government would be in a position to compete with the grain carriers on the lakes, and these boats would not cost more than half what a new boat would cost. I think the government would be well advised and fully justified in experimenting with at least five or six of these boats, having new hulls built for them converting them into lake carriers of the latest type and using the machinery they now have in the smaller boats. I see no reason why they could not be made a success, and in that way the government could determine what it would cost to carry grain.
Hon. GEORGE P. GRAHAM (Minister of Railways and Canals): Mr. Speaker, I was informed the leader of the opposition (Mr. Meighen) wished to speak. I should like him to have the opportunity of doing so but as he does not seem desirous of availing himself of it I shall say a few words and they shall be very brief.
In the first place I point out that this is the first time in the history of the Canadian parliament, as far as I know, that it is proposed1 to refer estimates to a committee. The House is not being asked in this amendment >o do something recommended in a motion proposed by the leader of the opposition when he was at the head of the government, or by the present Prime Minister when he was leader of the opposition. They did not ask for any of the things which are asked for in the present amendment. A reference to their speeches will show that what they proposed has no bearing on what is now suggested here. Let me read the amendment itself:


Arthur Meighen: Does the minister mean
every transaction of the National Railway board?


George Perry Graham: I am speaking generally.
Very many transactions would not be in the Auditor General's report.


Arthur Meighen: None of the National
Railway board's transactions are in the Auditor General's report.


George Perry Graham: You will find the transactions of the Canadian Government railways are, and everything in connection with them, I imagine, can be examined if it is so desired. I would raise no objection to that, as that is the usual method of investigation. In this case, however, my hon. friend from West York is asking for a special enactment to provide that the estimates should be sent to a committee; not only that, but that the committee shall have power to call witnesses and examine them under oath. Now, I submit, Mr. Speaker, that if we are going to make a success of the Canadian National Railways it must be by co-operation and not by the establishment of new machinery for the purposes of inquisition, whether inquisition be necessary or not.
What position would it put the management of the Canadian National in, if throughout the year they are liable to be haled before this body of inquisition, whether there is any charge or not, and the railway managers placed on a plane inferior to other managers- not only that, but inferior to members of the House of Commons, because members of the House of Commons can say all these things in committee or in the House, without having to take the oath as to their accuracy, but the board of railway management has to submit to be sworn every year this committee sees fit to investigate what it is doing. I think it is not the right attitude to take if we want to make the system a success. I am in favour of co-operation between parliament and the Canadian National Railway board, and for that reason I am prepared to accept a proposition for a committee along certain lines. I have a precedent for this proposition, a precedent referred to last year by the leader of the opposition himself, and that is a resolution moved by the present Chief Justice of the Exchequer Court, who was a colleague of my right hon. friend for quite a time, a gentleman who knows the inside workings of the Unionist party, and knows the inside workings of that government. He was a member of the Liberal party, and knows the inside workings of that party. He is now in the 173
Exchequer Court, and with this combination of information, his opinion ought to be pretty good. In 1921 he moved the following resolution in this House:
That all words after "that" be struck out and the following inserted in lieu thereof:
Rule 10 of the House of Commons relating to the appointment of the select standing committees of the House, be amended for the present session by adding to the select standing committees of the House for the present session a select standing committee on Railways and Shipping, owned, operated or controlled by the government, and that the special committee appointed to prepare and report the list of members to constitute the standing committees for the present session, be instructed to prepare and report the list of members to compose the select standing committee on Railways and Shipping owned, operated or controlled by the government for the present session.
Mr. Maclean was very careful to make it for the present session, knowing it was an experiment, and he wanted to see how it would work out. That was wisdom. The amendment of my hon. friend makes it a standing committee for the future, and I would not be prepared to do that with any committee, because this is an experiment, and the members of the House of Commons may not care for this experiment once they work it out. What did Mr. Maclean have in his mind? I will read one paragraph from his speech, as I think it conveys what I have in my mind perfectly. He says:
What I seek to do is to afford the opportunity for the management meeting a committee of the parliament oi Canada who represent the people so that, sitting together, they might discuss all the important matters relating to the railway administration,, and I suggest, Mr. Speaker, that only through a parliamentary committee can this be done.
Some of the matters referred to have to be discussed at greater length a little later on, and without making any further remarks I am merely suggesting the resolution to which I think the House might well adhere, and which the government is prepared to accept. It has this feature which was outlined by Mr. Maclean; it brings the management and the committee of the House together, to sit down as man to man and discuss these problems. There would be no question whatever, and no difficulty, in getting all the information that it was possible to have in detail. I admit the accuracy of the suggestion made by my hon. friend from Kindersley (Mr. Carmichael) that it does sometimes seem a little peculiar that a deputy gives the minister the details,, and the minister gives them to the House. Quite often it happens that the minister does not give the same details to the House that the deputy gives him, because his hearing may be bad. I admit there is something incongruous about that. In this trial committee which I have suggested, the deputies could


Minister's Statement
appear with tl?e management of the railway, the deputy acting as a go-between between the government and the board of management. In that way I believe every detail could be secured by this coijnnittee, and would be open to the public as well; so that when we came into the House to discuss the details of estimates, there would be no question about the minister being wrong in his information because the members of this House would have had that information direct from the officials themselves. I would suggest to my hon. friend from West York as a fair compromise in the trying out of this new departure of handing estimates to a committee, which is only an experiment, the proposed resolution which I will read to the House. Of course I would not commit this government or any other government to continue this committee, because it is a real departure in principle from anything we have ever had in this this House. Instead of the resolution moved by my hon. friend, I would copy the resolution proposed by Mr. Maclean partially, but not at such great length. My suggested resolution would read:
That rule 10 of the House of Commons relating to the appointment of the select standing committees of the House be amended for the present session by adding to the select standing committees of the House for the present session a select standing committee on Railways and Shipping, owned, operated or controlled by the government, to which will be referred the estimates of the Canadian National Railway and th<* Canadian Merchant Marine for the present session for consideration and for report to the House, provided however, that nothing in this resolution shall be construed to curtail in any way the full right of discussion in committee of Supply.
I do not move this as an amendment to the amendment, because that cannot be done in going into supply.


Arthur Meighen: The time which I have had to consider this suggested amendment of the Minister of Railways is very brief. It now amounts to about two seconds and a half. However, the amendment really is not before us except as indicative of the attitude of the minister. His suggestion appears to be that we should submit all the estimates of the Department of Railways and Canals-*


George Perry Graham: No, no.


Arthur Meighen: Then I have got it
wrongly.


George Perry Graham: Canadian National Railways and the merchant marine.


Arthur Meighen: There is not much else
except the canals. He desires to submit to this committee the estimates of the Canadian National Railways and the merchant marine

for this session, and provide that the submission to that committee should not affect in any way the right of discussion in committee of the Whole. I think now that I grasp the full meaning of what the minister suggested. I will refer to it as I proceed a little further with the discussion. In commenting on the time at which I spoke, which the minister did not seem to like, I really am surprised that he took exception-


George Perry Graham: Oh no, I did not care.


Arthur Meighen: I do not care to pursue
a debate until we have some little intimation of where the government Stands. We have had several speeches from hon. members to my left, and one from the hon. member for Pontiac (Mr. Cahill); but the House was left in entire ignorance of any idea that might be in the minds of the government, much less as to the course ft intended to pursue in respect to a definite motion and a proposal before parliament. Further the Minister of Railways had spoken in debate prior to the speech I made myself. I wondered why he should object to my speaking again. I am not going to make much mention of some rather uncalled-for, wholly unit p.m. founded suggestions or insinua tions, some of which came from the hon. member for Pontiac-and if 1 needed any other reason for ignoring them I consider that sufficient-others of which came from hon. gentlemen to my left, to the effect that if you criticise anything connected with the management of the road you are failing in that idolatry with which the whole nation should look up to the mighty personage at its head; you are laying hands on the Ark of the Covenant; you are stepping on holy ground; nnd you are liable to incur the eternal penalty. To suggest that anything could be wrong or that anything indeed could fall short of perfection in the operation of this system is to commit the unpardonable sin and to be forever debarred from political reward.
I am not one of those who look forward to the Canadian National Railways ever going into private hands. Long before hon. gentlemen opposite became enthusiastic for the National Railways I stood1 in this House and on many a platform in Canada and declared that now that we had them they were to be our property, and that they would be the possession of our people after hon. gentlemen were many years in their political and, I feared, in their physical graves. This is still true; and whether Sir Henry Thornton stays or leaves the roads will still remain the pro-

C.N.R.-Minister's Statement
perty of the Canadian people. Why, therefore, these suggestions should be made, that anything at all in the way of criticism or even in the way of proposals for the betterment of the system or of the scheme of management, or of review, is dictated by the foes of the road or, still worse, dictated by friends of a private company, the Canadian Pacific Railway, I know not. I know of no reason for any such imputation; I can only attribute it to mad and mean political animosity.
I became in some degree responsible for a policy" which, however it may have been favoured by others, was certainly not favoured by the Canadian Pacific Railway; and I took the consequences of that position. Many of those prominent in that system came out manfully in opposition to that policy, and to the consequences I submitted. And I would be prepared under similar circumstances to do the same again. I resent therefore, particularly at the hands of those whom also I had to fight in this House, the suggestion that I am affiliated1 or connected with any private company whatever, or that those who speak as I do in this debate have any other object except to safeguard the public welfare.
Yes, the present management of the Canadian National Railways is entitled to fair treatment; so is the present head of the system. I do not know that I have ever observed at the hands of any on this side of the House or of anybody in the Dominion anything but the fairest treatment ever accorded him. I know of no public servant who ever entered the service of Canada who has received as fair, as generous, as flattering treatment as Sir Henry Thornton has been given. Some one suggests that I attacked him before he came; but as usual the one who makes that suggestion takes good care not to quote the attack. No word of attack ever escaped my lips, not even up to now, save where Sir Henry Thornton exceeded the authority given him by his board of directors and the Parliament of Canada, and many months after he had come. Those who think otherwise I now invite, while I am on my feet, to state wherein I attacked him. No; he has had fair treatment at our hands. But I wonder what was the treatment accorded his predecessor by those who now hold everybody associated with the road as sacrosanct, beyond even the suggestion of criticism. Why, day after day in this House no attack was too vicious, no suggestion too mean, no vitriol too heated to pour upon his head. Assertions were made which, if made beyond 173i
the walls of parliament, would have been libellous; and they were made day after day. And even the then leader of the opposition went on the stump and condemned not only the head of the railways but the directors as well as men so associated with other companies which were doing business with the road that they could not honestly discharge the duties of their office. From that party now comes the appeal to hush the lips of all; we must not dare criticise anything. Yea, more than that, we are told that if we see something which we think is wrong, which we know is wrong, we must ignore it; for behold! that is evidence that the man is alive: nobody except a dead man could help making mistakes, says the Minister of Railways (Mr. Graham). So that if we find any mistake we must immediately bow down and worship it inasmuch as it is an evidence of activity on the part of the president of the Canadian National Railways. Is that not the argument the minister used?


George Perry Graham: No.


Arthur Meighen: Those are his words,
then.


George Perry Graham: No.


Arthur Meighen: At all events, that is
supposed to be the attitude we should assume.


George Perry Graham: No.


Arthur Meighen: Well, if it is not we
will not assume it; and in not assuming that attitude we are not failing in justice to the system. Now, sir, what is the amendment before the House? The amendment is that there should be some committee with definite powers to review, at such time and under such restraints as will not interfere with the management of the system, the record of the system in the past. The amendment goes further-and I will refer to this second feature before I cover the first fully. It suggests that the future programme of the National Railways be subject to review by that committee, but only to the extent of its capital investments and its proposals to sell the property entrusted to it for mange-ment or in part thereof. I hope hon. gentlemen understand the purpose of the amendment. It is not the intention of the amendment that proposals regarding those things which the directors are there to sell shall first be reviewed by the committee; subject to that review shall be such suggestions only as to the sale of that property which the directors are supposed to manage and not to
C .N Jt-Minister's Statement

sell. These things should first be reviewed by the committee, just as they should now be reviewed by the government and' parliament.
The Minister of Railways takes exception to this second power of the committee. He declares that to refer estimates to a committee of this House is something new. I admit that; estimates have never yet been referred to a special committee of parliament. But the estimates to be referred in this case are not the entire estimates; they differ from the other estimates in one particular, and one very great particular: they refer to the purchase of new property for the people of Canada to be operated by the government railway system, and they refer to the sales of property which we already have decided should be operated and not sold.
Hon. gentlemen will see at a glance that these are estimates of an extraordinary character; in the one case we have estimates and in the other proposals. The estimates which it is here proposed to refer to the committee are estimates of a character that never before, until we acquir'd the National Railways at least, have come before parliament or the government. But it is not altogether a new suggestion that a committee of this House should review estimates. I would not favour submitting to a committee the ordinary estimates which year by year we have reviewed; but I was somewhat surprised that the antagonism of the minister to the review of estimates by a committee should be received with applause by hon. gentlemen to my left. Why, I had to stand in the House three years ago and resist the proposal coming from the very party that sits to my left. The hon. member for Neepawa of that day, Mr. Davis, on frequent occasions pleaded in this House that all the estimates should first be reviewed by a committee, and that until this was done we could never get that retrenchment and economy which we should have. Not only did he so plead, but he was supported by man after man, and while I do not speak positively, I am pretty sure I could name hon. gentlemen opposite who supported his plea. And it was stated repeatedly by the hon. member for Neepawa at that time and by others-I have not reviewed the matter but I now accept the minister's statement that it was wrong-that this system was followed in the British House. According to the minister, it is only adopted in respect of special estimates for the purpose of secrecy. Well, these are special estimates. We do not want them so reviewed for the purpose of secrecy,

but we want them so reviewed because of their special character, and because this will be a committee which will have especially under its custody matters concerning the National Railways and the mercantile marine I do not see any very great objection to testing out the system of special review of estimates by a committee, referring and embracing in its scope, for the time being, any way, simply the limited class of estimates named in the amendment.
But I do not regard that as a vital feature of the amendment. I would be glad to accept some concrete proposal from the government which would cover the other features of the amendment. Cheerfully would I accep* such a proposal. But is the minister's suggestion a concrete proposal? His suggestion is too much like the proposal of the hon. leader of the Progressive party (Mr. Forke). He wants a committee too. His study of the subject has brought him to that conclusion. But what he wants a committee for he does not know! I asked him specially to tell me, but he did not succeed. I do not believe in appointing committees until we give them definite work to do-definite responsibilities and definite powers. For this reason I argued against the motion of the former hon. member for Halifax, Mr. Maclean, three years ago. You get nowhere by appointing a committee simply on a certain subject, with no special powers and no special duties. This seems to be what is in the mind of the leader of the Progressive party-at least he did not feel like going further until he found out where the government stood. We want a committee, and we want to tell the committee what subjects it should take care of, what its powers should be, and the character of the recommendations it is entrusted to make. What is the value of appointing a committee on the subject of the National Railways and the mercantile marine? "Oh" we are told, "they will co-operate with the directors." Well, I am pretty nearly tired of the word "co-operate" until I know what powers the committee are going to have as distinct from the powers of the directors. I suppose they could co-ordinate too; there would be no objection to that. And perhaps, to borrow the favourite word of the ministry this session in the Speech from the Throne, they could "stabilize" something. We could fill in all these meaningless phrases, but the committee would be a mere nonentity, it would be utterly worthless for the purposes of this House.
Now, does the minister suggest any reason why a committee could not usefully review

C.NJi.-Minister's Statement
the operations of the system that are now closed, subject to the very ample restraints, if not too ample, embodied in th| amendment itself? He suggests no reason at all. In fact he says, "I am prepared to let the Public Accounts committee do that." Well, I am prepared to accept the Public Accounts committee. Let him bring in an amendment to this effect, and I shall be prepared to accept it. The Public Accounts committee cannot do the work now. All the time that we have had the Canadian National Railways we have never been able to review those accounts. I do not care particularly up to what date, but there must be some time when the accounts can be reviewed by the representatives of the people who pay the money. And if the minister is prepared to move in this House that those accounts be dealt with in the same manner as the other accounts of Canada are dealt with by the Public Accounts committee, subject, if he likes, to the restraints embodied in this amendment, which Certainly are complete, then it will be satisfactory to me. And if there is any other restraint that he feels is reasonable and necessary in order to give the management all the scope and all the freedom from embarrassment they need to make the railways a success, then I am prepared to accept that amplification of the restraints embodied in the amendment. Can anything be more reasonable than that? This is all we ask. I shall expect the government to Come forward this session-for evidently they purpose to defeat this amendment-and propose in this House at a very early date, so the work can be undertaken this session, a committee with full powers which the minister suggests should now belong to the committee on public accounts. The minister says there should be no power of summoning witnesses and putting them on oath. I wonder has not the Public Accounts committee that power?


George Perry Graham: Surely.


Arthur Meighen: It is true that a member must show that he believes that in the public interest there is reason for doing this. Certainly the directorate should be entitled to that protection in any committee. Nobody ever suggested that any parliament should empower a committee to examine men on oath unless someone takes the responsibility of saying that there is reason in the public interest to do it. To all the safeguards against recklessly putting men on oath which now pertain to the Public Accounts commit-* tee, or which would pertain to the minister's case if he moves for a reference to the Public
Accounts committee, there will be no exception taken in this end of the House at all. But is the minister to say that in relation to all other matters affecting the Dominion, all the departments of government in relation to every dollar spent in this or spent in that you can summon the minister himself, you can summon the deputy, you can summon all the officers of the Crown and put them on oath, but in relation to anything affecting the National Railways you cannot put anybody on oath at all, and that whatever you get you must get by co-operation and by sitting down side by side in an aimless and blind committee?
Now, there are some special reasons why we should lose no time in affording this machinery. Never in the history of the late parliament was such machinery resisted. It is true we did not solve all the problems connected with the National Railways, but we solved the most and the biggest of them, and we indicated the line upon which this problem should be solved, but the session of the House at which it was intended to carry on the work of the committee under General Mewburn was not held. We have passed through nearly three sessions, and this government has not made the slightest progress towards providing the machinery for taking care and assuming the duties of review which this parliament allows the public of Canada. We have let years go by and hundreds of millions of dollars have been spent with no system of review at all. Now when we seek this machinery we are told by hon. members that we are pin-pricking the road, that we are doing something awful for which we should be haled before the bar of public opinion, simply because we dare to suggest that the hundreds of millions of the people's money should, under proper safeguard so as not to interfere with the management, be subject to review by the representatives of the people in parliament.
I said there were special reasons why we should lose no time in affording this machinery. I could not help but note that the Minister of Railways in respect to some of those suggestions by my hon. friend to my left, the mover of the amendment, should be so brief as to be totally silent. Brief was he in his main address on the question of the Scribe hotel; stiff briefer is he now. I wonder has this parliament done its duty to the country in relation to that matter? Has this parliament not been under some soporific influence, seemingly wholly unable to reveal to the people the real character of that transaction?
C.N.R.-Minister's Statement

I have had an opportunity this afternoon of reading the correspondence that has been brought down with relation to this matter. Let me say this: The purchase of this hotel in Paris was a breach of law, was a misappropriation of funds, was an exercise of jurisdiction never conferred on any board or any man by the Parliament of Canada. The minister says himself it was a mistake; I compliment him for his frankness in that respect. But three million dollar mistakes are things that the people of this country cannot afford altogether to ignore. Let us examine the circumstances under which this so-called mistake was made.
A gentleman by the name of Aronovici came into the employ of the National Railways apparently on the first of December, 1922. This was about the time the present president of the Canadian Na/tional Railways assumed his duties. He is reported as first of all giving attention to immigration and colonization, some things of that sort-a general securing of business for the road in Europe. For the months of December, January, February, March and the half of April, four and a half months, he was paid for that work $5,625, as shown by a return brought down to this House just a few weeks ago. That is at the rate of $1,100 or $1,200 a month. This is a man of mighty ability; he certainly must be something of a superman-taken on, to spy out the immigration possibilities, just occasionally, for an occasional report-occasional services paid for at the rate of $1,100 to $1,200 a month. But the beginning was trifling; wait until we see what comes. So wonderful was his work that on the 15<th of April he was given what is called permanent or regular employment at the rate of $15,000 a year, approximately the rate at which he was paid for these special services. But Mr. Aronovici was not going to have his valuable time wasted at the rate of $1,100 or $1,200 a month, so he set out to make a little on the side. He took an option on the Scribe hotel. Just when he took the option is not revealed in this correspondence, but Aronovici was doubtless in the employ of that company when he took the option. If he was not,
I ask the minister to deny it now. Was not Aronovici in the employ of the National Railways when he took the option on the Scribe hotel? The minister, I think, knows he was.


George Perry Graham: I am not admitting anything. It was not my bargain; I did not make it, and I do not know. I have given all the data to the House that has been asked of me.


Arthur Meighen: The minister has done
nothing of the sort. Not only has he not given to the House what has been asked for, but he has not given to the House what this House ordered. This House ordered on the fifth of May that there be brought down-
A copy of all papers, reports, valuations, letters, receipts, vouchers and any other documents relating to the different transfers of the Scribe hotel, Paris, France, and its purchase, including copies of instructions given to the Deputy Minister of Railways and his reports to the minister; also a return of all letters, papers, reports, estimates and other documents relating to the renovation and repair of the said hotel.
The first document relating to this, so far as I would judge-certainly among the first- would be the option of Aronovici. The option Aronovici got on that hotel is not in these documents brought down. Aronovici when he got that option was in the employ of the company to whom he sold the hotel. Nor is the contract under which Aronovici got it in any way before this House or yet revealed to the public of Canada. What is revealed is so patchy and sketchy that anybody reading it will know that it is only an indication here and! there of what actually took place. Does the minister suggest to me that this notification to himself on the 31st of May is the first knowledge he had of that transaction? According to this correspondence the president of the National Railways did not notify the government until the 31st of May, 1923, that he had buried nearly 40,000,000 francs, approximately $2,700,000, in a hotel in Paris. The minister will not say he had no intimation up to that time. I do not think he will say so; if he would, the position of Sir Henry Thornton would be utterly indescribable before the Parliament of Canada.


George Perry Graham: What date have you got there as being the date on which the arrangement was made?


Arthur Meighen: The whole affair started on the third-


George Perry Graham: That is not the question I asked. The member for West York (Sir Henry Drayton) stated this afternoon that the transaction was made on a certain day.


Arthur Meighen: On the 30th of April
the whole details were completed, put in writing by Sir Henry Thornton, agreed to by Mr. Aronovici. A month after, on the 31st of May, after the money was all gone, irretrievably gone, we are asked to believe the minister was informed for the first time, and informed by the gentleman who is erected into the status almost of godhead by hon.

C.N.R.-Minister's Statement
members of this House. I cannot attribute to Sir Henry Thornton that conduct; I must assume that he apprised the Minister of Railways otherwise than is shown by this correspondence. But we are asked to accept the statement of this correspondence-and it is given every appearance of bona fides-that the minister knew nothing of it until the 31st of May. Why, four months before, or almost that, on the 3rd of February-mark you, practically two months after Sir Henry Thornton assumed his duties, and before one would imagine he had a very thorough acquaintance with Canadian conditions, with Canadian finances, and with the circumstances of the National Railways-he communicates with Mr. Roy. Now, will hon. gentlemen really follow me while I disclose to this House what he communicated with Mr. Roy about-Mr. Roy is Canadian Commissioner for this country in Paris. I think his title is Trade Commissioner; at any rate he is a commissioner of some kind for Canada. With him Sir Henry Thornton first consults as to the purchase of a site. He recalls that they were acquainted with each other when Sir Henry Thornton was in the British army in Paris, and he goes on to say:
I am anxious to provide the Canadian National Railways with adequate office accommodation and a proper re-rpS station in Paris, apart from purely traffic matters.
I do not get the significance of those words. It would appear to me that traffic matters, passenger and freight traffic, would be what he was interested in, and little more.
We are already well represented there from that point of view.
I ask hon. gentlemen to note: The president admits that so far as traffic goes we are already well represented there,-the very day he opens up the correspondence. And here is what he is looking for on behalf of this Dominion:
I want a well-located office where our literature, time tables and, in general, the allurements of Canada, can be exposed to the public. I do not know quite how you are situated with respect to office accommodation; but it occurred to me that perhaps there might be an opportunity for co-operation between the government and ourselves to our mutual advantage. I would suggest the acquisition of a suitable building, properly located, and preferably on the Boulevard des Capucines, somewhere not far from the intersection of that boulevard with the Rue Edouard VII.. The ground floor could be occupied by the railway company with exhibits and literature of various sorts in charge of a competent staff, and the upper floors, which no doubt would be more suitable to your requirements, would be used as offices for the High Commissioner. I think the offices should be of a dignified character and thoroughly in keeping with the importance of the post you occupy and the National Railway system. If this idea should commend itself to you, I should be very
happy to collaborate with you here with a view to bringing the suggested plan about. I have asked Mr. William Phillips, European manager of the Canadian National Railways,' to see you upon his return to Europe, as he is here on a business trip. Meanwhile, I would appreciate any comments you may care to send on the subject.
Here we actually have the president of the Canadian National Railways, two months in Canada, undertaking to buy a block in Paris for this government in order to show exhibits and the allurements of Canada, and in order that Mr. Roy will have something suitable to his position. Do hon. gentlemen really conceive the presumption that is embedded in the epistle? If Sir Henry Thornton were of that opinion was it not his duty to communicate with the government of Canada, and not with the Trade Commissioner or the High Commissioner in Paris? Even the first initiation is an assumption of a function that he did not possess at all. But we go on. Mr. Roy replies:
Letter received. Entirely in accord with you. Am writing.
And then another letter goes from Mr. Roy. So far as Mr. Roy's letter is concerned, it bears to me evidence of bona fides. He recalls that they did know each other in Paris. He goes on to say what he thinks the government of Canada ought to be doing in Europe in the way of getting immigrants, and appears to think we could be getting immigrants from France. The letter is somewhat long, and for that reason alone I do not read it. But I call attention to this paragraph:
Mr. Aronovici tells me that you have asked him to take charge of your office in Paris. I know that he is a man of large experience and unbounded activity.
I agree with both. But mark! Aronovici already, on the 3rd of February, has been asked by the Canadian National Railways to take charge of their office in Paris, he the man who in his pocket at that time held the option for the Scribe hotel!
There is this also in the letter which I have marked, and I do not want to conceal any of it; if any hon. gentleman would like me to read the whole of it, I would be glad to do it. But it appears to be bona fide as far as I can see:
There is a corner to be sold at this moment which would be an ideal one.
That letter is dated the 9th of March, the answer to the letter of the 3rd of February. It goes on:
It will be expensive, no doubt, but there is none better in Paris. You will remember the Grand Cafe with the Jockey Club and the Hotel Scribe upstairs. The
r .	COMMONS
C.N.R.-Minister's Statement
whole building is announced for sale. It would be too large for our requirements, but a part of it could be easily rented and bring in a very large revenue. The amount to be paid for that property may discourage the Minister of Finance and frighten parliament.
Wei], poor fellow, had he any conception that the Minister of Finance was not to know anything about it until the money was gone, and that parliament was not to know anything about it until a good while after, and not know the real truth for almost a year after? There was not much use in the minister being discouraged or in parliament being badly frightened after the horse was stolen. Aronovici, though, had the option on the Scribe hotel, and Mr. Roy t recommends the Scribe hotel with a warning that it is going to be high. Then this cablegram goes forth from Sir Henry Thornton dated the 9th of April, almost two months before the minister is supposed to have known anything about it. It was sent to Phillips:
Please repeat to Roy in confidential cypher following:
Understand from Aronovici that the property now occupied by Grand Cafe and others on the corner of the Rue des Capucines and the Rue Scribe can be acquired for purchase price of 30,000.000 francs, to which must be added government tax of 3,600,000 francs, and an additional amount of about 3,600,000 francs would have to be paid present tenants to secure gprly possession< making total of 37,200,000 francs. Beyond this we have to lay down about 3.500,000 francs to adapt building to offices for you-	,,
That is for Mr. Roy:
-and railways, including cinema gallery for propaganda purposes. Building larger than government and railways require-surplus space can no doubt be rented to advantage. Please say firstly whether you endorse proposition in principle, secondly whether you consider purchase price reasonable, as I have no personal knowledge of Parisian property values. It would be necessary to move fairly quickly, as there is an option on property expiring April 20-
Eleven days after this cablegram was Bent. The last words are:
Cable reply.
And now it will be known that two questions are asked Mr. Roy: First, do you endorse the purchase in principle? This was totally unnecessary because Mr. Roy, with unbounded enthusiasm, had endorsed the idea of a grand purchase, even the purchase of the Scribe hotel, in. his previous letter of March 9. So the only question of importance asked him was: Do you 'consider the purchase price reasonable? This question Mr. Roy very discreetly evaded. His reply was as follows:
Rue Scribe property would be ideal one for our work. Would recommend it strongly if it could be bought on reasonable conditions. ,
That is an evasion so skilful I almost commend it to the Prime Minister himself. IMr. MeighenJ


George Perry Graham: The leader of the opposition does not need it.


Arthur Meighen: No, he does not; he
never evades anything. Just imagine the president of the National Railways and Mr. Roy negotiating for the purchase of a property from $2,000,000 to $3,000,000 for the government of Canada, without the government knowing anything about itl The agent in Paris is the man he negotiates with, and the man that has the option on the property and is going to make the money out of it. This is the proceeding we are supposed to commend. But the worst is yet to come.
Next is this telegram dated the 16th of March. So far as the record shows, nothing took place between the 12th of April and the 16t.h of Match, save a letter which I will read in a few moments, a letter dated the 30th of April, which embodies the contract, and which I purpose to embalm in Hansard for the curiosity of the Canadian people for all time to come. If the lawyers of this Dominion will just study this contract under which the Scribe hotel was bought, and if any two of them can agree on what on earth it means, then I think at least there will be a considerable degree of credit coming to them for their friendship. But prior to reading the document I am going to read this cablegram. It appears on the record ahead of the document, and is dated the 16th of May. This is addressed to the precious Aronovici by Sir Henry Thornton:
Bank sending money to Morgan's with instructions to pay to you, on receipt of deed to you and mortgage to us, satisfactory to Phillips, London, who will come to see you. Bank will also require a demand note from you on the whole amount as evidence of their advance which note this company guarantees you against. '
So the purchase of the property there was authorized, and a cablegram was sent to Phillips, ordering him to come to Paris, to see the letter of April 30th in the hands of Aronovici, to get a lawyer to approve title and deed to Aronovici and mortgage to this company. At this stage the best thing I can do is to read the letter, dated 25th May, from Sir Henry Thornton to the manager of the Bank of Commerce, at Montreal. This is the letter under which the money was extracted from the National Railway treasury and planted in this property in Paris, and the circuitous route that was adopted to do it is really so delectable that I hope none will miss the import of a single line:
In connection with the advance made by your bank of 38,232,161 French francs-

C.N.R.-Minister's Statement
And then in brackets:
-($2,608,330) to Arnold Aronovici for which his note has been issued payable on demand at 6 per cent, funds have been deposited by the Canadian National Railways in a special account in the Montreal branch of the Bank of Toronto in the sum of $2,608,330.
Some amount!
This money is not to be withdrawn from the Bank of Toronto until the note and interest thereon is paid. You are authorized at any time to call for the payment of the said advance with interest after giving the general treasurer of the Canadian National Railways five days notice of your purpose so to do, and if the principal of the said note is defaulted you are empowered to apply the deposit to the liquidation of the defaulted principal. Any failure to pay the interest on the note is to be brought to our attention, but no part of the deposit is to be used for the discharge of this indebtedness.
It could not be very well used for the interest because it was exactly sufficient to pay for the principal, but the effect of the arrangement is this: The National Railway board took $2,608,000 odd dollars out of the treasury, put it in the Bank of Toronto, asked the Bank of Toronto to send $2,600,000, the same amount, over to France, but to leave this money on deposit. If the money was not paid on six days' notice then they could take the amount on deposit and apply it. Hon. gentlemen are wondering, I know they are, why that method was adopted. Hon. gentlemen are wondering why the company did not send the money over. We deposit the money in the bank, tell the bank to send over the same amount, and bind ourselves to hold that money in the bank and let the bank apply it in payment, if it is not paid after six days' notice. Why in the world go round all these circles? Well, if hon. gentlemen wonder why that was done I think I can tell them. It was because the purchase was illegal from the beginning, and because they wanted to keep it in the shape of pretending to lend the money to Aronovici, and all the while Aronovici was borrowing it here, the bank was lending it to Aronovici. I do not know how otherwise to describe the transaction. The very course pursued shows that the straight course could not legally be pursued. Now, I ask the minister why the money was not taken and sent over? If they had the right to buy that property they had the right to pay for it. They had the money why did they not pay for the property? It is because they wanted to get something which would evade the law and they resorted to subterfuge to get round it. Even trying to do that they did not succeed. The Canadian National Railways of this country have no authority in the world from this parliament- and they could get authority nowhere elseto guarantee the Bank of Toronto the payment of that note. I do not think the legal director of the National Railways would say that. I may say I consulted him on the point.
I am surprised to find that the Canadian National Railways had no power at all to give that guarantee.


George Perry Graham: What did he say when you consulted him?


Arthur Meighen: I will tell you what he said. He stated to me that the guarantee was not given to be binding-in a word that a verbal guarantee was not legal so there was no real breach; but it is given in writing and the railway company had no power to do that. I am not finding fault with the legal director. He found himself in this position and had to resort to the best scheme possible to get out of it. But why did he, or why did the management, ever get into that position? After this is done we are supposed to believe that six clear days elapsed before the minister knew a thing about it, and) this is deemed to be only a mistake.
Now I come to this mysterious letter, this contract of the 30th April. Here is the contract under which the deal was consummated. It is consummated by a letter of the president to Aronovici, and the reply of Aronovici accepting the letter of the 30th April, of the president. Aronovici writes on the 22nd May, still nine days before the minister is supposed to know anything about the transaction, and this copy does not show who he writes to but manifestly it must have been to the president. The letter is as follows:
Referring to the letter from Sir Henry Thornton, chairman and president of the Canadian National Railways, addressed to me and dated April 30, 1923, reading as follows:
Then the letter is recited and in order that hon. members will understand I will read all except the letter first:
I beg to state that the terms and conditions stated therein are accepted by me and this letter is given in full acknowledgement of the same.
Yours faithfully,
A. Aronovici.
Now what is the letter which he accepts:
Arnold Aronovici,
2 and 4 Rue Edouard VII,
Paris.
This is a letter from Sir Henry Thornton:
Dear Sir,-I am writing this letter to you for the purpose of reporting our understanding of a tentative arrangement made with you respecting the acquisition of a location in Paris, France, for the offices of the Canadian National Railway Company, and for the Dominion government should they desire to avail themselves of the space.
C.N.R.-Minister's Statement

Description : The property to be acquired is shortly described as follows:	the property facing the Boulevard des Capucines at the corner of the Rue Scribe now occupied by the Jockey Club and the Grand Cafe.
It will be recalled that Aronovici's option had existed for months. Indeed that is the first option, unless renewed, and we are utterly helpless to judge because the correspondence does not show anything about its renewal. It is the first option, unless renewed, that Aronovici held on the 20th April, a month before this letter was written, before the reply was written, and ten days before Sir Henry Thornton's letter was written:
You are to acquire the property in your own name for amounts not to exceed the following:
(a)	30,000,000 francs for the building and lot;
(b)	Twelve per cent on this amount for the taxes payable to the government of France;
(c)	3,600,000 francs for the removal of existing tenants;
(d)	300,000 francs (estimated) for fees and commissions ;
(e)	$50,000 (estimated) for sundry expenses; making an estimated total of 37,500,000 francs; the equivalent thereof, to be supplied by us in Canadian dollars at the rate of exchange of the day; in addition to which we also furnish the $50,000 estimated for sundry expenses.
Payments: The railway company has advanced to you, to enable you to bind the bargain, $200,000.
When that went we have no information whatever.
Security: The railway company is to be secured for all its advance by a mortgage executed by yourself upon the property for the amount advanced, to be returned to the railway company in Canadian money.
Terms of security: Interest at the rate charged us by the bank in making advances per annum, payable half-yearly out of the rental as specified below. Principal repayable in 20 years, or such additional time as may be necessary to enable the sinking fund, hereinafter provided, to retire the whole indebtedness.
I would like to go slowly because I know that nobody can follow me unless I read it several times. But so far it appears to be this, that the company advances all the money, the property to go into the name of Aronovici, Aronovioi to give a mortgage back to the company for the whole amount of the advance and for the rate of interest charged at the bank, Aronovici to give the bank a note for the moneys he got at the bank, and the note to lie there as collateral security to the government's guarantee to the bank. That is the simplest explanation I can give so far, but the complication has only begun. Then the next:
Occupation:	The railway company is to take space
on the premises as follows:
Basement, space for cinema.
First floor, space for exhibition hall for Dominion government.
[Mr. Meighen.j
Actually locating the different floors before the government knew even that they had the building.
Exhibition hall for Dominion government, and offices for Canadian National.
Second floor, about twenty rooms for Dominion government.
I call the attention of the minister to this. Here we have Sir Henry Thornton aware of how many rooms the Dominion government were to take, and actually allotting them the rooms just exactly a month before the D>
minion government knew anything about tin property.
About twenty rooms for the Dominion government, and the same number of rooms for the administration offices of the railway company.
They were certainly going to spread themselves all right.
Detailed measurements and locations to be subsequently agreed upon and subject to change on mutual agreement.
Rental-
This is really delightful.
Rental:	To be agreed upon between yourself and
myself as president of the Canadian National Railways.
Rental of the property they paid for

rental of the property, every dollar of which was gone to purchase, and for which they would hold a mortgage in return.
Payment of interest:	Interest shall be payable out
of rental.
What is meant by that?


Mr. CANNON:: Rental of the offices.


Arthur Meighen: But the government
owned them.


Lucien Cannon: The Canadian National
Railways owned them.


Arthur Meighen: I mean the Canadian
National Railways. Why would they be paying for them?


Lucien Cannon: Whoever rented offices
outside the Canadian National Railways would pay rent.


Arthur Meighen: This says that interest
shall be payable out of rentals. What would the government pay interest for? I know the hon. gentleman who interrupted cannot understand it, and there is no brighter mind on the other side of the House. Wherever you go you run into a stone wall.


Lucien Cannon: The government rented
the property, and if they rented offices to anyone else, they would charge them rental.

C.N.R.-Minister's Statement


Arthur Meighen: My hon. friend does not
get the full wording. In the letter from Sir Henry Thornton to Mr. Arnold Aronovicd, he says:
Now, as to payment of interest-
Who would be paying the interest, let me ask? He says that interest shall be payable out of rental. The government would likely have to pay a rent if they took some of the rooms, but what would they be paying interest out of the rental for? The National Railways bought the building and paid for it. Why would they be paying interest out of rental?
Interest shall be paid out of rental, so far as it goes, being deducted by the railway company.
My hon. friend will see he could not have been on the right track. But I do not blame him; he will struggle over this for months and will not get on the right track, unless of course he sees Aronovici. The document continues :
No interest shall be payable on the advances made under this agreement, until the rental begins; in other words the railway company charges no interest on its advances until concurrent with its occupation of the premises.
I despair. I will offer no explanation of that. I will leave it for any hon. gentleman who wants to try it. The next thing is:
Equipment of space: You are to furnish soon as possible to the railway company suggestions and estimates as to the best use to be made of the space taken and the equipment to be provided.
Principal payments: You are to pay $25,000 per annum, Canadian money on account of the principal.
I figured it out, and I find it would take about 111 years to pay for the property, so that Aronovici could not complain of the liberality of his terms. There is a provision for acceleration on account of the principal.
Provided that, if and when the exchange between Canada and France so improves that the franc comes up to par the payments on account of principal, while the franc remains at par, shall be doubled.
Option to purchase: the railway company may at any time, within ten years purchase the whole of the property upon the following terms-
Will the House believe me when I read the terms? They are:
(1)	Discharge the mortgage above provided, upon *payment of all interest to the date of discharge, but sinking fund payments previously made go to you with interest at the same rate of interest as fixed in the mortgage.
I am sure the member for George Etienne Cartier (Mr. Jacobs) would like me to read that again.


Mr. JACOBS:: Why bring me into it?


Arthur Meighen: I noticed a look of blank dismay on the hon. member's face when I
read it. I do not know who is to pay the interest. Evidently the railway company is to pay it, but what on earth they would pay it for I do not know, or why Aronovici would keep the sinking fund I do no know. The next paragraph reads:
(2)	Compensate you for your expenditure from your own funds on the building, plus 5 per cent on such expenditure.
(3)	Should the purchase be made within five years, a ten per cent commission on the total purchase price shall be paid to you for management and other expenses.
Blessed is the name of Aronovici. The government puts up every cent, pays him interest on it, lets him keep the sinking fund and then pays him 10 per cent for managing it so well.
Should the purchase be made between the fifth and tenth years-
That is in the second five years-
-twenty per cent commission on the total purchase price shall be allowed to you for management and other expenses.
Let me see: That would be approximately $525,000. No wonder Aronovici retired. I do not say he got it because the option apparently was taken up in the first five years, but if it had waited five years he would have got that amount. As it was under this contract he had a right to half of it, or $260,000 odd on the purchase from him, who was himself an agent of the company.
Insurance: You to insure the building and improvements to an insurable value to be agreed upon making the loss if any payable to us as interest may appear.
Why it was necessary to put things in that were to be agreed upon, I do not know. It is mere surplusage. However, it does not do any harm.
Rental, terms: The railway company is to execute the usual Parisian contract for rental or space in Paris. The period of rental to be fixed by the railway company.
Name of building:	While the railway company
occupies space in the building, no other name than the Palais Canadien shall be used as a description of the building, without the consent of the railway company.


Samuel William Jacobs: I hope the right hon. leader of the opposition does not object to that.


Arthur Meighen: No. He was evidently determined to get rid of the name of Scribe hotel.
Form of Mortgage: The form and terms of the mortgage to be satisfactory to us, the mortgage of course to be a first mortgage, free from prior liens and charges.
Yours faithfully,
H. W. Thornton.
I emphasize the word " faithfully." This was dated April 30. The letter of Sir Henry Thornton and the reply, of May 22, constitute the contract; and it is out of the meshes
C.N.R.-Minister's Statement

of that contract that the Deputy Minister of Railways was despatched to France to endeavour to rescue this administration. It was while that contract tied and entwined this parliament that we had the debate last session as to the real facts connected with this transaction; and after the whole thing was done Sir .Henry Thornton writes to the Minister of Railways and deigns to inform him as follows:
May 81, 1923.
Dear Mr. Graham :
For some months the necessity for a more aggressive campaign in Europe on the part of the Canadian National Railway system has been apparent to me, if we are to get our share of the European business, and likewise develop a constructive immigration policy?
In this connection let me observe that the Canadian National Railway system is not in possession of ocean-carrying passenger vessels and therefore cannot develop an immigration traffic overseas. In this regard it is not in the same position as the Canadian Pacifio Railway.


George Perry Graham: It is not in the same position as the Canadian Pacific at all. but it can do a great deal in that way providing traffic for the National Railways and directing it thither from other ships. It is true the Canadian National system has not its own vessels, and to that extent it is at a disadvantage; but overseas traffic can be directed to the National roads.


Arthur Meighen: Does the minister mean passenger traffic?


George Perry Graham: Take immigration traffic for example.


Arthur Meighen: It seems to me that the government could do something in that regard without any special efforts on the part of the National Railways. I do not want to digress from the main subject, but I think there is very valid objection to this government maintaining an expensive immigration service of its own, and our alter ego, the National Railways, maintaining another. And that objection can be pretty well illustrated by just what has developed here. It seems to me that in so far as the question of immigration is made an excuse for this purchase there might well have been some discussion between the government and the president first, because I do not accept the immigration theory at all as any warranty for the purchase of the Scribe hotel. We do not get any immigrants from France; we have not succeeded in securing any for years, the number being virtually negligible. As every one knows, the French government is strongly opposed to 
the encouragement of emigration from that country; and as to diverting emigrants from Europe, I presume something might be done in that direction. But undoubtedly the railway was already equipped towards that end in the matter of traffic,-and the word "traffic" embraces passengers as well as freight. And Sir Henry Thornton admitted in his very first letter that the Canadian National system was equipped from the standpoint of this accommodation. I proceed with the letter:
Two months ago I brought the matter to the attention of our board of directors, outlining in a general way what I thought should be done, and the board expressed itself as being in accordance with my views. There has been abundant evidence that our inactivity abroad was losing us a certain amount of business, and you may recall, for example, the statement made recently on the floor of the House by an hon. member, complaining that the National Railway system was unknown in Europe.
I venture to suggest that the statement was the most expensive utterance ever made on the floor of this House, and I cannot think now to whom I should attribute the responsibility for it.
One of the essential implements in the solicitation of business, as well as for the purpose of advertising the Dominion of Canada as a whole, is proper quarters at strategic European points.
It looks as if we were in for a series of hotels.
We are already properly housed in London but we have no quarters on the continent. I therefore considered it necessary to secure offices of sufficient prominence to meet our requirements in that territory. Early in this month, an opportunity developed to secure a property at' the corner of Rue Scribe and Boulevard des Capucines, close to the place de l'Opera, and in the centre of the banking and transportation district: briefly it may be said that this location is in the very heart of the city.
This had occurred nearly four months, or at least three months before. But that may be merely a mistake of memory.
Immediate action was necessary, as I had known from authentic sources that other interests were considering the property. Accordingly, I immediately arranged with an agent to purchase the property, and employed the support of the Canadian National Railway system in arranging suitable financial credit.
Does the minister think that was a fair statement of the facts? I ask him in all seriousness. Was it fair to the minister, was it fair to the government, to conceal the fact that the agent employed to purchase the property had already held for months an option on it himself? In the next place, was it fair to state that the arrangement for financing was temporary when, as shown in the contract of April 30, the arrangement for financing contemplated 110 years?


George Perry Graham: My right hon. friend will find his calculations wrong as to time.

C.N.R.-Minister's Statement


Arthur Meighen: At the rate of $25,000
a year how long would it take to pay $2,700,000? I have it worked out before me; at $25,000 a year it would take 100 years to pay $2,500,000, and the amount is more than that;
I think it is nearly $3,000,000. I do not think that the extension of time to 110 years will convert the transaction from a permanent one into a mere matter of temporary financing. There is not the slightest evidence of any temporary financial arrangement to be found on the whole face of the file; not a document, not a suggestion of any kind is there to indicate that the matter is anything but a permanent acquirement of property, save what I read in the latter part of the letter, a very significant feature:
The deal was immediately consummated, and simultaneously negotiations were entered into with a responsible syndicate not connected with the Canadian National Railway system, for the purpose of taking over the property, and with a view to our becoming tenants. These arrangements have now been completed and the syndicate has agreed to take over the property, subject to certain details.
Outside of the assertion of the minister, there is a definite, conclusive, inescapable statement; and the whole file can be searched from beginning to end for the slightest reference to any attempt to get a syndicate or the slightest testimony of the existence of a syndicate at all. The minister told us last session, just as we are told here, that the deal was complete for another syndicate to take the property over, and that we were to be out of the transaction at the price we paid for the property; all of which turns out wholly incorrect. Would that we were out of it! I do not know, though, that the taking over of the property by a syndicate on terms of our renting the property at a figure that would represent a profit to the syndicate would be getting very well out of the transaction. But if there is any way of getting any one to take it at anything approaching the price we paid for it, yes, at half or a good deal less than half what it cost the country, it will be a lot better than our putting up with the loss year after year. I go on:
There will be reserved for. the Canadian National Railway system such space as will be required for its purposes, and also for such departments of the Canadian government as may wish to avail themselves of this opportunity.
Should the provincial governments also wish to take advantage of the opportunity, they will be treated in the same way as the Canadian National Railway system.
The president of a few months of our
National system started out to get accommodation in Paris for the Dominion government
and for the provincial governments without deigning to consult a member of any of the whole ten governments.
It is the intention to locate, if possible, in the building offices for Canadian institutions, so that the property will be and will become known as a Canadian headquarters in Paris and on the Continent.
The "Palais Canadien."
I regard it as fortunate that the Canadian National Railway System has been able to secure such advantageous quarters at a reasonable rental-
By the way, there is nothing in the whole thing to give the slightest indication what the rental is, or even that any rental is payable.
It would be unwise and undersirable in the interests of the Canadian National Railway System that full details of the transaction should be known-
This sentence I enthusiastically concur in.
-until all arrangements have been completed, but I may say for your information that Major Bell, the deputy minister of Railways and Canals and Mr. Gerard Ruel, vice-president in charge of the legal department, have full knowledge of the entire transaction and are prepared to join with me in a complete endorsement.
Well, I find no endorsement on the file. For that I congratulate the two gentlemen referred, to. If there should be one I would say, all the worse for them.
Now we come to the fall, October arrives with nothing on the intervening file at all, not a letter, not a telegram. We are asked to believe that not one single communication passed between the notification to the government in May and the following October. Does anybody imagine that to be correct? Is not this parliament being denied information which we ordered to be revealed? And is there any reason for denying us this information? Is it going to help the Canadian Pacific to the injury of the National Railways that the truth about this should be known? This has not the slightest thing to do with the operation of the system; this is a capital purchase away over in Europe beyond' the scope and beyond the jurisdiction of the directorate altogether, even if rightly done. Certainly there must have been communications between the month of May and the month of October. In the month of October a contract is submitted to the National Railway board for ratification. Apparently Mr. Bell had been in Europe trying to extricate the administration and the directorate from the mess into which they had precipitated themselves. Mr. Bell came back and submitted for approval this contract made between himself-representing the National Railways, but subject to the approval of the board of directors and the Dominion government-and
C.N.R.-Minister's Statement

Mr. Arnold Aronovici. I will read the description of him:
Mr. Arnold Aronovici of Paris, acting in his capacity of temporary proprietor of the building situated at the corner of the Rue Scribe and the Boulevard des Capucmes, Paris, known at the present time as the
Palais Canadien."
That is his description, and I Commend to the delectation of parliament those fine words, "temporary proprietor". Now the terms of this agreement I can give. It is not altogether very clear, but it is an infinite improvement in its clearness, though not in its ultimate effect, on the original agreement upon which it was built and for which apparently it is now a substitute. But, mind you, the terms of the original agreement are what .constituted the weapon which extracted this agreement from the National Railways of Canada, that is, from the treasury of Canada. It is recited that the government had advanced the sum now of 38,232,161.75 francs to Mr. Arnold Aronovici for the purchase of the property. That money was already gone. It included the original purchase price which Arnold Aronovici quoted the National Railways. What his option price was we are never told, we never get a hint of it; in all the answers to our questions it is evaded. That amount included 3,600,000 francs for registration fee to the French government; it included 3,600,000 francs for settling with tenants; in included 300,000 francs for fees and commissions-I wonder where those commissions went unless to Mr. Aronovici-and it included 50,000 francs for sundry expenses. Add those up and there is still a gap between that amount and the 38.000,000 francs which the government paid, and regarding this deficiency we are not favoured with information. Now then, over and above the 38,000,000 francs odd which already the government had advanced-, this agreement made by Mr. Bell-and no doubt he did the very best he could after they got into this position,-called for the payment of 650,000 francs more. Payment to whom? Well, it goes without saying that it was to Mr. Aronovici. He was to get that in order to liberate himself. Let us just contemplate this:
in order to liberate himself from all contracts he may have made to the present time with any parties whatsoever with regard to the "Palais Canadien"-
Arnold Aronovici up to this time held the "Palais Canadian" for the National Railways. If he had made any contracts they were ours. Why in the world would we pay him 650,000 francs to get free of contracts of which we should have had the benefit if

there was any benefit in them? 650,000 francs to liberate himself from his contracts for us. Would that we could have paid the same to liberate us from his! But that is not all:
For architectural work, plans, estimates and expenses -to be justified-in view of transforming the basements, ground floor and first floor of the "Palais Canadien"; 169,000 francs (temporary estimate).
All these things were not included in the original option at all or in the original contract with Arnold- Aronovici. These apparently are just some other methods of getting rid of Aronovici without paying him the 10 per cent commission called -for by the original contract, and I do -not think it will take hon. gentlemen very long to come to that conclusion.
These two sums are to be paid at the latest by the end of December 1923.
But there is a lot more yet:
The sum of 700,000 francs will be held at the disposal of Mr. Arnold Aronovici at the bank before December 31st 1923,-
I should in all fairness explain that this is a translation, from the French, and consequently the language may not sound just as it would in the original. But the meaning is easily got at.
-and he will have to produce a receipt for the said sum from the Societe du Jockey Club, the expense of which receipt will be borne by the C.N.R.
Now, it will be recalled that in the original sum, much less than 38,000,000 francs, there was included 3,600,000 francs for paying off the tenants, of whom the Societe du Jockey Club was c-ne. Now if he can show a receipt from that Jockey Club for some 700,000 francs or under, he is to get that money too, and if he can show a receipt from the Societe Fran^aise La Rente Fonciere-that is, I believe, the company from which he had the option, although I am not certain of that- he is to get up to the balance of the 700,000 francs. Here is provided for this man, in addition to the whole sum, in the first place, of the contract, 650,000 francs to be paid him to liberate him from contracts, 169,000 francs for the plans and 700,000 francs for some other supposed claims that he had in respect of La Rente Fonciere and in respect of La Society du Jockey Club. Now, apparently he is getting more than all this, but what for I do not know. Then, the contract proceeds:
Mr. Aronovici will receive within the period mentioned in article 3, and from the same bank, the amounts due to the Societe Frangaise La Rente Fonciere, for which amounts he will have to produce a receipt from the said company.	'[DOT]
Then there is a lot more, principally to make clear that all further expenses in con-

CJV.R- Minister's Statement
nection with this, that and the other thing are to be paid by the Canadian National Railways. In case the Canadian National Railways do not go ahead they are to forfeit 500,000 francs and he is to do the same thing if he does not go ahead. But why he would not go ahead I will ask hon. gentlemen to imagine. Then, the contract is to come into effect when approved by the board of directors and by the Canadian National. There is a provision also that if Madame Aronovici has any claim she must release it too. It is a pity there could not have been something paid to her in order to liberate her from any intricacy in which she might have been involved.
Now this contract was ratified by the Canadian National Railways. The matter then was submitted to the government and on the 17th of December the government passed an order in council congratulating themselves on the splendid bargain that had been made and authorizing the National Railways to go through with it. I do not need to read the order. It recites that they have formed a company among the subsidiaries of the National Railways, a company with power to hold the stock of any other company. So they formed a company in Paris under a French name.


Mr. CARROLL:: A bad thing, that French name.


Arthur Meighen: Well, I did not say it was. What does the hon. member interject that for?


William F. Carroll: My right hon. friend
suggested that it was a French name. There was a little inference there.


Arthur Meighen: No, there was no inference. I stated they formed it under a French name, and I did not have the name before me, that was all, I know what the hon. member had in mind.


William F. Carroll: May I ask the right hon. gentleman a question? Suppose everything he says is true, has he a remedy? Does he suggest a way in which the National Railways can be looked after better than the present government is doing it?


Arthur Meighen: Yes, I think I do, but that is rather a poor escape from the position the hon. member got himself into. Now, I go on. The French company has its stock held by a subsidiary company of the National Railways. The stock of that subsidiary company is of course held by the National Railways. The National Railway stock is held by the government of Canada, so as hon. gentlemen will see, we are the owners of the Scribe hotel. We are the real owners of it by ownership of the stock of the companies
that own it. Now, I ask, where has gone into blank space that syndicate that was to relieve us of this incubus? What has become of it? Did they take a look at the Scribe hotel or take a look at Aronovici? If so, what was the reason of their vanishing into thin air? We have heard nothing of this syndicate this session except that it does not exist. I do not doubt for a minute that the government have scurried about the financial offices of New York trying to get somebody to make some sort of deal to relieve us of this white elephant. I do not doubt it for a minute, because the government assured this House last session that the syndicate deal was complete, just as the government was assured it was complete by Sir Henry Thornton himself. Under this delusion the members of the House rested for many months.


Samuel William Jacobs: I do not think the government said it was complete, because on several occasions I asked the Minister of Railways and Canals whether he had any information to give the House as to the completion of the deal and he said he had not.


Arthur Meighen: Was not the hon. member's question as to the personnel?


Samuel William Jacobs: No, I asked him-


Arthur Meighen: I think so. The minister would not give us the personnel. He stated it was a mere temporary financing; that arrangements had been made to take it over, and Sir Henry Thornton had so stated to the minister in writing, in his letter of the 31st of May. I know the minister would not give us names, and I never could understand why. He said it would be bad in the making of arrangements with the tenants in the Scribe hotel, as if it made any difference to the tenants who owned the building or who did not; if they had to get out they would make the best terms they could. I could never see any force in the reason the minister gave, and I do not think the hon. member for George-Etienne Cartier (Mr. Jacobs) saw any force in it either.


Samuel William Jacobs: If the right hon. gentleman will pardon me, I asked the minister in the last days of the session whether he had any information to give the House as to the completion of the deal with the New York syndicate, and he said he did not have any information.


Arthur Meighen: That may have been the way the hon. member put it of course I could not be expected to remember the exact wording. But I put myself in the judgment of hon. members of this House of all
C.N.R.-Minister's Statement

parties if in the original discussion the minister did not give us to understand precisely what Sir Henry Thornton gave him to understand: That the syndicate arrangements were completed but that he could not reveal the names because of the negotiations pending between the syndicate and the tenants of the Scribe hotel.
Now, this House has a right to understand this transaction. Some hon. members may want to pass it over as a mere mistake; that, of course, is their privilege. . Those who take a more serious view of their responsibilities to the people for the money of Canada will certainly, I think, take a loftier attitude toward the subject than that. I ask hon. members to read this correspondence from end to end, all of it that is revealed. Ask yourselves first, is this a real record of the transaction, a complete record, or is it not ? If you feel it is not, ask yourselves, why is^ the intervening correspondence not here? Why is there not something to tell us what took place between those awful gaps? Ask yourselves next, is this whole contract such as to inspire confidence in the management of that great system? That it is an excess of jurisdiction all of us know, and it is more than an excess of jurisdiction. Just imagine the position this parliament is in. For years this parliament and the government of Canada have looked forward to the time when we could . get suitable quarters in London, England. We have never felt we were in a position to do so, even at the price of a million dollars and something over. But without being asked at all, without the slightest consultation, without even the government being apprised of the negotiations, the president of the National Railways calmly plants nearly twice that amount in the Rue des Capucines in Paris.-and that is what is described as a mere mistake.
I want hon. members to reflect on two or three other features of this correspondence.
I wonder did the minister observe that in that letter to him of 31st May, in which the first information was given him of the transaction, so we are asked to believe, Sir Henry Thornton describes its merits and all about it, or is supposed to have done so, and he never tells the minister the cost; he does not even indicate what it was costing at all. Did he consider that of no importance? Let the minister look through the correspondence and he will find that in the whole body of it there is not a single valuation by a solitary soul of the Scribe hotel in Paris, not the slightest word to justify the opinion of any human being that the property was worth 
the money paid-not only no word, but an utter absence of reply from the only gentleman to whom Sir Henry Thornton ever appealed to get a valuation of the property.
LTnder those circumstances I ask hon. members to sit down and think of the responsibilities of this parliament. Are we going to go on in this fashion, or are we going to have some means by which transactions can be reviewed, and reviewed in time to be of some service, that is as respects at least further investments of the Canadian people in capital acquirement? We cannot review, to be of some service, mere matters of operation. That is impossible, but because such is impossible let us not disrobe ourselves of the responsibility that we have such as we can effectively exercise. Let us live up to .our responsibility to the best of our capacity. Now I ask the minister, if he is determined that the House shall vote down this resolution, not to let many days elapse before he does bring down a plan to parliament in line with the recommendations in his address, some line that we can pursue, some path that we can follow by which we can discharge responsibilities that are justly and inescapably our own.


William F. Carroll: Supposing this whole
Hotel Scribe proposition is wrong: what proposition has my right hon. friend to put before parliament whereby our railways may be run without interference from parliament?


Arthur Meighen: There is one embodied
in the amendment. Under the law as it stands to-day the government of Canada must advance to the railways, their prior assent being secured, moneys for capital investment. The railway company has no authority save what parliament gives it. It could not have any authority save that. It is a parliamentary creation. We have never given .it that authority. Such is the law to-day. My first remedy then is that the government see to it that there is no excessive jurisdiction exercised by the National Railway board, that when it is done, instead of passing a blessing upon it and standing in this House and defending it, as the Minister of Railways did a year ago, he severely reprimand the president of the railways and let him understand that that kind of thing cannot be pursued, that investments of that kind are not of the nature of investments that are required in the ordinary course of operation. They are just as far the antithesis of it as you could conceive. Next, when it is done, that the government do not pass an order in council, as they did in this case, approving of it and declaring what I do not think they believed and what

C.NJt.-Minister's Statement
the minister at this session has admitted that he does not believe that it was in the interests of Canada. That is my first suggestion. Second, that we take the additional precaution in respect of these matters that are new in their responsibility, of having a committee of this kind review them, review them not in any way detracting from the power of the whole committee of parliament, but review them by way of additional precaution. Thirdly, I would recommend that we have a standing committee which under proper restraints, at a sufficiently subsequent time, can take before it all expenditures of the railways, and if it is believed that the investigation of any is in the public interest, investigate them effectively and finally. This, I believe, will be a restraint upon the perpetuation of the system that has already been launched in that railway.


William F. Carroll: I have no doubt in the world as to the broad-minded view taken by my right hon. friend, but if there is going to be a railway in this country, I would ask him who is going to have the management of that road-a committee of parliament or the management to which parliament has already turned over the roads. If that management does wrong, I presume the Minister of Railways is responsible, but I fail to see the ground that my right hon. friend takes when he says: You may have a railway in this country, you hand over the management to them. If they go wrong, then there is something that is certainly almost libellous that may be cast towards my hon. friend the Minister of Railways. I would ask my hon. friend how were the National Railways conducted for two years previous to the advent of this government to power? You had a board of operators at Montreal. Did you take full responsibility for them? I suppose you should.


Arthur Meighen: I have answered the hon. member. His first question was: Who should manage it? As I have stated repeatedly, and as I wish to emphasize now, the management should be undoubtedly in the unrestrained control of the directorate.


William F. Carroll: Absolutely.


Arthur Meighen: Now my hon. friend asks, how was it managed before? In accordance with that very principle. No acquisition of new property such as this, or any other property not a mere detail of operation, was ever launched upon by the old directorate without a prior vote of parliament and the authorization of the government.


William F. Carroll: Suppose a question came up necessitating a quick decision. Would my hon. friend come to parliament or the government for that?


Arthur Meighen: There is no quick procedure ever needed in any matter of acquisition of capital; there never was. Who would suggest that this procedure was needed or should have been done quickly? It is not practically necessary. As a matter of fact, at that time parliament was sitting.


Mr. W. M. GERMAN (Welland):: Mr. Speaker, it is certainly with a considerable degree of diffidence that I rise at this late hour to speak on this question of very great importance, and particularly in reply to the right hon. gentleman who for an hour or more has criticised this agreement for the purchase of the Scribe hotel and the arrangements made in connection with the purchase price. I quite appreciate that the right hon. gentleman is quite sincere in his criticism, and that the hon. member for West York is quite sincere in his resolution in which he asks for a committee of inquiry. I am opposed to the hon. gentleman's amendment for a committee of inquiry, and I am likewise opposed to the suggestion of the hon. Minister of Railways. I think that the resolution of the hon. member for West York goes too far. I think that the suggestion of the hon. Minister of Railways does not go far enough, and that it is not in the right direction.
It is suggested that the management of the Canadian National Railways should be kept out of politics. That was the suggestion made by the former government when this railway system was acquired by them, and with that principle every man in this country is in perfect accord. There is no man in this House or in this country who has for one moment the idea that the Canadian National Railway system can be operated successfully if political influences are allowed to intervene or to influence the action of the executive of that organization in the slightest degree. If such were to take place, the road would be a failure from the start. Human nature is much the same whether it is enclosed in the skin of a Tory, a Liberal or a Progressive. I have not much doubt but that when the Liberals were in opposition they perhaps unduly and perhaps improperly criticised the action of the former government and the action of the Canadian National Railway management. I am very much inclined to believe that if a Conservative government were in power now, and if a branch line bill had



C.NJi.-Minister's Statement
been brought down and had passed this House and gone to the Senate, constituted as it is, we would not have seen the opposition in the Senate that we see to-day to the branch line bills that are now before it. I am very strongly of the belief-I do not wish to attribute improper motives to anybody-that had a Conservative government been in power we would not have had a resolution from Senator Bennett-


Henry Lumley Drayton: Order.


William Manley German: -calling for an investigation of the Canadian National Railway system.


Henry Lumley Drayton: Order.


Hewitt Bostock: I call the attention of the hon. member to the well known rule that no criticism of the Upper House is permissible in this chamber.


Arthur Meighen: I ask, Mr. Speaker, that you relax your ruling to the extent of enabling the hon. member to explain the position of Liberal senators on the same question.


William Manley German: I am not excusing Liberal senators any more than I am excusing Conservative senators. With the permission of the Speaker and of the House I would say it is suggested in the newspapers that some Liberal senators are like some Conservative senators-they are very much bound up in the interests of the Canadian Pacific Railway. But the Canadian National Railway Company is managed in such a way at the present time that I believe we are bound to have the intervention of politics to a greater or lesser extent. This should not be the case, and before I sit down I intend to propose a new arrangement whereby, I think, politics will be eliminated entirely.
The leader of the opposition devoted his speech very largely, in fact almost entirely, to a criticism of the purchase of the hotel property in Paris. He has had the opportunity-which I have not had although I might have had had I been as diligent as he has been-of examining the papers. It seems to me, however, that the real thing to consider, the real gist of the transaction, is this: Has the property cost the Canadian National Railways what it is worth and no more than it is worth? Whatever may have been done in the way of purchasing the property, whatever may have been said in regard to the formation of a subsidiary company or companies to take over the property and hold it in trust for the government, whatever may be said about the agreement or about the action of Sir Henry Thornton in regard to the initiation of the proceedings or in regard to

the commissions paid to this Roumanian gentleman who had the handling of the affair -whatever I submit may be said with regard to .all these matters it comes down at last in the final analysis to this question:	Have we got value	for our
money? If we have then I submit, Mr. Speaker, that all these criticisms regarding the manner in which the property was purchased fall to the ground. There may have been mistakes made, I do not know. I do not intend to excuse a man even for making a mistake, or a glaring mistake such as is suggested has been made here; but if there have been mistakes made the only man really who can explain to this House and to the country the true inwardness of the transaction is Sir Henry Thornton himself. He is the naan I would like to have before this House. I should like to have him appear before parliament-not only before the members of the House but before the members of the Senate as well-and make a statement. Now here is the plan I would suggest for keeping the Canadian National Railway system out of politics:	It has been said
that the Canadian National Railway Company is a company with one shareholder, the government of Canada. So long as that idea prevails there will be politics mixed up with the management of the company and there cannot be any other result. I say that the shareholders of the Canadian National Railway Company are composed of about eight million people. The shareholders number eight million and those people should be represented here at an annual meeting of the company. It is impossible, however, to have the whole of the people 'attend at an annual meeting. It is not possible to have even all the shareholders of the Canadian Pacific Railway Company attend at their annual meeting. In actual practice I do not suppose that one-tenth of the Canadian Pacific shareholders attend at an annual meeting. But we do have the representatives of the whole of the people assembled in parliament every year. Now as parliament is in session every year in the month of March-as it must necessarily be in consequence of the financial year expiring at the end of that month-why is it not possible for parliament to temporarily postpone its customary work and for the members of the House and senators to meet in this chamber, or in some other room equally accessible and equally commodious, not as members of parliament, not as members of the Conservative party or as of the Liberal party or of the Progressive party; not with the Prime Min-

C.N.R.-Minister's Statement
ister at the head of one party and the leader of the opposition at the head of another party; but meet here absolutely as shareholders in the Canadian National Railway Company, with the president,

Sir Henry Thornton or whoever he may be-sitting at the head of the table presenting the financial statement for the year, explaining the operations of the system for the past year and perhaps the operations of the company for the succeeding year. Then allow these shareholders, the representatives of the people-members of the Senate and House of Commons-to select the board of directors by ballot each year. I do not think it is best in the interest of the Canadian National Railway Company that the government of Canada should select the directors as they are doing now. Even if part were selected by the government, part by the Conservatives, and part by the Progressives there would still be criticism. I do submit that the directors should be selected in the same way the directors of any other incorporated company are selected, by ballot of the shareholders, the shareholders in this case being the members of the Parliament of Canada. Then we would have a board of directors in whom all parties in Canada would have confidence. We could then have the annual statement of the president of the company laying before us the past actions of the company and perhaps the proposals for the future. If the president had branch lines to build that proposition would be submitted to the members of the Canadian parliament, assembled not as partisans but simply as shareholders in the company. If that scheme were adopted I believe you would have a board of management from which the political element would be eliminated.


William F. Carroll: Would you expect the
whole number of shareholders, the entire population of nine millions, of Canada to vote on this question?


William Manley German: I do not know how many shareholders there are in the Canadian Pacific Railway Company. I venture to say there are pretty close to a million.


Henry Herbert Stevens: No. 140,000.


William Manley German: Very well, 140,000, and I do not suppose that three hundred, or two hundred, or perhaps even one hundred attend the annual meeting. Whereas at this meeting of the representatives of the shareholders of the Canadian National Railway Company we would have 235 members of the House of Commons and 100 members, or thereabouts, 171J
of the Senate, representing the people of Canada, holding what you might call statutory proxies for the people whom they represent, and they would sit here as shareholders. You would then have the whole financial affairs of the company placed before this large committee, not a small committee as suggested by the Minister of Railways (Mr. Graham) and not a committee as suggested by the hon. member for West York. It seems to me- and it may not meet the views of anyone but myself-that something of that kind could be worked out whereby, as far as humanly possible, the political element could be eliminated entirely from the operation of the Canadian National Railway Company. I would like to see that done, and I am sure Conservatives as well as Liberals would like to see it done; then under the management of Sir Henry Thornton I would have no fear whatever -of the future success of the Canadian 'National Railway system.
Great credit is due Sir Henry Thornton. He came here at a most critical time in the history of the Canadian National Railway system. He was a new man in Canada, almost entirely unacquainted with the country, its necessities and possibilities. He has acquired a thorough knowledge of the whole country, from the Atlantic to the Pacific. He has brought the standard of the Canadian National Railways up to a pitch equal to that of any system of railways on the American continent. I live in a section of Ontario Which is served very largely by the old Grand Trunk system and the Canadian Northern system. The difference between the operation of the road now and the operation under the old system is so marked that we cannot help appreciating the capability of the management behind the operations which have brought about that great change, and I hope to see some scheme devised by which the political element will be entirely eliminated.
Regarding the question which has been so fully discussed by the leader of the opposition, I can only say that I am not sufficiently conversant with it to go fully into the details as he has done, but my information is that the building and the property which have been purchased are full value for the money which has been paid for them, if not more. I think it is a property which will be of great benefit to the Canadian National Railway system, and when the full particulars of the transaction are known, as in all probability they will be before this session is closed, it will be found that the criticisms of the leader of
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the opposition, strong though they have been, are similar, perhaps to some of his criticisms on other occasions, which have not reached their full fruition, and have not had the effect on the public of Canada which he had hoped they would.
Amendment (Sir Henry Drayton) negatived.
Motion agreed to and the House went into committee of Supply, Mr. Gordon in the chair.
Progress reported.
On motion of Mr. Mackenzie King the House adjourned at 1.05 ajm., Tuesday.
Tuesday, June 3, 1924